/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090402.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 2, 2009, Vol. 13, No. 91 Headlines ABITIBI-CONSOLIDATED CO.: S&P Cuts Secured Debt Rating to 'D' ABITIBI-CONSOLIDATED INC: Fitch Cuts Issuer Default Rating to 'D' ABITIBI-CONSOLIDATED INC: Missed Payments Cue S&P's 'D' Rating ACCENTIA BIOPHARMA: Court Extends Plan Filing Period to July 8 ACTIVE WALLACE: Gets Interim OK to Cash Collateral & DIP Funding ADVANTAGE RENT-A-CAR: Selects Hertz' $33MM Bid for Certain Assets AES CORPORATION: Moody's Reaffirms 'B1' Senior Unsecured Rating AFFINITY BANK: Weiss Ratings Assigns "Very Weak" E- Rating ALISAL WATER: Fitch Assigns 'BB+' Rating on $8.2-Mil. Bonds BAIRE TRUCKING: Voluntary Chapter 11 Case Summary BALLY TOTAL: Court Grants 1st Plan Exclusivity Extension BANK OF AMERICA: May Sell Columbia Management & First Republic BARCELONA II LLC: Case Summary & 8 Largest Unsecured Creditors BEARINGPOINT INC: Creditors Committee Opposes Quick Sale BELLEAIR CONVERSION: Case Summary & 20 Largest Unsec. Creditors BERNARD L. MADOFF: Regulators Sue Firm's Largest Feeder Fund BIOVAIL CORP: S&P Withdraws 'BB-' Corporate Credit Rating BOSQUE POWER: S&P Cuts Rating on $412.5 Mil. Facilities to 'B' BRUNO'S SUPERMARKETS: Court to Consider Bid to Reject CBA Today CANON COMMUNICATIONS: Pact Amendment Cues Moody's Junk Rating CF HOSPITALITY: 2 Hotels Can Be Sold in Foreclosure After May 11 CHRYSLER FINANCIAL: May Exhaust $1.5BB in Federal Aid This Month CHRYSLER LLC: Various Parties Say Bankruptcy Inevitable CHRYSLER LLC: Chrysler-Fiat Combination an "Impossible Goal" CNH GLOBAL: S&P Cuts Long-Term Corporate Credit Rating to 'BB+' COMPTON PETROLEUM: S&P Gives Negative Outlook; Affirms 'B' Rating COMSTOCK HOMEBUILDING: May File for Bankruptcy Protection CONSECO INC: BofA Loan Amended; Interest Rate Hiked to 7.5% CREATIVE LOAFING: Court Denies Creditor's Plea to Take Control CROTCHED MOUNTAIN: Moody's Downgrades Issuer Rating to 'B2' DALLAS WASTE DISPOSAL: Voluntary Chapter 11 Case Summary DBSI INC: Court Asks U.S. Trustee to Mull on 2 Separate Committees DELPHI CORP: BeijingWest Deal "Most High Profile Acquisition Yet" DIAL-A-MATTRESS: Court Okays Six First-Day Motions DIAL-A-MATTRESS: Franchisee Balks at Asset Sale to Sleepy's DIAMOND GLASS: Wins Court Confirmation of Liquidating Plan DREIER LLP: Receiver Recovers $100-Mil. from Firm's Founder DYNAMIC DECISIONS: Hedge Fund May Be Taken Over by Liquidators EDDIE BAUER: S&P Affirms Corporate Credit Rating at 'CCC' ENERGY FUTURE: Moody's Downgrades Corporate Family Rating to 'B2' ENTERCOM COMMUNICATIONS: S&P Withdraws 'B+' Corporate Rating FIRST BANK: Weiss Ratings Assigns "Very Weak" E- Rating FIRSTENERGY CORP: Fitch Affirms Issuer Rating on 2 Units at 'BB+' FORD MOTOR: Peter Horbury to Return to Volvo as Design VP FORD MOTOR: To Lose Competitive Edge if GM, Chrysler Plans Succeed FRANK & CAMILLE'S: Voluntary Chapter 11 Case Summary GENCORP INC: S&P Junks Corporate Credit Rating From 'B+' GENERAL MOTORS: Various Parties Say Bankruptcy Inevitable GEORGIA GULF: Fitch Downgrades Issuer Default Rating to 'C' GLOBAL OUTREACH: Court Approves Kasen & Kasen as Counsel GOLDCREST FARMS: Voluntary Chapter 11 Case Summary GOTTSCHALKS INC: GECC Seeking to Repossess Corporate Jet GOTTSCHALKS INC: Reorganization Fails, Seeks to Liquidate GOTTSCHALKS INC: To Begin Going Out of Business Sale Today GREENBRIER HOTEL: Taps McGuirewoods LLP as Counsel GULF COAST: Voluntary Chapter 11 Case Summary HALLWOOD ENERGY: Files Schedules of Assets and Liabilities HARVEST OIL: Case Summary & 20 Largest Unsecured Creditors HERTZ CORP: Wins Auction to Acquire Advantage Rent-A-Car for $33MM HERTZ CORP: S&P Downgrades Long-Term Corp. Credit Rating to 'B' HSN INC: S&P Downgrades Corporate Credit Rating to 'BB-' IDEARC INC: Chapter 11 Filing Cues S&P's Rating Cut to 'D' IDEARC INC: Moody's Cuts Default Rating to 'D' on Ch. 11 Filing INTERMET CORP: Court Approves Incentive Payments to 7 Supervisors JG WENTWORTH: S&P Affirms Counterparty Credit Ratings at 'CC' KDK INC.: Voluntary Chapter 11 Case Summary LANDSOURCE COMMUNITIES: First-Lien Lenders File Modified Plan LEHMAN BROTHERS: Moody's Cuts Enhanced Libor Fund Rating to 'Ca' LIGHTHOUSE TENN: Section 341(a) Meeting Scheduled for April 24 MAGNA ENTERTAINMENT: Creditors Ask for Bankruptcy Examiner MAR VISTA: Section 341(a) Meeting Scheduled for April 23 MERISANT WORLDWIDE: U.S. Trustee Picks 5 for Creditors Committee MERISANT WORLDWIDE: Committee Can Hire Winston as Counsel MERUELO MADDUX: Wants to Schedules Filing Extended Until May 13 MICHAEL VICK: Will Pay Atlanta Falcons Up to $7.5 Million NARANG ACQUISITION: Taps Nordman Cormany as General Legal Counsel NATIONAL CONSUMER: Fitch Cuts Preferred Stock Rating to 'BB+' NES RENTALS: S&P Junks Long-Term Corp. Credit Rating From 'B+' NORCRAFT HOLDINGS: S&P Downgrades Corporate Credit Rating to 'B' NORTHERN ROCK: Moody's Downgrades Bank Strength Rating to 'E' NTELOS INC: Moody's Affirms Corporate Family Rating at 'Ba3' NYMAGIC INC: Fitch Downgrades Issuer Default Rating to 'BB-' PACIFIC NATIONAL: Weiss Ratings Assigns "Very Weak" E- Rating PLATINUM MOTORS: Section 341(a) Meeting Set for Tomorrow, April 3 PLY GEM: S&P Downgrades Corporate Credit Rating to 'SD' From 'B-' PRATT-READ CORP: Has Until May 4 to File Schedules and Statements PRECISION PARTS: U.S. Trustee Appoints 5-Member Creditors Panel PRICE TRUCKING: Can Access TAB Cash Collateral on Interim Basis QUANTUM CORPORATION: Moody's Downgrades Default Rating to 'Ca' RETAIL PRO: Court Defers Approval of Sale Until April 14 RHODES COMPANIES: Case Summary & 20 Largest Unsecured Creditors RITZ CAMERA: Acting U.S. Trustee Picks 7-Member Creditors Panel RITZ CAMERA: Gets Final Court Order to Access $85MM DIP Facility RITZ CAMERA: Panel Wants to Hire Cooley Godward as Lead Counsel RIVIERA HOLDINGS: Dec. 31 Balance Sheet Upside Down by $58.7MM RIVIERA HOLDINGS: Interest Nonpayment Cues Moody's Rating Cuts RIVIERA HOLDINGS: Nonpayment of Interest Cues S&P's 'D' Ratings RIVIERA HOLDINGS: Skips $4MM Interest Payment; May Go Bankrupt RPM SOLUTIONS: Back On Track and Now Able to Make Payments SARATOGA RESOURCES: Files for Chapter 11, In Talks for DIP Funding SEEQPOD: Files for Chapter 11 Bankruptcy Protection in California SEMGROUP LP: To Wind Down Portion of Asphalt Unit Left by SGLP SENSATA TECHNOLOGIES: S&P Downgrades Corp. Credit Rating to 'SD' SILGAN HOLDINGS: S&P Gives Positive Outlook; Keeps 'BB+' Rating SILICON GRAPHICS: Case Summary & 50 Largest Unsecured Creditors SILICON GRAPHICS: Goes Belly-Up, Sells Biz to Rackable for $25MM SOUTHEASTERN STUD: Voluntary Chapter 11 Case Summary SOUTHLAND CHRYSLER-JEEP: Voluntary Chapter 11 Case Summary SPIRIT FINANCE: S&P Junks Corporate Credit Rating From 'B-' STANFORD GROUP: CIO Pedergest-Holt Sues Counsel for Malpractice STAR TRIBUNE: Asks Court to Approve Modifications to Typos' CBA STAR TRIBUNE: Asks Court to Approve Modifications to Mailers' CBA STEADIVEST LLC: Voluntary Chapter 11 Case Summary THORNBURG MORTGAGE: Throws in Towel; to Liquidate Under Ch 11 TRONOX INC: Creditors Ask Court to Dissolve Equity Committee TRONOX INC: Equity Panel Seeks Approval of Pillsbury Engagement TRONOX INC: Files Schedules of Assets and Liabilities TRONOX INC: Seeks July 12 Extension for Removal of Actions TROPICANA ENTERTAINMENT: Deadline for Casino Sale Extended TROPICANA ENTERTAINMENT: Gets $200.0 Mil. Offer From Carl Icahn TVI CORP: Files for Chapter 11, Secures $19MM DIP Loan From BB&T TVI CORPORATION: Case Summary & 20 Largest Unsecured Creditors UNITED SUBCONTRACTORS: Will File for Chapter 11 Protection VERASUN ENERGY: Closes Sale of 5 Ethanol Plants to Valero VINEYARD CHRISTIAN: Court Sets April 30 General Bar Date VINEYARD CHRISTIAN: Stipulation on Use of Cash Collateral Okayed VISTEON CORP: May File for Chapter 11 Bankruptcy Protection VOLT INFORMATION: Fitch Affirms Issuer Default Rating at 'BB' W.R. GRACE: Commissioned Study on Dangers of Asbestos in Libby WADENA HOUSING: S&P Corrects Outlook to Stable; Cuts Rating to B WILDGOOD INC.: Voluntary Chapter 11 Case Summary WE PRINT TODAY: Voluntary Chapter 11 Case Summary WL HOMES: Court Oks Standard Procedures for Undeveloped Land Sale WL HOMES: Procedures for Payment of Claims from Home Sales Okayed WOLF HOLLOW: S&P Affirms 'B' Rating on $260 Mil. Senior Facility * Sued Company Officers Lack Standing to Appeal, Court Rules * Joseph Smolinsky Joins Weil Gotshal as Partner * Chapter 11 Cases With Assets and Liabilities Below $1,000,000 ********* ABITIBI-CONSOLIDATED CO.: S&P Cuts Secured Debt Rating to 'D' ------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on newsprint producer Abitibi-Consolidated Inc., a subsidiary of AbitibiBowater Inc. (CC/Watch Neg/--), to 'D' from 'CC'. "We downgraded the company after it missed principal and interest payments on its 364-day loan that was due yesterday," said Standard & Poor's credit analyst Jatinder Mall. At the same time, S&P lowered the senior unsecured debt rating on Abitibi-Consolidated to 'D' from 'C'. S&P also lowered the secured debt rating on Abitibi-Consolidated Co. of Canada to 'D' from 'CCC' and the senior unsecured debt to 'D' from 'C'. Finally, S&P removed all the ratings on Abitibi-Consolidated and Abitibi Consolidated Co. of Canada from CreditWatch negative where they were placed Feb. 10, 2009. The corporate credit ratings on AbitibiBowater Inc. and Bowater Inc. remain at 'CC' and on CreditWatch negative. The CreditWatch on these entities S&P expects will be resolved once S&P has a clear indication on the outcome of the proposed recapitalization program. ABITIBI-CONSOLIDATED INC: Fitch Cuts Issuer Default Rating to 'D' ----------------------------------------------------------------- Fitch Ratings has lowered the Issuer Default Ratings of Abitibi- Consolidated Inc. and its subsidiaries to 'D'. The senior secured and senior unsecured ratings are unchanged: Abitibi-Consolidated Inc. and subsidiaries -- IDR to 'D' from 'C'; -- Senior secured term loan - 'B-/RR1'; -- Secured notes - 'B-/RR1'; -- Long-term unsecured - 'C/RR6'. The ratings of AbitibiBowater, Inc., Bowater Inc. and its subsidiaries are unaffected. This rating action follows a missed debt service payment on the company's senior secured term loan which was due March 30, 2009. Abitibi has petitioned and received an interim order from the Superior Court of Quebec which includes a stay of proceedings in favor of Abitibi and certain of its affiliates under the Canada Business Corporations Act. The order has set a meeting date of April 30, 2009, for unsecured and secured note holders and lenders of record on April 1 to consider a recapitalization plan proposed by Abitibi. As part of the recapitalization plan, the $347 million senior secured term loan would be paid down to $200 million and its maturity would be extended to March 31, 2012 at a lesser interest rate. Any delinquent interest on the loan would be paid in cash. Also as part of the recapitalization plan, existing unsecured notes would ultimately be exchanged for a combination of 12.50% first lien notes maturing in March 2014, a series of 11.00% second lien notes maturing in June 2014, common stock and warrants for common stock. Interest on unsecured notes payable April 1 would receive in lieu of cash first lien notes. The 13.75% senior secured notes due in April 2011 would be unaffected. The recapitalization plan must ultimately be approved by the court which would follow an approval of the plan by two-thirds of the affected lenders and note holders. Abitibi is also concurrently looking to raise $350 million in cash from an offering of $389 million of the first lien notes and a series of five year warrants to purchase common stock. The company has received commitments totaling $250 million. The 'B-/RR1' ratings of the secured term loan and the secured notes reflect their probability of a superior recovery by comparison to the unsecured obligations of Abitibi without giving effect to the proposed recapitalization. AbitibiBowater Inc. together with Bowater, Abitibi-Consolidated Inc. and subsidiaries, produce a wide range of newsprint, commercial printing papers, market pulp and wood products. AbitibiBowater Inc. owns or operates 24 pulp and paper facilities and 30 wood product facilities in the United States, Canada, the United Kingdom and South Korea. ABITIBI-CONSOLIDATED INC: Missed Payments Cue S&P's 'D' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on newsprint producer Abitibi-Consolidated Inc., a subsidiary of AbitibiBowater Inc. (CC/Watch Neg/--), to 'D' from 'CC'. "We downgraded the company after it missed principal and interest payments on its 364-day loan that was due yesterday," said Standard & Poor's credit analyst Jatinder Mall. At the same time, S&P lowered the senior unsecured debt rating on Abitibi-Consolidated to 'D' from 'C'. S&P also lowered the secured debt rating on Abitibi-Consolidated Co. of Canada to 'D' from 'CCC' and the senior unsecured debt to 'D' from 'C'. Finally, S&P removed all the ratings on Abitibi-Consolidated and Abitibi Consolidated Co. of Canada from CreditWatch negative where they were placed Feb. 10, 2009. The corporate credit ratings on AbitibiBowater Inc. and Bowater Inc. remain at 'CC' and on CreditWatch negative. The CreditWatch on these entities S&P expects will be resolved once S&P has a clear indication on the outcome of the proposed recapitalization program. ACCENTIA BIOPHARMA: Court Extends Plan Filing Period to July 8 -------------------------------------------------------------- The U.S. Bankruptcy Court extended Accentia Biopharmaceuticals Inc. and its affiliates' exclusive period to propose a plan until July 8, 2009, and their exclusive period to solicit acceptances of that plan until September 6. Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc. (Nasdaq: ABPI) -- http://www.accentia.net/-- is a vertically integrated biopharmaceutical company focused on the development and commercialization of drug candidates that are in late-stage clinical development and typically are based on active pharmaceutical ingredients that have been previously approved by the FDA for other indications. The company's lead product candidate is SinuNase(TM), a novel application and formulation of a known therapeutic to treat chronic rhinosinusitis. Additionally, the Company has acquired the majority ownership interest in Biovest International Inc. and a royalty interest in Biovest's lead drug candidate, BiovaxID(TM) and any other biologic products developed by Biovest. The company also has a specialty pharmaceutical business, which markets products focused on respiratory disease and an analytical consulting business that serves customers in the biopharmaceutical industry. Accentia Biopharmaceuticals and nine affiliates filed for Chapter 11 protection on November 10, 2008 (Bankr. M. D. Florida, Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P. Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida; Jonathan B. Sbar, Esq., at Rocke, McLean & Sbar, P.A., represent the Debtors as counsel. Adam H. Friedman, Esq., at Olshan Grundman Frome Rosenzweig, and Paul J. Battista, Esq., at Genovese Joblove & Battista PA, represent the Official Committee of Unsecured Creditors as counsel. Based in Tampa, Florida, Biovest International Inc. (OTC BB: BVTI) -- http://www.biovest.com/-- is a pioneer in the development of advanced individualized immunotherapies for life-threatening cancers of the blood system. Biovest is a majority-owned subsidiary of Accentia Biopharmaceuticals Inc., with its remaining shares publicly traded. Biovest International Inc.'s consolidated balance sheet at June 30, 2008, showed $5.9 million in total assets, $36.8 million in total liabilities, and $4.6 million in non-controlling interests in variable interest entities, resulting in a $35.5 million total stockholders' deficit. ACTIVE WALLACE: Gets Interim OK to Cash Collateral & DIP Funding ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California granted, on an interim basis, The Active Wallace Group: a) authorization to enter immediately into a postpetition loan amendment with Merrill Lynch Commercial Finance Corp., and access credit pursuant to the amendment; b) approval on the stipulation entered in connection with the proposed postpetition secured financing; c) authorization in favor of Merrill Lynch to allow an administrative expense claim with priority over any and all administrative expense; d) authorization to grant in favor of Merrill Lynch a first priority lien on property of the estate that is not otherwise subject to a lien; e) authorization to grant in favor of Merrill a junior lien on property of the estate, to the extent of the funds advanced postpetition; and f) authorization use of cash collateral. Hon. Richard M. Neiter will continue the hearing on this motion on April 7, 2009, at 10:30 a.m. (PDT) at 255 E. Temple Street, Courtroom 1645, Los Angeles, California. Salient Terms of the DIP Financing Amount of DIP Financing: Amount equal to all disbursements provided for in the budget. Interest Rate: Interest will accrue at the rate of LIBOR plus 2.25% per annum will be payable on a monthly basis. Term Of DIP Financing: The Lender's agreement to make postpetition financing available to the Debtor and to allow use of cash collateral will continue until the earlier of: (i) conclusion of the final hearing on the motion; (ii) date of all prepetition indebtedness and post petition indebtedness owing to lender is repaid in full; or (iii) April 17, 2009. Default Interest Rate: In an event of default, interest on the loan will accrue upon the outstanding principal at the default interest rate equal to the lesser of: (i) the interest rate plus 2% or (ii) highest amount allowed by the law, which will accrue per annum commencing on the initial sate of the event of default. Priority/Security: The loan will be afforded administrative priority. As additional security, the loan will be secured against all assets of the estate. A full-text copy of the Budget is available for free at: http://bankrupt.com/misc/activewallacediporder.pdf About The Active Wallace Group Headquartered in Mira Loma, California, The Active Wallace Group, doing business as 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 estimated assets of $10 million to $50 million and debts of $10 million to $50 million. ADVANTAGE RENT-A-CAR: Selects Hertz' $33MM Bid for Certain Assets ----------------------------------------------------------------- Hertz Global Holdings, Inc., has won the right to purchase certain assets of Advantage Rent A Car which, according to company filings, generated full year 2008 revenues of about $146 million. The purchase price, subject to court approval, is approximately $33 million. The purchase agreement provides Hertz with the rights to purchase certain rights, trademarks and copyrights to use the Advantage brand name, Web site and phone numbers. In addition, the agreement provides Hertz with the option to have assigned to the Company certain leases, fixed assets, airport concession agreements and other agreements associated with roughly 20 locations that Advantage is or previously was operating. Hertz will continue operating the Advantage business at certain rental locations, and it will assess expansion opportunities. Specifically, Hertz will operate the Advantage brand in Salt Lake City, Phoenix, Denver, Tucson, Colorado Springs, San Antonio, Los Angeles, Seattle, Maui, Honolulu, San Diego, Reno, Burbank, Palm Springs, Orlando, Ft Meyers (4 Hotels, 1 additional location). Mark P. Frissora, Hertz's Chairman and Chief Executive Officer, commenting on the agreement, said, "We're pleased to have secured the purchase of Advantage Rent A Car, a popular brand for price- oriented customers at key U.S. leisure travel destinations. Underscoring our commitment to serve all segments of the leisure car rental market, the 20 Advantage locations, combined with our six Simply Wheelz locations and the Hertz brand nationwide, enables us to serve the wide range of service and price-oriented car rental customers in the United States." On December 8, 2008, the corporate entities that owned and operated Advantage Rent A Car each filed a voluntarily petition for relief under Chapter 11 of the United States Code in the United States Bankruptcy Court for the District of Minnesota. Two bidders participated in the Bankruptcy Court auction with Hertz winning the auction. As reported by the Troubled Company Reporter on March 5, 2009, Enterprise Rent-A-Car inked a deal to purchase certain assets of Advantage Rent-A-Car on Enterprise for $19 million. The Bankruptcy Court will hold a hearing April 3 to approve the Hertz bid. The transaction is targeted for completion on April 8, 2009. About the Enterprise Family of Companies Headquartered in St. Louis, the Enterprise family of companies operates Enterprise Rent-A-Car, National Car Rental, and Alamo Rent A Car at more than 8,000 rental locations in neighborhoods and at airports worldwide. Enterprise Rent-A-Car has more than 6,900 offices. Enterprise Rent-A-Car Company -- http://www.enterprise.com/car_rental/home.do-- is a privately held company serving customers in the U.S., Canada, Germany, Ireland, Puerto Rico, and the U.K. They are also the owners of the Vanguard Automotive Group, operator of National Car Rental and Alamo Rent A Car in North America. About Hertz Corp. The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc. (NYSE: HTZ), based in Park Ridge, New Jersey, is the world's largest general use car rental brand, operating from approximately 8,000 locations in 147 countries worldwide. Hertz also operates one of the world's largest equipment rental businesses, Hertz Equipment Rental Corporation, through more than 375 branches in the United States, Canada, France, Spain and China. About Advantage Rent A Car Advantage Rent A Car -- http://www.advantage.com-- is a car rental company with 50 locations in the U.S. and 130 international affiliate locations. It is privately held by Denny Hecker Family Ventures, with headquarter operations in Minneapolis. Advantage serves travel and leisure, lifestyle, business, government and insurance replacement rentals. The Hecker group of companies include automobile dealerships, leasing, daily automobile and motorcycle rental, commercial, and residential real estate development, aviation, hospitality, and technology. As reported by the Troubled Company Reporter on Dec. 10, 2008, Advantage Rent A Car filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Minnesota. AES CORPORATION: Moody's Reaffirms 'B1' Senior Unsecured Rating --------------------------------------------------------------- Moody's Investors Service reaffirmed the B1 senior unsecured rating assigned to The AES Corporation's new note offering following its upsizing to $535 million from $350 million and also affirmed AES' Corporate Family Rating at B1. The rating affirmations are predicated on the understanding that AES intends using proceeds from the note offering to refinance approaching maturities. Moody's Investors Service has revised its LGD point estimates for AES: * Senior Secured Credit Facilities, to LGD 1, 2% from LGD 1, 5%; * Second Priority Senior Secured Global Notes, to LGD 3, 38% from LGD 3, 41%; * Senior Unsecured Notes, to LGD 4, 54% from LGD 4, 57%. The point estimate for the Convertible Trust Preferred Securities is unchanged at LGD 6, 95%. The last rating action on AES occurred on March 30, 2009 when Moody's assigned a B1 rating to the new senior unsecured note offering. AES's ratings were assigned by evaluating factors believed to be relevant to its credit profile, such as i) the business risk and competitive position of AES versus others within its industry or sector, ii) the capital structure and financial risk of AES, iii) the projected performance of AES over the near to intermediate term, and iv) AES's history of achieving consistent operating performance and meeting financial plan goals. These attributes were compared against other issuers both within and outside of AES's core peer group and AES's ratings are believed to be comparable to ratings assigned to other issuers of similar credit risk. The AES Corporation is a global power company with generation and distribution assets in Europe, Asia, Latin America, Africa and the United States. AFFINITY BANK: Weiss Ratings Assigns "Very Weak" E- Rating ---------------------------------------------------------- Weiss Ratings has assigned its E- rating to Ventura, Calif.-based Affinity Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Affinity Bank is not a member of the Federal Reserve, and is primarily regulated by the Federal Deposit Insurance Corporation. The institution was established on Sept. 19, 1982, and deposits have been insured by the FDIC since Mar. 14, 1988. Affinity Bank maintains a Web site at http://www.affinitybank.com/and has 10 branches in California. At Dec. 31, 2008, Affinity Bank disclosed $1.2 billion in assets and $1.1 billion in liabilities in its regulatory filings. ALISAL WATER: Fitch Assigns 'BB+' Rating on $8.2-Mil. Bonds ----------------------------------------------------------- Fitch Ratings assigns a 'BB+' rating to Alisal Water Corporation's $8.2 million of outstanding senior secured bonds due in 2027. Fitch also assigns Alco an Issuer Default Rating of 'BB-'. The Rating Outlook is Stable. The ratings reflect Alco's weak financial metrics, manageable capital needs, narrow customer base and economic profile, and essential service provided. The California regulatory environment is balanced, with the utility achieving rate relief as needed. Despite plans to issue additional senior secured bonds in the near future, leverage ratios are forecasted to decline over the next several years. At the same time, cash flow and liquidity levels are expected to show improvement. At the end of calendar 2008 (Alco's fiscal year also ends Dec. 31), Alco had limited cash and cash equivalents totaling less than $71,000. The current liquidity position is marginally better than historical performance. Debt-to-total capital and debt-to- EBITDA ratios were relatively high for the ratings category at 91% and 8.3 times in 2008, respectively. Alco provides water service to approximately 28,000 persons in the eastern portion of the city of Salinas, California. Water supplies are derived exclusively from groundwater sources, with available supplies sufficient to meet demands for the foreseeable future. BAIRE TRUCKING: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Baire Trucking LLC 210 Oppitz Lane Lakeland, FL 33803 Bankruptcy Case No.: 09-05325 Chapter 11 Petition Date: March 23, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: Michael G. Williamson Debtor's Counsel: Ziona Kopelovich, Esq. Debt Relief Law Offices of Tampa Bay LLC 6014 US Hwy. 19, Suite 305 New Port Richey, FL 34652 Tel: (727) 849-3328 Fax: (727) 846-6787 Email: ziona@debtrelieftampabay.com Total Assets: $744,924.00 Total Debts: $1,679,454.24 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-05325.pdf The petition was signed by Bobby E. Baire, managing member of the Company. BALLY TOTAL: Court Grants 1st Plan Exclusivity Extension -------------------------------------------------------- At the request of Bally Total Fitness Holding Corp., Judge Burton R. Lifland of the United States Bankruptcy Court for the Southern District of New York extended the time within which the Company file a Chapter 11 plan of reorganization to July 31, 2009. In Bally and its affiliates' request for an extension of its exclusive periods to file a plan until July 31 and solicit acceptances of that Plan until September 9, Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, relates that the Debtors have achieved considerable progress toward their expeditious exit from the Chapter 11 cases. Among other things, the Debtors have addressed numerous issues raised by employees, vendors, landlords and other parties-in- interest, and worked with the Office of the U.S. Trustee to comply with reporting requirements under the Bankruptcy Code. The Debtors have also stabilized their business operations and implemented an extremely successful operational restructuring and cost savings plan, which enabled them to build significant cash reserves and operate solely through the use of cash collateral and without the need for postpetition financing. Most importantly, the Debtors have formulated and presented a business plan to various constituents for their postpetition and post-emergence operations, Mr. Eckstein added. Mr. Eckstein, nonetheless said that the extensions were necessary because numerous issues need to be addressed and require more time to be resolved. Specifically, the Debtors are currently negotiating with their prepetition lenders and other parties, and are pursuing various proposals, with respect to the sponsorship of a Chapter 11 plan. The Debtors are also continuing to evaluate their unexpired leases and to work on restructuring their operational and geographic footprint, Mr. Eckstein explained. About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada (R) brands. Bally Total and its affiliates filed for Chapter 11 protection 7on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre- packaged chapter 11 plan. Joseph Furst, III, Esq. at Latham & Watkins, L.L.P. represents the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had US$408,546,205 in total assets and US$1,825,941,54627 in total liabilities. The Debtors filed their Joint Prepackaged Plan & Disclosure Statement on July 31, 2007. The Court confirmed the Plan in September 2007. The Plan was declared effective Oct. 1, 2007. Bally Total Fitness Holding Corp. and its debtor-affiliates and subsidiaries again filed voluntary petitions under Chapter 11 on Dec. 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818). Their counsel is Kenneth H. Eckstein, Esq. at Kramer Levin Naftalis & Frankel LLP, in New York. As of September 30, 2008, the Company (including non-debtor affiliates) had consolidated assets totaling approximately $1.376 billion and recorded consolidated liabilities totaling approximately $1.538 billion. Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the chapter 11 proceedings of Bally Total Fitness Holding Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000) BANK OF AMERICA: May Sell Columbia Management & First Republic -------------------------------------------------------------- Bank of America Corp. is likely to sell Columbia Management Group and First Republic Bank to try to preserve capital and shed noncore assets, Dan Fitzpatrick and Heidi N. Moore at The Wall Street Journal reports. According to WSJ, Bank of America picked up Columbia Management as part of its 2004 acquisition of FleetBoston Financial Corp. WSJ relates that Bank of America had $386.4 billion in assets under management as of December 31, 2008. WSJ notes that Columbia Management is redundant when compared to BlackRock Inc., a New York money manager that was partly owned by Merrill Lynch & Co. The report says that Bank of America won't sell its BlackRock stake. WSJ relates that First Republic is a private bank that Bank of America inherited from Merrill Lynch. Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk- management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and award- winning online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 40 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). As reported by the Troubled Company Reporter on March 27, 2009, 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. BARCELONA II LLC: Case Summary & 8 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Barcelona II, LLC 5060 California Ave., #1150 Bakersfield, CA 93309 Bankruptcy Case No.: 09-12689 Chapter 11 Petition Date: March 30, 2009 Court: Eastern District of California (Fresno) Judge: W. Richard Lee Debtor's Counsel: Leonard K. Welsh, Esq. Klein, DeNatale, Goldner, Cooper 4550 California Avenue, 2nd Floor Bakersfield, CA 93309 Tel: (661) 395-1000 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First Bank acquisition & $8,570,676 1625 Douglas Blvd. development loan; Roseville, CA 95661 value: $6,200,000; Tel: (714) 375-7024 unsecured: $5,470,676 Pro-Air services rendered $508,820 405 East 29th Street value: $15,500,000 Bakersfield, CA 93305 unsecured: Tel: (661) 578-6550 $508,820 Moreland Corporation construction cost $104,317 5060 California Avenue Suite 1150 Bakersfield, CA 93309 Tel: (661) 322-1081 American Contractors Indemnity lawsuit $93,837 Ferguson Enterprises services rendered $11,044 State of California annual tax $4,320 Franchise Tax Board Henry Visser Insulation services rendered $2,380 value: $6,200,000 unsecured: $2,380 A&R Prehung Doors, Inc. services rendered $1,518 value: $6,200,000 unsecured: $1,518 The petition was signed by Terry Moreland, member. BEARINGPOINT INC: Creditors Committee Opposes Quick Sale -------------------------------------------------------- According to Bloomberg's Bill Rochelle, the official committee of unsecured creditors of BearingPoint Inc. opposes the idea of a quick sale of the business, saying it "would eliminate any prospect of a significant balance-sheet restructuring, and inevitably propel the debtors into dismemberment through a series of discrete asset sales." Bill Rochelle notes that while BearingPoint filed for Chapter 11 in February with a proposed exit plan that gives new stock to unsecured creditors and holders of $690 million in subordinated notes, it changed course and started the process to sell its businesses. As reported by the Troubled Company Reporter on March 24, BearingPoint said that it has entered into an asset purchase agreement by which Deloitte LLP will purchase a significant portion of BearingPoint's largest business unit, Public Services, for a price of $350 million, subject to adjustment and customary closing conditions. The purchase agreement is subject to the rules of the existing financial restructuring process, which, among other things, require that the Company consider all "higher and better" offers from other potential buyers and obtain Court approval. There can be no assurance that the transaction will be approved by the Court or completed. Subsequent sales of other portions of the Company may be subject to a similar approval process. In addition, BearingPoint has signed a non-binding letter of intent to sell a substantial portion of its North American Commercial Services business, including its Financial Services segment, to PricewaterhouseCoopers LLP for $25 million. PwC Advisory Co., Ltd. (PwC Japan), a PricewaterhouseCoopers firm operating in Japan, is also in advanced negotiations to acquire the Company's consulting practice in Japan. BearingPoint is in late-stage negotiations with its local management teams to sell its European and Latin America practices. Further, BearingPoint is in separate negotiations with other parties and local management to sell various Asia Pacific practices, separate from Japan. There can be no assurance that the Company can enter into definitive agreements regarding such sales or that any transaction will be completed. "Since we entered the restructuring process, we've been committed to evaluating all strategic options with the goal of charting the best possible course for the people, clients and creditors of BearingPoint," said Ed Harbach, BearingPoint's CEO. "We have concluded that a sale of the Company's business units maximizes value and provides the greatest stability for all interested parties. We are pleased that several parties have expressed interest in purchasing the majority of the Company," continued Mr. Harbach. "These offers reflect the inherent value of our business and the world-class service we continue to provide our clients." "We remain steadfast in our commitment to the clients we serve as we transition through this process and beyond," concluded Mr. Harbach. AlixPartners, LLP and Greenhill & Co. are acting as financial advisors to the Company. Davis Polk & Wardwell is acting as legal counsel to the Company in connection with the sale of its Public Services business to Deloitte. Weil, Gotshal & Manges LLP is acting as legal counsel in connection with the Company's restructuring process. About BearingPoint BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP -- has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D. N.Y., Case No. 09-10691). Alfredo R. Perez, Esq. at Weil Gotshal & Manges LLP, has been tapped as counsel. Greenhill & Co., LLC, and AP Services LLC, have also been tapped as advisors. Davis Polk & Wardell is special corporate counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of Sept. 30, 2008. Contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter to implement the terms of their agreement with the secured lenders. Under the Plan, the Debtors propose to exchange general unsecured claims for equity in the reorganized company. Existing shareholders are out of the money. The Plan and the explanatory disclosure statement remain subject to approval by the Bankruptcy Court. BELLEAIR CONVERSION: Case Summary & 20 Largest Unsec. Creditors --------------------------------------------------------------- Debtor: Belleair Conversion Developers LLC 2851 N.E. 183rd St., Unit 1408 Aventura, FL 33160 Tel: (786) 294-7027 Bankruptcy Case No.: 09-15820 Chapter 11 Petition Date: March 31, 2009 Court: Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Carlos L De Zayas, Esq. cdz@lydeckerlaw.com Lydecker, Lee, Behar, Berga & de Zayas 1201 Brickell Ave., #200 Miami, FL 33131 Tel: (305) 416-3180 Total Assets: $11,969,262 Total Debts: $15,552,788 The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Hilder Valbuena $2,915,255 c/o Cuevas & Ortiz 536 Biltmore Way Coral Gables, FL 33134 Natalis Marin $2,243,979 Carrera 13 No. 9340 Oficina 215 Bogota, Colombia NR Group 3 Contractors $687,268 3447 N.E. 163rd St. North Miami Beach, FL 33160 Hector Lawrence Stracuzzi $30,000 German Osorio Davila $30,000 All Construction & Developers $25,000 Luis Edgardo Diaz $8,844 Ruben Santana $6,718 Barbara Modlin $500 Tiffany Armstrong $300 Pedro de Jesus $300 Phung Huynh $300 Mariangeline Rodriguez $300 Marcela Pinto $300 Jennifer Cassio $300 Michael Pozo $300 Rey Camacho $300 Jorge Luis Lopez $300 Angela Ayala $300 Teresa Jones $300 The petition was signed by Joaquin M. Bello, managing member. BERNARD L. MADOFF: Regulators Sue Firm's Largest Feeder Fund ------------------------------------------------------------ Robert Frank and Tom Lauricella at The Wall Street Journal report that Secretary of the Commonwealth William F. Galvin, on behalf of Massachusetts regulators, has filed civil fraud claims against Fairfield Greenwich Group for its involvement in Bernard L. Madoff's alleged Ponzi scheme. According to WSJ, Fairfield Greenwich is the largest feeder fund to Mr. Madoff's Ponzi scheme, earning hefty fees for bundling money to invest with Mr. Madoff. WSJ relates that Fairfield Greenwich said it had $6.9 billion of its $14 billion of assets invested with Mr. Madoff. The regulators claimed that the company's founding partners, Jeffrey Tucker and Mr. Noel, each earned more than $30 million in 2007 and more than $100 million each over the past decade, WSJ reports. The regulators, WSJ states, claimed that Fairfield Greenwich ignored red flags as it collected hundreds of millions of dollars in fees. "They had a blind spot when it came to Madoff. And we allege that it was because of the remarkable fees they were getting from him," WSJ quoted Mr. Galvin as saying. The regulators claimed that Mr. Madoff coached officials at Fairfield Greenwich on how to ward off questions from U.S. Securities and Exchange Commission investigators, WSJ states. Fairfield Greenwich said in a statement that the allegations were false, misleading, and erroneous and said that it would vigorously contest them. WSJ relates that Fairfield Greenwich claimed that it first checked with the SEC for any prohibition against discussing the matter with Mr. Madoff. The company said that the SEC gave it the go ahead, WSJ says. WSJ relates that the regulators are for: -- compensation to Massachusetts investors for losses, -- return of performance fees paid to Fairfield, and -- administrative fine. Fairfield Greenwich, according to WSJ, was already facing private lawsuits from investors alleging that the firm was negligent in its research and monitoring of Mr. Madoff. WSJ relates that Fairfield Greenwich said that it had scrutinized Mr. Madoff's trading. WSJ notes that Fairfield Greenwich either said that Mr. Madoff routinely provided false documentation or refused to provide certain information in response to their questions. Citing federal prosecutors, WSJ states that Friehling & Horowitz, Fairfield Greenwich's auditor, started auditing Mr. Madoff's books in 1991. According to WSJ, internal Fairfield Greenwich e-mails released by Massachusetts with the complaint show that the company's workers and executives sought in September 2005 information about the auditors in response to a question from a client following a fraud at hedge fund Bayou Group. WSJ quoted an employee saying, "I have looked into Horowitz and cannot find much information." WSJ relates that Friehling & Hororwitz's David Friehling has been charged criminally in connection with the Madoff case. WSJ notes that the lawsuit could spark broader attempts by investors to reclaim lost money from firms and people who earned hefty fees for bringing investors to Mr. Madoff. Mr. Galvin, according to WSJ, said that he is also looking at other firms, including Tremont Group Holdings. The Associated Press relates that federal authorities started to seize Mr. Madoff's Palm Beach, Fla., mansion, and seized his antique yacht and a smaller boat from two Florida marinas. Bloomberg News states that the Securities Investor Protection Corp., the agency liquidating Mr. Madoff's brokerage, says that the $2.6 billion it has on hand is enough to satisfy legitimate claims by victims of the Ponzi scheme. According to the report, SIPC President Stephen Harbeck said that the agency has kept the money in an industry-financed fund and from recovered assets to reimburse Mr. Madoff's 5,000 clients to the maximum allowed by its charter. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on Dec. 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Madoff's fraud were allegedly at least 50 billion. Also on Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. istrict Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Mr. Madoff, if found guilty of all counts, would be imprisoned for 150 years, but legal experts expect the actual sentence to be much lower and would still be an effective life sentence for the 70- year-old defendant, WSJ notes. Mr. Madoff, WSJ relates, would also face millions of dollars in possible criminal fines. The report says that Mr. Madoff has been free on bail since his arrest on December 11, 2008. There was no plea agreement with Mr. Madoff in which leniency in sentencing might be recommended, the report states, citing prosecutors. BIOVAIL CORP: S&P Withdraws 'BB-' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services said it withdrew its ratings, including its 'BB-' long-term corporate credit rating, on Mississauga, Ontario-based specialty pharmaceutical company Biovail Corp. at the company's request. BOSQUE POWER: S&P Cuts Rating on $412.5 Mil. Facilities to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered to 'B' from 'B+' its rating on Laguna Park, Texas-based Bosque Power Co. LLC's $412.5 million senior secured facilities ($401 million outstanding at Sept. 30, 2008). S&P also removed the rating from CreditWatch with negative implications, where S&P placed it on Sept. 24, 2008. The outlook is negative. The downgrade primarily reflects the project's increased risk of cash flow volatility after it replaced hedge counterparty Lehman Brothers Commodity Services with an unrated hedge counterparty (Fulcrum Marketing and Trade LLC). The project issued the debt in part to fund the conversion of existing units 1 and 2 into a single combined-cycle unit. The substantial completion date for that construction has been postponed to early summer 2009 from a planned completion date of March 2009. A third combined-cycle unit continues to operate. The senior facilities consist of a five-year $25 million senior secured revolving credit facility due January 2013 and a seven- year $387.5 million senior secured term facility due January 2015. The term facility includes $203 million for construction-related expenses and $65 million to cash collateralize letters of credit. The project is wholly owned by Bosque Power Co. LLC, which in turn is owned by holding company BosPower Development, LLC. BosPower is 97.85% owned by Arcapita and 2.15% owned by Fulcrum Power Services L.P. and has no debt at this time. The ratings on the bank loans reflect these weaknesses: The exposure to merchant risk; only 230 MW to 250 MW of Bosque's current 570 MW total capacity (812 MW following construction) is currently hedged, with unrated hedge counterparty Fulcrum. The fact that the project relies on continued, robust markets in the ERCOT region for interest and debt paydown; if market conditions deteriorate, lenders will be exposed to refinancing risk. Under Standard & Poor's more conservative case, about $377 million to $405 million, or $471 to $505 per kilowatt, of debt may require refinancing at loan maturity. The fact that lenders are exposed to risks associated with construction, including cost overruns and schedule delays during the conversion. The heat recovery steam generator and steam turbines are unused "gray" market equipment and do not have typical equipment warranty and performance guarantees associated with new equipment. Geographical and market concentration risk; all units are co- located and dispatch into a single market. These strengths partially offset the project's weaknesses: An excess cash sweep designed to repay debt cash flow is strong; a 100% cash sweep steps down to 75% on achievement of target debt balances. A $28 million letter of credit placed by hedge counterparty Fulcrum that will decrease steadily to $14 million at the end of 2009 and zero at the end of 2010. The fact that Bosque is in ERCOT North, a zone projected to experience declining reserve margins, and with limited ability to import generation from other ERCOT zones. The scarcity factor could improve market economics for the Bosque facility. The negative outlook reflects the increased potential that the project's cash sweeps will fail to significantly amortize debt as a result of its entering into a hedge with a relatively weak hedge counterparty. A return to stable outlook or potential upgrade could result from the project's entering into a hedge with a strong counterparty. BRUNO'S SUPERMARKETS: Court to Consider Bid to Reject CBA Today --------------------------------------------------------------- Following a one-week delay, the U.S. Bankruptcy Court for the Northern District of Alabama will hear April 2 Bruno's Supermarkets LLC's request to terminate existing union contracts. According to Bloomberg's Bill Rochelle, the union said the delay gave workers time to hold talks with prospective buyers. Under its financing agreement, Bruno's has an April 25 deadline to sign up a buyer. The Company said in its motion for the delay that the most likely purchasers indicated they won't buy unless the successorship clause in the company's collective bargaining agreement is deleted. Bruno's is in the process of closing 11 stores. As reported by the TCR on March 11, 2009, Bruno's Supermarkets, has taken a procedural step to facilitate a sales process that the company believes could preserve jobs at Bruno's and FOOD WORLD locations. Bruno's filed a motion that is technically described as a motion to reject the collective bargaining agreements between Bruno's and the United Food & Commercial Workers. The Debtor asks the Bankruptcy Court to allow Bruno's to make changes to the labor agreements with its Teammates that will make a sale of some or all of the company's store locations easier, which will ultimately preserve jobs. The motion was made following extensive discussions over several months between Bruno's and the UFCW regarding the Company's current CBAs. Impending court deadlines for completing a sale necessitated the motion filing. The UFCW represents nearly two- thirds of Bruno's Teammates. Bruno's non-unionized Teammates and other grocery store employees have already made significant sacrifices in their terms and conditions of employment, but Bruno's and the UFCW have been unable to reach agreement on modified CBAs. Under the terms of the proposed modified CBAs, union Teammates would still receive financial and other benefits that non-union Teammates do not receive. The current CBAs also include a "successorship clause," requiring any purchaser of the Company's stores to assume the CBAs and all the obligations they contain. During its pre- and post-petition conversations with potential acquirers, the Company and its financial advisors were in contact with unionized and non- unionized companies. Bruno's has determined that this clause is an impediment to serious conversations with many potential acquirers. The Company also believes that modifying the CBAs increases the likelihood for additional potential acquirers to come forward. If Bruno's is unable to reach sale agreements, it will be forced to pursue other courses of action available in a bankruptcy process, including liquidation. "We want to preserve jobs. Our motion is intended facilitate a process that we believe will do just that at our Bruno's and FOOD WORLD locations," said Jim Grady, Chief Restructuring Officer for Bruno's. "What we're proposing would help in our restructuring efforts and makes it more likely that both union and non-union Teammates will retain their jobs through a sale to a strategic buyer. We intend to continue working with the UFCW and remain committed to reaching a resolution that facilitates a sale while recognizing the Union's role as authorized representative for many of our Teammates." "In the meantime, our doors remain open and our focus will remain, as always, on offering the service, quality and community commitment that make Bruno's and FOOD WORLD the most desirable shopping destinations. I want to express my sincere gratitude to all of our Teammates, their continued hard work and dedication is a key reason we are so important to the communities we serve," Mr. Grady stated. Bruno's made the filing under Section 1113 of the U.S. Bankruptcy Code. Under the Code, the Court will likely schedule a hearing to be held approximately 14 days from today and would be expected to rule within 30 days following the commencement of the hearing. The Company will continue to try to reach an agreement with the union before such a court hearing. The Company noted that if the Court approves its filing, it has no immediate plans to alter wages and benefits other than to potentially make adjustments that were previously agreed to by the UFCW. About Bruno's Supermarkets, LLC Bruno's Supermarkets, LLC, is a privately held company headquartered in Birmingham, Alabama. Bruno's is the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. Bruno's filed voluntary Chapter 11 petitions on Feb. 5, 2009. Bruno's has retained Alvarez & Marsal, a restructuring and corporate advisory firm, to assist the company throughout the restructuring process. Burr & Forman LLP is the Debtor's lead counsel. Najjar Denaburg, P.C. is its conflicts counsel. CANON COMMUNICATIONS: Pact Amendment Cues Moody's Junk Rating ------------------------------------------------------------- Moody's Investors Service has lowered Canon Communications, LLC's CFR to Caa1 from B3 following the recent conclusion of an amendment granting covenant relief and disclosure of financial results for the quarter ended December 2008. Details of the rating actions are: Ratings downgraded: * Corporate Family rating -- to Caa1 from B3 * Probability of Default rating -- to Caa1 from B3 * Senior secured first lien revolving credit facility due 2010 -- to B3, LGD3, 36% from B2, LGD3, 36% * Senior secured first lien term loan due 2011-- to B3, LGD3, 36% from B2, LGD3, 36% Moody's does not rate Canon's $49 million senior secured second lien term loan. The rating outlook is negative. This concludes the review initiated on November 17, 2008. The downgrade of Canon's CFR to Caa1 reflects Moody's concern that weak economic conditions will likely have an adverse effect on of Canon's niche B-2-B trade show and publishing businesses. Although Canon's properties appear to have thus far held up better than the B-2-B sector as a whole, Moody's considers it likely that over the near-to-intermediate term the company will experience a contraction in organic sales. In addition, the downgrade incorporates Moody's view that decreased investor appetite for B- 2-B acquisitions may have reduced the value of Canon's business to levels below the company's current debt level, presenting weaker refinancing opportunities and/or recovery prospects for debtholders (especially second lien lenders) in a default scenario. The Caa1 CFR further incorporates the company's relatively small size (around $100 million) and modest scale, high leverage, the acquisitiveness of management, and its vulnerability to advertising spending in the medical device manufacturing sector. Ratings are supported by the defensibility and leading market position of the company's properties, (especially the annual New York City and Anaheim shows), the cost efficiencies and high margins provided by Canon's co-location model, the high growth prospects of its on-line product offerings, the company's ability to generate modest levels of free cash flow and the high degree of near-term revenue visibility which characterizes Canon's trade show business in particular. Moody's considers that the recent amendment has averted an almost- certain covenant default at the end of the December 2008 and will likely provide the company with manageable headroom within its revised covenant levels for the balance of 2009. Nonetheless, the Caa1 PDR reflects Moody's concern with the refinancing risk posed by the May 2010 maturity of Canon's revolving credit facility, as well the prospects of renewed covenant pressure in 2010, absent a further amendment. In particular, Moody's consider that Canon's second lien lenders would be reluctant to renew their loan commitments on favorable terms and conditions, given Moody's view of potential loss prospects for this creditor class. The negative rating outlook underscores Moody's concern that Canon's business will likely face top line organic contraction, as recessionary market conditions force its customers to cut-back on their travel budgets, trade show attendance and spending on exhibit space. In addition, the negative outlook expresses Moody's view that market spending on B-to-B magazine advertising (down by over 13% in December 2008 according to a recent report by Business Information Network) will face increasing cyclical weakness as well as secular pressure from electronic substitution, the latter providing relatively low barriers to entry for existing or emerging competitors. Although Canon's flagship trade show "Medical Design and Manufacturing" reported good results for its February 2009 Anaheim show (and over a 70% exhibitor renewal rate), nevertheless Moody's considers that over the near-to- intermediate-term the company could face pressure on sales more in line with that experienced by the B-2-B sector as a whole. The last recent rating action occurred on November 17, 2008, when Moody's placed Canon's ratings on review for possible downgrade. Canon's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected financial and operating performance of the company over the near-to-intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Canon's core industry and Canon's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in Los Angeles, California, Canon Communications is a leading producer of print productions, trade shows and digital media for the medical device manufacturing and other niche markets. The company reported sales of $94 million for the LTM period ended December 30, 2008. CF HOSPITALITY: 2 Hotels Can Be Sold in Foreclosure After May 11 ---------------------------------------------------------------- CF Hospitality Inc., needs to come up with $15 million of financing to obtain approval of its proposed bankruptcy exit plan, otherwise, a secured lender will have the right to foreclose CF's two hospitals and sell them. CF Hospitality's restructuring plan for its two hotels, one in Miami, Florida and the other in Orlando, is scheduled for confirmation on March 25. Gramercy Investment Trust has previously conveyed objections to the Plan, asserting that the Debtor won't be able to procure financing. The Debtor subsequently reached an agreement with Gramercy under which Gramercy can foreclose after May 11 unless $15 million cash surfaces by April 29. About CF Hospitality Apopka, Florida-based CF Hospitality, Inc., owns two hotels, one in Orlando and another in Miami. The Company and a subsidiary filed for Chapter 11 bankruptcy protection on May 1, 2008 (Bankr. M.D. Fla. Lead Case No. 08-03518). David R. McFarlin, Esq., and Frank M. Wolff, Esq., at Wolff, Hill, McFarlin & Herron, P.A., represent the Debtors in their restructuring efforts. In its filing, the Lead Debtor listed estimated assets between $10 million and $50 million and estimated debts between $10 million and $50 million. CHRYSLER FINANCIAL: May Exhaust $1.5BB in Federal Aid This Month ---------------------------------------------------------------- Chrysler Financial will have exhausted by the middle of April the $1.5 billion in federal aid it received through the Treasury's Troubled Asset Relief Program in January, Alex P. Kellogg at The Wall Street Journal reports, citing a person familiar with the matter. WSJ relates that Chrysler Financial said in February that it will need an unspecified amount in additional aid to continue lending. WSJ states that on Tuesday, Chrysler Financial said that it will lay off about 80 employees, or 2% of its work force, effective immediately. WSJ notes that the Obama administration's automotive task force pointed to weaknesses at Chrysler Financial as a key factor undermining Chrysler LLC's claim that it could be a viable independent company. Chrysler Finance has backed more than 90% of Chrysler vehicle sales in the first two weeks of March, WSJ relates, citing a person familiar with the matter. WSJ says that Chrysler has relied heavily on credit programs from Chrysler Finance to sell its cars, programs that were fueled largely by federal aid. According to WSJ, parent Cerberus Capital Management LP's decision to give up its equity in Chrysler raises new questions about the future of Chrysler Financial and what function it will serve if Chrysler goes out of business. Chrysler, under terms dictated by the Obama administration, has 30 days to secure a partnership and execute a restructuring plan that can help it become a viable car maker, WSJ notes. WSJ states that without Chrysler, Chrysler Finance could be left with almost no source of new business, the report says. About Chrysler Financial Chrysler Financial -- http://corp.chryslerfinancial.com-- offers automotive financial products and services to both dealers and consumers of Chrysler, Jeep(R) and Dodge vehicles in the U.S., Canada, Mexico and Venezuela. In addition it offers vehicle wholesale and retail financing to more than 3,600 Chrysler, Jeep and Dodge dealers. Currently, nearly three million drivers in the United States enjoy the benefits of financing with Chrysler Financial. Chrysler Financial has an employee base of 4,000 and supports a global portfolio of $60 billion. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. CHRYSLER LLC: Various Parties Say Bankruptcy Inevitable ------------------------------------------------------- The quick and surgical bankruptcy option that was said possible when President Barack Obama declared that the viability plans of General Motors Corp. and Chrysler LLC insufficient now appears to be inevitable, FOXNews.com reports, citing members of Congress and other sources. As reported by the Troubled Company Reporter on March 31, 2009, the Obama administration was considering a plan to fix GM and Chrysler by dividing their "good" and "bad" assets and putting them into bankruptcy to eliminate their biggest problems. Members of Congress and unnamed sources said that President Obama is convinced that a negotiated bankruptcy is the best way for GM to restructure and become a competitive automaker, Bloomberg News reports. Citing lawmakers, Bloomberg relates that President Obama is also ready to let Chrysler face bankruptcy and be sold off piece-by-piece if it fails to form an alliance with Fiat SpA. FOXNews.com relates that a White House official quickly denied the report, saying, "The president's position has not changed. He remains committed to a significant restructuring without a bankruptcy if at all possible." A senior administration official also described the report as inaccurate, FOXNews.com states. Jeffrey McCracken at WSJ relates that applying the nation's bankruptcy laws to GM and Chrysler in a "surgical" way, will be messier than expected, especially due to the political stakes involved and the complexity of Detroit's problems. WSJ quoted investment bank Gordian Group President Peter Kaufman as saying, "The No. 1 risk is the parties can't agree to a consensual deal. The government takes away a lot of its leverage by admitting they won't let these companies liquidate." WSJ states that if GM and Chrysler pursue the administration's bankruptcy plan, the process most likely wouldn't involve a prepackaged bankruptcy. WSJ notes that the process is expected to resemble a prearranged filing, in which there is a less-formal agreement among the parties about concessions. Prearranged bankruptcy is riskier because constituents can back out if they think that the company's situation or operating environment has changed radically, WSJ says, citing bankruptcy experts. According to the report, state franchise laws give dealers strong protections if automakers violate their contracts, making it expensive to close them. "You could also have lawsuits between shareholders who will fight over the valuations of fixed assets or intangibles. The parties have the right to be heard, to prepare experts, to do depositions, to get on the schedule. That drags things out for weeks, for months. There are suppliers and dealers and other claimants we don't even know about," WSJ states, citing a person familiar with the matter. According to FOXNews.com, President Obama disclosed a "Warranty Commitment Program," where the government would cover 110% of an accounting reserve established to cover 125% of projected warranty costs for each new vehicle sold by GM and Chrysler. Kris Maher at WSJ states that bankruptcy would give Chrysler and GM the ability to rescind their United Auto Workers contracts and impose another wave of deep cuts in auto workers' wages and healthcare benefits, which would affect about 141,000 UAW members and hundreds of thousands of retirees. According to WSJ, UAW President Ron Gettelfinger has been saying that the union has already made substantial concessions compared with other stakeholders and won't make any more until bondholders and other creditors agree to givebacks to reduce GM and Chrysler debt. WSJ relates that Mr. Gettelfinger has already announced his retirement from the union. 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. CHRYSLER LLC: Chrysler-Fiat Combination an "Impossible Goal" ------------------------------------------------------------ A Bloomberg News report says Chrysler LLC may face an "impossible goal" in completing an alliance with Fiat SpA and meeting an Obama administration deadline to erase debt and win more union concessions by April 30. Bloomberg's Mike Ramsey reports that Chrysler got its blueprint for the month of April from President Barack Obama's task force, which said that $6 billion in new aid hinges on "extinguishing the vast majority" of outstanding secured debt and new givebacks from the United Auto Workers. Bloomberg says meeting those requirements would require help from lenders JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley, which haven't negotiated in the three months since Chrysler got its U.S. loans and have little incentive to do so because they would be paid off first in bankruptcy. Even President Obama's autos panel suggested Chrysler might fare better by reorganizing in court, Bloomberg said. According to Bloomberg, a Chrysler-Fiat combination would be the world's sixth largest by vehicle sales, behind Ford Motor Co. The companies said they have a framework for the alliance they agreed to in principle in January, while adding that "substantial hurdles" remain. The report states that according to President Obama's task force, "Given the magnitude of the concessions needed, the most effective way for Chrysler to emerge from this restructuring with a fresh start may be by using an expedited bankruptcy process as a tool to extinguish liabilities". Completing the Fiat deal is a precondition for loans beyond Chrysler's first $4 billion, the task force said as cited by the report, which listed debt restructuring among six additional requirements. Chrysler, dependent on light trucks and on the North American market, can't exist as a stand-alone company, President Obama's advisers said. 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. CNH GLOBAL: S&P Cuts Long-Term Corporate Credit Rating to 'BB+' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on CNH Global N.V., including the long-term corporate credit rating to 'BB+' from 'BBB-', after taking the same rating action on CNH's parent company, Italy-based auto and truck manufacturer Fiat SpA (BB+/Watch Neg/B). The ratings remain on CreditWatch with negative implications In addition, Standard & Poor's lowered its issue-level ratings on senior unsecured debt issues held by CNH subsidiaries Case Corp. and Case New Holland Inc. to 'BB+' from 'BBB-'. The ratings remain on CreditWatch with negative implications. At the same time, S&P assigned a recovery rating of '4' to these issues, indicating S&P's expectation of average (30%-50%) recovery in the event of a payment default. The corporate credit rating and outlook on publicly traded CNH are the same as those on Fiat because of the close ties between the two. "Fiat views CNH as a core business and provides liquidity support to CNH by way of intercompany loans and bank loan guarantees and has a roughly 90% equity ownership stake in CNH," said Standard & Poor's credit analyst Dan Picciotto. As of Dec. 31, 2008, CNH had more than $2 billion of cash deposited with Fiat affiliates' cash management pools (repayable to CNH on one-day's notice). Burr Ridge, Illinois-headquartered CNH has a satisfactory business position as the world's second-largest agricultural equipment maker and as a major manufacturer of construction equipment. Product diversification across agricultural equipment (about 75% of revenues) and construction equipment (about 25%) supports CNH's business profile. The company also benefits from good geographic diversity, with the North American market accounting for about 40% of sales, Western Europe about one-third, and Latin America and other regions the remainder. The agricultural and construction equipment markets remain cyclical and sensitive to economic activity, government policy, investment trends, commodity prices, and other variables. Despite CNH's revenue diversification, industry cyclicality will make for continued volatility in the company's operating performance. In the fourth quarter of 2008, CNH's agricultural equipment sales climbed 8% but construction equipment sales fell nearly 50% as market conditions deteriorated rapidly. The outlook for 2009 is for continued weakness in construction equipment and for somewhat lower industry volumes in agricultural equipment. In addition, profitability at the company's financial services operation is likely to be limited due to conditions in the financial markets that may limit the business's ability to secure funding for growth. Credit measures are currently good as equipment operations' adjusted net debt to EBITDA was less than 2x as of Dec. 31, 2008. Intersegment notes receivable are netted against debt, as are cash balances in excess of $400 million. The value of operating leases is added to debt, and the equity method is used to account for financial services operations. The ratings are on CreditWatch with negative implications, the same as on Fiat. Because S&P views CNH as core to the Fiat Group, a positive or negative rating action on Fiat would result in the same action on CNH. If S&P ceases to view CNH as core to the Fiat Group, and if CNH's stand-alone financial profile fails to support the ratings, S&P could take a negative rating action. COMPTON PETROLEUM: S&P Gives Negative Outlook; Affirms 'B' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Calgary, Alberta-based Compton Petroleum Corp. to negative from stable. At the same time, Standard & Poor's affirmed its 'B' long-term corporate credit rating on the company, and its 'B-' senior unsecured debt rating on subsidiary Compton Petroleum Finance Corp. The '5' recovery rating on the senior unsecured debt is unchanged, indicating the expectation for modest (10%-30%) recovery in the event of payment default. "The outlook revision reflects our concern that although Compton plans to only spend within cash flow in 2009, this will likely lead to decreased production with no debt reduction, resulting in increased debt servicing costs and leverage per barrel and weakening the company's financial risk profile," said Standard & Poor's credit analyst Jamie Koutsoukis. "Furthermore, as the company's proved plus probable reserves decreased 20% year-over- year, Compton's credit facility could be reduced, limiting its available liquidity," Ms. Koutsoukis added. In S&P's opinion, the ratings on Compton reflect the company's high level of debt, its limited financial flexibility, its increasing operating cost profile, its inability to increase production despite a large resource base, and concerns' regarding the company's strategic direction as it looks to restructure its balance sheet. In contrast to these factors, S&P believes Compton's strong internal growth prospects and good resource base provide some credit strength. The negative outlook reflects S&P's expectation that although Compton will limit its spending to internal cash flow, it will be unable to sustain year-end 2008 production levels, so debt servicing costs per barrel will increase and the company's debt to cash flow metrics will deteriorate. Furthermore, although management has stated the current capital structure is leveraged, there remains uncertainty regarding how the company will address the issue, so its financial flexibility remains limited. A negative rating action is possible should Compton increase its debt beyond C$900 million as a result of spending more than cash flow. The rating does not have room for debt to increase much beyond S&P's expected C$900 million level for 2009. Conversely, an outlook revision to stable would depend on the company's ability to reduce debt levels; improve liquidity; and maintain debt-to-cash flow metrics, particularly its total debt-to-EBITDA ratio somewhere near 2.5x-3.0x. COMSTOCK HOMEBUILDING: May File for Bankruptcy Protection --------------------------------------------------------- Comstock Homebuilding Cos. Inc. has warned that it may have to file for bankruptcy protection. If Comstock Homebuilding fails to identify new sources of cash and cash flow and/or successfully modify its existing facilities, it will likely deplete its cash reserves and be forced to file for bankruptcy protection in the near future. There can be no assurances that in that event the Company would be able to reorganize through bankruptcy, and it might be forced to liquidate its assets. Comstock Homebuilding said that the greatest challenge it faces in the current real estate market is liquidity. As a result of the global credit crisis facing banks and other non-traditional lenders the Company has very limited ability to generate capital through borrowing. With demand slow and continued price erosion on our homes the spread between the net selling price of the Company's homes and the financing costs associated with the homes it sells has been compressed to the point where there is little or no cash flow being generated by sales activity. Comstock Homebuilding's stock price has been dramatically depressed and the use of its stock as currency at these trading prices would be impractical and would compromise the preservation of its carry- forward net operating losses. The combination of these and other liquidity constraints have forced Comstock Homebuilding to rethink the way it operates on a daily basis. A continued lack of adequate access to liquidity will force the Comstock Homebuilding to once again resize its operations and may result in the Company either filing for bankruptcy protection or being forced to liquidate. Failure to successfully negotiate renewals of and extensions to credit facilities would adversely affect the Company's liquidity. The Company's operations require significant capital, which may not continue to be available. If the Company's primary source of financing becomes unavailable or accelerated repayment is demanded, the Company may not be able to meet obligations and its ability to continue operating would be seriously compromised, and may force the Company into bankruptcy or liquidation. Both the Company and its subsidiaries have secured debt of approximately $21.9 million which matured prior to December 31, 2008, or has curtailment covenants and interest obligations during 2009 and beyond. Since the Company is the guarantor of a majority of its subsidiaries' debt, any significant failure to negotiate renewals and extensions to this debt would severely compromise the Company's liquidity and could jeopardize its ability to satisfy its capital requirements. The Company recently reported and cured loan covenant violations, may at some point negatively impact our ability to renew and extend its debt. At December 31, 2008, the Company had $6.0 million in unrestricted cash and $3.9 million in restricted cash. Included in the Company's restricted cash balance is $3.0 million on deposit with Wachovia securing an irrevocable letter of credit relating to a captive insurance program. The Company is working with the insurance provider to obtain a release of the letter of credit. The Company's access to working capital is very limited and its debt service obligations and operating costs for 2009 exceed its current cash reserves. Comstock Homebuilding's auditor, PricewaterhouseCoopers LLP, said that the Company has experienced declining market conditions and has significant liquidity concerns that raise substantial doubt about its ability to continue as a going concern. Reuters relates that the Company has chosen to default on the March 31, 2009, interest payment of about $218,000 due on its senior unsecured debt to JP Morgan Ventures, due to limited liquidity. As of December 31, 2008, Comstock Homebuilding reported $160,859,000 in assets, $130,111,000 in debts, and $30,525,000 in shareholders' equity. About Comstock Homebuilding Based in Reston, Viginia, Comstock Homebuilding Companies, Inc. (NasdaqGM: CHCI) -- http://www.comstockhomebuilding.com-- develops, builds and markets single-family homes, townhouses and condominiums in the Washington D.C., Raleigh, North Carolina and Atlanta, Georgia metropolitan markets. The company also provides certain management and administrative support services to certain related parties. * * * As reported in the Troubled Company Reporter on April 3, 2008, PricewaterhouseCoopers LLP raised substantial doubt about the ability of Comstock Homebuilding Companies, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed stated that the company has experienced declining market conditions and has significant debt maturing during 2008. The Troubled Company Reporter said on July 11, 2008, that Comstock has retained FTI Consulting Inc. as advisor to the company with respect to strategic and financial alternatives in the face of a prolonged real estate downturn. On January 29, 2009, Comstock Homebuilding Companies, Inc., and Comstock Penderbrook, L.C., a wholly owned subsidiary of the Company, entered into a forbearance agreement with Guggenheim Corporate Funding with respect to the $13.5 million outstanding under the company's secured Penderbrook project loan. The company had receive a notice of default from Guggenheim on August 22, 2008. In connection with the forbearance agreement the original maturity date of the loan was extended from February 22, 2010 to March 6, 2011. The terms of the forbearance agreement provide for additional incremental extensions until March 6, 2012, provided certain unit delivery requirement thresholds are met. CONSECO INC: BofA Loan Amended; Interest Rate Hiked to 7.5% ----------------------------------------------------------- Conseco, Inc., on March 30, 2009, entered into Amendment No. 2 to its Second Amended and Restated Credit Agreement with the lenders signatory thereto and Bank of America, N.A., as administrative agent. The changes made by Amendment No. 2 include, without limitation: * An increase in the debt to capital ratio through June 30, 2010 to 32.5%, returning to 30% thereafter; * A decrease in the interest coverage ratio to 1.5x through June 30, 2010, returning to 2.0x thereafter; * A decrease in the minimum risk based capital ratio to 200% through June 30, 2010, returning to 250% thereafter; * A decrease in the minimum level of statutory capital to $1.1 billion through June 30, 2010, returning to $1.27 billion thereafter; and * An increase in the annual interest rate payable by the Company to either LIBOR plus 4.00%, with a LIBOR floor of 2.50%, or a base rate plus 3.00%, with a base rate floor of 3.50%, plus in either case an additional 1% that will be added to the principal balance of the facility and will be payable at the facility's maturity date. As a result of the amendment, the Company's current interest rate on the $911.8 million outstanding under the credit facility increased from approximately 2.6% to 7.5%. The amendment also places additional restrictions on the Company's ability to incur certain additional indebtedness, among other restrictions. The amendment made no changes to the amount borrowed under the credit facility, to the principal repayment schedule or to the collateral pledged as security for the facility. A full-text copy of Amendment No. 2 is available at no charge at: http://researcharchives.com/t/s?3af3 About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. * * * As reported in the Troubled Company Reporter on Jan. 6, 2009, Fitch Ratings has downgraded the ratings assigned to Conseco Inc. The rating outlook on Conseco Inc. and its subsidiaries remains negative. Fitch downgraded these ratings: (i) issuer default rating to 'BB-' from 'BB'; (ii) senior secured bank credit facility to 'BB-' from 'BB+'; and (iii) senior unsecured debt to 'B' from 'BB-'. CREATIVE LOAFING: Court Denies Creditor's Plea to Take Control -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida has denied a motion by Atalaya Funding, Creative Loafing Inc.'s major creditor, to take control of the Debtor's weekly publications, Kristi E. Swartz at The Atlanta Journal-Constitution reports, citing the Company's owner and CEO Ben Eason. Court documents say that Creative Loafing's bankruptcy filing may have stemmed partly from a dispute with Atalaya Funding and BIA Digital Partners. The Atlanta Journal relates that Atalaya Funding and BIA Digital lent Creative Loafing about $40 million to pay down $15 million in debt and to acquire Washington City Paper and Chicago Reader in 2007. About Creative Loafing Headquartered in Tampa, Florida, Creative Loafing, Inc. -- http://www.creativeloafing.com/-- publishes newspapers and magazines. The company and eight of its affiliates filed for Chapter 11 protection on September 29, 2008 (Bankr. M.D. Fla. Lead Case No. 08-14939). Chad S. Bowen, Esq., and David S. Jennis, Esq., Jennis & Bowen, P.L., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of between $10 million and $50 million each. CROTCHED MOUNTAIN: Moody's Downgrades Issuer Rating to 'B2' ----------------------------------------------------------- Moody's Investors Service has downgraded Crotched Mountain Rehabilitation Center's issuer rating to B2 from B1. The rating is removed from Watchlist and the outlook is negative. The downgrade addresses the continued decline in liquidity through seven months of fiscal year 2009 and risks associated with its swap and letter of credit agreement. The issuer rating reflects the unsecured general obligation characteristics of CMRC and is not a rating on the organization's bonds. Interest Rate Derivatives: CMRC entered into a swap agreement in conjunction with the issuance of the Series 2006 bonds whereby it pays a fixed rate of 3.776% and the variable component is set at 62% of LIBOR-BBA+0.34% with a notional amount of $30.7 million. The counterparty is RBC Capital Markets and the swap terminates on January 1, 2037. As of March 26, 2009, the mark to market valuation on the swap was negative $5.7 million and CMRC was required to post collateral in the amount of $5.7 million. The swap agreement also includes an additional termination event whereby if the underlying, unenhanced rating of the organization falls below Baa3 the counterparty can terminate the agreement and CMRC would be required to pay the fair market value. Moody's has incorporated the risks of the swap in the B2 issuer rating. Challenges * History of significant operating losses with operating margins in the negative double digit range which has deteriorated further in recent fiscal years. The organization has historically relied on its foundation to help offset losses. * Liquidity has declined steadily since FY 2002 and the decline has been exacerbated in FY 2008 and through October 31, 2008, due to the current investment market environment. At FYE 2008, unrestricted cash had declined to $18.8 million (115 days cash on hand) from $27.0 million (185 days cash on hand) at FYE 2007. Liquidity has continued to decline through January 31, 2009, to $10.9 million (74.2 days cash on hand) due to continued investment losses, a collateral posting requirement for its swap agreement, and upfront payroll and debt service requirements. The Crotched Mountain Foundation is 55% invested in equities and the remainder in fixed income and cash. Strengths * Niche provider of rehabilitation, education, residential, and care management services for physically and developmentally challenged children and adults. * CMRC received significant rate increases from Medicaid (50% increase) and has implemented several cost reduction measures which has led to significant improvements in operating results through seven months of fiscal year 2009 with an operating margin of -8.0% and operating cash flow margin of 0.4% compared to an operating margin of -19.4% and operating cash flow margin of -11.0% through the same period last year Recent Developments/Results Through seven months of FY 2009, operations at CMRC has dramatically improved with an operating deficit of $2.2 million (- 8.0% operating margin) and operating cash flow of $109 thousand (0.4% operating margin) compared to an operating deficit of $5.5million (-19.4% operating margin) and negative cash flow of $3.1 million (-11.0% operating cash flow margin) through the same period last year. The improvement in performance was due in part, to a 50% rate increase from the state Medicaid program as well rate increases from the New Hampshire Department of Education. In addition, various expense reduction measures have been implemented including a reduction of 107 FTEs (as of February 28, 2009) and expense savings in various non personnel areas. With help from an outside consultant, management is taking steps to further reduce costs by an additional $1 million and projects by fiscal year end 2009, CMRC will record an operating deficit of $1.0 million (-5.7% operating margin) and operating cash flow of $392 thousand (2.2% operating cash flow margin). By FY 2010, management expects to reach break even operating performance. In order for CMRC to reach break even operating performance by 2010, management plans on shifting its current payor mix to include more commercially insured patients with a focus on Anthem, the largest insurer in the state with whom CMRC just signed a new contract. CMRC balance sheet has historically benefited from the support of the Crotched Mountain Foundation and is a key credit strength. However, CMF's unrestricted cash balance has been declining for the last several years and significantly deteriorated in FY 2008. At fiscal year end 2008, the consolidated organization's unrestricted cash balance was at $18.7 million (117.0 days cash on hand) compared to $27.0 million (184.2 days cash on hand) at FYE 2007. The decline in unrestricted cash and investments was attributed to operating losses, investment losses, and a spike in accounts receivables which increased to 84.4 days in FY 2008 from 57.7 days in FY 2007. Management attributed the increase in AR days to a loss of experienced personnel. With the decline in liquidity, cash to debt has declined to 59.6% in FY 2008 from 85.0% in FY 2007. As of January 31, 2009, unrestricted cash balance has continued to decline to $10.9 million (74 days cash on hand) due to further investment losses; $5.1 million collateral posting requirement for the swap outstanding with RBC Capital Markets; and upfront payroll and debt service requirements which have further reduced cash to debt to 59.6%. Given the significant decline in unrestricted liquidity, CMRC may run the risk of not being able to meet its obligations if Allied Irish Bank, its letter of credit provider for its Series 2006 bonds, were to accelerate payments under its Reimbursement Agreement with CMRC. The Letter of Credit provider has the right to accelerate payment from the obligor if there is a failed remarketing and the bonds become bank bonds for 30 days. Given recent market disruptions, a failed remarketing is plausible. In addition, the Letter of Credit agreement includes a Material Adverse Effect clause as an event of default and several other covenants which CMRC is currently not 100% in compliance with. At the request of AIB for CMRC to reduce outstanding long term debt, management has proposed a plan with AIB whereby CMRC will pay $10 million of principal by 2011 via cash from operations, the sale of various pieces of real estate and the sale of a conservation easement on 1,165 acres of forest land to the U.S. Forest Legacy Program. Management has also put in a request to the state for $2 million in federal stimulus monies to help pay off a portion of the bonds. CMRC has garnered $2.75 million from selling conservation easements to the U.S. Forest Service with payment expected within the current calendar year. Given current market conditions, management may face challenges in selling its properties at the projected price as well generating the necessary cash flow, especially given the organization's historical operating performance. If this plan is successfully executed, the organization's debt load will decline but its liquidity position will remain at risk of further declines, especially given current market conditions and investment allocation, which is currently 55% invested in equities. CMRC continues to maintain its niche role as a provider of rehabilitative, educational, and residential services in the New Hampshire and New England area. CMRC provides four key areas of service including its school, residential, brain injury and children's hospital programs. Census levels continue to remain stable with 123 students enrolled at the school of which 93 are part of one of the various residential programs and the remainder are commuting students. The brain injury and children's hospital each has 30 beds and operates at 90% capacity. CMRC's key challenge continues to be matching clients with appropriate services and effectively predicting availability of beds, not competition from other providers. Outlook The negative outlook reflects Moody's concerns regarding the declining unrestricted cash position of the consolidated entity (including CMF) and the risks associated with its swap and letter of credit agreement. What could change the rating -- UP Significant improvement in liquidity; reworked capital structure that reduces short-term liquidity risks; significant improvement in operations that is demonstrated and sustainable; proven ability to retire $10 million of debt by 2011 What could change the rating -- DOWN Further decline in unrestricted cash balances; termination of the swap or acceleration of principal due under the letter of credit agreement Key Indicators Assumptions & Adjustments: -- Based on financial statements for Crotched Mountain Foundation and Affiliates -- First number reflects audit year ended June 30, 2007 -- Second number reflects audit year ended June 30, 2008 -- Investment returns normalized at 6% unless otherwise noted * Total operating revenues: $46.4 million; $50.9 million * Moody's-adjusted net revenue available for debt service: -$4.9 million; -$1.3 million * Total debt outstanding: $31.8 million; $31.5 million * Maximum annual debt service: $2.0 million; $2.0 million * Moody's-adjusted MADS Coverage with normalized investment income: -2.45 times; -0.64 times * Debt-to-cash flow: -5.3 times; -11.5 times * Days cash on hand: 185.2 days; 117.0 days * Cash-to-debt: 85.0%; 59.6% * Operating margin: -21.0%; -20.4% * Operating cash flow margin: -13.0%; -12.1% The last rating action was on December 24, 2008, when the issuer rating of Crotched Mountain Rehabilitation Center was downgraded to B1 from Baa3 and remained on Watchlist for downgrade DALLAS WASTE DISPOSAL: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Dallas Waste Disposal & Recycling, Inc. 3303 Pluto Street Dallas, TX 75212 Bankruptcy Case No.: 09-31675 Chapter 11 Petition Date: March 23, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Mark I. Agee, Esq. Mark Ian Agee, Attorney at Law 5401 N. Central Expressway, Suite 220 Dallas, TX 75205 Tel: (214) 320-0079 Fax: (214) 320-2966 Email: dallasbankruptcylawyer@gmail.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 20 largest unsecured creditors together with its petition. The petition was signed by Richard Szarkowski, president of the Company. DBSI INC: Court Asks U.S. Trustee to Mull on 2 Separate Committees ------------------------------------------------------------------ Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware wrote a letter asking the United States Trustee for Region 3 to consider seeking an order to dissolve the existing creditors committee of DBSI Inc., and create two separate committees, one representing claimants and the other representing TIC owners. Judge Walsh noted that DBSI's and its related entities' business falls into two separate groups: (1) the TIC properties with a DBSI entity acting as the seller of the property and another DBSI entity being the master lessee; and (2) the DBSI entities not involved in the TIC operations but engaged in owning and operating real estate projects. According to the Debtors, the Non-TIC Entities includes "certain Debtors and Non-Debtor Affiliates [who] are owners and developers of approximately 79 parcels of real property, which range in size and character from a single lot improved by one building to hundreds of acres of unimproved land." Funds to purchase and develop these properties were raised in part from investors. According to the Debtors, these Noteholders hold general unsecured claims against DBSI Notes Affiliates and DBSI Notes Affiliates. Among disputes between the TIC Debtors and the TIC owners, there is a sharp conflict between the TIC Debtors and the TIC owners as to whether certain "accountable reserves" constitute funds dedicated to specified uses and for which the appropriate DBSI entity is accountable to the TIC owners. The position of the TIC owners is reflected in hundreds of letters that I have received from TIC owners complaining about the TIC Debtors' treatment of the "accountable reserves." In contrast, the TIC Debtors' position is that the "accountable reserves" is a liability on the balance sheet of the DBSI master lessee and any assets that reflect that liability were paid to the selling DBSI entity and are freely available to that DBSI entity without restriction as to disposition. In short, the TIC Debtors take the position that the "accountable reserves" represent merely general unsecured claims by the TIC owners. "In their letters to me, many of the TIC owners attach excerpts from DBSI communications and documents in support of the position that the "accountable reserves" constitute some type of escrow or trust funds to which they are now entitled to as result of the termination of the master leases," Judge Walsh said. "Given this apparent conflict, I question whether the present creditors committee can represent both groups," Judge Walsh stated, noting also of an earlier concern of his that the composition of the Committee may be unbalanced. Judge Walsh also said that given his view that there appears to be a conflict between the TIC owners and the interest of the Noteholders (and other general unsecured claimants) in the Non-TIC Entities, he is concerned that, given Foley & Lardner's role in the prepetition promotion of one or more of the TIC ventures, its role in now representing the estates may be compromised. Meanwhile, as reported by the TCR on March 19, the State of Idaho's Department of Finance has won approval for a court- appointed examiner in the closely watched bankruptcy proceedings of DBSI, Inc. Judge Walsh has given the examiner the authority to probe $2 billion in allegedly fraudulent securities transactions made by DBSI. The scheme involved more than 12,000 investors and 270 properties throughout the country. Idaho, the state where DBSI is located, was joined by other states in the action, including Alabama, California, Colorado, Hawaii, Montana, Nevada, Oregon, Pennsylvania, South Carolina, Tennessee, and Washington. The Court on March 25 entered a formal order that directed the U.S. Trustee to appoint an examiner. According to the order, the examiner will (a) investigate the circumstances surrounding (i) any and all ofthe Debtors' inter-company transactions and transfers, (ii) any and all transactions and transfers between and among the Debtors and any non-debtor affiliates, and (iii) any and all transactions and transfers between and among the Debtors and any insiders, officers, directors and principals of the Debtors and; and (b) otherwise perfonn the duties of an examiner set forth in II U.S.C. Section 1106(a)(3) and 1106(a)(4) of the Bankruptcy Code. Accoridng to Judge Walsh, the examiner will meet with FTI Consulting, Inc., financial advisor to the Creditors' Committee and other parties-in-interest to discuss the examination. About DBSI Inc. Headquartered in Meridian, Idaho, DBSI Inc. -- http://www.dbsi.com -- operates a real estate company. On November 10, 2008, and other subsequent dates, DBSI and 167 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-12687). Lawyers at Young Conaway Stargatt & Taylor LLP represent the Debtors as counsel. The Official Committee of Unsecured Creditors tapped Greenberg Traurig, LLP as its bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' notice claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets and debts of between $100 million and $500 million each. DELPHI CORP: BeijingWest Deal "Most High Profile Acquisition Yet" ----------------------------------------------------------------- Katherine Yung at The Detroit Free Press calls the deal by two Chinese companies and the Chinese government to acquire Delphi Corp.'s brakes and suspension businesses the "most high-profile acquisition yet by the Chinese in the American auto industry." Free Press says Chinese auto supplier Tempo Group will acquire a 24% stake in the Delphi businesses while China's Capital Iron & Steel Co. will purchase a 51% stake. The Beijing government, Free Press relates, will own the remaining 25%. The Delphi businesses will be owned by a new Chinese company called Beijing West Industries Co. Ltd., based in Beijing, the report says. According to the Troubled Company Reporter on Wednesday, Delphi entered into an asset sale and purchase agreement with BeijingWest Industries Co., Ltd. Free Press says the buyer will pay $100 million in cash for the units, giving Delphi much needed capital. Delphi identified its brakes and suspension business as non-core product lines that no longer fit into the Company's future strategic framework and could become more profitable and competitive as stand-alone businesses or as part of another organization with the working capital to invest in and support these businesses. The deal is subject to approval by the U.S. Bankruptcy Court for the Southern District of New York. Delphi anticipates the sale closing during the fourth quarter of 2009. Free Press says the deal is expected to close by Nov. 1. "This is the right deal at the right time for this particular business," Rodney O'Neal, Delphi's CEO and president, said during a dinner Monday night to celebrate the signing of the deal, according to Free Press. Under the sale and purchase agreement, according to the TCR, BeijingWest will acquire machinery and equipment, intellectual property and certain real property. Assignment and assumption of certain customer and supplier contracts will also transfer to BeijingWest. Delphi will carefully manage the transition of the business, and the sale will be completed in coordination with Delphi's customers, employees, unions and other stakeholders. The business is comprised of approximately 3,000 employees, primarily located in Poland, China, Mexico, France and the United States. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DIAL-A-MATTRESS: Court Okays Six First-Day Motions -------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York has granted all six first-day motions proposed by 1800mattress.com, including approval for debtor-in-possession financing provided by Sleepy's, which is seeking to acquire the company through the Chapter 11 process. The voluntary Chapter 11 filing was made earlier this week by Dial-A-Mattress Operating Corp., the company's legal entity. The key motions granted include one for approval of procedures, dates and deadlines for sale of the company's assets, as well as issues surrounding assumption and assignment of contracts and leases. The other key motion granted by the court involved authorization to obtain post-petition financing and use of the collateral of existing lenders. "We are obviously pleased the court saw fit to grant all our first-day motions, including converting the involuntary Chapter 7 bankruptcy petition into the current Chapter 11 proceeding," said 1800mattress.com Chairman and CEO Napoleon Barragan. "Our call center, internet, chat and retail stores remain open and it is business as usual for our company. We have the right assortment and depth of inventory to satisfy our customers' needs and no one should see any disruption of service during this process," Mr. Barragan said. Last week, 1800mattress.com and Bethpage, NY-based Sleepy's, the largest mattress retailer in the country, disclosed their intention to combine their businesses to deliver greater quality, service and value to consumers. The deal is subject to approval of the bankruptcy court after completion of competitive bidding procedures routinely implemented in Chapter 11 cases. Founded in 1976, 1800mattress.com -- http://www.1800mattress.com- - is the leading national multi-channel (internet, chat, call center and showrooms) retailer of mattresses, box springs and bedding products. It features products by all major brands, including custom sizes, sofa beds, Murphy beds, futons, and adjustable and organic beds. As reported by Troubled Company Reporter on March 23, 2009, creditors filed a Chapter 7 petition for Dial-A-Mattress Operating Corp. in the U.S. Bankruptcy Court for the Eastern District of New York (Case No. 09-41966) on Tuesday. DIAL-A-MATTRESS: Franchisee Balks at Asset Sale to Sleepy's ----------------------------------------------------------- Consolidated Mattress Co., largest franchisee of Dial-a-Mattress Operating Corp. and affiliate 1-800-Mattress Corp., is objecting the sale of the Debtors' businesses to competitor Sleepy's LLC. As reported by the TCR on March 26, 2009, Sleepy's will acquire certain assets of Dial-A-Mattress' 1800mattress.com and invest in the growth of the brand as the nation's leading premiere telephone, Internet and chat retailer of bedding and sleep products. The parties plan to complete the sale through Chapter 11 of the U.S. Bankruptcy Code that will include a bidding process and ultimately a court ordered sale. 1800mattress.com is first electing to convert a pending involuntary Chapter 7 bankruptcy petition. The Debtors plan to sell those assets to Sleepy's for $2.1 million. According to Bloomberg's Bill Rochelle, Consolidated anticipates that Sleepy's will terminate agreements with franchisees, with results it says will be "absolutely devastating," the company said in court papers on March 25. Consolidated, the report adds, also takes issue with the sale agreement and the financing that Sleepy's will provide pending the purchase. The contract calls for Sleepy's to buy all the assets for $2.1 million. Among the assets will be a $2 million loan owed to Dial-a-Mattress by Napoleon Barragan, its founder and chief executive. Consolidated points out how the sale agreement forgives Mr. Barragan's loan over time, pays him $500,000 a year for 20 years, and gives him a $75,000 bonus up front. Consolidated is arguing that the consideration for the sale is going to Mr. Barragan and not to the company and its creditors. Consolidated describes a binding offer it gave to Dial-a-Mattress to provide more attractive financing than the $550,000 to come from Sleepy's. Consolidated says its financing would enable the company to operate longer before being forced to sell. Because Consolidated is a competitor with Sleepy's, it predicts the buyer won't take on the contracts with the franchisees, with the result that they "likely would be out of business immediately." Dial-a-Mattress has asked the Bankruptcy Court to approve sale procedures in which competing bids would be due April 13 for an April 16 auction. Founded in 1976, 1800mattress.com -- http://www.1800mattress.com// -- is the leading national multi-channel (internet, chat, call center and showrooms) retailer of mattresses, box springs and bedding products. It features products by all major brands, including custom sizes, sofa beds, Murphy beds, futons, and adjustable and organic beds. As reported by Troubled Company Reporter on March 23, 2009, creditors filed a Chapter 7 petition for Dial-A-Mattress Operating Corp. in the U.S. Bankruptcy Court for the Eastern District of New York (Case No. 09-41966). 1-800-Mattress Corp. and Dial-A- Mattress countered by filing voluntary chapter 11 petitions. DIAMOND GLASS: Wins Court Confirmation of Liquidating Plan ---------------------------------------------------------- Diamond Glass Inc., now known as DG Liquidation Corp., won confirmation of its proposed liquidating Chapter 11 plan following a sale of its business. The Plan is based upon a settlement that guaranteed at least $2.2 million for unsecured creditors, Bloomberg's Bill Rochelle said. Voting creditors gave overwhelming support to the Plan. Glassbytes.com said that about 200 of the 219 creditors were in favor of the plan, 19 voted to reject it, and 10 creditors abstained from the vote. According to Bloomberg, most of Diamond Glass's assets were sold to Belron SA of Luxemburg for $53.4 million plus assumed debt. Belron outbid at the June auction the secured creditor Guggenheim Corporate Funding LLC, which was willing to buy the business in exchange for $34 million in secured debt and specified assumed liabilities. Belron is the world's largest auto-glass replacement business. Headquartered in Kingston, Pennsylvania, Diamond Glass Inc. -- http://www.diamongtriumph.com/or http://www.daimondtriumphglass.com/-- provided automotive glass replacement and repair services. Founded in 1923, Diamond Glass had more than 1,600 employees as of March 15. The Company and its debtor-affiliate DT Subsidiary Corp., filed for Chapter 11 bankruptcy petition on April 1, 2008 (Bankr. D. Del. Lead Case No. 08-10601). Michael P. Richman, Esq., at Foley & Lardner LLP, and Donald J. Bowman Jr., Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. John T. Carrol, III, Esq., and Jeffrey R. Waxman, Esq., at Cozen O'Connor, represent the Committee in this case. When the Debtors filed for bankruptcy protection, they listed assets of between $10 million and $50 million and debts of between $100 million and $500 million. DREIER LLP: Receiver Recovers $100-Mil. from Firm's Founder ----------------------------------------------------------- The receiver who took over the assets of Marc Dreier reported to the court that he recovered more than $100 million, Bloomberg's Bill Rochelle said. The receiver's report, Mr. Rochelle added, said Dreier sold more than $700 million in bogus promissory notes to 13 hedge funds. Bloomberg previously reported that Mr. Dreier pleaded not guilty to a charge that he laundered $700 million as part of an alleged scheme to sell phony promissory notes. The money-laundering charge was added to the criminal case against Mr. Dreier on March 17. Bob Van Voris of Bloomoberg relates that Mr. Dreier previously pleaded not guilty to conspiracy, securities fraud and wire fraud. U.S. prosecutors claim Mr. Dreier sold more than $700 million in phony notes to at least 13 hedge funds and three individuals. Source says that in a hearing in federal court in New York, U.S. District Judge Jed Rakoff set a June 15 trial date in the case. Dreier's lawyer, Gerald Shargel, has said he expects his client to plead guilty before trial. Assistant U.S. Attorney Jonathan Streeter told Judge Rakoff that prosecutors want to sell Dreier's luxury East Side Manhattan apartment as soon as possible, to preserve assets for his victims. According to the report, Mr. Streeter said the apartment, where Dreier is confined and watched around the clock by armed guards, costs as much as $35,000 a month in mortgage interest and condominium fees. According to the report, Judge Rakoff said he will decide the issue, if the parties can't agree, after both sides file briefs on the issue. Prosecutors Identify Assets to Be Seized According to Bill Rochelle, prosecutors who indicted Mr. Dreier on charges of embezzlement and fraud wrote a letter to the Bankruptcy Court to explain what assets they might confiscate in their criminal forfeiture action and what property they would allow the bankruptcy trustees to administer. The report relates that the government said: -- the trustees for Mr. Drier and the law firm he founded can have the assets they recover and may distribute the proceeds of assets they sell. -- the trustees may have accounts receivable they collect and the fruits of lawsuits. About Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier has been charged by the U.S. government for conspiracy, securities fraud and wire fraud before the U.S. District Court for the Southern District of New York (Manhattan) (Case No. 09-cr-00085-JSR). Dreier LLP filed for Chapter 11 on Dec. 16, 2008 (Bankr. S. D. N.Y., Case No. 08-15051). Judge Robert E. Gerber handles the case. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, has been retained as counsel. The Debtor listed assets between $100 million to $500 million, and debts between $10 million to $50 million in its filing. Wachovia Bank National Association, Sheila M. Gowan as trustee for Chapter 11 estate of Dreier LLP, and Steven J. Reisman as post- confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that sent Mr. Dreier to bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D. N.Y., Case No. 09-10371). DYNAMIC DECISIONS: Hedge Fund May Be Taken Over by Liquidators -------------------------------------------------------------- After investors accused the manager of Dynamic Decisions Capital Management Ltd. of "gross mismanagement and misfeasance", a Cayman Islands court may decide to put the company's main hedge fund under the protection of an outside firm, Saijel Kishan of Bloomberg reports, citing people familiar with the case. Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising asset prices and participate substantially in profits from money invested. According to the report, the Grand Court of the Cayman Islands is set to consider a petition for a provisional liquidator to safeguard DD Growth Premium Master Fund, said the people, who asked not to be identified because they're not authorized to discuss the case. Bloomberg states that according to the filing, Dynamic Decisions founder Alberto Micalizzi said on a March 13 conference call that the fund had "substantial" losses last year and that assets may have fallen to as low as $20 million, excluding illiquid investments, from $550 million at the end of 2008. The report points out that in the Cayman Islands, which are British territories, investors can seek a provisional liquidator to protect a fund's assets, according to the U.K. government's Insolvency Service. Once appointed, the provisional liquidator investigates the business to discover, protect and recover assets and produces a report to the court, which then decides whether to liquidate. Bloomberg says that the March 23 petition was submitted by Zolfo Cooper, a restructuring firm appointed to oversee two so-called feeder funds set up to invest in the Cayman-incorporated master fund. Those funds were put under Zolfo Cooper's control at the request of investors Strathmore Capital LLP, based in London, and Cadogan Management LLC of New York. Dynamic Decisions suspended investor withdrawals and Mr. Micalizzi resigned from the board of the master fund to avoid conflicts of interests, according to a Feb. 27 letter to clients of one of the feeder funds, which are separate pools that channel money into the master fund. EDDIE BAUER: S&P Affirms Corporate Credit Rating at 'CCC' --------------------------------------------------------- Standard & Poor's Ratings Services said it revised the recovery rating on the secured debt of Eddie Bauer Holdings Inc. to '4' from '3' as a result of weaker prospects for recovery in the event of a payment default. The '4' recovery rating indicates expectations for average (30%-50%) recovery in the event of payment default. Concurrently, Standard & Poor's affirmed the Bellevue, Washington-based company's debt ratings, including the 'CCC' corporate credit rating. The outlook is negative. "We are concerned with Eddie Bauer's slim expected EBITDA cushion over financial covenants as of the fourth quarter of 2008," said Standard & Poor's credit analyst Diane Shand, "and S&P believes that a breach of covenants could occur within the next quarter." A breach of covenants would restrict the company's liquidity, increasing the likelihood of default. ENERGY FUTURE: Moody's Downgrades Corporate Family Rating to 'B2' ----------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating and Probability of Default Rating for Energy Future Holdings Corp from B2 to B3. EFH's speculative grade liquidity rating is confirmed at SGL-3, indicating adequate liquidity over the next four quarters. These rating actions conclude the review for possible downgrade that was initiated on February 24, 2009. The rating outlook is negative. EFH's rate-regulated transmission and distribution utility subsidiary, Oncor Electric Delivery Company LLC's Baa3 senior secured rating and stable rating outlook were not affected by these rating actions, primarily due to Moody's interpretation of the ring-fence type provisions associated with that entity. EFH's B3 Corporate Family Rating reflects a high business and operating risk profile, extreme amounts of leverage and limited financial flexibility. The company's ability to generate enough cash flow to service its approximately $37 billion of total consolidated debt (excluding Oncor debt) has been negatively impacted by current weak commodity prices and market heat rates and the prospect for a near-term recovery increasingly appears remote, at this time. "EFH's business model does not appear to be sustainable over the long-term horizon given its leverage, its debt service requirements, exposure to commodity prices and limited financial flexibility," said Jim Hempstead, Senior Vice President. "Current market conditions are well below the company's original expectations when they sized the debt associated with their leveraged buy-out, and it appears that EFH will increasingly find it challenging to earn their way out of the current adverse headwinds the company faces." Although the SGL-3 rating is confirmed, Moody's is somewhat concerned over Moody's expectations for the company to be materially free cash flow negative over the next twelve to eighteen months at both the consolidated EFH level as well as at the TCEH level, depending on various Moody's assumptions, which will need to be funded by additional draws on the existing liquidity facilities and cash balances. Although EFH has modest scheduled debt maturities over the next few years, there is the possibility of a sizeable IRS audit settlement payment that is expected to be made over the next 24 - 36 months, based on Moody's intrepretation of the 10K disclosure regarding their participation in settlement negotiations. As a result, EFH will increasingly need to rely on upstream cash distributions from both Oncor and TCEH to service its parent company obligations. EFH's estimated current annual cash uses at the parent level, which include parent-only cash interest expenses, corporate over-head and sponsor-management fees, are estimated to be approximately $0.5 billion. Over the near-term, Oncor is expected to contribute a material amount of cash in the form of up-stream dividends and tax payments, within the range of various regulatory restrictions, with the remainder expected to come from TCEH. TCEH's collateral commodity facility expires in December 2012, and is not expected to be renewed. The revolver expires in October 2013 and its senior secured term loan facilities expire in October 2014. Combined, the bank facilities create a material refinancing risk for EFH given current economic and financial conditions, and give rise to significant uncertainty surrounding the LBO-sponsor group's exit strategy plans. While still some distance in the future, these expiration dates are viewed negatively in light of recent market developments, which include a material transmission build-out program to facilitate incremental renewable energy supplies (Texas' CREZ program), thereby potentially depressing power prices in North Texas, and the prospects for some form of carbon dioxide emission regulations, which could potentially erode future margin expectations starting in 2012. The negative outlook reflects EFH's weak business fundamentals, extreme leverage, asset concentration, reduced liquidity availability and complex hedging strategies. Moody's believes additional negative rating actions are more likely than not over the next 12 to 18 months. Additional negative rating actions could materialize if, for example, the new coal-fired generation facilities fail to operate at expected capacity factors in a timely manner or if natural gas prices continue to decline from current levels, thereby impacting expected cash flow. Moody's incorporates a view that EFH will likely need to take some form of action that addresses its cash flow, liquidity and maturity challenges over the intermediate-term horizon, possibly through a debt for equity exchange, maturity extension or other transaction. Any such actions will likely be viewed by Moody's as a "distress exchange" although Moody's note that management has, to date, continued to assert that they are not contemplating any such action. The rating outlook could be changed to stable and rating upgrades could materialize if the market fundamentals in Texas (ERCOT) changed materially and lasted for a sustained period of time. Nevertheless, EFH appears to be in an extremely weak financial state and has very little financial flexibility, making the likelihood of rating upgrades remote. Moody's last rating action for EFH occurred on February 24, 2009, when the Corporate Family Rating was placed on review for possible downgrade. For more information, please refer to Moody's credit opinion under www.Moodys.com. EFH's ratings were assigned by evaluating factors believed to be relevant to its credit profile, such as i) the business risk and competitive position of EFH versus others within its industry or sector, ii) the capital structure and financial risk of EFH, iii) the projected performance of EFH over the near to intermediate term, and iv) EFH's history of achieving consistent operating performance and meeting financial plan goals. These attributes were compared against other issuers both within and outside of EFH's core peer group and EFH's ratings are believed to be comparable to ratings assigned to other issuers of similar credit risk. EFH is a large merchant generation company and retail electric provider operating in Texas. EFH is headquartered in Dallas, Texas. The ratings for EFH, TCEH and EFHC's individual securities were determined using Moody's Loss Given Default model. Based on EFH's B3 CFR and PDR, and based strictly on the priority of claims within those entities, the LGD model would suggest a rating of Caa2 for EFH's senior unsecured (guaranteed) debt. The Caa1 rating assigned reflects the fact that the holders of these securities also benefit from an upstream guarantee from Oncor's intermediate subsidiary holding company. Ratings changes are: Downgrades: Issuer: Brazos River Authority, Texas -- Revenue Bonds, Downgraded to Caa2 from Caa1 -- Senior Unsecured Revenue Bonds, Downgraded to Caa2 from Caa1 -- Senior Unsecured Revenue Bonds, Downgraded to Caa2 from Caa1 Issuer: Energy Future Holdings Corp. -- Probability of Default Rating, Downgraded to B3 from B2 -- Corporate Family Rating, Downgraded to B3 from B2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to a range of Caa1, LGD5, 78% from a range of B3, LGD4, 69% Issuer: Sabine River Authority, Texas -- Senior Unsecured Revenue Bonds, Downgraded to Caa2 from Caa1 Issuer: Texas Competitive Electric Holdings Co LLC -- Senior Secured Bank Credit Facility, Downgraded to B1 from Ba3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 from B3 -- Senior Unsecured Sec. Lease Oblig. Bond, Downgraded to Caa2 from Caa1 Issuer: Trinity River Authority, Texas -- Senior Unsecured Revenue Bonds, Downgraded to Caa2 from Caa1 Upgrades: Issuer: Brazos River Authority, Texas -- Senior Unsecured Revenue Bonds, Upgraded to LGD5, 83% from LGD5, 86% Issuer: Sabine River Authority, Texas -- Senior Unsecured Revenue Bonds, Upgraded to LGD5, 83% from LGD5, 86% Issuer: Texas Competitive Electric Holdings Co LLC -- Senior Secured Bank Credit Facility, Upgraded to LGD2, 27% from LGD2, 29% -- Senior Unsecured Regular Bond/Debenture, Upgraded to LGD5, 71% from LGD5, 76% -- Senior Unsecured Sec. Lease Oblig. Bond, Upgraded to LGD5, 83% from LGD6, 91% Issuer: Trinity River Authority, Texas -- Senior Unsecured Revenue Bonds, Upgraded to LGD5, 83% from LGD5, 86% Assignments: Issuer: Brazos River Authority, Texas -- Revenue Bonds, Assigned 83 - LGD5 -- Senior Unsecured Revenue Bonds, Assigned 83 - LGD5 Issuer: Sabine River Authority, Texas -- Senior Unsecured Revenue Bonds, Assigned a range of 83 - LGD5 to Caa2 Outlook Actions: Issuer: Energy Future Holdings Corp. -- Outlook, Changed To Negative From Rating Under Review Issuer: Texas Competitive Electric Holdings Co LLC -- Outlook, Changed To Negative From Rating Under Review Confirmations: Issuer: Energy Future Holdings Corp. -- Speculative Grade Liquidity Rating, Confirmed at SGL-3 Withdrawals: Issuer: TXU Corp. (Old) -- Senior Unsecured Conv./Exch. Bond/Debenture, Withdrawn, previously rated 95 - LGD6 -- Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated 95 - LGD6 ENTERCOM COMMUNICATIONS: S&P Withdraws 'B+' Corporate Rating ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its corporate credit and issue-level ratings on Bala Cynwyd, Pennsylvania-based Entercom Communications Corp. and subsidiary Entercom Radio LLC, including the 'B+' corporate credit rating, at the company's request. Ratings List Withdrawn Entercom Communications Corp. To From -- ---- Corporate Credit Rating NR B+/Stable/-- Entercom Radio LLC To From -- ---- Subordinated NR B- Recovery Rating NR 6 NR -- Not rated. FIRST BANK: Weiss Ratings Assigns "Very Weak" E- Rating ------------------------------------------------------- Weiss Ratings has assigned its E- rating to Calabasas, California- based First Bank of Beverly Hills. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." First Bank of Beverly Hills is not a member of the Federal Reserve, and is primarily regulated by the Federal Deposit Insurance Corporation. The institution was established on Jan. 1, 1979, and deposits have been insured by the FDIC since Dec. 23, 1980. First Bank of Beverly Hills maintains a Web site at http://www.fbbh.com/and has one branch in California. At Dec. 31, 2008, First Bank of Beverly Hills disclosed $1.5 billion in assets and $1.4 billion in liabilities in its regulatory filings. FIRSTENERGY CORP: Fitch Affirms Issuer Rating on 2 Units at 'BB+' ----------------------------------------------------------------- Fitch Ratings has affirmed the ratings of FirstEnergy Corp. and its Ohio subsidiaries, Ohio Edison, Cleveland Electric Illuminating Co., Toledo Edison, and OE subsidiary, Pennsylvania Power Co.: FE -- Issuer Default Rating at 'BBB'; -- Senior unsecured debt at 'BBB'; -- Commercial paper at 'F2'. OE -- IDR at 'BBB-'; -- Senior secured debt at 'BBB+'; -- Senior unsecured debt at 'BBB'; -- Short-term IDR at 'F2'. CEI -- IDR at 'BB+'; -- Senior secured debt at 'BBB'; -- Senior unsecured debt at 'BBB-'. TE -- IDR at 'BB+'; -- Senior unsecured debt at 'BBB-'. Penn Power -- IDR at 'BBB-'; -- Senior secured debt at 'BBB+'. The Rating Outlook for FE, OE and Penn Power is Stable. The Rating Outlook for CEI and TE is Positive. Approximately $7.2 billion of debt is affected by the rating action. The ratings affirmation for FE take into consideration the company's solid credit protection measures, improved operating performance of its generating fleet, stable cash flow generation from its electric transmission and distribution utilities, and relatively constructive regulatory environments in Ohio and New Jersey. FirstEnergy Solutions, FE's competitive generation subsidiary that houses its portfolio of low-cost, primarily coal- and nuclear-fueled, also supplies power to Metropolitan Edison and Pennsylvania Electric Co. to meet their provider of last resort obligation through 2010, adding a measure of predictability to FES' cash flows through 2010. FE rating concerns include higher costs associated with anticipated carbon restrictions and other environmental legislative/regulatory mandates, uncertainty regarding the post 2010 regulatory environment in Pennsylvania when subsidiaries Met- Ed and Penelec emerge from multi-year competitive transition plans. In 2009, scheduled maturities include $251 million of regulated subsidiary debt, a $300 million revolving credit facility shared by FE and FES and a $300 million term loan at FE Generation. Fitch expects the companies will be able to successfully renew these credit agreements. However, the current banking market is more costly, and conditions are more restrictive than in the past. FE manages its regulated operating subsidiaries as a system from an organizational, operational and liquidity perspective. And as such, the ratings of the utilities are closely aligned with that of the parent. In response to recessionary pressures and a restrictive credit environment, FE's management has reduced 2009 capital expenditures to approximately $1.6 billion from $2.1 billion in 2008. The lower capital program reflects changes in certain generating plants outage schedules, the delay in completion of the Fremont plant and adjustments to environmental programs. FE and its subsidiaries have sufficient liquidity with approximately $2.6 billion of available short-term capacity as of Jan. 31, 2009. The rating affirmations for OE, CEI, TE and Penn Power take into account stable credit protection measures at the utilities, as well as a constructive regulatory environment in Ohio. On March 25, 2009, the PUCO approved a supplemental agreement that establishes an electric security plan for FE's Ohio operating companies. The term of the ESP is from April 1, 2009, through May 31, 2011. Overall, Fitch expects the ESP to have a neutral impact on cash flows of the utilities as wholesale power prices have moderated along with declining energy prices. Highlights of the ESP include: a competitive bidding process to determine retail generation rates from June 1, 2009, through May 31, 2011, an option to phase in generation prices at the discretion of the PUCO, and the elimination of approximately $216 million of regulatory transition charges that otherwise would have been recovered in CEI customer bills through 2010. In addition, FE has committed to investing at least $615 million in capital investments to their distribution systems through Dec. 31, 2011, and to contributing $25 million in corporate funds over three years to support economic development and job retention programs in their service areas. FE will also continue its existing green resource program that allows customers to purchase renewable energy credits each month. The Ohio companies would further meet their renewable resource requirements under Ohio's new energy law by purchasing Renewable Energy Certificates through a separate Request for Proposal process, with costs recovered through a generation rider. Earlier in the year, the PUCO granted FE's Ohio companies an increase in distribution rates in the aggregate amount of $136.6 million, with new rates effective on Jan. 23, 2009, for OE and TE customers, and May 1, 2009, for CEI customers. Distribution rates will now be frozen through Dec. 31, 2011. The Stable Outlook for FE, OE and Penn Power reflects Fitch's expectation that the companies will continue to post financial results and credit protection measures commensurate with their respective rating categories, benefit from the relatively predictable nature of its regulated utility business, and maintain constructive relations in its regulatory jurisdictions. The Positive Outlooks for TE and CEI reflect the supportive credit outcome from the PUCO-approved ESP that should result in protection measures that are consistent with investment grade IDRs. FE is a diversified energy company whose subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies serve 4.5 million customers in Ohio, Pennsylvania and New Jersey; and its generation subsidiaries own or operate nearly 14,000 MW of primarily coal-fired capacity, with the balance from nuclear, hydro and oil/natural gas sources. FORD MOTOR: Peter Horbury to Return to Volvo as Design VP --------------------------------------------------------- Kerry E. Grace at The Wall Street Journal reports that Ford Motor Co. said that Peter Horbury will return to the Company's Volvo unit as vice president of design from effective May 1. According to WSJ, Mr. Horbury will succeed Stephen Mattin, who left Volvo to pursue other opportunities. WSJ relates that Moray Callum, currently director of design for cars at Ford Americas, will take Mr. Horbury's place as executive director of Ford Americas design. Mr. Horbury was one of the people behind the new Lincoln designs and before that was behind some of the most successful Volvo designs, WSJ says, citing Ford Motor executive J Mays. According to the report, Mr. Horbury was appointed Volvo's design director in 1991. In 2002, Mr. Horbury became executive director for the Jaguar, Land Rover, Volvo, and Aston Martin design studios, the report states. Mr. Horbury joined Ford Americas in 2004, the report says. WSJ reports that Mr. Callum will be responsible for all Ford cars and trucks designed in the Americas, and will guide the design of Lincoln and Mercury products. Ford Motor has held preliminary talks with several parties interested in acquiring Volvo, WSJ relates. Ford Motor Settles Patent Disputes With LKQ Corporation A settlement agreement has been reached between Ford Motor and LKQ Corporation in litigation filed by Ford Motor to protect its design patents on genuine Ford Motor collision parts. The settlement provides that LKQ will not challenge the validity and enforceability of Ford Motor's design patents during the term of the agreement. The settlement ends two legal actions: -- the first involving replacement collision parts for Ford's F-150 pickup truck, which had advanced to the Federal Circuit Court of Appeals; and -- the second involving replacement collision parts for the Ford Mustang, which was before the US International Trade Commission. Details about the agreement are confidential and will not be disclosed. "The settlement protects U.S. jobs and provides consumers with choices when repairing their vehicle," said Darryl Hazel, president, Ford Customer Service Division (FCSD). Mr. Hazel added that the settlement will benefit both companies and their customers in these ways: -- Ford Motor's enormous Intellectual Property investment is protected. -- Ford Motor will continue its U.S. investment, especially in Southeast Michigan, to design, engineer and produce genuine Ford Motor collision parts for sale through its U.S. dealer network. -- LKQ will be the only distributor of non-Original Equipment aftermarket copies of genuine Ford Motor collision parts protected by design patents. LKQ will pay Ford Motor a royalty for each such part sold during the agreement's term, which extends through September 30, 2011, subject to renewal upon mutual agreement of Ford Motor and LKQ. -- Competition in the market will continue by ensuring consumers have the right to choose between Original Equipment and non-OE aftermarket parts. -- Ford Motor and LKQ will work together to stop infringement of Ford Motor's design patents. Mr. Hazel stressed that the settlement does not endorse the quality or use of non-Original Equipment aftermarket replacement parts sold by LKQ Corporation. FCSD and LKQ will continue to compete vigorously. "The agreement we reached is beneficial to both Ford and LKQ," said Joseph Holsten, President and Chief Executive Officer of LKQ. "As the sole distributor of new non-Original Equipment aftermarket parts protected by Ford design patents, we will have the sole right to sell these parts in the United States for all of Ford's models." 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: To Lose Competitive Edge if GM, Chrysler Plans Succeed ------------------------------------------------------------------ If President Barack Obama is successful in slimming down General Motors Corp. with lower labor costs, debt and dealers, Keith Naughton of Bloomberg says Ford Motor Co., the only U.S. automaker not taking federal aid, could lose its competitive edge. According to the report, President Obama gave GM 60 days to come up with a new strategy to cut costs with its union, slash debt with bondholders and reduce dealers and brands. If GM does all that, it may have significantly lower costs than Ford, said auto analyst John Wolkonowicz of IHS Global Insight. Ford has been viewed by analysts and investors as the healthiest among the Detroit Three. Source says tt is the only U.S. automaker to secure concessions from the United Auto Workers union, which Ford said will get its labor costs competitive with Toyota Motor Corp.'s by 2011. It also is making progress in reducing $25.8 billion in debt by as much as 44%. Now, report states President Obama is asking GM to go beyond the gains Ford has made in labor costs and debt reduction. The administration has raised the prospect of putting GM through a so- called quick rinse bankruptcy of as few as 30 days so that it can tear up contracts with car dealers to reduce a glut of stores and brands. 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. FRANK & CAMILLE'S: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Frank & Camille's Keyboard Center of West 57th Street, Inc. f/d/b/a Frank & Camille's Fine Pianos 29 West 57th Street New York, NY 10019 Bankruptcy Case No.: 09-11331 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Piano Rotation and Replacement 09-11332 Distributors of Gre Frank & Camille's Keyboard 09-11333 Center of White Pl Frank & Camille's Keyboard 09-11334 Center of Paramus Chapter 11 Petition Date: March 23, 2009 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Gary C. Fischoff, Esq. Fischoff & Associates 600 Old Country Road, Suite 410 Garden City, NY 11530 Tel: (516) 228-4255 Fax: (516) 228-4278 Email: gfischoff@sfbblaw.com Total Assets: $123,897.83 Total Debts: $4,944,617.00 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nysb09-11331.pdf The petition was signed by Frank Sicari, president of the Company. GENCORP INC: S&P Junks Corporate Credit Rating From 'B+' -------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its ratings on Sacramento-based GenCorp Inc., including lowering the corporate credit rating to 'CCC+' from 'B+'. The outlook is developing. "The downgrade reflects significant uncertainty about GenCorp's ability to pay off or refinance $125 million of convertible notes if put to the company in January 2010," said Standard & Poor's credit analyst Christopher DeNicolo. As of Feb. 28, 2009, the firm had $80 million of cash and an undrawn $80 million revolving credit facility. However, the revolver cannot be used to repay the notes and the credit facility will have to be amended, likely resulting in much higher interest costs. "In addition," added Mr. DeNicolo, "the current trading price of the notes-around 70 cents on the dollar as of the date of this report-increases the likelihood that the company could enter into a distressed exchange to address the refinancing." GENERAL MOTORS: Various Parties Say Bankruptcy Inevitable --------------------------------------------------------- The quick and surgical bankruptcy option that was said possible when President Barack Obama declared that the viability plans of General Motors Corp. and Chrysler LLC insufficient now appears to be inevitable, FOXNews.com reports, citing members of Congress and other sources. As reported by the Troubled Company Reporter on March 31, 2009, the Obama administration was considering a plan to fix GM and Chrysler by dividing their "good" and "bad" assets and putting them into bankruptcy to eliminate their biggest problems. Members of Congress and unnamed sources said that President Obama is convinced that a negotiated bankruptcy is the best way for GM to restructure and become a competitive automaker, Bloomberg News reports. Citing lawmakers, Bloomberg relates that President Obama is also ready to let Chrysler face bankruptcy and be sold off piece-by-piece if it fails to form an alliance with Fiat SpA. FOXNews.com relates that a White House official quickly denied the report, saying, "The president's position has not changed. He remains committed to a significant restructuring without a bankruptcy if at all possible." A senior administration official also described the report as inaccurate, FOXNews.com states. Jeffrey McCracken at WSJ relates that applying the nation's bankruptcy laws to GM and Chrysler in a "surgical" way, will be messier than expected, especially due to the political stakes involved and the complexity of Detroit's problems. WSJ quoted investment bank Gordian Group President Peter Kaufman as saying, "The No. 1 risk is the parties can't agree to a consensual deal. The government takes away a lot of its leverage by admitting they won't let these companies liquidate." WSJ states that if GM and Chrysler pursue the administration's bankruptcy plan, the process most likely wouldn't involve a prepackaged bankruptcy. WSJ notes that the process is expected to resemble a prearranged filing, in which there is a less-formal agreement among the parties about concessions. Prearranged bankruptcy is riskier because constituents can back out if they think that the company's situation or operating environment has changed radically, WSJ says, citing bankruptcy experts. According to the report, state franchise laws give dealers strong protections if automakers violate their contracts, making it expensive to close them. "You could also have lawsuits between shareholders who will fight over the valuations of fixed assets or intangibles. The parties have the right to be heard, to prepare experts, to do depositions, to get on the schedule. That drags things out for weeks, for months. There are suppliers and dealers and other claimants we don't even know about," WSJ states, citing a person familiar with the matter. WSJ states that if GM goes bankruptcy, its path may resemble that of Italian dairy giant Parmalat SpA, which separated bad assets, old debt, and old claims from a "new" Parmalat that exited bankruptcy court in April 2005, about 15 months later. WSJ notes that many of the "bad" assets were eventually liquidated, but lawsuits between the firm, creditors, and lenders lingered until 2007. New CEO Lays Out Steps to Restructure GM John D. Stoll and Monica Langley at WSJ relates that GM CEO Frederick Henderson said that he is prepared to do whatever it takes to reorganize the company, including taking GM through bankruptcy court. According to Jamie LaReau at Automotive News, Mr. Henderson said that he is ready to meet the administration's mandate to restructure GM, even if it means going into bankruptcy. Mr. Henderson, according to Automotive News, said that he believes he can secure concessions from GM bondholders and the UAW without seeking Chapter 11 reorganization. Automotive News states that Mr. Henderson laid out these steps to restructure GM: -- Sell Saab, spin off Saturn and sell or close the Hummer Brand, -- Resume negotiations with bondholders and the UAW to reduce debt, and -- Likely close more than the 14 factories outlined in the Company's February 17 viability plan, in addition to the 12 plants GM shut down from 2000 to 2008. According to WSJ, White House officials said that Mr. Henderson will be GM's permanent CEO and they believe that he can deliver a satisfactory reorganization in a timely manner. The report says that this year, Mr. Henderson will have a salary of $1.3 million after taking the 30% pay cut that GM imposed on top management. The report states that Mr. Henderson won't be paid the $1 per year salary that Mr. Wagoner agreed to accept after the Company secured government financial aid. Mr. Henderson, WSJ relates, downplayed the need for an entirely new labor contract, and said that GM won't kill any more brands than the three reductions prescribed by former CEO Rick Wagoner. According to FOXNews.com, President Obama disclosed a "Warranty Commitment Program," where the government would cover 110% of an accounting reserve established to cover 125% of projected warranty costs for each new vehicle sold by GM and Chrysler. Kris Maher at WSJ states that bankruptcy would give Chrysler and GM the ability to rescind their United Auto Workers contracts and impose another wave of deep cuts in auto workers' wages and healthcare benefits, which would affect about 141,000 UAW members and hundreds of thousands of retirees. According to WSJ, UAW President Ron Gettelfinger has been saying that the union has already made substantial concessions compared with other stakeholders and won't make any more until bondholders and other creditors agree to givebacks to reduce GM and Chrysler debt. WSJ relates that Mr. Gettelfinger has already announced his retirement from the union. Germany Willing to Provide Financial Guarantees Christoph Rauwald at The Wall Street Journal reports that German Chancellor Angela Merkel said that her country's government was willing to provide financial guarantees to help General Motors Corp.'s Opel unit. According to WSJ, Opel and its British brand, Vauxhall, need $4.36 billion in aid to stay afloat. Ms. Merkel, WSJ says, pledged to help forge a viable plan for the GM's European operations. WSJ quoted Ms. Merkel as saying, "We need a contribution from GM.... But GM also needs a strong Opel." Finding a private investor for Opel remained crucial, WSJ states, citing Ms. Merkel. Opel's structure has to be simplified to attract possible partners and investors, WSJ relates, citing GM Europe President Carl-Peter Forster. According to WSJ, Mr. Forster said that GM has signaled that even if the Company reduces its stake to a minority shareholding, its ties to Opel will remain. "It has also been clarified that Opel will retain full access" to GM's technology patents, the report says, citing Mr. Forster. Annual Stockholders' Meeting on August 4 GM's Board of Directors disclosed that the Company's annual stockholders' meeting will be on August 4, 2009, in Detroit. The deadline for submitting stockholder proposals was on March 31, 2009, and the deadline for submitting stockholder board nominations is April 6, 2009. GM disclosed its 2008 executive compensation in its annual report on Form 10-K, filed on March 5. Stockholders of record as of June 12, 2009, are eligible to vote at the annual meeting; proxy materials will be mailed in June. 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. GEORGIA GULF: Fitch Downgrades Issuer Default Rating to 'C' ----------------------------------------------------------- Fitch Ratings has downgraded Georgia Gulf Corp.'s Issuer Default Rating to 'C' from 'CC' following its announcement of an exchange offer of $250 million in second lien notes for all of its senior unsecured and subordinated notes with a par amount of $794.6 million. A minimum threshold of the exchange offer is 95% of the aggregate outstanding senior unsecured and senior subordinated notes. Fitch has also downgraded Georgia Gulf's senior secured credit facility to 'B-/RR1' from 'B/RR1'. The downgrade reflects Fitch's view that the proposed transaction constitutes a Coercive Debt Exchange in accordance with Fitch's CDE Criteria published March 3, 2009, and that a CDE or other form of default is imminent. Fitch has also affirmed these ratings: -- Senior unsecured notes at 'C/RR6'; and -- Senior subordinated notes at 'C/RR6'. The Rating Outlook has been removed. Should the exchange prevail in full, interest expense would be reduced by about $38 million annually and debt net of cash would be reduced by $530 million. The exchange incorporates payment of accrued interest on the notes in cash. Fitch notes that $38 million in interest is due April 15, 2009 on the 9.5% senior unsecured notes due Oct. 15, 2014 and on the 10.75% senior subordinated notes due Oct. 15, 2016. Early exchange by April 14, 2009, is encouraged by additional consideration in the form of a pro rata share of 6.9 million shares of common stock representing 19.9% of existing equity. At Dec. 31, 2008, Georgia Gulf had cash on hand of roughly $90 million and $143 million available under its revolver. The company has obtained relief under its financial covenants through 2009, but the amendment requires that the company have at least $75 million of availability under its revolver at all times, or such lesser amount as shall be agreed upon by lenders holding a majority of the commitments under both the domestic and Canadian revolving credit facilities. In a prolonged downturn, Fitch believes the company will require its current revolver availability to provide adequate liquidity. Based in Atlanta, Georgia Gulf is a commodity chemicals producer. Its product portfolio includes VCM, PVC resin, vinyl compounds, cumene, acetone, phenol, window and door profiles and moldings as well as outdoor building products. Georgia Gulf earned approximately $174 million of EBITDA from continuing operations on sales of $2.9 billion in 2008. GLOBAL OUTREACH: Court Approves Kasen & Kasen as Counsel -------------------------------------------------------- The Hon. Donald H. Steckroth of the United States Bankruptcy Court for the District of New Jersey authorized Global Outreach S.A. to employ Kasen & Kasen its counsel. The firm will provide all services necessary to represent the Debtor in the Chapter 11 case. The firm received a prepetition retainer of $26,039. David A. Kasen, Esq., at Kasen & Kasen, charges $400 per hour while Francine S. Kasen bills $250.00 per hour for this engagement. To the best of the Debtor's knowledge, the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Morristown, New Jersey, Global Outreach, S.A. dba Global Outreach, Sociedad Anonima filed for Chapter 11 protection on March 12, 2009, (Bankr. Case No.: 09-15985). The Debtor listed estimated assets of $100 million to $500 million and estimated debts of $50 million to $100 million. GOLDCREST FARMS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Goldcrest Farms, Inc. 9551 New Hope Rd. Galt, CA 95632 Bankruptcy Case No.: 09-25001 Chapter 11 Petition Date: March 20, 2009 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Thomas Holman Debtor's Counsel: David C. Johnston, Esq. Gianelli & Associates P.O. Box 3212 Modesto, CA 95353-3212 Tel: (209) 521-6260 Fax: (209) 521-5791 Email: djohnston@gianelli-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 20 largest unsecured creditors together with its petition. The petition was signed by Bruce N. Goldsmith, President of the company. GOTTSCHALKS INC: GECC Seeking to Repossess Corporate Jet -------------------------------------------------------- As reported by the TCR on March 31, General Electric Capital Corp., won an order from a Delaware state court grounding a private jet used by Ritz Camera Centers Inc. GECC filed a suit to repossess the aircraft following missed payments by Ritz, owner of 800 camera stores that filed for Chapter 11. According to Bill Rochelle, GECC, for a second time in one week, is aiming to repossess a corporate jet from a bankrupt retailer. The report relates that following three months of missed payments, GECC filed papers in the U.S. Bankruptcy Court for the District of Delaware to repossess an aircraft from Gottschalks Inc. Gottschalks in its petition named GECC as the agent for secured lenders owed $73 million. About Gottschalks Inc. Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com-- is a regional department store chain, operating 58 department stores and three specialty apparel stores in six western states. Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., will serve as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts as of January 3, 2009. GOTTSCHALKS INC: Reorganization Fails, Seeks to Liquidate --------------------------------------------------------- Andrea Chang at Los Angeles Times reports that Gottschalks Inc. said that it is going out of business after failing to reorganize its operations under Chapter 11 bankruptcy. As reported by the Troubled Company Reporter on April 1, 2009, Gottschalks Inc. would have saved itself from liquidation after Shandong Commercial Group, a Chinese company with supermarkets and department stores, conveyed its intent to join the auction for Gottschalks' remaining stores. Shandong did not show up at the auction, leaving two liquidators as the official bids. Two groups of liquidators earlier submitted bids to conduct going-out- of business sales for Gottschalks stores. LA Times relates that Gottschalks' planned liquidation still needs the approval of the U.S. Bankruptcy Court for the District of Delaware. The liquidation sale could start as early as Thursday and is expected to be completed by July 15, according to LA Times. "Despite all our efforts at earnest negotiations, we were unable to reach an agreement with our creditors, lenders and bidders. Regrettably, liquidation is now the only path for our company. We are deeply disappointed with this outcome," LA Times quoted Gottschalks CEO Jim Famalette as saying. Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com-- is a regional department store chain, operating 58 department stores and three specialty apparel stores in six western states. Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., will serve as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts as of January 3, 2009. GOTTSCHALKS INC: To Begin Going Out of Business Sale Today ---------------------------------------------------------- After 105 years in business, renowned department store chain Gottschalks Inc. will conduct a court-ordered bankruptcy liquidation sale beginning April 2, 2009. The going out of business sale will include all 58 Gottschalks locations in California (38), Washington (7), Alaska (5), Oregon (5), Nevada (1) and Idaho (2). In what will be the most substantial sale in Gottschalks' extensive history, inventory valued at approximately $280 million will be completely liquidated at significant discounts. Customers will find tremendous savings on Gottschalk's wide selection of merchandise, which includes better to moderate fashion apparel for men, women, juniors and children; shoes, fine jewelry and accessories and select cosmetics. Gottschalks' large assortment of brand-names includes Calvin Klein, Dooney & Burke, Ralph Lauren, Izod, Tommy Hilfiger, Nautica and Levi Strauss, among many others. The liquidation sale will also include home furnishings such as china, house wares, and small electric appliances in brand names such as KitchenAid, Black & Decker and Keurig, as well as furniture and mattresses in America's top brands Simmons, Serta, Dreamwell, Tempur-pedic, and many more. Gottschalks' sale is being managed by a joint venture group of leading national retail liquidation firms, consisting of: Tiger Capital Group, LLC; Great American Group, LLC; SB Capital Group, LLC; and Hudson Capital Partners, LLC. Harvey Yellen, Chairman of Great American Group said, "For more than a century, Gottschalks has served as a leading shopping destination throughout the western region, known to customers for its selection, service and value. The liquidation sale will offer customers a great opportunity to purchase quality, brand-name merchandise at exceptional prices." Stephen Goldberger, Managing Member of Tiger Capital Group added, "This will be the most significant sale in Gottschalks long and storied history. Customers will find tremendous savings on store merchandise. Everything must be sold." In addition to store merchandise, the liquidation sale will also include store furnishings, trade fixtures and equipment throughout the chain. Upon completion of the sale, the 58 Gottschalks stores will be closed. About Gottschalks Inc. Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com-- is a regional department store chain, operating 58 department stores and three specialty apparel stores in six western states. Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., will serve as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts as of January 3, 2009. GREENBRIER HOTEL: Taps McGuirewoods LLP as Counsel -------------------------------------------------- Greenbrier Hotel Corporation and its debtor-affiliates ask the United States Bankruptcy Court for the Eastern District of Virginia for permission to employ McGuirewoods LLP as their counsel. The firm is expected to: a) advise the Debtors with respect to their powers and duties as debtors and debtors in possession in the continued management of their properties; b) advise and consult on the conduct of the Debtors' bankruptcy cases, including all of the legal and administrative requirements of operating in chapter 11; c) attend meetings and negotiate with representatives of creditors, Debtors' employees and other parties in interest; d) advise the Debtors in connection with any sales of assets or business combinations, including the negotiation of asset, stock purchase, merger or joint venture agreements, evaluating competing offers, drafting appropriate corporate documents with respect to the proposed sales, and counseling the Debtors in connection with the closing of such sales; e) advise the Debtors in connection with any debtor-in- possession and exit financing and cash collateral arrangements, and negotiating and drafting documents relating thereto, and providing advice and counsel with respect to any prepetition financing arrangements; f) advise the Debtors on matters relating to the evaluation of the assumption, rejection or assignment of unexpired leases and executory contracts; g) provide advice to the Debtors with respect to legal issues arising in or relating to the Debtors' ordinary course of business including attendance at senior management meetings, meetings with the Debtors' financial and turnaround advisors and meetings of the board of directors, and advice on employee, workers' compensation, employee benefits, executive compensation, tax, environmental, banking, insurance, securities, corporate, business operation, contracts, joint ventures, real property and press affairs and regulatory matters; h) take necessary action to protect and preserve the Debtors' estates, including the prosecution of actions and proceedings on their behalf, the defense of any actions and proceedings commenced against those estates, negotiations concerning all litigation in which the Debtors may be involved and objections to claims filed against the Debtors' estates; i) prepare on behalf of the Debtors motions, applications, answers, orders, reports and papers necessary to the administration of the Debtors' estates; j) negotiate and prepare on the Debtors' behalf chapter 11 bankruptcy plan(s), disclosure statement(s) and all related agreements and documents and taking any necessary action on behalf of the Debtors to obtain confirmation of such plan(s); k) attend meetings with third parties and participating in negotiations with respect to the above matters; l) appear before this Court, other courts, and the Office of the U.S. Trustee; m) meet and coordinate with other counsel and other professionals retained on behalf of the Debtors and approved by this Court; and n) perform all other necessary legal services and providing all other necessary legal advice to the Debtors in connection with these chapter 11 cases. The firm said it holds about $378,853.23 in retainer fee for services rendered and costs and expenses. The firm current hourly rates are: Designation Hourly Rate ----------- ----------- Partners $475-$715 Counsel $375-$450 Associates $295-$475 Legal Assistant $150-$255 Dion W. Hayes, Esq., partner of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Other than McGuirewoods, the Debtors are also asking the Court for permission to employ Protiviti Inc. as financial advisor, Dinsmore & Shohl LLP as special labor counsel, and Huddleston Bolen LLP as special corporate counsel. About Greenbrier Hotel Corporation Based in White Sulphur Springs, West Virginia, Greenbrier Hotel Corporation -- http://www.greenbrier.com-- fka CSX Hotels, Inc., The White Sulphur Springs Co. is a wholly owned subsidiary of The Greenbrier Resort and Management Corporation, which is wholly owned by CSX Corporation. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 19, 2009, (Bankr. E. D. Va. Lead Case No.: 09- 31703) Dion W. Hayes, Esq. and Patrick L. Hayden, Esq. at McGuireWoods LLP represent the Debtors in their restructuring efforts. The Debtors propose to employ Huddleston Bolen LLP as corporate counsel; Dinsmore & Shohl LLP as special labor counsel; Kurtzman Carson Consultants LLC as claims agent. The Debtors listed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. GULF COAST: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Gulf Coast Transport, Inc. 450 North Aston Drive Sunnyvale, TX 75182 Bankruptcy Case No.: 09-31896 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- GC Leasing Services, Inc. 09-31897 GC Logistics, Inc. 09-31898 Gulf Acquisitions, Inc. 09-31899 Type of Business: The Debtors provide transportation services. See http://www.gulfcoasttransport.com/ Chapter 11 Petition Date: March 31, 2009 Court: Northern District of Texas (Dallas) Debtor's Counsel: Mark A. Castillo, Esq. mcastillo@curtislaw.net Stephanie Diane Curtis, Esq. scurtis@curtislaw.net The Curtis Law Firm, PC 901 Main Street, Suite 6515 Dallas, TX 75202 Tel: (214) 752-2222 Fax: (214) 752-0709 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtors did not file a list of 20 largest unsecured creditors. The petition was signed by Steve Wooten, president and director. HALLWOOD ENERGY: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Hallwood Energy, L.P., and its affiliates filed with the U.S. Bankruptcy Court for the Northern District of Texas, their schedules of assets and liabilities, disclosing: Name of Debtor Assets Liabilities -------------- ----------- ------------ Hallwood Energy, L.P. $46,223,045 $164,453,597 Hallwood Petroleum, LLC $2,058,173 $126,648,541 Hallwood SWD, LLC $0 $15,000,000 HG II Management, LLC $0 $115,000,000 Hallwood Gathering, L.P. $15,294,994 $115,000,500 Hallwood Energy Management, LLC $0 $115,000,000 Copies of Hallwood Energy, et al.'s SALs are available at: http://bankrupt.com/misc/HallwoodEnergy.Schedules.pdf http://bankrupt.com/misc/HallwoodPetroleum.Schedules.pdf http://bankrupt.com/misc/HallwoodSWD.Schedules.pdf http://bankrupt.com/misc/HGIIManagement.Schedules.pdf http://bankrupt.com/misc/HallwoodGathering.Schedules.pdf http://bankrupt.com/misc/HallwoodEnergyManagement.Schedules.pdf The schedules of assets and liabilities filed by the Debtors are unaudited and remain subject to further review and verification by the Debtors. Subsequent information may result in material changes in financial and other data contained in the schedules. Based in Dallas, Hallwood Energy, L.P. -- http://www.hallwoodenergy.com/-- is an upstream energy corporation engaging in the exploration, acquisition, development and production of oil and gas properties. The company and five (5) of its debtor-affiliates filed separate petitions for Chapter 11 relief on March 1, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31253). Scott Mark DeWolf, Esq., and Kathleen M. Patrick, Esq., at Rochelle McCullough L.L.P., represent the Debtors as counsel. Brian A. Kilmer, Esq., at Okin Adams & Kilmer LLP, represents the Official Committee of Unsecured Creditors as counsel. The Debtors' business consultant and CRO is Blackhill Partners LLC. When the Debtors filed for Chapter 11 protection, they listed assets of between $50 million and $100 million, and debts of between $100 million and $500 million. HARVEST OIL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Harvest Oil and Gas, LLC 67201 Industry Lane Covington, LA 70433 Bankruptcy Case No.: 09-50397 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Saratoga Resources, Inc. 09-50398 The Harvest Group LLC 09-50399 Lobo Operating, Inc. 09-50400 Lobo Resources, Inc. 09-50401 Type of Business: The Debtors engage on acquisition, development and exploration of energy resources. See http://www.harvest-oil.com/ Chapter 11 Petition Date: March 31, 2009 Court: Western District of Louisiana (Lafayette/Opelousas) Debtor's Counsel: Robin B. Cheatham, Esq. cheathamrb@arlaw.com Adams & Reese LLP One Shell Square 701 Poydras Street, Suite 4500 New Orleans, LA 70139 Tel: (504) 581-3234 Fax: (504) 566-0210 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Axxis Drilling Inc. trade debt $1,654,087 1015 N. Cruse Avenue Broussard, LA 70518 Madere & Sons Marine Rental trade debt $317,975 37212 Hwy. 11 South Buras, LA 70041 Wise Well Intervention trade debt $316,482 Department 905 PO Box 4652 Houston, TX 77210-4652 Thomas Energy Services Inc. trade debt $280,153 Spirit Completion Fluids trade debt $235,626 Quality Energy Services trade debt $188,321 BJ Services Company trade debt $164,618 Tetra Applied Technologies trade debt $161,811 Jambon and Associates LLC trade debt $138,101 River Rental Tools trade debt $134,048 Precision Energy Services trade debt $132,509 Y&S Marine Inc. trade debt $124,687 Contractors Inc trade debt $124,476 C&D Production Specialist Co. trade debt $120,476 Trinity Petroleum Trust royalty $105,256 TK Towing Inc. trade debt $84,875 M&M Wireline & Offshore trade debt $80,164 Eagle Consulting LLC trade debt $78,301 Grand Isle Shipyard Inc. trade debt $71,126 Perf-O-Log Inc. trade debt $67,824 The petition was signed by Thomas F. Cooke, operating manager. HERTZ CORP: Wins Auction to Acquire Advantage Rent-A-Car for $33MM ------------------------------------------------------------------ Hertz Global Holdings, Inc. has won the right to purchase certain assets of Advantage Rent A Car which, according to company filings, generated full year 2008 revenues of about $146 million. The purchase price, subject to court approval, is approximately $33 million. The purchase agreement provides Hertz with the rights to purchase certain rights, trademarks and copyrights to use the Advantage brand name, Web site and phone numbers. In addition, the agreement provides Hertz with the option to have assigned to the Company certain leases, fixed assets, airport concession agreements and other agreements associated with roughly 20 locations that Advantage is or previously was operating. Hertz will continue operating the Advantage business at certain rental locations, and it will assess expansion opportunities. Specifically, Hertz will operate the Advantage brand in Salt Lake City, Phoenix, Denver, Tucson, Colorado Springs, San Antonio, Los Angeles, Seattle, Maui, Honolulu, San Diego, Reno, Burbank, Palm Springs, Orlando, Ft Meyers (4 Hotels, 1 additional location). Mark P. Frissora, Hertz's Chairman and Chief Executive Officer, commenting on the agreement, said, "We're pleased to have secured the purchase of Advantage Rent A Car, a popular brand for price- oriented customers at key U.S. leisure travel destinations. Underscoring our commitment to serve all segments of the leisure car rental market, the 20 Advantage locations, combined with our six Simply Wheelz locations and the Hertz brand nationwide, enables us to serve the wide range of service and price-oriented car rental customers in the United States." On December 8, 2008, the corporate entities that owned and operated Advantage Rent A Car each filed a voluntarily petition for relief under Chapter 11 of the United States Code in the United States Bankruptcy Court for the District of Minnesota. Two bidders participated in the Bankruptcy Court auction with Hertz winning the auction. As reported by the Troubled Company Reporter on March 5, 2009, Enterprise Rent-A-Car inked a deal to purchase certain assets of Advantage Rent-A-Car on Enterprise for $19 million. The Bankruptcy Court will hold a hearing April 3 to approve the Hertz bid. The transaction is targeted for completion on April 8, 2009. About the Enterprise Family of Companies Headquartered in St. Louis, the Enterprise family of companies operates Enterprise Rent-A-Car, National Car Rental, and Alamo Rent A Car at more than 8,000 rental locations in neighborhoods and at airports worldwide. Enterprise Rent-A-Car has more than 6,900 offices. Enterprise Rent-A-Car Company -- http://www.enterprise.com/car_rental/home.do-- is a privately held company serving customers in the U.S., Canada, Germany, Ireland, Puerto Rico, and the U.K. They are also the owners of the Vanguard Automotive Group, operator of National Car Rental and Alamo Rent A Car in North America. About Hertz Corp. The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc. (NYSE: HTZ), based in Park Ridge, New Jersey, is the world's largest general use car rental brand, operating from approximately 8,000 locations in 147 countries worldwide. Hertz also operates one of the world's largest equipment rental businesses, Hertz Equipment Rental Corporation, through more than 375 branches in the United States, Canada, France, Spain and China. About Advantage Rent A Car Advantage Rent A Car -- http://www.advantage.com-- is a car rental company with 50 locations in the U.S. and 130 international affiliate locations. It is privately held by Denny Hecker Family Ventures, with headquarter operations in Minneapolis. Advantage serves travel and leisure, lifestyle, business, government and insurance replacement rentals. The Hecker group of companies include automobile dealerships, leasing, daily automobile and motorcycle rental, commercial, and residential real estate development, aviation, hospitality, and technology. As reported by the Troubled Company Reporter on Dec. 10, 2008, Advantage Rent A Car filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Minnesota. HERTZ CORP: S&P Downgrades Long-Term Corp. Credit Rating to 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on car and equipment renter Hertz Corp., including lowering the long-term corporate credit rating to 'B' from 'BB-'. All ratings were removed from CreditWatch, where they were placed with negative implications on Dec. 22, 2008. The outlook is now negative. S&P also lowered its issue-level rating on the company's unsecured notes to 'CCC+' from 'B+'. At the same time, S&P revised the recovery rating on this debt to '6' from '5', indicating expectations of negligible (0%-10%) recovery of principal in the event of a payment default, based upon S&P's expectation that the current credit markets will continue to require higher collateralization for secured vehicle facilities, leaving less available for the unsecured lenders. Also, a shift by Hertz to a higher percentage of risk vehicles in its fleet, combined with a soft automotive retail market, suggests that unsecured recoveries would be lower in the event of a payment default. The rating actions are based on a weakening in the company's financial profile that began in 2008 and that S&P expects will continue through at least late 2009 primarily because of reduced demand for car and equipment rentals in addition to S&P's concerns regarding the company's approximately $6 billion of debt that matures through 2010. "We expect the company's earnings and cash flow to remain under pressure in 2009 as a result of reduced demand and the effect of a weak (albeit recently somewhat improved) used car market, which will likely result in continued higher-than-expected depreciation expense," said Standard & Poor's credit analyst Betsy Snyder. "In addition, S&P is concerned about the company's ability to refinance a significant portion of its $6 billion of debt that matures through 2010. If it appears that the company will be unsuccessful, S&P would likely lower the ratings further," the analyst continued. The ratings on Park Ridge, N.J.-based Hertz reflect an aggressive financial profile following its $14 billion leveraged acquisition in December 2005; the price-competitive and cyclical nature of on- airport car rentals and equipment rentals; its exposure to the troubled automobile manufacturing industry; and significant refinancing risk -- with $6 billion of debt maturities through 2010. Ratings also incorporate the company's position as the largest global car rental company and the strong cash flow its businesses generate. The rating incorporates S&P's expectation that Hertz's financial profile will remain under pressure through 2009 due to anticipated weaker earnings and cash flow. The negative outlook reflects refinancing risk. If it appears that Hertz will be unable to refinance a significant portion of its $6 billion in debt that matures through 2010, which could be due to a variety of reasons (including continued constrained credit markets and the ongoing negative effect from problems related to the auto manufacturers), S&P would likely lower ratings. However, if the company makes significant progress on refinancing its debt, S&P could revise the outlook to stable. While a bankruptcy of one or more of the auto manufacturers could cause some cash flow delays or further declines in used car values, these would not necessarily cause sufficient damage to result in a downgrade. If the company purchases a portion of its term loan at a discounted price through a tender offer, S&P would evaluate whether S&P considered this a distressed debt purchase, which could ultimately result in a downgrade to 'SD' (selective default), if completed. HSN INC: S&P Downgrades Corporate Credit Rating to 'BB-' -------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on television shopping network and catalog retailer HSN Inc. by one notch. The corporate credit rating was lowered to 'BB-' from 'BB', and the rating outlook is negative. "The downgrade is based on HSNi's weak performance in the fourth quarter and Standard & Poor's expectation that 2009 will continue to be difficult for HSNi with the U.S. economy searching for a bottom," said Standard & Poor's credit analyst Andy Liu. In the fourth quarter of 2008, HSNi's total revenues decreased 11% and EBITDA decreased 45%. The TV network, HSN, actually did fairly well when compared with its retailer peers, with a revenue decline of only 4%. However, Cornerstone, the company's catalog operation focusing on home furnishings and apparels, continues to struggle. Cornerstone accounted for about 31% of revenues in 2008. Revenue at the unit decreased 25% during the fourth quarter, and it generated a loss. The recession is compounding HSNi's effort to turn around Cornerstone; however, at this point, S&P don't believe that a turnaround is likely in 2009. The rating on HSNi reflects the company's inconsistent performance over the past several years, its declining profitability, and intense rivalry among retailers. High barriers to entry in TV shopping, moderate debt leverage, and positive discretionary cash flow are modest positives. For the 12 months ended Dec. 31, 2008, the company's EBITDA margin was 5.6%, down from 8% at the end of 2007. With U.S. consumer discretionary spending under pressure, HSNi increased its promotional activities in 2008, which lowered its EBITDA margin. A product mix shifted toward electronics and away from jewelry and fashion was also a contributing factor. To manage through difficult consumer demand conditions, HSNi has taken several steps to decrease its cost structure, including a workforce reduction of 250 and eliminating 2009 merit increases. Despite these steps, Standard & Poor's believes that profit margins will continue to be under pressure until the U.S. economy and Cornerstone show signs of stabilization. Lease-adjusted total debt to EBITDA and lease-adjusted EBITDA coverage of interest were 3.0x and 6.3x, respectively, at year-end 2008. Subsequent to year-end, HSNi paid down the $20 million outstanding balance on its revolving credit facility. Pro forma for the debt paydown, lease-adjusted total debt to EBITDA would have been 2.9x. HSN has a stated intention to maintain total debt to EBITDA (not adjusted for operating leases) at 2x to 3x, translating roughly to a range of between 2.5x and 3.5x when capitalizing operating leases. IDEARC INC: Chapter 11 Filing Cues S&P's Rating Cut to 'D' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating, as well as all issue-level ratings, on Idearc Inc. to 'D' following the company's announcement that it and its domestic subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the Northern District of Texas. The recovery rating on the company's senior secured credit facilities remains at '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for lenders upon emergence from bankruptcy protection. The recovery rating on the company's senior unsecured notes remains at '6', indicating S&P's expectation of negligible (0% to 10%) recovery for lenders upon emergence from bankruptcy protection. IDEARC INC: Moody's Cuts Default Rating to 'D' on Ch. 11 Filing --------------------------------------------------------------- Moody's Investors Service downgraded Idearc, Inc.'s Probability of Default rating to D from Caa3, the Corporate Family rating to Ca from Caa2, and associated debt ratings as detailed below. The downgrades follow Idearc's announcement on March 31, 2009 that it filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Under Idearc's agreement in principle with the agent bank and steering committee, the company's total debt will be reduced from approximately $9 billion to a pro forma level of $3 billion of secured debt. The rating outlook is stable, although Moody's plans to withdraw all ratings for the company over the near-term consistent with its business practice for companies operating under the purview of the bankruptcy courts wherein information flow typically becomes much more limited. Details of the rating action are: Ratings downgraded: * PDR -- to D from Caa3 * Corporate Family rating -- to Ca from Caa2 * $250 million revolving credit facility, due 2011 -- to Caa3, LGD4, 52% from B3, LGD2, 19% * $1,515 million term loan A, due 2013 -- to Caa3, LGD4, 52% from B3, LGD2, 19% * $4,679 million term loan B, due 2014 -- Caa3, LGD4, 52% from B3, LGD2, 19% * $2,850 million senior unsecured notes, due 2016 -- to C, LGD6, 94% from Ca, LGD5, 71% Outlook: * Outlook -- changed to stable from negative Idearc's SGL rating is unaffected by this rating action. Moody's last rating action on Idearc occurred on February 9, 2009, when it lowered the company's CFR to Caa2 and PDR to Caa3. Idearc's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and the competitive position of the company versus others in its industry, ii) the capital structure and the financial risk of the company, iii) the projected financial and operating performance of the company over the near-to-intermediate term, and iv) management's track record and tolerance of risk. These attributes were compared against other issuers both within and outside of Idearc's core industry and Idearc's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in DFW Airport, Texas, Idearc, Inc., is the second largest U.S. yellow pages publisher. The company reported sales of approximately $3.1 billion for the LTM period ended September 30, 2008. INTERMET CORP: Court Approves Incentive Payments to 7 Supervisors ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved the payment by Intermet Corporation, et al., of incentive awards to seven non-management employees at its Fort Worth, Texas headquarters. In papers filed with the Court, the Debtors related that the Fort Worth employees, each of which is a non-insider, play an important role in completing critical corporate functions and that the proposed incentive payments are designed to motivate the Fort Worth employees to remain with Interment at least through the end of June 2009, a time period which Intermet says is crucial to the success of these cases. As reported in the Troubled Company Reporter on March 24, 2009, the official committee of unsecured creditors of Intermet Corp. balked at the proposed payment of approximately $150,000 in retention bonuses to seven supervisors at the Debtors' headquarters in Fort Worth. According to the Bloomberg report, the Creditors Committee says that the bonuses should not be awarded to select managers at a time when the company is in "extreme financial distress" and workers had their retiree benefits terminated. Intermet's accommodation agreement with customers require certain milestones. If the Debtor fails to achieve these requirements, it will be in default of its obligations under the agreement and the customers may terminate the pricing and other accommodations necessary to its continued survival: Date Item Status 10/31/08 Obtain Financing through 6/30/09 Achieved 03/31/09 Elimination or significant reduction in legacy costs In Progress In Progress 04/30/09 File a reorganization plan, execute a merger or asset purchase agreement In Progress 06/__/09 Achieve 50% increase in capacity utilization In Progress 06/30/09 Confirmed plan of reorganization, close merger or asset purchase transaction In Progress "If Intermet can neither submit a plan of reorganization nor consummate an asset purchase agreement by April 30, 2009, it could be forced into a liquidation and cease all business operations," says the Company's counsel, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP. Intermet has requested authority to (ii) reject under Section 1113 of the Bankruptcy Code the CBAs of the two unions unless they reach an agreement; and (ii) terminate under Section 1114 the provision of retiree welfare benefits to existing retirees as of May 31. Pursuant to Section 1113, a court can only approve a CBA rejection if the debtor (1) has submitted to the union a proposal for modifications that are necessary to permit its reorganization and assures that all parties are treated fairly and equitably, (2) the union has refused to accept the proposal without good case, and (3) the balance of equities clearly favors the rejection of the CBA. Under Section 1114, the court may allow the debtor from modifying or not paying retiree benefits if the court finds that (i) the debtor has submitted to the retirees' representative a proposal for modifications that are necessary to permit its reorganization, (ii) the representative has refused to accept the proposal without good cause, and (iii) the modification is necessary to permit the reorganization of the debtor and assures that all parties are treated fairly and equitably, and is clearly favored by the balance of equities. Meanwhile, according to Bill Rochelle, Intermet has filed before the Bankruptcy Court a request to sell equipment for less than $500,000 without full-blown court approval. About Intermet Corp. Based in Fort Worth, Texas, Intermet Corp. designs and manufactures machine precision iron and aluminum castings for the automotive and industrial markets. The company and its debtor- affiliates filed for Chapter 11 protection on Aug. 12, 2008 (D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as the Debtors' counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq. and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as the Debtors' claims, notice and balloting agent. An Official Committee of Unsecured Creditors has been formed in this case. When the Debtors filed for protection from their creditors, they listed assets of between $50 million and $100 million and debts of between $100 million and $500 million. This is the Debtors' second bankruptcy filing. Intermet Corp., along with its debtor-affiliates, filed for Chapter 11 protection on September 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represents the Debtors. In their previous bankruptcy filing, they listed $735,821,000 in total assets and $592,816,000 in total debts. Intermet Corporation emerged from this first bankruptcy filing in November 2005. JG WENTWORTH: S&P Affirms Counterparty Credit Ratings at 'CC' ------------------------------------------------------------- Standard & Poor's Ratings Services said that it has removed its ratings on J.G. Wentworth LLC from CreditWatch, where they were placed with negative implications on March 17, 2009. At the same time, S&P affirmed Wentworth's 'CC' counterparty credit and senior secured ratings and assigned a negative outlook. Subsequently, the ratings on Wentworth were withdrawn at the company's request. "This rating action follows Wentworth's announcement that it had obtained an extension from Deutsche Bank of the waiver related to its $16.9 million margin call. The extension of this standstill agreement allows Wentworth to fund its business until April 22, 2009, without any further margin calls. However, following the expiration of the waiver, the warehouse lender could provide a notice of default, which S&P believes could lead to a cross- default on Wentworth's other debt, including its senior secured bank loan. In addition, S&P believes Wentworth's ability to continue operating is limited without further financial assistance from private equity owners JLL Partners Inc.," said Standard & Poor's credit analyst Rian Pressman. KDK INC.: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: KDK, Inc. d/b/a Vivo Restaurant, Inc. 838 W. Randolph St. Chicago, IL 60607 Bankruptcy Case No.: 09-09893 Chapter 11 Petition Date: March 23, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Robert R. Benjamin, Esq. Querrey & Harrow, Ltd. 175 West Jackson Boulevard, Suite 1600 Chicago, IL 60604 Tel: (312) 540-7000 Fax: (312) 540-0578 Email: rbenjamin@querrey.com Total Assets: $67,360.20 Total Debts: $1,310,781.46 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilnb09-09893.pdf The petition was signed by Danny Krasny, president of the Company. LANDSOURCE COMMUNITIES: First-Lien Lenders File Modified Plan ------------------------------------------------------------- According to Bloomberg's Bill Rochelle, the first-lien lenders for LandSource Communities Development LLC filed a modified Chapter 11 plan giving 85% of the stock in the reorganized companies to the lenders. The other 15% will go to Lennar Corp., which was a majority owner of LandSource along with California Public Employees Retirement System. The current draft of the explanatory disclosure statement contains blanks where secured and unsecured creditors eventually will be told what percentage they can expect to recover, Bill Rochelle said. LandSource lost its exclusive right to propose a Chapter 11 plan in October. The TCR reported March 23, 2009, that, according to Dow Jones Newswires, Lennar Corp is in talks with Landsource's creditors to create a new company. Dow Jones said the new firm would acquire much of LandSource's land out of bankruptcy, including the 12,000- acre Newhall Ranch north of Los Angeles. Dow Jones states that Lennar and several hundred creditors holding $1 billion of LandSource's debt would contribute "substantial" equity to the new firm. According to Dow Jones, Lennar has reached a tentative agreement with a committee representing a lead group of debt holders. Lennar's chief investment officer, Emile Haddad, would leave the company to manage the LandSource assets, Dow Jones says. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. (LandSource Bankruptcy News; http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: Moody's Cuts Enhanced Libor Fund Rating to 'Ca' ---------------------------------------------------------------- Moody's Investors Service has downgraded to Ca from A the fund rating of Lehman Brothers Enhanced Libor Fund. The fund's market risk rating was confirmed at MR5, Moody's lowest market risk rating. The rating action follows the decision by the fund's trustee, in consultation with the fund's manager, to suspend subscriptions to and redemptions from the Fund, liquidate the portfolio and distribute proceeds back to shareholders. Moody's will also withdraw its ratings of the Fund, given its expected liquidation. The downgrade to Ca from A reflects the Fund's decision to suspend redemption proceeds in the Fund effective March 2, 2009 and may result in additional losses from the liquidation of the fund's portfolio. The decision to suspend redemptions was taken by the Fund's trustee, in consultation with the fund manager, to preserve the net asset value per share and provide equal treatment to all shareholders. Moody's considers the decision to suspend cash redemptions a material deviation from the fund's stated objective of providing daily liquidity to investors and inconsistent with fund's practice of providing daily liquidity. According to the liquidation plan of the fund, shareholders would have an option to receive cash distributions or in kind distributions. The downgrade of the Fund rating to Ca also incorporates the significant deterioration in the maturity-adjusted weighted average credit quality of the fund's portfolio, mostly as a result of recent downgrades in the Fund's subprime residential mortgage backed security holdings. The Fund's portfolio consists almost exclusively of subprime mortgage backed securities, commercial mortgage backed securities and other consumer asset backed securities and may result in additional losses from the liquidation of the fund's portfolio. The net asset value per share of the Fund was $714.35 as of March 24, 2009. It was initially offered to market in March 2006 at a net asset value per share of $1,000. The MR5 rating reflects the very high volatility that the Fund's net asset value continues to experience due to market conditions and the fund's exposures to asset backed securities, including subprime mortgage backed securities. Moody's expects the portfolio's market risk to remain elevated during the Fund's liquidation. The Fund is managed by Lehman Brothers Asset Management LLC. Certain members of the senior management team of Lehman Brothers Holdings Inc.'s investment management division have entered into an agreement with LBHI to acquire LBAM, the Neuberger Berman business and certain alternative asset management businesses of IMD. Subject to the consent of the investors in the Fund, LBAM will continue to serve as the investment manager of the Fund and conduct the liquidation. The last rating action concerning this Fund was on November 3, 2008, when Moody's downgraded the fund rating and market risk rating to A/MR5 from Aaa/MR3. The Fund rating remained on review for further downgrade. LIGHTHOUSE TENN: Section 341(a) Meeting Scheduled for April 24 -------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors of Lighthouse Tennessee LLC on April 24, 2009, 10:00 a.m., Third Floor - Room 362, Russell Federal Building, 75 Spring Street, SW in Atlanta, Georgia. 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 officer of the Debtors under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Kennesaw, Georgia, Lighthouse Tennessee LLC filed for Chapter 11 protection on March 23, 2009 (Bankr. N.D. Ga. Case No. 09-67389). Paul Reece Marr, Esq., at Paul Reece Marr, P.C., represents the Debtor. When the Debtor filed for protection from its creditors, it listed assets between $10 million and $50 million, and debts between $1 million and $10 million. MAGNA ENTERTAINMENT: Creditors Ask for Bankruptcy Examiner ---------------------------------------------------------- Steven Church of Bloomberg reports that Magna Entertainment Corp. creditors asked a judge to order an investigation into why the owner of the Pimlico horse track filed bankruptcy and whether a proposed sale involving the company's chief executive is appropriate. Greenlight Capital Offshore Partners, according to Bloomberg, asked U.S. Bankruptcy Judge Mary Walrath to approve an examiner to investigate "whether there has been any mismanagement by the controlling shareholder and management." The Company is controlled by Chief Executive Officer Frank Stronach, who is also chairman of autoparts supplier Magna International Inc. Magna Entertainment has asked the Court to authorize an auction of its main assets, with an affiliate controlled by Mr. Stronach as the lead bidder, Bloomberg said. Bloomberg relates Greenlight and PNC Bank NA also filed objections to the proposed auction of Pimlico Race Course in Baltimore, and Magna's other major race courses, including Santa Anita Park in California. Pimlico is host to the Preakness Stakes, one of three races that make up horse racing's Triple Crown. Greenlight said in its objection that there isn't enough information about Stronach's role in the proposed auction, while PNC said in its March 26 objection that Magna hasn't provided enough details about what is being sold. 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. MAR VISTA: Section 341(a) Meeting Scheduled for April 23 -------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors of Mar Vista Development Corporation on April 23, 2009, 2:30 p.m., 411 W Fourth St., Room 1-159 in Santa Ana, 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 officer of the Debtors under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Orange, California, Mar Vista Development Corporation filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Case No. 09-11984). R. G. Pagter, Esq., at Pagter and Miller, represents the Debtors. When it the Debtor filed for protection from its creditors, it listed assets and debts between $10 million to $50 million each. MERISANT WORLDWIDE: U.S. Trustee Picks 5 for Creditors Committee ---------------------------------------------------------------- Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, appointed five members to the Official Committee of Unsecured Creditors in the Chapter 11 case of Merisant Worldwide Inc. and its debtor- affiliates. The panel consists of: 1. Corn Products International, Inc. Attn: Richard A. Duda 5 Westbrook Corporate Center Westchester, IL 60154 Tel: (708) 551-2804 Fax: (708) 551-2801 2. Newport Global Advisors Attn: Ryan L. Langdon 21 Waterway Avenue The Woodlands, TX 77380 Tel: (713) 559-7400 Fax: (713) 559-7499 3. Law Debenture Trust Company of New York, as Trustee Attn: James D. Heaney 400 Madison Avenue New York, NY 10017 Tel: (212) 750-6474 Fax: (212) 750-1361 4. Wells Fargo Bank, N.A. Attn: James R. Lewis, Corporate Trust Services 45 Broadway, 14th Floor New York, NY 10006 Tel: (212) 515-5258 Fax: 866-524-4681 5. Kirkwood Communications Attn: Michael Kirkwood 28 Ash Street Basking Ridge, NJ 07920 Tel: (973) 335-4400 Fax: 973-335-4474 About Merisant Worldwide Headquartered in Chicago, Illinois, Merisant Worldwide Inc. -- http://www.merisant.com/-- sell low-calorie tabletop sweetener. The Debtor's brands are Equal(R) and Canderel(R). The Debtor has principal regional offices in Mexico City, Mexico; Neuchatel, Switzerland; Paris, France; and Singapore. In addition, the Debtor owns and operates manufacturing facilities in Manteno, Illinois, and Zarate, Argentina, and own processing lines that are operated exclusively for the Debtor at plants located in Bergisch and Stendal, Germany and Bangkrason, Thailand. As of March 28, 2008, the Debtor has 20 active direct and indirect subsidiaries, including five subsidiaries in the United States, six subsidiaries in Europe, five subsidiaries in Mexico, Central America and South America, and three subsidiaries in the Asia Pacific region, including Australia and India. Furthermore, the Debtor's Swiss subsidiary holds a 50% interest in a joint venture in the Philippines. Merisant Worldwide holds 100% interest in Merisant Company. Merisant Worldwide and five of its units filed for Chapter 11 protection on January 9, 2009 (Bankr. D. Del. Lead Case No. 09- 10059). Sidley Austin LLP represents the Debtors in their restructuring efforts. Young, Conaway, Stargatt & Taylor LLP represents the Debtors' as co-counsel. Blackstone Advisory Services LLP is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC is the Debtors' Claims and Noticing Agent. Winston & Strawn LLP represents the Official Committee of Unsecured Creditors as counsel. Ashby & Geddes, P.A. is the Committee's Delaware counsel. The Debtors have $331,077,041 in total assets and $560,742,486 in total debts as of Nov. 30, 2008. MERISANT WORLDWIDE: Committee Can Hire Winston as Counsel --------------------------------------------------------- The official committee of unsecured creditors in Merisant Worldwide Inc.' and its debtor-affiliates' Chapter 11 cases obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to employ Winston & Strawn LLP as counsel. Winston & Strawn is expected to: a) provide legal advice to the Committee with respect to its duties and powers in the Chapter 11 cases; b) consult with the Committee and the Debtors concerning administration of the cases; c) assist the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors, operation of the Debtors' businesses and the desirability of continuing or selling the business or assets, sales, the formulation of a Chapter 11 Plan, and any other matter relevant to the cases; d) assist the Committee in evaluating claims against then estates, including analysis of and possible objections to the validity, priority, amount subordination, or avoidance of claims or transfers of property in consideration of the claims; e) assist the Committee in participating in the formulation of a Chapter 11 Plan, including the Committee's communications with unsecured creditors concerning any Plan; f) assist the Committee with any effort to request the appointment of a Trustee or examiner; g) advise and represent the Committee in connection with matters generally arising in the cases, including the obtaining of credit, the sale of assets, and the rejection or assumption of executory contracts and unexpired leases; h) appear before this Court, any other federal court, state court or appellate court; and i) perform other legal services as may be required and whuch are in the interests of unsecured creditors or otherwise directed by the Committee. The Debtors related that Winston & Strawn and the Committee's co- counsel, Ashby & Geddes, P.A., will communicate to ensure that all legal services provided to the Committee are not duplicative. The hourly rates of Winston & Strawn professionals are: Partners $400 - $995 Associates $210 - $670 Legal Assistants $110 - $300 The firm's professionals engaged in the Chapter 11 cases and their hourly rates are: David Neier, partner $760 Eric Sageman, partner $750 Justin Rawlins, partner $535 Robert Boudreau, associate $310 Gregory Martin, associate $290 Mr. Neier told the Court that Winston & Strawn has not received any advance fee or retainer for legal services. Mr. Neier assured the Court that Winston & Strawn is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Neier can be reached at: Winston & Strawn LLP 200 Park Avenue New York, NY 10166-4193 Tel: (212) 294-6700 About Merisant Worldwide Headquartered in Chicago, Illinois, Merisant Worldwide Inc. -- http://www.merisant.com/-- sell low-calorie tabletop sweetener. The Debtor's brands are Equal(R) and Canderel(R). The Debtor has principal regional offices in Mexico City, Mexico; Neuchatel, Switzerland; Paris, France; and Singapore. In addition, the Debtor owns and operates manufacturing facilities in Manteno, Illinois, and Zarate, Argentina, and own processing lines that are operated exclusively for the Debtor at plants located in Bergisch and Stendal, Germany and Bangkrason, Thailand. As of March 28, 2008, the Debtor has 20 active direct and indirect subsidiaries, including five subsidiaries in the United States, six subsidiaries in Europe, five subsidiaries in Mexico, Central America and South America, and three subsidiaries in the Asia Pacific region, including Australia and India. Furthermore, the Debtor's Swiss subsidiary holds a 50% interest in a joint venture in the Philippines. Merisant Worldwide holds 100% interest in Merisant Company. Merisant Worldwide and five of its units filed for Chapter 11 protection on January 9, 2009 (Bankr. D. Del. Lead Case No. 09- 10059). Sidley Austin LLP represents the Debtors in their restructuring efforts. Young, Conaway, Stargatt & Taylor LLP represents the Debtors' as co-counsel. Blackstone Advisory Services LLP is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC is the Debtors' Claims and Noticing Agent. Winston & Strawn LLP represents the Official Committee of Unsecured Creditors as counsel. Ashby & Geddes, P.A. is the Committee's Delaware counsel. The Debtors have $331,077,041 in total assets and $560,742,486 in total debts as of Nov. 30, 2008. MERUELO MADDUX: Wants to Schedules Filing Extended Until May 13 --------------------------------------------------------------- Meruelo Maddux Properties, Inc., and its debtor-affiliates ask the U. S. Bankruptcy Court for the Central District of California to extend until May 13, 2009, the deadline to file its schedules of assets and liabilities and statement of financial affairs. The Debtors relate that they will not be able to complete their schedules and statements by the April 10 and April 13, 2009, deadlines because of the complexity of the Debtors' business operations and other matters related to the Chapter 11 cases. The extension requested will provide sufficient time for the Debtors to prepare their schedules and statements. Based in Los Angeles, California, Meruelo Maddux Properties, Inc., -- http://www.meruelomaddux.com/-- together with its affiliates, engages in residential, commercial and industrial development. Meruelo and its affiliates filed for separate Chapter 11 protection on March 26, 2009, (Bankr. C. D. Calif. Lead Case No. 09-13356) John J. Bingham, Jr., Esq., represents the Debtors in their restructuring efforts. The Debtors' financial condition as of Dec. 31, 2008, showed estimated assets of $681,769,000 and estimated debts of $342,022,000. MICHAEL VICK: Will Pay Atlanta Falcons Up to $7.5 Million --------------------------------------------------------- Agence France-Presse reports that Michael Vick has settled a claim by the Atlanta Falcons. According to AFP, Mr. Vick will pay the Atlanta Falcons $6.5 million to $7.5 million. Citing an Atlanta Falcons official, AFP relates that the team's bid to recover bonus money paid to Mr. Vick remains ongoing. According to The Atlanta Journal-Constitution, the deal only related to the bankruptcy claim and not the bonus. AFP notes that the settlement should ease the way for the Atlanta Falcons to cut all ties with Mr. Vick, who hopes to be able to return to the NFL this year. AFP states that the Atlanta Falcons were awarded $20 million from the NFL in a grievance over bonus money when Mr. Vick was arrested, contending that the quarterback violated terms of his contract and should forfeit the money. According to the report, the award was reduced to $3.75 million in federal court, but the Atlanta Falcons have appealed that decision and expect that case to be heard before the next football season starts. AFP states that Mr. Vick will appear at a bankruptcy hearing on April 2 in Virginia. 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. NARANG ACQUISITION: Taps Nordman Cormany as General Legal Counsel ----------------------------------------------------------------- Narang Acquisition Group, LLC, asks the U.S. Bankruptcy Court for the Central District of California for authorization to employ Nordman Cormany Hair & Compton LLP as general legal counsel. Nordman Cormany will present the Debtors in all facets of their Chapter 11 reorganization, including the preparation of a disclosure statement, Plan of Reorganization, and any necessary motions to Chapter 11 reorganization, and to represent the Debtors in any legal dispute associated with their Chapter 11 proceeding. Willam E. Winfield, Esq., a partner at the firm, tells the Court that the firm received $15,000 retainer which will be held in a trust account and applied towards fees. The Debtors agreed that the firm has reserved the right to seek approval from the Court for additional compensation from the estate. Mr. Winfield assures the Court that the firm is a "disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Winfield can be reached at: Nordman Cormany Hair & Compton LLP 1000 Town Center Drive, Sixth Floor Oxnard, CA 93036 Tel: (805) 485-1000 Fax: (805) 988-8387 About Narang Acquisition Group, LLC Santa Barbara, California-based Narang Acquisition Group, LLC filed for Chapter 11 protection (Bankr. C. D. Calif. Case No. 09- 10987). The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. NATIONAL CONSUMER: Fitch Cuts Preferred Stock Rating to 'BB+' ------------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Rating of National Consumer Cooperative Bank and NCB, FSB to 'BBB' from 'A-' following the company's announcement that it violated a financial covenant in its revolving bank credit facility due to a $1.7 million impairment related to securities held from a prior securitization. NCB has amended the bank facility to get relief from the covenant default; the new terms include liens on all assets of NCB, relief on some covenants, overall reduction in amount of facility to $225 million from $350 million and further reduction on a quarterly basis till maturity on Dec. 15, 2010. The ratings are removed from Rating Watch Negative, where they were place on Dec. 12, 2008, due to concerns of a possible covenant violation. Approximately $1.7 billion of debt is affected by this action. The Rating Outlook is Negative. A complete list of ratings is provided at the end of this release. While Fitch's downgrade reflects the aforementioned covenant violation and amendment, it also incorporates weakening fundamental operating performance, which is likely to be sustained as well as more limited financial flexibility as future loan originations will need to be funded out of NCB, FSB through Federal Home Loan Bank advances and deposits. Fitch deems that NCB could receive funding through government programs such as Troubled Asset Relief Program (TARP), which could relieve some liquidity pressure. Fitch believes NCB's operating performance will continue to trend weaker due to the economic and capital markets environment, exhibiting itself in higher provision expenses, charge-offs, and funding costs over the near- to intermediate-term. While Fitch recognizes the membership structure is not designed to generate strong earnings and margins, nonetheless, Fitch believes it is still important to generate a modest and stable degree of profitability. Fitch is concerned with the trend in asset quality performance as non-performing loans increased to $17.4 million for the year ending 2008 versus $13.6 million for the comparable period in 2007. NCB is exposed to geographic and industry concentrations, as nearly 25% of its loans are secured by real-estate cooperatives in New York City. The Negative Outlook reflects the weak economic environment, which could lead to further negative asset quality performance beyond current expectations, pressuring profitability through increased provisioning and potentially violating amended asset quality covenants in the revolving bank facility. Resolution of the Negative Rating Outlook is driven by stabilization of asset quality, improvement in earnings, and increased liquidity. Fitch has withdrawn the company's commercial paper ratings as the program is no longer active and there are no outstandings. Fitch has downgraded these: National Consumer Cooperative Bank -- Long-term IDR to 'BBB' from 'A-'; -- Short-term IDR to 'F3' from 'F2'; -- Commercial paper to 'F3' from 'F2'; -- Individual to 'C' from 'B/C'. Fitch has subsequently withdrawn the commercial paper rating. NCB, FSB -- Long-term IDR to 'BBB' from 'A-'; -- Short-term IDR to 'F3' from 'F2'; -- Long-term deposit obligations to 'BBB+' from 'A'; -- Short-term deposit obligations to 'F2' from 'F1'. -- Individual to 'C' from 'B/C'. NCB Capital Trust I -- Trust preferred stock to 'BB+' from 'BBB+'. Fitch also affirms these: National Consumer Cooperative Bank -- Support at '5'; -- Support floor at 'NF'. NCB, FSB -- Support at '1'. In addition, Fitch has assigned this rating: National Consumer Cooperative Bank -- Senior secured debt assigned 'BBB'. NES RENTALS: S&P Junks Long-Term Corp. Credit Rating From 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services said it has lowered its long- term corporate credit rating on Chicago, Illinois-based equipment rental company NES Rentals Holdings Inc. to 'CC' from 'B+'. The outlook is negative. In addition, S&P lowered the issue-level rating on the company's $280 million, second-lien term loan due 2013 to 'C' from 'B-'. The recovery rating remains at '6', indicating that lenders can expect negligible (0 to 10%) recovery in the event of a default. The rating action follows the private company's receipt of an amendment to its second-lien credit agreement that gives it the ability to commence an offer to buy up to $15 million of the face amount of its second-lien debt for cash at a discounted price. "Our downgrade does not reflect a perceived increase in NES's bankruptcy risk," said Standard & Poor's credit analyst Peter Kelly. "Rather, S&P's downgrade is based on the offer that NES will make to retire debt for less than originally contracted, which S&P considers a de-facto partial restructuring," he continued. Similarly, investors' potential willingness to accept a substantial discount to contractual terms provides evidence that they have significant doubts about receiving full payment on obligations. S&P will lower its corporate credit rating on NES to 'SD' (selective default) upon completion of the offer. Shortly thereafter, S&P will assign a new corporate credit rating representative of the default risk after reviewing the new capital structure. The outlook is negative. As noted, S&P expects to lower the corporate credit rating to 'SD' upon completion of the tender offer. It is S&P's preliminary expectation that after the tender offer, S&P's new corporate credit rating on NES will likely be in the 'B' category. S&P expects the revised capital structure to improve the company's cash interest expense slightly and help offset an expected increase in total leverage. NORCRAFT HOLDINGS: S&P Downgrades Corporate Credit Rating to 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on kitchen and bath cabinet maker Norcraft Holdings LP, and its subsidiary, Norcraft Cos. LP, to 'B' from 'B+'. The outlook is negative. At the same time, Standard & Poor's revised the recovery rating on Norcraft's senior subordinated notes due 2011 to '2', indicating S&P's expectation of substantial (70% to 90%) recovery in the event of a payment default, from '3'. The issue-level rating on the senior subordinated notes is 'B+' (one notch higher than the corporate credit rating). Standard & Poor's also lowered the issue-level rating on Norcraft Holdings LP's senior discount notes to 'CCC+' (two notches lower than the corporate credit rating) from 'B-', while leaving the recovery rating on the notes at '6'. The recovery rating of '6' indicates S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. "The recovery rating revision reflects the company's decision to terminate its $60 million senior secured revolving credit facility due 2011 effective on March 31, 2009," said Standard & Poor's credit analyst Thomas Nadramia. "The downgrade reflects our expectation that the ongoing slump in new housing starts, reduced remodeling spending, and the U.S. recession will further weaken Norcraft's earnings and cash flow in 2009," added Mr. Nadramia. "As a result, credit measures are likely to weaken further in 2009, with gross debt to EBITDA possibly exceeding 5.5x later in 2009 and possibly moving higher, a level S&P considers no longer appropriate for the prior rating." S&P believes Norcraft's decision to cancel its $60 million revolving credit facility constrains overall liquidity. Still, S&P expects the company will maintain adequate liquidity in the next year, mainly derived from the nearly $55 million in balance sheet cash as of Sept. 30, 2008. The rating on Eagan, Minnesota-based Norcraft reflects the company's small sales and asset base, highly leveraged financial risk profile, and limited product diversity in a cyclical industry. The rating also reflects the company's national presence and relatively good production cost position. Norcraft is a manufacturer in the highly fragmented and cyclical kitchen and bathroom cabinet industry, an industry that depends almost exclusively on residential remodeling and new construction. The negative outlook reflects S&P's expectation that Norcraft's operating performance and cash flow will continue to be hurt by softer end-market demand due to the weak U.S. economy, the extended housing downturn, and intense competition. S&P expects liquidity to remain adequate in 2009 because of modest positive cash flow generation and the maintenance of significant cash balances, but S&P believes establishing another credit facility would enhance liquidity if the results are weaker than expected. S&P would consider a downgrade if the above factors cause operating profits to decline and excess cash to fall to less than $35 million, which approximates one-year's cash requirements. Although not likely in the near term, S&P would consider revising the outlook to stable if the company continues to use cost-cutting measures to successfully navigate this downturn, resulting in credit metrics strengthening to where consolidated leverage can be maintained at less than 4x. NORTHERN ROCK: Moody's Downgrades Bank Strength Rating to 'E' ------------------------------------------------------------- Moody's Investors Service announced that it has downgraded to E from E+ Northern Rock's Bank Financial Strength Rating. The E BFSR maps into a Baseline Credit Assessment of Caa1. The bank's dated and undated hybrid subordinated debts were also downgraded to Ca from B1 and B3, respectively. The outlook on the subordinated instruments is negative. The senior long term and short term ratings of A2/P-1 were affirmed with a developing outlook. The downgrade of the BFSR from E+ to E highlights the severe deterioration in Northern Rock's intrinsic financial fundamentals reflected in reported pre-tax losses of GBP1.4 billion as of year- end 2008-the losses were largely the result of loan loss impairment of GBP0.9 billion and treasury write-downs of GBP0.3 billion. As a result, Northern Rock's Tier 1 capital is now negative. Moody's notes that the FSA has agreed to a waiver enabling Northern Rock to use available Tier 2 capital as regulatory capital until the State Aid approval has been finalized. The government has also announced recently that pending the State Aid approval from the European Commission, the bank will soon be undergoing a legal and capital restructuring including an injection of up to GBP3 billion of fresh capital, and a mandate to increase lending. The E BFSR, which is the lowest financial strength rating within the Moody's ranking system captures the fact that solely on its current financial fundamentals, and without government support, the bank's viability as a going concern is extremely compromised. Key drivers for affirming the A2 ratings of longer term debt and deposits of Northern Rock are the government guarantee of these obligations and the uncertainty surrounding the final form of these guarantees post restructuring. Moody's notes that the starting point is the E BFSR, which combined with a very high probability of systemic support, leads to a rating of A2 for senior guaranteed obligations. While throughout its restructuring the commitment and availability of government support for Northern Rock has certainly not diminished, in Moody's view the degree of support is somewhat constrained by the uncertainties regarding the longer term nature of such guarantees both in terms of their duration and their status post restructuring of the bank. While at present the guarantee is for the full term of the senior obligations, the government has the option at anytime to remove these guarantees at a three-months notice. The developing outlook on the senior ratings reflects the uncertainties regarding the final form the bank will take after the State Aid approval has been finalized. The government announced in February that in order to enable the bank to focus on new lending, "the company will be restructured so that the back book of mortgages is managed separately to its other business". Moody's added, that should a break up of the bank materialize, it will reassess the ratings of the split institutions at such time. On the downgrade of Northern Rock's dated and undated hybrid subordinated debt, Moody's said the risk of impairments to such securities has significantly increased because of these factors: 1) significant deterioration, since the bank's nationalization, in the bank's stand alone financial fundamentals reflected in the E BFSR; and 2) as the equity cushion has already been fully absorbed and the bank's preferred securities, which were nationalized, have also already absorbed losses, the next layer of loss absorbing capital is comprised of the dated and undated hybrid subordinated debt. These considerations, together with the government's previous comments that Northern Rock's mortgage assets may be managed separately as its final form emerges, place the dated and undated hybrid subordinated debt at high risk for losses. In addition, there have been some UK precedents for loss absorption by such securities, which were not supported in situations of extreme distress for the lender. The Ca rating on the dated and undated hybrid subordinated debt reflects Moody's expectation of a very limited recovery for these instruments. Moody's last rating action on Northern Rock was on February 20, 2008, when the bank's senior debt and deposit ratings were downgraded to A2 and its outlook was changed to developing. Headquartered in Newcastle-upon-Tyne, Northern Rock had total assets of GBP104.3 billion at year-end 2008. NTELOS INC: Moody's Affirms Corporate Family Rating at 'Ba3' ------------------------------------------------------------ Moody's Investors Service affirmed NTELOS Inc.'s Ba3 corporate family rating, Ba3 senior secured debt rating and B1 probability of default rating. The outlook for all ratings is stable. This ratings affirmation follows a review of nTelos' annual operational and financial results for fiscal 2008 as well as an evaluation of the company's general business operating environment, and serves to reiterate Moody's perspective in light of the company's anticipated performance over the next roughly 2-year timeframe. nTelos' Ba3 CFR primarily reflects robust operational and financial performance which has translated into key credit protection measures that are strong for its rating category. nTelos saw its fiscal 2008 revenue base increase 8% and EBITDA margins improve 160 basis points to 46.6% compared to 2007, allowing the company to end the year with Debt/EBITDA leverage of 3.1x. However, the Ba3 CFR recognizes nTelos' weak Free Cash Flow/ Debt metric, with the company choosing to deploy most of its operational cash flow to growth-related capital expenditures and returning capital to shareholders via dividends. The Ba3 CFR also reflects the business risk inherent in nTelos' positioning as a small, regional operator competing with much larger and better- capitalized national wireless operators in the midst of weak current general economic conditions and rapidly slowing wireless market growth. Longer term, the company's ability to successfully address refinancing of its revolver maturing 24 February 2010 and 1st lien term loan maturing August 2011 (which begins amortizing in 4 equal installments in the fourth quarter of 2010) given current capital markets dislocation will also impact nTelos' rating. nTelos' short-term liquidity is assessed as adequate. Over the 4- quarter horizon to March 31, 2010, nTelos is expected to have cash resources of roughly $90 million comprised of (i) cash on hand of $65 million at December 31, 2008 and (ii) free cash flow generation of $25 million, to meet mandatory quarterly debt principal amortization totaling roughly $6 million over the same period. nTelos also has access to a $35 million revolving credit facility; however, since the facility matures during the 4-quarter liquidity assessment horizon (on 24 February 2010), it has not been considered a source of liquidity. The outlook for all ratings is stable, reflecting the view that while near-term operating and financial performance may remain strong, significant improvement in key credit protection measures is unlikely over the rating horizon in light of weak general economic conditions and increasing competitive pressures, leaving nTelos' current risk profile largely unchanged. Upgrades: Issuer: NTELOS Inc. -- Senior Secured Bank Credit Facility, Upgraded to LGD2, 29% from LGD3, 31% Moody's most recent rating action related to nTelos was taken on March 26, 2007, at which time Moody's upgraded the company's ratings to Ba3 from B2 and revised the outlook to stable from positive. Based in Waynesboro, Virginia, NTELOS is a regional communications provider in Virginia and West Virginia. NYMAGIC INC: Fitch Downgrades Issuer Default Rating to 'BB-' ------------------------------------------------------------ Fitch Ratings downgrades NYMAGIC, INC.'s Issuer Default Rating and debt ratings: -- IDR to 'BB-' from 'BBB-'; -- $100 million senior debt 6.5% due March 15, 2014 to 'B+' from 'BB+'. The Rating Outlook is Negative. The downgrade reflects Fitch's belief that NYMAGIC's capital position and financial flexibility has diminished as a result of the company's significant exposure to hedge funds and Alt-A residential mortgage backed securities, which together represented 36% of the company's investment portfolio at year-end 2008. Fitch notes that NYMAGIC had approximately $186 million of cash and short-term investments as well as approximately $148 million of U.S. treasury and municipal securities at year-end 2008 to meet policyholder obligations. The Negative Outlook reflects the company's significant concentration in volatile asset classes and the potential for further investment-related losses during the remainder of the year. Similar to other insurance company peers, NYMAGIC faces uncertainty surrounding the ultimate effect of the current financial market conditions on its investment portfolio. In 2008 the company posted a net loss of $104 million, including $48 million of realized investment losses and net investment losses of $64 million. The company's hedge fund and Alt-A investments were the primary drivers of the large investment losses, which included mark to market losses. NYMAGIC's debt-to-total capital ratio was roughly 38% at year-end 2008, up from 26% at Dec. 31, 2007, due to a 41% drop in shareholders' equity. Fitch notes that NYMAGIC held almost $54 million of cash and investments at the holding company at year-end 2008 (down from $120 million at year-end 2007) that can be used to service debt. However, Fitch believes the holding company may make a capital contribution to the insurance subsidiaries should policyholders' surplus (PHS) deteriorate in 2009. The company infused $32.5 million in capital to the operating subsidiaries in 2008. NYMAGIC's investment portfolio includes seven Alt-A, super senior RMBS with a fair value of $42.3 million. The company has recorded cumulative other-than-temporary impairment charges of $40.7 million through Sept. 30, 2008. Through that date, these securities were classified as 'available for sale' on a GAAP basis. However, effective Oct. 1, 2008, they are now classified as 'held to maturity.' As such they are recorded on the balance sheet at an adjusted cost basis of $61.2 million, which is based on a determination of the fair value of these securities on the date they were transferred. Fitch does not view this approach as conservative since Fitch believes NYMAGIC remains exposed to true economic losses relative to par value on these securities. Additionally, on a statutory basis the Alt-A securities are carried at an amortized cost of $99 million, or 52% of PHS. In February 2009 these securities experienced ratings downgrades by one agency and any economic losses would have a significant impact on PHS. PACIFIC NATIONAL: Weiss Ratings Assigns "Very Weak" E- Rating ------------------------------------------------------------- Weiss Ratings has assigned its E- rating to San Francisco, California-based Pacific National Bank. Weiss says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests Weiss uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." Pacific National Bank is chartered as a National Bank, primarily regulated by the Office of the Comptroller of the Currency. The institution was established on Jan. 1, 1887, and deposits have been insured by the Federal Deposit Insurance Corporation since Dec. 12, 1940. Pacific National Bank maintains a Web site at http://www.pacificnational.com/and has 18 branches in California. At Dec. 31, 2008, Pacific National disclosed $1.9 billion in assets and $1.7 billion in liabilities in its regulatory filings. PLATINUM MOTORS: Section 341(a) Meeting Set for Tomorrow, April 3 ----------------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors in Platinum Motors LLC's Chapter 11 case on April 3, 2009, at 1:00 p.m., at 411 W Fourth St., Room 1-159, Santa Ana, 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. Santa Ana, California-based Platinum Motors LLC filed for Chapter 11 protection on March 23, 2009 (Bankr. C. D. Calif. Case No. 09- 12472). Carlos F. Negrete, 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. PLY GEM: S&P Downgrades Corporate Credit Rating to 'SD' From 'B-' ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Cary, North Carolina-based Ply Gem Industries Inc. to 'SD' from 'B-'. At the same time, Standard & Poor's lowered the issue-level rating on Ply Gem's 9% senior subordinated notes due 2012 to 'D' from 'CCC'. The recovery rating on this debt remains '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default. All other outstanding ratings on Ply Gem remain unchanged. "These actions follow the recent announcement by the company that affiliates of its financial sponsor, CI Capital Partners LLC, (unrated) have made a cash investment and acquired a majority of the company's outstanding 9% senior subordinated notes due 2012 and that the company intends to amend the indenture of these notes to provide it with greater financial and operating flexibility," said Standard & Poor's credit analyst Tobias Crabtree. Standard & Poor's views the financial sponsor's affiliates in the same light as Ply Gem itself acquiring the notes, particularly given CI Capital Partners majority ownership of Ply Gem. S&P expects that the purchase was at a substantial discount to the par amount of the outstanding issue. As a result, S&P views the purchase as being tantamount to default given the weak financial profile of the company which S&P expects will continue given the ongoing downturn in new residential construction and repair and demand for remodeling. Previously, S&P stated that S&P were concerned that Ply Gem's EBITDA interest coverage, which is about 1x, could weaken further in 2009 because of the increased interest burden associated with its $700 million 11% secured notes due 2013 and $360 million 9% senior subordinated notes due 2012. As a result, free operating cash flow could become further constrained, resulting in reliance on its $150 million asset-based revolving credit facility to fund fixed charges. As a result, Ply Gem's ability to service its current capital structure may become difficult if residential construction activity remains depressed into 2010. S&P intends to reassess Ply Gem's capital structure (which from an absolute debt amount does not change) and latest operating trends in the near term. However, it is S&P's preliminary assessment that the corporate credit rating would likely not be higher than the previous 'B-' rating and potentially in the 'CCC' category, with a negative outlook. PRATT-READ CORP: Has Until May 4 to File Schedules and Statements ----------------------------------------------------------------- The Hon. Alan H. W. Shiff of the United States Bankruptcy Court for the District of Connecticut extended until May 4, 2009, the period within which Pratt-Read Corporation and American Industrial Manufacturing may file their schedules of assets and liabilities, and statement of financial affairs. Troubled Company Reporter on March 30, 2009, said the Debtors and their counsel need more time to collect and complete the Debtor's schedules and statement because the Debtors were unable to finalize the requirements due to several distractions during their bankruptcy filing. Headquartered in Shelton, Connecticut, Shelton, Pratt-Read Corporation -- http://www.pratt-read.com/-- makes metal stampings. The Company and its affiliate, American Industrial Manufacturing Company, filed for Chapter 11 protection on March 19, 2009 (Bankr. D. Conn. Lead Case No. 09-50481). When the Debtor filed for protection from its creditors, it listed assets and debts between $10 million and $50 million each. PRECISION PARTS: U.S. Trustee Appoints 5-Member Creditors Panel --------------------------------------------------------------- Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, appointed five members to the Official Committee of Unsecured Creditors in the Chapter 11 case of Precision Parts International Services Corp. and its debtor-affiliates. The panel consists of: 1. Golub Capital Incorporated Attn: Greg W. Cashman 551 Madison Avenue, 6th Floor, New York, NY 10022 Tel: (212) 660-7270 Fax: (212) 750-5505 2. Norwest Mezzanine Partners, LP Attn: Carter J. Balfour, CFA 80 S. 8th Street, Suite 3600 Minneapolis, MN 55402 Tel: (612) 215-1664 Fax: (612) 215-1602 3. Gibraltar Industries Attn: Kenneth W. Smith 3556 Lake Shore Rd. Buffalo, NY 14219, Tel: (716) 826-6500 Fax: (716) 826-1589 4. Heidtman Steel Attn: Sharon Zerman 2401 Front St. Toledo, OH 43605 Tel: (419) 469-8035 Fax: (419) 698-1317 5. Machine Concepts Inc. Attn: John Eiting 2167 SR 66 Minster, OH 45865 Tel: (419) 328-3498 Fax: (419) 628-2794 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. The Debtors proposed Alvarez & Marsal North America LLC 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. PRICE TRUCKING: Can Access TAB Cash Collateral on Interim Basis --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland authorized, on an interim basis, Price Trucking, Inc., and F.T. Silfies, Inc., to: i) use cash receipts secured under certain prepetition loan documents; ii) deem Transportation Alliance Bank, the Debtors' prepetition lender, adequately protected with regard thereto; iii) set hearing date; and iv) approve the extension of postpetition credit. The Debtors entered in a certain accounts receivable purchase and security agreement with TAB on May 12, 2008, as amended. The factoring agreement contains 2 relevant components: (i) a sale and purchase of accounts receivable; and (ii) security interest in these: (a) all accounts, chattel paper, general intangibles, documents, instruments, securities, deposit accounts, certificates of deposit and all rights of the Debtors as a seller of goods, including rights of reclamation, replevin and stoppage in transcit; (b) all goods, including but not limited to, all inventory, wherever located; (c) all equipment and fixtures, wherever located, and all additions, substitutions, replacements and accessions thereof and thereto; (d) all books and records, (e) all investments property; and (f) all proceeds of the foregoing. Under the term of the factoring agreement, TAB agreed to act as the exclusive purchaser of certain of the Debtors' eligible accounts receivable. TAB purchases the receivables at a discount and the balance of the purchase price, less certain fees and expenses, is remitted to the Debtors. On a daily basis, the Debtors electronically transmit a report to TAB which contains information regarding each Debtor's receivables for that day. thereafter, TAB wires an amount equal to approximately 90% of that day's receivables to the Debtors' operating account to fund the Debtors' operations. Payments by the Debtors' customers on account of the receivable are remitted directly to TAB. The cash collateral will provide working capital. The Court ordered the Debtors to deposit revenues, which TAB releases from its purchase of accounts receivable, to the extent not required to be held in the reserve accounts or other account retained by TAB under the factoring agreement into a debtor-in- possession account. TAB will retain control of the reserve account and will not permit the Debtors to direct disbursements from the reserve account. The Debtor is authorized to grant TAB a security interest in the Debtors' postpetition cash collateral with the same validity and priority as existed on the petition date in the assets, which security interest will serve as partial adequate protection for any decrease in the value of any prepetition security interest in the cash collateral. As adequate protection to TAB's interest in the cash collateral by granting, as additional security, a continuing and replacement first priority, automatically perfected security interest in, and li8en upon, all of the Debtors' unemcumbered personal property and assets, and all proceeds, products, rents and profits thereof, subject however, to any valid and perfected security interests in the assets in favor of any third party other than TAB prior to the petition date. The replacement liens will be enforceable in an amount equal to any aggregate postpetition diminution in the value of the prepetition collateral, a prepetition collateral existed as of the petition date, including, without limitation, any diminution in value resulting from the Debtors' use of cash collateral on or after the petition date. As additional adequate protection, TAB is allowed superpriority administrative claim to the extent the terms of the adequate protection procided prove insufficient to adequately protect the interest of TAB for use of the cash collateral and the proceeds from the sale of account receivable. The Court also ordered that notwithstanding the replacement liens granted to TAB, the collateral and liens will be subject and subordinate to a Carve Out of up to the amount of $15,000 for the (a) payment of allowed professionals fees and disbursements; and (b) payment of any quarterly fees payable to the Clerk of the Bankruptcy Court. The Carve Out is for the period of the interim order only. The Court is set to consider the Debtors' motion for continued use of the cash collateral on April 16, 2009, at 10:00 a.m. Objection to the motions are due April 13, 2009. About Price Trucking, Inc. Headquartered in Ogden, Utah, Price Trucking, Inc. -- http://www.pricetrucking.com/-- is a full service trucking company that serves 48 states. The Company holds permits for hazardous waste transportation in most of the eastern half of the United States. Price Trucking, Inc., and F.T. Silfies, Inc. filed for separate Chapter 11 protection on March 25, 2009, (Bankr. D. Md. Lead Case No.: 09-15044) J. Daniel Vorsteg, Esq. at Whiteford Taylor & Preston represents the Debtors in their restructuring efforts. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. QUANTUM CORPORATION: Moody's Downgrades Default Rating to 'Ca' -------------------------------------------------------------- Moody's Investors Service downgraded Quantum's probability of default rating to Ca from Caa2 following the recent announcement that the company has commenced a tender offer for up to $142 million of principal amount of its outstanding 4.375% Convertible Subordinated Notes due 2010. In addition, Moody's revised its open review for possible downgrade to a review with direction uncertain pending the completion of the tender offer process. The downgrade of the PDR reflects Moody's view that the tender offer whereby the Notes holders will receive $700 for each $1,000 of principal amount (and which will be financed with the net proceeds of a new term loan of $100 million issued to EMC Corporation), constitutes a distressed exchange. Moody's reflect the very high likelihood of this event occurring through the assignment of the Ca PDR. Moody's will classify this distressed exchange as a limited default and likely change the PDR upwards upon successful completion of the tender due to Moody's current belief that the going-forward PDR will end up at a higher level shortly following the closure of the tender process and recognition that the limited default has occurred. The successful completion of the tender offer will alleviate Moody's concerns regarding the potential accelerated maturity of the remaining $250 million senior secured term loan in February 2010. The resolution of this uncertainty combined with lower leverage, the company's improving financial performance (e.g., covenant free cash flow and EBITDA of $73 million and $106 million, respectively, during 2008 and increased gross margin rate due to the shift in sales mix, traction from its new DXi7500 products and EMC partnership, and cost reduction initiatives), and Moody's expectation of free cash flow generation in 2009 should provide a positive ratings bias for the company. The review will focus on the company's capital structure after completion of the tender offer and prospective ability to further improve its liquidity profile by increasing free cash flow in the midst of the current economic downturn, and/or potentially selling certain assets, business lines or the company as a whole, if necessary. The review will also continue to assess the company's ability to implement any additional restructuring programs, manage working capital needs, and maintain compliance with financial maintenance covenants under the bank credit facility, which notably tighten beginning March 30, 2009. Ratings downgraded: -- Probability-of-default rating to Ca from Caa2 -- Ratings under review direction uncertain: -- Corporate Family Rating of Caa1; -- Probability-of-default rating of Ca; -- $160 million subordinated convertible notes due 2010 of Caa3 (LGD 5, 75%); -- $50 million senior secured revolver expiring 2012 of B1 (LGD 2, 17%); -- $400 million senior secured first lien facility due 2014 (remaining balance of $250 million) of B1 (LGD 2, 17%); The last rating action for Quantum Corporation was on January 30, 2009, when Moody's downgraded Quantum's CFR to Caa1 from B3, its PDR to Caa2 from B3, and its subordinated convertible note ratings to Caa3 from Caa2. In addition, Moody's kept the ratings under review for further possible downgrade. With about $870 million in revenues for the twelve months ended December 31, 2008, Quantum Corporation, headquartered in San Jose, California, is a leading global data storage company offering a broad portfolio of disk-based deduplication/replication, tape and software products for backup, recovery and archive. RETAIL PRO: Court Defers Approval of Sale Until April 14 -------------------------------------------------------- Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware has continued the hearing on the proposed sale of Retail Pro Inc.'s assets to secured creditors Laurus Master Fund Ltd. and Midsummer Investment Ltd. The Debtors have scheduled a March 25 auction for their assets or businesses and contemplated on seeking approval of the sale to Laurus and Midsummer absent higher and better bids for the assets. Laurus, together with Midsummer, provided prepetition and postpetition secured financing to the Debtors. Prior to the March 25 auction, which was already delayed, Laurus filed a document with the U.S. Bankruptcy Court for the District of Delaware, stating that it had encouraged interested parties to make a bid in the bankruptcy sale process. Laurus clarified that it had not barred any party from conducting due diligence or from bidding on the Debtors' assets. While it has 5.1% of the common stock of Retail Pro, it noted that it does not have any reprepsentative on the board and it has not exercised any control over the Debtors. 3Q Holdings Limited filed a "preliminary objection" to the proposed sale, citing that in the event Laurus, which is submitting a credit bid, is the only bidder or the winning bidder at the auction, the hearing should be adjourned to allow the Court the ability to adjudicate 3Q's interests. 3Q asserts certain claims against Laurus in connection with a pre- bankruptcy sale of Retail Pro's former division. 3Q says it does not object to the continueance of the sale process, or the closing on a sale that cofers cash consideration to the estates that is sufficient to accomplish the return of 3Q's proeprty after its rights are adjudicated by the Court. 3Q has filed an adversary proceeding and a motion for preliminary injunction seeking to preserve its rights and interests that would otherwise be eviscerated through the sale process. 3Q does not consent to the transfer of certain "vendor loan documents" to Laurus. According to a minute entry posted in the court docket, Judge Peter J. Walsh has continued approval of the Sale and the Preliminary Injunction Motion until April 14, 2009. Background of 3Q Dispute On October 31, 2007, Island Pacific, Inc., entered into the Asset Purchase Agreement with 3Q, pursuant to which 3Q agreed to purchase the assets of Island for $16,000,000 subject to adjustments based upon, inter alia, the value of tangible assets transferred from Island to 3Q. Island is a former division of the Debtors that was acquired by merger in 1999 Prior to the execution of the APA, Island marketed and sold merchandising software to retail customers. As part of its business model, Island performed regular maintenance on the software for customers that chose these services, and the customers were charged periodic payments to cover the scheduled maintenance. The software and maintenance contracts were transferred to 3Q. The Purchase Price consisted of $13,000,000 in cash and $3,000,000 in a Vendor Loan Agreement entered into by and between Island and 3Q. Pursuant to the terms of the Vendor Note, 3Q was obligated to repay the $3,000,000 to Island starting with a $700,000 payment due and owing on July 1, 2008, with monthly payments of $200,000 due thereafter. 3Q was required to pay the balance of the Vendor Note on January 1, 2009. The terms of the Vendor Note-and the repayment thereof-were modified by the Security Trust and Intercreditor Deed entered into by and between, inter alia, National Australia Bank Limited and certain affiliates and related entities, as senior secured lender, and Island as subordinated lender. Specifically, pursuant to the terms of the Intercreditor Agreement, the Vendor Note obligations were subordinated to the indebtedness due and owing to NAB. Any repayment of the Vendor Note was prohibited unless 3Q satisfied a number of conditions precedent to repayment. The conditions included a requirement that 3Q complete and close upon -- within 6 months -- an equity infusion into the company in an amount no less than $8,000,000. To date, 3Q has not closed upon the requisite minimum equity infusion, and therefore, 3Q is prohibited from repayment of the Vendor Note. Pursuant to the terms of the Intercreditor Agreement, Island's rights to repayment of the Vendor Note remain unconditionally subordinated to NAB's claims and interests. In addition to the equity infusion, 3Q was required to maintain certain ratios and abide by restrictive covenants before the repayment could be made. 3Q's counsel, Mary E. Augustine, Esq., at Ciardi Ciardi & Astin, in Wilmington, Delaware, notes that the Purchase Price was subject to a downward adjustment in the event that the tangible assets delivered to 3Q were less than $800,000. As drafted, the APA contemplated the establishment of an escrow account from the sale proceeds to cover, inter alia, any shortfall in the value of the tangible assets. In the event that the escrow was insufficient, Island was required to deliver to 3Q cash in the amount of any shortfall. 3Q has not received any tangible net assets, and therefore, the full $800,000 is subject to refund. In addition, the Debtors are in possession of nearly $1.2 million in "converted payments" that should have been paid to 3Q. According to Ms. Augustine, despite numerous inquiries and requests by 3Q that the Funds be returned, and numerous pleadings filed by 3Q seeking various forms of relief with respect to the recovery of the Funds, the Debtors have not returned the Funds to 3Q. The Funds are not property of the Debtors' estates-and accordingly, if Laurus is allowed to acquire substantially all of the Debtors' assets at the Auction through credit bid, 3Q will be left with no legal remedy to recover the Funds. Terms of Laurus Sale Pat Regan, senior managing director employed by Laurus, says that pursuant to the asset purchase agreement reached with the Debtors, Laurus and Midsummer will credit bid the full amount of their prepetition and postpetition debts, pursuant to Section 363(k) of the Bankruptcy Code. The APA also provides that the Laurus/Midsummer will also pay, if they are the credit bidder, the cash amount of $400,000 Laurus/Midsummer will also pay all cure amounts related to the assume contracts set forth in the APA. Mr. Regan said that Laurus has had some preliminary discussions with certain of the Debtors' current officers concerning potential post-closing employment, but has not reached any agreements with these persons. He also admitted that Laurus had "limited conversations" with two potential bidders, but had not entered into any agreements with other party regarding the disposition of the Debtors' assets in the event that it is the successful purchaser. About Retail Pro Based in La Jolla, California, Retail Pro Inc. -- http://www.retailpro.com-- operates a chain of retail stores. The company and three of its affiliates filed for Chapter 11 protection on Jan. 10, 2009 (Bankr. D. Del. Lead Case No. 09-10087). Bruce Grohsgal, Esq., and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl Young & Jones, represent the Debtors in their restructuring efforts. The Debtor proposed View Partners Capital LLC as their investment banker and Kurtzman Carson Consultants LLC as their notice, claims and solicitation agent. As of Nov. 30, 2008, the Debtors have $24,652,353 in total assets and $28,867,462 in total debts. RHODES COMPANIES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Heritage Land Company, LLC 4730 S. Fort Apache #300 Las Vegas, NV 89147 Bankruptcy Case No.: 09-14778 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- The Rhodes Companies, LLC 09-14814 Tribes Holdings, LLC 09-14817 Apache Framing, LLC 09-14818 Geronimo Plumbing, LLC 09-14820 Gung-Ho Concrete, LLC 09-14822 Bravo, Inc. 09-14825 Elkhorn Partners 09-14828 Six Feathers Holdings, LLC 09-14833 Elkhorn Investments, Inc. 09-14837 Jarupa, LLC 09-14839 Rhodes Realty, Inc. 09-14841 C & J Holdings, Inc. 09-14843 Rhodes Ranch General Partnership 09-14844 Rhodes Design And Development Corporation 09-14846 Parcel 20, LLC 09-14848 Tuscany Acquisitions IV, LLC 09-14849 Tuscany Acquisitions III, LLC 09-14850 Tuscany Acquisitions II, LLC 09-14852 Tuscany Acquisitions, LLC 09-14853 Rhodes Ranch Golf And Country Club 09-14854 Overflow, LP 09-14856 Wallboard, LP 09-14858 Jackknife, LP 09-14860 Batcave, LP 09-14861 Chalkline, LP 09-14862 Glynda, LP 09-14865 Tick, LP 09-14866 Rhodes Arizona Properties, LLC 09-14868 Rhodes Homes Arizona, LLC 09-14882 Tuscany Golf Country Club, LLC 09-14884 Pinnacle Grading, LLC 09-14887 Type of Business: The Rhodes Companies, together with its affiliates, is a private master planned community developer and homebuilder in the Las Vegas valley. The Rhodes Companies was founded in 1991. Chapter 11 Petition Date: March 31, 2009 Court: District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Zachariah Larson, Esq. ecf@lslawnv.com Larson & Stephens 810 S. Casino Center Blvd., Suite 104 Las Vegas, NV 89101 Tel: (702) 382-1170 Fax: (702) 382-1169 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sunstate Companies Inc. trade debt $201,094 4435 East Colton Avenue Suite 101 Las Vegas, NV 89115 Tel: (702) 798-11776 GC Wallace trade debt $201,000 6655 South Cimaron Road Las Vegas, NV 89113 Tel: (702) 804-2000 Aspen Concrete Inc. trade debt $128,623 4177 East Huntington Drive Flagstaff, AZ 86004 Tel: (928) 226-9613 American Soils Engineering LLC trade debt $84,490 Triton Grading & Paving LLC trade debt $78,683 Sunland Asphalt trade debt $73,989 Cabinetec Inc. trade debt $69,139 KH Landscaping Inc. trade debt $69,026 Envision Concrete trade debt $67,480 NJ Shaum & Son Inc. trade debt $65,470 MS Concrete Inc. trade debt $52,691 Bair's Carpet Valley - C trade debt $51,572 American Asphalt & Grading Co. trade debt $35,000 Evans Recreation Installations trade debt $32,820 Integrity Masonry Inc. trade debt $31,553 J&J Enterprises Inc. trade debt $26,159 Western Landscape Construction trade debt $24,012 WestCor Construction trade debt $23,539 Interstate Plumbing & A/C trade debt $20,849 Slater Hanifan Group trade debt $20,546 TSS Enterprises Inc. trade debt $19,784 Westar Kitchens & Bath trade debt $19,476 Lovino Masonry Inc. trade debt $17,378 Northland Exploration Surveys trade debt $15,925 The petition was signed by James M. Rhodes, president. RITZ CAMERA: Acting U.S. Trustee Picks 7-Member Creditors Panel --------------------------------------------------------------- Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, appointed seven members to the Official Committee of Unsecured Creditors in the Chapter 11 case of Ritz Camera Centers Inc. The panel consists of: 1. Nikon Inc. Attn: John P. Browne 1300 Walt Whitman Road Melville, NY 11747 Tel: (631) 547-4251 Fax: (631) 547-6261 2. Canon U.S.A., Inc. Attn: Michael Lane One Canon Plaza Lake Success, NY 11042 Tel: (516) 328-4985 Fax: (516) 328-4993 3. SanDisk Corporation Attn: Phyllis Anne Miller 601 McCarthy Blvd. Milpitas, CA 95035, Tel: (408) 801-2846 Fax: (408) 801-8742 4. Tocad America Attn: Richard Darrow 53 Green Pond Road Rockaway, NJ 07866 Tel: (973) 627-9600 ext. 103 Fax: (973) 664-2438 5. Vertis, Inc. Attn: Luke J. Brandonisio 250 W. Pratt St. Baltimore, MD 21201 Tel: (410) 361-8659 6. Simon Property Group, Inc. Attn: Ronald M. Tucker 225 W. Washington St. Indianapolis, IN 46204 Tel: (317) 263-2346 Fax: (317) 263-7901 7. GGP Limited Partnership Attn: Julie Minnick Bowden 110 N. Wacker Drive Chicago, IL 60606 Tel: (312) 960-2707 Fax: (312) 442-6374 About Ritz Camera Centers Inc Headquartered in Beltsville, Maryland, Ritz Camera Centers Inc. -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. The company filed for Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case No. 09-10617). Karen M. McKinley, Esq., and Norman L. Pernick, Esq., at Cole Scholtz Meisel Forman Leonard, P.A., represent the Debtor in its restructuring efforts. The Debtor proposed Thomas & Libowitz PA as corporate counsel; FTI Consulting Inc. t/a FTI Palladium Partners as financial advisor; and Kurtzman Carson Consultants LLC as claims agent. When the Debtor filed for protection from its creditors, it listed assets and debts between $100 million and $500 million. RITZ CAMERA: Gets Final Court Order to Access $85MM DIP Facility ---------------------------------------------------------------- Judge Mary S. Walrath of the U.S. Bankruptcy Court for the District of Delaware issued a final order authorizing Ritz Camera Center Inc. to access up to $85 million in debtor-in-possession financing from its existing secured lenders. The Debtors will use the proceeds to fund operations as it closes 400 underperforming stores. The Final DIP Order was issued amid objections by the Debtors' official committee of unsecured creditors. As reported by the Troubled Company Reporter on March 19, 2009, the panel argued that the DIP facility does not benefit the Debtor's estates, and only serves the purpose of DIP lenders. The Creditors Committee said the DIP Loan "provides a phantasm of increased availability" and serves no purpose "other than to fund a platform for the rapid liquidation" in a "process controlled entirely by the DIP lenders." The Creditors Committee said the financing improperly allows the lenders to "convert their prepetition debt into postpetition debt, while forcing the debtor to liquidate its assets, at lightening speed, for their sole benefit after taking their $1.7 million fee." Ritz Camera received final authorization from the Bankruptcy Court to obtain the DIP Loans from Wachovia Bank, National Association, as agent for itself and other lenders. The Debtor is also authorized to enter into a Ratification Agreement dated February 25, 2009, by and among Debtor and Ray Enterprises, LLC (collectively, the "Borrowers"), Mufungo, LLC ("Guarantor"), the Agent and the Lenders, which ratifies, extends, adopts and amends the Existing Loan Agreement and the other Pre-petition Financing Agreements. Debtor is also authorized to use Lenders' cash collateral, in accordance with a budget, until the expiration of the Lenders' commitment to lend under the Loan Agreement and the other Financing Agreements. On February 23, 2009, the Debtor has proposed to access postpetition financing from the Lenders of up to $85,000,000 (subject to a Borrowing Base). As of the Petition Date, the aggregate amount of all loans, letter of credit obligations and other prepetition obligations owing by the Debtor and Ray Enterprises, LLC to Lenders amounted to $54,523,522, secured by first priority security interests upon all of the Pre-petition Collateral, subject only to certain permitted encumbrances. To secure the prompt payment and performance of any and all postpetition obligations, Lenders are granted valid and perfected security interests in all of the Prepetition Collateral and the Postpetition Collateral. Lenders are also granted an allowed superpriority administrative claim pursuant to Sec. 364(c) of the Bankruptcy Code. As adequate protection for the diminution in value of their interests in the Pre-petition Collateral (including Cash Collateral), Lenders are granted replacement liens in all Collateral. As further adequate protection, Debtor is authorized to provide adequate protection payments to the Lender in the form of: (a) payment of interest, fees and other amounts due under the Prepetition Financing Agreements, at the times specified therein, and (b) ongoing payment of the fees, costs and expenses, including reasonable legal and other professionals' fees and expenses, of the Agent and the Lenders as required under the Prepetition Financing Agreements. A copy of the Court's final order is available at: http://bankrupt.com/misc/RitzCamera.FinalDIPOrder.pdf About Ritz Camera Centers Inc Headquartered in Beltsville, Maryland, Ritz Camera Centers Inc. -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. The company filed for Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case No. 09-10617). Karen M. McKinley, Esq., and Norman L. Pernick, Esq., at Cole Scholtz Meisel Forman Leonard, P.A., represent the Debtor in its restructuring efforts. The Debtor proposed Thomas & Libowitz PA as corporate counsel; FTI Consulting Inc. t/a FTI Palladium Partners as financial advisor; and Kurtzman Carson Consultants LLC as claims agent. When the Debtor filed for protection from its creditors, it listed assets and debts between $100 million and $500 million. RITZ CAMERA: Panel Wants to Hire Cooley Godward as Lead Counsel --------------------------------------------------------------- The Official Committee of the Unsecured Creditors in Ritz Camera Centers Inc.'s Chapter 11 case seeks authorization from the U.S. Bankruptcy Court for the District of Delaware to employ Cooley Godward Kronish LLP as its lead counsel. Cooley will: a) attend meetings of the Committee; b) review financial information furnished by the Debtor to the Committee; c) negotiate the budget and the terms of post petition financing; d) review and investigate the liens of purported secured parties; e) confer with the Debtor's management and counsel; f) coordinate efforts to sell or reorganize assets of the Debtor in a manner that maximizes the value of unsecured creditors; g) review the Debtor's schedules, statements of affairs and business plan; h) advise the Committee as to the ramifications regarding all of the Debtor's activities and motions before the Court; i) file appropriate pleadings on behalf of the Committee; j) review and analyze the Debtor's financial advisor's work product and report to the Committee; k) provide the Committee with legal advice in relation to the case; l) prepare various applications and memoranda of law submitted to the Court for consideration and handle all other matters relating to the representation of the Committee that may arise; m) assist the committee in negotiations with the Debtor and other parties in interest on an exit strategy for this case; and n) perform other legal services for the Committee as may be necessary or proper in this proceeding. Cooley will represent the Committee in coordination with Bifferato Gentilotti LLC, the Committee's proposed local counsel to avoid or minimize duplication of services. Cooley professionals working in these Chapter 11 case and their hourly rates are: Jay R. Indyke, partner $785 Cathy R. Hershcopf, partner $705 Nicholas Smithberg, associate $580 Brent Weisenberg, associate $555 Lesley Kroupa, associate $390 Mr. Indyke assures the Court that Cooley is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Indyke can be reached at: Cooley Godward Kronish LLP The Grace Building 1114 Avenue of the Americas New York, NY 10036-7798 Tel: 212-479-6000 Fax: 212-479-6275 About Ritz Camera Centers Inc Headquartered in Beltsville, Maryland, Ritz Camera Centers Inc. -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. The company filed for Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case No. 09-10617). Karen M. McKinley, Esq., and Norman L. Pernick, Esq., at Cole Scholtz Meisel Forman Leonard, P.A., represent the Debtor in its restructuring efforts. The Debtor proposed Thomas & Libowitz PA as corporate counsel; FTI Consulting Inc. t/a FTI Palladium Partners as financial advisor; and Kurtzman Carson Consultants LLC as claims agent. When the Debtor filed for protection from its creditors, it listed assets and debts between $100 million and $500 million. RIVIERA HOLDINGS: Dec. 31 Balance Sheet Upside Down by $58.7MM -------------------------------------------------------------- Las Vegas-based Riviera Holdings Corporation on Tuesday reported the financial results for the three- and twelve-month periods ended December 31, 2008. Riviera said net revenues for the fourth quarter of 2008 were $36.0 million, a decrease of $11.4 million, or 24%, from $47.4 million for the comparable period in the prior year. Net loss for the fourth quarter of 2008 was $12.7 million, a decline of $6.6 million, compared to a net loss of $6.1 million, for the same period in the prior year. Net revenues for the 12 months ended December 31, 2008, were $169.8 million, a decrease of $35.7 million, or 17%, from $205.5 million for the comparable period in the prior year. Net losses were $11.9 million for the 12 months ended December 31, 2008, compared with $18.3 million for the same period in 2007. Riviera had cash and cash equivalents of $13.5 million as of December 31, 2008, and $20.5 million as of September 30, 2008. In addition, Riviera had $2.8 million in restricted cash and investments as of December 31, 2008. The Company's cash and cash equivalents decreased by $7.0 million during the three months ended December 31, 2008, primarily as a result of a $5.4 million decrease in income from operations and $4.1 million in net cash used in investing activities. Riviera had $204.9 million in total assets, $263.5 million in total current liabilities, and $158,000 in long-term debt, resulting in $58.7 million in stockholders' deficit. As of December 31, 2008, Riviera was in compliance with the financial covenant set forth in the Credit Agreement. The Consolidated Leverage Ratio as defined in the Credit Agreement was 8.4 for the four quarters ending December 31, 2008. The maximum allowable Consolidated Leverage Ratio permitted under the Credit Agreement as of December 31, 2008 is 6.5. However, the Consolidated Leverage Ratio test is applicable only if Riviera has more than $2.5 million outstanding on the Revolving Credit Facility. As of December 31, 2008, Riviera had $2.5 million outstanding on the Revolving Credit Facility. Las Vegas-based Riviera Holdings Corporation (NYSE Amex: RIV) owns and operates the Riviera Hotel and Casino on the Las Vegas Strip and the Riviera Black Hawk Casino in Black Hawk, Colorado. RIVIERA HOLDINGS: Interest Nonpayment Cues Moody's Rating Cuts -------------------------------------------------------------- Moody's Investors Service lowered all of Riviera Holdings Corporation's ratings to Ca from Caa2 in response to the company's announcement that it did not make the $4 million interest payment due March 30, 2009 under its credit facility. The company stated it has about $11 million in unrestricted cash, but that it was in the best interest of the company to retain the funds. The rating outlook is negative. The negative rating outlook considers that if the interest payment is not made within the three day grace period, the lenders under the credit facility would be able to accelerate repayment of all outstanding amounts under the credit facility. If Riviera fails to make the interest payment within the grace period, Moody's will downgrade the Probability of Default Rating to D. While Riviera is negotiating with its lenders regarding a waiver or forbearance, there is no assurance that the company will be successful in those negotiations. Moody's also believes that any restructuring of the company's capital structure would likely include a Chapter 11 proceeding. Riviera, like all casino companies with significant exposure to the Las Vegas Strip, has experienced weak gaming demand trends which are likely to continue through 2009. These ratings were lowered: -- Probability of Default Rating to Ca from Caa2 -- Corporate Family Rating to Ca from Caa2 -- $225 million term loan due 2014 to Ca (LGD3, 48%) from Caa2 (LGD3, 48%) -- $20 million revolving credit facility expiring 2012 to Ca (LGD3, 48%) from Caa2 (LGD3, 48%) Moody's previous rating action related to Riviera occurred on March 6, 2009, when the company's ratings were lowered to Caa2 and placed on review for further possible downgrade. Riviera Holdings Corporation owns and operates the Riviera Hotel and Casino on the Las Vegas Strip and the Riviera Black Hawk Casino in Black Hawk, Colorado. Riviera generates annual net revenue of approximately $180 million. RIVIERA HOLDINGS: Nonpayment of Interest Cues S&P's 'D' Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Las Vegas-based Riviera Holdings Corp. to 'D'. "The rating actions stem from the company's announcement that it did not pay the approximately $4 million of accrued interest on the company's $245 million credit facility," said Standard & Poor's credit analyst Melissa Long. A payment default has not occurred relative to the legal provisions of the credit facility since there is a three-day grace period to make the payments. However, S&P considers a default to have occurred, even if a grace period exists, when the nonpayment is a function of the borrower being under financial stress -- unless S&P is confident that the payment will be made in full during the grace period. Riviera said that it did not plan to pay the interest due within the grace period. Riviera has engaged XRoads Solution Group LLC as its financial advisor. The company has also entered into discussions with Wachovia Bank, the administrative agent under the credit facility, to negotiate a waiver or forbearance with respect to the anticipated payment default, the anticipated going concern default, and the notice of default received on Feb. 26, 2009 (regarding Riviera's failure to provide a Deposit Account Control Agreement from each of the company's depository banks pursuant to an Oct. 14, 2008 request made by Wachovia to the company). RIVIERA HOLDINGS: Skips $4MM Interest Payment; May Go Bankrupt -------------------------------------------------------------- Las Vegas-based Riviera Holdings Corporation did not pay the approximately $4 million interest due March 30, 2009. Riviera's current debt consists of a seven-year $225 million term loan which matures on June 8, 2014 and a $20 million five-year revolving credit facility. On February 26, 2009, the Company received a notice of default on its New Credit Facility from Wachovia Bank, National Association, the administrative agent. The notice of default relates to the Company's New Credit Facility and is the result of the Company's failure to provide a Deposit Account Control Agreement from each of the Company's depository banks per a request made by Wachovia to the Company on October 14, 2008. The DACA that Wachovia requested the Company to execute was in a form that the Company ultimately determined to contain unreasonable terms and conditions as it would enable Wachovia to access all of the Company's operating cash and order it to be transferred to a bank account specified by Wachovia. The Notice further provides that as a result of the default, the Company will no longer have the option to request LIBOR Rate loans. As a result of losing the availability of LIBOR Rate loans under the New Credit Facility, the interest rate on the Term Loan will increase from roughly 7.5% to 8.5% and the interest rate for the Revolving Credit Facility will remain the same. On March 25, 2009, the Company engaged XRoads Solution Group LLC as financial advisor. Based on an extensive analysis of its current and projected liquidity, and with its financial advisor's input, the Company determined it was in the best interests of the Company to not pay the accrued $4 million interest on its $245 million New Credit Facility, which was due March 30, 2009. The Company's failure to pay interest due on any loan within the New Credit Facility within a three-day grace period from the due date is an event of default under the New Credit Facility. The Company does not plan to pay the interest due within the three-day grace period. As a result of this event of default, the Company's lenders have the right to seek to charge additional default interest in the amount of 2% on the Company's outstanding principal and interest under the credit agreement and automatically charge additional default interest of 1% on any overdue amounts under the interest rate swap agreement the Company entered in conjunction with the New Credit Facility. The default rates are in addition to the interest rates that would otherwise be applicable under the Credit Agreement and Swap Agreement. The Company believes that the Company's lenders will seek to apply these higher default interest rates as a result of the Company's failure to make the interest payment due on March 30, 2009. The Company has entered into discussions with Wachovia to negotiate a waiver or forbearance regarding the Notice and the anticipated payment default and an anticipated going concern default. If the Company is not successful in negotiating a waiver or forbearance agreement with the Company's lenders regarding the Notice and the anticipated payment and going concern defaults, Wachovia and the lenders under the New Credit Facility would have the ability to: i) accelerate repayment of all amounts outstanding under the New Credit Facility ($227.5 million at December 31, 2008); ii) commence foreclosure on some or all of the Company's assets securing the outstanding balance under the New Credit Facility; or iii) exercise other rights and remedies granted under the New Credit Facility as may be available pursuant to applicable law. In addition, under the interest rate swap agreement, Wachovia can terminate the interest rate swap agreement and accelerate repayment of the amount outstanding under that agreement -- $30.2 million at December 31, 2008. If the New Credit Facility and interest rate swap indebtedness were to be accelerated, the Company would be required to refinance or restructure the payments on that debt. The Company cannot assure that it would be successful in completing a refinancing or consensual out-of-court restructuring, if necessary. If it were unable to do so, it would likely be compelled to seek protection under Chapter 11 of the U. S. Bankruptcy Code. The Company's independent registered public accounting firm has included an explanatory paragraph that expresses substantial doubt as to the Company's ability to continue as a going concern in their audit report contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities Exchange Commissions. William L. Westerman, Chairman and CEO of Riviera Holdings Corporation, said, "The decision not to pay our accrued interest was both difficult and unpleasant. We have always prided ourselves on paying all our obligations on a timely basis. However, in view of the continuing devastating competitive pressure on room rates, the rapidly depreciating convention attendance in the Las Vegas market, and the input of our financial advisor, we determined it was imperative and in the best interests of our Company to maximize our liquidity by retaining the funds that would have been employed to pay the first quarter interest. "Both our Las Vegas and Black Hawk properties are generating positive free cash flow and this, combined with our cash balances, will help insure that we continue to pay all our operating costs on a timely basis and fund maintenance capital expenditures. There will be no effect on our team members, vendors and most importantly, our customers. Our lenders and the Company are well aware of the necessity of resolving this situation in an expeditious manner to preserve the long term viability and value of the Company. Our immediate priority is to address our untenable capital structure with our lenders and Wachovia with the goal of achieving a solution that either avoids the necessity for Chapter 11 proceedings or that results in a pre-negotiated plan of reorganization which would be confirmed through voluntary Chapter 11 proceedings. "The deteriorating trends in revenue and earnings experienced during the first three quarters of 2008 continued as evidenced by our fourth quarter results and accelerated during the first quarter of 2009. We expect this situation to continue as long as competitors in the Las Vegas market follow a strategy of sacrificing ADR to maximize room occupancy and the decline in convention business is unabated. In spite of this pessimistic outlook, we are confident that we will maintain sufficient cash flow to meet our operating obligations and maintain our properties. We expect to emerge through a restructuring with a capital structure which will enable the Company not only to survive, but to grow as the economy recovers and the competitive situation in Las Vegas returns to a more rational environment." Las Vegas-based Riviera Holdings Corporation (NYSE Amex: RIV) owns and operates the Riviera Hotel and Casino on the Las Vegas Strip and the Riviera Black Hawk Casino in Black Hawk, Colorado. RPM SOLUTIONS: Back On Track and Now Able to Make Payments ---------------------------------------------------------- RPM Solutions Inc.'s owner and president, Jeffrey N. Caldwell, said that the Company is back on track and that it is able to make payments, Ben Sutherly at Dayton Daily News reports. According to Dayton Daily, RPM Solutions has been reorganizing under Chapter 11 protection since December 2008. RPM Solutions reported in January 2009 that it had $136,000 in personal property assets and $1.99 million in liabilities. On March 16, 2009, a fourth store in leased space at 4864 Airway Road in Dayton closed to make way for a Tim Hortons restaurant, the report states, citing Mr. Caldwell, who hopes to open another store near the Dayton Mall this year. Mr. Caldwell, Dayton Daily relates, said that a fire destroyed the Fricker's restaurant on Springboro Pike in September 2008, hurting his business by 35%. According to the report, Mr. Caldwell said that his business has suffered from being in an "economically depressed" area. Dayton, Ohio-based RPM Solutions Inc. is engaged in the general auto repair business. The Company has three local Precision Tune Auto Care franchises. The Company filed for Chapter 11 bankruptcy protection on December 22, 2008 (Bankr. S.D. Ohio Case No. 08-36529). Anne M. Frayne, Esq., who has an office at 18 West First Street, assists the Company in its restructuring effort. The Company listed $100,001 to $500,000 in assets and $1,000,001 to $10,000,000 in debts. SARATOGA RESOURCES: Files for Chapter 11, In Talks for DIP Funding ------------------------------------------------------------------ Saratoga Resources, Inc., and certain operating subsidiaries filed on March 31, 2009, voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Western District of Louisiana in Lafayette, Louisiana. Saratoga and its subsidiaries will continue to operate their businesses and manage their properties as debtors in possession. While Saratoga believes it has sufficient cash to operate its businesses in the immediate term, the company is also in discussions with its senior secured lender for new, debtor-in- possession financing to supplement existing working capital. As of March 31, 2009, the company had cash of roughly $4.718 million. The bankruptcy filings follow the aftermath of Hurricanes Ike and Gustav in the fall of 2008 and the unprecedented decline in oil and gas prices which, together, resulted in lower than projected revenues and profitability and a notice of default from Saratoga's secured lenders for alleged noncompliance with certain covenants in Saratoga's credit agreements. Management has sought, without success, an amicable resolution and forbearance in order to cure the alleged covenant defaults and to access available credit under its revolving credit facility to continue pursuit of its ongoing drilling, workover and recompletion program. Despite management's efforts, management and the company's board determined that a bankruptcy court reorganization would offer the best means of addressing the company's existing debt structure and realizing the long term anticipated benefits of Saratoga's drilling, workover and recompletion program. "Although we have made great progress in increasing our reserves and daily production and are actively pursuing cost reduction efforts to offset the effects of reduced oil and gas prices and assure future compliance with all applicable covenants, the restriction on access to available credit under our revolving debt facility has impaired our ability to continue our development program and to achieve compliance with covenants going forward," stated Thomas F. Cooke, Saratoga's Chairman and Chief Executive Officer. "We will use the Chapter 11 process to resolve issues with our lenders and to develop our holdings, continue to grow our production and revenues and reduce our operating expenses pending resolution of issues with our lenders," Mr. Cooke said. "Since acquisition of the Harvest companies in July 2008, Saratoga's ongoing development program has increased proved reserves from 67.3 billion cubic feet of gas equivalent (Bcfe) at year-end 2007 to 76.7 Bcfe at year-end 2008. Taking into account 2008 net production of 7.0 Bcfe, we have added 16.4 Bcfe of proved reserves during the year, a 24% increase over 2007. Net daily production has increased from an average of 2,359 barrels of oil equivalent per day (Boepd) in July 2008 to in excess of 3,300 Boepd for the week ended March 27, 2009, a 40% increase in production. We have targeted completion of our GPLD A-191 well in Grand Bay Field and more than fifteen attractive workover and recompletion prospects that we believe will continue the trend of increases in daily production and proven reserves. "We appreciate the support of our employees, vendors, business associates and stockholders. We want to assure them that we will continue doing business while we complete the processes before us and expect that a vast majority of our suppliers, vendors and business associates will see no disruption in our business. We believe that our long-term prospects are solid, that we have substantial untapped reserves and that our development program will continue to add to our daily production increases. The process we have undertaken will better allow us to realize the full value of our properties for the benefit of both our creditors and our stockholders and position us to benefit from what we expect is an inevitable recovery in oil and gas prices." Saratoga expects to file its Annual Report on Form 10-K on or before April 15, 2009, and intends to file its monthly reports to the bankruptcy court under Form 8-K. Saratoga is being advised by its legal counsel, Adams & Reese LLP; its investment banker, Pritchard Capital Partners LLC; and its financial advisor, Ambrose Consulting LLC. Saratoga Resources, Inc. is an independent exploration and production company with offices in Austin and Houston, in Texas, and Covington, Louisiana. Saratoga engages in the acquisition and development of oil and gas producing properties that allow the company to grow through low-risk development and risk-managed exploration. Saratoga currently operates properties in Texas and Louisiana with principal holdings covering approximately 30,000 net acres located in the state waters offshore Louisiana. SEEQPOD: Files for Chapter 11 Bankruptcy Protection in California ----------------------------------------------------------------- Robin Wauters at TechCrunch.com reports that SeeqPod has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court of the Northern District of California. According to TechCrunch.com, SeeqPod has raised $7 million in venture capital to date from undisclosed investors, which the Company is evidently doing out of fear about the outcome of the multibillion dollar lawsuits filed by music labels like Warner Music, Capitol Records, and EMI against the Company. TechCrunch.com states that SeeqPod has developed interesting and powerful technology that can quickly crawl the Web for playable media like MP3s, slideshow presentations, and videos and allow users to play it on-site. The report says that the crawling engine can pick up pirated music files from across the Web too, and encouraged many third-party services to use the engine as the basis of their online offerings. TechCrunch.com reports that SeeqPod has started selling its source code to developers for $5,000 in the hopes of creating a legion of 'mini-SeeqPods' which could prove difficult for the music labels to kill one by one. TechCrunch.com states that it's yet unclear if that strategy has paid off. SeeqPod is a "playable media" search service that many music sites use as the foundation for their core offering. SEMGROUP LP: To Wind Down Portion of Asphalt Unit Left by SGLP -------------------------------------------------------------- Steven Church of Bloomberg reports that SemGroup, L.P. will shut its asphalt subsidiary and fire the remaining employees after dividing the unit's assets with its publicly traded affiliate SemGroup Energy Partners L.P. Bloomberg reported that SemGroup Chief Executive Officer Terrence Ronan, in a memo to employees, said the Company failed to find a buyer for the pieces of its SemMaterials unit that won't be transferred to SemGroup Energy. And he added, "The only financially reasonable course of action is to begin the orderly wind-down of SemMaterials". Bloomberg notes that SemGroup LP, which filed for bankruptcy July 22, shared employees and other resources with publicly traded SemGroup Energy, according to court documents. Earlier, the company won court permission to split its asphalt assets, sending some workers to SemGroup Energy. According to the report, company spokesman Tom Becker said the company hasn't yet determined how many of the 551 SemMaterials workers will be transferred to SemGroup Energy and how many will be fired. SemGroup employs 1,962 people, said Bloomberg. Also, the report points out that SemGroup asked U.S. Bankruptcy Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware for more time to develop a reorganization plan. The Company's exclusive right to file a plan was scheduled to end March 19 but was automatically extended until Judge Shannon has a chance to rule, the company said in a court filing. As reported by the Troubled Company Reporter on March 17, SemGroup L.P. received approval from the Bankruptcy Court of its settlement with SemGroup Energy Partners. The Company, according to Bloomberg's Bill Rochelle, said that the settlement alleviates the need for selling the remaining businesses and will enable an emergence from Chapter 11 as a public company. According to Bill Rochelle, since SemGroup L.P. was unable to find a buyer for its liquid asphalt business, it will be turned over to SemGroup Energy along with 355,000 barrels of crude. He added that in return, the public company will transfer crude oil storage assets in Kansas to SemGroup LP. In total, SemGroup Energy and an affiliate will have $55 million in unsecured claims against SemGroup LP. Each party will release claims against one another. Tulsa World reported that SemGroup LP CEO Terry Ronan told employees March 9 that the Company could emerge from bankruptcy later this year as a publicly traded entity focused on its crude oil storage and distribution unit. SemGroup, according to the report, said it plans to separate its assets and operations now connected to the public subsidiary SGLP and continue the sell-off of assets that began with the SemMaterials asphalt unit. As reported by the TCR on March 2, SemMaterials, L.P. sought approval from the Bankruptcy Court of (i) a February 23 auction and sale of all or substantially all of its assets, or in the alternative, (ii) a winding-down of SemMaterials and the rejection of a terminalling agreement with non-debtor affiliate SemGroup Energy Partners Bloomberg reported that lawyers of SemGroup and New York investor John A. Catsimatidis confirmed that Mr. Catsimatidis submitted a bid for the asphalt products business, but failed to arrange financing on time. Mr. Catsimatidis owns five of nine seats on SemGroup's management committee, but has feuded with SemGroup's managers and lawyers over his effort to take charge of the company's restructuring. Relationship with SGLP SemGroup and its affiliates said that prior to their bankruptcy filing, they entered into four complex transactions with SemGroup Energy Partners whereby the Debtors sold various assets to SGLP and certain of its affiliates. In connection with these asset sales, the parties also entered into several services agreements. These transactions culminated in a situation where operations of the physical assets of the Debtors and SGLP became inextricably intertwined. Since the bankruptcy filing, several disputes have arisen with respect to the asset sales and the services agreements, including, but not limited to, the ownership of various assets, the amounts of prepetition claims owed under the services agreements, and the amounts of potential rejection damages associated with the services agreements. In addition, these issues have hampered the Debtors' efforts to sell their assets, including the SemMaterials assets, which SGLP filed an objection to. In an effort to resolve the disputes between the parties -- including SGLP's objection to sell SemMaterials or, absent a buyer, terminate their terminalling agreement -- the parties engaged in arms' length negotiations and reached the compromise and settlement A copy of the Term Sheet reached by the parties is available for free at http://bankrupt.com/misc/SemGroup_SGLP_TermSheet.pdf About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SENSATA TECHNOLOGIES: S&P Downgrades Corp. Credit Rating to 'SD' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Sensata Technologies B.V., a manufacturer of sensors and controls, to 'SD' (selective default) from 'CC'. S&P also lowered the issue-level rating on the affected senior unsecured and subordinated notes to 'D' from 'C'. Sensata's senior secured debt remains on CreditWatch with negative implications pending S&P's subsequent review of the corporate credit rating on the company. If the eventual corporate credit rating is lower than 'CCC+', S&P would lower these issue-level ratings. The downgrade follows the company's announcement that it completed a tender offer for its various notes with approximately $168 million aggregate principal amount purchased. "As S&P noted when S&P lowered the ratings to 'CC', S&P considers the offer a distressed exchange and, as such, tantamount to a default. The rating actions reflect effective completion of the tender offer," said Standard & Poor's credit analyst Dan Picciotto. S&P will continue to rate Sensata and it is its preliminary expectation that the new corporate credit rating is likely to be in the 'CCC' category, depending on S&P's assessment of the company's new capital structure and liquidity profile. SILGAN HOLDINGS: S&P Gives Positive Outlook; Keeps 'BB+' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Silgan Holdings Inc. to positive from stable, reflecting the company's progress toward improving its financial profile. In addition, Standard & Poor's affirmed all its ratings on the Stamford, Connecticut-based company, including the 'BB+' corporate credit rating. "The outlook revision incorporates Silgan's strengthening financial profile supported by improved earnings and solid free cash generation," said Standard & Poor's credit analyst Liley Mehta. Accordingly, the ratio of funds from operations to total debt (adjusted for capitalized operating leases and unfunded postretirement obligations) improved to 27% at Dec. 31, 2008, from 20% for the corresponding period of the prior year. S&P expects credit measures to maintain a gradually improving trend in the near term, and the company to continue to reduce debt, in the absence of acquisitions. Ratings incorporate the expectation that management will maintain a disciplined approach to acquisitions to support Silgan's growth strategy, in a manner that preserves credit quality. The ratings on Silgan reflect its satisfactory business position as a major North American producer of rigid consumer goods packaging, its fairly steady earnings and free cash flow generation, and its demonstrated ability to maintain (or quickly return to) a capital structure consistent with the rating despite periodic acquisitions. These attributes are offset by somewhat aggressive financial policies and other risks associated with the company's strategy of growth via acquisitions. SILICON GRAPHICS: Case Summary & 50 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Silicon Graphics, Inc. dba Silicon Graphics Computer Systems aka SGI, Inc. aka SGI 1140 East Arques Avenue Sunnyvale, CA 94085 Bankruptcy Case No.: 09-11701 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Silicon Graphics of Manhattan, Inc. 09-11700 Silicon Graphics, Inc. 09-11701 Silicon Graphics Federal, Inc. 09-11702 Cray Research, L.L.C. 09-11703 Silicon Graphics Real Estate, Inc. 09-11704 Silicon Graphics World Trade Corporation 09-11705 Silicon Studio, Inc. 09-11706 Cray Research America Latina Ltd. 09-11707 Cray Research Eastern Europe Ltd. 09-11708 Cray Research India Ltd. 09-11709 Cray Research International, Inc. 09-11710 Cray Financial Corporation 09-11711 Cray Asia/Pacific, Inc. 09-11712 ParaGraph International, Inc. 09-11713 WTI Development, Inc. 09-11714 Type of Business: The Debtors deliver an array of server, visualization, and storage software. This is the second bankruptcy filing for Silicon Graphics. The Debtors first filed for Chapter 11 on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06- 10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. The Court confirmed the Debtors' Plan of Reorganization on Sept. 19, 2006. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. See http://www.sgi.com/ Chapter 11 Petition Date: April 1, 2009 Court: Southern District of New York (Manhattan) Judge: Martin Glenn Debtor's Counsel: Mark R. Somerstein, Esq. mark.somerstein@ropesgray.com Ropes & Gray LLP 1211 Avenue of the Americas New York, NY 10036-8704 Tel: (212) 596-9000 Fax: (212) 596-9090 Corporate Counsel: Davis Polk & Wardell Restructuring Advisor: AlixPartners LLC Financial Advisor: Houlihan Lokey Howard & Zukin Capital, Inc. Claims and Noticing Agent: Donlin, Recano & Company, Inc. The Debtors' financial condition as of 2008: Total Assets: $390,462,000 Total Debts: $526,548,000 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Voltaire Incorporated Trade Debt $1,861,530 6 Fortune Drive, Suite 301 Billerica, MA 1821 Attn: Mary Beth Vassallo Tel: (978) 439-5400 Fax: (978) 439-5401 Intel Americas Incorporated Trade Debt $1,711,915 2200 Mission College Blvd. Santa Clara, CA 95054-1549 Attn: David Gee Tel: (262) 968-5596 Morgan Lewis & Bockius Trade Debt $905,402 1701 Market Street Philadelphia, PA 19103-2921 Attn: Thomas M. Kocher, Director of Collections Tel: (215) 963-5770 Fax: (215) 963-5001 Qimonda North America Trade Debt $893,176 2540 North First Street San Jose, CA 95131 Attn: Tom Trill Tel: (408) 501-7137 Tel: (408) 501-2444 Benchmark Electronics Trade Debt $775,918 Incorporated 3000 Technology Drive Angleton, TX 77515 Attn: Kathy Eides Tel: (979) 849-6550 Fax: (979) 848-5270 Tektronix Incorporated Trade Debt $601,580 14200 SW Karl Braun Drive P.O. Box 500 Beaverton, OR 97077 Attn: Susan Salzman Tel: (800) 835-9433 Fax: (503) 627-5359 Arrow Electronics Inc. Trade Debt $573,327 50 Marcus Drive Melville, NY 11747 Attn: Mike Clausan Tel: (631) 847-2000 Fax: (631) 847-2222 Spectra Logic Corporation Trade Debt $518,244 1700 North 55th Street Boulder, CO 80301 Attn: Yang Ponemany Tel: (303) 449-6400 Fax: (303) 939-8844 Key Equipment Finance Trade Debt $374,346 LSI Corporation Trade Debt $307,643 IBM Trade Debt $285,937 Datadirect Networks Trade Debt $270,400 Nortel Government Solutions Trade Debt $260,624 Incorporated Synopsys Incorporated Trade Debt $232,000 Group Health Cooperative of Trade Debt $203,204 Eau Claire Supermicro Computer Trade Debt $166,252 Incorporated Metlife Trade Debt $163,939 Christensen Holdings LP Trade Debt $162,309 BPG Grand Oak Investors LLC Trade Debt $139,926 Quantum Trade Debt $128,490 Cine-Tal Systems Incorporated Trade Debt $116,316 Trident Computer Resources Trade Debt $116,239 Incorporated Arbyte Corporation Trade Debt $104,601 Equipment Management Trade Debt $104,224 Technology Incorporated McGladrey and Pullen LLP Trade Debt $100,000 Mellanox Technologies Trade Debt $99,900 QWEST Communications Trade Debt $96,234 Company LLC DET Logistics (USA) Trade Debt $94,022 Corporation Magnus Incorporated Trade Debt $86,860 Willis of Texas Incorporated Trade Debt $85,042 Software Solutions Trade Debt $79,123 Graphtech Computer Systems Trade Debt $74,324 LTD Cooley Godward LLP Trade Debt $73,592 Alvarez and Marsal Tax and Trade Debt $70,173 LLC Deloitte Tax LLP Trade Debt $69,664 Barco Incorporated Trade Debt $67,450 Northern States Power Company Trade Debt $65,505 Boxx Technologies Incorporated Trade Debt $63,786 Harwood International Trade Debt $63,523 Corporation PDSI Trade Debt $59,843 Presagis USA Incorporated Trade Debt $59,568 DHL Worldwide Express Trade Debt $57,552 Accretive Solutions Trade Debt $56,768 Solutions Made Simple Trade Debt $56,682 Incorporated Asset Intertech Incorporated Trade Debt $56,000 EMC Corporation Trade Debt $53,187 Sierra Greens Trade Debt $51,315 Open Text Incorporated Trade Debt $50,000 Securitas Security Services Trade Debt $48,826 USA Incorporated Lytron Incorporated Trade Debt $46,900 The petition was signed by Gregory S. Wood, chief financial officer. SILICON GRAPHICS: Goes Belly-Up, Sells Biz to Rackable for $25MM ---------------------------------------------------------------- Silicon Graphics, Inc., and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code on April 1, 2009, in the United States Bankruptcy Court for the Southern District of New York. The Debtors will continue to operate their business as "debtors-in-possession" under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. On Tuesday, Silicon Graphics entered into an Asset Purchase Agreement with Rackable Systems, Inc. Under the agreement, Rackable will purchase substantially all the assets, except for certain excluded assets, of SGI for $25 million, subject to adjustment in certain circumstances, plus the assumption of certain liabilities associated with the acquired assets. The Asset Purchase Agreement has been approved by the boards of directors of Rackable and SGI. Completion of the transaction is subject to a number of closing conditions, including the approval of the Court. Subject to such conditions and uncertainties, the transaction is expected to close within approximately 60 days. The assets to be acquired do not include certain non-core patents, which will be retained by SGI. It is expected that the net proceeds of the transaction will be distributed for the benefit of the secured creditors of SGI, and that SGI stockholders will not receive any proceeds in respect of the sale. The bankruptcy filing constitutes an event of default under SGI's Senior Secured Credit Agreement, dated October 17, 2006, as amended, with Morgan Stanley Senior Funding, Inc., as administrative agent and revolving agent, Morgan Stanley & Co., Incorporated as collateral agent, and the other Lenders and Credit Parties thereto and resulted in the acceleration of all amounts due under the Credit Agreement. The ability of the creditors to seek remedies to enforce their rights under the Credit Agreement is automatically stayed as a result of the filing of Chapter 11 cases, and the creditors' rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. The automatic stay invoked by filing the Chapter 11 cases effectively precludes any actions against SGI resulting from such acceleration. As of March 31, 2009, under the Credit Agreement, the total principal amount of the outstanding obligations under the term loan was approximately $141.7 million and the total principal amount of the outstanding obligations under the revolving loan was approximately $20.7 million. Rackable says the combined businesses will provide customers with market leading hardware and software technology within large-scale x86 cluster computing, HPC, Internet, Cloud Computing, large-scale data storage environments and visualization platforms across many verticals and geographies. This combination is also expected to result in a stronger global services organization; reaching commercial, government and scientific sectors on a worldwide basis. "The combined company will be positioned to solve the most demanding business and technology challenges our customers confront today," said Mark J. Barrenechea, president and CEO of Rackable Systems. "In addition, this combination gives us the potential for significant operational synergies, a strong balance sheet, and positions the combined company for long-term growth and profitability." "We have been working very hard to strengthen our company, and today, we've taken another big step in that direction," stated Robert "Bo" Ewald, CEO of Silicon Graphics. "This transaction represents a compelling opportunity for Silicon Graphics' customers, partners and employees, who can all benefit from the emerging stronger company with better technologies, products and markets reach." Mr. Barrenechea added, "Together, we believe we will be a much stronger entity with great products and people offering a compelling proposition to compete more effectively in, and across, our collective markets." It is expected that SGI's business operations will continue during the pre-closing period. SGI's international operations would be part of the sale, but would not be part of the bankruptcy process. Rackable had suspended its program including the repurchase of up to $40 million of the company's stock. About Rackable Systems Rackable Systems, Inc. (RACK) -- http://www.rackable.com/-- providese Eco-Logical(TM) servers and storage for medium- to large-scale data center deployments. Rackable's products, available for purchase or lease, are designed to provide benefits in the areas of density, thermal efficiency, serviceability, power distribution, data center mobility and remote management. Founded in 1999 and based in Fremont, California, Rackable Systems is a founding member of The Green Grid and serves cloud computing and services, enterprise software, federal government, digital media, financial services, oil and gas exploration and HPC customers worldwide. About Silicon Graphics Based in Sunnyvale, California, Silicon Graphics, Inc. (SGIC) -- http://www.sgi.com/-- delivers a complete range of high- performance server and storage solutions along with industry- leading professional services and support that enable its customers to overcome the challenges of complex data-intensive workflows and accelerate breakthrough discoveries, innovation and information transformation. Silicon Graphics Inc. reported $390.4 million in total assets and $526.5 million in total liabilities, resulting in $136.0 million stockholders' deficit as of December 26, 2008. SOUTHEASTERN STUD: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Southeastern Stud & Components, Inc. 4542 Baldwin Ave. Montgomery, AL 36108 Bankruptcy Case No.: 09-30765 Chapter 11 Petition Date: March 23, 2009 Court: United States Bankruptcy Court Middle District of Alabama (Montgomery) Debtor's Counsel: James L. Day, Esq. Memory & Day P.O. Box 4054 Montgomery, AL 36103-4054 Tel: (334) 834-8000 Fax: (334) 834-8001 Email: jlday@memorylegal.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/almb09-30765.pdf The petition was signed by Kennon W. Whaley, Sr., chairman of the Company. SOUTHLAND CHRYSLER-JEEP: Voluntary Chapter 11 Case Summary ---------------------------------------------------------- Debtor: Southland Chrysler-Jeep, Inc. 223 Goodman Road East Southaven, MS 38671 Bankruptcy Case No.: 09-11452 Chapter 11 Petition Date: March 23, 2009 Court: United States Bankruptcy Court Northern District of Mississippi (Aberdeen) Debtor's Counsel: Russell W. Savory, Esq. Gotten, Wilson, Savory & Beard, PLLC 88 Union Avenue, 14th Floor Memphis, TN 38103 Tel: (901) 523-1110 Email: russell.savory@gwsblaw.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 20 largest unsecured creditors together with its petition. The petition was signed by John W. Roy, president of the Company. SPIRIT FINANCE: S&P Junks Corporate Credit Rating From 'B-' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Spirit Finance Corp. to 'CCC' from 'B-'. At the same time, S&P lowered its rating on Spirit's $850 million secured term loan to 'CCC-' from 'CCC+'. The recovery rating on the facility is unchanged at '5', which indicates S&P's expectation of a modest recovery (10% to 30%) in the event of a payment default. The outlook remains negative. "The downgrade reflects our concern that Spirit's already tight credit ratios could deteriorate due to dilutive asset dispositions, as well as tenant stress resulting from retail sector weakness, raising the possibility of a technical default under its credit agreement," said credit analyst Elizabeth Campbell. "In addition, frozen capital markets have made it difficult for Spirit to refinance and extend its warehouse credit facility, which has been partially paid down via asset sales." Retailer stress and unreceptive capital markets continue to weigh heavily on Spirit's credit metrics and its ability to refinance near-term obligations. Heightened tenant defaults in the company's portfolio would place additional pressure on already slim coverage metrics and could potentially cause a technical default. Upward rating momentum is currently precluded by Spirit's current high leverage and the challenging economic environment. S&P would lower the ratings further if it becomes clear that Spirit will breach its existing bank loan covenants and will be unable to receive covenant relief. STANFORD GROUP: CIO Pedergest-Holt Sues Counsel for Malpractice --------------------------------------------------------------- Chief investment officer of Stanford Financial Group, Laura Pendergest-Holt, sued attorney Thomas Sjoblom and his firm, blaming him for her being wrongfully accused of a crime. Bloomberg News' Dan Hart reports that according to the Houston Chronicle, Ms. Pendergest-Holt filed a $20 million suit, accusing Attorney Sjoblom of legal malpractice and breach of fiduciary duty by not informing her of her Fifth Amendment rights against self- incrimination before talking with the U.S. Securities and Exchange Commission. Bloomberg said that Houston Chronicle writes citing the lawsuit filed in federal court in Dallas, Ms. Pendergest-Holt's suit alleges she was acting for the company and Chairman R. Allen Stanford, that she had no attorney-client privilege with the lawyer and that she was not required to testify. About Stanford Group Stanford Financial Group was a privately held global network of independent, affiliated financial services companies led by Chairman and CEO Sir Allen Stanford. The first Stanford Company was founded by his grandfather, Lodis B. Stanford in 1932. Stanford's core businesses are private wealth management and investment banking for institutions and emerging growth companies. Stanford had over $50 billion in assets under management or advisement. The U.S. Securities and Exchange Commission, on February 17, 2009, charged R. Allen Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. Mr. Stanford's companies include Stanford International Bank, Stanford Group Company (SGC), and investment adviser Stanford Capital Management. The U.S. District Court for the Northern District of Texas (Dallas) appointed Ralph Janvey as receiver for Stanford Group. STAR TRIBUNE: Asks Court to Approve Modifications to Typos' CBA --------------------------------------------------------------- Star Tribune Holdings Corporation and The Star Tribune Company ask the U.S. Bankruptcy Court for the Southern District of New York for authorization to enter into certain modifications to the collective bargaining agreement with the Minnesota Newspaper Guild/Typographical Union, as embodied in a Letter of Agreement between Star Tribune and the Typos dated March 25, 2009. The Typos have consented to and fully support the relief sought by the Debtors. The CBA between Star Tribune and the Typos was signed on January 1, 2000, and is effective through December 31, 2014. The CBA sets forth the rates of pay, work rules and working conditions for Star Tribune's typographical workers, who are employed in the Debtors' composing, printers and dispatch businesses. As of March 20, 2009, the Typos union represents ten employees. The LOA provides for, among other things, adjustments to pay, paid time off policy (PTO) Plan, benefits and voluntary workforce reductions that the Debtors expect will result in labor cost savings of approximately $531,000 annually. Some of the major terms of the LOA are: a) Workforce reductions. The Star Tribune will provide a seven-day application window -- effective beginning on the date on which this Court approves this motion -- for a voluntary buyout offer to all Typos employees with severance pay and benefits to be paid in accordance with the terms of the LOA. Star Tribune will not be required to replace any of the Typos employees. b) Market rate wage reductions. The LOA provides for wage rate reductions from those set forth in the Typos' CBA such that all bargaining unit employees' wage rates -- regardless of shift (e.g. day or night) or skill set -- are brought down to a single, flat hourly rate of $26.00. The wage rate for employees earning below $26.00 per hour remains unchanged. c) PTO Plan. An allotted PTO Plan will replace the current vacation, sick and holiday time off plan. Under the PTO Plan, all employee time off plans are consolidated under a single plan for employees to utilize at their discretion. Unlike under the previous vacation program, most unused paid time off will not carry over to the following year. The company will no longer provide any other paid time off, aside from its short-term disability programs and government-mandated paid time off, such as voting and jury duty supplemental pay. d) Pension benefits. As soon as practicable, the company will withdraw from the Typos' pension plan, CWA/ITU Negotiated Pension Plan. The Typos have also agreed to allow the Star Tribune to freeze the company-sponsored pension Plan A. The contemplated Plan A freeze aligns with the freezing of the non-contract employees' company-sponsored pension Plan O. The Typos are also eligible to participate in the company's 401(k) plan under the same terms and conditions applicable to non- contract employees. The Star Tribune may adjust those conditions without needing to bargain with the Typos if any changes are equally applicable to non-contract employees. e) Healthcare benefits. The Typos will no longer be in the Star Tribune union healthcare plan but will be eligible to join the same health and welfare plan currently covering all non-contract employees and certain unionized employees. The Star Tribune retains the right to adjust the terms and conditions of such coverage without needing to bargain with the Typos, as long as any adjustments, with certain exceptions as set forth in the LOA, are equally applicable to non-contract employees. The Debtors tell the Court that Star Tribune's entry into the LOA is in the best interests of the Debtors, their estates, their creditors and other parties in interest, and "represents a judicious exercise of business judgment well within the standard of Section 363 of the Bankruptcy Code." The Debtors tell the Court that they have provided the relevant underlying documents and agreements to both the advisors to the statutory committee of unsecured creditors and to the first-lien lenders. The Debtors add that they intend to work closely with the Creditors Committee's and lenders' advisors over the next several days to assist them in their analysis of the LOA and to obtain their consent. A full-text copy of the Letter of Agreement, dated as of March 25, 2009, is available at: http://bankrupt.com/misc/StarTribuneTyposLOA.pdf 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., James I. McClammy, Esq., and Lynn Poss, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Blackstone Advisory Services L.P. is the Debtors' financial advisor. 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. Scott Cargill, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC, represents the Committee as counsel. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. STAR TRIBUNE: Asks Court to Approve Modifications to Mailers' CBA ----------------------------------------------------------------- Star Tribune Holdings Corporation and The Star Tribune Company ask the U.S. Bankruptcy Court for the Southern District of New York for authorization to enter into cetain modifications to the collective bargaining agreement with the Minneapolis-St. Paul Mailers' Union No. 4/Teamsters Local #120, as embodied in a Letter of Agreement between Star Tribune and the Mailers dated March 26, 2009. The Mailers have consented to and fully support the relief sought in this motion. The CBA between Star Tribune and the Mailers, which was entered into on June 1, 1998, and subsequently amended, sets forth the rates of pay, work rules and working conditions for Star Tribune's mailers, who perform a range of mailroom-related tasks, including tagging, wrapping and jogging papers for mailing machines, as well as preparing lists or wrappers, distributing and counting and inserting documents. The LOA provides for, among other things, adjustments to pay, benefits, work rules and staffing that the Debtors expect will result in labor cost savings of approximately $3,314,000 annually. The LOA extends the CBA from its current expiration date of June 30, 2009, to January 31, 2011. The significant terms of the LOA are: a) Market rate wage adjustments. The LOA provides for wage reductions from those set forth in the Mailers' CBA. The following table summarizes these new rates as compared to the average hourly rate in 2009 under the CBA: Position Average CBA Rate New Rate Under LOA ---------- ---------------- ------------------ Foremen $28.84 $24.25 Machinists/Operators $27.62 $22.25 Journeymen and $25.06 $18.00 Full-Time Mailers Part-Time Mailers/Current $16.62 30% reduction; Round Robin (Trainees) $12.50 minimum b) Workforce reductions. The Star Tribune will offer 23 voluntary buyouts to full- time employees with severance pay and benefits to be paid in accordance with the terms of the LOA. If fewer than 23 accept the offer, Star Tribune may layoff full-time employees in reverse seniority to achieve 23 buyouts. If more than 23 full-time employees seek buyouts from Star Tribune, then such buyouts will be offered on a priority basis. After 23 full-time mailers' positions have been eliminated, the Star Tribune will not be required to replace any of those positions. c) Shifts and scheduling adjustments. The Star Tribune, with proper notice, may adjust both the number and scheduling of shifts. In addition, Star Tribune may reduce the number of shifts because of a variety of factors, including reductions in the number of weekly pressruns, daily or Sunday total paid circulation, advertising inserts, and mail copies. d) Healthcare benefits. As soon as practicable, the company will become an Employer under the Minnesota Teamsters Health and Welfare Plan. The Plan will provide medical/dental coverage, life insurance coverage, disability coverage and retiree medical coverage for Mailers who retire after the date on which the company joins the Plan. In the 2009 calendar year under the Plan, the full Plan premium for each eligible active employee will be $206.70 per week. In the 2010 and 2011 calendar years under the Plan, the amount of premium may increase by more than $20 per week. There will be no withdrawal liability for the company. e) Paid Time Off. The Mailers' current vacation, sick and holiday time off plan is replaced by a general, single plan for employees to utilize at their discretion. Under the PTO Plan, the amount of allotted paid time off is based on length of service and hours worked. Unlike under the previous vacation program, most unused paid time off does not carry over to the following year. The company will no longer provide any other paid time off, aside from its short-term disability programs and government-mandated paid time off, such as voting and jury duty supplemental pay. The Debtors tell the Court that Star Tribune's entry into the LOA is in the best interests of the Debtors, their estates, their creditors and other parties in interest, and "represents a judicious exercise of business judgment well within the standard of Section 363 of the Bankruptcy Code." The Debtors tell the Court that they have provided the relevant underlying documents and agreements to both the advisors to the statutory committee of unsecured creditors and to the first-lien lenders. The Debtors add that they intend to work closely with the Creditors Committee's and lenders' advisors over the next several days to assist them in their analysis of the LOA and to obtain their consent. A full-text copy of the Letter of Agreement, dated as of March 26, 2009, is available at: http://bankrupt.com/misc/StarTribuneMailers'LOA.pdf 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., James I. McClammy, Esq., and Lynn Poss, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Blackstone Advisory Services L.P. is the Debtors' financial advisor. 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. Scott Cargill, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC, represents the Committee as counsel. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. STEADIVEST LLC: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Steadivest, LLC 4 Country Place Pearl, MS 39208 Bankruptcy Case No.: 09-01013 Chapter 11 Petition Date: March 23, 2009 Court: United States Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Debtor's Counsel: Jeffrey Kyle Tyree, Esq. Harris Jernigan & Geno, PPLC P.O. Box 3380 Ridgeland, MS 39158-3380 Tel: (6001) 427-0048 Fax: (601) 427-0050 Email: jktyree@harrisgeno.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 20 largest unsecured creditors together with its petition. The petition was signed by Marshall Wolfe, Managing Member of the company. THORNBURG MORTGAGE: Throws in Towel; to Liquidate Under Ch 11 ------------------------------------------------------------- Thornburg Mortgage, Inc. said Wednesday that JPMorgan Chase Funding Inc. (formerly Bear Stearns Investment Products Inc.); Citigroup Global Markets Limited; Credit Suisse Securities (USA) LLC; Credit Suisse International; Greenwich Capital Markets, Inc.; Greenwich Capital Derivatives, Inc.; The Royal Bank of Scotland plc; and UBS AG have agreed to grant the Company additional forbearance from demanding payment on deficiency claims under their various financing agreements through April 30, 2009, or earlier if certain events occur. In exchange for the continued forbearance, the Company has agreed that the remaining Counterparties who have not previously taken possession of their collateral under their financing agreements may do so at the Counterparty's discretion and that the price of such collateral will be determined on a date chosen by the Counterparty. The proceeds from the sales will be applied to reduce the outstanding borrowing amount under the respective financing and ISDA agreements. JPM, CSUSA, CSI, GCM, GCD and RBS have indicated that they intend to take possession of and sell such collateral during the forbearance period. Citigroup and UBS have agreed to continue to forbear on submitting deficiency claims totaling approximately $394 million and $87 million, respectively, through April 30, 2009, or earlier if certain events occur. The Company expects that additional substantial deficiency claims will result as the remaining Counterparties sell their collateral under their respective financing and ISDA agreements; however they have agreed to forbear on submitting such claims through April 30, 2009, or earlier if certain events occur. As a result of the expected and realized deficiency claims, the Company has also agreed to cooperate with the Counterparties to transfer the Company's mortgage servicing rights, which were granted to the Counterparties as security for the Company's obligations to the Counterparties under their financing agreements. As a result of these events, the Company expects to file for Chapter 11 bankruptcy protection. The Company also intends to commence an orderly sale or liquidation of its remaining assets assisted by Houlihan Lokey Howard & Zukin Capital, Inc. to maximize any remaining value for its bondholders and creditors. Once these sales or liquidations are completed, the Company will discontinue operations. In addition, the Company will not be able to make the March 31, 2009 interest payment on its Senior Subordinated Notes due 2015. However, the Company has a 30-day grace period in which to make such payment before triggering a default under the Senior Subordinated Notes indenture. Finally, the Company does not expect to file its Annual Report on Form 10-K for the year ended December 31, 2008. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable- rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage, Inc. and Thornburg Investment Management are separate and independent legal entities. Garrett Thornburg is the Chairman of both firms and together they occupy the Thornburg Campus, however the businesses of Thornburg Investment Management are not related to, or affected by, the business of Thornburg Mortgage, Inc. * * * As of September 30, 2008, Thornburg Mortgage had $26.2 billion in total assets and $26.6 billion in total liabilities, resulting in $323.3 million in stockholders' deficit. The Company posted net income of $140.0 million for the three months ended, and net loss of $2.75 billion for the nine months ended, September 30, 2008. As reported in the Troubled Company Reporter on Dec. 22, 2008, Standard & Poor's Ratings Services raised its counterparty credit rating on Thornburg Mortgage Inc. to 'CC' from 'D'. At the same time, S&P also raised its rating on Thornburg's senior notes to 'CC' from 'D'. The outlook is negative. TRONOX INC: Creditors Ask Court to Dissolve Equity Committee ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Tronox Inc. and its debtor affiliates asks Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York to dissolve the Official Committee of Equity Security Holders appointed by the U.S. Trustee on March 13, 2009, on the grounds that the appointment is "an extraordinary remedy" in the Debtors' Chapter 11 cases. Brian S. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, relates that in January 29, 2009, the Debtors and the Creditors' Committee each sent reply letters to the U.S. Trustee expressing their oppositions to the appointment of an equity committee. Mr. Hermann argues that, as indicated in their Letters, the overwhelming market evidence confirm that the Debtors appear to be hopelessly insolvent, which circumstance does not warrant the appointment of an equity committee. Moreover, he argues that the Debtors' unliquidated environmental, tort and other contingent liabilities -- which amounts are unknown -- account for the insolvency determination and became major factors in the Debtors' decision to seek Chapter 11 relief. Mr. Hermann specifies that if the Debtors' cases continue on their present trajectory, estate recoveries will largely depend on the success of: (i) the asset sale necessitated by Tronox's debtor-in- possession credit facility; and (ii) litigation against third parties, including, most prominently, Anadarko Petroleum Corporation, the successor-in-interest to Kerr-McGee, over responsibility for various of the Debtors' significant legacy environmental, tort and retiree liabilities inherited from its former parent company, Kerr-McGee. The Creditors' Committee, Mr. Herman tells the Court, will work to ensure that the sale procedures contemplated by the DIP Facility are fair and designed to obtain the highest possible recovery for the Debtors' estates. "The best protection for equity holders in a sale process is not separate representation, but fair sale procedures designed to obtain the highest value" he argues. Mr. Herman adds that the Creditors' Committee is collaborating with the Debtors in reviewing the documents necessary to pursue litigation against Anadarko. In this regard, the Creditors' Committee is intimately involved in representing the interests of the Debtors' unsecured creditors and equity holders as being "fully aligned," he affirms. Similarly, the Debtors' board of directors, which consists of shareholders, is a fiduciary not only for the Debtors' creditors but for their shareholders as well, Mr. Herman notes. The Board is incapable of responsibly discharging their duties, as the insolvency of a company does not absolve the Board of its fiduciary duty to the shareholders, he asserts, citing In re Commodities Futures Trading Comm'n. v. Weintraub, 471 U.S. 343, 355 (1985). Mr. Hermann contends that the benefit of a separate representation for shareholders, through the Equity Committee, is outweighed by the cost incurred in its appointment, which need not be borne by the Debtors' estates. "Tronox's successful emergence from bankruptcy is far from certain, and a 100% return to unsecured creditors, with a surplus to equity, is highly speculative at best," he maintains. Mr. Hermann assures the Court that the dissolution of the Equity Committee will not disenfranchise the equity holders in the Debtors' cases. Pursuant to Section 1109(b) of the Bankruptcy Code, any equity interest holder "has standing to be heard." Moreover, the equity holders have already formed an unofficial ad hoc committee that together own or manage more than 8,000,000 shares of common stock in Tronox, which will represent the interests of equity without the need for an official Equity Committee, Mr. Herman notes. The Court will convene a hearing on April 7, 2009, to consider approval of the Debtors' request. Objections, if any, must be filed by April 3. 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) TRONOX INC: Equity Panel Seeks Approval of Pillsbury Engagement --------------------------------------------------------------- The Official Committee of Equity Security Holders of Tronox Inc. and its debtor affiliates asks Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York for authority to retain Pillsbury Winthrop Shaw Pittman LLP as its bankruptcy counsel, nunc pro tunc to March 13, 2009. Prior to the Petition Date and continuing through March 13, 2009, the date the Equity Committee was appointed, Pillsbury has provided legal services to an ad hoc committee of equity security holders of the Debtors. Accordingly, the firm has developed valuable knowledge of the Debtors' Chapter 11 cases. Moreover, the firm has significant experience and expertise in representing official equity committees in large and complex Chapter 11 reorganizations, and has significant experience and expertise practicing. As the Equity Committee's counsel, Pillsbury will: (a) provide legal advice with respect to the Equity Committee's rights, powers and duties; (b) assist, advise and represent the Equity Committee in its consultation with the Debtors and the Official Committee of Unsecured Creditors in the administration of the Debtors' cases; (c) assist and represent the Equity Committee in analyzing the Debtors' assets and liabilities, investigating the extent and validity of liens and participating in and reviewing any proposed asset sales or dispositions; (d) represent the Equity Committee in any and all matters involving disputes or issues with the Debtors, secured creditors, the Creditors Committee, and other parties; (e) assist and advise the Equity Committee in its examination and analysis of the conduct of the Debtors' affairs; (f) assist the Equity Committee in the review, analysis, negotiation, and formulation of any plans of reorganization and accompanying disclosure statement; (g) take all necessary action to protect and preserve the interests of Tronox equity security holders; (h) generally prepare on behalf of the Equity Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Equity Committee; and (i) appear, as appropriate, before the Bankruptcy Court, the appellate courts, and other courts to protect the interests of the Equity Committee. Pillsbury professionals will be paid in accordance with these hourly rates: Professional Position Hourly Rate ------------ -------- ----------- David Crichlow, Esq. Partner $750 Craig Barbarosh, Esq. Partner $745 Karen Dine, Esq. Partner $735 Robyn Schneider, Esq. Associate $660 Brandon Johnson, Esq. Associate $490 Carrie Altenburg Paralegal $265 Pillsbury will also be reimbursed for its reasonable out-of- pocket expenses. Karen B. Dine, Esq., a member at Pillsbury Winthrop Shaw Pittman LLP, discloses in an affidavit that within 90 days of the Petition Date, her firm has not received any payments from the Debtors with respect their Chapter 11 cases, including in relation to Pillsbury's representation of the Ad Hoc Equity Committee. Ms. Dine tells the Court that Pillsbury may represent creditors and other parties-in-interest of the Debtors in matters unrelated to their Chapter 11 cases. In this regard, she maintains that her firm is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. A list of Pillsbury Winthrop's clients is available for free at: http://bankrupt.com/misc/Tronox_PillsburyRepresentedParties.pdf The Court will convene a hearing on April 7, 2009, to consider approval of the retention application. 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) TRONOX INC: Files Schedules of Assets and Liabilities ----------------------------------------------------- Tronox Inc. and its debtor-affiliates filed with the U.S. Bankruptcy Court for the Southern District of New York March 30, 2009, its schedules of assets and liabilities, disclosing: A. Real Property $0 B. Personal Property B.1 Cash on hand 0 B.2 Bank Accounts 0 B.3 Security Deposit 0 B.9 Insurance Policies ACE Amer. Ins. Co. Undetermined Lloyds/Lancashire Undetermined Lloyds/Arch/Lancashire Undetermined Various (Quota Share Program) Undetermined Nat'l. Union Fire Ins. (AIG) Undetermined ACE Amer. Ins. Co. Undetermined ACE Amer. Ins. Co. Undetermined Twin City Fire (Hartford) Undetermined Fed. Ins. Co. Undetermined Steadfast Ins. Co. (Zurich) Undetermined Lexington (AIG) Undetermined Allied World Assurance Co. (AWAC) Undetermined Oil Casualty Ins. Ltd. (OCIL) Undetermined AIG Cat Excess Undetermined Twin City Fire (Hartford) Undetermined Zurich Amer. Ins. Co. Undetermined US Specialty Ins. Co. (HCC) Undetermined ACE Amer. Ins. Co. Undetermined Nat'l. Union Fire Ins. Co. Undetermined Twin City Fire (Hartford) Undetermined Zurich Amer. Ins. Co. Undetermined US Specialty Ins. Co. (HCC) Undetermined St. Paul Mercury Ins. Co. Undetermined Navigator Ins. Co. Undetermined Arch Ins. Co. Undetermined Nat'l Union Fire Ins. Co. Undetermined Lloyds Synd. & Co. Undetermined Lloyds Synd. Undetermined Worldwide Marine Cargo/One Beacon Ins. Undetermined Lloyds Synd. Undetermined Nat'l. Union Fire Ins. (AIG) Undetermined B.12 Interests in IRA, ERISA, Keogh, et al. Grantor Trust 574,324 Grantor Trust - LT Beg. Bal. 3,386,169 Grantor Trust - LT Provisions 105,661 Grantor Trust - LT Payments (3,052,648) B.13 Stock and Interests Investment in Tronox Worldwide 1,927,805,308 B.16 Accounts Receivable 23,364,746 B.21 Other Contingent and Unliquidated Claims Pending Litigation - Kerr-McGee Corp. Undetermined Pending Litigation - Tronox LLC, et al. Undetermined Pending Litigation - Tronox Worldwide LLC Undetermined Pending Litigation - Tronox Worldwide LLC Undetermined Pending Litigation - St. Paul Ins. Undetermined B.35 Other Personal Property Taxes 153,839 General Insurance 1,033,115 TOTAL SCHEDULED ASSETS $1,953,370,517 ========================================================= C. Property Claimed as Exempt Not Applicable D. Creditors Holding Secured Claims ABN AMRO Bank N.V. Undetermined Credit Suisse Securities (USA) LLC Undetermined IOS Capital Undetermined JPMorgan Chase Bank NA Undetermined Lehman Commercial Paper Inc. Undetermined Ricoh Corporation Undetermined Safeco Insurance Company Undetermined Toyota Motor Credit Corporation Undetermined E. Creditors Holding Unsecured Priority Claims Adams, Thomas 10,950 Blake, David Wilson 10,950 Brown, Robert 10,950 Bull, Jeffrey 10,950 Corbett, Patrick Stacy 10,950 Dean, Richard 10,950 Dolton, Clifford 10,950 Flynn, Harry Eugene 10,950 Gibney, Robert Charles 10,950 Green, Kelly A. 10,950 Harris, Orlando Charles 10,950 Hatmaker, John William 10,950 Kahle, Candace 10,950 Krippel, Mark Stephen 10,950 Logan, Stewart Michael 10,950 Marshall, David Frank 10,950 Meadors, Mark 10,950 Mikkelson, Mary 10,950 Miller, William 10,950 Mouland, Ian Mark 10,950 Roberts, Paul 10,950 Romano, John David 10,950 Schramm, Deborah 10,950 Shelden, David John 10,950 Stater Frederick Richard 10,950 Thomas, Gregory 10,950 Vanlandingham, Mark 10,950 Wachnowsky, Stephen T. 10,950 Walke, Melody Ann 10,950 Wallace, Natalia G. 10,950 Widmann, Roy Keith 10,950 Others 82,570 F. Creditors Holding Unsecured Non-priority Claims Tronox Worldwide LLC 553,005,609 Others Undetermined TOTAL SCHEDULED LIABILITIES $553,427,629 ========================================================= Tronox Inc. also filed its statement of financial affairs. Gary Barton, chief restructuring officer of Tronox, reports that the company generated income from its business operations during the two years immediately preceding the Petition Date: Amount Source ------ ------ $12,252,497 01/01/2009-01/11/2009 $819,449,510 01/01/2008-12/31/2008 $763,989,376 01/01/2007-12/31/2007 The Debtor also earned income other than from employment or the operation of its business during the two years prior to its bankruptcy filing: Amount Source ------ ------ $442,183 01/01/2009-01/11/2009 $47,842,247 01/01/2008-12/31/2008 $23,260,561 01/01/2007-12/31/2007 According to Mr. Barton, the Debtor made payments through shares of stock in undetermined amounts to 13 insiders within one year to the Petition Date: (1) Adams, Thomas W. (2) Brown III, Robert Y. (3) Corbett, Patrick (4) Foster, Michael J. (5) Gibney, Robert C. (6) Green, Kelly A. (7) Hatmaker, John W. (8) Krippel, Mark S. (9) Logan, Stewart M. (10) Meadors, Mark S. (11) Mikkelson, Mary A. (12) Romano, John D. (13) Wachnowsky, Stephen T. Within one year before the Petition Date, the Debtor is or was a party to pending, active or inactive lawsuits and administrative proceedings litigated in various courts, a 24-page list of which is available for free at: http://bankrupt.com/misc/TronoxInc_Lawsuits.pdf In addition, Tronox Inc. is a party to several judicial or administrative proceedings under environmental law, with respect to its onsite facilities, a list of which is available for free at: http://bankrupt.com/misc/TronoxInc_EnvironmentalProceedings.pdf While the Debtor does not engage in setoffs in the ordinary course of business, certain creditors owe amounts to the Debtor and may have valid setoff and recoupment rights with respect to their asserted amounts. The Debtor, however, has not reviewed the validity of any setoff rights, Mr. Barton discloses. Mr. Barton reports that within six years immediately preceding the Petition Date, or from November 28, 2005, until present, Tronox Inc. owns five percent or more of the voting or equity securities of Tronox Worldwide LLC, which operates as Taxpayer Identification No. 11-3663540, located at 3301 NW 150th Street, in Oklahoma City, Oklahoma. These bookkeepers and accountants kept, or supervised the keeping of, the Debtor's books of accounts and records within two years to the Petition Date: Date of Bookkeeper/Accountant Rendered Services --------------------- ----------------- Ritter, Edward G. 01/12/2007 - present Klvac, David 01/12/2007 - 06/02/2008 Mikkelson, Mary 01/12/2007 - present As of the Petition Date, Ms. Mikkelson and Mr. Ritter were in possession of the Debtor's books and records. Meanwhile, Ernst & Young has audited the Debtor's books of accounts and records, or prepared the Debtor's financial statement from January 12, 2007, until the present. The Debtor is a public company registered with the Securities and Exchange Commission. In the ordinary course, it may have provided financial information to banks, bond holders, customers, suppliers, rating agencies and various other interested parties, Mr. Barton states. Three shareholders of Tronox, Inc. directly or indirectly own five percent of the voting securities of the Debtor: Stock Ownership Shareholder Percentage ---------- --------------- Ahab Capital Management, Inc. 12.51% Gallen, Jonathan 10.23% Paulson & Co., Inc. 7.75% These directors and officers disclose less than 5% ownership of Tronox common stock: * Adams, Jerome * Agdem, Robert D. * Birney, David G. * Corbett, Patrick * Foster, Michael J. * Gibney, Robert C. * Green, Kelly A. * Kinnear, Peter D. * Mikkelson, Mary * Pittman, Gary L. * Richardson, Bradley C. * Romano, John D. * Wachnowsky, Stephen T. * Wanlass, Dennis Ms. Green was terminated as of January 23, 2009. Stephen T. Wachnowsky was no longer connected with the Company as of March 20, 2009. Within one year to the Petition Date, these officers and directors terminated their relationship with the Debtor: Termination Name Title Date ---- ----- ------------ Adams, Thomas W. Chairman of the Board 08/15/2008 & Chief Executive Officer Brown, Robert Y. Vice President, Strategic 12/04/2008 Planning & Business Services Klvac, David J. Vice President & Controller 06/02/2008 Meadors, Mark Vice President, HR 03/06/2008 Thomas, Gregory Vice President, Supply Chain 04/30/2008 & Strategic Sourcing Walke, Melody A. Treasurer 06/30/2008 Adams, Thomas W. Director 09/05/2008 Tronox, Inc., has contributing to the Tronox Incorporated Defined Benefit Pension Plan Trust within six years immediately preceding the bankruptcy filing. 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) TRONOX INC: Seeks July 12 Extension for Removal of Actions ---------------------------------------------------------- Tronox Inc. and its debtor-affiliates are parties to about 238 prepetition actions pending in various state and federal courts and expect additional actions to be filed against them during the pendency of the Chapter 11 cases. While Section 362(a) of the Bankruptcy Code automatically stays many, if not all, of the actions pending against the Debtors, the Debtors are not yet prepared to decide which, if any, Actions it will seek to remove, Colin M. Adams, Esq., at Kirkland & Ellis LLP, in New York, tells the U.S. Bankruptcy Court for the Southern District of New York. Pursuant to Rule 9006(b) of the Federal Rules of Bankruptcy Procedures, the Court may extend the period within which the Debtors may remove actions pending against them before the Petition Date "for cause . . . at any time in its discretion . . . if the [request is] made before the expiration of the period originally prescribed or as extended by a previous [O]rder." The Debtors' deadline to Remove Actions pursuant to Rule 9027 is April 12, 2009. Mr. Adams relates that since the Petition Date, the Debtors have focused on: -- stabilizing their business operations; -- obtaining final approval of their postpetition financing arrangement; -- preparing and filing their schedules of assets and liabilities and statements of financial affairs, which is a time-consuming undertaking given the Debtors' size, complexity, and limited personnel; -- responding to the due diligence requests of the Official Committee of Unsecured Creditors, the Committee of Equity Security Holders and other Tronox stakeholders; -- initiating a marketing process to sell substantially all of their assets, as required by the their postpetition financing; -- negotiating with various state and federal government agencies, including the United States Environmental Protection Agency, regarding a comprehensive approach to Their environmental liabilities; and -- preparing a complaint against Anadarko Petroleum Corporation, as successor-in-interest to Tronox's former parent company, Kerr-McGee Corporation, concerning claims arising out of Tronox's spin-off from Kerr-McGee Corporation in 2006. As a result, the Debtors are not yet in a position to undertake a thorough analysis of the Actions or develop a strategy with respect to whether they should remove certain Actions, Mr. Adams contends. Thus, an extension of the Removal Period will afford them sufficient time to consider adequately whether Removal is necessary, he asserts. Mr. Adams assures that the rights of any party to the Actions will not be prejudiced by a Removal Period Extension because the Actions will not be proceeding in their courts with respect to Tronox pursuant to the automatic stay imposed by Section 362(a). In addition, if the Debtors ultimately seek to remove any Action pursuant any party to the litigation can seek to have the Action remanded, he points out. Against this backdrop, the Debtors ask the Court to extend its Actions Removal Deadline to the later of: (a) July 12, 2009; (b) 30 days after the entry of the Court's order terminating the Stay with respect to a particular Action sought to be removed; or (c) with respect to Postpetition Actions, the time periods set forth in Rule 9027(a)(3) of the Federal Rules of Bankruptcy Procedure. Judge Allan Gropper will convene a hearing to consider the Debtors' request on April 7, 2009. 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: Deadline for Casino Sale Extended ---------------------------------------------------------- Tropicana Entertainment LLC's affiliated casino in Atlantic City, New Jersey, won an extension until April 30 of the deadline to sell the property, Christopher Scinta of Bloomberg reports. Bloomberg says billionaire Carl Icahn and other creditors of bankrupt Tropicana plan to bid. The casino, which isn't currently part of the bankruptcy case, would file for court protection and then be sold in a court-supervised auction with the creditors' offer as the lead bid. According to a transcript provided to Bloomberg News, Commission Chair Linda M. Kassekert said a draft of the accord shows "extensive progress had been made in grappling with complicated and unprecedented contract matters". Mr. Icahn is among investors who own almost $1.5 billion in Tropicana mortgages. Report added that the group's proposal follows the breakdown of a $700 million offer by Cordish Co. The Baltimore-based real estate company cut its bid amid a decline in gambling revenue in Atlantic City. 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) TROPICANA ENTERTAINMENT: Gets $200.0 Mil. Offer From Carl Icahn --------------------------------------------------------------- Miriam Marcus at Forbes reports that billionaire and activist investor Carl Icahn has presented a $200.0 million offer for Tropicana Entertainment LLC's casino and resort in Atlantic City. According to Forbes, year-earlier bids were almost $1.0 billion. The casino, says Forbes, had been operating under a court- appointed supervisor since its license was rescinded in December 2007. Forbes states that Tropicana Entertainment lost control of its Atlanta City property after a $2.1 billion takeover in 2008. Forbes relates that Mr. Icahn's offer set the minimum bid price for the casino and resort in a bankruptcy-court auction expected to be authorized by state casino regulators within two weeks. Forbes quoted Gary Stein, the retired state Supreme Court Justice, as saying, "We are pleased the sale process is moving forward and that we have now reached agreement with the secured lender group on terms of a minimum credit bid for the Tropicana. It is my expectation that this stalking horse bid will generate substantial interest from multiple bidders, leading to a robust auction that achieves the highest price possible in light of current conditions in the gaming industry." 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) TVI CORP: Files for Chapter 11, Secures $19MM DIP Loan From BB&T --------------------------------------------------------------- Glenn Dale, Maryland-based TVI Corporation and its wholly owned subsidiaries, CAPA Manufacturing Corp., Safety Tech International, Inc. and Signature Special Events Services, Inc. have elected to file Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Maryland (Greenbelt Division) designed to implement a corporate restructuring and permanently improve the Company's capital structure. The Company intends to implement the restructuring through a plan of reorganization that the Company intends to file and to seek Court approval of this plan as soon as possible. The Company expects business operations to continue as usual during the reorganization process and expects to emerge from Chapter 11 later this year. As part of this reorganization, the Company has obtained a commitment for Debtor-In-Possession financing in the amount of $19 million from its senior lender, Branch Banking and Trust Company, anticipated to be adequate to fund the Company's operations and position the Company for long-term growth. The Company expects funding under the DIP financing to be available within approximately three days. Lt. Gen. Harley A. Hughes, USAF (Ret.), President and Chief Executive Officer, said, "[The] filing is a necessary step toward resolving the burdens of a debt load and capital structure that have been negatively affecting the Company for the past 18 months. The filing is not a reflection on the strength of our operations or the quality of our products. In fact, we fully expect that our customers will see no interruptions to product deliveries and our services during the reorganization process. Operationally, we have made and continue to make great progress toward completing our turnaround plan, even in the current economic downturn. While the global economic climate is certainly challenging, demand for our products is increasing. This reorganization will place the Company on firmer financial ground, which helps assure that we can meet this demand." "In light of the discussions with BB&T, and after careful consideration of all the alternatives, we have concluded that a court-supervised process will accelerate -- and enable us to finalize -- the restructuring of our obligations while ensuring that our current operations continue uninterrupted," added General Hughes. General Hughes continued, "Through this process, we will improve our capital structure and align it with the size of our business operations. Our innovative suite of products continues to generate considerable customer interest. We believe that this restructuring will enable us to unlock the underlying value of our businesses and achieve the Company's true growth potential." In conjunction with the filing, the Company filed a variety of "first day" motions to support its employees and vendors during the reorganization process. As part of these motions, the Company has asked the Court for permission to continue paying employee wages and salaries and to provide employee benefits without interruption. Additionally, during the restructuring process, vendors and business partners should expect to be paid for post- filing goods sold and services rendered to the Company in the ordinary course of business. The Company has retained Buccino & Associates, Inc. as financial and restructuring advisor and Duane Morris LLP as legal counsel to provide professional services in connection with these restructuring efforts. About TVI Corporation TVI Corporation -- http://www.tvicorp.com/-- designs, manufactures and supplies Decontamination, Command and Control, Airborne Infection Isolation, and Mobile Surge Capacity Shelters, Systems and Accessories including generators, trailers and water heaters. TVI also offers a complete line of NIOSH approved Powered Air Purifying Respirators, with multiple headpiece and other filter cartridge options. TVI products serve a variety of markets, including the first responder, fire, law enforcement, healthcare/first receiver, government, military, industrial and commercial. TVI CORPORATION: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: TVI Corporation 7100 Holladay Tyler Road Glenn Dale, MD 20769 Tel: (301) 352-8800 Fax: (240) 544-4030 Bankruptcy Case No.: 09-15677 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Safety Tech International, Inc. 09-15684 Signature Special Event Services, Inc. 09-15686 Type of Business: The Debtors (TVIN) supply military and civilian emergency first responder and first receiver products, personal protection products and quick-erect shelter systems. These products include powered air-purifying respirators, respiratory filters and quick-erect shelter systems used for decontamination, hospital surge systems and command and control. The users of these products include military and homeland defense/homeland security customers. See http://www.tvicorp.com/ Chapter 11 Petition Date: April 1, 2009 Court: District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: Christopher William Mahoney, Esq. cmahoney@duanemorris.com Duane Morris LLP 505 9th Street, Suite 1000 Washington, DC 20004-2166 Tel: (202) 776-7867 Financial Advisors and Consultants: Buccino & Associates, Inc. Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ TA Pelsue Company A/C Unites for $118,207 2500 South Tejon Street TVI tents Englewood, CO 80110-1128 Tel: (303) 936-7432 Whiteford, Taylor & Preston patents $103,258 Seven Saint Paul Street Baltimore, MD 21202-1626 Tel: (410) 347-8700 Federal Fabrics-Fibers inflatable $84,540 Inc. 45 W. Adams Street Lowell, MA 01851 Tel: (978) 441-3037 Glenn Dale Business Center landlord $66,277 LLC Troutman Sanders LLP law firm $57,907 Stegman & Company CPA firm $57,783 Reflexite Corp. patents $49,860 Aaladin Cleaning Systems heaters $48,515 Miles & Stockbridge PC law firm $43,480 Altman Group Inc. corp. proxy fight $41,633 Liberty Mutual Group audit expense $40,943 Broadridge mail expense $32,405 King's Eye Inc. consultant $32,167 Multiquip Inc. vendor $31,979 Saint-Gobain Performance equipment $31,429 Plastics Hudson Global Resources consultant $29,377 Sharon Merrill investor relation $26,316 Yellow Transportation trucking company $25,689 Kleinfield Kaplan and Becker SEC Investigation $25,138 LLP The petition was signed by Harley A. Hughes, president. UNITED SUBCONTRACTORS: Will File for Chapter 11 Protection ---------------------------------------------------------- United Subcontractors, Inc., will file for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. USI has reached an agreement in principle with holders of the Company's first-lien loan due in 2012 and holders of the Company's second-lien loans due in 2013 on the terms of a financial restructuring to reduce the Company's funded indebtedness by $314 million, via a conversion of the bulk of that debt to 100% of the equity in the Company upon the effective date of the reorganization plan. In order to implement the financial restructuring, USI elected to file for bankruptcy. The Company and its lenders have developed the terms for a pre-arranged plan of reorganization, which USI expects to file shortly. Under the terms of the plan of reorganization, all letters of credit will remain in place during and after the bankruptcy. The Company believes the filing will have little impact on its operations and it will look to maintain "business as usual" during the restructuring process. USI expects to emerge from Chapter 11 in the early summer. The Company's cash on hand, together with the cash generated from ongoing operations, will be sufficient to fund its normal business obligations through the financial restructuring under the terms of a consensual cash collateral agreement with the lenders. Once completed and approved by the Court, the financial restructuring will de-leverage the Company's balance sheet by approximately $314 million, leaving the Company with a healthy balance sheet and total debt of approximately $22.5 million. "We are very pleased to have reached an agreement with our lenders that will enable us to emerge from Chapter 11 with, in essence, a debt free balance sheet," said Paul Lustig, Chief Executive Officer of USI. "This agreement is significant for our customers, suppliers and employees as we believe it underscores our lenders' confidence in our ability to position ourselves for continued profitable growth. On an operational level, we have a strong foundation in place with a cash position that is more than sufficient to run our business during this period. Our branch network has a solid reputation and represents the best in their area of expertise by delivering exceptional quality and reliability in the local markets they serve. Thanks to this operational strength and in light of the progress we have made with our lenders, we have concluded that a court-supervised process will accelerate -- and finalize -- our financial restructuring while helping to ensure that current business operations continue. Through this process, we will improve our capital structure and align it with the size of our current business operations, thereby helping us to do what we do best -- serve our customers." USI has also filed a variety of customary motions to support its employees and suppliers during the restructuring process. As part of these motions, the Company has asked the Court for additional authorizations, including permission to continue paying employee wages and salaries and to provide employee benefits without interruption. In addition, the Company has filed a motion with the Court requesting permission to pay pre-petition and post- petition trade creditors. USI has retained Alvarez & Marsal as financial and restructuring advisor and Proskauer Rose LLP as legal counsel to provide professional services in connection with these restructuring efforts. About United Subcontractors United Subcontractors, Inc. -- http://www.unitedsub.com/-- is a privately owned company with approximately 40 branches and 1,600 employees across the country. Founded in 1998 and based in Edina, Minnesota, USI is a market leader in the installation of a wide range of residential and commercial products within the construction industry. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009 (Bankr. D. Delaware Case No. 09- 11152). Mark K. Thomas, Esq., Paul V. Possinger, Esq., and Peter J. Young, Esq., at Proskauer Rose LLP assist the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claim agents. The Debtors listed $50 million to $100 million in assets and $100 million to $500 million in debts. VERASUN ENERGY: Closes Sale of 5 Ethanol Plants to Valero --------------------------------------------------------- VeraSun Energy Corp. closed on the sale of assets to Valero Renewable Fuels that included five ethanol production facilities and a development site. The sale closed at 12:01 a.m. CDT, this morning. The facilities are located in Aurora, S.D.; Fort Dodge, Charles City, and Hartley, Iowa; and Welcome, Minn., and the development site is in Reynolds, Ind. VeraSun Energy selected Valero Renewable Fuels as the successful bidder for seven of its ethanol production facilities and the development site on March 17, 2009 as part of an auction sale process. Valero Renewable Fuels is a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer based in San Antonio, Texas. Valero purchased the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site, for $350 million. This group of assets was part of a "stalking horse" bid submitted by Valero in early February. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. The purchase price also includes working capital and other certain adjustments. Closing on the Albert City and Albion facilities is expected in the coming weeks. VeraSun also expects to close on the sale of its remaining facilities in the next several weeks. About Valero Valero Energy Corporation -- http://www.valero.com/-- is a Fortune 500 company based in San Antonio, Texas, with roughly 22,000 employees and 2008 revenues of $119 billion. The company owns and operates 16 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of approximately 3 million barrels per day, making it the largest refiner in North America. Valero is also one of the nation's largest retail operators with roughly 5,800 retail and branded wholesale outlets in the United States, Canada and the Caribbean under various brand names including Valero, Diamond Shamrock, Shamrock, Ultramar, and Beacon. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.comor http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 31, 2008, (Bankr. D. Del. Case No. 08-12606) Mark S. Chehi, Esq. at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). VINEYARD CHRISTIAN: Court Sets April 30 General Bar Date -------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has set April 30, 2009, as the deadline for creditors and holders of ownership interests in Vineyard Christian Fellowship of Malibu, to file proofs of claim against or proofs of interest in the Debtor's estate. For claims of governmental units, proofs of claim must be filed: (a) before 180 days after the date of the order for relief in this case, or (b) by April 30, 2009, whichever is later. Claims must be filed on or before the applicable Claims Bar Dates with: United States Bankruptcy Court Central District of California Riverside Division Clerk of the Court 21041 Burbank Boulevard Woodland Hills, CA 91367-6603 Any questions regarding this notice should be directed to Debtor's counsel: Pachulski Stang Ziehl & Jones LLP Attn: Victoria Newmark, Esq. 10100 Santa Monica Boulevard, 11th Floor Los Angeles, California 90067-4100 Tel: (310) 277-6910 Fax: (310) 201-0760 Email: vnewmark@pszjlaw.com Malibu, California-based Vineyard Christian Fellowship of Malibu owns real property in Malibu, California, on which it operates a multi-purpose office building and recording studio. The company filed for Chapter 11 protection on Sept. 12, 2008 (Bankr. C.D. Calif. Case No. 08-16951). James Stang, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtor as counsel. In its schedules, the Debtor listed total assets of $34,344,046 and total debts of $18,670,082. VINEYARD CHRISTIAN: Stipulation on Use of Cash Collateral Okayed ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved on March 20, 2009, the stipulation between Secured Creditor Marshall Investments Corporation and Vineyard Christian Fellowship of Malibu, resolving Marshall's motion to have the Debtor declared a single real estate case and its motion to dismiss or convert Debtor's case to Chapter 7 for cause. Marshall also agrees to withdraw its objections to the Debtor's use of its cash collateral. As agreed, the Debtor stipulates that the aggregate allowed amount of the Marshall indebtedness as of the Petition Date is at least $13,618,309, secured by valid and perfected, first priority liens upon all or substantially all of the Debtor's property and assets. The Debtor shall effect the sale of its real property in conformity with the follwing schedule: May 16, 2009 - Bid Deadline May 13, 2009 - Auction May 15, 2009 - Last day to close a prior prospect transaction May 15, 2009 - Bankruptcy Court hearing to approve auction results June 15, 2009 - Closing The foregoing schedule shall be included in any motion for approval of the bidding procedures. The Debtor represents that it has been engaged in discussions with a prospect who is affiliated with an insider of the Debtor who may be prepared to purchase the real property and lease back a portion of the real property to the Debtor for approximately 75 years. Discussions are ongoing. Marshall also agrees to provide up to $100,000 to fund marketing expenses for the real property and to fund the special real estate advisor's minimum fee. Marshall shall have an allowed superpriority administrative expense claim pursuant to section 364(c)(1) of the Bankruptcy Code for any DIP Loan advances made by it. The Debtor is authorized to use its cash, including any cosh collateral, consistent with a budget to be agreed upon by the parties and to pay allowed professional fees and expenses. As adequate protection and to the extent of any diminution in the value of its interests in the Collateral resulting from the Debtor's use of cash collateral, Marshall is granted replacement liens upon all of the Collateral, subject only to the Carve-Out. Marshall shall also be granted an allowed superpriority adequate protection claim to the extent its adequate protection replacement lien on the Collateral is not adequate to protect it against the diminution in value of the Collateral. Malibu, California-based Vineyard Christian Fellowship of Malibu owns real property in Malibu, California, on which it operates a multi-purpose office building and recording studio. The company filed for Chapter 11 protection on Sept. 12, 2008 (Bankr. C.D. Calif. Case No. 08-16951). James Stang, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtor as counsel. In its schedules, the Debtor listed total assets of $34,344,046 and total debts of $18,670,082. VISTEON CORP: May File for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Visteon Corp. said in a filing with the U.S. Securities and Exchange Commission that it may have to file for Chapter 11 bankruptcy protection. Detroit Free Press relates that analysts have long expected Visteon to file for bankruptcy protection. The British bankruptcy may not be the last filing from Visteon, Detroit Free Press states, citing analysts. As reported by the Troubled Company Reporter on April 1, 2009, Visteon said that Visteon UK Limited, a company organized under the laws of England and Wales and an indirect, wholly-owned subsidiary of the Company, filed on March 31, 2009, for administration under the United Kingdom Insolvency Act of 1986 with the High Court of Justice, Chancery division in London, England. According to Detroit Free Press, the bankruptcy filing was made after Visteon posted a steep loss last in 2008, and after the Company's shares were delisted from the New York Stock Exchange. Detroit Free Press states that while the news prompted workers at the supplier's plant in Belfast to hold a protest to demand better severance package. Citing KPMG, Detroit Free Press relates that those plants, since they were spun off from Ford Motor Co. in 2000, haven't reported an annual profit and have been a cash drain on Visteon. KPMG, the court-appointed firm that took control of the plants when Visteon put them into bankruptcy, said in a statement that Visteon can no longer support the business. According to Detroit Free Press, about 610 employees will lose their jobs due to the plant closures. The Company has obtained temporary waivers of defaults under its senior secured credit and securitization facilities, and if it is unable to achieve an acceptable negotiated restructuring with its lenders and customers, or make such waivers permanent, prior to their expiration, it may seek reorganization under the U.S. Bankruptcy Code. The Company is exploring various strategic and financing alternatives and has retained legal and financial advisors to assist in this regard. The Company has commenced discussions with lenders under the Facilities, including the Ad Hoc Committee, regarding the restructuring of the Company's capital structure. Additionally, the Company has commenced discussions with certain of its major customers to address its liquidity and capital requirements. Any such restructuring may affect the terms of the Facilities, other debt and common stock and may be affected through negotiated modifications to the related agreements or through other forms of restructurings, including under court supervision pursuant to a voluntary bankruptcy filing under Chapter 11 of the U.S. Bankruptcy Code. If an acceptable agreement is not obtained, an event of default under the Facilities would occur as of the expiration of the Waivers, excluding any extensions thereof, and the lenders would have the right to accelerate the obligations thereunder. Acceleration of the Company's obligations under the Facilities would constitute an event of default under the senior unsecured notes and would likely result in the acceleration of these obligations as well. In any such event, the Company may be required to seek protection under Chapter 11 of the U.S. Bankruptcy Code. Visteon said that while it is still in talks with its lenders, "it may seek reorganization under U.S. Bankruptcy Code" without a long-term agreement. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. * * * As reported by the Troubled Company Reporter on March 31, 2009, Moody's Investors Service lowered Visteon's Probability of Default and Corporate Family Ratings to Caa3 and Ca, respectively. In a related action, Moody's also lowered the ratings of Visteon's senior secured term loan to Caa2 from B3, unguaranteed senior unsecured notes to C from Caa3, and guaranteed senior unsecured notes to Ca from Caa2. Visteon's Speculative Grade Liquidity Rating was also lowered to SGL-4 from SGL-3. The outlook remains negative. On March 11, Fitch Ratings downgraded the Issuer Default Rating of Visteon Corporation to 'C' from 'CC', indicating that a default was imminent or inevitable. The ratings were removed from Rating Watch Negative, where they were placed on Dec. 11, 2008. The TCR said on Jan. 14, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Visteon Corp. to 'CCC' from 'B-' and removed all the ratings from CreditWatch, where they had been placed on Nov. 13, 2008, with negative implications. The outlook is negative. At the same time, S&P also lowered its issue-level ratings on the company's debt. VOLT INFORMATION: Fitch Affirms Issuer Default Rating at 'BB' ------------------------------------------------------------- Fitch Ratings has affirmed Volt Information Sciences, Inc. ratings: Volt Information Sciences, Inc. -- Issuer Default Rating affirmed at 'BB'; -- $42 million senior unsecured facility due February 2013 affirmed at 'BB'; -- Secured 8.2% $12 million term loan affirmed at 'BBB-'. Volt Delta Resources, Inc. -- IDR affirmed at 'BB'; -- $75 million senior secured facility due December 2009 affirmed at 'BBB-'. The Rating Outlook for all ratings has been revised to Negative from Stable. The revision in the Rating Outlook to Negative reflects the uncertainties posed by the unknown depth and breadth of the current recession and its effect on Volt's primary line of business -- the staffing segment. In the company's first fiscal quarter of 2009, total net sales declined 14% relative to the prior year, and Fitch anticipates further year-over-year declines in 2009. The effect on Volt has been mitigated by its variable cost components in its staffing business. In addition, to manage through the economic downturn, Volt has been streamlining its overhead costs and has consolidated certain operations. Mitigating the effect of declining revenues is the company's current strong cash position ($135 million of unrestricted cash on Feb. 1, 2009) and the funds expected to be provided by working capital as accounts receivable decline. Additionally, Fitch notes that even in periods of material declines in staffing business revenue -- such as in 2001 and 2002 -- the company has generally maintained a modest level of operating profitability at the bottom of the cycle through the management of its costs. In terms of potential rating action triggers, a downgrade could occur if the company's operations started burning cash (contrary to its historical pattern during recessions) and, conversely, the Outlook could return to Stable if revenue trends were to stabilize and return to growth. Volt's existing ratings reflect its ability to historically maintain adequate liquidity and relatively solid coverage and leverage metrics through up and down cycles in the economy. In addition, the company has moderately diversified its sources of operating income away from the staffing services segment, largely through acquisitions in the computer systems area. Leverage, as measured by total debt-to-EBITDA, was 2.6 times (x) in 2008. Volt now reports the amount outstanding on the accounts receivable securitization program on its balance sheet, and Fitch includes it in total debt. At fiscal year-end 2008 and on Feb. 1, 2009, the company had $50 million and $60 million, respectively, outstanding on the accounts receivable securitization program. Broader concerns in the long-term view of Volt reflect competition in the staffing services segment, the exposure of this segment to the business cycle, and the relatively low margins in the segment. Its revenue concentration with certain clients, coupled with the short-term nature of most contracts, is a concern which is mitigated by Volt's long-term relationship with key clients and the high-quality nature of these customers. Fitch will also monitor the company's progress towards addressing the December 2009 maturity of the $75 million Volt Delta secured credit facility. In general, Fitch expects the company to maintain conservative financial policies. In September 2008, the company completed the sale of the net assets of its directory systems and services as well as its North American Publishing operations to Yellow Page Group. Volt received $179 million in pretax cash proceeds from the sale. The company has retained a significant portion of the estimated $115 million to $120 million of after-tax proceeds (taxes on the gain were paid in the first quarter of 2009) on the balance sheet to preserve financial flexibility in the current economic and capital markets environment. Liquidity is provided by unrestricted cash balances of $135 million as of February 2009, and the company's $175 million accounts receivable securitization program that expires in 2013. The securitization program had $60 million outstanding as of Feb. 1, 2009. Additional liquidity is provided by Volt's senior unsecured $42 million revolving facility ($12 million outstanding on Feb. 1, 2009) which expires in February 2013 and Volt Delta's $75 million secured facility due December 2009. As of Feb. 1, 2009, there was $40.6 million outstanding on the Volt Delta facility. The Volt revolving credit facility requires the maintenance of certain accounts receivable in excess of borrowings and is guaranteed by eight subsidiaries of the company. The main financial covenants include a minimum interest coverage ratio of 4.0x and a maximum debt-to-EBITDA ratio of 3.0x. W.R. GRACE: Commissioned Study on Dangers of Asbestos in Libby -------------------------------------------------------------- Amy Linn and Bob Van Voris of Bloomberg reports that according to evidence in the W.R. Grace & Co.'s criminal trial, the company commissioned a study in 1976 that showed hamsters exposed to vermiculite mined in Libby, Montana, developed mesothelioma, a rare and deadly cancer. Ten of the 60 hamsters in the study suffered lung tumors and "extensive" thickening of the lungs, according to a progress report written by chemist and former company research manager, Grace Yang. Bloomberg relates that according to the report, Lung disease was so pronounced in one hamster, "the animal was choked to death, since no healthy tissue remained". According to Ms. Yang, W.R. Grace & Co. commissioned the study, which it never published, to determine how dangerous its vermiculite was compared to other companies' asbestos-containing products. Ms. Yang, who worked for the company from 1972 until 1995, testified as a government witness in the trial of Grace, the bankrupt maker of specialty chemicals and building products, and five former company executives. Source says they're charged with conspiring to expose Libby residents to asbestos, which is found in the local vermiculite. Moreover, Bloomberg states that the government alleges that Grace also knew early on that the type of asbestos in Libby's vermiculite was potentially more dangerous than other commercial varieties of the mineral. Libby tremolite, as the strain is sometimes called, has glass-like microscopic fibers that can individually penetrate lung tissues, according to one of more than 50 internal company memos shown to the jury. Ms. Yang's court appearance followed testimony from her onetime boss, chemist Heyman Duecker, the former director of research for Grace's construction products division. The Bloomberg report says that with their testimony, prosecutors are trying to show that W.R. Grace and its senior executives knew for years that vermiculite mined in Libby was hazardous and hid the dangers. The memos, according to the report which concluded that Libby tremolite caused cancer and was "quite active" at causing disease in lab animals, were seen by senior officials, including Jack Wolter, ex-general manager of the construction products division; Hary Eschenbach, former director of health and safety; and Mario Favorito, former Grace legal counsel, according to evidence in the trial. All three men are defendants in the case. According to Bloomberg, Favorito will be tried separately from the five ex-executives now on trial. The day-to-day process of the hamster study was carried out by William Smith, a cancer researcher at Fairleigh Dickinson University, who was asked to investigate the "relative carcinogenicity" of Libby asbestos. Ms. Yang's role was to make the solution the hamsters were injected with, and ensure it mimicked the type of fibers workers were exposed to in Libby. Report stressed that Federal prosecutors allege that "hundreds if not thousands" of people are suffering asbestos-related illnesses in Libby, where W.R. Grace mined and processed vermiculite ore from 1963 until it shuttered the mine in 1990, said Bloomberg. WADENA HOUSING: S&P Corrects Outlook to Stable; Cuts Rating to B ---------------------------------------------------------------- In the media release published earlier, the outlook on Wadena Housing and Redevelopment Authority (Humphrey Manor East Project), Minnesota was misstated. A corrected version follows. Standard & Poor's Ratings Services lowered its rating on Wadena Housing and Redevelopment Authority, Minnesota's multifamily housing revenue bonds (Humphrey Manor East Project) series 1993 to 'B' from 'BB'. The outlook is stable. "The downgrade reflects a further decline in debt service coverage levels to below 1.00x maximum annual debt service and a steep rise in expenses leading to deterioration in the expense ratio," said Standard & Poor's credit analyst Renee Berson. The latest audited financial results for the fiscal year ended June 30, 2008, indicate that debt service coverage declined to 0.93x from 1.02x in 2007. According to the unaudited financial statements through Nov. 30, 2008, the annualized debt service coverage is expected to improve. The average net rent is $560 per unit per month for June 2008, up from $555 in June 2007. The project received a recent rental increase in 2008, even though the contract rent was 125% of fair market rent. Expenses per unit per year have increased to $3,957 in June 2008, from $3,619 in June 2007. This increase was mainly due to an increase administrative expenses, utilities expenses and general expenses. The increase in expenses outpaced the increase in rent leading to worsening of the expense ratio to 54.14%. WILDGOOD INC.: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Wildgood, Inc. 4834 New Jesup Highway Brunswick, GA 31520 Bankruptcy Case No.: 09-20379 Chapter 11 Petition Date: March 23, 2009 Court: United States Bankruptcy Court Southern District of Georgia (Brunswick) Debtor's Counsel: Robert H. Baer, Esq. Law Office of Robert H. Baer P.O. Box 1792 Brunswick, GA 31521 Tel: (912) 264-3120 Fax: (912) 265-8337 Email: robertbaer@bellsouth.net Estimated Assets: $0 to $50,000 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/gasb09-20379.pdf The petition was signed by Hoke Smith Wilder III, President of the company. WE PRINT TODAY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: We Print Today, LLC 66 Summer Street Kingston, MA 02364 Bankruptcy Case No.: 09-12396 Chapter 11 Petition Date: March 23, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Debtor's Counsel: David B. Madoff, Esq. Madoff & Khoury LLP 124 Washington Street - Suite 202 Foxboro, MA 02035 Tel: (508) 543-0040 Fax: (508) 543-0020 Email: madoff@mandkllp.com Total Assets: $74,812.78 Total Debts: $1,340,687.84 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mab09-12396.pdf The petition was signed by David J. Struski, Manager of the company. WL HOMES: Court Oks Standard Procedures for Undeveloped Land Sale ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved standard bidding procedures for the sale of undeveloped and partially developed land of WL Homes LLC and its debtor- affiliates. Pursuant to the approved bidding procedures, when the Debtors have entered into a Stalking Horse Agreement, or when the Debtors determine in their business judgment thet an auction is appropriate, the Debtors will cause a copy of the Auction notice, the Bidding Procedures and any Stalking Horse Agreement to be served upon the Auction Notice Parties at least 20 days prior to any auction on the property. Any party-in-interest that objects to the selection of the Stalking Horse or the proposed Break-Up Fee must file with Court an objection no later than 5 days after the date of the filing of the Auction Notice. If no objection is made, the selection of the Stalking Horse and the proposed Break-Up Fee shall be deemed approved by the Court. Pursuant to the bidding procedures, the Debtors are authorized, in consultation with the Official Committee of Unsecured Creditors, to negotiate a reasonable Break-Up Fee with any Stalking Horse. The payment of the Break-Up Fee shall constitute an allowed administrative expense claim arising under Sections 503(b) and 507(a)(1) of the Bankruptcy Code. When the Debtors have designated a Successful Bidder, the Debtors shall serve copies of the Sale Hearing Notice, the purchase agreement with the Successful Bidder, and a proposed order approving the sale of the property on the Auction Notice Parties. A copy of the approved standard bid procedures is available at: http://bankrupt.com/misc/WLHomes.BidProcedures.pdf About WL Homes LLC Headquartered in Irvine, California, WL Homes LLC dba John Laing Homes -- sells and builds houses. The Debtor and five of its affiliates filed for Chapter 11 protection on February 19, 2009 (Bankr. D. Del. Lead Case No. 09-10571). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors' in their restructuring efforts. When the Debtors sought protection from their creditors, they listed assets of more than $1 billion, and debts between $500 million and $1 billion. WL HOMES: Procedures for Payment of Claims from Home Sales Okayed ----------------------------------------------------------------- WL Homes LLC, et al., have obtained permission from the U.S. Bankruptcy Court for the District of Delaware to resume the construction, sale and closing of homes to customers in the ordinary course of business. The Court also established procedures for the payment of claims secured by liens out of the proceeds of home sales. The Debtors are also authorized to perform all obligations under the Contracts and to take any other reasonable actions that may be necessary to effectuate closings under the Contracts, including to refund customer deposits or to negotiate modifications to Contracts consistent with the Debtor's judgment and past practices. All sales of homes by the Debtors will be free and clear of all claims and encumbrances, with liens attaching to the proceeds of each home sale. The Debtors stipulate and agree that the properties subject to the project loans or investments provided by RFC Construction Funding, LLC, or its predecessors-in-interest or affiliates, to the Debtors or the non-debtor affiliates, are excluded from the properties subject to these approved procedures. The Debtors likewise agree to exclude from the effect of this order any collateral of the following lenders: a) Bank of America, N.A. b) Housing Capital Company c) Guaranty Bank d) Wachovia Bank, National Association e) Wells Fargo Bank, N.A. A full-text copy of the Court's order is available at: http://bankrupt.com/misc/WLHomesProceduresOrder.pdf About WL Homes LLC Headquartered in Irvine, California, WL Homes LLC dba John Laing Homes -- sells and builds houses. The Debtor and five of its affiliates filed for Chapter 11 protection on February 19, 2009 (Bankr. D. Del. Lead Case No. 09-10571). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors' in their restructuring efforts. When the Debtors sought protection from their creditors, they listed assets of more than $1 billion, and debts between $500 million and $1 billion. WOLF HOLLOW: S&P Affirms 'B' Rating on $260 Mil. Senior Facility ---------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' rating on electricity generator Wolf Hollow I L.P.'s first-lien $260 million senior secured bank facility and $30 million working capital facility. At the same time, S&P removed the rating on the senior secured facilities from CreditWatch with negative implications, where S&P placed it on March 12, 2009. The $260 million debt consists of a $156 million term loan ($130 million and a $26 million sub-facility revolver, with $120.7 million outstanding on the $130 million as of Dec. 31, 2008), along with a $104 million synthetic letter of credit. The recovery ratings on the first-lien facilities remain at '1'. In addition, S&P affirmed the 'CCC+' rating on the $110 million second-lien term loan and also removed the negative CreditWatch on the issue. The recovery rating on the second-lien facilities remains at '4'. The outlook on both the first- and second-lien ratings is negative. "The CreditWatch removals follow S&P's conclusion that recent transactions by the project will not materially affect credit quality," said Standard & Poor's credit analyst Justin Martin. However, S&P's concerns remain regarding the facility's continued proximity to its financial covenant debt service coverage ratio of 1.2x, and -- based on actual cash flow coverage -- the ongoing difficulties in prepaying any significant portion of the first- lien debt before its 2012 maturity. In December 2008, Wolf Hollow wrote six heat-rate call options with its energy manager, Eagle Energy (formerly owned by Lehman Bros., subsequently acquired by Electricite de France S.A. (A+/Negative/A-1)). In aggregate, the options cover 75 MW of notional capacity for the period June-August of 2011 (after the J. Aron & Co. option expires). All premiums were paid in December and recognized as fourth-quarter revenue, at a price that is within the range of historical margins that could have otherwise been earned by this portion of the plant's capacity based on reasonable operating assumptions. While S&P typically find such hedges as credit positives (to the extent they mitigate margin volatility), in this instance S&P view the monetization of future cash flows as causing mild credit deterioration because the fourth-quarter 2008 call option proceeds were essentially a stop- gap to prevent a covenant violation (and resulting technical default). Without this revenue, the plant would have tripped its DSCR financial covenant of 1.2x. Somewhat offsetting this deterioration is the small volume sold relative to the total merchant capacity of 370 MW in 2011. The call option represents only 20% of this amount. Based on the period 2003-2008 (and ignoring start-related expenses and dispatch constraints), a plant with a 7.2 million Btu per megawatt-hour (mmBtu/MWh) heat rate and variable operations and maintenance costs of $2.95/MWh would have earned 34%-59% of its total revenues during the June-August period as a result of power demand in the northern part of the ERCOT region in the summer. If S&P assume summer earnings (as a percentage of the total year's earnings) equal the historical average for this five-year period, then Wolf Hollow would be foregoing 46% of the revenues for the 75 MW sold to Eagle Energy for 2011, or slightly more than 2% of total possible revenues for the 370 MW of capacity for the year. Foregone revenues will obviously fluctuate depending on actual prices; this calculation is merely an example of the trade-off, based on historical values, which underscores S&P's view that the size and duration of the option are not sufficient to warrant a downgrade. In addition to the call options, Wolf Hollow negotiated a lease agreement with Quicksilver Resources Inc. (B/Negative/--) for which the project received a one-time January 2009 payment and the right to receive royalties on any natural gas that Quicksilver may extract from the ground that pertains to the lease. Based on S&P's understanding that lenders' counsel has reviewed the lease subordination agreement and finds it acceptable and in accordance with all relevant project documents, S&P's initial concern that such a lease may violate lien prohibitions has been alleviated. At the same time, however, given the uncertain nature of any findings -- combined with the credit quality of Quicksilver -- S&P does not give credit for any potential future revenues that may result from this agreement. The negative outlook on Wolf Hollow reflects S&P's belief that the plant'sDSCR for the first two quarters of 2009 will be close to the 1.20x ratio required by the credit agreement. Although the plant's total leverage is low for the 'B' rating, the proximity to a technical default raises the concern that lenders may accelerate the loans. If coverage ratios (as calculated by the credit agreement) reach 1.25x-1.3x within the next four quarters, S&P will consider raising the rating. Conversely, if they decline below 1.20x or liquidity further deteriorates, a downgrade may result. In the market context, a sustained decrease in market heat rates below 9 mmBtu/MWh would also lower the earnings potential and while increasing the risk of refinancing default. By the same token, improved availability and operating efficiency (three to four quarters at a full load heat rate of 7.1 mmBtu/MWh and no urgent maintenance outages) could resolve the outlook and put upward pressure on the rating. * Sued Company Officers Lack Standing to Appeal, Court Rules ------------------------------------------------------------ According to Bloomberg's Bill Rochelle, a panel of the 6th U.S. Circuit Court of Appeals ruled that when a bankruptcy court authorized a committee to sue company officers and directors, an officer at whom the lawsuit is directed doesn't have standing to appeal the order authorizing the suit. Someone has the right to appeal only if she or he is a "person aggrieved." Courts of Appeal generally hold that a target of a lawsuit for that reason alone is not "aggrieved." All three judges on the 6th Circuit panel agreed with the general proposition, Mr. Rochelle relates. Circuit Judge Cornelia G. Kennedy dissented in part. One of the defendants was an officer who has a right of indemnification from the company in bankruptcy. Judge Kennedy believes that the resulting claim against the company made him a creditor who was "aggrieved" and thus should have been permitted to appeal. The other two circuit judges, Ronald L. Gilman and R. Guy Cole Jr., didn't believe that holding a claim for indemnification should change the result and thus dismissed the appeal for lack of standing. Judge Gilman wrote the opinion for the majority. The case is Moran v. LTV Steel Co., In re LTV Steel Inc., 06-4580, 6th U.S. Circuit Court of Appeals. * Joseph Smolinsky Joins Weil Gotshal as Partner ------------------------------------------------ Joseph Smolinsky will join Weil, Gotshal & Manges LLP as a Partner in its Business Finance & Restructuring practice in the New York office. "We are very pleased to have Joseph join us," Weil Gotshal Chairman Stephen Dannhauser stated. "His vast experience, particularly in the representation of creditors, further rounds out our industry-leading restructuring department." Mr. Smolinsky has over 20 years experience in bankruptcy law. Prior to joining Weil Gotshal, he was a partner at Chadbourne & Parke LLP, where he advised corporations, borrowers, lenders, investors and creditors on Chapter 11 restructuring cases. Mr. Smolinsky has been involved in a number of recent high profile cases, including TOUSA, Refco, Calpine and Mirant. He started his legal career as a judicial clerk for the Honorable Conrad B. Duberstein, Chief United States Bankruptcy Judge for the Eastern District of New York. "Joseph's expertise in complex and high profile Chapter 11 reorganizations and his involvement in structured finance transactions make him an ideal fit for our team," said Marcia Goldstein, Chair of Weil Gotshal's Business, Finance & Restructuring practice. Mr. Smolinsky is recognized in Chambers USA: The World's Leading Lawyers for Business 2009 in the field of Bankruptcy/Restructuring. A recognized authority in the bankruptcy arena, he has spoken at various conferences and seminars and authored numerous articles. Weil Gotshal's preeminent global Business Finance & Restructuring Department is consistently recognized as the leading practice by Chambers & Partners and other highly regarded legal publications. The largest and most innovative business reorganization practice in the U.S., Weil Gotshal is called upon by a wide range of constituencies to resolve the most complex cases. Serving the full spectrum of clients -- debtors, creditors, equity holders, and potential purchasers of troubled companies or their assets -- the Department has had preeminent roles in most major debt restructurings, both in the United States and Europe. The firm has handled the largest bankruptcy and restructuring cases in history, including Lehman Brothers, Washington Mutual, WorldCom, and Enron. About Weil, Gotshal & Manges Weil, Gotshal & Manges -- http://www.weil.com-- is an international law firm of over 1,300 lawyers, including approximately 300 partners. It is headquartered in New York, with offices in Austin, Beijing, Boston, Budapest, Dallas, Dubai, Frankfurt, Hong Kong, Houston, London, Miami, Munich, Paris, Prague, Providence, Shanghai, Silicon Valley, Warsaw, Washington, D.C. and Wilmington. * Chapter 11 Cases With Assets and Liabilities Below $1,000,000 --------------------------------------------------------------- In Re Jones, John Winston Bankr. S.D. Ala. Case No. 09-11394 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/alsb09-11394p.pdf See http://bankrupt.com/misc/alsb09-11394c.pdf In Re 32nd & Broadway LLC Bankr. C.D. Calif. Case No. 09-12552 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/cacb09-12552.pdf In Re Galicia, Arcelia Bankr. C.D. Calif. Case No. 09-13281 Chapter 11 Petition filed March 25, 2009 Filed as Pro Se In Re Bistro Du Soleil Bankr. D. Conn. Case No. 09-50534 Chapter 11 Petition filed March 17, 2009 See http://bankrupt.com/misc/ctb09-50534.pdf In Re Carp Building Structures, Inc. Bankr. D. Conn. Case No. 09-30713 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/ctb09-30713.pdf In Re Peterson, Dale H. Jr. Peterson, Joanne Bankr. M.D. Fla. Case No. 09-05507 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/flmb09-05507.pdf In Re Cleanest Office Environment, Inc. dba Cleanest Office Environments Bankr. M.D. Fla. Case No. 09-05508 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/flmb09-05508.pdf In Re Team Frascona, Inc. dba Domino's Pizza Bankr. M.D. Fla. Case No. 09-05599 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/flmb09-05599.pdf In Re TS Floors, LLC fka TS Floors, Inc. Bankr. M.D. Fla. Case No. 09-02243 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/flmb09-02243p.pdf See http://bankrupt.com/misc/flmb09-02243c.pdf In Re Floor Factory Outlet, LLC Bankr. M.D. Fla. Case No. 09-02247 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/flmb09-02247p.pdf See http://bankrupt.com/misc/flmb09-02247c.pdf In Re Coastal Express, Inc. Bankr. W.D. N.C. Case No. 09-10333 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/ncwb09-10333.pdf In Re Jones, Dustin Michael Jones, Karista Kay Bankr. E.D. Mich. Case No. 09-31547 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/mieb09-31547p.pdf See http://bankrupt.com/misc/mieb09-31547c.pdf In Re Saint Albans Outreach Day Care Center, Inc. Bankr. E.D. N.Y. Case No. 09-42267 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/nyeb09-42267.pdf In Re Goodeee Management, LLC dba Goodeee Motors of Buffalo Bankr. W.D. N.Y. Case No. 09-11176 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/nywb09-11176.pdf In Re Little Kingdom Land, Incorporated Bankr. E.D. Pa. Case No. 09-12132 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/paeb09-12132.pdf In Re Aggie Land Nutrition, Inc. Bankr. S.D. Tex. Case No. 09-31927 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/txsb09-31927.pdf In Re Atlas Investment, Inc. dba Waldo's Bar & Grill Bankr. W.D. Wash. Case No. 09-12767 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/wawb09-12767.pdf In Re Patel, Piyush G. Bankr. D. Wyo. Case No. 09-20236 Chapter 11 Petition filed March 25, 2009 See http://bankrupt.com/misc/wyb09-20236p.pdf See http://bankrupt.com/misc/wyb09-20236c.pdf In Re Knowledge Management Solutions, Inc. Bankr. M.D. Ala. Case No. 09-30808 Chapter 11 Petition filed March 26, 2009 See http://bankrupt.com/misc/almb09-30808.pdf In Re Turner Food Systems LLC Bankr. N.D. Ala. Case No. 09-01814 Chapter 11 Petition filed March 26, 2009 See http://bankrupt.com/misc/alnb09-01814.pdf In Re Swanson, Thomas Alfred Swanson, Karen Knill Bankr. C.D. Calif. Case No. 09-12605 Chapter 11 Petition filed March 26, 2009 Filed as Pro Se In Re Christy's On Orange, LLC Bankr. D. Conn. Case No. 09-30721 Chapter 11 Petition filed March 26, 2009 See http://bankrupt.com/misc/ctb09-30721.pdf In Re Glades Riverfront Estates, LLC Bankr. S.D. Fla. Case No. 09-15271 Chapter 11 Petition filed March 26, 2009 See http://bankrupt.com/misc/flsb09-15271.pdf In Re Chestnut Franklin, LLC Bankr. E.D. Pa. Case No. 09-20747 Chapter 11 Petition filed March 26, 2009 Filed as Pro Se In Re Best Communications, Inc. Bankr. D. Utah Case No. 09-22807 Chapter 11 Petition filed March 26, 2009 See http://bankrupt.com/misc/utb09-22807.pdf In Re Trading Intl. Bankr. D. Utah Case No. 09-22809 Chapter 11 Petition filed March 26, 2009 See http://bankrupt.com/misc/utb09-22809.pdf In Re JK-DK, Inc. Bankr. E.D. Wisc. Case No. 09-23699 Chapter 11 Petition filed March 26, 2009 See http://bankrupt.com/misc/wieb09-23699.pdf In Re IXP, Inc. aka Industrial X-ray Piping Bankr. D. Colo. Case No. 09-15193 Chapter 11 Petition filed March 27, 2009 Filed as Pro se In Re Homes Holding LLC Bankr. D. Conn. Case No. 09-20743 Chapter 11 Petition filed March 27, 2009 Filed as Pro Se In Re Miles Away Charter, LLC Bankr. D. Md. Case No. 09-15303 Chapter 11 Petition filed March 27, 2009 See http://bankrupt.com/misc/mdb09-15303.pdf In Re Mattera, Michele Peter aka Mattera, Mike P. aka Mattera, Mike aka Mattera, Michele P aka Mattera, Michele Bankr. E.D. Mich. Case No. 09-49446 Chapter 11 Petition filed March 27, 2009 See http://bankrupt.com/misc/mieb09-49446p.pdf See http://bankrupt.com/misc/mieb09-49446c.pdf In Re The Cappuccino Cafe, Inc. aka The Cappuccino Cafe Bankr. W.D. Mich. Case No. 09-03630 Chapter 11 Petition filed March 27, 2009 Filed as Pro Se In Re Robert, Matthew Brown Bankr. D. Nev. Case No. 09-14397 Chapter 11 Petition filed March 27, 2009 Filed as Pro Se In Re Neawanna by the Sea Limited Partnership Bankr. D. Ore. Case No. 09-32093 Chapter 11 Petition filed March 27, 2009 See http://bankrupt.com/misc/orb09-32093.pdf In Re Pyramid Landscape LLC Bankr. D. Nev. Case No. 09-50856 Chapter 11 Petition filed March 28, 2009 See http://bankrupt.com/misc/nvb09-50856.pdf In Re Pamela Ileen Matthews aka Montgomery Inn Bed & Breakfast Bankr. E.D. Ky. Case No. 09-50952 Chapter 11 Petition filed March 29, 2009 See http://bankrupt.com/misc/kyeb09-50952p.pdf See http://bankrupt.com/misc/kyeb09-50952c.pdf In Re Terry L. Groves Trust, u/a/d 12/20/99 Bankr. E.D. Mich. Case No. 09-31629 Chapter 11 Petition filed March 29, 2009 See http://bankrupt.com/misc/mieb09-31629.pdf In Re FMC Group Inc. Bankr. S.D. N.Y. Case No. 09-35179 Chapter 11 Petition filed March 29, 2009 See http://bankrupt.com/misc/nysb09-31579.pdf In Re Leonador, Mae Baniqued Leonador, Ronnie Selga Bankr. N.D. Calif. Case No. 09-42503 Chapter 11 Petition filed March 30, 2009 See http://bankrupt.com/misc/canb09-42503.pdf In Re L. G. Restaurant Group, LLC Bankr. M.D. Fla. Case No. 09-06112 Chapter 11 Petition filed March 30, 2009 See http://bankrupt.com/misc/flmb09-06112.pdf In Re Alliance Capital LLC Bankr. S.D. Fla. Case No. 09-15680 Chapter 11 Petition filed March 30, 2009 See http://bankrupt.com/misc/flsb09-15680.pdf In Re CRR, Inc. Bankr. D. Md. Case No. 09-15384 Chapter 11 Petition filed March 30, 2009 Filed as Pro Se In Re Lukowski, Robert S. Lukowski, Walleen A. Bankr. E.D. Nev. Case No. 09-14562 Chapter 11 Petition filed March 30, 2009 See http://bankrupt.com/misc/nvb09-14562.pdf In Re Morton, James Otis Jr. Morton, Rebecca Phelps Bankr. E.D. N.C. Case No. 09-02599 Chapter 11 Petition filed March 30, 2009 See http://bankrupt.com/misc/nceb09-02599p.pdf See http://bankrupt.com/misc/nceb09-02599c.pdf In Re Guthartz, Alan Michael Bankr. E.D. N.Y. Case No. 09-72103 Chapter 11 Petition filed March 30, 2009 Filed as Pro Se In Re 304 Washington Ave, Inc. Bankr. N.D. N.Y. Case No. 09-11053 Chapter 11 Petition filed March 30, 2009 See http://bankrupt.com/misc/nynb09-11053.pdf In Re 572-574 Madison, Inc Bankr. N.D. N.Y. Case No. 09-11052 Chapter 11 Petition filed March 30, 2009 See http://bankrupt.com/misc/nynb09-11052.pdf In Re ES&G Trading Inc. Bankr. S.D. N.Y. Case No. 09-11601 Chapter 11 Petition filed March 30, 2009 Filed as Pro Se In Re PG Investment Group Bankr. S.D. Tex. Case No. 09-32085 Chapter 11 Petition filed March 30, 2009 Filed as Pro Se In Re Edmondson, William P. Jr. Bankr. E.D. Va. Case No. 09-71251 Chapter 11 Petition filed March 30, 2009 See http://bankrupt.com/misc/vaeb09-71251.pdf In Re Quinones, Grace C. Bankr. E.D. Va. Case No. 09-12365 Chapter 11 Petition filed March 30, 2009 See http://bankrupt.com/misc/vaeb09-12365.pdf In Re Hancock, Gordon J. Hancock, Jennifer M. Bankr. D. Ariz. Case No. 09-06223 Chapter 11 Petition filed March 31, 2009 See http://bankrupt.com/misc/azb09-06223p.pdf See http://bankrupt.com/misc/azb09-06223c.pdf In Re Remillard, Anthony Peter aka Remillard, Tony Bankr. M.D. Fla. Case No. 09-06125 Chapter 11 Petition filed March 31, 2009 See http://bankrupt.com/misc/flmb09-06125.pdf In Re Moore, Gary W. Bankr. C.D. Ill. Case No. 09-90671 Chapter 11 Petition filed March 31, 2009 See http://bankrupt.com/misc/ilnb09-90671.pdf In Re Gulf States Staffing and Personnel, LLC Bankr. M.D. La. Case No. 09-10414 Chapter 11 Petition filed March 31, 2009 See http://bankrupt.com/misc/lamb09-10414p.pdf See http://bankrupt.com/misc/lamb09-10414c.pdf In Re Foamco Building Company, LLC Bankr. N.D. Miss. Case No. 09-11632 Chapter 11 Petition filed March 31, 2009 See http://bankrupt.com/misc/msnb09-11632.pdf In Re Zolkowski, Gregory Stanley Zolkowski, Ashley M. Bankr. W.D. Mo. Case No. 09-60637 Chapter 11 Petition filed March 31, 2009 See http://bankrupt.com/misc/mowb09-60637.pdf In Re Grupo Comunitario Reciclaje Inc. PT dba GC Reciclaje Inc. PT Bankr. D. P.R. Case No. 09-02497 Chapter 11 Petition filed March 31, 2009 See http://bankrupt.com/misc/prb09-02497.pdf In Re Tucker, Jason Eric dba Omega Security Safety and Patrol Bankr. M.D. Tenn. Case No. 09-03719 Chapter 11 Petition filed March 31, 2009 See http://bankrupt.com/misc/tnmb09-03719.pdf In Re Wedekind, Lawrence J. Bankr. S.D. Tex. Case No. 09-32057 Chapter 11 Petition filed March 31, 2009 See http://bankrupt.com/misc/txsb09-32057.pdf ********* 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. Ma. Theresa Amor J. Tan Singco, 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 ***