/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090327.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, March 27, 2009, Vol. 13, No. 85 Headlines 1031 TAX: Trustee Sues Boulder For Ignoring Fraud 1837 TENNVADA: Voluntary Chapter 11 Case Summary 955 ROUTE: Voluntary Chapter 11 Case Summary ABITIBIBOWATER INC: BowFin Extends Exchange Offer to March 27 ABITIBIBOWATER INC: Confirms TSX Delisting Review ABITIBIBOWATER INC: Provides Update on Filing of Annual Report ACTIVE WALLACE: Section 341(a) Meeting Slated for April 30 AGILENT TECHNOLOGIES: Will Lay Off 2,700 Electronics Employees ASBURY AUTOMOTIVE: In "Downward Momentum, Cut by Moody's to 'B2' AUCTION RATE: S&P Downgrades Ratings on $50 Mil. Certs. to 'BB-' AUTO SHOWCASE: Voluntary Chapter 11 Case Summary B&B COMPANIES: Voluntary Chapter 11 Case Summary BANK OF AMERICA: Moody's Cuts Preferred Stock Rating to 'B3' BEARD CO: Reports $1.5MM Gain on Sale of China Fertilizer Unit BENCO DELIVERY: Voluntary Chapter 11 Case Summary BI-LO LLC: Refinancing Woes Cued Chapter 11 Filing BLOCKBUSTER INC: Delays Annual Report to Close Talks With Lenders BLOCKBUSTER INC: Diamondback, et al., Disclose Equity Stake BLOCKBUSTER INC: Seeks to Extend JPMorgan Credit Facility BLUE MOON MOTEL: Voluntary Chapter 11 Case Summary BOSTON SCIENTIFIC: S&P Holds 'BB+' Rating; Gives Positive Outlook BWAY CORPORATION: Moody's Assigns 'B3' Rating on Senior Notes CABLEVISIONS SYSTEM: Finalizes Expiration of Cash Tender Offers CALTEX HOLDINGS: In Ch. 11 for Quick Sale of Equipment and Metals CALTEX HOLDINGS: Wants Access to NewStar Cash Collateral CALTEX HOLDINGS: Wants to Sell Property to Bennington for $20MM CAMBRIDGE MORTGAGE: Voluntary Chapter 11 Case Summary CHARLIE'S FOODS: Voluntary Chapter 11 Case Summary CHRYSLER LLC: Fate to be Decided by Auto Task Force By March 31 CHRYSLER LLC: Seeks to Recover Tooling From Precision Parts CINRAM INTERNATIONAL: S&P Junks Corporate Credit Rating From 'B' CMJ ENTEPRISES: Voluntary Chapter 11 Case Summary COEUR D'ALENE: Vitale Takes Bogert's Seat on Board Following Exit CONNECTICUT STAMPING: Voluntary Chapter 11 Case Summary CONSTELLATION BRANDS: To Use Sale Proceeds to Pay Off $210M Debt CORDIA CORP: Inks $1.2MM Factoring Agreement with Thermo Credit COTT CORPORATION: Moody's Retains 'Caa1' Corporate Family Rating CRUSADER ENERGY: Defers $833,000 Installment on Bank Debt CTI FOODS: S&P Gives Negative Outlook; Affirms 'B' Rating DAMMAN PROPERTIES: Voluntary Chapter 11 Case Summary DANA HOLDING: 2008 Sales Down $626MM from 2007's DFI PROCEEDS: Files Disclosure Statement; April 15 DS Hearing Set DIEBOLD INC: CFO K. Krakora Resigns As Regulators Probe Books DOLE FOOD: S&P Gives Negative Outlook; Keeps 'B-' Rating DORAL FINANCIAL: Voluntary Chapter 11 Case Summary EAU TECHNOLOGIES: Obtains Sept. 16 Extension of $3.3-Mil. Note FORD MOTOR: In Preliminary Talks for Sale of Volvo FORD MOTOR: Names R. Gephardt & A. Earley to Board of Directors FOSS MANUFACTURING: Stephen Foss Settles Creditors' Lawsuit GATEWAY ETHANOL: Court OKs Increase of Loan Amount to $5.7 Million GENERAL MOTORS: 7,600 U.S. Factory Workers to Voluntarily Resign GENERAL MOTORS: Auto Team Expected to Decide on Fate By March 31 GETRAG TRANSMISSION: Tipton County Files $14.1-Mil. Claim HALO TECHNOLOGY: Court to Hear Chapter 11 Plan Outline on April 4 INLET RETAIL: Wants to Hire Ivan Nossokoff as Bankruptcy Counsel INSIGNIA VESSEL: Moody's Reviews 'B2' Corporate Family Rating INVESTMENT REALTY: Voluntary Chapter 11 Case Summary JOHN SOTIRKOS: Voluntary Chapter 11 Case Summary LANIER HEALTH: S&P Downgrades Rating on $12.7 Mil. Bonds to 'BB-' LAS VEGAS CASINO: Files for Chapter 11 Bankruptcy Protection LAS VEGAS SANDS: Plans Debt Buyback, To Talk With Chinese Groups LAS VEGAS SANDS: Loan Amendment Won't Affect Moody's 'B3' Rating LEHMAN BROTHERS: Court Approves Repurchase Deal with Bank Unit LEHMAN BROTHERS: Investors File Suit to Recoup $1.5 Million LEHMAN BROTHERS: MAC Hikes Bid for Sikorsky Chopper to $3.1 Mil. LEHMAN BROTHERS: Seeks to Transfer Entegra Account to Barclays LIGHTHOUSE INTERACTIVE: Shut & Declared Bankrupt, Says Report LOGAN'S ROADHOUSE: Moody's Affirms 'B2' Corporate Family Rating MAGNA ENTERTAINMENT: Won't File 10Ks & 10Qs While in Bankruptcy MANALAPAN RETAIL: Wants to Hire Heilbrunn Pape as Special Counsel MANALAPAN RETAIL: Wants Rabinowitz Lubetkin as Bankruptcy Counsel MANITOWOC COMPANY: Moody's Cuts Corp. Family Rating to 'Ba3' MERUELO MADDUX: Case Summary & Six Largest Unsecured Creditors MGM MIRAGE: Hires Weil Gotshal as Bankruptcy Counsel MICHAEL VICK: Faces Suit for Misuse of Workers' Pension Funds MICHEAL VILLINES: Voluntary Chapter 11 Case Summary MILLAR WESTERN: S&P Gives Negative Outlook; Affirms 'B-' Rating MONACO COACH: Files 2nd Interim Plea for Use of Cash Collateral MONACO COACH: Lenders Oppose Sale of Manufacturing Operations MONACO COACH: Signs Non-Binding LOI to Sell RV Unit to Navistar MONACO COACH: U.S. Trustee Forms Seven-Member Creditors Committee MONEYGRAM INTERNATIONAL: David Parrin Steps Down as CFO MORIN BRICK: Sale of All Assets to Hillcrest Management Approved MERUELO MADDUX: Files Chapter 11 to Restructure Debt MUELLER PALLETS: Voluntary Chapter 11 Case Summary NATIONAL AMUSEMENTS: Starts Auction of Movie Theater Assets NAVISTAR INT'L: Signs Non-Binding LOI to Buy Monaco Coach RV Unit NCP MARKETING: High Court Refuses to Hear Trademark Dispute NEXIA HOLDINGS: Discloses Stock-Swap Deals With 3 Parties NORTHEAST BIOFUELS: Wins Court Nod on April 23 Auction for Assets NVIDIA CORP: S&P Affirms Corporate Credit Rating at 'BB-' OSI RESTAURANT: Closes Cash Offer for $240-Mil. Senior Notes PENSKE AUTOMOTIVE: Moody's Downgrades Corp. Family Rating to 'B2' PHILIP MARTIN: Wants to Hire Irvin Grodsky as Bankruptcy Counsel PIONEER NATURAL: Moody's Affirms 'Ba1' Corporate Family Rating POINTE LUCK: Creditors Have Until July 21 to File Proofs of Claim POINTE LUCK: Creditors Meeting Set for April 24 in New Hampshire POLAROID CORP: Lenders Say Terms of Sale to Benefit Insiders POWER EFFICIENCY: Hires Curhan to Expanded Board of Directors PREBUL AUTO: Infiniti and Volvo Dealerships Sold for $500,000 PRECISION PARTS: Chrysler Seeks to Recover Tooling PRS II LLC: Court Extends Schedules Filing Deadline until April 1 RENE SERRANO: Voluntary Chapter 11 Case Summary ROBERT ACOSTA: Voluntary Chapter 11 Case Summary S&K FAMOUS: Rivercity Branch to Close; To Get $13-Mil. DIP Loan SENSUS METERING: Moody's Affirms 'B2' Corporate Family Rating SHAW COMMUNICATIONS: Moody's Rates C$600 Mil. Senior Unsec. Notes SMURFIT-STONE: Wants Schedules Filing Deadline Moved to April 6 SMURFIT-STONE: Gets Court Nod to Raise DIP Loan to $750 Million SMURFIT-STONE: Calpine Corrugated Can Use Collateral Until 2010 SMURFIT-STONE: Seeks to Employ Levin Group as Financial Advisor SMURFIT-STONE: To Employ Hewitt as Compensation Consultant SMURFIT-STONE: S&P Revises Recovery Ratings on $750-Mil DIP Loan SONIC AUTOMOTIVE: Moody's Downgrades Corp. Family Rating to 'B1' SPANSION INC: Court Approves Latham & Watkins Engagement STANDARD MOTOR: Moody's Downgrades Default Rating to 'Ca' STANDARD MOTOR: S&P Downgrades Corporate Credit Rating to 'CC' STAR TRIBUNE: To Transfer Direct-Mail Assets to Impact Mailing STO INDUSTRIES: Voluntary Chapter 11 Case Summary TAPESTRY PHARMA: Voluntary Chapter 11 Case Summary TENET HEALTHCARE: Moody's Assigns 'Ba3' Rating on $1.4 Bil. Notes TRINITY FAITH: Voluntary Chapter 11 Case Summary TRONOX INC: Equity Committee Seeks to Retain Pillsbury Winthrop TROPICANA ENTERTAINMENT: May Emerge From Bankruptcy in April TUBE BENDS: Voluntary Chapter 11 Case Summary UNIGENE LABORATORIES: Revenue Decreased $1.19 Million in 2008 UNIVERSITY STANDING: Voluntary Chapter 11 Case Summary WARRIACH INC: Voluntary Chapter 11 Case Summary WASHINGTON MUTUAL: JPMorgan Sues FDIC Over Disputed Assets WASHINGTON MUTUAL: Sues FDIC Over Disallowance of $13-Bil. Claim WELLS FARGO: Moody's Downgrades Preferred Stock Rating to 'B2' * Democrats Seek to Curb Credit Card Charges for Bankrupt Users * Treasury Unveils Public-Private Investment Partnership Plan * Solutions for Ailing Newspapers "Plentiful and Thin", Says Hunt * Drinker Biddle's Wilmington Office Adds 10 WolfBlock Lawyers * Howard J. Berlin Joins Berger Singerman * Paul, Weiss Gets IFLR's "Restructuring Deal of The Year" Award * Stanley Shashoua to Lead Resilience Capital's Real Estate Fund * Tyler Brown Named as Fellow of American College of Bankruptcy * BOOK REVIEW: Financial Planning for High Net Worth Individual ********* 1031 TAX: Trustee Sues Boulder For Ignoring Fraud ------------------------------------------------- The Chapter 11 trustee of 1031 Tax Group LLC filed a $56.3 million suit against Boulder Capital LLC, contending the firm ignored signs a fraud was being conducted so it could continue profiting from a lending relationship. Bloomberg's Erik Larson reports that Gerhard McHale, 1031 Tax Group's court-appointed trustee, said in his complaint submitted to the U.S. Bankruptcy Court for the Southern District of New York that Boulder ignored misconduct by the tax firm so it could profit from loans to the company. Mr. McHale wants Boulder to return its profit from the loans so the Trustee can repay 1031 Tax Group's victims who lost a total of $126 million. Weston, Massachusetts-based Boulder makes loans to developers of office buildings, condominiums and malls. The firm allegedly knew that Edward Okun, 1031's founder, repaid its loans with money taken from his customers' accounts, and that he used some of the loans to support a "lavish" lifestyle, according to the complaint. Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to serve real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case Nos. 07-11447 through 07-11462). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier LLP, represent the Debtors in their restructuring efforts. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. 1837 TENNVADA: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: 1837 Tennvada Investments, Llc C/O Neil J. Beller, Ltd. 7408 W. Sahara Avenue Las Vegas, NV 89117 Bankruptcy Case No.: 09-14048 Type of Business: The Company is a single asset real estate debtor. Chapter 11 Petition Date: March 21, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Neil J. Beller, Esq. 7408 W. Sahara Ave. Las Vegas, NV, NV 89117 Tel: (702) 368-7767 Fax: (702)368-7720 Email: nbeller@njbltd.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-14048.pdf The petition was signed by Joseph Saddi, managing member of the Company. 955 ROUTE: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: 955 Route 1 South, Inc. 955 Route 1 South Avenel, NJ 07001 Bankruptcy Case No.: 09-16685 Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Darin D. Pinto, Esq. Law Offices of Darin D. Pinto, P.C. 376 South Avenue East Westfield, NJ 07090 Tel: (908)317-9405 Fax: (908)317-9554 Email: dpintolaw@comcast.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by Louis Ambrogio, treasurer of the Company. ABITIBIBOWATER INC: BowFin Extends Exchange Offer to March 27 ------------------------------------------------------------- Bowater Finance II LLC, an indirect wholly owned subsidiary of AbitibiBowater Inc., has extended the expiration date for its private exchange offers, consent solicitation and concurrent private notes offering until 5:00 p.m., New York City time, on March 27, 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 25, 2009. As of March 25, 2009, approximately 60.3% of the outstanding 9.00% Debentures due 2009, 60.8% of the outstanding Floating Rate Senior Notes due 2010, 70.9% of the outstanding 7.95% Notes due 2011, 70.2% of the outstanding 9.50% Debentures due 2012, 80.2% of the outstanding 6.50% Notes due 2013 and 36.1% 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. 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. * * * On March 13, 2009, AbitibiBowater Inc. and its Abitibi- Consolidated Inc. subsidiary commenced a recapitalization proposal which is intended to, among other things, reduce the Company's net debt by approximately $2.4 billion, lower its annual interest expense by approximately $162 million and raise approximately $350 million through the issuance of new notes of ACI and common stock and warrants of the Company. The Recapitalization is proposed to be implemented as part of a plan of arrangement, which was filed in connection with an application for an interim order with the Commercial Division of the Superior Court of Quebec in Montreal on March 13 pursuant to section 192 of the Canada Business Corporations Act. The Court granted an interim order on March 13, which included a stay of proceedings in favor of ACI and certain of its affiliates. 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: Confirms TSX Delisting Review ------------------------------------------------- AbitibiBowater Inc. said its common shares (TSX: ABH) and the exchangeable shares of AbitibiBowater Canada Inc. (TSX: AXB) are under delisting review by the Toronto Stock Exchange. In connection with the Company's recapitalization proposal for its Abitibi-Consolidated Inc. subsidiary, the New York Stock Exchange accepted the Company's application to utilize an exception from the NYSE's shareholder approval requirements based on the Company's determination that the time necessary to seek shareholder approval prior to the commencement of the recapitalization would seriously jeopardize the Company's financial viability. AbitibiBowater intends to rely on a similar exemption from the TSX shareholder approval requirements. AbitibiBowater understands that a delisting review by the TSX is customary when a listed company relies on such an exemption. AbitibiBowater expects that its common shares and the exchangeable shares of AbitibiBowater Canada Inc. will continue to trade in the ordinary course during the TSX's review process. 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. * * * On March 13, 2009, AbitibiBowater Inc. and its Abitibi- Consolidated Inc. subsidiary commenced a recapitalization proposal which is intended to, among other things, reduce the Company's net debt by approximately $2.4 billion, lower its annual interest expense by approximately $162 million and raise approximately $350 million through the issuance of new notes of ACI and common stock and warrants of the Company. The Recapitalization is proposed to be implemented as part of a plan of arrangement, which was filed in connection with an application for an interim order with the Commercial Division of the Superior Court of Quebec in Montreal on March 13 pursuant to section 192 of the Canada Business Corporations Act. The Court granted an interim order on March 13, which included a stay of proceedings in favor of ACI and certain of its affiliates. 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: Provides Update on Filing of Annual Report -------------------------------------------------------------- AbitibiBowater Inc. received on March 18, 2009, a written notice from the NYSE Regulation, Inc., stating that the Company is not in compliance with the NYSE's continuing listing criteria because it failed to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2008. The Company was required within five business days of receipt of the letter to contact the NYSE to discuss the status of the annual filing and to issue a press release disclosing the status of the filing, noting the delay, the reason for the delay, and the anticipated filing date, if known. The Company had the required conversation with the NYSE and issued the required press release on March 25, 2009. According to the Company, it required additional time to finalize its accounting for certain transactions, to complete its accounting analysis, primarily related to goodwill impairment and long-lived asset impairment, and to more accurately reflect the outcome of a significant pending debt refinancing in its Form 10-K. The Company is working to finalize its accounting for certain transactions and the related accounting analysis, in connection with the finalization of its consolidated financial statements and related disclosures in the Form 10-K as expeditiously as possible and expects to file the Form 10-K very shortly. As a result of the delay in filing the Form 10-K, the Company will be unable to use its previously filed registration statements on Form S-3 for a period of at least 12 months from the date the Form 10-K is filed. This means, among other things, that the Company will be unable to deliver freely tradable common shares to holders of the exchangeable shares of AbitibiBowater Canada Inc. upon exercise of their exchange rights until the Company has filed a new registration statement on Form S-1 with respect to such shares and the Securities and Exchange Commission has declared the registration statement effective. The Company currently intends to file a new registration statement on Form S-1 in the near future; however, the holders of exchangeable shares may experience a delay in receiving freely tradable common shares deliverable upon exchange of the exchangeable shares until the SEC declares such registration statement effective. For the period of time during which exchangeable shareholders will not be able to exchange their exchangeable shares for freely tradable shares of the common stock of AbitibiBowater, the holders of the exchangeable shares may have difficulty in disposing of their shares on the TSX as the volume of exchangeable shares traded on the TSX is generally substantially lower than the volume of shares of common stock of AbitibiBowater traded on the NYSE and the TSX, and there can be no assurance that holders of exchangeable shares will be able to sell their shares at an equivalent price on the TSX as they would otherwise be able to sell shares of common stock of AbitibiBowater had they been able to exchange their exchangeable shares for freely tradable AbitibiBowater common shares on either the NYSE or the TSX. Any questions regarding the exchangeable shares may be directed to CIBC Mellon Trust Company at 1-800-387-0825 or by email at inquiries@cibcmellon.com 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. * * * On March 13, 2009, AbitibiBowater Inc. and its Abitibi- Consolidated Inc. subsidiary commenced a recapitalization proposal which is intended to, among other things, reduce the Company's net debt by approximately $2.4 billion, lower its annual interest expense by approximately $162 million and raise approximately $350 million through the issuance of new notes of ACI and common stock and warrants of the Company. The Recapitalization is proposed to be implemented as part of a plan of arrangement, which was filed in connection with an application for an interim order with the Commercial Division of the Superior Court of Quebec in Montreal on March 13 pursuant to section 192 of the Canada Business Corporations Act. The Court granted an interim order on March 13, which included a stay of proceedings in favor of ACI and certain of its affiliates. 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'. ACTIVE WALLACE: Section 341(a) Meeting Slated for April 30 ---------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors in The Active Wallace Group's Chapter 11 case on April 30, 2009, at 2:30 p.m., at 3420 Twelfth St., Room 100 A, Riverside, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Mira Loma, California, The Active Wallace Group dba Active Mail-Order, Inc., Active Sweats, Active Sweats and Surf and Active Ride Shop is a retailer. The Debtor filed for Chapter 11 protection on March 23, 2009, (Bankr. Case No.: 09-15370) Garrick A. Hollander, Esq. and Marc J. Winthrop, Esq. represent the Debtor in its restructuring efforts. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. AGILENT TECHNOLOGIES: Will Lay Off 2,700 Electronics Employees -------------------------------------------------------------- Justin Scheck and David Benoit at The Wall Street Journal report that Agilent Technologies Inc. said that it will lay off 2,700 workers from its electronics testing- and measurement-equipment business due to a sharp drop in demand. Agilent Technologies said that along with the 1,400 job cuts already announced in recent months, has now cut 20% of its global work force, WSJ relates. According to WSJ, Agilent Technologies Chief Financial Officer Adrian Dillon said that the Company is uncertain when big purchasers of its equipment will start spending again. Fiscal 2009 revenue in the Company's Electronic Measurement Segment is expected to be down roughly 30 percent from 2008 to the lowest level in the company's 10-year history. Revenue in the Semiconductor & Board Test Segment is expected to be down over 50 percent from last year and off 65 percent from its peak volume. "We have been very aggressive to date in addressing the downturn in electronic measurement markets," said Bill Sullivan, Agilent Technologies president and chief executive officer. "However, business remains severely depressed, and there are no prospects for a meaningful recovery in the foreseeable future. Therefore, we have no choice but to resize our electronic measurement businesses for the realities of the marketplace." Agilent Technologies said that it would reduce costs in its Electronic Measurement Segment by an annualized $300 million over the course of the next four quarters, sizing the Segment to achieve a 12% operating margin and a 21% ROIC at annualized revenues of $2.3 billion. It also disclosed a further restructuring of its Semiconductor & Board Test Segment to reduce annual costs by an additional $10 million. This restructuring will affect approximately 2,700 employees and have a cash cost of about $160 million. Mr. Sullivan said, "For Agilent to realize its full potential, we must have a financially healthy company and a solidly profitable Electronic Measurement business. We will move quickly to resize the EM businesses to the new business levels, align resources to the best market opportunities, and position the company for the new economic environment." To fully fund the restructuring and conserve cash in an environment of severely constrained financial markets, the Company said it was temporarily suspending its share repurchase program until the end of its 2009 fiscal year. Ron Nersesian as Electronic Unit's Sr. VP & Gen. Manager Agilent Technologies has named Ron Nersesian senior vice president and general manager of the company's Electronic Measurement Group (EMG). Nersesian is currently vice president and general manager of EMG's Wireless Business Unit (WBU), Agilent's largest business unit with operations in the U.S., Europe and Asia. He is based in Santa Rosa, Calif. EMG is comprised of three business units: WBU, Network & Digital Solutions, and Electronic Instruments, as well as Sales, Service and Support. Under the new organization, Mr. Nersesian will oversee all business operations of both the Electronic Measurement (EM) and Semiconductor & Board Test (SBT) segments. Agilent Technologies president and CEO Bill Sullivan said, "Ron's experience and strong record of performance make him ideally qualified to lead Agilent's Electronic Measurement Group, particularly as we navigate through difficult economic times." Nersesian, 49, has 27 years of experience in engineering, marketing and general management at Agilent Technologies, Hewlett- Packard Company and other high-tech companies. Mr. Nersesian earned a Bachelor of Science degree in electrical engineering from Lehigh University in Pennsylvania, and an MBA from New York University's School of Business. About Agilent Tech Agilent Technologies Inc. (NYSE: A) -- http://www.agilent.com/ -- is the world's premier measurement company and a technology leader in communications, electronics, life sciences and chemical analysis. The company's 19,000 employees serve customers in more than 110 countries. The company has operations in India, Argentina, Puerto Rico, Bolivia, Paraguay, Venezuela, and Luxembourg, among others. * * * As reported in the Troubled Company Reporter-Europe on July 16, 2008, Moody's Investors Service affirmed the corporate family and probability of default ratings on Agilent Technologies Inc. at Ba1. Moody's also affirmed its Ba1 rating on the Company's $600 million Senior Unsecured Notes due 2017. Moody's revised the outlook to positive. ASBURY AUTOMOTIVE: In "Downward Momentum, Cut by Moody's to 'B2' ---------------------------------------------------------------- Moody's Investors Service downgraded Asbury Automotive Group, Inc's corporate family and probability of default ratings to B2 from B1. The outlook is negative. These actions conclude the review for possible downgrade initiated on December 22, 2008. The downgrade considers the weakened credit metrics that have resulted from Asbury's soft 2008 operating performance, with debt/EBITDA rising to 6.9 times at FYE 2008. This represents an increase of over two turns from fiscal 2007, and is no longer consistent with the B1 rating category. The negative outlook encompasses the risk that 2009 will be another challenging year from a top-line sales perspective. Given that, Asbury's cost reduction strategy and other efficiency improvements may be unable to stem continued erosion in credit metrics during 2009. "Moody's concern is that the tough macroeconomic environment for the auto dealers will continue well into 2009, and it may be difficult for Asbury to staunch the downward momentum it is presently feeling," stated Moody's Senior Analyst Charlie O'Shea. The B2 rating considers Asbury's weak credit metrics, as well as its strong market position in the still very fragmented auto retailing segment. The rating also considers Asbury's historically-favorable brand mix, with 73% of new vehicle sales coming from luxury and import brands, and its operating profit trend away from new vehicle sales. Asbury's business model, with solid parts and service and finance and insurance segments, reduces reliance on new car sales. Ratings downgraded include these: -- Corporate family rating to B2 from B1; -- Probability of default rating to B2 from B1, and -- Senior subordinated notes to Caa1 (LGD5, 87%) from B3 (LGD5, 85%). The most recent rating action for Asbury was the December 22, 2008 placing of the ratings on review for possible downgrade. Asbury Automotive Group, Inc., headquartered in Duluth, Georgia, is a leading auto retailer with 122 franchises, and generates annual revenues of around $4.6 billion. AUCTION RATE: S&P Downgrades Ratings on $50 Mil. Certs. to 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Auction Rate Securities Trust 2007-2's $50 million class A and B trust certificates to 'BB-' from 'A-'. The ratings on the certificates are dependent on the rating on the underlying security, Bank of America Corp.'s perpetual floating- rate noncumulative preferred stock series E notes. The announcement reflects two recent rating actions that affected the underlying security. The lowered ratings reflect the Feb. 24, 2009, lowering of the rating on the underlying security to 'BBB' from 'A-', and the subsequent March 3, 2009, lowering of the rating to 'BB-' from 'BBB'. AUTO SHOWCASE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Auto Showcase of Laurel, LLC 14107 Baltimore Avenue Laurel, MD 20707 Bankruptcy Case No.: 09-14731 Chapter 11 Petition Date: March 20, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: John Douglas Burns, Esq. 6303 Ivy Lane, Ste. 102 Greenbelt, MD 20770 Tel: (301) 441-8780 Email: burnslaw@burnslaw.algxmail.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb09-14731.pdf The petition was signed by Sandra Landsman, managing member of the Company. B&B COMPANIES: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: B&B Companies of NC, Inc. 6991 Old US 1 New Hill, NC 27562 Bankruptcy Case No.: 09-02281 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- B & B Trucking, LLC 09-02282 Chapter 11 Petition Date: March 22, 2009 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Debtor's Counsel: James B. Angell, Esq. Howard, Stallings, From & Hutson, PA PO Box 12347 Raleigh, NC 27605-2347 Tel: (919) 821-7700 Fax: (919) 821-7703 Email: jangell@hsfh.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nceb09-02281.pdf The petition was signed by Frank W. Bolton, president and CEO of the Company. BANK OF AMERICA: Moody's Cuts Preferred Stock Rating to 'B3' ------------------------------------------------------------ Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. The rating agency also lowered the deposit and senior debt ratings of BAC's U.S. banking subsidiaries, including Bank of America, N.A., to Aa3 from Aa2, and its subordinated debt rating to A1 from Aa3. The banks' Prime-1 short-term ratings were affirmed. Bank of America, N.A.'s bank financial strength rating was lowered to D from B-. Moody's Bank Financial Strength Rating represents Moody's opinion of a bank's intrinsic safety and soundness and, as such, excludes certain external credit support elements. The ratings outlook is stable for the bank deposit ratings, as well as for the senior debt and senior subordinated debt ratings at both the holding company and the bank subsidiaries. The outlook for the BFSR and the ratings on junior subordinated debt and preferred stock is negative. These actions conclude a review for possible downgrade that commenced on March 4, 2009. The actions had no impact on the FDIC-guaranteed debt issued by Bank of America. That debt remains rated Aaa with a stable outlook. The downgrades of the BFSR and the preferred stock ratings reflect Moody's view that Bank of America's capital ratios could come under pressure in the short-term, increasing the probability that systemic support will be needed. The more modest downgrades of Bank of America's deposits, senior debt and senior subordinated debt ratings are based on Moody's expectation of very high systemic support for these instruments, and the view that such support will enable the substantial value of its franchise to materialize in the medium to long-term. Such support, however, could be potentially harmful to preferred stock investors. The rating actions are consistent with Moody's recent announcement that it is recalibrating some of the weights and relative importance attached to certain rating factors within its current bank rating methodologies. Capital adequacy, in particular, takes on increasing importance in determining the BFSR in the current environment. Meanwhile, debt and deposit ratings will reflect the fact that Moody's expects that its support assumptions will continue to increase for systemically important institutions during this global financial crisis. BFSR Downgrade Due To Pressures On Common Equity The downgrade of Bank of America, N.A.'s BFSR to D from B- reflects the increased probability of systemic capital support due to Moody's view that Bank of America's tangible common equity position could fall to comparatively low levels. Whereas Bank of America's current regulatory capital position is quite strong, Bank of America's Tier 1 capital is heavily dependent upon preferred stock and hybrid capital instruments, including $45 billion of preferred stock issued to the U.S. government. Bank of America reported a pro forma Tier 1 capital ratio of 10.7% as of year-end 2008. However, Moody's estimates that pro forma adjusted tangible common equity, after giving some credit to hybrid capital securities and excluding after-tax fair value adjustments for the debt of Merrill Lynch, was approximately 4.3% of risk-weighted assets as of the same date. "The downgrade of the BFSR is driven by Bank of America's capital challenges, which are made more acute because U.S. banks access to the equity market is shut or very limited at best," said Moody's Senior Vice President, David Fanger. "This increases the likelihood of a capital initiative by the U.S. government to support Bank of America in the event that its tangible common equity position deteriorates further. The BFSR is intended to express an opinion about the likelihood of such an event," explained Mr. Fanger. Moody's does not expect Bank of America to generate sizable amounts of capital until the second half of 2010, at the earliest. Higher unemployment, a weak U.S. economy, and challenging real estate markets are likely to contribute to a rise in delinquent and problem loans, most notably in credit cards, residential and commercial real estate loans. This will require significant additional loan loss provisions in 2009 and into 2010. In addition, although Bank of America benefits from a loss-sharing arrangement with the U.S. government on a pool of $118 billion in capital markets-related assets, it remains exposed to a $10 billion first loss position on those assets. "Earnings are therefore likely to be weak and, in light of Bank of America's sizable preferred dividend, could place significant additional pressure upon the company's already modest tangible common equity position," Mr. Fanger added. When evaluating Bank of America's ability to absorb losses, Moody's incorporates additional factors other than Bank of America's current capital position. The additional factors include: 1) the mark Bank of America took against Countrywide's loans, which it acquired in July 2008, 2) the $13.8 billion in incremental loan loss reserves which the bank built over 2007 and 2008 to absorb higher credit costs caused by the current economic downturn, 3) charge-offs already taken during 2008 on the bank's residential and commercial real estate loans, 4) existing loss sharing arrangements with the U.S. government on capital markets assets as well as protection purchased from third parties on portions of the bank's residential mortgage portfolio, 5) tax- effecting forecasted losses, and 5) an assumption of continued strong pre-tax, pre-provision profitability, which is reduced by the preferred and common dividends that average about $1.3 billion per quarter. The negative outlook on the BFSR, as well as on the preferred stock and trust preferred ratings, reflects Moody's view that the bank remains vulnerable to further declines in its tangible common equity due to rising credit losses. This could lead the bank to seek additional capital support from the government, and/or to suspend preferred dividends or even offer a distressed exchange to preferred shareholders in order to boost its common equity position. Systemic Support And Valuable Franchise Benefit Deposit And Senior Debt Ratings Moody's believes that despite Bank of America's capital challenges, a modest lowering of its deposit and senior and senior subordinated debt ratings was appropriate because Moody's assumes that systemic support for Bank of America is very high and that its valuable franchise will remain intact. "Bank of America would almost certainly be a recipient of systemic support if additional support should be required, given its importance to the U.S. economy and financial system," said Mr. Fanger. Such support would likely benefit all depositors and senior and senior subordinated debt holders of the bank and the bank holding company. Moody's also expects that if systemic support were to be provided, this would not result in a transforming event such as a breakup or sale which could threaten the bank's franchise value. This is an important factor in the stable outlook on the debt and deposit ratings. The bank has leading positions in U.S. deposits, credit cards, and mortgages. "We believe that Bank of America still faces considerable challenges in successfully integrating Merrill Lynch," added Mr. Fanger. "However, the franchise value in Bank of America's core banking businesses should allow for its return to good financial fundamentals and sustainable profitability within a reasonable period of time following the end of the credit crisis." Government Support Could Prove Detrimental To Preferred Shareholder Interests The downgrade of the preferred stock rating to B3 from Baa1 was based on the view that if Bank of America were the recipient of additional capital support from the U.S. government, that support could be accompanied by the suspension of dividends, or even a distressed exchange by which preferred investors may be compelled to exchange their preferred stock for common stock. "With the capital markets essentially shut down, the recent Citigroup recapitalization becomes a very relevant reference point," said Mr. Fanger. "While Bank of America's preferred securities do not have any triggers that would cause an automatic suspension of dividends, Moody's believe that in the event government support is provided, the U.S. government could require Bank of America to suspend its common and preferred dividends in order to preserve capital," Mr. Fanger added. A distressed exchange could be a way to increase common equity and limit the size of the U.S. government's stake in the bank in the event that support was required. The ratings on Bank of America's non-cumulative trust preferred securities, originally issued by subsidiaries of ABN Amro North America Holding Company and LaSalle Banking Corporation, were also lowered to B3 from Baa1. The non-cumulative dividend on these instruments as well as their underlying preferred stock claim distinguishes them from Bank of America's other junior- subordinated debt-backed trust preferred securities. Moody's believes that the risk of a suspension of interest payments or a distressed exchange on these non-cumulative trust preferred instruments is similar to that of Bank of America's preferred securities. The rating on the cumulative preferred stock issued by Bank of America Preferred Funding Corporation was lowered to Ba3 from A1. While this instrument benefits from a support agreement from the Bank of America, N.A., which Bank of America's other preferred stock instruments do not have, Moody's believes it could nonetheless be caught up with Bank of America's other preferred securities if a preferred dividend suspension were imposed. However, since the dividend on this instrument is cumulative, the severity of loss would be lower on this security in the event that dividends on all Bank of America preferred stock were suspended. Further Notching For Junior Subordinated Trust Preferred Ratings Moody's lowered the ratings on all junior-subordinated debt-backed trust preferred securities of Bank of America Corporation and subsidiaries to Baa3 from A2 and Baa1. Moody's believes that the cumulative nature of the interest on such instruments reduces the incentive to defer interest. However, the rating incorporates the view if there is an unexpected need for further government support, the risk of deferred payment on these instruments could increase. The last rating action on Bank of America on March 4, 2009 when Moody's placed all of Bank of America's long-term ratings and its BFSR under review for possible downgrade. This is a partial list of entities whose ratings have been affected: Issuer: Bank of America Corporation Downgrades: -- Issuer Rating, Downgraded to A2 from A1 -- Junior Subordinated Shelf, Downgraded to (P)Baa3 from (P)A2 -- Multiple Seniority Medium-Term Note Program, Downgraded to a range of Baa3 to A2 from a range of A2 to A1 -- Multiple Seniority Shelf, Downgraded to a range of (P)B3 to (P)A2 from a range of (P)Baa1 to (P)A1 -- Preferred Stock, Downgraded to B3 from Baa1 -- Subordinate Regular Bond/Debenture, Downgraded to A3 from A2 -- Senior Subordinated Regular Bond/Debenture, Downgraded to A3 from A2 -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to A2 from A1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to a range of (P)A2 to A2 from a range of (P)A1 to A1 Outlook Actions: -- Outlook, Changed To Stable(m) From Rating Under Review Issuer: Merrill Lynch & Co., Inc. Downgrades: -- Issuer Rating, Downgraded to A2 from A1 -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to A2 from A1 -- Senior Unsecured Medium-Term Note Program, Downgraded to A2 from A1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to A2 from A1 -- Senior Unsecured Shelf, Downgraded to (P)A2 from (P)A1 -- Subordinate Regular Bond/Debenture, Downgraded to A3 from A2 -- Multiple Seniority Medium-Term Note Program, Downgraded to a range of A3 to A2 from a range of A2 to A1 -- Multiple Seniority Shelf, Downgraded to a range of (P)B3 to (P)A2 from a range of (P)Baa1 to (P)A1 -- Preferred Stock, Downgraded to B3 from Baa1 Outlook Actions: -- Outlook, Changed To Stable(m) From Rating Under Review Issuer: Bank of America, N.A. Downgrades: -- Bank Financial Strength Rating, Downgraded to D from B- -- Senior Unsecured Deposit Rating, Downgraded to Aa3 from Aa2 -- Issuer Rating, Downgraded to Aa3 from Aa2 -- OSO Senior Unsecured OSO Rating, Downgraded to Aa3 from Aa2 -- Senior Unsecured Bank Note Program, Downgraded to Aa3 from Aa2 -- Senior Unsecured Deposit Note/Takedown, Downgraded to Aa3 from Aa2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Aa3 from Aa2 -- Multiple Seniority Bank Note Program, Downgraded to a range of A1 to Aa3 from a range of Aa3 to Aa2 -- Multiple Seniority Medium-Term Note Program, Downgraded to a range of A1 to Aa3 from a range of Aa3 to Aa2 -- Subordinate Regular Bond/Debenture, Downgraded to A1 from Aa3 -- Senior Subordinated Regular Bond/Debenture, Downgraded to A1 from Aa3 Outlook Actions: -- Outlook, Changed To Stable(m) From Rating Under Review Issuer: Banc of America Preferred Funding Corp. Downgrades: -- Preferred Stock Preferred Stock, Downgraded to Ba3 from A1 Outlook Actions: -- Outlook, Changed To Negative From Rating Under Review Issuer: Countrywide Bank FSB Downgrades: -- Bank Financial Strength Rating, Downgraded to D from B- -- Issuer Rating, Downgraded to Aa3 from Aa2 -- OSO Senior Unsecured OSO Rating, Downgraded to Aa3 from Aa2 -- Senior Unsecured Deposit Rating, Downgraded to Aa3 from Aa2 Outlook Actions: -- Outlook, Changed To Stable(m) From Rating Under Review Issuer: Merrill Lynch Bank & Trust Company Downgrades: -- Bank Financial Strength Rating, Downgraded to D from B- -- Issuer Rating, Downgraded to Aa3 from Aa2 -- Senior Unsecured Deposit Rating, Downgraded to Aa3 from Aa2 Outlook Actions: -- Outlook, Changed To Stable(m) From Rating Under Review Issuer: Merrill Lynch Bank USA Downgrades: -- Bank Financial Strength Rating, Downgraded to D from B- -- Issuer Rating, Downgraded to Aa3 from Aa2 -- Subordinate Regular Bond/Debenture, Downgraded to A1 from Aa3 -- Senior Unsecured Deposit Note/Takedown, Downgraded to Aa3 from Aa2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Aa3 from Aa2 -- Senior Unsecured Deposit Rating, Downgraded to Aa3 from Aa2 Outlook Actions: -- Outlook, Changed To Stable(m) From Rating Under Review Bank of America Corporation is headquartered in Charlotte, North Carolina. The bank reported total assets of $2.5 trillion as of December 31, 2008, including the acquisition of Merrill Lynch on a pro forma basis. BEARD CO: Reports $1.5MM Gain on Sale of China Fertilizer Unit -------------------------------------------------------------- The Beard Company reported that the disposition of the Company's China fertilizer operation has resulted in a financial gain of more than $1,573,000. This amount will be reported as a gain on disposition of controlling interests in subsidiaries for the fourth quarter and year ended December 31, 2008, according to the Company. President of the Beard Company, Herb Mee, Jr., stated that the gain is greater than the amount originally estimated. "We are pleased to report that, primarily as a result of the transaction, the Company's year-end working capital position is expected to reflect a similar improvement when compared with working capital at December 31, 2007," Mr. Mee said. Beard Co. filed with the Securities and Exchange Commission Pro Forma Condensed Balance Sheets as of December 31, 2007, and December 31, 2008, reflecting the BEE/7HBF disposition. The full- text of the Proforma Condensed Balance Sheet is available for free at http://ResearchArchives.com/t/s?3a9f On December 31, 2008, Beard Co. entered into an agreement to finalize the sale of the Company's entire interest in BEE/7HBF effective as of that date. BEE/7HBF was a partnership between Beard Environmental Engineering, LLC, a wholly-owned subsidiary of the Company, and 7HBF, Ltd., a Texas limited partnership. BEE/7HBF conducts fertilizer manufacturing and sales activities in the People's Republic of China through its wholly-owned subsidiary, Xianghe BH Fertilizer Co., Ltd. The assets of BEE/7HBF consist primarily of fertilizer manufacturing equipment and inventory (including both raw materials and work-in-progress). Under the terms of the Agreement, the Company has relinquished all of its ownership interests in the partnership to 7HBF and issued a six-month $47,000 promissory note to 7HBF to pay for the Company's 50% share of the accrued interest to December 31, 2008 on an $850,000 note. 7HBF will pay BEE $1 for the partnership interest acquired. BEE/7HBF and XBH will no longer be controlled by the Company and its results of operations will cease to be consolidated with the Company's. In a January 2009 statement, the Company said it expects to record a gain in excess of $1 million in the quarter ended December 31, 2008, as a result of the deal. According to the Company, the transaction will also improve the Company's working capital by approximately $1.5 million via the elimination of over $500,000 in assets and over $2 million in debt and other liabilities of the two deconsolidated subsidiaries. The Company's Board of Directors had voted to discontinue the China Segment effective December 31, 2007, and elected to dispose of the Company's fertilizer manufacturing manufacturing operations and related interests in China. Operations of the segment, which produced revenues of $55,000 and incurred losses of $721,000 for the nine months ended September 30, 2008, were reported as discontinued operations during the year 2008. 7HBF, in addition to being Beard's partner in BEE/7HBF, is also the largest outside stockholder of the Company, owning on the date of the transaction 18.92% of the Company's outstanding common stock. The transaction was concluded following arm's-length negotiations between the two parties, and followed a year-long period during which the partnership, Company management and 7HBF management made diligent efforts to sell XBH, or alternatively, to negotiate a contract with another fertilizer company to manufacture product for them. All such efforts have, to date, been unsuccessful. Finalization of the sale and the wind down of the other subsidiaries will conclude all of the activities of the China Segment. About The Beard Company Based in Oklahoma City, The Beard Company (OTC BB: BRCO) http://www.beardco.com/-- through its subsidiaries, is principally engaged in coal reclamation in the United States. It operates in four segments: Coal Reclamation, Carbon Dioxide, e- Commerce, and Oil and Gas. The Beard Company reported net earnings of $1,642,000 for the nine months ended Sept. 30, 2008, compared with a net loss of $1,630,000 in the comparable 2007 period. Revenues increased 6% to $1,127,000 in the first nine months of 2008, versus $1,063,000 in the year-earlier period. For the quarter ended Sept. 30, 2008, the Company reported a net loss of $610,000 versus a net loss of $446,000 in the third quarter of 2007. Revenues decreased 10% to $376,000 in the recent quarter, versus $415,000 in the prior-year period. At Sept. 30, 2008, the Company's balance sheet showed total assets of $1,950,000 and total liabilities of $6,534,000, resulting in a stockholders' deficit of $4,584,000. Going Concern Doubt Cole & Reed, P.C., in Oklahoma City, expressed substantial doubt about The Beard Company's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. Cole & Reed pointed to the company's recurring losses and negative cash flows from operations. BENCO DELIVERY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Benco Delivery Service, Inc. 1144 Larpenteur Ave. W., Suite 200 St. Paul, MN 55113 Bankruptcy Case No.: 09-31764 Chapter 11 Petition Date: March 20, 2009 Court: United States Bankruptcy Court District of Minnesota (St Paul) Judge: Robert J. Kressel Debtor's Counsel: Douglas W. Kassebaum, Esq. Fredrikson & Byron, P.A. 200 South Sixth Street, Suite 4000 Minneapolis, MN 55402 Tel: (612) 492-7292 Email: dkassebaum@fredlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mndb09-31764.pdf The petition was signed by Kurian Benjamin, president of the Company. BI-LO LLC: Refinancing Woes Cued Chapter 11 Filing -------------------------------------------------- According to Bloomberg's Bill Rochelle, BI-LO LLC said it filed a Chapter 11 petition after lenders wouldn't refinance a $260 million term loan that matures this month except on "onerous and oppressive terms that would severely cripple its business." The Company said in a statement that it would have expected to refinance the term loan "in a normal credit market." The $100 million revolving credit would have been in default if the term loan were not repaid when due. According to the report, financial problems resulted from steadily falling revenue and earnings. Earnings before interest, taxes, depreciation and amortization decreased to $78 million in 2008 from $114 million in 2006. General Electric Capital Corp. will provide debtor-in-possession financing for BI-LO LLC. Greenville, South Carolina-based BI-LO LLC -- http://my.bi-lo.com/ -- is a chain of 215 supermarkets based in Greenville, South Carolina. Founded in 1964 by Frank Outlaw, the Company and its affiliates operate supermarkets around South Carolina, North Carolina, Georgia, and Tennessee and have about 17,000 employees. Dallas-based Lone Star Funds bought the business in 2005 from Koninklijke Ahold NV, the Dutch supermarket operator. Lone Star also owns Bruno's Supermarkets LLC, a chain of 66 stores that filed under Chapter 11 in February in Birmingham, Alabama. BI-LO and its affiliates filed for Chapter 11 bankruptcy protection on March 23, 2009 (Bankr. D. S.C. Case No. 09-02140). Betsy Johnson Burn, Esq., Frank B.B. Knowlton, Esq., George Barry Cauthen, Esq., and Jody A. Bedenbaugh, Esq., at Nelson, Mullins, Riley and Scarborough assist the Companies in their restructuring efforts. The Companies listed $100 million to $500 million in assets and $100 million to $500 million in debts. BLOCKBUSTER INC: Delays Annual Report to Close Talks With Lenders ----------------------------------------------------------------- Blockbuster Inc. informs the Securities and Exchange Commission that it won't be able to file its Annual Report on Form 10-K for the period ended January 4, 2009. Blockbuster expects to file its 2008 Annual Report no later than April 6, 2009. Blockbuster explains that its revolving credit facility and term A loan facility are each scheduled to expire in August 2009. If the revolver matures without renewal, replacement or extension, the Company's borrowing capacity would be immediately reduced by $300 million. Consequently, the Company has been actively pursuing options to refinance its debt and is concurrently taking actions to minimize the Company's need for external capital to fund operations. Jim Keyes, Chairman and Chief Executive Officer of Blockbuster, said on March 19 that the Company has reached agreements with JPMorgan Chase Bank and two of the largest lenders under its existing revolving credit facility to amend and extend the revolving credit facility through September 30, 2010. The commitments from these lenders, with respect to the extended revolving credit facility, represent 65% of the expected aggregate principle amount of the extended revolving credit facility. In light of the recent significant deterioration in the credit and capital markets, the Company believes that additional time is necessary to conclude negotiations with its primary lenders and other prospective lenders and to obtain an amendment to its credit agreement or other financing arrangements to address the impending debt maturities. The substantial time and resources dedicated to the refinancing negotiations by the Company's management and financial staff directly impacts the Company's ability to timely file its Annual Report on Form 10-K with respect to fiscal 2008 without unreasonable effort or expense. Blockbuster notes that in connection with the preparation of its fiscal 2008 consolidated financial statements, it has taken a $435.0 million non-cash impairment charge to its goodwill and other long-lived assets. This impairment charge is the primary driver behind the Company's year-over-year increase in net loss, which was $374.1 million for fiscal 2008 as compared to $73.8 million for fiscal 2007. Auditors May Raise Going Concern Doubt In the event that the Company is unable to complete the refinancing of its existing debt or uncertainties regarding the Company's liquidity position remain unresolved at the time the Company ultimately files its fiscal 2008 Form 10-K, management anticipates that the report of the Company's independent registered public accounting firm relative to the Company's 2008 consolidated financial statements will contain an explanatory paragraph indicating that substantial doubt exists with respect to the Company's ability to continue as a going concern. Such a paragraph could, unless waived by the Company's lenders, constitute an event of default under the Company's credit agreement. If not cured or waived, such a default could result in the termination of the commitments under the credit agreement, as well as the acceleration of all outstanding amounts thereunder. An acceleration under the credit agreement will trigger cross- default provisions in the Company's senior secured notes indenture. $374.1-Mil. Net Loss for 2008 On March 19, 2009, Blockbuster reported financial results for the fourth quarter and fiscal-year ended January 4, 2009. Total revenues were $1.38 billion, compared with total revenues of $1.57 billion for the same period one year ago. The company's results were impacted by the 52-week year, compared to the 53-week year in 2007. Additionally, fourth quarter 2008 total consolidated revenues reflect the negative impact of foreign currency exchange rates, a decline in the company-operated store base worldwide, and lower rental revenues from the company's by-mail rental service. Net loss was $359.8 million, which includes the non-cash charge of $435.0 million for the impairment of goodwill and other long-lived assets. This compares to net income of $41.0 million in the fourth quarter of 2007. Blockbuster ended the fourth quarter of 2008 with $154.9 million in cash and cash equivalents. Cash provided by operating activities during the quarter increased $6.9 million to $152.1 million, compared with $145.2 million of cash provided by operating activities in the fourth quarter of 2007. Free cash flow (net cash used for operating activities less capital expenditures) was positive at $110.1 million in the fourth quarter of 2008, compared with positive free cash flow of $122.8 million in the same period one year ago. Total revenues for the full year 2008 were $5.29 billion, compared to $5.54 billion for the full year of 2007. Operating loss for fiscal 2008 totaled $293.3 million, compared to operating income of $39.1 million for the full year 2007. Net loss for the full year was $374.1 million, compared with net loss of $73.8 million in 2007. 2009 Outlook "In the fourth quarter the company generated strong cash flow from operations before working capital, resulting in free cash flow of $110 million dollars," stated Tom Casey, Executive Vice President and Chief Financial Officer of Blockbuster. "On March 11, 2009, we accessed our available borrowing capacity of $60 million under our revolving credit facility as a precaution against prevailing economic conditions and ongoing uncertainty in the credit market, and as a cushion in the event we require incremental capital in the coming months to meet typical or unanticipated working capital, general corporate and operating needs." Mr. Casey continued, "We remain cognizant of the constrained capital markets and our needs to reduce costs and maximize cash flow. As a result, we intend to further reduce G&A by over $200 million through significant ongoing cost reductions across all areas of the business, including compensation and lease costs. We believe our conservative approach towards operating the business will allow us to deliver fiscal 2009 adjusted EBITDA in the range of $305 million to $325 million, which corresponds to GAAP financial measures of operating income in the range of $164 million to $184 million and net income in the range of $40 million to $60 million." A full-text copy of Blockbuster's earnings release, including selected financial highlights, is available at no charge at: http://researcharchives.com/t/s?3ab6 About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (NYSE: BBI, BBI.B) -- http://www.blockbuster.com/-- is a leading global provider of in- home movie and game entertainment, with more than 7,500 stores throughout the Americas, Europe, Asia and Australia. * * * 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. BLOCKBUSTER INC: Diamondback, et al., Disclose Equity Stake ----------------------------------------------------------- Various parties disclosed in separate regulatory filings with the Securities and Exchange Commission their ownership of Blockbuster Inc. securities. Diamondback Master Fund, Ltd. said it may be deemed to beneficially own 4,535,817 shares of Class B Common Stock of Blockbuster. Moreover, Diamondback Capital Management, LLC and DBCM Partners, LLC, may be deemed the beneficial owner of the 4,535,817 shares of Class B Common Stock beneficially owned by Diamondback Master Fund, Ltd. As of November 7, 2008, the total number of outstanding shares of Class B Common Stock was 72,000,000. Accordingly, the Diamondback entities may be deemed to beneficially own 6.30% of the outstanding shares of Class B Common Stock. Diamondback Capital Management, LLC, is the investment manager of Diamondback Master Fund, Ltd. DBCM Partners, LLC is the managing member of Diamondback Capital Management, LLC. Chad Loweth, Richard Sapanski and Richard H. Schimel serve as managing members of DBCM Partners, LLC. Intana Management, LLC, said it owns 7,251,615 Blockbuster shares as of March 17, 2009, representing 6% of the shares outstanding. Intana is based in New York. Fine Capital Partners, L.P., and its related entities disclosed that as of March 3, 2009, they ceased to be the beneficial owners of more than 5% of Blockbuster's Class A Common Stock. As of March 6, 2009, Fine Capital et al., beneficially owns 3,530,000 shares of Class A Common Stock, which represents 2.9% of the Company's outstanding shares of Class A Common Stock. Fine Capital et al., disposed of Blockbuster shares in two transactions on March 3 (1,217,400 shares sold at $0.2180 apiece) and March 4 (1,500,000 shares sold at 0.4488 each). Marlin Sams Fund, L.P., and related entities -- Marlin Sams GenPar, LLC, William M. Sams, Gladwyne Marlin GenPar, LLC, Suzanne Present, Michael Solomon, Candice McCurdy, Sams' daughter, and Chad McCurdy, Candice McCurdy's husband -- also ceased to be the beneficial owners of more than 5% of the Company's Class B Common Stock. Marlin Sams Fund, its General Partner, Gladwyne, Suzanne Present and Michael Solomon may be deemed to beneficially own no shares of Class B Common Stock. William M. Sams may be deemed to beneficially own 2,156,082 shares of Class B Common Stock, approximately 3.0% of the outstanding shares of Class B Common Stock. Candice McCurdy and Chad McCurdy may be deemed to beneficially own 250,000 shares of Class B Common Stock, approximately 0.3% of the outstanding shares of Class B Common Stock. Marlin Sams Fund sold on March 4 2,892,360 Class B shares for $0.2122 a share, and on March 5 567,640 Class B shares for $0.2296. William M. Sams sold on March 5 843,918 Class B shares for $0.1980 a share. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. -- http://www.blockbuster.com/-- is a leading global provider of in-home movie and game entertainment, with more than 7,500 stores throughout the Americas, Europe, Asia and Australia. * * * 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. BLOCKBUSTER INC: Seeks to Extend JPMorgan Credit Facility --------------------------------------------------------- Blockbuster Inc. on March 19, 2009, announced its intention to implement a proposed amendment of its revolving credit and term loan facility and an extension of its revolving credit facility. Jim Keyes, Chairman and Chief Executive Officer of Blockbuster, said the Company has reached agreements with JPMorgan and two of the largest lenders under its existing revolving credit facility to amend and extend the revolving credit facility through September 30, 2010. The commitments from these lenders, with respect to the extended revolving credit facility, represent 65% of the expected aggregate principle amount of the extended revolving credit facility. Blockbuster is a borrower under a Credit Agreement dated as of August 20, 2004, with JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent, and a syndicate of other lenders. The Amendment will effect certain other amendments to the Existing Credit Agreement. No changes will be made to the pricing, amortization or maturity of the Term Loans. Moreover, The swingline subfacility and the competitive bid subfacility will cease to be in effect. Pursuant to the Amendment, Blockbuster said each Revolving Lender will be invited to extend until September 30, 2010, the scheduled maturity of all or any portion of its Revolving Commitment -- and to increase its Revolving Commitment -- in exchange for, among other things, fees and pricing increases. The Company will also invite other parties to join the lending consortium. Blockbuster will also ask the Revolving Lenders to waive any Default or Event of Default arising from a "going concern" or like qualification or exception, if any, contained in the audit report of PricewaterhouseCoopers LLP with respect to the Company's financial statements for the fiscal year ended January 4, 2009. Increase of LC Collateral On the effective date of the restatement of the Credit Agreement, Blockbuster proposes that each Letter of Credit then outstanding will continue to be outstanding in accordance with its terms and the Company will cease to have the right to request the issuance of any new Letter of Credit. The Company will deposit with the Issuing Banks Agent, for the account of each Issuing Bank, cash collateral equal to 105.0% of the Letter of Credit exposure as of the Restatement Effective Date attributable to the Letters of Credit issued by the Issuing Bank. The Issuing Banks Agent will have exclusive dominion and control over the LC Cash Collateral and shall apply the LC Cash Collateral to reimburse the Issuing Banks for LC Disbursements. In the event the Issuing Banks Agent is restricted by applicable law from applying the LC Cash Collateral to reimburse in full any LC Disbursement on the date such disbursement is made, or the LC Cash Collateral is insufficient to make such reimbursement, the unreimbursed amount thereof shall bear interest at the rate per annum equal to ABR plus 9.00%. In the event the aggregate amount of the LC Cash Collateral exceeds, at any time, by more than 5.0% the LC Obligations at that time, the Issuing Banks Agent will (a) unless a Default or Event of Default will have occurred and be continuing, release the amount of the excess to the Company, but only in the event the excess arises from a permanent reduction in the LC Exposure attributable to the Viacom LCs and only to the extent the aggregate amount of the LC Cash Collateral released to the Company does not exceed $52,500,000, and (b) otherwise, release the amount of the excess to the Administrative Agent, to be applied to the mandatory prepayment of the Revolving Loans. In the event the LC Obligations will have been reduced to zero, the Issuing Banks Agent will (a) unless a Default or Event of Default will have occurred and be continuing, release all the LC Cash Collateral held by it to the Company, but only to the extent the aggregate amount of the LC Cash Collateral released to the Company does not exceed $52,500,000, and (b) otherwise, release the amount of the excess to the Administrative Agent, to be applied to the mandatory prepayment of the Revolving Loans. Mandatory Prepayments Blockbuster proposes to prepay the Revolving Loans on this schedule: Date Prepayment Amount ---- ----------------- December 15, 2009 $25,000,000 January 31, 2010 $20,000,000 February 28, 2010 $20,000,000 March 31, 2010 $20,000,000 April 30, 2010 $10,000,000 May 31, 2010 $15,000,000 June 30, 2010 $50,000,000 July 31, 2010 $10,000,000 August 31, 2010 $10,000,000 Other Covenants Blockbuster proposes to covenant with the Lenders not to let Capital Expenditures exceed (a) in the 2009 fiscal year, $30,000,000 and (b) in the 2010 fiscal year, the sum of $40,000,000 and up to $10,000,000 of Capital Expenditures permitted to be made but not made in the 2009 fiscal year. Blockbuster won't let Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters of the Borrower to be less than (a) for any such period ending on or after March 31, 2009 but not after January 3, 2010, 1.25 to 1.00; and (b) for any period ending thereafter, 1.30 to 1.00. The Company also won't let Leverage Ratio to exceed at any time 2.75 to 1.00. Blockbuster seeks permission to enter into sale/leaseback transactions with respect to owned property having fair market value not in excess of $28,000,000 in the aggregate. However, after giving effect on a pro forma basis to any sale/leaseback transaction and any repayment of Indebtedness arising from the application of the proceeds, the Leverage Ratio, determined as of the last day of the most recently ended fiscal quarter of the Borrower, will not exceed 2.50 to 1.00. Blockbuster seeks to have its Credit Agreement restated by May 10, 2009. A full-text copy of Blockbuster's Proposed Amendment to Credit Agreement is available at no charge at: http://researcharchives.com/t/s?3ab5 About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (NYSE: BBI, BBI.B) -- http://www.blockbuster.com/-- is a leading global provider of in- home movie and game entertainment, with more than 7,500 stores throughout the Americas, Europe, Asia and Australia. * * * 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. BLUE MOON MOTEL: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Blue Moon Motel, LLC 4650 US Highway 9 Howell, NJ 07731 Bankruptcy Case No.: 09-16735 Chapter 11 Petition Date: March 20, 2009 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Timothy P. Neumann, Esq. Broege, Neumann, Fischer & Shaver 25 Abe Voorhees Drive Manasquan, NJ 08736 Tel: (732) 223-8484 Email: tneumann@bnfsbankruptcy.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-16735.pdf The petition was signed by Eli Weinstein, managing member of the Company. BOSTON SCIENTIFIC: S&P Holds 'BB+' Rating; Gives Positive Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BB+' ratings on Natick, Massachussetts-based Boston Scientific Corp., and revised the outlook to positive from negative. These actions reflect the company's ongoing debt paydown over the past several years, maintenance of its leading market share in the drug eluting stent market in the face of increasing competition, and prospects for (at minimum) modest growth in cardiac rhythm management devices, given recent new product launches. "Our ratings on Boston Scientific reflect somewhat aggressive debt leverage; refinancing risk in 2011; and the steep contraction of, and increased competition in, the DES market," said Standard & Poor's credit analyst Cheryl Richer. These risks outweigh key strengths, including the company's broad portfolio of market- leading medical devices and its strong cash flows. Boston Scientific is a large, worldwide manufacturer (global sales represent 44% of 2008 revenues) of medical devices used in diverse interventional medicine specialties. The cardiovascular group contributed 43% of 2008 sales, with cardiac rhythm management and endosurgery business segments contributing 31% and 17%, respectively. The additional divisions are neurovascular (6%) and neuromodulation (3%), which was created by the June 2004 purchase of Advanced Bionics Inc. S&P's positive outlook reflects the potential for Boston Scientific to solidify a financial risk profile commensurate with an investment-grade rating. Boston Scientific's global and product diversity should enable it to achieve overall revenue growth, despite a setback in any one product line. While debt leverage of under 3x is within the parameters of intermediate financial risk profile (2x-3x debt to EBITDA), funds from operations to debt of 19% remains a bit weak relative to the 30%- 45% metric. The rating could be upgraded within one year if revenue growth and cost-reduction efforts improve operating margins and cash flow. This could contribute to refinancing the 2011 maturities. Still, the outlook could be revised to stable if revenue shortfalls or margin erosion results in an EBITDA decline that preempts further financial improvement. In accordance with S&P's sensitivity analysis, no improvement in operating margin, combined with a 5% EBITDA decline, would push debt leverage to over 3x. BWAY CORPORATION: Moody's Assigns 'B3' Rating on Senior Notes ------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the new senior subordinated notes due 2014 and affirmed the B1 corporate family rating and negative outlook of BWAY Corporation. The rating is in response to the company's announcement on March 2009 that it was issuing subordinated notes to refinance the existing 10% senior subordinated notes due June 2010. Moody's took these rating actions: -- Assigned $222 million senior subordinated notes due 2014. B3 (LGD 5, 84%) (approximately $200 million in cash after the original issue discount) -- Affirmed $50 million senior secured first lien revolver due 2012, Ba2 (to LGD 2, 25% from LGD 2, 28%) -- Affirmed $5 million Canadian senior secured first lien revolver due 2012, Ba2 (to LGD 2, 25% from LGD 2, 28%) -- Affirmed $190 million senior secured first lien term loan B due 2013, Ba2 (to LGD 2, 25% from LGD 2, 28%) -- Affirmed $50 million senior secured first lien term loan C due 2012, Ba2 (to LGD 2, 25% from LGD 2, 28%) -- Affirmed $200 million 10% senior subordinated notes due 2010, B3 (LGD 5, 86%) -- will be withdrawn upon completion of refinancing -- Affirmed Speculative Liquidity Rating of SGL-3 -- Affirmed corporate family rating, B1 -- Affirmed probability of default rating, B1 The ratings outlook is negative. The ratings are subject to receipt and review of the final documentation. BWAY's B1 Corporate Family Rating reflects credit risks resulting from the high concentration of sales and cyclical nature of the primary end market. The negative outlook reflects the company's limited cushion under financial covenants in the credit agreement; reliance primarily upon cost cutting measures to improve margins and the covenant cushion under upcoming step downs; and continuing weakness in its primary end markets. While the company has successfully executed on its cost cutting initiatives and improved its credit metrics over the last twelve months, covenant cushion remains tight while conditions in the company's primary end market have deteriorated. The ratings are supported by the company's strong market share, the limited number of suppliers in its market and logistical barriers to entry in the industry. The ratings are also supported by modest leverage for the rating category and long standing customer relationships. Headquartered in Atlanta, Georgia, BWAY Corporation is a North American manufacturer of metal paint and specialty containers and industrial general line rigid plastic containers for industrial and consumer products. Revenues for the twelve months ended December 28, 2008, were approximately $1.01 billion. CABLEVISIONS SYSTEM: Finalizes Expiration of Cash Tender Offers --------------------------------------------------------------- On March 16, Cablevision Systems Corporation and CSC Holdings, Inc., announced the expiration and final results of the cash tender offers commenced February 13, for any and all of its outstanding Floating Rate Senior Notes due 2009 and any and all of CSC Holdings' outstanding 8.125% Senior Notes due July 2009 and 8.125% Senior Debentures due August 2009. According to the Company's Report, notes accepted for purchase amounts per $1,000 principal. The notes under Total Consideration label includes, with respect to each $1,000 principal amount of notes, the Early Tender Premium of $5.00 with respect to the April notes, $22.84 with respect to the July notes, and $27.63 with respect to the August notes. The Early Tender Premium was paid to holders of notes who validly tendered their notes at or prior to 11:59 p.m., New York Time, on Friday, February 27, 2009 (the "Early Tender Premium Deadline"). The full text of Cablevison's financial report is available with no charge at: http://ResearchArchives.com/t/s?3a9c As of the Early Tender Premium Deadline, approximately $196.3 million aggregate principal amount of the April notes, $448.8 million aggregate principal amount of the July notes and $306.7 million aggregate principal amount of the August notes had been validly tendered. As of the Expiration Time, an additional approximately $0.7 million aggregate principal amount of notes were validly tendered. The total amount validly tendered as of the Expiration Time represents 39.3% of the outstanding principal among of April notes, 89.9% of the outstanding principal amount of July notes, 76.7% of the outstanding principal amount of the August notes, and 68.0% of the outstanding principal amount of all notes subject to the tender offers. Cablevision and CSC Holdings, as the case may be, will accept for payment all notes that were validly tendered at or prior to the Expiration Time. Subject to the satisfaction of the conditions to the tender offers, the final settlement date for notes validly tendered after the Early Tender Premium Deadline but at or prior to the Expiration Time was on March 16, 2009. Notes validly tendered at or prior to the Early Tender Premium Deadline were settled on March 2, 2009. Payments for notes purchased will include accrued and unpaid interest from and including the last interest payment date applicable to the relevant series of notes to, but excluding, the final settlement date. All notes purchased in the tender offers will be retired upon consummation of the tender offers. J.P. Morgan served as dealer manager for the tender offers. The Bank of New York Mellon served as the depositary and MacKenzie Partners served as information agent About Cablevision Systems Corp. Headquartered in Bethpage, New York, Cablevision Systems Corp. (NYSE: CVC) -- is a cable operator in the United States that operates cable programming networks, entertainment businesses and telecommunications companies. Through its wholly owned subsidiary, Rainbow Media Holdings LLC, Cablevision owns interests in and manages numerous national and regional programming networks, the Madison Square Garden sports and entertainment businesses, and cable television advertising sales companies. Through Cablevision Lightpath Inc., its wholly owned subsidiary, the company provides telephone services and Internet access to the business market. As of December 31, 2008, the company's balance sheet showed total assets of $9,383,208,000 and total liabilities of $14,745,455,000, resulting in total stockholders' deficit of $5,362,247,000. * * * As reported by the Troubled Company Reporter on February 11, 2009, Standard & Poor's Ratings Services said it assigned its 'BB' issue-level and '3' recovery ratings to CSC Holdings Inc.'s proposed $500 million senior notes due 2019. The '3' recovery rating indicates the expectation for meaningful (50%-70%) recovery of principal in the event of payment default. At the same time, S&P placed the 'BB+' rating on $650 million of senior secured debt of majority-owned Newsday LLC on CreditWatch with negative implications. The 'BB' corporate credit rating on parent Cablevision Systems Corp. remains unchanged. Bethpage, New York- based Cablevision is a major cable operator in the New York metropolitan area. CALTEX HOLDINGS: In Ch. 11 for Quick Sale of Equipment and Metals ----------------------------------------------------------------- CalTex Holdings LP filed a Chapter 11 petition to conduct a quick sale of equipment and scrap metal for $21 million, according to a Bloomberg News report. CalTex Holdings owns a 992-acre industrial property in Houston, Texas. The property itself is worth $35.3 million, according to a recent appraisal cited in a bankruptcy court filing, Bloomberg's Bill Rochelle reported. Court filings say the equipment in the plant, which previously produced paper for Abitibi-Consolidated Inc., is worth $11.2 million. In addition there are scrap metals on the property worth another $14.3 million. CalTex Holdings LP filed for Chapter 11 on March 20, 2009 (Bankr. S.D. Texas, Case No. 09-31875). H. Rey Stroube, III, Esq., has been tapped as counsel. The Debtor disclosed it has assets of $50 million to $100 million and debts of $10 million to $50 million. CALTEX HOLDINGS: Wants Access to NewStar Cash Collateral -------------------------------------------------------- CalTex Holdings LP asks the U.S. Bankruptcy Court for the Southern District of Texas for authorization to use the cash that is included among assets securing repayment of a loan from NewStar Financial, Inc. CalTex wants to use the cash collateral, in accordance with a budget, upon the Court's entry of an interim order. The Debtors want to use the cash for about 15 days, until the Court holds a final hearing on the proposal on April 10. Prepetition, the Debtor purchased real estate, equipment and metals using two loans. One loan was from Paseo Group LLC, the Debtor's limited partner, in the amount of $12,000,000. The second loan was through a $20,963,000 financing with NewStar Financial, Inc. as agent for NewStar Short-Term Funding LLC and NewStar Warehouse Funding 2005 LLC. Subsequent to the initial financing NewStar Warehouse Funding 2005 LLC was replaced by NewStar CP Funding LLC, and NewStar Short-Term Funding LLC was replaced by NewStar Credit Opportunities Funding I Ltd. The Debtor and NewStar are parties to the amended loan agreement as of June 18, 2008, which provided for the financing. The NewStar financing is secured by a deed of trust dated as of Dec. 28, 2006, as amended. NewStar has been in complete control of Debtor's receipts and disbursements, and has achieved dominion and control of Debtor's business operations and asset disposition. Several controlled bank accounts were established, although the Debtor has one uncontrolled account located at Wells Fargo Bank that, on the petition date had a balance of $50,000. NewStar as the Debtor's secured creditor claims an interest in cash collateral well as a lien and security interest in all of Debtor's assets including the real property, the equipment and the metals. Based on current appraisals, the real estate has a value of $35,300,000 as of Oct. 2, 2008, the equipment is valued at $11,161,775, and as of Sept. 12, 2008, the metals as scrap are valued at $ 14,325,000. As of the petition date, NewStar asserts a secured debt obligation of $21,900,000. The Debtor believes a portion of this alleged secured debt is unsecured. According to the Debtor, with respect to the use of cash collateral for the interim period, NewStar is adequately protected by the value of the collateral securing the various alleged secured obligations. The Debtor cites a $33,000,000 equity cushion which adequately protects the interest of NewStar. As additional adequate protection, the Debtor proposes to grant a replacement lien for the benefit of NewStar in collateral acquired post-petition of the same type as NewStar's collateral. According to the Budget, the Debtor expects to have cash needs of approximately $127,118 for operating and other business expenses during the period ending April 10, 2009. The outlined expenses will be paid using the $50,000 cash with the Debtor and anticipated $200,000 cash generated from a certain contract with Bennington Group LLC regarding a sale. A full-text copy of the Budget is available for free at http://bankrupt.com/misc/caltexholdings_cashcoll_budget.pdf About CalTex Holdings LP Headquartered in Houston, Texas, CalTex Holdings LP was formed on Dec. 12, 2006. Its limited partners were Sierra Mesa LLC and Paseo Group LLC. The general partner is CalTex Holdings GP, Inc., which owns a 1% limited partner interest. Paseo owns 75% of the stock of GP, and Sierra owns 25% of the stock of GP. The Debtor filed for Chapter 11 protection on March 20, 2009, (Bankr. S. D. Tex. Case No.: 09-31875). H. Rey Stroube, III, Esq. represents the Debtor in its restructuring efforts. The Debtor listed estimated assets of $50 million to $100 million and estimated debts of $10 million to $50 million. CALTEX HOLDINGS: Wants to Sell Property to Bennington for $20MM --------------------------------------------------------------- CalTex Holdings LP asks the U.S. Bankruptcy Court for the Southern District of Texas for authorization to sell real estate, equipment and metals, free and clear of liens, claims and encumbrances, to Bennington Group LLC for $20 million. The real estate is in Harris County, Texas, and is located adjacent to the San Jacinto River, within a 17-mile radius of the Port of Houston and approximately 25 miles from both of Houston's airports. The real estate consists of and contains infrastructure including buildings, roads, electrical lines, railway spurs and access, highway access and other improvements. Included among the infrastructure and improvements is approximately 200 heavy industrial manufacturing machines and related equipment associated with the former paper production process well as both ferrous and non-ferrous metals, as aluminum, copper, stainless steel and steel. Based on current appraisals the real estate has a value of $35 million. As of Oct. 2, 2008, the equipment is valued at $11.1 million, and as of Sept. 12, 2008, the metals as scrap are valued at $14.3 million. Included in the assets that are not subject to sale are certain claims and counter-claims against both creditors and third parties well as insurance claims for property damage. When aggregated the value of these claims exceeds $5 million. The Debtors relate that the proposed transaction (i) provides an opportunity to receive the maximum value for the assets being sold; (ii) will provide cash resources for the operation of the Debtor's business; (iii) allows the Debtor to retain a viable business, to satisfy creditor claims, to restructure and reorganize and to emerge from Chapter 11; and (iv) the terms and conditions in the Bennington Contract, are reasonable and were the subject of arm's length negotiations. A full-text copy of the Bennigton contract is available for free at: http://bankrupt.com/misc/caltexbenningtoncontract.pdf About CalTex Holdings LP Headquartered in Houston, Texas, CalTex Holdings LP was formed on Dec. 12, 2006. Its limited partners were Sierra Mesa LLC and Paseo Group LLC. The general partner is CalTex Holdings GP, Inc., which owns a 1% limited partner interest. Paseo owns 75% of the stock of GP, and Sierra owns 25% of the stock of GP. The Debtor filed for Chapter 11 protection on March 20, 2009, (Bankr. S. D. Tex. Case No.: 09-31875). H. Rey Stroube, III, Esq. represents the Debtor in its restructuring efforts. The Debtor listed estimated assets of $50 million to $100 million and estimated debts of $10 million to $50 million. CAMBRIDGE MORTGAGE: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Cambridge Mortgage Corporation 800 University Rochester, MI 48307 Bankruptcy Case No.: 09-48415 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Town & Country - Sterling Heights, Inc. 09-43650 Chapter 11 Petition Date: March 20, 2009 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Erika D. Hart, Esq. 700 E. Maple Road, 2nd Floor Birmingham, MI 48009-6359 Tel: (248) 644-7800 Email: ehart@tauntlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $50,001 to $100,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mieb09-48415.pdf The petition was signed by John R. Kersten, president of the Company. CHARLIE'S FOODS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Charlie's Foods, Inc. 201 S. Mountain View Street Santa Ana, CA 92704 Bankruptcy Case No.: 09-12343 Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court Central District Of California (Santa Ana) Debtor's Counsel: Harlene Miller, Esq. Pagter and Miller 525 N Cabrillo Park Dr., Ste. 104 Santa Ana, CA 92701 Tel: (714) 541-6072 Email: harlene@pagterandmiller.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cabc09-12343.pdf The petition was signed by Charlie Akoboff, president of the Company. CHRYSLER LLC: Fate to be Decided by Auto Task Force By March 31 --------------------------------------------------------------- The Obama administration's auto team told key members of Congress it plans to make significant announcements on the future of the domestic automakers and to their suppliers, David Shepardson and Gordon Trowbridge of The Detroit News report. Separately, General Motors Corp. and Chrysler LLC -- still struggling to win critical concessions from debtholders and the United Auto Workers -- sought to make the case that they're worth saving, and are making progress toward meeting a critical March 31 deadline, the report adds. The Detroit News says that Chrysler Chairman and CEO Robert Nardelli warned that his company will have to file for bankruptcy if it doesn't receive $5 billion in additional loans by the end of the month. His GM counterpart, GM Chairman and CEO Rick Wagoner, acknowledged that bankruptcy "could work" for his company, but said it isn't a good option and carries "significant risks." Chrysler LLC and General Motors Cop. submitted their viability plans to the Treasury on Feb. 17, saying that they need additional aid to avert bankruptcy, which, if allowed to happen, would hurt, not only the two companies, but also their suppliers, employees and the public. GM, in its viability plan submitted Feb. 17, said it needs an additional $16.6 billion on top of the $13.4 billion loaned from the Treasury, while Chrysler needs another $5 billion in addition to the $4 billion it has already received. On Dec. 31, 2008, the U.S. Treasury completed a transaction with General Motors, under which the Treasury agreed to provide GM with up to a total of $13.4 billion in a three-year loan from the Troubled Assets Relief Program, secured by various collateral. On January 2, 2009, the Treasury provided a three-year $4 billion loan to Chrysler LLC. The two companies are required to show by March 31 that they can be viable. The loan agreement provides for acceleration of the loans if those goals under the plan are not met According to Detroit News, under terms of the agreements with the U.S. government, the two automakers are to (i) cut their debt by two-thirds, and (ii) must win competitive wage and benefit rates from the UAW and reduce by 50% cash payments to a trust fund that takes over responsibility for retiree health care in 2010. Steve Rattner and Ron Bloom, two top advisers to the Obama auto team, met privately with members of the Congressional Auto Caucus. According to the source, though lawmakers said the task force signaled quick action on the supplier issue, it also seems clear that not all endangered parts makers will be saved. Sources say Rep. Dale Kildee, D-Flint, described the situation as "triage," saying the task force was placing a priority on companies vital to keeping the industry operating. U.S. Rep. Sander Levin, D-Royal Oak, according to the report said Obama's auto task force leaders indicated "they will say something to all of the stakeholders. He added saying, "They hope to come forth with a framework and a preliminary assessment of viability, and it will include discussion of any additional resources and the path to viability." 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. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. CHRYSLER LLC: Seeks to Recover Tooling From Precision Parts ----------------------------------------------------------- Bankruptcy Law360 reports that Chrysler LLC has asked the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay in Precision Parts International Holdings Inc.'s Chapter 11 bankruptcy proceedings so the auto maker can take back production tooling it provided to the Debtors. Chrysler, according to the report, told the Court relief from the bankruptcy stay will allow it to avoid layoffs and millions of dollars in losses. According to the report, Chrysler said it had reached an agreement with Cerion LLC to reclaim the tooling. The TCR notes that about a year ago on February 1, 2008, Plastech Engineered Products Inc. sought bankruptcy protection to stop Chrysler from taking back tooling and other equipment and resourcing business with other suppliers. Plastech was allowed by the U.S. Bankruptcy Court for the Eastern District of Michigan to keep the tooling pending trial, and reached agreements and obtained debtor-in-possession funding from its customers, which included the Big 3 automakers and Johnson Controls Inc. Plastech, however, after reviewing alternatives, eventually broke up its business and sold key assets to parties, including JCI, which bought the interiors business. About Precision Parts Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com/-- sells products to major north American automotive and non- automotive original equipment manufacturers and Tier 1 and 2 suppliers. The Debtors operate six manufacturing facilities throughout north America, including a facility in Mexico operated on the Debtors' behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The Debtors' operations consist of two distinct lines of business: MPI, which performs fineblanking work and conventional metal stamping, as well as a range of value-added finishing operations, and Skill which performs conventional metal stamping, as well as a range of assembly and value-added finishing operations. Four of the Debtors are holding companies that have no employees and are not involved in the Debtors' day-to-day operations: PPI Holdings, Inc.; PPI Sub-Holdings, Inc.; MPI International Holdings, Inc.; and Skill Tool & Die Holdings Corp. The Company and eight of its affiliates filed for Chapter 11 protection on Dec. 12, 2008 (Bankr. D. Del. Lead Case No. 08-13289). David M. Fournier, Esq., at Pepper Hamilton LLP; and Robert S. Hertzberg, Esq., and Deborah Kovsky-Apap, Esq., at Pepper Hamilton LLP, represent the Debtors in their restructuring efforts. Alvarez & Marsal North America LLC serves as financial advisor and Kurtzman Carson Consultants LLC as notice, claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets of between $100 million to $500 million each. As reported by the Troubled Company Reporter on March 20, 2009, the Court authorized Precision Parts to sell its business to Cerion LLC for $18.5 million. No rival bids were received for Precision Parts' six plants that produce auto-parts. 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. Liquidity Crunch Chrysler has been trying to keep itself afloat. As reported by the Troubled Company Reporter on March 20, 2009, its Chief Financial Officer Ron Kolka, has said even if Chrysler gets additional government loans, it could face another cash shortage in July when revenue dries up as the company shuts down its factories for two weeks to change from one model year to the next. The Company's CFO has said Chrysler planned for the $4 billion federal government bailout it received Jan. 2 to last through March 31. The Company is talking with the Obama administration's autos task force about getting another $5 billion, and faces a March 31 deadline to complete its plan to show how it can become viable and repay the loans. General Motors Corp. and Chrysler admitted in their viability plans submitted to the U.S. Treasury on February 17 that they considered bankruptcy scenarios, but ruled out the idea, citing that a Chapter 11 filing would result to plummeting sales, more loans required from the U.S. government, and the collapse of dealers and suppliers. A copy of the Chrysler viability plan is available at: http://ResearchArchives.com/t/s?39a3 A copy of GM's viability plan is available at: http://researcharchives.com/t/s?39a4 * * * 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. CINRAM INTERNATIONAL: S&P Junks Corporate Credit Rating From 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Cinram International Inc. to 'CCC+' from 'B'. At the same time, S&P lowered the ratings on Cinram's and its subsidiaries' various debt issues to 'CCC+' from 'B'. All ratings have been placed on CreditWatch with negative implications. "These rating actions follow the company's announcement that it is seeking bank permission through an amendment to its credit agreement to repurchase term loan debt at a discount from par using an auction," said Standard & Poor's credit analyst Lori Harris. Upon lender approval, S&P expects Cinram to commence an auction to apply up to US$150 million of cash to reduce its term loan debt at a discount. Under S&P's criteria, S&P views a formal cash tender offer or exchange offer at a discount by a company under substantial financial pressure as a distressed debt exchange and tantamount to a default. S&P will lower its corporate credit rating on Cinram to 'SD' (selective default) and lower S&P's ratings on issues repurchased under the tender offer to 'D' (default) upon completion of the offer. Shortly thereafter, S&P will then assign a new corporate credit rating, representative of the default risk after the financial restructuring. "Our downgrade does not reflect a perceived increase in Cinram's bankruptcy risk. S&P believes the tender offer, if successful, will reduce debt and cash interest expense, and will decrease the risk of a default," Ms. Harris added. Rather, S&P's downgrade is based on the financial pressure S&P feel Cinram is under to reduce its debt burden by retiring debt for less than originally contracted. Similarly, in S&P's view investors' potential willingness to accept a substantial discount to contractual terms provides evidence that they have significant doubts about receiving full payment on obligations, even though the term debt is secured. Cinram is likely to use its cash balances and free cash flow to fund the debt repayment. The ratings on Cinram will remain on CreditWatch with negative implications until such time as Standard & Poor's lowers the ratings to 'SD' because of a term loan repurchase or because the amendment is declined by the lenders. Should the amendment be approved and the term loan repurchases below par reach the permitted maximum, S&P's preliminary expectation is that the new corporate credit rating on Cinram could return to the 'B' category despite significant industry challenges. S&P believes the revised capital structure could significantly reduce Cinram's cash interest expense in the next couple of years and meaningfully lower the company's debt outstanding. CMJ ENTEPRISES: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: CMJ Enterprises, LLC dba Club Pepe Le Pui 212 Bittersweet Lane Belleville, IL 62221 Bankruptcy Case No.: 09-30671 Chapter 11 Petition Date: March 20, 2009 Court: United States Bankruptcy Court Southern District of Illinois (East St Louis) Judge: Kenneth J. Meyers Debtor's Counsel: Mary E. Lopinot, Esq. PO Box 307 Belleville, IL 62222-0307 Tel: (618) 234-9800 Fax: (618) 234-9786 Email: mlopinot@mmrg.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $100,001 to $500,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilsb09-30671.pdf The petition was signed by Courtney Johnson, member of the Company. COEUR D'ALENE: Vitale Takes Bogert's Seat on Board Following Exit ---------------------------------------------------------------- Alex Vitale resigned from Coeur d'Alene Mines Corporation's board of directors effective March 17. On the same date, L. Michael Bogert was appointed to fill the vacancy created by Mr. Vitale. Under the Company's 2005 Non-Employee Directors' Equity Incentive Plan, Mr. Bogert will receive a portion of his annual director compensation in Coeur common shares valued at $20,000. About Coeur d'Alene Coeur d'Alene Mines Corp. (NYSE:CDE) (TSX:CDM) -- http://www.coeur.com/-- is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile, Bolivia and Australia. * * * Coeur d'Alene Mines Corp.'s $180 Million notes due Jan. 15, 2024, carry Standard & Poor's Ratings Services B-rating. CONNECTICUT STAMPING: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Connecticut Stamping and Bending Company 206 Newington Avenue New Britain, CT 06051 Bankruptcy Case No.: 09-20642 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Tube Bends Incorporated 09-20641 Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court District of Connecticut (Hartford) Judge: Albert S. Dabrowski Debtor's Counsel: Anthony S. Novak , Esq. Lobo & Novak, LLP 280 Adams Street Manchester, CT 06042-1975 Tel: (860) 645-0006 Fax: (860) 645-1110 Email: AnthonySNovak@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors together with its petition. The petition was signed by Jon Barlow, Vice President of the company. CONSTELLATION BRANDS: To Use Sale Proceeds to Pay Off $210M Debt ---------------------------------------------------------------- Constellation Brands, Inc., has completed the sale of its value spirits business to Sazerac Company, Inc. for $334 million, subject to post-closing adjustments. The Company will use the entire net after-tax cash proceeds of approximately $210 million to further reduce Constellation's borrowings. In connection with the sale of the value spirits business, the Company has received $274 million in cash proceeds and a note receivable for $60 million. The Company has updated its diluted earnings per share outlook for fiscal 2009. The Company's new comparable basis diluted earnings per share range for fiscal 2009 is targeted to be $1.60 to $1.62 compared to the Company's previous estimate of $1.68 to $1.72. The revision is driven primarily by an increasingly challenging global economic environment, particularly the accelerated deterioration in the Company's U.K. and Australian businesses during its fourth quarter. "We experienced weaker than expected demand in our European and Australian businesses during the Christmas and New Year holiday," said Rob Sands, president and chief executive officer of Constellation Brands. "The most significant impact was felt in the U.K., where the economy weakened during this critical selling season, retail competition intensified, and we made the decision to forego participation in significant price discounting offered by multiple grocers. Previously, we passed through price increases to offset two duty increases that were implemented earlier in the year." "While we have already begun to take actions in the U.K. to align the cost structure with the realities of the marketplace, we believe it is appropriate to implement additional cost reductions not only in the U.K., but across our global businesses," Mr. Sands continued. "Although not finalized, these initiatives are currently expected to result in the elimination of approximately five percent of our global workforce." Additional details of the restructuring will be included as part of the Company's earnings announcement scheduled for April 8, 2009. During the fourth quarter, the Company expects to record an estimated $430 million of after-tax charges, primarily related to the non-cash impairments of certain goodwill, intangible assets and equity method investments associated with the company's international businesses. These one-time charges will drive a reported basis loss for fiscal 2009 and will be excluded from comparable basis results. For fiscal 2009, the Company now expects a reported basis diluted loss per share in the range of $1.26 to $1.28. "Although we are experiencing the effects of the global recession, we are pleased that Constellation's free cash flow generation continues to be strong and is anticipated to be within our previously guided $360 to $390 million range for fiscal 2009," said Bob Ryder, chief financial officer of Constellation Brands. "We continue to be in a strong liquidity position, as total debt has decreased by more than $800 million from year end fiscal 2008, primarily through a combination of strong free cash flow and proceeds from asset dispositions. Our focus on rapid deleveraging has allowed us to achieve our debt to comparable basis EBITDA goal for the year in the low four times range." To achieve synergies and operating efficiencies, the Company will consolidate the retained premium spirits business into its North American wine operations. For fiscal 2010, the Company expects the challenging macro- economic operating environment to continue and as a result, is targeting comparable basis diluted EPS growth in the low-to-mid single digit range versus fiscal 2009. Free cash flow is expected to fall below fiscal 2009 levels due primarily to the expected $65 million tax impact from the sale of the value spirits business and $50 million in favorable hedge transaction settlements that is not expected to reoccur in fiscal 2010. The Company will provide further details relating to its fiscal 2010 outlook, including key strategic initiatives, in connection with its fourth quarter fiscal 2009 earnings news release and conference call. "In North America, the wine industry continues to grow and we continue to see consumers trading up albeit at lower rates as compared to its peak. The Company's U.S. spirits business continues to experience strong growth rates driven by sales of SVEDKA Vodka. Increased promotional activities in the Crown imported beer business are expected to offset the impact of the recession in some of our key markets," said Mr. Sands. "We are taking decisive action to ensure we are adaptive and responsive to the rapidly-changing global economy by remaining focused on creating efficiencies, generating cash flow and paying down debt. The continuation of this strategy in combination with worldwide cost reductions positions us well for the future as we work through the current challenging macro economic environment and take advantage of the recovery when it occurs." Fourth Quarter Earnings Release and Conference Call The Company will report financial results for its fiscal fourth quarter and full year ended Feb. 28, 2009, on April 8, 2009, before the open of U.S. markets. A conference call to discuss the financial results and outlook will be hosted by President and Chief Executive Officer Rob Sands and Executive Vice President and Chief Financial Officer Bob Ryder, at 10:30 a.m. eastern time, April 8, 2009. About Constellation Brands Headquartered in Fairport, New York, Constellation Brands Inc. (NYSE:STZ) -- http://www.cbrands.com/-- has more than 250 brands in its portfolio, sales in approximately 150 countries and operates approximately 60 wineries, distilleries and distribution facilities. The company has market presence in the U.K., Australia, Canada, New Zealand, and Mexico. Barton Brands Ltd. is the spirits division of Constellation Brands Inc. is a producer, importer and exporter of a wide range of spirits products, including brands such as Black Velvet Canadian Whisky, Ridgemont Reserve 1792 bourbon, and Effen vodka. * * * As reported in the Troubled Company Reporter on Dec. 3, 2007, Fitch Ratings assigned a 'BB-' rating to a note registered by Constellation Brands Inc. to fund the purchase price of Beam Wine Estates Inc., a subsidiary of Fortune Brands Inc: $500 million 8.375% senior unsecured note due Dec. 15, 2014. The rating outlook is negative. CORDIA CORP: Inks $1.2MM Factoring Agreement with Thermo Credit --------------------------------------------------------------- Cordia Corporation, through its subsidiary Cordia Prepaid Corp., entered into a Factoring and Security Agreement with Thermo Credit, LLC, in which CPC will offer to sell, transfer, and assign certain eligible receivables to Thermo in exchange for payment of the net value of the purchased receivables after deducting applicable LEC and billing fees, adjustments and reserves. The Agreement is for a term of two years and provides for an initial purchase commitment of up to $1,200,000 of eligible receivables. The full-text copy of the Factoring and Security Agreement is available for free at: http://ResearchArchives.com/t/s?3aa0 The first purchase of eligible receivables in the amount of approximately $789,000 occurred on March 16, 2009. The net payment received by Cordia was $600,000 after adjustment which included an initial commitment fee of 2 % of the initial purchase commitment payable in two equal installments, the first of which was paid at the time of the first purchase. Cordia also has entered into an Amendment to Factoring and Security Agreement with Thermo Credit, LLC, amending the original agreement between the parties dated September 21, 2007. The Amendment changes the termination date of the agreement from September 14, 2010, to March 16, 2011. The purpose of the Amendment was to make the Factoring Agreement between Thermo and CPC coterminous with the Amendment. A full-text of the Amendment is available without extra charge at: http://ResearchArchives.com/t/s?3aa1 With the execution of the Amendment, Cordia paid to Thermo a purchase commitment fee equal to 0.375 of the purchase commitment which is $20,625. The remaining terms, provisions and conditions of the original agreement remain unchanged and in full force and effect. About Cordia Corp. Based in Winter Garden, Fla., Cordia Corporation (OTC BB: CORG) -- http://www.cordiacorp.com/-- through its operating subsidiaries, Cordia Communications Corp., CordiaIP Corp., My Tel Co Inc., Northstar Telecom Inc., and Cordia International Corp. offers business, residential, and wholesale customers local and long distance telecommunications services in more than sixty (60) countries utilizing traditional wireline and Voice over Internet Protocol (VoIP) technologies. In addition, Cordia develops and provides a suite of proprietary web-based billing software and outsourced services to local, long distance and VoIP telecommunications providers. The Company has Latin America operations in Mexico, Brazil, Argentina, Chile, and Peru. COTT CORPORATION: Moody's Retains 'Caa1' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service changed Cott Corporation's speculative grade liquidity rating to SGL-3 from SGL-4. The company's corporate family rating of Caa1 and stable outlook remain unchanged. The SGL-3 rating reflects Moody's expectation that Cott would likely maintain adequate liquidity over the next twelve months. Moody's notes that Cott's cash flow generation may continue to be pressured by increasing competition and promotional activity from national brands, loss of its exclusive relationship with Wal-Mart, and a weak CSD market in North America. However, these negative pressures should be tempered somewhat by the moderating input costs as well as the expected reduction in capital expenditures to maintenance level over the next 12 months. As such, Moody's anticipate that Cott would generate breakeven or slightly positive free cash flow in the coming year. The SGL-3 also anticipates ample cushion would be maintained above the $30 million excess availability under the revolving credit facility, hence a springing fixed charge covenant would not be triggered. In a scenario where this covenant would be triggered as a result of increased revolver drawings and/or a collapse in eligible borrowing base assets, Moody's believes that covenant compliance would be uncertain. As of December 27, 2008, Cott's availability under its revolving credit facility was approximately $45.5 million. Since then, the cushion has likely improved modestly as Moody's expect that the company used its cash balances to pay down the outstanding revolver borrowings. Moody's currently projects that Cott should sustain availability in excess of a $50-60 million range during the next four quarters. That said, if the excess availability dips below mid-50 million on a sustained basis due to a diminished borrowing base as its overall business further shrinks or other reasons, the company's SGL rating could be negatively pressured. These ratings are unaffected by the action: Cott Corporation: -- Corporate Family rating at Caa1 -- Probability of Default Rating at Caa1 Cott Beverages, Inc.: -- $275 million 8% senior sub notes due 2011 at Caa2, (LGD 5, 74%) Rating outlook remains stable This rating has changed: -- Speculative grade liquidity rating to SGL-3 from SGL-4 The last rating action was taken on December 22, 2008 where Cott's corporate family rating was lowered to Caa1 from B3, speculative grade liquidity rating was lowered to SGL-4 from SGL-3, and outlook was stabilized. Headquartered in Toronto, Ontario, Cott Corporation is one of the world's largest retailer-brand soft drink suppliers with a leading position in take-home carbonate soft drink markets in the US, Canada, and the UK. Sales for the trailing twelve month period were approximately $1.6 billion. CRUSADER ENERGY: Defers $833,000 Installment on Bank Debt --------------------------------------------------------- Crusader Energy Group Inc. said that in connection with its continued evaluation and assessment of financial and strategic alternatives to address its $5 million borrowing base deficiency under its senior credit facility, the Company elected not to pay the approximately $833,000 first installment on the repayment of the borrowing base deficiency that was due on March 25, 2009. The Company said it had notified the lenders under the senior credit facility that it had elected to repay the borrowing base deficiency through six equal monthly installments, with the first installment due March 25, 2009. The Company said its election not to pay the installment due on March 25, 2009 results in an event of default under the Company's senior credit facility, and the administrative agent under the Company's senior credit facility could elect to declare all amounts outstanding under the senior credit facility to be immediately due and payable. In addition, an event of default under the senior credit facility results in an event of default under the Company's second lien credit facility, and the administrative agent under the second lien credit facility (subject to certain intercreditor agreement provisions) could elect to declare all amounts outstanding under the second lien credit facility to be immediately due and payable. If the lenders under either credit facility accelerate such indebtedness, the Company does not have sufficient funds currently available to repay such indebtedness. The Company remains in discussions with the lenders under both its senior credit facility and its second lien credit facility regarding potential solutions to address the borrowing base deficiency and default, as well as with other third parties regarding potential strategic alternatives -- which may include restructuring the Company's debt, the sale of some or all of the Company's assets or a merger or other business combination involving the Company. The Company may be required to seek protection under Chapter 11 of the United States Bankruptcy Code if such efforts are not successful or to effect any strategic alternative that it elects to pursue. About Crusader Energy Oklahoma City-based Crusader Energy Group Inc. -- http://www.crusaderenergy.com-- is an oil and gas company with assets focused in various producing domestic basins. The Company has a primary focus on the development of unconventional resource plays which includes the application of horizontal drilling and cutting edge completion technology aimed at developing shale and tight sand reservoirs. The Crusader assets are located in various domestic basins, the majority of which are in the Anadarko Basin and Central Uplift, Ft. Worth Basin Barnett Shale, Delaware Basin, Val Verde Basin, and the Bakken Shale of the Williston Basin. CTI FOODS: S&P Gives Negative Outlook; Affirms 'B' Rating --------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Wilder, Idaho-based CTI Foods Holding Co. LLC to negative from stable. At the same time, S&P affirmed the ratings on CTI, including the 'B' corporate credit rating. As of Jan. 3, 2009, CTI foods had about $179 million in reported debt. The outlook revision reflects S&P's concerns about tight covenant cushion on the company's funded debt to EBITDA covenant in the coming quarters. S&P estimate that the EBITDA cushion on this leverage covenant will decline to the 5% area in the first and second quarters of fiscal 2009, compared with a cushion of closer to 10% as of fiscal year end 2008, following a scheduled quarter- turn step-down to 4.75x on March 31, 2009. Sales for fiscal 2008 exceeded budget and increased by 26% compared with fiscal 2007, primarily due to higher volumes in all three divisions (meat, beans, and soups) and pricing. Soup and bean volumes were modestly below plan as new soup customer rollouts were slower than expected and the bean rollout was delayed. The outlook is negative, reflecting S&P's concerns about tighter covenant cushion in the upcoming quarters following a quarter-turn step-down to 4.75x in the company's funded debt to EBITDA covenant at the end of March 2009. "We could consider lowering the ratings in the very near term if cushion becomes more constrained and/or the company cannot maintain compliance with its financial covenants," said Standard & Poor's credit analyst Christopher Johnson. This could occur if the company experiences any near-term delays in manufacturing production leading to corresponding declines in EBITDA. "S&P could consider an outlook revision back to stable if the company continues to generate double-digit sales and EBITDA growth rates, thereby improving the EBITDA cushion on its leverage ratio to closer to 15% by fiscal year end," he continued. DAMMAN PROPERTIES: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Damman Properties, Inc. dba Blackberry Development, LLC dba The Patch dba Blackberry Patch Golf Course dba Mad Mike's Auction 4555 Cambria Road Hillsdale, MI 49242 Bankruptcy Case No.: 09-03187 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Damman Construction, Inc. 09-03189 Chapter 11 Petition Date: March 20, 2009 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Scott W. Dales Debtor's Counsel: Kerry D. Hettinger, Esq. Hettinger & Hettinger PC 200 Admiral Avenue Portage, MI 49002-3503 Tel: (269) 344-1100 Email: khett57@hotmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-00557.pdf The petition was signed by Michael A. Damman, president of the Company. DANA HOLDING: 2008 Sales Down $626MM from 2007's ------------------------------------------------ Dana Holding Corporation on March 16 announced its full-year and fourth-quarter 2008 results. According to their report, sales for the full-year 2008 were $8,095 million, down $626 million from $8,721 million in 2007. This decrease was driven primarily by sharply declining vehicle production levels in North America. Including a one-time gain of $754 million related to emergence from Chapter 11 reorganization, net income was $18 million, compared with a net loss of $551 million for 2007. Earnings before interest, taxes, depreciation, amortization, and restructuring (EBITDA) for the full year were $301 million, compared with $450 million in 2007. The decline was due to significantly lower vehicle production, which was partially offset by margin improvements and cost reductions. At year end, Dana had cash balances of $777 million and total liquidity of $866 million. Net debt was $474 million. "We continue to respond to difficult market conditions through aggressive cost-reduction and efficiency actions, comprehensive operational restructuring, and being responsive to our customers," said Chairman and CEO John Devine. "These are unprecedented times that make any projections uncertain. We believe we are taking the difficult actions necessary to survive in the current environment and compete over the long term. There can be no assurances, however, if the global economy deteriorates substantially beyond our planning assumptions." Dana's sales for the fourth quarter of 2008 were $1,521 million, down $636 million, or 29 percent, from the prior year. Sales were impacted by both sharply declining North American vehicle production and unfavorable currency changes. Fourth-quarter EBITDA was a negative $3 million, compared to $112 million for the same period in 2007. The impact of lower vehicle production drove the reduction in earnings. This decline was partially offset by higher pricing and cost savings from operational improvements. Free cash flow was a negative $50 million for the fourth quarter, compared to $83 million for the prior-year period, primarily due to lower earnings for the quarter. Working capital was a source of $177 million of cash during the quarter, primarily due to lower production volumes. The cash balance at year end also reflects the repayment of $150 million of outstanding principal under the term loan facility to support an amendment to the company's credit agreement. The full text of Dana's Financial Report during the Company's conference call is available for free at: http://ResearchArchives.com/t/s?3a9b About Dana Holding Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ - - designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. Dana Corp. and its affiliates filed for Chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP, served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC, served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. Judge Burton Lifland confirming the Plan, as thrice amended, on Dec. 26, 2007. The Plan was declared effective Jan. 31, 2008. Upon emergence, the company was renamed as Dana Holding Corporation. (Dana Corporation Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on Dec. 22, 2008, Moody's Investors Service has lowered the ratings of the Dana Holding Corporation -- Corporate Family Rating and Probability of Default Rating to Caa1 from B2. Moody's also lowered the ratings on the company's senior secured asset based revolving credit facility to B2 from Ba3, and lowered the rating for the senior secured term loan to B3 from B1. The ratings remain under review for possible further downgrade. The Speculative Grade Liquidity Rating of SGL-3 was affirmed. The downgrades result from the expectation of continued erosion in the North American market for SUVs and light trucks over the near term. Reduced demand, according to Moody's, is expected to be driven by weakening economic conditions and consumer aversion of purchasing automobiles from distressed OEMs. DFI PROCEEDS: Files Disclosure Statement; April 15 DS Hearing Set ----------------------------------------------------------------- Driggs Farms of Indiana, Inc., now known as DFI Proceeds, Inc., and its official committee of unsecured creditors has filed with the U.S. Bankruptcy Court for the Northern District of Indiana a disclosure statement for their Joint Plan of Liquidation, dated as of March 18, 2009. The hearing to consider the adequacy of the disclosure statement is set for April 22, at 10:50 a.m. Objections, if any, to the disclosure statement must be filed not later than April 15. Plan Terms The Plan implements the distribution of the proceeds from the sale of the Debtor's assets to Land-O-Sun Dairies, LLC, after the payment of Allowed Secured Claims. The sale closed on September 22, 2008. On the Plan's Effective Date, all remaining assets of the Debtor and its estate, including all unencumbered assets and all Cash, shall be transferred to and vest in the Liquidating Trust. From the proceeds held in the Liquidating Trust, the Liquidating Trustee is to make distribution to claims in accordance with the Plan terms. The Plan segregates the claims against and interests in the Debtor into 6 classes: Class 1 Secured Claims Unimpaired Class 2 Non-Tax Priority Claims Unimpaired Class 3 General Unsecured Claims Impaired; Entitled to Vote Class 4 Subordinated 510(c) Claims Impaired and Deemed to Reject Class 5 Subordinated 510(b) Claims Impaired and Deemed to Reject Class 6 Old Equity Interests Impaired and Deemed to Reject General Unsecured Claims will receive from the Liquidating Trustee, in full satisfaction of its claim, its Pro Rata share of the Class 3 Distribution Amount. General Unsecured Claims is the only Class that is entitled to vote to accept or reject the Plan. On the Plan's Effective Date, the Old Equity Interests will be cancelled and each holder thereof shall not receive or retain any property or interest on account of said Interests. Holders of Subordinated 510(c) Claims under Class 4 and Subordinated 510(b) Claims under Class 5 will not receive or retain any property under the Plan and are deemed to reject the Plan, and, therefore, are not entitled to vote to accept or reject the Plan. "Cramdown" Provisions The Debtors reserve the right to seek confirmation of the Plan pursuant to the "cramdown" provisions under Sec. 1129(b) of the Bankruptcy Code. Under said provision 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 disclosure statement explaining the Debtors' Joint Chapter 11 Plan of Reorganization is available at: http://bankrupt.com/misc/DFIProceeds.DSPart1.pdf http://bankrupt.com/misc/DFIProceeds.DSPart2.pdf http://bankrupt.com/misc/DFIProceeds.DSPart3.pdf Based in Decatur, Ind., Driggs Farms of Indiana Inc. nka. DFI Proceeds, Inc. manufactures frozen desserts & novelties and dairy products. The company filed for Chapter 11 protection on June 20, 2008 (N.D. Indiana Case No. 08-11955). Daniel J. Skekloff, Esq., and Sarah Mustard Heil, Esq., at Skekloff, Adelsperger & Kleven, LLP, represent the Debtor as counsel. Mark A. Warsco, Esq., at Rothberg Logan & Warsco L.L.P., represents Unsecured Creditors' Committee as counsel. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and debts of $10 million to $50 million. DIEBOLD INC: CFO K. Krakora Resigns As Regulators Probe Books ------------------------------------------------------------- Joe Barrett and Steve Gelsi at The Wall Street Journal report that Diebold Inc. said that its chief financial officer, Kevin Krakora, has resigned after he received a notice of possible enforcement action by regulators in connection with an accounting probe at the Company. WSJ states that Diebold restated financial statements for the 2006, 2005, 2004, and 2003 periods as disclosed in its 2007 annual report. The restatements involved a revenue recognition method that favored quicker booking of revenue, but didn't affect the overall amount, WSJ relates, citing Gil Luria at Wedbush Morgan Securities. According to the report, Diebold stopped filing financial results for about 10 months in 2007 and 2008. Citing Diebold, WSJ relates that Mr. Krakora received a Wells notice, or a notice of possible enforcement action from the U.S. Securities and Exchange Commission. Other former employees in the finance organization also received Wells notices, WSJ says, citing Diebold. Diebold, according to WSJ, said that its vice president and corporate controller, Leslie A. Pierce, is taking the role of interim CFO. The latest development in the SEC's probe into Diebold's revenue recognition procedures, which led to a multi-year financial restatement, doesn't appear to cause any new financial issues for the Company, WSJ reports, citing analysts. According to WSJ, Diebold said that it drew scrutiny for its past practice of recognizing revenue on a bill and hold basis in its North America business segment and other accounting matters. WSJ relates that the Department of Justice is also investigating Diebold. WSJ reports that Diebold said it continues to cooperate with the government in connection with the probes, and that it can't predict the length or scope of the probes, or their possible impact on its operations. About Diebold Incorporated Headquartered in North Canton, Ohio, Diebold Incorporated (NYSE: DBD) -- http://www.diebold.com/-- is engaged in the sale, manufacture, installation and service of automated self-service transaction systems, electronic and physical security products, election systems and software. The company specializes in technology that people worldwide can use to access services when, where and how they may choose. Diebold's segments comprise its three main sales channels: Diebold North America, Diebold International, and Election Systems and Other. DOLE FOOD: S&P Gives Negative Outlook; Keeps 'B-' Rating -------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Westlake Village, California-based Dole Food Co. Inc. to stable from negative. S&P also affirmed the existing ratings on the company, including the 'B-' corporate credit rating. As of Jan. 3, 2009, the company had about $2.2 billion of debt. The outlook revision follows Dole's successful completion of the sale and issuance of $350 million of 13.875% senior secured notes due 2014. The company used net proceeds of $325 million from the issuance, together with cash and borrowings under the revolving credit facility, to refinance its $345 million senior notes due May 1, 2009, and pay related fees, premiums, and expenses. The ratings on Dole reflect its highly leveraged financial profile and participation in the competitive, commodity-oriented, and volatile fresh produce industry, which is subject to seasonality, as well as political and economic risks. The company has additional upcoming maturities in 2010 and 2011. S&P believes the company has alleviated S&P's near-term liquidity concerns. Dole completed a notes offering and used proceeds, along with cash and revolver borrowings, to repay the May 2009 maturity. Still, S&P note the company has upcoming maturities in June 2010 and March 2011. S&P could revise the outlook to negative if Dole's operating performance declines and/or covenant cushion becomes weak. "We could also revise the outlook to negative if Dole does not address its June 2010 notes maturity on a timely basis, while maintaining adequate liquidity," said Standard & Poor's credit analyst Alison Sullivan. "A positive outlook is unlikely until Dole addresses the 2010 and 2011 maturities and can sustain improved operating performance trends," she continued. DORAL FINANCIAL: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Doral Financial Centre, LLC 7910 NW 25th Street, Suite 205 Doral, FL 33122 Tel: (305) 398-0214 Bankruptcy Case No.: 09-14477 Type of Business: The company is a single asset real estate debtor. Chapter 11 Petition Date: March 16, 2009 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: John M. Cruz II, Esq. 1041 Ives Dairy Rd # 236 Miami, FL 33179 Tel: (305) 249-2070 Email: cruzjohnm@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor does not have any creditors who are not insiders. The petition was signed by Sandra Blanco, manager of the Company. EAU TECHNOLOGIES: Obtains Sept. 16 Extension of $3.3-Mil. Note -------------------------------------------------------------- EAU Technologies, Inc., and Water Science, LLC, have agreed to amend a Promissory Note to extend the maturity date from March 16, 2009, to September 16, 2009, and increase the annual simple interest rate payable under the Promissory Note from 3% to 10%, thereby eliminating the 8% interest rate that became effective March 16, 2009. EAU is a debtor under the Second Amended and Restated Senior Secured Convertible Promissory Note with WS. On March 16, 2009, the Promissory Note matured, causing the outstanding balance of $3,314,750 to become due. The Promissory Note provides that, to the extent that it was not paid in full at maturity, the interest rate increased to 8%. The Promissory Note was not paid at maturity. WS is a shareholder of the Company and is controlled by Peter Ullrich, a member of the Board of Directors of the Company. About EAU Technologies Based in Kennesaw, Ga. EAU Technologies Inc., fka as Electric Aquagenics Unlimited Inc. (OTC BB: EAUI) -- http://www.eau-x.com/ -- is a supplier of Electrolyzed Water Technology and other complementary technologies with applications in diverse industries. Going Concern Doubt As reported in the Troubled Company Reporter on April 8, 2008, HJ & Associates, LLC, in Salt Lake City, expressed substantial doubt about EAU Technologies Inc., fka Electric Aquagenics Unlimited Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's working capital and stockholders' deficits. As of September 30, 2008, the company's balance sheet showed total assets of $4,537,253 and total liabilities of $11,691,026, resulting in total stockholders' deficit of $7,153,773. FORD MOTOR: In Preliminary Talks for Sale of Volvo -------------------------------------------------- Matthew Dolan, Norihiko Shirouzu, and Joann S. Lublin at The Wall Street Journal report that Ford Motor Co. said that it has held preliminary discussions with companies interested in its Swedish unit, Volvo Cars. According to WSJ, people familiar with the matter said that Geely Automobile Holdings Ltd. and a Europe-based consortium of investors are among those bidding for Volvo cars. Three or more companies are interested in Volvo Cars, the report says, citing a source. Ford's Michigan neighbor, General Motors Corp. is disposing of its Swedish unit, SAAB, but so far has not found a buyer. SAAB has already filed for bankruptcy, and the Swedish government has so far not provided a bail-out for SAAB. 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: Names R. Gephardt & A. Earley to Board of Directors --------------------------------------------------------------- Ford Motor Company said that Richard A. Gephardt and Anthony F. Earley, Jr., were elected to its board of directors effective immediately. Mr. Gephardt, 68, is the former Majority Leader of the U.S. House of Representatives and served 14 terms in Congress. He is currently president and CEO of the Gephardt Group, a multi- disciplined consulting firm that helps companies compete in the global marketplace, and senior counsel and strategic advisor for DLA Piper Rudnick, one of the world's largest legal services providers. Mr. Earley, 59, is Chairman and CEO of DTE Energy, a position he has held since 1998. DTE Energy owns Detroit Edison, an electric utility, and Michigan Consolidated Gas Company, a natural gas utility, which serve a combined 3.5 million customers. DTE Energy also owns several non-utility companies that provide energy services to large industrial customers, provide transportation and storage of fuels, such as natural gas and coal, engage in energy trading and undertake the development of unconventional gas resources. "I have known and respected Dick Gephardt and Tony Earley for a long time, and Ford is very fortunate to have these two seasoned leaders join our Board at an important time in our company's history," said Ford Executive Chairman Bill Ford. "Dick's distinguished record of public service and his recent experience helping companies and labor organizations find better ways to compete in the global economy make him an invaluable addition to Ford's Board. Tony is one of the most successful leaders in the utility industry and joins our Board at a time when automakers and utilities are working together to find ways to cooperate on the electrification of automobiles. He will also help us immeasurably as we deal with the serious issues of energy independence, energy security and sustainability." Mr. Gephardt served for 28 years in the United States House of Representatives from 1976 to 2004, representing Missouri's Third Congressional District, home to his birthplace, St. Louis. He was elected to serve as House Democratic Leader for more than 14 years, as House Majority Leader from 1989 to 1995 and Minority Leader from 1995 to 2003. Mr. Gephardt also is a member of the board of directors of United States Steel Corporation, Spirit Aerosystems Holding, Inc., Dana Corporation, Centene Corporation and Embarq Corporation. He earned a bachelor of science from Northwestern University in 1962 and a juris doctorate from the University of Michigan Law School in 1965. Mr. Earley also is a member of the board of directors of DTE Energy and MASCO Corporation. He serves on the board of directors of numerous educational and civic organizations, including the Nuclear Energy Institute, Edison Electric Institute, Detroit Renaissance, the Detroit Zoological Society, United Way for Southeastern Michigan and Cornerstone Schools. Mr. Earley earned a bachelor of science degree in physics, a master of science degree in engineering and a law degree, all from the University of Notre Dame. He served as an officer in the United States Navy nuclear submarine program, where he was qualified as a chief engineering officer. 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. FOSS MANUFACTURING: Stephen Foss Settles Creditors' Lawsuit ----------------------------------------------------------- Patrick Cronin at Seacoastonline.com reports that former Foss Manufacturing Company, Inc., CEO Stephen Foss has settled a lawsuit that creditors filed against him. According to Seacoastonline.com, the creditors had claimed that Mr. Foss and others accused Foss Manufacturing looted the Company as it was going bankrupt. The report states that terms of the settlement were finalized on February 24 and are confidential. Citing the trustee, the report says that the estate gained about $8.6 million from settling this case, as well as one against the Company's former auditing firm. Seacoastonline.com relates that the creditors had alleged, among other things, that Mr. Foss used company money as his own "personal piggy bank," and that he and the Pease Development Authority board chairperson spent millions of the Company's money on personal and family expenses, like improvements to family homes and club memberships at more than a dozen private clubs in Bermuda, New York, and Florida. The creditors, says Seacoastonline.com, had claimed that Foss Manufacturing was on the brink of bankruptcy for several years, but remained afloat by misrepresenting its condition and falsifying financial information. Citing the creditors, Seacoastonline.com relates that Mr. Foss enlisted former chief financial officer Kevin Sexton and former technology department chief Marcella Darling to change financial records to give the appearance that the Company was doing better than it really was. The board of directors, including Mr. Foss' wife, Patricia, and his daughter, Jenifer Smyth, failed to live up to its fiduciary responsibilities of keeping a watchful eye over Foss Manufacturing, according to Seacoastonline.com. Headquartered in Hampton, New Hampshire, Foss Manufacturing Company, Inc., nka Felt Manufacturing Company, Inc. -- http://www.fossmfg.com/-- is a producer of engineered, non-woven fabrics and specialty synthetic fibers, for a variety of applications and markets. The Company filed for chapter 11 protection on Sept. 16, 2005 (Bankr. D. N.H. Case No. 05-13724). Andrew Z. Schwartz, Esq., at Foley Hoag LLP represented the Debtor. Beth E. Levine, Esq., at Pachlski, Stang, Zieh, Young, Jones & Weintraub represents the Official Committee of Unsecured Creditors. The Court appointed Patrick J. O'Malley as the Debtor's Chapter 11 Trustee and lawyers from Hanify & King, Perkins, Smith & Cohen, LLP, and Mintz, Levin, Cohn, Ferris represent the Chapter 11 Trustee. When the Debtor filed for protection from its creditors, it listed $49,846,456 in assets and $53,419,673 in debts. GATEWAY ETHANOL: Court OKs Increase of Loan Amount to $5.7 Million ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Kansas approved on February 27, 2009, amendments to its stipulated final order granting Gateway Ethanol, L.L.C., authority to obtain secured postpetition financing from Dougherty Funding LLC. The amendments include an increase in the maximum principal amount from $5,625,761 to $5,707,319, and postponement to March 31 of the deadline to close the asset sale. A full-text copy of the Court order, which includes a revised budget, is available at: http://bankrupt.com/misc/GatewayEthanol.AmendedDIPOrder.pdf As reported by the Troubled Company Reporter on Nov 19, 2008, pursuant to the DIP Loan terms, the financing terminates if certain milestones are not achieved, including the completion of a sale at a specified date. Pratt, Kansas-based Gateway Ethanol, LLC, operates an ethanol plant that has a capacity of 55 million gallons a year, according to Orion Ethanol's Web site. The Company filed for bankruptcy protection on October 5, 2008 (Bankr. D. Ks., Case No. 08-22579). Laurence M. Frazen, Esq., Megan J. Redmond, Esq., and Tammee E. McVey, Esq., at Bryan Cave, LLP, represent the Debtor in its restructuring efforts. In its schedules, the Debtor listed total assets of $94,545,022, and total debts of $93,353,654. GENERAL MOTORS: 7,600 U.S. Factory Workers to Voluntarily Resign ---------------------------------------------------------------- General Motors Corp. said on Thursday that about 7,600 of its U.S. factory workers will resign from the Company under its job-buyout program, John D. Stoll and Jeff Bennett at The Wall Street Journal report. WSJ relates that GM, under terms of the union job buyout plan, began offering in February 2009 early-retirement incentives to 22,000 of its 62,000 United Auto Workers union members as part of the Company's efforts to reduce its global operations. GM said in February that they would be "pleased" if as many as half of those offered the deal would take it. According to WSJ, the current number of employees leaving is fewer than GM had hoped. WSJ states that GM told the Treasury in February that it would decrease its hourly workers in the U.S. to 44,500 by October 2009. Citing people familiar with the matter, WSJ relates that GM has negotiated another agreement with the UAW that could let it to cut as many as 9,000 more people by October. WSJ states that GM, after the buyout offer, still has to cut about 10,000 positions in the next six months. According to WSJ, GM said it will fill any UAW-covered job openings with laid-off workers when possible before hiring new workers at entry-level wages, as allowed under a UAW contract. GM, says WSJ, still has to convince the UAW to renegotiate the restructuring of $20 billion in health-care benefits for retirees. According to the report, the UAW said that it prefers to negotiate a health-care agreement similar to one it reached with Ford Motor Co. GM said that the Ford deal won't meet its cost-cutting needs, the report states. WSJ relates that that the union said it won't negotiate with GM on the health plan until the Company's bondholders -- who carry $27 billion in unsecured debt -- offer deeper concessions to the Company. WSJ notes that it is increasingly unlikely that GM will meet a March 31 deadline for gaining concessions from its main union and bondholders. Citing people familiar with the matter, the report states that the auto-industry task force appears willing to extend the deadline by 30 days. Sources said that GM and potentially, the bondholders, will meet with the task force before March 31, WSJ reports. WSJ relates that GM has threatened to terminate the Hummer brand next Tuesday if it fails to reach a workable agreement with one of the suitors by then, but the Company is open to extending negotiations beyond March 31 under the right circumstances, WSJ states, citing people familiar with the matter. 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: Auto Team Expected to Decide on Fate By March 31 ---------------------------------------------------------------- The Obama administration's auto team told key members of Congress it plans to make significant announcements on the future of the domestic automakers and to their suppliers, David Shepardson and Gordon Trowbridge of The Detroit News reported. Separately, General Motors Corp. and Chrysler LLC -- still struggling to win critical concessions from debtholders and the United Auto Workers -- sought to make the case that they're worth saving, and are making progress toward meeting a critical March 31 deadline, the report added. The Detroit News says that Chrysler Chairman and CEO Robert Nardelli warned that his company will have to file for bankruptcy if it doesn't receive $5 billion in additional loans by the end of the month; GM Chairman and CEO Rick Wagoner acknowledged that bankruptcy "could work" for his company, but said it isn't a good option and carries "significant risks." Chrysler LLC and General Motors Cop. Submitted their viability plans to the Treasury on Feb. 17, saying that they need additional aid in order to avert bankruptcy, which, if allowed to happen, would hurt, not only the two companies, but also their suppliers, employees and the public. GM, in its viability plan submitted Feb. 17, said it needs an additional $16.6 billion on top of the $13.4 billion loaned from the Treasury, while Chrysler needs another $5 billion in addition to the $4 billion it has already received. To recall, on Dec. 31, 2008, the U.S. Treasury completed a transaction with General Motors, under which the Treasury agreed to provide GM with up to a total of $13.4 billion in a three-year loan from the Troubled Assets Relief Program, secured by various collateral. On January 2, 2009, the Treasury provided a three- year $4 billion loan to Chrysler Holding LLC. The two companies are required to show by March 31 that they can be viable. The loan agreement provides for acceleration of the loans if those goals under the plan are not met. According to Detroit News, under terms of the agreements with the U.S. government, the two automakers are to (i) cut their debt by two-thirds, and (ii) must win competitive wage and benefit rates from the UAW and reduce by 50% cash payments to a trust fund that takes over responsibility for retiree health care in 2010. Steve Rattner and Ron Bloom, two top advisers to the Obama auto team, met privately with members of the Congressional Auto Caucus. According to the source, though lawmakers said the task force signaled quick action on the supplier issue, it also seems clear that not all endangered parts makers will be saved. Sources say Rep. Dale Kildee, D-Flint, described the situation as "triage," saying the task force was placing a priority on companies vital to keeping the industry operating. U.S. Rep. Sander Levin, D-Royal Oak, according to the report said Obama's auto task force leaders indicated "they will say something to all of the stakeholders. He added saying, "They hope to come forth with a framework and a preliminary assessment of viability, and it will include discussion of any additional resources and the path to viability." 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. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. 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. GETRAG TRANSMISSION: Tipton County Files $14.1-Mil. Claim --------------------------------------------------------- Inside INdiana Business reports that Tipton County has filed a $14.1 million claim in the U.S. Bankruptcy Court of Southern Michigan against Getrag Transmission LLC over the failed transmission plant that the Company planned to operate with Chrysler LLC. Inside INdiana states that Getrag Transmission and Chrysler had an agreement to construct a $530 million plant in Tipton County that would have employed more than 1,000. Inside INdiana says that Chrysler sued Getrag Transmission, claiming that the Company couldn't secure the needed financing, and the Company abandoned the project before it filed for bankruptcy. The filing covers the county's costs related to the failed joint venture, Inside INdiana relates, citing Barnes and Thornburg LLP Partner Michael McCrory. According to Inside INdiana, Mr. McCory said that talks continue, but the filing preserves the county's right to get any compensation if there is a distribution of Getrag Transmission's assets. Inside INdiana reports that Getrag Transmission will decide if it will reject the claim. There are other legal avenues that the county could take if that happens, the report states, citing Mr. McCrory. Citing Secretary of State Todd Rokita, Kokomo Tribune relates that the Securities Division of the Indiana Secretary of State's Office started a probe on the failed Getrag transmission plant two weeks ago. Mr. Rokita, according to Indystar.com, said that Chrysler is the focus of the probe into possible security fraud. About GETRAG Transmission Headquartered in Sterling Heights, Michigan, GETRAG Transmission Manufacturing LLC -- http://www.getrag.de/-- designs and makes dual clutch transmission its facility in Tipton, Indiana. The company filed for Chapter 11 relief on Nov. 17, 2008 (Bankr. E.D. Mich. Case No. 08-68112). Jayson Ruff, Esq., Jeffrey S. Grasi, Esq., and Stephen M. Gross, Esq., at McDonald Hopkins represent the Debtor as counsel. 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. HALO TECHNOLOGY: Court to Hear Chapter 11 Plan Outline on April 4 ----------------------------------------------------------------- Halo Technology Holdings, Inc., et al., has filed with the U.S. Bankruptcy Court for the District of Connecticut a Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code. On March 9, 2009, the Debtors submitted a disclosure statement explaining their Joint Plan of Reorganization. The hearing to consider approval of the adequacy of the information in the disclosure statement will be held on April 4, 2009, at 10:00 a.m. The disclosure statement explains the terms of the Plan and, if approved, will be included in the plan solicitation package to parties entitled to vote on the plan. Objections, if any, to the approval of the disclosure statement, is due on April 10. A full-text copy of the Disclosure Statement is available at: http://bankrupt.com/misc/HaloTech.DisclosureStatement.pdf Plan Terms The Debtors expect to become financially viable firms upon exit from bankruptcy. The debtors will issue new common stock and senior notes following emergence. Pursuant to the Plan: -- holders of Contributing Claims will receive shares of common stock at a price of $1.00 per share. -- the New Equity Investor will pay $1,000,000 in exchange for shares of preferred stock, at a purchase price of $1.00 per share. -- General unsecured creditors will receive distribution from certain litigation proceeds, about 30 days after the new senior notes have been paid in full. -- Holders of existing equity interests, which will be cancelled, won't receive anything. -- Holders of subordinated claims will receive notes subordinate to the new senior notes. The Plan segregates the various claims against and interests in the Debtors into 7 classes: Class 1 Priority Non-Tax Claims Not impaired. Class 2 Secured Claims Impaired. Class 3 Other Secured Claims Impaired. Class 4 General Unsecured Claims Impaired. Class 5 Subordinated Claims Impaired. Class 6 Convenience Claims Impaired. Class 7 Old Equity Interests Impaired; deemed to reject. Administrative Expenses and Priority Tax Claims, which are unclassified under the Plan, will be paid in full. Pursuant to the Plan, holders of Allowed Secured Claims under Class 2, Allowed of Other Secured Claims under Class 3, Allowed General Unsecured Claims under Class 4, Allowed Subordinated Claims under Class 5, and Allowed Convenience Claims under Class 6 are entitled to vote on the Plan. Holders of Old Equity Interests under Class 7 are deemed to reject the Plan and are not entitled to vote. "Cramdown" Provisions The Debtors reserve the right to seek confirmation of the Plan pursuant to the "cramdown" provisions under Sec. 1129(b) of the Bankruptcy Code. Under that 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. Greenwich, Connecticut-based Halo Technology Holdings, Inc. fka Warp Technology Holdings Inc. -- http://www.haloholdings.com/-- is a holding company whose subsidiaries operate enterprise software and information technology businesses. The company and its affiliates filed for chapter 11 protection on Aug. 20, 2007 (Bankr. D. Conn. Lead Case No. 07-50480). David Wallman, Esq., at The Wallman Law Firm, LLC; lawyers at Zeisler & Zeisler P.C.; and Jeffrey R. Gleit, Esq., at Kasowitz Benson Torres & Friedman, LLP, serve as the Debtors' counsel. James C. Graham, Esq., Kristin B. Mayhew, Esq., at Pepe & Hazard, and Patrick M. Birney, Esq., at Robinson & Cole LLP, represent the Official Committee of Unsecured Creditors as counsel. At March 31, 2007, the company reported total assets of $47,344,373 and total liabilities of $45,494,297. INLET RETAIL: Wants to Hire Ivan Nossokoff as Bankruptcy Counsel ---------------------------------------------------------------- Inlet Retail Associates, LLC, asks the U.S. Bankruptcy Court for the District of South Carolina for authority to employ Ivan N. Nossokoff, LLC, as counsel. The firm will: a) give the Debtor legal advice with respect to its powers and duties as debtor-in-possession in the continued operation of its business and property; b) proceed with necessary actions to collect accounts receivable and to pursue all other claims which the debtor in possession may have; c) review and prepare on behalf of the Debtor necessary applications, motions, adversary proceedings, answers, orders, reports, plans, disclosure statements, objections and other legal papers; d) perform all other legal services for the Debtor which may be necessary. Ivan N. Nossokoff, Esq., will charge the Debtor at a rate of $360 per hour. Paralegal and legal assistant services will be billed at a rate not to exceed $75 per hour. Mr. Nossokoff was paid prepetition a general retainer of $35,000 on June 30, 2008. Of this sum, approximately $8,500 remains as a general retainer. Mr. Nossokoff assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14 of the Bankruptcy Code. Mr. Nossokoff can be reached at: Ivan N. Nossokoff, LLC 1470 Tobias Gadson Boulevard, Suite 107 Charleston, SC 29407 Tel: (843) 571-5442 About Inlet Retail Headquartered in Irvine, California, Inlet Retail Associates, LLC filed for Chapter 11 protection March 20, 2009, (Bankr. Case No.: 09-02083). Ivan N. Nossokoff, LLC represents the Debtor in its restructuring efforts. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. INSIGNIA VESSEL: Moody's Reviews 'B2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service placed Insignia Vessel Acquisition, LLC's ratings, including its B2 Corporate Family rating, on review for possible downgrade. Insignia is a wholly owned operating subsidiary of Oceania Cruises, Inc. that is in turn owned by Prestige Cruise Holdings, Inc. The review for possible downgrade reflects the likelihood that Oceania's earnings will be hurt by lower demand and falling cruise pricing. The weak earnings environment is likely to impact the company's liquidity profile as well. Additionally, Oceania is scheduled to take delivery of a new ship in September 2010, which may be delivered into a weak demand environment that could cause credit metrics to remain below previous expectations. The review for possible downgrade will focus on future demand and pricing trends, the company's liquidity profile, as well as its ability to absorb new ship capacity in 2010 and beyond. Ratings placed under review for possible downgrade (LGD rates subject to adjustment) are: -- Corporate Family rating at B2 -- Probability of Default rating at B2 -- First Lien revolver at B1, LGD 3, 39% -- First lien term loan at B1, LGD 3, 39% -- Second lien term loan at Caa1, LGD 6, 90% Moody's last rating action occurred on December 10, 2007, when Moody's affirmed the B2 corporate family rating and stable outlook of Insignia Vessel Acquisition, LLC, a wholly owned subsidiary of Oceania Cruises, Inc. owned by Prestige Cruise Holdings, Inc. Oceania Cruises Inc. owns three identical passenger cruise ships that each have 698 berths (2,094 in total) operating under the brand name of Oceania Cruises. INVESTMENT REALTY: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Investment Realty Funding, Inc. dba Investment Realty Funding Trust dba IRFDILF Realty Trust 400 Nathan Ellis Highway Mashpee, MA 02649 Bankruptcy Case No.: 09-12279 Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Alex M. Rodolakis, Esq. Gilman, McLaughlin & Hanrahan LLP 297 North Street Hyannis, MA 02601 Tel: (508) 778-1100 ext 10 Fax: (508) 778-1800 Email: amr@gilmac.com Total Assets: $7,500,000.00 Total Debts: $9,000,000.00 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by Craig Jalbert, chief restructuring officer of the company. JOHN SOTIRKOS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: John S. Sotirkos Susan S. Sotirkos 2003 West Ave. 140th San Leandro, CA 94577 Bankruptcy Case No.: 09-42156 Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court Northern District of California (Oakland) Judge: Randall J. Newsome Debtor's Counsel: Eric A. Nyberg, Esq. Kornfield, Nyberg, Bendes and Kuhner 1999 Harrison St. #2675 Oakland, CA 94612 Tel: (510) 763-1000 Email: e.nyberg@kornfieldlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cabn09-42156.pdf The petition was signed by John S. Sotirkos and Susan S. Sotirkos. LANIER HEALTH: S&P Downgrades Rating on $12.7 Mil. Bonds to 'BB-' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating to 'BB-' from 'BBB-'on Lanier Health Services, Alabama's $12.7 million series 1997-A bonds, issued for Chattahoochee Valley Hospital Society Inc. The downgrade reflects the continuing deterioration in Lanier's operating performance and a weakened balance sheet. Lanier's operating performance deteriorated in fiscal 2008 following the loss of the hospital's only vascular surgeon, who accounted for nearly $2 million (5%) of net patient revenues, while a larger and better capitalized competitor continues to challenge Lanier's overall market share. Additionally, the difficult regional economy resulted in higher levels of bad debt than expected. And, while Lanier avoided the deleterious volatility facing hospitals that had invested in equities, the hospital's unrestricted cash declined by more than half to $5.7 million as of Jan. 31, 2009, due to required capital spending on fire safety and pharmacy upgrades that were entirely funded from cash reserves. The 'BB-' rating also reflects Lanier's $3.6 million net operating loss for fiscal 2008, and $2.2 million operating loss for the seven months ended Jan. 31, 2009; significant clinical staff concentration; and maximum annual debt service coverage, which at 0.3x (at fiscal year-end) required the engagement of an outside consultant. "The negative outlook reflects the heightened risks that the loss of additional physicians, or other operating issues could negatively affect Lanier's ability to repay its outstanding debt," said Standard & Poor's credit analyst Karl Propst. "We also believe that Lanier will successfully recruit a replacement vascular surgeon, and that the hospital will capture adequate new patient volumes from the expected population influx within its 10- county total service area without further dilution of its current market share," said Mr. Propst. Standard & Poor's believes that management will successfully execute its plan to correct operating weaknesses and restore positive operating margins over the next two years. However, S&P may lower the rating if operating or balance sheet metrics continue to deteriorate. A return to an investment-grade rating is unlikely in the near term but possible over the longer term, particularly if the region realizes the benefits expected from the new Kia Motors plant. Lanier Memorial Hospital, located in Valley, Alabama, operates a 115-bed acute-care hospital and 103-bed nursing home. LAS VEGAS CASINO: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------ Anika Myers Palm at OrlandoSentinel.com reports that Las Vegas Casino Lines has filed for Chapter 11 bankruptcy protection. OrlandoSentinel.com relates that Las Vegas Casino listed $1 million to $10 million in liabilities and $1 million to $10 million in assets. According to court documents, Las Vegas Casino said that it has more than 200 creditors. Las Vegas Casino, court documents state, said that after it had discharged other debts, it would be able to pay unsecured creditors. OrlandoSentinel.com says that Las Vegas Casino's unsecured creditors include: -- Canaveral Port Authority, which holds a disputed claim of $800,000; -- North Florida Shipyard, which claims to have a disputed debt of about $1.18 million related to ship renovations; -- Richard Stottler, who is owed $3.5 million; and -- Sunrise Bank, which is owed $1.72 million. Las Vegas Casino Lines is a casino cruise line that operates out of Port Canaveral. LAS VEGAS SANDS: Plans Debt Buyback, To Talk With Chinese Groups ---------------------------------------------------------------- Tamara Audi at The Wall Street Journal reports that Las Vegas Sands Corp. has taken steps to prepare for a possible buyback of its debt and said that it will start talks with Chinese investment groups that want to acquire stakes in its casinos and hotels in Macau. According to WSJ, Las Vegas Sands is seeking ways to raise cash to meet its coming loan obligations. WSJ relates that Las Vegas Sands hired Goldman Sachs Group Inc. to negotiate an amendment from lenders that would let it repurchase up to $800 million of its debt. Las Vegas Sands, according to the report, had $10.4 billion in debt at the end of 2008. WSJ states that Las Vegas Sands Chief Executive and majority shareholder Sheldon Adelson denied on Tuesday that the Company has plans to buy back debt. Citing Mr. Adelson, WSJ says that Las Vegas wants the amendment "solely for the purpose of flexibility." Two Chinese groups are interested in acquiring stakes in the Venetian and Sands resort casinos in Macau, WSJ reports, citing Mr. Adelson. WSJ, citing Las Vegas Sands, relates that the Chinese groups are interested in buying stakes in the Company's Four Seasons hotel in Macau. According to WSJ, Mr. Adelson said that the Company is also in talks with two Chinese construction firms interested in financing and completing portions of Las Vegas Sands' resort development in Macau, which it recently suspended. Las Vegas Sands will keep control and maintain the majority stake in the properties even if the sales go forward, WSJ says, citing Mr. Adelson. Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo and convention center. The company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China. As of Sept. 30, 2008, the company has US$14.7 billion in total assets, and US$12.4 billion in total liabilities. Unrestricted cash balances as of September 30, stood at US$1.28 billion while restricted cash balances were US$239.1 million. Of the restricted cash balances, US$199.6 million is restricted for Macao-related construction and US$32.3 million is restricted for construction of Marina Bay Sands in Singapore. As of Sept. 30, total debt outstanding, including the current portion, was US$10.35 billion. As reported in the Troubled Company Reporter on Mar. 12, 2009, Moody's Investors Service lowered the Probability of Default and Corporate Family Ratings of Las Vegas Sands, Corp. to B3 from B2. Moody's also lowered various ratings of Las Vegas Sands' subsidiaries, including Venetian Casino Resort, LLC (and its co- issuer Las Vegas Sands, LLC) and Venetian Macao Limited. The rating outlook is negative. Moody's also affirmed Las Vegas Sands' SGL-3 Speculative Grade Liquidity rating. The rating action concludes the review process that was initiated on November 12, 2008. As reported by the TCR on March 19, Las Vegas Sands Corp., which owns the Venetian Casino Resort and other casinos, got a one-notch downgrade of its corporate rating to 'B3' from Moody's Investors Service. Moody's projects there will be a "liquidity shortfall" and violation of covenants on the Macau credit facility absent the sale of non-core assets in Macau. Moody's does expect Sands to succeed in selling one of the three properties on the market. LAS VEGAS SANDS: Loan Amendment Won't Affect Moody's 'B3' Rating ---------------------------------------------------------------- Moody's Investors Service says that Las Vegas Sands Corp.'s ratings are not immediately affected by the company's announcement that it is in discussions with lenders to its Las Vegas subsidiary regarding an amendment that would allow the company to acquire up to $800 million of outstanding term loans. The last rating action took place on March 10, 2009 when Moody's lowered the company's Corporate Family Rating to B3 from B2 and assigned a negative rating outlook. Las Vegas Sands, Corp. owns and operates gaming and entertainment facilities in Las Vegas, Nevada and in Macau, China. The company is also developing gaming facilities in Pennsylvania and Singapore. The company generates consolidated annual net revenues of about $4.4 billion. LEHMAN BROTHERS: Court Approves Repurchase Deal with Bank Unit -------------------------------------------------------------- Lehman Brothers Holdings, Inc., and its affiliated debtors obtained authority from Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to ink a master repurchase agreement with Lehman Brothers Bank FSB. The agreement permits LBHI to purchase from Lehman Brothers Bank a portfolio of residential mortgage loans for up to $325 million in exchange for its agreement to repurchase those loans at the same price on a certain date. Attorney for LBHI, Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in New York, said that the agreement would help Lehman Brothers Bank's subsidiary, Aurora Loan Services LLC, to make advance monthly payment to mortgagees in connection with its mortgage servicing business. Lehman Brothers Bank conducts its residential mortgage loan servicing operation in the United States primarily through Aurora Loan. Due to the recent collapse of the financial markets, Lehman Brothers Bank is unable to access the sources from where it usually gets fund to finance Aurora Loan, Mr. Perez related. Mr. Perez said that the mortgagees might declare Aurora Loan to be in default under their mortgage servicing agreements if the company failed to make advance payments to them. "The [mortgagees] could take precipitous actions that would threaten the value of Aurora's business and [Lehman Brothers Bank's enterprise as a whole," Mr. Perez said. He added that regulators may also limit the activities of Lehman Brothers Bank out of concern that the bank may no longer be able to rely on Aurora Loan's business. Lehman Brothers Bank is subject to the regulatory authority of the Office of Thrift Supervision and its deposits are insured by the Federal Deposit Insurance Corporation. These regulators routinely monitor the bank's capital and business such as the performance of Aurora Loan, which is reportedly one of the bank's most significant operations. "If [Lehman Brothers Bank] is not adequately capitalized or if there is a material risk to the bank's capital or operations, such as, for example, a serious disruption to Aurora's business, the regulators may take actions to restrict or control [Lehman Brothers Bank's] activities," Mr. Perez asserted. Mr. Perez further asserted that the deal represents another effort by LBHI "to preserve the opportunity to realize the value of its equity interest in [Lehman Brothers Bank]," which was recently reported at about $467 million. "The master repurchase agreement represents an arm's-length transaction, is on market terms, and protects LBHI's cash investment through [its] custody of and interest in a portfolio of mortgage loans that will be purchased by LBHI," he said. The key terms of the master repurchase agreement are: (1) Upon satisfying certain conditions, Lehman Brothers Bank may sell to LBHI certain mortgage loans in exchange for an amount paid by LBHI, with a simultaneous agreement by Lehman Brothers Bank to repurchase those mortgage loans at a date certain for the purchase price paid by LBHI plus an incremental amount. Unless a longer period is agreed to by LBHI, the repurchase is expected to occur within three to four days although Lehman Brothers Bank has the option to renew so long as it continues to satisfy the conditions precedent. (2) Before any transaction is entered into, Lehman Brothers Bank must identify to LBHI a portfolio of mortgage loans to be subject to a transaction. The purchase price to be paid by LBHI for a transaction will be a percentage, generally ranging from 50% to 60%, of the value of the purchased loan determined based on the most recent valuation by a third party valuation firm as may be further adjusted by LBHI in its discretion. (3) Upon satisfying certain conditions, Lehman Brothers Bank is entitled to enter into transactions during a period of 180 days following the execution of the repurchase agreement and no "repurchase date " should be later than such 180th day unless otherwise agreed to by the parties. Lehman Brothers Bank can enter into a series of transactions during this period and is expected to do so on a monthly basis starting in March to satisfy Aurora Loan's cash flow needs. (4) Upon a repurchase by Lehman Brothers Bank of the mortgage loan, LBHI will get the purchase price that it paid for the mortgage loan plus an amount equivalent to the interest that would accrue at a per annum rate equal to the LIBOR rate plus 6% on a 360-day year basis for the actual number of days during the period commencing on the purchase date and ending on the repurchase date. (5) At no time may the aggregate outstanding purchase price for all purchased mortgage loans by LBHI exceed $325,000,000. (6) In the event the transactions are deemed to be loans, Lehman Brothers Bank pledges to LBHI, as security for the performance of Lehman Brother Bank's obligations, a fully perfected first priority security interest in the purchased mortgaged loans, all servicing rights related to the purchased mortgage loans and other related assets. Prior to any purchase, the original mortgage notes for the mortgage loan must be delivered to a third party custodian for LBHI's benefit. (7) LBHI should determine the market value of the purchased mortgage loans at intervals determined in its discretion. If at any time, the aggregate asset value of all purchased mortgage loans is less than 100% of the aggregate outstanding purchase price, LBHI may require Lehman Brothers Bank to transfer cash or additional mortgage loans in its sole discretion to restore the aggregate asset value to or above 100% of the aggregate outstanding purchase price. (8) If an "event of default" occurs, LBHI may exercise certain rights and remedies immediately without notice to Lehman Brothers Bank including obtaining all files related to the purchased mortgage loans and liquidating those loans. (9) Lehman Brothers Bank will indemnify LBHI and its affiliates and their respective direct and indirect partners, shareholders, members, officers, directors, employees, agents and advisors for any costs incurred in connection with the repurchase agreement. Capital Maintenance Actions In another motion filed with the Court, LBHI and LCPI also seek approval to step up these actions to support the capital level of Lehman Brothers Bank: * LBHI's entry into one or more assignment agreements with Aurora Loan to transfer all or part of a portfolio of LBHI's unencumbered mortgage servicing rights to Aurora Loan; * LBHI's entry into a settlement agreement with Lehman Brothers Bank and Aurora Loan, pursuant to which LBHI will convey to and confirm Aurora Loan's ownership of certain funds; * LBHI's investment of cash of up to $15 million in one or more capital contributions; and * The consensual termination of unfunded loan commitments with General Electric Capital Corporation, among others, in which LCPI, Lehman Brothers Bank, and the Bank and Woodlands Commercial Bank are participants aggregating $1.375 billion. Mr. Perez says most of these actions should be taken by March 31, 2009, for Lehman Brothers Bank to meet the capital adequacy requirements. A hearing to consider approval of the motion is scheduled for March 31, 2009. Creditors and other concerned parties have until March 30, 2009 to file their objections. 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) LEHMAN BROTHERS: Investors File Suit to Recoup $1.5 Million ----------------------------------------------------------- Bankruptcy Law360 reports that a New Jersey couple filed a complaint against Lehman Brothers Holdings Inc. on Tuesday to recover about $1.5 million in bonds and cash from the Debtors. Bankruptcy Law360 notes that the complaint adds to the massive tangle of litigation surrounding the largest bankruptcy in U.S. history. 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) LEHMAN BROTHERS: MAC Hikes Bid for Sikorsky Chopper to $3.1 Mil. ---------------------------------------------------------------- Lehman Brothers Holdings, Inc., and its affiliated debtors informed Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York on March 23, 2009, that MAC Aircraft Sales LLC made a higher offer for a helicopter in the amount of $3,100,000. The Debtors and the Purchaser have entered into Amendment No. 1 to the SPA, pursuant to which the purchase price was amended. Debtor CES Aviation V LLC had originally signed an agreement with MAC for the purchase of the Sikorsky S-76C+ helicopter for $2,795,000. The key terms of the sale agreement are: (1) The aircraft will be subjected to an inspection in order to verify that it is in "delivery condition." (2) MAC will shoulder the cost of the inspection unless CES Aviation V defaults, in which case it should reimburse MAC. (3) The deposit in the sum of $500,000 is non-refundable if MAC accepts the aircraft unless the Court does not authorize the sale of the aircraft; the aircraft is materially damaged or destroyed due to Force Majeure; or CES Aviation V is in default under the terms and conditions of the sale agreement. In case MAC rejects the aircraft, the sale agreement will terminate and the deposit will be refunded to MAC. (4) Prior to the sale closing, CES Aviation should position the aircraft at the "delivery location" and MAC should reimburse CES Aviation V of the costs with respect to such flight. (5) CES Aviation V's and MAC's obligations under the sale agreement will be subject to several conditions including MAC's obligation to transfer the balance of the purchase price in the sum of $2,295,000 to the escrow agent and CES Aviation V's obligation to pay all maintenance contracts up to the sale closing. (6) Except as otherwise noted in the sale agreement, the aircraft is being sold and delivered in "as is, where is, with all faults" condition, and all delivery conditions specified in the sale agreement will expire and be of no further force or effect as of the closing. (7) MAC will pay any sales, use, excise and other taxes as a result of the sale, delivery, ownership and use of the aircraft. (8) All effective rights under warranties from manufacturers and service providers or suppliers with respect to the aircraft are assigned and transferred to MAC as of the closing. (9) Except as otherwise stated in the sale agreement, CES Aviation V and MAC will bear their own transaction costs and expenses. CES Aviation V will be solely responsible for the fees of its broker, Bloomer deVere Group Avia Inc., and may direct the escrow agent to pay the fees to the broker at closing out of the proceeds. MAC and CES Aviation V will each pay one-half of the "escrow and title search fee" in connection with the transactions. The sale agreement may be terminated at anytime prior to closing if the Court does not approve the agreement on or before May 4, 2009, and MAC terminates the agreement upon written notice within five days. In case MAC has not provided the notice of termination and the Court has not approved the proposed sale on or before May 19, 2009, either company may terminate the sale agreement. The sale agreement between CES Aviation V and MAC does not contemplate additional competitive bidding for the aircraft. However, the sale of the aircraft remains subject to higher or better offers. Any buyer interested to make an offer for the aircraft is advised to contact Bloomer deVere. 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) LEHMAN BROTHERS: Seeks to Transfer Entegra Account to Barclays -------------------------------------------------------------- Lehman Brothers Holdings, Inc., and Lehman Commercial Paper, Inc., seek authority from Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to transfer a deposit account to Barclays Bank PLC. The deposit account was created to hold funds provided by certain lenders to Entegra TC LLC under a credit agreement it signed with LCPI, which serves both as an administrative agent and lender under the agreement. The funds in the account were held at JPMorgan Chase Bank N.A. and were eventually transferred to another account at The Bank of New York Mellon following the acquisition of Lehman Private Investment Management Division, the custodian of the account, by Barclays Capital Inc. Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, contends that the transfer of the deposit account from LCPI to Barclays Bank is a necessary component of LCPI's resignation from its role as administrative agent under the credit agreement. LCPI, Ms. Marcus relates, agreed with Barclays Bank and Entegra for its resignation as administrative agent and the transfer of its role to Barclays Bank pursuant to an October 6 court order issued in its bankruptcy case. Ms. Marcus clarifies that the deposit account and the funds belong to the lenders and are not property or assets of LCPI. She also clarifies that LCPI sold its position as lender shortly after the closing of the credit agreement and that it has no beneficial interest in the account. "The motion does not seek approval of the transfer of the custodianship of the account from LCPI to Barclays Bank. Rather, the motion seeks approval of the transfer of any interest LCPI might have in the [deposit account] to Barclays Bank in connection with the transfer of LCPI's agency role," Ms. Marcus further clarifies. In connection with the proposed transfer, LBHI and LCPI also seek approval to change the name of the deposit account to "Revolving Loan Lenders Credit-Linked Deposit Account" to evidence the transfer, and to transfer or assign any additional bank accounts or funds which LCPI holds merely as agent. "The transfer or assignment of other additional agency accounts as may be necessary or appropriate from time to time is similarly in the best interests of their estates as it is likely that such transfers or assignments may be required for future resignations from administrative agency positions," Ms. Marcus further says. 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) LIGHTHOUSE INTERACTIVE: Shut & Declared Bankrupt, Says Report ------------------------------------------------------------- Het Parool reports that Lighthouse Interactive has been shut down and been declared bankrupt. Worthplaying.com reports that the personnel have been notified. The report states that Lighthouse Interactive got into financial trouble after selling Silverbirch in 2008. According to the report, its shares were put on hold at the Toronto Stock Exchange. Lighthouse Interactive is a Dutch/Canadian videogame publisher. It is known for titles such as Ship Simulator and Sword of the Stars. LOGAN'S ROADHOUSE: Moody's Affirms 'B2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed all of Logan's Roadhouse Inc.'s ratings -- including its B2 Corporate Family and Probability of Default Ratings -- and revised the outlook to negative from stable. The outlook revision was primarily triggered by the softening top- line performance such as same store sales growth in the back half of 2008 and expectations that negative trends are likely to persist into 2009. Logan's same store sales turned negative for the first time (after 21 consecutive quarters of flat or positive growth) in the first quarter of its fiscal year 2009 (ending October 2008) and Moody's expects this trend would continue throughout 2009. "While Logan's has so far performed generally better than its casual dining peers in part due to its consistent focus on value offering, it's not impervious to the deepening recession as consumers cut back on eating-out spending." Stated Moody's analyst John Zhao, "Thus rising negative pressure on sales is tempering those positive effects from cost saving initiatives implemented by the company, and hence are a concern." The affirmation of the B2 CFR reflects expectations that the company will maintain good liquidity, including remaining free cash flow positive and covenant compliant in the next twelve months. Negative rating pressure would build if the company's efforts to maintain margins in the face of weakening sales volumes are not successful. These ratings were affirmed: -- Corporate Family Rating at B2 -- Probability of Default Rating at B2 -- $30 million revolver maturing in 2011 at Ba3 (LGD2, 29%) -- $138 million term loan B maturing in 2012 at Ba3 (LGD2, 29%) Moody's last rating action for Logan's occurred on November 1, 2006, when the company's corporate family and probability of default ratings were assigned for the first time at B2 with a stable outlook. Refer to Moodys.com for an update credit opinion. Logan's Roadhouse, Inc., headquartered in Nashville, Tennessee, operates 176 and franchises 26 traditional American roadhouse- style steakhouses in 23 states across the country. Company-owned units are largely concentrated in the south and southeastern United States with franchise locations in California and the Carolinas. Annual revenues were approximately $544 million as of January 2009. MAGNA ENTERTAINMENT: Won't File 10Ks & 10Qs While in Bankruptcy --------------------------------------------------------------- Magna Entertainment Corp. will not be filing its Annual Report on Form 10-K for the fiscal year ended December 31, 2008, nor will it be filing quarterly reports on Form 10-Q, with the U.S. Securities and Exchange Commission or the Canadian securities regulators during the period it continues to operate its business as a debtor in possession under the U.S. Bankruptcy Code. MEC's inability to file these materials is attributable to the circumstances of MEC's ongoing court-supervised restructuring process under Chapter 11 of the U.S. Bankruptcy Code. In particular, the expense and effort involved in complying with annual and quarterly reporting requirements cannot, in the opinion of the Company, be justified in light of MEC's current operational and financial situation. As a means of keeping the public informed of its financial condition during the remainder of the bankruptcy case, MEC will file monthly reports required to be filed with the U.S. Bankruptcy Court under cover of Form 8-K with the SEC and the Canadian securities regulators as well as any other disclosure required by Form 8-K. MEC also intends to comply with the alternative information guidelines as set out in National Policy 12-203 of the Canadian securities regulators throughout the default period. In that regard, MEC will issue default status reports in the form of news releases that include material information concerning MEC's affairs that has not been generally disclosed. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks, based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a fifty percent interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. As of December 31, 2008, the Company had total assets of $1,049,387,000 and total debts of $958,591,000. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del., Lead Case No. 09-10720). Marcia L. Goldstein, Esq., Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. L. Katherine Good, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC, has been tapped as financial advisor and Kurtzman Carson Consultants LLC, as claims agent. MANALAPAN RETAIL: Wants to Hire Heilbrunn Pape as Special Counsel ----------------------------------------------------------------- Manalapan Retail Realty Partners, LLC, asks the U.S. Bankruptcy Court for the District of New Jersey for authority to employ Heilbrunn, Pape & Goldstein as special counsel. HPG will perform work related to obtaining approvals from the municipality of Manalapan for the development of the Debtor's real property. Kenneth Pape, Esq., a member at HPG, tells the Court that the hourly rates of the firm's professionals are: Partners $425 Associates $375 - $250 Paralegal $125 Mr. Pape assures the Court that HPG is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Pape can be reached at: Heilbrunn, Pape & Goldstein 516 Route 33 West, Building 1 Millstone Township, NJ 08535 Tel: (732) 679-8844 Fax: (732) 679-6554 (732) 679-0156 About Manalapan Retail Headquartered in Millstone Township, New Jersey, Manalapan Retail Realty Partners, LLC filed for Chapter 11 protection on March 10, 2009, (Bankr. Case No.: 09-15765) Jay L. Lubetkin, Esq. at Rabinowitz Lubetkin & Tully, L.L.C. represents the Debtor in its restructuring efforts. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. MANALAPAN RETAIL: Wants Rabinowitz Lubetkin as Bankruptcy Counsel ----------------------------------------------------------------- Manalapan Retail Realty Partners, LLC, asks the U.S. Bankruptcy Court for the District of New Jersey for authority to employ Rabinowitz, Lubetkin & Tully, L.L.C. as counsel. RLT will perform all necessary court appearances, research, preparation and drafting of pleadings and other legal documents, hearing preparation and related work, negotiations and advice with respect to the Debtors' Chapter 11 proceeding. Jay L. Lubetkin, Esq., partner at RLT, tells the Court that the hourly rates of the firm's professionals are: Partners $290 - $475 Associates $190 Law Clerk $175 Paralegal $150 Mr. Lubetkin assures the Court that RLT is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Lubetkin can be reached at: Rabinowitz, Lubetkin & Tully, L.L.C. 293 Eisenhower Parkway, Suite 100 Livingston, New Jersey 07039 Tel: (973) 597-9100 Fax: (973) 597-9119 About Manalapan Retail Realty Partners, LLC Headquartered in Millstone Township, New Jersey, Manalapan Retail Realty Partners, LLC filed for Chapter 11 protection on March 10, 2009, (Bankr. Case No.: 09-15765) Jay L. Lubetkin, Esq. at Rabinowitz Lubetkin & Tully, L.L.C. represents the Debtor in its restructuring efforts. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. MANITOWOC COMPANY: Moody's Cuts Corp. Family Rating to 'Ba3' ------------------------------------------------------------ Moody's Investors Service lowered the ratings of The Manitowoc Company, Inc. -- Corporate Family and Probability of Default Ratings to Ba3 from Ba2. The outlook is negative. The downgrade and change in outlook reflects the significant contraction in the global economy which is negatively impacting the construction industry, the main driver of the company's cranes business, and the foodservice industry. Moody's believes that these sectors will remain weak through 2009. Operating margins are likely to come under more pressure as the company may take more restructuring charges to right size its businesses and experiences reduced demand. As a result, Moody's view is that Manitowoc's operating performance will likely be below prior and will be more reflective of a Ba3 rating. EBITA margin (adjusted per Moody's methodology) for FY08 declined to 12.0% from 13.8% for FY07 and backlog within the crane business declined by about 34% over the same time period. Based on the tightening margins, reduced backlog and weak outlook for cranes and foodservice, Moody's believes that credit metrics will deteriorate and under certain circumstances could impair the company's ability to remain in compliance with financial covenants in its bank credit facilities in late 2009. Manitowoc is continuing with its integration of Enodis plc and maximizing synergies. The company is also pursuing restructuring initiatives and working capital improvement, attempting to minimize the negative impact of this downturn on its operating margins and cash generation. Manitowoc has been aggressively reducing its workforce and is rationalizing underutilized facilities. Notwithstanding these efforts, Manitowoc's operating performance has trended towards credit metrics that were previously identified by the rating agency as being supportive of a lower rating. These metrics include debt/EBITDA nearing 4.25x, and free cash flow/debt near 15% (all ratios adjusted per Moody's methodology). Moody's believes that the company's future credit metrics are more indicative of the Ba3 Corporate Family Rating. The negative outlook incorporates Moody's view that Manitowoc will continue to face a difficult economic environment through 2009 while it contends with the Enodis integration, reducing costs within its crane business, and improving its working capital management to generate free cash flow for debt reduction. These ratings/assessments were affected by this action: -- Corporate Family Rating lowered to Ba3 from Ba2; -- Probability of Default lowered to Ba3 from Ba2; -- $2.8 billion senior secured credit facility affirmed at Ba2, but its loss given default assessment is changed (LGD3, 37%) from (LGD3, 45%); and, -- $150 million senior unsecured notes due 2013 lowered to B2 (LGD5, 89%) from B1 (LGD6, 92%). The last rating action was on July 29, 2008 at which time Moody's affirmed Manitowoc's Ba2 Corporate Family Rating. The Manitowoc Company, Inc., headquartered in Manitowoc, WI, is a diversified global manufacturer supporting the construction and foodservice end markets. Revenues for FY08 were approximately $4.5 billion. MERUELO MADDUX: Case Summary & Six Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Meruelo Maddux Properties - 12385 San Fernando Road LLC 12385 San Fernando Road Sylmar, CA 91342 Bankruptcy Case No.: 09- 13338 Type of Business: The Debtor engages in residential, commercial and industrial development. See http://www.meruelomaddux.com/ Chapter 11 Petition Date: March 26, 2009 Court: Central District Of California (San Fernando Valley) Judge: Kathleen Thompson Debtor's Counsel: John J. Bingham, Jr., Esq. jbingham@dgdk.com Danning, Gill, Diamond & Kollitz, LLP 2029 Century Park East, Third Floor Los Angeles, CA 90067 Tel: (310) 277-0077 Fax: (310) 277-5735 Estimated Assets: $500 million to $1 billion Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Meruelo Maddux Properties, LP Inter-company $8,997,302 761 Terminal Street payable Building 1 2nd Fl Los Angeles, CA 90021 Employment Development Dept. taxes Unknown Bankruptcy Croup MIC 92E P.O. Box 82680 Sacramento, CA 94280-0001 Franchise Tax Board taxes Unknown Bankruptcy Unit P.O. Box 2952 Sacramento, CA 95812-2952 Internal Revenue Service taxes Unknown LA County Tax Collector property tax Unknown State of California taxes Unknown The petition was signed by Richard Meruelo, chief executive officer. MGM MIRAGE: Hires Weil Gotshal as Bankruptcy Counsel ---------------------------------------------------- MGM Mirage has hired Weil, Gotshal & Manges LLP to help prepare a possible Chapter 11 filing for City Center and to explore other options, Tamara Audi and Jeffrey Mccracken at The Wall Street Journal report, citing people familiar with the matter. According to WSJ, MGM Mirage and investment partner Dubai World appear unlikely to make a $220 million payment due Friday on the Company's City Center project. Citing people familiar with the matter, WSJ relates that MGM Mirage might file for bankruptcy protection this weekend, depending on negotiations among MGM Mirage, its lenders, and Dubai World, which is suing the Company for breach of contract and blamed it for cost overruns. As reported by the Troubled Company Reporter on March 24, 2009, Dubai World implied in the lawsuit that it probably won't make a $100 million payment on the City Center project, increasing the financial pressure on the project and on MGM Mirage. People familiar with the matter said that MGM Mirage's lenders, concerned enough about the situation, have hired Mayer Brown LLP as bankruptcy counsel, WSJ reports. According to WSJ, the sources said that Bank of America and Deutsche Bank are the agent banks for MGM Mirage. Citing the sources, WSJ states that MGM Mirage's lenders won't let the casino giant make the City Center payment on Friday unless Dubai World makes its payment. WSJ relates that analysts expect MGM Mirage earnings to drop to $1.2 billion to $1.6 billion in 2009. WSJ notes that to be in line with loan covenants, MGM Mirage needs to cut its debt to between $9 billion and $12 billion. About MGM Mirage Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported by the Troubled Company Reporter on March 23, 2009, Moody's Investors Service downgraded MGM MIRAGE's Probability of Default Rating to Caa3 from Caa2 and its Corporate Family Rating to Caa2 from Caa1. According to the TCR on March 23, 2009, Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Las Vegas-based MGM MIRAGE and its subsidiaries by two notches; the corporate credit rating was lowered to 'CCC' from 'B-'. These ratings were removed from CreditWatch, where they were initially placed with negative implications on Jan. 30, 2009. S&P said that the rating outlook is negative. The TCR reported on March 25, 2009, that Fitch Ratings took these rating actions for MGM MIRAGE following the lawsuit filed against MGM by CityCenter JV partner Dubai World, and the two-month covenant waiver obtained from its bank lenders last week: -- Issuer Default Rating downgraded to 'C' from 'CCC'; -- Senior secured notes downgraded to 'CCC/RR2' from 'B/RR2'; -- Senior unsecured credit facility downgraded to 'CC/RR3' from 'B-/RR3'; -- Senior unsecured notes downgraded to 'CC/RR3' from 'B-/RR3'; -- Senior subordinated notes affirmed at 'C/RR6'. MICHAEL VICK: Faces Suit for Misuse of Workers' Pension Funds ------------------------------------------------------------- The U.S. Department of Labor has filed a lawsuit in federal district court in Newport News, alleging that former National Football League player Michael Vick and others violated federal employee benefits law by making a series of prohibited transfers from a pension plan sponsored by one of his companies. The department also simultaneously filed an adversary complaint in federal bankruptcy court to prevent Mr. Vick from discharging his alleged debt to the MV7 retirement plan. MV7 was a celebrity marketing enterprise owned by Mr. Vick, who filed for Chapter 11 bankruptcy on July 7, 2008. The company sponsored a defined benefit retirement plan for nine current and former employees as of October 2008. "This action sends a message that the Labor Department will not tolerate the misuse of plan money and will take whatever steps necessary to recover the assets owed to eligible workers," said Secretary of Labor Hilda L. Solis. The department's complaints allege that Mr. Vick violated his duties as a plan trustee under the Employee Retirement Income Security Act by making a series of prohibited transfers from the plan for his own benefit. The plan assets were partially used to help pay the criminal restitution imposed upon Vick after his conviction for unlawful dog fighting as well as his attorney in the bankruptcy cases. From March 7, 2007, through July 7, 2008, Mr. Vick made and caused $1.35 million in withdrawals from the retirement plan. Former Vick financial advisors Mary Wong and David Talbot allegedly participated in some of the transfers. In addition, the complaint alleges that MV7 has co-fiduciary liability for the actions of Messrs. Vick and Talbot. Employers and workers can reach the Washington District Office of the Labor Department's Employee Benefits Security Administration at 301-713-2000 or toll-free at 866-444-3272 for help with problems relating to retirement and health benefits. In fiscal year 2008, EBSA achieved monetary results of $1.2 billion related to the pension, 401(k), health and other benefits for millions of American workers and their families. About Michael Vick Michael Dwayne Vick, born June 26, 1980 in Newport News, Virginia, is a suspended National Football League quarterback under contract with the Atlanta Falcons team. In 2007, a U.S. federal district court convicted him and several co-defendants of criminal conspiracy resulting from felonious dog fighting and sentenced him to serve 23 months in prison. He is being held in the United States Penitentiary at Leavenworth, Kansas. Mr. Vick is also under indictment for two related Virginia state felony charges for his role in the dogfighting ring and related gambling activity. His state trial has been delayed until he is released from federal prison. He faces a maximum 10-year state prison term if convicted on both counts. Mr. Vick filed a chapter 11 petition on July 7, 2008 (Bankr. E.D. Va. Case No. 08-50775). Dennis T. Lewandowski, Esq., and Paul K. Campsen, Esq., at Kaufman & Canoles, P.C., represent the Debtor in his restructuring efforts. Mr. Vick listed assets of $10 million to $50 million and debts of $10 million to $50 million. MICHEAL VILLINES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Micheal Villines Patricia Villines P.O. Box 240 Pea Ridge, AR 72751 Bankruptcy Case No.: 09-71330 Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court Western District of Arkansas (Fayetteville) Debtor's Counsel: Andrew L. Clark, Esq. Clark, Byarlay & Sparks 620 West Third Street, Ste. 100 Little Rock, AR 72201 Tel: (501) 376-0550 Fax: (501) 421-8365 Email: lawyerclark@msn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/arbw09-71330.pdf The petition was signed by Micheal Villines and Patricia Villines. MILLAR WESTERN: S&P Gives Negative Outlook; Affirms 'B-' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Edmonton, Alberta-based Millar Western Forest Products Ltd. to negative from stable. At the same time, S&P affirmed the ratings, including the 'B-' long-term corporate credit rating, on the company. "The revised outlook reflects our expectations that declining demand for bleached chemi-thermomechanical pulp and persistently weak lumber market conditions will result in Millar Western's operating profitability declining to a level that will not allow the company to cover fixed charges," said Standard & Poor's credit analyst Jatinder Mall. "This, in turn, will likely lead to the generation of negative free operating cash flow in 2009," Mr. Mall added. While Millar Western's operating cash flow will be very weak, low maintenance capital expenditures of about C$3 million annually and its large existing cash balance should allow liquidity to remain at a level adequate for the ratings for the next 12 months. The ratings on Millar Western reflect the company's participation in the highly cyclical, fragmented, and competitive pulp and lumber industries; exposure of the company's earnings to changes in volatile exchange rates; competition in hardwood pulp from South American producers; and a very highly leveraged capital structure. These risks are partially offset in S&P's view by the company's modern, efficient assets, and high degree of fiber self- sufficiency. Millar Western is a small, privately held pulp and lumber producer. It operates two sawmills with a combined annual capacity of 400 million board feet, and one pulp mill with an annual capacity to produce 300,000 metric tons of bleached chemi- thermomechanical pulp. Pulp accounted for 60% of 2008 sales, and lumber accounted for the remaining 40%. The company's financial risk profile is highly leveraged in S&P's opinion, characterized by high debt leverage. Partially offsetting this is Millar Western's good cost position, which S&P believes has insulated it from the high energy and fiber cost that most of its peers experienced in the recent history. The company's ability to generate better margins than its competitors is particularly important at the bottom of the cycle. Millar Western's pulp and sawmills benefit from a low-cost fiber supply; a high degree of energy self-sufficiency provided through a long- term power purchase agreement; modern, cost-efficient equipment; and a non-unionized workforce. The company's sawmill and pulp mill in Whitecourt, Alberta, use state-of-the-art technology and automation and consistently operate above design-capacity levels. The negative outlook reflects Standard & Poor's expectations that Millar Western's financial performance will remain weak in the near term due to what S&P believes will be poor market conditions for the pulp and lumber segment for the next two years. S&P would likely lower the ratings if lower profitability and an accelerated free cash burn, along with a weak pulp and lumber market outlook, contributed to liquidity declining below C$50 million by year-end. A revision in the outlook to stable would require an improvement in industry conditions, such that operating profitability improved to a level that would result in EBITDA interest coverage above 1.3x on a sustained basis, which would ensure the company could generate some free cash flow in a full-year working-capital cycle. MONACO COACH: Files 2nd Interim Plea for Use of Cash Collateral --------------------------------------------------------------- Monaco Coach Corporation and its affiliates are asking the U.S. Bankruptcy Court for the District of Delaware, for the second time, interim authority to use cash collateral of Bank of America, N.A. and Ableco Finance LLC. The Debtors want to continue using cash collateral, pending a hearing, and pursuant to a budget. The Court's previous order allows them to use the cash until March 28. The Debtors have determined that the further use of cash collateral is essential for the continued operations of their businesses, pending "one or more sales of their businesses or assets." Monaco Coach, the Wall Street Journal relates, owes Ableco about $37 million on a secured term loan. Court documents say that Monaco Coach owes Bank of America-led working capital lenders $36 million. As adequate protection for any diminution in the value of their collateral, each of the secured lenders is granted replacement security interests in all of the Debtors' post-petition assets, and shall have an allowed superpriority claim under Sec. 507(b) of the Bankruptcy Code. Both the replacement liens and the 507(b) superpriority claims will be subordinate to the Carve Outs for (a) U.S. Trustee Fees, (b) Fees of the Clerk of the Court; (c) the regular employee payroll and commissions' payment; and (d) the actual unpaid fees and expenses by professionals retained by an order of the Court. The lenders' agreement to the use of cash collateral is subject to the compliance of certain milestones pertaining to major asset and sales: April 15 -- File a sale or sale procedures motion; April 25 -- Obtain bidding and sale procedures; May 13 -- Conduct an auction sale; May 19 -- Obtain one or more orders authorizing the Major Asset Sale or Other Sales; June 5 -- Consummate the Other Sales; and June 19 -- Consummate the Major Asset Sales. A copy of the BofA Loan Major Asset Sale Budget is available at http://bankrupt.com/misc/MonacoCoach.ExhibitB.pdf A copy of the Term Loan Major Asset Sale Budget is available at http://bankrupt.com/misc/MonacoCoach.ExhibitC.pdf A copy of the BofA Loan Other Budget is available at: http://bankrupt.com/misc/MonacoCoach.ExhibitD.pdf A copy of the Term Loan Other Budget is available at http://bankrupt.com/misc/MonacoCoach.ExhibitE.pdf 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., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. Dennis A. Meloro, Esq., at Greenberg Traurig, represents the Official Committee of Unsecured Creditors as counsel. MONACO COACH: Lenders Oppose Sale of Manufacturing Operations ------------------------------------------------------------- Peg Brickley at The Wall Street Journal reports that Monaco Coach Corp. said that its senior lenders are opposing the potential sale of its manufacturing operations. According to WSJ, Monaco Coach is willing to pay $50 million for the operations. Monaco Coach said in a filing with the U.S. Bankruptcy Court in Delaware that it received a letter of intent from an unnamed "major public company" offering a combination of cash and stock for the recreational vehicle manufacturing business. WSJ states that Monaco Coach said that if the offer turns into a deal, the Company will be able to pay off all or most of its secured debts. According to court documents, the deal is not yet signed up, and secured lenders led by Bank of America Corp. and Cerberus Capital Management's distressed lending unit Ableco Finance have yet to support it. Monaco Coach, WSJ relates, owes Ableco about $37 million on a secured term loan. Court documents say that Monaco Coach owes Bank of America-led working capital lenders $36 million. 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: Signs Non-Binding LOI to Sell RV Unit to Navistar --------------------------------------------------------------- Monaco Coach Corporation has signed a non-binding letter of intent with Navistar, Inc. with respect to a proposed transaction in which Navistar would acquire certain assets and assume certain liabilities primarily associated with the Company's recreational vehicle manufacturing business. Navistar, with nearly $15 billion in annual sales, is a global manufacturer of commercial vehicles, military vehicles, diesel engines and related parts and services. Monaco Coach Corporation is one of the nation's recreational vehicle manufacturers. The letter of intent contemplates that Monaco and Navistar will work to sign a definitive asset purchase agreement during early April. Following the completion of due diligence and the bankruptcy court approval process, including the auction process, the parties intend to close the transaction shortly after obtaining the entry of a final non-appealable sale order of the bankruptcy court pursuant to Section 363 of the Bankruptcy Code, authorizing the transfer of purchased assets to Navistar. Monaco continues to work with other interested parties regarding the acquisition of its Motorhome Resorts segment and other assets held for sale. "We look forward to working with Navistar to complete this transaction and ultimately become a part of one of the nation's most respected companies. This is a great opportunity for our employees, dealers, suppliers and the communities in which we operate. We look forward to continuing the Monaco Coach brands and our legacy of producing quality and innovative recreational vehicles for our owners," stated Kay Toolson, Chairman and CEO of Monaco Coach Corporation. "If we are able to reach agreement, the purchase of certain Monaco assets would fit our strategy of leveraging our assets to expand our diesel business, serve the end customer and would also complement our Workhorse custom chassis business," said Jack Allen, president of Navistar's North American truck group. "Any asset purchase would fall within our current capital expenditure program for fiscal 2009." About Navistar International Based in Warrenville, Illinois, Navistar International Corporation (NYSE: NAV) -- http://www.navistar.com/-- produces International(R) brand commercial and military vehicles, MaxxForce(TM) brand diesel engines, IC brand school and commercial buses, and Workhorse(R) brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Navistar is also a provider of truck and diesel engine parts. Another affiliate offers financing services. Navistar reported $9.62 billion in total assets and $11.09 billion in total liabilities as of January 31, 2009, resulting in $1.49 billion in stockholders' deficit. The TCR reported on June 2, 2008, that Fitch Ratings affirmed and simultaneously removed from Rating Watch Negative the ratings for Navistar International Corporation and Navistar Financial Corp. to reflect progress in filing audited financial statements. The ratings are: Navistar International Corp. -- Issuer Default Rating 'BB-'; -- Senior unsecured bank facility 'BB-'. Navistar Financial Corp. -- IDR 'BB-'; -- Senior unsecured bank lines 'BB-'. The TCR also reported on Feb. 25, 2008 that Standard & Poor's Ratings Services removed its 'BB-' corporate credit ratings on Navistar International Corp. and subsidiary Navistar Financial Corp. from CreditWatch with negative implications, where they were placed Jan. 17, 2006. About Monaco Coach Monaco Coach Corporation, a national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. 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. Monaco Coach is listed on the Pink Sheets under the symbol "MCOAQ". 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. Omni Management Group LLC serves as the Debtors' claims, balloting, noticing and administrative agent. MONACO COACH: U.S. Trustee Forms Seven-Member Creditors Committee ----------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, appointed seven creditors to serve on an Official Committee of Unsecured Creditors of Monaco Coach Corporation and its debtor- affiliates. The members of the Committee are: 1) Lazy Days RV Center, Inc. Attn: Randall R. Lay 6130 Lazy Days Blvd. Seffner, FL 33584, Tel: (813) 342-4237 Fax: (813) 246-4659 2) Onan Corporation Attn: Paul Malone Mail Code 60701 500 Jackson Street Columbus, IN 47201, Tel: (812) 377-9632 Fax: (812) 377-3272 3) Hardwoods Specialty Products Attn: Kevin Slabaugh 2700 Lind Ave. SW Renton, VA 98057, Tel: (425) 251-1213 Fax: (425) 251-8731 4) Villa International Attn: Bill Connelly 13760 Midway St. Cerritos, CA 90703 Tel: (562) 404-8111 Fax: (562) 404-7499 5) Horizon Transport Attn: David L. Miller 407 E. Wabash Wakarusa, IN 46573 Tel: (800) 320-4055 Fax: (574) 862-1771 6) Atwood Mobile Products LLC Attn: Timothy C. Stephens 1120 N. Main Street Elkhart, IN 46514 Tel: (574) 266-4777 Fax: (574-262-0956 7) Lippert Components Attn: Jim Montague 2703 College Ave. Goshen, IN 46528 Tel: (574) 312-6022 Fax: (574) 534-3475 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Monaco Coach Monaco Coach Corporation, a national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. 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. Monaco Coach is listed on the Pink Sheets under the symbol "MCOAQ". 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. Omni Management Group LLC serves as the Debtors' claims, balloting, noticing and administrative agent. MONEYGRAM INTERNATIONAL: David Parrin Steps Down as CFO ------------------------------------------------------- MoneyGram International, Inc., and David J. Parrin, entered into a Separation Agreement and Release of all Claims dated March 20, 2009, which provides for Mr. Parrin's resignation as MGI's executive vice president and chief financial officer, effective March 24. Under the Separation Agreement, Mr. Parrin will receive severance benefits to which he was entitled under the terms of the MoneyGram International, Inc. Special Executive Severance Plan. These benefits are: * $782,458 as salary severance; and * $1,558,333 as bonus severance under the MoneyGram International, Inc. Management and Line of Business Incentive Plan, as amended and restated March 24, 2008. Mr. Parrin will also receive an increase in the special retirement benefits under the MoneyGram Supplemental Pension Plan approximating the incremental amount of the retirement benefits that would have been payable to Mr. Parrin under the SERP if Mr. Parrin's employment had continued through March 24, 2011, payable over 10 years commencing in 2010 when Mr. Parrin first attains retirement age; $28,891 as payment for accrued and unused vacation; $77,823 as payment in lieu of certain taxable perquisites; and certain other benefits including continuation of life, medical and dental insurance for a period of two years and outplacement benefits. In general, cash payments, other than those with respect to the SERP, will be made in October 2009. In addition, the Severance Plan provides for, and the Separation Agreement acknowledges, that, to the extent any of the payments are subject to the excise tax under section 4999 of the Internal Revenue Code, an additional payment will be made in an amount sufficient to allow Mr. Parrin to pay all excise taxes without a reduction in severance payments. Under the Separation Agreement, Mr. Parrin agreed that, for a period of 12 months following the separation date, he will not engage in any activities in competition with the business of MGI or solicit employees or customers of MGI. Additionally, Mr. Parrin agreed that for a period of 24 months, he would not accept employment with or render services to specific named entities. MGI agreed to pay attorneys' fees in connection with the Separation Agreement. The Separation Agreement also includes confidentiality, non-disparagement and non-disclosure obligations. A full text copy of the Separation Agreement is available for free at: http://ResearchArchives.com/t/s?3a9e About MoneyGram International Headquartered in Minneapolis, Minnesota, MoneyGram International Inc. (NYSE: MGI) -- http://www.moneygram.com/-- is a global payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with approximately 157,000 global money transfer agent locations in 180 countries and territories. As reported in the Troubled Company Reporter on Nov. 11, 2008, MoneyGram International, Inc.'s balance sheet at Sept. 30, 2008, showed total assets of $7,261,049, total liabilities of $8,104,313, resulting in a stockholders' deficit of $843,264. MORIN BRICK: Sale of All Assets to Hillcrest Management Approved ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maine has approved the sale of substantially all of the assets of Morin Brick Company to Hillcrest Management, LLC, free and clear of all liens and encumbrances. As approved, the sale proceeds will be distributed at or immediately after closing. Subject to certain adjustments as set forth in the Asset Purchase Agreement between the Debtor and Hillcrest, the Debtor and Hillcrest estimate the purchase price will equal approximately in the range of $2.7 million to $2.9 million. Bank of America, the Debtor's only secured creditor, has consented to the sale. A copy of the Court's order, dated March 25, 2009, approving the sale of the Debtors assets to Hillcrest Management, is available at http://bankrupt.com/misc/MorinBrick.AssetSaleOrder.pdf A copy of Exhibit A detailing the order of the distribution of sale proceeds is available at: http://bankrupt.com/misc/MorinBrick.OrderofDistribution.pdf Headquartered in Auburn, Maine, Morin Brick Company -- http://www.morinbrick.com/-- manufactures moulded and waterstruck brick and extruded brick for customers primarily located in the Northeastern United States and Canada. The Company filed for Chapter 11 protection on Sept. 3, 2008 (Bankr. D. Maine Case No. 08-21022). D. Sam Anderson, Esq., and Robert J. Keach, Esq., at Bernstein Shur Sawyer & Nelson P.A., in Portland, Maine, represent the Debtor as counsel. Anthony J. Manhart, Esq., Fred W. Bopp III, Esq., and Randy J. Creswell, Esq., at Perkins Thompson, P.A., represent the Official Committee of Unsecured Creditors as counsel. Tron Group is the Debtor's Chief Restructuring Officer. When the Debtor filed for protection from its creditors, it listed assets of between $10 million and $50 million, and debts of between $1 million and $10 million. MERUELO MADDUX: Files Chapter 11 to Restructure Debt ---------------------------------------------------- Meruelo Maddux Properties and numerous of its subsidiaries have filed, or will be filing, voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in California, with the intent of implementing a comprehensive reorganization to restructure its debt. Excluded from the filing is the Company's 35-story 717 W. Ninth Street residential tower project currently under construction. Earlier this month, the Company announced during its fourth quarter earnings call that it was experiencing significant, recurring cash shortfalls because of a challenging credit climate and real estate market and, as a result, was considering its strategic options, including seeking Chapter 11 protection. "The company worked with diligence to avoid a reorganization filing," said Richard Meruelo, Chairman and Chief Executive Officer of Meruelo Maddux Properties. "Despite our best efforts and careful consideration of all other alternatives, the filing became necessary given the challenging economic climate. Now, our goal is to implement a comprehensive reorganization and continue to seek additional outside financing which we believe will allow us to move forward." The Company expects to continue to manage its real estate portfolio and does not currently anticipate any disruption to its tenants. The filing excludes its 35-story residential tower project currently under construction in downtown Los Angeles, and no disruptions to the ongoing construction are anticipated. About Meruelo Maddux Properties Meruelo Maddux Properties is a self-managed, full-service real estate company that develops, redevelops and owns commercial and residential properties in downtown Los Angeles and other densely populated urban areas in California that are undergoing demographic or economic changes. Meruelo Maddux Properties is committed to socially responsible investment. Through its predecessor business, Meruelo Maddux Properties has been investing in urban real estate since 1972. MUELLER PALLETS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Mueller Pallets, L.L.C. 27059 Mueller Place Sioux Falls, SD 57108 Bankruptcy Case No.: 09-40159 Type of Business: Mueller Pallets, L.L.C., manufactures and sells pallets. Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court District of South Dakota (Southern (Sioux Falls)) Debtor's Counsel: Laura L. Kulm Ask, Esq. Gerry & Kulm Ask, Prof LLC PO Box 966 Sioux Falls, SD 57101-0966 Tel: (605) 336-6400 Fax: (605) 336-6842 Email: ask@sgsllc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/sdb09-40159.pdf The petition was signed by Margie Mueller, manager of the company. NATIONAL AMUSEMENTS: Starts Auction of Movie Theater Assets ----------------------------------------------------------- National Amusements Inc. has started the auction of chunks of its movie-theater chain as it seeks to pay down its debt, Sam Schechner at The Wall Street Journal reports, citing people familiar with the matter. WSJ, citing sources, said that National Amusements has sent out these two separate books to potential bidders: -- one for a bundle of 54 U.S. theaters, and -- one for its 21 theaters in the U.K. According to WSJ, initial bids are due in about four weeks. WSJ relates that people familiar with the matter said that the U.S. sale doesn't include 17 theaters in the Northeast U.S., although some theaters in the region are included. According to the report, a source said that National Amusements theaters in Russia and Latin America aren't included in the auction. The Latin American theaters may be put up for sale, WSJ states, citing the source. WSJ reports that owner Sumner Redstone and his family will use the sales to help repay $1.6 billion in National Amusements debt-and avoid having to sell some or all of their controlling stakes in Viacom Inc. and CBS Corp. An agreement National Amusements reached in February with its lenders to repay its debt would close in April, WSJ states, citing a person familiar with the matter. About National Amusements, Inc. National Amusements, Inc., North America's sixth largest theatre operator is a closely held corporation, that operates more than 1,425 motion picture screens in the U.S., the U.K., Latin America, is an equal partner in the online ticketing service, MovieTickets.com and the parent company of Viacom. Viacom is a leading global media company, with preeminent positions in broadcast and cable television, radio, outdoor advertising and online. With programming that appeals to audiences in every demographic category across virtually all media, the company is a leader in the creation, promotion and distribution of entertainment, news, sports, music and comedy. Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, BET, Paramount Pictures, Viacom Outdoor, Infinity, UPN, Spike TV, TV Land, CMT: Country Music Television, Comedy Central, Showtime, Blockbuster, and Simon & Schuster. As reported by the Troubled Company Reporter on Nov. 25, 2008, National Amusements would likely have to file for Chapter 11. Owner Sumner Redstone put last month about $233 million of his stock in Viacom and CBS, which he controls through National Amusements, to try to fix his debt problems after the stock market dropped lower and National Amusements breached an asset-to-debt covenant. The move didn't work, and the Redstone family has since been discussing with its lenders about restructuring a $1.6 billion debt. NAVISTAR INT'L: Signs Non-Binding LOI to Buy Monaco Coach RV Unit ----------------------------------------------------------------- Monaco Coach Corporation has signed a non-binding letter of intent with Navistar, Inc. with respect to a proposed transaction in which Navistar would acquire certain assets and assume certain liabilities primarily associated with the Company's recreational vehicle manufacturing business. Navistar, with nearly $15 billion in annual sales, is a global manufacturer of commercial vehicles, military vehicles, diesel engines and related parts and services. Monaco Coach Corporation is one of the nation's recreational vehicle manufacturers. The letter of intent contemplates that Monaco and Navistar will work to sign a definitive asset purchase agreement during early April. Following the completion of due diligence and the bankruptcy court approval process, including the auction process, the parties intend to close the transaction shortly after obtaining the entry of a final non-appealable sale order of the bankruptcy court pursuant to Section 363 of the Bankruptcy Code, authorizing the transfer of purchased assets to Navistar. Monaco continues to work with other interested parties regarding the acquisition of its Motorhome Resorts segment and other assets held for sale. "We look forward to working with Navistar to complete this transaction and ultimately become a part of one of the nation's most respected companies. This is a great opportunity for our employees, dealers, suppliers and the communities in which we operate. We look forward to continuing the Monaco Coach brands and our legacy of producing quality and innovative recreational vehicles for our owners," stated Kay Toolson, Chairman and CEO of Monaco Coach Corporation. "If we are able to reach agreement, the purchase of certain Monaco assets would fit our strategy of leveraging our assets to expand our diesel business, serve the end customer and would also complement our Workhorse custom chassis business," said Jack Allen, president of Navistar's North American truck group. "Any asset purchase would fall within our current capital expenditure program for fiscal 2009." About Navistar International Based in Warrenville, Illinois, Navistar International Corporation (NYSE: NAV) -- http://www.navistar.com/-- produces International(R) brand commercial and military vehicles, MaxxForce(TM) brand diesel engines, IC brand school and commercial buses, and Workhorse(R) brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Navistar is also a provider of truck and diesel engine parts. Another affiliate offers financing services. Navistar reported $9.62 billion in total assets and $11.09 billion in total liabilities as of January 31, 2009, resulting in $1.49 billion in stockholders' deficit. The TCR reported on June 2, 2008, that Fitch Ratings affirmed and simultaneously removed from Rating Watch Negative the ratings for Navistar International Corporation and Navistar Financial Corp. to reflect progress in filing audited financial statements. The ratings are: Navistar International Corp. -- Issuer Default Rating 'BB-'; -- Senior unsecured bank facility 'BB-'. Navistar Financial Corp. -- IDR 'BB-'; -- Senior unsecured bank lines 'BB-'. The TCR also reported on Feb. 25, 2008 that Standard & Poor's Ratings Services removed its 'BB-' corporate credit ratings on Navistar International Corp. and subsidiary Navistar Financial Corp. from CreditWatch with negative implications, where they were placed Jan. 17, 2006. About Monaco Coach Monaco Coach Corporation, a national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. 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. Monaco Coach is listed on the Pink Sheets under the symbol "MCOAQ". 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. Omni Management Group LLC serves as the Debtors' claims, balloting, noticing and administrative agent. NCP MARKETING: High Court Refuses to Hear Trademark Dispute ----------------------------------------------------------- Bankruptcy Law360 reports that the U.S. Supreme Court denied a petition for a write of certiorari on a trademark dispute between bankrupt N.C.P. Marketing Group, Inc., and BG Star Productions, Inc. According to Bankruptcy Law360, the case involves a split in the circuit courts over the power of a Chapter 11 debtor-in-possession to assume certain executory licenses, which include patent and copyright licenses, held before bankruptcy. Trademark Dispute Billy Blanks, Gayle Blanks created the Tae Bo(R), a total body fitness system. It includes videotapes sold in retail chains and through television shopping networks. The Blanks, through BG Star, own the Tae Bo(R) and Billy Blanks(R) tradenames and other related trademarks. In August 1999, NCP and the Blanks entered into an agreement allowing NCP to advertise and sell products and services containing Tae Bo(R). To settle a dispute regarding the parties' obligations, in October 2001, the parties entered into a settlement and related licensing deal confirming the Blanks' ownership of the trademark. NCP later breached the agreements regarding the payment of royalties, and the Blanks instituted arbitration for the breach. The arbitrator required NCP to pay $2.1 million in royalties. NCP failed to make the payment and filed for bankruptcy in April 2004. In its bankruptcy plan and related documents, NCP claimed ownership of the Tae Bo trademarks. The Blanks disputed NCP's purported ownership of the trademarks and its ability to assume the trademark in bankruptcy proceedings. The Blanks asked the U.S. Bankruptcy Court for the District of Nevada to compel the Debtor to reject the trademark license. The Blanks also argued that, even if NCP owns the rights, any rights were non-assumable and NCP could not issue the licenses in further bankruptcy proceedings. In November, the Bankruptcy Court issued a written order holding that the agreements with the Blanks did not give NCP permission to assign rights to any party. NCP argued that it was not required to show it had received consent from the Blanks to license the trademark to third parties because trademark law does not specifically excuse the licensor from accepting performance from a person other than the original licensee. NCP also argued that even if trademark law did make such an excuse for the licensor, NCP had consent to license the trademark from rights derived from the settlement and license agreements with the Blanks. Non-Assignable In November 2005, the U.S. District Court for the District of Nevada issued a decision affirming the Bankruptcy Court's decision. The District Court held that trademark licenses are personal and nonassignable in bankruptcy absent a provision in the trademark license to the contrary. According to the District Court, NCP mischaracterized what constitutes the value of a trademark and the purpose of trademark law. "[Trademarks] are also used by trademark owners to protect themselves from unauthorized use of their mark, and they are used by trademark owners to preserve the value of their business name and products," the District Court held. The District Court also held that "because the Blanks retained the ownership rights of the trademark and gave NCP a non-exclusive license, NCP only had the right to transfer a non-exclusive license and not to 'assign' the trademark in the exclusive sense." A full-text copy of the District Court's decision is available at no charge at: http://bankrupt.com/misc/NCPDistrictCourtOrder.pdf In May 2008, the U.S. Court of Appeals for the Ninth Circuit affirmed the District Court's judgment for reasons provided by the District Court. The Ninth Circuit also denied a request for oral argument. A full-text copy of the 9th Circuit's order is available at no charge at: http://bankrupt.com/misc/NCP9thCircuitOrder.pdf The petition for writ of certiorari was filed before the Supreme Court in October 2008. N.C.P. Marketing Group was represented by Thomas David Warren, Esq., at Baker & Hostetler LLP in Cleveland. Respondents Billy Blanks, Gayle Blanks, and BG Star Productions, Inc., are represented by Michael S. Greger, Esq., at Allen Matkin Leck Mallory & Natsis, LLP in Irvine, California. Michael A. T. Pagni, Esq., at McDonald Carano Wilson LLP, in Reno, Nevada, also represented BG Star Productions. Hypothetical Vs. Actual Test Robert L. Eisenbach III, Esq., a partner at Cooley Godward Kronish, LLP, says "It looks like the U.S. Supreme Court, or at least two of the Justices, is interested in deciding whether the 'hypothetical test' or the 'actual test' should be used in determining whether an intellectual property license can be assumed by a debtor in possession under Section 365(c)(1) of the Bankruptcy Code." "That was the clear message from the somewhat unusual statement by Justice [Anthony M.] Kennedy, with whom Justice [Stephen] Breyer joined, issued on March 23, 2009, in connection with the Supreme Court's denial of a writ of certiorari in the N.C.P. Marketing Group, Inc. case," Mr. Eisenbach says. Justice Kennedy noted that the object of Chapter 11 of the Bankruptcy Code is to empower a debtor with going concern value to reorganize its operations to become solvent once more. In a typical case, the debtor takes on the role of "debtor in possession," allowing it to retain possession and control of its business. A debtor-in-possession operates its business and performs many functions that would fall to the trustee under other chapters of the Bankruptcy Code. At issue in N.C.P. Marketing's petition is the power of a debtor-in-possession to assume executory contracts held by the debtor before bankruptcy. Section 365 gives the debtor-in-possession the power to assume -- that is, to continue to receive the benefits of, while also continuing to perform its obligations under -- the debtor's leases, ongoing performance contracts, and licenses to use the property of others. Justice Kennedy said this power is withdrawn, however, if "applicable law excuses a party, other than the debtor, to [an executory contract] from accepting performance from or rendering performance to an entity other than the debtor or the debtor in possession, whether or not such contract or lease prohibits or restricts assignment of rights or delegation of duties; and . . . such party does not consent to such assumption or assignment . . ." Justice Kennedy noted that, according to the Court of Appeals for the Ninth Circuit, this language means that a debtor-in-possession may assume an executory contract only if hypothetically it might assign that contract to a third party. That is to say, if the debtor-in-possession lacks hypothetical authority to assign a contract, then it may not assume it -- even if the debtor-in- possession has no actual intention of assigning the contract to another. Justice Kennedy pointed to In re Catapult Entertainment, Inc., 165 F. 3d 747 (CA9 1999). Justice Kennedy continued that the so-called "hypothetical test" is preferred by a majority of the other Courts of Appeals that have addressed this question. He pointed to In re Sunterra Corp., 361 F. 3d 257 (CA4 2004); In re James Cable Partners, L. P., 27 F. 3d 534 (CA11 1994) (per cu-riam); In re West Electronics, Inc., 852 F. 2d 79 (CA3 1988). The hypothetical test is not, however, without its detractors, according to Justice Kennedy. "One arguable criticism of the hypothetical approach is that it purchases fidelity to the Bankruptcy Code's text by sacrificing sound bankruptcy policy. For one thing, the hypothetical test may prevent debtors-in-possession from continuing to exercise their rights under non-assignable contracts, such as patent and copyright licenses. Without these contracts, some debtors-in- possession may be unable to effect the successful reorganization that Chapter 11 was designed to promote," Justice Kennedy said. "For another thing, the hypothetical test provides a windfall to nondebtor parties to valuable executory contracts: If the debtor is outside of bankruptcy, then the nondebtor does not have the option to renege on its agreement; but if the debtor seeks bankruptcy protection, then the nondebtor obtains the power to reclaim -- and resell at the prevailing, potentially higher market rate -- the rights it sold to the debtor. To prevent Section 365(c) from engendering unwise policy, one Court of Appeals, and a number of Bankruptcy Courts, reject the hypothetical test in favor of an "actual test," under which a Chapter 11 debtor-in-possession may assume an executory contract provided it has no actual intent to assign the contract to a third party, according to Justice Kennedy, citing Institut Pasteur v. Cambridge Biotech Corp., 104 F. 3d 489, 493 (CA1 1997) (applying the actual test); In re Catapult, 165 F. 3d, at 749, n. 2 (collecting Bankruptcy Court decisions favoring the actual test). "Of course, the actual test may present problems of its own," Justice Kennedy said. "It may be argued, for in-stance, that the actual test aligns Section 365(c) with sound bankruptcy policy only at the cost of departing from at least one interpretation of the plain text of the law." "The division in the courts over the meaning of Section 365(c)(1) is an important one to resolve for Bankruptcy Courts and for businesses that seek reorganization," Justice Kennedy said. "This petition for certiorari, however, is not the most suitable case for our resolution of the conflict. Addressing the issue here might first require us to resolve issues that may turn on the correct interpretation of antecedent questions under state law and trademark-protection principles. "For those and other reasons, I reluctantly agree with the Court's decision to deny certiorari. In a different case the Court should consider granting certiorari on this significant question," he said. A full-text copy of Justice Kennedy's statement is available at no charge at: http://bankrupt.com/misc/NCPUSCKennedy.pdf About N.C.P. Marketing Headquartered in North West Canton, Ohio, N.C.P. Marketing Group, Inc. is an infomercial producer and global marketer of the platinum award-winning original Billy Blanks' Tae-Bo Video Library. The Debtor and its affiliate, Tae Bo Retail Marketing, Inc., filed for chapter 11 protection on April 13, 2004 (Bankr. Nev. Case No. 04-51071). Jeffrey Baddeley, Esq., at Spangenberg Shibley & Liber LLP and Jennifer A. Smith, Esq., at Lionel Sawyer & Collins represent the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for protection from their creditors, it estimated assets and debts between $10 million to $50 million. On March 23, 2007, Jeri Coppa-Knudson was appointed as the Chapter 11 Trustee to oversee the Debtors' estates. Jeffrey L. Hartman, Esq., at Hartman & Hartman, represents the chapter 11 trustee. In June 2007, the Chapter 11 Trustee sought conversion of the case to Chapter 7 liquidation proceedings, citing (1) continuing loss to or diminution of the estate and absence of a reasonable likelihood of rehabilitation; (2) the inability to effectuate a plan; and (3) unreasonable delay by the Debtors prejudicial to the interests of creditors. NEXIA HOLDINGS: Discloses Stock-Swap Deals With 3 Parties --------------------------------------------------------- Nexia Holdings Inc. said a total of 5,136,688,673 shares of its common stock were issued and outstanding as of March 19. On March 2, the Company entered into a Stock Exchange Agreement with AmeriResource Technologies, Inc., to exchange 100,000 shares of the Company's Series C Preferred Stock for Series F Preferred Stock of AmeriResource with a stated conversion value of $500,000. The shares of both companies will be issued with restrictive legends and carry no guarantee of future value and thus the exchange carries a significant risk of the loss of investment by the Company in the preferred stock of AmeriResource. The agreement was handled as a private sale exempt from registration under Rule 506 of Regulation D and the Securities Act of 1933. A full-text of the AmeriResource agreement is available for free at: http://ResearchArchives.com/t/s?3aa2 On March 12, 2009, the Company entered into a Stock Exchange Agreement with Seamless Corporation to exchange 200,000 shares of the Company's Series C Preferred Stock for 1,000,0000 Series C Preferred Stock of Seamless with a stated conversion value of $1,000,000. The shares of both companies will be issued with restrictive legends and carry no guarantee of future value and thus the exchange carries a significant risk of the loss of investment by the Company in the preferred stock of Seamless. The agreement was handled as a private sale exempt from registration under Rule 506 of Regulation D and the Securities Act of 1933. A full-text of the Seamless Corp. Agreement is available for free at: http://ResearchArchives.com/t/s?3aa3 On March 12, 2009, the Company also entered into a Stock Exchange Agreement with 1st Global Financial Corp. to exchange 200,000 shares of the Company's Series C Preferred Stock for Preferred Stock of 1st Global with a stated conversion value of $1,000,000. The shares of both companies will be issued with restrictive legends and carry no guarantee of future value and thus the exchange carries a significant risk of the loss of investment by the Company in the preferred stock of 1st Global. The agreement was handled as a private sale exempt from registration under Rule 506 of Regulation D and the Securities Act of 1933. A full-text of the 1st Global agreement is available without charge at: http://ResearchArchives.com/t/s?3aa4 About Nexia Holdings Headquartered in Salt Lake City, Utah, Nexia Holdings Inc. (OTC BB: NEXA) -- http://www.nexiaholdings.com/-- is a diversified holdings company with operations in real estate, health & beauty, and fashion retail. Nexia owns a majority interest in Landis Lifestyle Salon, a hair salon built around the AVEDA(TM) product lines. Through its Style Perfect Inc. subsidiary, Nexia owns the retail and design firm Black Chandelier and its related brands. Going Concern Doubt Hansen Barnett & Maxwell, P.C., in Salt Lake City, expressed substantial doubt Nexia Holdings Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. For nine months ended Sept. 30, 2008, the company posted net loss of $4,699,893 compared with net loss of $3,288,803 for the same period in the previous year. For the three months ended Sept. 30, 2008, the company posted net loss of $1,861,552 compared with net loss of $1,272,214 for the same period in the previous year. At Sept. 30, 2008, the company's balance sheet showed total assets of $4,606,164 and total liabilities of $12,528,363, resulting in a stockholders' deficit of $7,922,199. NORTHEAST BIOFUELS: Wins Court Nod on April 23 Auction for Assets ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York has given Northeast Biofuels, LP, approval to conduct an auction for the sale of the Company's assets. As part of this approval on March 19, 2009, the Court established bidding procedures and scheduled a hearing on April 29, 2009, for the sale of the Company's assets. The Company filed a voluntary petition for protection under Chapter 11, in the U.S. Bankruptcy Court for the Northern District of New York on January 14, 2009. Northeast Biofuels owns an ethanol plant that is strategically located in Fulton, NY, and, when completed, is slated to produce approximately 100 million gallons per year of dry corn milled denatured ethanol. "The plant's location offers a unique opportunity to capitalize on the growing demand for ethanol in the northeastern U.S. and Canada," said Brian Roach, Northeast Biofuels' CEO. In connection with this filing, the plant is expected to be sold "free and clear" pursuant to Section 363 of the U.S. Bankruptcy Code. The Bankruptcy court approved the following schedule for the Northeast Biofuels' Sec. 363 Sale: Initial bids from interested parties are due on April 21, 2009; the auction date will be on April 23, 2009; and the sale hearing before the Court will be on April 29, 2009. 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. NVIDIA CORP: S&P Affirms Corporate Credit Rating at 'BB-' --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating and other ratings on Santa Clara, California-based Nvidia Corp. At the same time, S&P revised the outlook on Nvidia to stable from positive. The action reflects severely depressed revenues and profitability, and S&P's expectations that operating performance will not approach historical levels over the intermediate term. Ratings continue to reflect a narrow business profile, rapid technology evolution, the presence of significant competitive pressures, and changing consumer buying patterns, partly offset by the company's ample liquidity and minimal leverage, its fabless business model, and generally good market position. Nvidia had $155 million of lease-adjusted debt outstanding as of Jan. 31, 2009, and no funded debt. Nvidia competes in a small segment of the semiconductor industry, designing graphics processors used in desktop and notebook computers and handheld devices. Graphics chip life cycles are very brief, contributing to revenue and earnings volatility, notwithstanding generally improving unit prices. The chips are sold to consumers as desktop computer upgrades, or to computer original equipment manufacturers for high-performance PCs. Basic PCs generally embed graphics capabilities in the microprocessor, an increasingly common alternative to the use of graphics chips as PC makers seek lower price points in light of economic challenges. Nvidia is trying to expand into graphics- enabled cell phones and other handheld devices, as well as into supercomputer applications, but revenues from these ventures are small. In the interim, the company's recently introduced high performance PC multi-core graphics chips are expected to face aggressive competition from Intel Corp.'s "Larrabee" processor, likely to be introduced late this year. Rapid technology evolution, uncertain product acceptance cycles, competitive actions, and some execution failures have contributed to highly volatile revenue and earnings, notwithstanding generally improving unit prices. Revenues had reached $1.1 billion quarterly in early 2008. However, Nvidia experienced a manufacturing problem in midyear, followed by a delayed product introduction, and a competitor's aggressively-priced new product in late 2008. This was followed by a sharp decline in PC sales and depressed consumer markets. Sales for the January 2009 quarter were $481 million, compared with $1.2 billion in the year-ago period. April 2009 quarterly revenues are expected to be in roughly the same area as January. Nvidia has maintained its product development expenses, flat on a dollar basis and 40% of January quarter sales, to continue developing its advanced graphics processing chips. While the company hopes to reduce operating expenses by $35 million, and also reduce inventory charges against gross margins in coming quarters, EBITDA margins are likely to remain negative until revenues recover materially, while historical margins had been in the mid-20% area. Capital expenditures are small because of the fabless business model, $46 million in the January 2009 quarter. Working capital was a moderate source of cash in the January quarter because of the revenue decline, but is not likely to be a source of cash in coming quarters. OSI RESTAURANT: Closes Cash Offer for $240-Mil. Senior Notes ------------------------------------------------------------ OSI Restaurant Partners, LLC, has accepted for purchase about $240 million in principal amount of its outstanding 10% Senior Notes due June 15, 2015 issued by the Company and OSI Co-Issuer, Inc., a wholly owned subsidiary of the Company, which were validly tendered pursuant to its previously announced cash tender offer for the notes. The Tender Offer was made pursuant to the Offer to Purchase dated February 18, 2009, as amended March 5 and March 20, 2009, and the related Letter of Transmittal. The Tender Offer expired at 5:00 p.m. New York City time, on March 20, 2009. The aggregate consideration to be paid by the Company for the notes accepted for purchase, excluding accrued interest, is $73 million. Miller Buckfire & Co., LLC acted as Dealer Manager for the Tender Offer. Questions regarding the Tender Offer should be directed to Miller Buckfire & Co., LLC, Adam Fitzner (212) 895-1865 or Ofir Nitzan (212) 895-1871. OSI Restaurant Partners is the #3 operator of casual-dining spots (behind Darden Restaurants and Brinker International), with more than 1,400 locations in the US and 20 other countries. Its flagship Outback Steakhouse chain boasts more than 950 locations that serve steak, chicken, and seafood in Australian-themed surroundings. OSI also operates the Carrabba's Italian Grill chain, with about 240 locations. Other concepts include Bonefish Grill, Fleming's Prime Steakhouse, and Cheeseburger In Paradise. Most of the restaurants are company owned. A group led by chairman Chris Sullivan took the company private in 2007. * * * As reported by the Troubled Company Reporter on Feb. 24, 2009, Moody's Investors Service downgraded OSI Restaurant's Probability of Default rating to Ca from Caa1 and lowered the rating on its $550 million 10% senior unsecured notes to C from Caa3. Moody's also placed OSI's Corporate Family and senior secured ratings on review for possible downgrade. The review was prompted by the recent announcement that OSI continues to experience a substantial decline in earnings and store traffic to levels worse than Moody's previously expected. The company also announced that it will likely need to take an impairment charge of between $480 and $540 million for goodwill due to a reduction in its projected results for future periods as a result of poor overall economic conditions. PENSKE AUTOMOTIVE: Moody's Downgrades Corp. Family Rating to 'B2' ----------------------------------------------------------------- Moody's Investors Service lowered Penske Automotive Group, Inc.'s corporate family rating to B2 from B1. Actions on rated debt instruments are detailed below. The rating outlook remains negative. The downgrade reflects Moody's expectations that Penske's leverage will remain high for an extended period. Leverage (debt/EBITDA) was near 6.5 times at the end of 2008 and Moody's expect this ratio will remain elevated as market conditions remain challenged. "While the company has taken steps to address current market conditions -- such as its announced expense reduction initiatives and the suspension of the dividend on its common shares -- Moody's believe that performance will remain soft and leverage will remain high for an extended period" said Moody's Vice President & Senior Analyst Scott Tuhy. The negative outlook primarily reflects Moody's concerns that weak consumer demand and constrained credit availability for big-ticket consumer durables such as automobiles will depress Penske's operating performance over the next year. The continuation of weak performance could more than offset the company's steps to reduce costs. Moody's remain concerned that the luxury market, where Penske has a significant presence, will experience further stress as higher income and aspirational consumers defer purchases in the US and UK. Downward pressure on ratings could continue if leverage rises from current levels should these negative trends persist. Moody's rating and outlook also reflect Moody's expectations that the company's liquidity profile will remain good for its rating with limited debt maturities until 2011, good levels of committed bank financing, and minimal reliance on financing from the Detroit 3 OEMs and their captive finance affiliates. These ratings were downgraded: -- Corporate Family Rating to B2 from B1 -- Probability of Default Rating to B2 from B1 -- $375 million Senior Subordinated Notes due 2016 to Caa1 (LGD 5, 89%) from B3 (LGD 5, 89%) -- $306 million Convertible Senior Subordinated Notes due 2026 to Caa1 (LGD 5, 89%) from B3 (LGD 5, 89%) Moody's last rating action on Penske Automotive Group was on December 22, 2008 when the company's rating outlook was revised to negative from stable. Headquartered in Bloomfield Hills, MI, Penske is the second largest automotive retailer headquartered in the US. As of December 31, 2008, the company owned and operated 159 franchises in the United States and Puerto Rico and 148 franchises outside the United States, primarily in the United Kingdom. PHILIP MARTIN: Wants to Hire Irvin Grodsky as Bankruptcy Counsel ---------------------------------------------------------------- Philip J. Martin asks the U.S. Bankruptcy Court for the Southern District of Alabama for authority to employ Irvin Grodsky, P.C., as counsel. Irvin Grodsky will: a) take appropriate action with respect to the secured and priority creditors; b) take appropriate action with regard to possible voidable preferences, transfers, and liens; c) prepare on behalf of Debtors necessary petitions, answers, orders, reports and other papers; d) assist Debtor in preparing and proposing a plan under Chapter 11 of the Bankruptcy Code; e) perform all other legal services for Debtor which may be necessary herein. The Debtor has paid Irvin Grodsky, P.C., a retainer in the amount of $15,000 towards its fees incurred in this proceeding which is being held in the firm's escrow account and $1,300 toward costs. To the best of the Debtor's knowledge Irvin Grodsky is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Irvin Grodsky, P.C. 454 Dauphin Street, P.O. Box 3123 Mobile, AL 36652, Tel: (251) 433-3657 Fax: (251) 433-3670 About Philip J. Martin Headquartered in Orange Beach, Alabama, Philip J. Martin filed for Chapter 11 protection on March 12, 2009, (Bankr. S. D. Ala. Case No.: 09-11178) Irvin Grodsky, Esq. represents the Debtor in its restructuring efforts. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. PIONEER NATURAL: Moody's Affirms 'Ba1' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service affirmed Pioneer Natural Resource Company's Ba1 Corporate Family Rating, Ba1 Probability of Default Rating, and Ba1 (LGD 4; 56%) senior unsecured note rating. The outlook remains negative. Moody's said that the negative outlook reflects the company's continued high leverage, particularly as measured by debt/average daily production, which is among the highest in the Ba peer group, and weak capital productivity. During the upcycle Pioneer continued to outspend cash flow without any meaningful reduction in debt. In addition, Pioneer's capex resulted in finding and development costs in the upper range of its rated peers. Concurrently, over the past four years the company has repurchased 40.5 million shares, or 28% of shares outstanding to increase shareholder returns at the detriment of debt reduction. Pioneer's Ba1 rating is supported by its scale and underlying long-lived asset base. Pioneer has executed a major portfolio transition to a lower risk asset base. However, Moody's believe Pioneer needs to demonstrate sustainable production trends at competitive replacement costs to support its Ba1 rating. For Pioneer's outlook to change to stable a meaningful demonstration of capital productivity is needed to reduce costs and repay debt. Additionally, Pioneer's rating could be downgraded if a persistent emphasis of stock buyback activities continue or a new aggressive governance style emphasizing shareholder returns is initiated. The last rating action was on January 28, 2008 at which time Moody's confirmed PXD's ratings and assigned a negative outlook. PXD, headquartered in Irving, Texas, operates primarily in North America with over 96% of its proved reserves and just under 90% of its production concentrated in the U.S. Core production holdings are the Spraberry trend oil field (West Texas), the Raton Basin coal bed methane natural gas field (Southern Colorado), the Hugoton and West Panhandle natural gas and liquid fields (Kansas and the Texas Panhandle, respectively) and the Edwards Trend natural gas holdings (South Texas). POINTE LUCK: Creditors Have Until July 21 to File Proofs of Claim ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Hampshire has set July 21, 2009, as the last day of creditors in Pointe Luck, LLC's Chapter 11 case to file proofs of claim. Proofs of claim must be filed with: Office of the Clerk United States Bankruptcy Court 1000 Elm Street, Suite 1001 Manchester, NH 03101-1708 Headquartered in Hopkinton, Massachusetts, Pointe Luck, LLC filed for Chapter 11 protection on March 23, 2009, (Bankr. D. N.H. Case No.: 09-10919) Jennifer Rood, Esq. at Bernstein Shur represents the Debtor in its restructuring effort. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. POINTE LUCK: Creditors Meeting Set for April 24 in New Hampshire ---------------------------------------------------------------- The U.S. Trustee for Region 1 will convene a meeting of creditors in Pointe Luck, LLC's Chapter 11 case on April 24, 2009, at 10:00 a.m., at 1000 Elm Street, 7th Floor - Room 702, Manchester, New Hampshire. 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. Headquartered in Hopkinton, Massachusetts, Pointe Luck, LLC filed for Chapter 11 protection on March 23, 2009, (Bankr. D. N.H. Case No.: 09-10919) Jennifer Rood, Esq. at Bernstein Shur represents the Debtor in its restructuring effort. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. POLAROID CORP: Lenders Say Terms of Sale to Benefit Insiders ------------------------------------------------------------ The pending sale of one of Polaroid Corp.'s remaining assets, set for next week, will benefit unspecified insiders, David Phelps at Star Tribune reports, citing attorneys for the Company's lenders. According to Star Tribune, the lenders said that they want to question Polaroid's top executive and its former general counsel about their knowledge of the sale. Star Tribune relates that the creditors subpoenaed Polaroid CEO Mary Jefferies and former Petters Group Worldwide general counsel David Baer for depositions. Star Tribune states that Polaroid's bankruptcy counsel will argue in U.S. Bankruptcy Court in St. Paul that the subpoenas should be quashed, as they weren't filed in a timely manner. A previous attempt to conduct pretrial discovery on the sale was rejected by Bankruptcy Judge Gregory Kishel, who gave his approval for the sale in a ruling in February, the report says, citing Polaroid's lawyers. The report quoted the attorneys as saying, "Polaroid employees and certainly Jefferies are spending all of their energies on maximizing the value of Polaroid. It seems diverting attention from the main task at hand is exactly what Ritchie [Capital Management] and Acorn [Capital Group] intended to do." Star Tribune relates that depositions of Ms. Jefferies and Mr. Baer had been set for Monday and Tuesday this week, but court documents say that they didn't attend because personal attorneys for each had scheduling conflicts. About Polaroid Corporation Polaroid Corporation -- http://www.polaroid.com-- makes and sells films, cameras, and other imaging products. The company and 20 of its affiliates first filed for bankruptcy protection on October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864). Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors in their previous restructuring efforts. At that time, the company blamed steep decline in its revenue and the resulting impact on its liquidity. On June 28, 2002, the U.S. Bankruptcy Court for the District of Dealware approved the purchase of substantially all of Polaroid's business by One Equity Partners. The bid provides for cash consideration of $255 million plus a 35% interest in the new company for unsecured creditors. Polaroid Corp., together with 11 affiliates, filed its second voluntary petition for Chapter 11 on Dec. 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles the Chapter 22 case. James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P, is the Debtors' counsel. According to the company, the financial structuring process and the second bankruptcy filing are the result of events at Petters Group Worldwide, which has owned Polaroid since 2005. The founder of Petters Group and certain associates are currently under investigation for alleged acts of fraud that have compromised the financial condition of Polaroid and other entities owned by Petters Group. The company and its leadership team are not subjects of the ongoing investigation involving Petters Group. POWER EFFICIENCY: Hires Curhan to Expanded Board of Directors ------------------------------------------------------------- Power Efficiency Corporation expanded its Board of Directors by one, and appointed Gregory S. Curhan as director to fill this vacancy, effective March 12. Mr. Curhan was a founder and principal of the investment advisor Curhan, Merriman Capital Management from July 1988 through December 1992. Mr. Curhan earned his Bachelor of Arts degree, summa cum laude, from Dartmouth College. Mr. Curhan most recently served as executive vice president, chairman of the commitment committee and head of the CleanTech banking team at Merriman Curhan Ford Group, Inc., an investment bank he co-founded, where he worked from January 2002 to January 2009. Previously, he served as chief financial officer of WorldRes.com from May 1999 through June 2001. Prior to joining WorldRes.com, Mr. Curhan served as director of global technology research marketing and managing director specialty technology institutional equity sales at Merrill Lynch & Co. from May 1998 to May 1999. Mr. Curhan will receive, as compensation for his service on the board of directors, options to purchase 100,000 shares of Power Efficiency common stock per year. Additionally, Mr. Curhan will be a consultant for Power Efficiency for a period of twelve months, and will initially receive, on a monthly basis, $3,000 for services provided in this capacity, as well as warrants to purchase 30,000 shares of common stock exercisable at an exercise price of $0.11 per share. The consultant agreement is terminable by either party after six months upon thirty days notice. About Power Efficiency Corp. Based in Las Vegas, Power Efficiency Corporation (OTC BB: PEFF) -- http://www.powerefficiency.com/-- is a green energy company focused on efficiency technologies for electric motors. The company has developed a patented and patent-pending technology platform, called E-Save Technology(TM), which has been demonstrated in independent testing to improve the efficiency of electric motors by 15-35% in appropriate application Going Concern Doubt As reported in the Troubled Company Reporter on April 4, 2008, Livingston, N.J.-based Sobel & Co., LLC, expressed substantial doubt about Power Efficiency Corporation's ability to continue as a going concern after the firm audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations and deficiency of cash from operations. The Company suffered recurring losses from operations, a recurring deficiency of cash from operations, including a cash deficiency of approximately $2,425,000 from operations for the nine months ended September 30, 2008. While the Company appears to have adequate liquidity at September 30, 2008, there can be no assurances that such liquidity will remain sufficient. PREBUL AUTO: Infiniti and Volvo Dealerships Sold for $500,000 ------------------------------------------------------------- Chattanoogan.com reports that Prebul Auto Group has sold its dealerships. Chattanoogan.com relates that in an auction conducted by Jerry Farinash, the bankruptcy trustee, dealer Nelson Long won Prebul Auto's Infiniti and Volvo dealerships for $500,000. Nelson Bowers, another dealer, won the Chattanooga KIA dealership for $300,000, while Johnny Pye Jr. won the rights to the Prebul dealerships in Dalton -- KIA, Cadillac, Pontiac, GMC, and Mazda -- for $100,000, Chattanoogan.com states. According to Chattanoogan.com, Mr. Farinahs said that there were no bids for the Jeep, Chrysler, Dodge franchise due to the uncertainty over Chrysler LLC's future. Mr. Farinash, states Chattanoogan.com, said that an announcement should come about Chrysler by the end of March. A hearing is set for April 9 on the franchise, Chattanoogan.com says. Chattanoogan.com relates that Mr. Farinash said that he expects the high bidders to be easily approved by the manufacturers, and that should happen in 30 to 90 days. Mr. Farinahs said that he may reach management agreements with them in the interim, according to the report. The deals, according to Chattanoogan.com, exclude inventory, buildings or property, just the dealership rights. Prebul Automotive Group is based in Chattanooga. It is owned by car dealer Joe Prebul. As reported by the Troubled Company Reporter on March 19, 2009, Prebul Auto Group filed for Chapter 7 bankruptcy protection. PRECISION PARTS: Chrysler Seeks to Recover Tooling -------------------------------------------------- Bankruptcy Law360 reports that Chrysler LLC has asked the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay in Precision Parts International Holdings Inc.'s Chapter 11 bankruptcy proceedings so the auto maker can take back production tooling it provided to the Debtors. Chrysler, according to the report, told the Court relief from the bankruptcy stay will allow it to avoid layoffs and millions of dollars in losses. According to the report, Chrysler said it had reached an agreement with Cerion LLC to reclaim the tooling. The TCR notes that about a year ago on February 1, 2008, Plastech Engineered Products Inc. sought bankruptcy protection to stop Chrysler from taking back tooling and other equipment and resourcing business with other suppliers. Plastech was allowed by the U.S. Bankruptcy Court for the Eastern District of Michigan to keep the tooling pending trial, and reached agreements and obtained debtor-in-possession funding from its customers, which included the Big 3 automakers and Johnson Controls Inc. Plastech, however, after reviewing alternatives, eventually broke up its business and sold key assets to parties, including JCI, which bought the interiors business. About Precision Parts Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com/-- sells products to major north American automotive and non- automotive original equipment manufacturers and Tier 1 and 2 suppliers. The Debtors operate six manufacturing facilities throughout north America, including a facility in Mexico operated on the Debtors' behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The Debtors' operations consist of two distinct lines of business: MPI, which performs fineblanking work and conventional metal stamping, as well as a range of value-added finishing operations, and Skill which performs conventional metal stamping, as well as a range of assembly and value-added finishing operations. Four of the Debtors are holding companies that have no employees and are not involved in the Debtors' day-to-day operations: PPI Holdings, Inc.; PPI Sub-Holdings, Inc.; MPI International Holdings, Inc.; and Skill Tool & Die Holdings Corp. The Company and eight of its affiliates filed for Chapter 11 protection on Dec. 12, 2008 (Bankr. D. Del. Lead Case No. 08-13289). David M. Fournier, Esq., at Pepper Hamilton LLP; and Robert S. Hertzberg, Esq., and Deborah Kovsky-Apap, Esq., at Pepper Hamilton LLP, represent the Debtors in their restructuring efforts. Alvarez & Marsal North America LLC serves as financial advisor and Kurtzman Carson Consultants LLC as notice, claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets of between $100 million to $500 million each. As reported by the Troubled Company Reporter on March 20, 2009, the Court authorized Precision Parts to sell its business to Cerion LLC for $18.5 million. No rival bids were received for Precision Parts' six plants that produce auto-parts. 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. Liquidity Crunch Chrysler has been trying to keep itself afloat. As reported by the Troubled Company Reporter on March 20, 2009, its Chief Financial Officer Ron Kolka, has said even if Chrysler gets additional government loans, it could face another cash shortage in July when revenue dries up as the company shuts down its factories for two weeks to change from one model year to the next. The Company's CFO has said Chrysler planned for the $4 billion federal government bailout it received Jan. 2 to last through March 31. The Company is talking with the Obama administration's autos task force about getting another $5 billion, and faces a March 31 deadline to complete its plan to show how it can become viable and repay the loans. General Motors Corp. and Chrysler admitted in their viability plans submitted to the U.S. Treasury on February 17 that they considered bankruptcy scenarios, but ruled out the idea, citing that a Chapter 11 filing would result to plummeting sales, more loans required from the U.S. government, and the collapse of dealers and suppliers. A copy of the Chrysler viability plan is available at: http://ResearchArchives.com/t/s?39a3 A copy of GM's viability plan is available at: http://researcharchives.com/t/s?39a4 * * * 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. PRS II LLC: Court Extends Schedules Filing Deadline until April 1 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas extended until April 1, 2009, the time within which PRS II, LLC, must file its schedules and statement of financial affairs. The extension will enable the Debtor to gather the information required to prepare accurate schedules and statement of financial affairs. Headquartered in Dallas, Texas, PRS II, LLC, filed for Chapter 11 protection on March 6, 2009, (Bankr. Case No.: 09-31436) Gerrit M. Pronske, Esq., at Pronske & Patel, P.C., represents the Debtor in its restructuring efforts. The Debtor listed estimated assets and $10 million to $50 million and estimated debts of $10 million to $50 million. RENE SERRANO: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Rene Serrano 476 Jeweled Mesa Court El Paso, TX 79928 Bankruptcy Case No.: 09-30539 Type of Business: Rene Serrano operates a trucking company. Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court Western District of Texas (El Paso) Debtor's Counsel: E. P. Bud Kirk, Esq. 6006 N. Mesa, #806 El Paso, TX 79912 Tel: (915) 584-3773 Email: budkirk@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by Rene Serrano. ROBERT ACOSTA: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Robert Acosta dba El Dorado Restaurant- Alamo dba El Rancho Grande dba El Dorado Restaurant- Harligen dba Rio Meats and Marsha Alba Acosta aka Jewelry by Marsha P.O. Box 577 Alamo, TX 78516 Bankruptcy Case No.: 09-70223 Type of Business: The Debtors operate restaurants. Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court Southern District of Texas (McAllen) Debtor's Counsel: Ellen C. Stone, Esq. The Stone Law Firm PC 4900 N. 10th St., Suite A2 McAllen, TX 78504 Tel: (956) 630-2822 Fax: (956) 631-0742 Email: ignmca@ellenstonelaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by Robert Acosta. S&K FAMOUS: Rivercity Branch to Close; To Get $13-Mil. DIP Loan --------------------------------------------------------------- Jacksonville Business Journal reports that the S&K Men's Warehouse at Rivercity Market Place is one of S&K Famous Brands Inc.'s 30 stores that will close. As reported by the Troubled Company Reporter on March 18, 2009, S&K Famous is closing 30 of 136 stores. A liquidator will conduct going-out-of-business sales at those 30 stores. The Company had already shut 78 stores pre-bankruptcy. S&K Famous, says Business Journal, is cutting operating costs and introducing new merchandise to attract a new generation of shoppers. Business Journal relates that S&K Famous has negotiated $13 million debtor-in-possession financing from Wells Fargo Retail Finance to fund its working capital requirements during the Chapter 11 process. Business Journal quoted S&K Famous President and CEO Joseph Oliver as saying, "Our first priority is to reduce debt and recapitalize the company as quickly as possible." About S&K Famous Brands, Inc. Headquartered in Glen Allen, Virginia, S & K Famous Brands, Inc. - - http://www.skmenswear.com/-- sells men's swimwear. The Debtor filed for Chapter 11 protection on Feb. 9, 2009, (Bank. E.D. Va. Case No.: 09-30805) Lynn L. Tavenner, Esq., Paula S. Beran, Esq., at Tavenner & Beran, PLC and McGuireWoods LLP represent the Debtor in its restructuring efforts. Its financial advisor is Alvarez & Marsal North America LLC. The Debtor's DIP Lender is Wells Fargo Retail Finance LLC as administrative and collateral agent. The Debtor listed total assets of $41,440,100 and total debts of $35,499,00. SENSUS METERING: Moody's Affirms 'B2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed the B2 Corporate Family and Probability of Default ratings of Sensus Metering Systems Inc. but changed the outlook to negative from stable to reflect refinancing risks associated with significant upcoming debt maturities and the likelihood that Senus will operate with limited headroom to its bank covenants through the next year. In conjunction with the rating action, Moody's affirmed the senior secured rating of Sensus and Sensus Metering Systems (Luxco 2) S.a.r.l. at Ba2 and the rating on Sensus' senior subordinate notes at B3. As an administrative matter the rating on Luxco's senior secured term loan was withdrawn as that obligation has been repaid. Ratings Affirmed: Issuer: Sensus Metering Systems Inc. -- Corporate Family Rating at B2 -- Probability of Default Rating at B2 -- Senior Secured Bank Credit Facility at Ba2 (LGD2, 17% from LGD2, 18%) -- Senior Subordinated Regular Bond/Debenture at B3 (LGD5, 72% from LGD5, 73%) Issuer: Sensus Metering Systems (Luxco 2) S.a.r.l. -- Senior Secured Bank Credit Facility (Revolver) at Ba2 (LGD2, 17% from LGD2, 18%) Outlook Actions: Issuer: Sensus Metering Systems Inc. and Sensus Metering Systems (Luxco 2) S.a.r.l. -- Outlook, Changed To Negative From Stable Withdrawals: Issuer: Sensus Metering Systems (Luxco 2) S.a.r.l. -- Senior Secured Bank Credit Facility (Term Loan), Withdrawn, previously rated at Ba2 (LGD2, 17%) The ratings affirmation reflects Moody's expectation that Sensus' results are likely to remain relatively resilient through the challenging economic environment, supported by replacement sales of its water meters and growing contribution from advanced metering infrastructure contracts. Nonetheless, some caution on Sensus' forward earnings stream is warranted. EBITDA has remained relatively stagnant over the past several years even as revenues have grown strongly. Moreover, in Sensus' latest quarter (FQ3/09), some pressure appeared evident from municipal budget constraints. Still, Moody's expects the balance of these considerations is likely to sustain Sensus' profitability within proximity to current levels through fiscal 2010 (FYE March 31, 2010). Importantly, free cash flow is expected to remain comfortably positive through the near term with proceeds retained on balance sheet or directed towards debt reduction. Consequently, Sensus' key credit metrics are expected to show modest improvement through the near term. Leverage, however will likely remain elevated (roughly 5.5x adjusted currently) and EBITA interest coverage relatively thin (modestly in excess of 1x adjusted currently). While Moody's expects modest improvement to Sensus' fundamentals, this improvement may not keep pace with covenant step-downs in Sensus' bank credit facilities. Covenant compliance is expected to be maintained, although Moody's expects headroom to remain thin through fiscal 2010 (FYE March 31, 2010). These concerns escalate into the ratings horizon as further covenant step-downs occur at the beginning of Sensus' fiscal 2011 (April 1, 2010). Covenant concerns contribute to the negative outlook, but the outlook change also reflects that Sensus needs to address its upcoming revolver maturity (December 2009) while sizeable payments on its $162 million term loan commence March 31, 2010 (ultimately due December 2010). Although Moody's expects Sensus' key credit metrics to remain supportive of its B2 rating, refinancing risks, if not resolved in the near term, may drive the rating lower. Moody's last rating action on Sensus was September 16, 2008, when the company's Corporate Family rating was affirmed at B2. Headquartered in Raleigh, North Carolina, Sensus Metering Systems, Inc., is a leading provider of metering and related communication systems to electric, gas and water utilities. SHAW COMMUNICATIONS: Moody's Rates C$600 Mil. Senior Unsec. Notes ----------------------------------------------------------------- Moody's Investors Service rated Shaw Communications Inc.'s C$600 million senior unsecured note issue Baa3. While the logistics of debt repayment from the new issue proceeds may cause debt and credit protection measures to temporarily spike, as Moody's anticipates that Shaw will ultimately use the new issue proceeds to repay other existing indebtedness that comes due during 2010 and 2011, the issue is neutral to the company's credit profile. Accordingly, the new issue's rating is equivalent with the company's other senior unsecured debts, and, as part of the rating action, applicable senior unsecured ratings were affirmed as was Shaw's stable ratings outlook. Rating Actions: Assignments: Issuer: Shaw Communications Inc. -- Senior Unsecured Regular Bond/Debenture, Assigned Baa3 Affirmations: Issuer: Shaw Communications Inc. -- Senior Unsecured Regular Bonds/Debentures, unchanged at Baa3 Outlook Actions: Issuer: Shaw Communications Inc. -- Outlook unchanged at stable Moody's most recent rating action concerning Shaw was taken on March 16, 2009, at which time the company's senior unsecured debt ratings were upgraded to Baa3 from Ba1. Headquartered in Calgary, Alberta, Canada, Shaw Communications Inc. is a diversified Canadian communications company whose core business is providing cable television, Internet and telephone service to residential consumers in specific regions provided for in its operating licenses (offered under the Shaw brand name). Shaw also provides television signals to residential consumers on a national basis via satellite direct-to-home services (Star Choice brand name). Shaw is traded on the Toronto and New York stock exchanges. SMURFIT-STONE: Wants Schedules Filing Deadline Moved to April 6 --------------------------------------------------------------- Smurfit-Stone Container Corporation and its debtor affiliates ask the United States Bankruptcy Court for the District Of Delaware to extend until April 6, 2009, the deadline within which they may file their schedules of assets and liabilities and statement of financial affairs. The Debtors are currently in the process of completing the Schedules and Statements, notes James P. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois. However, he says, the Debtors may not be able to complete the documents by March 27, 2009, given the size of their businesses. A brief extension of 10 days will provide them sufficient time to finalize and file complete Schedules and Statements, he adds. According to Mr. Conlan, the Debtors have worked diligently and have made significant progress towards completing their Schedules and Statements. Specifically, the Debtors have engaged PricewaterhouseCoopers LLP to assist them in their preparation of the Schedules and Statements in addition to the tax and financial advisory services already provided throughout the administration of the Chapter 11 cases as requested by the Debtors. "The necessity of the brief extension is largely due to the number of the Debtors' creditors, the size and complexity of the Debtors' businesses, the diversity of their operations and assets, and the limited staffing available to gather, process and complete the Schedules and Statements," Mr. Conlan maintains. In addition, since the Petition Date, and during the course of preparing the Schedules and Statements, the Debtors concurrently performed, or are performing, many critical tasks, including: * Managing the daily operations of their businesses; * Gaining approval of their requested "first-day" and "second- day" relief, including approval of a postpetition financing facility; * Navigating a parallel foreign proceeding in Canada and successfully gaining recognition of the Court's orders in the Canadian proceeding; * Communicating with all parties-in-interest in the Chap. 11 cases, including employees, customers and vendors; and * Developing responsive information and otherwise responding to diligence requests by parties-in-interest. The time required to perform these critical tasks has necessarily limited the amount of time that the Debtors have been able to commit to preparing the Schedules and Statements, Mr. Conlan notes. Filing the Schedules and Statements no later than April 6, 2009, will still provide the creditors and other parties-in- interest time to review the Schedules and Statements prior to the meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code, which meeting has been continued until April 8, 2009, he says. Moreover, the Debtors have been in discussion with the U.S. Trustee regarding the Debtors' intention to request this additional extension of time to complete and file the Schedules and Statements. The Debtors understand that the U.S. Trustee does not object to the brief extension requested, which extension still allows for the 341 Meeting to be held at its presently scheduled time, Mr. Conlan relates. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Gets Court Nod to Raise DIP Loan to $750 Million --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized Smurfit-Stone Container Corporation and its debtor affiliates on February 23, 2009, to enter into a DIP credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian administrative agent and Canadian collateral agent, and the lenders from time to time party thereto. In a regulatory filing with the Securities and Exchange Commission dated March 2, 2009, Craig A. Hunt, Esq., the Debtors' senior vice president, secretary and general counsel, disclosed that on February 25, 2009, the parties to the DIP Credit Agreement executed the "First Amendment to Credit Agreement and to Security and Pledge Agreement", to, upon the satisfaction of certain conditions precedent, effect modifications to the DIP Credit Agreement in the form of an amendment and restatement of the agreement. On the same date, the provisions of the First Amendment to DIP Credit Agreement became effective, and the DIP Credit Agreement was amended and restated. The Amended DIP Credit Agreement provides for borrowings up to an aggregate committed amount of $750 million, consisting of: -- a $400 million U.S. term loan for borrowings by Smurfit- Stone Container Enterprises, Inc.; -- a $35 million Canadian term loan for borrowings by Smurfit- Stone Container Canada Inc.; -- a $215 million U.S. revolving credit facility for borrowings by SSCE and/or SSC Canada; -- a $35 million U.S. revolving credit and letter of credit facility for borrowings by SSCE and/or SSC Canada; and -- a $65 million Canadian revolving credit and letter of credit facility for borrowings by SSCE and/or SSC Canada. Mr. Hunt says that except for these changes, the material terms of the Amended DIP Credit Agreement are the same as those set forth in the original DIP Credit Agreement. Mr. Hunt also disclosed that on February 27, 2009, the parties to the Amended DIP Credit Agreement executed the First Amendment to Amended and Restated Credit Agreement. The First Amendment to Amended DIP Credit Agreement conformed certain provisions of the Amended DIP Credit Agreement to the Court's final order issued in connection with its approval of the original DIP Credit Agreement. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Calpine Corrugated Can Use Collateral Until 2010 --------------------------------------------------------------- Judge Brendan Linehan Shannon of the United States Bankruptcy Court for the District of Delaware has authorized Calpine Corrugated LLC to use on a final basis, cash collateral from March 10, 2009, to January 2, 2010. Calpine Corrugated, an affiliate of Smurfit-Stone Container Corporation, may use the Cash collateral to fund general corporate and working capital requirements and capital expenditures, solely in accordance with the cash collateral budget, a copy of which is available for free at: http://bankrupt.com/misc/SmurfCalpineBudget.pdf The Budget may be amended or modified by the Debtors from time to time, after consultation with the Official Committee of Unsecured Creditors and subject to either (a) the written consent of the Prepetition Lenders or (b) the approval of the Court after notice and a hearing. As adequate protection against diminution in the value of Union Bank's interests in its collateral, Union Bank is granted (a) replacement security interests in and liens upon all of the Union Bank Collateral and the proceeds of any avoidance actions under section 549 and 550 of the Bankruptcy Code related to a postpetition transfer of Union Bank Collateral, and (b) a superpriority administrative expense claim under Section 507(b) of the Bankruptcy Code payable solely from the assets of Calpine Corrugated. The Union Bank Adequate Protection Liens and the Union Bank Adequate Protection Priority Claim will secure the payment of the Union Bank Adequate Protection Obligations. As adequate protection against diminution in the value of CIT's interests in the CIT Collateral, CIT is granted: (a) replacement security interests in and liens and mortgages upon (i) any and all presently owned and hereafter acquired personal property, real property and all other assets of Calpine Corrugated and its estate, together with any proceeds of the property, and (ii) the proceeds of avoidance actions under Chapter 5 of the Bankruptcy Code in Calpine Corrugated's Chapter 11 case; and (b) a superpriority administrative expense claim under Section 507(b) of the Bankruptcy code payable solely from the assets of Calpine Corrugated. The CIT Adequate Protection Liens and the CIT Adequate Protection Priority Claim will secure the payment of the CIT Adequate Protection Obligations. The Union Bank Adequate Protection Liens will be senior in priority to the CIT Adequate Protection Liens in the Union Bank Collateral and the prepetition liens and security interests of CIT in the Union Bank Collateral, but will be junior in priority to the prepetition liens and security interests of Union Bank in the Union Bank Collateral. As additional adequate protection -- Union Bank will be entitled to (i) monthly payments of principal in the amount of $50,000, payable in advance on the first business day of each month, (ii) the current payment of accrued but unpaid interest as and when due and payable under the Union Bank Credit Agreement, and (iii) the current payment of the reasonable fees, costs and expenses of Union Bank in accordance with the terms of the Union Bank Credit Agreement. -- CIT will be entitled to (i) monthly payment of principal in the amount of $150,000, payable in advance on the first business day of each month, (ii) the current payment accrued but unpaid interest as and when due and payable under the CIT Credit Agreement, and (iii) the current payment of the reasonable fees, costs and expenses of CIT in accordance with the terms of the CIT Credit Agreement. Calpine Corrugated's authorization to use Cash Collateral will terminate on the earliest to occur of: (a) January 2, 2010; (b) the dismissal of Calpine Corrugated's Chapter 11 case or the conversion of the Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code; (c) the appointment of a trustee or examiner with expanded powers in Calpine Corrugated's Chapter 11 case; (d) the entry of an order reversing, staying, vacating or otherwise modifying in any material respect the terms of the Final Cash Collateral Order; (e) failure by Calpine Corrugated to comply with any material provision of this Final Cash Collateral Order, as determined by the Court pursuant to a final order after notice and a hearing; (f) any misrepresentation of a material fact made after the Petition Date by any of the Debtors or their agents to the Prepetition Lenders about (i) the financial condition of Calpine Corrugated, (ii) the nature, extent, location or quality of any Prepetition Collateral, or (iii) the disposition or use of any Prepetition Collateral, including the Cash Collateral, in each case as determined by the Court pursuant to a final order after notice and a hearing; (g) the sale after the Petition Date of any portion of Calpine Corrugated's assets outside the ordinary course of business without the prior written consent of the Prepetition Lenders, each in its sole discretion; and (h) the failure by Calpine Corrugated to comply with any material terms of the Prepetition Credit Agreements after the Petition Date, as determined by the Court pursuant to a final order after notice and a hearing. Judge Shannon held that no portion of the Prepetition Collateral will (i) be used by the Debtors to satisfy administrative expenses in any Chapter 11 case other than the Chapter 11 case of Calpine Corrugated or (ii) be distributed by Calpine Corrugated to Smurfit-Stone Container Enterprises, Inc. in the form of an upstream dividend, intercompany loan, or any distribution for less than reasonably equivalent value. SSCE will (a) pay in cash on a weekly basis for all postpetition purchases of goods from Calpine Corrugated and (b) provide payment terms to Calpine Corrugated for all postpetition purchases of goods from SSCE by Calpine Corrugated in accordance with the terms of the Budget. A copy of the Final Cash Collateral Order is available for free at http://bankrupt.com/misc/SmurfCalpineCashCoORD.pdf About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Seeks to Employ Levin Group as Financial Advisor --------------------------------------------------------------- Smurfit-Stone Container Corporation and its debtor affiliates ask the United States Bankruptcy Court for the District Of Delaware for permission to employ The Levin Group LP, nunc pro tunc to the Petition Date, as their strategic and financial advisors. TLG is a strategic and financial advisory services firm with extensive experience in the containerboard and packaging industry. TLG also specializes in detailed strategic, operational and financial analysis and modeling as the foundation for transactional and corporate advisory assignments. TLG has advised on in excess of $9 billion in completed transactions and been retained on numerous strategic advisory assignments by Fortune 500 corporations, including within the past five years, three of the largest pulp and paper companies in North America: Georgia-Pacific Corporation, the Debtors, and Bowater Incorporated, which is now doing business as AbitibiBowater, Inc. Craig A. Hunt, Esq., the Debtors' senior vice president, secretary and general counsel, says that the Debtors have used the services of TLG since 2006. He adds that TLG advised the Debtors on the sale of their 500,000 ton Brewton, Alabama mill. TLG also advised the Debtors in connection with potential, major industry consolidations, which included detailed analysis and modeling of the operations and financial condition of the Debtors and potential industry participants. Given the services that TLG has provided to the Debtors to date, TLG's professionals have become well-acquainted with the Debtors' operations and business and have worked closely with the Debtors' management team, Mr. Hunt tells the Court. He submits that TLG is well qualified to provide its services to the Debtors in a cost-effective, efficient, and timely manner. As the Debtors' financial advisor, TLG will: (a) prepare an initial detailed financial and operational forecast model, built up by inputs from each mill, container business plant, recycling plant, and major corporate items, with the capability to incorporate changes in: * price forecasts by products and channel; and * cost inflation drivers, whether controllable company- wide or in an individual facility level; (b) complete a financial and operational forecast model to analyze, support and present the Debtors' plan of reorganization, which incorporates: * price, volume and cost assumptions tied to current budget projections; * the management of discretionary expenditures; * the impact of major restructuring actions; * potential alternative operating scenarios, including mill and box plant asset utilization, mill conversions, asset divestitures, channel mix and operating strategies; and * strategic and operating initiatives to improve business performance; (c) provide assistance in connection with asset sales, including due diligence preparation, financial analysis, and similar activities, only to the extent asked by the Debtors and only to the extent that no other financial advisor is similarly engaged with respect to any specific assignment; (d) provide other strategic advisory services as asked by the Debtors in connection with potential business combinations and industry analysis, only to the extent asked by the Debtors and only to the extent that no other financial advisor is similarly engaged with respect to any specific assignment; and (e) attend meetings of the Debtors' Board of Directors and committees and make presentations on the matters for which TLG has been employed, consistent with past practice. The Debtors will pay TLG these fees: -- a monthly fee of $150,OOO until the completion of the engagement; -- $1,500,000 upon completion and delivery of a "Phase I Model" to the satisfaction of the Debtors' Management and Board of Directors; -- $3,500,000 upon completion and delivery of a "Plan of Reorganization Model" to the satisfaction of the Debtors and payable upon the filing of the Plan to the Court; and -- a percentage fee with the completion of any asset sales or strategic combination transactions in which TLG was engaged as exclusive advisor. TLG will also be reimbursed for all reasonable expenses incurred in connection with the performance of the engagement, including travel and lodging and other appropriate expenditures but excluding normal operating and business expenses. Mr. Hunt discloses that in the 90 days before the Petition Date, TLG received payments totaling $2,877,622. William Levin, a managing director of TLG, assures the Court that to the best of his knowledge, his Firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Court. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: To Employ Hewitt as Compensation Consultant ---------------------------------------------------------- Smurfit-Stone Container Corporation and its debtor affiliates ask the United States Bankruptcy Court for the District Of Delaware for authority to employ Hewitt Associates LLC as their compensation consultant, nunc pro tunc to the Petition Date. The Debtors disclose that Hewitt has acted as the Debtors' general compensation consultant for the past four years and has provided general human resources services to the Debtors for more than 10 years. On the Petition Date, the Debtors and Hewitt executed an engagement letter that sets forth the scope of Hewitt's compensation consulting services in the Chapter 11 cases. In particular, the Engagement Letter provides that Hewitt will assist the Debtors in the design of compensation programs for various classes and subclasses of their employees. As a result of Hewitt's prior experience in assisting the Debtors, Hewitt's professionals have worked closely with the Debtors' management, internal staff, and other professionals. Given Hewitt's knowledge of the Debtors and the additional time and costs that would be required for a new compensation consultant to develop a comparable understanding of the Debtors, the Debtors wish to continue utilizing Hewitt's services in connection with the Chapter 11 cases and believe that doing so will be cost-effective for their estates. Specifically, the Debtors seek to employ Hewitt to provide compensation consultation services including, but not limited to: (a) conducting activities to gain an understanding of the Debtors' business strategies, operations and compensation programs; (b) conducting competitive market benchmarking of applicable employees' compensation; (c) accumulating and analyzing benchmark information regarding incentive pay practices of peer debtor entities; (d) assisting the Debtors with regard to the design of proposed compensation programs; (e) preparing a summary report combining all of the specified work and setting forth its findings, conclusions and recommendations; (f) assisting management in presenting proposed compensation programs to the Committee and their representatives; (g) assisting management in developing materials to Effectively communicate approved compensation programs to employees; and (h) perform other services as are customary in engagements of the type contemplated and as may be reasonably agreed upon by the Debtors and Hewitt. The Debtors will pay Hewitt on an hourly basis in accordance with its ordinary and customary rates in effect on the date the services are rendered. In addition, the Debtors will reimburse Hewitt of actual and necessary costs and expenses incurred by Hewitt. Hewitt's hourly rates are: Principal $550 to $750 Senior Consultant 425 to 550 Consultant 325 to 425 Associate 275 to 325 Analyst 200 to 275 Administrative Assistant 150 to 200 The Debtors disclose that before the Petition Date, the Debtors retained Hewitt in the ordinary course, however Hewitt did not perform work in conjunction with the Debtors' Chapter 11 cases. As of the Petition Date, Hewitt had accrued less than $10,000 in unpaid fees and expenses, but in light of its retention, Hewitt has agreed to waive and forego payment of any unpaid prepetition fees and expenses. Todd McGovern, Esq., a principal at Hewitt, assures the Court that, to the best of his knowledge, his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. According to Bloomberg News, Smurfit-Stone joins other pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corp. Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: S&P Revises Recovery Ratings on $750-Mil DIP Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its recovery rating on Smurfit-Stone Container Enterprises Inc.'s senior secured (prepetition) credit facilities, following S&P's assessment of the impact of Smurfit-Stone Container's $750 million debtor-in-possession financing on prepetition lender recoveries. "We revised the recovery rating on Smurfit-Stone Container's $1.4 billion in prepetition senior secured credit facilities to '3' from '2', indicating S&P's expectation that lenders may receive a meaningful (50%-70%) recovery upon the company's emergence from bankruptcy," said Standard & Poor's credit analyst Pamela Rice. The issue-level rating remains at 'D' (the same level as the corporate credit rating on the company). The issue-level rating on Smurfit-Stone Container's unsecured debt remains at 'D' and the recovery rating on these notes is '6', indicating S&P's expectation for negligible (0%-10%) recovery upon the company's emergence from bankruptcy. On Jan. 26, 2009, with the company and its U.S. subsidiaries filing for Chapter 11 bankruptcy protection in Delaware and its Canadian subsidiaries filing to reorganize in Ontario, Canada, Standard & Poor's lowered the issue-level ratings and the corporate credit rating on Smurfit-Stone Container to 'D'. SONIC AUTOMOTIVE: Moody's Downgrades Corp. Family Rating to 'B1' ---------------------------------------------------------------- Moody's Investors Service downgraded Sonic Automotive's corporate family and probability of default ratings to B1 from Ba3, and left the ratings on review for further possible downgrade. The downgrade considers the overall weak operating environment for the auto retailing segment, especially in the fourth quarter of 2008, which has had a material negative impact on auto dealers generally. The downgrade also reflects Moody's view that the difficult operating environment will continue through 2009, further pressuring Sonic's performance and credit metrics. The continuing review for possible downgrade reflects the uncertainty surrounding Sonic's expected 2009 operating performance given the difficult macroeconomic environment. It also reflects risks the company faces as it negotiates waivers from its various lenders surrounding a potential "going concern opinion" from its auditors which would constitute a technical default under its bank credit agreement. This comes at a time when the company must seek to refinance or renegotiate its $105 million 5.25% convertible senior subordinated notes which mature in May 2009. While Sonic presently has sufficient availability under its bank revolver to repay the notes (assuming any required waivers are obtained) the potential going concern opinion heightens liquidity risk. Should Moody's not become comfortable that Sonic can maintain credit metrics going forward that are appropriate for the B1 rating, it could be downgraded further. Additionally, should the company have difficulty obtaining any necessary amendments or waivers to its bank facilities or if such bank accommodations come with much higher pricing or stringent terms, additional downgrades could occur. "Moody's concern is that Sonic's fourth quarter performance will likely weakly position it in the B1 rating category, and considering the likelihood that 2009 will be more difficult than 2008, Sonic may have a tough time stabilizing its credit metrics," stated Moody's Senior Analyst Charlie O'Shea. "In addition, there is heightened risk surrounding liquidity at least through the end of May as the company's bonds mature." The B1 rating considers Sonic's weakening credit profile, as well as its strong market position in the still very fragmented auto retailing segment. The rating also considers Sonic's historically-favorable brand mix, with 73% of new vehicle sales coming from luxury and import brands, and its operating profit trend away from new vehicle sales. Sonic's business model, with solid parts and service and finance and insurance segments, reduces reliance on new car sales. Ratings downgraded and left on review for possible downgrade include these: -- Corporate family rating to B1 from Ba3; -- Probability of default rating to B1 from Ba3; -- Senior guaranteed subordinated notes to B3 (LGD 5, 79%) from B1 (LGD 5, 79%), and -- Senior convertible subordinated notes to B3 (LGD 6, 92%) from B2 (LGD 6, 93%). The most recent rating action for Sonic was the December 22, 2008, placing of the ratings on review for possible downgrade. Sonic Automotive, Inc., headquartered in Charlotte, NC is a leading auto retailer with 164 franchises, and generates annual revenues of around $7 billion. SPANSION INC: Court Approves Latham & Watkins Engagement -------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware grants Spansion Inc. and its affiliates authority to employ Latham & Watkins LLP, as their bankruptcy counsel, nunc pro tunc to March 1, 2009. The Court has yet to rule on the Debtors' request to employ Duane Morris LLP as Delaware counsel and Baker & McKenzie LLP as special counsel. As reported by the Troubled Company Reporter on March 5, 2009, the Debtors selected Latham & Watkins because: (a) they have consulted the firm prior to the Petition Date with respect to, among other things, advice regarding a host of issues related to their restructuring efforts and the preparation for the commencement and prosecution of their Chapter 11 cases; (b) the firm and its attorneys have considerable experience in Chapter 11 reorganization cases and the fields of debtors' and creditors' rights generally; and (c) the firm has performed other work for the Debtors in the past, and is therefore familiar with their corporate structure and businesses. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., will have primary responsibility for providing services to the Debtors. These attorneys will: (i) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties; (ii) attend meetings and negotiate with representatives of creditors and other parties-in-interest; (iii) take all necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors' interest in negotiations concerning all litigation in which the Debtors are involved, including objections to claims filed against the estates; (iv) prepare all motions, applications, answers, orders, reports, and papers necessary to the administration of the Debtors' estates; (v) take all necessary action on behalf of the Debtors to obtain approval of a disclosure statement and confirmation of the Debtors' plan of reorganization; (vi) advise the Debtors in connection with any potential sale of assets; (vii) appear before the Court, any appellate court, and the United States Trustee, and protect the interests of the Debtors' estates; and (viii) perform all other necessary legal services for the Debtors in connection with the Chapter 11 cases, including (a) analyzing the Debtors' leases and executory contracts and the assumption or assignment of those contracts, (b) analyzing the validity of liens against the Debtors, and (c) advising on corporate, litigation, environmental, and other legal matters. In addition, the Debtors have asked Latham & Watkins to serve as special counsel to Spansion Japan Limited in connection with a corporate reorganization proceeding commenced by Spansion Japan on February 10, 2009. Moreover, the Debtors have also asked the firm to advise on activities of Spansion International and certain affiliates in non-United States jurisdictions. The Debtors propose to pay Latham & Watkins based on the firm's current hourly rates: Professional Rate/hour ------------ --------- Partners $750-$1,050 Counsel $695-$975 Associates $370-$725 Paraprofessionals $105-$620 According to the Debtors, the amount of Latham & Watkins' postpetition retainer as of the Petition Date is $1,600,000. Michael S. Lurey, Esq., a partner of Latham & Watkins LLP, has attested that his firm does not represent any interest adverse to the Debtors with respect to matters upon which it is to be employed, and that his firm is a "disinterested person", as that phrase is defined in Section 101(14) of the Bankruptcy Code as modified by Section 1107(b). About Spansion Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc. and four affiliates filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. As of Sept. 30, 2008, Spansion disclosed total assets of $3,840,000,000, and total debts of $2,398,000,000. STANDARD MOTOR: Moody's Downgrades Default Rating to 'Ca' --------------------------------------------------------- Moody's Investors Service lowered Standard Motor Products, Inc.'s Probability of Default rating to Ca from Caa1 following its debt exchange offer announcement. The Corporate Family rating was also downgraded to Caa2 from Caa1 while the rating of the convertible subordinated debenture due July 2009 was confirmed at Caa3. The rating outlook is negative. The rating action concludes the review initiated on January 14, 2009 when the company was downgraded to Caa1 and placed under review for possible further downgrade. The downgrade of PDR reflects the company's mounting default risk as the company is attempting to shore up liquidity to refinance its upcoming maturity of $45 million debentures. According to its March 20 announcement, Standard Motor is offering to exchange for up to a maximum of $20 million of the 6.75% debentures for the same principal amount of 15% convertible subordinated debentures due 2011. If the exchange offer is successfully completed, Moody's would likely deem the exchange a distressed exchange. Moody's would reassess Standard Motor's ratings when the exchange completes and there is additional clarity around its refinancing plan for the remainder of the maturating debt ($25 million approximately assuming the proposed amount gets exchanged). The company's ability of funding the rest of the maturing debenture remains uncertain at this time. Standard Motor's internal liquidity remains weak: its cash balance as of December 31, 2008 was approximately $6.6 million and has limited access to its revolver for debenture redemption purpose per the recent amendment. Should the exchange fail or no other meaningful alternative financing be ascertained, the ratings could be downgraded further. The negative outlook is reflective of possible further rating pressure pending refinance activities as well as challenging operating environment that would continue to adversely affect the company's aftermarket auto parts business. The rating action is: * Probability of default rating -- downgraded to Ca from Caa1 * Corporate family rating -- downgraded to Caa2 from Caa1 * $45 million convertible subordinated debentures due July 2009 -- confirmed at Caa3, LGD adjusted to (LGD3, 35%) from (LGD6, 93%) * Rating outlook: Negative The last rating action was on January 14, 2009, when the CFR was downgraded to Caa1. Standard Motor Products, headquartered in Long Island City, New York, is a manufacturer and distributor of replacement parts for the automotive aftermarket industry. The company is organized into two principal divisions: (i) Engine Management (ignition and emission parts; ignition wires; battery cables; and fuel system parts) and (ii) Temperature Control (air conditioning compressors; other air conditioning parts; and heater parts). Standard Motor's annualized revenues currently approximate $775 million. STANDARD MOTOR: S&P Downgrades Corporate Credit Rating to 'CC' -------------------------------------------------------------- Standard & Poor's Ratings Services said it has lowered its corporate credit rating on Standard Motor Products Inc. to 'CC' from 'CCC+' and lowered the ratings on the company's various debt issues. The outlook is negative. These actions follow the company's announcement on March 20, 2009, that it is offering to exchange $1,000 principal of its 15% convertible subordinated debentures due 2011 for each $1,000 principal amount of its outstanding 6-3/4% convertible subordinated debentures due July 2009, up to a maximum of $20 million aggregate principal amount. Currently, $45 million is outstanding. "Under our criteria, S&P views the exchange as being made by a company under substantial financial pressure and offering investors less than the original promise -- in this case, when the new debentures' maturities extend beyond the original maturities," said Standard & Poor's credit analyst Lawrence Orlowski. Our downgrade is based on the financial pressure that Standard Motor Products is under to reduce its debt by retiring it later than originally contracted. Similarly, investors' potential willingness to accept a substantial modification to contractual terms provides evidence that they have significant doubts about receiving full payment on the obligations. Upon completion of the offer, S&P will lower its corporate credit rating on Standard Motor Products to 'SD' (selective default) and lower S&P's ratings on issues repurchased under the exchange offer to 'D' (default). S&P will, shortly thereafter, assign a new corporate credit rating, representative of the default risk, after the financial restructuring. The outlook is negative. S&P would expect to lower the corporate credit rating to 'SD' and the affected issue ratings to 'D' upon completion of the exchange offer. S&P would, shortly thereafter, assign a new corporate credit rating to Standard Motor Products based on, among other things, S&P's assessment of the company's new capital structure, liquidity profile, and ability to meet the remaining July maturities. S&P could raise the rating out of the 'CC' category without lowering the ratings to 'SD' if Standard Motor decided to rescind its exchange offer and repay its debentures in full. STAR TRIBUNE: To Transfer Direct-Mail Assets to Impact Mailing -------------------------------------------------------------- Bankruptcy Law360 reports that Star Tribune Co. has asked the U.S. Bankruptcy Court for the Southern District of New York for permission to transfer assets related to its direct-mail advertising business to a direct-mail company in exchange for a share of future revenues from the Debtors' former clients. Bankruptcy Law360 says the Debtors have concluded that their direct-mail advertising business makes little or no profit. The Minneapolis/St. Paul City Pages reports that the Debtors intend to transfer the business to Impact Mailing of MN Inc. Star Tribune filed the motion on Tuesday. Bankruptcy Law360 says the Debtors are seeking approval of a transition agreement. City Pages says that, as part of the proposed deal, the seven workers in the division get to keep their jobs. City Pages, citing an article on Law360, relates that Star Tribune has planned to unload the direct-mail business even before it filed for bankruptcy. The Debtors have told the Bankruptcy Court the business is revenue-losing and its disposal is consistent with their plan to return to core operations. Star Tribune, City Pages says, told the Court a public sale or bidding and auction of the assets would cause delays and expense, pointing out that the pool of potential buyers for the business is relatively small because they must be based locally. Headquartered in Minneapolis, Minnesota, The Star Tribune Company -- http://www.startribune.com-- operate the largest newspaper in the U.S. state of Minnesota and published seven days each week in an edition for the Minneapolis-Saint Paul metropolitan area. The company and its affiliate, Star Tribune Holdings Corporation, filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10245). Marshall Scott Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. The Debtors proposed Blackstone Group LP as their financial advisor; and Curtis, Mallet-Prevost, Colt & Mosle LLP as conflict counsel; and Garden City Group Inc. as claims agent. Diana G. Adams, the U.S. Trustee for Region 2, selected seven members to the official committee of unsecured creditors in the Debtors' Chapter 11 cases. The Committee proposed Lowenstein Sandler PC as its counsel. In their schedules of assets and liabilities, the Debtors disclosed $355,409,331 in total assets and $490,254,282 in total liabilities. STO INDUSTRIES: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: S.T.O. Industries, Inc. 10822 117th Place NE Kirkland, WA 98033 Bankruptcy Case No.: 09-12521 Chapter 11 Petition Date: March 18, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Thomas T. Glover Debtor's Counsel: Peter S Holmes, Esq. Crocker Kuno PLLC 720 Olive Way Ste 1000 Seattle, WA 98101 Tel: (206) 624-9894 Email: pholmes@crockerkuno.com and Jill I Lunn, Esq. 700 Stewart St Ste 5103 Seattle, WA 98101 Tel: (206) 553-2000 Email: Jill.I.Lunn@usdoj.gov Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wawb09-12521.pdf The petition was signed by Jacob Davis, president of the Company. TAPESTRY PHARMA: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Tapestry Pharmaceuticals, Inc. fka NaPro BioTherapeutics, Inc. 2310 S.E. Delaware Ave, Suite G281 Ankeny, IA 50021 Bankruptcy Case No.: 09-14463 Type of Business: The Debtor researches and develops Cancer drugs. Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Steven T. Mulligan, Esq. 4582 S. Ulster St. Pkwy., Ste. 1650 Denver, CO 80237 Tel: (720) 488-0220 Email: smulligan@bsblawyers.com Estimated Assets: $50,001 to $100,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cob09-14463.pdf The petition was signed by Gordon H. Link, CEO of the Company. TENET HEALTHCARE: Moody's Assigns 'Ba3' Rating on $1.4 Bil. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 (LGD2, 23%) rating to Tenet Healthcare Corporation's new $1.4 billion senior secured notes. Moody's also affirmed all existing ratings of Tenet. The new notes were offered in exchange for an equal aggregate principal amount of the existing senior unsecured notes. The affirmation of the B3 Corporate Family Rating reflects the expectation that the company will continue to operate with high financial leverage and modest interest coverage. While Moody's acknowledge that refinancing risk was partially mitigated by the exchange, due to the extended maturity of the new notes, the transaction does not reduce the total debt level and the company will incur incremental interest expense. Additionally, the difficult economy contiues to impact operating performance and has impeded improvement in credit metrics. However, the rating is supported by good liquidity, characterized by $507 million in cash reserves and $444 million available under the revolver as of December 31, 2008. Following is a summary of Moody's rating actions. Ratings assigned: -- $700 million 9.0% senior secured notes due 2015, Ba3 (LGD2, 23%) -- $700 million 10.0% senior secured notes due 2018, Ba3 (LGD2, 23%) Ratings affirmed/LGD assessments revised: -- $800 million senior secured revolving credit facility due 2011, Ba3 (LGD1, 2%) -- 6 3/8% senior notes due 2011, to Caa1 (LGD5, 75%) from Caa1 (LGD4, 62%) -- 6 ½% senior notes due 2012, to Caa1 (LGD5, 75%) from Caa1 (LGD4, 62%) -- $1,000 million 7 3/8% senior notes due 2013, to Caa1 (LGD5, 75%) from Caa1 (LGD4, 62%) -- $1,000 million 9 7/8% senior notes due 2014, to Caa1 (LGD5, 75%) from Caa1 (LGD4, 62%) -- $800 million 9 1/4% senior notes due 2015, to Caa1 (LGD5, 75%) from Caa1 (LGD4, 62%) -- $450 million 6 7/8% senior notes due 2031, to Caa1 (LGD5, 75%) from Caa1 (LGD4, 62%) -- Corporate family rating, B3 -- Probability of Default Rating, B3 -- Speculative Grade Liquidity Rating, SGL-2 The rating outlook remains at stable. Moody's last rating action was on September 28, 2006, when the B3 Corporate Family Rating was affirmed, the Speculative Grade Liquidity Rating was upgraded to SGL-2 from SGL-4 and the outlook was changed to stable from negative. Tenet is headquartered in Dallas, Texas and is expected to continue to operate 50 hospitals in 12 states (excluding three hospitals not yet divested and included in discontinued operations at December 31, 2008). Tenet generated revenue from continuing hospital operations of approximately $8.7 billion for the year ended December 31, 2008. TRINITY FAITH: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Trinity Faith Full Gospel Church, Inc. 6600 Hallelujah Boulevard Wendell, NC 27591 Bankruptcy Case No.: 09-02210 Type of Business: The Debor is a religious institution. Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: A. Thomas Small Debtor's Counsel: Danny Bradford, Esq. Paul D. Bradford, PLLC dba Bradford Law Offices 6512 Six Forks Road, Suite 304 Raleigh, NC 27615 Tel: (919) 758-8879 Fax: (919) 803-0683 Email: dbradford@bradford-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors, together with its petition. The petition was signed by William Ellis Simmons, Sr., CEO of the Company. TRONOX INC: Equity Committee Seeks to Retain Pillsbury Winthrop --------------------------------------------------------------- Bankruptcy Law360 reports that the official committee of equity security holders in Tronox Inc.'s bankruptcy cases is seeking permission from the U.S. Bankruptcy Court for the Southern District of New York to retain Pillsbury Winthrop Pittman LLP as the panel's bankruptcy counsel. Pillsbury Winthrop, the report says, will represent the equity security holders' interests and help recoup some losses as Tronox digs itself out from Chapter 11 bankruptcy. The Tronox equity security holders committee, the report says, is seeking to retain six Pillsbury employees to represent their interests. As reported by the Troubled Company Reporter on March 17, 2009, Diana G. Adams, United States Trustee for Region 2, appointed seven members to the Official Committee of Equity Security Holders in Tronox's case. 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. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. 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) TROPICANA ENTERTAINMENT: May Emerge From Bankruptcy in April ------------------------------------------------------------ Sara Thompson and Jeff Munson at Nevada Appeal News Service reports that Tropicana Entertainment LLC said that it hopes to emerge from Chapter 11 bankruptcy protection in late April or early May. Tropicana Entertainment said that it reached a deal with creditors, Nevada Appeal states. As reported by the Troubled Company Reporter on March 26, 2009, unsecured creditors are urging voters to support Tropicana Entertainment LLC's Chapter 11 reorganization plan. Tropicana has started distributing the ballots, which are accompanied by a letter of support from the unsecured creditors committee. According to Nevada Appeal, Horizon Casino Resort spokesperson Tom Davis said that Horizon and MontBleu Resort Casino & Spa will continue to operate. The report states that former Tropicana Entertainment owner William J. Yung III won't hold any positions with the Company. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TUBE BENDS: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Tube Bends, Incorporated 610 North Mountain Road Newington, CT 06111 Bankruptcy Case No.: 09-20641 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Connecticut Stamping and Bending Company 09-20642 Type of Business: The Debtors provides metal bending and stamping services. Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court District of Connecticut (Hartford) Debtor's Counsel: Anthony S. Novak, Esq. Lobo & Novak, LLP 280 Adams Street Manchester, CT 06042-1975 Tel: (860) 645-0006 Fax: (860) 645-1110 Email: AnthonySNovak@aol.com Total Assets: $2,500,000.00 Total Debts: $8,227,350.64 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ctb09-20641.pdf The petition was signed by Jon Barlow, vice president of the Company. UNIGENE LABORATORIES: Revenue Decreased $1.19 Million in 2008 ------------------------------------------------------------- On March 16, 2009, Unigene Laboratories, Inc., issued a press release announcing its financial results for the fiscal quarter ended December 31, 2008. Revenue for the three months ended December 31, 2008, was $4,854,000, compared to $3,033,000 for the three months ended December 31, 2007, and $19,229,000 for the year ended December 31, 2008, compared with $20,423,000 for the year ended December 31, 2007. According to Unigene, the decrease in revenue for 2008 was primarily due to payments of $2,500,000 received in 2007 under a non-recurring supply agreement. Unigene's revenue for all periods primarily consists of Fortical sales and royalties, which were $16,578,000 for the year ended December 31, 2008, and $16,131,000 for the year ended December 31, 2007. Fortical royalties were $6,520,000 for the year ended December 31, 2008, compared to $5,572,000 for the year ended December 31, 2007. Fortical sales were $10,058,000 for the year ended December 31, 2008 compared to $10,559,000 for the year ended December 31, 2007. Net loss for the three months ended December 31, 2008, was $2,337,000, or $.03 per share, compared to a net loss of $1,670,000, or $.02 per share, for the three months ended December 31, 2007, while net loss for the year ended December 31, 2008, was $6,078,000, or $.07 per share, compared to a net loss of $3,448,000, or $.04 per share, for the year ended December 31, 2007. The Company's total operating expenses were $7,054,000 for the three months ended December 31, 2008, an increase of $1,801,000 from $5,253,000 for the three months ended December 31, 2007 while the total operating expenses were $24,179,000 for the year ended December 31, 2008, an increase of $660,000 from $23,519,000 for the year ended December 31, 2007. The increase was primarily attributable to increased research expenses, primarily related to our oral calcitonin and oral PTH programs. Cash at December 31, 2008, was $8,583,000, an increase of approximately $4,906,000 from December 31, 2007. Accounts receivable at December 31, 2008, were $4,635,000 an increase of approximately $1,493,000 from December 31, 2007. About Unigene Based in Fairfield, New Jersey, Unigene Laboratories Inc. (OTC BB:UGNE) -- http://www.unigene.com/-- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. Due to the size of the worldwide osteoporosis market, Unigene is targeting its initial efforts on developing calcitonin and PTH-based therapies. Fortical(R), Unigene's nasal calcitonin product for the treatment of postmenopausal osteoporosis, received FDA approval and was launched in August 2005. Unigene has licensed the U.S. rights for Fortical to Upsher-Smith Laboratories, worldwide rights for its oral PTH technology to GlaxoSmithKline and worldwide rights for its calcitonin manufacturing technology to Novartis. Going Concern Doubt Grant Thornton, in Edison, New Jersey, expressed substantial doubt about Unigene Laboratories Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit. As of September 30, 2008, the company's balance sheet showed total assets of $31,733,398 and total liabilities of $48,489,743, resulting in total stockholders' deficit of $16,756,345. UNIVERSITY STANDING: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: University Standing Open MRI of New Haven, LLC 216 Crown Street New Haven, CT 06510 Bankruptcy Case No.: 09-30656 Chapter 11 Petition Date: March 19, 2009 Court: United States Bankruptcy Court District of Connecticut (New Haven) Debtor's Counsel: Matthew K. Beatman, Esq. Zeisler and Zeisler 558 Clinton Avenue P.O. Box 3186 Bridgeport, CT 06605 Tel: (203) 368-4234 Email: MBeatman@zeislaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ctb09-30656.pdf The petition was signed by Scott Faro, member of the company. WARRIACH INC: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Warriach, Inc. dba Ramco Transmission dba Express Transmission dba USA Auto Sales dba USA Auto Sales, Paint & Body 12113 Garland Road Dallas, Tx 75218 Bankruptcy Case No.: 09-31665 Chapter 11 Petition Date: March 20, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Rd., Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 Email: eric@ealpc.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/txnb09-31665.pdf The petition was signed by Ghulam Warriach, President of the company. WASHINGTON MUTUAL: JPMorgan Sues FDIC Over Disputed Assets ---------------------------------------------------------- JPMorgan Chase Bank, National Association, the acquirer of Washington Mutual Bank, commenced an adversary action against Washington Mutual, Inc., and WMI Investment Corp. and the Federal Deposit Insurance Corporation, as receiver for Washington Mutual Bank pursuant to a Purchase and Assumption Agreement dated September 25, 2008. JPMorgan filed its Complaint: * to ensure that it is "not divested of the assets and interests purchased in good faith from the FDIC; and * for indemnification and recovery against the Debtors for certain liabilities that may be asserted against JPMorgan, the successor by merger to WMB. The Complaint was filed before the U.S. Bankruptcy Court for the District of Delaware. According to Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, the P&A provides that JPMorgan purchased "all of the Receiver's right, title and interest" to certain assets in accordance with the Federal Deposit Insurance Act, as amended, including some assets that have been claimed by the Debtors in a lawsuit it filed against FDIC in United States District Court for the District of Columbia. However, many of the assets that the Debtors "improperly claim" as belonging to them -- but that JPMorgan Chase acquired from the FDIC -- have already been determined not to be the Debtors' property pursuant to the resolution procedures under Title 12 of the United States Code, Mr. Landis tells the Court. Mr. Landis elaborates that Assets that are the subject of the Debtors' Claims, as asserted in the District Court Action, are among the assets set forth in the Debtors' Schedules and Statements of Financial Affairs filed December 19, 2008, as well as January 27 and February 24, 2009. The Assets are neither property of the Debtors' estates under Section 541 of the Bankruptcy Code, nor the Receiver's. Rather, the assets are property of JPMorgan, which acquired them in good faith and for value from the FDIC pursuant to the FDI Act, Mr. Landis tells Judge Mary F. Walrath. The Assets of the FDIC that were sold to JPMorgan, as to which the Debtors have asserted rights or have refused to acknowledge JPMorgan's ownership, include: * approximately $4 billion in the aggregate face amount of Trust Securities contributed by the Debtors to WMB; * the right to tax refunds arising from overpayments attributable to operations of WMB and its subsidiaries for the 2008 tax year, and prior tax years and net operating loss, net capital loss, and excess tax credit carrybacks from 2008 to prior tax years; * approximately $3.7 billion credited by book entry shortly prior to the receivership of WMB so as to create a purported deposit account at WMB in the name of WaMu without any apparent deposit of funds; * at least $234 million in tax refunds that belonged to WMB and were acquired by JPMorgan, but were deposited to the credit of WMI following the Receivership; * goodwill judgments that arise from pending and prior litigation; * assets of certain trusts supporting deferred compensation arrangements covering the former and current employees of WMB; and * other assets of WMB, including Visa shares, intellectual property and contractual rights. The Debtors are also refusing to recognize the Receiver's ability to transfer to JPMorgan Chase certain tax qualified pension and 401(k) Plans that are held for the exclusive benefit of participants, most of whom were WMB's employees, Mr. Landis adds. JPMorgan further points out that various liabilities "did not transfer to the Receiver or to JPMorgan Chase, but rather are liabilities of the Debtors that relate to acts, conduct or omissions of WMI in connection with events prior to the . . . receivership proceedings for WMB," Mr. Landis explains. The Liabilities relate principally to: -- the issuance of "Trust Securities" with the aggregate face amount of approximately $4 billion; -- the so-called "deposit accounts," which recorded a book balance of approximately $4.3 billion as of the Petition Date; and -- the restructuring and transfer of assets and liabilities among the Debtors and their former subsidiaries. "Claims have been threatened against JPMorgan arising out of or relating to the acts, omissions or conduct of Debtors prior to the Petition Date. To the extent that any claim is asserted against JPMC as a result [of the acts], JPMorgan is entitled to be indemnified and held harmless by the Debtors for any loss, damage or liability they might incur," Mr. Landis contends. JPMorgan Chase asks Judge Walrath to: (1) declare that the legal title and all beneficial interest in the Assets belong to JPMorgan Chase; (ii) direct the Debtors to deliver the Assets to JPMorgan; (iii) direct the Debtors to take steps to allow, and where appropriate, direct third parties to act in accordance with JPMorgan's ownership of its Assets; (iv) award JPMorgan damages as a result of Debtors' failure to transfer, or facilitate the transfer of, the Assets that JPMorgan Chase acquired under the Purchase and Assumption Agreement; (v) direct the Debtors to indemnify JPMorgan for any losses it incurs as a result of Debtors' prepetition actions; (vi) award JPMorgan's damages for losses resulting from the Debtors' postpetition actions, including the Debtors' failure to deliver the Pension and 401(k) Plans to JPMorgan; (vii) grant JPMorgan Chase an administrative claim for amounts paid into or on account of the Pension and 401 (k) Plans; (viii) require the Debtors to reimburse JPMorgan for all amounts by which they have been unjustly enriched; (ix) determine that JPMorgan Chase is entitled to setoff, recoup, or impose a lien against any liabilities that it may owe to Debtors, for all amounts that JPMorgan may be entitled to; (x) determine that any and all interested persons, entities or agencies are restrained from instituting any actions against JPMorgan for recovery of any amounts; (xi) determine that JPMorgan should be discharged from any and all liability with regard to claims to the interplead funds; and (xii) award JPMorgan pre-judgment interest and punitive damages, attorney's fees and costs. "The [District Court and Adversary] Lawsuits will not undo JPMorgan's $1.9 billion purchase [of WMB] . . . but resolution of the suits could be a template for other U.S. bank failures, " Jonathan Stempel at Reuters reports. A full-text copy of the JPMorgan's Complaint is available at no charge at: http://bankrupt.com/misc/AdversaryComplaint_JPMv.WaMuFDIC.pdf About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over Sept. 25 by U.S. government regulators. The next day, WaMu and its debtor-affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. (Washington Mutual Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) WASHINGTON MUTUAL: Sues FDIC Over Disallowance of $13-Bil. Claim ---------------------------------------------------------------- Washington Mutual, Inc., and WMI Investment Corp. filed a lawsuit against the Federal Deposit Insurance Corporation, in its corporate capacity and in its capacity as the receiver of Washington Mutual Bank. The Lawsuit, filed before the United States District Court for the District of Columbia, is in light of the FDIC's disallowance of the Debtors' claims, aggregating more than $13.6 billion. On September 25, 2008, the Director of the Office of Thrift Supervision appointed the FDIC as receiver for WMB, and advised that FDIC was immediately taking possession of the Bank, which led to the subsequent Chapter 11 filing of the Debtors. In a 39-page complaint filed with the District Court, the Debtors said that as of the occurrence of the Receivership, many of their books and records were seized by the FDIC and transferred to the custody of JPMorgan Chase, as purchaser of the WaMu's banking operations. As a result, the Debtors prepared the Claim using the information and documentation as may be available to them. The Debtors' Claim David R. Betz, Esq., at Weil Gotshal & Manges LLP, in Washington, D.C., relates, on behalf of the Debtors, that the Claims were asserted against the Receivership on December 30, 2008, in these amounts: (1) $177,075,719 in outstanding principal and accrued interest due under certain Promissory Notes, plus other liquidated and unsecured amounts; (2) $22,528,014 and $184,849 on account of Intercompany Receivables owed by WMB to the Debtors; (3) Approximately $3 billion in tax refunds on account of the Debtors' payment of taxes for the consolidated tax group, plus unliquidated amounts on account of the Debtors' federal tax-related amounts under a Tax Sharing Agreement; (4) Approximately $6.5 billion in fraudulent transfers on account of capital contributions; (5) An aggregate of $4 billion in liquidation preference in Trust Preferred Securities; and (6) $151,934,564 on account of the Debtors' property transfers for the benefit of WMB occurring one year prior to the Petition Date. The Debtors' Claim also includes undisclosed claim amounts on account of: -- any and all outstanding liabilities on account of goods or services provided to WMB, and rejections of Vendor Contracts in the Debtors' cases; -- Indenture Guarantees and other guarantees of WMB's obligations; -- the Debtors' assets that were taken into the FDIC's possession, as are deemed improper or subject to avoidance and recovery; -- WMB deposit accounts that were transferred to JPMorgan; -- costs and expenses that inured to the benefit of WMB subsequent to the Receivership Date; -- all amounts paid by the Debtors for programs and policies, including payroll, severance and related taxes, for the benefit of WMB employees; -- share of the cost of procuring the extended insurance policies covering the indemnification of the Debtors' officers; -- WMB's mortgage loan origination business. According to Mr. Betz, the FDIC disallowed the Claims as of January 23, 2009, indicating that the Claims "lack sufficient documentation or specificity . . . fail to state the claims against the Receivership . . . [and] appear to assert claims against a third party." "The [Disallowance] Notice provides no additional detail or explanation regarding the FDIC-Receiver's decision," Mr. Betz tells the District Court. Mr. Betz argues that the Claims are valid against the Receivership and the FDIC is obligated to pay the Claims. He elaborates that "by failing to liquidate WMB in a manner that will allow [the Bank's] creditors and other claimants to recover what they would have recovered in a straight liquidation, the FDIC breached its statutory duty to maximize the net present value of WMB's assets." Mr. Betz adds that the FDIC's Receivership constitutes a taking of the Debtors' property without just compensation in violation of the Fifth Amendment of the United States Constitution. Moreover, the disallowance of the Debtors' Claim without any meaningful explanation is an abrogation of FDIC-Receiver's statutory duties, he contends. The Debtors ask the District Court to: (i) declare that the Claims are valid and proven against the Receivership; (ii) direct the FDIC to pay the Claims from the assets of the Receivership; (iii) direct the FDIC to provide the Debtors with an accounting of the disposition of the assets of the Receivership, in the event that Claim is not satisfied in full; (iv) direct the FDIC to provide the Debtors with an accounting of all property transferred from the Debtors with respect to the Receivership; (v) compel the FDIC to pay the damages, in an amount that is equal to the amount that the Debtors would have received in a straight liquidation of WMB's assets and liabilities less any amounts actually received from the Receivership; (vi) direct payments for damages from the FDIC in an amount equal to the value of the Debtors' property converted by the FDIC; (vii) declare that the FDIC's January 23, 2009 disallowance is void, and that the parties should proceed as if the Disallowance never occurred; and (viii) award the Debtors for costs and attorneys fees as may be permitted by law. The Debtors demand a trial by jury on all the Claims. A full-text copy of the Complaint is available for free at: http://bankrupt.com/misc/WaMu_$13-BilDistrictCourtLawsuit.pdf About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over Sept. 25 by U.S. government regulators. The next day, WaMu and its debtor-affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. (Washington Mutual Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) WELLS FARGO: Moody's Downgrades Preferred Stock Rating to 'B2' -------------------------------------------------------------- Moody's Investors Service lowered the senior debt rating of Wells Fargo & Company to A1 from Aa3, the senior subordinated debt rating to A2 from A1, and the junior subordinated debt rating to A3 from A1. The preferred stock rating was downgraded to B2 from A2. Wells Fargo's short-term rating was affirmed at Prime-1. Wells Fargo Bank N.A.'s rating for deposits was lowered to Aa2 from Aa1, and its Prime-1 short-term rating was affirmed. Moody's bank financial strength rating on Wells Fargo Bank N.A. was lowered to D+ from B. All ratings have a stable outlook except for the BFSR and preferred stock rating where the outlook is "developing". These actions conclude a review for possible downgrade that commenced on March 4, 2009. The actions had no impact on the FDIC-guaranteed debt issued by Wells Fargo. That debt remains rated Aaa with a stable outlook. "The downgrades of the BFSR and the preferred stock ratings reflect Moody's view that Wells Fargo's capital ratios could come under pressure in the short-term, increasing the probability that systemic support will be needed," said Moody's Senior Vice President, Sean Jones. "The moderate downgrades of Wells Fargo's deposits, senior debt and senior subordinated debt ratings are based on Moody's expectation of very high systemic support for these instruments, and the view that such support will enable the substantial value of its franchise to materialize in the medium to long-term. Such support, however, could be potentially harmful to preferred stock investors." The rating actions are consistent with Moody's recent announcement that it is recalibrating some of the weights and relative importance attached to certain rating factors within its current bank rating methodologies. Capital adequacy, in particular, is taking on increasing importance in determining BFSRs in the current environment. Meanwhile, debt and deposit ratings are expected to reflect higher support assumptions for systemically important institutions during this global financial crisis. BFSR Downgrade Due To Low Capital Ratios The downgrade of Wells Fargo Bank N.A.'s BFSR to D+ from B reflects the increased probability of systemic capital support due to Moody's view that Wells Fargo's capital ratios could fall to comparatively low levels. The factors contributing to the potentially weak capital position are 1) its current ratios are relatively low (Tier 1 at 7.84% and adjusted tangible common equity ratio at 4.05%), and 2) Moody's view that Wells Fargo could face sizable credit costs in the coming twelve to eighteen months. Moody's notes that should Wells Fargo be able to take these credit costs over a more extended period of time, given its core earnings power, this could reduce its capital needs. "The BFSR is driven by Wells Fargo's capital challenges, which are made more acute because U.S. banks' access to the equity market is shut or very limited at best," said Moody's Mr. Jones. "This increases the likelihood of a capital initiative by the U.S. government to support Wells Fargo. The BFSR is intended to express an opinion about the likelihood of such an event," explained Mr. Jones. Wells Fargo's comparatively low capital ratios -- especially its tangible common equity ratio -- result from its acquisition of Wachovia. In Moody's opinion, the amount of equity that Wells Fargo raised was modest in comparison to the amount and quality of assets it acquired from Wachovia. Moody's does not expect Wells Fargo to generate sizable amounts of capital until the second half of 2010, at the earliest, for these reasons. First, Wells Fargo will need to take provisions and merger expenses -- predominantly in 2009 and into 2010 -- against those Wachovia assets that were not marked down on December 31, 2008. Secondly, a challenging housing market and higher unemployment will result in higher loan-loss provisions for the legacy Wells Fargo portfolio. Thirdly, additional charges beyond Wells Fargo's life-time loss estimate of approximately 29% against the legacy Wachovia option-ARM portfolio cannot be ruled out. When evaluating Wells Fargo's ability to absorb losses, Moody's incorporates additional mitigating factors other than Wells Fargo's current capital position. These additional factors include: 1) the $37.2 billion mark it took against Wachovia's loans, which it acquired at year-end 2008, 2) a high proportion of Wells Fargo's credit-loss reserve, which stood at $21.7 billion at year-end, which is large in relation to its nonperforming assets, 3) 2008 charge-offs it took against its residential and commercial real estate loans, 4) tax-effecting forecasted losses, and 5) an assumption of high core profitability, which is reduced by Wells Fargo's payments of preferred and common dividends that average about $711 million per quarter. Systemic Support And Valuable Franchise Benefit Deposit And Senior Debt Ratings Moody's believes that despite Wells Fargo's capital challenges, a more modest lowering of its deposit, senior, and senior subordinated debt ratings was appropriate because Moody's assumes that systemic support for Wells Fargo is very high and that its valuable franchise will remain intact. "Wells Fargo would almost certainly be a recipient of systemic support, given its importance to the U.S. economy and financial system," said Mr. Jones. Such support would likely benefit all depositors, senior, and senior subordinated debt holders of the bank and the bank holding company. Moody's assumes that if systemic support were to be provided, this would not result in changes to Wells Fargo's franchise, which is viewed as very strong. Wells Fargo has a large presence in direct banking in the U.S. supported by an effective sales force. The banking franchise is supplemented by a large and well-managed mortgage company and retail brokerage operations. This business mix generates high core profitability, while also providing it with a strong liquidity profile. Moody's also assumes that Well Fargo has the expertise to successfully manage the sizable merger with Wachovia. Government Support Could Prove Detrimental To Preferred Shareholder Interests The downgrade of the preferred stock rating to B2 from A2 was based on Moody's view that if Wells Fargo were the recipient of capital support from the U.S. government, that support may be accompanied by the suspension of dividends, or even a distressed exchange by which preferred investors may be compelled to exchange their preferred stock for common stock. "With the capital markets essentially shut down, the recent Citigroup recapitalization becomes a very relevant reference point," said Mr. Jones. "While Wells Fargo's preferred securities do not have any triggers that would cause an automatic suspension of dividends, Moody's believe that in the event government support is provided, the U.S. government could require Wells Fargo to suspend its common and preferred dividends in order to preserve capital," Mr. Jones added. A distressed exchange could be a way to increase common equity and limit the size of the U.S. government's stake in the bank in the event that support was required. The developing rating outlook on the preferred stock rating and the BFSR is in response to their sensitivity to both capital and asset quality trends for the coming year. If Wells Fargo can build capital through earnings or attract capital from investors then positive ratings pressures emerge for both the preferred stock and BFSR. In contrast, if Wells Fargo's capital ratios fall and there is no compensating action taken then negative ratings pressures would likely emerge for both ratings. Finally, the two ratings could move in opposite directions, if Moody's felt that a suspension of preferred dividends is more likely and that this would be accompanied by either an equity infusion or a conversion of preferred into common. Such an opinion could result in negative rating pressures on the preferred stock rating but could be positive for the BFSR at the completion of the capital initiative. Further Notching For Junior Subordinated Debt Ratings Moody's lowered the junior-subordinated debt ratings of Wells Fargo to A3 from A1. The junior subordinated debt rating is one notch lower than the senior subordinated debt rating of A2. Moody's believes that the cumulative nature of the interest on such instruments reduces the incentive to defer interest. However, the rating incorporates the view if there is an unexpected need for further government support, the risk of deferred payment on these instruments, warrants an additional notch on the ratings of these instruments. The last rating action on Wells Fargo was on March 4th, 2009 when Moody's placed all of Wells Fargo's long-term ratings and its BFSR under review for possible downgrade. This is a partial list of entities whose ratings have been affected: Downgrades: Issuer: Wells Fargo & Company -- Issuer Rating, Downgraded to A1 from Aa3 -- Multiple Seniority Medium-Term Note Program, Downgraded to a range of A2 to A1 from a range of A1 to Aa3 -- Multiple Seniority Shelf, Downgraded to a range of (P)B2 to (P)A1 from a range of (P)A2 to (P)Aa3 -- Preferred Stock Preferred Stock, Downgraded to B2 from A2 -- Preferred Stock Shelf, Downgraded to (P)B2 from (P)A2 -- Subordinate Regular Bond/Debenture, Downgraded to A2 from A1 -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to A1 from Aa3 -- Senior Unsecured Medium-Term Note Program, Downgraded to A1 from Aa3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to A1 from Aa3 Issuer: Wells Fargo Bank, N.A. -- Bank Financial Strength Rating, Downgraded to D+ from B -- Issuer Rating, Downgraded to Aa2 from Aa1 -- OSO Senior Unsecured OSO Rating, Downgraded to Aa2 from Aa1 -- Multiple Seniority Bank Note Program, Downgraded to a range of Aa3 to Aa2 from a range of Aa2 to Aa1 -- Subordinate Regular Bond/Debenture, Downgraded to Aa3 from Aa2 -- Senior Unsecured Deposit Note/Takedown, Downgraded to Aa2 from Aa1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Aa2 from Aa1 -- Senior Unsecured Deposit Rating, Downgraded to Aa2 from Aa1 Issuer: Wachovia Corporation -- Junior Subordinated Shelf, Downgraded to (P)A3 from (P)A1 -- Multiple Seniority Medium-Term Note Program, Downgraded to a range of A2 to A1 from a range of A1 to Aa3 -- Multiple Seniority Shelf, Downgraded to a range of (P)B2 to (P)A1 from a range of (P)A2 to (P)Aa3 -- Preferred Stock Preferred Stock, Downgraded to B2 from A2 -- Preferred Stock Shelf, Downgraded to (P)B2 from (P)A2 -- Subordinate Medium-Term Note Program, Downgraded to A2 from A1 -- Subordinate Regular Bond/Debenture, Downgraded to A2 from A1 -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to A1 from Aa3 -- Senior Unsecured Medium-Term Note Program, Downgraded to A1 from Aa3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to A1 from Aa3 Issuer: Wachovia Bank, N.A. -- Bank Financial Strength Rating, Downgraded to D+ from B -- Issuer Rating, Downgraded to Aa2 from Aa1 -- OSO Senior Unsecured OSO Rating, Downgraded to Aa2 from Aa1 -- Multiple Seniority Bank Note Program, Downgraded to a range of Aa3 to Aa2 from a range of Aa2 to Aa1 -- Multiple Seniority Medium-Term Note Program, Downgraded to a range of Aa3 to Aa2 from a range of Aa2 to Aa1 -- Subordinate Bank Note Program, Downgraded to Aa3 from Aa2 -- Subordinate Conv./Exch. Bond/Debenture, Downgraded to Aa3 from Aa2 -- Subordinate Regular Bond/Debenture, Downgraded to Aa3 from Aa2 -- Senior Unsecured Bank Note Program, Downgraded to Aa2 from Aa1 -- Senior Unsecured Deposit Note/Takedown, Downgraded to Aa2 from Aa1 -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to Aa2 from Aa1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Aa2 from Aa1 -- Senior Unsecured Deposit Rating, Downgraded to Aa2 from Aa1 Issuer: First Fidelity Bancorporation -- Preferred Stock Preferred Stock, Downgraded to B2 from A2 Issuer: WFC Holdings Corporation -- Preferred Stock Preferred Stock, Downgraded to B2 from A2 Issuer: Wachovia Preferred Funding Corporation -- Preferred Stock Preferred Stock, Downgraded to B2 from A2 Outlook Actions: Issuer: First Fidelity Bancorporation -- Outlook, Changed To Developing From Rating Under Review Issuer: Wachovia Preferred Funding Corp. -- Outlook, Changed To Developing From Rating Under Review Issuer: WFC Holdings Corporation -- Outlook, Changed To Developing From Rating Under Review Issuer: Wachovia Bank, N.A. -- Outlook, Changed To Stable(m) From Rating Under Review Issuer: Wachovia Corporation -- Outlook, Changed To Stable(m) From Rating Under Review Issuer: Wells Fargo & Company -- Outlook, Changed To Stable(m) From Rating Under Review Issuer: Wells Fargo Bank, N.A. -- Outlook, Changed To Stable(m) From Rating Under Review Wells Fargo & Company is headquartered in San Francisco, CA and its reported assets were $1.3 trillion as of December 31, 2008. * Democrats Seek to Curb Credit Card Charges for Bankrupt Users --------------------------------------------------------------- The Associated Press reports that Democratic lawmakers are seeking to block credit card companies charging high interest rates from collecting from bankrupt consumers. The AP relates that the proposal would change bankruptcy laws to dissolve claims for repayment of debt carrying interest over a certain level, currently 18.5%. The report states that it could affect millions of dollars in claims made by creditors against consumers who have filed for bankruptcy protection. The AP quoted Sen. Sheldon Whitehouse as saying, "American consumers are relying more than ever on credit cards to make ends meet each month. At the same time, banks losing money in mortgages and their other areas of business are attempting to squeeze more and more profit out of their credit card customers." According to The AP, Sen. Whitehouse said that with the leverage of a bankruptcy threat and high-interest claims dissolved, "a customer struggling under a 30% penalty rate could negotiate for more reasonable terms." Republicans and the banking industry are objecting the Democrat's proposal, The AP states. Sen. Jeff Sessions, according to the report, said that it would be wrong for lawmakers to use changes in the bankruptcy laws "to deal with interest rates we don't like." Citing the American Bankers Association, The AP relates that such a change in bankruptcy requirements would prompt lenders to restrict credit in an already tight market or raise interest rates and fees. The AP quoted Kenneth Clayton, the group's senior vice president and general counsel, as saying, "It is absolutely the worst time to exacerbate our financial problems by enacting changes to the bankruptcy laws that would further contract credit. This would significantly hurt tens of millions of Americans at the very time they can least afford it." * Treasury Unveils Public-Private Investment Partnership Plan ------------------------------------------------------------- David Wessel at The Wall Street Journal reports that U.S. Treasury Secretary Timothy Geithner has disclosed the final piece of his financial-rescue plan, the public-private investment partnerships that would buy toxic loans and securities from troubled banks. According to WSJ, the government will finance the plan, which won't require congressional approval. WSJ relates that if a bank has a $100 mortgage loan that it manages to sell for $84 to a public-private investment partnership, both the private investors and the Treasury put up $6. WSJ states that the Federal Deposit Insurance Corp. guarantees a loan for $72. WSJ notes that the point of recruiting private investors is to avoid having the government set the prices. The report quoted Mr. Geithner as saying, "Since these investors will have an incentive to bargain hard to assure their investments are profitable, the taxpayer will be protected from overpaying." According to WSJ, Peter Fisher of money manager BlackRock Inc. said, "I'm a little nervous that, while I think it's the right thing for the Fed and the Treasury to be doing, we've got to worry a little about whether we aren't taking the net interest margin of the next five years away from the banking system." Damian Paletta at WSJ relates that Mr. Geithner will call for changes in how the government supervises risk-taking in financial markets, seeking tougher rules on how big firms manage their finances and tighter controls on some hedge funds and money-market mutual funds. Mr. Geithner, says WSJ, would seek more power for the government to monitor emerging risks to the economy. The new rules would require financial institutions to hold more capital to cushion losses, the report states. WSJ reports that Mr. Geithner's proposal would let the Treasury and FDIC, in consultation with the Fed, to jointly determine if a firm needed to be seized and would then entrust the running of the company to the FDIC, allowing the agency to borrow money from the Treasury. According to WSJ, the proposal would let the FDIC to sell firm's assets and renegotiate or reject existing contracts. The governments, says WSJ, could ban bonuses at struggling companies. Citing the Treasury, WSJ states that the FDIC would be able to replace directors and senior executives and "none of these actions would be subject to the approval of the institution's creditors or other stakeholders." * Solutions for Ailing Newspapers "Plentiful and Thin", Says Hunt ----------------------------------------------------------------- Albert R. Hunt, executive editor for Washington at Bloomberg News, said in his commentary that as the value of major banks and financial institutions has fallen some 75% during the economic decline, the devastation of American newspapers appears as great. The fate of the New York Times, Los Angeles Times and other American newspapers, much less important economically, may more profoundly affect the destiny of the U.S., Mr. Hunt relates. The commentary notes that the Tribune Co. -- whose holdings include two once towering papers, the L.A. Times and the Chicago Tribune -; the Philadelphia Inquirer has declared bankruptcy. It added that a major newspaper in Seattle ended its print edition and another in Denver closed. In December, Tribune Co., filed for Chapter 11 bankruptcy protection in Wilmington, Delaware. Star Tribune followed in January. In February, Philadelphia Newspapers LLC and Journal Register Co. commenced bankruptcy proceedings. Other newspaper organizations have shut down certain operations. On March 16, Hearst Corp. said the Seattle Post-Intelligencer will shift to an entirely digital news product. The final print issue of the newspaper appeared the next day. In February, Hearst said it might close the San Francisco Chronicle unless it could find a way to cut operating costs. Mr. Hunt notes newspapers and publishers that have survived so far are "floundering." He notes that the Star-Ledger of Newark, New Jersey's largest newspaper, cut its staff almost in half; McClatchy Co. arguably the highest-quality chain has reduced its editorial staff by a third. On the other hand, overseas and Washington coverage has been decimated. The Baltimore Sun and Boston Globe have closed their foreign bureaus. In Washington, major organizations such as Newhouse, Copley and Media General have eliminated their bureaus, while others have downsized dramatically. The commentary further stated that the New York Times, which considered by many the world's greatest newspaper, has seen its market value decline to about $635 million, less than one-tenth of what it once was. The company had to turn to Mexican billionaire Carlos Slim for a loan. Alex Jones, director of Harvard's Shorenstein Center on the Press, Politics and Public Policy, according to the commentary said "While some political conservatives thoughtlessly relish the prospect of a world without the New York Times and L.A. Times, what they ignore is that "about 85% of the news people get is initially generated by newspapers." Mr. Hunt noted that newspapers, not Internet outlets, have invested more in producing better content. He cites (i) the Washington Post's nine-month probe and stories about the maltreatment of wounded veterans at the Walter Reed Medical Center, (ii) scandals and revelations of corruption exposed by newspapers, and (iii) millions of dollars spent by New York Times to maintain its Irag coverage with multiple correspondents and other personnel. He notes that no Web site will do that or has the resources to put up that level of coverage. According to Mr. Hunt, solutions are "plentiful and thin": (i) Newspapers could charge for content, just like the Wall Street Journal. He added that online services of newspapers haven't attracted advertising that print editions enjoyed. While WSJ's online site has not cannibalized its print editions, WSJ's parent, Dow Jones, have lost much of its market value. (ii) Government can subsidize newspapers, similar to what is proposed in France. There are concerns though about the government being helpful in encouraging newsgathering. (iii) Foundations or wealthy individuals could provide funding, like Poynter Institute, which has long run the St. Petersburg Times and Congressional Quarterly, and the Christian Science church, which published the prestigious Christian Science Monitor. Yet this year the print edition of the Monitor went out of business, and Poynter is looking to sell Congressional Quarterly. He ended that new economic models for the industry will evolve, or that newspapers might recover as soon as the economy rebounds. U.S. and Canadian Newsprint Demand Drops According to the Pulp and Paper Products Council, U.S. and Canadian demand for newsprint fell a combined 33% in February, the most in at least 27 years, as newspaper publishers cut purchases. Christopher Donville of Bloomberg reports that according to Martine Hamel, the head of research at the Montreal-based pulp and paper group, the demand for newsprint in the U.S. dropped 35% in February from a year earlier, while demand in Canada declined 21%. Demand for newsprint from U.S. dailies fell 26% to 331,000 metric tons in February compared with a combined 24% drop in the first two months of the year. Bloomberg says slower economic growth and competition from the Internet for readers and advertisers have forced four newspaper publishers, including Los Angeles Times owner Tribune Co. and the owner of the Philadelphia Inquirer, to seek bankruptcy court protection from creditors since December. According to Bloomberg, Hamel said that the plunge in U.S. and Canadian newsprint demand in February was the largest since at least 1981 and may be the biggest ever. Reduced demand has also hurt makers of newsprint paper, including Montreal-based AbitibiBowater Inc., which is seeking creditor approval to restructure its debt, said Bloomberg. * Drinker Biddle's Wilmington Office Adds 10 WolfBlock Lawyers -------------------------------------------------------------- A group of 10 litigation and real estate lawyers, including five partners, have joined the Wilmington office of Drinker Biddle & Reath LLP. With this addition, Drinker Biddle offers clients significant skill, depth and experience in handling complex business and white collar criminal cases in Delaware's federal, Chancery, Supreme and Superior courts as well as deep local roots in zoning, land use and other real estate matters. The lawyers were previously with WolfBlock LLP. Kathleen M. Jennings, William J. Rhodunda, Todd C. Schiltz, Joseph C. Schoell and Shawn P. Tucker are joining Drinker Biddle as partners while Charles M. Oberly joins as of counsel to the firm. Ms. Jennings and Mr. Oberly are experienced litigators with significant backgrounds in white collar criminal defense. Mr. Tucker and Rhodunda are both experienced real estate and litigation attorneys. Joining the firm as associates are Jennifer B. Ranji, Chandra J. Rudloff, Karen V. Sullivan and Daniel Turner, Jr. "The ability to offer our clients first-hand familiarity with Delaware's federal and state courts has been part of our strategy since opening our Wilmington office in 2003," said Drinker Biddle Chairman Alfred W. Putnam, Jr. "The addition of these top-notch lawyers now gives us a significant presence in Delaware, allowing us to act as experienced counsel in the type of litigation prevalent in Delaware." More than 850,000 businesses are incorporated in Delaware, including nearly two-thirds of Fortune 500 companies. The new Drinker Biddle lawyers' public service experience in the state spans an impressive array of positions, including Delaware Attorney General, Delaware Chief Deputy Attorney General, Chief Counsel to the Governor of Delaware, County Attorney for New Castle County (Del.), Land Use General Manager for New Castle County and Chairman of the Delaware Tax Appeals Board. The new group is combining with Drinker Biddle's established restructuring and litigation group in Delaware, which includes William T. Quillen, a former justice of the Delaware Supreme Court, a former chancellor of the Delaware Court of Chancery and a former judge of the Delaware Superior Court, as well as a former Delaware Secretary of State. The firm now counts more than 15 lawyers in its Wilmington office. "We are thrilled to add such an excellent group of people who are so well regarded in the Delaware Bar and who bring the skill sets we were looking for in Delaware," said Andrew C. Kassner, Drinker Biddle's Executive Partner and chair of the Corporate Restructuring Practice Group. "These lawyers' practices have been very successful in Delaware, and we are looking forward to building on that success here at Drinker Biddle. Our clients tell us that there is tremendous value in our ability to serve them in one of the top jurisdictions in the nation for business litigation and bankruptcy, not to mention other areas such as white collar defense, corporate governance, intellectual property and real estate." Mr. Tucker, who will be the new Regional Partner in Charge of the Wilmington office, said that Drinker Biddle was attractive to the group because of its national scope, wide diversity of practice groups and established bankruptcy practice in Delaware. He added that Drinker Biddle's structure and culture offer an opportunity for the group to grow its practices significantly. "We have enjoyed working with the tremendous lawyers at WolfBlock," said Mr. Tucker. "We believe our clients will benefit from Drinker Biddle's national footprint and its large and sophisticated national litigation, bankruptcy, business and real estate practices. The cross-marketing opportunities the firm offers are exciting." (A) Kathleen M. Jennings Ms. Jennings' practice is focused on commercial, regulatory and white collar criminal defense litigation, representing clients in a wide variety of industries, including pharmaceutical, medical device, securities and environmental. Before entering private practice, she was Chief Deputy Attorney General and State Prosecutor with the Delaware Attorney General's Office, a position in which she oversaw both civil and criminal litigation matters throughout the state. She is an experienced and skilled trial lawyer in Delaware's federal and state courts, with more than 100 jury and bench trials in both criminal and civil cases. A Fellow of the American College of Trial Lawyers, Ms. Jennings earned her J.D. from Villanova University School of Law. She has a bachelor's degree with distinction from the University of Delaware, graduating with high honors. (B) William J. Rhodunda Mr. Rhodunda's practice is concentrated on zoning and subdivision law, as well as general real estate and regulatory matters. He also has a strong background in civil and criminal litigation, with more than 60 jury trials, and in government relations matters. Before entering private practice, he held several top government legal positions, including as County Attorney for New Castle County (Del.), as Chief Civil Litigator for the City of Wilmington's City Solicitors Office and as a Delaware Deputy Attorney General. As County Attorney, Mr. Rhodunda was extensively involved with the development of New Castle County's new zoning and subdivision code. Mr. Rhodunda earned his law degree from Pennsylvania State University's Dickinson School of Law and his bachelor's degree from the University of Delaware. (C) Todd C. Schiltz Mr. Schiltz focuses his practice on corporate and commercial litigation, as well as representing debtors and creditors in bankruptcy proceedings. He also handles matters involving boards, directors and stockholders of corporations as well as disputes involving alternate entities in litigation related to governance and fiduciary duties arising under Delaware and federal securities laws. Todd is also Chairman of the Delaware Tax Appeals Board. A frequent author on Delaware law, he earned his J.D. from Northwestern University School of Law. He received his bachelor's degree, cum laude, from DePauw University. (D) Joseph C. Schoell Mr. Schoell has handled a broad array of sophisticated business litigation and transactional matters, practicing extensively in Delaware's Chancery Court. He has served as Governor's Counsel to Delaware Gov. Ruth Ann Minner, advising the state's chief executive, her cabinet and senior agency personnel on myriad legal issues, as well as counseling the Governor and coordinating with the Delaware General Assembly on policy issues. Mr. Schoell was instrumental in the adoption of legislation that modernized the state's bank franchise tax and that expanded the Delaware Court of Chancery's jurisdiction to permit mediation of complex business and technology disputes. He has advised and counseled businesses and government agencies on investigations, and he was involved in the representation of Bluewater Wind, which resulted in the first offshore wind power generation agreement in U.S. History. Mr. Schoell earned his J.D. from Yale Law School, where he was an associate editor of Yale Law & Policy Review, and his B.A., summa cum laude, from the University of Delaware. (E) Shawn P. Tucker Mr. Tucker has extensive experience in zoning and subdivision law, general real estate deals, land use litigation, and government procurement and regulatory matters. He has served as New Castle County's attorney in charge of all land use matters and land use- related litigation and was one of the principal authors of the county's zoning and subdivision code. He also served as the General Manager of the New Castle County Land Use Department, a position that included responsibility for all zoning, subdivision, permitting, property assessment and code enforcement matters as well as responsibility for intergovernmental coordination on land use matters across the state. Mr. Tucker is also a former Delaware Deputy Attorney General and a former judicial clerk to the Hon. Richard R. Cooch, Resident Judge of New Castle County for the Superior Court of the State of Delaware. Mr. Tucker received his law degree from Widener University School of Law, where he was a member of the Trial Advocacy Honor Society. Shawn received his bachelor's degree from the University of Delaware. (F) Charles M. Oberly Mr. Oberly, who served 12 years as Delaware's Attorney General, concentrates his practice on corporate and other civil litigation, internal corporate investigations, white collar defense and government relations matters. He has appeared before and tried cases in all Delaware state and federal courts as well as argued before the U.S. Court of Appeals for the Third Circuit and the U.S. Supreme Court. A longtime fixture of the Delaware bar, Charles was a founder and co-editor of the Delaware Law Monthly, a publication that reported all significant Delaware state court decisions for nearly two decades before ceasing publication in 1997. Mr. Oberly earned his J.D. from the University of Virginia Law School and his bachelor's degree, magna cum laude, from Pennsylvania State University. (G) Jennifer B. Ranji Ms. Ranji has significant experience in government affairs, serving in several government policy positions including Director of Legal Affairs for the Delaware Family Court system and as deputy legal counsel to then-Gov. Thomas R. Carper. She is a former chairwoman of the Women and the Law Section of the DSBA, the Delaware Child Protection Accountability commission and the Governor's Synar Advisory Committee, having been appointed to the latter two positions by Gov. Minner. Ms. Ranji earned her law degree from Widener University School of law and her bachelor's degree from Rutgers University. (H) Chandra J. Rudloff Ms. Rudloff focuses her practice in white collar defense and civil litigation matters. She earned her J.D. from Widener University School of Law and her B.S. from the University of Delaware. She served as a clerk to the Hon. William C. Carpenter, Jr., associate judge of the New Castle County Superior Court. (I) Karen V. Sullivan Ms. Sullivan has broad experience in a variety of litigation matters, including white collar defense, bankruptcy and civil litigation. She received her law degree from Georgetown University Law Center and her bachelor's degree from the University of Delaware. (J) Daniel Turner, Jr. Mr. Turner focuses his practice on real estate financing, with experience handling multimillion-dollar commercial real estate financings. He has served as bond counsel, co-bond counsel or underwriters counsel in municipal, public utility and state agency bond financings. Daniel earned his J.D. from Howard University School of Law, an M.A. from Temple University and a B.A. from the College of Wooster. Drinker Biddle & Reath LLP, a national law firm with nearly 700 lawyers in 12 offices, strives to provide clients with the best possible service in areas such as commercial litigation, corporate and securities, real estate, corporate restructuring, intellectual property, government and regulatory affairs, labor and employment, environmental, communications litigation, products liability and mass tort litigation, health care, employee benefits and executive compensation, insurance coverage, investment management, life insurance and annuities, and private client services. * Howard J. Berlin Joins Berger Singerman ----------------------------------------- Howard J. Berlin, formerly a managing director and name partner at Kluger Peretz Kaplan Berlin, has joined the Florida business law firm Berger Singerman. Mr. Berlin is a shareholder resident in Berger Singerman's Miami office and a member of the firm's Business Reorganization Team. Mr. Berlin brings more than 25 years of experience representing corporate debtors, secured lenders, creditors' committees, and individual creditors in complex restructuring and insolvency proceedings. Berlin is a former Chair of the Bankruptcy/UCC Committee of the Business Law Section of The Florida Bar and a former Chair of the Business Law Section of The Florida Bar. While Chair of the Business Law Section, Berlin advanced the development of the Complex Business Courts in the Florida Circuit Courts, and currently there are three such divisions throughout the State, including in Miami Dade and Broward Counties. Mr. Berlin's sense of civic responsibility and leadership skill set is reflected in his service as Mayor (2001-2003 and 2007-2009) and Assistant Mayor (2005-2007) and Councilman (2003-2005) of the Village of Bal Harbour, Florida. "The transactional, tax and litigation expertise at Berger Singerman is outstanding and far surpasses that at many excellent firms substantially larger than Berger Singerman" said Mr. Berlin. "And the firm's Business Reorganization Team has been a market leader for years. I am very excited to become a member of the team, and I look forward to contributing to its future growth and success." Berger Singerman's Business Reorganization Team is widely recognized as a market leader in Florida. Each year since Chambers and Partners, the prestigious law firm and lawyer ranking guide in the U.K., has published Chambers USA, Berger Singerman has been recognized as a first tier Restructuring and Bankruptcy practice in Florida. For many years, the firm's Business Reorganization Team has been involved in most of the larger bankruptcy cases in the State. Berger Singerman has recently represented Levitt and Sons and its affiliates in its bankruptcy cases and is co-counsel to Kirkland & Ellis in the TOUSA chapter 11 cases. TOUSA and Levitt and Sons are amongst the largest home- builder bankruptcy cases pending in the United States. Prior chapter 11 representations of the firm include Aloha Airlines, Piccadilly Cafeterias, Renaissance Cruise Lines, AT&T Latin America, Atlas Air, and Polar Air Cargo. Mitchell Berger, founder and Chairperson of Berger Singerman, noted that the complexities of today's economy have made large restructurings even more complex. "Howard Berlin joining us so soon after well known bankruptcy attorney Brian Gart joined our team is additional evidence of leading restructuring professionals in our market appreciating the depth of our restructuring resources and our tremendous talent in practice areas that are essential to the effective handling of the restructuring needs of large companies and organizations." Mr. Berlin is admitted to practice in the Courts of the State of Florida, the U.S. District Courts for the Southern and Middle Districts of Florida and the U.S. Court of Appeals for the Eleventh Circuit. He received his J.D. from the University of Miami School of Law and B.A. from George Washington University. Berlin is AV rated by Martindale-Hubbell and listed in Chambers USA; Best Lawyers of America; South Florida Legal Guide, Top Lawyers in Bankruptcy, and Super Lawyers Magazine. About Berger Singerman Berger Singerman is a Florida business law firm with 65 attorneys working out of offices in Boca Raton, Fort Lauderdale, Miami and Tallahassee. The firm serves leading companies, successful individuals and other law firms. Members of the firm have expertise in many areas of commercial law, including restructuring and bankruptcy , dispute resolution and litigation, real estate and land use issues, wealth planning and tax, and white collar criminal defense. * Paul, Weiss Gets IFLR's "Restructuring Deal of The Year" Award ---------------------------------------------------------------- Paul, Weiss, Rifkind, Wharton & Garrison LLP received the "Restructuring Deal of the Year" award for its representation of Banque Populaire Group and Caisse d'Epargne Group in the restructuring of bond insurer, CIFG Holding, Ltd., at the International Financial Law Review (IFLR) 2009 Americas Awards Ceremony held in New York City. Paul, Weiss' representation of Banque Populaire Group and Caisse d'Epargne Group was a team effort across multiple practice groups, including members of the firm's litigation, corporate, bankruptcy and tax departments. The team was led by litigation partners Martin Flumenbaum and Marc Falcone, corporate partner Kelley D. Parker, bankruptcy partner Alan W. Kornberg and tax partner Jeffrey B. Samuels. "The firm is honored to receive this award from IFLR, and proud of the team that achieved such an outstanding result for Banque Populaire Group and Caisse d'Epargne Group," said Brad S. Karp, chair of Paul, Weiss. "Our successful resolution of this matter represents Paul, Weiss at its best -- teams of talented lawyers across practice areas working collaboratively to achieve the best possible outcome for our clients." Banque Populaire Group and Caisse d'Epargne Group announced on January 21, 2009 that their jointly owned monoline subsidiary, CIFG Holding, Ltd., reached a final settlement with credit default swap counterparties and bondholders holding 98% of its gross par outstanding of ABS CDO exposures and certain specified CRE CDO exposures. The transaction substantially reduced CIFG's exposure to problematic derivatives, resulting in a significantly improved capital position and claims paying resources. As a result of the restructuring, CIFG received an upgrade from the rating services; something that no other bond insurer has been able to do since the start of the credit crisis. About Paul, Weiss Paul, Weiss -- http://www.paulweiss.com-- is a firm of more than 500 lawyers with diverse backgrounds, personalities, ideas, and interests who collaboratively provide innovative solutions to clients' most critical and complex legal and business challenges. It represents a varied range of clients, including some of the largest publicly and privately held corporations and financial institutions in the U.S. and abroad. * Stanley Shashoua to Lead Resilience Capital's Real Estate Fund ---------------------------------------------------------------- Resilience Capital Partners has added Stanley Shashoua to head up the firm's real estate fund. Mr. Shashoua and his team, based in New York City, will manage the real estate fund as a new Resilience dedicated effort separate from the firms other corporate recovery private equity funds based in Cleveland, Ohio. Mr. Shashoua has extensive experience in real estate and finance. Prior to joining Resilience, Mr. Shashoua was a partner with HRO Asset Management where he acquired and managed over $1 billion of properties comprising over three million square feet on behalf of institutional clients. Mr. Shashoua also worked at Dresdner Kleinwort Wasserstein where he was responsible for $20 billion of transactions in private equity, mergers and acquisitions, public/private equity, and debt financings and restructurings across a broad range of industries including real estate, media, business and consumer services, industrial, food, and retail. At Resilience, Mr. Shashoua will focus on identifying real estate opportunities that generate superior risk-adjusted returns while ensuring capital preservation. Resilience will consider a variety of property types including institutional quality office, retail, residential, hotel and industrial; traditional or distressed assets; and, raw or entitled land. "I'm thrilled to be part of the Resilience team. I'm eager to put my deep and broad experience in real estate and finance to work at Resilience -- a firm that is nimble, well-connected and passionate about the power of team work," explained Mr. Shashoua. "Adding Stanley to our management team indicates the firm's continued commitment to hire and retain top talent" said Steve Rosen, co-CEO, Resilience Capital Partners. Co-CEO Bassem Mansour continued by stating that "Stanley's vast knowledge of the real estate industry and impressive track record helps round out our skill base and ensures Resilience's success in today's challenging business environment." About Resilience Capital Partners Headquartered in Cleveland, Ohio, Resilience Capital Partners -- http://www.resiliencecapital.com-- is a leading private equity firm specializing in investing in lower middle market companies within a broad range of industries. Resilience's value oriented investment strategy is to acquire companies with solid business prospects in a variety of special situations including underperformers, corporate divestitures, turnarounds, and orphan public companies. Its team of in-house professionals brings both operational and transactional expertise to its portfolio companies. Since inception in 2001, Resilience has acquired 17 companies with total revenue in excess of $1.5 billion and over 4,000 employees. The Resilience Real Estate Fund is focused on investing in hospitality, retail, office and multi-family properties, including the formation of property-related debt/equity securities, and property-related operating businesses. * Tyler Brown Named as Fellow of American College of Bankruptcy --------------------------------------------------------------- Hunton & Williams LLP reported that Tyler P. Brown, co-chair of the firm's bankruptcy, restructuring & creditors' rights practice, has been named a Fellow of the American College of Bankruptcy. He will be inducted on March 27 in a ceremony to be held in the Great Hall of the United States Supreme Court. Mr. Brown is one of 33 nominees from the United States and abroad being inducted in the 20th Class of College Fellows for 2009. All are being honored and recognized for their professional excellence and exceptional contributions to the fields of bankruptcy and insolvency. The American College of Bankruptcy is an honorary professional and educational association of bankruptcy and insolvency professionals. Fellows in the College include commercial and consumer bankruptcy attorneys, insolvency accountants, turnaround and workout professionals, law professors, judges, government officials and others involved in the bankruptcy and insolvency community. The College currently has 712 Fellows, each selected by a Board of Regents from among recommendations of the Circuit Admissions Council in each federal judicial circuit and specially appointed Committees for Judicial and Foreign Fellows. Criteria for selection include: the highest standard of professionalism, ethics, character, integrity, professional experience and leadership contributing to the enhancement of bankruptcy and insolvency law and practice; sustained evidence of scholarship, teaching, lecturing or writing on bankruptcy or insolvency; and a commitment to elevate knowledge and understanding of the profession and public respect for the practice. Mr. Brown's practice focuses on bankruptcy and creditors' rights, loan workouts, lender liability, contract disputes, landlord- tenant disputes and other commercial litigation at the trial and appellate levels. He also advises commercial, consumer and mortgage lenders. Brown holds a J.D. (magna cum laude) from Washington and Lee University, and a B.A. from Syracuse University. He is based in the firm's Richmond, VA office. About Hunton & Williams LLP Hunton & Williams LLP -- http://www.hunton.com-- provides legal services to corporations, financial institutions, govern-ments and individuals, as well as to a broad array of other entities. Since the firm's establishment more than a century ago, Hunton & Williams has grown to more than 1,000 attorneys serving clients in 100 countries from 19 offices around the world. While the firm's practice has a strong industry focus on energy, financial services and life sciences, the depth and breadth of our experience extends to more than 100 separate practice areas, including bankruptcy and creditors rights, commercial litigation, corporate transactions and securities law, intellectual property, international and gov-ernment relations, regulatory law, products liability, and privacy and information management. * BOOK REVIEW: Financial Planning for High Net Worth Individual --------------------------------------------------------------- Authors: Richard H. Mayer and Donald R. Levy Publisher: Beard Books Paperback: 428 pages List Price: US$59.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587982323/internetbankrupt Financial Planning for High Net Worth Individuals by Richard H. Mayer and Donald R. Levy is a comprehensive and authoritative guide to the art and science of wealth management. It is a source book that wealth management advisers can turn to when looking for in-depth answers. Collected here are the insights of expert advisers, presented in a thoughtful and thorough manner on the vital aspects of financial management. This book is for high net worth individuals as well as for every serious wealth management professional. Richard H. Mayer, Chartered Life Underwriter, Registered Investment Advisor. Mr. Mayer has more than 40 years of experience in the insurance industry where he specializes in advising high net worth individuals and in developing executive compensation plans. Donald R. Levy, JD, MBA, is an attorney and benefits consultant. Mr. Levy has authored or edited a number of books including the Research Institute of America Answer Book, Executive Compensation Treatise, 403(b) Answer Book, Guide to Cash Balance Plans, Quick Reference Guide to IRAs, and the State-by-State Guide to Managed Care Law. ********* 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 ***