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/raid1/www/Hosts/bankrupt/TCR_Public/090408.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, April 8, 2009, Vol. 13, No. 97 Headlines ACTIVE WALLACE: U.S. Trustee Picks 7-Member Creditors Committee ADVANTAGE RENT-A-CAR: Hertz Global Buys Firm's Assets for $33MM ALBERT LINDLEY: Files for Chapter 11 Bankruptcy Protection ATA AIRLINES: Chapter 11 Plan Declared Effective March 31 ATA AIRLINES: Court OKs Claim Agreement with City of Phoenix ATA AIRLINES: Plan Trustee Seeks to Sell Equipment for $150,000 AXIUM INTERNATIONAL: Trustee Sues Former Officers for $100 Million BARRINGTON BROADCASTING: Moody's Raises Sr. Bond Ratings to 'Caa3' BEARINGPOINT INC: PwC to Pay $38MM for Japan Unit's Shares BEARINGPOINT INC: Bid Protocol Approved; April 15 Auction Set BEARINGPOINT INC: Cash Collateral Hearing Adjourned to April 15 BERNARD L. MADOFF: Trustee Seeks Counsel for Luxembourg Pursuit BERNARD L. MADOFF: Trustee to Sell Some Units to Castor Pollux BERNARD L. MADOFF: Court Lets Trustee Sell Market-Making Operation BOATERS WAREHOUSE: Voluntary Chapter 11 Case Summary BSC DEV'T: Statler Receivers Agree to Pay National Fuel $10,000 BUFFALO THUNDER: Moody's Withdraws 'Caa3' Corporate Family Rating CALABASAS AUTO GROUP: Voluntary Chapter 11 Case Summary CAPITAL AUTOMOTIVE: S&P Downgrades Corporate Credit Rating to 'B' CDM PROPERTIES: Voluntary Chapter 11 Case Summary CENTRAL CORPORATE: S&P Withdraws '--/Watch Neg/B' Credit Rating CENTURY ALUMINUM: Moody's Junks Corporate Family Rating from 'B2' CHARTER COMMUNICATIONS: Showdown with JPMorgan Set for April 29 CHEM RX: Covenant Violations Cue Moody's Junk Corporate Rating CHUKCHANSI ECONOMIC: Moody's Cuts Corporate Family Rating to 'B3' CITIGROUP INC: Names Mike Corbat as Citi Holdings CEO CORPUS CHRISTI: Involuntary Chapter 11 Case Summary CRUSADER ENERGY: Gets Court Okay on Vinson & Elkins as Counsel CRUSADER ENERGY: Gets Interim Access to JPMorgan Cash Collateral CRUSADER ENERGY: Jefferies & Co. Can Initially Serve as Advisors CRUSADER ENERGY: SALs and SOFAs Deadline Extended to May 6 CUSTOM CRAFTERS: Voluntary Chapter 11 Case Summary DAVID BARROSO: Voluntary Chapter 11 Case Summary DOUBLE JJ RANCH: Assets to Sold for $9.75MM Under Confirmed Plan EASTERN CORPORATE: S&P Withdraws '--/Watch Neg/B' Credit Rating EDRA D BLIXSETH: Sec. 341(a) Meeting Set for April 30 in Montana EPIX PHARMACEUTICALS: Launches Distressed Debt Offer; Might File FEDERAL-MOGUL CORPORATION: Moody's Cuts Corporate Rating to 'B1' FORD MOTOR: Completion of Tender Offers Cue S&P's 'SD' Rating FRONTIER COMMUNICATIONS: Fitch Puts 'BB' Rating on $600 Mil. Debt FRONTIER COMMUNICATIONS: S&P Affirms 'BB' Rating on 2014 Notes GEHL CO: Breaches Banking Pacts, May File for Ch. 11 Bankruptcy GENERAL MOTORS: Works With Segway to Develop Scooter GENERAL MOTORS: Speeds Up Preparations for Possible Bankruptcy GENERAL MOTORS: Levin Says Bondholders Will Be Wiped Out in Ch. 11 GENERAL MOTORS: Saab Unit Attracts 20 Potential Bidders GLOBAL MOTORSPORT: Wants Plan Filing Period Extended to July 31 GREENWICH ASSOCIATION: Voluntary Chapter 11 Case Summary HARVEST OIL: Wants to Hire Adams and Reese as Counsel HARVEST OIL: Wants Schedules & SOFA Filing Extended Until May 15 HILITE INTERNATIONAL: Moody's Downgrades Default Rating to 'Caa2' HOUSTON PROMENADE: Voluntary Chapter 11 Case Summary IDEARC INC: Gets Initial Nod for Fulbright & Jaworski as Counsel INDIANAPOLIS DOWNS: S&P Puts 'B-' Rating on $100 Mil. Facilities INVERNESS MEDICAL: S&P Gives Positive Outlook; Keeps 'B+' Ratings JAMIE VERGARA: Schedules $12.8MM in Assets and $32.5MM in Debts JANE & COMPANY: Files for Chapter 11 Bankruptcy Protection JANE & COMPANY: Case Summary & 30 Largest Unsecured Creditors JH&KC ENTERPRISES: Voluntary Chapter 11 Case Summary JOHNSONDIVERSEY INC: Fitch Affirms Issuer Default Rating at 'B-' JOYA JOHNSON: Voluntary Chapter 11 Case Summary KANSAS CITY: S&P Affirms 'B' Long-Term Corporate Credit Rating KNIGHT-CELOTEX: Files for Chapter 11 Bankruptcy Protection KNIGHT-CELOTEX: Case Summary & 20 Largest Unsecured Creditors KOBRA PROPERTIES: Court Okays Steven Victor as Chapter 11 Trustee LANDSOURCE COMMUNITIES: Sues Defaulting Los Angeles Purchaser LANDSOURCE COMMUNITIES: Continues as Going Concern Under New Plan LANDSOURCE COMMUNITIES: Disclosure Statement Hearing on April 17 LEVEL 3: S&P Assigns 'B+' Rating on $220 Mil. Senior Tranche LINDA CATRON: Voluntary Chapter 11 Case Summary M W SEWALL: Wants Access to TD Bank Cash Collateral 'Til Sept. 30 M&K REAL ESTATE: Voluntary Chapter 11 Case Summary MERVYN'S LLC: Target Wants Out of Suit Filed Against Sun Capital METALS USA: Moody's Downgrades Corporate Family Rating to 'B3' MID-STATES EXPRESS: Voluntary Chapter 11 Case Summary MORTGAGES LTD.: Investors Committee's Plan Heads for Confirmation NEW CENTURY ENERGY: May Use Laurus Cash Collateral Until May 15 NORANDA ALUMINUM: S&P Downgrades Corporate Credit Rating to 'SD' NOVA HOLDING: Can Hire Epiq Bankruptcy as Claims, Noticing Agent NOVA HOLDING: Can Initially Use WestLB Cash Collateral 'Til May 1 OLD HILLCROFT: Voluntary Chapter 11 Case Summary PARK AT ASPEN: Files for Chapter 11 Bankruptcy Protection PB SURF: Voluntary Chapter 11 Case Summary PHILADELPHIA NEWSPAPERS: Court Postpones Hearing on DIP Financing PLY GEM: S&P Withdraws 'SD' Corporate Credit Rating POLAROID CORP: Judge Declines to Approve Patriarch Sale POTOMAC EDISON: Fitch Raises Issuer Default Rating from 'BB+' PROSPECT MEDICAL: S&P Puts 'B-' Ratings on Negative CreditWatch RITZ CAMERA: Expects to Liquidate Over $50 Million in Inventory SERENDIPITY ENTERTAINMENT: Voluntary Chapter 11 Case Summary SIERRA TRIPLE NET: Voluntary Chapter 11 Case Summary SILICON GRAPHICS: Donlin Recano Approved as Claims Agent SILICON GRAPHICS: Moves to Sell All Assets to Rackable for $25MM STAR TRIBUNE: Employees Launch Online Campaign to Save Newspaper SUN MICROSYSTEMS: S&P Puts 'BB+' Rating on Developing CreditWatch SUN-TIMES MEDIA: U.S. Trustee Sets Creditors Meeting for April 29 SUN-TIMES MEDIA: Kurztman Carson Approved as Claims Agent SYNTAX-BRILLIAN: Asks Court's Approval of Sale of Olevia Brand SYNTAX-BRILLIAN: Wants Solicitation Period Extended to May 11 TEAM FINANCIAL: Files Chapter 11 Following Banks' Takeover THE VICTOR GROUP: Chapter 7 Trustee Selling 2 Vehicles for $6,000 TOJU EKWEJUNOR: Voluntary Chapter 11 Case Summary TOLL BROTHERS: Moody's Gives Negative Outlook; Holds 'Ba1' Rating TOUSA INC: Asks Court to Approve New Home Warranty Program TOUSA INC: District Court Affirms Final Cash Collateral Order TOUSA INC: Files Form 10-Q Report for Quarter Ended June 2008 TOWN CENTRE: Case Summary & 20 Largest Unsecured Creditors TUSCANY PRESERVE: Files for Chapter 11 Bankruptcy Protection TVI CORPORATION: Seeks Duane Morris as Counsel VCA ANTECH: Moody's Upgrades Corporate Family Rating to 'Ba2' VIRGINIA RETIREMENT: Voluntary Chapter 11 Case Summary VISION FOR SOULS: Voluntary Chapter 11 Case Summary WILDFLOWER TDS: Case Summary & Seven Largest Unsecured Creditors WYNNE RESIDENTIAL: Voluntary Chapter 11 Case Summary ZOUNDS INC: Blames Bankruptcy on Investors & High Mall Rents ZOUNDS INC: Wants to Hire Squire Sanders as Bankruptcy Counsel * Patton Boggs Hires Three New Partners * Upcoming Meetings, Conferences and Seminars ********* ACTIVE WALLACE: U.S. Trustee Picks 7-Member Creditors Committee --------------------------------------------------------------- Peter C. Anderson, U.S. Trustee for Region 16, appointed seven members to the official committee of unsecured creditors in the Chapter 11 case of The Active Wallace Group. The panel consists of: 1. Nike USA Attn: Jim Sarray Customer Financial Services Director 1 Bowerman Drive Beaverton, OR 97005 Tel:(503) 671-5758 2. Sole Technology Attn: Allison Bogart Credit and Collections Manager 20162 Windeow Drive Lake Forest, CA 92630 3. Advantage Construction Attn: Andrew Schiavo 18195 Mockingbird Cyn Riverside, CA 92504 Tel: (714) 329-0245 4. Hurley International Attn: Tim Carney Director of Credit 1945 Placentia Avenue Costa Mesa, CA 92627 Tel: (949) 548-9375 5. One Distribution Attn: Scott Bailey, President 3233 W. Harvard St. Santa Ana, CA 92704 Tel: (714) 436-5771 x.103 6. Ezekiel Attn: Steven Kurtzman, CEO 17822 Gillette Ave., Ste. B Irvine, CA 92614 Tel: (949) 266-3400 7. Matix Clothing Attn: Mark Feig, Sr. Vice President 955 Francisco St. Torrance, CA 90502 Tel:(310) 715-8300 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 listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. ADVANTAGE RENT-A-CAR: Hertz Global Buys Firm's Assets for $33MM --------------------------------------------------------------- Orlando Business Journal reports that Hertz Global Holdings, Inc., has purchased Advantage Rent-A-Car's assets for approximately $33 million. The purchase would close on April 8, 2009. As reported by the Troubled Company Reporter on April 2, 2009, Hertz Global won the right to purchase certain assets of Advantage Rent-A-Car which generated full year 2008 revenues of about $146 million. Hertz Global, according to Business Journal, said that it will operate Advantage brand locations in 16 cities nationwide. 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 December 10, 2008, Advantage Rent A Car filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Minnesota. ALBERT LINDLEY: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- News10now.com reports that The Albert Lindley Lee Memorial Hospital, a.k.a. A.L. Lee Memorial Hospital, has filed for Chapter 11 bankruptcy protection. According to News10now.com, Albert Lindley Lee Memorial was scheduled to close. News10now.com relates that Oswego Health is taking over Lee Memorial. News10now.com states that the facility would stop its in-patient care service by next week and transition to a strictly out-patient facility by the end of the month. News10now.com relates that Albert Lindley Lee Memorial said that it is filing for bankruptcy to help with financial obligations as the facility winds down its operations. The hospital, according to the report, said that its bankruptcy filing won't disrupt employee pay. The hospital said that it will continue to assist displaced workers, the report states. Fulton, New York-based The Albert Lindley Lee Memorial Hospital, a.k.a. A.L. Lee Memorial Hospital, filed for Chapter 11 bankruptcy protection on April 3, 2009 (Bankr. N.D. N.Y. Case No. 09-30845). Stephen A. Donato, Esq., at Bond, Schoeneck & King, PLLC, assists the Company in its restructuring effort. The Company listed $17,167,501 in assets and $12,281,735 in debts. ATA AIRLINES: Chapter 11 Plan Declared Effective March 31 --------------------------------------------------------- ATA Airlines Inc.'s First Amended Chapter 11 Plan became effective March 31, 2009, barely a week after it was confirmed by the U.S. Bankruptcy Court for the Southern District of Indiana. The Plan, which was confirmed on March 26, 2009, generally provides for the settlement of claims and equity interests asserted against ATA Airlines. Under the Plan, unsecured creditors would be paid about 1.3 percent of their claims totaling about $420 million while secured creditors whose claims total $365 million, would receive about 13.9 percent. Secured creditors also agreed to share proceeds from potential lawsuits against suppliers that could yield as much as $12.2 million in damages. ATA Airlines' Plan also embodies the terms of the global settlement ATA reached with the Official Committee of Unsecured Creditors, Global Aero Logistics, Jefferies Finance, JPMorgan Chase Bank and its terminated employees. Part of the settlement is the dismissal of the lawsuits filed by the labor unions and the terminated employees against the airline. The Plan also provides for the sale of ATA Airlines' $7.5 million worth of assets to Southwest Airlines Co., including its 14 takeoff and landing slots at LaGuardia Airport in New York. Claims Bar Dates Pursuant to the Plan, creditors are given until April 30, 2009, to file their applications or other requests for payment of administrative claims arising on or before March 26, 2009. Meanwhile, any party to an executory contract that was rejected under the Plan is required to file a proof of claim on or before April 27, 2009, for any damages resulting from the rejection of the contract. Each rejection damages claim or application for administrative payment must be transmitted and delivered with the original signature so that it is actually received on or before the deadline by ATA Airlines' claims agent, BMC Group Inc., at this address: By Mail: -------- ATA Airlines Inc. c/o BMC Group Inc. PO Box 921 El Segundo, CA 90245-0921 By Hand or Overnight Delivery: ------------------------------ ATA Airlines, Inc. c/o BMC Group, Inc. 444 N. Nash St. El Segundo, CA 90245 About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for Chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on December 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. Bankruptcy Creditors' Service, Inc., publishes ATA Airlines Bankruptcy News. The newsletter tracks the chapter 11 case of ATA Airlines, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) ATA AIRLINES: Court OKs Claim Agreement with City of Phoenix ------------------------------------------------------------ ATA Airlines Inc. asks the U.S. Bankruptcy Court for the Southern District of Indiana to approve its agreement with the city of Phoenix, in Arizona. ATA Airlines and Phoenix inked the agreement to provide that the Court's order confirming ATA Airlines' First Amended Chapter 11 Plan will not prejudice Phoenix's right to recover on its general unsecured claim of $90,005 or to the rights of the airline to object to the claim pursuant to the Plan. Under the confirmation order, Phoenix is merely granted an allowed general unsecured claim for $5,200 on account of the rejection of its executory contracts with ATA Airlines. The city is also not entitled to any administrative claim against ATA Airlines, whether arising under their executory contract or otherwise, and any administrative claims are disallowed. ATA Airlines says that the order approving the agreement merely preserves the parties' rights without prejudicing the rights of any other creditor. ATA says that the agreement does not require modification of the confirmation order. A hearing to consider approval of the Plan Trustee's request is scheduled for April 8, 2009. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for Chapter 11 protection on October 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on January 31, 2006. The Debtors' emerged from bankruptcy on February 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until February 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on December 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. Bankruptcy Creditors' Service, Inc., publishes ATA Airlines Bankruptcy News. The newsletter tracks the chapter 11 case of ATA Airlines, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) ATA AIRLINES: Plan Trustee Seeks to Sell Equipment for $150,000 --------------------------------------------------------------- Steven Turoff, Plan Trustee under the confirmed First Amended Chapter 11 Plan of ATA Airlines Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Indiana to sell equipment to Lufthansa Technik Tulsa Corp. for $150,000. The equipment, a CFM56-7 thrust reverser half, is currently in the custody of Lufthansa. It was sent to the company by ATA Airlines for repair prior to its bankruptcy filing. The Plan Trustee has not reportedly marketed the thrust reverser to other companies other than Lufthansa due to its "heavily damaged state." The estimated costs for Lufthansa to repair the equipment would be about $215,000. The equipment may also be sold at auction for less than $400,000. "The Plan Trustee has determined that [Lufthansa's] offer is the highest and best offer that the Plan Trustee will receive for the thrust reverser," Terry Hall, Esq., at Baker & Daniels LLP, in Indianapolis, Indiana, says on behalf of the Plan Trustee. San Antonio Aerospace L.P. notes in a statement filed in the Court that it won't oppose the approval of the motion so long as the Plan Trustee does not destroy any records or materials that are or may be relevant to pending litigation involving ATA Airlines. SAA suggests that the Plan Trustee maintain an inventory of records that will be destroyed. The Court will also hear today the Plan Trustee's request to abandon and destroy certain ATA records. As a result of ATA Airlines Inc.'s former flight operations, the Plan Trust is in possession of a variety of paper and electronic records that were necessary for an operating airline, but are now merely burdensome to a liquidating vehicle like the Plan Trust. Many of these records -- the PII Records -- contain personally identifiable information. For example, the PII Records include employee records containing names, social security numbers, addresses, phone numbers, bank account numbers, employment histories, employee training records and other personnel records, and customer records containing names, credit card account numbers and addresses. Ms. Hall says the request is in accordance with the federal regulations governing certificated air carriers, which authorize the destruction of records when an airline is liquidated. "As [ATA Airlines'] business has been liquidated and [ATA Airlines'] will be dissolved under applicable law, the relief requested is appropriate," Ms. Hall says. "Retention of the records would be burdensome to the estate, in that the Plan Trust might be required to hire employees or pay a record-keeping service to store the records and to respond to requests for documents" Ms. Hall further says. She adds that the records also contain sensitive information that could harm ATA Airlines' former employees and customers if inadvertently released. The Plan Trustee also asks the Court to relieve ATA Airlines and its successors from (i) any duty to comply with record retention requirements imposed by any federal or state statutes or other regulations; (ii) from any duty to respond to requests or demands for the records; and (iii) from any liability for noncompliance with those requests or demands for the records. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for Chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until February 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on December 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. Bankruptcy Creditors' Service, Inc., publishes ATA Airlines Bankruptcy News. The newsletter tracks the chapter 11 case of ATA Airlines, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) AXIUM INTERNATIONAL: Trustee Sues Former Officers for $100 Million ------------------------------------------------------------------ The Chapter 7 trustee for Axium International Inc. filed a lawsuit against former company officers including John Visconti, the former chairman and chief executive, Bloomberg's Bill Rochelle reported. According to Bill Rochelle, the $100 million suit contends the officers violated their duties to the company by allowing "profligate corporate spending" and permitting payroll taxes to go unpaid, resulting in a claim for $100 million in unpaid taxes. The complaint also alleges the managers took money for their own use that wasn't declared as personal income. As reported by the Troubled Company Reporter on March 3, Howard M. Ehrenberg, partner at Los Angeles-based SulmeyerKupetz law firm and the court appointed Chapter 7 bankruptcy Trustee for Axium International, Inc., and its subsidiaries, has sued BDO Global in New York Federal Court and BDO Seidman in arbitration for gross negligence for their "massive multiple audit failures." Mr. Ehrenberg said that he was "stunned" when he discovered that Axium significantly underpaid federal payroll taxes. According to the IRS claim, the underpayment exceeds $100 million. BDO Seidman's certified financial audits, however, had painted the picture of a substantially profitable company. "At the end of the day, it wasn't substantially, or partially, or even narrowly a profitable company. It was insolvent," said Ehrenberg. BDO Seidman, LLP, is the United States BDO entity that performed the Axium audits and BDO Global, B.V., manages and controls BDO firms worldwide and is responsible for the standards to be followed in all BDO audits, including the Axium audits. The complaint charges that BDO Seidman's certified financial statements "were a sham." The complaint further states that BDO Global promised "strict quality control" over its agent, BDO Seidman, but "BDO Global broke its promise." The complaint notes that when BDO Global broke its word, and BDO Seidman missed over $100 million in liabilities, huge losses followed. The complaint was filed by the Los Angeles-based law firm of Thomas, Alexander & Forrester, LLP. As a payroll company, Axium's business was to pay the studio's payrolls to employees and to pay the payroll taxes to the government. However, Axium significantly underpaid the taxes for years, and BDO missed it "year after year," says the complaint. In fact, Steven Thomas, partner at Thomas, Alexander & Forrester, says in the complaint that BDO's final reports, prepared just months prior to Axium's bankruptcy falsely "gave Axium a clean bill of health." About Axium Axium International Inc. -- http://www.axium.com/-- provides payroll solutions for production. It offers various financial services and technology for the entertainment industry through Axium Global and Axium Global Workforce. It serves companies ranging from mid-market to Fortune 500. Axium International has offices in Los Angeles, New York, Burbank, Hollywood, Las Vegas, Toronto, Vancouver and London. The company filed for protection under Chapter 7 of the Bankruptcy Code on Jan. 8, 2008 (Bankr. C.D. Calif. Case No. 08-10277). Howard M. Ehrenberg, a partner at SulmeyerKupetz, has been appointed as Chapter 7 Trustee. BARRINGTON BROADCASTING: Moody's Raises Sr. Bond Ratings to 'Caa3' ------------------------------------------------------------------ Moody's Investors Service changed the probability of default rating for Barrington Broadcasting Group LLC to Caa1 from Caa1/LD and upgraded the rating on its senior subordinated bonds to Caa3 from C. These changes are in line with the expectations outlined by Moody's in the April 1, 2009, press release on Barrington. The raised rating on the senior subordinated notes is consistent with Moody's Loss Given Default framework based on the company's capital structure after its recent debt purchases, which were considered a distressed exchange by Moody's. A summary of the actions follows. Barrington Broadcasting Group LLC -- Probability of Default Rating, Adjusted to Caa1 from Caa1/LD -- Senior Subordinated Regular Bonds, Upgraded to Caa3, LGD5, 89% from C, LGD5, 83% The last rating action was on April 1, 2009, when Moody's affirmed Barrington's Caa1 corporate family rating and changed its probability of default rating to Caa1/LD from Caa2. Barrington Broadcasting Group, LLC, headquartered in Hoffman Estates, Illinois, owns or programs 23 network television stations in 15 markets. Its net revenue for the year ended December 31, 2008, was $119 million. BEARINGPOINT INC: PwC to Pay $38MM for Japan Unit's Shares ---------------------------------------------------------- BearingPoint International Bermuda Holdings Limited, an indirect subsidiary of BearingPoint, Inc., on April 2, 2009, entered into a Share Sale Agreement with PwC Advisory Co., Ltd., the Japanese affiliate of PricewaterhouseCoopers LLP, for the sale of the Company's consulting business in Japan to PwC Japan. Pursuant to the Share Sale Agreement, PwC Japan agreed to purchase BearingPoint Co., Ltd. (Chiyoda-ku), an indirect, wholly owned subsidiary of the Company, through the purchase of all issued and outstanding shares of BearingPoint Japan. The Company expects to generate cash of roughly $45 million in connection with the Transaction, including roughly $38.4 million in cash for the Shares and $6.6 million in cash from the repayment of intercompany charges owed by BearingPoint Japan to the Company, subject to adjustment. In addition, in connection with the Transaction, PwC Japan will assume the intercompany debt owed by certain non-Debtor subsidiaries of the Company to BearingPoint Japan. On March 23, 2009, the Company announced the planned sale of substantially all of its business to a number of parties, which the Company expects will result in modifications to its proposed plan of reorganization. The consummation of the PwC Transaction is expected to occur on or prior to April 28, 2009, and is subject to customary closing conditions, including the delivery of a transition services agreement and various other transaction documents on or prior to Closing. Key terms of the Share Sale Agreement are: -- Payment of Net Payables to the Company by BearingPoint Japan The Share Sale Agreement permits the payment of any payables owed by BearingPoint Japan to the Company or its other subsidiaries net of any receivables owed to BearingPoint Japan from any such entity. The settlement of any inter-company payables and receivables between BearingPoint Japan and the Company requires approval of the Bankruptcy Court. The approval is not a condition to closing of the sale of BearingPoint Japan to PwC Japan, but the Company expects to seek such Bankruptcy Court approval promptly. -- Termination The Share Sale Agreement may be terminated by mutual consent of the parties, or by either the Seller or PwC Japan if the other party fails to comply with any of its material closing obligations, subject to a 10 business-day cure period not to extend beyond April 28, 2009. PwC Japan may terminate the Share Sale Agreement if: * the conditions precedent are not satisfied or waived on or before the April 28 Drop Dead Date; * the Seller breaches its covenants in the Share Sale Agreement, subject to a right to cure; or * the Seller breaches any of its representations or warranties, except where the breach has not had and is not reasonably expected to have a material adverse effect on BearingPoint Japan, subject to a right to cure. -- Representations and Warranties The Share Sale Agreement contains customary representations and warranties regarding the Seller, the Shares and BearingPoint Japan. The Seller's representations and warranties will not survive the Closing, and PwC Japan is not entitled to claims for damages against the Seller for a breach of such representations. The Company believes that the Transaction does not require Bankruptcy Court approval because the Transaction was approved by subsidiaries of the Company that are not Debtors, and, therefore, are not under the jurisdiction of the Bankruptcy Court. The sale is expected to become effective on or before April 28, 2009. There can be no assurance that the transaction will be completed. 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. BEARINGPOINT INC: Bid Protocol Approved; April 15 Auction Set ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has approved (a) procedures for the sale of BearingPoint, Inc.'s public services industry group and (b) the payment of a break-up Fee and expense reimbursement fee to Deloitte LLP, the stalking horse bidder. Objections of the official committee of unsecured creditors, Law Debenture Trust Company of New York, as Indenture Trustee, were overruled by the Court. Pursuant to the Stalking Horse Agreement, the Debtors have agreed to provide the Deloitte LLP a Break-Up Fee of $10.5 million and expense reimbursement not to exceed $1,500,000. In certain circumstances where a Breakup Fee is not paid, the amount of the expense reimbursement may be up to $12,000,000, subject to objection rights of the Official Committee of Unsecured creditors and Wells Fargo Bank, N.A., as administrative agent for the Debtors' prepetition secured lenders. Pursuant to the Stalking Horse Agreement, Deloitte LLP has agreed to purchase the Debtors' assets for the purchase price of $350 million, to be adjusted at closing based on any difference between target and actual amounts of accounts receivable and unbilled revenue less any deferred revenue associated with the acquired assets. The stalking horse agreement may be terminated by buyer or sellers if the closing doesn't occur by the earlier of May 15, 2009, and 10 days after the Sale Order becomes a final order. Competing bids are due by April 13. Bids must be for a value greater that or equal to the sum of the (x) the value, as reasonably determined by the Debtors' financial advisor, of the Stalking Horse Agreement plus (y) $12.0 million plus (z) at least $2.5 million. Bids must be accompanied by a good faith deposit equal to 5% of the proposed purchase price. In the event that more than one qualified bid is received, an auction will be conducted at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, NY on April 15, 2009, at 10:00 a.m. (Eastern Time). The sale approval hearing will be held on April 17, 2009, at 9:00 a.m. (Eastern Time). Objections to the approval of the relief to be sought at the sale approval hearing must be filed and served on the Objection Notice Parties by April 10, 2009, at 12:00 p.m. (Eastern Time), provided that objections as to the auction or the selection of the successful bidder must be filed and served on the Objection Notice Parties by April 16, 2009, at 12:00 p.m. (Eastern Time). A full-text copy of the bid procedures order is available at: http://bankrupt.com/misc/BearingPoint.BidProceduresOrder.pdf As reported in the Troubled Company Reporter on April 7, 2009, BearingPoint Inc. had a closed court hearing on whether it can sell assets to Deloitte LLP. The Court barred the public from most of the hearing on BearingPoint's plan to sell the bulk of its business to Deloitte, Tiffany Kary of Bloomberg reported, citing sensitive business information. "I won't have insider trading under my watch," Judge Robert Gerber said at the outset of the hearing, noting that much of the discussion might involve inside information, such as details about thecompany's operating results. Bloomberg News pointed out that BearingPoint said that it wanted to speed up the sale process, citing an April 6 deadline for getting a bidding procedure in place. Bloomberg reported that a committee of creditors said in papers filed March 25 that the company was rushing a sale. The committee said it served document requests seeking to find out whether BearingPoint is "skewing" the sale toward "a bidder favored by management, and a timeframe favored by the senior lenders." The report stated the Law Debenture Trust Co. of New York, trustee to $450 million in BearingPoint's Class A and Class B notes, also objected to an expedited sale, saying the sale would gut any alternative plan. 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. 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 September 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. BEARINGPOINT INC: Cash Collateral Hearing Adjourned to April 15 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has adjourned to April 15, 2009, at 2:00 p.m., the final hearing on BearingPoint, Inc., et al.'s request for the contined use of its lender's cash collateral. Until the final hearing, the Debtors have authorization to use cash collateral pursuant to the terms of the Initial Cash Collateral order, dated February 19, 2009, as amended by the Bridge Order dated March 13, 2009, and the Second Bridge Order dated March 30, 2009. As reported in the Troubled Company Reporter on March 18, 2009, BearingPoint Inc. will continue to have access to its lenders' cash collateral, but subject to modified provisions. The Court extended its interim order on BearingPoint's cash collateral use, until a final hearing, which was postponed to March 30 (the Bridge Order). The Debtor rescheduled the final hearing by about two weeks after its official committee of unsecured creditors conveyed objections to the proposal. The panel said that while all parties agree that cash collateral is necessary to fund operations, it balks at a suite of provisions -- the hair-trigger budget controls, default conditions, automatic stay relief grants, and confirmation milestones -- designed to lock in a plan favorable to the senior lenders and thereby control the reorganization. According to Bloomberg's Bill Rochelle, although the hearing was reset for March 30 as requested, some of the objectionable provisions in the cash-use arrangement were modified. Among them, the lenders can't cut off use of cash without 24 hours' notice and can't exercise any remedies unless the bankruptcy court modifies the so-called automatic stay. At the March 30 hearing, the Court authorized the Debtors to use the lenders' cash collateral pursuant to the terms of the Interim Cash Collateral Order and adjourned the final cash collateral hearing to April 8 (the Second Bridge Order). 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. BERNARD L. MADOFF: Trustee Seeks Counsel for Luxembourg Pursuit --------------------------------------------------------------- Irving H. Picard, as trustee for the liquidation of the business of Bernard L. Madoff Investment Securities LLC, under the Securities Investor Protection Act, 15 U.S.C. Sections 78aaa, et seq., has asked the U.S. Bankruptcy Court for the Southern District of New York for permission to retain special counsel, nunc pro tunc to March 30, 2009. Mr. Picard explains that issues have arisen overseas, and in Luxembourg in particular, that require the Trustee's participation and representation by counsel. The Trustee has become aware of assets that he believes to be customer property located within that country and requires counsel to pursue such customer property. The Trustee has determined that it will be necessary to engage counsel to represent him in Luxembourg. Such legal counsel will enable the Trustee to carry out his duties in this SIPA Liquidation Proceeding. The Trustee, therefore, proposes to retain and employ the law firm of Schiltz & Schiltz as its special counsel with regard to its recovery of customer property in Luxembourg, and any related matters as directed by the Trustee, effective as of March 30, 2009. The Trustee seeks to retain Schiltz & Schiltz as special counsel because of its knowledge and expertise in the law of Luxembourg. The services of Schiltz & Schiltz are necessary and essential to enable the Trustee to execute faithfully his duties herein. The Trustee submits that Schiltz & Schiltz's provision of professional services to the Trustee is permissible under Section 78eee(3) of SIPA and is in the best interest of the Debtor's estate and customers and creditors. To the best of the Trustee's knowledge, and except as disclosed, the members, counsel and associates of Schiltz & Schiltz are disinterested pursuant to Section 78eee(b)(3) of SIPA and do not hold or represent any interest adverse to the Debtor's estate in respect of the matter for which Schiltz & Schiltz is to be retained. Schiltz & Schiltz's employment and retention is necessary and in the best interests of the Debtor's estate and its customers and creditors. Schiltz & Schiltz will be compensated at agreed upon rates, which reflect a reduction of its normal rates greater than ten percent (10%). Applications for compensation to Schiltz & Schiltz will be filed with this Court pursuant to applicable statutes and rules. Schiltz & Schiltz rate information is as follows: Level of Experience Normal Rates Agreed Upon Rates ------------------- ------------ ----------------- Partner EUR400/hour, EUR380/hour plus 17.5% VAT Associate EUR200-300/hour, EUR190-285 plus 17.5% VAT The Securities Investor Protection Corporation has no objection to the proposed retention. The Court will convene a hearing on April 20. Objections are due April 17. 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. BERNARD L. MADOFF: Trustee to Sell Some Units to Castor Pollux -------------------------------------------------------------- Irving H. Picard, the SIPA Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC, signed a definitive agreement dated March 27, for Castor Pollux Securities, LLC, to act as the "stalking horse" bidder for the acquisition of the assets related to the market making business of BLMIS. Castor Pollux is a Boston-based broker-dealer. "This agreement is a successful outcome of the broadly-marketed sales process we started in December," said Mr. Picard. Under the terms of the agreement, Castor Pollux will acquire the infrastructure assets and intellectual property related to the market making business of BLMIS. The sale excludes cash and securities related to the market making business. Subject to higher and better offers, Castor Pollux will pay $500,000 to the Trustee at closing and payments of up to $15 million based on gross revenues generated and shares traded through 2012. Mr. Picard continued: "We have faced many challenges in this process. The initial proceeds reflect that the business has not been operational since December 12 and that significant capital is required to restart operations. The structure of this transaction enables the Madoff victims to participate in future value derived from the assets acquired by Castor Pollux." Retention of the skeletal BLMIS staff necessary for the market making business is not a condition to the deal. Thus, the Trustee has terminated their employment effective today. The agreement is subject to the completion of a court-approved overbid process expected to occur in mid-April, receipt of financing, other contingencies and bankruptcy court approval. 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. BERNARD L. MADOFF: Court Lets Trustee Sell Market-Making Operation ------------------------------------------------------------------ David McLaughlin at The Wall Street Journal reports that the Hon. Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York has allowed Irving Picard, the trustee liquidating Bernard Madoff's business, to sell the market-making operation to raise money for Mr. Madoff's victims. According to WSJ, Judge Lifland approved an auction for the market-making unit, a legitimate business separate from Mr. Madoff's massive Ponzi scheme. The market-making business stopped operating after Mr. Madoff's arrest in December 2008, WSJ states. WSJ relates that Mr. Picard agreed to sell the business to Castor Pollux Securities for up to $15.5 million. WSJ says that the deal is subject to higher bids at an auction, and if other bidders come forward by April 22, 2009, the auction would be held on April 27, 2009. Castor Pollux said in a statement that it agreed to purchase the Madoff business because it was one of Wall Street's top market- making operations with "cutting edge technology." WSJ, citing Castor Pollux, states that the business made markets in more than 2,000 U.S. equities in 2008. Other parties have expressed interest in bidding, with less than a dozen doing due diligence, since the deal with Castor Pollux was disclosed, WSJ states, citing Marc Hirschfield, a lawyer representing Mr. Picard. Court documents say that more than 40 potential buyers initially expressed interest in the business and four made offers. French Gov't Seizes $7 Million Yacht The Associated Press reports that French authorities, at the request of Meeschaert, have confiscated Bernard Madoff's $7 million yacht "Bull" at a port in Cap d'Antibes. Gide Loyrette Nouel's Philippe Rames, a lawyer who is working for Meeschaert on the case, said that the yacht is an 89-foot Leopard built by French luxury-boat builder Rodriguez Group SA, according to The AP. Port Gallice posted on its Web site that the yacht is moored at the port, where the annual fee to keep a yacht of that size runs to $47,500. The AP relates that French investment firm Meeschaert, a former investor in one of Mr. Madoff's funds, secured court approval for its request. The report says that Meeschaert is now suing Mr. Madoff to get some of its clients' money back. According to The AP, U.S. authorities seized last week Mr. Madoff's Palm Beach mansion as well as two other of his yachts -- including one also named "Bull," a 1969 Rybovich valued at $2.2 million. The AP states that prosecutors in the U.S. have also started demanding millions of dollars in payments from Mr. Madoff's relatives. About 6,700 people have filed claims for a share of whatever money is recovered, and thousands of others are expected to come forward, The AP relates. WSJ states that Mr. Picard has recovered about $1 billion in assets that will be distributed to thousands of Madoff client. According to WSJ, Mr. Madoff's investors are also eligible to get up to $500,000 from the Securities Investor Protection Corp., which oversees failed brokerages. About Bernard 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. BOATERS WAREHOUSE: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Boaters Warehouse/Advanced Boating Services, LLC 3362 Tamiami Trail Port Charlotte, Fl 33952 fka Advanced Boating Services, LLC Tel: (866) 243-4496 Bankruptcy Case No.: 09-05752 Chapter 11 Petition Date: March 26, 2009 Court: United States Bankruptcy Court Middle District of Florida (Fort Myers) Judge: Alexander L. Paskay Company Description: The debtor sells boats and boating supplies See http://ResearchArchives.com/t/s?3b24 Debtor's Counsel: Chad S. Bowen, Esq. Jennis & Bowen, P.L. 400 N Ashley Drive, Suite 2540 Tampa, FL 33602 Tel: (813) 229-1700 Fax: (813) 229-1707 Email: ecf@jennisbowen.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Mark L. Burpee, a manager of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb09-05752.pdf BSC DEV'T: Statler Receivers Agree to Pay National Fuel $10,000 --------------------------------------------------------------- James Fink of the Business First of Buffalo reports that the court appointed receivers of BSC Development Buffalo LLC's Statler Towers have agreed to pay National Fuel Gas Corp. $10,000 to keep the gas on at least through April 14. Business First relates that State Supreme Court Judge John Curran has named Stephen Leous as receiver for Statler, while Bruce Zeftel was named special counsel. According to the report, Messrs. Leous and Zeftel will handle matters like collecting rent, making payments, and marketing the building. The report states that the receivership excludes a 44-foot luxury yacht acquired by British investor and BSC Development owner Bashar Issa that remains stored in Western New York. As reported by the Troubled Company Reporter on April 7, 2009, National Fuel was threatening to shut off gas to Statler next week. Business First relates that National Fuel Gas is owed more than $210,000. According to Business First, Judge Curran also held and Mr. Issa on contempt of court citations for failing to produce evidence of a 99-year lease that he signed with a London firm and for failure to turn over an $81,000 check he received from New York's Enterprise Zone tax credit program. Business First states that the funds were supposed to go to the receivers to help Statler address its debts. Judge Curran, Business First relates, said that he learned that the state withheld $27,000 in rent payments that the Worker's Compensation Board made for sales taxes that Mr. Issa failed to pay when he sold a $500,000 luxury boat in 2008. According to the report, Mr. Issa is being fined $250 per day on each contempt of court charge. Business First says that Mr. Issa hasn't been in Buffalo for more than one year. Business First reports that Mr. Issa said that he has visa problems that prevent him from entering the country. BSC Development Buffalo LLC is based in Buffalo, New York. It owns Statler Towers. As reported by the Troubled Company Reporter on April 7, 2009, James Fink at Business First of Buffalo reports that Park Lane Catering has filed a Chapter 11 bankruptcy petition for BSC Development. According to Business First, Park Lane is an anchor tenant at BSC's Statler. Business First relates that Park Lane filed a lawsuit against BSC in December 2008 after it suffered more than $1 million in damages through lost bookings because of uncertainties surrounding the Statler Towers. BUFFALO THUNDER: Moody's Withdraws 'Caa3' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service has withdrawn all of its ratings for Buffalo Thunder Development Authority, including the Caa3 corporate family rating, Caa3 probability of default rating, and Caa3 (LGD 4, 52%) rating on the $245 million senior notes due 2014. Moody's has withdrawn the ratings for business reasons. The last rating action was on December 18, 2008 when BTDA's corporate family rating was downgraded to Caa3 from B3. BTDA is a political subdivision of the Pueblo of Pojoaque, which was created in 2006 to oversee all of the Pueblo's gaming operations. BTDA operates in Santa Fe, New Mexico, The Cities of Gold Casino, the Sports Bar Casino, and since August 2008 Buffalo Thunder Resort. CALABASAS AUTO GROUP: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Calabasas Euro Auto Group LLC 2441 Pullman Street Santa Ana, CA 92705 Tel: (949) 812-0603 dba Lamborghini Calabasas dba Lotus Calabasas Bankruptcy Case No.: 09-12593 Chapter 11 Petition Date: March 26, 2009 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Erithe A. Smith Company Description: The debtor is a dealer of automobiles. Debtor's Counsel: Carlos F. Negrete, Esq. 27422 Calle Arroyo San Juan Capistrano, CA 92675-2747 Tel: (949) 493-8115 Fax: (949) 493-8170 Email: cnegrete1@hotmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Asdghig Astrid Keuylian, a manager of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-12593.pdf CAPITAL AUTOMOTIVE: S&P Downgrades Corporate Credit Rating to 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit ratings on Capital Automotive LLC and Capital Automotive L.P. to 'B' from 'BB'. At the same time, S&P lowered its rating on CARS' senior secured debt to 'B'. S&P also removed all of its ratings on CARS from CreditWatch, where they were placed with negative implications on March 6, 2009. The recovery rating remains a '3', indicating S&P's expectation of a meaningful recovery (50%-70%) in the event of a payment default. The outlook on CARS is negative. "The downgrades reflect S&P's deepening concern regarding the immense pressure that CARS' auto dealer tenant base faces due to a significant drop in auto sales, and the negative pressure this will likely place on the valuation of auto dealerships," said credit analyst Elizabeth Campbell. "Highly leveraged CARS faces the maturity of its revolver later this year and a large term loan maturity in December 2010. If CARS does not extend this term loan, an equity infusion or recapitalization would be necessary if the credit markets and underwriting remain more conservative than in 2005, which is when the term loan was put in place." The negative outlook reflects S&P's expectation that CARS' counterparty risk will increase as its tenants' underlying businesses remain under pressure. S&P will lower the ratings further if key tenants come under pressure, jeopardizing CARS' rental income; debt coverage measures weaken from current levels (1.4x debt service coverage and 1.2x fixed-charge coverage); or a covenant is tripped. S&P would also lower the ratings if the credit environment remains difficult and the revolver cannot be extended, or if the company has to initiate some form of recapitalization to successfully address the 2010 term loan maturity. CDM PROPERTIES: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: CDM Properties, Inc. 19732 MacArthur Blvd., #125 Irvine, CA 92612 Bankruptcy Case No.: 09-12631 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: Marie A. Karam, Esq. 3860 Ocean Birch Corona Del Mar, CA 92625 Tel: (949) 735-5535 Total Assets: $200,200 Total Debts: $2,513,100 The petition was signed by Leon Satero, president of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-12631.pdf CENTRAL CORPORATE: S&P Withdraws '--/Watch Neg/B' Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it has taken rating actions on six corporate credit unions. The ratings on all the credit unions remain on CreditWatch Negative. S&P is also withdrawing S&P's ratings on Eastern Corporate Federal Credit Union and Central Corporate Credit Union, each at the company's request. This action was prompted by S&P's reassessment of these institutions' creditworthiness in light of recent regulatory actions taken by the National Credit Union Administration (regulator for credit unions) and the corporate credit unions' capitalization being severely impaired as the result of the expected write-down of their capital investments in U.S. Central Federal Credit Union. None of these corporate credit unions have rated debt outstanding. On March 20, 2009, the NCUA took U.S. Central and Western Corporate Federal Credit Union into conservatorship after determining that their exposure to losses in their portfolios of mortgage-related structured securities was in excess of their capital. As a result, the NCUA has announced that all corporate credit unions' capital investments (paid-in capital and membership capital shares) in U.S. Central will have to be completely or almost completely written down. Although the NCUA has stated that it does not plan to seize any corporates because of the write-down of their investments in U.S. Central, S&P believes that this will severely impair the corporates' capitalization. The impact of this write-down on the rated corporate credit unions' capitalization varies widely, but in all cases it results in a capital profile that S&P believes is insufficient to support any rated corporate at the prior ratings level. Before these recent events, EasCorp and Cencorp were among the highest rated corporates because they had the least exposure to at-risk, mortgage-related, structured securities, but S&P expects their capital levels to be the most severely affected by the write-down of their U.S. Central capital investments. According to S&P's calculations, each is likely to have negative regulatory core capital. Although S&P expects the capital levels at Southwest Corporate Federal Credit Union and Constitution Corporate Federal Credit Union to be least affected by the write-down, S&P believes their resulting capitalization will be weak in light of their significant exposure to potential future losses on their portfolios of mortgage-related structured securities. The remaining rated corporate credit unions will stay on CreditWatch Negative because of continued negative pressure on the ratings from weak capitalization, the potential for further securities write-downs in the near term, and uncertainty as to the direction and form of future regulatory action toward these companies. The NCUA has stated that it would inject capital into any corporate that needed it as the result of securities write- downs. It remains to be seen if this would be done under conservatorship, as it was at U.S. Central and WesCorp, or in a way less favorable to creditors. Credit Union creditors are especially well protected in the event of a liquidation because all credit union debt ranks senior to members' shares and deposits. S&P believes the NCUA's program to guarantee all member deposits through December 2010, into which all of the rated corporates with the exception of Eascorp have opted, is crucial to the corporate credit unions' creditworthiness. To resolve the CreditWatch on the remaining rated corporate credit unions, S&P will closely monitor further industry and company- specific developments, assess each rated corporate's capital plans, and seek further insight from the NCUA as to its plans for the corporate credit union network. Ratings Lowered, Remain On CreditWatch Southeast Corporate Federal Credit Union Counterparty Credit Rating To From -- ---- BBB-/Watch Neg/A-3 A+/Watch Neg/A-1 Southwest Corporate Federal Credit Union Counterparty Credit Rating To From -- ---- BBB-/Watch Neg/A-3 A+/Watch Neg/A-1 Constitution Corporate Federal Credit Union Counterparty Credit Rating To From -- ---- --/Watch Neg/A-3 --/Watch Neg/A-1 SunCorp Corporate Credit Union Counterparty Credit Rating To From -- ---- --/Watch Neg/A-3 --/Watch Neg/A-1+ Central Corporate Credit Union Counterparty Credit Rating To From -- ---- --/Watch Neg/B --/Watch Neg/A-1+ Eastern Corporate Federal Credit Union Counterparty Credit Rating To From -- ---- --/Watch Neg/B --/Watch Neg/A-1+ Ratings Withdrawn Central Corporate Credit Union Counterparty Credit Rating To From -- ---- NR --/Watch Neg/B Eastern Corporate Federal Credit Union Counterparty Credit Rating To From -- ---- NR --/Watch Neg/B CENTURY ALUMINUM: Moody's Junks Corporate Family Rating from 'B2' ----------------------------------------------------------------- Moody's Investors Service downgraded Century Aluminum Company's ratings, including the corporate family rating which was lowered to Caa3 from B2. This concludes the review for downgrade initiated on December 17, 2008. The outlook is negative. Although Moody's believes that CENX has cash likely in excess of $200 million, the rating actions reflect Moody's concerns about CENX's overall liquidity profile during what could be a prolonged downturn in the global aluminum industry. Moody's believes that the high cost domestic operations are incurring substantial operating losses and are unlikely to return to profitability over the intermediate term. The ratings favorably acknowledge that CENX's management team has taken significant steps to restructure its domestic operations and has reduced costs substantially in a short period of time. However, in Moody's opinion, the company has limited flexibility to unilaterally curtail its smelters in Kentucky and South Carolina and its alumina refinery in Louisiana. While near-term liquidity was significantly enhanced by the recent equity offering and cash tax refunds, Moody's believes the liquidity position may be insufficient to offset material expected cash consumption over the next several quarters. The Caa3 corporate family rating anticipates that operating cash flow generated from the aluminum smelter in Iceland is unlikely to be sufficient to support ongoing operations across CENX on a sustained basis. Although the ratings positively reflect CENX's significant balance sheet cash and the low-cost operation in Iceland (which is held in a non-guarantor subsidiary), they consider CENX's shrinking business profile and Moody's expectation that the current capital structure may be unsustainable in light of the current operating and financial challenges. The negative outlook reflects Moody's concerns regarding the level of cash consumption, and the potential for liquidity challenges absent a significant recovery in the aluminum markets. The ratings could be further downgraded if the company's cash position deteriorates substantially outside of expectations, if conditions in the global aluminum industry deteriorate further, or if there were a change in the capital structure. These ratings were impacted by the action: -- Corporate Family Rating lowered to Caa3 from B2 -- Probability of Default Rating lowered to Caa3 from B2 -- 1.75% Guaranteed Convertible Notes due 2024 to Ca (LGD 4; 62%) from B3 (LGD 4; 66%) -- 7.5% Guaranteed Senior Global Notes due 2014 to Ca (LGD 4; 62%) from B3 (LGD 4; 66%) The prior rating action for Century Aluminum Company was on December 17, 2008, when the corporate family rating was lowered to B2 with the ratings kept under review for further possible downgrade. Headquartered in Monterey, California, Century is a primary aluminum producer with ownership interests in four aluminum production facilities in North America and Iceland along with alumina and bauxite assets in the US and Jamaica. CENX had revenues of approximately $2 billion in 2008. CHARTER COMMUNICATIONS: Showdown with JPMorgan Set for April 29 --------------------------------------------------------------- Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing April 29, 2009, for arguments regarding Charter Communications' motion to dismiss a lawsuit filed on the first day of bankruptcy last month by JPMorgan Chase Bank NA, as agent for secured lenders owed $8.2 billion, Bloomberg's Bill Rochelle said. According to Bill Rochelle, this "pivotal" hearing is scheduled on the same day the disclosure statement explaining the Chapter 11 plan of Charter will be heard. JPMorgan Chase's lawsuit could delay or derail Charter Communications' bankruptcy process, Business Journal states, citing sources. JPMorgan, as agent for certain lenders, gave Charter Communications Operating LLC, pursuant to a prepetition credit agreement, access to: a) a $6.5 billion term loan with a final maturity of March 6, 2014; b) a $1.5 billion revolving credit facility that matures March 6, 2013, including the availability of letters of credit aggregating to $350 million; and c) $500 million of incremental term loan financing. JPMorgan contends that Charter has breached their loan agreement which would bar the roll-over and reinstatement of the debt, as Charter's reorganization plan contemplates. Points raised by JPMorgan include: -- Under Sections 8(f) and 8(g) of the Prepetition Credit Agreement if any designated holding company (i) filed for bankruptcy, (ii) had its debt accelerated, or (iii) "shall be unable to . . . pay its debts as they become due." According to JPM, at least two Designated Holding Companies- specifically, Charter Communications Holdings, LLC ("Charter Holdings") and CCH I Holdings, LLC - were unable to pay their debts as they would become due soon after October 1, 2008 (if not earlier). -- Section 8(b) of the Prepetition Credit Agreement provides that it is a Default and Event of Default if "any representation or warranty made or deemed made by any Loan Party . under or in connection with this Agreement . shall prove to have been inaccurate in any material respect on or as of the date made or deemed made." According to JPM, Charter falsely represented on numerous occasions, that all Designated Holding Companies were able to pay their debts as they would become due when, in fact, at least two such Designated Holding Companies had become unable to do so. Charter made these false representations in connection with up to $750 million in credit extensions. JPMorgan noted that it negotiated certain cross-default/cross- acceleration provisions because of the relationship of CCO with its parent entities -- among other things, CCO is the sole source of operational cash flow for repayment of debt by CCO's parents. Charter's lawyer, according to Bill Rochelle, said replacing the existing bank debt would cost an additional $500 million a year and in the process wipe out junior creditors. A full-text copy of the JPMorgan suit is available for free at: http://bankrupt.com/misc/Charter_JPM_Lawsuit.pdf JPMorgan is represented by SIMPSON THACHER & BARTLETT LLP Bruce D. Angiolillo, Esq. Peter V. Pantaleo, Esq. Bryce L. Friedman, Esq. George S. Wang, Esq. 425 Lexington Avenue New York, New York 10017 Tel: (212) 455-2000 Fax: (212) 455-2502 Prepetition Capital Structure As of March 27, 2009, Charter's total funded debt obligations were approximately $21.7 billion and consisted of, among other things, amounts under the secured credit facilities and secured and unsecured notes payable. On March 6, 2007, Charter Communications Operating, LLC, as borrower, amended and restated its credit agreement, dated as of March 18, 1999, with JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders thereto. The First Lien Credit Facility initially consisted of a $6.5 billion term loan with a final maturity of March 6, 2014, and a $1.5 billion revolving credit facility that matures on March 6, 2013. As of As of March 27, 2009, the borrowings under the revolving credit facility are in the amount of $1.3 billion, and the letters of credit outstanding under this facility are approximately $140 million. The First Lien Credit Facility is secured by a lien on substantially all of the assets of CCO and its subsidiaries and a pledge by CCO Holdings, LLC of its equity interests in CCO. Moreover, the First Lien Credit Facility is subject to an upstream guarantee by CCOH. Also on March 6, 2007, CCOH entered into the credit agreement, dated as of March 6, 2007, by and among CCOH, as borrower, Bank of America, N.A., as administrative agent, and certain lenders thereto. The Junior Credit Facility consists of a $350 million term loan that matures on September 6, 2014. Additionally, under the Junior Credit Facility, CCOH may enter into incremental term loans from time to time. Obligations under the Junior Credit Facility are secured by CCOH's equity interest in CCO. Charter is also a party to 26 series of notes: Rate Principal Amount Maturity ---- ---------------- -------- CCI 5.875% convertible senior notes $3 million 11/16/09 CCI 6.50% convertible senior notes $479 million 10/01/27 CCH 10.000% senior notes $53 million 04/01/09 CCH 10.750% senior notes $4 million 10/01/09 CCH 9.625% senior notes $25 million 11/15/09 CCH 10.250% senior notes $1 million 01/15/10 CCH 11.750% senior discount notes $1 million 01/15/10 CCH 11.125% senior notes $47 million 01/15/11 CCH 13.500% senior discount notes $60 million 01/15/11 CCH 9.920% senior discount notes $51 million 04/01/11 CCH 10.000% senior notes $69 million 05/15/11 CCH 11.750% senior discount notes $54 million 05/15/11 CCH 12.125% senior discount notes $75 million 01/15/12 CIH 11.125% senior notes $151 million 01/15/14 CIH 13.500% senior discount notes $581 million 01/15/14 CIH 9.920% senior discount notes $471 million 04/01/14 CIH 10.000% senior notes $299 million 05/15/14 CIH 11.750% senior discount notes $815 million 05/15/14 CIH 12.125% senior discount notes $217 million 01/15/15 CCH I 11.00% senior notes $3.987 billion 10/01/15 CCH II 10.250% senior notes $1.860 billion 09/15/10 CCH II 10.250% senior notes $614 million 10/01/13 CCOH 8 3/4% senior notes $800 million 11/15/13 CCO 8.00% senior second-lien notes $1.1 billion 04/30/12 CCO 8 3/8% senior second-lien notes $770 million 04/30/14 CCO 10.875% senior second-lien notes $546 million 09/15/14 Overview of the Plan Together with its bankruptcy petition, Charter filed a proposed Chapter 11 plan of reorganization. Charter has received executed Plan Support Agreements from members of the Crossover Committee -- composed of the holders of approximately 73% of the CCH I, LLC notes and holders of approximately 52% of the CCH II notes. The Plan also has the support of Charter's primary shareholder, Paul G. Allen, who has likewise executed a Plan Support Agreement. Gregory L. Doody, CCI chief restructuring officer and senior Counsel, said that the Plan essentially provides for a balance sheet restructuring that will leave intact both Charter's operations and the senior portion of its capital structure. Charter also intends to: * cancel approximately $8 billion of debt at various holding companies; * reduce its annual interest expense by more than $830 million; * raise up to $2 billion in additional equity through a rights offering; and * refinance approximately $1.2 billion in senior holding company debt instruments and raise $267 million in new notes. Treatment of Claims and Interest Under the Plan, the treatment of claims provides that: * All claims against CCO -- the operating company -- and CCOH -- the first tier holding company -- will be reinstated and paid in full; * The holders of CCH II notes on the Crossover Committee will receive new notes and other holders of the notes will have the option of receiving new notes or cash in the amount of their claims; * The holders of CCH I notes will receive stock in the reorganized entity subject to dilution pursuant to the Rights Offering, the warrants to be issued under the Plan, and the equity-based compensation reserved for management; * The holders of the CIH notes and CCH notes will receive warrants to purchase stock in the reorganized company; * All claims relating to the CCHC notes will be settled as part of the settlement with CII; * The holders of CCI notes, in part on account of the Holdco notes, will receive new preferred stock and $24.2 million in cash; * The holders of common stock will not receive any recovery; and * All executory contracts, unless expressly rejected, will be deemed assumed as of the effective date of the Plan. The Crossover Committee is an informal committee of holders of certain 11% Senior Secured Notes due 2015 of CCH I, LLC and CCH I Capital Corporation and 10.25% Senior Notes due 2010 of CCH II, LLC and CCH II Capital Corporation, represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. Another committee, the CCH II Committee, is an informal committee of holders of certain 10.25% Senior Notes due 2010 and 10.25% Senior Notes due 2013 of CCH II, LLC and CCH II Capital Corporation, represented by Kasowitz, Benson, Torres & Friedman LLP. The CCH II Committee was formed in December 2008, and has been in communication with Charter. The Plan also provides that Charter's trade creditors will be paid in full. To that end, Charter has filed a request with the Court seeking to pay its trade creditors in the ordinary course of business. Charter believes that the payment will allow it to continue its operations with minimal disruption and preserve its enterprise value for the benefit of the estates, creditors, and all parties-in-interest. The secured prepetition lenders of Charter's operating subsidiary, whose cash collateral is being used to pay these trade creditors, support the request. Charter's largest unsecured trade creditor is Warner Communications Inc.'s Home Box Office unit, which holds a $25.7 million claim. The top 20 unsecured creditors are holders of Charter bonds. Plan Funding The Plan will be funded with: (a) cash on hand and cash generated from Charter's operations, (b) an exchange of CCH II notes, (c) an additional debt commitment by certain holders of CCH II notes, and (d) the proceeds of the Rights Offering that certain members of the Crossover Committee have agreed to backstop. Charter expects to raise an aggregate of approximately $1.2 billion through the Notes Exchange, $267 million through the New Debt Commitment, and up to $2 billion through the Rights Offering. No DIP Financing Other than the Plan funding, Charter is not seeking to enter into debtor-in-possession financing, Mr. Doody points out. Upon filing for Chapter 11, pursuant to its commitments under the Plan, Charter will waive its right to access its revolving credit facility and will rely on cash on hand and cash flows from operating activities to fund its projected cash needs. Among other things, Charter's projected cash needs and projected sources of liquidity depend upon, among other things, its actual results, the timing and amount of its expenditures, and the outcome of various matters in its Chapter 11 cases and financial restructuring. Charter has filed a request with the Court asking permission to access these funds, and expects to receive interim authorization shortly. Reinstatement of Credit Facilities The Plan includes provisions for reinstating these credit facilities and indentures: Principal Amt Outstanding ------------------------- First Lien Credit Facility Term Loan Facility maturing 2014 $6.9 billion Revolving Credit Facility maturing 2013 $1.3 billion 8.00% senior second lien notes due 2012 $1.1 billion 8 3/8% senior second lien notes due 2014 $770 million 10.875% senior second lien notes due 2014 $546 million Junior Credit Facility maturing 2014 $350 million 8 3/4% senior notes due 2013 $800 million ------------- Total $11.8 billion These credit facilities and indentures are extremely valuable, irreplaceable assets of Charter's estate, Mr. Doody asserts. In light of current capital market conditions, they would be difficult, if not impossible, to replace at comparable terms and rates, he says. "I am not aware of any instance where Charter has defaulted or otherwise failed to comply with its obligations under these credit facilities and indentures before filing these chapter 11 cases," he notes. Because of Charter's significant debt load, the company has put in place extensive systems and processes to ensure that it complies with its payment and debt obligations on a timely basis. "To my knowledge, Charter has never missed an interest payment or failed to make a payment within the allotted grace period . . . Charter has fully complied with its obligations to file compliance certifications and annual budgets," he adds. According to Mr. Doody, it is the company's intent to continue performing under the agreements and satisfy its repayment obligations as if the Chapter 11 cases had never been filed. Moreover, Charter has taken care to ensure that the counterparties to the credit facilities and indentures it is seeking to reinstate will be unaffected under the Plan. It has agreed to pay interest at a higher negotiated default rate as long as the Chapter 11 cases remain pending. In addition, the Plan includes Charter's binding commitment that it will irrevocably waive any rights to engage in additional borrowing under the First Lien Credit Facility, and that, if required by the Court, the company will cash collateralize any letters of credit under the facility that remain outstanding. This Commitment is described in greater detail in Charter's memorandum of reinstatement in support of approval of disclosure statement, a copy of which is available for free at: http://bankrupt.com/misc/CCI_Memo_Supporting_DS.pdf For the plan to work, however, the bankruptcy judge must concur that $11.8 billion in debt obligations may be reinstated by employing a provision in bankruptcy law allowing defaults to be cured, notes Bloomberg News. Mr. Doody said the loans "would be difficult, if not impossible, to replace at comparable terms and rates" and that he expects that "certain lenders" will oppose the Plan and argue that it's not possible to reinstate the debt. If reinstatement is not permitted, more than half a billion dollars will flow out of the estates every year and into the pockets of Charter's senior creditors; Charter's junior creditors would likely be wiped out; and Charter would be forced into extended Chapter 11 proceedings, Charter's proposed counsel, Paul M. Basta, Esq., at Kirkland & Ellis LLP, in New York, explained in court papers. As of March 19, 2009, Charter's equity value has plunged to as low as $21 million from around $5 billion in 2001, Reuters reports. April 29 Disclosure Statement Hearing Charter has filed a request with the Court asking Judge Peck to convene a hearing on April 29, 2009, to consider approval of the Disclosure Statement explaining the Plan. If the schedule proceeds as proposed, creditors would finish voting by June 8 so a confirmation hearing for approval of the plan could begin July 23. A full-text copy of the Plan is available for free at: http://bankrupt.com/misc/CCI_Chapter11_Plan.pdf A full-text copy of the Disclosure Statement explaining the Plan is available for free at: http://bankrupt.com/misc/CCI_Disclosure_Statement.pdf In addition to the Disclosure Statement and Plan, Charter has filed its Plan supplement, which is available for free at: http://bankrupt.com/misc/CCI_Plan_Supplement.pdf About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (NASDAQ: CHTR) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. On March 16, 2009, Charter Communications filed its annual report on Form 10-K, which contained a going concern modification to the audit opinion from its independent registered public accounting firm. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D. N.Y. Case No. 09-11435). The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet- Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. As of Dec. 31, 2008, the Debtors had total assets of $13,881,617,723, and total liabilities of $24,185,668,550. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEM RX: Covenant Violations Cue Moody's Junk Corporate Rating -------------------------------------------------------------- Moody's Investors Service lowered Chem Rx Corporation's corporate family rating and probability-of-default rating to Caa1 from B3 and the first lien senior secured credit facilities to B3 from B2. Moody's also affirmed the Caa2 rating on the second lien term loan. These ratings have been placed under review for possible further downgrade. The speculative grade liquidity rating remains SGL-4. The downgrade of the corporate family rating and probability-of- default rating follows the company's announcement that it violated several financial covenants under its first and second lien credit facilities. The company stated that certain charges were recorded in the quarter ended December 31, 2008 that contributed to its inability to meet these covenants. The company also announced that it would delay filing of the 2008 10-K. Moody's review will focus on Chem Rx's ability to timely secure an amendment to its credit facilities, its plan to address the late 10-K filing as well as an assessment of the company's fundamentals, liquidity, and cost reduction efforts. If the company were to secure an amendment, Moody's would also focus on how onerous any revised conditions may be. These ratings were downgraded: -- Corporate family rating to Caa1 from B3; -- Probability-of-default rating to Caa1 from B3; -- $25 million senior secured revolving credit facility due 2012 to B3 (LGD3, 35%) from B2 (LGD3, 35%); -- $80 million first lien senior secured term loan due 2013 to B3 (LGD3, 35%) from B2 (LGD3, 35%). This rating was affirmed: -- $37 million second lien senior secured term loan due 2014 at Caa2 (LGD5, 80%). In spite of Moody's view that the company's liquidity has worsened given the aforementioned covenant violations, the speculative grade liquidity remains SGL-4. The last rating action was on December 19, 2008 when Moody's lowered Chem Rx's corporate family rating to B3 from B2, the rating on the company's first lien senior secured credit facilities to B2 from B1, and the rating on the second lien term loan to Caa2 from Caa1. As part of this action, Moody's also affirmed the company's SGL-4 speculative grade liquidity rating. The ratings outlook remained negative. Chem Rx'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 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 Chem Rx's core industry and Chem Rx's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in Long Beach, New York, Chem Rx Corporation provides institutional pharmacy services to skilled nursing facilities and other long-term healthcare institutions. For the twelve months ended September 30, 2008, Chem Rx generated sales of approximately $352 million. CHUKCHANSI ECONOMIC: Moody's Cuts Corporate Family Rating to 'B3' ----------------------------------------------------------------- Moody's Investors Service lowered Chukchansi Economic Development Authority's corporate family rating and senior unsecured notes rating to B3 from B2. It also downgraded the probability of default rating to B2 from B1. The rating outlook remains negative. The rating actions reflect the material deterioration in the Authority's financial leverage and Moody's expectation that continued economic weakness will constrain near-term improvement. Weakening economic conditions in the Authority's local market of Fresno, California, significantly reduced spend per visit, net revenues and EBITDA in 2008. As a result, total debt/EBITDA, as adjusted by Moody's, rose to 5.9 times as of December 31, 2008, a level that is no longer in line with a B1 probability of default rating. Additionally, Moody's believes that the economic environment will remain challenging in 2009, with little improvement expected in Chukchansi's financial leverage. More positively, Moody's expect the Authority's liquidity profile to remain adequate. The rating outlook remains negative at this junction, reflecting the risk that weak economic conditions could continue to negatively weigh on Chukchansi's operating performance and preclude de-leveraging. Ratings downgraded: - Corporate Family Rating to B3 from B2 - Probability of Default Rating to B2 from B1 - Senior Note Rating to B3 (LGD4, 68%) from B2 (LGD4, 66%) The last rating action was on September 25, 2008, when Moody's revised the rating outlook to negative from stable. Chukchansi is a wholly owned enterprise of the Picayune Rancheria of Chukchansi Indians, a federally-recognized Indian tribe with approximately 1,250 enrolled members. Chukchansi operates the Chukchansi Gold Resort & Casino, a facility located 35 miles north of Fresno, California. CITIGROUP INC: Names Mike Corbat as Citi Holdings CEO ----------------------------------------------------- Mike Corbat has been named CEO of Citi Holdings, a Citigroup Inc. unit that includes brokerage and asset management, local consumer finance and a special asset pool. Mr. Corbat has served as interim CEO since Citigroup's announced realignment into Citicorp and Citi Holdings on January 16, 2009. Mr. Corbat will continue to work closely with newly appointed Citi Holdings Chairman Gary Crittenden to evaluate and set the strategic course for these businesses, while tightly managing risks and losses and maximizing the value of these assets. Mr. Crittenden said, "Mike Corbat is a terrific business manager and a great partner. In a short time, Mike and the team have done excellent work, and I couldn't be more pleased to have him move into the CEO role on a permanent basis." "With more than 25 years at Citi in a variety of leadership roles, Mike brings a tremendous amount of experience, insight and energy to this post," said Citigroup CEO Vikram Pandit. "Mike will work closely with us to accelerate our assessment of strategic opportunities for these businesses, as we also seek to optimize their performance through this challenging market environment." Mr. Corbat most recently served as the CEO of Citigroup's Global Wealth Management unit. Prior to this, he was Head of the Global Corporate Bank and Global Commercial Bank at Citigroup, a role in which he led the firm's efforts to provide best-in-class financial services to top-tier multi-national corporations and financial institutions around the world. Previously, Mr. Corbat was Head of Global Emerging Markets Debt, responsible for the origination, trading and sales of emerging markets fixed income debt. Mr. Corbat joined the Company in 1983 and has worked in Atlanta, New York and London. Citigroup Appoints Eric Aboaf Treasurer Citigroup reported that Eric Aboaf has been appointed Treasurer of Citigroup, reporting to Chief Financial Officer Ned Kelly. Mr. Aboaf will manage Citigroup's balance sheet and will be responsible for ensuring strong liquidity, asset and liability management and optimization of our capital structure. He will work closely with all of Citigroup's businesses within both Citicorp and Citi Holdings to support their funding needs and optimize capital deployment. Mr. Aboaf will also work closely with external regulators and rating agencies. He will communicate with and expand our base of fixed income investors. "Eric brings invaluable experience as CFO of both our major businesses to the role of Treasurer as we seek to more fully integrate Treasury with our businesses as well as Risk," Mr. Kelly said. Mr. Aboaf has made a significant contribution in Finance at Citigroup, including his most recent role as CFO of the Institutional Clients Group. He has also held the positions of CFO of Global Consumer as well as Head of Financial Planning and Analysis. Prior to joining Citigroup in 2003, Mr. Aboaf was co- head of Bain's U.S. Financial Services practice. In addition to working closely with all of the businesses, he will work closely with the Risk organization. Mr. Aboaf is a summa cum laude graduate of the Wharton School of Business at the University of Pennsylvania and holds a Masters of Science degree from Massachusetts Institute of Technology. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citi had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of September 30, 2008. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve will backstop residual risk in the asset pool through a non-recourse loan. CORPUS CHRISTI: Involuntary Chapter 11 Case Summary --------------------------------------------------- Alleged Debtor: Corpus Christi Associates, Limited Partnership 9 East 59th Street New York, NY 10022 Case Number: 09-11773 Involuntary Petition Date: April 3, 2009 Court: Southern District of New York (Manhattan) Judge: Burton R. Lifland Petitioner's Counsel: Leonard Benowich, Esq. leonard@benowichlaw.com Benowich Law, LLP 1025 Westchester Avenue White Plains, NY 10604 Tel: (914) 946-2400 Fax: (914) 946-9474 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Eric D. Rosenfeld note $386,552 c/o Benowich Law, LLP Peter Fischbein note $564081 c/o Benowich Law, LLP CRUSADER ENERGY: Gets Court Okay on Vinson & Elkins as Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized, on an interim basis, Crusader Energy Group Inc. and its debtor-affiliates to employ Vinson & Elkins LLP as counsel. A final hearing on the motion will be held on April 28, 2009, at 9:15 a.m., before Hon. Barbara J. Houser at the U.S. Bankruptcy Court, 1100 Commerce Street, 14th Floor, Dallas, Texas. V&E is expected to: a. serve as counsel of record for the Debtors in all aspects of the cases, to include any adversary proceedings commenced in connection with the cases, and to provide representation and legal advice to the Debtors throughout the cases; b. assist in the formulation and confirmation of a Chapter 11 Plan and disclosure statement for the Debtors; c. consult with the U.S. Trustee, any statutory committee and all other creditors and parties-in-interest concerning the administration of the cases; d. take all necessary steps to protect and preserve the Debtors' bankruptcy estates; and e. provide all other legal services required by the Debtors and to assist the Debtors in discharging their duties as the debtors in possession in connection with these cases. Rodney L. Moore, a partner at V&E, told the Court that prior to the petition date, the Debtors paid V&E the sum of $1,368,892 in fees and expenses. Approximately $1,129,532 of these fees and expenses were incurred in rendering prepetition services. V&E has a $265,387 retainer to secure all postpetition fees and expenses. These funds were maintained in the firm's general retainer account. V&E's hourly rates for professionals working on these cases are: Junior Associate $295 Senior Partner $880 Paraprofessional $105 - $295 Mr. Moore assured the Court that V&E is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Moore can be reached at: Vinson & Elkins LLP First Tower City, 1001 Fannin Street, Suite 2000 Houston, TX 77002-6760 Tel: (713) 758-2222 Fax: (713) 758-2346 About Crusader Energy Group Inc. Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explore, develop and acquire of oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N. D. Tex. Lead Case No. 09-31797). The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. CRUSADER ENERGY: Gets Interim Access to JPMorgan Cash Collateral ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized, on an interim basis, Crusader Energy Group Inc. and its debtor-affiliates to: a) access the cash collateral securing repayment of loan from Union Bank of California, N.A., et. al. and JPMorgan Chase Bank, N.A., et. al; b) grant adequate protection to the prepetition lenders and the holders of trade liens; and c) make payments to royalty and working interest owners on account of prepetition and postpetition sales of oil and gas. A final hearing on the motion will be held on April 28, 2009, at 9:15 a.m., before Hon. Barbara J. Houser at the U.S. Bankruptcy Court, 1100 Commerce Street, 14th Floor, Dallas, Texas. Objections are due 4:00 p.m. (prevailing Central time) on April 21, 2009. Crusader Energy Group Inc. is party to a second amended and restated credit agreement dated as of June 26, 2008, as amended, ("first lien credit agreement") with Union Bank of California, N.A., as administrative agent, and the other lenders from time to time party thereto. The first lien credit agreement, with a maturity date of October 4, 2010, was originally a $200,000,000 revolving credit facility with an initial borrowing base limit of $100,000,000 and was later reduced by amendment to a $140,000,000 revolving line of credit with a borrowing base limit of $70,000,000. UBOC further reduced the borrowing base limit to $25,000,000. The aggregate principal amount of the advances currently outstanding under the first lien credit agreement is approximately $30,000,000. Crusader is also party under that a second lien credit agreement dated as of July 17, 2008, among Crusader, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders from time to time party thereto. The second lien credit agreement is a $250,000,000 term loan facility with a maturity date of July 18, 2013. The aggregate principal balance outstanding under the second lien credit agreement is approximately $249,750,000. Each of the Debtor's subsidiaries has guaranteed the obligations under the credit agreements. The first lien lenders allege that the obligations under the first lien credit agreement are secured by a first lien on all of the material assets of the Debtors, and the second lien lenders allege that the obligations under the second lien credit agreement are secured by a subordinate lien on all of the material assets of the Debtors. In addition, the first lien lenders and the second lien lenders allege that the Debtor has pledged to them the Debtor's rights, title and interest in the equity of each of the Debtor's subsidiaries. As of the petition date, unsecured claims aggregate approximately $49,080,950, which amount excludes deficiency claims under the credit agreements, if any. Certain parties, including contractors and subcontractors, allege that they have provided goods and services to the Debtors, and have asserted that they have perfected statutory liens on, and security interests in, certain leaseholds and the related property and equipment. The Debtors will use the cash collateral, including cash proceeds, to continue the operation of their businesses. The Debtors will adequately protect the prepetition lenders' alleged interest in their prepetition collateral in this manner: 1. The Debtors believe that the value of the prepetition collateral substantially exceeds the sum total of the indebtedness to the first lien lenders, and the resulting equity cushion will protect the first lien lenders against any decrease in the value of their interests in the prepetition collateral for the duration of the requested use of their cash collateral and other prepetition collateral interests. 2. The Debtors will make interest payments to the first lien lenders in the amounts and at the times set forth in the interim budget. 3. The Debtors will grant the prepetition lenders replacement liens in their prepetition collateral, subject to prior perfected and unavoidable liens and security interests and to the extent of any decrease in the value of the prepetition lenders' interests as a result of the Debtors' use of cash collateral, the Debtors propose to grant the prepetition lenders replacement liens upon: (a) all assets in which the prepetition lenders held a validly perfected lien as of the petition date; (b) all property acquired by the Debtors after the petition date that is of the exact nature, kind or character of the prepetition collateral; and (c) all cash and receivables that are the proceeds, product, offspring or profits of the prepetition collateral. The Debtors anticipate that those replacement liens will adequately protect the prepetition lenders for the use of cash collateral. 4. The Debtors will provide the prepetition lenders with ample information relating to projected revenues and expenses, actual revenue and expenses, and variances from the Interim Budget. This information will enable the prepetition lenders to monitor their interests in the prepetition collateral and cash collateral. The Debtors will grant the trade lien holders replacement liens in their collateral. The Debtors anticipate that those replacement liens will adequately protect the Trade Lien Holders for the use of cash collateral. The Debtors will use cash collateral in accordance with a budget. A full-text copy of the Budget is available for free at: http://bankrupt.com/misc/crusaderenergybudget.pdf About Crusader Energy Group Inc. Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explore, develop and acquire of oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N. D. Tex. Lead Case No. 09-31797). Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, LLP, represent the Debtors in their restructuring efforts. The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. CRUSADER ENERGY: Jefferies & Co. Can Initially Serve as Advisors ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized, on an interim basis, Crusader Energy Group Inc. and its debtor-affiliate to employ Jefferies & Company, Inc., as financial advisors. A final hearing on the motion will be held on April 28, 2009, at 9:15 a.m., before Hon. Barbara J. Houser at the U.S. Bankruptcy Court, 1100 Commerce Street, 14th Floor, Dallas, Texas. Jefferies is expected to provide: a) the valuation of the Debtors in connection with a refinancing, restructuring, or sale pursuant to the Bankruptcy Code and acting as the exclusive financial advisor of the Debtors; b) assistance in the analysis of the Debtors' assets and liabilities; and c) other services. Tero Janne, managing director of Jefferies, told the Court that the firm will be paid: a) a monthly fee equal to $125,000 per month for the first three months and $150,000 per month thereafter until the termination of the engagement. 50% of the Monthly Fees in excess of $825,000 will be credited against the Debt Restructuring and M&A Transaction Fees. b) Termination Fee -- upon any termination of the engagement by the Debtors, if the aggregate amount of monthly fees paid to Jefferies is less than $375,000, the Debtors will pay Jefferies an amount equal to $375,000 over the aggregate amount of monthly fees paid by the Debtors prior to termination. c) Debt Restructuring Fee -- upon consummation of a debt restructuring, including the effective date of a confirmed plan, a fee equal to 1% of the principal amount of indebtedness of the Debtors restructured, plus any accrued interest thereon. d) M&A Transaction Fee -- upon the consummation of each M&A Transaction, a fee equal to the greater of (i) 1% of the Transaction Value or (ii) $2 million. e) Debt Restructuring and M&A Fee -- In the event a transaction is both a Debt Restructuring Transaction and an M&A Transaction, a fee equal to the greater of the Debt Restructuring and M&A Transaction Fees, but Jefferies will not be entitled to both fees. f) Capital Raise Fee -- upon the consummation of any financing transaction, a fee equal to (i) 5.5% of the proceeds, plus either (ii) in the case of secured debt, 1.5% of the greater of the aggregate principle or aggregate availability of debt raised; or (iii) in the case of other debt, 2.5% of the greater of the aggregate principle or aggregate availability of the debt raised. If the Debtors execute a term sheet or definitive documentation with any of the parties within six weeks of the effective date of the engagement, 50% of the Capital Raise Fee is due at the time of execution and the remainder is due on consummation of the transaction. g) Opinion Fee -- upon the delivery of an Opinion, a fee equal to $1 million. 50% of the Opinion Fee will be credited against the M&A Transaction Fee for which the opinion is delivered. h) Break-Up Fee -- Jefferies is entitled to recover 25% of any Break-Up Fee received by the Debtors in connection with any M&A Transaction. Mr. Janne assured the Court that Jefferies is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. About Crusader Energy Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explores, develops and acquires oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N. D. Tex. Lead Case No. 09- 31797). Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, LLP, represent the Debtors in their restructuring efforts. The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. CRUSADER ENERGY: SALs and SOFAs Deadline Extended to May 6 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas extended until May 6, 2009, Crusader Energy Group Inc. and its debtor-affiliates' time of filing schedules of assets and liabilities and statement of financial affairs. Due to the size and complexity of the Debtors' operations and these cases, the Debtors anticipated that they will be unable to have the schedules and statements ready for filing within the initial 15-day period. The Debtors related that the extension period will be sufficient to complete, review and file the schedules and statements. Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explore, develop and acquire of oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N. D. Tex. Lead Case No. 09- 31797). Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, LLP, represent the Debtors in their restructuring efforts. The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. CUSTOM CRAFTERS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Custom Crafters, Inc. 4000 Howard Ave. Kensington, MD 20895 Phone: (301) 493-4000 Fax: (301) 493-6686 E-Mail:cchwastyk@customcraftersinc.com Bankruptcy Case No.: 09-15230 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Company Description: Custom Crafters, Inc., offers complete project management of kitchen or bath remodeling projects. See http://www.customcraftersinc.com Debtor's Counsel: John Douglas Burns, Esq. 6303 Ivy Lane, Ste. 102 Greenbelt, MD 20770 Tel: (301) 441-8780 Email: burnslaw@burnslaw.algxmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Tim Kravchunovsky, president of the Company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb09-15230.pdf DAVID BARROSO: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: David R. Barroso David R. Barroso DDS, P.C. 402 Main Street Blanchard, MI 49310 Tel: (989) 561-2865 Bankruptcy Case No.: 09-03641 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Debtor's Counsel: Robert J. Sayfie, Esq. Robert J. Sayfie, PC 161 Ottawa Ave., NW, Suite 407 Grand Rapids, MI 49503 Tel: (616) 774-9244 Email: robert@sayfie.com Estimated Assets: Not Reported Estimated Debts: Not Reported A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/miwb09-03641.pdf DOUBLE JJ RANCH: Assets to Sold for $9.75MM Under Confirmed Plan ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District Michigan said it will sign an order confirming the Chapter 11 plan for Double JJ Ranch Resort, a dude ranch-style resort hotel and water park in Rothbury, Michigan, Bloomberg's Bill Rochelle reported. The Bankruptcy Court is also expected to approve a sale of the resort for $9.75 million to Progressive Resorts LLC. The sale doesn't include the adjacent golf course. The disclosure statement explaining the Plan said the resort was worth about $8.5 million while the golf course has a value of $1.5 million. The Plan gives about 78% of sale proceeds to BankFirst, the lender with an $18.9 million mortgage. The shortfall on the bank mortgage becomes an unsecured claim. The bank doesn't receive all proceeds from a sale because the banks' mortgage does not cover all of the resort's property. The Court previously refused to approve a sale of the resort to the bank in exchange for mortgage debt. At BankFirst's request, the trustee was appointed five days after the Chapter 11 filing in July. The resort includes a water park and horseback riding. Double JJ Resort Ranch operates a resort in Rothbury, Michigan. The Debtor filed for Chapter 11 bankruptcy on July 18, 2008 (Bankr. W.D. Mich. Case No. 08-06296). Steven L. Rayman, Esq., at Rayman & Stone, and Michael S. McElwee, Esq., at Varnum, Riddering, Schmidt & Howlett, LLP, represent the Debtor as counsel. An affiliate OutdoorResources Inc. filed on the same day (Case No. 08-06299). EASTERN CORPORATE: S&P Withdraws '--/Watch Neg/B' Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it has taken rating actions on six corporate credit unions. The ratings on all the credit unions remain on CreditWatch Negative. S&P is also withdrawing S&P's ratings on Eastern Corporate Federal Credit Union and Central Corporate Credit Union, each at the company's request. This action was prompted by S&P's reassessment of these institutions' creditworthiness in light of recent regulatory actions taken by the National Credit Union Administration (regulator for credit unions) and the corporate credit unions' capitalization being severely impaired as the result of the expected write-down of their capital investments in U.S. Central Federal Credit Union. None of these corporate credit unions have rated debt outstanding. On March 20, 2009, the NCUA took U.S. Central and Western Corporate Federal Credit Union into conservatorship after determining that their exposure to losses in their portfolios of mortgage-related structured securities was in excess of their capital. As a result, the NCUA has announced that all corporate credit unions' capital investments (paid-in capital and membership capital shares) in U.S. Central will have to be completely or almost completely written down. Although the NCUA has stated that it does not plan to seize any corporates because of the write-down of their investments in U.S. Central, S&P believes that this will severely impair the corporates' capitalization. The impact of this write-down on the rated corporate credit unions' capitalization varies widely, but in all cases it results in a capital profile that S&P believes is insufficient to support any rated corporate at the prior ratings level. Before these recent events, EasCorp and Cencorp were among the highest rated corporates because they had the least exposure to at-risk, mortgage-related, structured securities, but S&P expects their capital levels to be the most severely affected by the write-down of their U.S. Central capital investments. According to S&P's calculations, each is likely to have negative regulatory core capital. Although S&P expects the capital levels at Southwest Corporate Federal Credit Union and Constitution Corporate Federal Credit Union to be least affected by the write-down, S&P believes their resulting capitalization will be weak in light of their significant exposure to potential future losses on their portfolios of mortgage-related structured securities. The remaining rated corporate credit unions will stay on CreditWatch Negative because of continued negative pressure on the ratings from weak capitalization, the potential for further securities write-downs in the near term, and uncertainty as to the direction and form of future regulatory action toward these companies. The NCUA has stated that it would inject capital into any corporate that needed it as the result of securities write- downs. It remains to be seen if this would be done under conservatorship, as it was at U.S. Central and WesCorp, or in a way less favorable to creditors. Credit Union creditors are especially well protected in the event of a liquidation because all credit union debt ranks senior to members' shares and deposits. S&P believes the NCUA's program to guarantee all member deposits through December 2010, into which all of the rated corporates with the exception of Eascorp have opted, is crucial to the corporate credit unions' creditworthiness. To resolve the CreditWatch on the remaining rated corporate credit unions, S&P will closely monitor further industry and company- specific developments, assess each rated corporate's capital plans, and seek further insight from the NCUA as to its plans for the corporate credit union network. Ratings Lowered, Remain On CreditWatch Southeast Corporate Federal Credit Union Counterparty Credit Rating To From -- ---- BBB-/Watch Neg/A-3 A+/Watch Neg/A-1 Southwest Corporate Federal Credit Union Counterparty Credit Rating To From -- ---- BBB-/Watch Neg/A-3 A+/Watch Neg/A-1 Constitution Corporate Federal Credit Union Counterparty Credit Rating To From -- ---- --/Watch Neg/A-3 --/Watch Neg/A-1 SunCorp Corporate Credit Union Counterparty Credit Rating To From -- ---- --/Watch Neg/A-3 --/Watch Neg/A-1+ Central Corporate Credit Union Counterparty Credit Rating To From -- ---- --/Watch Neg/B --/Watch Neg/A-1+ Eastern Corporate Federal Credit Union Counterparty Credit Rating To From -- ---- --/Watch Neg/B --/Watch Neg/A-1+ Ratings Withdrawn Central Corporate Credit Union Counterparty Credit Rating To From -- ---- NR --/Watch Neg/B Eastern Corporate Federal Credit Union Counterparty Credit Rating To From -- ---- NR --/Watch Neg/B EDRA D BLIXSETH: Sec. 341(a) Meeting Set for April 30 in Montana ---------------------------------------------------------------- The U.S. Trustee for Region 18 will convene a meeting of creditors in Edra D. Blixseth and Yellowstone Mountain Club Inc.'s Chapter 11 case on April 30, 2009, at 10:00 a.m., at U400 N Main Street, 2nd Fl. Crtrm, Butte, MT 59701, Butte, Montana. 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. Rancho Mirage, California-based, Edra D. Blixseth and Yellowstone Mountain Club Inc. filed for separate Chapter 11 protection on March 26, 2009 (Bankr. Lead D. Mont. Case No. 09-60452). The Debtors listed estimated assets of $100 million to $500 million and estimated debts of $500 million to $1 billion. The Debtors did not file a list of 20 largest unsecured creditors. EPIX PHARMACEUTICALS: Launches Distressed Debt Offer; Might File ---------------------------------------------------------------- EPIX Pharmaceuticals, Inc., has commenced an exchange offer for all of its $100 million aggregate principal amount of 3.00% Convertible Senior Notes due 2024. EPIX is offering to exchange the Notes for shares of common stock and a cash payment. Under the terms of the Exchange Offer, EPIX will issue in exchange for each $1,000 in principal amount of Notes properly tendered and accepted for exchange, a cash payment of $180.00, 339 shares of common stock, par value $0.01 per share, and one contingent value right. Subject to certain exceptions, each CVR represents a contractual right to receive additional payments if, within nine months after completion of the Exchange Offer or earlier in certain circumstances, the company consummates any future repurchase of Notes not tendered in the Exchange Offer at a value that exceeds that offered in the Exchange Offer. The company intends to use the net cash proceeds from the sale of its U.S., Canadian and Australian rights for MS-325 (formerly marketed as Vasovist(R), gadofosveset trisodium, by Bayer Schering Pharma), its novel blood pool magnetic resonance angiography (MRA) agent, to Lantheus Medical Imaging, Inc., which was announced separately today by the company. If all Notes are tendered in the Exchange Offer, the noteholders would receive $18 million and an aggregate of 33,900,000 common shares, representing approximately 44.7% of the total outstanding common stock of EPIX immediately following consummation of the Exchange Offer. The company currently has 41,947,441 shares of common stock outstanding. In conjunction with the Exchange Offer, EPIX is soliciting consents to the adoption of proposed amendments to the indenture governing the Notes. Any holder of the Notes who tenders its Notes pursuant to the Exchange Offer will be deemed to have delivered a consent to the proposed amendments. The proposed amendments are being sought in order to eliminate certain restrictive covenants and certain events of default contained in the indenture governing the Notes. Holders of approximately 83% of the Notes have committed to tender their Notes in the Exchange Offer and consent to the proposed amendments in the Consent Solicitation. The Exchange Offer will expire at 5:00 p.m. (EDT) on Monday, May 4, 2009, unless extended by EPIX with the consent of the holders of 75% in outstanding principal amount of the Notes. Tenders of the Notes must be made before the Exchange Offer expires and may be withdrawn at any time before the Exchange Offer expires. The Exchange Offer is conditioned upon the valid tender of at least 93% of the aggregate principal amount of the outstanding Notes. This condition may be modified by EPIX with the consent of the holders of 75% in outstanding principal amount of the Notes. The Exchange Offer is also subject to several other conditions. Further details about the terms, conditions, risk factors, tax considerations and other factors that should be considered in evaluating the Exchange Offer and Consent Solicitation are set forth in an Offer to Exchange and a related Letter of Transmittal, which are expected to be distributed to holders of the Notes beginning today. If EPIX is unable to restructure its obligations under the Notes, it may be forced to seek protection under the United States bankruptcy laws. It is expected that written materials explaining the full terms and conditions of the Exchange Offer will be filed with the Securities and Exchange Commission later today. The materials are available free of charge at the SEC's website - www.sec.gov. In addition, EPIX will provide copies of these documents free of charge to holders of its outstanding Notes upon request to EPIX at (781) 761-7600 or from the exchange agent, U.S. Bank National Association, at (800)-934-6802. The shares of common stock issuable in the Exchange Offer have not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities law and, unless so registered, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This news release is for informational purposes only, and is not an offer to buy or the solicitation of an offer to sell any security. The Exchange Offer and Consent Solicitation are being made only pursuant to the Exchange Offer documents that are being distributed to the holders of the Notes and filed with the Securities and Exchange Commission. About EPIX Pharmaceuticals EPIX Pharmaceuticals, Inc. (NASDAQ:EPIX), is a biopharmaceutical company focused on discovering and developing novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform. The company has a pipeline of internally-discovered drug candidates currently in clinical development to treat diseases of the central nervous system -- see http://www.trialforAD.com/-- and lung conditions. EPIX also has collaborations with leading organizations, including GlaxoSmithKline, Amgen and Cystic Fibrosis Foundation Therapeutics. FEDERAL-MOGUL CORPORATION: Moody's Cuts Corporate Rating to 'B1' ---------------------------------------------------------------- Moody's Investors Service has lowered the ratings of the Federal- Mogul Corporation -- Corporate Family and Probability of Default Ratings, to B1 from Ba3. In a related action, the ratings of the senior secured term loans were lowered to Ba3 from Ba2, and the Speculative Grade Liquidity Rating was affirmed at SGL-2. The rating for the senior secured asset based revolver was affirmed at Ba2. The outlook is stable. The lowering of Federal-Mogul's Corporate Family to B1 reflects the company's weakened credit metrics as a result of the dramatic decline of global automotive production and the impact of the global recessionary environment on consumer spending. Moody's expects that these conditions will result in credit metric unsupportive of a Ba rating over the intermediate term. The ratings also reflect the company's strong competitive position and product lines within the automotive supplier industry. Federal- Mogul's aftermarket business represents about 38% of revenues, which should provide some stability to offset production volume declines in the company's original equipment business (62% of revenues). The general fundamentals of the automotive aftermarket, such as a large vehicle base and higher average vehicle age, should continue to benefit the company over the long- term. Federal-Mogul indicates that no individual customer accounted for more than 6% of the company's sales during 2008. The stable outlook considers that while the risk of further reductions in global OEM production continues over the near-term, Federal-Mogul is expected to maintain sufficient operating flexibility to manage through the current trough. The company has no major debt maturities over the intermediate term and the senior secured credit facilities do not have financial maintenance covenants. Federal-Mogul has taken actions to mitigate the OEM production declines including a 26% workforce reduction since July 2008, plant and distribution center closures, shortened work weeks, and other actions. Moody's expects the market for automotive aftermarket parts to benefit from current OEM industry conditions, as consumers hold on to cars for longer periods. For fiscal 2008, the company's EBITA/Interest expense was 1.5x (including Moody's Standard adjustments) and Debt/EBITDA was 5.2x (4.0x, net of cash). The company's credit metrics are expected to remain under pressured for the assigned rating over the near-term. Federal-Mogul's B1 Corporate Family Rating and stable outlook are supported by the company's good liquidity profile over the next twelve months. Cash on hand at 12/31/08 was approximately $888 million. Industry conditions are expected to pressure free cash flow generation over the near-term. However, the company's term loans have nominal amortization requirements over the next twelve months. As such, the company's $540 million asset based revolver is expected to continue to be largely undrawn over the near-term. Outstanding letters of credit at 12/31/08 were approximately $57 million. The senior secured credit facilities do not have financial maintenance covenants. Federal-Mogul has limited alternate liquidity, as the senior secured credit facilities are secured by essentially all of the company's domestic subsidiaries' personal property (including 66% of the stock of certain first-tier foreign subsidiaries) and certain real property. The asset based revolving credit is rated Ba2. In a January 2008 Special Comment, Moody's outlined the changes to its Loss-Given- Default methodology to differentiate the favorable recovery experience of asset-based loans relative to other types of senior secured first-lien loans. The terms of Federal-Mogul's ABL meet the eligibility requirements outlined in the Special Comment and, therefore, its rating is Ba2, which is one notch higher than it otherwise would have been. These ratings were lowered: -- Corporate Family Rating, to B1 from Ba3; -- Probability of Default Rating, to B1 from Ba3; -- $1.0 billion senior secured term loan facility December 2015, which includes a $50 million senior secured synthetic letter of credit facility and a $0.95 billion senior secured term loan, to Ba3 (LGD3, 37%) from Ba2 (LGD3, 42%) -- $1.96 billion senior secured term loan December 2014, to Ba3 (LGD3, 37%) from Ba2 (LGD3, 42%); These ratings were affirmed: -- Ba2 (LGD2, 29%) rating for the $540 million senior secured asset based revolver; -- The Speculative Grade Liquidity Rating of SGL-2 The last rating action on Federal-Mogul was on January 8, 2008 when the Ba3 Corporate Family Rating was assigned. Future events that have potential to drive Federal-Mogul's outlook or ratings higher would result from operating performance leading to improvements in EBITA/Interest coverage to over 2.0x, or in leverage approaching 4.0x. Future events that have potential to drive Federal-Mogul's outlook or ratings lower include decreasing aftermarket volumes or profitability, further production volume declines at the company's OEM customers, material increases in raw materials costs that cannot be passed on to customers or mitigated by restructuring efforts, or deteriorating liquidity. Consideration for a lower outlook or rating could arise if any combination of these factors were to increase leverage, or result in EBITA/Interest coverage consistently below 1.5x times. Federal-Mogul Corporation, headquartered in Southfield, Michigan, is a leading global supplier of vehicular parts, components, modules and systems to customers in the automotive, small engine, heavy-duty, marine, railroad, aerospace and industrial markets. The company's primary operating segments are: Powertrain - Energy, Powertrain Sealing and Bearings, Vehicle Safety and Protection, and Global Afermarket. Federal-Mogul offers market-leading products for original equipment and aftermarket applications. Annual revenues approximate $6.9 billion. FORD MOTOR: Completion of Tender Offers Cue S&P's 'SD' Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said it has lowered its corporate credit and other ratings on Ford Motor Co., reflecting the completion of tender offers for Ford debt. S&P lowered the corporate credit rating to 'SD' (selective default) and certain issue ratings to 'D'. The rating actions are consistent with S&P's previously published intentions. As S&P stated previously, S&P considers the completion of the tender offers to be distressed exchanges and, as such, are tantamount to defaults under S&P's criteria. S&P expects to assign a new corporate credit rating on Ford by mid-April. The new rating will be based on S&P's assessment of the company's new capital structure and liquidity profile, as well as Ford's business prospects and other relevant rating considerations, including S&P's view of the effect of any assistance the U.S. government may provide. Ford is not seeking government loans but has requested a standby credit line of up to $9 billion to protect its liquidity against further market deterioration. "The tender offers will reduce debt and lower interest costs, and Ford has stated that annual interest savings will be more than $500 million," said Standard & Poor's credit analyst Robert Schulz. "However, even with this debt reduction, our preliminary expectation is that the new corporate credit rating will likely not be higher than the 'CCC' category initially because S&P believes Ford's fundamental business risks remain unchanged for at least the rest of 2009 and perhaps longer: most notably, deteriorating vehicle demand globally and the substantial execution risk of the ongoing restructuring," he continued. The offers for Ford debt were conducted by Ford Motor Credit Co. (Ford Credit), with the exception of a conversion of convertible notes, which was conducted by Ford. Ford Credit and Ford used $2.4 billion in cash and approximately 468 million shares of Ford common stock to reduce Ford's automotive debt by $9.9 billion, from $25.8 billion at Dec. 31, 2008. The counterparty credit ratings and issue-level ratings on Ford Credit (CCC+/Negative/--) and FCE Bank PLC (B-/Negative/--) remain unchanged. S&P expects the differential between the issuer credit ratings on Ford and Ford Credit to be temporary because S&P still considers Ford Credit's default risk to be indistinguishable from that of its parent, in accordance with S&P's criteria on captive finance subsidiaries. Ford Credit used $1 billion in cash to purchase and retire the $2.2 billion principal amount of Ford's secured term loan debt, and another $1.1 billion in cash to retire the $3.4 billion principal amount of Ford's unsecured, nonconvertible debt. Ford purchased $4.3 billion principal amount of the company's 4.25% senior convertible notes due 2036 using common equity and $344 million in cash. Ford previously indicated that all debt acquired by Ford Credit through the tender offers will be retired. FRONTIER COMMUNICATIONS: Fitch Puts 'BB' Rating on $600 Mil. Debt ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to Frontier Communications Corporation's offering of $600 million of 8.25% senior unsecured debt due 2014. Proceeds will be used to reduce, repurchase or refinance indebtedness or for general corporate purposes. In addition to assigning a rating to the current offering, Fitch has withdrawn the ratings assigned to Commonwealth Telephone Enterprises, Inc., as shown below, due to the repayment of its debt. Frontier's Rating Outlook is Stable. Frontier's 'BB' rating incorporates Fitch's expectation for the company to maintain, if not improve, its credit metrics, to sustain strong operating margins in the near term, and to have access to ample liquidity. In the near-term, operating margins are expected to remain relatively strong as cost controls remain an ongoing area of focus, with the resultant operating cash flows and a lower capital budget contributing to solid free cash flows. These positive attributes are balanced against the risks posed by emergence of greater economic pressures in late 2008 and the continuing effects of greater competition. An additional constraining factor is the potential for reform of universal service and intercarrier compensation in late 2009, at the earliest, but more likely in 2010. Fitch also notes that Frontier historically has prudently managed its maturity schedule, and expects a similar approach as it addresses its next major maturities, which amount to approximately $1.1 billion, in 2011. Fitch believes that free cash flows, combined with the current offering, could be used to partly address the 2011 maturities and materially reduce refinancing risk. With regard to 2009 expectations, Frontier has stated it will look for opportunities to reduce leverage and may look at retiring existing debt issues. Fitch believes, even without the retirement of existing issues, net debt leverage could decline in 2009, as its cash position will build as the company has no plans to institute a common stock repurchase program as it has done in recent years. With regard to specific targets, Frontier has indicted a desire to reduce net debt leverage in the longer term to the 3.2 times (x) to 3.3x range. In 2008, leverage on a net debt basis was just under 3.8x, and at 3.9x, Frontier's gross debt-to-EBITDA was slightly higher than the 3.8x recorded in 2007. The company's guidance calls for pre-dividend free cash flow (as defined by the company) to be in the range of $460 million to $485 million, and capital spending to range from $250 million to $270 million. Fitch will monitor Frontier's progress in reducing leverage, as well as efforts to address its 2011 debt maturities. Although Fitch does not anticipate a near-term change in Frontier's recently stated financial policies, Fitch would be concerned if such policies were to be materially changed, in light of its upcoming maturity schedule and the current financial market environment. Competition from cable telephony and wireless operators has pressured Frontier's revenues, and there is rising pressure as well from the recessionary economy. Frontier estimates approximately 65% of its access lines are exposed to cable- provided voice services. To retain and attract customers, Frontier is aggressively bundling high-speed data and video services. In 2008, customer-based revenues were relatively stable, although there was some increased pressure in the fourth quarter that partly offset growth in the earlier part of the year. While customer revenues have been somewhat stable, in 2008 Frontier experienced larger revenue declines from high-margin regulatory-derived sources such as universal service fund receipts and switched access services. Fitch notes that Frontier is likely to continue to evaluate acquisitions as a use of capital. However, management has changed its criteria and has stated that they would not lever up to make an acquisition and could potentially look at opportunities where they would be able to delever. Total debt at Dec. 31, 2008 was $4.726 billion, down approximately $14 million from year-end 2007. Liquidity is good with an undrawn, $250 million senior unsecured credit facility in place until May 2012 and $164 million in cash at Dec. 31, 2008. There are no material maturities until 2011, when approximately $1.1 billion in debt matures. Frontier completed its $200 million share repurchase program, announced in February 2008, in October 2008. Free cash flow (net cash provided by operating activities less capital spending and dividends) was approximately $133 million. Fitch has withdrawn these ratings due to repayment: Commonwealth Telephone Enterprises, Inc. -- Issuer Default Rating 'BB'; -- Convertible Notes 'BB'. FRONTIER COMMUNICATIONS: S&P Affirms 'BB' Rating on 2014 Notes -------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'BB' issue-level rating on Stamford, Connecticut-based Frontier Communications Corp.'s senior unsecured notes due 2014, which was upsized to $600 million from $300 million. The '3' recovery rating on the notes remains unchanged and indicates the expectation for meaningful (50%-70%) recovery in the event of payment default. Proceeds will be used for general corporate purposes, including the repayment of existing debt. Pro forma for this issue, total funded debt is about $5.3 billion. At the same time, S&P affirmed all ratings on Frontier Communications, including the 'BB' corporate credit rating. The outlook is stable. "Wireless substitution and cable telephony competition continue to pressure Frontier Communications' customer base," said Standard & Poor's credit analyst Allyn Arden. "We believe the company will face greater competition as cable operators continue to deploy less expensive Internet Protocol telephony service in rural markets," he added. Frontier Communications' overlap with cable telephone service is about 65% currently. "As a result," said Mr. Arden, "we believe that access-line losses will accelerate despite the company's promotional efforts to retain customers." In the December 2008 quarter, line losses were 7.2%, up from 6.7% in the previous quarter. GEHL CO: Breaches Banking Pacts, May File for Ch. 11 Bankruptcy --------------------------------------------------------------- Gehl Co. may have to file for Chapter 11 bankruptcy protection, after breaches in banking covenants, USAgNet reports, citing French manufacturer and owner Manitou. According to USAgNet, Manitou said that it will start talks with its bankers and also those of Gehl. Gehl's banks demanded early repayment of financing on March 31, 2009, USAgNet states, citing Manitou. The report quoted Manitou as saying, "In these circumstances and in view of the negative earnings outlook for 2009, the group is pursuing discussions with its banking partners in the United States and Europe with the aim of securing the financing of Gehl while continuing to contain the risk in the United States." Wisconsin-based Gehl Co. is a U.S. specialist in compact equipment, particularly for the construction and agriculture markets, producing telehandlers and skid steer loaders and other equipment. GENERAL MOTORS: Works With Segway to Develop Scooter ---------------------------------------------------- General Motors Corp. is working with Segway to develop an electrically powered, two-seat prototype vehicle that has only two wheels. GM, according to Sharon Terlep at The Wall Street Journal, is seeking to generate enthusiasm for its increasingly uncertain future. WSJ states that GM has cut product-development programs, advertising and spending on auto-show events. WSJ says that GM believes that P.U.M.A.'s (Personal Urban Mobility and Accessibility) more car-like traits will lead to better results. According to the report, GM didn't say how much the machines would cost, but research chief Larry Burns said owners would spend one- third to one-fourth of the cost of a traditional vehicle. WSJ reports that GM said that it aims to develop the vehicle by 2012. The vehicle, says WSJ, would run on batteries and use wireless technology. The new vehicle could allow people to travel around cities more quickly, safely, quietly and cleanly, and at a lower total cost. The vehicle also enables design creativity, fashion, fun and social networking. Project P.U.M.A. combines several technologies demonstrated by GM and Segway, including electric drive and batteries; dynamic stabilization (two-wheel balancing); all-electronic acceleration, steering and braking; vehicle-to-vehicle communications; and autonomous driving and parking. Those technologies integrate in Project P.U.M.A. to increase mobility freedom, while also enabling energy efficiency, zero emissions, enhanced safety, seamless connectivity and reduced congestion in cities. 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. General Motors Corp. admitted in its viability plan submitted to the U.S. Treasury on February 17 that it 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 GM's viability plan is available at: http://researcharchives.com/t/s?39a4 The U.S. Treasury and U.S. President Barack Obama's automotive task force are currently reviewing the Plan, which requires an additional $16.6 billion on top of $13.4 billion already loaned by the government to GM. As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: Speeds Up Preparations for Possible Bankruptcy -------------------------------------------------------------- General Motors Corp. is speeding up preparations for a possible bankruptcy filing, Jeff Green at Bloomberg News reports, citing people familiar with the matter. According to Bloomberg, the sources said that preparations include creating a new company from GM's best assets if necessary, and looking at a 363 sale -- a reference to a section of the Chapter 11 bankruptcy code that would help form a new automaker from the assets and brands of GM to increase the Company's chances of survival. GM will meet with Treasury officials this week to review new restructuring proposals, Bloomberg states, citing a person familiar with the matter. Saab Eyes 20 Possible Buyers GM's Swedish unit, Saab Automobile, said in court documents that it has as many as 20 possible buyers. Saab has started talks with around 20 different parties interested in acquiring the Company, Reuters reports, citing Guy Lofalk, a court-appointed administrator. According to Reuters, Mr. Lofalk said that Saab hopes to reach a deal by June 2009, shortly after its bankruptcy protection would end. Reuters relates that the court granted Saab an extension to its Chapter 11 bankruptcy protection. Reuters quoted a Swedish court official as saying, "The court has decided that the reconstruction can continue until May 20 at the latest, if no other decision is taken before then." None of Saab's creditors objected to its reorganization plan, which calls for the creditors to write-off 75% of its $1.34 billion debt, of which GM owns over 90%, Reuters states. According to court documents, the debt deal will be completed in July 2009 and the first payments will be made a year later. Reuters says that Saab's plan will require an infusion of about $1 billion to complete. Reuters states that about $400 million will come from GM in the form of production equipment and debt write- offs, while Saab hopes to raise $600 million from the European Investment Bank. Saab's Plan calls for the Company to boost efficiency in its plants, dropping its break-even point to 130,000 vehicles per year from the current 150,000, Reuters reports. Daewoo Posts KRW875.69 billion Net Loss in 2008 Dow Jones Newswires reports that GM's South Korean subsidiary, GM Daewoo Auto & Technology Co., posted a KRW875.69 billion net loss in 2008, compared to a net profit of KRW540.51 billion in 2007, due to low demand and investment losses. High oil prices in 2008 led to reduced sales of SUVs, while increasing manufacturing costs and volatile foreign exchange rates took their toll on profits, Dow Jones states, citing GM Daewoo's Vice President Jay Cooney. According to Dow Jones, GM Daewoo's operating profit dropped 39% to KRW290.31 billion in 2008, from KRW472.27 billion in 2007. Sales dropped 1.6% to KRW12.310 trillion from KRW12.514 trillion, Dow Jones says. GM Daewoo, Dow Jones relates, said that it may suffer liquidity problems in the second quarter 2009. It is negotiating with the Korean government to secure short-term financial support, according to Dow Jones. South African Arm To Cut 700 Jobs Dow Jones state that a spokesperson of GM's South African unit said that the firm will lay off about 700 employees, after market conditions deteriorated further in the early part of this year. Dow Jones quoted General Motors South Africa communications manager Denise van Huyssteen as saying, "We anticipate terminating the services of temporary contract employees, extending the voluntary separation plan to all employees and, as a last resort, implementing forced retrenchments." General Motors South Africa would proceed with lay offs after consulting with the industry union and other worker representatives, Dow Jones says, citing Mr. van Huyssteen. 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 November 10, 2008, General Motors Corporation's balance sheet at September 30, 2008, showed total assets of $110.425 billion, total liabilities of $170.3 billion, resulting in a stockholders' deficit of $59.9 billion. General Motors Corp. admitted in its viability plan submitted to the U.S. Treasury on February 17 that it 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 GM's viability plan is available at: http://researcharchives.com/t/s?39a4 The U.S. Treasury and U.S. President Barack Obama's automotive task force are currently reviewing the Plan, which requires an additional $16.6 billion on top of $13.4 billion already loaned by the government to GM. As reported in the Troubled Company Reporter on November 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 November 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 $16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: Levin Says Bondholders Will Be Wiped Out in Ch. 11 ------------------------------------------------------------------ Tina Seeley and Peter Cook of Bloomberg News report that according to U.S. Representative Sander Levin, General Motors Corp. bondholders have been holding back from talks on the company's restructuring and are "terribly misguided" if they think they will get a better deal through a bankruptcy filing. "Bankruptcy would wipe them out," Mr. Levin, a Michigan Democrat, said in an interview dated April 6 on Bloomberg Television. According to Bloomberg, GM, the largest U.S. carmaker, is trying to craft a new strategy for financial viability that cuts debt and boosts cash flow. The U.S. government ordered the company to come up with a plan by June to justify taxpayer aid that is keeping GM alive. Bondholders are "holding back" on the assumption that bankruptcy would be better for them, while "labor is back at the table, making concessions," Mr. Levin said. "It is essential that the automobile industry survive, but everyone has to pitch in and help," said Mr. Levin. As reported by the Troubled Company Reporter on March 23, 2009, an ad hoc group of holders of General Motors Corp. bonds cast doubt on the viability of the five-year restructuring plan that GM presented to the U.S. Department of the Treasury on February 17, 2009. In a letter dated March 22, 2009, addressed to Treasury Secretary Timothy Geithner and advisors to the Presidential Task Force on the Auto Industry, the bondholders expressed concern that GM is putting too much faith in a near-term turnaround in the economy that would enable annual auto sales to reach previous levels. GM bondholders have been asked to swap 2/3 of the value of their bonds for stake in the Company. "We do not know if the plan would, in fact, keep the company out of bankruptcy (in which case the securities received by bondholders in an exchange would likely be worthless and the retirement funds and others who counted on these securities would be left with nothing)," according to the letter prepared by the group's advisors Houlihan Lokey Howard & Zukin Capital, Inc., and Paul, Weiss Rifkind, Wharton & Garrison, LLP. The letter added, "It appears a purely arbitrary decision was made in December as to what bondholders would receive. All other parties involved in the restructuring process will walk away with far more. Many will be paid in full. It is unclear why it was decided that GM's bondholders should bear the greatest risk here." On March 5, the group's advisors presented to the Presidential Task Force a framework for constructing a debt-to-equity exchange. The bondholders believe their own framework is consistent with the government's restructuring objectives under the terms of the UST brige loan; and provides the best chance of completing the out-of- court restructuring desired by all parties by securing the necessary high level of acceptance among GM's bondholders. "It is only with this high level of acceptance from the thousands of holders of $28 billion of GM debt that GM can successfully be restructured out of court," the letter said. The bondholders had noted that their own framework will be accepted by institutional investors who hold roughly 80% of GM unsecured debt; and from retail investors, who hold the remaining 20% and who bought GM bonds in small blocks. The group had said neither GM nor the auto task force has responded to the group's proposal. The group had indicated they're open for discussions. 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. General Motors Corp. admitted in its viability plan submitted to the U.S. Treasury on February 17 that it 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 GM's viability plan is available at: http://researcharchives.com/t/s?39a4 The U.S. Treasury and U.S. President Barack Obama's automotive task force are currently reviewing the Plan, which requires an additional $16.6 billion on top of $13.4 billion already loaned by the government to GM. As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: Saab Unit Attracts 20 Potential Bidders ------------------------------------------------------- Bloomberg News' Niklas Magnusson reports that more than 20 "active parties" are interested in the Swedish carmaker Saab Automobile as it seeks a new owner to emerge from bankruptcy protection by June. The Company has drawn interest from Swedish and international carmakers as well as financial investors, Saab management said at a press conference dated April 6 after a court hearing in Vaenersborg, southern Sweden. According to Bloomberg News, Saab creditors agreed to extend the company's reorganization to May 20, giving it three months to restructure after the bankruptcy filing. Saab Chief Executive Officer Jan-Aake Jonsson said he will return the company to its "roots" with four new models in the next 18 months that peddle Saab's engineering and safety heritage and promote the company's turbo-charged engines. Saab predicted it will make fewer cars in 2009 and 2010 than the 93,000 produced last year, and that it needs to make 130,000 cars to break even, Bloomberg said. "We face a number of challenges. Saab has always had a very thin product base, which has always been an Achilles Heel for Saab. We also have very long life cycles for our products," Mr. Jonsson said at the court hearing. Bloomberg relates that Saab sought protection from creditors six weeks ago after parent General Motors Corp. said it would sever ties with the division by the start of next year at the latest. GM has claims on Saab of 9.6 billion kronor ($1.2 billion) after taking over other creditors' claims, the companies said. Saab will propose all creditors, including GM and the Swedish state, write down claims by 75%, bankruptcy lawyer Guy Lofalk said. 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. General Motors Corp. admitted in its viability plan submitted to the U.S. Treasury on February 17 that it 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 GM's viability plan is available at: http://researcharchives.com/t/s?39a4 The U.S. Treasury and U.S. President Barack Obama's automotive task force are currently reviewing the Plan, which requires an additional $16.6 billion on top of $13.4 billion already loaned by the government to GM. 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. GLOBAL MOTORSPORT: Wants Plan Filing Period Extended to July 31 --------------------------------------------------------------- Global Motorsport Group, Inc., et al., asks the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive period to propose a plan to July 31, 2009, and their exclusive period to solicit acceptances of a plan to September 30, 2009. This is the Debtors' fourth request for an extension of their exclusive periods. As reported in the Troubled Company Reporter on March 12, 2008, the Debtors obtained approval of the sale of substantially of their assets to Dae-II USA, Inc., for $16 million. The sale closed on March 7, 2008. The Debtors tell the Court that they, together with the Official Committee of Unsecured Creditors and secured lender Ableco Finance LLC, have agreed on the essential terms of a plan, and have now executed a term sheet memorializing the terms of that agreement. About Global Motorsport Headquartered in Morgan Hill, California, Global Motorsport Group Inc. -- http://www.gmgracing.com/home.shtml-- is a dealer of European model sports cars. The company is also known as Global Motorsport Parts Inc. The Company and three of its affiliates filed for protection on January 31, 2008 (Bankr. D. Del. Lead Case No. 08-10192). Laura Davis Jones, Esq., James O'Neill, Esq., and Joshua Fried, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. T. Scott Avil, Esq., at CRG Partners Group LLC, is the Debtors' restructuring services provider. Federico G.M. Mennella, Esq., at Lincoln International Advisors, LLC, is the Debtors' investment banker. The Debtors selected Epiq Bankruptcy Solution LLC as their claims agent. The U.S. Trustee for Region 3 has appointed five creditors to serve on an Official Committee of Unsecured Creditors in these cases. The Committee selected Fox Rothschild LLP as its new counsel. Edward T. Gavin, CTP, at NachmanHaysBrownstein, Inc., is the Committee's financial advisor. Adam Harris, Esq., and David Hillman, Esq., at Schulte Roth & Zabel LLP, serve as counsel to the prepetition and postpetition secured lenders. 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. GREENWICH ASSOCIATION: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Greenwich Association, Inc. 1470 NE 123rd Street Miami, FL 33161 Tel: (305) 895-0191 Bankruptcy Case No.: 09-15499 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Laurel M. Isicoff Company Description: The Debtor is a condominium association. See http://greenwichcondominium.tripod.com/ Debtor's Counsel: Douglas J. Snyder, Esq. 7901 SW 67th Ave. # 206 South Miami, FL 33143 Tel: (305) 663-0740 Email: djspa@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The petition was signed by Maria Lidia Da Cunha, president of the Company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-15499.pdf HARVEST OIL: Wants to Hire Adams and Reese as Counsel ----------------------------------------------------- Harvest Oil and Gas LLC and its debtor-affiliates ask the United States Bankruptcy Court for the Western District of Louisiana for authority to employ Adams and Reese LLP as their counsel. The firm is expected to: 1) assist the Debtors in the preparation, filing and approval of a disclosure statement and plan of reorganization; 2) appear in the Court to protect the interest of the Debtors; 3) represent and advise the Debtors in connection with the use of cash collateral and obtaining debtor-in-possession financing; 4) advise the Debtors concerning and assisting with the negotiation and documentation of a DIP financing agreements, cash collateral orders, and any related transaction or documents; 5) investigate the nature and validity of liens asserted against the Debtors' properties, and advise the Debtors regarding the enforceability of the liens; 6) investigate and advise the Debtors regarding, and taking such actions as may be necessary to collect the Debtor's income and assets in accordance with applicable law and to recover property for the benefit of the estates; 7) assist the Debtor in the disposition of their assets, through this proceeding which they no longer need in the operation of their business, if any; 8) advise and assist the Debtors regarding exectory contract and unexpired lease assumptions, assignments and rejections, restructuring and recharacterizations; 9) assist the Debtors in reviewing , estimating and resolving claims asserted against the estates; 10) represent, advise, counsel and assist the Debtors in all litigation, whether brought by the Debtors or against the Debtors; and 11) perform all legal services for the Debtors which may be necessary and appropriate in these cases; The firm's professionals assigned to represent the Debtors and their hourly rates are: Professional Hourly Rate ------------ ----------- Robin B. Cheatham, Esq. $375 John M. Duck, Esq. $375 Lisa, M. Hedrick, Esq. $270 JoAnn J. Courcelle, Esq. $250 Scott R. Cheatham, Esq. $235 Shana A. Stumpf, Esq. $205 Law Clerks/Paralegals $110-$150 John M. Duck, Esq., an attorney and capital 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 Adams and Reese, the Debtors are also seeking the Court's permission to employ certain professionals to assist them in their restructuring efforts, including: Schully, Robert, Slattery & Marino as special counsel; Michael W. Sanders as general corporate counsel, and securities and exchange commission counsel; Suzanne Ambrose and Ambrose Consulting LLC as financial advisor; and Calvin Kilonzo as accountant. Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC -- http://www.harvest-oil.com/-- is engaged on acquisition, development and exploration of energy resources. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. W. D. La. Lead Case No. 09-50397). The Debtors listed estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. HARVEST OIL: Wants Schedules & SOFA Filing Extended Until May 15 ---------------------------------------------------------------- Harvest Oil & Gas LLC and its debtor-affiliates ask the United States Bankruptcy Court for the Western District of Louisiana to extend until May 15, 2009, the time to file: -- a list of names and addresses of its equity holders; -- schedules of assets and liabilities, schedule of current income and expenditures, schedule of executory contracts and unexpired leases; and -- statement of financial affairs. Given the substantial size and scope of the Debtors' businesses; the complexity of their financial affairs, the limited staffing to perform the required internal review of their accounts and affairs; and the limited time available prior to the commencement of these cases, the Debtors will be unable to assemble all information necessary to complete and file the lists by the April 15 deadline. The Debtors relate that the extension is necessary for the efficient and orderly administration of these cases. Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC -- http://www.harvest-oil.com/-- is engaged on acquisition, development and exploration of energy resources. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. W. D. La. Lead Case No. 09-50397). Robin B. Cheatham, Esq., at Adams & Reese LLP represents the Debtors in their restructuring efforts. The Debtors listed estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. HILITE INTERNATIONAL: Moody's Downgrades Default Rating to 'Caa2' ----------------------------------------------------------------- Moody's Investors Service downgraded Hilite International, Inc.'s ratings, including its Probability of Default rating to Caa2 from Caa1. All ratings will be subsequently withdrawn for business reasons. The downgrade of PDR reflects the continuously depressed production level in the automobile industry on a global basis, which would likely persist in 2009 and in turn affect Hilite's already weak operating performance and credit metrics in the medium term. The Caa2 also considers the company's weak liquidity position, in particular concerns on its ability of remaining covenant compliant as cash flow generation deteriorates. These ratings were downgraded and will be withdrawn: Hilite International, Inc. * Corporate Family Rating -- to Caa2 from Caa1 * Probability of Default Rating --to Caa2 from Caa1 Hilite Germany GmbH & Co. KG * $95.0 million first lien senior secured term loan --to B3(LGD3, 30%) from B2(LGD3, 30%) * $70.0 million second lien term loan -- to Caa3(LGD5,80%) from Caa2(LGD5, 80%) Hilite Industries, Inc * $25.0 million multi-currency revolving credit facility -- to B3(LGD3, 30%) from B2(LGD3, 30%) * Rating outlook: negative The last rating action on Hilite occurred on November 3, 2008 when its CFR was downgraded to Caa1 with negative outlook. Hilite, headquartered in Cleveland, Ohio, is a designer and manufacturer of highly-engineered, valve-based components, assemblies, and systems used principally in powertrain (engine and transmission) applications for the automotive market. Major products include camphasers, diesel valves, cylinder deactivation valves, SCR emissions control units for heavy duty truck applications, solenoid valves, proportioning valves, and clutch assemblies. The company's annual revenues approximate $460 million. HOUSTON PROMENADE: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Houston Promenade Associates I. Ltd. 7373 E. Doubletree Ranch Road #225 Scottsdale, AZ 85258 Bankruptcy Case No.: 09-32395 Chapter 11 Petition Date: April 6, 2009 Court: Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Rogena Jan Atkinson, Esq. rogena@rjabankruptcy.com The Law Offices of RJ Atkinson LLC 3617 White Oak Dr Houston, TX 77007 Tel: (713) 862-1700 Fax: (713) 862-1745 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by Raymond G. Tiedje, president of Milenium Development Corp. IDEARC INC: Gets Initial Nod for Fulbright & Jaworski as Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas granted authority, on an interim basis, Idearc Inc. and its debtor-affiliates to employ Fulbright & Jaworski L.L.P. as counsel. Fulbright is expected to: a) take all necessary actions to protect and preserve the Debtors' estates, including, if required by the facts and circumstances, the prosecution of adversary proceedings and other actions and matters on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes, including litigation, in which the Debtors are involved, and the preparation of objections to, or motions to estimate, claims filed against the Debtors' estate where appropriate; b) provide legal advice with respect to the Debtors' rights, powers, and duties as debtors-in-possession in the continued operation of their respective businesses and the management of their properties; c) prepare on behalf of the Debtors all necessary motions, applications, complaints, answers, orders, reports, notices, schedules, and any other pleadings and legal documents in connection with matters effecting the administration of the Debtors and their bankruptcy estates, and the prosecution of the Cases; d) assist the Debtors in connection with any disposition of the Debtors' assets, whether by sale or otherwise; e) assist the Debtors in the negotiation, preparation, confirmation and consummation of a plan of reorganization or liquidation, the preparation of a disclosure statement in respect thereof, and in the preparation and execution of all related documents and transactions; f) appear before the Court, any appellate courts and the United States Trustee to protect the interests of the Debtors and their bankruptcy estates before the courts and the United States Trustee; and g) perform all other necessary legal services that the Debtors may request in connection with these Cases and pursuant to the Bankruptcy Code. Toby Gerber, Esq., a partner at Fulbright, told the Court that his hourly rate is $850 per hour and the hourly rates of other professionals working in these cases are: Partners $450 - $850 Senior Counsel, Counsel and Associates $195 - $725 Legal Assistants and Support Staff $105 - $325 Mr. Gerber related that for the period preceding the commencement of these cases, Fulbright received payments in the aggregate amount of approximately $3,173,251 from the Debtors for professional fees and expenses incurred with respect to various legal matters. Prior to the petition date, Fulbright also received $2,500,000 retainer for legal services, and for reimbursement of expenses incurred in representing the Debtors in connection with these Chapter 11 cases. Mr. Gerber assured the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Gerber can be reached at: Fulbright & Jaworski L.L.P. 2200 Ross Avenue, Suite 2800 Dallas, TX 75201-2784 Tel: +1 214 855 8000 Fax: +1 214 855 8200 The Court also ordered that this Interim Order will become a final order on the 20th day after the entry of the Interim Order without further notice or hearing unless an objection to the Interim Order is timely filed with the Court and served on Fulbright on or before the 20th day after entry of this Interim Order. About Idearc Inc. Headquartered in DFW Airport, Texas, Idearc Inc. (NYSE: IAR) -- http://www.idearc.com/-- fka Verizon Directories Disposition Corporation provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, their information directory for wireless subscribers. The Debtors are the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. The Debtors use the Verizon brand on their print directories in their incumbent markets, well as in their expansion markets. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 31, 2009, (Bankr. N. D. Tex. Lead Case No. 09- 31828) The Debtors propose Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. INDIANAPOLIS DOWNS: S&P Puts 'B-' Rating on $100 Mil. Facilities ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to Indianapolis Downs LLC's amended and restated $100 million senior secured first-lien credit facilities. The loans, which consist of a $25 million revolving credit facility and $75 million term loan, were rated 'B-' (two notches higher than the 'CCC' corporate credit rating on the company) with a recovery rating of '1', indicating S&P's expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. The corporate credit rating on Indianapolis Downs is 'CCC' and the rating outlook is negative. The 'CCC' rating reflects the company's near-term liquidity concerns, high pro forma debt leverage, heavy interest burden, and reliance on a single property for cash flow generation. Indianapolis Downs owns and operates the Indiana Live! Casino. Ratings List Indianapolis Downs LLC Corporate Credit Rating CCC/Negative/-- New Ratings Indianapolis Downs LLC $25M first-lien revolver due October 2011 B- Recovery Rating 1 $75M first-lien term loan due October 2011 B- Recovery Rating 1 INVERNESS MEDICAL: S&P Gives Positive Outlook; Keeps 'B+' Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Waltham, Massachussetts-based Inverness Medical Innovations Inc. to positive, from stable. At the same time, S&P affirmed its 'B+' corporate credit and other ratings on Inverness. The action reflects the company's reduced leverage, its well- established positions in professional rapid diagnostics, the increase in revenue diversity from the health management business, and S&P's belief that the acquisitive company will continue to use significant equity financing in funding its acquisitions. "The ratings on Inverness Medical Innovations Inc. reflect the company's appetite for growth through acquisitions, the uncertain prospects of its aggressive move into the health management business, and high leverage," said Standard & Poor's credit analyst Arthur Wong. These concerns are partially offset by the company's expanding offerings of professional rapid diagnostic products and management's willingness to use significant equity capital financing. The outlook on Inverness is positive. Should the company demonstrate sustained success at integrating its acquisitions while maintaining leverage in the 4-4.5x range despite an active acquisition program, S&P may raise the ratings over the next year. Given good growth prospects and the possibility for additional operational improvements, S&P expects modest, steady improvements in its credit and operating measures over the near term. However, the company's strategy of offering professional diagnostics tests and health care management services is still recent and unproven. Furthermore, the current recession raises the possibility of lessened demand for Inverness' products and services, given a decline in doctor's office visits and/or companies' eagerness to cut costs. Should any unexpected setbacks in operations and/or the company undertakes significant debt-financed acquisition that would result in leverage consistently above 4.5x, then the outlook would be revised back to stable. JAMIE VERGARA: Schedules $12.8MM in Assets and $32.5MM in Debts --------------------------------------------------------------- Jamie Ruben Vergara filed with the U.S. Bankruptcy Court for the Middle District of Florida his schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $12,625,000 B. Personal Property $240,221 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $12,204,492 E. Creditors Holding Unsecured Priority Claims $330,354 F. Creditors Holding Unsecured Non-priority Claims $20,002,771 ---------- ----------- TOTAL $12,865,221 $32,537,618 A copy of Jamie Ruben Vergara's schedule of assets and liabilities is available at: http://bankrupt.com/misc/JamieVergara.Schedules.pdf Headquartered in Orlando, Florida, Jamie Ruben Vergara filed for Chapter 11 protection on March 9, 2009 (Bankr. M.D. Fla. Case No. 09-02751). Lawrence M. Kosto, Esq., at Kosto & Rotella PA, represents the Debtor as bankruptcy counsel. In his petition, Mr. Vergara listed assets of between $10 and $50 million, and the same range of debts. JANE & COMPANY: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Jane & Company and Jane & Co., Inc., have filed individual petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Court for the District of Delaware. According to Bill Rochelle, the Company said in its "barebones" petition that its assets and debt both exceed $10 million. The bankruptcy filing was necessary due to significant cash liquidity issues faced by Jane arising from the economic crisis that affected retail customers nationwide. Jane has successfully obtained a debtor-in-possession financing commitment from its senior secured lender that will provide funds necessary to continue operating Jane's cosmetic distribution business during the Chapter 11. Jane has annual revenues of approximately $25 million. Chapter 11 will allow Jane to operate its business as a debtor-in-possession while it seeks a sale of Jane and/or its assets or another alternative exit strategy. Drew McManigle has been named Chief Restructuring Officer (CRO) and is leading Jane's business reorganization efforts. Derek C. Abbott and Daniel B. Butz of the Wilmington law firm of Morris, Nichols, Arsht & Tunnell, LLP, represent the debtors-in- possession. Jane & Company's quality cosmetic lines fill a niche between value and more expensive cosmetic brands. Its corporate headquarters and operations are located in Baltimore, Maryland. Baltimore-based Jane & Co., purchased the Jane brand of younger women's cosmetics from Estee Lauder Cos. in 2004. It filed for Chapter 11 on April 6, 2009 (Banrk. D. Del., Case No. 09-11204). JANE & COMPANY: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Jane & Company, Inc. 9611 Pulaski Park Drive, Suite 311 Baltimore, MD 21220 Bankruptcy Case No.: 09-11203 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Jane & Company, LLC 09-11204 GIH-SPE II, LLC 09-11205 Type of Business: The Debtors sells hair and skin care products and accessories. Chapter 11 Petition Date: April 6, 2009 Court: District of Delaware (Delaware) Judge: Kevin J. Carey Debtor's Counsel: Derek C. Abbott, Esq. dabbott@mnat.com Morris, Nichols, Arsht & Tunnell 1201 N. Market Street P.O. Box 1347 Wilmington, DE 19899 Tel: (302) 658-9200 Fax: (302) 658-3989 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Topline Products Company Inc. trade debt $1,673,580 Wayne Plaza 1 145 Route 46 West Tel: (973) 785-8866 Jane Holdings, LLC trade debt $947,096 1407 Broadway, Suite 3200 New York, NY 10018 Tel: (212) 730-7950 Garrett-Hewitt International trade dbet $474,106 (NY) Inc. 228 Danbury Road Wilton, CT 06897 Tel: (203) 834-0746 DMI $381,309 UNIQUE DISPLAY CORP. $336,017 CSR Cosmetic Solutions $322,069 2156619 Ontario Esmin Co., Ltd. $305,081 Cosmolab, Inc. $294,612 Active media services Inc. $288,841 BP PACKAGING, INC. $259,918 Wachtel & Masyr, LLP $225,137 DISPLAY DESIGN & MFG. INC. $201,989 CSI Cosmetic Specialties, Inc. $155,972 Oxygen Development $132,163 Rexam Der Kwei Limited $129,194 Yellow Freight System Inc. $119,008 Arnold & Porter LLP $116,607 Zhong Shan Fong Yang $113,574 Metal Plastics Co. Shya Hsin Int'l $92,435 ALL YOU $76,047 Data Processing Solutions Inc. $71,214 News America Marketing $62,391 Yonyu Plastics Co., Ltd $62,274 Nielsen $61,595 Roadway Express, Inc. $59,404 Kolmar Laboratories Inc. $51,458 Gujarat Glass-Piramal $50,214 Glass-USA Inc. UPS Freight $49,630 Ford Models, Inc. $48,000 Laspataidecaro $46,066 The petition was signed by Drew McManigle, chief restructuring officer. JH&KC ENTERPRISES: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: JH & KC Enterprises, Inc. 17924 Leesville Road Evington, VA 24550 Bankruptcy Case No.: 09-60948 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court Western District of Virginia (Lynchburg) Judge: William E. Anderson Debtor's Counsel: Andrew S. Goldstein, Esq. Magee Foster Goldstein & Sayers P.O. Box 404 Roanoke, VA 24003 Tel: (540) 343-9800 Email: agoldstein@mfgs.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by John R. Hodges, Jr., president of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/vawb09-60948.pdf JOHNSONDIVERSEY INC: Fitch Affirms Issuer Default Rating at 'B-' ---------------------------------------------------------------- Fitch Ratings has affirmed JohnsonDiversey, Inc.'s ratings: -- Senior secured bank credit facilities at 'BB-/RR1'; -- Issuer Default Rating (IDR) at 'B-'. Fitch also downgrades JohnsonDiversey's senior subordinated debt rating to 'B-/RR4' from 'B/RR3'. In addition, Fitch affirms JohnsonDiversey Holdings Inc.'s ratings: -- IDR at 'B-'; -- Senior discount notes at 'CCC/RR6'. The Rating Outlook for both JohnsonDiversey and JohnsonDiversey Holdings Inc. is revised to Negative from Stable. The rating affirmation is supported by JohnsonDiversey's modestly improved profitability and cash flow levels (particularly after adjusting for the builds in restricted cash levels and foreign currency movements), stable debt levels and relatively stable operating performance during the fourth quarter despite deteriorating global economic conditions. The Negative Outlook reflects JohnsonDiversey's continued negative free cash flow levels, weak credit metrics after adjusting for debt levels at the parent company and when viewed against funds from operations (FFO as opposed to EBITDA based metrics) and the potential for deteriorating earnings and cash flow levels stemming from weak global economic conditions. Fitch also continues to be concerned about potential changes in the capital structure of the company stemming from the December 2010 debt maturities and the May 2010 'put' by Unilever. The company is not expected to generate meaningful internally generated cash flows prior to 2010 to support the funding of either the Unilever 'put' or debt maturities. As a result, significant uncertainty in both the bank and broader financial markets serve to further highlight the risks with regard to the company's future capital structure changes. While the company appears to be making progress on its previously announced restructuring plan which it expects to conclude during 2009, Fitch remains concerned that improvements will have little time to be reflected in the company's financial performance prior to the debt maturities and the expiration of the company's credit facility in December 2010. The downgrade of the senior subordinated notes at JohnsonDiversey is a result of the decreased enterprise value due to a lower EBITDA multiple expected in the current economic environment. The lower EBITDA multiple is offset by a modest improvement in EBITDA as well as a lower EBITDA discount resulting from the slightly improved performance at the company. The lower enterprise value provides for a reduced expected recovery value for the subordinated notes. The subordinated notes are expected to have a recovery of 40% or 'RR4'. Fitch's recovery ratings incorporate an evaluation using a distressed EBITDA and a derived multiple reflecting scorecard characteristics for the company and industry; the going concern value remains higher than the asset liquidation value. Recovery prospects for JohnsonDiversey's senior subordinated notes are rated average. JohnsonDiversey is a global player in the industrial and institutional cleaning market and sells its products into these product segments: floor care, foodservice, food processing, restroom/housekeeping, laundry and industrial. JohnsonDiversey is a wholly owned subsidiary of JohnsonDiversey Holdings, which is owned by Commercial Markets Holdco (67%) and Unilever (33%). JohnsonDiversey had $3.32 billion in net sales and Fitch estimated EBITDA of approximately $362 million before one-time charges for the twelve months ending Dec. 31, 2008. JOYA JOHNSON: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Joya O. Johnson 6212 Quebec Place College Park, MD 20740 Bankruptcy Case No.: 09-15257 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Wendelin Lipp Debtor's Counsel: Thomas W. Felder, II, Esq. Law Office of Thomas Felder LLC 10201 Martin Luther King Hwy. Bowie, MD 20720 Tel: (240) 232-9594 Email: thomas@tfelder.com Total Assets: $1,005,646 Total Debts: $1,458,673 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-15257.pdf KANSAS CITY: S&P Affirms 'B' Long-Term Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit rating on Kansas City Southern and removed the ratings from CreditWatch, where they were placed with negative implications on March 24, 2009. The CreditWatch placement followed concerns regarding the company's liquidity position and its deteriorating earnings and cash flow. The outlook is negative. "The rating action reflects decreased concerns regarding the company's liquidity position subsequent to the recent completion of a $200 million bond offering by its Mexican subsidiary," said Standard & Poor's credit analyst Anita Ogbara. Proceeds were used to repay outstanding debt under the Mexican credit facility; effective March 30, 2009, the facility has been terminated. "The completion of the bond offering bolsters liquidity, although liquidity remains constrained. Further, declining volumes and capital expansion plans will hamper financial performance and limit free cash flow during the first half of 2009," the analyst added. Year-to-date 2009, total carload and intermodal unit volumes have been weaker-than-expected, down 6% and 26% in the U.S. and Mexico, respectively. The Kansas City, Missouri-based freight railroad previously announced several cost-reduction measures targeted at reducing operating expenses and maintaining profitability. Still, for the duration of 2009, Standard & Poor's Ratings Services expects further deterioration in revenues and operating performance due to declining volumes and high operating leverage, particularly in Mexico. Given Kansas City Southern's relatively limited scale and end-market diversity, its earnings stability is somewhat weaker than its Class 1 peers. The company's Mexican operations, which represented 44% of consolidated revenues in 2008, have been hampered by weakness in the automotive- and manufacturing-related sectors. Kansas City Southern has been spending a significant amount on capital investments in the past few years, causing debt to remain high and constraining liquidity at times. As of Dec. 31, 2008, credit measures remain consistent with funds from operations to debt (adjusted for operating leases) in the upper-teens percentage area (versus 17% in 2007), and adjusted debt to capital in the mid-50% area (compared with the 57% in 2007). Over the next few years, debt levels are likely to remain relatively unchanged because of ongoing investments in infrastructure and equipment. However, S&P expects the declining tonnage environment and reduced earnings to result in a modest deterioration in credit metrics in 2009. S&P expects Kansas City Southern's operating results and credit measures to deteriorate somewhat in 2009. Liquidity is constrained but adequate. S&P could lower ratings if liquidity becomes further constrained, resulting in consolidated cash and revolver availability falling below its current levels. Given these concerns, S&P considers an outlook revision to stable unlikely in the near term; however, Kansas City Southern has indicated its intent to issue equity, if successful, S&P will assess the impact on liquidity and S&P's rating outlook. KNIGHT-CELOTEX: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Knight-Celotex has been forced to seek the protection of the Court and has filed for Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Illinois. The Knight-Celotex Management Team deemed the action necessary after the Company's accounts were frozen by Bank of America last week. Throughout 2008, the Company voluntarily took steps to ensure the viability of its operations. During that time the company maintained a positive cash flow and paid all principal and interest on time. Despite these efforts, last week Bank of America made the decision not to renew the company's credit facilities and froze the company's accounts. "We believe that filing for Chapter 11 protection provides us with the best opportunity to protect our employees and our operations, while fulfilling our obligations to our customers, vendors and the communities in which we operate," said Knight-Celotex CEO James Knight. Knight-Celotex has retained Crane, Heyman, Simon, Welch & Clar of Chicago for legal counsel. About Knight-Celotex Headquartered in Northfield, Illinois, Knight-Celotex is the largest fiberboard manufacturer in the world and the only U.S. fiberboard manufacturer that both manufactures and ships products nationally within the United States. Knight-Celotex is privately owned by Knight Industries, LLC and has operations in Lisbon Falls, Maine; Sunbury, Pennsylvania; and Danville, Virginia. The Company filed for Chapter 11 on April 6 (Bankr. N.D. Illin., Case No. 09-12200). KNIGHT-CELOTEX: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Knight-Celotex, LLC One Northfield Plaza, #400 Northfield, IL 60093 Bankruptcy Case No.: 09-12200 Type of Business: The Debtor makes insulation sheathing, sound deadening and roofing fiberboard for the residential and commercial construction. See http://www.knightcelotex.com/ Chapter 11 Petition Date: April 6, 2009 Court: Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Scott R. Clar, Esq. sclar@craneheyman.com Crane Heyman Simon Welch & Clar 135 S Lasalle, Suite 3705 Chicago, IL 60603 Tel: (312) 641-6777 Fax: (312) 641-7114 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Landstar Logistics $1,574,997 P O Box 8500-54302 Philadelphia, PA 19178-4302 Hess Corporation $699,612 PO Box 905243 Charlotte, NC 28290-5243 UGI Energy Services Inc. $530,597 C/O Energy services Funding Philadelphia, PA 19182-7032 Corn Products International $334,849 Arrow Trucking Co. $319,961 Norjohn Limited $195,860 New South Lumber Co., Inc. $179,520 Shell Energy North America $172,096 Cypress Truck Lines $169,834 Allen Lund Company $151,997 Newell Norman $151,358 City of Danville $133,537 Division of Central Kamin, LLC $132,884 Durametal Corporation $126,765 Sprague Energy Corp. $114,401 Archer Daniel Midland $111,597 KTM Industries $108,157 Town of Lisbon $134,944 West Motor Freight of PA $107,940 Western express, Inc. $158,623 The petition was signed by Lisa Rogers, vice president shared services. KOBRA PROPERTIES: Court Okays Steven Victor as Chapter 11 Trustee ----------------------------------------------------------------- Roseville Press-Tribune reports that the Hon. Michael S. McManus of the United States Bankruptcy Court for the Eastern District of California has approved a motion to appoint Steven L. Victor of Development Specialists Inc. as Chapter 11 bankruptcy trustee for Kobra Properties and its affiliates. Court documents say that Mr. Victor will oversee Kobra Properties, Vernon Street Associates LLC, Kobra Preserve LLC, and Rocky Ridge Center LLC. Roseville Press relates that Kobra Properties founder Abe Alizadeh had recently filed a comprehensive reorganization plan that would have made Mr. Victor as a chief restructuring officer and abandoned more properties. Creditors, according to court documents, objected the Plan and their attorneys had said that they would detail substantial fraud under Mr. Alizadeh's watch. Court documents say that the lawyers said that an independent trustee was necessary to ensure that creditors were adequately protected. Mr. Alizadeh and the creditors agreed to Mr. Victor's appointment, according to court documents. About Kobra Properties Headquartered in Roseville, California, Kobra Properties develops and operates non-residential buildings. The company and two of its affiliates filed for Chapter 11 protection on Nov. 25, 2008 (Bankr. E.D. Calif. Lead Case No. 08-37271). Leonard M. Shulman, Esq., at Shulman Hodges & Bastian LLP, represents the Debtors' in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts between $10 million and $50 million each. LANDSOURCE COMMUNITIES: Sues Defaulting Los Angeles Purchaser ------------------------------------------------------------- LandSource Communities Development LLC sued the buyer who refused to complete the $45 million purchase of the Washington Square property in Los Angeles, Bloomberg's Bill Rochelle said. The Debtor previously told the U.S. Bankruptcy Court for the District of Delaware that no competing qualified bids for the Washington Square Property were timely received. It said that Dulce View (Los Angeles) LLC, the stalking horse bidder, is thus determined as the successful bidder for the property. Judge Kevin Carey accordingly approved the sale notwithstanding objections by various parties, including Southern Sun Construction Company, which claimed that it should have share of the proceeds of the sale on account of its mechanics' lien on the sold property. According to Bill Rochelle, the sale contract with Dulce View was guaranteed by CIM Fund III LP, which also is being sued. A full- text copy of the Dulce View Purchase and Sale Agreement is available for free at: http://bankrupt.com/misc/LandS_DulceViewPSA.pdf Bill Rochelle relates that LandSource is moving ahead with 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. According to LANDSOURCE BANKRUPTCY NEWS, Barclays Bank PLC, as administrative agent for itself and various financial institutions that may become, from time to time, lenders under that certain Superpriority DIP First Lien Credit Agreement, delivered to the U.S. Bankruptcy Court for the District of Delaware the Amended Plan, which contemplates the continued operation as a going concern. The original Plan contemplated the sale of substantially all of the Debtors' assets to one or more purchasers through an auction. Barclays Managing Director Mark Manski, relates that the Amended Plan provides for, among other things: (a) The reorganization of each of the Debtors, with ownership of the Reorganized Debtors and their respective assets vesting in the applicable Reorganized Debtor, free and clear of all claims, liens, encumbrances and interests. Reorganized LandSource Communities is contemplated to be owned up to 85% by the Holders of First Lien Secured Claims, subject to dilution, and up to 15% by Lennar Corporation; (b) A settlement of certain claims of Lennar Corporation and its affiliates; (c) A sale to the Lennar Entities of certain assets, including Mare Island, Kingwood/Royal Shores, LLP II HCC Holdings LLC and its interest in Lennar Bridges LLC and HCC Investors LLC, Placer Vineyard and the LNR Excess G&A Claims; (d) The establishment and implementation of a Litigation Trust for the purposes of (i) evaluating, prosecuting and resolving all Disputed Class 4 Claims against the Debtors' Estates; and (ii) prosecuting Avoidance Actions, to the extent not settled or resolved prior to the Effective Date of the Plan; (e) The evaluation, prosecution and resolution all Claims and Interests; and (f) The Reorganized Debtors may engage in a rights offering. Under the Amended Plan, Reorganized LandSource Communities, on the Effective Date, will have no indebtedness for borrowed money and carry at least $105 million cash on its balance sheet after taking into account distributions under the Amended Plan, the Rights Offering and the Lennar Equity Investment. The Lennar Equity Investment refers to a $140 million investment in Reorganized LandSource Communities to be made by Lennar on the Effective Date in exchange for the Lennar Equity Interest, the settlement and release of the Lennar Claims, and the Lennar Acquired Assets. The Lennar Equity Interest refers 15% of the common units of Reorganized LandSource Communities as of the Effective Date, on a fully diluted basis, subject to dilution due to the Equity Interest of a management company to be formed before the Effective Date for the purpose of managing the day-to- day affairs of the Reorganized Debtors. Lennar also has the option to purchase, no later than April 15, 2009, up to an additional 10% of the common units of Reorganized LandSource Communities, on a fully diluted basis, in exchange for $55 million to be paid on the Effective Date. The "Lennar Option" may be assigned to California Public Employees' Retirement System, subject to all rights of the common units. A full-text copy of Amended Plan is available for free at: http://bankrupt.com/misc/LandS_1st_AmendedPlan.pdf A full-text copy of Amended Disclosure Statement is available for free at http://bankrupt.com/misc/LandS_1st_AmendedDS.pdf 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) LANDSOURCE COMMUNITIES: Continues as Going Concern Under New Plan ----------------------------------------------------------------- Barclays Bank PLC, as administrative agent for itself and various financial institutions that may become, from time to time, lenders under that certain Superpriority DIP First Lien Credit Agreement, delivered to the U.S. Bankruptcy Court for the District of Delaware an amended Chapter 11 plan of reorganization for LandSource Communities Development LLC and its 20 debtor affiliates and an accompanying Disclosure Statement on March 20, 2009. Upon careful review of the Debtors' current business operations and various liquidation and recovery scenarios, Barclays has concluded that the recovery of holders and interests will be maximized by the Debtors' continued operation as a going concern, according to Barclays Managing Director Mark Manski. The Original Plan contemplated the sale of substantially all of the Debtors' assets to one or more purchasers through an auction. Mr. Manski discloses that the Amended Plan provides for, among other things: (a) The reorganization of each of the Debtors, with ownership of the Reorganized Debtors and their respective assets vesting in the applicable Reorganized Debtor, free and clear of all claims, liens, encumbrances and interests. Reorganized LandSource Communities is contemplated to be owned up to 85% by the Holders of First Lien Secured Claims, subject to dilution, and up to 15% by Lennar Corporation; (b) A settlement of certain claims of Lennar Corporation and its affiliates; (c) A sale to the Lennar Entities of certain assets, including Mare Island, Kingwood/Royal Shores, LLP II HCC Holdings LLC and its interest in Lennar Bridges LLC and HCC Investors LLC, Placer Vineyard and the LNR Excess G&A Claims; (d) The establishment and implementation of a Litigation Trust for the purposes of (i) evaluating, prosecuting and resolving all Disputed Class 4 Claims against the Debtors' Estates; and (ii) prosecuting Avoidance Actions, to the extent not settled or resolved prior to the Effective Date of the Plan; (e) The evaluation, prosecution and resolution all Claims and Interests; and (f) The Reorganized Debtors may engage in a rights offering. Under the Amended Plan, Reorganized LandSource Communities, on the Effective Date, will have no indebtedness for borrowed money and carry at least $105 million cash on its balance sheet after taking into account distributions under the Amended Plan, the Rights Offering and the Lennar Equity Investment. The Lennar Equity Investment refers to a $140 million investment in Reorganized LandSource Communities to be made by Lennar on the Effective Date in exchange for the Lennar Equity Interest, the settlement and release of the Lennar Claims, and the Lennar Acquired Assets. The Lennar Equity Interest refers 15% of the common units of Reorganized LandSource Communities as of the Effective Date, on a fully diluted basis, subject to dilution due to the Equity Interest of a management company to be formed before the Effective Date for the purpose of managing the day-to- day affairs of the Reorganized Debtors. Lennar also has the option to purchase, no later than April 15, 2009, up to an additional 10% of the common units of Reorganized LandSource Communities, on a fully diluted basis, in exchange for $55 million to be paid on the Effective Date. The "Lennar Option" may be assigned to California Public Employees' Retirement System, subject to all rights of the common units. Designation & Treatment of Claims The Amended Plan reflects certain modification to the designation of claims and the treatment of those claims: Class Description Claim Treatment ----- ----------- --------------- N/A Administrative Paid in full, cash. Expense Claim N/A Fee Claims Paid in accordance with Court's order. N/A Priority Tax Paid in full, cash or paid in full, Claims plus interest accrued at the Mid-Term APR Rate Holder. N/A DIP Revolver Paid in full, cash. Loan Claim 1 Priority Non- Paid in full. Tax Claims 2 First Lien First Lien Secured Claims are any Secured Claims secured claims of and obligations owing to the lenders with respect to the Roll-Up Facility in an amount equal to the value of the DIP Loan Collateral. Each Holder of a First Lien Secured will: (a) receive its Pro Rata Share of the First Lien Claim Equity Interests; (b) be paid its Pro Rata Share of the proceeds of the LNR Excess G&A Claims in excess of the amount agreed to by the Administrative Agent and Lennar; and (c) receive the right to participate in the Rights Offering. 3 Senior Paid in full, cash. Permitted Lien Claims 4 Unsecured Each Holder of an Allowed Unsecured Claims Claim will receive its Pro Rata Share of the Unencumbered Assets Distribution, subject to the Turned- Over Distribution. 5 Convenience Paid in full, cash. Class Claims 6 LandSource Cancelled on the Effective Date. Communities Holders of LandSource Interests Interest will not be entitled to any distribution under the Amended Plan. 7 Intercompany All Intercompany Interests will be Interests cancelled on the Effective Date. Holders of Interests will not be entitled to distribution. The Plan Documents note that as of March 20, 2009, the aggregate amount of Revolver Loan Claims, First Lien Claims and Second Lien Claims are: DIP Revolver Loan Claims $84,204,770 First Lien Claims $1,077,410,774 Second Lien Claims $244,000,000 The Amended Disclosure Statement also tracks the progress of the Debtors in their Chapter 11 cases, including the status of approved and pending asset sales, the identification of the members of the executive committee, the hiring of a fee auditor, and the filing of omnibus claims objections since February 2009, Barclays expects the Amended Plan to become effective May 31, 2009, the date on which the DIP Credit Agreement matures. Barclays has yet to file a Liquidation Analysis and Financial Projections for the Debtors. A full-text copy of Amended Plan is available for free at: http://bankrupt.com/misc/LandS_1st_AmendedPlan.pdf A full-text copy of Amended Disclosure Statement is available for free at http://bankrupt.com/misc/LandS_1st_AmendedDS.pdf About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. (LandSource Bankruptcy News, Issue No. 20; http://bankrupt.com/newsstand/or 215/945-7000) LANDSOURCE COMMUNITIES: Disclosure Statement Hearing on April 17 ---------------------------------------------------------------- Barclays Bank PLC, as administrative agent for itself and various financial institutions that may become, from time to time, lenders under that certain Superpriority DIP First Lien Credit Agreement, asks the U.S. Bankruptcy Court for the District of Delaware to approve the disclosure statement explaining the amended Chapter 11 plan of reorganization for LandSource Communities Development LLC and its 20 debtor affiliates, as containing adequate information pursuant to Section 1125 of the Bankruptcy Code. The Court will convene a hearing on April 17, 2009, at 10:00 a.m. Eastern Time, to consider the adequacy of the Disclosure Statement. Objections are due no later than April 10, at 4:00 p.m. Eastern Time. Barclays asks the Court to set May 19, 2009, as the Confirmation Hearing. It also seeks to have May 16, as the last date for filing and serving written objections to the confirmation of the Plan. Under Section 1125, adequate information is defined as sufficient information that would enable a hypothetical reasonable investor typical of holders of claims or interests to make an informed judgment about the plan. Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, avers that the Disclosure Statement contains information concerning among other things, the Debtors' businesses, significant events that occurred in the Debtors' bankruptcy cases, treatment of creditors under the Amended Plan, parties entitled to vote on the Plan, selected historical information, means for implementation of the Amended Plan, governance of the Reorganized Debtors, distributions under the Amended Plan, and procedures for confirming the Amended Plan. Solicitation Package Barclays proposes that Kurtzman Carson Consultants, LLC, the balloting agent, be required to transmit by first class mail to parties entitled to vote on the Amended Plan a solicitation package containing, among others: * a notice of the Disclosure Statement Order; * a notice of the Voting Deadline; * a notice of the Confirmation Hearing date; * a copy of the Amended Plan; * a copy of the Disclosure Statement; * a ballot and a ballot return envelope postage-paid; * a notice of the deadline and procedures for filing objections to the confirmation of the Amended Plan; and * the Rights Offering materials for holders of First Lien Secured Claim. Barclays seeks that it not be required to transmit a Solicitation Package to unimpaired creditors, which include holders of Administrative Expense Claims, Fee Claims, Priority Tax Claims and DIP Revolver Loan Claims, and holders of Class 1 and Class 3 Claims, and are thus deemed to accept the Amended Plan. The Plan Proponent also seeks that it not be required to serve Solicitation Packages to holders of Class 6 and 7 Claims, given that those classes will not receive any distribution under the Amended Plan and are deemed to reject the Plan. Record Date, Voting Deadline The Plan Proponent also asks the Court to set April 23, 2009, be set as the record date for determining: -- which creditors will be entitled to receive a solicitation package and vote on the Plan; -- the holders of LandSource Communities Interests and Intercompany Interests entitled to receive a Non-Voting Notice; and -- counterparties to the Contracts and Leases entitled to receive the Confirmation Hearing Notice, Disclosure Statement and Amended Plan. Barclays urges the Court to set May 16, 2009, as the voting deadline. For the solicitation of votes, Barclays proposes the use a ballot based on Official Form No. 14 modified to meet the particular requirements of the Debtors' chapter 11 cases and the Amended Plan. For purposes of voting on the Amended Plan, the Plan Proponent proposes that the amount of a claim used to tabulate vote on the plan should be, as applicable: -- the Claim listed in a Debtor's schedule of liabilities; -- the non-contingent and liquidated amount specified in a timely proof of claim; -- the amount temporarily allowed by the Court for voting purposes; or -- for ballots of creditors who have timely filed proofs of claim in wholly unliquidated or unknown amounts, the ballots will be counted in determining whether the numerosity requirement of Section 1126(c) of the Bankruptcy Code has been met, but will not be counted in determining whether the aggregate Claim Amount requirement has been met. If a creditor casts a Ballot and has timely filed a proof of Claim, but the creditor's Claim is the subject of an objection, Barclays seeks that the creditor's Ballot not be counted. Ballot Tabulation The Plan Proponent also seeks approval of these voting procedures: * For purposes of the numerosity requirement of Section 1126(c) of the Bankruptcy Code, separate Claims held by a single creditor in a particular Class will be aggregated as if the creditor held one Claim against the Debtors in that Class. * Creditors may not split their vote. * Ballots that fail to indicate an acceptance or rejection of the Amended Plan or that indicate both acceptance and rejection of the Amended Plan will not be counted. * Only Ballots that are timely received with original signatures will be counted. * Ballots postmarked prior to the Voting Deadline, but received after the Voting Deadline, will not be counted. * Ballots that contain insufficient information to permit the identification of the creditor, will not be counted. * A creditor's last dated, properly executed Ballot received prior to the Voting Deadline, will be deemed to reflect the voter's intent and supersede any prior Ballots. * Inconsistent duplicate Ballots will not be counted. * Questions as to the validity, form, eligibility, acceptance and revocation of Ballots will be determined by the Balloting Agent and the Plan Proponent. * Facsimile Ballots or Ballots submitted via email or other electronic submission will not be counted. A claimant who seems to have its claim temporarily allowed for voting purposes will be required to file Claims Estimation Motion no later than seven days prior to the Voting Deadline. The Plan Proponent also proposes to cause a one-time publication of the Confirmation Hearing Notice in The Wall Street Journal Global Edition not later than 10 business days after the entry of the Disclosure Statement order. Rights Offering Pursuant to the Amended Plan, Eligible Holders of First Lien Secured Claims have the right to subscribe for their Primary Allocable Units and Oversubscription Units of Reorganized LandSource Communities. The Rights Offering will only be made to Holders of First Lien Secured Claims that are "Accredited Investors," as that term is defined in Rule 501 of the Securities Act. The Plan Proponent proposes to include an Accredited Investor Questionnaire with instructions and offering documents and a form on which each Eligible Holder may exercise its Subscription Rights contemporaneously with the Rights Offering participant's Solicitation Package. A full-text copy of the Subscription Form is available for free at: http://bankrupt.com/misc/LandS_APlan_RightsOfOfferingIns.pdf About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. (LandSource Bankruptcy News, Issue No. 20; http://bankrupt.com/newsstand/or 215/945-7000) LEVEL 3: S&P Assigns 'B+' Rating on $220 Mil. Senior Tranche ------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B+' issue-level rating (two notches above the corporate credit rating) to Level 3 Financing Inc.'s proposed $220 million senior secured tranche B term loan facility due 2014. S&P also assigned a recovery rating of '1' to the proposed term loan, indicating S&P's expectations of very high (90%-100%) recovery in the event of a payment default. Level 3 Financing Inc. is a funding conduit for Broomfield, Colorado-based telecommunications carrier Level 3 Communications Inc. The new term loan is being issued as an additional tranche under the company's existing $1.4 billion credit facility and falls within the 1.5x leverage covenant. Level 3 expects to use the proceeds for general corporate purposes. At the same time, S&P lowered the issue-level ratings on all senior unsecured notes at Level 3 Financing to 'CCC' (two notches below the corporate credit rating) from 'CCC+' as S&P is lowering the recovery ratings on all these issues to '6' from '5'. The proposed new senior secured term loan reduces S&P's expectations for recovery of the unsecured debt to below 10%. S&P affirmed the 'CCC' issue-level and '6' recovery ratings on all debt issues at Level 3. The '6' recovery rating indicates expectations for negligible (0%-10%) recovery in the event of a payment default. This rating action affects $2.3 billion in debt at Level 3 Financing. Finally, S&P affirmed the 'B-' corporate credit rating on Level 3. The outlook is stable. With the proceeds of this proposed new issue and its current cash balance, Level 3 should be able to meet all upcoming 2009 and 2010 maturities, including its $192 million July 2010 maturity. Debt outstanding, pro forma for the proposed new issue totals about $6.8 billion. "Level 3's ratings reflect the company's second-tier position in a highly competitive industry marked by large, well-capitalized competitors," said Standard & Poor's credit analyst Richard Siderman. Other factors include the impact of a recession on the company's ability to sustain sales momentum, operating risk resulting from rapid growth, elevated leverage, and sizable capital expenditure requirements which consume the majority of the company's operating cash flow. Tempering factors include rapidly growing demand for broadband communication services and Internet content, which, when coupled with industry consolidation, have resulted in a more stable pricing environment, and adequate near- term liquidity. LINDA CATRON: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Linda Sue Catron 2614 Sacramento San Francisco, CA 94115 Bankruptcy Case No.: 09-30827 Chapter 11 Petition Date: April 2, 2009 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Peter N. Hadiaris, Esq. peterhadiaris@att.net Law Offices of Peter N. Hadiaris 600 Harrison St. #120 San Francisco, CA 94107 Tel: (415) 593-0077 Estimated Assets: $50 million to $100 million Estimated Debts: $50 million to $100 million The Debtor did not file a list of 20 largest unsecured creditors. M W SEWALL: Wants Access to TD Bank Cash Collateral 'Til Sept. 30 ----------------------------------------------------------------- M.W. Sewall & Co. asks the U.S. Bankruptcy Court for the District of Maine for authority to: -- use TD Bank, N.A., fka TD Banknorth, N.A cash collateral through Sept. 30, 2009; and -- provide Banknorth adequate protection in the form of replacement liens in all cash, accounts receivable and inventory acquired and created by the Debtor after the filing date, the replacement liens to be limited in amount to the amount of cash collateral actually utilized by the Debtor on and after the filing date and during the period reflected in the cash plan. In addition, the replacement liens will be further limited in that they will have the same validity, perfection, and priority as the prepetition liens of Banknorth in the cash collateral as of the filing date. Pursuant to various financing arrangements entered into by the Debtor prior to the filing date, TD Bank, a purported secured creditor of the Debtor, claims a security interest in certain of the Debtor's assets. The Debtor has not conceded the validity, priority or enforceability of TD Bank's secured claims; however, the Debtor acknowledges that the Bank claims an interest in cash collateral. The value of the Debtor's cash collateral as of the filing date, is approximately $5,100,220, consisting of the: i) $622,000 in cash on hand; ii) $1,201,220 in accounts receivable; and iii) the book value of the inventory held by the Debtor in the amount of approximately $3,277,000 as of the filing date. The Debtor is projecting that as Sept. 30, 2009, the Debtor will have a total of $2,410,999 of cash on hand, plus projected receivables and inventory of approximately $3,832,975, for a total of $6,243,974. Thus, at the end of the period, it is clear that through the business operations of the Debtor, the Debtor will increase the total value of cash collateral from the filing date value of approximately $5,100,220 to the ending cash collateral value of $6,243,974. At the same time, the cash plan reveals that the Debtor will generate sufficient cash to pay its expenses of operation through Sept. 30, 2009. The Debtor proposes to provide TD Bank, as adequate protection, replacement liens in all cash, accounts receivable and inventory acquired and created by the Debtor after the filing date, the replacement liens to be limited in amount to the amount of cash collateral actually utilized by the Debtor on and after the filing date and during the period reflected in the cash plan. In addition, the replacement liens will have the same validity, perfection, and priority as the prepetition liens that Banknorth had in cash collateral as of the filing date. As a result of the projected improvements in cash position of the Debtor as set forth in the cash plan, the replacement liens provide TD Bank with adequate protection. In addition to the adequate protection afforded by the net increase in cash collateral during the period reflected in the cash plan, TD Bank is also adequately protected by the continued business operations of the Debtor. A full-text copy of the Budget is available for free at: http://bankrupt.com/misc/mwscashcollbudget.pdf U.S. Trustee Objects The U.S. Trustee for Region 1 objects to the entry of any order authorizing the Debtor to use cash collateral in an amount more than what is necessary to avoid immediate and irreparable harm to the estate pending a final hearing. The UST requests that the Debtor satisfy its burdens of proof consistent with the standards enunciated in 11 U.S.C. Section 363; Rules 4001 and 6004 of the Federal Rules of Bankruptcy; and Rule 4001-2 of the Local Rules. The UST relates that the cash plan attached does not appear to be a budget as required by D. Me. LBR 4001-2(b). There also is no dollar amount requested by the Debtor that would allow the Debtor to avoid immediate and irreparable harm to the estate and no narrative and budget reflecting the intended uses of the funds. The amount of income of the Debtor needed to support any type of proposed budget does not appear to be substantiated by any evidence or affidavits. The Debtor has only provided conclusory representations contained in the motion to support a finding of immediate and irreparable harm if relief is not granted. The UST also says that there is no basis in the record to support the finding that TD Bank is the only creditor that claims a lien or other interest in the Debtor's cash collateral. The UST further adds that the order does not appear to limit TD Bank's replacement liens. Any replacement liens granted to TD Bank must not extend or apply to any interest of the Debtor in any avoidance action arising under Chapter 5 of the Bankruptcy Code. About M.W. Sewall & Co. Headquartered in Bath, Maine, M.W. Sewall & Co. distributes petroleum products. The Debtor filed for Chapter 11 protection on March 27, 2009 (Bankr. D. Maine Case No. 09-20400). George J. Marcus, Esq. at Marcus, Clegg & Mistretta, PA represents the Debtor in its restructuring efforts. The Debtor did not file a list of 20 largest unsecured creditors. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. M&K REAL ESTATE: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: M & K Real Estate, LLC 1805 Princeton Avenue Lawrenceville, NJ 08648 Bankruptcy Case No.: 09-17426 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Michael B. Kaplan Debtor's Counsel: Michael S. Richmond, Esq. Garces & Grabler, P.C. 6 Throckmorton Street Freehold, NJ 07728 Tel: (732) 414-5000 Fax: (732) 414-5001 Email: mrichm4921@aol.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors. MERVYN'S LLC: Target Wants Out of Suit Filed Against Sun Capital ---------------------------------------------------------------- Discount retailer Target Corp. wants to be excluded from a lawsuit filed by liquidated retailer Mervyn's LLC against it and 35 other defendants in connection with the 2004 leveraged buyout in which private-equity investors acquired the 177-store chain from Target for $1.175 billion, Bloomberg's Bill Rochelle said. The other defendants include Sun Capital Partners Inc., the leader of the investor group that bought the Mervyn's chain from Target. According to Bloomberg, thirteen of Sun Capital's investments have filed under Chapter 11 since January 2006. Target says there was "nothing unlawful or improper" about selling Mervyn's through a "competitive bidding process." Target says the complaint contains no specific facts showing it knew about transactions that Sun Capital would carry out after the acquisition. In its 57-page complain filed before the U.S. Bankruptcy Court for the District of Delaware, Mervyn's said that valuable real estate assets -- owned store locations and below-market leases -- were stripped out of Mervyn's and used to finance the leveraged buyout of Mervyn's by a consortium of private equity players. "Hundreds of millions of dollars of loans were made against those real estate assets, with none of the proceeds going to Mervyn's. Moreover, by separating Mervyn's real estate assets from its retail operations, the private equity players made sure that any residual value or upside in the real estate assets were reserved for themselves and not for Mervyn's." "Not content to simply cut the real estate assets out of Mervyn's, the private equity players also leased Mervyn's own real estate assets back to it at substantially increased rates, to both service the acquisition debt and to continue to extract over time the significant excess value of the real estate assets over the debt piled onto those assets. According to Mervyn's, the 2004 transaction ultimately led to Mervyn's bankruptcy and is a fraudulent transfer that cannot withstand scrutiny. Mervyn's noted that of the $1.263,853,000 distributed at the closing of the 2004 purchase, $1,175,230,000 was paid to Target and only $8,300,000 was paid or allocated to Mervyn's, despite Mervyn's losing all of its real estate assets and encumbering these assets with $800,000,000 in debt. More than $58,000,000 was paid to the private-equity sponsors (entities related to Sun Capital and others), their professionals and others as "fees" at the closing. Since the closing of the sale, the PE Sponsors have taken more than $400,000,0000 in payments or distributions from Mervnyn's, according to the suit. A full-text copy of the suit is available for free at: http://bankrupt.com/misc/Mervyn_Fraud_Complaint2.pdf About Mervyn's LLC Headquartered in the San Francisco Bay Area, Mervyn's LLC -- http://www.mervyns.com/-- provided a mix of top national brands and exclusive private labels. Mervyn's had 176 locations in seven states. Mervyn's stores have an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and are located primarily in regional malls, community shopping centers, and freestanding sites. The Company and its affiliates filed for Chapter 11 protection on July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586). Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors' financial advisor is Miller Buckfire & Co. LLC. Mervyn's LLC's balance sheet at Aug. 30, 2008, showed $665,493,000 in total assets and $717,160,000 in total liabilities resulting in a $51,667,000 total stockholders' deficit. In October 2008, Mervyn's disclosed its plans to close all stores and wind down its assets. The official committee of unsecured creditors has proposed a conversion of the case to Chapter 7. (Mervyn's Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) METALS USA: Moody's Downgrades Corporate Family Rating to 'B3' -------------------------------------------------------------- Moody's Investors Service downgraded the ratings for Metals USA Holdings Corp. and its subsidiary, Metals USA, Inc. Holdings' corporate family rating was lowered to B3 from B2, and the rating for its senior unsecured floating rate PIK toggle notes due 2012 fell to Caa2 from Caa1. MUSA's 11.125% senior secured notes due 2015 were downgraded to Caa1 from B3. Holdings' SGL-3 speculative grade liquidity rating was affirmed. The rating outlook remains negative. The downgrades reflect the anticipated impact of significantly reduced metals demand and prices on Holdings' earnings and leverage, and the aggressive financial management of its owner, Apollo Management. If metal market conditions remain subdued for the remainder of 2009, which is quite likely, Holdings' EBITDA to interest could be approximately 1.0 and debt to EBITDA could exceed 10x by the end of the year. With cash of approximately $167 million at December 31, 2008 ($93 million of that at MUSA), the company's liquidity is adequate and will be boosted somewhat by the further liquidation of working capital in the first half of 2009 quarter and the election of payment-in-kind interest for Holdings' PIK toggle notes. However, the company's commitment to maximizing liquidity has been mitigated by its payment of a $70 million dividend to Holdings in the first quarter of 2009. If that cash were used to repurchase a portion of Holdings' PIK toggle notes, which are trading at a deep discount to par, that could constitute a distressed exchange by Moody's. The SGL-3 speculative grade liquidity rating reflects the company's solid cash position and the lack of any material financial covenants as long as revolver availability is greater than $45 million, offset by limited availability ($71 million at year end) under the company's asset-based revolving credit facility and an expectation that cash from operations may be breakeven except for cash generated in the near-term from liquidation of working capital. The company's cash position was enhanced by its decision to draw down $160 million of its revolver in September 2008. Based on Moody's forecast of breakeven funds from operations in 2009, and excluding any unusual events such as acquisitions or debt repurchases, Moody's believe that MUSA will be able to maintain its total liquidity above $150 million. Moody's notes that the company's liquidity must accommodate the higher working capital investment that would be associated with a pick-up in metal demand or prices; fortunately, the revolver's borrowing base will expand in concert with its working capital. This rating action were affected by Moody's actions: Metals USA Holdings Corp.: * Corporate family rating -- lowered to B3 from B2 * Probability of default rating -- lowered to B3 from B2 * Senior unsecured floating rate PIK toggle notes due 2012 -- lowered to Caa2 (LGD5, 89%) from Caa1 Metals USA, Inc.: * 11.125% guaranteed senior secured notes due 2015 -- lowered to Caa1 (LGD4, 64%) from B3 Moody's previous rating action for Holdings was on June 26, 2007, when the company issued the PIK toggle notes and the rating outlook was changed to negative. Holdings' rating have been assigned by evaluating factors that Moody's believe are relevant to the company's risk profile, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance 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 Holdings' core industry; Holdings' ratings are believed to be comparable to those of other issuers with similar credit risk. Metals USA Holdings Corp., headquartered in Houston, is the parent company of Metals USA, Inc., a leading U.S. distributor of carbon steel, stainless steel, aluminum, red metals, and manufactured metal components. It conducts its operations through two metal service center segments, Plates and Shapes and Flat Rolled and Non-Ferrous, and a small Building Products division primarily servicing the residential remodeling market. In 2008, the company had net sales of $2.16 billion. The company is owned by Apollo Management and certain members of management. MID-STATES EXPRESS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Mid-States Express, Inc. 540 West Galena Boulevard Aurora, IL 60506 Tel: (630) 906-0250 Fax: (630) 906-0260 Bankruptcy Case No.: 09-10818 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Bruce W. Black Company Description: The debtor provides trucking services. See http://www.midstatesexpress.com/ Debtor's Counsel: Gerald F. Munitz, Esq. Goldberg Kohn 55 East Monroe Street, Ste. 3700 Chicago, IL 60603 Tel: (312) 201-4000 Fax: (312) 332-2196 Email: gerald.munitz@goldbergkohn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/ilnb09-10818.pdf MORTGAGES LTD.: Investors Committee's Plan Heads for Confirmation ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona has approved the disclosure statement explaining the official investors committee's plan to reorganize Mortgages Ltd., Bloomberg'S Bill Rochelle said. The confirmation hearing will begin May 13. Mortgages Ltd. lost its exclusive right to propose a plan in January. The investors' committee immediately filed its own plan. The company's competing plan is on a slower track. The Company's plan currently is scheduled for an April 20 hearing to consider approving the explanatory disclosure statement. Bill Rochelle notes that unless the judge slows down the committee's plan, the company plan will become a dead issue because bankruptcy law permits confirmation of only one plan. A motion made by a creditor for conversion of the case to liquidation in Chapter was deferred to a hearing in May. As reported by the Troubled Company Reporter, the Investors Committee filed its Plan of Reorganization on January 21, 2009, after the Debtor's exclusive rights to propose its own exit plan expired. Pursuant to said plan, investors would control the real- estate loans that Mortgages made to developers. Holders of Class 11 General Unsecured Claims will be beneficaries of the Liquidating Trust to be established on the Effective Date of the Plan in accordance with the Plan. Claims and portions thereof that are treated in Class 11 and are beneficiaries of the Liquidating Trust become Channeled Claims unless they choose the Opt-Out Provision under the Plan. A full-text copy of the disclosure statement explaining the Investors Committee's Plan of Reorganization for Mortgages Ltd. is available for free at: http://bankrupt.com/misc/MortgagesLtdDS.InvestorsCommitteePlan.pdf A full-text copy of the disclosure statement explaining Mortgages Ltd.'s proposed plan dated March 4, 2009, is available for free at: http://bankrupt.com/misc/MortgagesLtd.DisclosureStatement.pdf About Mortgages Ltd. Phoenix, Arizona-based Mortgages Ltd. -- http://www.mtgltd.com/ -- acted as a full service private lender prior to filing for bankruptcy. Through its licensed broker dealer, Mortgages Ltd. Securities, ML received money raised from approximately 2,700 investors for placement into loans secured by real estate located solely in Arizona. These accredited investors financed the lending operations of ML and received as collateral for their funding direct fractional interests in "pass through" loans and deeds of trust or membership interests in "Opportunity Funds" which held fractionalized interests in loans and deeds of trust. Mortgages Ltd. was the subject of an involuntary chapter 7 petition dated June 20, 2008, filed by KGM Builders Inc. -- a contractor for Grace Communities, a borrower of the company -- in the U.S. Bankruptcy Court for the District of Arizona. Central & Monroe LLC and Osborn III Partners LLC, divisions of Grace Communities, sought the appointment of an interim trustee for Mortgages Ltd. in the chapter 7 proceeding. Mortgages Ltd. is also facing lawsuits filed by Grace Communities and Rightpath Limited Development Group for its alleged failure to fully fund loans. Mortgages Ltd. denied the charges. It has filed a motion to dismiss the Rightpath suit. The Debtor's case was converted to a chapter 11 proceeding on June 24, 2008 (Bankr. D. Ariz. Case No. 08-07465). Judge Sarah Sharer Curley presides over the case. Carolyn Johnsen, Esq., and Bradley Stevens, Esq., at Jennings, Strouss & Salmon P.L.C., replaced Todd A. Burgess, Esq., at Greenberg Traurig LLP, as counsel to the Debtor. As of Dec. 31, 2007, the Debtor had total assets of $358,416,681 and total debts of $350,169,423. NEW CENTURY ENERGY: May Use Laurus Cash Collateral Until May 15 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas granted Gulf Coast Oil Corp., Century Resources, Inc., and New Century Energy Corp. permission to continue using Cash Collateral in which Laurus Master Fund, Ltd., asserts an interest, in accordance with a budget. The Stipulated Final Order Authorizing Use of Cash Collateral dated September 29, 2008, shall continue in effect, and the Debtors are authorized to use cash collateral until May 15, 2009. A final hearing is set for April 13. As reported in the Troubled Company Reporter on March 24, 2009, the Debtors filed with the Court on March 13, 2009, a First Amended Disclosure Statement explaining the Debtors' First Amended Chapter 11 Joint Plan of Reorganization. The plan calls for the orderly liquidation of the Debtors' business. On the Plan's Effective Date, the Debtors will be dissolved and will cease doing business. Under the Plan, Secured Lender Claims will receive a Ratable Portion of the proceeds of the sale of the Debtors' assets. General Unsecured Claims under will receive Cash equal to their ratable share of the Unsecured Creditors Fund. A hearing to approve the adequacy of the disclosure statement is scheduled for April 27, 2009, at 3:00 p.m. Hearing on confirmation of Debtors' amended plan of reorganization will take place on May 8, 2009, at 2:00 p.m. A full-text copy of the Debtors' First Amended Disclosure Statement is available at: http://bankrupt.com/misc/NewCentury.FirstAmendedDS.pdf A full-text copy of the Debtors' First Amended Plan of Reorganization is available at: http://bankrupt.com/misc/NewCentury.FirstAmendedPlan.pdf About New Century Energy Based in Houston, Gulf Coast Oil Corp., Century Resources, Inc. and New Century Energy Corp. are engaged in independent oil and gas exploration and production. The Debtors' major areas of operations are located onshore United States, primarily in McMullen, Matagorda, Wharton, Goliad and Jim Hogg Counties in Texas. All of the Debtors oil and gas properties are operated by Century Resources, a wholly owned operating subsidiary of New Century. Title ownership of the various oil and gas properties are held in three entities -- Gulf Coast Oil, another wholly owned subsidiary of New Century; New Century and Century Resources, with all field operations conducted under the name of Century Resources. The working interest ownership of the various operated properties range from 80% in the Sargent South Field in Matagorda County, Texas, to 100% in the San Miguel Creek Field (McMullen County, Texas), Mustang Creek Field (McMullen and Atascosa Counties, Texas), Prado Field (Jim Hogg County, Texas), Soleberg Wilcox Field (Goliad County, Texas), and Tenna Field (Wharton County, Texas). Additionally, the Debtors own a 15.20% non-operated working interest with a 12.214% net revenue interest in the Wishbone Field in McMullen County, Texas. The Debtors filed separate petitions for Chapter 11 relief on July 28, 2008 (Bankr. S.D. Tex. Lead Case No. 08-50213). Chasless L. Yancy, Esq., and David A. Zdunkewicz, Esq., at Andrews & Kurth LLP represent the Debtors as counsel. As of March 31, 2008, Gulf Coast had total assets of $51,901,717 and total debts of $75,326,678. NORANDA ALUMINUM: S&P Downgrades Corporate Credit Rating to 'SD' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Franklin, Tennessee-based Noranda Aluminum Holding Corp. to 'SD' (selective default) from 'CCC+'. At the same time, S&P lowered the issue-level rating on Noranda's $220 million notes due 2014 to 'D' from 'CCC-' and kept the '6' recovery rating, indicating S&P's expectation of negligible (0%- 10%) recovery in the event of a payment default. S&P also lowered the issue-level rating on Noranda Aluminum Acquisition Corp.'s $510 million notes due 2015 to 'D' from 'CCC' and kept the '5' recovery rating, indicating S&P's expectation of modest (10%-30%) recovery in the event of a payment default. All other outstanding ratings on Noranda remain on CreditWatch with negative implications, where they were placed on Jan. 29, 2009. These actions follow the company's recent repurchase of amounts outstanding under the above mentioned notes at deeply discounted prices, which S&P has deemed as distressed transactions and thus tantamount to default. S&P has taken this view in light of the company's highly leveraged financial profile. S&P expects that Noranda's high leverage will persist into the foreseeable future because of the depressed condition of aluminum markets, which has resulted in pricing for primary aluminum that is well below the cash cost of most producers. S&P initially placed the ratings on Noranda Aluminum Holding on CreditWatch with negative implications on Nov. 12, 2008, following the company's announcement that it had elected to pay in kind the interest on both note issues. Noranda took this action to conserve liquidity, given its expectation of subpar operating results amid the weak aluminum market. In S&P's view, operating income in 2009 will likely be well below the level that Noranda would require to cover interest payments on all of its debt issues if it were to pay interest under the aforementioned notes in cash. S&P intends to reassess Noranda's capital structure and latest operating trends in the near term. However, the corporate credit rating would likely not be higher than the previous 'CCC+' rating. NOVA HOLDING: Can Hire Epiq Bankruptcy as Claims, Noticing Agent ---------------------------------------------------------------- Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware authorized Nova Holding Clinton County, LLC and its debtor-affiliates to employ Epiq Bankruptcy Solutions, LLC as claims, noticing, and balloting agent. Epiq is expected to: a. notify all potential creditors of the filing of the Chapter 11 petitions and of the setting of the first meeting of creditors, pursuant to section 341(a) of the Bankruptcy Code; b. notify all potential creditors of the last date for the filing of proofs of claim and furnishing a form for filing a proof of claim to creditors and parties-in- interest; c. file affidavits of service for all mailings performed by Epiq, including a copy of each notice, a list of persons to whom the notice was mailed, and the date mailed; d. assist the Debtors preparing and filing their schedules of assets and liabilities, schedules of executory contracts and unexpired leases, and statements of financial affairs and maintaining an official copy of the Debtors' Schedules, listing creditors and amounts owed; e. docket all claims filed and maintaining the official claims register on behalf of the Clerk and providing to the Clerk an exact duplicate thereof; f. specify in the claims register for each claim docket (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant, (iv) the filed amount of the claim, if liquidated and (v) the allowed amount of the claim; g. record all transfers of claims and providing notices of the transfer; h. maintain the official mailing list of all entities that have requested service of pleadings in these cases; i. maintain the official mailing list of all entities that have filed a proof of claim or proof of interest, which lists will be available upon request of the Clerk's Office; j. notify all potential creditors and parties-in-interest of any hearings on a disclosure statement and confirmation of a Chapter 11 plan; k. mail the Debtors' disclosure statement, plan, ballots and any other related solicitation materials to holders of impaired claims and equity interests; l. receive and tally ballots and respond to inquiries respecting to voting procedures and the solicitation of votes on the plan; m. provide any other distribution services as are necessary or required; and n. provide other claims processing, noticing, and related administrative services as may be requested from time to time by the Debtors, including, but not limited to, maintaining a website for the limited purpose of disseminating publicly-available information about the Debtors' chapter 11 cases the as copies of notices and key pleadings and establishing a toll-free call center to operate during the early days of the Chapter 11 cases to provide publicly-available information about the cases. James Katchadurian, senior vice president of Epiq, told the Court that hourly rates of professionals working in these cases are: Title Rate Range Average Rate Clerk $40 - $60 $50 Case Manager (Level 1) $125 - $175 $142 IT Programming Consultant $140 - $190 $165 Case Manager (Level 2) $185 - $220 $202 Senior Case Manager $225 - $275 $247 Senior Consultant TBD TBD The level of senior consultant activity will vary by engagement. The usual rate for services is $295 per hour. In addition, before the petition date, Epiq received a $25,000 retainer to be applied in satisfaction of obligations incurred pursuant to the engagement agreement. A full-text copy of the Engagement Agreement is available for free at http://bankrupt.com/misc/servicesagreement.pdf About Nova Holding Clinton County, LLC Based in Seneca, Illinois, Nova Holding Clinton County, LLC make industrial organic chemicals and biological products. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. D. Del. Lead Case No. 09- 11081). David W. Carickhoff, Jr., Esq., at Blank Rome LLP 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. NOVA HOLDING: Can Initially Use WestLB Cash Collateral 'Til May 1 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized, on an interim basis, Nova Holding Clinton County, LLC, and its debtor-affiliates to: a) access the cash collateral securing repayment of loan from West LB AG, New York Branch until May 1, 2009; b) grant adequate protection to WestLB. Nova Biofuels Seneca, LLC, one of the Debtors, obtained a credit facility providing for a $36 million construction loan/term loan facility and a $5 million working capital loan facility pursuant to a Credit Agreement dated as of Dec. 26, 2007, as amended from WestLB in its capacities as administrative agent, collateral agent and sole lender, and Sterling Bank as accounts bank. The Seneca Credit Facility was intended to: (i) finance the ownership, development, engineering, construction, testing and operation of the Seneca biodiesel refinery and all auxiliary and other facilities constructed or to be constructed by or on behalf of Seneca, together with all fixtures and improvements thereto, all real property owned by Seneca and all other real property, easements and rights-of-way held by or on behalf of Seneca and all rights to use easements and rights-of-way of others, and all personal property, contracts and permits related thereto, (ii) fund certain reserves and accounts, and (iii) pay interest, fees and other expenses associated with the credit facility. As of the petition date, the outstanding principal of debt under the credit agreement was approximately $41 million plus all accrued interest, fees and expenses. The loans and other indebtedness, obligations and liabilities under the Seneca Credit Agreement and related loan documents are secured by liens and security interests in Seneca Collateral. Seneca Collateral includes: (i) all Seneca personal property including the Project Accounts and the Sponsor Support Account; (ii) a mortgage granted by Seneca on the plant and real estate making up the Seneca Plant; (iii) a pledge by Holding Seneca of all of the equity in Seneca; and (iv) a pledge by Holding Seneca of an unsecured intercompany loan receivable in the amount of $35 million owing to Holding Seneca from Seneca. Nova Biosource Fuels, Inc., the parent, also executed a limited and unsecured Completion Guaranty Agreement in favor of WestLB and dated as of Feb. 22, 2008. In the Guaranty, Biosource Fuels has agreed to pay or cause to be paid all Project Costs if and to the extent that there are insufficient funds available to Seneca to cover any Project Completion Deficiency not to exceed $41 million. The Seneca Credit Agreement required Seneca to establish certain specified cash management accounts, operating accounts and reserve and collateral accounts. Pursuant to the Seneca Credit Agreement, Seneca created a security interest and lien in its right, title and interest in the Project Accounts in favor of WestLB. Under the Seneca Credit Agreement, Seneca has the right, in the absence of a default, to give instructions to the Accounts Bank directing the Seneca Account Bank to withdraw and disburse funds from the various Project Accounts for the purposes and in the amounts/ within the parameters provided for in the Seneca Credit Agreement. The Sponsor Support Account is an asset of Seneca intended to support its obligations to construct the Seneca Plant and thereafter satisfy certain warranty obligations. Pursuant to the Seneca Credit Agreement, Seneca created a security interest and lien for the benefit of WestLB in Seneca's right, title and interest in the Sponsor Support Account, which security interest is acknowledged by Seneca and the Subject Debtors in the Interim Order. Neither Seneca nor the Subject Debtors are seeking present authority pursuant to this Motion to use cash on deposit in the Sponsor Support Account as Seneca Cash Collateral pursuant to the Seneca or Non-Seneca Budgets. All cash flow, revenues, and customer payments and collections on accounts receivable from the operations of the Seneca Plant and the sale of Products produced at the Seneca Plant are required to be and currently are deposited into the Revenue Account. Disbursements from the Revenue Account are controlled by the Accounts Bank. Seneca, the Accounts Bank, and WestLB have adopted a course of conduct pursuant to which Seneca submits to the Accounts Bank detailed written requests for the release of funds from the Revenue Account to the Operating Account to permit payment of specifically identified operating costs and expenses. Per agreement between Seneca and WestLB, upon receipt by the Accounts Bank of each the funding request, the Accounts Bank provides a copy of the request to WestLB, and WestLB, after review of the request for consistency with the Seneca Credit Agreement and the then applicable Operating Budget, if appropriate consents to the Accounts Bank permitting the withdrawals and payments initiated by Seneca. The Seneca Credit Agreement also contemplated the establishment of Local Accounts, which would be local bank accounts of Seneca that would be under the direct control of Seneca. Pursuant to the Seneca Credit Agreement and a separate Blocked Account Agreement between Seneca and Sterling Bank, Seneca created a security interest and lien in favor of the Seneca Agent for the benefit of WestLB in its right, title and interest in the Local Operating Account. As of the petition date, the balance in the Revenue Account is approximately $9,603, the balance in the Operating Account is approximately $2,101,320, the balance in the Construction Account is approximately $38, the balance in the Sponsor Support Account is approximately $1,169,230, and the balance in the Local Operating Account is approximately $38,618. All cash in the Revenue Account, the Operating Account, the Construction Account, the Sponsor Account, and the Local Operating Account is Seneca Cash Collateral. The Debtors will use Seneca Cash Collateral solely in accordance with a thirteen week, detailed cash budget or the Non-Seneca Budget to fund each Debtors' general corporate overhead and the administrative expenses in each of their respective chapter 11 cases, well as the Subject Debtors' working capital requirements and their capital expenditures. The Debtors, in negotiations with WestLB have estimated that Seneca would be responsible for 85% of the general corporate overhead and the general administrative expenses and that the remaining Debtors would be responsible for 15% of the expenses. The Non-Seneca Budget utilizes the Seneca Cash Collateral to fund Seneca's estimated 85% share of the expenses; As adequate protection, WestLB will be granted: i) replacement security interests in and liens upon (a) all of the Prepetition Collateral; (b) all proceeds of the Prepetition Collateral; (c) all assets of Seneca of the same nature and type as the Prepetition Collateral whether presently owned or hereafter acquired by Seneca, and (d) subject to entry of the Final Order and the terms thereof, and in respect of any diminution claim asserted against each of Seneca and each Subject Debtor, if any, the proceeds of avoidance actions; and ii) superpriority administrative expense diminution claim in Seneca's and each of the Subject Debtors' Chapter 11 cases; provided, however, that the Adequate Protection Liens will be junior in priority to the Prepetition Liens, but will be senior in priority to all other prepetition liens and security interests in the Prepetition Collateral that are already junior to the Prepetition Liens, and (ii) any Adequate Protection Priority Claim against each of Seneca and each Subject Debtor will be senior in priority to all other administrative expense claims in Seneca's and each of the Subject Debtors' Chapter 11 cases. A full-text copy of the Seneca Budget is available for free at: http://bankrupt.com/misc/senecabudget.pdf A full-text copy of the Non-Seneca Budget is available for free at http://bankrupt.com/misc/nonsenecabudget.pdf About Nova Holding Clinton County, LLC Based in Seneca, Illinois, Nova Holding Clinton County, LLC, make industrial organic chemicals and biological products. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. D. Del. Lead Case No. 09- 11081). David W. Carickhoff, Jr., Esq., at Blank Rome LLP 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. OLD HILLCROFT: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Old Hillcroft II Associates Ltd. 7373 E. Doubletree RAnch Rd #225 Scottsdale, AZ 85258 Bankruptcy Case No.: 09-32402 Chapter 11 Petition Date: April 6, 2009 Court: Southern District of Texas (Houston) Debtor's Counsel: Rogena Jan Atkinson, Esq. rogena@rjabankruptcy.com The Law Offices of RJ Atkinson LLC 3617 White Oak Drive Houston, TX 77007 Tel: (713) 862-1700 Fax: (713) 862-1745 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by Raymond G. Tiedje, president of Millenium Development Corp. PARK AT ASPEN: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------- Austin Business Journal reports that Park At Aspen Lake II LP has filed for Chapter 11 bankruptcy protection. Brenda Tworoger, CEO of Aspen Properties, the parent company of PAAL II, in a statement, "This reorganization will allow PAAL II sufficient time to complete the current leasing program, service all obligations, and maintain this property past the current economic downturn." Austin, Texas-based Park At Aspen Lake II LP owns the 207,000- square-foot Class A office building in Northwest Austin. Park At Aspen filed for Chapter 11 bankruptcy protection on April 3, 2009 (Bankr. W.D. Texas Case No. 09-10840). Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., assists the Company in its restructuring effort. The Company listed $10 million to $50 million in assets and $10 million to $50 million in liabilities. PB SURF: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: PB Surf, Ltd. 40 South Palafox Street, Suite 500 Pensacola, FL 32502 Bankruptcy Case No.: 09-30656 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: April 6, 2009 Court: Northern District of Florida (Pensacola) Debtor's Counsel: Bruce C. Fehr, Esq. bfehr@liberislaw.com Liberis & Associates, P.A. 40 South Palafox Street, Suite 500 Pensacola, FL 32502 Tel: (850) 438-9647 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by David A. Brannen, president. PHILADELPHIA NEWSPAPERS: Court Postpones Hearing on DIP Financing ----------------------------------------------------------------- The Associated Press reports that a hearing on a debtor-in- possession financing for Philadelphia Newspapers has been postponed until the week of May 11. The AP relates that investors offered $25 million in temporary financing, if Philadelphia Newspapers CEO Brian Tierney stays, but creditors oppose that condition and have offered their own $20 million plan. As reported by the Troubled Company Reporter on April 6, 2009, Philadelphia Newspapers asked the Hon. Jean K. FitzSimon of the U.S. Bankruptcy Court for the Eastern District of Philadelphia to postpone a hearing on debtor-in-possession financing for a month. Philadelphia Newspapers wanted to delay the hearing until the week of May 11, saying that it has been doing well enough financially to go longer without DIP financing. The Debtor said that it would be in its best interest to avoid costly litigation over the financing. The hearing had been set for April 13 and 14 According to The AP, Philadelphia Newspapers reached an agreement with its lenders to postpone the hearing. The AP states that senior lenders have agreed to multiple delays for the hearing. Philadelphia Newspapers, LLC -- http://www.philly.com/-- owns and operate numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa., Lead Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Debtors listed assets and debts of $100 million to $500 million. PLY GEM: S&P Withdraws 'SD' Corporate Credit Rating --------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its 'SD' corporate credit rating and various debt ratings on Ply Gem International Inc. at the company's request. However, S&P will reassess Ply Gem's corporate and issue ratings in the near term and will publish these ratings on an unsolicited basis. Unsolicited rating(s) are initiated by Standard & Poor's and may be based solely on publicly available information and may or may not involve the participation of the issuer's management. Standard & Poor's will utilize information from sources believed to be reliable, but does not guarantee the accuracy, adequacy, or completeness of any information used. Cary, NC-based Ply Gem is a manufacturer and distributor of siding and windows for use in residential construction. POLAROID CORP: Judge Declines to Approve Patriarch Sale ------------------------------------------------------- Polaroid Corp. conducted an auction for its assets last week and selected Patriarch Partners LLC's $59.1 million offer as the wining bid. The U.S. Bankruptcy Court for the District of Minnesota, however, refused to approve the sale to Patriarch after the official committee of unsecured creditors in the case said that liquidators had provided the best offer for the auctioned assets, Bloomberg's Bill Rochelle reported. The judge told affiliates of Hilco Merchant Resources LLC and Gordon Brothers Group LLC to make new offers. The Company is required to report the new results of the bidding today, April 8. A hearing to approve the sale will take place tomorrow. The stalking horse bidder, an affiliate of Genii Capital, S.A., a Luxembourg based private equity firm, did not emerge the winning bidder at the March 31 auction. As reported by the Troubled Company Reporter on March 12, 2009, the Bankruptcy Court approved procedures for the sale of all the properties, assets and rights of Polaroid to PHC Acquisitions, LLC, the proposed purchaser, subject to higher or better offers. PHC, an affiliate of Genii, offered to buy all of Polaroid's intellectual property rights and the "Polaroid" name and brand, and other assets related to the Polaroid business for $42,000,000 in cash and the assumption of certain liabilities, free and clear of all liens, claims, and encumbrances. The Court also approved the payment of a break-up fee of $1,200,000, an expense reimbursement of up to $500,000 for PHC. Minneapolis/St. Paul Business Journal relates that Patriarch Partners won the auction with a $59.3 million bid, but creditors objected. A bid from PLR Holdings should have been given stronger consideration, Business Journal says, citing creditors. Judge Kishel, according to the Star Tribune, said that he would let Patriarch and PLR to each submit final, best offers for Polaroid. Business Journal states that the court will hold a hearing on Thursday, at which time a final sale of the company is expected to be completed. Deal Being Forged With SavePolaroid.com Donna Goodison at BostonHerald.com reports that PolaPremium.com, Polaroid's joint venture with Austrian businessman Florian Kaps, is forging a deal with SavePolaroid.com's two U.S. co-founders to ship products directly from a New York warehouse. According to the report, the new shipping arrangement will begin with Polaroid's TZ Artistic film. About Patriarch Partners Based in New York, Patriarch Partners LLC, founded in 2000, is a distressed private equity firm, concentrating on direct investments in distressed businesses, managing funds with more than $6 billion of equity and secured loan assets with equity investments in more than 70 companies. The Patriarch funds have investments in an extensive portfolio of companies, including Rand McNally, Arizona Iced Tea and MD Helicopters. Patriarch specializes in rebuilding companies that span across a broad spectrum of consumer and industrial sectors by providing innovative financial solutions, strategic direction and operational expertise. About Polaroid Corporation Polaroid Corporation -- http://www.polaroid.com-- makes and sells films, cameras, and other imaging products. The company and 20 of its affiliates first filed for bankruptcy protection on October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864). Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors in their previous restructuring efforts. At that time, the company blamed steep decline in its revenue and the resulting impact on its liquidity. On June 28, 2002, the U.S. Bankruptcy Court for the District of Dealware approved the purchase of substantially all of Polaroid's business by One Equity Partners. The bid provides for cash consideration of $255 million plus a 35% interest in the new company for unsecured creditors. Polaroid Corp., together with 11 affiliates, filed its second voluntary petition for Chapter 11 on Dec. 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles the Chapter 22 case. James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P, is the Debtors' counsel. According to the company, the financial structuring process and the second bankruptcy filing are the result of events at Petters Group Worldwide, which has owned Polaroid since 2005. The founder of Petters Group and certain associates are currently under investigation for alleged acts of fraud that have compromised the financial condition of Polaroid and other entities owned by Petters Group. The company and its leadership team are not subjects of the ongoing investigation involving Petters Group. POTOMAC EDISON: Fitch Raises Issuer Default Rating from 'BB+' ------------------------------------------------------------- Fitch Ratings has upgraded The Potomac Edison Company d/b/a Allegheny Power's ratings: -- Issuer Default Rating to 'BBB-' from 'BB+'; -- Senior secured debt rating to 'BBB+' from 'BBB'; -- Pollution control revenue bonds to 'BBB+' from 'BBB'. The ratings have been removed from Rating Watch Positive. The Rating Outlook is Stable. The ratings of Potomac Ed's parent company, Allegheny Energy, Inc. (IDR: 'BBB-', Stable Outlook), and Allegheny's other subsidiaries are not affected by the rating action. The ratings upgrade reflects an improved, yet somewhat challenging, regulatory environment. The recent resolution in Virginia of Potomac Ed's fuel cost under-recovery is an important step toward restoring credit quality. The Virginia State Corporation Commission permitted Potomac Ed to hold a competitive- bid auction for power in December 2008 to provide generation service to Virginia customers from June 1, 2009 through June 30, 2011, with full recovery of purchased power costs starting on July 1, 2011. These power auctions were completed in December at favorable prices. Potomac Ed's clear market transition plans in Virginia and Maryland, combined with its fully regulated structure in West Virginia that includes an annual fuel cost recovery clause, removes much of the regulatory uncertainty that has negatively impacted the company. Ratings also reflect a financial profile that is improving as a result of the recent regulatory resolution in Virginia. The company's fuel cost under-recovery in Virginia since July 1, 2007 resulted in a material deterioration of credit metrics. For 2008, Potomac Ed's debt-to-EBITDA ratio was almost 13 times and its EBITDA interest coverage was just 1.2x. With a purchased power recovery plan now in place, it is expected that Potomac Ed's profitability will improve greatly and likely return to the levels experienced before the fuel cost under-recovery began in 2007. In 2009, debt-to-EBITDA could strengthen to less than 3.5x and EBITDA interest coverage could increase to over 5x. However, cash flows will be temporarily constrained in 2009 and 2010 because of the rate stabilization and market transition plans in Virginia and Maryland. Customer credits in both states will curb cash flows in 2009, with Maryland the primary reason for lower cash flows in 2010. Under Maryland's rate stabilization and market transition plan, Potomac Ed received a 15% increase in Maryland's residential customer rates in 2007 and then an additional 15% increase in 2008 (approximately $30 million in each year). This surcharge was recorded as a regulatory liability and is now in the process of being returned to customers in 2009 and 2010 as a credit to customers' bills to reduce the impact of the generation rate cap expiration and maintain rate stability until Dec. 31, 2010. Starting on Jan. 1, 2011, the regulatory liability will have been fully charged down and Potomac Ed will no longer need to provide the cash flow-dilutive credit to Maryland's residential customers. At that point, cash flow metrics are expected to return to levels consistent with the ratings and the company's ability to charge market rates for power in Maryland. Favorably, in Maryland, Potomac Ed can recover all of its power supply costs in full and without any lag. Potomac Ed's liquidity is supported by Allegheny's intercompany money pool, which provides Potomac Ed and its sister utility companies Monongahela Power Company d/b/a Allegheny Power and West Penn Power Company d/b/a Allegheny Power with adequate liquidity to weather the current economic downturn and cash flow needs associated with the rate stabilization and market transition plans. Ready access to liquidity includes Allegheny's cash on hand, Allegheny's $376 million undrawn revolving credit facility, and affiliated generating company Allegheny Energy Supply Company, LLC's $400 million revolving credit facility. The Potomac Edison Company d/b/a Allegheny Power is a regulated transmission and distribution utility subsidiary of Allegheny Energy, Inc. that serves approximately 480,000 customers in Maryland, West Virginia, and Virginia. About 25% of Potomac Ed's entire customer load is in Virginia, 50% in Maryland, and the remaining 25% in West Virginia. PROSPECT MEDICAL: S&P Puts 'B-' Ratings on Negative CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings on Prospect Medical Holdings Inc., including the 'B-' counterparty credit rating, on CreditWatch with negative implications. "We took this rating action as a result of a contractual performance dispute that has arisen between the company and certain members of its lender group," explained Standard & Poor's credit analyst Joseph Marinucci. Specifically, Prospect Medical has received notices of nonmonetary default from its administrative agent and certain lenders for the nondivestiture of certain assets by a specified date. The company has strongly disputed the administrative agent's characterization of the matter, and the parties have engaged in ongoing discussions seeking its resolution. As a result of this development, S&P believes Prospect Medical's risk of covenant breach has increased. This could result in the immediate termination of its $7.25 million revolver and cause its credit agreement loan balance (about $135.5 million as of Dec. 31, 2008) to become payable immediately. If the lending group does not elect to waive its enforcement rights, this would create a significant liquidity problem for the company. It would also hurt the company's ability to operate and continue as a going concern. "We believe this matter has the potential to be a significant operational distraction that could ultimately impair the company's financial and business profile, particularly if this dispute is not favorably resolved in the near term," Mr. Marinucci added. S&P intends to conduct follow-up discussions with Prospect Medical's management team in the second quarter of 2009. Thereafter, S&P could affirm the rating or lower it. S &P also could assign either a stable or negative outlook. RITZ CAMERA: Expects to Liquidate Over $50 Million in Inventory --------------------------------------------------------------- Eric Eyre at The Charleston Gazette reports that Ritz Camera Centers Inc. expects to liquidate more than $50 million in inventory at the stores that it will close. According to the report, joint venture group is conducting the sales, which began on Saturday. As reported by the Troubled Company Reporter on April 7, 2009, Ritz Camera will shut down 300 stores nationwide and sell the merchandise in liquidation sale. Stores to be closed include three Triangle stores that operate under the Wolf Camera brand located at Cary Towne Center mall, Durham's The Streets at Soutpoint mall, and Raleigh's North Hills mixed-use center. Ritz Camera will have about 400 stores left after the sales, including eight Wolf Camera and two Ritz Camera locations in the Triangle. The Charleston Gazette relates that Ritz Camera's store at Charleston Town Center Mall will remain open. According to The Charleston Gazette, the Charleston store is the chain's only location in West Virginia. 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. SERENDIPITY ENTERTAINMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------------ Debtor: Serendipity Entertainment Corporation 4600 Hampton Ave. Kansas City, MO 64112 Tel: (816) 531-8882 Bankruptcy Case No.: 09-14469 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Serendipity Leasing Corporation 09-14470 Bravo Entertainment Corporation 09-14471 Shazam Entertainment Corporation 09-14472 Verite Entertainment Corporation 09-14473 Chapter 11 Petition Date: March 28, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce Markell Company Description: The debtor is engaged in video rental. Debtor's Counsel: Richard F. Holley, Esq. 400 S. Fourth St., 3rd Floor Las Vegas, NV 89101 Tel: (702) 791-0308 Fax: (702) 791-1912 Email: rholley@nevadafirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by James Porterfield, vice president of the Company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-14469.pdf SIERRA TRIPLE NET: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Sierra Triple Net, Ltd. 365 Calle De La Plata Sparks, NV 89436 Bankruptcy Case No.: 09-50846 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Alan R. Smith, Esq. 505 Ridge St. Reno, NV 89501 Tel: (775) 786-4579 Email: mail@asmithlaw.com 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/nvb09-50846.pdf SILICON GRAPHICS: Donlin Recano Approved as Claims Agent -------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized Silicon Graphics Inc. and its debtor-affiliates to employ Donlin Recano & Company as their claims and noticing agent. The firm will: a) notify all potential creditors of the filing of the Debtors' bankruptcy petitions and of the setting of the first meeting of creditors, pursuant to Bankruptcy Code Section 341, under the proper provisions of the Bankruptcy Code and the Bankruptcy Rules; b) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs listing the Debtors' known creditors and the amounts owed thereto; c) notify all potential creditors of the existence and amount of their respective claims, as evidenced by the Debtors' books and records and as set forth in their Schedules; d) furnish a notice of the last day for the filing of proofs of claim and a form for the filing of a proof of claim, after such notice and form are approved by this Court; e) file with the Clerk an affidavit or certificate of service which includes a copy of the notice, a list of persons to whom it was mailed, and the date the notice was mailed, within 3 days of service; f) docket all claims received, maintain the official claims registers for each of the Debtors on behalf of the Clerk, and provide the Clerk with certified duplicate unofficial Claims Registers on a monthly basis, unless otherwise directed; g) specify, in the applicable Claims Register, the following information for each claim docketed: (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant and agent, if applicable, who filed the claim, (iv) the filed amount of the claim, if liquidated, and (v) the classification(s) of the claim according to the proof of claim; h) relocate, by messenger, all of the actual proofs of claim filed to the firm, not less than weekly; i) record all transfers of claims and provide any notices of such transfers required by Bankruptcy Rule 3001; j) make changes in the Claims Register pursuant to Court Order; k) upon completion of the docketing process for all claims received to date by the Clerk's office, turn over to the Clerk copies of the Claims Registers for the Clerk's review; l) maintain the Claims Register for public examination without charge during regular business hours; m) maintain the official mailing list for each Debtor of all entities that have filed a proof of claim, which list shall be available upon request by a party-in-interest or the Clerk; n) assist with, among other things, solicitation, calculation, and tabulation of votes and distribution, as required in furtherance of confirmation of the Plan; o) provide and maintain a website where parties can view claims filed, the status of claims, and pleadings or other documents filed with the Court by the Debtors; p) file with the Court the final version of the Claims Register immediately before the closing of these chapter 11 cases; and q) at the close of the case, box and transport all original documents in proper format, as provided by the Clerk's office, to the Federal Archives Record Administration, located at Central Plains Region, 200 Space Center Drive, Lee's Summit, MO 64064. The firm's standard hourly rates are: Designation Hourly Rate ----------- ----------- Senior Case Manager $175-$250 Case Manager $180-$200 Technology Consultant $115-$195 Senior Analyst $115-$175 Junior Analyst $70-$110 Clerical $40-$65 Louis A. Recano, president of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. 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. SILICON GRAPHICS: Moves to Sell All Assets to Rackable for $25MM ---------------------------------------------------------------- The Hon. Martin Glenn of the United States Bankruptcy Court for the District of Delaware approved bidding procedures to govern the auction of the assets of Silicon Graphics Inc. and its debtor- affiliates. He also approved (i) the manner of notice of the Debtors' request and the sale hearing; (ii) procedures for the assumption and assignment of assigned contracts, including notice of proposed cure amounts; and (iii) bid protections as provided in the asset purchase agreement agreement dated March 31, 2009. All objections to the Debtors' request that were not withdrawn, waived or settled are overruled, Judge Glenn said. As reported in the Troubled Company Reporter on April 2, 2009, Rackable Systems Inc., the designated stalking-horse bidder, agreed to purchase substantially all the assets, except for certain excluded assets, of the Debtors for $25 million under the agreement. The sale is subject to adjustment in certain circumstances, plus the assumption of certain liabilities associated with the acquired assets. The APA agreement has been approved by the boards of directors of Rackable and the Debtors. 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. To participate in the auction, bid for the Debtors' assets and $2 million good faith deposit must be delivered before April 27, 2009, by 5:00 p.m. A bid must propose a purchase price of at least $27 million as indicated in the APA agreement. During the auction, bid will be made in $250,000 increments. An auction will take place at the offices of the Debtors' counsel, Ropes & Gray LLP, at 1211 Avenue of the Americas in New York on April 28, 2009, at 10:00 a.m., followed by a sale hearing on April 30, 2009, at 10:00 a.m. The stalking horse bidder will receive $750,000 break-up fee and expense reimbursement if the Debtors consummate the sale to another party. 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. STAR TRIBUNE: Employees Launch Online Campaign to Save Newspaper ---------------------------------------------------------------- Agence France-Presse reports that Star Tribune employees have launched an online campaign to save the Minnesota newspaper. AFP quoted Star Tribune employees as saying, "We, the journalists who write, photograph, edit and present the news every day, are launching this campaign because we believe the Star Tribune is an essential community resource that is too valuable to lose. Our best chance of continuing to provide the breadth and quality of news, opinion, sports and entertainment coverage Minnesotans deserve is to attract a new owner who shares our values and who is ready to lead the Star Tribune into a new age. Help us convince a potential owner that great cities need robust news operations." AFP relates that a Web site, savethestrib.com, features testimonials from readers, a petition supporting the Star Tribune newspaper, and invites readers to submit business proposals. Headquartered in Minneapolis, Minnesota, The Star Tribune Company -- http://www.startribune.com-- operate the largest newspaper in the U.S. state of Minnesota and published seven days each week in an edition for the Minneapolis-Saint Paul metropolitan area. The company and its affiliate, Star Tribune Holdings Corporation, filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10245). Marshall Scott Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. The Debtors proposed Blackstone Group LP as their financial advisor; and Curtis, Mallet-Prevost, Colt & Mosle LLP as conflict counsel; and Garden City Group Inc. as claims agent. Diana G. Adams, the U.S. Trustee for Region 2, selected seven members to the official committee of unsecured creditors in the Debtors' Chapter 11 cases. The Committee proposed Lowenstein Sandler PC as its counsel. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. SUN MICROSYSTEMS: S&P Puts 'BB+' Rating on Developing CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings, including its 'BB+' corporate credit rating, on Santa Clara, California-based Sun Microsystems Inc. on CreditWatch with developing implications indicating the possibility of an upward or downward rating movement. "The CreditWatch listing follows widely disseminated press reports that Sun has been in negotiations with IBM (A+/Stable/A-1) and potentially others, to be acquired," said Standard & Poor's credit analyst Philip Schrank. Reportedly, the talks with IBM have broken off for now. If Sun ultimately agrees to merge with a higher rated entity, its' ratings could be raised. However, if Sun remains independent, S&P's ratings could be lowered should the company choose to adopt shareholder friendly initiatives, such as a large share repurchase or a one-time dividend funded by debt that would weaken credit protection measures and/or reduce liquidity. Even without these actions, S&P's ratings on Sun could be lowered because of weak operating performance. Revenues and EBITDA have declined year over year for the past four quarters, coupled with the likelihood of a challenging IT spending environment extending through 2009, which could further dampen operating performance. Sun's liquidity is currently strong, with about $3 billion in cash and short- and long-term marketable debt securities (as of Dec. 28, 2008) versus less than $2 billion of total debt. S&P will continue to monitor events as they unfold. S&P will reassess Sun's ratings when S&P has greater clarity into its strategic direction, although S&P may take an interim step based on earnings performance and its outlook for future standalone operations. SUN-TIMES MEDIA: U.S. Trustee Sets Creditors Meeting for April 29 ----------------------------------------------------------------- Roberta A. DeAngelis, Acting U.S. Trustee for Region 3 will convene a meeting of creditors in Sun-Times Media Group Inc.'s Chapter 11 case on April 29, 2009, at 10:00 a.m., at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Sun-Times Media Group, Inc. (Pink Sheets:SUTM) -- http://www.thesuntimesgroup.com/-- owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. The Company and its affiliates conduct business as a single operating segment which is concentrated in the publishing, printing, and distribution of newspapers in greater Chicago, Illinois, metropolitan area and the operation of various related Web sites. The Company also has affiliates in Canada, the United Kingdom, and Burma. Sun-Times Media's balance sheet at September 30, 2008, showed total assets of $479.9 million, total liabilities of $801.7 million, resulting in a stockholders' deficit of roughly $321.8 million. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009, (Bankr. D. Delaware Case No. 09- 11092). James H.M. Sprayregan, P.C., James A. Stempel, Esq., David A. Agay, Esq., and Sarah H. Seewer, Esq., at Kirkland & Ellis LLP assist the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. As of November 7, 2008, the Debtors listed $479,000,000 in assets and $801,000,000 in debts. SUN-TIMES MEDIA: Kurztman Carson Approved as Claims Agent --------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized Sun-Times Media Group Inc. and its debtor-affiliates to employ Kurtzman Carson Consultants LLC as their notice, claims and solicitation agent. The firm will, among other things: a) maintain and update the master mailing lists of Debtors' creditors; b) gather data in conjunction with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs; c) track and administer claims; and d) perform other administrative tasks pertaining to the administration of the chapter 11 cases, as may be requested by the Debtors or the Clerk's Office. The firm's compensation rates are: Designation Hourly Rate ----------- ----------- Senior Managing Consultant $295-325 Senior Consultant $255-$275 Consultant $165-$245 Programming Consultant $145-$195 Project Specialist $80-$140 Clerical $45-$65 Michale Frishberg, vice president of the firm's corporate restructuring services, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Sun-Times Media Group, Inc. (Pink Sheets:SUTM) -- http://www.thesuntimesgroup.com/-- owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. The Company and its affiliates conduct business as a single operating segment which is concentrated in the publishing, printing, and distribution of newspapers in greater Chicago, Illinois, metropolitan area and the operation of various related Web sites. The Company also has affiliates in Canada, the United Kingdom, and Burma. Sun-Times Media's balance sheet at Sept. 30, 2008, showed total assets of $479.9 million, total liabilities of $801.7 million, resulting in a stockholders' deficit of roughly $321.8 million. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009 (Bankr. D. Delaware Case No. 09- 11092). James H.M. Sprayregan, P.C., James A. Stempel, Esq., David A. Agay, Esq., and Sarah H. Seewer, Esq., at Kirkland & Ellis LLP assist the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. As of November 7, 2008, the Debtors listed $479,000,000 in assets and $801,000,000 in debts. SYNTAX-BRILLIAN: Asks Court's Approval of Sale of Olevia Brand -------------------------------------------------------------- Syntax-Brillian Corporation, et al., asks the U.S. Bankruptcy Court for the District of Delaware to approve (i) bidding procedures for the sale of their "Olevia" brand name and related assets at an auction, and (ii) the payment of a $28,000 break-up fee at the closing of an alternative transaction other than with the stalking horse bidder at the auction. The Debtors tell the Court that a sale of the Olevia brand and related assets provides the best and most efficient means for them to maximize the value of their estates, and avoid further deterioration in value. Amergence Technology, Inc., the stalking horse bidder, is an electronics supplier for both OEM and ECM parts. Amergence has offered to pay $280,000 for the purchased assets. Competing Bid Deadline/Auction Date The Debtors ask the Court to approve a April 24 deadline for the submission of competing bids. In the event that competitive bids are received, an auction of the purchased assets is set for April 28 at the law offices of Greenberg Traurig LLP, The Nemours Building, 1007 North Orange Street, Suite 1200, in Wilmington, Delaware 19801, beginning at 2:00 p.m. Bidding at the auction will start at no less than $400,000. Incremental bids will be at least $50,000. The Debtors ask the Court to set a sale hearing for April 29. At the sale hearing, the Debtors will move the Court the approve the the sale of the purchased assets to the winning bidder or bidders. Closing shall take place immediately after the sale hearing and entry of the sale order, but in no event later than May 1, 2009. A full-text copy of the Asset Purchaser Agreement between the Debtors and Amergence Technology, Inc. is available for free at: http://bankrupt.com/misc/Syntax.AmergenceAPA.pdf A full-text copy of the Debtor's Bid Procedures motion is available at: http://bankrupt.com/misc/Syntax.BidProceduresMotion.pdf As reported in the Troubled Company Reporter on March 24, 2009, the Court approved the disclosure statement explaining the terms of the Debtors' Second Amended Chapter 11 Liquidating Plan, dated March 11, 2009. A hearing to consider confirmation of the Plan is set for April 21. Objections, if any, to confirmation of the Plan is due on before April 13. A full-text copy of the Second Amended Disclosure Statement is available at: http://bankrupt.com/misc/Syntax-Brillian2ndAmendedDS.pdf Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq: BRLC) -- http://www.syntaxbrillian.com/-- and its affiliated debtors, Syntax-Brillian SPE, Inc., and Syntax Groups Corp. design, develop, and distribute high-definition televisions (HDTVs) utilizing liquid crystal display (LCD) and, formerly, liquid crystal (LCoS) technologies. The Debtors sell their HDTVs under the Olevia brand name. SBC is also the sole shareholder of Vivitar Corp., a suplier of film cameras and a line of digital imaging products, including digital cameras. The Debtors filed separate petitions for Chapter 11 relief on July 8, 2008 (Bankr. D. Del. Lead Case No. 08-11407). Nancy A. Mitchell, Esq., Allen G. Kadish, Esq., and John W. Weiss, Esq., at Greenberg Traurig LLP in New York, represent the Debtors as counsel. Victoria Counihan, Esq., at Greenburg Traurig LLP in Wilmington, Delaware, represents the Debtors as Delaware counsel. Five members compose the Official Committee of Unsecured Creditors. Pepper Hamilton, LLP, represents the Committee as counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' balloting, notice, and claims agent. Syntax-Brillian cut a deal to sell its business assets to Olevia International Group LLC. On Sept. 10, 2008, OIG told the Bankruptcy Court that it won't pursue the deal, contending that the Debtors irreparably breached various covenants and representations contained in the Purchase Agreement, causing various Closing Conditions to fail, and rendering it unable to comply with its obligations under the Purchase Agreement. OIG also accused the Debtors of violating their sale contract by losing business from Target Corp., the Debtors' main customer. The following day, the Debtors filed a lawsuit asking the Court to compel Olevia International to complete the purchase. On Oct. 10, the Bankruptcy Court denied OIG's emergency request to excuse it from its obligations. OIG has taken an appeal of that order. When the Debtors filed for protection from their creditors, they listed total assets of $175,714,000 and total debts of $259,389,000. SYNTAX-BRILLIAN: Wants Solicitation Period Extended to May 11 ------------------------------------------------------------- Syntax-Brillian Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive period to solicit acceptances of their Chapter 11 Plan to May 11, 2009, which is one week after the anticipated May 4 effective date of the Plan. The Debtors relate that the hearing on the confirmation of the Plan is set for a date which falls after the April 20 expiration date of the current exclusive solicitation period. This extension will ensure that the confirmation process may take place without interruption and without the Debtors ceding any exclusivity rights. As reported in the Troubled Company Reporter on March 24, 2009, the Court approved the disclosure statement explaining the terms of the Debtors' Second Amended Chapter 11 Liquidating Plan, dated March 11, 2009. A hearing to consider confirmation of the Plan is set for April 21. Objections, if any, to confirmation of the Plan is due on before April 13. A full-text copy of the Second Amended Disclosure Statement is available at: http://bankrupt.com/misc/Syntax-Brillian2ndAmendedDS.pdf Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq: BRLC) -- http://www.syntaxbrillian.com/-- and its affiliated debtors, Syntax-Brillian SPE, Inc. and Syntax Groups Corp. design, develop, and distribute high-definition televisions (HDTVs) utilizing liquid crystal display (LCD) and, formerly, liquid crystal (LCoS) technologies. The Debtors sell their HDTVs under the Olevia brand name. SBC is also the sole shareholder of Vivitar Corp., a suplier of film cameras and a line of digital imaging products, including digital cameras. The Debtors filed separate petitions for Chapter 11 relief on July 8, 2008 (Bankr. D. Del. Lead Case No. 08-11407). Nancy A. Mitchell, Esq., Allen G. Kadish, Esq., and John W. Weiss, Esq., at Greenberg Traurig LLP in New York, represent the Debtors as counsel. Victoria Counihan, Esq., at Greenburg Traurig LLP in Wilmington, Delaware, represents the Debtors as Delaware counsel. Five members compose the Official Committee of Unsecured Creditors. Pepper Hamilton, LLP, represents the Committee as counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' balloting, notice, and claims agent. Syntax-Brillian cut a deal to sell its business assets to Olevia International Group LLC. On Sept. 10, 2008, OIG told the Bankruptcy Court that it won't pursue the deal, contending that the Debtors irreparably breached various covenants and representations contained in the Purchase Agreement, causing various Closing Conditions to fail, and rendering it unable to comply with its obligations under the Purchase Agreement. OIG also accused the Debtors of violating their sale contract by losing business from Target Corp., the Debtors' main customer. The following day, the Debtors filed a lawsuit asking the Court to compel Olevia International to complete the purchase. On Oct. 10, the Bankruptcy Court denied OIG's emergency request to excuse it from its obligations. OIG has taken an appeal of that order. When the Debtors filed for protection from their creditors, they listed total assets of $175,714,000 and total debts of $259,389,000. TEAM FINANCIAL: Files Chapter 11 Following Banks' Takeover ---------------------------------------------------------- After Colorado National Bank of Colorado Springs, Colorado, and TeamBank NA of Paola, Kansas, were taken over by the Federal Deposit Insurance Corp. in March, the banks' holding company, Team Financial Inc., filed a Chapter 11 petition on April 5 in the U.S. Bankruptcy Court for the District of Kansas (Wichita). According to Kansas City Business Journal, Team Financial said in court documents that its employee stock-ownership plan held an 11.6% stake in the Company. Business Journal relates that Team Financial had 3.5 million shares of common stock outstanding. Business Journal states that Team Financial CFO Bruce Vance resigned from his post in February 2009. According to the report, Team Financial reported on December 8, 2008, a loss of $10 million for the quarter ended September 30, 2008, compared with profit of $908,000 for the same quarter the prior year. According to Bloomberg's Bill Rochelle, Team Financial's petition listed $26.7 million in debt, including $22.7 million in secured claims. Assets were less than $700,000. On March 20, 2009, TeamBank, NA and Colorado National Bank, the wholly-owned subsidiaries and principal assets of Team Financial, Inc., were closed by the Office of the Comptroller of the Currency and the FDIC was appointed as receiver of the Banks. Team Financial's principal assets are the common stock that it owns in TeamBank and CNB, and, as a result of the closure of TeamBank and CNB, the Company has very limited remaining tangible assets. As the owner of all of the capital stock of TeamBank and CNB, Team Financial would be entitled to the net recoveries, if any, following the liquidation or sale of TeamBank and CNB or its assets by the FDIC. However, at this time, Team Financial does not believe that it will realize any recovery. In connection with the closure of TeamBank, the FDIC said: -- The FDIC approved the assumption of all of the deposits of TeamBank by Great Southern Bank, Springfield, Missouri ("Great Southern Bank"). Accordingly, all depositors of TeamBank automatically became depositors of Great Southern Bank. -- TeamBank's 17 offices reopened on Saturday, March 21, 2009, as branches of Great Southern Bank. -- Great Southern Bank has agreed to pay a total premium of 1% for TeamBank's deposits. -- Great Southern Bank will purchase $656.5 million of TeamBank's assets. -- The FDIC will retain the remaining assets for later disposition. In connection with the closure of CNB, the FDIC said: -- The FDIC approved the assumption of all of the deposits of CNB by Herring Bank, Amarillo, Texas ("Herring Bank"). Accordingly, all depositors of CNB automatically became depositors of Herring Bank. -- CNB's three offices reopened on Saturday, March 21, 2009, as branches of Herring Bank. -- Herring Bank has agreed to pay a total discount of 1.27% for CNB's deposits. In addition, Herring Bank will purchase approximately $117.3 million of CNB's assets. The FDIC will retain the remaining assets for later disposition. On March 20, 2009, Team Financial determined that it was in breach of the Revolving Credit Agreement, dated March 18, 2004 and amended effective October 15, 2008, with U.S. Bank, N.A. ("U.S. Bank") as a result of its inability to fully comply with the requirements of the September 2, 2009 and September 3, 2009 Consent Orders entered into with the Office of the Comptroller of the Currency. As of March 20, 2009, the Credit Agreement has a current outstanding balance of $4 million in principal and approximately $38,000 accrued but unpaid interest. Accordingly, U.S. Bank may declare any outstanding balance and interest thereon due and payable. On March 20, Team Financial also determined that it was in breach of the Indenture (the "Indenture"), by and between, the Registrant and Wells Fargo Bank, NA (the "Trustee"), dated September 14, 2006 as a result of the FDIC taking possession as receiver of a substantial portion of the Registrant's assets (the "Default"). Accordingly, the Trustee or the holders of the debt securities under the Indenture may declare the entire principal of the debt securities ($22 million) and any premium and interest accrued due and payable. On March 24, 2009, Team Financial received a letter from the Nasdaq Stock Market indicating that it no longer complies with the minimum [[$10]] million in stockholder's equity requirement for continued listing on the Nasdaq Global Market under Nasdaq Marketplace Rule [[4450(a)(3)]]. In addition, Nasdaq expressed concerns about the Company's ability to sustain compliance with other requirements for continued listing on Nasdaq as well as the residual equity interest of the Registrant's common stock holders. As a result, Nasdaq notified Team Financial that the Registrant's securities will be delisted from Nasdaq. About Team Financial Team Financial Inc. is a financial holding company. The Company offers a range of community banking and financial services through 21 locations in Kansas, Missouri, Nebraska and Colorado through its banking subsidiaries, Team Bank and Colorado National Bank. Its presence in Kansas consists of nine locations in the Kansas City metropolitan area and three locations in southeast Kansas. The Company operates at two locations in south-western Missouri, three in metropolitan Omaha, Nebraska, and four in metropolitan Colorado Springs, Colorado. The Company offers financial services to its retail and commercial banking customers including personal and corporate banking services, mortgage banking, trust and estate planning, and personal investment financial counseling services. THE VICTOR GROUP: Chapter 7 Trustee Selling 2 Vehicles for $6,000 ----------------------------------------------------------------- Joseph B. Spero, Esq., the Chapter 7 trustee overseeing the liquidation of The Victor Group II, Inc., intends to sell two vehicles: -- a 1990 Ford Club Wagon Van (VIN: 1FBJS31YXLHA11747), and -- a 2004 Dodge Ram 2500 Quad (VIN 3D7KU28D54G220242), subject these terms and conditions: PRICE: Initial offer is $6,000 cash or certified funds, for both vehicles, after the entry of a Final Order of the Bankruptcy Court approving the sale. HEARING AND LOCATION: April 27, 2009, at 1:30 p.m. before Judge Bentz, U.S. Courthouse, Bankruptcy Court, 17 South Park Row, Erie, Pennsylvania 16501. OBJECTION DEADLINE: April 17, 2009, or thereafter as the Court permits, with a copy to Trustee's undersigned counsel. TERMS & CONDITIONS: (a) "as-is, where is and with all faults"; (b) all cash at closing, no financing contingencies; (c) initial offer of $6,000; (d) the bankruptcy court may receive higher offers at the time of the hearing; and, (e) the bankruptcy court to approve highest and best offer. FOR INFORMATION: Contact the chapter 7 trustee: Joseph B. Spero, Esq. 3213 West 26th Street Erie, Pennsylvania 16506 Telephone (814) 836-1011 The Victor Group II, Inc., dba First Machine and Manufacturing, Inc., sought chapter 11 protection (Bankr. W.D. Pa. Case No. 07-11723) on October 25, 2007, and the case converted to a Chapter 7 liquidation thereafter. The debtor estimated its assets at more than $1 million at the time of the Chapter 11 filing. TOJU EKWEJUNOR: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Toju Ekwejunor-Etchie 1785 15th Street San Francisco, CA 94103 Bankruptcy Case No.: 09-30715 Chapter 11 Petition Date: March 25, 2009 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Duane L. Tucker, Esq. Law Offices of Duane L. Tucker 27793 Tampa Ave. Hayward, CA 94544 Tel: (510) 670-0668 Email: tucker@pacbell.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb09-30715.pdf TOLL BROTHERS: Moody's Gives Negative Outlook; Holds 'Ba1' Rating ----------------------------------------------------------------- Moody's Investors Service revised the ratings outlook of Toll Brothers, Inc. to negative from stable and affirmed the existing ratings, including its senior unsecured rating at Ba1, senior sub debt rating at Ba2, and speculative grade liquidity rating at SGL- 1. The negative ratings outlook reflects Moody's expectation that Toll Brothers' high density mid- and high-rise tower business will continue to be a drag on earnings and result in reduced cash low, as cancellations are expected to mount while new orders remain weak. In addition, although the company has by far the longest land supply in the industry, it has begun bidding selectively, and so far unsuccessfully, on small parcels of additional land. If it should escalate its bidding activity and successfully acquire larger parcels, some of the company's currently strong liquidity position may be lessened. The ratings are supported by Toll Brothers' leadership position in its upper end homebuilding niche; an ability to greatly restrict, or even shut off entirely, its land spend for relatively long periods of time without incurring the need to race to catch up when the market turns; and its currently strong liquidity profile, as captured in its SGL-1 rating. At the same time, the ratings incorporate Moody's expectation that consolidated cash flow from operations will be negative in 2009, that pre-impairment earnings will dip into the negative column, that continued impairment charges will erode the substantial headroom that the company currently enjoys in its bank covenants, that the overall general economy and macro housing outlook will remain unsupportive into 2010, and that there could be additional capital drain from troubled joint ventures. Going forward, the outlook could stabilize if the company were to resume positive cash flow generation in 2009, remain profitable on a pre-impairment basis, and continue building its cash balances. The ratings could be lowered if Moody's were to expect cash flow generation to remain negative in 2010; liquidity were to be materially impaired; the company were to re-lever its balance sheet above 50%; and/or modest pre-impairment losses were to continue on a sustained quarterly basis or a significant pre- impairment loss were to occur in any one quarter. Moody's last rating action for Toll Brothers, Inc. occurred on July 3, 2008, at which time Moody's lowered the company's senior unsecured rating to Ba1 from Baa3. Based in Horsham, Pennsylvania, Toll Brothers, Inc. is the nation's leading builder of luxury homes, serving move-up, empty- nester, and "active adult" buyers in 21 states and four regions around the country. Total revenues and consolidated net income for the fiscal year that ended October 31, 2008 were $3.2 billion and $(298) million, respectively. TOUSA INC: Asks Court to Approve New Home Warranty Program ---------------------------------------------------------- TOUSA Inc. and its affiliates seek permission from John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida to enter into a new Home Warranty Program with Professional Warranty Service Corporation. In the ordinary course of business, the Debtors provide their homebuyers with standardized limited warranties. During the period in which a home is under warranty, the Debtors are obligated to repair and replace any part of the new home that is materially defective due to the Debtors' workmanship or materials. The Debtors' obligations were administered by Professional Warranty Service Corp. To help ensure that customers had added confidence in purchasing a home from the Debtors notwithstanding these Chapter 11 cases, the Debtors, PWSC and Zurich North America discussed the future availability of the Home Warranty Program for the Debtors' customer base. Accordingly, the Debtors hired PWSC to provide, at no cost to the customer, a 10-year transferable supplementary warranty to those homebuyers with contracts of sale in force as well as those customers who signed a contract of sale between the Petition Date and April 30, 2008. Under the Original Program, in the event the Debtors failed to fulfill their obligations to "eligible" homebuyers under their Home Warranty Program, the insurer would perform according to the Supplementary Warranty. Although disputed claims under the Home Warranty Program were administered through PWSC, a substantial portion of the intake of new warranty claims under the Home Warranty Program came directly to the Debtors from new homebuyers who raised claims at regional locations. In light of the Debtors' change in operational direction, in which new construction will be sharply curtailed and ultimately eliminated, it is of paramount importance that the Debtors' customers have assurance that warranty claims will in fact be honored, Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, says. Absent the ability to provide a customer with this assurance under the current circumstances, the Debtors are concerned that the sale of homes in progress and current inventory at market-level pricing would be nearly impossible. To ensure that the value of the Debtors' estates can truly be maximized in the face of the current situation, the Debtors believe it is of critical importance to enter into a new Home Warranty Program with PWSC. The salient terms of the New Home Warranty Program are: a. The Warranty Program will apply to two categories of homes constructed by the Debtors: * Group 1 -- homes as to which a sale has closed since June 30, 2008 and which are not covered by the Original Program, and * Group 2 -- about 1,100 homes that the Debtors anticipate selling and delivering during the 12-month period following April 1, 2009. b. Between Group 1 and Group 2 home categories, the Debtors expect all homes sold after July 1, 2008, and delivered before March 23, 2009, and all existing construction in progress would be covered by the Warranty Program. c. If all eligible homes have not been sold and delivered within the one-year period after the April 1, 2009 Effective Date, PWSC and the Debtors will negotiate an extension of the Warranty Program to include any remaining unsold eligible homes. d. Enrollment Fee. * Before the Effective Date, the terms of the Warranty Program require that the Debtors pay to PWSC a non- refundable initial payment for $4.5 million. * PWSC acknowledges that it currently holds a $2.5 million deposit previously paid by the Debtors to PWSC pursuant to the Original Program. The Debtors and PWSC agree to apply the Deposit to the Initial Payment. Before the Effective Date, the Debtors will pay the remaining $2 million of the Initial Payment to PWSC. * In addition to the required Initial Payment, the Debtors will pay to PWSC an enrollment fee for each home enrolled under the Warranty Program, consisting of $10.97 per $1,000 of the final sale price of each home plus any applicable surplus taxes and fees. * If the number of homes in Group 2 Home Category remaining to be enrolled is reduced to 300 homes, the Debtors will then prepay the enrollment fees applicable to the next 100 homes. Those prepayments will continue thereafter for each lot of 100 of the remaining homes to be enrolled. Prepayments will include estimated surplus taxes and fees. * After the Debtors' enrollment of the last of Group 2 Home Category, the Debtors and PWSC will engage in a final accounting of all home enrollments under the Warranty Program. If the final accounting sets an overpayment of enrollment fees and surplus taxes for those homes on which fees and taxes were prepaid to PWSC, any overpayment will be promptly remitted to the Debtors by PWSC. If the prepaid fees are less than the actual aggregate final sales price and related surplus taxes for the enrolled homes, the Debtors will immediately remit the shortfall to PWSC. e. The Debtors remain responsible for all walk through and punch-list items. Moreover, the Debtors estimate that the obligations under the New Warranty Program are: -- $2 million in new cash, plus application of the remaining Deposit from the Original Program, for a lump sum cost of $4.5 million; -- 1.1% of the sales price will also be due for home sales that close after March 23, 2009, at an estimated cost of $3.5 million; -- For houses that were sold or closed between July 1, 2008 and March 23, 2009, PWSC will be provided at an estimated cost of $3.4 million; and -- Warranty claims after April 15, 2009 will be covered by PWSC, while the Debtors will cover all open warranty claims up to April 15, 2009. The Debtors believe that entry into the New Warranty Program is a transaction within the ordinary course of their business that may be undertaken without Court approval pursuant to Section 363(c) of the Bankruptcy Code. However, out of an abundance of caution, the Debtors seek the Court's approval of the Program. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008, (Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) TOUSA INC: District Court Affirms Final Cash Collateral Order ------------------------------------------------------------- Judge Alan S. Gold of the U.S. District Court for the Southern District of Florida affirmed a bankruptcy court ruling authorizing TOUSA Inc. to use the cash collateral securing its obligations to its prepetition lenders. Judge Gold denied the appeals by TOUSA's lenders and affirmed the Cash Collateral Final Order dated June 20, 2008. The Appeals are deemed dismissed. Wells Fargo Bank, N.A., as successor administrative agent under a Second Lien Credit Agreement, and Noteholders Aurelius Capital Master, Ltd., Aurelius Capital Partners, LP, GSO Special Situations Fund L.P., GSO Special Situations Overseas Master Fund Ltd., GSO Credit Opportunities Fund (Helios), L.P., and Carlyle Strategic Partners took separate appeals to the United States District Court for the Southern District of Florida from Judge John K. Olson's June 20, 2008, approval of a stipulated Final Cash Collateral Order. In September 2008, Judge Gold consolidated the Wells Fargo and the Noteholder Appeals. Judge Gold then instructed pleadings to be filed under the Noteholder Appeal as the consolidated Appeal. Upon review, Judge Gold opined that the Cash Collateral Order reflected a compromise between the interests and concerns of the Debtors, the First Lien Lenders, and the Official Committee of Unsecured Creditors. Each of the Debtors, the First Lien Lenders, and the Committee agreed to the terms of the Order as a whole. In its Appeal, the Noteholders sought the reversal of the Cash Collateral. However, over the course of time, the Noteholders sought only the excision of the "paydown provision" from the Cash Collateral Order and the return of $175 million to the Debtors for their continued business operations. For its part, Wells Fargo sought either the reversal of the Cash Collateral Order or a modification of the Order to remove the provision authorizing the use of cash collateral to fund litigation against Wells Fargo. Judge Gold held that the Appeals are non-justifiable for reasons of standing and mootness. Judge Gold said that in the absence of a successful avoidance action, the Noteholders, as unsecured creditors, stands behind the Prepetition Lenders in priority for the recovery of amounts owed to them. Thus, the Noteholders were in effect appealing the payment for $175 million owed to the First Lien Lenders. Even if "paydown" at this stage is improper, the Noteholders suffer no direct pecuniary injury as it is not entitled to any portion of the $175 million, Judge Gold opined. Similarly, Wells Fargo has no standing to pursue its appeal because despite its limited objection to the Debtors' use of cash collateral, it was deemed to have consented to the Cash Collateral Order by the Bankruptcy Court and thus cannot be considered an aggrieved party, the District Court added. Wells Fargo has bargained away its right to object in connection with the use of the cash collateral pursuant to an Intercreditor Agreement with the First Lien Lenders, Judge Gold noted. More importantly, Judge Gold said that permitting the Noteholders' and Wells Fargo's request to excise portions of the Cash Collateral Order would unravel the Cash Collateral Order, which was reached by a consensus based on the inclusion of all of its components. Judge Gold also held that the Appeals are equitably moot. He averred that the Noteholders' and Wells Fargo's failure to obtain a stay and the resulting substantial consummation of the Cash Collateral Order weighs in favor of finding equitable mootness. "Since the piecemeal modifications of the Cash Collateral Order require a new cash collateral order at this stage of the Debtors' bankruptcy cases, granting Wells Fargo's and the Noteholders' requests pose a threat to the re-emergence of the Debtors as revitalized entities," Judge Gold said. "Placing the Debtors in the position to renegotiate a new cash collateral order or engage in a contested hearing to secure the use of cash for their business operations will likely undermine the willingness of business partners and customers to continue to conduct business with the Debtors and undermine a successful reorganization." Even if the Appeals are not equitably moot and Wells Fargo and the Noteholders have standing, the Appeals must be dismissed for lack of jurisdiction, Judge Gold contended. With respect to the Noteholder Appeal, Judge Gold concluded that the Cash Collateral Order is a conditional order dependent on the outcome of the ongoing avoidance litigation before there can be a final adjudication of the rights by the competing rights to the Paydown. Similarly, the Cash Collateral Order is non-final as to Wells Fargo's Appeal because an award of interim professional fees is interlocutory in nature, he stated. Judge Gold further averred that the Appeals failed on their merits. A full-text copy of Judge Gold's 44-page Dismissal Order is available for free at: http://bankrupt.com/misc/Tousa_AureliusAppealDsmssalOrd.pdf About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008, (Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) TOUSA INC: Files Form 10-Q Report for Quarter Ended June 2008 ------------------------------------------------------------- TOUSA, Inc., filed its quarter report for the three months ended June 30, 2008, on Form 10-Q with the U.S. Securities and Exchange Commission on March 20, 2009. Tommy L. McAden, executive vice president, director and chief financial officer of TOUSA, disclosed that the Company's total revenues decreased 48% to $297.5 million for the three months ended June 30, 2008, from $576.7 million for the three months ended June 30, 2007. This decrease is primarily attributable to a 48% decrease in homebuilding revenues. For the three months ended June 30, 2008, the Company reported a loss from continuing operations before reorganization items and the benefit for income taxes of $360.2 million as compared to a loss from continuing operations before benefit for income taxes of $135.3 million for the three months ended June 30, 2007. Results from continuing operations for the three months ended June 30, 2008, include charges totaling $306.6 million related to inventory impairments, abandonment costs, joint venture impairments, goodwill impairments and the provision for settlement of loss contingency. During the three months ended June 30, 2008, the Company recognized $18.2 million of reorganization expenses related to its bankruptcy cases. Results from continuing operations for the three months ended June 30, 2008, include charges of $129.2 million related to inventory impairments and abandonment costs joint venture impairments and the provision for settlement of loss contingency. Inventory impairments charges for the second quarter of 2008 totaled $175.5 million as compared to $41.4 million for the second quarter of 2008. These charges were recognized in discontinued operations. For the second quarter of 2008, the Company also recognized $18.2 million of reorganization expenses related to its bankruptcy proceedings. Mr. McAden related that TOUSA's effective tax rate from continuing operations was 0.2% for the second quarter of 2008. The effective tax rate for the three months ended March 2008 was primarily impacted by a valuation allowance on the Company's deferred tax asset, he noted. TOUSA reported a loss from continuing operations, net of taxes, of $379.1 million for the second quarter of 2008. For the same period in 2007, the Company only had a loss of $122.1 million from continuing operations, net of taxes. A full-text copy of TOUSA's 2008 2nd Quarter Report on Form 10-Q is available at the SEC at http://ResearchArchives.com/t/s?3ad8 TOUSA, Inc., and Subsidiaries Consolidated Balance Sheet As of June 30, 2008 ASSETS HOMEBUILDING: Cash and cash equivalents: Unrestricted $192,400,000 Restricted 185,800,000 Inventory: Deposits 30,200,000 Homesites and land under development 288,100,000 Residences completed and under construction 337,900,000 Inventory not owned 10,300,000 -------------- 666,500,000 Property and equipment, net 19,000,000 Investments in unconsolidated joint ventures 8,700,000 Receivables from unconsolidated joint ventures 100,000 Other assets 61,300,000 Goodwill - Assets held for sale 2,900,000 -------------- 1,136,700,000 FINANCIAL SERVICES: Cash and cash equivalents: Unrestricted 11,300,000 Restricted 4,300,000 Mortgage loans held for sale 6,100,000 Other assets 4,100,000 -------------- 25,800,000 -------------- Total assets $1,162,500,000 ============== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) HOMEBUILDING: Accounts payable and other liabilities $130,800,000 Customer deposits 21,800,000 Obligations for inventory not owned - Notes payable - Bank borrowings - Liabilities associated with assets held for sale 200,000 -------------- 152,800,000 FINANCIAL SERVICES: Accounts payable and other liabilities 4,700,000 Bank borrowings - -------------- 4,700,000 -------------- Total liabilities 2,301,300,000 Commitments and contingencies Stockholders' equity (deficit): Preferred stock, at $0.01 par value 9,100,000 Common stock, at $0.01 par value 600,000 Additional paid-in capital 567,200,000 Retained earnings (accumulated deficit) (1,715,700,000) -------------- Total stockholders' equity (deficit) (1,138,800,000) -------------- Total liabilities and stockholders' equity $1,162,500,000 ============== TOUSA, Inc., and Subsidiaries Consolidated Statement of Operations For The Quarter Ended June 30, 2008 HOMEBUILDING: Revenues: Home sales $276,900,000 Land sales 17,300,000 -------------- 294,200,000 Cost of sales: Home sales 260,800,000 Land sales 12,100,000 Inventory impairments and abandonment costs 304,700,000 Other - -------------- 577,600,000 -------------- Gross profit (loss) (283,400,000) -------------- Selling, general and administrative expenses 55,600,000 Loss (income) from unconsolidated joint ventures, net - Impairments (recovery) of investments in and receivables from unconsolidated joint ventures and (9,300,000) Provision for settlement of loss contingency - Goodwill impairments 11,200,000 Interest expense 16,700,000 Other income, net (500,000) -------------- Homebuilding pretax income (loss) (357,100,000) FINANCIAL SERVICES: Revenues 3,300,000 Expenses 6,400,000 -------------- Financial Services pretax income (loss) (3,100,000) -------------- Income (loss) from continuing operations before income taxes (360,200,000) Reorganization items 18,200,000 Provision (benefit) for income taxes 700,000 -------------- Income (loss) from continuing operations, net of taxes (379,100,000) Discontinued operations: Loss from discontinued operations (600,000) Provision (benefit) for income taxes - -------------- Income (loss) from discontinued operations, net of taxes (600,000) -------------- Net loss (379,700,000) -------------- Dividends and accretion of discount on preferred stock 2,500,000 -------------- Net income (loss) available to common stockholders ($382,200,000) ============== TOUSA, Inc., and Subsidiaries Consolidated Statement of Cash Flows For The Quarter Ended June 30, 2008 Cash flows from operating activities: Net loss ($665,000,000) Loss from discontinued operations 3,200,000 -------------- Income (loss) from continuing operations (661,800,000) Adjustments to reconcile income (loss) from continuing operations to net cash used in operating activities, net of effects of acquisitions and dispositions: Depreciation and amortization 7,600,000 Non-cash compensation expense 1,700,000 Non-cash interest expense 25,400,000 Reorganization items, net 86,700,000 Provision for settlement of loss contingency - Inventory impairments and abandonment costs 477,000,000 Goodwill impairments 11,200,000 Write-down of receivables 5,700,000 Deferred income taxes - Income from unconsolidated joint ventures (300,000) Distributions of earnings from unconsolidated joint ventures 200,000 Impairment of investments in/receivables from unconsolidated joint ventures and related (8,800,000) Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Restricted cash (179,400,000) Inventory 113,100,000 Receivables from unconsolidated joint ventures (3,700,000) Other assets 222,800,000 Mortgage loans held for sale 8,900,000 Accounts payable and other liabilities 15,000,000 Customer deposits (12,100,000) -------------- Net cash used in operating activities 109,200,000 Cash flows from investing activities: Net additions to property and equipment (400,000) Investments in unconsolidated joint ventures (1,600,000) Capital distributions from unconsolidated joint ventures - -------------- Net cash used in investing activities (2,000,000) Cash flows from financing activities: Net borrowings from revolving credit facilities 31,500,000 Net repayments of Financial Services bank borrowings (7,800,000) Payments for deferred financing costs (2,900,000) -------------- Net cash provided by financing activities 20,800,000 -------------- Net cash provided by (used in) continuing operations 128,000,000 Cash flows from discontinued operations: Net cash used in discontinued operations (800,000) -------------- Net cash provided by discontinued operations (800,000) -------------- Increase (decrease) in cash and cash equivalents 127,200,000 -------------- Cash and cash equivalents at beginning of year 76,500,000 -------------- Cash and cash equivalents at end of year $203,700,000 ============== Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC, dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) TOWN CENTRE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Town Centre of Lago Vista, LP dba Town Centre of Lago Vista 10516 FM 1431 East Marble Falls, TX 78654 Bankruptcy Case No.: 09-10881 Chapter 11 Petition Date: April 6, 2009 Court: Western District of Texas (Austin) Judge: Craig A. Gargotta Debtor's Counsel: Frank B. Lyon, Esq. frank@franklyon.com Frank B. Lyon, Attorney at Law 6836 Austin Center Blvd., Suite 150 Austin, TX 78731 Tel: (512) 345-8964 Fax: (512) 345-4393 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 ------ --------------- ------------ Regions Bank 8,408,745 5005 Riverway, Suite 110 Houston, TX 77056 D.H. Pruett & Co. $212,390 PO Box 15 Cedar Park, TX 78630 Travis County Tax Assessor property taxes $76,370 5501 Airport Blvd. Austin, TX 78751-1410 Tribble & Associates of $75,482 Austin, LLC Cotham Construction $24,054 Services F.L. Crane & Sons $22,277 Jim Connelly Masonry, Inc. $5,660 Johnson Mechanical Services $6,505 Burleson Contracting, Inc. $5,285 Minyard Services $4,890 Anchor Ventana Glass Co. $4,600 Premier Electrical $4,600 Contracting Pedernales Elec. Cooperative $2,481 Inc. Otis Elevator $1,350 IESI - Austin $1,255 Cothran's Safe & Lock $743 AT&T $604 Viking Fence Co., Ltd. $550 Estrella Trucking $487 Vanguard fire Systems, LP $364 The petition was signed by Debra Fryar, director of operations. TUSCANY PRESERVE: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------ Tampa Bay Business Journal reports that Tuscany Preserve Development, Inc., has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Middle District of Florida. According to Business Journal, Tuscany Preserve has filed an emergency motion asking the Court to return its property, which is being held by Michael E. Moecker. Court documents say that Tuscany Preserve assigned its assets to Mr. Moecker in November 2008 to be liquidated for its creditors. Business Journal relates that on March 17, 2009, a Polk circuit court judge denied Mr. Moecker's motion to operate the business. Business Journal states that Tuscany Preserve then failed to complete homes under contract. According to court documents, Mr. Moecker had no authority to complete the homes or any closings on the homes, to the detriment of the Debtor's estate and its creditors. Kissimmee, Florida-based Tuscany Preserve Development Inc. is a developer that primarily builds single-family houses and town homes in Polk County. The Company is owned by Amnon Golan, J. Steven and Joann Davenport, and Richard and Karen Davenport. Tuscany Preserve filed for Chapter 11 bankruptcy protection on April 3, 2009 (Bankr. M.D. Fla. Case No. 09- 06591). Steven J. Solomon, Esq., at Adorno & Yoss LLP assists the Company in its restructuring effort. As of November 30, 2008, the Company listed $44,064,958 in assets and $48,881,497 in debts. TVI CORPORATION: Seeks Duane Morris as Counsel ---------------------------------------------- TVI Corporation and its debtor-affiliates ask the United States Bankruptcy Court for the District of Maryland for permission to employ Duane Morris LLP as their counsel. The firm will: 1) provide legal advice to the Debtors with respect to their rights, powers and duties as debtor-in-possession in the continued operation of their business and management of their properties; 2) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtor, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estate; 3) prepare and pursue confirmation of the Debtors' plan(s), approval of the Debtors' plan(s) and approval of the Debtors' disclosure statement(s); 4) prepare necessary applications, motions, answers, order, reports and other legal papers on behalf of the Debtor; 5) appear in the Court and to protect the interest of the Debtors before the Court; and 6) perform all other legal services for the Debtors which may be necessary and proper in this proceeding; The firm's compensation rates are: Designation Hourly Rate ----------- ----------- Partners $495-$640 Associates $305-$325 Paralegals $195-$250 Legal Assistants $150 Christopher W. Mahoney, 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. The Debtors also ask the Court for authority to employ Buccino & Associates Inc. as their financial advisor and consultant. Headquartered in Gleen Dale, Maryland, TVI Corporation -- http://www.tvicorp.com/-- supplies 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. The Company and two of its affiliates filed for Chapter 11 protection on April 1, 2009 (Bankr. D. Md. Lead Case No.: 09-15677). Christopher William Mahoney, Esq., at Duane Morris LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Buccino & Associates, Inc. as their financial advisors and consultants. When the Debtors filed for protection from their creditors, they posted assets between $10 million and $50 million, and debts between $1 million and $10 million. VCA ANTECH: Moody's Upgrades Corporate Family Rating to 'Ba2' ------------------------------------------------------------- Moody's Investors Service upgraded VCA's Corporate Family Rating and secured credit facility rating to Ba2 from Ba3. The rating outlook was changed to stable from positive. The upgrade reflects VCA's solid financial performance during a challenging economic environment in 2008, strong financial strength metrics for the rating category, leading market positions in the animal hospital and laboratory segments and a track record of earnings and profit growth in a relatively stable service sector. "The stable rating outlook anticipates that credit metrics will remain strong for the rating category during 2009 despite a weak outlook for discretionary consumer spending," stated Lenny Ajzenman, Senior Credit Officer. Moody's took these rating actions: -- Upgraded Corporate Family Rating to Ba2 from Ba3 -- Upgraded Probability of Default Rating to Ba3 from B1 -- Upgraded the $75 million Senior Secured Revolver due May 2010, to Ba2 LGD 2 (29%) from Ba3 LGD 2 (29%) -- Upgraded the $522 million Senior Secured Term Loan due May 2011, to Ba2 LGD 2 (29%) from Ba3 LGD 2 (29%) The last rating action on VCA was on April 9, 2008 at which time Moody's affirmed the Ba3 CFR and changed the outlook to positive from stable. VCA is a leading animal healthcare company operating 471 animal hospitals and 44 laboratories in the United States and Canada. The company provides veterinary services and diagnostic testing to support veterinary care and sells diagnostic imaging equipment and other medical technology products and related services to the veterinary market. VIRGINIA RETIREMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Virginia Retirement Services of Chesterfield, L.L.C. dba Magnolias of Chesterfield 203 Gold Leaf Terrace Dawsonville, GA 30534 Bankruptcy Case No.: 09-31938 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court Eastern District of Virginia (Richmond) Judge: Kevin R. Huennekens Debtor's Counsel: Roy M. Terry, Jr. , Esq. DurretteBradshaw, PLC 600 E. Main St., 20th Fl. Richmond, VA 23219 Tel: (804) 775-6948 Email: rterry@durrettebradshaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Ben S. Read, Jr., manager of the Company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/vaeb09-31938.pdf VISION FOR SOULS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Vision For Souls Outreach Center Church, Inc. P.O. Box 852 Mabelton, GA 30126 dba Vision For Souls Family Worship Center Tel: (770) 739-2816 Fax: (770) 819-7685 E-mail: visionforsouls@aol.com Bankruptcy Case No.: 09-67626 Chapter 11 Petition Date: March 25, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Company Description: The debtor is a church. See http://visionforsouls.com/ Debtor's Counsel: Paul Reece Marr, Esq. Paul Reece Marr, P.C. 300 Galleria Parkway, N.W., Suite 960 Atlanta, GA 30339 Tel: (770) 984-2255 Email: pmarr@mindspring.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Keith Young, Sr., CEO of the company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-67626.pdf WILDFLOWER TDS: Case Summary & Seven Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Wildflower TDS, LP 1940 Fountainview Dr. #187 Houston, TX 77057 Tel: (361) 579-6700 Bankruptcy Case No.: 09-60042 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Circle TDS, LP 09-60043 Chapter 11 Petition Date: April 6, 2009 Court: Southern District of Texas (Victoria) Judge: Wesley W. Steen Debtor's Counsel: Jerome A. Brown, Esq. jerome@txbizlaw.com Brown & Associates P.O. Box 1667 Victoria, TX 77902 Tel: (361) 579-6700 Estimated Assets: $500,000 to $1 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Madison Realty Capital LP note $14,000,000 261 Madison Avenue, 18th flr. New York, NY 10016 City of Victoria services $7,375 PO Box 1279 Victoria, TX 77902 Jose Garcia services $545 2201 A. Wayside Drive Victoria, TX 77901 CPL services $338 Waste Management services $329 Victoria Apartments Assn. services $322 Reliant Energy services $159 The petition was signed by Tracy Suttles, president. WYNNE RESIDENTIAL: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Wynne Residential Asset Management, LLC 2214 Westwood Avenue Richmond, VA 23230 Bankruptcy Case No.: 09-50401 Chapter 11 Petition Date: March 27, 2009 Court: United States Bankruptcy Court Western District of North Carolina (Wilkesboro) Judge: J. Craig Whitley Debtor's Counsel: Jimmy R. Summerlin, Jr., Esq. Young, Morphis, Bach & Taylor, L.L.P. P.O. Drawer 2428 400 Second Ave., NW Hickory, NC 28603 Tel: (828) 322-4663 Fax: (828) 322-2023 Email: jimmys@hickorylaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by J. Michael Henderson, manager of the Company. A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ncwb09-50401.pdf ZOUNDS INC: Blames Bankruptcy on Investors & High Mall Rents ------------------------------------------------------------ Angelique Soenarie at The Arizona Republic reports that Zounds, Inc., founder Sam Thomasson has blamed the Company's bankruptcy on investor skittishness, high mall rents, and a decline in "mall traffic." Zounds, says The Arizona Republic, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Arizona. Citing Mr. Thomasson, The Arizona Republic relates that Zounds will still honor warranties on purchased hearing devices. According to The Arizona Republic, Zounds opened its 17th store in Portland, Oregon, last year and planned to open 30 more stores. Mr. Thomasson said that investors pulled back on funding when the credit market tightened, The Arizona Republic states. The report quoted Mr. Thomasson as saying, "We grew dramatically, but as the economy turned, we began to see that with our new stores they didn't have chance to mature. It was bad timing." Mr. Thomasson, The Arizona Republic relates, said that he won't close his three Valley stores but will move stores at malls in other states into smaller spaces. According to the report, Mr. Thomasson said that Zounds will focus on its core markets, which include Arizona, Florida, and Pittsburgh. "Our intent over the next 18 months is to open stores in strip centers or medical offices. We're looking at locations closer to our customer base and who would like to have as stores within 10 to 15 miles," the report quoted Mr. Thomasson as saying. The Arizona Republic reports that Zounds closed 12 stores in Michigan, Delaware, Texas, Washington, and Pittsburgh. Mr. Thomasson, says The Arizona Republic, will keep a few stores open in Texas, Washington, and Pittsburgh. Mr. Thomasson has reduced his 200-member workforce to 105, The Arizona Republic states. Headquartered in Phoenix, Arizona, Zounds, Inc. -- http://www.zoundshearing.com/-- offers a portfolio of hearing aids and wireless devices. The Debtor filed for Chapter 11 protection on March 30, 2009 (Bankr. D. Ariz. Case No. 09-06053). Jordan A. Kroop, Esq., at Squire Sanders & Dempsey LLP 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. ZOUNDS INC: Wants to Hire Squire Sanders as Bankruptcy Counsel -------------------------------------------------------------- Zounds, Inc., asks the U.S. Bankruptcy Court for the District of Arizona for authority to employ Squire, Sanders & Dempsey L.L.P. as counsel. Squire Sanders will: a) advise the Debtor with respect to its powers and duties as debtor-in-possession in the continued management and operation of its business and property; b) attend meetings and negotiate with representatives of creditors and other parties in interest and advise and consult on the conduct of this Chapter 11 case, including all of the legal and administrative requirements of operating in Chapter 11; c) assist the Debtor with the preparation of its schedules of assets and liabilities and statements of financial affairs; d) advise the Debtor in connection with any contemplated sales of assets or business combinations, including the negotiation of asset, stock, purchase, merger or joint venture agreements, formulate and implement appropriate procedures with respect to the closing of any transaction and counsel the Debtor in connection with the transactions; e) advise the Debtor in connection with any postpetition financing and cash collateral arrangements and negotiate and draft documents relating thereto, provide advice and counsel with respect to prepetition financing arrangement, and negotiate and draft documents relating thereto; f) advise the Debtor on matters relating to the evaluation of the assumption, rejection or assignment of unexpired leases and executory contracts; g) advise the Debtor with respect to legal issues arising in or relating to the Debtor's ordinary course of business including attendance at senior management meetings, meetings with the Debtor's financial and turnaround advisors and meetings of the board of directors; h) take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on its behalf, the defense of any actions commenced against them, negotiate concerning all litigation in which the Debtor is involved and object to claims filed against the Debtor's estate; i) prepare on Debtor's behalf, all motions, applications, answers, orders, reports and papers necessary to the administration of the estate; j) negotiate and prepare, on the Debtor's behalf, a Plan of Reorganization, disclosure statement and all related agreements and documents and taking any necessary action on behalf of the Debtor to obtain confirmation of the Plan; k) attend meetings with third parties and participate in negotiations with respect to these matters; l) appear before the Court, any appellate courts and the U.S. Trustee and protect the interests of the Debtor's estate before the Courts and the U.S. Trustee; and m) perform all other necessary legal services and provide all other necessary legal advice to the Debtor in connection with this Chapter 11 case. Jordan A. Kroop, a partner at Squire Sanders, tells the Court that the hourly rates of professionals working on this case are: New Associates $155 Senior Partners $955 New Project Assistants $100 Senior Paralegals $325 Non-Attorney Personnel $100 - $325 Mr. Kroop also relate that on March 5, 2009, Squire Sanders received a $50,000 retainer for professional services, charges and disbursements. On March 25, the Debtor prepaid $20,000 for additional services Squire Sanders would render up to the petition date. As of the petition date, Squire Sanders was compensated for all known fees and reimbursed for all known expenses incurred before the petition date. Mr. Kroop assures the Court that Squire Sanders is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Court. Mr. Kroop can be reached at: Squire, Sanders & Dempsey L.L.P. Two Renaissance Square 40 North Central Avenue, Suite 2700 Phoenix, AZ 85004 Tel: +1-602-528-4000 Fax: +1-602-253-8129 About Zounds, Inc. Headquartered in Phoenix, Arizona, Zounds, Inc. -- http://www.zoundshearing.com/-- offers a portfolio of hearing aids and wireless devices. The Debtor filed for Chapter 11 protection on March 30, 2009 (Bankr. D. Ariz. Case No. 09-06053). Jordan A. Kroop, Esq., at Squire Sanders & Dempsey LLP 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. * Patton Boggs Hires Three New Partners --------------------------------------- Patton Boggs LLP has hired Michael P. Richman, Mark A. Salzberg, and Erika L. Morabito as partners. Patton Boggs hired one of the nation's premier bankruptcy legal teams, bolstering the firm's ability to help clients restructure their businesses in a climate of economic uncertainty. Mr. Richman will lead the firm's national bankruptcy practice, which includes practitioners in the firm's New York City, Washington, D.C., Dallas and Northern Virginia offices. The team will advise clients on virtually every aspect of financial distress and bankruptcy, including out-of-court restructurings and the prosecution and defense of creditors' rights litigation, including preference and fraudulent conveyance cases. Mr. Richman will be resident in the firm's New York City office, which has experienced significant growth over the last year. Mr. Salzberg and Ms. Morabito will practice from the firm's Washington office. "This is a real coup for the firm," said Stuart M. Pape, managing partner at the firm. "This extremely talented and respected legal team will deepen our well of expertise in the areas of bankruptcy and restructuring and provide a huge asset to companies weathered by these financial times." Mr. Richman, past director, president and board chairman of the American Bankruptcy Institute, will lead the team in their representation of Chapter 11 debtors and creditors' committees. The team provides a wealth of experience having represented clients before state and federal courts in over 20 states and territories. The bankruptcy team will also provide expertise representing secured and unsecured creditors, landlords, purchasers of assets under Bankruptcy Code section 363, franchisors, intellectual property owners and other parties in interest. "This is an extraordinary opportunity to provide distressed companies with the full array of strategic options to escape the financial storm," Mr. Richman said. "No one knows Washington the way Patton Boggs does. That expertise blended with our extensive knowledge about bankruptcy options, will be a potent mix for clients." Before joining the firm, Mr. Richman was the chairman of the Bankruptcy & Business Reorganization practice at Foley & Lardner LLP. Mr. Salzberg and Ms. Morabito were partners in that practice as well. Mr. Richman graduated from Vassar College in 1975 and earned his law degree from Columbia University Law School in 1979. At Columbia, he was selected as a Harlan Fiske Stone Scholar and awarded the David M. Berger Memorial Award. Mr. Salzberg graduated from Swarthmore College in 1987 and earned his law degree from the University of Virginia School of Law in 1992. Ms. Morabito graduated from Oswego State University in 1995 and earned her law degree from Syracuse University College of Law in 1999. When Mr. Richman is not in the courtroom he is performing with the Indubitable Equivalents, a classic rock band whose members are all bankruptcy professionals, including the Chief United States Bankruptcy Judge for the Eastern District of Michigan. Based in Washington, D.C., Patton Boggs LLP -- http://www.pattonboggs.com-- is a leader in public policy, litigation, and business law, and is well known for its deep bipartisan roots in the U.S. political arena. The firm's core practice areas are Public Policy and Regulatory, Litigation, Business, and Intellectual Property. With offices in New York, New Jersey, Dallas, Denver, Anchorage, Northern Virginia and internationally in Doha, Qatar and Abu Dhabi, United Arab Emirates, more than 600 lawyers and professionals provide comprehensive, practical, and cost-effective legal counsel to clients around the globe. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Apr. 1-4, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 16-19, 2009 COMMERICAL LAW LEAGUE OF AMERICA 2009 Chicago/Spring Meeting Westin Hotel on Michigan Ave., Chicago, Ill. Contact: (312) 781-2000; http://www.clla.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners Alexander Hamilton Custom House, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ May 4, 2009 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference New York Marriott Marquis, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ May 7-8, 2009 RENASSANCE AMERICAN MANAGEMENT, INC. 6th Annual Conference on Distressted Investing - Europe The Le Meridien Piccadilly Hotel, London, U.K. Contact: 1-903-595-3800 or http://www.renaissanceamerican.com/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 12-15, 2009 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University, New Orleans, La. Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 10-13, 2009 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 25th Annual Bankruptcy & Restructuring Conference The Ritz-Carlton Orlando Grande Lakes Orlando, Florida Contact: http://www.aria.org/ June 11-14, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ July 29-Aug. 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Westin Hilton Head Island Resort & Spa, Hilton Head Island, S.C. Contact: http://www.abiworld.org/ Aug. 6-8, 2009 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Conference Hotel Hershey, Hershey, Pa. Contact: http://www.abiworld.org/ Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: March 16, 2009 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***