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/raid1/www/Hosts/bankrupt/TCR_Public/090415.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 15, 2009, Vol. 13, No. 103 Headlines ABITIBIBOWATER INC: Receives Management Cease Trade Order ACCT1ST TECHNOLOGY: Voluntary Chapter 11 Case Summary AGRIPROCESSORS INC: Ex-Manager Guilty of Harboring Illegal Aliens ALBERT LINDLEY: U.S. Trustee Sets Creditors Meeting for April 29 ALL AMERICAN SEMICONDUCTOR: Committee's 3rd Amended Plan Confirmed ALLIANCE INVESTMENTS: Voluntary Chapter 11 Case Summary ALLIANT TECHSYSTEMS: Fitch Affirms Issuer Default Rating at 'BB' AMBAC ASSURANCE: Moody's Cuts Insurer Strength Rating to 'Ba3' AMERICAN AIRLINES: Pilots & Attendants Demand Pay Raises AMERICAN INT'L: Unit Seeks $5-Bil Credit Line from Federal Reserve ASARCO LLC: Can Employ Unnamed Consultant for AMC Dispute ASARCO LLC: De Baca Plaintiffs to Get $615,000 Unsecured Claim ASARCO LLC: Parent Wants District Court to Review Settlements ASARCO LLC: Seeks Open-Ended Extension of Removal Period ASARCO LLC: To Pay $170,000 Fine for Silver Bell Violations ATA AIRLINES: Southwest to Use LaGuardia Slots Starting June AVENTINE RENEWABLE: Senior Secured Lenders Object to DIP Financing AZTEC LAND: Voluntary Chapter 11 Case Summary B & C CORPORATION: Case Summary & 20 Largest Unsecured Creditors BARNEY'S NEW: Deteriorating Liquidity Cues S&P's Junk Rating BEARINGPOINT INC: Committee Balks at Greenhill & Co. Fees BEARINGPOINT INC: Plaintiff Wants Securities Appeal to Proceed BELO CORP: May Breach Loan Accords as Cash Falls, Analysts Say BERNARD L. MADOFF: Competing Bids for Market Maker Due April 22 BERNARD L. MADOFF: Trustee Uses Preference Theory to Recover $150M BERNARD L. MADOFF: NY Mets' Opening-Day Seats Sold for $7,500 BETHANY ROLLING: Section 341(a) Meeting Slated for May 11 BIG 10: U.S. Trustee Sets May 13 Meeting of Creditors BLOCK 34: Voluntary Chapter 11 Case Summary BLOCKBUSTER INC: Liquidity Concerns Cue S&P's Junk Rating BROTMAN MEDICAL: Emerges from Ch. 11; Prospect Hikes Stake to 72% BRUNO'S SUPERMARKETS: Can Obtain $19 Million DIP Loan from Regions BRUNO'S SUPERMARKETS: Files Amended Procedures for Sale of Assets BRUNO'S SUPERMARKETS: Supermarket Operator's Bid "Unacceptable" BRUNO'S SUPERMARKETS: Files Schedules of Assets and Liabilities BRYAN SHOOLERY: Voluntary Chapter 11 Case Summary BROOKLYN NAVY: Fitch Affirms 'BB' Rating on Senior Secured Bonds CANWEST GLOBAL: Noteholders Extend Payment Deadline; Talks Go On CANWEST MEDIA: Moody's Cuts Probability of Default Rating to 'Ca' CAPMARK FINANCIAL: Maturity Extension Won't Affect S&P's B+ Rating CERTIFICHECKS: Files for Chapter 7 Bankruptcy Protection CHARTER COMMUNICATIONS: Kirkland Engagement to Be Heard Today CHARTER COMMUNICATIONS: Gets Court OK to Hire KCC as Claims Agent CHARTER COMMUNICATIONS: Microsoft's Allen to Sell 28-Mil. Shares CHARTER COMMUNICATIONS: Seeks Dismissal of JPMorgan Lawsuit CHARTER COMMUNICATIONS: Taps Duff & Phelps as Valuation Consultant CHESAPEAKE CORP: Seeks July 27 Extension of Plan Filing Period CHRYSLER FINANCIAL: Raises Lending Rates to Vehicle Buyers CHRYSLER LLC: Boston Consulting to Advise on Alliance's Viability CHRYSLER LLC: Lenders Seek Cash Or Other Protection CIRCUIT CITY: To Sell E-Commerce Biz to Systemax for $6.5 Million CITIGROUP INC: SEC Won't OK Stock-Registration Until Friday CMR MORTGAGE: Section 341(a) Meeting Slated for April 28 in Calif. CRUSADER ENERGY: Reaches Deal for Use of Cash Until April 28 CRUSADER ENERGY: Bankruptcy Should Be in Oklahoma, Creditor Says DBSI INC: Former Refco Examiner to Probe Alleged Fraud DELPHI CORP: Wants to Disband Now Out-of-Money Shareholders' Panel DIPLOMAT CONSTRUCTION: Section 341(a) Meeting Slated for April 30 EE HOLDINGS: Voluntary Chapter 11 Case Summary DRUG FAIR: DIP Financing Draws Objection from Committee ENRON CORP: Gets $6.2MM as Settlement of Piper Jaffray, DISH Suit ENRON CORP: Fleming Clients Join Newby Settlement Class ENRON CORP: National City Elevates MFN Issue to District Court FATBURGER RESTAURANTS: Filed for Chapter 11 in California FERRELLGAS PARTNERS: S&P Affirms Corporate Credit Rating at 'B+' FIREPOND INC: Files for Chapter 7 After Foreclosure, Asset Sale FIRST LIGHT: Voluntary Chapter 11 Case Summary FLEETWOOD ENTERPRISES: To Sell Inventory to Lazy Days for $2.2MM FOAMEX INTERNATIONAL: Court OKs Matlin As Stalking Horse Bidder FORD MOTOR: S&P Raises Corporate Credit Rating to 'CCC+' FREMONT GENERAL: Exclusive Plan Filing Period Extended to April 30 FRONTIER AIRLINES: Grants $3,587,080 Admin. Claim to World Fuel FURNITURE MINNESOTA: Voluntary Chapter 11 Case Summary FX REAL ESTATE: Receives Notice of Breach, Warns of Bankruptcy FX REAL ESTATE: NASDAQ Notice Prompts Voluntary Delisting GANNETT CO: Will Reduce Oakland County Non-Daily Newspapers in May GENERAL MOTORS: Treasury Hires 4 Firms for Advice on Auto Industry GENERAL MOTORS: Gov't Mulls Swapping Some Loans with Equity GENERAL MOTORS: Bonds Fall to All-Time Low Following Ratings Cut GETRAG TRANSMISSION: Taps Baker & Daniels as Special Counsel GMC WORLDWIDE: Voluntary Chapter 15 Case Summary GOLD TOE: S&P Changes Outlook to Negative, Affirms 'CCC' Rating GREEKTOWN CASINOS: Hiked Market Share to 25% in March GREEKTOWN CASINOS: To Buy 280 Slot Machines From IGT GREEKTOWN CASINOS: Won't Assign City of Detroit Pact to 3rd Party GUNDLE/SLT ENVIRONMENTAL: Operating Results Cue S&P's Junk Rating HALLWOOD ENERGY: Receives Final Approval to Use Cash Collateral HICKS SPORTS: Fails to Pay Debt, May Lose Club & Franchise HINES HORTICULTURE: Amended Joint Plan Declared Effective HOUSTON PROMENADE: Files List of Largest Unsecured Creditors HUBBARD AUTOMOTIVE: Voluntary Chapter 11 Case Summary IDEARC INC: U.S. Trustee To Hold Sec. 341(a) Meeting on May 11 INDALEX HOLDINGS: Gets Interim Approval of $42.5 Million DIP Loan JAMES RHODE: Case Summary & 17 Largest Unsecured Creditors JOHN HENRY: Ivy Hill Acquisition Won't Affect Moody's Ratings JOSEPH DIEKEMPER: Sentenced to 10 Years in Prison JOSEPH TAGLIARINI: Voluntary Chapter 11 Case Summary JOURNAL REGISTER: State Officials Object JRC Executives' Bonuses KNIGHT-CELOTEX: U.S. Trustee Sets Section 341(a) Meeting for May 6 KEOKUK AREA: Moody's Affirms 'B3' Rating on $6.1 Mil. Debt KNIGHT INC: Fitch Affirms Issuer Default Rating at 'BB+' LANDAMERICA FIN'L: Has $10 Million Bid for Home Warranty Business LANDSOURCE COMMUNITIES: Creditors Committee Seeks Plan Delay LAZY DAYS: To Acquire Fleetwood Trailer Inventory for $2.2MM LEHMAN BROTHERS: Pays Trustee $12-Mil. for 4.5 Months' Work LEHMAN BROTHERS: Acquires "Bomb's Worth of Uranium Cake" LEHMAN BROTHERS: Court Permits Insurers to Pay D&O Legal Costs LEHMAN BROTHERS: Delays Filing of Annual Report on Form 10-K LEHMAN BROTHERS: LCPI to Provide $30MM Funding to TPG-Austin LEHMAN BROTHERS: Seek Additional Services From Simon Thacher LEHMAN BROTHERS: Trustee Seeks Approval of Barclays Agreements LEHMAN BROTHERS: Trustee Seeks OK of Protocol to Return Funds LEVI STRAUSS: March 1 Balance Sheet Upside-Down by $315 Million LIGHTHOUSE LODGE: Case Summary & 20 Largest Unsecured Creditors LIN TV: May Breach Loan Accords as Cash Falls, Analysts Say MAC-GRAY CORP: S&P Gives Negative Outlook; Affirms 'BB-' Rating MADOFF SECURITIES: Voluntary Chapter 15 Case Summary MARINA BAY: Case Summary & Seven Largest Unsecured Creditors MASONITE CORP: Perella Weinberg on Board as Investment Bankers MASONITE CORP: Sec. 341 Meeting of Creditors Slated for May 7 MASONITE CORP: Seeks Approval of Kirkland & Ellis Engagement MASONITE CORP: Seeks to Tap Richards Layton as Delaware Counsel MASONITE CORP: Taps Alvarez & Marsal as Restructuring Advisors MASONITE CORP: U.S. Trustee Fails to Appoint Creditors Committee METALS USA: S&P Junks Corporate Credit Rating From 'B-' METALS USA HOLDINGS: S&P Junks Corporate Credit Rating From 'B-' MILACRON INC: GECC and DDJ DIP Facilities Approved on Final Basis MIRANT CORP: Class Action Plaintiffs Seek More Time to File Claims MIRANT CORP: Adopts Stockholder Rights Plan to Protect NOLs MIRANT CORP: Five Officers Disclose Equity Stake MIRANT CORP: To Conduct 2009 Shareholders' Meeting on May 7 MONACO COACH: Panel Member to Acquire Fleetwood Trailer Inventory MORGAN STANLEY: S&P Corrects Rating on Two Classes of 2006-8 Notes NAVISTAR INTERNATIONAL: Fitch Affirms 'BB-' Issuer Default Rating NEXPAK CORPORATION: Case Summary & 37 Largest Unsecured Creditors NORTEL NETWORKS: Pass-Through Trust Gets S&P's Junk Rating NOVA HOLDING: Taps OPA as Financial Advisor and Investment Banker NOVA HOLDING: Wants to Employ Blank Rome as Bankruptcy Counsel PARK AT ASPEN: Section 341(a) Meeting Slated for May 5 in Texas PB SURF: U.S. Trustee Schedules Creditors Meeting on May 28 PHILADELPHIA NEWSPAPERS: Gets Lenders Consent on Sonenshine Hiring PHILADELPHIA NEWSPAPERS: Panel May Hire O'Melveny as Lead Counsel PILGRIM'S PRIDE: Will Close Processing Facility in Dalton, Georgia POWERMATE CORP: Plan Filing Period Extended to July 10 RANGELINE PROPERTIES: Voluntary Chapter 11 Case Summary ROCKWOOD SQUARE: Voluntary Chapter 11 Case Summary SEAGATE TECHNOLOGY: Fitch Assigns 'BB+' Rating on $430 Mil. Notes SEAGATE TECHNOLOGY: Moody's Confirms 'Ba2' Corporate Family Rating SEAGATE TECHNOLOGY: S&P Assigns 'BB+' Rating on $430 Mil. Notes SEMGROUP LP: Pursues Injunction vs. Catsimatidis; Seeks Ouster SEMGROUP LP: Canadian Unit to Implement $10.5MM Retention Plan SEMGROUP LP: Seeks to Amend Mark Lietzke Incentive Plan SEMGROUP LP: Taps Valuation Research Corp. for Valuation Services SEMGROUP LP: Wants BofA Loan Maturity Date Moved to September 30 SEMGROUP LP: Weil Gotshal Seeks $3.3MM in Fees for November Work STATION CASINOS: Lender Talks Go On; Ch.11 Filing Moved to May 15 STONE HORSE MOTEL: Voluntary Chapter 11 Case Summary STORABLES INC: Voluntary Chapter 11 Case Summary STRONGBUILT: Voluntary Chapter 11 Case Summary SUN-TIMES MEDIA: Proposes to Hire Young Conaway as Co-Counsel SUSAN LORE: Voluntary Chapter 11 Case Summary TIMES SQUARE: Case Summary & Largest Unsecured Creditor TIMES SQUARE: Wants to Hire Stichter Riedel as Bankruptcy Counsel TOWN CENTRE: Sec. 341(a) Meeting Scheduled for May 6 in Texas TRG WOOD PRODUCTS: Voluntary Chapter 11 Case Summary TRIBUNE CO: Court Approves Amendments to Barclays Facilities TRONOX INC: Bankruptcy Judge Declines to Disband Equity Committee TROPICANA ENTERTAINMENT: Parties File Plan Confirmation Objections TROPICANA ENTERTAINMENT: To Reject Columbia Sussex Service Pacts TROPICANA ENTERTAINMENT: Updates Court on Plan Voting Process TROPICANA ENTERTAINMENT: Wimar Seeks $2 Mil. Admin. Expense Claim ULTRA STORES: Case Summary & 20 Largest Unsecured Creditors VILLAGE JEWELERS: Voluntary Chapter 11 Case Summary WILLIAM MOTORS: Voluntary Chapter 11 Case Summary WASHINGTON MUTUAL: McKee Assigns $1.3 Million Claim to Longacre WASHINGTON MUTUAL: Transition Employees May be Heavily Taxed WASHINGTON MUTUAL: Weil Gotshal Bills $1.7MM for January Work Z GALLERIE: Case Summary & 20 Largest Unsecured Creditors ZOHAR WATERWORKS: Can Access $1.5MM of Patriarch DIP Financing ZOHAR WATERWORKS: Section 341(a) Meeting Set for May 8 in Delaware ZOUNDS INC: Wins Court Nod for Squire Sanders as Bankr. Counsel ZOUNDS INC: Has until April 29 to File Schedules and Statements ZOUNDS INC: Wants to Obtain $1-Mil. DIP Loan; LandLords Object * Upcoming Meetings, Conferences and Seminars ********* ABITIBIBOWATER INC: Receives Management Cease Trade Order --------------------------------------------------------- AbitibiBowater Inc. and AbitibiBowater Canada Inc. issued their first bi-weekly Default Status Report in accordance with National Policy 12-203 - Cease Trade Order for Continuous Disclosure Defaults. On March 31, 2009, the Companies announced that they were not able to timely file their annual financial statements, accompanying management's discussion and analysis and related CEO and CFO certifications for the financial year ended December 31, 2008. In accordance with NP 12-203, the Companies applied to the applicable securities commissions and regulators for Management Cease Trade Orders related to the shares of the common stock of AbitibiBowater Inc. and AbitibiBowater Canada Inc.'s exchangeable shares to be imposed against certain of the Companies' executive officers -- and at the discretion of the applicable securities commissions, some or all of the persons who have been directors, officers or insiders of the Companies -- instead of a general Cease Trade Order being imposed against all securities of the Companies. On April 2, 2009, the Quebec Autorite des marches financiers issued a temporary Management Cease Trade Order expiring April 20, 2009, related to the Companies' securities against certain directors and officers of the Companies for so long as annual financial statements, certifications and related MD&A are not filed. On April 6, 2009, the Ontario Securities Commission rendered a similar Management Cease Trade Order related to certain Ontario-resident directors of AbitibiBowater Inc. The issuance of such Management Cease Trade Orders does not generally affect the ability of persons who have not been directors, officers or insiders of the Companies to trade the securities of the Companies. A general Cease Trade Order may be imposed by the applicable securities commissions if the Companies fail to satisfy the provisions of the Alternative Information Guidelines required pursuant to NP 12-203. The Companies are working with their auditors to complete the audit of the 2008 Annual Financial Statements as soon as possible. Until the 2008 Annual Financial Statements are filed, the Companies intend to satisfy the Alternative Information Guidelines by issuing bi-weekly Default Status Reports, each of which will be issued in the form of a press release. If the 2008 Annual Financial Statements are not filed beforehand, the Companies intend to issue their next Default Status Report on April 28, 2009. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. * * * On March 13, 2009, AbitibiBowater Inc. and its Abitibi- Consolidated Inc. subsidiary commenced a recapitalization proposal which is intended to, among other things, reduce the Company's net debt by approximately $2.4 billion, lower its annual interest expense by approximately $162 million and raise approximately $350 million through the issuance of new notes of ACI and common stock and warrants of the Company. The Recapitalization is proposed to be implemented as part of a plan of arrangement, which was filed in connection with an application for an interim order with the Commercial Division of the Superior Court of Quebec in Montreal on March 13 pursuant to section 192 of the Canada Business Corporations Act. The Court granted an interim order on March 13, which included a stay of proceedings in favor of ACI and certain of its affiliates. As reported in the Troubled Company Reporter on Nov. 13, 2008, AbitibiBowater Inc. reported a net loss of US$302 million on sales of US$1.7 billion for the third quarter 2008. These results compare with a net loss of US$142 million on sales of US$815 million for the third quarter of 2007, which consisted only of Bowater Incorporated. The company's 2008 third quarter results reflect the full quarter results for Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company after their combination on Oct. 29, 2007. As reported by the TCR on January 29, 2009, Moody's Investors Service downgraded the corporate family rating of AbitibiBowater Inc.'s subsidiaries Abitibi-Consolidated Inc. and Bowater Incorporated to Caa3 from Caa1. The rating action, according to Moody's, was prompted by AbitibiBowater's weakened liquidity position and the deteriorating economic and industry conditions. "The Caa3 corporate family ratings of Abitibi and Bowater reflect a heightened probability of default in the near term given the anticipated challenges of refinancing or paying down their significant short term debt obligations through asset sales, either of which may prove to be difficult in the current market environment." The ratings of both Abitibi and Bowater also reflect the accelerating decline in demand for newsprint and other paper grades manufactured by both companies as consumers continue to migrate to online news and other forms of electronic media. The TCR reported on February 12, 2009, that Standard & Poor's Ratings lowered its long-term corporate credit rating on newsprint producers AbitibiBowater Inc. and subsidiaries Bowater Inc. and Bowater Canadian Forest Products Inc. two notches to 'CC' from 'CCC'. S&P also lowered the long-term corporate credit rating on Abitibi-Consolidated Inc. one notch to 'CCC-' from 'CCC'. ACCT1ST TECHNOLOGY: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Acct1st Technology Group, LLC P.O. Box 12588 Dallas, TX 75225 Tel: (888) 790-7045 Bankruptcy Case No.: 09-31917 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Company Description: Acct1st Technology Group LLC offers imaging, document management, tax workflow and client portals through internal or hosted systems. See http://www.acct1st.com/ Debtor's Counsel: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Rd., Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 Email: eric@ealpc.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Andrew Hatfield, a managing member 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/txnb09-31917.pdf AGRIPROCESSORS INC: Ex-Manager Guilty of Harboring Illegal Aliens ----------------------------------------------------------------- Amy Lorentzen at The Associated Press reports that Elizabeth Billmeyer, Agriprocessors Inc.'s former human resources manager, pleaded guilty to one count of conspiracy to harbor undocumented foreigners for profit and one count of knowingly accepting false resident alien cards. According to The AP, Ms. Billmeyer was arrested after a massive immigration raid at Agriprocessors' Iowa kosher slaughterhouse last year. The report says that Ms. Billmeyer, who remains free on bond, faces up to 20 years in prison and a $500,000 fine. The U.S. attorneys' office said in a news release that Ms. Billmeyer conspired with others to harbor illegal immigrants at the plant over a five-year period for commercial advantage and private financial gain. The AP relates that Ms. Billmeyer is accused of accepting false resident alien cards with the knowledge that they were forged or counterfeit. Headquartered in Postville, Iowa, Agriprocessors Inc. -- http://www.agriprocessor.com/-- operates a kosher meat and poultry packing processors located at 220 North West Street. The Company maintains an executive office with 50 employees at 5600 First Avenue in Brooklyn, New York. The Company filed for Chapter 11 protection on November 4, 2008 (Bankr. E. D. N.Y. Case No. 08- 47472). The case, according to McClatchy-Tribune, has been transferred to Iowa. Kevin J. Nash, Esq., at Finkel Goldstein Rosenbloom & Nash represents the Company in its restructuring effort. The Company listed assets of $100 million to $500 million and debts of $50 million to $100 million. ALBERT LINDLEY: U.S. Trustee Sets Creditors Meeting for April 29 ---------------------------------------------------------------- The U.S. Trustee for Region 6 will convene a meeting of creditors in The Albert Lindley Lee Memorial Hospital's Chapter 11 case on April 29, 2009, at 10:00 a.m., at Alexander Pirnie Federal Building, 10 Broad Street, Rm. 106, Utica, New York. 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. Fulton, New York-based The Albert Lindley Lee Memorial Hospital, also known as A.L. Lee Memorial Hospital, filed for Chapter 11 protection on April 3, 2009 (Bankr. N. D. N.Y. Case No. 09-30845). Stephen A. Donato, Esq., at Bond, Schoeneck & King, PLLC, represents the Debtor in its restructuring efforts. The Debtor listed total assets of $17,167,501 and total debts of $12,281,735. ALL AMERICAN SEMICONDUCTOR: Committee's 3rd Amended Plan Confirmed ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Florida confirmed on April 8, 2009, the Third Amended Plan of Liquidation proposed by the official committee of unsecured creditors appointed in the bankruptcy cases of All American Semiconductor, Inc., et al. The Bankruptcy Court will conduct a post-confirmation status conference on June 10, 2009, at 1:30 p.m. The Plan contemplates the liquidation of all assets of the consolidated estate for the benefit of the holders of allowed claims and allowed interests. The primary sources of funding the implementation of the Plan are the cash in the consolidated estate as of the Plan's Effective Date, monies to be collected after the Plan's Effective Date from the liquidation of the remaining assets, and any recoveries achieved from the prosecution of claims and causes of action, including Litigation Claims, which claims and causes of action, including Litigation Claims, are being transferred to and vested, along with all other assets, in the Liquidating Trust under and pursuant to the terms of the Plan. The Plan places the various claims against and interests in the Debtors in 6 classes: Class Description ----- ----------- 1 Allowed Priority Claims 2A Lender Secured Claims 2B Allowed Other Secured Claims 3 Allowed Unsecured Claims 4 Lender Deficiency Claims 5 Allowed Subordinated Claims 6 Allowed Interests Classes 3 and 4, both of which are impaired, voted to accept the Plan. Under the Plan, claims in Classes 1, 2A and 2B are unimpaired and holders are deemed to have accepted the Plan; Classes 5 and 6 are impaired and deemed to have rejected the Plan. No Distributions are expected to be made on account of Allowed Interests under the Plan. All Interests shall be cancelled as of the Plan's Effective Date, except Interests held by any Debtor in any other Debtor. Allowed Unsecured Claims under Class 3 will be paid from time to time from the Collected Cash Accounts on a pro rata basis with (i) the other allowed unsecured claims and (ii) the Lenders on account of the Lender Deficiency Claim under Class 4. Under the Plan terms, holders of Lender Secured Claims under Class 2A will receive (i) full payment of their unpaid claims in cash, (ii) the proceeds of the sale or disposition of the collateral, (iii) the collateral securing said Lender Secured Claim, (iv) other treatment that leaves unaltered the Lenders' legal, equitable and contractual rights, or (v) such other distribution as agreed to by the Committee, the Debtors or the Liquidating Trustee, on the one hand, and the Lenders, on the other hand. Allowed Other Secured Claims under Class 2B will receive similar treatment, except that in addition to the foregoing treatment for Class 2A claims, holders of Class 2B claims may also receive a note with periodic cash payment having a present value equal to the extent of the value of each holder's secured interest. A copy of the Committee's Third Amended Plan of Liquidation is available at http://bankrupt.com/misc/AASI.3rdAmendedPlan.pdf About All American Based in Miami, Florida, All American Semiconductor Inc. (Pink Sheets: SEMI.PK) -- http://www.allamerican.com/-- distributed electronic components manufactured by other firms. In total, the company offered approximately 40,000 products produced by approximately 60 manufacturers. The company had 36 strategic locations throughout North America and Mexico, as well as operations in China and Western Europe. The company and its debtor-affiliates filed for Chapter 11 protection on April 25, 2007 (Bankr. S.D. Fla. Lead Case No. 07-12963). Jason Z. Jones, Esq., Mindy A. Mora, Esq., at Bilzin Sumberg; and Tina M. Talarchyk, Esq., at Squire Sanders, represent the Debtors as counsel. Adrian C. Delancy, Esq., Jerry M. Markowitz, Esq., Rachel Lopate Rubio, Esq., Rilyn A. Carnahan, Esq., Ross R. Hartog, Esq., at Markowitz, Davis, Ringel & Trusty; and Stanley F. Orszula, Esq., at Loeb & Loeb, represent the Official Committee of Unsecured Creditors as counsel. As of June 30, 2007, the company posted total assets of $4,071,000, consisting solely of cash; total liabilities of $18,348,000; and total stockholders' deficit of $14,277,000. ALLIANCE INVESTMENTS: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Alliance Investments Group, LLC P.O. Box 2034 Delano, CA 93216 Bankruptcy Case No.: 09-12849 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Eastern District of California (Fresno) Judge: Whitney Rimel Debtor's Counsel: T. Scott Belden, Esq. 4550 California Ave., 2nd Fl. Bakersfield, CA 93309-1172 Tel: (661) 395-1000 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The petition was signed by Andres Lopez, a managing member of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/caeb09-12849.pdf ALLIANT TECHSYSTEMS: Fitch Affirms Issuer Default Rating at 'BB' ---------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating for Alliant Techsystems at 'BB', along with these: -- IDR at 'BB'; -- Senior secured term loan at 'BBB-'; -- Senior secured revolver at 'BBB-'; -- Convertible senior subordinated notes at 'BB-'; -- Senior subordinated notes at 'BB-'. Approximately $2 billion of debt are covered by these ratings. The Rating Outlook remains Stable. ATK's ratings continue to be supported by healthy free cash flow and solid credit metrics for the rating; high levels of spending for munitions and some missile defense programs that benefit the company; ATK's position in the NASA budget; and ATK's role as a sole source provider for many of its products to the U.S. Government. Concerns focus on the company's willingness to increase leverage for acquisitions; potential budgetary pressures in the longer term, particularly for missile defense and NASA; a lack of diversity compared to other large and medium-sized defense contractors; the amount of revenue generated by operations in Iraq and Afghanistan; pension plan funding and commodities exposure. The Stable Rating Outlook reflects the current high levels of defense spending, U.S. Army training requirements that should result in continued high usage of munitions, and the general level of the company's credit metrics for the rating category. Fitch expects ATK to have sufficient liquidity given near-term cash requirements for $280 million of debt retirement and $150 million for pension contributions. At the end of the third quarter of fiscal 2009 (3Q'09; ended Dec. 31, 2008), ATK had $568 million of liquidity, which consisted of $162 million of cash on hand and $406 million available on the $500 million secured revolver. ATK plans to make a $150 million discretionary pension fund contribution early in fiscal year 2010. Additionally, the company may need to use some of its liquidity or access the capital markets to retire $280 million of 2.75% convertible notes due 2024. The convertible notes are callable/puttable in August 2009. No other debt maturities are scheduled until FY12. Historically, the company has a solid track record of cash flow generation when adjusted for discretionary pension contributions (as was done in FY07). In FY09, the company expects to generate free cash flow of approximately $260 million which Fitch believes is an achievable target. Projections for free cash flow are slightly below the $282 million generated in FY08. The slightly lower projection for free cash flow can be attributed to a $20 million increase in capital expenditures and the absence in FY09 of an FY08 $30 million tax benefit arising from the aforementioned FY07 pension contribution. Leverage has been on the decline since FY07 when ATK issued debt to fund its pension plan and repurchase shares, causing leverage to increase to 3.5 times (x). At the end of 3Q'09 (ended Dec. 31, 2008), leverage declined to 2.7x versus 2.9x at the end of FY08. Though this credit metric has been improving, Fitch remains concerned about ATK's willingness to use the balance sheet for acquisitions. Changes to the budget for NASA or for defense spending could have an impact on ATK. The company received 78% of its revenues from the U.S. Government in FY08, and the U.S. Army accounted for 27% of the total sales (with 12% of the total sales coming from one contract for ammunition). Sales to NASA accounted for 20% of FY08 revenues. U.S. Secretary of Defense Gates' recommendations for the FY10 Department of Defense budget include significant program cancellations and delays, but the proposals were not as dramatic as expected, in Fitch's view. The full financial impact of the recommendations will not be known until the detailed budget is released in several weeks, but Fitch expects that the defense industry's credit quality will remain solid, with relatively stable revenues compared to most industrial sectors over the next several years. Four of the top 10 programs from the FY09 budget will likely be reduced or delayed in the FY10 budget proposal (some missile defense programs, carrier replacement, Future Combat System, and DDG-1000), but several of the top programs are likely to be increased, including the Joint Strike Fighter (F-35) and F/A-18 aircraft programs. Fitch expects missile defense program changes will have a mixed impact on ATK, while the company should benefit from its position on the Joint Strike Fighter. AMBAC ASSURANCE: Moody's Cuts Insurer Strength Rating to 'Ba3' -------------------------------------------------------------- Moody's Investors Service has downgraded to Ba3 from Baa1 the insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited. In the same rating action, Moody's also downgraded the senior debt of Ambac Financial Group, Inc. to Caa1 from Ba1. The rating action concludes a review for possible downgrade that was initiated on March 3, 2009. The outlook for the ratings is developing. The rating action has implications for the various transactions wrapped by Ambac as discussed later in this press release. The downgrade of Ambac's ratings primarily reflects weakened risk adjusted capitalization, as Moody's loss estimates on RMBS securities have increased significantly (particularly with respect to Alt-A transactions). These higher loss estimates increase the estimated capital required to support Ambac's sizable direct RMBS portfolio (including securities owned as well as securities guaranteed) and also the insurer's large portfolio of ABS CDO risks. The rating agency noted that the claims-paying resources of Ambac remain above Moody's expected loss estimates for the firm, though this cushion has been significantly eroded, and losses in more severe stress scenarios would exceed available resources. Ambac recorded a statutory net loss of $4.0 billion for 2008, ending the year with $1.6 billion in policyholders' surplus only after giving effect to $2.0 billion of new capital raised during the year. Qualified statutory capital, comprised of policyholders' surplus and contingency reserves, stood at approximately $3.5 billion at year-end 2008, but remains vulnerable to increases in case loss reserves over the near to medium term, based on Moody's expected loss estimates. Furthermore, Ambac's current impairment provisions for ABS CDOs are highly sensitive to estimates of future cash flows on underlying CDO collateral and projections of the timing of claims payments many years into the future. In Moody's view, Ambac's liquidity risks associated with its investment agreement business have been largely contained due to inter-company asset purchases and lending, with approximately 93% of investment agreement liabilities collateralized. However, the credit profile of Ambac Assurance's investment portfolio has deteriorated due to the purchase of structured finance assets from the financial services business. At year-end 2008, the market value of Ambac's consolidated invested assets was approximately $2.5 billion below amortized cost, with much of the difference attributable to RMBS assets. While Moody's believes that large liquidity premiums contribute to this differential, Moody's also expect some further loss to principal based on Moody's ratings on these securities. Ambac is steadily de-leveraging through natural portfolio run-off, high levels of refundings and via commutations of credit default swaps on ABS CDOs. However, downward credit migration in the firm's insured portfolio outside its mortgage-related exposures has largely offset the positive capital accretion benefits associated with the de-leveraging process to date. In addition to reduced capitalization, Moody's also cited deterioration in other key rating factors as dislocation in financial markets -- and in Ambac's situation -- have persisted. These include, most notably, Ambac's weakened business position and very constrained financial flexibility. Taken together, Moody's believes that these factors limit Ambac's ability to effectively counter the company's weakened capital position. Moody's stated that Ambac's developing outlook reflects the potential for further deterioration in the insured portfolio as asset performance develops over the intermediate (6-18 month) term. It also incorporates positive developments that could occur over that time including lower variability in mortgage-related asset performance, the possibility of commutations or terminations of certain ABS CDO exposures, and/or successful remediation efforts on poorly performing RMBS transactions. The company's developing outlook is also based on the potential for various initiatives being pursued at the US federal level to mitigate the rising trend of mortgage loan defaults. Moody's will continue to evaluate Ambac's ratings in the context of the future performance of its insured portfolio relative to expectations and resulting capital adequacy levels, as well as changes, if any, to the company's strategic and capital management plans. Rating Rationale For Ambac Financial Group, Inc. The increase in the notching between the Ba3 insurance financial strength rating of Ambac and the Caa1 senior unsecured debt rating of ABK, to four notches, from three, reflects the deterioration in Ambac's capital adequacy profile and the subordinated status of holding company creditors to policyholder claims and $800 million of preferred stock issued by the operating company. Moody's notes that holding company liquidity remains strained due to the lack of unrestricted dividend capacity during 2009. At year-end 2008, ABK had approximately $233 million of cash and inter-company loans, which is equivalent to approximately 1.8 years of debt service and holding company expenses. Treatment Of Wrapped Transactions Moody's ratings on securities that are guaranteed or "wrapped" by a financial guarantor are generally maintained at a level equal to the higher of these: a) the rating of the guarantor (if rated at the investment grade level); or b) the published underlying rating (and for structured securities, the published or unpublished underlying rating). In light of the downgrade of Ambac to below the investment grade level, Moody's will position the ratings of all structured transactions wrapped by Ambac at the higher of the underlying rating of the structured security -- regardless of whether the underlying rating is published or not -- and Ambac's Ba3 rating. For all other transactions wrapped by Ambac, including municipal securities, Moody's will withdraw the ratings for which there are no published underlying ratings in accordance with current rating agency policy. For these transactions, if the rating of Ambac should subsequently move back into the investment grade range, or if the agency should subsequently publish the underlying rating, Moody's would reinstate the rating to the wrapped instruments. List Of Rating Actions These ratings have been downgraded; with a developing outlook: * Ambac Assurance Corporation -- insurance financial strength to Ba3 from Baa1; * Ambac Assurance UK Limited -- insurance financial strength to Ba3 from Baa1; * Ambac Financial Group, Inc. -- senior unsecured debt to Caa1 from Ba1, junior subordinated debt to Caa2 from Ba2 and provisional rating on preferred stock to (P)Ca from (P)Ba3. The last rating action related to Ambac was on March 3, 2009, when Moody's placed Ambac's ratings on review for possible downgrade. Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. For the year ended December 31, 2008, the company reported a GAAP net loss of approximately $5.6 billion and a shareholders' deficit of $3.8 billion. AMERICAN AIRLINES: Pilots & Attendants Demand Pay Raises -------------------------------------------------------- Mike Esterl at The Wall Street Journal reports that American Airlines' pilots and flight attendants are asking for a pay increase. According to WSJ, American Airlines' pilots are demanding a 50% pay increase. American Airlines attendants also want to be made whole after their salaries were cut by more than 25% six years ago, WSJ says, citing the Association of Professional Flight Attendants chief Laura Glading. WSJ relates that the Transport Workers Union of America, which represents American's maintenance crews, has called for yearly pay increases of 6%, 4%, and 3%, respectively, over the next three years. Workers at American Airlines agreed in 2003 to $1.8 billion in payroll cuts, WSJ states. The pilots see the 2003 concessions as "a loan, and it's time to restore us," WSJ says, citing Sam Mayer, a pilot-union spokesperson and 767 captain for American Airlines. WSJ reports that the Allied Pilots Association and the Transport Workers criticized the $300 million in bonuses to American Airlines' top 1,000 executives over the past three years and highlighting an ongoing government probe into possible safety violations at the airline. American Airlines, according to WSJ, has been in talks with the union since May 2008. WSJ relates that American Airlines has since entered federal mediation with representatives of its flight attendants and maintenance crews. Citing the Massachusetts Institute of Technology, WSJ reports that American Airlines' pilots earned an average of about $225,000 in salary and benefits in 2007, depending on seniority and other factors, well above a 15-airline average of $188,268. WSJ relates that American Airlines' management said that its executive compensation is in line with other airlines and that the airline's safety is top-notch. The report states that the Federal Aviation Administration is still investigating wiring problems on American Airlines aircraft. According to WSJ, American Airlines will still make wage counterproposals to the pilots' union or flight attendants, preferring to first work on productivity issues. American Airlines' most recent offer to transport workers included a 5% bonus payment in return for scaled-back medical benefits, WSJ says. The report states that American Airlines said last week that it will freeze wages for nonunion workers, which represent about a quarter of the airline's U.S. work force. The conflict with the pilots has stalled American Airlines' plan to fly planes to Beijing from Dallas, WSJ relates. The plan, according to WSJ, needs the pilots' approval as it involves long- distance flights. The unions, says WSJ, could step up opposition to possible job cuts from a proposed trans-Atlantic alliance between American Airlines and British Airways PLC. WSJ, citing analysts, reports that big pay increases at American Airlines could push the airline to the brink of insolvency. WSJ states that American Airlines executives are making the same argument as they urge unions to cut back demands. According to WSJ, American Airlines faces increasing liquidity concerns as it expects to disclose a first-quarter loss that analysts expect at about $400 million. About American Airlines Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. American provides scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter on Aug. 5, 2008, the TCR said that Moody's Investors Service downgraded the Corporate Family and Probability of Default Ratings of AMR Corp. and its subsidiaries to Caa1 from B2, and lowered the ratings of its outstanding corporate debt instruments and certain equipment trust certificates and Enhanced Equipment Trust Certificates of American Airlines Inc. The company still carries Moody's Negative Outlook. AMERICAN INT'L: Unit Seeks $5-Bil Credit Line from Federal Reserve ------------------------------------------------------------------ American International Group's aircraft-leasing unit, International Lease Finance Corp., is seeking a $5 billion credit line from the Federal Reserve, a report by Justin Baer, Francesco Guerrera and Julie MacIntosh at The Financial Times said. According to FT.com, AIG could use the money to facilitate ILFC's sale. Citing people familiar with the matter, the report says that the unit is in talks with ILFC and the New York Fed. The sources, FT.com states, said that the credit line from the Fed would come from the billions of dollars worth of loans the monetary authorities have already extended to AIG. FT.com relates that ILFC is in negotiations with several consortia of potential buyers that include Carlyle Group, Thomas H. Lee Partners, and Greenbriar Equity Group. FT.com notes that without reassurances that ILFC's short-term financing needs could be met, the unit may be unlikely that any of the bidders would be willing to take on a capital-intensive business. William Launder at The Wall Street Journal reports that AIG's woes have spread to little towns throughout Germany. WSJ notes that the reach can be chalked up in part to a kind of infrastructure tax deal that spread among hundreds of municipal and state governments around the world. WSJ state that the deals in many cases have failed due to AIG's problems. WSJ relates that under the deal, localities could earn millions of dollars selling their infrastructure to U.S. banks and other investors in deals guaranteed by U.S. banks and insurance companies. WSJ states that the investors would get a tax break, the benefits of which they would share with the municipalities. The tax break isn't allowed any longer, says WSJ. The deals, according to WSJ, generally called for top-rated guarantors to insure the municipalities' invested funds. The report says that downgrades of those guarantors have forced the governments to inject more cash or other collateral, in some cases to the banks that acquired the infrastructure, to compensate for the guarantor's lower credit standing with the investors. Julian Roberts -- a lawyer at Roessner, which represents municipalities trying to get out of deals that have soured -- said that 160 German municipalities signed into those leasing deals with a total transaction value of EUR80 billion, WSJ reports. Citing lawyers, WSJ states that some German municipalities accepted the unusually structured transactions more readily, partly because Germany lets its towns and cities engage in complex financial deals without the permission of state or federal authorities. According to WSJ, one deal was structured around the Bodensee water utility, which is owned by the city of Stuttgart and its surrounding towns and manages the water facilities and plant providing water for four million people in the region. The utility, states the report, ended the deal on March 26 and after paying out of its EUR45 million in earnings from the contract. The utility said that it will borrow and raise water rates to consumers to offset its new debts, according to the report. About American International Based in New York, American International Group, Inc. (AIG), is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on September 8, 2008, to $4.76 on September 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These and other events severely limited AIG's access to debt and equity markets. On September 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and, pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At September 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since September 30, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. In addition, subsequent to September 30, 2008, certain of AIG's domestic life insurance subsidiaries entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On November 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At September 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the US Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. ASARCO LLC: Can Employ Unnamed Consultant for AMC Dispute --------------------------------------------------------- Judge Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas has authorized ASARCO LLC to employ a certain professional to provide consulting services to its counsel in connection with its objection to Administrative Claim No. 18571 filed by Americas Mining Corporation and ASARCO Incorporated. The Court directed the confidential Consulting Expert to file, under seal, an affidavit of disinterestedness within 10 days after its retention's approval. The Consulting Expert, in consultation with ASARCO's counsel, is authorized to file its quarterly fee applications under seal, with copy to the Office of the U.S. Trustee. ASARCO's Employment Application was filed on a no-name basis to avoid disclosure of the professional's identity and other details of the retention and scope of work, Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, said. He said the professional is now being retained as a consulting expert to ASARCO's counsel, and a decision as to whether the professional will testify as an expert in connection with the claim objection will be made at a later time. The Consulting Expert will be paid in an hourly rate of $780, and will be paid "travel time portal to portal and time for any fee applications required." The Consulting Expert will also be reimbursed for its necessary expenses. Given the nature and scope of the issues on which ASARCO has sought the Consulting Expert's expertise and judgment, ASARCO consent that the Consulting Expert may consult with other members of its firm and if it does, the necessary services of those members will be paid for at the firm's customary rates. The Consulting Expert has represented to ASARCO and its counsel that it does not have or represent any interest adverse to the Debtors or their bankruptcy estates on the matters for which it is being retained, and it otherwise meets the "disinterested person" definition as set forth in Section 101(14) of the Bankruptcy Code. Court Approves Westbrook Engagement In a separate order, the Court authorized ASARCO LLC to employ Jay L. Westbrook as special purpose consultant and testifying expert in connection with the hearing -- which commenced April 13, 2009 -- on ASARCO's request for the approval of a renewed settlement and release with Sterlite (USA), Inc. ASARCO LLC filed a plan of reorganization on July 31, 2008, premised on the sale of the Debtors' assets to Sterlite USA for $2.6 billion. By October 2008, ASARCO LLC informed the Court that Sterlite refused to close the proposed sale and thus, the Original Plan could not be confirmed. The parties has since renewed their purchase and sale agreement and on March 11, 2009, ASARCO LLC sought Court approval of a settlement and release contained in the new PSA for the sale of the ASARCO assets for $1.7 billion. Grupo Mexico SAB is offering $1.3 billion in cash to take ASARCO LLC out of bankruptcy. Robert Moore, counsel to Grupo Mexico, said at a court hearing on Monday that ASARCO LLC's asbestos creditors have agreed to support Grupo Mexico's offer. The asbestos committee has opposed ASARCO LLC's plan to sell its operating assets to Sterlite, citing the liability release Sterlite could receive. Sterlite is a unit of London-based Vedanta Resources PLC. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: De Baca Plaintiffs to Get $615,000 Unsecured Claim -------------------------------------------------------------- ASARCO LLC asks Judge Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas to approve its compromise and settlement with the Class of Plaintiffs Established by Denver District CT, 97CV6180 Administered by Matthew Pohl Class Action Administration regarding Claim No. 10902 and administrative Claim No. 18560, pursuant to Section 363(b)(1) of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure. The Debaca Class has filed proofs of claim against the Debtors, with the alleged amount exceeding $1,570,000. The Parties' Settlement Agreement resolves all of the claims asserted by the Debaca Class against ASARCO, subject to approval by the Bankruptcy Court, the Denver District Court, and appropriate representatives of the Debaca Class. The Settlement Agreement provides that the Debaca Class will receive an allowed general, unsecured claim for $615,000 in ASARCO's bankruptcy case, and an allowed administrative claim for $135,000 to be paid after satisfying certain conditions. Within 30 days of the Bankruptcy Court's approval of the Settlement Agreement, the Debaca Class will release any liens or deeds of trust it holds on any ASARCO property in San Juan County, Colorado, or elsewhere. ASARCO believes that the Settlement Agreement meets applicable standards and is reasonable, fair and equitable because it eliminates the risks and uncertainties that are inherent in any litigation. ASARCO informs the Court that the Settlement Agreement has been previously approved by the Debtors' official committees and the Future Claims Representative. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Parent Wants District Court to Review Settlements ------------------------------------------------------------- Asarco Incorporated seeks withdrawal of reference to the U.S. District Court for the Southern District of Texas of ASARCO LLC's request for approval of global settlements of environmental claims under Rule 9019 of the Federal Rules of Bankruptcy Procedure and the Parent's objection to that request. Charles A. Beckham, Jr., Esq., at Haynes and Boone, LLP, in Houston, Texas, contends that the reference must be withdrawn because the U.S. Bankruptcy Court lacks jurisdiction to approve the request. He asserts that pursuant to Section 157(b)(5) of the Judicial and Judiciary Procedures Code, withdrawal to the District Court may be mandatory where resolution of the proceeding requires substantial and material consideration of, inter alia, any federal statute regulating activities affecting interstate commerce. Mr. Beckham insists that the disposition of the environmental claim settlements is case-dispositive because of: -- their sheer enormity; -- the fact that the Debtors have filed a Chapter 11 plan, which requires injunction under Section 524(g) of the Bankruptcy Code; -- the fact that the settlements collectively require the Debtors' bankruptcy estates to deal with hundreds of millions of dollars in administrative expense claims, which must be paid in full, in cash and which payments will significantly dilute recoveries to all other creditors in the bankruptcy cases; -- the fact that the proposed consent decrees require the estate to clean-up certain sites currently owned by the estate and then to relinquish ownership and transfer the property into a "custodial trust"; and -- the fact that the Debtors filed a plan that permits cost recovery in excess of environmental clean-up costs in violation of non-bankruptcy law and policy. As reported by the Troubled Company Reporter, the Debtors are seeking to resolve several environmental claims asserted against the bankruptcy estate through different settlement agreements, which propose to pay millions with respect to certain sites and custodial trusts. The salient terms of the Environmental Settlement Agreements are: (a) owned, non-operating sites with identified environmental issues are to be placed into environmental custodial trusts along with approximately $233.8 million for remediation and closure costs and $27.5 million for administration costs of the trusts; (b) environmental claims relating to the vast majority of previously unresolved state and federal environmental claims will be allowed as unsecured claims, totaling approximately $100 million; and (c) environmental claims of the United States and the states of Nebraska and Washington relating to the Residual Environmental Settlement Sites will be allowed as administrative claims, totaling approximately $14 million, and unsecured claims, totaling approximately $736 million. The subject sites and trusts and the corresponding proposed amounts are: Site/Trust Proposed Amount ---------- --------------- Coeur d'Alene Custodial Trust $359,179,000 Omaha Lead Site $186,500,000 East Helena Site $100,000,000 Custodial trust - Alabama, et al. $70,955,493 United States for DOI and FS $67,500,000 Amarillo and El Paso Site $52,000,000 Coeur d'Alene Basin Site $41,464,000 Tacoma Site $27,000,000 Int'l Boundary Water Commission Site $19,000,000 Black Pine Site $17,500,000 Coeur d'Alene Custodial Trust, land $14,000,000 Jack Waite Mine Site $11,300,000 Mike Horse Site $10,000,000 Richardson Flat Tailings Site $7,400,000 Circle Smelting Site $6,052,390 Monte Cristo Mining District Site $5,500,000 State of Washington $5,500,000 The Environmental Claims either have been the subject of estimation hearings, which provided a thorough examination of the legal and factual complexities of the claims, or were the product of arm's-length negotiations. The Bankruptcy Court will commence a hearing on May 18 and 19, 2009, to consider ASARCO's request. Several parties have balked at the Debtors' request: 1. The Official Committee of Unsecured Creditors; 2. The Official Committee of Asbestos Claimants; 3. Asarco Incorporated; 4. Robert C. Pate, as the Future Claims Representative; 5. Union Pacific Railroad Company; 6. Mitsui & Co. (U.S.A.), Inc.; 7. City of El Paso, Texas; and 8. Blue Tee Corp. The Creditors Committee is concerned that the Debtors seem to seek to force through the settlement of $1.1 billion of claims involving more than 50 sites without any of the procedural safeguards or transparency that were the hallmark of the Court- approved estimation process and without the protections afforded creditors by the plan confirmation process. The Creditors Committee contends, among other things, that with the Debtor's Third Amended Plan of Reorganization on the table and hearings set, there is no good reason why the proposed environmental settlements, with their serious dilutive effect on creditors' recoveries, should not again be made part of the plan process to provide full disclosure to creditors and an opportunity to vote knowing the effect of the settlements on the creditors' recoveries. The Asbestos Committee is also concerned that the proposed settlements encompassed by the request would, if approved, implicate considerable estate resources. The FCR also shares the Asbestos Committee's concerns, and in addition, points out that the settlements will encompass approximately 50 unrelated sites dispersed across the country. Asarco Incorporated argues that the Debtors take an unprecedented approach to resolve over $3.2 billion in outstanding environmental claims. The Parent asserts that by providing almost no particularized detail of the individual settlements, the Debtors betray their intention that the Bankruptcy Court simply grants all of their wishes without engaging in intensive review required under the Comprehensive Environmental Response, Compensation and Liability Act. The Parent's counsel, Gregory Evans, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California, filed with the Court a declaration in support of the Parent's objection. The declaration contains numerous exhibits, including a copy of the minutes from the April 7, 2004 Omaha Lead Team meeting, at which an official of the Agency For Toxic Substances And Disease Registry expressed reservations about conducting a health study at the Omaha Lead Site because it could undermine the U.S. Environmental Protection Agency's cost recovery action against the Debtors. Union Pacific asserts that the Debtors have not provided sufficient information to enable a determination as to whether the settlements comply with the CERCLA or the Rule 9019 of the Federal Rules of Bankruptcy Procedure. Mitsui relates that the Debtors seek approval of certain settlements that would result in the transfer of certain properties located in El Paso, Texas, and East Helena, Montana, to environmental custodial trusts, free and clear of any claims, liens and encumbrances, including a lien in favor of Mitsui on silver located at the El Paso and East Helena facilities. Mitsui contends that the Debtors have no authority to strip its lien as part of the request. The City of El Paso is concerned that the settlement agreement relating to properties in the city does not reflect "important allocation of funds." The City also wants the Bankruptcy Court to examine whether the funds set forth in the settlement agreements are enough to clean up and remediate environmental contamination in the affected locations. Blue Tee relates that its negotiation is still ongoing as to the non-ASARCO owned portion of the Taylor Springs Site, and that it will seek to clarify certain issues regarding restoration and other actions related to natural resource damages at the site. Alabama, et al., File Amended Agreement Romina L. Mulloy, Esq., at Baker Botts L.L.P., in Dallas, Texas, relates that due to the large number of parties negotiating and editing the Amended Consent Decree and Settlement Agreement establishing a Custodial Trust for Certain Owned Sites in Alabama, Arizona, Arkansas, Colorado, Illinois, Indiana, New Mexico, Ohio, Oklahoma, Utah and Washington, among the United States, ASARCO, ASARCO Master, Inc., AR Sacaton, LLC, CAPCO, Alta Mining and Development Company, the States of Alabama, Arizona, Arkansas, Colorado, Illinois, Indiana, New Mexico, Ohio, Oklahoma, Utah and Washington, LePetomane XXV, solely in its representative capacity as trustee of the custodial trust, and St. Paul Travelers, the previously filed version of the document did not include page numbers. Hence, Ms. Mulloy says, a supplemental version was filed to add the page numbers to the document for the convenience of the reader. A full-text copy of the Amended Consent Decree and Settlement Agreement can be obtained for free at: http://bankrupt.com/misc/ASARCO_Settlement_AlabamaEtAl_32709.pdf A full-text copy of the Consent Decree and Settlement Agreement establishing a Custodial Trust for the Owned Smelter Site in El Paso, Texas and the Owned Zinc Smelter Site in Amarillo, Texas, among the United States, the State of Texas, ASARCO LLC and American Smelting and Refining Company is available for free at: http://bankrupt.com/misc/ASARCO_Settlement_ElPaso_TX.pdf About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Seeks Open-Ended Extension of Removal Period -------------------------------------------------------- ASARCO LLC ask Judge Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas to further extend the deadline within which they may remove pending civil actions to the Bankruptcy Court through 90 days after the effective date of any plan of reorganization confirmed in their bankruptcy cases. The current Removal Period Deadline is May 1, 2009. The Debtors are parties to myriad lawsuits in various state and federal courts. The issues involved in many of the Lawsuits are complex and many require individual analysis of each case, asserts Shelby A. Jordan, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., in Corpus Christi, Texas. Hence, the Debtors aver that they need additional time to review the Lawsuits at issue to determine whether removal of the various cases is in the best interest of their bankruptcy estates. The Debtors' need for additional time is sufficient cause to extend the Removal Period Deadline, and the Court should permit an extension of the time for the Debtors to remove the various civil actions, Ms. Jordan contends. She points out that an extension of the deadline would aid the efficient and economical administration of the bankruptcy estates. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: To Pay $170,000 Fine for Silver Bell Violations ----------------------------------------------------------- Silver Bell Mining, LLC, has agreed to pay $170,000 in fines in settlement of state regulators' allegations that it released 340,000 gallons of contaminated wastewater containing sulfuric acid and heavy metals from its copper mine near Marana, Arizona, the Arizona Daily Star reports, quoting the Arizona Department of Environmental Quality. State regulators has also alleged that the pollutants seeped into the soil, thus, endangering the groundwater in the aquifer below the mine, and exceeded surface water-quality standards in the state of Arizona. ASARCO, however, maintained that the spills, which ADEQ described as containing 90,000 gallons of sulfuric acid, was actually a very dilute solution with 0.6% sulfuric acid. ASARCO also said that its routine groundwater monitoring has confirmed that ground water standards were not exceeded. "We responded diligently to the spills and are confident that the issues that caused the spills have been resolved," the Daily Star quoted Tom Phillips as saying. Mr. Phillips is Silver Bell's general manager. Under the parties' settlement, Silver Bell will increase the frequency of its inspections to monitor leaks in its dams, ponds and impoundments. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ATA AIRLINES: Southwest to Use LaGuardia Slots Starting June ------------------------------------------------------------ According to Bloomberg's Bill Rochelle, Southwest Airlines Co. said April 7 that it will use the slots it purchased in December from ATA Airlines Inc. to fly five nonstops a day from New York's La Guardia airport to Midway in Chicago. Southwest Airlines said it will be touching down in the Big Apple on June 28, 2009. The Dallas-based airline will offer a total of eight daily nonstop departures--five daily nonstop flights between Chicago Midway and LaGuardia and three daily nonstop departures between Baltimore/Washington and LaGuardia. Southwest is offering these new flights with fares as low as $89 one-way for Chicago flights and $49 one-way for Baltimore/Washington flights with a 14-day advance purchase. Southwest Airlines will conduct a live webcast of its first quarter 2009 financial results on April 16, 2009 at 11:30 AM Eastern Time. As reported by the TCR on April 6, the U.S. Bankruptcy Court for the Southern District of Indiana's order confirming its Chapter 11 plan paved way for the completion of the sale of certain assets to Southwest Airlines. Southwest Airlines, pursuant to the sale, will take control of ATA's 14 takeoff and landing slots at LaGuardia Airport in New York. 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) AVENTINE RENEWABLE: Senior Secured Lenders Object to DIP Financing ------------------------------------------------------------------ JPMorgan Chase Bank, N.A., as administrative agent for senior secured lenders, filed with the U.S. Bankruptcy Court for the District of Delaware its preliminary objection to Aventine Renewable Energy Holdings Inc.'s motion to obtain post petition financing and utilize cash collateral; and grant adequate protection to prepetition secured parties. As reported in the Troubled Company Reporter on April 13, 2009, Holders of 75% of the $300 million in unsecured notes issued by Aventine Renewable Energy Holdings Inc. have offered to provide the Company with debtor-in-possession financing. The proposed $30 million in DIP financing would entitle the noteholders to liens that would knock the existing lenders down to second-lien status. A full text copy of the Term Sheet entered into by the Debtors and the noteholders is available for free at: http://bankrupt.com/misc/Aventine_DIP_TermSheet.pdf The Debtor is party to a credit agreement as of March 23, 2007, with Bank of America, N.A., BMO Capital Markets Financing, Inc., JPMorgan Chase Bank, N.A., Siemens Financial Services, Inc., UBS Loan Finance LLC, Wachovia Bank, National Association, and Wells Fargo Foothill, LLC. As of April 7, 2009, the senior secured lenders were owed at least $40.25 million. JPMorgan tells the Court that: i) the Debtors proposed facility imposes sever and unreasonable rick on the interests of the senior secured lenders and the Debtors cannot adequately protect the senior secured lenders' interests. Under the Debtors' proposed facility, the Debtors are attempting to layer $30 million of senior postpetition debt above the approximate $40 million of secured claims of the senior secured lenders. ii) as will be demonstrated at the interim hearing on the motion, it is expected that, if the Debtors' proposed facility is approved, the Debtors will deplete their liquidity and working capital in less that nine months, leaving the senior secured lenders to look only to the Debtors' property and equipment to satisfy their claims, the value of which will likely not be sufficient. iii) the senior secured lenders have offered postpetition financing to the debtors on terms and conditions more suited to the Debtors' specific business needs than those of the Debtors' proposed facility taking into account the Debtors' cash flows and negative gross margin and current persistently depressed ethanol industry; iv) absent from the Debtors' proposed facility is any timeline for a sale or other exit strategy for the Debtors in these cases. About Aventine Renewable Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc. (Pink Sheets:AVRN) -- http://www.aventinerei.com/-- is a producer and marketer of ethanol to many leading energy companies in the United States. In addition to ethanol, Aventine also produces distillers grains, corn gluten meal, corn gluten feed, corn germ and brewers' yeast. Morgan Stanley Capital Partners IV bought Aventine in May 2003 from Williams Cos. Aventine had a public offering in May 2006. The Morgan Stanley group retained 28% of the stock at year's end. The Company and its affiliates filed for Chapter 11 on April 7, 2009 (Bankr. D. Del., Lead Case No. 09-11214). The Debtors have tapped Joel A. Waite, Esq., at Young, Conaway, Stargatt & Taylor, as counsel. Davis Polk & Wardwell is special counsel and Houlihan, Lokey, Howard & Zukin, Inc., is the financial advisor. Garden City Group, Inc., has been engaged as claims agent. In its bankruptcy petition, Aventine disclosed $799,459,000 in assets and $490,663,000 in debts as of Dec. 31, 2008. AZTEC LAND: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Aztec Land Holdings, LLC 1878 Frenchtown Center Drive Monroe, MI 48162 Bankruptcy Case No.: 09-50129 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Walter Shapero Debtor's Counsel: Robert N. Bassel, Esq. P.O. Box T Clinton, MI 49236 Tel: (248) 835-7683 Fax: (248) 928-0656 Email: bbassel@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Anthony St. Bernard, a principal of the Company. The Debtor did not file a list of largest unsecured creditors. B & C CORPORATION: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: B & C Corporation 5208 Wooster Road W. Norton, OH 44203 Bankruptcy Case No.: 09-51455 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- B & C Diversified Products, Inc. 09-51456 B & C Distribution Center, Inc. 09-51457 B & C Services, Inc. 09-51458 Type of Business: B & C supplies and makes automotive parts. Chapter 11 Petition Date: April 10, 2009 Court: Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtor's Counsel: Marc Merklin, Esq. mmerklin@brouse.com Brouse McDowell, LPA 388 S. Main Street, Suite 500 Akron, OH 44311 Tel: (330) 535-5711 Fax: (330) 253-8601 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 ------ --------------- ------------ Retrospective Rated compensation $419,894 150 E. Gay Street, 21st flr. Columbus, OH 43215 US Steel Tubular $397,116 15660 N. Dallas Pkwy. Suite 500 Dallas, TX 75248 Ohio Edison $286,632 6896 Miller Road Brecksville, OH 44141 Medical Mutual $202,426 MSC Industrial Supply $118,703 Ohio Bureau of Workers $114,153 Tenney Tool $99,433 John Donoforio property tax $89,508 Unytite $85,390 Tri-Power $70,665 Garfield Industries $66,310 American Express $56,410 Brockman, Coats, Gedelian & $56,022 Co. Kolene $50,640 Frank Gates $46,000 Sax $44,142 Metal-Matic $42,699 GE Capital SOL $41,339 Akron Bearing Co. Inc. $39,591 RBC Linear Precision $35,416 The petition was signed by Louis P. Bilinovich, Sr., president. BARNEY'S NEW: Deteriorating Liquidity Cues S&P's Junk Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its rating on New York City-based Barney's New York Inc. to 'CCC' from 'B-'. At the same time, S&P lowered the issue-level rating on the company's senior secured term loan to 'CCC' from 'B-'. The outlook is negative. "The downgrade reflects the deteriorating liquidity position of the company as demonstrated by the need for a cash infusion by Istithmar World," explained Standard & Poor's credit analyst David Kuntz. Also, S&P is becoming increasingly concerned that vendors may tighten terms or limit shipments to the company. BEARINGPOINT INC: Committee Balks at Greenhill & Co. Fees --------------------------------------------------------- Bankruptcy Data reports that the official committee of unsecured creditors appointed in BearingPoint Inc.'s case filed with the U.S. Bankruptcy Court a limited objection to the Debtors' request to employ Greenhill & Co. as financial advisor and investment banker. The Committee took exception on Greenhill's $9 million transaction fee. The Creditors Committee, according to the report, said that while the fee arrangements "appear to be at the high end of market, the Committee will not object to payment of the fee provided that it is earned solely with respect to the closing of a transaction that results in net proceeds to the estate in excess of $100 million and, provided further, that this is the one and only fee (other than the quarterly Retainer Fee) that Greenhill will receive with respect to the engagement." The report adds that Wells Fargo Bank, the agent for the secured lenders in the case, filed a similar objection against the Greenhill engagement. Wells Fargo said Greenhill should only be entitled to one transaction fee and that minor transactions should not be subject to said fee. As reported by the Troubled Company Reporter on March 9, 2009, the Debtors will look to Greenhill to: a. review the business, assets and operations of BearingPoint, Inc. and its historical and projected financial condition; b. assist the board of directors in assessing the Debtors' current and potential future equity value; c. review the strategic and capital needs of the Debtors, analyzing the alternatives for raising capital, refinancing or restructuring existing indebtedness and assisting the Debtors in designing and implementing an appropriate capital structure; d. evaluate and recommend financial and strategic alternatives with respect to a proposed (i) merger or sale of the Company as a whole; (ii) acquisition of a majority of the stock of the Debtors; (iii) reorganization, recapitalization or debt restructuring, tender or exchange offer; (iv) a sale of all or substantially all of the assets of the Debtors; or (v) the sale by the Debtors of any of its five principal business unites (EMEA, Asia Pacific, Public Services, Commercial Services, and Financial Services) or a majority of the assets of any the principal business unit including a debt refinancing or restructuring strategy for the Debtors' various series of subordinated debt, including its 5% convertible senior subordinated debentures due 2025; e. identify and contact selected qualified partners to a proposed Transaction that are approved in advance by the Debtors; f. advise the Board as to the timing, structure and pricing of a proposed Transaction; g. assist the Debtors in marketing, selling, negotiating and consummating a proposed Transaction; h. provide assistance to the Board regarding investor relation matters; and i. provide the other financial advisory and investment banking services as are customary for similar transactions and as may be mutually agreed upon by the board and Greenhill. Bradley A. Robins, managing director of Greenhill, said the firm will receive: a. a retainer fee of $1,000,000 per quarter, payable in cash quarterly during the term of the Greenhill Agreement with the first payment due promptly after the date of the Greenhill Agreement, the second payment due on Jan. 1, 2009, and the remaining payments due on a quarterly basis thereafter for the remainder of the term of the Greenhill Agreement. One half of the Retainer Fees, to the extent paid, will be credited against any Transaction Fee if payable to Greenhill under the Greenhill Agreement. b. a transaction fee equal to $9 million, will be payable in cash if, during the term of the Greenhill Agreement or, if the Greenhill Agreement is terminated prior to the end of its stated term or expires other than if the Greenhill Agreement is terminated by Greenhill, within 12 months of the termination or expiration, a Transaction is consummated or a definitive agreement is entered into that subsequently results in a Transaction. c. reimbursement for travel and other out-of-pocket expenses incurred by Greenhill in performing its services hereunder, including the reasonable fees and expenses of legal counsel. Mr. Robins attested that Greenhill is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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: Plaintiff Wants Securities Appeal to Proceed -------------------------------------------------------------- Plaintiffs in a securities fraud class-action suit against BearingPoint Inc. asked the U.S. Bankruptcy Court for the Southern District of New York to permit a federal appeals court to rule on the pending appeal of an order dismissing the suit. According to Bloomberg's Bill Rochelle, the class-action cases, begun in 2005, were dismissed by a federal district judge in July 2007. The plaintiffs appealed, and the 4th U.S. Circuit Court of Appeals heard argument in January. The Circuit Court put the appeal on hold after BearingPoint filed for Chapter 11 in February. The class-action plaintiffs asked Bankruptcy Court to modify the "automatic stay" so the Circuit Court can decide the appeal. If they win and dismissal is set aside, the plaintiffs want permission to proceed with the suit. 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. The sale is expected to become effective on or before April 28, 2009. There can be no assurance that the transaction will be completed. BearingPoint Inc. has signed a contract to sell the bulk of its businesss to Deloitte LLP for $350 million by April 17. BearingPoint and Deloitte have entered into an asset purchase agreement by which Deloitte 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. An auction is scheduled for April 15. 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. BELO CORP: May Breach Loan Accords as Cash Falls, Analysts Say -------------------------------------------------------------- Carla Main and Dawn McCarty of Bloomberg said that LIN TV Corp. and Belo Corp., their cash flows declining as ad sales drop, risk breaching loan agreements this year and face higher bank fees and interest to renegotiate the deals. Broadcasters may violate loan covenants if earnings-to-debt ratios fall below minimum levels set in credit agreements, said Neil Begley, a bond analyst with Moody's Investors Service, according to the Bloomberg report. To amend the loans, the broadcasters may be required to pay fees and higher interest, using up more cash, he said. If earnings for TV broadcasters "keep getting worse, you'll probably see a lot of restructurings," Mr. Begley said. Revenue at independent or non-network-owned chains such as LIN and Belo has plummeted as the global recession chokes consumer spending, in particular as it affects automotive advertising. Auto commercials made up as much as a fourth of ad sales for TV companies, said Barry Lucas, an analyst with Gabelli & Co. in Rye, New York. LIN "expects to remain compliant" with its covenants, while "preparing to seek an amendment if we deem it necessary," Chief Financial Officer Richard Schmaeling said in an interview. Belo renegotiated terms in February, with a goal of not having to seek further relief. About Belo Corp Belo Corp. (Belo) is a pure-play television company. The Company has a diversified group of television broadcasting operations, including interactive media and cable news operations. The Company owns and operates 20 television stations reaching more than 14% of United States television households, including ABC, CBS, NBC, FOX, CW and MyNetwork TV (MNTV) affiliates, and their associated Websites, in 15 markets across the United States. Belo manages one television station through a local marketing agreement (LMA). In addition it owns two local and two regional cable news channels and holds ownership interests in two other cable news channels. On February 8, 2008, the Company completed the spin-off of its former newspaper businesses and related assets, into a separate public company, A. H. Belo Corporation (A. H. Belo) As reported by the TCR on March 10, 2009, Standard & Poor's Ratings Services revised its rating outlook on Dallas, Texas-based Belo Corp. to negative from stable. The 'BB-' corporate credit rating on the company was affirmed. "The negative corporate credit rating outlook reflects our concern that despite the relaxation of financial covenants in the amended credit agreement, Belo's revenue and EBITDA could deteriorate over the next several quarters so that the cushion of compliance could become very thin, necessitating another amendment or waiver," said Standard & Poor's credit analyst Deborah Kinzer. "Our expectation of a sharp decline in local and national ad revenue in 2009, particularly in the absence of significant political ad revenue, would result in an even more precipitous drop in EBITDA." BERNARD L. MADOFF: Competing Bids for Market Maker Due April 22 --------------------------------------------------------------- Irving Picard, the liquidating trustee of Bernard L. Madoff Investment Securities LLC, will sell the Debtor's market making operations to Castor Pollux Securities, LLC, unless other parties present better bids at an auction on April 27. Lazard Freres & Co. LLC contacted approximately 100 customers of the trading and market making business, private equity firms, hedge funds, and other strategic buyers to solicit interest from potential bidders. Ultimately, after a reasonable period of marketing under the circumstances and negotiations with other parties, the Trustee selected Castor Pollux to serve as the "stalking horse" bidder in the proposed auction. Castor Pollux has agreed to pay up to $15,500,000 for the market maker assets. The total consideration to be paid by the buyer is computes as (i) $500,000 (the "Closing Payment"); plus (ii) certain additional payments totaling up to $3,000,000) (the "Revenue Earn-Out Payments") plus (iii) certain additional payments (the "Trading Earn-Out Payments") in an amount determined in accordance with and pursuant to the APA. Caster will receive a $15,000 break-up fee in the event the Trustee terminates the APA. The procedures approved by the U.S. Bankruptcy Court for the Southern District of New York provides for this schedule: April 22, 2009 Deadline to submit competing bids April 27, 2009 Auction for market making operations April 28, 2009 Sale hearing 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 Uses Preference Theory to Recover $150M ------------------------------------------------------------------ Irving Picard, the trustee for the liquidation of Bernard L. Madoff Investment Securities Inc., has filed a lawsuit before the U.S. Bankruptcy Court for the Southern District of New York to recover a $150 million payment in October to Vizcaya Partners Ltd. The suit also was filed against Banque Jacob Safra (Gibraltar) Ltd., a bank in Gibraltar that made the investment in the Madoff firm on behalf of Vizcaya Partners, according to the complaint. This is the first lawsuit to recover a payment made to a customer before the Ponzi scheme was discovered, according to Bill Rochelle of Bloomberg. The trustee contends that the $150 million payment in October was a "preference". A preference is a payment made within 90 days of bankruptcy in repayment of a pre-existing debt. The lawsuit says the defendant, Vizcaya Partners Ltd., invested $327 million with Madoff since January 2002. According to Bill Rochelle, the lawsuit is notable because the trustee decided to pursue return of the payment on a preference theory and not by claiming the payment was a fraudulent transfer. He notes that: -- In Ponzi scheme cases, trustees often file fraudulent transfer suits to recover fictitious profits received within about two years of bankruptcy. S -- Some trustees also use the fraud theory to seek repayment of principal returned to an investor if the investor had reason to believe that a fraud was occurring. -- The preference theory used by the Madoff trustee is a possibly more clear-cut approach to recovering repayments to investors. -- A payment can be a preference only if made within 90 days of bankruptcy, which the fraud theories can look back at least two years before bankruptcy. 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: NY Mets' Opening-Day Seats Sold for $7,500 ------------------------------------------------------------- Two tickets to the New York Mets' opening home game of the Major League Baseball season owned by Bernard L. Madoff Investment Securities LLC were sold for $7,500 on EBay Inc.'s auction site, Nancy Kercheval of Bloomberg News reported. According to the report, the tickets for April 13's game against the San Diego Padres at the new $800 million Citi Field, each with a face value of $525, solicited 68 bids before the April 12 auction ended at 09:56:42 New York time. A bidding war between two people drove the price from $4,000 in the last half hour. Moreover, Bloomberg points out that Mr. Picard will sell tickets for April games individually and the remainder of the season tickets through an auction starting in mid-April. Mr. Picard, a lawyer with Baker & Hostetler LLP in New York who has recovered about $1 billion for Madoff investors, asked that a hearing be held April 14 to approve the auction. According to a document filed before the U.S. Bankruptcy Court for the Southern District of New York, Madoff had two season tickets to the New York Mets -- located in the Delta Club Platinum, Section 16, Row 2, Seats 5 and 6. The face value of the Delta Club Platinum tickets ranges from $295 to $695 per ticket depending on how the games are classified by the NY Mets, and the tickets have a total face value of $80,190. If the Trustee were to attempt to sell these tickets, he would only be able to convey the right to attend 81 regular season baseball games. After negotiations, the Mets have agreed to allow the Trustee to exchange the Delta Club Platinum tickets for Delta Club Gold tickets, which are just a few sections over and a few rows behind the Platinum tickets. The Mets have agreed to provide the Trustee with a full refund of $19,400, representing the difference in face price between the two locations. The Mets have also agreed to treat the purchaser as the acount holder, which allows the purchaser to receive any and all rights and renewal opportunities offered to ticket holders in the same category. The Trustee said that while the Tickets are still for excellent and exclusive seats, the less expensive tickets will be more marketable, especially given the current economic environment. 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. BETHANY ROLLING: Section 341(a) Meeting Slated for May 11 --------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors in Bethany Rolling Hills, LLC's and its affiliates' Chapter 11 cases on May 11, 2009, at 1:00 p.m., at 411 W Fourth St., Room 1-154, in Santa Ana, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible 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. Bethany Rolling Hills, LLC, and its affiliates filed for Chapter 11 on various dates, starting on March 4, 2009 (Bankr. C. D. Calif. Lead Case No. 09-12937). Evan D. Smiley, Esq., at Weiland, Golden, Smiley, et al., represents the Debtors in their restructuring efforts. Bethany Rolling listed assets of $10 million to $50 million and debts of $100 million to $500 million. BIG 10: U.S. Trustee Sets May 13 Meeting of Creditors ----------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors in BT Tires Group Holding, LLC's and its affiliates' Chapter 11 cases on May 13, 2009, at 1:00 p.m., at J. Caleb Boggs Federal Building, 844 King Street, 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. Big 10 Tires -- http://www.big10tires.com/-- headquartered in Mobile, Alabama, and established in May 1954 in Pensacola, Florida, has grown to become one of the largest independent tire dealers in North America, with the majority of its stores located in key markets in the Southeast. In addition to tire sales, the Company provides services such as tire rotations, oil changes, belts, hoses, parts and warranty sales. Big 10 Tires enjoys a leading market position in 8 of its 11 key markets, and prides itself on its strong, long-standing relationships with customers and vendors. BT Tires Group Holding, LLC, and its affiliates filed for Chapter 11 protection on April 2, 2009 (Bankr. D. Del. Lead Case No. 09- 11173). Chad A. Fights, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell represent the Debtors in their restructuring efforts. The Debtors tap NatCity Investment Inc. as investment banker; Epiq Bankruptcy Solutions LLC as claims and noticing agent; and Stanton Crenshaw Communications as communications consultant. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. BLOCK 34: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Block 34 U.S., Inc. 2361 Rosecrans Avenue, Suite 375 El Segundo, CA 90245 Bankruptcy Case No.: 09-11255 Chapter 11 Petition Date: April 10, 2009 Court: District of Delaware (Delaware) Debtor's Counsel: Robert S. Brady, Esq. bankfilings@ycst.com Young, Conaway, Stargatt & Taylor The Brandywine Bldg. 1000 West Street, 17th Floor P.O. Box 391 Wilmington, DE 19899-0391 Tel: (302) 571-6600 Fax: (302) 571-1253 Estimated Assets: $10 million to $50 million Estimated Debts: $100,000 to $500,000 The Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ WCP Real Estate loan $225,000 PO Box 908GT Walker House Mary Street Goerge Tow, Grand Cayman Cayman Islands Tel: (345) 949-0100 The petition was signed by Sean Armstrong, vice president of the Company. BLOCKBUSTER INC: Liquidity Concerns Cue S&P's Junk Rating --------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Dallas-based Blockbuster Inc. to 'CCC' from 'B-'. S&P removed the ratings from CreditWatch with negative implications, where they were placed on March 4, 2009. At the same time, S&P lowered the issue-level ratings on both its secured debt to 'CCC+' from 'B' and its subordinated debt to 'CC' from 'CCC'. The outlook is negative. "The downgrade reflects our concerns that the company may face liquidity issues despite amending the credit facility due to expected weaker operations and the mandatory revolver amortizations," said Standard & Poor's credit analyst David Kuntz. Additionally, S&P remains concerned that the company's covenant cushion is likely to remain thin over the near term. BROTMAN MEDICAL: Emerges from Ch. 11; Prospect Hikes Stake to 72% ----------------------------------------------------------------- Brotman Medical Center, Inc. officially exited from Chapter 11 Bankruptcy Protection on April 14, 2009. Prospect Medical Holdings, Inc. said it has increased its ownership in Brotman from approximately 33% to approximately 72%. In exchange for its increased interest, Prospect made an additional investment of $1.8 million, and anticipates making a further investment of $0.7 million within six months. Four existing shareholders of Brotman own the remaining 28%. Brotman's emergence from bankruptcy and Prospect's majority ownership in the facility evidence the institution's successful reorganization and its improved standing as a financially strong, well-run and needed hospital in the Culver City and West Los Angeles communities. $29.0 Million Funding Commitment As part of its Plan of Reorganization, Brotman obtained a commitment from Gemino Healthcare Finance, LLC for a three-year, $6.0 million, senior credit facility secured by accounts receivable at an interest rate of LIBOR plus 7% per annum. In addition, the Los Angeles Jewish Home for the Aging provided an aggregate of approximately $23.0 million in financing through a $16.0 million loan with a two-year term and a $6.25 million loan with a three-year term. The entire financing is secured by real estate and personal property. The interest rate on the $16.0 million loan is 10.0% per annum during the first year of the loan and 7.5% thereafter. Under the $6.25 million loan, the interest rate is 10% per annum during the life of the loan. The proceeds of the JHA loans were used to repay all existing senior secured loans at Brotman, including Debtor-In-Possession financing. Prospect has not guaranteed any portion of the Gemino or JHA financing. As part of the JHA financing, Brotman has granted JHA an option to purchase, for cancellation of $16 million of debt, certain Brotman-owned land adjacent to the hospital, where JHA plans to construct a senior living facility. Founded in 1912, the JHA is one of the foremost continuing senior living facilities in the United States and is the largest single- source provider of senior housing in Los Angeles. In total, the JHA annually serves more than 1,700 seniors through an extraordinary continuum of services, including in-residence housing on two village campuses (spanning 16 acres), with services featuring independent-living "Neighborhood Home" accommodations, residential care, skilled nursing care, Alzheimer's disease and dementia care, and end-of-life care. Sam Lee, Chairman and Chief Executive Officer of Prospect, and Chairman of Brotman commented, "The story of Brotman's turnaround is, we believe, a noteworthy success that can be shared by our physicians and a variety of committed stakeholders. Prospect's new management team, Brotman's medical, administrative and other staff, and many others worked together to reshape and refine Brotman's operations over the past 18 months, while putting the facility on a path to optimize its vast potential. We instituted many of the same principles that have substantially improved the operations of our other businesses. For nearly 18 months, Brotman is now consistently operating profitably for the first time in several years and we expect this to continue to improve. Hospital census data, as well as many other key operating metrics, rose steadily during the reorganization process and continue to improve, although there is still much work to be done." Stan Otake, Chief Executive Officer of Brotman, stated, "This is more than a financial success story. The importance of access to quality health care on a community's ability to grow and prosper cannot be understated. For more than 85 years, Brotman has served as a vital institutional anchor to the dynamic and evolving West Los Angeles community. I want to thank the Governing Board of Brotman, our physicians, nurses, administrators and staff for their tireless efforts and dedication to the cause. I would also like to thank JHA and Gemino for their financial commitment and support of our vision. During a time when community hospitals are rapidly disappearing, Brotman's survival and positive outlook are sources of much pride for all of us." Effective April 14, 2009, Prospect began consolidating Brotman into its financial statements and expects to publish standalone Brotman audited and unaudited financial statements and pro forma financial information by no later than June 30, 2009. About Prospect Medical Holdings Prospect Medical Holdings Inc. (NYSE Amex: PZZ) operates five community-based hospitals in the greater Los Angeles area and manages the medical care of individuals enrolled in HMO plans in Southern California, through a network of approximately 14,000 specialist and primary care physicians. About Brotman Medical Founded in 1924 and based in Culver City, California, Brotman Medical Center Inc. -- http://www.brotmanmedicalcenter.com/-- is a 420-bed acute care hospital that offers a wide range of inpatient and outpatient acute care services, including a 24-hour emergency room, rehabilitation, psychiatric care and chemical dependency services. Following several years of significant operating losses, Brotman voluntarily filed for Chapter 11 Bankruptcy Protection in October 2007. Prospect's new Hospital Services segment, through the purchase of Alta Healthcare System, Inc., was then engaged to help return Brotman to operational profitability and will continue this process going forward. The company filed for Chapter 11 protection on Oct. 25, 2007 (Bankr. C.D. Calif. Case No. 07-19705). Courtney E. Pozmantier, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern, L.L.P., serve as the Debtor's counsel. The Debtor selected Kurztman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 16 appointed nine creditors to serve on a Official Committee of Unsecured Creditors in this case. Buchalter Nemer represents the Creditors Committee. When the Debtor filed for protection against its creditors, it listed assets and debts of between $1 million and $100 million. BRUNO'S SUPERMARKETS: Can Obtain $19 Million DIP Loan from Regions ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Alabama has granted Bruno's Supermarkets, LLC, after a final hearing, authority to obtain financing and other extensions of credit from Regions Bank, Debtor's pre-petition lender, up to an aggregate principal amount of $19,000,000. As of the Petition Date, Debtor was indebted to Regions in the approximate principal amount of $10,078,000, secured by first priority liens upon substantially all of the Debtor's real and personal property. Sensormatic Electronics Corporation, Varesources Inc., and CIT Technology Financing Services, Inc. also assert ownership of or liens upon specific items of equipment in the possession of the Debtor. American Bank Note Company asserts ownership of or liens upon all U.S. Postal Service postage delivered to Debtor for sale to the public. Debtor is authorized to use proceeds of the DIP loans solely for the purposes authorized under the DIP Loan Agreement, including, without limitation, (a) to pay fees to the Clerk of the Bankruptcy Court; (b) to pay quarterly fees of the U.S. Trustee; and (c) to pay such expenses of professionals retained by the Debtor or the Unsecured Creditors' Committee. As security for the DIP loans, Regions is granted senior security interests in all of the Debtor's unencumbered assets and junior security interests in the Debtor's pre-petition collateral, except avoidance claims. All DIP loans shall constitute an allowed superpriority administrative claim pursuant to Section 364(c)(1) of the Bankruptcy Code. All cash collateral shall be applied to pay the DIP loans and, to the extent not paid, the pre-petition debt, or to cash collateralize contingent obligations of Debtor to Regions. As partial adequate protection to the extent of any diminution in value of Regions' pre-petition liens or pre-petition collateral, Regions is granted replacement liens in and to all of the Debtor's pre-petition and post-petition assets. The pertinent provisions of the DIP Facility are: Borrower: Bruno's Supermarkets, LLC Facility: Senior Revolving Credit Facility of up to $19,000,000, subject to a Borrowing base Interest Rates: Variable rate equal to the Base Rate plus 4% Fees: $380,000 closing fee; $10,000 collateral management fee payable on the Closing Date, and in advance on the first day of each month thereafter; and an unused line fee equal to 0.50% p.a. payable monthly in arrears Termination On the sooner to occur of (i) May 31, 2009; Date: (ii) the effective date of any acceptable plan or the date of entry of a confirmation order with respect to any other reorganization plan; (iii) the effective date of any sale of all or a substantial part of the personal property collateral or real property; (iv) the date on which Debtor terminates DIP Loan Agreement and the Revolver Loan Commitment; (v) the date on which DIP Lender terminates its Revolving Loan Commitment; (vi) the date on which DIP Lender is granted relief from the automatic stay; or (vii) the date on which the Chapter 11 case is dismissed or converted to Chapter 7 Bruno's Supermarkets, LLC, is a privately held company headquartered in Birmingham, Alabama. Bruno's is the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. Bruno's filed for Chapter 11 relief on Feb. 5, 2009 (Bankr. N.D. Ala. Case No. 09-00634). Burr & Forman LLP is the Debtor's lead counsel. Najjar Denaburg, P.C., is the Debtor's interim conflicts counsel. Greenberg Traurig, LLP is the Official Committee of Unsecured Creditors' counsel. Alvarez & Marsal is the Debtor's restructuring advisor. When Bruno's filed for protection from its creditors, it listed assets and debts of between $100 million and $500 million each. BRUNO'S SUPERMARKETS: Files Amended Procedures for Sale of Assets ----------------------------------------------------------------- Bruno's Supermarkets, LLC, asks the U.S. Bankruptcy Court for the Northern District of Alabama to (i) authorize it to sell all or substantially all of its assets either as a going concern or to a buyer who will conduct a liquidation sale of the assets; (ii) approve the amended bidding procedures; (iii) authorize the Debtor to offer prospective purchasers certain protections; and (iv) approve procedures whereby a buyer can conduct a liquidation sale. The assets to be offered for sale includes, without limitation, all inventory, certain equipment, interests in contracts or leases, accounts receivable, payment intangibles, and goodwill associated with any of the assets, but excluding all Excluded Assets. If the amended bidding procedures are approved, Debtor will conduct an auction on April 29. Debtor will first offer the assets for sale as a going concern. If an acceptable offer is not received for all of the assets as a going concern, Debtor will offer the remaining assets for sale to bidders desiring to purchase the assets and then sell the assets through a liquidation or going-out-of business sale. Proposed Bid Protections Under the amended bidding procedures, Debtor can conduct the auction with or without a stalking horse. In the event the Debtor selects a stalking horse for all or part of the assets, the amended bidding procedures permit Debtor to pay a termination fee of up to 2.5% of the cash purchase of the purchase price. In the event of multiple bids on the same asset, the Debtor at its own discretion may reduce the purchase price set forth in the stalking horse's Asset Purchase Agreement by up to 115% of the allocated purchase price for a particular asset, to the extent said asset is sold to another entity and the stalking horse is still the successful bidder with respect to the remaining assets on which it bid as a group. The Debtor tells the court that the bid protections are reasonable and necessary to preserve and enhance the value of the assets to be sold. A copy of the Debtor's motion, including the proposed bidding procedures, is available at: http://bankrupt.com/misc/Bruno's.BidProcedures.pdf Bruno's Supermarkets, LLC, is a privately held company headquartered in Birmingham, Alabama. Bruno's is the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. Bruno's filed for Chapter 11 relief on Feb. 5, 2009 (Bankr. N.D. Ala. Case No. 09-00634). Burr & Forman LLP is the Debtor's lead counsel. Najjar Denaburg, P.C. is the Debtor's interim conflicts counsel. Greenberg Traurig, LLP is the Official Committee of Unsecured Creditors' counsel. Alvarez & Marsal is the Debtor's restructuring advisor. When Bruno's filed for protection from its creditors, it listed assets and debts of between $100 million and $500 million each. BRUNO'S SUPERMARKETS: Supermarket Operator's Bid "Unacceptable" --------------------------------------------------------------- According to Bloomberg's Bill Rochelle, a union representing workers at Bruno's Supermarkets LLC says it reached a "tentative understanding" with an unidentified supermarket operator about purchasing some of the stores in the auction process now under way. The union says the prospective buyer would include Bruno's workers under its existing collective bargaining agreement. The union asked the U.S. Bankruptcy Court for the Northern District of Alabama in an April 8 letter not to issue a ruling after the trial completed last week on Bruno's motion to terminate the existing union contract. Bruno's sent a letter in response, saying that the offer is "unacceptable" and represents only a marginal amount above "liquidation value." It adds that the unidentified bidder is offering to pick up only 36 of 56 stores, leaving the remainder without a purchaser. Bruno's urged the judge to grant its contract-rejection motion so a buyer wouldn't be bound by the existing agreement. Bruno's says no one will purchase the stores without removing the union contract. Bruno's isn't alone in when it comes to concern that bids may be meager. "I doubt there would be a bid appreciably greater than liquidation value given Bruno's recent track record," said Craig Boucher, a partner with CRG Partners Group LLC. Boucher was a financial adviser for Winn-Dixie Stores Inc., a supermarket chain that confirmed a Chapter 11 plan in late 2006. Bruno's filed papers this week to set up sale procedures leading to an auction on April 29, when bids would be taken either from liquidators or going-concern purchasers. If the bankruptcy judge agrees with the proposed schedule, initial bids would be due April 28. Bruno's papers say there is as yet no offer attractive enough to warrant a breakup fee and the designation of a so-called stalking horse bidder. The motion acknowledges that "at least some of the assets will have to be liquidated." Bruno's is already in the process of closing 11 stores. The Chapter 11 reorganization begun Feb. 5 is Bruno's second. It's had four owners since 1995. The current owner is Lone Star Funds, a Dallas-based investor. Bruno's owes $22.5 million to trade suppliers and other unsecured creditors plus $6.8 million to taxing authorities. About Bruno's Supermarkets, LLC Bruno's Supermarkets, LLC, is a privately held company headquartered in Birmingham, Alabama. Bruno's is the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. Bruno's filed voluntary Chapter 11 petitions on Feb. 5, 2009. Bruno's has retained Alvarez & Marsal, a restructuring and corporate advisory firm, to assist the company throughout the restructuring process. Burr & Forman LLP is the Debtor's lead counsel. Najjar Denaburg, P.C. is its conflicts counsel. BRUNO'S SUPERMARKETS: Files Schedules of Assets and Liabilities --------------------------------------------------------------- Bruno's Supermarkets, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Alabama, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $13,775,000 B. Personal Property $59,319,353 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $10,080,486 E. Creditors Holding Unsecured Priority Claims $9,259,443 F. Creditors Holding Unsecured Non-priority Claims $25,537,327 ---------- ----------- TOTAL $73,094,353 $44,877,257 A copy of the Debtor's schedule of assets and liabilities is available at http://bankrupt.com/misc/Bruno's.Schedules.pdf Bruno's Supermarkets, LLC, is a privately held company headquartered in Birmingham, Alabama. Bruno's is the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. Bruno's filed for Chapter 11 relief on Feb. 5, 2009 (Bankr. N.D. Ala. Case No. 09-00634). Burr & Forman LLP is the Debtor's lead counsel. Najjar Denaburg, P.C., is the Debtor's interim conflicts counsel. Greenberg Traurig, LLP, is the Official Committee of Unsecured Creditors' counsel. Alvarez & Marsal is the Debtor's restructuring advisor. When Bruno's filed for protection from its creditors, it listed assets and debts of between $100 million and $500 million each. BRYAN SHOOLERY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Bryan J. Shoolery Chondra J. Shoolery 534 Sheridan Rd. Arroyo Grande, CA 93420 Bankruptcy Case No.: 09-11124 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Central District of California (Santa Barbara) Judge: Robin Riblet Company Description: Debtor's Counsel: Debra C. Young, Esq. 4535 Oak Glen Drive East Santa Barbara, CA 93110 Tel: (805) 403-2213 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-11124.pdf BROOKLYN NAVY: Fitch Affirms 'BB' Rating on Senior Secured Bonds ---------------------------------------------------------------- Fitch Ratings has affirmed the 'BB' rating of Brooklyn Navy Yard Cogeneration Partners' senior secured bonds, consisting of $63 million of taxable debt issued by BNY and $307 million of tax- exempt debt issued by the New York City Industrial Development Agency on behalf of BNY. The rating reflects BNY's long-term financial performance, which is subject to natural gas price volatility. While positive developments include a sustained improvement in operations and the elimination of certain tax obligations, BNY's long-term cost profile and liabilities arising from unresolved tax disputes could affect long-term credit quality. The Rating Outlook remains Evolving. BNY's debt service coverage ratio fell to 0.96 times (x) for the 12 months ended Sept. 30, 2008. BNY paid the natural gas sales- and-use tax under protest while incurring additional expenses to perform a major overhaul of the combustion turbines. The project also experienced an increase in operating and maintenance expenses, though it is unclear whether these additional expenses represent a permanent shift in BNY's cost profile. BNY appears to have conclusively resolved prior technical issues, allowing BNY to achieve greater than 95% availability in 2006 and 2007. Excluding the effect of scheduled outages, Fitch has no reason to believe availability in 2008 was inconsistent with recent operating results. Accordingly, Fitch expects long-term availability to exceed historically poor performance. Furthermore, Fitch's rating no longer incorporates the assumption that BNY will incur the sales-and-use tax as an ongoing expense. State legislation enacted in 2008 effectively passes through BNY's natural gas sales-and-use tax obligation to Consolidated Edison (ConEd; rated 'BBB+' with a Stable Outlook by Fitch). BNY anticipates its DSCR will fall slightly below 1.00x in 2009 due to a combination of higher debt service and costs associated with a scheduled major overhaul of the steam turbine. With strong operational performance and the elimination of the sales-and-use tax on natural gas, Fitch expects BNY's long-term financial performance to improve after 2009. DSCRs should also benefit from a moderation in scheduled debt service over the next few years. However, the expected recovery in cash flows could be impeded if the recent increases in O&M expenses persist. BNY is also exposed to a combined total of approximately $40 million of potential liability for unpaid taxes, subject to two separate tax disputes. It is uncertain whether BNY will prevail in either dispute, and the ultimate cash flow impact cannot be assessed at this time. BNY's credit quality could improve if the tax disputes are favorably resolved and if recent increases in O&M costs prove only temporary. Conversely, a sustained increase in O&M or an unfavorable tax judgment could impair, respectively, long-term credit quality or pressure short-term liquidity. Thus, the Rating Outlook is Evolving. Previously, the Evolving Outlook considered the potential for ongoing payment of the sales-and-use tax and a continuation of the positive trend in operating performance. BNY owns a nominal 286-megawatt cogeneration facility that delivers its output primarily to ConEd under a long-term energy services agreement. Under the ESA, ConEd purchases essentially the entire output of the facility in the form of electricity and steam. Electrical deliveries are proportionately greater in the summer and steam deliveries are proportionately greater in the winter. BNY's senior debt obligations are payable in April and October. CANWEST GLOBAL: Noteholders Extend Payment Deadline; Talks Go On ---------------------------------------------------------------- Canwest Global Communications Corp. said its subsidiary, Canwest Media Inc. has entered into an extension agreement with the members of an ad hoc committee of 8% noteholders who hold approximately 70% of the outstanding notes. Canwest Media did not make its March 15, 2009 interest payment of approximately US$30.4 million relating to its outstanding 8% senior subordinated notes. Under the terms of the notes, failure to make this interest payment on or before April 14, 2009, would permit the 8% noteholders to demand payment of the approximately US$761 million principal amount outstanding as well as the unpaid interest payment and associated default interest. Under the terms of the extension agreement, the noteholders have agreed not to demand payment of their notes for a period ending on April 21, 2009, to coincide with the expiry date of CMI's waiver agreement with its senior lenders. CMI continues discussions with its senior lenders and noteholders to develop a framework for a potential recapitalization transaction and to secure the necessary extensions to allow the recapitalization process to proceed. Canwest Global also announced that Canwest Limited Partnership has initiated discussions with its senior lenders with respect to an amendment of the financial covenants under its senior credit facility to enable Canwest Limited Partnership to maintain compliance with these financial covenants through the remainder of fiscal 2009. About Canwest Global Canwest Global Communications Corp. -- http://www.canwest.com/-- (TSX: CGS and CGS.A,) an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and/or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. * * * As reported in the Troubled Company Reporter on January 16, 2009, Canwest Global Communications Corp. warned that based on current revenue and expense projections, it may not be able to comply with its existing quarterly total financial leverage ratio covenants in fiscal 2009. Continuation of negative conditions may affect the Company's ability to meet certain financial covenants in its credit facilities. The company is reviewing and implementing strategies to ensure compliance with its covenants, including strategies intended to improve profitability and reduce debt. The TCR reported on January 19, 2009, that Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Winnipeg, Manitoba-based Canwest Media Inc. to 'CCC+' from 'B'. At the same time, S&P lowered the senior secured debt rating on wholly owned subsidiary Canwest Limited Partnership to 'B-' from 'BB-'. In addition, S&P lowered the senior subordinated debt ratings on Canwest Media and Canwest LP to 'CCC-' from 'CCC+'. S&P removed all ratings from CreditWatch with negative implications, where they were placed Oct. 31, 2008. The outlook is negative. CANWEST MEDIA: Moody's Cuts Probability of Default Rating to 'Ca' ----------------------------------------------------------------- Moody's Investors Service downgraded Canwest Media Inc.'s probability of default rating and corporate family rating to Ca from Caa3 as it appears inevitable that the company will not pay approximately $30.4 million of interest prior to the expiration of the applicable 30 day cure period. The payment was due on March 15th. Bill Wolfe, Vice President and Senior Credit Officer noted that "Even should a forbearance agreement be agreed-to, per standard practice, Moody's will view the payment missed at the end of the original cure period as constituting a default." To date, as per standard practice, Moody's has treated Canwest, Canwest LP and CW Media as comprising a single corporate family. However, while it appears likely that the corporate family will be financially and legally restructured, the manner in which events have transpired suggests that creditor prospects may not be entirely linked. In particular, the pending default and related activities at Canwest may not have direct ratings' implications at Canwest Limited Partnership and CW Media Holdings Inc. Should this be the case, it can be concluded that the PDR's are not 100% correlated, and, in turn, the expected loss (i.e. the Moody's ratings) may have to be de-linked. Consequently, ratings of Canwest LP and CW Media have been placed on review. To initiate the review and the parallel process of determining whether the applicable ratings should be permanently de-linked from those of Canwest, each company was assigned a CFR and PDR. Both ratings for both companies were assigned as Caa2, rating levels that are implied by the existing ratings of their outstanding debt instruments. Instrument ratings for both companies' debts are unchanged at this juncture, however, with each debt now calibrated against a unique waterfall of liabilities, loss given default point estimates have been revised accordingly. The end of the cure period at Canwest will allow the matter of a single versus multiple CFR's to be assessed. Wolfe noted that "Should, for example, Canwest default or voluntarily file for creditor protection while Canwest LP and CW Media continue to operate without interruption, then it will be clear that separate (although related) ratings will be required. Alternatively, again for example purposes, should two or more of the companies be involved in the same creditor protection filing, their ratings will remain linked." As it appears unlikely that CW Media could be involved in such a circumstance and as CW Media's intrinsic credit quality is likely superior to the starting point of its Caa2 CFR and PDR, its ratings have been placed on review for possible upgrade. While not likely, since Canwest LP is a wholly-owned subsidiary, there is nonetheless the potential of it being included in voluntary restructuring actions initiated by Canwest, and its rating could therefore be downgraded. The company is also facing deteriorating cushions relative to financial covenant compliance thresholds that could also adversely impact its ratings. Consequently, while Canwest LP's intrinsic credit quality may be superior to the initial Caa2 CFR, the direction of the outcome of the ratings review is uncertain. In addition to the matter of assessing whether unique CFR's are appropriate, Moody's will conduct a comprehensive reassessment of each company's prospects and liquidity in order to determine the applicable ratings' level. With common ownership, management, and various inter-company contractual relationships, the three companies' PDR's are likely to have some positive correlation, suggesting that the difference between CFR's at any of the companies will potentially be capped. In turn, there may be an implicit cap on the difference among instrument ratings within the group of companies. Moody's expects to conclude the ratings review within 30 to 45 days of the expiry of the ongoing interest payment cure period. At the conclusion of the review, individual speculative grade liquidity ratings will also be assigned. Rating, outlook and loss given default assessment actions: Issuer: Canwest Media Inc.: Outlook: Unchanged as Negative -- Corporate Family Rating: Downgraded to Ca from Caa3 -- Probability of Default Rating: Downgraded to Ca from Caa3 -- Speculative Grade Liquidity Rating: Unchanged as SGL-4 -- Senior Subordinated Regular Bond/Debenture, Unchanged at Ca with the Loss Given Default Assessment revised to (LGD4, 62%) from (LGD6, 91%) Issuer: Canwest Limited Partnership: Outlook assigned as: On Review, Direction Uncertain -- Corporate Family Rating: Assigned as Caa2 -- Probability of Default Rating: Assigned as Caa2 -- Senior Secured Bank Credit Facility, Unchanged at B3 with the Loss Given Default Assessment revised to (LGD3, 30%) from (LGD2, 18%) -- Senior Subordinated Regular Bond/Debenture, Unchanged at Ca with the Loss Given Default Assessment revised to (LGD5, 88%) from (LGD4, 67%) Issuer: CW Media Holdings Inc.: Outlook assigned as: On Review for Possible Upgrade -- Corporate Family Rating: Assigned as Caa2 -- Probability of Default Rating: Assigned as Caa2 -- Senior Secured Bank Credit Facility, Unchanged at B3 with the Loss Given Default Assessment revised to (LGD2, 25%) from (LGD2, 18%) -- Senior Subordinated Regular Bond/Debenture, Unchanged at Ca with the Loss Given Default Assessment revised to (LGD5, 88%) from (LGD4, 67%) Moody's most recent rating action concerning Canwest was taken on February 23, 2009 at which time the company's CFR and PDR were downgraded to Caa3. Canwest's ratings were assigned by evaluating factors Moody's believes 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 Canwest's core industries and Canwest's ratings are believed to be comparable to those of other issuers of similar credit risk. Canwest Media Inc. is wholly-owned by Winnipeg, Manitoba, Canada- based Canwest Global Communications Corp., a publicly traded international media company with interests in broadcast television, newspaper publication (held through Canwest Limited Partnership), radio, specialty television channels (held through CW Media Holdings, Inc., a joint venture), out-of-home advertising and interactive operations in Canada, Australia, Malaysia, Singapore, Indonesia, Turkey, the United Kingdom and the United States. Substantially all of the publicly traded parent company's operations are held though Canwest. CAPMARK FINANCIAL: Maturity Extension Won't Affect S&P's B+ Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its rating on Capmark Financial Group Inc. (B+/Watch Neg/--) is unaffected by the firm's announcement that it has extended the maturity of its bridge loan by 11 days. The additional extension increases S&P's concerns regarding Capmark's ability to negotiate a longer-term extension of its bridge loan and modifications to the terms of both the bridge loan and the firm's senior credit facility. Capmark announced on March 24 that it had agreed with certain lenders to extend the maturity of the bridge loan to April 9, 2009. On that date, it extended the maturity to April 20, 2009. This is also the deadline, in its lending agreements, for filing its 2008 financial statements. If the firm cannot amend its bridge loan and credit agreements before filing its annual financial statements, additional write- downs will cause its leverage ratio to exceed levels permitted under certain loan agreements. S&P will monitor management's negotiation of new terms and time frames for its outstanding debt. CERTIFICHECKS: Files for Chapter 7 Bankruptcy Protection -------------------------------------------------------- Ben Sutherly at Dayton Daily News reports that CertifiChecks, Inc., has filed for Chapter 7 bankruptcy protection. As reported by the Troubled Company Reporter on March 3, 2009, CertifiChecks, Inc., ceased operations and said that it would file for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Ohio. CertifiChecks' collapse is due to an extremely difficult economic environment. CertifiChecks stopped administering gift certificate programs. The Company also stopped its gift certificate sales. Dayton Daily relates that the Ohio Attorney General's Office filed a lawsuit against CertifiChecks in Montgomery County Common Pleas Court in March, claiming that the Company failed to honor its gift certificates and misled consumers. A spokesperson for the state Attorney General's Office said that as of April 14, the Attorney General had received 238 complaints from those who lost money to CertifiChecks, Dayton Daily states. According to Dayton Daily, CertifiChecks had gross revenue of $19.2 million in 2007 and $17.7 million in 2008. The Company, says Dayton Daily, listed $1.02 million in personal property assets and $460,151 in liabilities. CertifiChecks, Inc. -- http://www.certifichecks.com/-- is headquartered in Dayton, Ohio serving consumers and merchants nationwide. Its gift certificate offers business merchants redemption, similar to a bank check. CertifiChecks has developed a customizable gift certificate that processes like a check through the national Federal Reserve banking system. Each gift certificate is customer personalized and merchant branded. CHARTER COMMUNICATIONS: Kirkland Engagement to Be Heard Today ------------------------------------------------------------- Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, informed the U.S. Bankruptcy Court for the Southern District of New York that his firm represents, and formerly has represented, certain affiliates, subsidiaries, and entities associated with the parent companies of so-called Crossover Committee Members and Plan Support Agreement Signatories in Charter Communications Inc.'s bankruptcy cases: * Apollo Management Holdings, L.P.; * Contrarian Capital Management LLC; * Fidelity Management & Research Company; * General Motors Corporation; * Illinois Municipal Retirement Fund; * Manulife Financial Corp.; * Oaktree Capital Management, L.P.; * Wells Fargo & Company; and * Western Asset Management Company. The only listed entity that represents more than 1% of the firm's fee receipts for the 12-month period ending March 31, 2009, is General Motors at 2.63%, Mr. Cieri said. He assured the Court that all prior and current Kirkland & Ellis' representations of the entities have been in matters unrelated to the Debtors or their Chapter 11 cases. Mr. Cieri filed a supplement his original declaration supporting the Debtors' application to employ his firm as bankruptcy counsel, disclosing results of the firm's latest conflicts searches with respect to certain vendors, certain crossover committee members with whom the Debtors have negotiated plan support agreements, and signatories to the Plan Support Agreements. Crossover Committee Members include certain holders of CCH I, LLC, notes and CCH II, LLC. The Court will convene a hearing beginning at 9:45 a.m. on April 15, in Manhattan, to consider the Kirkland engagement. In their request, Gregory L. Doody, the Debtors' chief restructuring officer and senior counsel, said Kirkland will: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties; (b) take all necessary action to protect and preserve the Debtors' estates; (c) represent the Debtors in connection with obtaining postpetition financing; (d) advise the Debtors in connection with any potential sale of assets; (e) take any necessary action on behalf of the Debtors to negotiate, prepare on behalf of the Debtors, and obtain approval of a Chapter 11 plan and all related documents; and (f) perform all other necessary or otherwise beneficial legal services for the Debtors in connection with the prosecution of their Chapter 11 cases. The Debtors will pay Kirkland & Ellis according to its customary hourly rates, and reimburse the firm for actually incurred expenses. The firm's current hourly rates are: Partners $550 - $965 Counsel $390 - $965 Associates $320 - $660 Paraprofessionals $110 - $280 Consistent with the terms of the engagement letter between the parties, on December 8, 2008, the Debtors paid $400,000 to Kirkland & Ellis as a classic retainer. On December 9, 2008, the Debtors paid to the firm an additional classic retainer of $400,000. These retainers constitute "classic retainers" as defined in In re Prod. Assocs., Ltd., 264 B.R. 180, 184-85 (Bankr. N.D. Ill. 2001), and In re McDonald Brothers Construction, Inc., 114 B.R. 989, 997-99 (Bankr. N.D. Ill. 1990), according to Mr. Doody. As such, Kirkland & Ellis earned the classic retainer upon receipt and, consequently, placed the amount into its general cash account. The Debtors have replenished and increased the classic retainer subsequently, Mr. Doody said. As of the Petition Date, the retainer balance was roughly $1,999,700. In connection with services to be rendered to the Debtors, Kirkland & Ellis will not commence a cause of action against certain current clients with respect to the Debtors' Chapter 11 case, unless the firm receives a waiver from the Current Client allowing Kirkland & Ellis to commence an action, or is no longer representing the Current Client in any matters. In connection with the Debtors' bankruptcy cases, to the extent any causes of action are commenced by or against a Current Client, and a waiver letter is not obtained permitting Kirkland & Ellis to participate in the action, the Debtors' proposed conflicts counsel, Curtis, Mallet-Prevost, Colt & Mosle LLP, will represent the Debtors in that action, according to Mr. Cieri. Kirkland & Ellis represents certain of the Debtors' creditors, equity security holders or other parties-in-interest in ongoing matters unrelated to the Debtors and their bankruptcy cases. Mr. Cieri has said, however, that none of the representations are materially adverse to the interests of the Debtors' estates. These entities include: * J.P. Morgan Chase, * Madison Dearborn Partners, * Verizon Communications, Inc., and * Ambit Microsystems, Inc., Cisco Systems, Inc., ARRIS, Netgear, Motorola, Scientific Atlanta, and Thomson. Kirkland & Ellis is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and does not hold or represent an interest adverse to the Debtors' estates, Mr. Cieri had attested. 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) CHARTER COMMUNICATIONS: Gets Court OK to Hire KCC as Claims Agent ----------------------------------------------------------------- Charter Communications Inc. and its affiliates won authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Kurtzman Carson Consultants LLC, as their notice and claims agent. The thousands of creditors, equity security holders and other parties-in-interest involved in the Debtors' Chapter 11 cases may impose heavy administrative and other burdens on the Court and the Office of the Clerk of the Court. KCC has already developed an efficient and cost-effective methods in its area of expertise, according to Gregory L. Doody, the Debtors' chief restructuring officer and senior counsel. KCC is fully equipped to handle the volume of mailing involved in properly sending the required notices to and processing the claims of creditors and other interested parties in these Chapter 11 cases, he says. KCC has substantial experience "in matters of this size and complexity," and has acted as the official notice, claims, solicitation, and balloting agent in many large bankruptcy cases, including In re Wellman, Inc., In re Bally Total Fitness of Greater New York, Inc., and In re Calpine Corp., Mr. Doody says. As notice and claims agent, KCC will: (a) Notify all potential creditors of the filing of the bankruptcy petitions and of the setting of the first meeting of creditors, pursuant to Section 341(a) of the Bankruptcy Code; (b) Prepare and serve required notices in the Chapter 11 cases; (c) 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 to them; (d) Provide access to the public for examination of copies of the proofs of claim or proofs of interest filed in the Chapter 11 cases without charge during regular business hours, if necessary; (e) Docket all claims received by the Clerk's Office, maintain the official claim registers for each Debtor on behalf of the Clerk's Office, and provide the Clerk's Office with certified duplicate, unofficial Claims Register on a monthly basis, unless otherwise directed; (f) Record all transfers of claims, pursuant to Bankruptcy Rule 3001(e) and provide any notices of transfers required by Bankruptcy Rule 3001(e); and (g) Assist with, among other things, solicitation and calculation of votes and distribution as required in furtherance of confirmation of plans of reorganization. The firm will be paid based on its hourly rates: Clerical $45 - $65 Project specialist $80 - $140 Consultant $165 - $245 Senior consultant $255 - $275 Senior managing consultant $295 - $325 Technology/programming consultant $145 - $195 Weekend, holidays, and overtime waived Before the Petition Date, the Debtors paid KCC a retainer of $150,000. Invoices will be drawn down from this "evergreen retainer" and payments will then be deposited into the retainer to return the retainer to its original $150,000, Mr. Doody tells the Court. The Debtors will remit to KCC only the undisputed portion of the invoice and, if applicable, will pay the remainder to the firm upon resolution of the disputed portion, as mandated by the Court. KCC may also require prepayment from the Debtors under certain circumstances, as provided in the KCC Agreement. As part of the overall compensation payable to KCC under the terms of the agreement between the parties, the Debtors have agreed to certain indemnification obligations, Mr. Doody says. The Debtors also ask that the undisputed fees and expenses KCC incurs in the performance of the services be treated as an administrative expense of the Debtors' Chapter 11 estates and be paid by the Debtors in the ordinary course of business without further application to the Court. Michael J. Frishberg, director of restructuring services of KCC, informs the Court that the firm may have rendered and may continue to render services to certain of the Debtors' creditors. However, KCC has not and will not represent the separate interests of any creditor in the Debtors' Chapter 11 cases, he says. KCC neither holds nor represents any interest adverse to the Debtors' estates in connection with any matter on which the firm would be employed. KCC is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code, Mr. Frishberg attests. 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) CHARTER COMMUNICATIONS: Microsoft's Allen to Sell 28-Mil. Shares ---------------------------------------------------------------- Billionaire Paul G. Allen, Charter Communications, Inc.'s chairman and the co-founder of Microsoft Corp., has notified the U.S. Bankruptcy Court for the Southern District of New York and parties-in-interest that he intends to sell, trade or otherwise transfer 28,467,421 from his 406,236,644 shares of Charter common stock. A list of Mr. Allen's acquisition of shares of Charter common stock is available without additional charges at: http://bankrupt.com/misc/CCI_Shares_CommonStock_Allen.pdf If his proposal is permitted, Mr. Allen, who controls CCI through his ownership of Class A common stock and Class B common stock and who has a voting control interest of 91.09% as of Dec. 31, 2008, will have beneficial ownership of 377,769,223 shares of Charter common stock after the transfer becomes effective. Consequently, Mr. Allen filed an amended Form 13D with the Securities and Exchange Commission to reflect the decrease in his number of shares after the proposed transaction. W. Lance Conn, Charter Investment, Inc.'s vice president, told the SEC that if Mr. Allen is permitted to proceed with the proposed transaction, Mr. Allen intends to dispose of the shares in one or more private transactions or pursuant to Rule 144 of the Securities Act of 1933. Pursuant to the Debtors' proposed procedures for notification and hearing for transfers of common stock, the Debtors have 15 calendar days after receipt of Mr. Allen's declaration to object to the proposed transaction. If the Debtors file an objection, the transaction will not be effective unless and until the end of the 10th day after the Court enters an order overruling the objection. If the Debtors do not object, then after expiration of the 15-day period, the proposed transaction may proceed as declared. 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) CHARTER COMMUNICATIONS: Seeks Dismissal of JPMorgan Lawsuit ----------------------------------------------------------- Charter Communications Inc. and its affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to dismiss the complaint filed by JPMorgan Chase Bank, N.A. Bloomberg News says Bankruptcy Judge James Peck would hear arguments on April 29, 2009, regarding the Debtors' dismissal request. As reported by the Troubled Company Reporter, JPMorgan, on behalf of itself and as administrative agent for certain prepetition first-lien secured prepetition lenders, filed a complaint against Charter Communications Operating, LLC, and CCO Holdings, LLC, seeking declaratory judgment that there have been events of default under the parties' Amended and Restated Credit Agreement, dated as of March 18, 1999. Because the plan of reorganization proposed in CCO and CCO Holding's bankruptcy cases purports to leave the Prepetition Lenders' legal, contractual and equitable rights under Prepetition Credit Agreement unimpaired under Section 1124 of the Bankruptcy Code, the disputes between JPMorgan and the Defendants over the Events of Default are ripe for adjudication, relates Bruce D. Angiolillo, Esq., at Simpson Thacher & Bartlett LLP, in New York, on JPMorgan's behalf. Beginning March 18, 1999, CCO borrowed a total of over $8.2 billion from the Prepetition Lenders under the Prepetition Credit Agreement. CCO Holdings guaranteed CCO's obligations under the Prepetition Credit Agreement, and undertook various other obligations under that agreement. While CCO is the Borrower under the Prepetition Credit Agreement, CCO's business is fundamentally affected by the financial condition of its several affiliates, Mr. Angiolillo asserts. Because of the close interrelationship between CCO and its affiliates, JPMorgan specifically negotiated for, and the Defendants agreed to, the inclusion of defaults and Events of Default in the Prepetition Credit Agreement based upon the financial condition of certain affiliates, defined as "Designated Holding Companies" in the Prepetition Credit Agreement. The parties agreed that a Default and an Event of Default under the Prepetition Credit Agreement would occur if any of the Designated Holding Companies will "be unable to . . . pay its debts as they become due." Relatedly, the parties agreed to restrict the Defendants' right to upstream amounts to Designated Holding Companies through dividends, distributions and repayment of intercompany indebtedness. From October 2 through November 5, 2008, CCO borrowed additional funds totaling $750 million from the Prepetition Lenders in four separate borrowing requests. On each borrowing date, CCO obtained additional credit based on its representations to the Prepetition Lenders, among other things, that no Default or Event of Default will have occurred, and based on similar representations by CCO Holdings under the Prepetition Credit Agreement. However, the representations were false at the time they were made, Mr. Angiolillo tells the Court. He asserts that at the time of borrowings, two Designated Holding Companies, namely, Charter Communications Holdings, LLC, and CCH I Holdings, LLC, were unable to pay their debts as they would become due. Accordingly, there were Defaults and Events of Default under the Prepetition Credit Agreement. Charter Explains Side Under the terms of its prearranged plan of reorganization, Charter Communications, Inc., seeks to reinstate approximately $11.8 billion in senior debt instruments, including a credit agreement to which JPMorgan, serves as administrative agent, the Debtors' proposed counsel, Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, relates. He asserts that because the Plan is contingent on reinstatement, Charter's ability to reinstate its senior debt instruments under Section 1124 of the Bankruptcy Code will be a critically important aspect of the confirmation hearing scheduled for late July. "Instead of complying with the ordinary bankruptcy rules and procedures for objecting to a proposed plan, JPMorgan has launched a preemptive strike in the form of a three count adversary complaint," Mr. Cieri tells the Court. "The entire purpose of this complaint is to obtain declaratory relief that might block reinstatement and derail confirmation," he contends. Mr. Cieri notes that the "gravamen of the complaint," or the allegations on which all JPMorgan's claims rise or fall, is that two designated holding companies, Charter Communications Holdings, LLC, and CCHI Holdings, LLC, supposedly violated Section 8(g)(v) of the Amended and Restated Credit Agreement, dated as of March 18, 1999, which requires that the Designated Holding Companies "shall be able . . . to pay their debts as they become due." Because JPMorgan refuses to consent to the entry of final orders or judgment by the Court, the Debtors seek a determination that the adversary complaint falls within the Court's core jurisdiction, and is a core proceeding because it will have a significant impact on the administration of the Debtors' bankruptcy estates and on Plan confirmation. The Debtors also seek dismissal of the complaint because all of the issues raised in the complaint will be fully and fairly addressed at the Plan confirmation. JPMorgan should not be permitted to circumvent the ordinary rules and procedures for objecting to confirmation by filing an unnecessary and improper adversary proceeding, Mr. Cieri contends. He argues that the complaint fails to state a claim on which relief can be granted, and is defective on its face because JPMorgan has not alleged a violation of the Credit Agreement. There is no dispute, as the complaint's allegations confirm, that the Designated Holding Companies have paid their debts as they have become due, Mr. Cieri asserts. He points out that JPMorgan instead seeks to bind the Designated Holding Companies to an obligation that is not imposed under the Credit Agreement -- to have sufficient funds available at all times to pay their debts "as they would become due" at some unspecified future point. Because that allegation is not consistent with the Credit Agreement and because JPMorgan's alleged interpretation is untenable, the Debtors maintain that the Court should dismiss the complaint with prejudice. Court Sets Schedule The Court has set a schedule for discovery in the adversary proceeding: Activity Proposed Date -------- ------------- Formal fact discovery commenced 03/27/2009 Completion of document productions 04/09/2009 - JPMorgan's 1st set of requests Completion of document productions 04/16/2009 - JPMorgan's 2nd set of requests Completion of privilege logs 04/16/2009 - Debtors, Gibson Dunn, & et al. Completion of document productions 04/20/2009 - Noteholders and Vulcan Inc. Completion of privilege logs 04/22/2009 - Noteholders and Vulcan Inc. Fact depositions commence 04/30/2009 Opening expert reports due 06/19/2009 Fact discovery completed 06/30/2009 Rebuttal expert reports due 07/03/2009 Expert depositions commence 07/10/2009 Pre-hearing opening briefs & 07/14/2009 Motions in limine due Pre-hearing response briefs & 07/21/2009 Responses to Motions in limine due Trial begins 07/23/2009 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) CHARTER COMMUNICATIONS: Taps Duff & Phelps as Valuation Consultant ------------------------------------------------------------------ Charter Communications Inc. and its affiliates seek to employ Duff & Phelps, LLC, as their valuation consultant, nunc pro tunc to March 27, 2009. Duff & Phelps has a substantial presence in the communications, entertainment, and media industries, generally providing valuation services for financial reporting and tax purposes for some of the most prominent companies in those industries, including News Corp., Discovery Communications, Inc., AT&T Inc., and Verizon Communications, Inc., Gregory L. Doody, the Debtors' restructuring officer and senior counsel, says. Duff & Phelps has also performed appraisals in connection with fresh start accounting in other Chapter 11 cases, including Tower Automotive, NTL, Inc., Exide Technologies, Federal-Mogul, and Kmart Corp., Mr. Doody relates. In anticipation of their ultimate emergence from bankruptcy, the Debtors seek Duff & Phelps services to provide a "Reorganization Value" for financial reporting purposes in accordance with Statement of Position 90-7, Statement of Financial Accounting Standards No. 141, and Statement of Financial Accounting Standards No. 157. According to Mr. Doody, the firm will: (a) identify intangible assets to be recognized apart from goodwill pursuant to SFAS 141R; (b) estimate the Fair Value and Remaining Useful Life of certain tangible assets, intangible assets, and other assets and liabilities; and specifically for intangible assets, estimating RULs in accordance of Financial Accounting Standards No. 142; and (c) identify those assets and liabilities arising from contingencies to be recognized pursuant to SFAS 141R. The services to be performed by Duff & Phelps will neither duplicate nor overlap with the services being performed by the Debtors' other retained consultants or advisors, and the Debtors will use its reasonable efforts to ensure that there is no duplication of the services that the firm is being retained to perform, Mr. Doody says. The firm will be paid based on its current hourly rates: Managing director $560 Director $500 Manager $405 Senior associate $300 Associate $225 Analyst $120 The Debtors will reimburse Duff & Phelps for any direct expenses incurred. John E. Kane, a managing director at Duff & Phelps, discloses that the firm has in the past represented, currently represents, and likely in the future will represent parties-in-interest in matters unrelated to the Debtors' Chapter 11 cases. Duff & Phelps has in the past, and may in the future, be represented by several attorneys and law firms in the legal community, some of whom may be involved in the Debtors' Chap. 11 proceedings. The firm has also in the past and will likely in the future be working with or against other professionals involved in the Debtors' Chapter 11 cases in matters unrelated to these cases, Mr. Kane adds. However, Duff & Phelps will continue to provide professional services to entities or persons that may be creditors or equity security holders of the Debtors, or other potential parties-in- interest, provided that these services do not relate to or have any direct connection with the cases of the Debtors, Mr. Kane says. Duff & Phelps is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code, Mr. Kane asserts. 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) CHESAPEAKE CORP: Seeks July 27 Extension of Plan Filing Period -------------------------------------------------------------- Chesapeake Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond to extend its exclusive period to propose a plan of reorganization to July 27, 2009, and its exclusive period to solicit acceptances of that plan to September 25, 2009. The Debtors said the extension is needed to allow them more time to close their asset sale, Bankruptcy Data notes. Absent an extension, the Debtors' exclusive plan filing period expires April 28, and their exclusive solicitation period expires June 27. As reported by the Troubled Company Reporter on March 24, 2009, the Court approved the sale of the Debtors' operating businesses to a group of investors, including affiliates of Irving Place Capital Management, L.P. and Oaktree Capital Management, L.P. The company expects the transaction to close by mid-April 2009. The company's financial advisor is Goldman Sachs & Co., its restructuring advisor is Alvarez & Marsal, and its legal advisor in the U.S. is Hunton & Williams LLP. The TCR said on March 18, 2009, that Chesapeake received no other qualifying bids. The TCR said on March 4, 2009, that the Debtors' unsecured creditors want an investigation on the sale, saying they had reservations as to whether the sale negotiations were conducted in good faith. The official committee of unsecured creditors said Chesapeake's requests for court approval of its bankruptcy financing and sale procedures may have been commenced for the benefit of Chesapeake, the lead group bidding on its assets, and Wachovia, at the expense of the unsecured creditors. The committee said it wanted to make sure Chesapeake hadn't been improperly "coaxed" into selling all of its assets. Headquartered in Richmond, Virginia, Chesapeake Corporation (NYSE: CSK) -- http://www.cskcorp.com-- supplies specialty paperboard packaging products in Europe and an international supplier of plastic packaging products to niche end-use markets. The Debtors have 44 locations in Europe, North America, Africa and Asia and employs approximately 5,400 people worldwide. The company directly owns 100% of each of the other Debtors. The company owns, directly or indirectly, 100% of each of the non- debtor subsidiaries except: (i) Chesapeake Plastics Kft, a Hungarian joint venture which is 49% owned by Chemark Kft; and (ii) Rotam Boxmore Packaging Co. Ltd., a British Virgin Islands company which is 50% owned by Canada Rotam International Co. Ltd. The company's certificate of authorization authorizes the issuance of 60,000,000 shares of common stock. About 20,559,115 shares of common stock are issued and outstanding with par value of $1.00 per share as of Dec. 26, 2008. Moreover, the company's certificate allows the issuance of 500,000 shares of preferred stock, and no shares are outstanding. As of Dec. 31, 2007, Dimensional Fund Advisors LLP owns 7.98% of the company; T. Rowe Price Associates Inc., 8.4%; and Wells Fargo & Company, 14.71%. Edelmann GmbH & Co. KG and Joachim W. Dziallas owns 13.5% of the company as of Sept. 19, 2008. New York Stock Exchange suspended the listing of the company's common stock effective Oct. 8, 2008, due to its inability to meet the global market capitalization requirements for continued listing on the exchange. Subsequently, the company's stock began to be quoted on the over-the-counter bulletin board under the trading symbol "CSKE.PK." Chesapeake Corporation, and 18 affiliates filed Chapter 11 petitions (Bankr. E.D. Virginia, Lead Case No. 08-336642) on Dec. 29, 2008. Chesapeake has tapped Alvarez and Marsal North America LLC, and Goldman Sachs & Co. as financial advisors. It also brought along Tavenner & Beran PLC as conflicts counsel and Hammonds LLP as special counsel. Its claims agent is Kurtzman Carson Consultants LLC. The United States Trustee for Region 4 appointed seven creditors to serve on an Official Committee of Unsecured Creditors for the Debtors' Chapter 11 cases. As of September 30, 2008, Chesapeake's consolidated balance sheets showed $936.4 million in total assets, including $340.7 million in current assets; and $937.1 million in total liabilities, including $469.2 million in current liabilities, resulting in $500,000 in stockholders' deficit. CHRYSLER FINANCIAL: Raises Lending Rates to Vehicle Buyers ---------------------------------------------------------- Chrysler LLC dealers said that Chrysler Financial has raised some of its lending rates to vehicle buyers on Tuesday at an average of more than a full percentage point, Alex P. Kellogg at The Wall Street Journal reports. According to WSJ, dealers might have to seek financing for some of their clients elsewhere. Citing a person familiar with the matter, WSJ states that Chrysler Financial could run out of the $1.5 billion in government funds it received in January to increase car sales in a matter of days. Clients, even those with top credit scores, will likely pay higher loan rates, WSJ says. WSJ quoted a dealer as saying, "Short term, it's probably going to mean the banks and credit unions are going to be more competitive than Chrysler Financial." WSJ relates that Chrysler Financial tightened its lending practices in 2008, often taking only the safest customers, and dealers were left looking for financing elsewhere for more marginal clients. Chrysler Financial said in March that it has asked for more assistance under the government's Troubled Asset Relief Program, WSJ states. According to WSJ, those who take advantage of Chrysler's Employee Pricing Plus Plus campaign won't be affected since that program is financed by Chrysler, and not by Chrysler Finance. The report says that the program has helped boost Chrysler's sales in recent months by offering steep discounts and 0% financing to some client. The report states that the deal would end on April 30. About Chrysler Financial Chrysler Financial -- http://corp.chryslerfinancial.com-- offers automotive financial products and services to both dealers and consumers of Chrysler, Jeep(R) and Dodge vehicles in the U.S., Canada, Mexico and Venezuela. In addition it offers vehicle wholesale and retail financing to more than 3,600 Chrysler, Jeep and Dodge dealers. Currently, nearly three million drivers in the United States enjoy the benefits of financing with Chrysler Financial. Chrysler Financial has an employee base of 4,000 and supports a global portfolio of $60 billion. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. CHRYSLER LLC: Boston Consulting to Advise on Alliance's Viability ----------------------------------------------------------------- According to government Web site http://www.fbo.gov/,the U.S. Treasury Department has awarded a $7,000,000 contract to The Boston Consulting Group effective April 3. The Department of the Treasury said it requires immediate management consulting services to (a) assist in Treasury's continued assessment of the automotive sector generally; (b) assist in Treasury's work with General Motors Corporation and GM advisors to develop a comprehensive restructuring and business plan acceptable to the Government and thoroughly evaluate that plan; and (c) advise Treasury with respect to the results of its comprehensive diligence exercise evaluating the viability of the announced alliance between Fiat and Chrysler, LLC. Prior notices posted in the Web site showed that the U.S. Treasury Department has awarded, effective March 30, contracts to three law firms to advise on auto industry restructurings and on how to provide debtor-in-possession financing for troubled manufacturers and suppliers: Award's Contractor Ceiling Value ---------- ------------- Cadwalader Wickersham & Taft LLP $8,590,000 Sonnenschein Nath & Rosenthal LLP $8,590,000 Haynes and Boone LLP $8,590,000 The notices posted said that the Department of the Treasury requires expert legal services in support of loans, equity investments, or other direct or indirect investments related to the auto industry for programs instituted pursuant to the Emergency Economic Stabilization Act of 2008. Under the contract, the contractors may be tasked with providing expert advice and guidance with respect to loans, equity investments, and other direct or indirect investments in various auto industry participants; developing legal documentation with respect to loans, equity investments, and other direct or indirect investments related to the auto industry; negotiating relevant transactions; and performing related legal services within the general contract scope. The auto industry is comprised of manufacturers, suppliers, dealerships and related entities. Treasury identified areas to be awarded to the three law firms. These include: -- Debtor-in-Possession (DIP) Facility Structuring. The Contractor may be tasked to provide expertise and guidance in the formulation of a DIP facility structure and to draft related legal documentation for direct or indirect financing of distressed auto industry participants, including DIP financing. -- DIP Loan Closings. The Contractor may be tasked to negotiate DIP loan transactions to auto industry participants using existing form documentation, and to conduct the closing of such transactions. -- Claims and Bankruptcy Advice. The Contractor may be tasked to advise Treasury in connection with bankruptcy issues, including analysis of assignments and claims relating to loans to or investments in auto industry participants. The Contractor also may be tasked to analyze assignments, sales and claims relating to such transactions. -- Disposition of Assets. The Contractor may be tasked to advise Treasury in connection with disposition of assets in connection with Treasury's loans and investments relating to auto industry participants. The Contractor also may be tasked to negotiate the transactions relating to the disposition of such assets, and conduct the closing of such transactions. According to The American Lawyer, Haynes and Boone is new to the auto restructurings. Cadwalader and Sonnenschein already had previously announced deals to advise the government on bailout- related issues but for much smaller values. Cadwalader received a $417,562 contract in January to provide auto bankruptcy advice to the government. Thacher Proffitt & Wood received a $500,000 contract in December. The contract carried over to Sonnenschein when Thacher dissolved later that month and 100 lawyers switched firms. Structured Bankruptcy In accordance with the March 31, 2009 deadline in the U.S. Treasury's loan agreements with General Motors and Chrysler, the Obama Administration announced its determination of the viability of the companies, pursuant to their February 17, 2009 submissions, and is laying out a new finite path forward for both companies to restructure and succeed. These findings and new framework for success are consistent with the President's commitment to support an American auto industry that can help revive modern manufacturing and support our nation's effort to move toward energy independence, but only in the context of a fundamental restructuring that will allow these companies to prosper without taxpayer support. -- Viability of Existing Plans: The plans submitted by GM and Chrysler on February 17, 2009 did not establish a credible path to viability. In their current form, they are not sufficient to justify a substantial new investment of taxpayer resources. Each will have a set period of time and an adequate amount of working capital to establish a new strategy for long-term economic viability. -- General Motors: While GM's current plan is not viable, the Administration is confident that with a more fundamental restructuring, GM will emerge from this process as a stronger more competitive business. This process will include leadership changes at GM and an increased effort by the U.S. Treasury and outside advisors to assist with the company's restructuring effort. Rick Wagoner is stepping aside as Chairman and CEO. In this context, the Administration will provide GM with working capital for 60 days to develop a more aggressive restructuring plan and a credible strategy to implement such a plan. The Administration will stand behind GM's restructuring effort. -- Chrysler: After extensive consultation with financial and industry experts, the Administration has reluctantly concluded that Chrysler is not viable as a stand-alone company. However, Chrysler has reached an understanding with Fiat that could be the basis of a path to viability. Fiat is prepared to transfer valuable technology to Chrysler and, after extensive consultation with the Administration, has committed to building new fuel efficient cars and engines in U.S. factories. At the same time, however, there are substantial hurdles to overcome before this deal can become a reality. Therefore, the Administration will provide Chrysler with working capital for 30 days to conclude a definitive agreement with Fiat and secure the support of necessary stakeholders. If successful, the government will consider investing up to the additional $6 billion requested by Chrysler to help this partnership succeed. If an agreement is not reached, the government will not invest any additional taxpayer funds in Chrysler. -- A Fresh Start to Implement Aggressive Restructurings: While Chrysler and GM are different companies with different paths forward, both have unsustainable liabilities and both need a fresh start. Their best chance at success may well require utilizing the bankruptcy code in a quick and surgical way. Unlike a liquidation, where a company is broken up and sold off, or a conventional bankruptcy, where a company can get mired in litigation for several years, a structured bankruptcy process - if needed here - would be a tool to make it easier for General Motors and Chrysler to clear away old liabilities so they can get on a path to success while they keep making cars and providing jobs in our economy. -- A Commitment to Consumer Warrantees: The Administration will stand behind new cars purchased from GM or Chrysler during this period through an innovative warrantee commitment program. -- Appointment of a Director of Auto Recovery: The Administration also announced that Edward Montgomery, a top labor economist and former Deputy Secretary of Labor, will serve as Director of Recovery for Auto Workers and Communities. Dr. Montgomery will work to leverage all resources of government to support the workers, communities and regions that rely on the American auto industry. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. Liquidity Crunch Chrysler has been trying to keep itself afloat. As reported by the Troubled Company Reporter on March 20, 2009, its Chief Financial Officer Ron Kolka, has said even if Chrysler gets additional government loans, it could face another cash shortage in July when revenue dries up as the company shuts down its factories for two weeks to change from one model year to the next. The Company's CFO has said Chrysler planned for the $4 billion federal government bailout it received Jan. 2 to last through March 31. The Company is talking with the Obama administration's autos task force about getting another $5 billion, and faces a March 31 deadline to complete its plan to show how it can become viable and repay the loans. General Motors Corp. and Chrysler admitted in their viability plans submitted to the U.S. Treasury on February 17 that they considered bankruptcy scenarios, but ruled out the idea, citing that a Chapter 11 filing would result to plummeting sales, more loans required from the U.S. government, and the collapse of dealers and suppliers. A copy of the Chrysler viability plan is available at: http://ResearchArchives.com/t/s?39a3 A copy of GM's viability plan is available at: http://researcharchives.com/t/s?39a4 * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. 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, Dominion Bond Rating Service 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. CHRYSLER LLC: Lenders Seek Cash Or Other Protection --------------------------------------------------- In exchange for slashing Chrysler LLC's debt and helping it avoid a bankruptcy filing, the automaker's lenders who are holding $6.9 billion in secured loans want cash or other protection, Mike Ramsey and John Lippert of Bloomberg News report, citing people familiar with the negotiations. According to Bloomberg, the lenders will make a counteroffer in the next few days after the U.S. Treasury asked Chrysler's banks to exchange what they are now owed for a new senior, secured loan of about $1 billion. Bloomberg says the sides are trying to reach an agreement before an April 30 government-imposed deadline when Chrysler could be forced into court protection. Under the government's plan, the automaker must also cut labor costs and forge an alliance with Fiat SpA by the end of the month. As this current proposal is structured, Bloomberg reports that the lenders could consider exchanging their existing loan obligation for the lower amount only if they concluded that they would get less in a bankruptcy. These lenders are usually first to be repaid from the sale of assets in court protection. Lenders view the Treasury's proposal as unacceptable because many have fiduciary responsibilities to pension funds, endowments and other investors. To relinquish their secured claims and accept more risk, according to Bloomberg, lenders would have to receive compensation, perhaps including substantial equity in the reorganized company. "It's a smart play, albeit extraordinary," said Don Workman, a bankruptcy attorney at Baker & Hostetler in Washington. "The Treasury is acting like an official committee in bankruptcy, negotiating against the secured lenders so there is something left on the table for other parties, not the least of which is an operating company." Bloomberg relates that the lenders received an updated business plan for Chrysler that included Fiat's potential structure late on April 12 that will help the group make a counterproposal. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. Liquidity Crunch Chrysler has been trying to keep itself afloat. As reported by the Troubled Company Reporter on March 20, 2009, its Chief Financial Officer Ron Kolka, has said even if Chrysler gets additional government loans, it could face another cash shortage in July when revenue dries up as the company shuts down its factories for two weeks to change from one model year to the next. The Company's CFO has said Chrysler planned for the $4 billion federal government bailout it received Jan. 2 to last through March 31. The Company is talking with the Obama administration's autos task force about getting another $5 billion, and faces a March 31 deadline to complete its plan to show how it can become viable and repay the loans. General Motors Corp. and Chrysler admitted in their viability plans submitted to the U.S. Treasury on February 17 that they considered bankruptcy scenarios, but ruled out the idea, citing that a Chapter 11 filing would result to plummeting sales, more loans required from the U.S. government, and the collapse of dealers and suppliers. A copy of the Chrysler viability plan is available at: http://ResearchArchives.com/t/s?39a3 A copy of GM's viability plan is available at: http://researcharchives.com/t/s?39a4 * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. CIRCUIT CITY: To Sell E-Commerce Biz to Systemax for $6.5 Million ----------------------------------------------------------------- Systemax Inc. has signed a "stalking horse" agreement to purchase selected assets of Circuit City's e-commerce business for $6.5 million in cash plus a share of future revenue generated utilizing those assets over a 30 month period. Systemax believes the transaction, if completed, would further extend its position as a leader in online retailing of value-priced, branded consumer electronics. The agreement has been submitted for approval to the Bankruptcy Court for the Eastern District of Virginia, Richmond, Division. Completion of Systemax's proposed acquisition of the assets is subject to both approval by the Bankruptcy Court as well as the auction process, and it will not be completed if a higher or better bid for the assets is submitted and approved by the court. Systemax can provide no assurances, therefore, that a transaction will be completed. Should the ecommerce business be sold to another purchaser for a higher or better price, or Circuit City terminates the auction, Systemax will be entitled to break-up fees and expenses. Carla Main and Dawn McCarty of Bloomberg report that Circuit City asked a judge to name Systemax the so-called stalking-horse bidder at an auction to consider competing offers. The Debtors have proposed a May 6 deadline to submit competing bids and a May 11 auction for the trademarks. A hearing to consider approval of the sale will be on May 13. Systemax will receive a $250,000 break-up fee in the event the Debtors select another party at the auction. According to Bloomberg, the Company anticipates the sale of the intellectual property and Internet assets would bring "significant recovery for the sellers' estates and creditors," it said in its filing. Under the proposed sale, Circuit City would get a share of sales from the brand name. According to Bloomberg, Systemax, based in Port Washington, New York, agreed last year to buy the CompUSA name and some stores for about $30 million after the retailer shut its doors amid competition from Best Buy Co. and Wal-Mart Stores Inc. A copy of the Asset Purchase Agreement signed by Circuit City and Systemax is available for free at: http://bankrupt.com/misc/CircuitCity_Systemax_APA.pdf About Systemax Inc. Port Washington, New York-based Systemax Inc. -- http://www.systemax.com-- a Fortune 1000 company, sells personal computers, computer supplies, consumer electronics and industrial products through a system of branded ecommerce Web sites, direct mail catalogs, relationship marketers and retail stores in North America and Europe. It also manufactures and sells personal computers under the Systemax and Ultra brands and develops and markets ProfitCenter Software, a web-based, on-demand application for multi-channel direct marketing companies. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments -- domestic and international. Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Court's approval to pursue going-out-of-business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITIGROUP INC: SEC Won't OK Stock-Registration Until Friday ----------------------------------------------------------- The U.S. Securities and Exchange Commission told Citigroup Inc. executives that it won't approve the Company's stock-registration statement until after the Company discloses first-quarter earnings on Friday, David Enrich and John Jannarone at The Wall Street Journal report, citing people familiar with the matter. WSJ relates that Citigroup officials had been telling investors that the SEC would declare the Company's stock-registration statement "effective" last week. According to WSJ, Citigroup applied to the SEC in March to register about 4.4 billion new shares as part of its process to convert much of its outstanding preferred shares into common stock. WSJ notes that the move was designed to boost one gauge of Citigroup's capital and is expected to flood the market with Citigroup's shares. It will also make it easier to sell borrowed shares used for short positions, WSJ states. WSJ reports that the New York Stock Exchange is showing signs of retreating from plans to create a market for the new Citigroup shares before they're issued. WSJ notes that speculators had hoped to get relief from a "when issued market" created by the NYSE. Citing a person familiar with the matter, WSJ states that the NYSE will no longer create a when-issued market for Citigroup's new shares, but an NYSE spokesperson said that the exchange hasn't made a final decision. According to WSJ, the "when issued market" is employed by the NYSE to trade securities that are not yet in investors' hands. WSJ states that a when issued market for Citigroup stock would create an opportunity to sell the common stock that investors in preferred shares expected to receive in the exchange offer, which might have narrowed the gap between the price of the preferred shares and the current price of the common shares. 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 Sept. 30, 2008. As reported in the Troubled Company Reporter on Nov. 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve will backstop residual risk in the asset pool through a non-recourse loan. CMR MORTGAGE: Section 341(a) Meeting Slated for April 28 in Calif. ------------------------------------------------------------------ The U.S. Trustee for Region 17 will convene a meeting of creditors in CMR Mortgage Fund II, LLC's Chapter 11 case on April 28, 2009, at 1:00 p.m., at San Francisco U.S. Trustee Off, Office of the U.S. Trustee, 235 Pine Street, Suite 850, San Francisco, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. San Francisco, California-based CMR Mortgage Fund II, LLC, filed for Chapter 11 protection on March 31, 2009 (Bankr. N. D. Calif. Case No. 09-30788). Robert G. Harris, Esq., and Roya Shakoori, Esq., at the Law Offices of Binder and Malter, represent the Debtor in its restructuring efforts. The Debtor listed estimated assets of $100 million to $500 million and estimated debts of $10 million to $50 million. CRUSADER ENERGY: Reaches Deal for Use of Cash Until April 28 ------------------------------------------------------------ Crusader Energy Group Inc. worked out an agreement with its secured lenders for the temporary use of cash until a final hearing on April 28, Bloomberg's Bill Rochelle said. Crusader's debt includes $30 million owed to the first-lien creditor and $250 million to second-lien debt holders. Unsecured claims are some $49 million, a court filing says. Crusader said the options in bankruptcy include a sale of "all or substantially all" of the assets. 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. Crusader Energy and its 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: Bankruptcy Should Be in Oklahoma, Creditor Says ---------------------------------------------------------------- Creditors of Crusader Energy Group Inc., ask the U.S. Bankruptcy Court for the Northern District of Texas to transfer jurisdiction of the Debtors' bankruptcy case to Oklahoma. According to Bloomberg's Bill Rochelle, creditors Alpine Inc. and Alpine Energy Inc. say more than 70% of Crusader's production and proved reserves are located in Oklahoma, where the company is based. The Alpine companies say the only connection with Texas comes from properties in formations known as the Fort Worth and Permian basins in Texas. The creditors take note of how Crusader admits it's based in Oklahoma City, Mr. Rochelle adds. According to Mr. Rochelle, bankrupt companies seldom file for reorganization in their hometowns, which explains why so many Chapter 11 cases are in Delaware and New York. Creditors only rarely try to move a bankruptcy case closer to where the company is located, perhaps because such efforts ordinarily don't succeed. A recently filed oil and gas case in Dallas is an exception to the rule. Mr. Rochelle notes that another Oklahoma-based company that didn't file at home is petroleum product transporter and marketer SemGroup LP, which sought Chapter 11 protection in Delaware. 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. Crusader Energy and its 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. DBSI INC: Former Refco Examiner to Probe Alleged Fraud ------------------------------------------------------ According to Bill Rochelle of Bloomberg, a former head of the U.S. Justice Department's fraud unit was selected to investigate DBSI Inc. Joshua Hochberg, a lawyer with McKenna Long & Aldridge LLP in Washington, was named examiner by the U.S. Trustee in Delaware on April 3, according to the report. Mr. Hochberg has been tasked to investigate transactions between the company, affiliates not in bankruptcy and insiders. Allegations about fraud began surfacing in January when the State of Idaho Department of Finance contended there were "numerous fraudulent securities transactions that have defrauded hundreds of creditors." Idaho authorities said DBSI's business "mirrors a Ponzi scheme" and involved "$2 billion in allegedly fraudulent securities transactions." Mr. Hochberg served as examiner for Refco Inc., the liquidated futures broker whose Chief Executive Officer Phillip Bennett and President Tone Grant were given prison sentences of 16 years and 10 years, respectively. As reported by the TCR on March 19, the State of Idaho's Department of Finance has won approval for a court-appointed examiner in the closely watched bankruptcy proceedings of DBSI, Inc. The Hon. Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware has given the examiner the authority to probe $2 billion in allegedly fraudulent securities transactions made by DBSI. The scheme involved more than 12,000 investors and 270 properties throughout the country. Idaho, the state where DBSI is located, was joined by other states in the action, including Alabama, California, Colorado, Hawaii, Montana, Nevada, Oregon, Pennsylvania, South Carolina, Tennessee, and Washington. "This is more than just a bankruptcy case. The State of Idaho alleges fraudulent activity that mirrors a Ponzi scheme, making it a sophisticated investor fraud," said David J. Baldwin, a partner with Potter Anderson & Corroon LLP and lead trial counsel to the State of Idaho. "We're pleased the court accepted our motion and appointed an examiner. It is important to have someone whose focus is on the potential wrongdoing of the companies and not just on the process of a typical bankruptcy proceeding." DBSI allegedly used powers of attorney, signed by investors at real estate closings, to convert non-recourse loans to recourse loans -- making investors personally liable without their knowledge. "Investors were also assured there would be 'accountable reserves' benefitting their properties," said Mr. Baldwin. "It's now been shown that DBSI never set aside such reserves at all. These investors arguably are now personally liable and the reserves they expected would be there with their properties don't exist." About DBSI Inc. Headquartered in Meridian, Idaho, DBSI Inc. -- http://www.dbsi.com -- operates a real estate company. On November 10, 2008, and other subsequent dates, DBSI and 167 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-12687). Lawyers at Young Conaway Stargatt & Taylor LLP represent the Debtors as counsel. The Official Committee of Unsecured Creditors tapped Greenberg Traurig, LLP as its bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' notice claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets and debts of between $100 million and $500 million each. General Information: On November 10, 2008, and other subsequent dates, each of the Debtors filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code"). The 168 Debtors cases were assigned case numbers listed here (collectively, the "Bankruptcy Cases") and are jointly administered under case no. 08-12687. The Bankruptcy Cases are pending before the Honorable Peter J. Walsh in the United States Bankruptcy Court for the District of Delaware. DELPHI CORP: Wants to Disband Now Out-of-Money Shareholders' Panel ------------------------------------------------------------------ Delphi Corporation has filed an expedited motion before Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York for an order directing the disbandment of the official committee of equity security holders appointed in its bankruptcy case. Delphi and its affiliates ask Judge Drain to enter an order directing the Office of the United States Trustee to (a) disband the Equity Committee effective as of March 6, 2009 or, alternatively, (b) suspend the activities of the Equity Committee and its counsel, Fried, Frank, Harris, Shriver & Jacobson LLP, its financial advisors, Houlihan Lokey Howard & Zukin Capital, Inc., and its conflicts counsel, Farrell Fritz, P.C., subject to reactivation upon application to the Court and notice to the U.S. Trustee. Judge Drain will convene a hearing on April 23, 2009 at 10:00 a.m. (prevailing Eastern time). Objections are due April 20, 2009 at 4:00 p.m. (prevailing Eastern time), The Court issued a bench decision on March 22, 2006 directing the U.S. Trustee to appoint an equity committee. Appaloosa Management L.P., which then held a 15.2% stake in Delphi, requested for the committee's appointment. Seven parties, including institutional members Brandes Investment Partners, L.P., and D.C. Capital Partners, L.P., and Pardus European Special Opportunities Master Fund, L.P., were appointed to the Committee. The Equity Committee is now comprised of four individual investors, Luqman Yacub, James E. Bishop, Sr., and James H. Kelly, and James N. Koury, as trustee of the Koury Family Trust, after other members resigned. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, relates that the circumstances which existed in March 2006 that provided the basis for the appointment of the Equity Committee have changed dramatically since then. Because equity security holders will almost certainly receive no distributions in these chapter 11 cases, the costs to the Debtors' estates of continuing to maintain the Equity Committee can no longer be justified. The Debtors said they have worked tirelessly to effectuate their transformation plan, and, achieved confirmation of their Chapter 11 Plan. When the Court entered the confirmation order on January 25, 2008, the total business enterprise value associated with the Plan was $12.8 billion based upon an agreed negotiated value with the Debtors' principal stakeholders. The Confirmed Plan for an estimated 100% recovery for unsecured claims aggregating up to $3.69 billion, and a $348 million recovery (in the form of new stock and warrants to purchase stock) for holders of existing stock in Delphi. After the closing on Delphi's Confirmed Plan was suspended on April 4, 2008, Delphi undertook to reaffirm the business plan embodied in the Confirmed Plan. This reaffirmed business plan for 2008-2011 was attached to the Modified Disclosure Statement filed on October 3, 2008, as part of the Plan Modification Motion. The mid-point of the total enterprise business valuation associated with the Debtors' revised reorganization plan was $7.2 billion. Because of that reduced valuation, the revised proposed distributions to creditors and equity security holders in the modified plan filed on October 3, 2008 were materially less than under the Confirmed Plan. Mr. Butler relates that, after the Debtors developed and filed the revised plan, the global automotive industry took a dramatic turn for the worse. During the fourth quarter of 2008 and the first quarter of 2009, domestic and global vehicle sales and production plummeted dramatically to lows not seen in decades. Additionally, the global credit and capital markets remain frozen, which has had a significant negative impact on the Debtors' businesses as well as those of other automotive suppliers and OEMs. The severity of these economic crises has led governments around the world, including the United States, to take protective actions aimed at avoiding the financial collapse of key participants in the global automotive industry. Facing these significant economic challenges, the Debtors are negotiating with their stakeholders which have a continuing economic interest in the Debtors' reorganization cases to formulate further plan modifications. In connection with those discussions, the Debtors are making further revisions to their business plan consistent with the recent North American vehicle production volume declines, the global slowdown in vehicle sales, and the ongoing economic recession. Although no formal revised business plan has been completed, it is anticipated that the total business enterprise value associated with the revised plan will be substantially below the valuation range contained in the Plan Modification Motion and may be equivalent to, or even less than, the amount of the Debtors' postpetition obligations, including the DIP credit facility. Mr. Butler notes that as of April 13, Tranches A and B of the Debtors' DIP credit facility are trading at 78.5% of the face amount of such debt and Tranche C of the DIP credit facility is trading at approximately 14.8% of the face amount. In addition, trading activity in the Debtors' prepetition bonds is currently sporadic, with asking prices ranging from one to three percent of the face amount of such bonds and some recent trades taking place at a price lower than one percent of the face amount. It is now clear that there is no substantial likelihood of a meaningful distribution to the Debtors' equity security holders, Mr. Butler asserts. Thus, the rationale which formed the basis for the appointment of the Equity Committee, as articulated by this Court in its 2006 Decision, is no longer operative. Finally, the Debtors are also concerned about the ongoing cost to their estates of the Equity Committee. The four professional firms that have been retained to represent the Equity Committee over the course of these chapter 11 cases have collectively accrued more than $19 million of fees and expenses, including both fees and expenses that have been awarded by Court order through September 30, 2007, and amounts subsequently billed through February 2009. Any further costs of the Equity Committee are no longer justifiable. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DIPLOMAT CONSTRUCTION: Section 341(a) Meeting Slated for April 30 ----------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in Diplomat Construction, Inc.'s Chapter 11 case on April 30, 2009, at 10:00 a.m., at Third Floor - Room 362, Russell Federal Building, 75 Spring Street, SW, Atlanta, Georgia This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible 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. Atlanta, Georgia-based Diplomat Construction, Inc., doing business as Red Roof Inc - Airport, filed for Chapter 11 protection on April 3, 2009 (Bankr. N. D. Ga., Case No. 09-68613). Joseph H. Turner, Jr., Esq., represents the Debtor in its restructuring efforts. The Debtor listed total assets of $31,322,625 and total debts of $11,330,505. EE HOLDINGS: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: EE Holdings, LLC 7865 Vallagio Lane, Unit 411 Englewood, CO 80112 Bankruptcy Case No.: 09-15686 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Equity Services, LLC 09-15687 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: A. Bruce Campbell Debtor's Counsel: James R. Chadderdon, Esq. 128 S. Tejon, Ste. 408 Colorado Springs, CO 80903 Tel: (719) 444-0422 Email: jchadderdon@qwest.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 The petition was signed by Mark Lane, a sole member of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob09-15686.pdf DRUG FAIR: DIP Financing Draws Objection from Committee ------------------------------------------------------- Carla Main and Dawn McCarty of Bloomberg report that Drug Fair Group Inc.'s bid for a debtor-in-possession financing order received a partial objection from the official committee of unsecured creditors appointed in the case. The Company has been functioning as a debtor in possession since March 20 under a temporary order of the U.S. Bankruptcy Court for the District of Delaware, meaning it could use cash, incur debt and manage its business, Bloomberg notes. The Committee objects in part to a financing order because it wants to work out details relating to professional fee adjustments, liens on leasehold interests and priority on certain uncontested liens. Total recovery of estate assets is "estimated to come in at $70.3 million", Bloomberg said, citing court papers filed on April 10. About Drug Fair Group, Inc. Headquartered in Somerset, New Jersey, Drug Fair Group, Inc. -- http://www.drugfair.com/or http://www.costcuttersonline.com/-- fka Community Distributors, Inc. operates pharmacies and general merchandise stores in northern and central New Jersey. Founded in 1954, the Company has two divisions: Drug Fair and Cost Cutters. The Drug Fair division includes stores which sell both pharmaceuticals and general merchandise and the Cost Cutters division which are larger format stores that offer value-oriented, general merchandise. The Debtor and CDI Group, Inc., filed for Chapter 11 protection on March 18, 2009, (Bankr. D. Del. Case No.: 09-10897 to 09-10898) Domenic E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg & Ellers represent the Debtors in their restructuring efforts. The Debtors propose to employ Epiq Bankruptcy Solutions, LLC, as claims agent. The Debtors listed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. ENRON CORP: Gets $6.2MM as Settlement of Piper Jaffray, DISH Suit ----------------------------------------------------------------- Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, Enron Creditors Recovery Corp. asks Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement it entered into with Piper Jaffray & Co., and DISH Network Corporation, formerly known as EchoStar Communications Corporation. Prior to December 2, 2001, Enron issued unsecured commercial paper to various entities. The CP paper had maturities of up to 270 days. In a series of transfers starting on October 26, 2001, and concluding on November 6, 2001, Enron paid more than $1 billion to various entities with respect to the CP prior to the stated maturity date of the CP. Enron commenced litigation against Piper Jaffray and DISH asserting claims for the avoidance and recovery of allegedly preferential or constructive fraudulent transfers, and seeking disallowance of claims filed by Piper and DISH claims. Specifically, Enron sought to recover from Piper Jaffray $52,288,282 and $41,542,480 from DISH in connection with the CP Transfers. Following discussions among Enron, Piper and DISH, the parties have negotiated that Piper and DISH will pay Enron $6,200,522. Piper and DISH will forfeit, waive and release any claim they have against Enron. The settlement also contemplates that Enron will execute a stipulation and order dismissing with prejudice its claims against Piper and DISH. Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D. N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. After the approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre-bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. (Enron Bankruptcy News, Issue No. 218; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENRON CORP: Fleming Clients Join Newby Settlement Class ------------------------------------------------------- The U.S. District Court for the Southern District of Texas granted a request by Fleming & Associates LLP revoking the firm's prior requests for exclusion from settlements in the class action titled In re Mark Newby, et al., v. Enron Corp., et al. At various times during the pendency of the Newby Class Action, counsel for the class has announced settlements with various defendants. Fleming & Associates, on behalf of its clients, who are mostly defendants in the Newby Action, asked to be excluded from some of the settlement classes. In September 2003, F&A clients listed at http://bankrupt.com/misc/Enron_F&AOptOut1.pdfopted out of the Andersen Worldwide Societe Cooperative settlement. In March 2005, F&A clients opted out of the Outside Directors, Bank of America and Lehman Brothers settlement. A list of the F&A clients is available for free at: http://bankrupt.com/misc/Enron_F&AOptOut2.pdf In April 2006, F&A clients opted out of the Citigroup, JPMorgan Chase and CIBC settlements. A list of the F&A clients is available for free at: http://bankrupt.com/misc/Enron_F&AOptOut3.pdf F&A said it has discussed their desire to revoke their opt-outs with class counsel for Newby. Class counsel for Newby has advised that it would not oppose the filing of the revocation motion. Sean G. Jez, Esq., at Fleming & Associates LLP, in Houston, Texas, asserts that the granting of F&A Opt-Outs revocation would not prejudice any defendants that have paid settlements to the Newby class because the revocation of the opt-outs would not result in their paying any additional funds to the Newby class. Additionally, class members would not be prejudiced by the granting of the motion. Mr. Jez notes that only a portion of class funds have been distributed to class members and that proof of claims on behalf of the F&A Opt-Outs have been timely submitted to the Newby class claims administrator. When the claims administrator compiled the total allowed loss for purposes of the allocation of the initial distribution, it included claims submitted by persons who had opted out of some or all of the settlements, including the F&A Opt-Outs, Mr. Jez says. He asserts that at the time of the initial distribution, only a portion of settlement funds were paid to class members who had not opted out of the class. Therefore, he notes, the class settlement fund still maintains adequate funds to include F&A Opt-Outs in future distributions. Moreover, any reduction to a class members' proportionate share of settlement funds would likely be de minimis due to the overall size of the settlements collected and the size of the total allowed loss, he points out. About Enron Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D. N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. After the approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre-bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. (Enron Bankruptcy News, Issue No. 218; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENRON CORP: National City Elevates MFN Issue to District Court -------------------------------------------------------------- National City Bank has taken an appeal to the United States District Court for the Southern District of New York from Judge Arthur J. Gonzalez's order denying its motion enforcing an October 2003 stipulation. As reported by the Troubled Company Reporter, Judge Gonzalez of the United States Bankruptcy Court for the Southern District of New York denied a motion by National City Bank, an indenture and property trustee in Enron Corp.'s bankruptcy proceedings, to use its most favored nation status in the case to collect more than $50 million in claims from a group of Enron debtors. Pursuant to the stipulation, National City Bank, as indenture trustee for certain debentures of Enron North America Corp., and Enron Transportation Services Company, and other Enron affiliates, resolved a variety of open issues relating to the less than par recovery to be received by holders of Enron's Trust Preferred Securities or TOPRS despite the fact that the value of the interest of ETS in the Transwestern Pipeline Company was more than sufficient to pay all of the ETS creditors. In connection with the stipulation, NCB agreed to withdraw its objection to the proposed transfer of the Transwestern Pipeline, which was owned by a subsidiary of ETS, to the newly created shell corporation, Cross Country Energy Corp. Consequently, NCB insisted that the stipulation contain a "most favored nation" clause pursuant to which parties to the stipulation agreed that: ". . . in the event the Debtors agree to pay, or pay, to any class of unsecured nonpriority claims of any Debtor . . . a higher percentage recovery than the holders of Allowed ETS Debenture Claims are to receive . . . the percentage paid to the holders of Allowed ETS Debenture Claims shall automatically increase to the same percentage recovery . . . " By order dated April 8, 2004, the cases of each of Offshore Power Production C.V., Enron India Holdings Ltd., and Enron Mauritius Company Limited "Dabhol Debtors", were procedurally deconsolidated from the rest of the Debtors' cases. As of July 15, 2004, the date of confirmation of Enron's bankruptcy plan, none of the Dabhol Debtors had confirmed a plan of reorganization. On November 16, 2005, the Dabhol Debtors confirmed a plan of reorganization pursuant to which they agreed to pay at least one class of unsecured claims a 100% recovery. Edward M. Fox, Esq., at K&L Gates LLP, in New York, on behalf of NCB, argued that the Court must read the stipulation in its entirety to garner the parties' intent in entering into the agreement. Where a particular provision would eliminate the protections afforded by other provisions of the stipulation as a whole, or a contractual provision incorporated by reference into another contract, this contractual interpretation is not favored, Mr. Fox said. Accordingly, Mr. Fox said the Court must enforce the plain language of the October 2003 Stipulation and direct that the allowed ETS Debenture Claims be paid in full plus accrued interest. The MFN Clause requires that holders of Allowed ETS Debenture Claims receive the same 100% recovery, Mr. Fox said. However, the Reorganized Debtors argued that pursuant to their confirmed Plan of Reorganization they have not paid nor agreed to pay to any class of unsecured nonpriority claims any recovery in a higher percentage than the holders of Allowed ETS Debenture Claims are to receive under the Second Amended Plan and therefore have not triggered the "most favored nation" clause. The Reorganized Debtors believe that the October Stipulation is unambiguous and that its plain meaning requires collective action to trigger the MFN Clause. James Bulger, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, attorney for Enron Creditors Recovery Corp., et al., said NCB's assertion that the Reorganized Debtors are seeking to "shield" themselves from the consequences of severing the Dabhol Entities is disingenuous. On the contrary, it is NCB that is seeking to use the actions of the Dabhol Entities to its benefit, Mr. Bulger said. Mr. Bulger pointed out that the Reorganized Debtors had no control over the Dabhol Entities nor the Dabhol Plan. Thus, NCB must not be permitted to recover millions of dollars from the Debtors' estates as a result of a payout of less than $50,000 by entities outside of the Debtors' control. According to Mr. Bulger, the recovery would be contrary to the plain meaning of the October Stipulation, contrary to the parties' intent in both the October Stipulation and the Settlement, and an inequitable windfall for NCB. National City countered that the MFN Clause does not, by its terms, require that payment must be made under any particular plan to trigger the MFN Clause. Mr. Fox said the MFN Clause was intended to protect NCB from a stipulation where one of the Debtors was removed from the Plan of the Plan Compromise, thus enabling its creditors to obtain higher recovery than would be available to holders of Allowed ETS Debenture Claims under the Plan Compromise. Mr. Fox argued that even if the Debtors are correct that collective action is required under the October Stipulation to trigger the MFN Clause, they fail to point to any language of the October Stipulation which mandates that the collective action have been taken by the group of the Debtors that confirmed the Plan rather than by the group of Debtors which confirmed the Dabhol Plan. According to Mr. Fox, the fact the cases of the Dabhol Debtors were eventually deconsolidated from the cases of the remaining Debtors long after the October Stipulation was agreed to but before the Plan was confirmed, does not somehow operate to exclude them from the defined term "Debtors" as that term was used in the October Stipulation. Moreover, Mr. Fox noted, even if the Court concludes that the operation of the MFN Clause, by its terms, was limited to the treatment of creditors of those Debtors who eventually became proponents of the Plan, the inclusion of the MFN Preservation Clause in Section 34.6 of the Plan and in Paragraph 54 of the Confirmation Order created a new obligation under, or revived, the MFN Clause with which the Debtors must now comply. According to Mr. Fox, the MFN Clause merely restores to NCB that recovery to which it was always legally entitled. In his order, Judge Gonzalez held that the plain language of the MFN Clause in the October Stipulation required collective action by the Debtors in agreeing to pay a class of creditors a higher percentage than the recovery afforded to Allowed ETS Debenture Claims in order to trigger the MFN clause. Judge Gonzalez held that while the collective Debtors included the Dabhol entities at the time of the October Stipulation, the Dabhol Debtors and their affairs were completely separated from the bankruptcy cases of Enron Corp., and its other affiliated debtors and their plan of reorganization as a result of an April 2004 order approving the settlement of a complex transaction. Judge Gonzalez opined that after the separation of the Dabhol entities from the other Debtors, the Debtors lost all control over the Dabhol entities and could not have agreed to the payments made under the plan. Applying the plain meaning of the MFN clause, the collective Debtors did not agree to pay the approximate $50,000 payment made to the Dabhol creditors. About Enron Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D. N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. After the approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre-bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. (Enron Bankruptcy News, Issue No. 218; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FATBURGER RESTAURANTS: Filed for Chapter 11 in California --------------------------------------------------------- Two subsidiaries of Fog Cutter Capital Group Inc. that operate Fatburger fast-food franchises filed Chapter 11 petitions filed for bankruptcy protection before the U.S. Bankruptcy Court for the Central District of California (Woodland Hills). Fatburger Restaurants of California Inc., and Fatburger Restaurants of Nevada Inc. both listed assets and debt less than $10 million. Fog Cutter said a subsidiary of General Electric Capital Corp. called a default on a $3.85 million loan this month. Fog Cutter said in January that subsidiaries own the Fatburger chain, which has 94 locations. Fog Cutter subsidiaries operate 37 outlets, while the other 57 are franchised. Portland, Oregon-based Fog Cutter didn't file bankruptcy. The two subsidiaries in bankruptcy are located in Sherman Oaks, California. The cases are In re Fatburger Restaurants of California Inc., 09-13964, and In re Fatburger Restaurants of Nevada Inc., 09-13965, both in U.S. Bankruptcy Court, Central District California (Woodland Hills). FERRELLGAS PARTNERS: S&P Affirms Corporate Credit Rating at 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B+' corporate credit rating on propane distributor Ferrellgas Partners L.P. and its operating limited partnership, Ferrellgas L.P. The affirmation follows S&P's ongoing surveillance on the company and incorporates S&P's expectation for improved financial metrics in 2009 related to its positive organic growth trends in gallons of propane sold and cash flow. The outlook is stable. The ratings on Ferrellgas reflect the partnership's weak business risk profile and highly leveraged financial profile. Rating concerns include a challenging operating environment characterized by margin pressure, customer conservation, high leverage, a less favorable operating footprint than its peers, and acquisition risk. The partnership's flexible cost structure, large, geographically diverse retail footprint, recent positive organic growth trends, and portable propane tank exchange business, which offsets some of the seasonality involved in Ferrellgas Partners' retail operations, partially mitigate the rating concerns. Ferrellgas's Midwestern geographic footprint noticeably affects gross margin per gallon compared with competitors operating along the coasts. Generally, competition in the propane business is more intense in the U.S. Midwest, which results in lower margins per customer and makes pricing somewhat stickier than higher- margin customers in coastal states. While customer conservation remains a concern, the partnership achieved two consecutive quarters of propane gallon sales growth, and increased adjusted EBITDA guidance to about $255 million for fiscal 2009. Organic growth in the retail and wholesale operations contributed to the overall improvement. Ferrellgas's master limited partnership structure further restricts ratings because the partnership generally pays to unitholders distributions equal to nearly all available cash flow after debt service and business reinvestment commitments. The partnership's distribution support mechanism partly mitigates this credit risk. Through that mechanism, the partnership can potentially defer up to $36 million of common unit distributions to Ferrell Cos. Inc. (not rated), the general partner parent, if a downturn in operations occurs that would require greater internal liquidity at the operating partnership level. The partnership, which recently extended this mechanism (originally implemented in 2001) through April 2010, has never used it. "The stable outlook on Ferrellgas reflects our expectation that the recent organic growth in propane gallons sold will enable the company to achieve its 2009 EBITDA target, which will improve financial metrics and deleverage the company," said Standard & Poor's credit analyst Michael Grande. A positive outlook is unlikely in the next 12 to 18 months, but could be possible through sustained improvement in financial performance that would result in total debt to EBITDA of about 4.25x and FFO to debt of at least 20%. S&P could revise the outlook to negative or lower the rating if cash flows deteriorate due to increased customer attrition or an inability to maintain margins, resulting in FFO to debt below 12% and total debt to EBITDA of about 6x for two consecutive quarters. The rating could also be at risk if the liquidity position and financial performance deteriorates due to material acquisitions that would increase the partnership's business or financial risk profiles. FIREPOND INC: Files for Chapter 7 After Foreclosure, Asset Sale --------------------------------------------------------------- Firepond Inc. filed a voluntary petition under Chapter 7 with the U.S. Bankruptcy Court for District of Minnesota, on March 31, 2009. Firepond has been assigned Case No. 09-32103. The Company is represented by Jacob B. Sellers, Esq., at Leonard, Street and Deinard, Professional Association. The Company's assets were foreclosure upon and sold to FP Tech Holdings, LLC's FPX unit on February 23, 2009. The Company ceased business operations on the same date. Effective February 23, directors Francis Knuettel II, Scott Kline and Audrey Spangenberg resigned from the Board of Directors of the Company and each of their committees of the Board. Mr. Knuettel was Chairman of the Audit Committee and a member of the Compensation and Nominating Committees. Mr. Kline was chairman of the Compensation Committee and a member of the Nominating Committee. Ms. Spangenberg was a member of the Audit Committee. There are no known disagreements with Mr. Knuettel, Mr. Kline or Ms. Spangenberg. Ms. Spangenberg is the senior executive and principal owner of Firepond's largest shareholder, FP Tech Holdings. Also as part of the foreclosure and sale, L. Bradlee Sheafe, President, and William P. Stelt, Chief Financial Officer, resigned their positions with the Company. Stephen Peary, 60, was appointed CEO and CFO. Mr. Peary is charged with the wind up of the corporate activities of the Company. At February 23, 2009, Mr. Peary was the General Counsel of the Company, a position Mr. Peary retains. Also, Mr. Peary previously served as CFO of the Company and its predecessor from April 2005 to May 2008. From October 2004 to April 2005, Mr. Peary was a consultant to the Company's predecessor. Prior to that, Mr. Peary ran his own consulting firm, Stinson Capital Management, LLC. Mr. Peary is not related to any previous directors, officers or stockholders of the Company, nor is or has he been engaged in any related person transactions with the Company, except as an employee and the salary received there from. Firepond, Inc. (OTC BB: FPND), provides multi-tenant, on-demand software that automates and simplifies the process companies use to sell products and services in the United States. It offers Configure, Price, Quote (CPQ) software-as-a-service that automates sales processes, enhances order accuracy, and accelerates sales cycles. The company also provides professional services, which include consulting, implementation, and training services. Firepond also provides technical support services, such as data maintenance, enhancement, and end-user support services. It serves high technology, transportation, construction machinery, agricultural equipment, and service companies. The company, formerly known as FP Technology Holdings, Inc., was founded in 1983 and is headquartered in Mankato, Minnesota. As of December 31, 2008, the Company had $1.8 million in total assets and $13.3 million in total liabilities, resulting in $11.5 million in stockholders' deficit. FIRST LIGHT: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: First Light Properties, LLC 1062 E. Evans St. Springfield, MO 65810 Bankruptcy Case No.: 09-60645 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- FF Development, LLC 09-60647 Stowaway, LLC 09-60648 Chapter 11 Petition Date: March 31, 2009 Court: United States Bankruptcy Court Western District of Missouri (Springfield) Judge: Arthur B. Federman Debtor's Counsel: M. Brent Hendrix, Esq. P.O. Box 3373 Springfield, MO 65808 Tel: (417) 889-8820 Fax: (417) 889-3493 Email: brenthendrix@sbcglobal.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Ruthie Pomeroy, a manager and member 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/mowb09-60645.pdf FLEETWOOD ENTERPRISES: To Sell Inventory to Lazy Days for $2.2MM ---------------------------------------------------------------- Fleetwood Enterprises and its affiliates ask the U.S. Bankruptcy Court for the Central District of California for authority to sell their travel trailer inventory to Lazy Days' R.V. Center, Inc., free and clear of liens, claims, interests and encumbrances. Bankruptcy Data reports that Lazy Days offered an aggregate cash purchase price of $2,250,968. The inventory includes 154 finished travel trailer units, comprising all of Fleetwood Enterprises' remaining inventory in the travel trailer realm, the report says. Lazy Days is one of seven entities named to the official committee of unsecured creditors in the bankruptcy cases of Monaco Coach Corporation, maker of motorized and towable recreational vehicles, according to the Troubled Company Reporter on March 27, 2009. About Lazy Days Based in Seffner, Florida, Lazy Days' R.V. Center Inc., is a single-site dealer of new and previously-owned recreational vehicles. The Company is a primary point of distribution for eight of the leading manufacturers in the recreational vehicle retail industry. The Company is widely recognized in the RV community as the premier destination for RV enthusiasts. Lazy Days' is a wholly owned subsidiary of LD Holdings, Inc. As reported by the Troubled Company Reporter in November 2008, Lazy Days said it would not pay the interest payment due Nov. 17, 2008, on $137 million in 11.75% senior notes that mature May 15, 2012. Lazy Days in March entered into a fourth amendment to its Forbearance Agreement dated December 12, 2008, with certain holders of Lazy Days' 11-3/4% Senior Notes due 2012. As of March 30, Lazy Days has obtained forbearance from holders of more than 81% of the Notes from exercising their potential remedies under the Indenture dated as of May 14, 2004. Under the Fourth Amendment, more than 81% of the holders of the Notes have agreed to forbear from exercising their potential remedies under the Indenture at least until April 13, 2009, unless the Company fails to meet its obligations under the Forbearance Agreement prior to that date. Lazy Days has yet to provide update on the matter. As of September 30, 2008, the Company had $318.0 million in total assets and $251.9 million in total liabilities. * * * According to the Troubled Company Reporter, in November 2008, Moody's Investors Service downgraded Lazy Days' ratings, including the Corporate Family Rating and Probability of Default Ratings to Ca from Caa2. Moody's also downgraded the rating on the company's 11.75% senior unsecured notes to C from Caa3. Lazy Days' SGL-4 Speculative Grade Liquidity rating was affirmed. The ratings remain on review for possible downgrade. Standard & Poor's Ratings Services also lowered its long-term corporate credit rating Lazy Days' to 'CC' from 'CCC+', as well as S&P's rating on the company's unsecured debt to 'C' from 'CCC-'. The outlook is negative. About Monaco Coach Monaco Coach Corporation, a national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. Headquartered in Coburg, Oregon, with manufacturing facilities in Oregon and Indiana, the Company offers a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, and R-Vision brand names. The Company operates motorhome-only resorts in California, Florida, Nevada and Michigan. Monaco Coach is listed on the Pink Sheets under the symbol "MCOAQ". As of September 27, 2008, the Company had $442.1 million in total assets and $208.8 million in total liabilities. Monaco Coach Corporation and its affiliates filed for Chapter 11 on March 5 (Bankr. D. Del., Lead Case No. 09-10750). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, was tapped as counsel. Omni Management Group LLC serves as the Debtors' claims, balloting, noticing and administrative agent. About Fleetwood Enterprises Headquartered Riverside, California, Fleetwood Enterprises -- http://www.fleetwood.com-- produces recreational vehicles and manufactured homes. The Debtors have about 9,000 associates working in facilities strategically located throughout the nation. The company and 19 of its affiliates filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., atGibson, Dunn & Crutcher LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. FOAMEX INTERNATIONAL: Court OKs Matlin As Stalking Horse Bidder --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved Foamex International L.P.'s proposed procedures for the sale of its assets. According to Bloomberg's Bill Rochelle, Foamex overcame opposition from creditors and received approval at an April 9 hearing for auction procedures in which an affiliate of MatlinPatterson Global Advisers LLC, the provider of $95 million in secured financing, could end up owing the business in exchange for debt. Competing bids are initially due May 15, followed by a May 19 auction and a May 21 hearing to approve the sale. As reported in the Troubled Company Reporter on March 26, 2009, Foamex agreed to sell substantially all of its assets to MP Foam DIP, LLC, an affiliate of MatlinPatterson Global Opportunities Partners III L.P., subject to higher and better offers at an auction. MP has offered to pay $105 million, of which $78.4 million is a combination of cash and MatlinPatterson's DIP claim, for Foamex's assets. The Court has granted final approval for up to $95 million in Foamex International Inc. debtor-in-possession financing provided by MatlinPatterson and Bank of America. Pursuant to the proposed bid protocol, parties will have a May 15 deadline to submit bid. Should a qualified be received in addition to MatlinePatterson's, an auction has been scheduled for May 19. The bid protocol hearing is scheduled for April 7, with objections due April 2. The hearing to consider approval of the sale to MP Foam, or the winning bidder will be on May 21, with objections due May 15. A copy of the Bid Protocol is available at: http://bankrupt.com/misc/FOamex_BidProtocol.pdf About Foamex International Foamex International Inc. (FMXL) -- http://www.foamex.com/-- headquartered in Media, PA, produces polyurethane foam-based solutions and specialty comfort products. The company services the bedding, furniture, carpet cushion and automotive markets and also manufactures high-performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The company and eight affiliates first filed for chapter 11 protection on September 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). On February 2, 2007, the U.S. Bankruptcy Court for the District of Delaware confirmed the Debtors' Second Amended Joint Plan of Reorganization. The Plan became effective and the company emerged from chapter 11 bankruptcy on February 12, 2007. Foamex missed $7.3 million in interest payments due at the end of the Jan. 21 grace periods on the company's $325 million first-lien term loan and the $47 million second-lien term loan. On February 18, 2009, Foamex International Inc. and seven affiliates filed separate voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 09-10560). The Hon. Kevin J. Carey presides over the cases. Ira S. Dizengoff, Esq., Phillip M. Abelson, Esq., and Brian D. Geldert, Esq., at Akin Gump Strauss Hauer in New York; and Mark E. Felger, Esq., and Jeffrey R. Waxman, Esq., at Cozen O'Connor, in Wilmington, Delaware, serve as bankruptcy counsel. Investment Banker is Houlihan Lokey; accountant is McGladrey & Pullen LLP, and claims and noticing agent is Epiq Bankruptcy Solutions LLC. David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton LLP, represent the Official Committee of Unsecured Creditors as counsel. As of September 28, 2008, the Debtors had $363,821,000 in total assets, and $379,710,000 in total debts. FORD MOTOR: S&P Raises Corporate Credit Rating to 'CCC+' -------------------------------------------------------- Standard & Poor's Ratings Services said it has raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. The outlook on all entities is negative. The upgrade reflects S&P's evaluation of Ford's creditworthiness following the Company's completion of what S&P considered to be a distressed debt exchange. S&P lowered its corporate credit rating on Ford to 'SD' on April 6, reflecting the completion of tender offers for Ford debt. The transaction improved Ford's capital structure; Ford's automotive debt was reduced by $9.9 billion, from $25.8 billion at Dec. 31, 2008. Still, Ford estimates that annual cash interest savings will be less than $600 million, a fraction of the Company's automotive cash outflows in 2008 and, S&P believe, in 2009. Moreover, S&P believes fundamental business risks will remain unchanged for at least the rest of 2009 and perhaps longer, most notably the company's exposure to weak vehicle demand globally, but also the substantial execution risk of the company's ongoing restructuring and repositioning. "We expect continued heavy cash losses in Ford's automotive operations for at least the next year," said Standard & Poor's credit analyst Robert Schulz. The outflows are being caused by weak auto sales in almost every market, but especially in the U.S. and Europe. S&P's rating also reflects concerns that General Motors Corp. or Chrysler LLC (both rated CC/Negative/--) could file for bankruptcy in the coming months, or even sooner in the case of Chrysler, and S&P believes this would be a negative development for Ford's liquidity, given the commonality of the auto sector supply base. S&P expects U.S. light-vehicle sales of about 9.7 million units this year, the lowest in 42 years and down 26% from 13.1 million units in 2008. S&P currently expects sales to rise to 11.2 million units in 2010, but even with an improvement, sales would still be 15% below the weak levels of 2008. The outlook for other major auto markets, including Europe, will also remain bleak, in S&P's view, until economic stabilization becomes apparent. S&P said its ratings reflect the possibility that the multiple problems Ford faces in stemming cash use could overwhelm its cash and liquidity during the next year. Items that Ford can address over time, such as its overcapacity, labor costs, and product lineup, will not, in S&P's view, be sufficient to produce any meaningful free cash flow in the immediate future, although a stabilization of industry sales, even at low levels, would lead to somewhat lower but still sizable cash use in 2009. The shift in demand away from large pickup trucks and SUVs in the U.S. in recent years remains a negative factor in S&P's view. S&P expects Ford's cash outflows to further reduce its cash balances during the coming quarters, which will test the company's ability to maintain sufficient liquidity into 2010. S&P believes Ford may have to revisit its informal request for $9 billion of loans from the U.S. government, unless industry sales begin to recover later this year. S&P believes that because the government is heavily engaged with requests for aid from GM and Chrysler, as well as from other industries, direct support for Ford, if requested, is likely in S&P's view, but not a given. Moreover, the form, timing, and magnitude of this assistance are difficult to predict, and S&P's current ratings do not reflect any such assistance. Even if the government were to eventually provide funding, S&P stresses that it would likely view such assistance as buying more time rather than as a solution to the automaker's fundamental business risks, especially deteriorating global demand. In S&P's view, Ford's current credit profile remains superior to that of its Michigan-based competitors, GM and Chrysler. S&P believes both of those companies will need to complete debt exchanges and reach agreements with their main labor union in the near term, or they will likely have to pursue bankruptcy filings. S&P also believes Ford Credit has been less constrained recently than its peers in its ability to provide financing for Ford customers. Still, S&P believes Ford faces the possibility of falling below the necessary levels of cash to run its automotive business. S&P estimates that this could occur if cash use in its automotive operations, including restructuring charges, exceeded about $14 billion in 2009, or if auto sales remained unchanged in 2010 from weak 2009 levels. S&P also continues to believe the failure of one or more of Ford's Michigan-based competitors would adversely affect many of Ford's suppliers, and the resulting turmoil could reduce Ford's liquidity further. The Company reported that it used $17.3 billion in cash, including cash restructuring costs, in its global automotive operations in 2008, including $6.8 billion in the fourth quarter. Since then, U.S. industry sales have remained weak in North America and Europe (although recent incentive plans have bolstered demand in some European countries at least temporarily). Consequently, S&P expects Ford's cash use to continue relatively unabated through the end of this year and perhaps into 2010, even as the company continues to aggressively slash costs and conserve cash. S&P views the agreements reached recently with the United Auto Workers union as a long-term positive for Ford's turnaround efforts in North America, should the company survive the current downturn. S&P believes the Company has few unencumbered assets it could use to support additional borrowing. Asset sales have been a source of cash in recent years. Ford said it is exploring a possible sale of its Volvo unit, although under terms of Ford's credit agreement, half of the proceeds from any Volvo sale must be used to repay secured debt. S&P does not expect Ford to sell a stake in Ford Credit. The negative outlook reflects S&P's view that cash losses could cause Ford's liquidity to sink toward the minimum necessary levels in 2009 or 2010, in light of weak auto industry sales globally, even if management's cash-saving actions are partly successful. S&P would evaluate the effect of any specific announcements regarding federal funding if they were to materialize. S&P could lower the ratings if, among other things, S&P believed cash balances would drop significantly below $10 billion at any time. This could occur even with more vehicle sales than S&P has seen in recent months. S&P could also lower the rating if Ford Credit failed to maintain sufficient funding to continue its already lower levels of auto loan originations. A bankruptcy by a major competitor could lead us to place Ford's ratings on CreditWatch with negative implications while S&P assess the potential industry ripple effects, including Ford's need to support its supply base. S&P believes the most likely trigger for a financial restructuring or bankruptcy filing by Ford remains a reduction in cash balances approaching levels that Ford views as insufficient to operate the business, caused by low vehicle sales and production, rather than by the Company's making a strategic decision to file for bankruptcy. S&P could revise the outlook to positive or raise the rating if, among other things, the global light-vehicle sales outlook began to show sustained improvement, if Ford's prospects for generating free cash flow improved significantly, and if the actions of distressed competitors do not cause a significant reduction in Ford's liquidity. FREMONT GENERAL: Exclusive Plan Filing Period Extended to April 30 ------------------------------------------------------------------ Bankruptcy Data reports that the U.S. Bankruptcy Court for the Central District of California has approved a stipulation between Fremont General Corp. and its official committee of unsecured creditors regarding the Debtor's exclusivity periods, and continuing the Debtor's exclusivity periods. The report says the Debtor's exclusive period to propose a bankruptcy exit plan is extended through and including April 30, 2009, and the exclusive period to solicit acceptances of the plan is extended through and including July 29, 2009. The report says the Court vacated a hearing on the Debtor's exclusivity motion previously scheduled for April 9, 2009. The Bankruptcy Court granted a prior request by Fremont General to extend the exclusive plan filing period to April 10, 2009, and the exclusive solicitation period to July 9. About Fremont General Based in Santa Monica, Calif., Fremont General Corp. (OTC: FMNTQ) -- http://www.fremontgeneral.com/-- was a financial services holding company with $8.8 billion in total assets at Sept. 30, 2007. Fremont General ceased being a financial services holding company on July 25, 2008, when its wholly owned bank subsidiary, Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan) completed the sale of its assets, including all of its 22 branches, and 100% of its $5.2 billion of deposits to CapitalSource Bank. Fremont General filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at Stutman Treister & Glatt, represent the Debtor as counsel. Kurtzman Carson Consultants LLC is the Debtor's Noticing Agent/Claims Processor. Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff & Stern LLP, represent the Official Committee of Unsecured Creditors as counsel. The Debtor filed with the Court an amended schedule of its assets and liabilities on Oct. 30, 2008, disclosing $330,036,435 in total assets and $326,560,878 in total debts. FRONTIER AIRLINES: Grants $3,587,080 Admin. Claim to World Fuel --------------------------------------------------------------- World Fuel Services Corporation provided within 20 days before the Petition Date, aviation fuel to Frontier Airlines Holdings, Inc., with a total value of $3,734,826. The amount remains unpaid. Accordingly, World Fuel asked the U.S. Bankruptcy Court for the Southern District of New York to allow its claim as an administrative claim pursuant to Section 503(b)(9) of the Bankruptcy Code. To resolve their dispute, the Debtors and World Fuel agree that World Fuel will have an Allowed Administrative Claim for $3,587,080. The Claim will not be payable until the earlier of: * the effective date of a plan of reorganization; * any conversion of the Chapter 11 cases to Chapter 7; * trustee appointment under Section 1104 of the Bankruptcy Code; or * any dismissal of the Debtors' cases. World Fuel's Administrative Claim, however, will be payable at the same time the Debtors pay substantially all other claims in their Chapter 11 cases. In addition, World Fuel will have an allowed non-priority general unsecured claim for $241,219 on account of aviation fuel sold to the Debtors and delivered to Frontier outside the 20-day period preceding the Petition Date. The Debtors and World Fuel agree to waive or discharge each other from any causes of action that may arise from prepetition agreements or transactions, other than with respect to the Settled Claims and claims related to environmental liabilities. The Stipulation is effective with respect to the General Unsecured Claim as of March 20, 2009. Accordingly, World Fuel further agrees to promptly withdraw all related requests it filed in the Debtors' cases. About Frontier Airlines Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provides air transportation for passengers and freight. It operates jet service carriers linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, as well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FURNITURE MINNESOTA: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Furniture Minnesota, Inc. 967 Payne Ave. St. Paul, MN 55130 Tel: (651) 774-7070 Bankruptcy Case No.: 09-32167 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court District of Minnesota (St. Paul) Judge: Robert J. Kressel Company Description: Furniture Minnesota Inc. is a family-owned and operated discounter of high-quality furniture. See http://www.furnitureminnesota.com/ Debtor's Counsel: David G. Keller, Esq. Grannis & Hauge 1260 Yankee Doodle Rd., Suite 200 Eagan, MN 55121 Tel: (651) 456-9000 Email: kellerd@grannishauge.com Total Assets: $708,020 Total Debts: $1,139,613 The petition was signed by Stephen Katainen, 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/mnb09-32167.pdf FX REAL ESTATE: Receives Notice of Breach, Warns of Bankruptcy -------------------------------------------------------------- FX Real Estate and Entertainment Inc. reports that, as a result of the ongoing default under the mortgage loan, on April 9, 2009, its first lien lenders sent a Notice of Breach and Election to Sell, which initiates the trustee sale procedure against the Company's Las Vegas property to satisfy the principal amount of $259 million and other obligations owed to them under the mortgage loan and secured by the property. Under Nevada law, the Las Vegas subsidiaries have the legal right to cure the default during a 35-day redemption period that expires on May 18, 2009 or else the Las Vegas property may be sold thereafter in accordance with Nevada law -- the process takes approximately 120 days -- in a trustee sale to satisfy the first lien lenders' obligations secured by the property. Neither the Company nor its subsidiaries are able to cure the default. Consequently, the Company and the Las Vegas subsidiaries are considering all possible legal options, including bankruptcy proceedings. The Company cannot guarantee to what extent, if any, such actions may be viable or effective. In its Annual Report on Form 10-K for the year ended December 31, 2008, the Company explained that its Las Vegas subsidiaries are in default under the mortgage loan secured by the Las Vegas property, which, as of December 31, 2008, was made up of a $280 million senior secured first lien loan and a $195 million senior secured second lien loan. As a result of the application of certain escrowed proceeds to the payment of principal on the first lien loan, there was $454 million outstanding under the mortgage loan as of March 27, 2009. The mortgage loan matured on January 6, 2009. As a result of a prior breach of certain maintenance covenants governing the mortgage loan, on January 5, 2009, the second lien lenders under the mortgage loan had delivered a written demand for repayment of all of the obligations owed to them under the loan, including the second lien principal amount of $195 million. On January 6, 2009, following the Las Vegas subsidiaries' failure to repay the mortgage loan at maturity, the first lien lenders delivered their demand for repayment of all of the obligations owed to them under the loan, including the first lien principal amount of $280 million. On January 30, the first lien lenders seized the cash collateral reserve accounts established under the mortgage loan from which the Las Vegas subsidiaries had been drawing working capital funds to meet ordinary expenses, including operating the Las Vegas property, and applied $21 million of that amount to the outstanding principal amount of the first lien loan thereby leaving a minimal balance in the reserve accounts. In addition, the first lien lenders have directed all payments from the existing tenants on the Las Vegas property to be delivered directly to the lenders. Each month the Las Vegas subsidiaries may make a request of the lenders to access the cash generated by the tenants that the Las Vegas subsidiaries deem necessary to meet the operating expenses related to the Las Vegas property. The lenders have sole discretion to approve or reject any such request. Because the Las Vegas subsidiaries have limited cash available, if the lenders fail to honor the draw requests in full or in part or delay the processing, the Las Vegas subsidiaries will not be able to satisfy their obligations and pay for necessary expenses unless the Company is able to fund shortfalls from other sources. The Company noted that it has limited cash available with which to provide any such funding. Thus, the Las Vegas subsidiaries may not be able to meet their obligations as they come due. Neither the Company nor the Las Vegas subsidiaries are able to repay the obligations outstanding under the mortgage loan. As a result of delivery of the demands for repayment and the loan being past due, the first lien lenders may at any time exercise their remedies under the amended and restated credit agreements governing the mortgage loan, which may include foreclosing on the Las Vegas property. While the Las Vegas subsidiaries have engaged in preliminary discussions with the first lien lenders and the second lien lenders regarding potential solutions to the existing loan defaults, no agreement has yet been reached. To the extent that no consensual arrangement is reached and the lenders pursue their remedies, the Las Vegas subsidiaries may explore possible legal options in connection with trying to maintain their ownership of the Las Vegas property, including bankruptcy or similar filings. Whether or to what extent such action may be effective or viable is unclear. The loss of the Las Vegas property, which is substantially the Company's entire business, would have a material adverse effect on its business, financial condition, results of operations, prospects and ability to continue as a going concern. Ernst & Young LLP is the Company's independent registered public accounting firm. As of December 31, 2008, the Company had $258.0 million in total assets and $497.9 million in total liabilities, resulting in $239.8 million in stockholders' deficit. The Company reported consolidated net loss of $461.8 million for the year ended December 31, on revenues of $6.0 million. A full-text copy of the Company's 2008 Annual Report is available at no charge at http://ResearchArchives.com/t/s?3b7c Based in New York, FX Real Estate and Entertainment Inc.'s business consists of the ownership and operation of the Las Vegas property, which is made up of six contiguous parcels aggregating 17.72 acres of land located on the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada. The Las Vegas property is currently occupied by a motel and several commercial and retail tenants with a mix of short and long-term leases. The Las Vegas property's six parcels generated total rental and other revenue of approximately $19.5 million for the fiscal year ended December 31, 2008. FX REAL ESTATE: NASDAQ Notice Prompts Voluntary Delisting --------------------------------------------------------- FX Real Estate and Entertainment Inc. on April 8, 2009, received notice from The NASDAQ Stock Market indicating that, as of December 31, 2008, the Company is no longer in compliance with NASDAQ's continuing listing requirement of a minimum of $10,000,000 in stockholders' equity. Under the NASDAQ Marketplace Rules, the Company is permitted to submit to NASDAQ, by no later than April 23, 2009, a plan to regain compliance with NASDAQ's continued listing criteria. If the Company were to submit a plan and it is accepted by NASDAQ, the Company would have up to 105 calendar days from April 8, 2009, the date of the notice from NASDAQ, to regain compliance. However, based on the Company's deteriorating financial condition, the Company has determined that it will not be able to regain compliance with NASDAQ's continued listing criteria within the prescribed time frame. As a result, the Company has provided notice to NASDAQ of its intent to voluntarily delist its common stock from NASDAQ in lieu of submitting a plan to regain compliance. By April 24, 2009, the Company will file a Form 25 with the Securities and Exchange Commission relating to the delisting. The delisting is expected to be effective 10 calendar days after filing the Form 25. The Company anticipates that the last day of trading for its common stock on The NASDAQ Global Market will be on or about May 4, 2009. The Company will seek to have its common stock quoted on the Over-The-Counter Bulletin Board shortly after the date of delisting from The NASDAQ Global Market, though the Company cannot provide any assurances in this regard. Based in New York, FX Real Estate and Entertainment Inc.'s business consists of the ownership and operation of the Las Vegas property, which is made up of six contiguous parcels aggregating 17.72 acres of land located on the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada. The Las Vegas property is currently occupied by a motel and several commercial and retail tenants with a mix of short and long-term leases. The Las Vegas property's six parcels generated total rental and other revenue of approximately $19.5 million for the fiscal year ended December 31, 2008. GANNETT CO: Will Reduce Oakland County Non-Daily Newspapers in May ------------------------------------------------------------------ Businessnewsweek.com reports that Gannett Co. Inc.'s several non- daily newspapers in Oakland County have said that they will cease or merge publications on May 31, 2009. According to Businessnewsweek.com, these editions of the Eccentric will close: -- The Birmingham, -- West Bloomfield, -- Troy, and -- Rochester. Businessnewsweek.com relates that The Southfield edition and the Observer & Eccentric group's Mirror newspaper will merge into multi-community Sunday newspaper, the South Oakland Eccentric. Gannett said that it will lay off about 44 employees due to the closings and consolidations, Businessnewsweek.com states. Gannett, says the report, will continue to publish the Observer Newspapers and Hometown Weekly Newspapers in western Wayne and Oakland counties. Gannett executives, according to Russell Adams at The Wall Street Journal, projected a decline of as much as 35% in the first- quarter 2009 ad revenue from 2008. Gannett is the publisher of more than 80 U.S. dailies, WSJ reports. WSJ relates that most of Gannett's papers are profitable, but profits are shrinking. Gannett's entire debt structure is due to mature by 2012, WSJ notes. Private Exchange Offer for 5.75% Notes & 6.375% Notes Radio Business Report reports that institutional investors are being offered higher interest payments if they will exchange Gannett notes due in 2011 and 2012 for some new notes that mature in 2015 and 2016. Gannett disclosed on April 7 that it has commenced a private exchange offer relating to its 5.75% Notes due 2011 (CUSIP No. 364725AE1) and its 6.375% Notes due 2012 (CUSIP No. 364725AC5) (collectively, the "Old Notes"). The Company is offering to exchange $1,000 in principal amount of new 10% Senior Notes due 2015 (including a $30 early participation payment) for $1,000 principal amount of the 2011 notes, and $1,000 in principal amount of new 10% Senior Notes due 2016 (including a $30 early participation payment) for $1,000 principal amount of the 2012 notes. The exchange offer is being made only to qualified institutional buyers and certain non-U.S. investors located outside the United States. An offering memorandum and accompanying letter of transmittal, each dated April 7, set forth the terms of the exchange offer. Only eligible holders who validly tender their Old Notes prior to the early participation deadline, 5:00 p.m., New York City time on April 21, 2009 (unless extended), and do not withdraw their tenders, will be eligible to receive the $30 early participation payment for each $1,000 principal amount of Old Notes tendered. All eligible holders whose Old Notes are validly tendered and accepted will also receive a cash payment equal to the accrued and unpaid interest on their Old Notes to, but not including, the date on which the Old Notes are exchanged. The exchange offer will expire at 5:00 p.m., New York City time, on May 5, 2009, unless extended. Any such extension will be followed by a public announcement no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled Expiration Date. Tenders of Old Notes may be withdrawn prior to, but not after, 5:00 p.m., New York City time on April 21, 2009 (unless extended). The new 2015 notes and the new 2016 notes will be senior unsecured obligations and will be guaranteed by certain of Gannett's subsidiaries. The New Notes and the subsidiary guarantees have not been and will not be registered under the Securities Act of 1933, as amended, or any state securities laws, may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The exchange offer is conditioned upon the satisfaction of certain customary conditions described in the offering memorandum. These conditions include the requirement that Gannett receives valid tenders, not validly withdrawn, of Old Notes exchanged for at least $100,000,000 aggregate principal amount of new 2015 notes and $100,000,000 aggregate principal amount of new 2016 notes. Subject to applicable law, Gannett may, at its sole discretion, waive any condition applicable to the exchange offer, may extend the exchange offer and may terminate the exchange offer before the Expiration Date. About Gannett Co. Inc. Headquartered in McLean, Virginia, Gannett Co. Inc. (NYSE:GCI) -- http://www.gannett.com/-- is an international news and information company. In the United States, the Company publishes 85 daily newspapers, including USA TODAY, and nearly 900 non-daily publications. Along with each of its daily newspapers, the company operates Websites offering news, information and advertising that is customized for the market served and integrated with its publishing operations. Newspaper publishing operations in the United Kingdom, operating as Newsquest, include 17 paid-for daily newspapers, almost 300 non-daily publications, locally integrated Websites and classified business Websites with national reach. The Company has two segments: newspaper publishing and broadcasting. As reported by the Troubled Company Reporter on January 19, 2009, Gannett reported that it is offering to sell certain assets of the Tucson (AZ) Citizen. If a sale is not completed by March 21, 2009, Gannett said it will have to close the newspaper. According to the TCR on January 15, 2009, Gannett said that it asked U.S. non-unionized workers to take a week of unpaid leave the first quarter. Gannett CEO and Chairperson Craig Dubow said that the company needs to preserve its operations and continue to deliver for its customers while confronting the issues raised by some of the most difficult economic conditions that the Company has ever experienced. Mr. Gannett said that employees in unions will also be asked to participate in the furlough. The TCR reported on October 2, 2008, that Gannett drew on a revolving credit line to ensure it has funds to repay its commercial paper. The action was taken in response to credit- market disruption. The company said it has significant credit available under a $3.9 billion revolving credit line, in excess of its $2 billion in commercial paper outstanding. GENERAL MOTORS: Treasury Hires 4 Firms for Advice on Auto Industry ------------------------------------------------------------------ According to government Web site http://www.fbo.gov/,the U.S. Treasury Department has awarded a $7,000,000 contract to The Boston Consulting Group effective April 3. The Department of the Treasury said it requires immediate management consulting services to (a) assist in Treasury's continued assessment of the automotive sector generally; (b) assist in Treasury's work with General Motors Corporation and GM advisors to develop a comprehensive restructuring and business plan acceptable to the Government and thoroughly evaluate that plan; and (c) advise Treasury with respect to the results of its comprehensive diligence exercise evaluating the viability of the announced alliance between Fiat and Chrysler, LLC. Prior notices posted in the Web site showed that the U.S. Treasury Department has awarded, effective March 30, contracts to three law firms to advise on auto industry restructurings and on how to provide debtor-in-possession financing for troubled manufacturers and suppliers: Award's Contractor Ceiling Value ---------- ------------- Cadwalader Wickersham & Taft LLP $8,590,000 Sonnenschein Nath & Rosenthal LLP $8,590,000 Haynes and Boone LLP $8,590,000 The notices posted said that the Department of the Treasury requires expert legal services in support of loans, equity investments, or other direct or indirect investments related to the auto industry for programs instituted pursuant to the Emergency Economic Stabilization Act of 2008. Under the contract, the contractors may be tasked with providing expert advice and guidance with respect to loans, equity investments, and other direct or indirect investments in various auto industry participants; developing legal documentation with respect to loans, equity investments, and other direct or indirect investments related to the auto industry; negotiating relevant transactions; and performing related legal services within the general contract scope. The auto industry is comprised of manufacturers, suppliers, dealerships and related entities. Treasury identified areas to be awarded to the three law firms. These include: -- Debtor-in-Possession (DIP) Facility Structuring. The Contractor may be tasked to provide expertise and guidance in the formulation of a DIP facility structure and to draft related legal documentation for direct or indirect financing of distressed auto industry participants, including DIP financing. -- DIP Loan Closings. The Contractor may be tasked to negotiate DIP loan transactions to auto industry participants using existing form documentation, and to conduct the closing of such transactions. -- Claims and Bankruptcy Advice. The Contractor may be tasked to advise Treasury in connection with bankruptcy issues, including analysis of assignments and claims relating to loans to or investments in auto industry participants. The Contractor also may be tasked to analyze assignments, sales and claims relating to such transactions. -- Disposition of Assets. The Contractor may be tasked to advise Treasury in connection with disposition of assets in connection with Treasury's loans and investments relating to auto industry participants. The Contractor also may be tasked to negotiate the transactions relating to the disposition of such assets, and conduct the closing of such transactions. According to The American Lawyer, Haynes and Boone is new to the auto restructurings. Cadwalader and Sonnenschein already had previously announced deals to advise the government on bailout- related issues but for much smaller values. Cadwalader received a $417,562 contract in January to provide auto bankruptcy advice to the government. Thacher Proffitt & Wood received a $500,000 contract in December. The contract carried over to Sonnenschein when Thacher dissolved later that month and 100 lawyers switched firms. Structured Bankruptcy In accordance with the March 31, 2009 deadline in the U.S. Treasury's loan agreements with General Motors and Chrysler, the Obama Administration announced its determination of the viability of the companies, pursuant to their February 17, 2009 submissions, and is laying out a new finite path forward for both companies to restructure and succeed. These findings and new framework for success are consistent with the President's commitment to support an American auto industry that can help revive modern manufacturing and support our nation's effort to move toward energy independence, but only in the context of a fundamental restructuring that will allow these companies to prosper without taxpayer support. -- Viability of Existing Plans: The plans submitted by GM and Chrysler on February 17, 2009 did not establish a credible path to viability. In their current form, they are not sufficient to justify a substantial new investment of taxpayer resources. Each will have a set period of time and an adequate amount of working capital to establish a new strategy for long-term economic viability. -- General Motors: While GM's current plan is not viable, the Administration is confident that with a more fundamental restructuring, GM will emerge from this process as a stronger more competitive business. This process will include leadership changes at GM and an increased effort by the U.S. Treasury and outside advisors to assist with the company's restructuring effort. Rick Wagoner is stepping aside as Chairman and CEO. In this context, the Administration will provide GM with working capital for 60 days to develop a more aggressive restructuring plan and a credible strategy to implement such a plan. The Administration will stand behind GM's restructuring effort. -- Chrysler: After extensive consultation with financial and industry experts, the Administration has reluctantly concluded that Chrysler is not viable as a stand-alone company. However, Chrysler has reached an understanding with Fiat that could be the basis of a path to viability. Fiat is prepared to transfer valuable technology to Chrysler and, after extensive consultation with the Administration, has committed to building new fuel efficient cars and engines in U.S. factories. At the same time, however, there are substantial hurdles to overcome before this deal can become a reality. Therefore, the Administration will provide Chrysler with working capital for 30 days to conclude a definitive agreement with Fiat and secure the support of necessary stakeholders. If successful, the government will consider investing up to the additional $6 billion requested by Chrysler to help this partnership succeed. If an agreement is not reached, the government will not invest any additional taxpayer funds in Chrysler. -- A Fresh Start to Implement Aggressive Restructurings: While Chrysler and GM are different companies with different paths forward, both have unsustainable liabilities and both need a fresh start. Their best chance at success may well require utilizing the bankruptcy code in a quick and surgical way. Unlike a liquidation, where a company is broken up and sold off, or a conventional bankruptcy, where a company can get mired in litigation for several years, a structured bankruptcy process - if needed here - would be a tool to make it easier for General Motors and Chrysler to clear away old liabilities so they can get on a path to success while they keep making cars and providing jobs in our economy. -- A Commitment to Consumer Warrantees: The Administration will stand behind new cars purchased from GM or Chrysler during this period through an innovative warrantee commitment program. -- Appointment of a Director of Auto Recovery: The Administration also announced that Edward Montgomery, a top labor economist and former Deputy Secretary of Labor, will serve as Director of Recovery for Auto Workers and Communities. Dr. Montgomery will work to leverage all resources of government to support the workers, communities and regions that rely on the American auto industry. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. Liquidity Crunch Chrysler has been trying to keep itself afloat. As reported by the Troubled Company Reporter on March 20, 2009, its Chief Financial Officer Ron Kolka, has said even if Chrysler gets additional government loans, it could face another cash shortage in July when revenue dries up as the company shuts down its factories for two weeks to change from one model year to the next. The Company's CFO has said Chrysler planned for the $4 billion federal government bailout it received Jan. 2 to last through March 31. The Company is talking with the Obama administration's autos task force about getting another $5 billion, and faces a March 31 deadline to complete its plan to show how it can become viable and repay the loans. General Motors Corp. and Chrysler admitted in their viability plans submitted to the U.S. Treasury on February 17 that they considered bankruptcy scenarios, but ruled out the idea, citing that a Chapter 11 filing would result to plummeting sales, more loans required from the U.S. government, and the collapse of dealers and suppliers. A copy of the Chrysler viability plan is available at: http://ResearchArchives.com/t/s?39a3 A copy of GM's viability plan is available at: http://researcharchives.com/t/s?39a4 * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. 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, Dominion Bond Rating Service 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: Gov't Mulls Swapping Some Loans with Equity ----------------------------------------------------------- The U.S. government is considering taking a stake in General Motors Corp. in exchange for some of the $13.4 billion it lent to the Company, Sharon Terlep and Jeffrey Mccracken at The Wall Street Journal report, citing people familiar with the matter. WSJ states that interim GM Chairperson Kent Kresa said that the Company would welcome the government's willingness to let it pay off some of the loans with stock. A source said that the government doesn't seem to be opposed to swapping all the debt for GM stock, WSJ relates. The move, says WSJ, could make the government a direct shareholder in GM for years to come. WSJ, citing a person familiar with the matter, relates that the government is considering the step because it hasn't had success in finding outside private investors for a revamped GM. According to the report, the government wants GM's revamping plan to be set by June 1. According to WSJ, the sources said that the government hopes to encourage the United Auto Workers union and bondholders to accept similar concessions. Citing people familiar with the matter, WSJ states that once the Treasury agrees to convert its debt to equity in the GM, it will put pressure on the other parties to do the same, strengthening the revamped GM. WSJ notes that the Treasury is in line to be paid off before GM bondholders or the UAW, which is owed billions of dollars in retiree health-care funds. WSJ relates that Mr. Kresa admitted that GM is running out of time to restructure outside of bankruptcy. GM's board remains convinced that an out-of-court restructuring is preferred, but "time is not on our side on trying to get things done out of bankruptcy," WSJ state, citing Mr. Kresa. GM, according to WSJ, is looking to launch a debt-for-equity swap with bondholders by Friday. WSJ notes that a deal would be needed by then for GM to cut its obligations by the time the $1 billion in outstanding debt comes due on June 1. Citing Mr. Kresa, WSJ reports that the government is also pressing to resolve talks involving Delphi Corp., a former GM unit that may be forced to liquidate if it can't secure funding. 1.5 Million Vehicles Recalled The Associated Press reports that GM is recalling 1.5 million vehicles due to potential engine fires, though GM said that there have been no reports of any fires or injuries. GM spokesperson Kerry Christopher said it was a precautionary measure for consumers, the report states. According to the report, some of the recalled vehicles are no longer in production. The AP relates that GM is recalling these vehicles: -- 1998-1999 Oldsmobile Intrigue, -- 1997-2003 Pontiac Grand Prix, -- 1997-2003 Buick Regal, and -- 1998-2003 Chevrolet Lumina, Monte Carlo and Impala. According to The AP, the recall involves vehicles with a 3.8-liter V6 engine. Drops of oil could fall into the exhaust system and cause a fire in the engine, The AP states, citing GM. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GENERAL MOTORS: Bonds Fall to All-Time Low Following Ratings Cut ---------------------------------------------------------------- Carla Main and Dawn McCarty of Bloomberg News said April 13 that General Motors Corp. bonds fell to new lows three days after a ratings cut as the automaker faces a U.S. deadline to restructure or file for bankruptcy. Standard & Poor's Ratings Services said April 10 that it has lowered its issue- level rating on General Motors Corp.'s $4.5 billion senior secured revolving credit facility to 'CCC-' (one notch above the 'CC' corporate credit rating on the company) from 'CCC'. S&P revised the recovery rating on this facility to '2' from '1', indicating its view that lenders can expect substantial (70% to 90%) recovery in the event of a payment default. The corporate credit rating remains unchanged, at 'CC', reflecting S&P's view of the likelihood that GM will default -- through either a bankruptcy or a distressed debt exchange. The issue rating on GM's $1.5 billion senior secured term loan was left unchanged, at 'CCC' (two notches above the corporate credit rating); the recovery rating on this debt remains at '1', indicating S&P's view that lenders can expect very high (90% to 100%) recovery in the event of a payment default. In addition, the issue rating on GM's unsecured debt was left unchanged, at 'C' (below the corporate credit rating); the recovery rating on these tranches remains at '6', indicating S&P's view that lenders can expect negligible (0-10%) recovery in the event of a payment default. According to Bloomberg, GM's $3 billion of 8.375 percent debt due in 2033 fell to the lowest level since the securities were sold in June 2003, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. Economy. GETRAG TRANSMISSION: Taps Baker & Daniels as Special Counsel ------------------------------------------------------------ GETRAG Transmission Manufacturing, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Michigan for authority to employ Baker & Daniels LLP, on a general retainer basis, as its special counsel for issues and matters relating to real property tax assessments as well as issues and matters relating to certain Tipton County economic incentives, including revenue bonds issued by Tipton County, for the Debtor. Pursuant to an engagement letter, Baker will review the Tipton County assessor's assessments, as well as represent and counsel Debtor with respect to certain economic development incentives offered by the Tipton County to induce the Debtor to build its plant in the Tipton Property. As compensation for their services, Baker's professionals bill: Position Hourly Rate -------- ----------- Partner $350-$620 Associate $225-$280 Real Estate Analysts $230-$270 Paralegal $140 Mark S. Moore, Esq., a partner at Baker & Daniels LLP, assures the Court that the firm does not hold or represent any interest adverse to the Debtor or its estate. Mr. Moore tells the Court that Baker holds a prepetition claim against the Debtor in the amount of $36,800. About GETRAG Transmission Headquartered in Sterling Heights, Michigan, GETRAG Transmission Manufacturing LLC -- http://www.getrag.de/-- designs and makes dual clutch transmission its facility in Tipton, Indiana. The company filed for Chapter 11 relief on Nov. 17, 2008 (Bankr. E.D. Mich. Case No. 08-68112). Jayson Ruff, Esq., Jeffrey S. Grasi, Esq., and Stephen M. Gross, Esq., at McDonald Hopkins represent the Debtor as counsel. Matthew Wilkins, Esq., Max J. Newman, Esq., and Paula A. Hall, Esq., at Butzel Long, represent the Official Committee of Unsecured Creditors as counsel. In its schedules, the Debtor listed total assets of $690,071,505 and total debts of $582,208,616. GMC WORLDWIDE: Voluntary Chapter 15 Case Summary ------------------------------------------------ Chapter 15 Petitioner: Wayne Edward Benton liquidator of GMC Worldwide Pty. Ltd. fka Trapone Corporation Pty. Ltd., and GMCAT Pty Ltd. Chapter 15 Debtor: GMC Worldwide Pty Ltd Suite 1A Ground Floor 182 Victoria Parade East Melbourne Victoria, Australia Tel: (415) 268-7000 Chapter 15 Case No.: 09-04679 Debtor-affiliates filing subject to Chapter 15 petitions: Entity Case No. ------ -------- GMCAT Pty. Ltd. 09-04680 Chapter 15 Petition Date: April 9, 2009 Court: Southern District of California (San Diego) Judge: James W. Meyers Chapter 15 Petitioner's Counsel: G. Larry Engel, Esq. Morrison & Foerster LLP 425 Market St. San Francisco, CA 94105-2482 Tel: (415) 268-7000 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million GOLD TOE: S&P Changes Outlook to Negative, Affirms 'CCC' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Hickory, North Carolina-based sock manufacturer Gold Toe Moretz Holdings Corp. to negative from developing. At the same time, Standard & Poor's affirmed its 'CCC' corporate credit rating, and all other ratings on the company. As of Dec. 31, 2008, GTM had about $407 million in lease and pension-adjusted debt. The outlook revision reflects GTM's continued weak operating performance, increased leverage, and S&P's concerns about the company's ability to maintain adequate liquidity and cushion on its financial covenants. The ratings on GTM reflect S&P's concerns about the company's liquidity as a result of tight covenant cushion, its participation in the highly competitive apparel industry, its narrow product focus, the commodity nature of socks, customer concentration, and a highly leveraged financial profile. The ratings also incorporate the well-known Gold Toe brand. S&P attributes a high degree of business risk to the sock industry because of intense competition, low barriers to entry, and the commodity nature of these items. "Standard & Poor's could lower the ratings if the company experiences continuing weak operating performance, violates its financial covenants, and/or loses access to its revolving credit facility for working-capital purposes," said Standard & Poor's credit analyst Bea Chiem. S&P estimates that if EBITDA declines by 6% from current levels, then GTM may trip its June leverage covenant (assuming debt levels do not change significantly from current levels). "Although highly unlikely in the near term, S&P could revise the outlook to stable or positive if the company can restore and maintain ample cushion on its financial covenants and operating measures stabilize," she continued. GREEKTOWN CASINOS: Hiked Market Share to 25% in March ----------------------------------------------------- Continuing a trend that started in February, for the second consecutive month Greektown Hotel-Casino increased its market share from 23.5% in February to 25.0% in March, according to MGCB figures released. From January, where the property had 22.8% share, the net increase is 2.2%, an increase of almost 10%. "It is a new day at Greektown, and on behalf of every team member at the property, we are thrilled with the response customers have had to our efforts to offer unmatched value through our marketing programs -- new promotions, new database efforts, and our $99 hotel rate," said Randall A. Fine, Managing Director of The Fine Point Group, the management company that was hired in January to turnaround the property. Pending regulatory approval, Mr. Fine will also become CEO of Greektown. "But we are not letting up. With a new $9.99 buffet that launches tomorrow, the opportunity for every customer to compete with a real, live chicken every day to win up to $200, and a $50,000 cash promotion for our table games customers, we are going to keep offering our customers new ways to play, new ways to win, and new ways to have fun," Mr. Fine added. "For all those naysayers out there -- and for those considering buying the property -- I would note that this market share came while we beat our March profitability plan -- which was developed by the financial constituents without any involvement by us -- by more than 100%, this after beating it by 30% in January, and 80% in February," Mr. Fine said. "You know you are doing something right when your competitors start coming after you specifically, which we have seen in the past several days. It is much more fun to be the hunted than the hunter, and we welcome the competition, as we hope it will energize the entire market, and improve our customer experience and employee engagement." About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC and its affiliates -- http://www.greektowncasino.com/-- operates world- class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. (Greektown Casino Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). GREEKTOWN CASINOS: To Buy 280 Slot Machines From IGT ---------------------------------------------------- Greektown Casino and its debtor affiliates seek permission from the U.S. Bankruptcy Court for the Eastern District of Michigan, pursuant to Section 363 of the Bankruptcy Code, to purchase 280 slot machines currently leased from International Game Technology pursuant to a financing and security agreement. The Debtors currently lease the Slot Machines from IGT, which has agreed to convert the lease arrangement to into a sale deal. Previously, the Debtors have sought permission to buy 480 new slot machines. The Court has yet to rule on that request. Daniel J. Weiner, Esq., at Schafer and Weiner PLLC, in Bloomfield Hills, Michigan, relates that although the intended Slot Machine Purchase is in the ordinary course of business, the Debtors filed a formal motion out of an abundance of caution and to satisfy the concerns of IGT that the Purchase be allowed by a Court order should the purchases be deemed outside of the ordinary course of business. Mr. Weiner contends that the conversion of the lease into a sale arrangement will be beneficial to the Debtors, as it will reduce the total payments the Debtors will have to make with respect to the Slot Machines. Specifically, the monthly lease payment for the Slot Machines will be reduced from $193,000 to $141,000. The Debtors also seek Court authority to incur indebtedness with respect to the Slot Machine Purchase. Pursuant to the parties' Agreement, IGT agrees to finance the amount of the Slot Machine Purchase by accepting payment in 19 equal monthly installments. However, IGT requires a first priority purchase money security interest in the Slot Machines, consistent with their practice with the Debtors before the Petition Date and in the industry in general, Mr. Weiner notes. He maintains that the Slot Machines will have value well beyond the end of the proposed 19-month payment term and thus, it makes financial sense for the Debtors to acquire ownership of the Slot Machines. Mr. Weiner notes that the DIP Lenders have consented to the extension of the credit and the granting of the Lien. In a separate filing, Mr. Weiner relates that the hearing on the Debtors' request to buy 480 slot machines was adjourned indefinitely pending the resolution of certain informal objections raised by the Official Committee of Unsecured Creditors. Accordingly, the Debtors filed modifications to their original request: -- with respect to slot machines attributable to WMS Gaming, a slot machine vendor, the Debtors, in consultation with gaming consultant Fine Point Group, and WMS negotiated new payment terms whereby the Debtors accelerated payment of the balance owed for the Slot Machines, resulting in approximately $200,000 of savings; -- with respect to the Slot Machines attributable to International Game Technology, the Debtors renegotiated the terms of the contract to change the individual slot machines purchased, which will result in a more attractive selection for customers. Bid to Purchase Tax Credits Withdrawn The Debtors intended to purchase Michigan tax credits for the 2009 tax year from Painia Development Corp. and Marquette Train Depot LLC for $2,130,000. Painia and Marquette Train intend to sell the Michigan tax credits for the 2009 tax year for $0.89 to $0.91 per dollar. Each Tax Credit purchased will provide the Debtors with a one dollar credit against the Debtors' 2009 Michigan tax liability, according to Mr. Weiner. By purchasing the Tax Credits, the Debtors will have saved approximately $210,000, Mr. Weiner asserted. The Debtors will also be able to stop making the quarterly Michigan Estimated Tax Payments that they are currently obligated to pay. Instead, the proposed Purchase will allow the Debtors to retain the amounts and use it for their operations, he averred. The Debtors subsequently withdrew their request on April 13, 2009, without prejudice. No reason was given for the withdrawal. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC and its affiliates -- http://www.greektowncasino.com/-- operates world- class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. (Greektown Casino Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). GREEKTOWN CASINOS: Won't Assign City of Detroit Pact to 3rd Party ----------------------------------------------------------------- Greektown Casino and its debtor-affiliates reiterated before the U.S. Bankruptcy Court for the Eastern District of Michigan that they merely seek authority to assume their Development Agreement with the City of Detroit and the Economic Development Corporation of the City of Detroit, and continue to perform under the Agreement. Daniel J. Weiner, Esq., at Schafer and Weiner PLLC, in Bloomfield Hills, Michigan, said the Debtors do not intend to assign the Development Agreement to any other party. The Debtors noted that the City of Detroit seems intent on blocking them from assuming the Development Contract by citing certain provisions of Section 365 of the Bankruptcy Code. Mr. Weiner said Section 365 is clear that it does not prevent a debtor-in-possession from assuming, and continuing to perform pursuant to, an executory contract in a Chapter 11 reorganization, but rather serve only to prevent the assignment of a contract by a trustee to a third party other than the debtor or debtor-in- possession in violation of non-bankruptcy "applicable" state or federal law -- none of which apply to the Debtors' request. Should the City succeed in blocking the Debtors' right to assume the Development Contract and terminating the Contract by enforcing its "ipso facto clauses," the City will have destroyed any chance for reorganization in the Debtors' cases as the Debtors would be forced to immediately cease operations, irretrievably losing tremendous value, and dashing any hopes for recovery for the creditors of the Debtors' estates, Mr. Weiner said. Detroit Reply Under Seal, Depositions Granted Judge Walter Shapero authorized the City to file its responses to the Debtors' requests under seal. In a separate order, Judge Shapero approved the Debtors' and the City of Detroit's request to take certain limited depositions. The Detroit Free Press reports that counsel for the City of Detroit argued before Bankruptcy Judge Shapero that Greektown Casino "has failed multiple times to fulfill promises it made to the City . . . that are crucial to a tax break." A 5% tax rollback could improve Greektown's cash flow by up to $15 million annually, Mary Francis Masson of the Detroit Free Press relates. Greektown previously asserted that it is entitled to this tax rollback by virtue of the opening of the Greektown Casino Hotel Complex in February 2009. Representing the City, Michael J. Schaller Esq., at Shefsky & Froelich, enumerated to the Court certain instances whereby Greektown Casino is noted not to have performed under its Development Agreement with the City, the newspaper notes. The news source quoted Mr. Schaller as saying: -- Greektown Casino's bankruptcy filing violated the Contract; -- Greektown never completed a public hearing that required it to offer 10% ownership; and -- Greektown owe the City $660,000 in related fees. Greektown refuted the City's allegations. Amidst the dispute over the tax rollback, the Michigan Gaming Control Board also needs to make a stand on the matter, Ms. Masson of the Detroit Free Press cites. The Board has the authority to grant the tax rollback. "The precedent says we wait for the City of Detroit to tell us that the city is in full compliance. That would be the triggering event for us. We would defer to the City of Detroit in that regard," Gaming Board Chairman Damian Kassab told the news source. The Detroit Free Press says Judge Shapero, together with an attorney representing the City of Detroit and an attorney representing Greektown Casino estate, toured the Casino Complex on April 7, 2009. In line with the parties' ongoing discovery process, the City of Detroit has served subpoenas on: -- Melissa A. Langridge, Esq., a partner at Honigman Miller Schwartz and Cohn LLP; -- Andrea L. Hansen, Esq., a partner at Honigman Miller; -- Clifford J. Vallier; -- William Williams, Greektown's Vice President of Guest Services; -- Charles Moore, a member of Conway MacKenzie & Dunleavy; -- Thane Carlston, managing director of Moelis & Company; and -- David Groban, an associate at Moelis & Company. All the subpoenas by the City were served on March 24, 2009, except for the subpoena for Mr. Moore, which was served on April 1, 2009. Likewise, the Debtors served subpoenas on March 20, 2009, on Anne Marie Langan, the deputy director of the City of Detroit, and Irvin Corley, Jr., a director of the City of Detroit. Parties Agree on MGCB's Function The Debtors, the Michigan Gaming Control Board, and the City of Detroit have agreed that none of the determinations of the Court with respect to the Debtors' request for authority to assume the revised Development Agreement among Debtor Greektown Casino LLC, the City of Detroit, and the Economic Development Corporation of the City of Detroit, will be binding on the Board in exercising its regulatory powers under Section 432.212(7) of the Michigan Compiled Laws. The Board will not be bound by principles of either res judicata or collateral estoppel with respect to the Court's findings of fact, conclusions of law, or its final determination and order with respect to the Debtors' request. Instead, the Board will retain its full authority and discretion to make its determinations under the "Rollback Provision." The Stipulating Parties further agree that: -- any party may present the history of the proceedings of the Debtors' Request to the Board as evidence in making its determinations under the Rollback Provisions, and the Board may, in its sole discretion, determine the probative value of the Proceedings; and -- none of the Court's determinations with respect to the Debtors' Request will constitute or be construed as a determination regarding the impact of the filing or continuation of the Debtors' bankruptcy cases on the ongoing regulatory powers of the Board, and all rights of the Board with respect to its ongoing regulatory powers, and the rights of any other party-in-interest to oppose any interpretation, or the applicability or extent of any ongoing regulatory powers, are expressly preserved. Interested Buyers A number of entities are interested in bidding for the acquisition of Greektown's Casino complex, Detroit Free Press relates in a separate report. The potential buyers though maintain that a tax rollback is crucial to their offer because it would put Greektown under the same tax rate as its competitors MotorCity and MGM Grand, the newspaper relates. As widely reported, Tom Celani, a Michigan businessman, is one of those interested in buying the Casino complex. Mr. Celani has partnered with Plainfield Asset Management L.L.C., a Connecticut- based hedge fund to bid for Greektown's Casino. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC and its affiliates -- http://www.greektowncasino.com/-- operates world- class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. (Greektown Casino Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). GUNDLE/SLT ENVIRONMENTAL: Operating Results Cue S&P's Junk Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its long- term corporate credit rating on Houston, Texas-based Gundle/SLT Environmental Inc. to 'CCC+' from 'B-'. The outlook is negative. At the same time, Standard & Poor's lowered its issue-level rating on GSE's $150 million 11% senior unsecured notes to 'CCC' (one notch lower than the corporate credit rating) from 'CCC+'. The recovery rating remains at '5', indicating the expectation for modest (10%-30%) recovery in the event of a payment default. "The downgrade follows weaker-than-expected operating results as eroding demand and an inability to fully pass through higher raw material prices impacts GSE's earnings," said Standard & Poor's credit analyst Ket Gondha. "While key measures of credit quality remain at acceptable levels, the company's depressed operating results reduce the amount of cushion available for covenant compliance, and S&P is concerned about a potential covenant violation in 2009." The run-up in resin prices in 2008 has also left GSE with diminished liquidity, reducing the company's ability to withstand working capital fluctuations in an uncertain economic environment. The rating on GSE reflects the limited scope of the Company's operations, the commodity nature of its products, limited liquidity and cushion under covenants, its vulnerability to fluctuating raw material costs, and its highly leveraged financial risk profile. The company's market position as the largest manufacturer of geomembrane liners, its global manufacturing and distribution capabilities, and relatively stable end markets partially offset these factors. With annual sales of about $465 million, GSE is one of the largest participants in the estimated $1 billion U.S. geosynthetics market. The Company competes primarily in the geomembrane subsegment, with applications in solid waste containment (about 45% of total sales), liquid containment, and mining. The geomembrane market is price competitive and has modest barriers to entry, including customer relationships and established service capabilities associated with the installation of products. GSE's competitors include regional, privately owned companies. The outlook is negative. Global economic weakness resulted in a significant reduction in orders during the fourth quarter of 2008. A run-up in resin prices last year has left the company with higher inventory levels that are being sold off at lower levels, negatively impacting earnings and S&P's expectations with respect to the cushion under financial covenants. The Company also has limited liquidity to withstand working capital swings and any additional earnings deterioration in an uncertain economic environment. S&P could lower the ratings further if cushion under covenants or availability under the revolver weaken beyond S&P's expectations, even if credit metrics remained near current levels. S&P could revise the outlook to stable or raise the ratings if the Company's operating performance results in improvements to the covenant cushion or if liquidity is bolstered by an improving trend in operating results. HALLWOOD ENERGY: Receives Final Approval to Use Cash Collateral --------------------------------------------------------------- Hallwood Energy LP received final approval from the U.S. Bankruptcy Court for the Northern District of Texas (Dallas) to use cash representing collateral for secured lenders, Bloomberg's Bill Rochelle reported. Hallwood, according to the report, owes $115 million on two secured loans from Hall Phoenix Inwood Ltd. plus $30 million on convertible unsecured notes. Based in Dallas, Hallwood Energy, L.P. -- http://www.hallwoodenergy.com/-- is an upstream energy corporation engaging in the exploration, acquisition, development and production of oil and gas properties. The company and five (5) of its debtor-affiliates filed separate petitions for Chapter 11 relief on March 1, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31253). Scott Mark DeWolf, Esq., and Kathleen M. Patrick, Esq., at Rochelle McCullough L.L.P., represent the Debtors as counsel. Brian A. Kilmer, Esq., at Okin Adams & Kilmer LLP, represents the Official Committee of Unsecured Creditors as counsel. The Debtors' business consultant and CRO is Blackhill Partners LLC. When the Debtors filed for Chapter 11 protection, they listed assets of between $50 million and $100 million, and debts of between $100 million and $500 million. HICKS SPORTS: Fails to Pay Debt, May Lose Club & Franchise ---------------------------------------------------------- Matthew Futterman at The Wall Street Journal reports that creditors to Tom Hicks' Hicks Sports Group have declared the company in default. WSJ relates that a group of 40 financial institutions and other investors hold $525 million in debt, with New York sports- financing group Galatioto Sports Partners holding the largest position, having lent Hicks Sports almost $100 million. According to WSJ, Mr. Hicks missed a $10 million quarterly interest payment on March 31, 2009, triggering the default notice. WSJ states that Mr. Hicks could eventually lose the Texas Rangers baseball club and Dallas Stars hockey franchise. Citing a person familiar with the matter, WSJ states that the teams failed to fund their operating expenses and debt service, and Mr. Hicks has declined to continue using his own money to make up the difference. WSJ says that the default notice begins a process that could put the banks in control of the teams. WSJ notes that lenders have agreed to the National Hockey League provisions that prevent immediate foreclosure, but if Hicks Sports still can't satisfy lenders, the creditors can eventually force a Major League Baseball-sanctioned sale of the Rangers. According to WSJ, Mr. Hicks must pay off his current debt or reach a new deal with his lenders. While negotiating a new deal with the lenders, Mr. Hicks is selling a minority stake in the Rangers and Stars, WSJ relates. Mr. Hicks, WSJ states, said that he will fund operational losses of the teams but wants the banks to cover interest payments. WSJ quoted Mr. Hicks as saying, "I'm confident that I'll be able to reach agreement with 51% of the lenders because I will be able to fund all the cash needs of the two teams during the period that I'm bringing in new partners, which will help us to drastically reduce if not eliminate HSG's debt. These are great sports franchises and they're valuable assets and I want to make sure I have ample time to identify appropriate partners to invest at a fair value." About Hicks Sports Hicks Sports Group -- http://www.hickssportsgroup.com/-- was formed in 1999 as a sports and entertainment holding company controlled by Thomas O. Hicks. Prior to the formation of HSG, Mr. Hicks acquired the Dallas Stars in 1996 and then acquired the Texas Rangers from the George W. Bush/Edward W. Rose partnership in 1998. HSG was formed to oversee the Hicks family's sports teams, as well as the Hicks family's sports-related real estate developments. In a joint venture with an affiliate of the Dallas Mavericks, HSG owns a 50% stake in Center Operating Company, the group that manages and leases the American Airlines Center, which is home to the Dallas Stars and the Dallas Mavericks NBA team. Further, HSG operates Hicks Sports Marketing Group, an entity formed in 2006 to represent sports branding opportunities and corporate sponsorships for HSG, most notably for the Stars, the Rangers, and real estate projects related to Hicks' sports venues. HSG has an interest in eight Dr. Pepper StarCenter facilities, including the StarCenter in Frisco, Texas, that serves as the practice facility for the Dallas Stars, and owns approximately 40 acres surrounding the Dr. Pepper/7 Up Ballpark in Frisco, which is designated for future mixed-use development. In Arlington, HSG is involved in the development of over 100 acres, as an exciting mixed-use development focused on restaurants and entertainment, planned between the Rangers Ballpark in Arlington and the new Dallas Cowboys Stadium. HINES HORTICULTURE: Amended Joint Plan Declared Effective --------------------------------------------------------- Hines Horticulture's First Amended Joint Plan of Reorganization, with technical amendments, became effective, and the Company emerged from Chapter 11 protection, Bankruptcy Data reports. As reported by the Troubled Company Reporter, Hines Horticulture won from the U.S. Bankruptcy Court for the District of Delaware approval of its reorganization plan on January 28, 2009. The reorganization plan provides for: -- Full payment to secured creditors on their $35.9 million in claims; -- Payment to unsecured creditors, including holders of $175 million in 10.25% senior notes due 2011, from 7.2% of future profits of NewCo, the entity created by Black Diamond to conduct Hines' former businesses; and -- Zero recovery to holders of equity interests in the company. As reported by the Troubled Company Reporter in December, the Hon. Kevin J. Carey authorized the sale of substantially all assets of Hines Horticulture and Hines Nurseries to an affiliate of Black Diamond Capital LLC. The Black Diamond unit was declared the winning bidder when no other competing offers were made. The Black Diamond unit offered to pay $58 million in cash and assume more than $45.9 million in debts. The Plan requires the consummation of the sale before the Plan could be declared effective. A copy of the Plan is available at: A full-text copy of the Debtors' First Amended Joint Plan is available for free at: http://bankrupt.com/misc/Hines_1stAmendedJointPlan.pdf About Hines Horticulture Headquartered in Irvine, California, Hines Horticulture, Inc. -- http://www.hineshorticulture.com/-- operates nursery facilities located in Arizona, California, Oregon and Texas. Through its affiliate, the company produces and distributes horticultural products. The company and its affiliate, Hines Nurseries, Inc., filed for Chapter 11 protection on Aug. 20, 2008 (Bankr. D. Del. Lead Case No.08-11922). Anup Sathy, Esq., Ray C.Schrock, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructure efforts. Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtors' co-counsel. The Debtors selected Epiq Bankruptcy Solutions LLC as their voting and claims agent, and Financial Balloting Group LLC as their securities voting agent. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' case. In its schedules, Hines Horticulture, Inc. listed total assets of $30,068 and total debts of $218,052,380. In its schedules, Hines Nurseries, Inc. listed total assets of $229,231,003 and total debts of $228,698,592. HOUSTON PROMENADE: Files List of Largest Unsecured Creditors ------------------------------------------------------------ Houston Promenade Associates I, Ltd., filed with the U.S. Bankruptcy Court for the Southern District of Texas a list of its largest unsecured creditors, disclosing: Creditor Nature of Claim Claim Amount -------- --------------- ------------ Millennium Development Corp. Business Loan $1,756,371 7373 E Doubletree Ranch Road, No. 225 Scottsdale, AZ 85258 John N. Vatistas Loan $62,550 6831 E. 5th Avenue Scottsdale, AZ 85251 Scottsdale, Arizona-based Houston Promenade Associates I. Ltd. filed for Chapter 11 protection on April 6, 2009 (Bankr. S. D. Tex., Case No. 09-32395). Rogena Jan Atkinson, Esq., represents the Debtor in its restructuring efforts. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $1 million to $10 million. HUBBARD AUTOMOTIVE: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Hubbard Automotive/Lake Norman, LLC 12815 Statesville Road Huntersville, NC 28078 Tel: (704) 625-8098 Bankruptcy Case No.: 09-30806 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Western District of North Carolina (Charlotte) Judge: J. Craig Whitley Company Description: Hubbard Automotive/Lake Norman, LLC operates as a car dealership. See http://www.hondaoflakenorman.com/ Debtor's Counsel: Travis W. Moon, Esq. Hamilton Moon Stephens Steele Martin 2020 Charlotte Plaza 201 S. College Street Charlotte, NC 28244-2020 Tel: (704) 344-1117 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Reginal T. Hubbard, 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/ncwb09-30806.pdf IDEARC INC: U.S. Trustee To Hold Sec. 341(a) Meeting on May 11 -------------------------------------------------------------- The U.S. Trustee for Region 6 will convene a meeting of creditors in Idearc Inc.'s Chapter 11 case on May 11, 2009, at 1:30 p.m., at 801 Main Street, Room C130, Dallas, Texas. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in 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). Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represents the Debtors in their restructuring efforts. 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. INDALEX HOLDINGS: Gets Interim Approval of $42.5 Million DIP Loan ----------------------------------------------------------------- Indalex Holdings Finance Corp. obtained from the U.S. Bankruptcy Court for the District of Delaware interim approval for what is intended eventually to be an $85.9 million secured credit provided by JPMorgan Chase Bank NA, as administrative agent for the lenders. Indalex has authority to borrow $42.5 million until a final hearing on April 27. The newly appointed creditors' committee tried to block the expedited approval of the interim financing at the hearing held April 8. About Indalex Holdings Indalex Holding Corp., a wholly-owned subsidiary of Indalex Holdings Finance Inc., through its operating subsidiaries Indalex Inc. and Indalex Ltd., with headquarters in Lincolnshire, Illinois, is the second largest producer of soft alloy extrusion products in North America. The company's aluminum extrusion products are widely used throughout industrial, commercial and residential applications and are customized to meet specific end- user requirements. Indalex operates 10 extrusion facilities, 29 extrusion presses with circle sizes up to 20 inches, a variety of fabrication and close tolerance capabilities, two anodizing operations, two billet casting facilities, and six electrostatic paint lines, including powder coat capability. Indalex is indirectly controlled by private-equity investor Sun Capital Partners Inc. Sun Capital purchased Indalex in 2005 from Honeywell International Inc. for $425 million. Indalex is the 12th investment by Boca Raton, Florida-based Sun Capital to file in Chapter 11 since January 2006. Indalex Holdings and four affiliates filed for Chapter 11 on March 20 (Bankr. D. Del., Lead Case No. 09-10982). Donald J. Bowman, Jr., Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, has been tapped as counsel. Epiq Bankruptcy Solutions LLC is the claims and noticing agent. In its bankruptcy petition, Indalex listed assets of $356 million against debt totaling $456 million. JAMES RHODE: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: James A. Rhode Naomi R Rhode 95 Biltmore Estates Phoenix, AZ 85016 Bankruptcy Case No.: 09-07133 Chapter 11 Petition Date: April 10, 2009 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: James E. Cross, Esq. jcross@omlaw.com Osborn Maledon P.A. 2929 N. Central Ave. #2100 Phoenix, AZ 85012 Tel: (602) 640-9307 Fax: (602) 664-2077 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 ------ --------------- ------------ Bankers Trust Company N.A. property $11,400,000 453 7th Street P.O. Box 897 Des Moines, IA 50304 M&I Marshall & Ilsley Bank property $1,889,380 P.O. Box 2045 secured: Milwaukee, WI 53201 $1,800,000 Desert Hills Bank property $1,250,000 3001 E. Camelback Road Phoenix, AZ 85016 FIRST FIDELITY BANK, N.A. property $750,000 Greenway-Hayden Office SCOTTSDALE, AZ 85260 Valley Bank of Arizona property $500,000 3550 North Central secured: Phoenix, AZ 85012 $3,150,000; senior lien: $3,000,000 First Horizon Home Loans property $320,000 Sunbank, N.A. $250,000 Towne Bank of Arizona revolving line $206,000 Wells Fargo Bank, N.A. loan $199,005 Bank of Arizona unsecured line $161,493 D&M Rittenhouse Contractors promissory note $100,000 Inc. Desert Hills Bank unsecured loan $100,000 Bank of America credit card $81,864 M&I Marshall & Ilsley Bank unsecured line $65,451 Citicards credit card $15,175 American Express credit card $1,568 Southwest Gas Corporation utility $87 JOHN HENRY: Ivy Hill Acquisition Won't Affect Moody's Ratings ------------------------------------------------------------- Moody's Investors Service said all ratings of John Henry Holdings, Inc., a wholly-owned subsidiary of Multi Packaging Solutions, Inc., are unchanged following MPS' acquisition of certain assets of Ivy Hill Corporation on April 9, 2009. The last rating action occurred on March 20, 2008 when Moody's affirmed JHH's B2 CFR and upgraded the ratings on the senior secured credit facilities. Multi Packaging Solutions is a leading print and packaging company for the multi-media, cosmetics, healthcare, horticultural, and value-added consumer markets. Headquartered in New York City, the company is privately held and generated pro forma revenues in excess of $500 million for the twelve months ended December 31, 2008. JOSEPH DIEKEMPER: Sentenced to 10 Years in Prison ------------------------------------------------- The Associated Press reports that Joseph Diekemper has been sentenced to 10 years of imprisonment in connection with a federal bankruptcy fraud case linked to the unsolved killings of two people. According to The AP, Mr. Diekemper pleaded guilty to conspiracy to commit bankruptcy fraud and perjury. As reported by the Troubled Company Reporter on March 11, 2009, U.S. District Court Judge G. Patrick Murphy sentenced Margaret Diekemper, accused with her husband of conspiring to hide assets in a bankruptcy case, to two years of probation. The AP said that Mr. Diekemper and his wife were accused of hiding an expensive tractor from creditors by taking it to the rental property of George Weedon. Mr. Weedon and his wife turned up dead in April 2007, two days after Mr. Weedon approached the FBI about the tractor. No one has been charged in the killings, according to the report. The Diekempers filed for bankruptcy in 2004, claiming assets of $1.7 million and liabilities of almost $5 million, although bankruptcy officials and the bank managing their property suspected that they weren't telling the truth. According to The AP, that bank took out in April 2007 a large ad in the Carlyle Union Banner warning that anyone helping the Diekempers hide their possessions could be breaking the law. JOSEPH TAGLIARINI: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Joseph Michael Tagliarini 7 Calle Careyes San Clemente, CA 92673 Bankruptcy Case No.: 09-12872 Chapter 11 Petition Date: March 31, 2009 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Andrew S. Bisom, Esq. Law Offices of Andrew S. Bisom 695 Town Center Drive, Suite 700 Costa Mesa, CA 92626 Tel: (714) 245-8800 Email: abisom@bisomlaw.com Total Assets: $1,840,500 Total Debts: $4,512,211 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-12872.pdf JOURNAL REGISTER: State Officials Object JRC Executives' Bonuses ---------------------------------------------------------------- The Associated Press reports that officials in Pennsylvania have objected Journal Register Co.'s plan to pay its top executives up to $1.7 million in bonuses. Attorney General Tom Corbett said in court documents that the bonuses amount to a worker retention plan that doesn't meet federal bankruptcy law standards. According to The AP, Journal Register's motion for "incentive pay," which is yet to be approved by the court, applies to 31 "key employees" who can receive bonuses for cutting jobs, eliminating publications and reaching certain financial targets. The dates for achieving these goals will have largely passed by the time the court hears Journal Register's arguments for the plan, the report says, citing Mr. Corbett. According to the report, Mr. Corbett said that the goal of incentive plans should be "to provide motivation for future performance ... not to reward past performance." About Journal Register Yardley, Pennsylvania-based Journal Register Company (PINKSHEETS: JRCO) -- http://www.JournalRegister.com-- owns 20 daily newspapers, more than 180 non-daily publications and operates over 200 individual Web sites that are affiliated with the Company's daily newspapers, non-daily publications and its network of employment Web sites. All of the Company's operations are strategically clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The Company also owns JobsInTheUS, a network of 20 employment Web sites. The Company, along with its affiliates, filed for Chapter 11 bankruptcy protection on February 21, 2009 (Bankr. S.D. N.Y. Case No. 09-10769). Marc Abrams, Esq., Rachel C. Strickland, Esq., Shaunna D. Jones, Esq., and Jennifer J. Hardy, Esq., at Willkie Farr & Gallagher LLP, assist the Company in its restructuring effort. The Company's financial advisor is Lazard Freres & Co. Its restructuring advisor is Conway, Del Genio, Gries & Co., LLC. Robert P. Conway is the Company's chief restructuring officer. The Company listed $100 million to $500 million in total assets and $500 million to $1 billion in total debts. KNIGHT-CELOTEX: U.S. Trustee Sets Section 341(a) Meeting for May 6 ------------------------------------------------------------------ The U.S. Trustee for Region 11 will convene a meeting of creditors in Knight-Celotex, LLC's Chapter 11 cases on May 6, 2009, at 1:30 p.m., at 219 South Dearborn, Room 802, Chicago, Illinois. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Northfield, Illinois, Knight-Celotex, LLC -- http://www.knightcelotex.com/-- 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 Debtor filed for Chapter 11 protection on April 6, 2009 (Bankr. N. D. Ill. Case No. 09-12200). Scott R. Clar, Esq., at Crane Heyman Simon Welch & Clar represents the Debtor in its restructuring efforts. The Debtor said it has assets and debts ranging $10 million to $50 million. KEOKUK AREA: Moody's Affirms 'B3' Rating on $6.1 Mil. Debt ---------------------------------------------------------- Moody's Investors Service has affirmed Keokuk Area Hospital's B3 debt rating. This action affects approximately $6.1 million of outstanding Series 1998 revenue bonds issued by the City of Keokuk, Iowa. The outlook remains negative. Legal Security: The Series 1998 bonds are secured by a gross revenue pledge of KAH. KAH is the only member of the obligated group. KAH is a member of the Keokuk Health System, Inc. KAH represents approximately 78% of KHS total revenues. Other affiliates of KHS include: (a) Organized Delivery System, Inc., a small local health plan; (b) Tri-State Medical Group, a local physician practice; and (c) Keokuk Area Medical Equipment and Supply, Inc. Interest Rate Derivatives: None. Strengths * Improved operating performance in fiscal years 2007 and 2008. In audited fiscal year 2008, KAH recorded operating income of $672,000 (2.0% operating margin) and operating cash flow of $2.3 million (6.8% operating cash flow margin). Results in FY 2008 were in line with those in FY 2007, when KAH recorded an operating margin of 1.5% and operating cash flow margin of 7.1%. Results generally were more modest prior to FY 2007, as KAH recorded an operating loss and modest operating cash flow in each year between FY 2003 and FY 2006 (with the exception of FY 2005). The generally favorable results in FY 2008 benefited from an improved reimbursement formula for Medicare Dependent status hospitals (which benefited both FY 2007 and FY 2008) and a rebound in inpatient admission volumes and total surgery volumes in FY 2008 (2.3% and 7.1% growth, respectively) after both volume indicators declined in fiscal years 2006 and 2007. Moody's notes with concern, however, that operating results are weaker in interim FY 2009, as KAH recorded an operating loss of $351,000 through the first five months of FY 2009 (2.8% operating loss margin, after reclassifying $161,000 of subsidies to physicians as an operating expense) and operating cash flow of $372,000 (3.0% margin), compared to an operating margin of 0.3% and operating cash flow margin of 5.9% for the same period FY 2008. According to KAH management, the more modest results in interim FY 2009 are due to Medicare reimbursement changes that came into effect in late calendar year 2008. Based on interim FY 2009 results, management does not expect FY 2009 to match performance achieved in FY 2008. * Adequate adjusted debt ratios for a B-rated credit, with 3.6 times debt-to-cash flow and 1.7 times peak debt service coverage based FY 2008 results. Debt ratios in FY 2009 will be more modest, however, unless performance unexpectedly improves materially in the second half of the current fiscal year. * Market leader in the City of Keokuk, Iowa, as the closest acute care providers are 50-staffed bed Fort Madison Community Hospital (19 miles north of Keokuk in Fort Madison, Iowa) and 15-staffed bed Memorial Hospital (16 miles east of Keokuk in Carthage, Illinois). Management estimates that KAH captures approximately 80% market share of a primary service area that covers the City of Keokuk, Iowa and southern Lee County, Iowa. Additionally, KAH faces very little physician competition in the area. Challenges * While improved somewhat at fiscal year end 2008 and interim FY 2009 compared to prior years, KAH's liquidity position is quite modest. At FYE 2008 (September 30 year end), KAH's unrestricted cash increased to $2.3 million from $1.5 million at FYE 2007. As a result, cash on hand and cash-to-debt improved to a still weak 26 days and 28%, respectively, at FYE 2008 from 19 days and 19% at FYE 2007. Unrestricted cash measured $2.2 million at February 28, 2009 (28 days cash on hand), essentially unchanged from FYE 2008. KAH's liquidity position remains a fundamental credit concern. KAH's cash is invested very conservatively, as all of KAH's unrestricted liquidity is invested in certificates of deposit and money market funds. * Small service area with struggling demographics in Lee County, Iowa. According to the U.S. Census Bureau, the county's population decreased an estimated 6.4% between April 2000 and July 2007. Additionally, the county's median income is below state and national averages. Accordingly, KAH operates with a small patient base of just over 3,000 inpatient admissions and is very reliant on a handful of physicians for admissions. * Despite profitability in fiscal years 2007 and 2008, KAH has a track record of variable operating performance. * Very modest capital spending in recent years, as KAH's capital spending ratio (the ratio of additions to property, plant and equipment divided by depreciation expense) averaged a low 0.26 times over the last five fiscal years (the median capital spending ratio is 1.5 times). Consequently, KAH's average age of plant has increased steadily in recent years, measuring a high 16 years in FY 2008. Outlook The negative outlook reflects Moody's concern that KAH's historically variable operating performance will continue to stress the hospital's already very thin liquidity. Given the track record of modest cash flow generation, it is unlikely that KAH will improve its liquidity position materially in the coming years. What could change the rating -- UP Material liquidity gains without additional debt; sustained improvement in operating margins. What could change the rating -- DOWN Return to weaker operating margins or reduction in absolute unrestricted liquidity. Key Indicators: Assumptions & Adjustments: -- Based on Keokuk Area Hospital financial report -- First number reflects audited FY 2007 for the year ended September 30, 2007 -- Second number reflects audited FY 2008 for the year ended September 30, 2008 -- Losses on disposition of property and equipment removed from results ($9,918 in FY 2007, negligible in FY 2008) -- Investment returns smoothed at 5% * Inpatient admissions: 3,297; 3,374 * Total operating revenues: $31.4 million; $33.6 million * Moody's-adjusted net revenues available for debt service: $2.5 million; $2.7 million * Total debt outstanding: $8.3 million; $8.1 million * Maximum annual debt service (MADS): $1.6 million; $1.6 million * MADS Coverage with reported investment income: 1.55 times; 1.65 times * Moody's-adjusted MADS Coverage with normalized investment income: 1.55 times; 1.70 times * Debt-to-cash flow: 4.31 times; 3.59 times * Days cash on hand: 19.0 days; 26.2 days * Cash-to-debt: 18.6%; 28.2% * Operating margin: 1.5%; 2.0% * Operating cash flow margin: 7.1%; 6.8% Rated Debt Issued through City of Keokuk, Iowa (debt outstanding as of September 30, 2008): -- Series 1998 Fixed Rate Hospital Revenue Bonds ($6.16 million outstanding), rated B3 The last rating action was on May 30, 2008 when KAH's B3 rating was affirmed and the outlook remained negative. KNIGHT INC: Fitch Affirms Issuer Default Rating at 'BB+' -------------------------------------------------------- Fitch Ratings has affirmed the outstanding ratings for Knight Inc.: -- Issuer Default Rating at 'BB+'; -- Secured notes and debentures to at 'BB+'; -- Secured credit facility at 'BB+'; -- Capital trust securities (KN Capital Trust I and III) at 'BB- '. The Rating Outlook is Stable. Knight (formerly Kinder Morgan, Inc.) is a privately owned company with ownership interests in two businesses: the 2% general partner interest and approximately 22 million limited partner units in Kinder Morgan Energy Partners, L.P. (rated 'BBB' with a Stable Outlook by Fitch) and approximately 11 million shares of its affiliate Kinder Morgan Management, LLC; and a 20% interest in NGPL PipeCo LLC (NGPL; rated 'BBB-' with a Stable Outlook by Fitch). KMP is the largest master limited partnership, owning and operating a diverse portfolio of primarily fee-based energy infrastructure assets in the U.S. and Canada. NGPL provides interstate natural gas transportation and storage services primarily in the Chicago and Midwest markets. Distributions from KMP and NGPL contribute approximately 95% and 5% of Knight's cash flow, respectively. Knight's ratings and Stable Rating Outlook are based on these favorable considerations: asset sales and debt reduction have met or exceeded expectations; execution risk associated with de- leveraging is no longer an issue; prospectively Knight should have minimal liquidity requirements and substantial free cash flow; operating performance at KMP and NGPL has met expectations; and Knight's remaining investments have significant market value and liquidity, providing financial flexibility. The ratings also recognize that Knight's cash flow is subordinated to debt service and maintenance capital expenditures at KMP and NGPL. Of modest concern is the possibility Knight could ultimately unwind its private structure through an initial public offering which could result in an entity with a weaker credit profile. Also of modest concern is the possibility that Knight would increase its debt leverage in order to fund future purchases of KMP equity to support KMP's growth capital expenditures. Knight has committed to purchase up to $750 million of KMP common equity if needed. However, given KMP's demonstrated access to debt and equity capital markets in late 2008 and early 2009, Fitch believes it is unlikely KMP would require Knight's help. Over the past year Knight's total debt has dropped from nearly $9 billion on Dec. 31, 2007 to under $3 billion on Dec. 31, 2008. Fitch expects Knight's standalone Debt to EBITDA to approximate 3.0 times (x) for 2009 and improve in future years as KMP's LP and GP distributions increase. Knight's 'BB+' rating is consistent with its current credit measures and the quality of the cash flow up-streamed from KMP and NGPL. LANDAMERICA FIN'L: Has $10 Million Bid for Home Warranty Business ----------------------------------------------------------------- LandAmerica Financial Group Inc. has a buyer willing to pay $10 million for its home warranty and inspection businesses, Bloomberg's Bill Rochelle reported. According to the report, the prospective buyer is Buyers Protection Group Inc. Other bids would be due May 7 if the bankruptcy court agrees with proposed auction and sale procedures. LandAmerica Financial Group, Inc. is a leading provider of real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Dion W. Hayes, Esq., and John H. Maddock III, Esq., at McGuireWoods LLP, are the Debtors' bankruptcy counsel. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDSOURCE COMMUNITIES: Creditors Committee Seeks Plan Delay ------------------------------------------------------------ The creditors' committee for LandSource Communities Development LLC filed papers asking the bankruptcy judge in Delaware to put off the hearing scheduled for April 17 to consider approval of the disclosure statement explaining the proposed Chapter 11 plan, Bloomberg's Bill Rochelle said. The Committee said in its April 7 papers that the current draft of the disclosure statement has so many blanks that the hearing shouldn't go forward next week. For example, the current draft doesn't list the amount of claims or provide an estimate for creditors' recoveries. The Committee also said the plan is "unconfirmable on its face." The Bankruptcy Court will consider delaying the disclosure statement hearing when the hearing itself begins on April 17. 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). LAZY DAYS: To Acquire Fleetwood Trailer Inventory for $2.2MM ------------------------------------------------------------ Fleetwood Enterprises and its affiliates ask the U.S. Bankruptcy Court for the Central District of California for authority to sell their travel trailer inventory to Lazy Days' R.V. Center, Inc., free and clear of liens, claims, interests and encumbrances. Bankruptcy Data reports that Lazy Days offered an aggregate cash purchase price of $2,250,968. The inventory includes 154 finished travel trailer units, comprising all of Fleetwood Enterprises' remaining inventory in the travel trailer realm, the report says. Lazy Days is one of seven entities named to the official committee of unsecured creditors in the bankruptcy cases of Monaco Coach Corporation, maker of motorized and towable recreational vehicles, according to the Troubled Company Reporter on March 27, 2009. About Lazy Days Based in Seffner, Florida, Lazy Days' R.V. Center Inc., is a single-site dealer of new and previously-owned recreational vehicles. The Company is a primary point of distribution for eight of the leading manufacturers in the recreational vehicle retail industry. The Company is widely recognized in the RV community as the premier destination for RV enthusiasts. Lazy Days' is a wholly owned subsidiary of LD Holdings, Inc. As reported by the Troubled Company Reporter in November 2008, Lazy Days said it would not pay the interest payment due Nov. 17, 2008, on $137 million in 11.75% senior notes that mature May 15, 2012. Lazy Days in March entered into a fourth amendment to its Forbearance Agreement dated December 12, 2008, with certain holders of Lazy Days' 11-3/4% Senior Notes due 2012. As of March 30, Lazy Days has obtained forbearance from holders of more than 81% of the Notes from exercising their potential remedies under the Indenture dated as of May 14, 2004. Under the Fourth Amendment, more than 81% of the holders of the Notes have agreed to forbear from exercising their potential remedies under the Indenture at least until April 13, 2009, unless the Company fails to meet its obligations under the Forbearance Agreement prior to that date. Lazy Days has yet to provide update on the matter. As of September 30, 2008, the Company had $318.0 million in total assets and $251.9 million in total liabilities. * * * According to the Troubled Company Reporter, in November 2008, Moody's Investors Service downgraded Lazy Days' ratings, including the Corporate Family Rating and Probability of Default Ratings to Ca from Caa2. Moody's also downgraded the rating on the company's 11.75% senior unsecured notes to C from Caa3. Lazy Days' SGL-4 Speculative Grade Liquidity rating was affirmed. The ratings remain on review for possible downgrade. Standard & Poor's Ratings Services also lowered its long-term corporate credit rating Lazy Days' to 'CC' from 'CCC+', as well as S&P's rating on the company's unsecured debt to 'C' from 'CCC-'. The outlook is negative. About Monaco Coach Monaco Coach Corporation, a national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. Headquartered in Coburg, Oregon, with manufacturing facilities in Oregon and Indiana, the Company offers a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, and R-Vision brand names. The Company operates motorhome-only resorts in California, Florida, Nevada and Michigan. Monaco Coach is listed on the Pink Sheets under the symbol "MCOAQ". As of September 27, 2008, the Company had $442.1 million in total assets and $208.8 million in total liabilities. Monaco Coach Corporation and its affiliates filed for Chapter 11 on March 5 (Bankr. D. Del., Lead Case No. 09-10750). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, was tapped as counsel. Omni Management Group LLC serves as the Debtors' claims, balloting, noticing and administrative agent. About Fleetwood Enterprises Headquartered Riverside, California, Fleetwood Enterprises -- http://www.fleetwood.com-- produces recreational vehicles and manufactured homes. The Debtors have about 9,000 associates working in facilities strategically located throughout the nation. The company and 19 of its affiliates filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., atGibson, Dunn & Crutcher LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. LEHMAN BROTHERS: Pays Trustee $12-Mil. for 4.5 Months' Work ----------------------------------------------------------- According to Bloomberg's Bill Rochelle, the trustee appointed by the Securities Investor Protection Corp. to liquidate the brokerage subsidiary of Lehman Brothers Holdings Inc. was authorized to pay himself and his lawyers more than $12 million for 4 1/2 months' work. The firm, Hughes Hubbard & Reed LLP, gave SIPC a 10% discount on its normal hourly rates. In addition, 15% of $14.3 million in total fees is being held back until the conclusion of the case. Meanwhile, 15 professionals retained in the Debtors' bankruptcy cases seek the U.S. Bankruptcy Court for the Southern District of New York's interim allowance of fees and reimbursement of expenses for services rendered. A. Debtors' Professionals: Professional Period Fees Expenses ------------ ------ ---- -------- Weil, Gotshal & 09/15/08- $55,140,791 $1,336,880 Manges LLP 01/31/09 Lazard Freres 09/15/08- 6,600,000 33,467 & Co. LLC 01/31/09 Curtis Mallet-Prevost 09/26/08- 4,611,589 151,402 Colt & Mosle LLP 01/31/09 McKee Nelson LLP 09/15/08- 2,727,562 105,916 01/31/09 Simpson Thacher & 09/15/08- 1,383,114 28,601 Bartlett LLP 01/31/09 Jones Day Engagement 1,258,056 10,425 dates to 01/31/09 McKenna Long & 09/15/08- 631,156 35,620 Aldridge LLP 01/31/09 Ernst & Young LLP 09/15/08- 552,700 0 01/31/09 Reilly Pozner LLP 09/15/08- 464,631 33,888 01/31/09 Bortstein Legal LLC 12/15/08- 353,154 0 01/31/09 Weil Gotshal is the Debtors' lead bankruptcy counsel. Curtis is their conflicts counsel. Bortstein Legal, McKee Nelson, Jones Day, Simpson Thacher, McKenna Nelson and Reilly Pozner are their special counsel. Ernst & Young is the Debtors' auditor. Lazard Freres is their investment banker. B. Official Committee of Unsecured Creditors' Professionals Professional Period Fees Expenses ------------ ------ ---- -------- Milbank, Tweed, Hadley 09/17/08- $12,132,376 $668,388 & McCloy LLP 01/31/09 FTI Consulting Inc. 09/17/08- 5,261,715 148,515 01/31/09 Houlihan Lokey Howard 09/17/08- 2,233,333 159,070 & Zukin Capital, Inc. 01/31/09 Quinn Emanuel Urquhart 09/15/08- 2,129,413 41,113 Oliver & Hedges, LLP 01/31/09 Milbank is the legal counsel of the Creditors' Committee while Quinn Emanuel serves as the panel's special counsel. FTI is the panel's financial advisor; Houlihan Lokey its investment banker. C. Chapter 11 Examiner's Professionals Professional Period Fees Expenses ------------ ------ ---- -------- Anton Valukas/Jenner 01/19/09- $613,650 $13,514 & Block LLP 01/31/09 Jenner & Block is the legal counsel for Anton Valukas, the examiner appointed in the Debtors' bankruptcy cases. A hearing to consider approval of the interim fee applications is scheduled for May 13, 2009. Creditors and other concerned parties have until May 6 to file their objections. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Acquires "Bomb's Worth of Uranium Cake" -------------------------------------------------------- Lehman Brothers Holdings Inc. is sitting on enough uranium cake to make a nuclear bomb as it waits for prices of the commodity to rebound, Bloomberg News' Linda Sandler, Yuriy Humber and Christopher Scinta reported, citing traders and nuclear experts. The bankrupt bank, in the throes of paying off creditors, acquired uranium cake "under a matured commodities contract" and plans to sell it when the market improves "to realize the best prices," Chief Executive Officer Bryan Marsal said. According to Bloomberg, Uranium typically trades through broker- dealers, including MF Global Ltd. and Tullett Prebon Plc, or in direct sales between mining companies and nuclear utilities. Utilities buy processed ore known as yellowcake, which is later converted, enriched and fabricated into fuel rods. The New York Stock Exchange also supports trading in futures contracts, which are not linked to physical delivery. The market is regulated by governments, who control transport of radioactive material and limit the number of buyers and sellers by requiring them to obtain licenses. The report said utilities and producers are key buyers and sellers. Lehman got its license just a month before its bankruptcy, one of the traders said. A supply of 500,000 pounds of yellowcake is just "slightly" less than the amount needed to make one bomb, or fuel one nuclear power reactor for a year, if the latest enrichment technologies are used, said Gennady Pshakin, an Obninsk, Russia-based nonproliferation expert. According to the report, Lehman has an estimated $200 billion in unsecured liabilities left to pay. The uranium, which may be as much as 500,000 pounds, might fetch $20 million at today's prices of about $40 per pound, said traders who asked not to be named because of the confidential nature of the data. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Court Permits Insurers to Pay D&O Legal Costs -------------------------------------------------------------- Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York authorized insurers to pay the legal costs of Lehman Brothers Holding Inc. personnel who have been targeted in a string of lawsuits and investigations. The Debtors have $20 million in the first layer of the so-called primary directors and officers liability insurance policies, and another policy with $15 million coverage for executives' liability with regards to employee benefit plans. Judge Peck rules that nothing in the Order will constitute a determination that the proceeds of the Policies are property of the Debtors' estates, and the rights of all parties-in-interest to assert that the proceeds of the Policies are, or are not, property of the Debtors' estates. As reported by the Troubled Company Reporter, the Debtors asked the Court to lift the automatic stay to permit insurers to pay the legal costs. Former and current directors, officers, and employees of the Debtors, and the fiduciaries and administrators of Lehman Brothers Honding, Inc.'s sponsored employee benefit plans under the Employee Retirement Income Security Act, have been named as defendants in civil lawsuits, class actions, and are currently under investigation. The lawsuits include various securities actions filed in both federal and state court, alleging violations of the Securities Exchange Act and wrongful actions in connection with the securities issued by LBHI. Most of these securities actions had been consolidated for pre-trial purposes before Judge Lewis Kaplan in the U.S. District Court for the Southern District of New York while others have not yet been consolidated and await action from the Judicial Panel on Multi-District Litigation. Attorney for the Debtors, Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, said that prior to the Petition Date, the Debtors indemnified and covered their officers and directors for defense costs incurred in legal proceedings. Subsequent to the Petition Date, however, the Debtors have been unable to continue to advance defense costs to the defendants, he adds. The Debtors' third party insurers have expressed a willingness to immediately commence payment of the outstanding and ongoing fees and expenses to and for the benefit of the individual defendants but only upon obtaining satisfactory assurances that doing so will not be in contravention of the automatic stay, Mr. Krasnow tells the Bankruptcy Court. The Debtors do not believe that the payment of the proceeds of the policies in satisfaction of those defense costs implicates property of the estate or the automatic stay, Mr. Krasnow relates. The Alameda County Employees' Retirement Association and various other groups have asked the Court to clarify, in any order it signs approving the Debtors' motion, that the proceeds of the policies are not property of the bankruptcy estates. Michael Etkin, Esq., at Lowenstein Sandler PC, in New York, said that although the Debtors claimed that the proceeds of the policies are not property of their estates, the proposed order they submitted with the motion is silent on this issue. "The nature of the relief sought by the motion may, at the very least, imply or infer that stay relief is necessary and, therefore, that the proceeds of the policies are property of The Debtors' estates," Mr. Etkin said. "The entry of an order that is silent on this issue may be interpreted as a determination that the proceeds of the policies are property of the Debtors' estates," he points out. According to Mr. Etkin, the groups have an interest in the proceeds of the insurance policies since the claims they assert in the securities litigation are or may be covered by the policies. The groups are lead plaintiffs in the consolidated securities class action they filed against some of the officers of Lehman Brothers Holdings Inc. before the U.S. District Court for the Southern District of New York. The complaint stemmed from LBHI's alleged undisclosed exposure to losses from distressed mortgage and asset-backed securities. LBHI allegedly failed to disclose the true risk of losses associated from its mortgage-related assets and did not properly write-down the assets to reflect their true value. The Department of Treasury Division of Investment in New Jersey filed a separate statement with the Bankruptcy Court, expressing concern that the content of the proposed order may be changed to address the objections of creditors or other concerned parties. "NJ DOI reserves its right to object to the motion or any proposed modifications to the form of order submitted in connection with the motion," the statement says. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Delays Filing of Annual Report on Form 10-K ------------------------------------------------------------ Lehman Brothers Holdings, Inc., stated in a Form NT 10-Q filed with the U.S. Securities and Exchange Commission that it won't be able to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2009, because: (1) of the filing by LBHI of a voluntary Chapter 11 petition in September 2008; (2) the commencement of various administrative or civil rehabilitation proceedings of subsidiaries comprising significant parts of LBHI's European and Asian businesses; and (3) the sale since September 15, 2008, of significant businesses comprising LBHI's historical business. As a result of those developments, William J. Fox, controller, treasurer and senior vice president of LBHI, relates LBHI is currently unable to complete the preparation of its consolidated financial statements for the period in as much as it currently has neither access to major components of its internal systems nor the ability to prepare its consolidated financial statements and the remainder of the report, with all the required disclosures, to have them properly certified by its current executive officers, and have them reviewed by its independent auditors. LBHI had until April 9, 2009, to file the report as prescribed in Rule 12b-25. LBHI has also not filed its Quarterly Report for the fiscal quarter ended August 31, 2008, and its Annual Report for the fiscal year ended November 30, 2008. LBHI, according to Mr. Fox, anticipates that results of operations for the First Quarter ended February 28, 2009, will be significantly different from those for the corresponding period for the last fiscal year, due to significant developments in the business over the past year. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LCPI to Provide $30MM Funding to TPG-Austin ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved a stipulation among Lehman Brothers Holdings Inc., Lehman Commercial Paper Inc., TPG-Austin Portfolio Holdings LLC and other parties for the assumption of a credit agreement by LCPI. The credit agreement dated June 1, 2007, was signed to fund the acquisition and the continued operation of 10 properties in Austin, Texas. The properties were acquired for about $1.2 billion from the affiliates of The Blackstone Real Estate Advisors by TPG-Austin Portfolio Syndication Partners JV, a partnership comprised of Thomas Properties Group, the California State Teachers Retirement System and Lehman Brothers Holdings. Under the stipulation, the parties also agreed to amend the credit agreement by providing for two debt tranches: (i) a commitment by LCPI, TPG-Austin Portfolio Lender LLC, and Revere Funding Limited to fund the revolving loan as a priority credit facility for $60 million; and (ii) a tranche consisting of a portion of the term loan for $112.5 million. Of the $60 million, half of this will be funded to TPG-Austin Portfolio Holdings by LCPI; $15 million by TPG-Austin Portfolio Lender; and $15 million by Revere. "The Austin portfolio is comprised of top-tier office properties with stabilized rents and occupancies. Our ability to deleverage this portfolio further assures our success in maintaining the quality and performance of these properties," said James A. Thomas, CEO, Thomas Properties Group. "This restructuring resolves pending financing issues and provides capital required for operations. We have great confidence in Austin and its future, and we remain committed to providing the best service to our tenants, enhancing the performance of our properties and being an involved member of the Austin community." "All our partners have worked diligently with us on the restructuring and we are gratified that Lehman Brothers will remain an active and engaged participant in the partnership," noted John R. Sischo, Executive Vice President, Thomas Properties Group. "We are delighted to have reached an agreement that balances the needs of all parties and positions the Austin portfolio for continued success," said Jeff Fitts and Jerry Pietroforte, managing directors with Alvarez & Marsal and co- heads of Lehman Brothers' real estate asset team. The professional services firm of Alvarez & Marsal has been overseeing the Lehman Brothers Estate and working to preserve and maximize value for creditors. Lehman Brothers continues to retain a 50% ownership interest in the Austin portfolio while Thomas Properties Group, indirectly through its joint venture with the California State Teachers' Retirement System, holds a 6.25% interest. Thomas Properties Group owns an interest in and manages approximately 2.5 million square feet of premier Class A office space in the Austin Central Business District including the two most recently constructed downtown office towers, Frost Bank Tower and 300 West 6th Street. The company also owns interests in and manages approximately one million square feet of Class A space in the growing Northwest submarket. About Thomas Properties Group Thomas Properties Group Inc. is a full-service real estate company that owns, acquires, develops and manages office, retail and multi-family properties throughout the United States. The company has four primary areas of focus: property operations, property acquisitions, property development and redevelopment, and investment management. For more information on Thomas Properties Group, Inc., visit the company's Web site at http://www.tpgre.com/ Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Seek Additional Services From Simon Thacher ------------------------------------------------------------ Lehman Brothers Holdings, Inc., and its affiliated debtors ask the U.S. Bankruptcy Court for the Southern District of New York to amend its prior order approving their engagement of Simpson, Thacher & Bartlett. The Court previously authorized Simpson, Thacher & Bartlett to represent Lehman Commercial Paper, Inc., with respect to certain non-bankruptcy related postpetition matters that are now concluded. The Debtors seek to include legal services, nunc pro tunc to the dates of engagement of Simpson Thacher by the Debtors, in connection with these matters: (i) commencing on December 18, 2009, the representation of one or more of the Debtors in connection with insurance regulatory advice with respect to insurance company counterparties to derivatives contracts in circumstances where Weil, Gotshal & Manges LLP is unable to provide advice due to conflicts; and (ii) commencing on February 13, 2009, the representation of Debtor Lehman Commercial Paper Inc. with respect to its direct and indirect interests in loans that financed the 2007 acquisition of BAWAG PSK, an Austrian bank. The Debtors assert that it would be efficient and cost-effective for Simpson Thacher to provide legal assistance to LCPI since the firm is also representing other Lehman units in connection with the 2007 acquisition through Ian Barratt and Tony Keal, two English partners in the firm's London-based office. Mary Elizabeth McGarry, Esq., a member at Simpson Thacher, assures the Court that her firm represent any interest adverse to the Debtors and their creditors, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Trustee Seeks Approval of Barclays Agreements -------------------------------------------------------------- James Giddens, trustee for the liquidation of Lehman Brothers Inc.'s business, asks the U.S. Bankruptcy Court for the Southern District of New York to approve a systems access agreement with Barclays Capital Inc. Mr. Giddens also seeks to assume and assign software and patent license agreements to Barclays Capital. The systems access agreement generally provides a legal foundation as well as a mechanism by which the Trustee may obtain access to information about LBI and information systems that are held and under the control of Barclays. The key terms of the agreement are: (1) Barclays will grant the Trustee and his representatives access to certain systems controlled by Barclays. With respect to mixed systems or those containing LBI or non- LBI data, such access is provided solely to enable the Trustee to use LBI data in order to fulfill his duties. (2) The Trustee and his representatives will not knowingly access non-LBI data contained in the mixed systems or use and disclose those pieces of data which they may access without the permission of the data owner. (3) The Trustee agrees to indemnify Barclays for any losses actually paid by it to any third party to the extent such losses result from either (i) Barclays providing access to non-LBI data and data belonging to LBI immediately prior to their acquisition by the U.K.-based bank on September 22, 2008; or (ii) the use thereof by the Trustee. Barclays will provide the Trustee with prompt notice of any such third party claims. The Trustee has the right to participate with Barclays in the resolution of any such claims. (4) Barclays is entitled to charge the Trustee for the costs of access to the systems. The charges do not include amounts related to data utilized in reconciling claims of customers whose accounts were transferred from LBI to Barclays or of Barclays. (5) Claims by Barclays arising under the systems access agreement constitute costs and expenses of the administration of LBI's estate. (6) Barclays may share LBI data with other members of the former Lehman Brothers group who, prior to such access, sign a data sharing agreement containing confidentiality terms and restrictions on use and access that are substantially the same as those contained in the systems access agreement. (7) The systems access agreement will not be deemed by implication or otherwise to constitute an admission by either the Trustee or Barclays as to whether any data about LBI is part of its estate. The license agreements are utilized in conjunction with LBI's business unit acquired by Barclays. Both license agreements permit assignment in connection with the sale of that business unit, where the assignee agrees to assume the obligations under the agreements. In consideration for the assignment of the license agreements, Barclays is required to pay $30,000 to the Trustee within two days after court approval of the proposed assignment. A hearing to consider the requests is scheduled for April 22, 2009. Creditors and other concerned parties have until April 17, 2009 to file their objections. Separately, the Court gave Mr. Giddens until June 16, 2009 to assume or reject the company's executory contracts and unexpired leases. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Trustee Seeks OK of Protocol to Return Funds ------------------------------------------------------------- James Giddens, trustee for Lehman Brothers Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to approve a set of protocols governing the return of funds that were erroneously transferred to LBI's bank accounts. "Due to the high number of return requests that the trustee has received since the commencement date, the trustee wishes to establish court-authorized procedures to enhance the efficiency of the return process," Daniel Lubell, Esq., at Hughes Hubbard & Reed LLP, in New York, says on behalf of the Trustee. Mr. Giddens, according to Mr. Lubell, receives about 10 requests every week to return the funds, some of which involve misdirected transfer of $50,000 or less. As of April 8, 2009, the Trustee has returned funds, aggregating over $442 million that were sent in error to LBI's accounts. Under the protocols, a party (i) alleging that the funds wired to LBI's bank account were sent in error, and (ii) requesting return of the misdirected funds is required to report the allegations and request to the Trustee by sending a request form for the return of the funds. The request form, available at http://www.lehmantrustee.com/contains form fields that must be completed electronically. Once completed, the requesting party must send the request form to misdirectedwires@lbitrustee.com with the subject line "New Request For The Return Of Misdirected Funds." Upon the Trustee's receipt of the request form, the party will receive a return e- mail confirming receipt. The Trustee's representatives will then contact the party if they need additional information and once they make a determination on whether to authorize a return of the funds or not. If the Trustee authorizes a return of the funds, his representatives will prepare the documentation required and send it to the requesting party to obtain the parties' signatures. With respect to returns of funds of up to $50,000, Mr. Giddens seeks the Court's authorization to return those funds without further order. In most of the cases, the Trustee will prepare a letter agreement to be signed by the party that ordered the misdirected transfer and the beneficiary of that transfer. With respect to returns of more than $50,000, the Trustee will continue to seek authorization from the Court to return those funds, and will prepare a stipulation to be signed by the party that ordered the misdirected transfer and the beneficiary. The Trustee may also require the signature of the bank that wired the misdirected funds or the requesting party. Parties wishing to receive the funds being returned through this expedited process must acknowledge the accuracy of the representations made to the Trustee in the request form. In connection with receiving the funds, those parties must also sign a release of claims against the Trustee, LBI's estate and the Securities Investor Protection Corporation with respect to the misdirected transfer. Upon receipt of signed documents or entry of the stipulation, the Trustee will authorize the bank that received the misdirected funds from the "sending bank" to issue a return according to the wire instructions provided in the request form. Thereafter, the bank receiving the misdirected funds should return them within a few days. The Trustee will also file with the Court each quarter a report summarizing the returns of $50,000 or less that were made in the prior quarter. A hearing to consider approval of the proposed protocols is scheduled for April 22, 2009. Creditors and other concerned parties have until April 17 to file their objections. Meanwhile, the Court approved the LBI Trustee's stipulations with various parties concerning the return of funds erroneously transferred to LBI's bank accounts: Parties Amount ------- ----------- Barclays Capital Inc. $1,306,130 The Drake Offshore Master Fund Ltd. $520,000 COC Holdings Inc. $32,999 Davidson Kempner Distressed Opportunities Fund $200,000 Morgan Stanley Real Estate Fund $28,798 IV-International $28,626 PNC Global Investment Servicing (Europe) Ltd. GBP450,000 Credit Suisse International $40,128 Goldman Sachs International $416,129 The 3D Capital Fund Ltd $6,208,408 Credit Suisse Securities (USA) LLC $1,160,221 Alternative Debt Portfolios LP $437,534 CNP Assurances-201/CNP Assurances-270 $275,627 U.S. Bank N.A. $3,909,408 Goldman Sachs Emerging Markets Opportunities Fund Offshore Ltd. $426,000 Goldman Sachs Emerging Markets Opportunities Fund LLC $778,000 Mr. Giddens is awaiting the Court's approval of the stipulations he entered into with these parties: Parties Amount ------- ----------- Emilio Dodds/Sofia Irribarra $97,172 Atheron Lane Advisers LLC $1,300,000 Svoboda Collins Fund II LP $118,295 TPG Holding Buyouts LP $488,608 Lincoln National Life Insurance Company $232,323 Gregory S. Ledford Trust $1,944,727 Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEVI STRAUSS: March 1 Balance Sheet Upside-Down by $315 Million --------------------------------------------------------------- Levi Strauss & Co. reported $2.69 billion in total assets and $3.00 million in total liabilities resulting in stockholders' deficit of $315.5 million as of March 1, 2009. For the quarter ended March 1, 2009, Levi Strauss posted $48.0 million in net income on net revenues of $951.4 million, compared to $97.1 million in net income on net sales of $1.08 billion. Levi Strauss says lower reported net revenues reflected the impact of a challenging global economy; a weak retail environment in most markets worldwide; and the substantial negative effect of currency compared to the prior year, which accounted for nearly half of the net revenue decline. Reported revenues also reflected the volumes lost due to the bankruptcies of two significant U.S. customers and lower performance of the Dockers(R) brand. These factors were partly offset by increased sales from new company-operated and franchised stores. Levi Strauss says the reported net income decline was driven by lower operating results. The company reported a strong liquidity position with approximately $431 million of total liquidity, including cash and cash equivalents, complemented by availability under a revolving credit facility. "Our Levi's(R) brand continues to perform relatively well in a tough retail climate," said John Anderson, president and chief executive officer. "Our sales growth in Asia Pacific demonstrates the advantage of our broad global footprint. Although our Dockers(R) performance was disappointing, we finished the first quarter where we expected to be given the difficult operating environment. We are focused this year on gaining market share, controlling operating costs and investing strategically to strengthen our brands during the market downturn." Levi Strauss had fixed-rate debt of roughly $1.3 billion -- 73% of total debt -- and variable-rate debt of roughly $500 million -- 27% of total debt -- as of March 1, 2009. The borrower of substantially all of the debt is Levi Strauss & Co., the parent and U.S. operating company. The Company's required aggregate debt principal payments are $74.4 million in the remainder of 2009, $108.3 million in 2012, $319.5 million in 2013, $323.1 million in 2014 and the remaining $1.0 billion in years after 2014. Effective May 1, 2008, to mitigate a portion of its interest rate risk, Levi Strauss entered into a $100 million interest rate swap agreement to pay a fixed-rate interest of approximately 3.2% and receive 3-month LIBOR variable rate interest payments quarterly through May 1, 2010. Levi Strauss' long-term debt agreements contain customary covenants restricting its activities as well as those of its subsidiaries. Currently, the Company is in compliance with all of the covenants. A full-text copy of Levi Strauss' quarterly report is available at no charge at http://ResearchArchives.com/t/s?3b7d About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The company markets its products in three geographic regions: Americas, Europe and Asia Pacific. The Troubled Company Reporter reported on Nov. 28, 2008, that Fitch Ratings affirmed these ratings on Levi Strauss & Co.: -- Issuer Default Rating at 'BB-'; -- $750 million bank credit facility at 'BB+'; -- Senior unsecured notes at 'BB-'; -- Senior unsecured term loan 'BB-'. The Rating Outlook is Stable. Approximately $1.68 billion of senior unsecured debt and the bank credit facility is affected by these actions. LIGHTHOUSE LODGE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Lighthouse Lodge, LLC dba Lighthouse Lodge & Suites 1150 Lighthouse Avenue Pacific Grove, CA 93950 Bankruptcy Case No.: 09-52610 Type of Business: The Debtor offers cabin and motel accommodation. See http://www.lhls.com/ Chapter 11 Petition Date: April 9, 2009 Court: Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Hagop T. Bedoyan, Esq. hbedoyan@kleinlaw.com Klein, DeNatale, Goldner, et al. 5260 N Palm Ave. #217 Fresno, CA 93704 Tel: (559)438-4374 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 ------ --------------- ------------ 1st National Bank of Central $25,000 California 495 Washington St. Monterey, CA 93940 Kimble, Macmichael & Upton $15,069 5260 N. Palm Avenue, Ste. Fresno, CA 93704 Taba Architecture $14,005 4331 N. Golden State Blvd. Suite 1 Fresno, CA 93722 MRWPCA Monterey Reg Water $11,879 POL Control Sicks, Tracy $10,698 Blue Cross $8,880 Cal-American Water $7,322 Russo's $6,674 American Supply Company $6,191 Carmel Marina Corp. $6,060 Slater Moffat Associates, LLP $5,948 Markel Insurance $5,347 California Travel & Tourism $5,131 Pacific Grove Chamber $4,960 of Comme Sysco Food Services $4,378 The Home Depot Supply $4,245 Inn Tel Management Company $4,257 Travel Click Canada Company $4,065 Monterey Peninsula $3,638 Reservation American Services $3,614 The petition was signed by Jacci Plfieger. LIN TV: May Breach Loan Accords as Cash Falls, Analysts Say ----------------------------------------------------------- Carla Main and Dawn McCarty of Bloomberg said that LIN TV Corp. and Belo Corp., their cash flows declining as ad sales drop, risk breaching loan agreements this year and face higher bank fees and interest to renegotiate the deals. Broadcasters may violate loan covenants if earnings-to-debt ratios fall below minimum levels set in credit agreements, said Neil Begley, a bond analyst with Moody's Investors Service, according to the Bloomberg report. To amend the loans, the broadcasters may be required to pay fees and higher interest, using up more cash, he said. If earnings for TV broadcasters "keep getting worse, you'll probably see a lot of restructurings," Mr. Begley said. Revenue at independent or non-network-owned chains such as LIN and Belo has plummeted as the global recession chokes consumer spending, in particular as it affects automotive advertising. Auto commercials made up as much as a fourth of ad sales for TV companies, said Barry Lucas, an analyst with Gabelli & Co. in Rye, New York. LIN "expects to remain compliant" with its covenants, while "preparing to seek an amendment if we deem it necessary," Chief Financial Officer Richard Schmaeling said in an interview. Belo renegotiated terms in February, with a goal of not having to seek further relief. About LIN TV Corp LIN TV Corp. (LIN TV) is a local television and digital media company, owning and/or operating 27 television stations in 17 United States markets, all of which are affiliated with a national broadcast network. The Company's stations deliver local news and community stories, along with sports and entertainment programming to 9% of United States television homes. LIN TV operates multiple stations in nine of its markets. All the Company's stations are affiliated with one of the national television networks, such as ABC, CBS, NBC, FOX, CW or MyNetworkTV. As reported by the TCR on March 26, 2009, Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to LIN TV Corp. on an unsolicited basis. "The 'B-' corporate credit rating reflects financial risk from high debt leverage (including LIN's guarantee of joint venture debt), the possibility of a leverage covenant violation in late 2009, increasing competition for audiences and advertising revenue, and advertising cyclicality," noted Standard & Poor's credit analyst Deborah Kinzer. "The company's competitive positions in midsize TV markets, TV broadcasting's high margins, and good discretionary cash flow potential minimally offset these factors." MAC-GRAY CORP: S&P Gives Negative Outlook; Affirms 'BB-' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its ratings outlook on Waltham, Massachusetts-based Mac-Gray Corp. to negative from stable. At the same time, Standard & Poor's affirmed the 'BB-' corporate credit rating, lowered the issue rating on the company's senior unsecured notes to 'B' from 'B+', and revised the recovery rating to '6' from '5', indicating negligible recovery (0% to 10%) of principal in a default scenario. Total debt as of Dec. 30, 2008, was about $301 million. The outlook revision reflects S&P's belief that the weaker economy and its effect on rental vacancy rates will challenge the Company's operating performance and its ability to maintain credit measures within S&P's expectations. Mac-Gray announced that it expects revenues to be lower in 2009, including a 20% decline in its product sales division, which accounted for about 16% of its 2008 revenues. The ratings on Mac-Gray incorporate the Company's active acquisition strategy, moderately high leverage, and relatively narrow business focus. Mac-Gray benefits from its position as a national supplier of debit card- and coin-operated laundry equipment services in the highly fragmented and regional U.S. laundry market, and its historically relatively stable and predictable cash flow stream, although organic revenue growth has slowed in recent periods. The negative outlook reflects S&P's expectation that the weaker economy and higher vacancy rates will affect the Company's revenue base. S&P believes this will challenge the Company to maintain credit measures closer to historical levels, including total debt to EBITDA of below 4.5x. S&P's internal forecasts indicate that if sales declined by 5% and margins declined by 300 basis points, leverage would increase to the 5x area. "Standard & Poor's could lower the ratings if credit measures continue to weaken, business conditions worsen, and/or the company cannot maintain sufficient cushion on its financial covenants," said Standard & Poor's credit analyst Susan H. Ding. "On the other hand, S&P may revise the outlook to stable if the company can maintain leverage under 4.5x and if covenant cushion improves," she continued. MADOFF SECURITIES: Voluntary Chapter 15 Case Summary ---------------------------------------------------- Chapter 15 Petitioner: Mark Richard Byers Andrew Laurence Hosking Stephen John Akers Grant Thornton UK LLP 30 Finsbury Square London EC2A 1AG Chapter 15 Debtor: Madoff Securities International Limited 12 Berkeley St., Mayfair England, EC2A 1AG London Chapter 15 Case No.: 09-16751 Type of Business: The Debtors is a money management business of Bernard L. Madoff in the United Kingdom. Chapter 15 Petition Date: April 14, 2009 Court: Southern District of Florida (West Palm Beach) Judge: Paul G Hyman, Jr. Chapter 15 Petitioners' Counsel: Tina M. Talarchyk, Esq. TTalarchyk@ssd.com Squire, Sanders & Dempsey LLP 777 S. Flagler Dr. #1900 West Palm Beach, FL 33401 Tel: (561) 650-7261 Fax: (561) 655-1509 Estimated Assets: $100 million to $500 million Estimated Debts: More than $1 billion MARINA BAY: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Marina Bay at Rio Grande, LLC PO Box 141 Chester Heights, PA 19017 Bankruptcy Case No.: 09-18825 Chapter 11 Petition Date: April 8, 2009 Court: District of New Jersey (Camden) Judge: Gloria M. Burns Debtor's Counsel: Scott M. Zauber, Esq. szauber@subranni.com Subranni, Ostrove & Zauber 1624 Pacific Avenue P.O. Box 1913 Atlantic City, NJ 08404 Tel: (609) 347-7000 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Fox Rothschild, LLP $175,000 1301 Atlantic Avenue Atlantic City, NJ 08401 Noreaster Electric $100,000 3400 Park Blvd, Wildwood, NJ 08260 Action Supply $45,000 1413 Old Stagecoach Rd. Ocean View, NJ 08230 Fred Fala Plumbing and Hearing $28,500 Dinaso Building Supplies $19,000 Sherwin Williams $3,300 City of Wildwood $0 The petition was signed by Gary J. Papa. MASONITE CORP: Perella Weinberg on Board as Investment Bankers -------------------------------------------------------------- Masonite Corporation and its affiliates has brought in Perella Weinberg Partners LP as their investment banker and financial advisor pursuant to an engagement letter dated April 25, 2008, revised on September 25, 2008. The Debtors ask the U.S. Bankruptcy Court for the District of Delaware to approve the engagement. A full-text copy of the parties' engagement letter is available for free at: http://bankrupt.com/misc/Masonite_PWPEngagementLetter.pdf As financial and investment advisor to the Debtors, PWP will: (a) further familiarize itself with the business, operations, properties, financial condition, and prospects of the Debtors; (b) review the Debtors' financial condition and outlook; (c) assist in the development of financial data and presentations to the Debtors' Board of Directors, various creditors, and other parties; (d) analyze the Debtors' financial liquidity and evaluate alternatives to improve that liquidity; (e) evaluate the Debtors' debt capacity and alternative capital structures; (f) participate in negotiations among the Debtors and their creditors, suppliers, lessors, and other interested parties with respect to any of the transactions contemplated by the Engagement Letter; (g) advise the Debtors and negotiate with lenders with respect to potential waivers or amendments of various credit facilities; (h) provide other advisory services as are customarily provided in connection with the analysis and negotiation of any of the transactions contemplated by the Engagement Letter, as requested and mutually agreed; (i) analyze various Restructuring' scenarios and the potential impact of these scenarios on the value of the Debtors and the recoveries of those stakeholders impacted by the Restructuring; (j) provide strategic advice with regard to restructuring or refinancing the Debtors' obligations; (k) value securities offered by the Debtors in connection with a Restructuring; (1) provide financial advice and assistance to the Debtors in developing a Restructuring; (m) if requested by the Debtors, provide financial advice and assistance to the Debtors in structuring any new securities to be issued under a Restructuring; and (n) if requested by the Debtors, assist the Debtors or participate in negotiations with entities or groups affected by the Restructuring. PWP will also provide additional investment banking and financial advisory services in connection with the engagement as the Debtors may reasonably request from time to time. The Debtors will pay PWP in accordance with this Fee Structure: (a) a monthly financial advisory fee of $200,000, commencing on the Engagement Date and payable in advance on each monthly anniversary of the Engagement Date, with the first Monthly Fee due upon the execution of the Engagement Letter; and (b) a Restructuring Fee of $8,000,000, payable promptly upon consummation of a Restructuring. PWP will be entitled to the Restructuring Fee in the event that at any time prior to the expiration of nine months after the termination or expiration of PWP's engagement a Restructuring is consummated on terms similar to those negotiated by PWP; provided that if PWP terminates the Agreement without cause, or the Debtors terminate the Agreement with justifiable cause, the provisions of the sentence will not apply. The Debtors reimburse PWP of its expenses in cash, with the payment of the fees and expenses to be approved in accordance with Section 328(a). Since PWP does not charge for its services on an hourly basis and does not have systems in place to track professionals' time usage, PWP will not maintain records of time spent by its Professionals in connection with the rendering of services for the Debtors except, to the extent required, in half- hour increments. Before the Petition Date, the Debtors paid to PWP $1,887,931 for investment banking and financial advisory services and reimbursed PWP for $69,121 in prepetition expenses. Any portion of the payment not used to pay and reimburse PWP for its prepetition fees and expenses will be detailed in PWP's first interim fee application, and the portion will be credited towards PWP's postpetition fees and expenses as allowed by the Court. PWP has received no other compensation from the Debtors pursuant to the Engagement Letter. As of the Petition Date, PWP did not hold a prepetition claim against the Debtors for services rendered in connection with the engagement. PWP's engagement may be terminated by the Debtors or PWP with or without cause at any time upon 15 days written notice and without liability or continuing obligation to the Debtors or PWP. PWP will remain entitled to payment of fees accrued but not yet paid prior to the termination or expiration and to reimbursement of incurred expenses. The Debtors have also agreed to indemnify and to make certain contributions to PWP in accordance with the indemnification provisions of the Engagement Letter. Michael A. Kramer, a partner at PWP, discloses that PWP may have in the past represented, may currently represent, and likely in the future will represent, parties in interest of the Debtors in connection with matters unrelated to the Debtors and the Chapter 11 cases. However, he assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) in that its professionals: (a) are not creditors, equity security holders, or insiders of the Debtors; (b) are not and were not, within two years before the date of the filing of the Debtors' Chapter 11 cases, a director, officer, or employee of the Debtors; (c) do not have an interest materially adverse to the interest of the estates or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason. About Masonite International Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. Masonite International, Inc., and six affiliates filed petitions on March 16, 2009, before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. The Honorable Justice Campbell presides over the CCAA proceedings. Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at Goodmans LLP in Toronto, serve as the Applicants' counsel. Masonite Corporation, based in Tampa, Florida, and several U.S. affiliates filed for Chapter 11 bankruptcy protection on the same day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP; and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. The Debtors' Investment Banker and Financial Advisor is Perella Wenberg Partners LLP; the Debtors' Restructuring Advisors is Alvarez & Marsal North American LLC; and the Debtors' Claims Agent is Kurtzman Carson Consultants LLC. As of January 31, 2009, the Debtors had total assets of $1,527,495,443 and total debts of $2,641,590,842. The Debtors filed with the Bankruptcy Court a pre-negotiated reorganization plan together with their petitions. The Plan provides that Masonite's existing senior secured obligations will be converted on a pro rata basis subject to the election of each existing holder of Senior Secured Obligations into: (i) a new first-priority senior secured term loan; (ii) a new second- priority senior secured PIK loan; and (iii) 97.5% of the common equity of the reorganized Masonite. Holders of Masonite's existing senior subordinated notes will be allocated 2.5% of the common equity in the reorganized Masonite plus warrants for 17.5% of the common stock of the reorganized Company, subject to dilution under certain conditions. Holders of Class 5 General Unsecured Claims under the Plan will be unimpaired and is expected to recover 100% under the Plan. Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy News. The newsletter tracks the CCAA proceedings in Canada and parallel chapter 11 proceedings in Delaware undertaken by company and its various affiliates. http://bankrupt.com/newsstand/or 215/945-7000) MASONITE CORP: Sec. 341 Meeting of Creditors Slated for May 7 ------------------------------------------------------------- Roberta A. DeAngelis, the Acting United States Trustee for Region 3, will convene a meeting of the creditors of Masonite Corporation and its affiliates on May 7, 2009, at 11:00 a.m. Eastern Time, at Room 2112, at the second floor of the J. Caleb Boggs Federal Building, at 844 King Street, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. The meeting may be continued or adjourned from time to time by notice at the meeting, without further written notice to the creditors. About Masonite International Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. Masonite International, Inc., and six affiliates filed petitions on March 16, 2009, before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. The Honorable Justice Campbell presides over the CCAA proceedings. Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at Goodmans LLP in Toronto, serve as the Applicants' counsel. Masonite Corporation, based in Tampa, Florida, and several U.S. affiliates filed for Chapter 11 bankruptcy protection on the same day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP; and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. The Debtors' Investment Banker and Financial Advisor is Perella Wenberg Partners LLP; the Debtors' Restructuring Advisors is Alvarez & Marsal North American LLC; and the Debtors' Claims Agent is Kurtzman Carson Consultants LLC. As of January 31, 2009, the Debtors had total assets of $1,527,495,443 and total debts of $2,641,590,842. The Debtors filed with the Bankruptcy Court a pre-negotiated reorganization plan together with their petitions. The Plan provides that Masonite's existing senior secured obligations will be converted on a pro rata basis subject to the election of each existing holder of Senior Secured Obligations into: (i) a new first-priority senior secured term loan; (ii) a new second- priority senior secured PIK loan; and (iii) 97.5% of the common equity of the reorganized Masonite. Holders of Masonite's existing senior subordinated notes will be allocated 2.5% of the common equity in the reorganized Masonite plus warrants for 17.5% of the common stock of the reorganized Company, subject to dilution under certain conditions. Holders of Class 5 General Unsecured Claims under the Plan will be unimpaired and is expected to recover 100% under the Plan. Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy News. The newsletter tracks the CCAA proceedings in Canada and parallel chapter 11 proceedings in Delaware undertaken by company and its various affiliates. http://bankrupt.com/newsstand/or 215/945-7000) MASONITE CORP: Seeks Approval of Kirkland & Ellis Engagement ------------------------------------------------------------ Masonite Corporation and its affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Kirkland & Ellis LLP, as their lead bankruptcy counsel, nunc pro tunc to the Petition Date. As lead bankruptcy counsel, K&E will: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their businesses and properties; (b) advise and consult on the conduct of the Chapter 11 cases, including all of the legal and administrative requirements of operating in Chapter 11; (c) attend meetings and negotiate with representatives of the creditors and other parties-in-interest; (d) take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors' interests in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; (e) prepare pleadings in connection with the Chapter 11 cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; (f) represent the Debtors in connection with obtaining authority to continue using cash collateral and, if necessary, postpetition financing; (g) advise the Debtors in connection with any potential sale of assets; (h) appear before the Court and any appellate courts to represent the interests of the Debtors' estates; (i) advise the Debtors regarding tax matters; (j) take any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a Chapter 11 plan of reorganization and all documents related to it; and (k) perform all other necessary legal services for the Debtors in connection with the prosecution of the Chapter 11 cases, including (i) analyzing the Debtors' leases and contracts and their assumption and assignment or rejection; (ii) analyzing the validity of liens against the Debtors; and (iii) advising the Debtors on corporate and litigation matters. The Debtors will pay K&E according to the firm's customary hourly rates at: Professional Hourly Rates ------------ ------------ Partners $550-$965 Of Counsel $390-$965 Associates $320-$660 Paraprofessionals $110-$280 The Debtors will also compensate K&E for expenses incurred in connection with the Chapter 11 cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., are presently expected to have primary responsibility for providing services to the Debtors. In addition, as necessary, other K&E professionals and paraprofessionals will provide services to the Debtors. Mr. Cieri assures the Court that his firm does not represent any interest adverse to the Debtors and their estates, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Cieri, however, discloses that K&E represents certain of the Debtors' creditors, equity security holders, or other parties-in- interest in ongoing matters unrelated to the Debtors and the Chapter 11 cases. However, he assures the Court that none of those representations are materially adverse to the interests of the Debtors' estates. Consistent with the terms of an engagement letter between the Debtors and K&E dated August 1, 2008, the Debtors advanced K&E a retainer of $500,000 on August 11, 2008. On August 26, 2008, the Debtors increased K&E's retainer to $1,000,000. On January 16, 2009, the Debtors reduced K&E's retainer to $500,000. On March 12, 2009, the Debtors increased K&E's retainer to $1,000,000. On March 13, 2009, K&E returned $385,000 to the Debtors because the amount was an erroneous payment. As of the Petition Date, the Masonite Debtors do not owe K&E any amounts for legal services rendered before the Petition Date. About Masonite International Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. Masonite International, Inc., and six affiliates filed petitions on March 16, 2009, before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. The Honorable Justice Campbell presides over the CCAA proceedings. Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at Goodmans LLP in Toronto, serve as the Applicants' counsel. Masonite Corporation, based in Tampa, Florida, and several U.S. affiliates filed for Chapter 11 bankruptcy protection on the same day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP; and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. The Debtors' Investment Banker and Financial Advisor is Perella Wenberg Partners LLP; the Debtors' Restructuring Advisors is Alvarez & Marsal North American LLC; and the Debtors' Claims Agent is Kurtzman Carson Consultants LLC. As of January 31, 2009, the Debtors had total assets of $1,527,495,443 and total debts of $2,641,590,842. The Debtors filed with the Bankruptcy Court a pre-negotiated reorganization plan together with their petitions. The Plan provides that Masonite's existing senior secured obligations will be converted on a pro rata basis subject to the election of each existing holder of Senior Secured Obligations into: (i) a new first-priority senior secured term loan; (ii) a new second- priority senior secured PIK loan; and (iii) 97.5% of the common equity of the reorganized Masonite. Holders of Masonite's existing senior subordinated notes will be allocated 2.5% of the common equity in the reorganized Masonite plus warrants for 17.5% of the common stock of the reorganized Company, subject to dilution under certain conditions. Holders of Class 5 General Unsecured Claims under the Plan will be unimpaired and is expected to recover 100% under the Plan. Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy News. The newsletter tracks the CCAA proceedings in Canada and parallel chapter 11 proceedings in Delaware undertaken by company and its various affiliates. http://bankrupt.com/newsstand/or 215/945-7000) MASONITE CORP: Seeks to Tap Richards Layton as Delaware Counsel --------------------------------------------------------------- Masonite Corporation and its affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Richards, Layton & Finger, P.A., as their local Delaware counsel, nunc pro tunc to the Petition Date. As co-counsel to the Debtors' bankruptcy, Richards Layton will: (a) advise the Debtors of their rights, powers and duties as debtors and debtors in possession in the continued operation of their business and management of their properties; (b) 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 Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' states; (c) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the Debtors' estates; (d) attend meetings and negotiations with representatives of creditors, equity holders, prospective investors or acquirers, and other parties-in-interest; (e) appear before the Court, any appellate courts and the Office of the United States Trustee to protect the interests of the Debtors; (f) pursue approval of confirmation of a plan of reorganization and approval of the corresponding solicitation procedures and disclosure statement; and (g) perform all other necessary legal services in connection with the bankruptcy cases. The Debtors will pay Richards Layton according to the firm's customary hourly rates. The Debtors anticipate these professionals to take a lead in the Debtors' bankruptcy cases: Professional Hourly Rates ------------ ------------ Daniel J. DeFranceschi, Esq. $550 Jason M. Madron, Esq. $345 Katisha D. Fortune, Esq. $255 Rebecca Speaker $185 The Debtors will also reimburse Richards Layton for actual, necessary expenses and other charges incurred by the firm during the cases. Before the Petition Date, the Debtors paid Richards Layton a total retainer of $96,624 in connection with and in contemplation of the bankruptcy cases. The Debtors propose that the retainer paid to Richards Layton and not expended for prepetition services and disbursements be treated as an evergreen retainer to be held by Richards Layton as security throughout the bankruptcy cases until Richards Layton's fees and expenses are awarded by final order and payable to the firm. Mr. DeFranceschi assures the Court that his firm is a "disinterested person" under Section 101(14) of the Bankruptcy Code; does not hold or represent an interest adverse to the Debtors' estates; and the Firm's directors and associates have no connection to the Debtors, their creditors, or their related parties. He, however, discloses that Richards Layton has in the past represented, currently represents and may in the future represent in matters wholly unrelated to the bankruptcy cases. About Masonite International Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. Masonite International, Inc., and six affiliates filed petitions on March 16, 2009, before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. The Honorable Justice Campbell presides over the CCAA proceedings. Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at Goodmans LLP in Toronto, serve as the Applicants' counsel. Masonite Corporation, based in Tampa, Florida, and several U.S. affiliates filed for Chapter 11 bankruptcy protection on the same day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP; and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. The Debtors' Investment Banker and Financial Advisor is Perella Wenberg Partners LLP; the Debtors' Restructuring Advisors is Alvarez & Marsal North American LLC; and the Debtors' Claims Agent is Kurtzman Carson Consultants LLC. As of January 31, 2009, the Debtors had total assets of $1,527,495,443 and total debts of $2,641,590,842. The Debtors filed with the Bankruptcy Court a pre-negotiated reorganization plan together with their petitions. The Plan provides that Masonite's existing senior secured obligations will be converted on a pro rata basis subject to the election of each existing holder of Senior Secured Obligations into: (i) a new first-priority senior secured term loan; (ii) a new second- priority senior secured PIK loan; and (iii) 97.5% of the common equity of the reorganized Masonite. Holders of Masonite's existing senior subordinated notes will be allocated 2.5% of the common equity in the reorganized Masonite plus warrants for 17.5% of the common stock of the reorganized Company, subject to dilution under certain conditions. Holders of Class 5 General Unsecured Claims under the Plan will be unimpaired and is expected to recover 100% under the Plan. Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy News. The newsletter tracks the CCAA proceedings in Canada and parallel chapter 11 proceedings in Delaware undertaken by company and its various affiliates. http://bankrupt.com/newsstand/or 215/945-7000) MASONITE CORP: Taps Alvarez & Marsal as Restructuring Advisors -------------------------------------------------------------- Pursuant to Sections 327(a) and 328(a) of Bankruptcy Code and Rule 2014 of the Federal Rules of Bankruptcy Procedure, Masonite Corporation and its affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Alvarez & Marsal North America, LLC, as their restructuring advisors, nunc pro tunc to March 16, 2009. The Debtors and A&M entered into an engagement letter, dated September 8, 2008, a full-text copy of which is available for free at http://bankrupt.com/misc/Masonite_A&MEngagementLetter.pdf As restructuring advisor, A&M will provide assistance to the Debtors with respect to the management of the restructuring process, including support with the administrative efforts of a chapter 11 proceeding, the development of business and financial analyses, and support with the restructuring negotiations between the Debtors, their advisors and their creditors with respect to the development of the Debtors' exit strategy related to their Chapter 11 cases. Pursuant to the Engagement Letter, A&M will provide restructuring support services, including, but not limited to: (a) assistance to the Debtors in the preparation of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; (b) assistance to the Debtors with information and analyses required pursuant to the Debtors' cash collateral relief requests; (c) assistance with the identification and implementation of short-term cash management procedures; (d) assistance with the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each; (e) assistance to Debtors' management team and counsel focused on the coordination of resources related to the ongoing reorganization effort; (f) assistance in the preparation of financial information for distribution to creditors and others, including cash now projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; (g) attendance at meetings and assistance in discussions with potential investors, banks and other secured lenders, any official committee(s) appointed in the Chapter 11 cases, the U.S. Trustee, other parties in interest and professionals hired by the same, as requested; (h) analysis of creditor claims by type, entity, and individual claim, including assistance with development of databases, as necessary, to track the claims; (i) assistance in the preparation of information and analysis necessary for the confirmation of a plan of reorganization in these Chapter 11 cases, including information contained in the disclosure statement; (j) assistance in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; (l) litigation advisory services with respect to accounting and tax matters, along with expert witness testimony on case related issues as required by the Debtors; and (m) render other general business consulting or such other assistance as Debtors' management or counsel may deem necessary that is consistent with the role of a financial advisor and not duplicative of services provided by other professionals in the proceeding. The Debtors will pay A&M according to the firm's customary hourly rates at: Professional Hourly Rate ------------ ----------- Managing Directors $625-850 Directors $450-625 Associates $300-450 Analysts $225-300 The Debtors will reimburse reasonable and necessary actual and direct expenses A&M has incurred in connection with the Debtors' Chapter 11 cases, including transportation costs, lodging, load, telephone, third party copying, and messenger services. The Debtors say A&M is not owed any amounts with respect to its prepetition fees and expenses. According to A&M's books and records, during the 90-day period before the Petition Date, the firm received approximately $850,000 from the Debtors for professional services performed and expenses incurred. Further, A&M's current estimate is that it has received unapplied advance payments from the Debtors in excess of prepetition billings in the amount of $200,000. The Debtors and A&M have agreed that any portion of the advance payments not used to compensate A&M for its prepetition services and expenses will be held and applied against its final postpetition billing and will not be placed in a separate account. Jeffery J. Stegenga, a managing director at A&M, says his firm is not a "creditor" of any of the Debtors within the meaning of Section 101(10) of the Bankruptcy Code. Mr. Stegenga adds that neither he nor any member of the A&M engagement team serving the Debtors is a holder of any of the Debtors' debt or equity securities. Accordingly, Mr. Stegenga assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, in that, A&M: (a) are not creditors, equity security holders, or insiders of the Debtors; (b) are not and were not, within two years before the date of the filing of the Debtors' Chapter 11 cases, a director, officer, or employee of the Debtors; (c) do not have an interest materially adverse to the interest of the estates or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason. The Debtors and A&M have agreed that notwithstanding the Engagement Letter: (a) any controversy or claim with respect to the services provided by A&M to the Debtors will be brought in the U.S. Bankruptcy Court for the District of Delaware or the U.S. District Court for the District of Delaware; (b) A&M and the Debtors and all their successors consent to the jurisdiction and venue of the Bankruptcy and District Courts as the sole and exclusive forum for the resolution of those claims, causes of actions, or lawsuits; (c) A&M and the Debtors and all their successors waive trial by jury with the waiver being informed and freely made; (d) if the Bankruptcy Court or the District Court does not have or retain jurisdiction over the claims and controversies, A&M and the Debtors will submit first to non-binding mediation; and if mediation fails, then to binding arbitration; and (e) judgment on any arbitration award may be entered in any court having proper jurisdiction. About Masonite International Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. Masonite International, Inc., and six affiliates filed petitions on March 16, 2009, before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. The Honorable Justice Campbell presides over the CCAA proceedings. Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at Goodmans LLP in Toronto, serve as the Applicants' counsel. Masonite Corporation, based in Tampa, Florida, and several U.S. affiliates filed for Chapter 11 bankruptcy protection on the same day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP; and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. The Debtors' Investment Banker and Financial Advisor is Perella Wenberg Partners LLP; the Debtors' Restructuring Advisors is Alvarez & Marsal North American LLC; and the Debtors' Claims Agent is Kurtzman Carson Consultants LLC. As of January 31, 2009, the Debtors had total assets of $1,527,495,443 and total debts of $2,641,590,842. The Debtors filed with the Bankruptcy Court a pre-negotiated reorganization plan together with their petitions. The Plan provides that Masonite's existing senior secured obligations will be converted on a pro rata basis subject to the election of each existing holder of Senior Secured Obligations into: (i) a new first-priority senior secured term loan; (ii) a new second- priority senior secured PIK loan; and (iii) 97.5% of the common equity of the reorganized Masonite. Holders of Masonite's existing senior subordinated notes will be allocated 2.5% of the common equity in the reorganized Masonite plus warrants for 17.5% of the common stock of the reorganized Company, subject to dilution under certain conditions. Holders of Class 5 General Unsecured Claims under the Plan will be unimpaired and is expected to recover 100% under the Plan. Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy News. The newsletter tracks the CCAA proceedings in Canada and parallel chapter 11 proceedings in Delaware undertaken by company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MASONITE CORP: U.S. Trustee Fails to Appoint Creditors Committee ---------------------------------------------------------------- On behalf of Roberta A. DeAngelis, the Acting United States Trustee for Region 3, David L. Buchbinder -- trial attorney assigned to Masonite Corp. and its U.S. affiliates' Chapter 11 cases -- informed the U.S. Bankruptcy Court for the District of Delaware that as of March 31, 2009, the U.S. Trustee failed to appoint members of a committee of unsecured creditors in the Debtors' bankruptcy cases. According to Mr. Buchbinder, there has been insufficient response to the U.S. Trustee's communication for service on the committee. About Masonite International Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. Masonite International, Inc., and six affiliates filed petitions on March 16, 2009, before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. The Honorable Justice Campbell presides over the CCAA proceedings. Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at Goodmans LLP in Toronto, serve as the Applicants' counsel. Masonite Corporation, based in Tampa, Florida, and several U.S. affiliates filed for Chapter 11 bankruptcy protection on the same day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP; and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. The Debtors' Investment Banker and Financial Advisor is Perella Wenberg Partners LLP; the Debtors' Restructuring Advisors is Alvarez & Marsal North American LLC; and the Debtors' Claims Agent is Kurtzman Carson Consultants LLC. As of January 31, 2009, the Debtors had total assets of $1,527,495,443 and total debts of $2,641,590,842. The Debtors filed with the Bankruptcy Court a pre-negotiated reorganization plan together with their petitions. The Plan provides that Masonite's existing senior secured obligations will be converted on a pro rata basis subject to the election of each existing holder of Senior Secured Obligations into: (i) a new first-priority senior secured term loan; (ii) a new second- priority senior secured PIK loan; and (iii) 97.5% of the common equity of the reorganized Masonite. Holders of Masonite's existing senior subordinated notes will be allocated 2.5% of the common equity in the reorganized Masonite plus warrants for 17.5% of the common stock of the reorganized Company, subject to dilution under certain conditions. Holders of Class 5 General Unsecured Claims under the Plan will be unimpaired and is expected to recover 100% under the Plan. Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy News. The newsletter tracks the CCAA proceedings in Canada and parallel chapter 11 proceedings in Delaware undertaken by company and its various affiliates. http://bankrupt.com/newsstand/or 215/945-7000) METALS USA: S&P Junks Corporate Credit Rating From 'B-' ------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit ratings on Houston-based Metals USA Holdings Corp. and on its wholly owned subsidiary, Metals USA Inc., to 'CCC+' from 'B-'. At the same time, S&P lowered its rating on the senior secured notes and the senior unsecured pay-in-kind toggle notes to 'CCC-' from 'CCC'. The recovery rating remains at '6' on these issues, indicating negligible (0%-10%) recovery in the event of a payment default. The outlook is negative. All ratings are removed from CreditWatch, where they were placed with negative implications on March 18, 2009, due to the sharp deterioration in steel market conditions in North America over the past several months and S&P's expectation that operating conditions will remain challenging in the near-term. "The ratings downgrade reflects our assessment that the challenging operating environment will materially impact the company's near-term operating results. S&P believes that low metal prices and weak end market demand will lead to deterioration in credit metrics," said Standard & Poor's credit analyst Maurice Austin. "Specifically, S&P expects adjusted debt to EBITDA to weaken above 15x by the end of 2009." Our ratings reflect the significant volatility associated with its markets and cash flows, thin margins, and highly leveraged financial profile. The ratings also reflect the company's variable cost structure and its ability to generate cash flow from working capital during periods of soft end markets. METALS USA HOLDINGS: S&P Junks Corporate Credit Rating From 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit ratings on Houston-based Metals USA Holdings Corp. and on its wholly owned subsidiary, Metals USA Inc., to 'CCC+' from 'B-'. At the same time, S&P lowered its rating on the senior secured notes and the senior unsecured pay-in-kind toggle notes to 'CCC-' from 'CCC'. The recovery rating remains at '6' on these issues, indicating negligible (0%-10%) recovery in the event of a payment default. The outlook is negative. All ratings are removed from CreditWatch, where they were placed with negative implications on March 18, 2009, due to the sharp deterioration in steel market conditions in North America over the past several months and S&P's expectation that operating conditions will remain challenging in the near-term. "The ratings downgrade reflects our assessment that the challenging operating environment will materially impact the company's near-term operating results. S&P believes that low metal prices and weak end market demand will lead to deterioration in credit metrics," said Standard & Poor's credit analyst Maurice Austin. "Specifically, S&P expects adjusted debt to EBITDA to weaken above 15x by the end of 2009." S&P said its ratings reflect the significant volatility associated with its markets and cash flows, thin margins, and highly leveraged financial profile. The ratings also reflect the Company's variable cost structure and its ability to generate cash flow from working capital during periods of soft end markets. MILACRON INC: GECC and DDJ DIP Facilities Approved on Final Basis ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Ohio granted Milacron Inc.'s request to borrow up to $55 million in postpetition financing from General Electric Capital Corporation, as administrative agent and GE Capital Financial, as issuing bank. The GECC facility includes a $15 million sublimit for letters of credit. The Court also permitted the Debtors to obtain postpetition financing of up to $80 million under a term loan facility and a note purchase with DDJ Capital Management acting as administrative agent. Milacron and certain of its subsidiaries entered into a debtor-in- possession credit agreement on March 11, 2009, with certain affiliates of Avenue Capital Group and certain funds or accounts managed by DDJ Capital Management LL. Also on March 11, the Company acknowledged and agreed to recognize an Intercreditor Agreement dated as of March 10, 2009, between General Electric Capital Corporation and DDJ Capital Management, LLC. The Intercreditor Agreement sets forth the seniority and priority of the respective liens on the Company's assets created by the DIP Term Facility and the $55 million Credit Agreement with GECC. The GECC Facility, among others, requires the Debtors to retain Rothschild Inc., and Conway, Del Genio, Gries & Co, LLC or any (i) a restructuring advisor and (ii) a financial advisor that, in each case, has substantial experience and expertise advising Chapter 11 debtors-in-possession in large and complex bankruptcy cases. A full-text copy of the $80 Million Senior Secured Superpriority Priming Debtor-In-Possession Credit Facility dated as of March 11, 2009, among Milacron Inc., Avenue Investments, L.P., and DDJ Capital Management, LLC, is available at no charge at: http://ResearchArchives.com/t/s?3a76 A full-text copy of the Intercreditor Agreement dated March 10, 2009, between General Electric Capital Corporation and DDJ Capital Management, LLC and acknowledged and agreed to by Milacron Inc. and certain subsidiaries, is available at no charge at: http://researcharchives.com/t/s?3a77 A full-text copy of the $55 Million Senior Secured, Super Priority Debtor-In-Possession Credit Agreement dated as of March 11, 2009, among Milacron Inc., certain of its subsidiaries and General Electric Capital Corporation, is available at no charge at: http://researcharchives.com/t/s?3a78 As reported by the Troubled Company Reporter, the Debtors entered into a Restructuring Support Agreement on March 10 with certain affiliates of Avenue Capital Group and certain funds or accounts managed by DDJ Capital , which hold approximately 78% of the Company's 11-1/2% Senior Secured Notes, and a commitment letter for a debtor-in-possession credit agreement. The RSA includes an agreement in principle whereby the Noteholder Group, together with eligible holders of Notes that accept an invitation to participate in the transaction, would purchase substantially all of the Company's assets. As consideration for the Company's assets, the Noteholder Group would, among other things, repay the full amount of the DIP Term Loan Facility and the DIP Revolving Credit Facility, assume certain of the Company's ordinary course liabilities and provide additional consideration to the holders of the Company's Notes that do not participate in the process. Upon executing a definitive purchase agreement, the Company will solicit competing bids from other potential purchasers and conduct a sales process approved by the Bankruptcy Court. The Company's assets would then be sold to the bidder submitting the highest and best offer, subject to Bankruptcy Court approval. About Milacron Inc. Headquartered in Batavia, Ohio, Milacron Inc. supplies plastics- processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron is also manufactures synthetic water-based industrial fluids used in metalworking applications. The company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead Case No. 09-11235). On the same day, the Company filed an ancillary proceeding for reorganization of its Canadian subsidiary under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. The Petitions include the Company and its U.S. and Canadian subsidiaries and its non-operating Dutch holding company subsidiary only, and do not include any of the Company's operating subsidiaries outside the U.S. and Canada. Kim Martin Lewis, Esq., and Patrick Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Torys LLP as counsel to the CCAA proceeding; Conway Del Genio Gries & Co. LLC as restructuring and financial advisor; Rothschild Inc. as banker and financial advisor; Kurtzman Carson Consultants LLC as claims agent; and RSM Richter Inc. as CCAA monitor. Paul, Hastings, Janofsky & Walker LLP, represents DIP Lender General Electric Capital Corp. When the Debtors filed for protection from their creditors, they listed assets and debts between $500 million to $1 billion. MIRANT CORP: Class Action Plaintiffs Seek More Time to File Claims ------------------------------------------------------------------ David Walters, Gregory Ho and Steven Webb ask Judge D. Michael Lynn of the United States Bankruptcy Court for the Northern District of Texas to extend until October 30, 2009, the bar date for late-filed claims to allow them and members of a putative class to pursue the statutorily-mandated wages and penalties they are owed. The Claimants tell the Court that they represent a class of current and former operators at three of the Debtors' power plants in California, and are named plaintiffs in a class action against the Debtors filed on October 17, 2007, in the Superior Court of the County of San Francisco, in California. The class action, titled In re Mitchell, et al. v. Mirant California LLC, No. CGC 07-468320, seeks statutory damages in the form of wages that the Debtors owe the putative class for providing solely on-duty meal and rest periods, along with derivative statutory penalties. The lawsuit seeks the wages from four years to the October 2007 filing date of the complaint and from 2003 to the present. The Claimants' counsel, John Paul Stanford, Esq., at Quilling, Selander, Cummiskey & Lownds, P.C. in Dallas, Texas, relates that on February 10, 2009, the Debtors informed the Claimants that all of their claims prior to January 3, 2006, had been discharged by order of the Bankruptcy Court. The Claimants, Mr. Stanford says, learned that because they had not timely filed their claims alleged in the class action by January 24, 2006 Claims Bar Date, their claims were effectively discharged upon the Debtors' emergence from bankruptcy on January 3, 2006. The Claimants do not dispute that they received a notice of the Debtors' bankruptcy filing and the January 24, 2006 Claims Bar Date. Nevertheless, the Claimants ask that the Bankruptcy Court to permit them and the putative class members to assert late- filed claims based on excusable neglect. Mr. Stanford explains that the Claimants did not know that they had the statutory claims they allege in the class action until July 2007 when Pacific Gas & Electric settled claims on behalf of PG&E's power plant operators for back wages owed those operators for on-duty meal periods. Prior to July 2007, the Claimants had no idea that the on-duty meal and rest periods they suffered could be unlawful after all their union had assented to a series of collective bargaining agreements that set out that power plant operators' meal and rest periods were on-duty and to be taken at the operators' workstations. Despite having learned of their claim in July 2007, Mr. Stanford says the Claimants still did not know until February 10, 2009, that they ought to have filed a motion asking the Court to sustain a substantial portion of their claims, Mr. Stanford tells the Court. The Claimants, he says, certainly would have filed the motion sooner if Debtor had informed them of the lateness of their claims. According to Mr. Stanford, the Claimants' claims are not substantial in relation to the rest of the claims that have been filed against the Debtors. In general, the value of each putative class member's late-filed claim, though varying, is estimated at approximately $30,000. The Debtors' exposure, he says, to the putative class with respect to the late-filed claims is slightly more than $3,000,000. Mr. Stanford asserts that the class' claims will not dramatically increase the amount of unresolved claims or substantially delay completion of the Debtors' plan of reorganization. He notes that a substantial portion of the claims against the Debtors have already been resolved, thus allowing the Claimants' claims will not disrupt efficient judicial administration. Mr. Stanford further asserts that the Court should consider that the Claimants are not the typical claimant whose claim is based solely on contract. Rather, the Claimants are the Debtors' present and former employees on whose backs the Debtors' exceedingly profitable emergence from bankruptcy was built, Mr. Stanford contends. Without these employees, the Debtors would not have been able to succeed as they did with their reorganization, he further contends. Moreover, Mr. Stanford contends that the debt owed to the Claimants and the putative class is based on California law. It would be inequitable and contrary to public policy to deny those workers the wages that California law mandates be paid to employees who are required to work on-duty meal and rest periods, he asserts. Debtors Object The Debtors ask the Court to deny the putative creditors' motion on the grounds that the putative creditors cannot establish excusable neglect and thus, cannot show good cause why their motion should be granted. Ian T. Peck, Esq., at Haynes and Boone, LLP, in Dallas, Texas, argues that "[the Claimants] seek to make a mockery of the Chapter 11 discharge (i) granted under the Bankruptcy Code, (ii) approved in a confirmed Chapter 11 Plan, and (iii) embodied in a final order of the Court. After the expenditure of thousands of hours of judicial resources and hundreds of millions of dollars reorganizing the Debtors, David Walter, Gregory Ho, and Steven Webb seek to undermine the fresh start provided by the statutory, contractual and judicial discharge of claims granted over three years ago." The Putative Creditors seek the extension despite the fact that prior to the expiration of the bar date they had actual knowledge of the facts on which their alleged claims are predicated and of the Chapter 11 cases and that they were served with actual notice of applicable bar dates, Mr. Peck notes. The Putative Creditors had ample opportunity to file an Administrative Claim before the Bar Date, Mr. Peck asserts. They knew everything they needed to know to assert their claim within the same time frame as all other administrative claimants and they had ample opportunity to ask the Court to extend the Bar Date in a timely fashion. Nevertheless, the Putative Creditors have continuously and inexclusively failed to act, Mr. Peck asserts. Mirant Commences Adversary Action Separately, Mirant Corp. and Mirant California LLC filed an adversary proceeding asking the U.S. Bankruptcy Court to declare that Messrs. Walters, Ho, and Webb, individually and on behalf of all other alleged similarly situated individuals, are in civil contempt for having violated the order confirming the Debtors' Plan of Reorganization by commencing the class action as to the "discharged alleged claims" and thereafter refusing to withdraw the Discharged Alleged Claims. As a result of the civil contempt, the Debtors assert that they are entitled to money damages. By the adversary proceeding, the Debtors also ask the Bankruptcy Court to declare that the Discharged Alleged Claims and any liability of the Debtors were discharged by the Plan, the Confirmation Order and the Bankruptcy Code and that Messrs. Walters, Ho, and Webb violated the Plan, the Confirmation Order and the Bankruptcy Code by including the Discharged Alleged Claims in the Action and will continue to violate these if they continue pursuing the Discharged Alleged Claims. The Debtors also seek an award of all their attorneys' fees and costs incurred as a result of enforcing the provisions of the Plan, the Confirmation Order, and the Bankruptcy Code. About Mirant Corp. Mirant Corporation -- http://www.mirant.com/-- produces and sells electricity in the United States. Mirant owns or leases approximately 10,097 megawatts of electric generating capacity. The company operates an asset management and energy marketing organization from its headquarters in Atlanta, Georgia. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included in the parent's bankruptcy exit plan. In February 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and Disclosure Statement. The Court confirmed an amended version of the Plan on May 7, 2007. Mirant NY-Gen emerged from Chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan. The Court confirmed Mirant Lovett's Plan on Sept. 19, 2007. Mirant Lovett emerged from bankruptcy on Oct. 2, 2007. Bankruptcy Creditors' Service, Inc., publishes Mirant Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Mirant Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the Troubled Company Reporter on March 23, 2009, Fitch Ratings affirmed Mirant Corp. and its subsidiaries' Issuer Default Ratings at 'B+'. Fitch also affirmed the companies' other existing ratings as shown in the list of rating actions at the end of this release. The Rating Outlook for MIR and each of its listed subsidiaries remains Stable. In December 2008, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Mirant and its subsidiaries, Mirant North America LLC and Mirant Americas Generating LLC following a full review of the company. S&P rated Mirant and all of its subsidiaries, including Mirant Mid-Atlantic, on a consolidated basis. Mirant has a weak business profile, reflecting exposure to merchant power commodity markets, environmental emissions compliance due to coal fuel use, and debt refinancing, according to S&P. These risks are mitigated by a large, base-load coal asset position, some geographic diversity, and solid plant operations. MIRANT CORP: Adopts Stockholder Rights Plan to Protect NOLs ----------------------------------------------------------- Mirant Corporation on March 26, 2009, entered into a rights agreement with Mellon Investor Services, LLC, as Rights Agent, to deter acquisitions of Mirant's common stock that would potentially limit its ability to use its net operating loss carryforwards and any built in losses to reduce potential future federal income tax obligations. Under the Rights Agreement, from and after the record date of April 6, 2009, each share of Common Stock will carry with it one preferred share purchase right, until the Distribution Date or earlier expiration of the Rights, as described below. In general terms, the Rights will work to impose a significant penalty upon any person or group which acquires 4.9% or more of the outstanding Common Stock after March 26, 2009, without the approval of the Company's Board of Directors. Stockholders that own 4.9% or more of the outstanding Common Stock as of the close of business on March 26, 2009, will not trigger the Rights so long as they do not: (i) acquire additional shares of Common Stock (a) representing 0.2% or more of the shares of Common Stock then outstanding, if they have continuously owned 5.0% or more of the Common Stock since March 26, 2009, or (b) that are in an amount that would result in the stockholders owning 5% or more of the Common Stock if they have continuously owned 4.9% or more of the Common Stock, but have not continuously owned 5.0% or more of the Common Stock, since March 26, 2009; or (ii) fall under 4.9% ownership of Common Stock and then re- acquire shares that in the aggregate equal 4.9% or more of the Common Stock. The Board may, in its sole discretion, exempt any person or group for purposes of the Rights Agreement if it determines the acquisition by such person or group will not jeopardize tax benefits or is otherwise in the Company's best interests. The Rights Agreement is not expected to interfere with any merger or other business combination approved by the Board. From April 6, 2009, until the Distribution Date or earlier expiration of the Rights, the Rights will trade with, and will be inseparable from, the Common Stock. New Rights will also accompany any new shares of Common Stock that the Company issues after April 6, 2009, until the Distribution Date or earlier expiration of the Rights. Each Right will allow its holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock for $50, subject to adjustment, once the Rights become exercisable. This portion of a Preferred Share will give the stockholder approximately the same dividend and liquidation rights as would one share of Common Stock. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights. The Rights will not be exercisable until 10 days after the public announcement that a person or group has become an "Acquiring Person" by: (i) obtaining beneficial ownership, after March 26, 2009, of 4.9% or more of the outstanding Common Stock; or (ii) if already the beneficial owner of at least 4.9% of the outstanding Common Stock, by acquiring additional shares of Common Stock (a) representing 0.2% or more of the outstanding Common Stock if the person or group has continuously owned 5.0% or more of the outstanding Common Stock since March 26, 2009, or (b) that are in an amount that would result in a person or group owning 5.0% or more of the Common Stock if the person or group has continuously owned 4.9% or more of the outstanding Common Stock, but has not continuously owned 5.0% or more of the outstanding Common Stock, since March 26, 2009, unless exempted by the Board. The date when the Rights become exercisable is the "Distribution Date." Until that date or earlier expiration of the Rights, the Common Stock certificates will also evidence the Rights, and any transfer of shares of Common Stock will constitute a transfer of Rights. After that date, the Rights will separate from the Common Stock and be evidenced by book-entry credits or by Rights certificates that the Company will mail to all eligible holders of Common Stock. Any Rights held by an Acquiring Person are void and may not be exercised. Consequences of a Person or Group Becoming an Acquiring Person If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for payment of the Exercise Price, purchase shares of Common Stock with a market value of twice the Exercise Price, based on the market price of the Common Stock as of the acquisition that resulted in such person or group becoming an Acquiring Person. After a person or group becomes an Acquiring Person, the Board may extinguish the Rights by exchanging one share of Common Stock or an equivalent security for each Right, other than Rights held by the Acquiring Person. Preferred Share Provisions Each one one-hundredth of a Preferred Share, if issued: -- will not be redeemable; -- will entitle its holder to dividends equal to the dividends, if any, paid on one share of Common Stock; -- will entitle its holder upon liquidation either to receive $1 or an amount equal to the payment made on one share of Common Stock, whichever is greater. -- will have the same voting power as one share of Common Stock. -- will entitle holders to a per share payment equal to the payment made on one share of Common Stock, if shares of Common Stock are exchanged via merger, consolidation, or a similar transaction. The value of one one-hundredth interest in a Preferred Share is expected to approximate the value of one share of Common Stock. The Rights will expire on the earliest of: * March 25, 2010; * the time at which the Rights are redeemed; * the time at which the Rights are exchanged; * the repeal of Section 382 or any successor statute, or any other change, if the Board determines that the Rights Agreement is no longer necessary for the preservation of tax benefits; * the beginning of a taxable year of the Company to which the Board determines that no tax benefits may be carried forward and no built-in losses may be recognized; or * a determination by the Board, prior to the time any person or group becomes an Acquiring Person, that the Rights Agreement and the Rights are no longer in the best interests of the Company and its stockholders. The Board may redeem the Rights for $.001 per Right at any time before any person or group becomes an Acquiring Person. If the Board redeems any Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of $.001 per Right. The redemption price will be adjusted if the Company has a stock split or stock dividends of its Common Stock. The Board may adjust the Exercise Price, the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, or a reclassification of the Preferred Shares or Common Stock. The terms of the Rights Agreement may be amended by the Board without the consent of the holders of the Rights. After a person or group becomes an Acquiring Person, the Board may not amend the agreement in a way that adversely affects holders of the Rights. Declaration of Dividend The Mirant Board has authorized and declared a dividend of one preferred share purchase right for every common share of the company outstanding as of April 6, 2009. Each right represents the right to purchase one one-hundredth of a Preferred Share. The Board has further authorized and directed the issuance of one Right with respect to each Common Share that will become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date, the Early Expiration Date and the Final Expiration Date. The Exercise of Rights is governed under these procedures: (a) The registered holder of any Right Certificate may exercise the Rights, in whole or in part, at any time after the Distribution Date, upon surrender of the Right Certificate, with the form of election to purchase properly completed and duly executed; (b) The Purchase Price for every one one-hundredth of a Preferred Share purchasable pursuant to the exercise of a Right will initially be $50, and will be subject to adjustment from time to time; (c) Upon receipt of a Right Certificate representing exercisable Rights, the Rights Agent will promptly: -- requisition from any transfer agent of the Preferred Shares certificates for the number of Preferred Shares to be purchased and the Company irrevocably authorizes any transfer agent to comply with all requests; or -- requisition from the depositary agent depositary receipts representing the number of one one- hundredths of a Preferred Share as are to be purchased and the Company directs the depositary agent to comply with the request; -- when necessary to comply with this Rights Agreement, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares; -- after receipt of the certificates or depositary receipts, cause these to be delivered to or upon the order of the registered holder of the Right Certificate, registered in the name or names as may be designated by the holder; and -- when necessary to comply with this Rights Agreement, after receipt, promptly deliver the cash to or upon the order of the registered holder of that Right Certificate; and (d) In case the registered holder of any Right Certificate will exercise less than all the Rights evidenced, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised will be issued by the Rights Agent to the registered holder of that Right Certificate or to the holder's duly authorized assigns. All Right Certificates surrendered for the purpose of exercise, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, will be cancelled by it, and no Right Certificates will be issued in lieu thereof except as expressly permitted by any of the provisions of the Agreement. Mirant will deliver to the Rights Agent for cancellation and retirement, and the Rights Agent will cancel and retire, any other Right Certificate purchased or acquired by the Company. A full-text copy of the Rights Agreement with the Summary of Rights to Purchase Preferred Shares is available for free at: http://ResearchArchives.com/t/s?3aef About Mirant Corp. Mirant Corporation -- http://www.mirant.com/-- produces and sells electricity in the United States. Mirant owns or leases approximately 10,097 megawatts of electric generating capacity. The company operates an asset management and energy marketing organization from its headquarters in Atlanta, Georgia. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included in the parent's bankruptcy exit plan. In February 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and Disclosure Statement. The Court confirmed an amended version of the Plan on May 7, 2007. Mirant NY-Gen emerged from Chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan. The Court confirmed Mirant Lovett's Plan on Sept. 19, 2007. Mirant Lovett emerged from bankruptcy on Oct. 2, 2007. Bankruptcy Creditors' Service, Inc., publishes Mirant Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Mirant Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the Troubled Company Reporter on March 23, 2009, Fitch Ratings affirmed Mirant Corp. and its subsidiaries' Issuer Default Ratings at 'B+'. Fitch also affirmed the companies' other existing ratings as shown in the list of rating actions at the end of this release. The Rating Outlook for MIR and each of its listed subsidiaries remains Stable. In December 2008, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Mirant and its subsidiaries, Mirant North America LLC and Mirant Americas Generating LLC following a full review of the company. S&P rated Mirant and all of its subsidiaries, including Mirant Mid-Atlantic, on a consolidated basis. Mirant has a weak business profile, reflecting exposure to merchant power commodity markets, environmental emissions compliance due to coal fuel use, and debt refinancing, according to S&P. These risks are mitigated by a large, base-load coal asset position, some geographic diversity, and solid plant operations. MIRANT CORP: Five Officers Disclose Equity Stake ------------------------------------------------ In separate Form 4's filed with the U.S. Securities and Exchange Commission, five officers of Mirant Corporation disclosed that on March 3, 2009, they collectively acquired 1,129,841 Restricted Units of Exide common stock: Beneficially Shares Owned After Officer Acquired Transaction ------- -------- ------------ Thomas Legro 26,199 59,860 William S. Linn 62,308 163,504 James Iaco 62,308 168,271 Robert M. Edgell 71,282 187,432 Edward R. Muller 218,269 550,774 Every Restricted Stock Unit represents a contingent right to receive one share of Mirant Common Stock. The restricted stock units have a three year vesting period. In the same individual Form 4's, the officers reported that they have derived employee stock options, or the right to buy shares of Mirant Common Stock at $10.40 per share to expire on March 3, 2019: Beneficially Number Owned After Officer of shares Transaction --------- --------- ----------- Thomas Legro 26,608 26,608 William S. Linn 63,281 63,281 James Iaco 63,281 63,281 Robert M. Edgell 72,396 72,396 Edward R. Muller 221,679 221,679 These stock options have a three year vesting period. About Mirant Corp. Mirant Corporation -- http://www.mirant.com/-- produces and sells electricity in the United States. Mirant owns or leases approximately 10,097 megawatts of electric generating capacity. The company operates an asset management and energy marketing organization from its headquarters in Atlanta, Georgia. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included in the parent's bankruptcy exit plan. In February 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and Disclosure Statement. The Court confirmed an amended version of the Plan on May 7, 2007. Mirant NY-Gen emerged from Chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan. The Court confirmed Mirant Lovett's Plan on Sept. 19, 2007. Mirant Lovett emerged from bankruptcy on Oct. 2, 2007. Bankruptcy Creditors' Service, Inc., publishes Mirant Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Mirant Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the Troubled Company Reporter on March 23, 2009, Fitch Ratings affirmed Mirant Corp. and its subsidiaries' Issuer Default Ratings at 'B+'. Fitch also affirmed the companies' other existing ratings as shown in the list of rating actions at the end of this release. The Rating Outlook for MIR and each of its listed subsidiaries remains Stable. In December 2008, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Mirant and its subsidiaries, Mirant North America LLC and Mirant Americas Generating LLC following a full review of the company. S&P rated Mirant and all of its subsidiaries, including Mirant Mid-Atlantic, on a consolidated basis. Mirant has a weak business profile, reflecting exposure to merchant power commodity markets, environmental emissions compliance due to coal fuel use, and debt refinancing, according to S&P. These risks are mitigated by a large, base-load coal asset position, some geographic diversity, and solid plant operations. MIRANT CORP: To Conduct 2009 Shareholders' Meeting on May 7 ----------------------------------------------------------- Mirant Corporation says it will hold its annual meeting of stockholders on May 7, 2009, at 8:00 a.m. Eastern Daylight Time at the company's corporate headquarters located at 1155 Perimeter Center West, in Atlanta, Georgia. Then, Mirant will host an earnings call to discuss its first quarter 2009 financial results, from 9 a.m. to 10 a.m. EDT on May 8. Analysts are invited to listen to the call by dialing 888 259 8552 (International 913 312 1503) and referencing pass code 9341108, or by logging onto http://www.mirant.com/ A recording of the event will be available for playback on this site beginning on Friday, May 8, 2009, at 1 p.m. EDT. A replay will also be available by dialing 888 203 1112 (International 719 457 0820), and entering the pass code 9341108. Julia A. Houston, Mirant's Corporate Secretary, in a March 27, 2009, filing with the U.S. Securities and Exchange Commission says the 2009 Annual Meeting of Stockholders will be held to: (1) elect nine members of the Board of Directors nominated by the Board of Directors; (2) ratify the appointment of KPMG LLP as our independent registered public accountant for 2009; (3) act on the stockholder proposal described in the attached Proxy Statement; and (4) transact other business as may properly be brought before the meeting and any and all adjournments or postponements. Stockholder Proposal In 2007, the Intergovernmental Panel on Climate Change found that that "warming of the climate system is unequivocal" and that man- made greenhouse gas emissions are now believed, with greater than 90 percent certainty, to be the cause. In October 2007, a group representing the world's 150 scientific and engineering academies including the U.S. National Academy of Sciences issued a report urging governments to lower greenhouse gas emissions by establishing a firm and rising price for such emissions and by doubling energy research budgets to accelerate deployment of cleaner and more efficient technologies. In October 2006, a report authored by former chief economist of The World Bank, Sir Nicolas Stern, estimated that climate change will cost between 5% and 20% of global domestic product if emissions are not reduced, and that greenhouse gases can be reduced at a cost of approximately 1% of global economic growth. The report also warned that "the investment that takes place in the next 10-20 years will have a profound effect on the climate in the second half of this century and in the next." According to Ms. Houston, the shareholders request a report reviewed by a board committee of independent directors on how the company is responding to rising regulatory, competitive, and public pressure to significantly reduce carbon dioxide and other emissions from the company's products and operations. The report, as asserted by the shareholders, should be provided by September 1, 2009, at a reasonable cost and omit proprietary information. The Board of Directors, Ms. Houston says, recommends a vote against the shareholders' proposal. The Board of Directors reasons out that Mirant's principal responsibility is to provide reliable and competitive electricity. In doing so, Mirant recognizes the importance of minimizing the environmental impact of our operations. The Board points out that Mirant: (a) have underway a $1.674 billion initiative to install, by 2010, emissions controls at our Maryland facilities that will be capable of reducing emissions of sulfur dioxide, nitrogen oxides and mercury by approximately 98%, 90% and 80%, respectively, for three of its largest coal- fired units; (b) participate in the Regional Greenhouse Gas Initiative, a multi-state effort in the Northeast, which calls for the stabilization of carbon dioxide emissions at current levels from 2009 to 2015, followed by a 2.5% reduction each year from 2015 to 2018; (c) participate in the Climate Registry for its California plants; (d) have adopted corporate "Principles for Addressing Greenhouse Gases' and supported a global approach to reducing emissions of all sources of carbon, not just emissions from the electric sector; (e) have supported "cap and trade' legislation in Congress; and (f) recently joined the Chicago Climate Exchange, a voluntary greenhouse gas registry, reduction and trading system, and have committed to meet annual emissions reduction targets and, by 2010, to reduce its greenhouse gas emissions by 6% below the average of its 1998 to 2001 levels. Although there is no existing cost-effective technology to reduce emissions of carbon dioxide from power plants fueled by coal, oil or gas, the Board says the company is exploring ways to mitigate emissions by, among other things, improving the efficiency of its plants, recycling waste products like gypsum and ash and seeking offsets. The Board thinks the company has taken a reasonable and practical approach to manage carbon dioxide and other emissions and has estimated and disclosed its existing and future emissions and described its emissions reduction efforts in its SEC filings, including its recently filed Annual Report on Form 10-K. The Board says the proposed report would be largely duplicative of its current disclosure and does not think that the time and resources required to produce the report would create additional value for the company's stockholders. Ms. Houston says that in accordance with the Company's Bylaws and by order of the Board of Directors, stockholders owning Mirant common stock at the close of business on March 9, 2009, are entitled to attend and vote at the meeting. Stockholders who plan to attend the meeting in person, are requested to note that they may be asked to present valid picture identification, like driver's license or passport. A full-text copy of Mirant Corp.'s Proxy Statement is available for free at http://ResearchArchives.com/t/s?3af7 The Proxy Statement and the 2008 Annual Report are also available at http://www.mirant.com/under "Investor Relations," then "Financial Information," then "Annual Reports." About Mirant Corp. Mirant Corporation -- http://www.mirant.com/-- produces and sells electricity in the United States. Mirant owns or leases approximately 10,097 megawatts of electric generating capacity. The company operates an asset management and energy marketing organization from its headquarters in Atlanta, Georgia. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included in the parent's bankruptcy exit plan. In February 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and Disclosure Statement. The Court confirmed an amended version of the Plan on May 7, 2007. Mirant NY-Gen emerged from Chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan. The Court confirmed Mirant Lovett's Plan on Sept. 19, 2007. Mirant Lovett emerged from bankruptcy on Oct. 2, 2007. Bankruptcy Creditors' Service, Inc., publishes Mirant Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Mirant Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the Troubled Company Reporter on March 23, 2009, Fitch Ratings affirmed Mirant Corp. and its subsidiaries' Issuer Default Ratings at 'B+'. Fitch also affirmed the companies' other existing ratings as shown in the list of rating actions at the end of this release. The Rating Outlook for MIR and each of its listed subsidiaries remains Stable. In December 2008, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Mirant and its subsidiaries, Mirant North America LLC and Mirant Americas Generating LLC following a full review of the company. S&P rated Mirant and all of its subsidiaries, including Mirant Mid-Atlantic, on a consolidated basis. Mirant has a weak business profile, reflecting exposure to merchant power commodity markets, environmental emissions compliance due to coal fuel use, and debt refinancing, according to S&P. These risks are mitigated by a large, base-load coal asset position, some geographic diversity, and solid plant operations. MONACO COACH: Panel Member to Acquire Fleetwood Trailer Inventory ----------------------------------------------------------------- Fleetwood Enterprises and its affiliates ask the U.S. Bankruptcy Court for the Central District of California for authority to sell their travel trailer inventory to Lazy Days' R.V. Center, Inc., free and clear of liens, claims, interests and encumbrances. Bankruptcy Data reports that Lazy Days offered an aggregate cash purchase price of $2,250,968. The inventory includes 154 finished travel trailer units, comprising all of Fleetwood Enterprises' remaining inventory in the travel trailer realm, the report says. Lazy Days is one of seven entities named to the official committee of unsecured creditors in the bankruptcy cases of Monaco Coach Corporation, maker of motorized and towable recreational vehicles, according to the Troubled Company Reporter on March 27, 2009. About Lazy Days Based in Seffner, Florida, Lazy Days' R.V. Center Inc., is a single-site dealer of new and previously-owned recreational vehicles. The Company is a primary point of distribution for eight of the leading manufacturers in the recreational vehicle retail industry. The Company is widely recognized in the RV community as the premier destination for RV enthusiasts. Lazy Days' is a wholly owned subsidiary of LD Holdings, Inc. As reported by the Troubled Company Reporter in November 2008, Lazy Days said it would not pay the interest payment due Nov. 17, 2008, on $137 million in 11.75% senior notes that mature May 15, 2012. Lazy Days in March entered into a fourth amendment to its Forbearance Agreement dated December 12, 2008, with certain holders of Lazy Days' 11-3/4% Senior Notes due 2012. As of March 30, Lazy Days has obtained forbearance from holders of more than 81% of the Notes from exercising their potential remedies under the Indenture dated as of May 14, 2004. Under the Fourth Amendment, more than 81% of the holders of the Notes have agreed to forbear from exercising their potential remedies under the Indenture at least until April 13, 2009, unless the Company fails to meet its obligations under the Forbearance Agreement prior to that date. Lazy Days has yet to provide update on the matter. As of September 30, 2008, the Company had $318.0 million in total assets and $251.9 million in total liabilities. * * * According to the Troubled Company Reporter, in November 2008, Moody's Investors Service downgraded Lazy Days' ratings, including the Corporate Family Rating and Probability of Default Ratings to Ca from Caa2. Moody's also downgraded the rating on the company's 11.75% senior unsecured notes to C from Caa3. Lazy Days' SGL-4 Speculative Grade Liquidity rating was affirmed. The ratings remain on review for possible downgrade. Standard & Poor's Ratings Services also lowered its long-term corporate credit rating Lazy Days' to 'CC' from 'CCC+', as well as S&P's rating on the company's unsecured debt to 'C' from 'CCC-'. The outlook is negative. About Monaco Coach Monaco Coach Corporation, a national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. Headquartered in Coburg, Oregon, with manufacturing facilities in Oregon and Indiana, the Company offers a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, and R-Vision brand names. The Company operates motorhome-only resorts in California, Florida, Nevada and Michigan. Monaco Coach is listed on the Pink Sheets under the symbol "MCOAQ". As of September 27, 2008, the Company had $442.1 million in total assets and $208.8 million in total liabilities. Monaco Coach Corporation and its affiliates filed for Chapter 11 on March 5 (Bankr. D. Del., Lead Case No. 09-10750). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, was tapped as counsel. Omni Management Group LLC serves as the Debtors' claims, balloting, noticing and administrative agent. About Fleetwood Enterprises Headquartered Riverside, California, Fleetwood Enterprises -- http://www.fleetwood.com-- produces recreational vehicles and manufactured homes. The Debtors have about 9,000 associates working in facilities strategically located throughout the nation. The company and 19 of its affiliates filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., atGibson, Dunn & Crutcher LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. MORGAN STANLEY: S&P Corrects Rating on Two Classes of 2006-8 Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services corrected its ratings on two classes of Morgan Stanley ACES SPC's secured fixed-rate notes series 2006-8 by lowering its rating on the $3 million class A-7 notes to 'CCC+' from 'B' and raising its rating on the $3 million class A-11 notes to 'BB+' from 'BB'. The class A-7 notes remain on CreditWatch with negative implications, where they were placed June 29, 2007. The rating actions follow the March 17, 2009, lowering of S&P's rating on Huntsman International LLC's $175 million 7.375% senior subordinated notes due Jan. 1, 2015 (the reference obligation of the class A-7 notes) to 'CCC+' from 'B' and the March 18, 2009, raising of S&P's rating on Rock-Tenn Co.'s $250 million 8.2% senior secured notes due Aug. 15, 2011 (the reference obligation of the class A-11 notes) to 'BB+' from 'BB'. The Huntsman International notes remain on CreditWatch negative, where they were placed Feb. 11, 2005. The ratings on the class A-7 and A-11 notes are dependent on the lowest of the rating on the related reference obligation; the rating on Morgan Stanley ('A'), which acts as the swap payments guarantor; or the rating on the underlying security, BA Master Credit Card Trust II's class A floating-rate asset-backed certificates series 2001-B due Aug. 15, 2013 ('AAA'). NAVISTAR INTERNATIONAL: Fitch Affirms 'BB-' Issuer Default Rating ----------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings of Navistar International Corporation and Navistar Financial Corp. at 'BB-', the Rating Outlook remains Negative. The ratings cover approximately $1.8 billion of debt at NAV and $3.2 billion debt at NFC as of Jan. 31, 2009. Fitch affirms these: Navistar International Corp. -- Issuer Default Rating at 'BB-'; -- Senior unsecured bank facility at 'BB-'. Navistar Financial Corp. -- IDR at 'BB-'; -- Senior unsecured bank lines at 'BB-'. Due to the close operating relationship and importance to the parent, NFC's ratings are directly linked to those of the ultimate parent. The relationship is governed by a formal operating agreement that among other things, requires NIC to own 100% of NFC's equity at all times. NAV's Negative Outlook is based on concerns at NFC and the risk that the economy continues to weaken, pressuring consolidated performance of NAV. In particular, Fitch expects NFC's operating performance and asset quality to remain pressured. Fitch is also concerned with $1.9 billion of refinancing risk at NFC in 2010 and NFC's current capitalization levels. At NAV's manufacturing operations, the Negative Outlook reflects the continued weakening of the U.S. and Canadian medium- and heavy-truck market that will contribute to declining sales at the company in its current fiscal year. NAV's manufacturing operations outlook has improved somewhat, reflected by improved credit metrics, positive free cash flow, successful military business entrance, Class 8 market share growth, settlement with Ford and related low margin engine business exit, and current filing status. Fitch's expectation is that NAV's manufacturing operations will continue to perform well in this difficult economic environment; however, Fitch will look for renewal of NFC's funding facilities to reduce potential liquidity issues and improvement in NFC's capitalization before considering a revision of the Negative Rating Outlook. The ratings affirmation is based on NAV's adequate liquidity position, U.S. and Canada market share leadership in Class 6-8 trucks and school buses, competitive engine portfolio, strong North American distribution network, military business strength and potential future success with its Mahindra & Mahindra and Caterpillar joint ventures. Credit concerns include significant pension liabilities, future cash pension contributions, and material accounting weaknesses. Additionally, Fitch is concerned about the possibility of restructuring costs related to the weak truck market and CAW contract that expires at the end of June. NAV remains geographically dependent on North America and derived approximately 92% of its 2008 fiscal-year revenue from this region. NFC's 2008 operating performance was a drag on NAV's overall performance with a loss of $31 million in the fiscal year ending Oct. 31, 2008 versus a profit of $67 million the previous year. The loss was driven by increased provision for losses, impact of fair value on swaps due to decreasing interest rates, and higher funding costs. Although, the derivative expense will be earned back through the life of the loans, the volatility of this expense could cause covenant issues and capital contributions from the parent. This occurred during the quarter ended Jan. 31, 2009, whereby NIC made a $20 million capital contribution to and maintain NFC's fixed-charge coverage at 1.25x. Fitch expects future earnings to be low versus historical returns as credit losses will remain relatively high due to the economic environment. Fitch is concerned with NFC's long-term alternatives to fund originations if the capital markets environment remains status quo. Execution risk is a concern on the renewal of NFC's main funding facilities both maturing in June/July 2010. Fitch expects increasing risks at NFC, mainly due to weak capital levels. Leverage did show improvement to 10.99x at Jan. 31, 2009 from 13.48x Oct. 31, 2008, but it remains well above other captive finance subsidiaries. NAV has begun 2009 with increased revenue, higher margins, and improved leverage on the strength of its military business and increased Class 8 market share at the end of its first quarter ending Jan. 31, 2009. NAV expects sales for its entire fiscal year to decline 5% to 8%, but for its manufacturing segment profit and pre-tax income to increase. NAV forecasts that Class 6-8 industry sales will decline 8% to 14% in its fiscal year, but Fitch is concerned industry sales could fall further, which is incorporated into Fitch's expectations and ratings. Should the year become more difficult for the company than expected, it has the flexibility to preserve liquidity by reducing capital expenditures, acquisitions, alliance and joint venture investments, selling general and administrative expenses, and share repurchase activity. The end of 2009 could see a positive improvement in industry sales related to pre-buying ahead of the 2010 emissions standards change, but this will have little impact on NAV's 2009 results. At the end of NAV's first quarter ending Jan. 31, 2009, Fitch calculates NAV had a liquidity position of approximately $714 million, consisting of $582 million of cash and equivalents and $341 million in aggregate credit facility capacity, less $209 million of current maturities of long-term debt. NAV's $1.7 billion of credit facilities consist of a $200 million secured asset-backed revolving credit facility, unsecured $1.1 billion term loan and unsecured $400 million synthetic revolving credit facility. NAV's $200 million secured asset-backed credit facility due June 2012 has a $10 million commitment against it, and this bank revolver is subject to a borrowing base that could decrease the availability of the facility. NAV's $400 million unsecured synthetic revolving credit facility due January 2012 has $230 million drawn on it and $19 million of letters of credit against it. This facility and the $1.1 billion term loan are subject to a covenant that requires NAV to maintain a fixed charge coverage ratio (EBITDA/fixed charges) of not less than 1.1 to 1.0 on a rolling four-quarter basis. Fitch expects NAV will be able to end the current fiscal year with cash balances at least as high as at the end of fiscal 2008, and the company should be able to generate positive free cash flow even in a downside scenario, despite an expected increase in capital expenditures. The $250 million to $350 million capital expenditures NAV is forecasting is higher than NAV's last fiscal year in part to prepare for the 2010 emission standards change. Other uses of cash in NAV's current fiscal year include pension contributions of $40 million, a value that will balloon in 2010, and restructuring cash charges of at least $58 million related to the closing of its Indianapolis plants. Fitch believes restructuring cash costs could increase depending on the severity of the industry's truck sales decline this year and the outcome of the CAW contract talks. NAV does not have plans to reduce its debt in the near term and Fitch estimates cash interest expense will be approximately $120 million this year. The company initiated a $36 million share repurchase program that expires this July and to date has repurchased $7 million of its common stock against it. NAV expects its professional fees to decline to between $30 million and $40 million this year which is a significant improvement from 2008. Fitch expects NAV's investments in its Mahindra & Mahindra and CAT joint ventures this year to be substantial as the company prepares to launch its first joint products with Mahindra & Mahindra in July and possibly with CAT by year-end. Other material uses of cash this year could include additional capital contributions to NFC and potential cash outflows related to the possible acquisition of certain assets of Monaco Coach. Fitch calculates NAV's pension fund plan asset balance lost 36.6% of its value in fiscal 2008, leading to year-end funded status of 74.8% ($763 million underfunded) compared with 94.8% in 2007. NAV contributed $108 million to its pension fund in 2008 and estimates contributions in 2009 will be $44 million. Based on current forecasts NAV estimates that it may need to contribute at least $250 million per year in 2010 through 2012 to comply with existing U.S. pension plan funding regulations. At Oct. 31, 2008, equities accounted for 74% of NAV's pension plan assets including 8% in the company's own stock, exposing NAV to additional market and diversification risk. NAV's leverage and coverage metrics improved dramatically in fiscal 2008 and continued to improve in its latest quarter driven primarily by higher revenues and margin expansion. NAV's EBITDA increased to $1.1 billion in its 2008 fiscal year compared to $347 million in fiscal 2007. The company's latest 12 months EBITDA as of Jan. 31, 2009 was $1.366 billion. Debt in NAV's 2008 fiscal year decreased to $1.834 billion from $2.028 billion in its 2007 fiscal year. NAV's debt-to-EBITDA ratio decreased to 1.7x at the end of its 2008 fiscal year compared to 5.8x in fiscal 2007. As of Jan. 31, 2009, NAV's leverage ratio was 1.3x. NAV's EBITDA-to- interest coverage increased to 7.2x at the end of its 2008 fiscal year compared to 1.8x in its 2007 fiscal year. As of Jan. 31, 2009, NAV's coverage ratio was 10.3x. NAV's EBITDA margins expanded to 7.7% in its 2008 fiscal year compared to 2.9% in fiscal 2007 and were at 12.6% at the end of its latest quarter. NEXPAK CORPORATION: Case Summary & 37 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Nexpak Corporation 2444 Meadowbrook Parkway Duluth, GA 30096 Bankruptcy Case No.: 09-11244 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- AEI Acquisition LLC 09-11245 Atlanta Precision Molding Co., LLC 09-11246 EPM Holdings, Inc. 09-11247 JMC Acquisition LLC 09-11248 Nexpak Holdings LLC 09-11249 Type of Business: NexPak Corporation manufactures and supplies packaging for DVD, CD, video, audio, and professional media formats. See http://www.nexpak.com/ Chapter 11 Petition Date: April 10, 2009 Court: District of Delaware (Delaware) Debtor's Counsel: William A. Hazeltine, Esq. Bankruptcy001@sha-llc.com Sullivan Hazeltine Allinson LLC 4 East 8th Street, Suite 400 Wilmington, DE 19801 Tel: (302) 428-8191 Fax: (302) 428-8195 Estimated Assets: $10 million to $50 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Pam Capital Funding, L.P. Subordinated $17,833,908 c/o Highland Cap. Management Secured Debt LP 13455 Noel Road, Suite 800 Dallas, TX 75240 First Dominion 3 Subordinated $3,490,829 c/o Credit Suisse Secured Debt 11 Madison Avenue New York, NY 10010 Highland Legacy, Ltd. Subordinated $2,816,429 c/o Highland Cap. Management Secured Debt LP 13455 Noel Road, Suite 800 Dallas, TX 75240 Morgan Stanley Prime Subordinated $2,579,304 Income Trust Secured Debt c/o Morgan Stanley 1585 Broadway New York, NY 10036 Deutsche Bank Subordinated $2,406,655 60 Wall Street Secured Debt New York, NY 10005 First Dominion 1 Subordinated $2,321,374 c/o Credit Suisse Secured Debt 11 Madison Avenue New York, NY 10010 Chevron Phillips Chemical Co. Materials $2,088,807 P.O. Box 96001 Supplier Chicago, IL 60693 Ineos Olefms & Polymers Materials $1,921,666 13536 Collections Center Drive Supplier Chicago, IL 60693 First Dominion 2 Subordinated $1,547,582 c/o Credit Suisse Secured Debt 11 Madison Avenue New York, NY 10010 Highland Crusaders Offshore Subordinated $1,289,652 Partners Secured Debt c/o Highland Cap. Management LP 13455 Noel Road, Suite 800 Dallas, TX 75240 Cerberus Partners, LP Subordinated $1,165,822 c/o Cerberus Capital Secured Debt Management LP 299 Park Avenue New York, NY 10171 Flagship 2001-1 Subordinated $844,928 c/o Deutsche Bank Secured Debt 60 Wall Street New York, NY 10005 CSAM Funding II Subordinated $703,511 c/o Credit Suisse Secured Debt 11 Madison Avenue New York, NY 10010 W.P. Carey Landlord $491,000 I Georgia Power Company Utility $177,520 Total Petrochemicals USA Materials $152,847 Supplier Hangzahn Materials $113,270 Supplier CIGNA Health Insurance $99,206 Premium Sensormatic Electronics Materials $89,460 Supplier Unisource Materials $34,373 Supplier Colormatrix Materials $33,010 Supplier Incite Strategic, LLC Service Provider $30,120 American Electric Power Service Provider $27,557 American Profol, Inc. Materials $27,552 Supplier Wayne Battle Lumber Co. Materials $16,139 Supplier Randstad Temporary $15,570 SST Consumables Group Materials $14,570 Supplier United Parcel Service Delivery Service $14,476 USF Holland Freight $14,133 NHMG Financial Services Equipment Lease $13,752 Morris Trucking Corp. Freight $13,055 Forum Financial Services Equipment Lease $11,660 JIT Packaging, Inc. Service Provider $11,253 JMF Precision Welding, Inc. Repair & $10,950 Maintenance CV Transport Inc. Freight $10,365 Groffre Investments Landlord $10,275 Orion Advanced Marketing Sales $10,154 The petition was signed by Kevin I. Dowd, president and chief restructuring officer. NORTEL NETWORKS: Pass-Through Trust Gets S&P's Junk Rating ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Nortel Networks Lease Pass-Through Trust 2001-1's certificates to 'CCC' from 'B-' and removed it from CreditWatch, where it was placed with negative implications on Jan. 16, 2009. The downgrade reflects the increased likelihood of principal losses and interest shortfalls to the trust following Nortel Networks Ltd.'s notification to the special servicer, Wachovia Bank N.A., that it will not pay the special servicing fees due to Wachovia. S&P originally placed the rating on CreditWatch with negative implications on Jan. 16, 2009, after Nortel announced that it will file for creditor protection under the Companies' Creditors Arrangement Act in Canada. On Feb. 4, 2009, the loan securing the single-tranche transaction was transferred to special servicing. The trust certificates from series 2001-1 are secured by two notes backed by five single-tenant office/R&D buildings in Research Triangle Park, North Carolina, totaling 1,403,058 sq. ft. that are leased to Nortel. Based primarily on conversations with Wachovia, it is S&P's understanding that Nortel has not rejected or modified the lease and is current with the rent for the buildings it leases. However, Nortel recently stated that it will not pay the special servicing fees due to Wachovia. If an interest shortfall occurs and Standard & Poor's expects it will likely continue for the foreseeable future, S&P may take additional negative rating actions. Additionally, due to Nortel's bankruptcy filing, Nortel may reject the current lease or renegotiate the lease terms, which may result in payment interruptions to the transaction. NOVA HOLDING: Taps OPA as Financial Advisor and Investment Banker ----------------------------------------------------------------- Nova Holding Clinton County, LLC, and its affiliates seek the U.S. Bankruptcy Court for the District of Delaware's authority to employ Ocean Park Advisors, LLC, for financial advisory services and investment banking services, effective as of March 30, 2009. As the Debtors' financial advisor and investment banker, Ocean Park will formulate strategic alternatives, negotiate with the Debtors' creditor constituencies, and assist the Debtors to achieve a successful outcome in the Chapter 11 cases which may include an asset sale or other strategy. Bruce Comer, a managing director at Ocean Park, assures the Court that the firm does not hold or represent any interest materially adverse to the Debtors or their estates, and that the firm is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. As compensation for their financial advisory services, Ocean Park's professionals will bill at these hourly rates: Managing Director $400-$500 Vice President $250-$350 Associate $150-$250 Administrative Personnel $90 As compensation for the investment banking services, Ocean Park will receive: a) an initial expense retainer in the amount of $75,000 which will be fully earned whether or not a successful sale transaction occurs. If the transaction does not close by the fourth month anniversary of the execution of the Engagement Agreement, a $75,000 additional retainer will be paid. b) If Nova consummates a sale of a substantial portion of its assets, whether through an auction, private sale, Section 363 sale or a recapitalization or transaction under a confirmed plan of reorganization, Ocean Park will be paid within 30 days of the closing a success fee of 2.5% of the value of any said transaction; provided, however that in any case a minimum Success Fee of $175,000 will paid. The success fee will not be reduced by the amount of the initial retainer or any subsequent retainer that was paid in connection with the Engagement Agreement. Based in Seneca, Illinois, Nova Holding Clinton County, LLC, makes industrial organic chemicals and biological products. Nova Holding and certain 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 assets and debts of $10 million to $50 million. NOVA HOLDING: Wants to Employ Blank Rome as Bankruptcy Counsel -------------------------------------------------------------- Nova Holding Clinton County and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Blank Rome LLP as general bankruptcy counsel. Effective March 30, 2009, Blank Rome agreed to: a) advise the Debtors in the continued management of their business and properties and with respect to their powers,] rights, duties, and obligations; b) assist the Debtors regarding the administration and prosecution of their Chapter 11 cases, including taking all necessary actions to protect and preserve the Debtors' estates, which actions may include, without limitation, prosecution of adversary proceedings or contested matters, defense of actions or contested matters commenced against the Debtors, commencement and prosecution of objections to claims and assisting the Debtors in the claims reconciliation process; c) prepare and prosecute all motions, applications, answers, orders, reports, papers and other pleadings or papers to be filed with the Bankruptcy Court, and counsel the Debtors as requested regarding the preparation of schedules, statements of financial affairs, and operating reports in connection with the administration of the Debtors' estates; d) appear before the Bankruptcy Court, any other courts including any appellate courts, and the Office of the United States Trustee to represent and protect the interests of the Debtors and their estates at hearings and meetings concerning the Debtors' Chapter 11 cases; e) attend meetings and negotiate with representatives of creditors and other parties in interest and advise and consult on the conduct of the cases, including all of the legal and administrative requirements of operating in Chapter 11; f) advise the Debtors in connection with all matters relating to any sale or other use or disposition of assets; g) assist the Debtors in the formulation and negotiation of a Chapter 11 plan and related disclosure statement and confirmation of such plan, and represent the Debtors during the confirmation process; h) advise the Debtors as requested on compliance matters with the Securities and Exchange Commission, tax matters with the Internal Revenue Service, or any other matters involving governmental agencies; i) render to the Debtors other legal services as may be requested by management of the Debtors and as may be required in furtherance of their Chapter 11 cases. Michael B. Schaedle, Esq., a partner at Blank Rome, assures the Court that his firm represents no interest adverse to the Debtors or their estates, and that the firm is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. Mr. Schaedle tells the Court that Blank Rome received $425,000 in retainer payments from the Debtors prior to the filing of the Chapter 11 cases. The attorneys and paraprofessionals presently designated to represent the Debtors and their current standard hourly rates are: Attorneys Hourly Rate --------- ----------- Michael B. Schaedle, Esq. $500 Lawrence R. Wiseman, Esq. $665 David W. Carickhoff, Esq. $430 Erin O'Brien Harkiewicz, Esq. $480 Melissa S. Vongtama, Esq. $400 Stanley B. Tarr, Esq. $395 Josef W. Mintz, Esq. $245 Kathleen Senese $225 Based in Seneca, Illinois, Nova Holding Clinton County, LLC, makes industrial organic chemicals and biological products. Nova Holding and certain 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 assets and debts of $10 million to $50 million. PARK AT ASPEN: Section 341(a) Meeting Slated for May 5 in Texas --------------------------------------------------------------- The U.S. Trustee for Region 7 will convene a meeting of creditors in Park at Aspen Lake II, L.P.' s Chapter 11 cases on May 5, 2009, at 10:30 a.m., at Austin Room 118, Homer Thornberry Bldg., 903 San Jacinto, Austin, Texas. 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. Austin, Texas-based Park at Aspen Lake II, L.P., filed for Chapter 11 protection on April 3, 2009 (Bankr. W.D. Tex. Case No. 09- 10840). Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., represents the Debtor in its restructuring efforts. The Debtor estimated assets of $10 million to $50 million and debts of $10 million to $50 million. PB SURF: U.S. Trustee Schedules Creditors Meeting on May 28 ----------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in PB Surf, Ltd.'s Chapter 11 case on May 28, 2009, at 11:00 a.m., at 220 W. Garden Street, Suite 700, Pensacola, Florida. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Pensacola, Florida, PB Surf, Ltd. is a real estate developer. The Debtor filed for Chapter 11 protection on April 6, 2009 (Bankr. N.D. Fla. Case No. 09-30656). Bruce C. Fehr, Esq., at Liberis & Associates, P.A., represents the Debtor in its restructuring efforts. The Debtor said its assets range from $10 million to $50 million and its debts is $1 million to $10 million. PHILADELPHIA NEWSPAPERS: Gets Lenders Consent on Sonenshine Hiring ------------------------------------------------------------------ Maryclaire Dale at The Associated Press reports that Philadelphia Newspapers' senior lenders have agreed to let the Debtor hire investment banking firm Sonenshine Partners LLC to assist the Company with its Chapter 11 reorganization. The AP relates that the lenders previously complained that Sonenshine Partners' work would duplicate that of another financial firm, Alvarez and Marsal, which is already advising the Debtor on operations. The Debtor, the report states, said that Sonenshine Partners' efforts won't be duplicative. According to the report, Philadelphia Newspapers will pay Sonenshine Partners $75,000 a month. The AP states that the lenders agreed on Monday to let Philadelphia Newspapers keep using its cash to fund operations through May 22. According to The AP, Brian Tierney -- the CEO of The Philadelphia Inquirer and Philadelphia Daily News -- defended the bonus he received before the bankruptcy filing last year, saying that the lenders' criticism of the payout is "disingenuous." Mr. Tierney said that the lenders at one point offered him a deal that would have paid him millions if he would have agreed to their plans for Philadelphia Newspapers, The AP relates. Philadelphia Newspapers Chairperson Bruce Toll had said that the Debtor's board approved the bonuses, along with since-rescinded pay raises that would have increased Mr. Tierney's salary to $850,000, the report states. 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 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. PHILADELPHIA NEWSPAPERS: Panel May Hire O'Melveny as Lead Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern Distict of Pennsylvania has granted the official committee of unsecured creditors of Philadelphia Newspapers, LLC, permission to employ O'Melveny & Myers as its lead counsel under the general retainer, nunc pro tunc to March 2, 2009. As the Committee's lead counsel, OMM will primarily advise the Committee generally regarding matters of bankruptcy law in connection with the Chapter 11 cases, take actions to protect and preserve the interests of unsecured creditors, and render other necessary advice and services as the Committee may require. OMM's professionals bill: Professional Hourly Rate ------------ ----------- Ben Logan, Esq. $860 Robert Blashek, Esq. $880 Gerald Bender, Esq. $810 Joshua Weisser, Esq. $545 Jennifer Taylor, Esq. $480 Melanie McLaughlin, Esq. $425 Ben Logan, Esq., a partner at O'Melveny & Myers LLP, assured the Court that the firm and the attorneys employed by it are disinterested persons who do not hold or represent an interest adverse to the Debtors or their estates. 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 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. Lawrence G. McMichael, Esq., Anne M. Aaronson, Esq., and Catherin G. Pappas, Esq., at Dilworth Paxson LLP represents the Debtors as local counsel. Alvarez & Marsal North America, LLC is the Debtors' restructuring advisor. The Debtors listed assets and debts of $100 million to $500 million each. PILGRIM'S PRIDE: Will Close Processing Facility in Dalton, Georgia ------------------------------------------------------------------ Pilgrim's Pride Corporation will close its chicken processing plant in Dalton, Georgia, within 60 days and consolidate production at the Company's processing facility in Chattanooga, Tenn. These actions are aimed at improving the Company's capacity utilization and reducing its costs. Approximately 280 employees who work at the Dalton plant will be affected by the closing. Pilgrim's Pride will provide transition programs to employees whose positions are eliminated to assist them in securing new employment, filing for unemployment and obtaining other applicable benefits. The hatchery in Cohutta, Georgia, will continue to operate. Other live production operations will also continue to function, but as a part of the Chattanooga complex or other nearby operations. Approximately 120 independent contract growers who currently supply birds to the Dalton processing plant will be transitioned to begin supplying the Company's Chattanooga plant or other nearby company facilities within approximately 90 days. There will not be any disruption in the supply of product to retail, foodservice and industrial customers as a result of closing the Dalton facility. "The closing of the Dalton plant is part of our plan to maximize our capacity utilization and operate more efficiently as a market- driven company," said Don Jackson, president and chief executive officer. "We will continue to look for opportunities to improve our cost structure as we reorganize the company. While the decision to eliminate jobs is always painful, we are taking decisive steps now to protect the greatest number of jobs in order to restructure our business and ultimately emerge from Chapter 11 as a stronger, more efficient competitor." About Pilgrim's Pride Corp. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the company owns 34 processing plants in the United States and 3 processing plants in Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) POWERMATE CORP: Plan Filing Period Extended to July 10 ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware extended Powermate Holding Corp., et al.'s exclusive period to file a plan to July 10, 2009, and their exclusive period to solicit acceptances of a plan to September 20, 2009. This is the third extension of the Debtors' exclusive periods. As reported in the Troubled Company Reporter on March 16, 2009, the Debtors told the Court that they have already liquidated the majority of their assets and have been actively focused on resolving their disputes with the Lowe's Companies, Home Depot, and the Pension Benefit Guaranty Association, and thus, have not had sufficient time to begin the Chapter 11 plan process. About Powermate Corp. Headquartered in Aurora, Illinois, Powermate Corp. -- http://www.powermate.com/-- manufactures portable and home standby generators, air compressors, air tools, pressure washer and accessories. Products were distributed through mass retailers, home centers, specialty store chains, industry buying cooperatives, online e-Dealers, and independent hardware retailers. Prior to the Petition Date, the Debtors sold their air compressor business and related assets. Sun Capital Partners bought 95% of Powermate in 2004. Powermate Holding Corp. is the parent of Powermate Corp. In turn Powermate Corp. owns 100% of Powermate International Inc. The three companies filed for Chapter 11 protection on March 17, 2008 (Bankr. D. Del. Lead Case No.08-10498). Neil Herman, Esq., at Morgan, Lewis & Bokius, represents the Debtors as counsel. Kenneth Enos, Esq., and Michael Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors as local counsel. Monika J. Machen, Esq., at Sonnenschein Nath Rosenthal LLP, represents the Official Committee of Unsecured Creditors as counsel. Charlene D. Davis, Esq., Eric M. Sutty, Esq., and Daniel A. O'Brien, Esq., at Bayard P.A., represent the Creditors Committee as local counsel. In schedules filed with the Court, the Debtors listed total assets of and debts of over $69 million and $144 million, respectively. RANGELINE PROPERTIES: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Rangeline Properties, LLC PRM Realty Group, LLC c/o Gary Sarles 900 Jackson St., 370 Founders Square Dallas, TX 75202 Bankruptcy Case No.: 09-31921 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Gerrit M. Pronske, Esq. Pronske & Patel, P.C. 1700 Pacific Avenue, Suite 2260 Dallas, TX 75201 Tel: (214) 658-6500 Fax: (214) 658-6509 Email: gpronske@pronskepatel.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Peter R. Morris, president of the Company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb09-31921.pdf ROCKWOOD SQUARE: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Rockwood Square, LLC P.O. Box 8860 Mobile, AL 36689 Bankruptcy Case No.: 09-32078 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Eastern District of Virginia (Richmond) Judge: Douglas O. Tice, Jr. Debtor's Counsel: Robert Coleman Smith, Esq. Richard Knapp & Associates 2800 Patterson Ave., Suite 101 Richmond, VA 23221 Tel: (804) 377-8848, Ext.4 Email: rsmith@chartwellcapital.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Christopher B. White, managing member 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/vaeb09-32078.pdf SEAGATE TECHNOLOGY: Fitch Assigns 'BB+' Rating on $430 Mil. Notes ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to the proposed private placement of $430 million of five-year senior secured second- priority lien notes due 2014 issued by Seagate Technology International, an indirect, wholly-owned subsidiary of Seagate Technology (parent). Furthermore, Fitch has assigned STI an Issuer Default Rating of 'BB'. The proceeds from the offering will be used for general corporate purposes, including repayment of debt maturing in the next 12 months, consisting of $300 million of floating rate senior notes due October 2009 and $136 million of convertible senior notes due April 2010. The notes will have the same guarantors and collateral package, but will be junior in ranking to Seagate's secured credit facility, which was granted a first-priority lien under the company's second amended and restated credit agreement dated April 3, 2009. The collateral package consists of all tangible and intangible assets, including intellectual property, contracts and certain real-estate, stock of the borrower's (Seagate and Seagate Technology HDD Holdings) direct and indirect U.S. subsidiaries and at least 66% of the stock of foreign subsidiaries. Fitch currently rates Seagate and its subsidiaries: Seagate -- IDR 'BB'; -- Secured first lien credit facility 'BBB-'. Seagate Technology HDD Holdings -- IDR 'BB'; -- Secured first lien credit facility 'BBB-'; -- Senior unsecured debt 'BB'. Maxtor Corporation -- IDR 'BB'; -- Senior unsecured debt 'BB'; -- Subordinated debentures 'B+'. The Rating Outlook is Negative. SEAGATE TECHNOLOGY: Moody's Confirms 'Ba2' Corporate Family Rating ------------------------------------------------------------------ Moody's Investors Service confirmed Seagate Technology HDD Holdings' corporate family rating of Ba2 and downgraded the senior unsecured notes and convertible senior notes ratings to Ba3 from Ba2. Moody's also assigned a first-time rating of Ba1 to the company's $430 senior secured notes offering announced. Concurrently, Seagate's speculative grade liquidity rating was upgraded to an SGL-2 from an SGL-3. The rating outlook is negative. The rating actions conclude the review for further possible downgrade initiated on January 15, 2009. The company announced that it will offer $430 million aggregate principal amount of senior secured second-priority notes due 2014 in a private placement. The secured notes are expected to be issued by Seagate Technology International, an indirect wholly- owned subsidiary of Seagate Technology, and guaranteed by Seagate Technology, Seagate Technology HDD Holdings and all of Seagate Technology's subsidiaries that guarantee its senior secured credit facility. The confirmation of the CFR and the upgrade of the SGL are supported by the company's strengthened liquidity following resolution of its near-term covenant compliance issues and Moody's expectation that the $430 million new notes offering will close. Excluding proceeds from the new debt, Seagate's current cash balance is $1.5 billion. While the revolver capacity was reduced from $500 million to $350 million under the amended credit agreement, the facility's net leverage and minimum liquidity covenants through calendar year 2009 were modified to provide additional flexibility for the remainder of the year as the company transforms its cost structure. The reduction of the facility to $350 million leaves the company with no availability under its revolver. Although free cash flow may be negative in 2009 and the company faces debt maturities of approximately $435 million through the end of 2010, the company's sizable cash balances should be sufficient to meet its cash needs through 2010. The Ba2 CFR continues to reflect the company's leading position in the disc drive industry and its proven ability to generate significant amounts of profits and free cash flow during peak cycles that provide cushion to withstand cyclical downturns. Moody's rating also incorporates the inherent volatility of the disc drive sector, which is characterized by capital intensity, short product life cycles, commoditization, and maturation-linked average selling price declines. While Moody's believe that industry volatility may have become less severe as a result of the sector's on-going consolidation, the industry is currently facing a steep pullback in demand as a result of the weak macroeconomic environment, which is forcing Seagate to rationalize production capacity as in past downturns. The downgrade of the unsecured and convertible senior notes reflects their un-guaranteed and junior position within the company's capital structure following the amendment of the credit facility (whereby the revolver is now secured) and completion of the proposed issuance of $430 million secured notes. The negative outlook reflects ongoing concerns over the company's ability to generate meaningful profitability and free cash flow in FY2010 and FY2011 following the steep pullback in demand for storage products and the major restructuring initiatives that the company has announced. While the recently-amended credit facility and the new note offering resolve uncertainty over near-term liquidity and provide the company with flexibility to manage its restructuring cost programs, the company must still contend with covenant compliance issues after January 1, 2010, when the covenants revert back to original requirements as well as nearly $1 billion of debt maturities in 2011 and 2012. The company's ability to manage its long-term liquidity could be impaired by a prolonged global recession, delays in realizing the benefits of its massive restructuring efforts, and continuing weak execution evidenced by further market share losses to Western Digital, especially in the faster-growing notebook segment. Ratings confirmed: -- Corporate Family Rating of Ba2 -- Probability of Default Rating of Ba2 -- $60 million of 5.75% subordinated debentures due 2012 (remaining balance of $40 million) at B1 (LGD6, 96%) Rating / assessment assigned: * $430 million senior secured notes due April 2014 -- Ba1 (LGD 2, 23%) Ratings downgraded / assessments revised: -- $300 million floating rate senior notes due October 2009 to Ba3 (LGD4, 67%) from Ba2 (LGD4, 56%) -- $600 million of 6.375% senior unsecured notes due 2011 to Ba3 (LGD4, 67%) from Ba2 (LGD4, 56%) -- $600 million of 6.8% senior unsecured notes due 2016 to Ba3 (LGD4, 67%) from Ba2 (LGD4, 56%) -- $230 million of 6.8% convertible senior notes due 2010 (remaining balance of $136 million) to Ba3 (LGD4, 67%) from Ba2 (LGD4, 56%) Rating upgraded: -- Speculative Grade Liquidity rating to SGL-2 from SGL-3 The last rating action was on January 15, 2009 when Moody's downgraded Seagate's corporate family, senior unsecured notes, and convertible senior notes ratings to Ba2 from Ba1, its subordinated debentures to B1 from Ba2, and its speculative grade liquidity (SGL) rating to SGL-3 from SGL-1. In addition, Moody's kept the ratings under review for further possible downgrade. Seagate, with revenues of $11.3 billion for the twelve months ended January 2, 2009, is the worldwide leader in the design, manufacture and marketing of disk drive products used as the primary medium for storing electronic information in systems ranging from personal computers and consumer electronics to data centers. SEAGATE TECHNOLOGY: S&P Assigns 'BB+' Rating on $430 Mil. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' issue level rating to the proposed $430 million of senior secured, second priority notes to be issued by Seagate Technology International, two notches above the corporate credit rating (BB-/Negative/--) of its parent, Seagate Technology. The notes will be guaranteed by Seagate Technology and Seagate Technology HDD Holdings. The recovery rating is a '1', indicating very high (90 to 100%) expectations of repayment in the event of a payment default. At the same time, issue level ratings of senior unsecured debt at Seagate Technology HDD Holdings were lowered to 'B+' from 'BB-', reflecting the revision of the recovery ratings on those issues to '5' from '4', indicating modest (10 to 30%) recovery in the event of a payment default. The recovery revision results from the increase in secured, priority debt in the capital structure. Proceeds from the new debt are expected to fund the refinancing of a maturing $300 million obligation and for general corporate purposes. "The ratings on Seagate reflect volatile industry dynamics in the hard-drive industry, including periods of aggressive product pricing and excess supply (as it is currently experiencing), substantial competition, and a high degree of product-cycle risk," said Standard & Poor's credit analyst Lucy Patricola. Offsets include the company's strong overall competitive standing, a leading market-share position (including good penetration of the nascent and rapidly growing consumer electronics end markets). The company enters the downturn with good liquidity and light leverage, although the severity of the cycle could erode these strengths rapidly. The industry has entered a period of increasingly soft demand and ample capacity, resulting in pricing pressure and excess supply. Seagate revenues have declined about 30% for the last two quarters, compared to the year earlier period. Because of high fixed-cost absorption and weak pricing, EBITDA margins have dropped sharply and are estimated by S&P to be about break-even in the March quarter. Visibility for near-term earnings is low and difficult demand conditions could persist in the near term. SEMGROUP LP: Pursues Injunction vs. Catsimatidis; Seeks Ouster -------------------------------------------------------------- SemGroup LP executives in February filed before the U.S. Bankruptcy Court for the District of Delaware an adversary proceeding against billionaire John A. Catsimatidis and his associates. In its complaint, SemGroup alleged that Mr. Catsimatidis, the owner of Girstedes' Supermarkets and United Refining Company, is attempting to acquire SemGrroup not through the well established bidding process, which is open, transparent, and orderly, but by trying to seize control of the management committee of SemGroup's general partner to force through his own self-interested proposal. SemGroup also alleged that that (i) Mr. Catsimatidis has blatantly and openly violated material terms of their confidentiality agreement by making public announcements regarding the Debtors' reorganization and attempting to influence or control the Debtors' management (ii) he has attempted to hijack and control management's reorganization efforts by publicly proclaiming that he himself would reorganize the Debtors. According to SemGroup, after filing the adversary proceeding, Mr. Catsimatidis and other defendants initially indicated their desire to be more cooperative with the Debtors. In reliance on their representations, the Debtors agreed to several extensions of the Defendants' answer deadline. However, without prior notice, the Defendants file a separate suit on April 2, 2009 in federal district court in Tulsa, Oklahoma against SemGroup CEO Terrence Ronan. The Defendants' lawsuit seeks, among other things, a declaratory judgment that they have "the authority to direct the actions of Defendant Ronan with respect to any and all bankruptcy issues," and that "Ronan does not have the authority to act without supervision, direction and corporate governance of the Management Committee." In that light, the Debtors on April 3, 2009, filed before the Bankruptcy Court a motion for preliminary injunction ordering the Mr. Catsimatidis and other defendants in the adversary proceeding to (i) cease and desist from further violations of the Confidentiality Agreement; (ii) withdraw from their positions on the Management Committee and (iii) refrain from continuing to obstruct the bankruptcy process. According to SemGroup, Mr. Catsimatidis is attempting to use the Oklahoma court to control SemGroup's CEO and the reorganization process. A copy of SemGroup's Injunction Motion is available for free at: http://bankrupt.com/misc/SemGroup_InjunctionMotion.pdf A copy of SemGroup's complaint is available for free at: http://bankrupt.com/misc/SemGroup_SuitvsCatsimatidis.pdf About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Canadian Unit to Implement $10.5MM Retention Plan -------------------------------------------------------------- Ernst & Young, LLP, the Court-appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act disclosed that SemCAMS ULC seeks to: (a) implement a $10.35 million Employee Retention Plan for 2009 based on revised data in the SEMCAMS 2008 ERP; (b) and secure the amount payable under the SemCAMS 2009 ERP by a charge for $10.35 million against SemCAMS' assets and property in priority to its secured creditors but subordinated to the charges set out in the Amended and Restated Initial Order; The Amended and Restated Initial Order consolidated the CCAA proceedings of SemCanada Crude and SemCAMS and appointed Ernst & Young monitor of the SemCanada Group, among others. (c) approve an increase in its salary program. SemCAMS 2009 ERP The SemCAMS 2009 ERP consists of (i) $2.07 million for the Incentive Plan portion, computed as a certain percentage of SemCAMS' projected EBITDA from January 1 to June 30, 2009, and (ii) $8.3 million for the Retention Bonus, including $5.7 million authorized by the Employee Retention Plans Order. A comparison of the SemCAMS 2008 ERP to the proposed SemCAMS 2009 ERP shows these data: Jan - Jul- Retention SemCAMS ERP June Dec. Total Bonus Total ----------- ------ ----- ------ --------- ------ (in '000s) 2008 ERP $1,772 $1,560 $3,332 $5,672 $9,004 ====== ====== ====== ====== ======= 2009 ERP: Incentive Plan 2,074 - 2,074 - 2,074 Retention Bonus: Retention Bonus per 2008 ERP 5,672 5,672 Retention Bonus Error 1,739 1,739 Proposed salary increase 343 343 Additional retention payment 524 524 ------- ------- ------ ------- ------- Total 2009 ERP $2,074 - $2,074 $8,278 $10,352 ======= ====== ====== ======= ======== The increase in the Incentive Plan portion of the proposed 2009 ERP relative to that in 2008 is primarily due to an increase in the forecast EBITDA from January to June 2009, when SemCAMS' plan of arrangement is expected to be completed. SemCAMS' proposed increase in the Retention Bonus from $5.67 million to $8.3 million consists of: (a) an additional $1.74 million relating to: * an error in computing the Retention Bonus resulting to an understatement of $1.622 million, where the schedule of certain wages of hourly wage earners over a six- months period was inadvertently and incorrectly divided by four, instead of two, to compute three months' salary; * an understatement of $117,000 due to the exclusion of certain employees who were employed for less than six months as of entry of the Employee Retention Plans Order but are entitled to the Retention Bonus. (b) a $343,000 increase in Retention Bonus due to the general salary increase SemCAMS proposed for 2009; (c) an additional retention payment of $524,000 for the difference between the proposed amount and the amount approved by the Court under the 2008 Incentive Plan. SemCAMS management said the implementation of the SemCAMS 2009 ERP is critical especially during SemCAMS solicitation process when the stability of its workforce and management team is essential. Proposed Salary Increase SemCAMS' proposed salary program contemplates a general salary increase for its salaried employees effective April 1, 2009. The Monitor, citing a report and survey by Mercer LLC, says the proposed salary program is comparable to the base salary increases provided or anticipated to be provided to oil and gas industry companies with similar business enterprise to SemCAMS. The proposed increase is also consistent with the SemCAMS' business practice and with the salary increase it has agreed to pay unionized employees at the Kaybob South Plant No. 3. The proposed salary program will cost SemCAMS $343,000, after allocation to the working interest owners. The Monitor tells the Court that SemCAMS 2009 ERP and the proposed salary program are reasonable, as well as critical to ensuring maximized values for all SemCAMS stakeholders. The Monitor recommends implementation of the SemCAMS 2009 ERP and supports approval of the proposed salary program. A full-text copy of the CCAA Monitor's report is available for free at http://bankrupt.com/misc/CCAAMonitor13thReport.pdf About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Seeks to Amend Mark Lietzke Incentive Plan ------------------------------------------------------- SemGroup, L.P., and its debtor affiliates ask permission from Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware to amend their executive incentive plan with respect to Mark Lietzke, their chief accounting officer and a member of their senior management overseeing the 2008 annual audit of the Debtors' consolidated financial statements. The Debtors believe that Mr. Lietzke is the only executive qualified to execute the Management Representation Letter necessary for the Debtors' auditors, BDO Seidman, LLP, to issue an opinion on the 2008 audit. BDO Seidman is currently conducting the audit. The Debtors disclose that Mr. Lietzke intends to resign from his position effective May 1, 2009, but will be employed on a part- time basis until the earlier of July 31, 2009, or the completion of the 2008 audit and execution of the Management Representation Letter. The proposed amendment provides that: (a) Mr. Lietzke will be paid his bonus on the earlier of: Option I --- the completion of the 2008 audit and the execution of the Management Representation Letter by July 31, 2009; or Option II -- the satisfaction of the requirements of the Executive Incentive Plan. Mr. Lietzke is entitled to either options, not to both. (b) Mr. Lietzke's bonus will be reduced from a maximum of $300,000 to $125,000 if he is entitled to a bonus under Option I. If he is entitled to a bonus under Option II, the bonus will be determined pursuant to the Executive Incentive Plan. (c) Mr. Lietzke will not receive a bonus under Option I if he is terminated from employment prior to completing the 2008 Audit and the execution of the Management Representation Letter. If Mr. Lietzke leaves before the 2008 Audit is complete and the Management Representation Letter is available to be signed, the Debtors would be forced to expend considerable resources to hire a qualified replacement, resulting to a delay in completing the audit, Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, in Dallas, Texas, tells the Court. Moreover, BDO Seidman has informed the Debtors that it will not provide a satisfactory audit opinion unless Mr. Lietzke executes the Management Representation Letter. The Official Creditors Committee and the agent to the Debtors' secured lenders have consented to the proposed amendment, Mr. Sosland tells the Court. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Taps Valuation Research Corp. for Valuation Services ----------------------------------------------------------------- SemGroup, L.P., and its debtor affiliates ask permission from Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware to employ Valuation Research Corporation as their specialized asset valuation service provider nunc pro tunc to February 25, 2009. The Debtors seek to engage VRC in connection with the valuation of and accounting for tangible and intangible assets as provided under Statement of Financial Accounting Standards 142 and Statement of Financial Accounting Standards 144, in support of fresh start accounting and the Debtors' fiscal year-end audit as of December 31, 2008. SFAS 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets. SFAS 144 governs financial accounting and reporting for the impairment or disposal of long-lived assets. As valuation service provider, VRC will: (a) conduct a SFAS 144 as of December 31, 2008, Step 1 analysis, to determine if the carrying value of the company's long-lived assets is recoverable from their undiscounted cash flows. (b) conduct a SFAS 142 analysis of certain intangible assets as of December 31, 2008, to support potential impairment. (c) interview management with respect to the Debtors' business plans, restructured business units and intangible assets; (d) estimate the weighted average remaining life of the long- lived asset group of each business unit, based upon the Debtors' fixed asset files; (e) review the five-year business plans for each of the Debtors' seven business units, and prepare an undiscounted cash flow analysis over the weighted average remaining life of the long-lived asset group; (f) compare the carrying value of the long-lived assets of each business unit to the undiscounted cash flows, to determine impairment; (g) value the tangible assets of the Debtors for potential SFAS 144, Step 2 purposes and for use in valuing certain intangible assets, under the excess earnings method; (h) value all intangible assets of the Debtors and interview the Debtors' management regarding the intangible assets of certain business units that are no longer viable and include a narrative write up for the narrative report; and (i) provide a narrative report, with supporting schedules, on its methodologies and valuation conclusions. Moreover, in connection with fresh start accounting, VRC will: -- update the valuation of all tangible assets, to the bankruptcy exit date, and provide an asset file with individual values by unit, consistent with the Debtors' existing records; -- update the valuation of all tangible assets, to the bankruptcy exit date; -- allocate the bankruptcy reorganization value to each of the Debtors' seven business units; -- provide a spreadsheet showing working capital, tangible assets and intangible assets, by business entity; and -- prepare a narrative report documenting its methodologies and valuation conclusions, with supporting schedules and an electronic asset file with value, by asset, based on the bankruptcy reorganization value for each entity. For the contemplated services, the Debtors will pay VRC based on these hourly rates: Professional Hourly Rate ------------ ----------- Partners $325 Senior Financial Professionals $275 Senior Tangible Asset Professionals $220 The Debtors will also reimburse VRC for direct and necessary expenses incurred in connection with its engagement. The Debtors disclose that they will ask the Court's permission to employ Deloitte Financial Advisory Services LLP to provide them fresh start accounting services in an advisory capacity. The fresh start accounting services by Deloitte Financial are distinguishable from those to be provided by VRC. VRC will focus its efforts primarily on the valuation of and accounting for tangible and intangible assets, while Deloitte Financial will provide accounting advice as the Debtors plan their emergence from Chapter 11. VRC, together with Deloitte Financial, will make reasonable efforts to minimize duplication of services, the Debtor assure the Court. Richard B. Nordberg, a senior vice president at Valuation Research Corp., tells the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Wants BofA Loan Maturity Date Moved to September 30 ---------------------------------------------------------------- SemCrude, LP, its parent, SemGroup, L.P., and its debtor affiliates ask permission from Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware to extend to September 30, 2009, the maturity date of the DIP Credit Agreement among SemCrude, SemGroup, SemOperating G.P., L.L.C., and Bank of America, N.A., as administrative agent, and letter of credit issuer and lender. The terms of the DIP Extension Amendment are: DIP Facility Amount: $150,000,000, with a sublimit of $50,000,000 for Loans. Up to $70,000,000 of the DIP Facility Amount may be used to post collateral in connection with swap contracts entered into in compliance with the trading protocol. The Borrower must maintain cash collateral of at least $156,000,000, to be held in a segregated account with the Administrative Agent. The minimum ending book balance required in the Credit Agreement will be reduced by that amount. Interest Rates: One-month LIBOR (subject to the existing floor of 4.00%), plus 4.00% or Prime, (subject to existing floor of 300%), plus 3.00%. Interest will be due and payable on the first day of each month. Extension Fee: A non-refundable extension fee of $500,000 is payable upon closing to the Administrative Agent for the ratable benefit of each lender under the Credit Agreement executing the DIP Extension Amendment. Administrative Agent's Fee: A non-refundable Administrative Agent's Fee of $250,000 payable to Bank of America, N.A., upon closing. Unused Line Fee: Remains unchanged as set forth in Credit Agreement Letter of Credit Fees: 4.00% per annum on the outstanding face amount of each Letter of Credit, payable monthly in arrears on the first day of each month; plus customary fees for issuance, amendments and processing and a fronting fee equal to 0.25 of 1% p.a. Maturity Date: September 30, 2009 Milestones: In addition to the events of default set forth in the Credit Agreement, the Borrower's failure to perform each of these actions, subject to a 5-day grace period in the case of (a) and (c), will constitute an event of default and a termination of the right to use Cash Collateral: (a) by April 24, 2009, deliver to the Administrative Agent and to the Administrative Agent under the Pre- Petition Credit Agreement a draft Reorganization Plan and disclosure statement; (b) by May 15, 2009, file with the Court a Reorganization Plan and disclosure statement explaining that Plan; (c) by June 26, 2009, commence a hearing seeking approval of the disclosure statement explaining the Plan and diligently prosecute the motion seeking approval of the Disclosure Statement; and (d) by September 18, 2009, obtain a confirmation order of the Plan. Budget Variances: Section 722 of the Credit Agreement to be revised (i) by deleting clause (c) in Section 722 of the Credit Agreement and (ii) to prohibit Total Net Cash From Operations in the Agreed Budget for any four-week period to be less than the amount of Total Net Cash From Operations for the applicable period, subject to a variance of 10%, tested monthly, on a rolling four-week basis starting May 20, 2009 with respect to the four-week period ending May 15, 2009. Reporting Requirements: Section 6.02(a) of the Credit Agreement will be revised so that all daily reporting will be weekly reporting (the financial statements for March 2009, aggregate bank and book balances, on a consolidating Loan Party basis, separately identifying bank and book balances of White Cliffs, will be provided weekly). The Existing Account Exhibit will be revised to exclude the beginning and ending account balances for the Bank of Oklahoma ZBA accounts. A full-text copy of the DIP Extension Agreement is available for free at http://bankrupt.com/misc/semgroup_amnddDIPtermsheet.pdf The Debtors were unable to obtain financing on more favorable terms from sources other than on the existing Credit Agreement, and are unable to obtain adequate unsecured credit allowable under Section 503 (b)(I ) of the Bankruptcy Code, Sylvia A. Mayer, Esq., at Weil, Gotshal & Manges LLP, in Dallas, Texas, explains. They are also unable to obtain secured credit allowable under Sections 364(c)(I), 364(c)(2), and 364(c)(3) of the Bankruptcy Code without them continuing to grant liens and superpriority claims on the terms and conditions set forth in the Final Order, the Extension Order, and the DIP Documents, she says. Absent extension of the Credit Agreement, the Debtors will be unable to continue to operate their businesses, thwarting their efforts to successfully reorganize, Ms. Mayer tells the Court. In connection with their request to extend the maturity date of their DIP Credit Agreement with Bank of America, the Debtors also seek the Court's authority to continue to use all cash collateral and prepetition collateral, as well as the cash collateral in which the producers assert an interest, securing their prepetition indebtedness, until the DIP Facility Maturity Date. The Debtors propose that the producers, which can meet the conditions set forth in the Final Order, continue to receive the adequate protection in the form of replacement liens, cash payments, and other protections, to the same extent provided for in the Final Order. The Court will consider the Debtors' request on April 23, 2009 at 10:00 a.m. (Eastern Time). Objections are due April 16. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Weil Gotshal Seeks $3.3MM in Fees for November Work ---------------------------------------------------------------- Pursuant to Section 331 of the Bankruptcy Code, professionals hired in SemGroup LP and its affiliates' bankruptcy cases filed applications for the allowance of fees and reimbursement of expenses: A. Debtors' Professionals Firm Period Fees Expenses ---- ---------- ---------- -------- Weil, Gotshal 11/01/08- & Manges LLP 11/30/08 $3,337,045 $100,773 BDO Seidman, LLP 02/01/09- 02/28/09 830,672 35,795 PA Consulting 02/01/09- Group, Inc. 02/28/09 372,118 27,722 Blackstone Advisory Services, 02/01/09- L.P. 02/28/09 275,000 19,737 Conner & 01/01/09- Winters, LLP 01/31/09 245,993 2,615 Richards, Layton 02/01/09- & Finger, P.A. 02/28/09 112,192 8,545 Jeffrey Burns, 03/01/09- C.P.A. 03/15/09 24,583 810 B. Committee's Professionals Houlihan Lokey Howard & Zukin 08/01/08- Capital Inc. 10/31/08 825,000 89,137 Houlihan Lokey Howard & Zukin 02/01/09- Capital Inc. 02/28/09 275,000 11,605 Andrews 12/01/08- Kurth LLP 12/31/08 256,168 10,975 Andrews 01/01/09- Kurth LLP 01/31/09 197,932 3,849 Lain, Faulkner 02/01/09- & CO., P.C. 02/28/09 135,238 303 Goldin 02/01/09- Associates 02/28/09 46,709 311 Ogilvy Renault 02/01/09- LLP 02/28/09 22,044 6 Cole, Schotz, Meisel, Forman 01/01/09- & Leonard, P.A. 01/31/09 12,717 4,915 D. Examiner's Professionals Polsinelli 02/01/09- Shughart PC 02/28/09 9,435 7,548 Morrison & 02/01/09- Foerster LLP 02/28/09 115,872 828 Freeh Group 02/01/09- International 02/28/09 411,731 10,315 KPMG LLP 02/01/09- 02/28/09 309,264 6,402 Morrison & Foerster LLP filed a revised fee application for the period from December 1 to 31, 2008 for $178,158 in fees earned and $4,340 in expenses incurred. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) STATION CASINOS: Lender Talks Go On; Ch.11 Filing Moved to May 15 ----------------------------------------------------------------- Tamara Audi at The Wall Street Journal reports that Station Casinos Inc. said late Tuesday it has delayed an expected bankruptcy filing to continue negotiating with lenders. According to the Journal, the Company, its lenders and bondholders have agreed to a 30-day extension of negotiations. The parties now have until May 15 to agree on a prepackaged bankruptcy plan, company spokeswoman Lori Nelson said Tuesday, according to WSJ. If the parties do not agree on a plan by then, they could extend negotiations, or the company could file for bankruptcy protection without a prepackaged plan, WSJ says. As reported by the Troubled Company Reporter on March 19, 2009, Station Casinos was expected to file for bankruptcy protection on or before April 15. Boyd Gaming Corp. told Station Casinos in February that it may be interested in acquiring most of the Company for $950 million. On April 1, 2009, Station Casinos elected not to make a scheduled $13.5 million interest payment due that date to holders of the Company's $450 million 6% Senior Notes due 2012. The grace period with respect to the payment of interest on the 2012 Senior Notes ends on May 1, 2009. About Station Casinos Station Casinos, Inc. is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. * * * As reported by the Troubled Company Reporter on April 6, 2009, Standard & Poor's Ratings Services said that it lowered its issue- level rating on Station Casinos's 6% senior notes to 'D' from 'CC'. S&P also removed the rating from CreditWatch, where it was initially placed with negative implications Dec. 16, 2008. These actions reflect the missed April 1, 2009 interest payment on the notes. A payment default has not occurred relative to the legal provisions of the notes, because there is a 30-day grace period to make the payment. However, S&P consider a default to have occurred, even if a grace period exists, when the nonpayment is a function of the borrower being under financial stress -- unless S&P is confident that the company will make the payment in full during the grace period. As reported by the Troubled Company Reporter on February 24, Moody's Investors Service said Station Casinos's ratings are not affected by the announcement that it failed to make a February 15, 2009 scheduled interest payment on its 7.75% senior notes due 2016. Standard & Poor's Ratings Services lowered its issue-level rating on Station Casinos' 7.75% senior notes to 'D' from 'CC'. The rating action reflects the missed February 15, 2009 interest payment on the notes. STONE HORSE MOTEL: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Stone Horse Motel, Inc. 70 Center Street Dennisport, MA 02639 Tel: (508) 430-2220 Fax: (508) 430-2998 Email: Info@stonehorsemotel.com Bankruptcy Case No.: 09-12897 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Company Description: Stone Horse Motel is a newly renovated family-style compound of 21 comfortable rooms nestled in the woods. See http://www.stonehorsemotel.com/ Debtor's Counsel: Michael R. Levin, Esq. 1500 Providence Highway, Suite 36 Norwood, MA 02062 Tel: (781) 255-1300 Fax: (781) 255-1335 Email: mrlbcy@hotmail.com Total Assets: $900,000 Total Debts: $1,818,738 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mab09-12897.pdf STORABLES INC: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Storables, Inc. 3250 NW Yeon Ave #W-12 Portland, OR 97210-1529 fdba Storables U.S.A., Inc. dba Storables fdba Storables-Extraspace fdba Storables USA, Inc. Tel: (866) 227-0092 Fax: (503) 227-4403 E-mail: webservice@storables.com Bankruptcy Case No.: 09-32252 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court District of Oregon Judge: Randall L. Dunn Company Description: The debtor operates miscellaneous home furnishings stores. See http://www.storables.com/ Debtor's Counsel: Albert N. Kennedy, Esq. Michael W. Fletcher Tonkon Torp LLP 888 SW 5th Ave., #1600 Portland, OR 97204 Tel: (503) 802-2013 Email: al.kennedy@tonkon.com Email: michael.fletcher@tonkon.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/ob09-32252.pdf STRONGBUILT: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: StrongBuilt International, LLC P.O. Box 186 Waterproof, LA 71375 Tel: (318) 749-3303 Bankruptcy Case No.: 09-30633 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Western District of Louisiana (Monroe) Debtor's Counsel: Wade N. Kelly, Esq. 1777 Ryan Street P.O. Box 2065 Lake Charles, LA 70601 Tel: (337) 433-0234 Fax: (337) 433-1274 Email: wnkellylaw@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Kenneth K. Killen, managing member 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/lawb09-30633.pdf SUN-TIMES MEDIA: Proposes to Hire Young Conaway as Co-Counsel ------------------------------------------------------------- Sun-Times Media Group Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Young Conaway Stargatt & Taylor, LLP, as co-counsel. Young Conaway will: a) provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business and management of their properties; b) pursuit of confirmation of the Chapter 11 Plan of Reorganization and approval of the corresponding solicitation procedures and disclosure statement; c) prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports and other legal papers; d) appear in Court and otherwise protect the interests of the Debtors before the Court; and e) perform all other legal services for the Debtors which may be necessary and proper in these proceedings. Young Conaway discussed the division of responsibilities with Kirkland & Ellis LLP, the proposed counsel of the Debtor, and will avoid duplication of efforts. The hourly rates of Young Conaway professionals working on the Chapter 11 cases are: Pauline K. Morgan, Partner $600 Sean M. Beach, Associate $440 Sean T. Greecher, Associate $330 Jaime N. Luton, Associate $265 Alex D. Thaler, Associate $245 Anastasia Josek, Paralegal $145 The Debtors propose to retain Young Conaway under a general retainer because of the extensive legal services that may be required and the fact that the nature and extent of the services are not known at this time. On March 13, 2009, Young Conaway received a $100,000 retainer in connection with the planning and preparation of a Chapter 11 filing and the postpetition representation of the Debtors. Young Conaway also received a payment of $35,326 to cover the anticipated filing fees for these cases. Ms. Morgan assures the Court that Young Conaway is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Morgan can be reached at: Young Conaway Stargatt & Taylor, LLP The Brandywine Building, 17th Floor 1000 West Street Wilmington, DE 19801 Tel: (302) 571-6707 Fax: (302) 576-3318 About Sun-Times Media Group 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. SUSAN LORE: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Susan E. Lore 55 Coeyman Avenue Nutley, NJ 07110 Bankruptcy Case No.: 09-18176 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court District of New Jersey (Newark) Debtor's Counsel: Melinda D. Middlebrooks, Esq. Middlebrooks Shapiro & Nachbar, P.C. 1767 Morris Avenue, Suite 2A Union, NJ 07083 Tel: (908) 687-6161 Fax: (908) 687-9090 Email: middlebrooks@middlebrooksshapiro.com Total Assets: $1,687,836 Total Debts: $1,593,625 A full-text copy of the Debtor's petition, including its largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-18176.pdf TIMES SQUARE: Case Summary & Largest Unsecured Creditor ------------------------------------------------------- Debtor: Times Square FMB, LLC 6170 First Financial Drive, Suite 301 Burlington, KY 41005 Bankruptcy Case No.: 09-06755 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- United Realty Holdings (U.S.), Inc. 09-06758 Consolidated Realty Holdings (U.S.), Inc. 09-06761 Consolidated Construction Corp. 09-06762 Seafarer's 1997, Inc. 09-06763 Seafarer's 2000, Inc. 09-06765 Chapter 11 Petition Date: April 7, 2009 Court: Middle District of Florida (Ft. Myers) Judge: Alexander L. Paskay Debtor's Counsel: Elena P. Ketchum, Esq. sleslie.ecf@srbp.com eketchum.ecf@srbp.com Stephen R. Leslie, Esq. Stichter, Riedel, Blain & Prosser 110 East Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: (813) 229-0144 Estimated Assets: $50 million to $100 million Estimated Debts: $1 million to $10 million The Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Joerg Wiebe $1,000,000 PO Box 216 Fort Myers Beach, FL 33931 The petition was signed by Frederick Burns. TIMES SQUARE: Wants to Hire Stichter Riedel as Bankruptcy Counsel ----------------------------------------------------------------- Times Square FMB, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida an application to employ Stichter, Riedel, Blain & Prosser, P.A., as counsel. Stichter Riedel will: a) render legal advice with respect to the Debtor's powers and duties as a debtor-in-possession, the continued operations of the Debtor's business, and the management of its property; b) prepare on behalf of the Debtor necessary motions, applications, orders, reports, pleadings, and other legal papers; c) appear before the Court, any appellate courts, and the U.S. Trustee to represent and protect the interests of the Debtor; d) take all necessary legal steps to confirm a Plan of Reorganization; e) represent the Debtor in all adversary proceedings, contested matters, and matters involving administration of this case, both in federal and in state courts; f) represent the Debtor in negotiations with potential financing sources and preparing contracts, security instruments, or other documents necessary to obtain financing; and g) perform all other legal services that may be necessary for the proper preservation and administration of the Chapter 11 case. The court documents did not disclose the hourly rates of professionals working on these cases. Stephen R. Leslie, a lawyer at Stichter Riedel, tells the Court that the firm received $60,000 from the Debtors on account of prepetition services and as a retainer for postpetition services. In addition, Stichter Riedel received $6,234 representing the filing fees for each of the Debtors. The retainer was to be applied first to prepetition services and costs and the balance was to reduce Stichter Riedel's application for postpetition fees and costs. Mr. Leslie assures the Court that Stichter Riedel is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Leslie can be reached at: Stichter, Riedel, Blain & Prosser, P.A. 110 East Madison Street, Suite 200 Tampa, Florida 33602-4700 Tel: (813) 229-0144 About Times Square FMB, LLC Naples, Florida-based Times Square FMB, LLC and its debtor- affiliates filed for Chapter 11 protection on April 7, 2009 (Bankr. M.D. Fla. Case No. 09-06755). Stephen R. Leslie, Esq., at Stichter, Riedel, Blain & Prosser. The Debtor listed estimated assets of $50 million to $100 million and estimated debts of $1 million to $10 million. TOWN CENTRE: Sec. 341(a) Meeting Scheduled for May 6 in Texas ------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in Town Centre of Lago Vista, LP's Chapter 11 case on May 6, 2009, at 9:30 a.m., at Austin Room 118, Homer Thornberry Bldg., 903 San Jacinto, Austin, Texas. 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. Marble Falls, Texas-based Town Centre of Lago Vista, LP dba Town Centre of Lago Vista filed for Chapter 11 protection on April 6, 2009 (Bankr. W.D. Tex. Case No. 09-10881). Frank B. Lyon, Esq., represents the Debtor in its restructuring efforts. The Debtor listed estimated assets of $10 million to $50 million and estimated debts of $1 million to $10 million. TRG WOOD PRODUCTS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: TRG Wood Products, Inc. 5001 Lindsay Court Chino, CA 91710 Tel: (909) 464-2871 Fax: (909) 464-2876 Bankruptcy Case No.: 09-16346 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Thomas B. Donovan Company Description: The debtor manufactures hardwood or hardwood faced plywood. Debtor's Counsel: James C. Bastian, Jr., Esq. 26632 Towne Centre Dr., #300 Foothill Ranch, CA 92610-2808 Tel: (949) 340-3400 Email: jbastian@shbllp.com Total Assets: $1,060,657 Total Debts: $3,794,652 The petition was signed by L.W. Rodewald, 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/cacb09-16346.pdf TRIBUNE CO: Court Approves Amendments to Barclays Facilities ------------------------------------------------------------ Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware approved amendments to Tribune Co.'s securitization facility and letter of credit facility with Barclays Bank PLC. As reported by the Troubled Company Reporter on April 1, 2009, the initial amended securitization facilities entered into among Tribune, non-debtor Tribune Receivables LLC, and Barclays were slated to expire April 10, 2009. The purpose of the limited period was to provide the Debtors a reasonable time to evaluate the impact of their Chapter 11 proceedings on their businesses, determine their long-term financing needs, and explore alternatives for the financing. Since the entry of the Final Financing Order approving the Existing Debt Facilities, the Debtors and Barclays continued to negotiate an (i) extended securitization facility to be syndicated by Barclays to other lenders, and (ii) amended letter of credit facility. As a result of the negotiations, the Debtors entered into Amended and Restated Securitization Agreements to assure available sources of working capital and financing to carry on the operation of their business, Bryan Krakauer, Esq., at Sidley Austin, LLP, in Chicago Illinois, explained. The Amended and Restated Securitization Agreements include these salient terms: (a) The Facility limit under the ARRLA is reduced from $300,000,000 to up to $225,000,000, consisting of an Aggregate Revolving Loan Commitment in the amount of [up to $75,000,000] and an Aggregate Term Commitment of [up to $150,000,000]. (b) The Maturity Date for the loans under the ARRLA is changed to the earliest of: -- 45th day after the commencement of scheduled amortization, which scheduled amortization will commence on April 10, 2010; -- the effective date of a Chapter 11 plan of reorganization for the parent company; -- the date on which a sale of all or substantially all of the assets of the guarantors is consummated under Section 363 of the Bankruptcy Code; and -- the date on which maturity of the Loans is accelerated pursuant to the loan agreement as a result of a Facility Termination Event. (c) The various representations, covenants, defaults and amortization triggers in the Existing Facilities are revised and incorporated into the Amended and Restated Securitization Agreements. (d) The Facility Termination Events relating to the bankruptcy proceedings are retained in the ARRLA. (e) The Amended and Restated Securitization Agreements are revised to accommodate syndication by Barclays to other Lenders, including provisions for defaulting lenders, replacement of lenders, additional administration agent provisions and revised fee letters. The Debtors also entered into an Amended and Restated Guaranty Security Agreement, which material terms are: (a) Tribune Co. and the other Debtors grant to the Administrative Agent, for the benefit of the Secured Parties, a first priority, perfected security interest in all of their personal assets and property of any kind or description. (b) The Collateral pledged under the ARGSA secured the obligations of Tribune Co. and the other Debtors under the ARRPA, the ARG, the ARSA, and any other document or instrument executed in connection therewith. (c) The security interest granted under the ARGSA is a first priority, perfected security interest in all Collateral that is not otherwise encumbered by a perfected security interest as of the Petition Date. It is a junior, perfected security interest in all Collateral that is subject to a permitted lien. (d) If a Facility Termination Event occurs, the RLA Agent may immediately enforce its security interest and exercise all remedies available under the ARGSA, the Transaction Documents, or the financing orders, including foreclosing on the Collateral. The Debtors also entered into an Amended Letter of Credit Facility to permit Tribune Co. to obtain standby letters of credit necessary in the ordinary course of its and its subsidiaries' business. The Amended Letter of Credit Facility provides these terms: Type of Facility: An Amended Letter of Credit Facility in the amount of up to $50,000,000 L/C Agent: Barclays Bank PLC Lenders: Barclays and the other lenders from time to time party to the L/C Agreement Account Parties: Tribune Co. and the other Debtors that are signatories to the L/C Agreement Guarantors: Debtor subsidiaries that are signatories to the L/C Agreement Commitment Amount: $50,000,000 Interest Rate: L/C Agent's base rate plus a 5% per annum Collateral: The amounts deposited into the collateral account from time to time pursuant to the L/C Agreement. The applicable account party is obligated to cash collateralize each outstanding obligation in an amount at least equal to 105% of that obligation. Termination Date: The earlier of (a) April 10, 2010, or (b) other date on which commitments terminate pursuant to the L/C Agreement. Tenor of L/C: Each L/C will expire on a date no later than the first anniversary of the issuance date of the L/C. Security: The facility will be secured by a first priority, perfected, security interest in, and lien on, the LC Cash Collateral pursuant to Section 364(d) of the Bankruptcy Code, with priority over (i) any other lien or security interest under Section 364(d), (ii) all other liens and claims against the property of Tribune Co. or of the Debtor subsidiaries of the Collateral existing on the Petition Date, and (iii) priority claims alleging priority pursuant to Sections 503, 506(c) or 507. A full-text copy of the Amended Securitization Agreement is available for free at http://researcharchives.com/t/s?3a9a The Debtors, Mr. Krakauer said, have a vital business purpose for continuing the Amended Facilities. It is essential that the Debtors' employees, vendors, service providers, and customers remain confident in the Debtors' ability to transition their businesses smoothly through the Chapter 11 process, operate normally in that environment, and implement their reorganization plan in an expeditious manner. In the absence of the proposed financing, serious and irreparable harm to the Debtors and their estates could occur, which may include third parties declining to conduct business dealings with the Debtors, Mr. Krakauer said. The preservation, maintenance and enhancement of the going concern value of the Debtors are of the utmost significance and importance to the Debtors' successful reorganization, he said. The Debtors filed under seal fee letters related to the facility amendments. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRONOX INC: Bankruptcy Judge Declines to Disband Equity Committee ----------------------------------------------------------------- Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York declined to disband the official committee representing shareholders of Tronox Inc., Bloomberg's Bill Rochelle reported. As reported by the TCR on April 2, the official committee of unsecured creditors of Tronox asks Judge Gropper to dissolve the Equity Committee on the grounds that the appointment is "an extraordinary remedy" in the Debtors' Chapter 11 cases. Brian S. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, said that overwhelming market evidence confirms that the Debtors appear to "be hopelessly insolvent," which circumstance does not warrant the appointment of an equity committee. About Tronox Inc. The company is the world's third largest maker of titanium dioxide behind DuPont Co. and Saudi-owned National Titanium Dioxide Co., known a Cristal, according to Bloomberg. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D. N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENTERTAINMENT: Parties File Plan Confirmation Objections ------------------------------------------------------------------ Several entities have filed formal opposition to the confirmation of the Amended Plans of Reorganization of Tropicana Entertainment LLC and 26 other debtors -- the OpCo Debtors -- and Tropicana Las Vegas Holdings, LLC, and six debtor affiliates -- the LandCo Debtors. The Objecting Parties are: (1) The United States, on behalf of the Internal Revenue Service; (2) ACE American Insurance Company, Indemnity Insurance Company of North America, Insurance Company of North America, Westchester Fire Insurance Company, and Westchester Surplus Lines Insurance Company, and possibly other members of the ACE group of companies; (3) Department of Revenue for the State of Louisiana; (4) Icahn Associates Corp. and its affiliates; and (5) William J. Yung, III; Columbia Sussex Corporation; Wimar Tahoe Corporation, formerly Tropicana Casinos and Resorts, Inc.; Columbia Properties Ozarks, Ltd.; Columbia Properties Indianapolis, Ltd.; Grandview Hotels Limited Partnership; Sargasso Corporation; Columgia Properties Mobile, Ltd.; Columbia Properties Albuquerque, LLC; Harbour Island Owner, LLC; W-Buttes, LLC; Belle of Orleans, LLC; LV Casino LLC; Columbia Properties Louisville, Ltd.; Columbia Properties Evansville, Ltd.; Columbia Properties Oklahoma City, LLC; CW Hotel Limited Partnership; 1994 William J. Yung Family Trust; CSC Holdings, LLC; Casuarina Cayman Holdings, Ltd.; and JMBS Casino Trust. 1) IRS According to Yonatan Gelblum, Esq., trial attorney for IRS Tax Division, the IRS objects to the Plans with respect to the provisions regarding payment of the IRS' priority tax claims -- $24,000 against the LandCo Debtors and $924,000 against the OpCo Debtors. The IRS complains that the provisions do not provide for the payment of interest on the Claims should the Debtors opt to pay in installments over time. Mr. Gelblum notes that the current rate of interest for unpaid taxes under 26 U.S.C. Section 6621(a)(2) is 4%. The Plans, however, fail to provide for accrual and payment of the 4% interest should the Debtors exercise the option to defer payments, he says. 2) ACE According to Marc Casarino, Esq., at White and Williams LLP, in Wilmington, Delaware, ACE is concerned that: (a) The proposed OpCo Plan does not provide adequate means for implementation to the extent it relies on coverage provided by any of the various insurance policies issued by ACE to one or more of the OpCo Debtors, but fails to provide for performance of the Debtors' reciprocal and continuing obligations; (b) The proposed Plan does not provide adequate means for implementation to the extent it relies on coverage provided by any of the ACE Policies, but limits, interferes with, and enjoins ACE from exercising its rights under the terms, conditions, limitations and exclusions of the Policies and under applicable law; (c) To the extent the ACE Policies contain anti-assignment provisions and those provisions are enforceable, the Debtors cannot assign any of the ACE Policies; (d) The proposed Plan does not provide fair treatment to the extent it allows the Debtors to transfer, assume or assign some of the ACE Policies, but does not provide for performance of the Debtors' reciprocal and continuing obligations. The Debtors cannot assume part of an executory agreement and reject another part; and (e) The Plan indicates an intention to have insurance coverage available for claims, but the proposed dispute resolution procedures ignore and possibly violate the insurers' duties or rights to defend claims against the Debtors or participate in the defense or settlement of claims. The proposed dispute resolution procedures may jeopardize the coverage that might otherwise be available under the Policies. ACE proposes that certain "insurance neutrality" language be included in the order confirming the OpCo Plan. ACE also reserves its rights, obligations, claims, and defenses under the ACE Policies, among other things, and applicable law. 3) Louisiana Revenue Dept. The Louisiana Revenue Dept. has asserted prepetition priority claims against certain OpCo Debtors, totaling $1,607,459, Department Secretary Cynthia Bridges relates. The Louisiana Revenue Dept. thus objects to the treatment provided in the OpCo Plan for priority claims because it does not comply with Section 1129(a)(9)(C) of the Bankruptcy Code, according to Ms. Bridges. Effective Jan. 1, 2009, interest accrues at an annual rate of three percentage points above the rate provided for in Louisiana Revised Statute Section 9:35000(B)(1). The applicable rate of interest effective January 1, 2009, through December 31, 2009, is 8.5%, Ms. Bridges notes. Among other things, the Department also objects to the provisions of the OpCo Plan that would require priority tax claimants to file a request for payment of an administrative tax claim. Ms. Bridges points out that Section 503(b)(1)(D) of the Bankruptcy Code provides that "a governmental unit shall not be required to file a request for the payment of an expense in subparagraph (B) or (C) as a condition of its being an allowed administrative expense." 4) Icahn Entities The Icahn Entities have been in discussions with the Debtors, directly or through the Steering Committee of OpCo Lenders, and have resolved many of their objections to the Plan Supplement documents. However, Icahn has not approved of several Plan Supplement documents, according to Justin R. Alberto, Esq., at Bayard, P.A., in Wilmington, Delaware. Mr. Alberto asserts that as a condition precedent to confirmation of the Debtors' Plans, the Plan Supplements must(i) be in final form, and (ii) either be in "form and substance acceptable to" or have the "reasonable approval of" the OpCo and LandCo Lenders, as applicable. However, certain instrumental Plan Supplement documents were recently received but are not in substantially final form, Mr. Alberto says. Icahn is unable to determine whether the Plan Supplement documents are in an acceptable form, he tells the Court. Icahn is also unsure of its additional objections to the Plans at this time in light of the present form of the Plan Supplements. The Icahn Entities say they are in discussions with the Debtors to resolve any objections to the Plans. They reserve their rights to raise additional objections to the Plans. 5) Yung Parties John W. Weiss, Esq., at Greenberg Traurig, LLP, in New York, contends that the LandCo Plan contains certain provisions that strip the Yung Parties of their due process and other litigation rights against the purported claims transferred to the Litigation Trust. The Yung Parties timely filed proofs of claim against the LandCo Debtors in the aggregate liquidated amount of over $28,000,000, plus substantial unliquidated and contingent claims, Mr. Weiss relates. Columbia Sussex and Wimar also asserted administrative and priority claims against the LandCo Debtors, aggregating roughly $853,000. Mr. Weiss maintains that the LandCo Plan must specify that allowed Administrative and Priority Claims held by the Yung Parties will be treated in accordance with Section 1129(a)(9) of the Bankruptcy Code. At its present form, he complains that the LandCo Plan improperly and inequitably prejudices the Yung Parties' litigation rights. While those provisions remain in the LandCo Plan, the Debtors cannot satisfy the requirement that the Plan comply with all provisions of the Bankruptcy Code and confirmation must be denied, he asserts. The Yung Parties hold over $7,000,000 in administrative and priority claims, nearly $190,000,000 of unsecured claims against the OpCo Debtors, and $35,900,000 in Subordinated Notes, Mr. Weiss relates. Moreover, Mr. Weiss argues that with respect to the OpCo Plan, the OpCo Debtors cannot sustain their burden of establishing the requirements for confirmation in several key respects. He points out that: (a) the classification of the Yung Parties' claims is not proper because the OpCo Plan both classifies similar claims separately and dissimilar claims together; (b) the OpCo Debtors have not provided any indication in the OpCo Plan or the OpCo Disclosure Statement as to how they will determine the amount of cash to be distributed to holders of Insider Claims; (c) the treatment of Administrative and Priority Claims held by the Yung Parties does not comply with the requirements of the Bankruptcy Code; and (d) the OpCo Plan contains certain provisions that strip the Yung Parties of their due process and other litigation rights against the purported claims transferred to the Litigation Trust. The Yung Parties reserve the right to supplement their objections. Reservation of Rights Onex Corporation and certain of its affiliates, the Steering Committee of the Debtors' Lenders, and Starbucks Corporation also reserve their rights to object to the Plans. Starbucks is unable to determine whether it needs to file an objection to confirmation of the Debtors' Plans until it receives information as to whether the Debtors intend to assume or reject the master license agreement with Aztar Indiana Gaming Company, LLC. Given the lack of disclosure as to the contracts and leases to be assumed, Starbucks objects to the Plans as they fail to provide for a clear assumption or rejection of the License Agreement, and fail to establish that the Debtors will comply with the requirements of Section 365(b) of the Bankruptcy Code. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENTERTAINMENT: To Reject Columbia Sussex Service Pacts ---------------------------------------------------------------- Tropicana Entertainment LLC is seeking to walk away from certain service agreements with Columbia Sussex, effective April 30, 2009, pursuant to Section 365(a) of the Bankruptcy Code. Since the Petition Date, the Debtors, as part of their restructuring efforts, have continued to separate themselves from Columbia Sussex, an entity owned and controlled by William Yung. Among other things, the Debtors have moved their corporate headquarters from Columbia Sussex's Kentucky location to Las Vegas, completely revamped senior management, and implemented back office administrative functions, Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, tells the U.S. Bankruptcy Court for the District of Delaware. As a result of those efforts, the Debtors have now determined to make this separation complete by rejecting the Service Agreements, pursuant to which the Debtors have shared certain administrative and business functions, including human resources, construction and development, purchasing, marketing, accounting, tax, administration, risk management, and legal and treasury functions with Columbia Sussex, Mr. Kaufman says. For the most part, the services were performed by Columbia Sussex pursuant to specialized service agreements, as amended. A list of the 22 Service Agreements is available at no charge at: http://bankrupt.com/misc/Tropi_RejColumbiaSussexSvcAgrmnts.pdf The Debtors have determined that they no longer need the Service Agreements, under which they pay an aggregate of roughly $111,394 per month. As a result of these efforts, the Debtors no longer intend to rely on Columbia Sussex with respect to the operations and management of their business after April 30, 2009. Columbia Sussex Asserts $5.8MM in Claims Columbia Sussex, meanwhile, is seeking payment of a $631,361 priority claim and a $5,296,496 administrative expense claim incurred against the Debtors. Columbia Sussex asserts that since the Petition Date, it has incurred costs and expenses for services provided for the Debtors' benefit. Before the Petition Date, Columbia Sussex says it provided for the administration of the Debtors' workers' compensation insurance. It also incurred fees and expenses related to the 401(k) plan for the Debtors' employees. The Debtors, however, failed to pay Columbia Sussex at least $631,361 for fees and expenses related to the Workers' Compensation Insurance and the 401(k) Plan in the 180 days before the Petition Date, according to John W. Weiss, Esq., at Greenberg Traurig, LLP, in New York. Columbia Sussex adds that before the Petition Date and through October 1, 2008, it sponsored an employee health insurance plan on behalf of the Debtors' employees. As of the Petition Date, at least $3,897,994 of the premiums due under the Health Insurance Plan were and remained unpaid, Mr. Weiss says. The Debtors paid premiums to Columbia Sussex postpetition, but Columbia Sussex has paid to the third party administrator of the Health Insurance Plan for the benefit of the Debtors' employees at least $3,800,000 more than the premiums paid by the Debtors since the Petition Date, Mr. Weiss informs the Court. Columbia Sussex also provided office space to the Debtors for which it did not receive any compensation, Mr. Weiss avers. Mr. Weiss maintains that the costs and expenses incurred by Columbia Sussex since the Petition Date totals at least $1,398,502 in administrative expense claim. He notes that the Debtors themselves recorded some of these charges in their ledgers. Mr. Weiss asserts that Columbia Sussex is entitled to the Administrative Expense Claim because the payments it made and the costs it incurred resulted in a "substantial contribution" to the Debtors' estate within the meaning of Section 503(b)(3)(D) of the Bankruptcy Code. Columbia Sussex reserves its rights against the Debtors or any other person liable for all or part of the Administrative Expense and Priority Claims. Columbia Sussex also reserves its right to assert to amend its motion and to assert additional claims. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENTERTAINMENT: Updates Court on Plan Voting Process ------------------------------------------------------------- Tropicana Entertainment LLC and its debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware a status report in accordance with the Court's request to provide an update on matters related to confirmation of their plans of reorganization. The Debtors relate that they have commenced solicitation of the OpCo and LandCo Chapter 11 Plans on March 23, 2009. The voting deadline for the Plans is April 17. The hearing for confirmation of the Plans has been set for April 27. The Debtors add that they are currently engaged in the confirmation discovery process, which has been limited as a result of the consensual nature of the Plans. Columbia Sussex Corporation, William J. Yung, and Tropicana Casinos and Resorts, Inc., are the only parties actively seeking discovery in connection with the confirmation of the Plans. The Yung Parties have indicated that they may object to the Plans based on the Plans' creation of a litigation trust to pursue potential claims against the Yung Parties and certain related entities, according to Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. The discovery sought by the Yung Parties falls into two categories: (i) the investigation and evaluation of Insider Causes of Action, and (ii) the Debtors' valuation of their estates. Both the Debtors and the Official Committee of Unsecured Creditors object to the first group of discovery requests as irrelevant and privileged. As to the second group of discovery requests, the Debtors have agreed not to object to certain witness disclosures or subpoenas by the Yung Parties on the grounds that they are tardy, so long as those disclosures and requests are filed sufficiently in advance of the April 27 Confirmation Hearing to ensure that the Court's schedule for receiving pre-trial submission remains on track. The Debtors are confident that any objections by the Yung Parties will be resolved before the Confirmation Hearing. In separate filings with the Court, the Yung Parties and certain related entities designated Joshua Scherer to present evidence under Rules 702, 703, or 705 of the Federal Rules of Evidence. The objectors also identified Theodore Mitchel as a person who may present evidence at the Confirmation Hearing. Moreover, the Debtors aver that they are in the process of negotiating court documents for the Plan Supplements and expect to file them timely. Over the past weeks, they have also worked closely with their constituents to finalize the forms of the documents and the contents of the schedules to be included in the Plan supplements. Generally, the documents and disclosures contained in the Plan Supplements will include: (a) additional disclosure regarding the Debtors' post- consummation corporate structure, including certain key terms and agreements related to the equity to be distributed under the Plans and the OpCo Exit Facility under the OpCo Plan; (b) restructuring transactions that the Debtors intend to implement to effectuate the Plans; (c) further disclosure of the terms of the Litigation Trust and the matter in which it will be operated, as well as the members currently designated to serve on the Litigation Trust subcommittees; (d) contracts and leases to be assumed or rejected; and (e) Causes of Action to be retained by each of the Debtors' estates, and Insider Causes of Action to be assigned to the Litigation Trust. Full-text copies of the Plan Supplements are available for free at: http://bankrupt.com/misc/Tropi_LandCoPlanSupp_041009.pdf http://bankrupt.com/misc/Tropi_OpCoPlanSupp_041009.pdf The Debtors expect to proceed with the April 27 Confirmation Hearing. In the meantime, they continue to work with their regulatory counsel for each of their gaming jurisdictions to ensure that they are able to exit from Chapter 11 in a timely manner after the confirmation of the Plans, Mr. Kaufman says. Publication Notice Erin Ostenson, advertising clerk of The Wall Street Journal, a daily national newspaper of general circulation throughout the United States, filed separate affidavits stating that the notices of the OpCo Lenders and the LandCo Lenders with respect to their First Amended Joint Plan of Reorganization, the objection and voting deadlines, the solicitation and voting procedures, the hearing to confirm the applicable Plan, and other relevant information were published on March 26, 2009. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENTERTAINMENT: Wimar Seeks $2 Mil. Admin. Expense Claim ----------------------------------------------------------------- Wimar Tahoe Corporation, formerly Tropicana Casinos and Resorts, Inc., seeks the payment of a $2,055,259 administrative expense claim incurred against the Debtors. Pursuant to certain agreements, including certain casino service agreements, Wimar agreed to provide services to the Debtors and the Debtors agreed to compensate Wimar for those services. Since the Petition Date, Wimar has incurred costs and expenses for those services. Notwithstanding the filing of Debtors' bankruptcy cases, Wimar continued to provide the Debtors with services. John W. Weiss, Esq., at Greenberg Traurig, LLP, in New York, tells the U.S. Bankruptcy Court for the District of Delaware that the costs and expenses, aggregating at least $2,055,259, incurred by Wimar provided a direct benefit to the Debtors. The Wimar services have allowed the Debtors to continue to operate and preserve the value of their businesses. The Debtors themselves have recorded these charges in their ledgers, Mr. Weiss points out. Mr. Weiss notes that Wimar's Administrative Expense Claim is asserted against certain Debtors in these amounts: Debtor Claim Amount ------ ------------ Tropicana Entertainment, LLC $1,376,060 Wimar Land Company 353,987 Columbia Properties Vicksburg, LLC 158,940 JMBS Casino, LLC, dba Jubilee Casino 164,477 Catfish Queen Partnership in Commendum, 1,000 Hotel Ramada of Nevada, dba Tropicana Las Vegas 792 Wimar reserves its rights with respect to the Administrative Expense Claim. Wimar also reserves its right to amend its Motion to Allow and to assert additional claims and requests for payment, or additional grounds for its claims. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ULTRA STORES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Ultra Stores, Inc. 122 S. Michigan Avenue, Suite 800 Chicago, IL 60603 Bankruptcy Case No.: 09-11854 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Ultra Stores Puerto Rico, Inc. 09-11855 Ultra Stores USVI, Inc. 09-11856 Type of Business: The Debtors operate a jewelry retail stores. Chapter 11 Petition Date: April 9, 2009 Court: Southern District of New York (Manhattan) Judge: Burton R. Lifland Debtor's Counsel: Andrew C. Gold, Esq. agold@herrick.com Frederick E. Schmidt, Esq. eschmidt@herrick.com Herrick, Feinstein LLP 2 Park Avenue New York, NY 10016 Tel: (212) 592-5941 Fax: (212) 592-1500 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Hyperion Industries $959,168 #2 140 - 1066 W. HASTIN GS ST. Vancouver, BC V6E 3XI Tel: (604) 669-9562 D1amstar Jewellery Pvt. $752,872 LTS G-9, GEM & Jewellery Complex II SEEPZ Andheri (East) Mumbai-400096, INDIA Kiran Jewels India DFD $713,350 SDF VII, SEEPZ, Andheri (e) Mumbai, India 00040-0096 VAISHALI DIAMOND CORP $669,086 579 5TH Avenue Suite 1475 New York, NY 10018 FJlL, Inc $659,949 608 5th Avenue, Suite # 405 A New York, NY 10036 Goldiam International $628,309 Gem & Jewellery Complex Seepz Andheri (East) Mumbai, India 400096 Chelsea GCA Realty, LP $414,367 Ciemme NY, LLC $379,866 Genesis Jewelry, Inc. $374,740 International Jewelry $361,885 Imports IRS $352,090 Atit Diamond Corporation $302,020 American Originals $276,083 Leo Schachter Diamonds LLC $271,709 World Pacific Jewelry $264,938 Amikam $258,144 Simon Property Group $236,602 Dialuck Corp. $221,342 Rayalty Jewelry $182,084 Jewel Source, Inc. $170,494 The petition was signed by Daniel Marks, president and chief executive officer. VILLAGE JEWELERS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Village Jewelers Group, L.P. 13636 Neutron Rd., Suite 100 Dallas, TX 75244 Tel: (972) 661-1100 E-mail: info@villagejewelers.com Bankruptcy Case No.: 09-31936 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Company Description: The debtor is a Dallas-based jewelry store. See http://www.villagejewelers.com/ Debtor's Counsel: Susan B. Hersh, Esq. Susan B. Hersh, P.C. 12770 Coit Rd., Suite 1100 Dallas, TX 75251 Tel: (972) 503-7070 Email: susan@susanbhershpc.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Phillip Samuels, managing member 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/txnb09-31936.pdf WILLIAM MOTORS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Williams Motors, Inc. 1621 Highway 50 P.O. Box 98 Commerce, TX 75248 Tel: (903) 246-4878 Fax: (903) 886-2802 Bankruptcy Case No.: 09-31927 Chapter 11 Petition Date: April 1, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey Jernigan Company Description: The debtor is a Chevrolet, Buick, and Pontiac dealer in Commerce, Texas. See http://www.williamsmotors.net/ Debtor's Counsel: Edwin Paul Keiffer, Esq. Kim E. Moses Wright Ginsberg Brusilow, PC 1401 Elm Street, Suite 4750 Dallas, TX 75202 Tel: (214) 651-6517 Fax: (214) 744-2615 Email: pkeiffer@wgblawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Wyman Williams, president of the company. A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb09-31927.pdf WASHINGTON MUTUAL: McKee Assigns $1.3 Million Claim to Longacre --------------------------------------------------------------- McKee Nelson, LLP, notified the U.S. Bankruptcy Court for the District of Delaware and parties-in-interest that on March 26, 2009, it sold, transferred and assigned Claim No. 1089 for $1,379,960, to Longacre Master Fund, Ltd. McKee originally filed Claim No. 1089 against the Debtors on March 5, 2009. However, in light of the Claim Transfer, McKee agrees that all payments and distributions with respect to the Claim will be given to Longacre. The parties also filed an amended Claim Transfer to reflect McKee's contact details. McKee has been employed by the Debtors as their special tax counsel. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over Sept. 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. (Washington Mutual Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) WASHINGTON MUTUAL: Transition Employees May be Heavily Taxed ------------------------------------------------------------ Former employees of Washington Mutual, Inc., who temporarily worked for WaMu acquirer JPMorgan Chase to aid in the WaMu- JPMorgan transition and who were promised with retention bonuses could be affected by the congressional bills, which seek to recoup multimillion-dollar bonuses paid to executives at American International Group, according to The Seattle Times. The Bills were in response to AIG's disclosure that it paid $165 million in bonuses after receiving bailout aid of more than $170 billion, the newspaper reports. One bill intends to slash "90 percent tax on bonuses given to employees of companies that received more than $5 billion in federal bailout money, including JPMorgan Chase," and would apply to all workers whose household adjusted gross income exceeds $250,000. Another bill would impose a 35% tax, applicable to a wider range of banks and financial-services companies, says the Seattle Times. According to the report, about 1,500 of 4,200 people who worked at WaMu's Seattle headquarters were laid off, while 1,900 are temporarily working as JPMorgan's "transition team," but will also be laid off in 2009. The transition workers are accruing a retention bonus equal to their regular pay rate. Accordingly, they get the bonus when they're laid off, The Seattle Times relates. Meanwhile, The Wall Street Journal reported that, as part of remodeling Washington Mutual Bank's branches, JPMorgan is replacing, among others, cash dispensers and bank-teller windows, in Dallas, Texas. The Journal quoted Charles Schraf, in charge of the Chase unit of JPMorgan, as saying that the traditional branches "are superior in every way" and are "practical." Specifically in California, 708 WMB branches and more than 2,000 ATMS will be sporting a new logo, described as a "bright blue octagon," the Puget Sound Business Journal related. JPMorgan is expecting completion of WMB branch remodeling in October 2009, WSJ said. JPMorgan is also putting up for sale WaMu's Cedarbrook Conference Center, located in a residential area near the Seattle-Tacoma International Airport, The Seattle Times noted in a separate report. JPMorgan is marketing Cedarbrook through Jones Lang LaSalle Hotels. Prices relating to the sale were kept confidential, according to the report. Originally named the Washington Mutual Leadership Center, the Cedar Conference Center was the "high-tech meeting and training complex" of WaMu, which opened in 2002. However, with WaMu no longer conducting a headquarters operation at the Center, a JPMorgan spokesperson told The Seattle Times that there seemed to be no longer any need to keep it. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over Sept. 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. (Washington Mutual Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) WASHINGTON MUTUAL: Weil Gotshal Bills $1.7MM for January Work ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has authorized Washington Mutual Inc. and WMI Investment Corp. to pay fees and reimburse expenses of bankruptcy professionals involved in their cases, for work done from January 1 to 31, 2009: Professional Fees Expenses ------------ -------- -------- Akin Gump Strauss Hauer & Fled $651,987 $35,388 Davis Wright Tremaine LLP 19,717 16,871 Gibson, Dunn & Crutcher LLP 36,686 144 Grant Thornton LLP 69,743 3,044 McKee Nelson LLP 51,788 3,815 Pepper Hamilton LLP 82,897 6,894 Richards, Layton & Finger, P.A. 20,964 2,152 Shearman & Sterling LLP 75,530 6,108 Weil, Gotshal & Manges LLP 1,773,982 57,514 The Court also has authorized the Debtors to pay the fees and reimburse the expenses of Gibson Dunn & Crutcher LLP, John W. Wolfe P.S. and Perkins Coie LLP for work done from December 1 to 31, 2009: Professional Fees Expenses ------------ ------ -------- Gibson, Dunn & Crutcher LLP $9,300 $0 John W. Wolfe, P.S. 56,502 0 Perkins Coie LLP 72,776 1,848 Meanwhile, several professionals are seeking allowance of their fees for services provided to the Debtors or the Official Committee of Unsecured Creditors and reimbursement of expenses for the fee period from February 1 to 28, 2009: Professional Fees Expenses ------------ -------- -------- Akin Gump Strauss Hauer $545,420 $21,930 & Fled LLP as the Creditors' Committee's co-counsel Davis Wright Tremaine LLP 7,498 683 As the Debtors' Special counsel FTI Consulting 239,106 2,580 as the Creditors' Committee's financial advisor John W. Wolfe, P.S. 10,536 0 as the Debtors' special counsel McKee Nelson LLP 50,093 818 as the Debtors' special tax counsel Pepper Hamilton LLP 120,089 3,598 as the Creditors' Committee's co-counsel Simpson Thacher & Barlett LLP, as the Debtors' special counsel, also seeks the Court's allowance of its fees for $24,082, and reimbursement of expenses totaling $773 for the period from January 1 to February 28, 2009. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over Sept. 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. (Washington Mutual Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) Z GALLERIE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Z Gallerie 1855 West 139th Street Gardena, CA 90249 Tel: (310) 277-6910 Bankruptcy Case No.: 09-18400 Type of Business: The Debtor sells pillows, tables, mirrors and house accessories. See http://www.zgallerie.com/ Chapter 11 Petition Date: April 10, 2009 Court: Central District of California (Los Angeles) Judge: Vincent P. Zurzolo Debtor's Counsel: Jeffrey W. Dulberg, Esq. jdulberg@pszjlaw.com Scotta E. McFarland, Esq. smcfarland@pszjlaw.com Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Blvd Ste 1100 Los Angeles, CA 90067 Tel: (310) 277-6910 Fax: (310) 210-0760 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 ------ --------------- ------------ River District Development Tenant $500,000 Group LLC 6737 South 85th East Avenue Tulsa, OK 74133 Tel: (404) 873-8752 Fax: (404) 873-8753 GDH INVESTMENTS, LLC Rent $284,421 c/o GK Development, Inc. 303 E. Main SI. Suite 201 Barrington, IL 60010 Tel: (847) 277-9930 (847) 277-9930 Fax: (847) 277-9940 Escalate Retail Trade $271,045 P.O. Box 200240 Pittsburgh, PA 15251 Tel: (800) 854-2263 (800) 854-2263 Fax: (858) 457-2145 Tyson's Corner Holdings LLC Rent $198,339 Sconsdale fashion square LLC Rent $164,264 Tampa Westshore Associates LP Rent $163,421 Oakbrook Shopping Center, LLC Rent $155,243 TIC Retail Properties - Rent $151,979 Fashion Island Somerset Collection Limited PT Rent $145,708 Frit San Jose Town & Country Rent $144,403 Village LLC Forbes Taubman Orlando LLC Rent $142,184 Kierland Greenway LLC Rent $135,041 340 University Avenue Assoc. Rent $133,200 Woodfield Mall LLC Rent $128,086 Hart Galleria North, LLC Rent $127,820 Mission Viejo Associates L.P. Rent $127,127 Downtown Plaza, LLC Rent $124,891 Highwoods Realty Limited Rent $123,815 Larimer Square North, LLC Rent $123,380 CLP-SPF Rookwood Commons LLC Rent $116,134 The petition was signed by Michael G. Zeiden, chief financial officer and secretary. ZOHAR WATERWORKS: Can Access $1.5MM of Patriarch DIP Financing -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized, on an interim basis, Zohar Waterworks, LLC, and B2 International Corporation to: a) obtain credit and incur debt, on an interim basis, up to the aggregate amount of $1.5 million; b) enter into a financing agreement with Patriarch Partners Agency Services, LLC, and the lenders party thereto; c) use proceeds of the DIP facility in accordance with the DIP credit documents and the Budget; d) grant the DIP agent (a) a first priority lien, valid, perfected and enforceable lien on the Debtors' unencumbered property; (b) a lien on the Debtors' property that is subject to the permitted prior liens, the lien to be junior only to the permitted prior liens; and (c) a first priority lien on the property of the Debtors' estates that is subject to the prepetition liens; e) grant the DIP agent superpriority administrative claim status in respect of all DIP obligations. The final hearing to consider the entry of the final order and approval of the DIP facility is scheduled for April 17, 2009, at 10:00 a.m. (Eastern Time) at the U.S. Bankruptcy Court for the District of Delaware, Wilmongton, Delaware. Objections were due April 14, 2009, 4:00 p.m. Prior to the petition date, the Debtors were party to (i) credit agreement dated Aug. 25, 2005, as amended, with Patriarch Partners and lenders party thereto; and (ii) Zohar Waterworks was party to equipment finance credit agreement dated April 25, 2007, with Patriarch Partners and lenders party thereto. To secure the 2005 credit agreement debt, Zohar Waterworks granted security interest and liens to the 2005 credit agreement agent, upon substantially all of the Debtors' property and assets. To secure the equipment finance debt, Zohar Waterworks granted security interest and liens to the agent upon substantially all of Zohar Waterworks's property and assets. As of the petition date, the Debtors owed obligations to the 2005 credit agreement secured parties of $70.5 million for outsatnding term loans, advances and financial accommodations; Zohar Waterworks owed equipment finance secured parties of $2.4 million for outstanding term loans and financial accomodations. Patriarch Partners, as DIP agent, agreed to provide financing for a Chapter 11 cases provided that the Debtors pursue an expedited sale of substantially all their assets to Patriarch Partners, though LVD Acquisitions, LLC, an acquisition entity, or to the highest bidder at an auction. The Debtors were unable to obtain postpetition financing on an unsecured basis or on a junior priority basis to the prepetition lenders. The financing under the DIP Facility will allow the Debtors to: a) fund the continued operation of, and minimize disruption to, their business and operations; b) avoid immediate and irreparable harm to their businesses as a going concern. Salient Terms of the DIP Credit Agreements Administrative Agent: Patriarch Partners Agency Services, LLC DIP Lenders: Zohar II 2005-1, Limited, and Zohar III, Limited Borrowers: Zohar Waterworks, LLC, and B2 International Corporation DIP Facility: The DIP Facility will consist of a senior revolving credit facility with a maximum commitment of $3.4 million. Maturity Date: All obligations under the DIP facility accrue or otherwise come due and payable in full on the earliest to occur of (i) June 1, 2009, or (ii) the date on which a sale of all or substantially all of the Debtors' assets is consumed. Use Proceeds: The DIP facility will be used (a) to pay all or part of any indebtedness of the Debtors arising prior to the petition date, or (b) in violation of the DIP orders. Interest Rates: Upon the occurrence and during the continuation of an event of default, all obligations will bear interest payable on demand at the default rate. Applicable Margins: The LIBOR Rate Margin is 8%; the base rate margin is 5.5% Security: The DIP Facility will be secured by (i) a perfected first priority lien on all property and assets of each Debtor and its estate that is not subject to permitted prior liens or prepetition liens; 9ii) a perfected lien upon all property and assets of each Debtor that is junior only to the permitted prior liens; and (iii) a perfected lien on all property of each Debtor that is subject to prepetition liens, senior in all respects to the prepetition liens and junior only to the permitted prior liens. The DIP facility will also be secured by a superpriority administrative expense claim having priority over all administrative expense. Agent Fee: $75,000 payable at the closing date and on each anniversary thereof on terms and conditions separately agreed upon by the agent and the Debtors. Termination Date: On the earlier to occur of (i)June 1, 2009; (ii) the date on which a sale of substantially all of the Debtors' assets is consummated; (iii) the date of the termination of the commitments of the DIP credit agreements; (iv) the conversion of any of the Chapter 11 cases to a Chapter 7; (v) the date after any period of three consecutive business days in which the DIP lenders and the DIP agent have denied the Debtors' request to fund loans to be used to pay professional fees and expenses as a result of an event of default. The agreement contains certain event of default. About Zohar Waterworks Headquartered in Columbus, Ohio, Zohar Waterworks, LLC -- http://www.zoharwaterworks.com/-- dba Tri Palm International, LLC, manufactures the Oasis brand water coolers and bottled water coolers. Zohar Waterworks LLC and B2 International Corporation dba Oasis Water, filed for separate Chapter 11 protection on April 2, 2009 (Bankr. D. Del. Lead Case No. 09-11179). The Debtor has tapped Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, as counsel. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. ZOHAR WATERWORKS: Section 341(a) Meeting Set for May 8 in Delaware ------------------------------------------------------------------ The U.S. Trustee for Region 3 will convene a meeting of creditors in Zohar Waterworks, LLC, and B2 International Corporation's Chapter 11 cases on May 8, 2009, at 3:30 p.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. Headquartered in Columbus, Ohio, Zohar Waterworks, LLC -- http://www.zoharwaterworks.com/-- manufactures the Oasis brand water coolers and bottled water coolers. Zohar Waterworks LLC and B2 International Corporation, filed for separate Chapter 11 protection on April 2, 2009 (Bankr. D. Del. Lead Case No. 09- 11179). The Debtor has tapped Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, as counsel. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. ZOUNDS INC: Wins Court Nod for Squire Sanders as Bankr. Counsel --------------------------------------------------------------- Hon. George B. Nielsen, Jr., of the U.S. Bankruptcy Court for the District of Arizona authorized Zounds, Inc., to employ Squire, Sanders & Dempsey L.L.P. as counsel. Squire Sanders is expected to: 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, told 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 related 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 assured 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. ZOUNDS INC: Has until April 29 to File Schedules and Statements --------------------------------------------------------------- Hon. George B. Nielsen, Jr., of the U.S. Bankruptcy Court for the District of Arizona extended until April 29, 2009, Zounds, Inc.'s time to its file statement of financial affairs and schedules of assets and liabilities. The Debtor said that an extension would allow it to have more time to gather information from books, records, and documents relating to thousands of transactions; complete and file the statements and schedules. 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 Obtain $1-Mil. DIP Loan; LandLords Object --------------------------------------------------------------- Zounds, Inc., asks the U.S. Bankruptcy Court for the District of Arizona: a) for authority to obtain up to $1,000,000 of delayed draw debtor-in-possession financing and to borrow up to $300,000, in the interim basis, from Michael Stewart and Derwood Chase, two of the lenders under Series D Notes; b) to approve the terms and conditions of the DIP loand documents, and authorize the Debtor to execute and enter into the DIP loan documents; c) for authority to use the cash collateral; and d) grant adequate protection to the prepetition lenders. Until January 2009, the Debtor had not incurred significant secured debt and had issued 2 series of convertible unsecured notes to accredited investors through private placements, including: (i) $3,685,000 aggregate principal amount of 10% Series B Convertible Notes due 2009; and (ii)$11,937,870 aggregate principal amount of 10% Series C Convertible Notes due 2009. Interest on the convertible notes is payable at maturity. In November 2008, certain additional holders of Series C Convertible Notes received a security agreement from the Debtor, purporting to secure an additional $525,000 aggregate principal of notes under that series. From December 2008 through February 200+, the Debtor issued a series of 10% Secured Convertible Notes to accredited investors through private placements in the aggregate principal amount of $4,500,000. Interest on the prepetition secured debt compounds quarterly and is payable at maturity. All the Debtor's obligations under the prepetition secured debt are secured by liens on substantially all the Debtor's assets. The Debtor also incurred, as of the petition date, approximately $10,000,000 in unsecured debt, not including alleged lease rejection damages arising from the Debtor's closure of several of its leased retail locations. Salient Terms of the DIP Facility Borrower: Zounds Inc. Lenders: Michael Stewart, Derwood Chase and other affiliated entities that may be designated. Loan Amount: $1,000,000 Term: The DIP Facility terminates on the earliest of: (i) 120 days after the petition date; (ii) 30 days after the petition date if the final DIP order is not entered in that time; (iii) confirmation and effectiveness of a Plan of Reorganization in this case; and (iv) the occurrence of an event of default. Pricing: Interest will be computed and accrue monthly on the outstanding principal amount of all draws under the DIP Facility at a rate of 12% per annum. All accrued interest will be added to the principal amount of the DIP facility. All outstanding principal and accrued interest will be due and payable on the termination date. The Debtor must pay an initial fee t6o the DIP lender pf 2%, added the principal amount owing under the DIP facility. Collateral: All borrowings under the DIP loan will at all times be secured by: (a) a perfected first priority lien on all the Debtor's prepetition and postpetition property not already subject to valid, perfected and non- avoidable liens; (b) perfected lien on all the Debtor's perpetition and postpetition property, subject to the liens permitted by the loan agreement; and (c)n perfected priority priming liens on all the Debtor's property subject to valid , perfected and non-avoidable liens. All security interests and liens granted are subject to the Carve Out. Carve Out: The liens, security interests and superpriority administrative expense claims granted to the DIP lender would be subject to a limited Carve Out. Adequate Protection: In order to adequately protect the prepetition lenders from the Debtor's use of cash collateral and the granting of the priming liens to the DIP lender, the Debtor believes that the prepetition lenders security interests in the Debtor's assets are adequately protected by virtue of a substantial equity cushion held by the prepetition lenders. The Debtor believes that the current outstanding balance under the prepetition secured debt is approximately $5,100,000. At the same time, the Debtor believes that the aggregate fair market value of the Debtor's assets is approximately $13.5 million. This equates to a very substantial equity cushion. Grant the lender superpriority administrative expense claim and a priming lien on property of the estate encumbered by existing prepetition liens, possibly without the consent of all holders of the liens. The loan agreement contains certain events of default. Landlords Object GGP Limited Partnership, as direct and indirect owner of the GGP locations and Kravco Simon Company, shopping centers in which the Debtor operates retail stores, object to the Debtor's attempt to grant a lien on landlords' leases and grant certain access rights to landlords premises contrary to the provisions of the leases. Landlords further object to any use of their leaseholds except as provided in the Leases or pursuant to a further order of this Court. The Macerich Company, as managing agent for the landlords of Arrowhead Towne Center, Paradise Valley Mall, and Superstition Springs Center, objects to the Debtor's motion for interim and final order to obtain postpetition financing. Macerich relates that neither the financing motion nor the interim oder provides a copy of the Budget, so the Debtor's intentions regarding the payment of April rent and charges under the leases is unclear. Moreover, the relief proposed by the financing motion is objectionable on a number of grounds. First, the Debtor proposed to pledge the liens as collateral, notwithstanding specific prohibitions on the pledges in the leases. Second, the relief the DIP lender after an event of default seems to includes essentially unregulated use of premises. 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. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- 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: April 5, 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. Ma. Theresa Amor J. Tan Singco, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***