/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090430.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 30, 2009, Vol. 13, No. 118 Headlines 750 GARLAND: Wants Access to Cash Securing Chinatrust Loan 2558 NORTH JERUSALEM: Voluntary Chapter 11 Case Summary ACCENTIA BIOPHARMA: Final DIP Hearing Moved to May 13 ACCENTIA BIOPHARMA: Court Sets June 1 Claims Bar Date ACCENTIA BIOPHARMA: Can Use Cash Collateral Until May 13 AIRBORNE HEALTH: Nonpayment of Loan Cues S&P's Rating Cut to 'D' ALLISON TRANSMISSION: PIK Payment Won't Affect S&P's 'B' Rating AIRBORNE HEALTH: Nonpayment of Loan Cues S&P's Rating Cut to 'D' ALLISON TRANSMISSION: PIK Payment Won't Affect S&P's 'B' Rating ALON REFINING: S&P Raises Corporate Credit Rating to 'B' AMERICAN AXLE: Declining Auto Markets Cue Fitch's Junk Rating AMERICAN CONTINENTAL: Voluntary Chapter 11 Case Summary AMERICAN HOME: Former CEO to Pay $2.45MM to Settle Fraud Charges AMERICAN INT'L: Rush Sale May Not Net Highest Price for AIU AMERICAN INT'L: Names Matthew E. Winter as Vice Chairperson AMERICAN NATURAL ENERGY: Cash-Strapped, Going-Concern Doubt Raised ARTHUR ANDERSEN: Settles Enron Creditors' Lawsuit for $16 Million ASARCO LLC: Amends Plan to Include Court-Approved Sterlite Deal ASYST TECH: Wants Access to Cash; Lenders Deal Has Sale Milestone ATLAS ENERGY: S&P Changes Outlook to Stable; Affirms 'B+' Rating AVIS BUDGET: S&P Assigns Recovery Rating on Unsecured Notes BANK OF AMERICA: CalPERS to Oppose Re-election of 18 Directors BANK OF AMERICA: Shareholders Oust Kenneth D. Lewis as Chairperson BASIC ENERGY: Moody's Assigns 'Ba1' Ratings on Tranche B BEARINGPOINT INC: Obtains Final OK to Use Lenders' Cash Collateral BERNARD L MADOFF: Castor Pollux Wins Market-Making Business BCBG MAX: S&P Raises Corporate Credit Rating to 'B-' From 'SD' BIG 10 TIRES: Sun Capital to Buy Stores Using Secured Debt BOMBARDIER INC: Fitch Affirms Issuer Default Rating at 'BB+' BERRY PETROLEUM: Moody's Confirms 'B1' Corporate Family Rating BERRY PLASTICS: Moody's Changes Default Rating to 'B3' BEST BRANDS: Moody's Changes Outlook on 'Caa3' Ratings to Positive BIRMINGHAM-JEFFERSON CIVIC: Moody's Raises Bond Ratings from 'B3' BOYD LOGISTICS: Voluntary Chapter 11 Case Summary BROADRIDGE FINANCIAL: S&P Raises Counterparty Rating From 'BB+/B' BRODER BROS: Amends Terms of Exchange Offer for 11.25% Sr. Notes BRUNO'S SUPERMARKETS: Workers Push For Buyer That Would Keep Jobs BURLINGTON COAT: S&P Changes Outlook to Stable; Keeps 'B-' Rating CAPITAL GROWTH: Receives State Approval for Financial Closing CAPMARK FINANCIAL: Going Concern Cues Moody's to Junk Rating CESAR O. DIEGO: Case Summary & 19 Largest Unsecured Creditors CHARTER COMMUNICATIONS: Disclosure Statement Hearing on May 5 CHARTER COMMUNICATIONS: Gets New Objections to Plan Terms CHARTER COMMUNICATIONS: Panel Wants to Intervene in JPMorgan Suit CHEMTURA CORP: Creditors Oppose $400 Million DIP Financing CHRYSLER LLC: Task Force Deadline for Fiat Alliance Today CHURCH & DWIGHT: S&P Assigns 'BB' Initial Senior Debt Rating CITIGROUP INC: Sumitomo Mitsui to Acquire Some Nikko Operations CITIGROUP INC: Wants to Free Phibro from Restrictions on Bonuses CLICO BAHAMAS: Seeks Recognition of Insolvency Case in Bahamas CONQUEST VACATIONS: Files for Bankruptcy in Toronto CRESCENT RESOURCES: Weak Credit Metrics Cue S&P's Junk Rating CRUSADER ENERGY: Forest Claims Recoupment Right DEREK M. LARSON: Case Summary & 20 Largest Unsecured Creditors DORIS PANOS: Files for Chapter 11 Bankruptcy Protection DREIER LLP: Marc Dreier to Plead Guilty to Money Laundering DRUG FAIR: Gets Court Approval for Sale of 31 Stores to Walgreen E*TRADE FINANCIAL: Posts $233 Million First Quarter Net Loss ENRON CORP: Arthur Andersen Settles for $16 Million EUROFRESH INC: Gets Interim OK to Access Prepetition Lenders' Cash EUROFRESH INC: Wants Alvarez & Marsal N.A. as Financial Advisor EUROFRESH INC: Wants to Hire A&M Sec. for Reorganization/Financing FAIRPOINT COMMUNICATIONS: Bank Debt Sells at Almost 51% Discount FLEETWOOD ENTERPRISES: To Sell Oregon Travel Trailer Plant FLORIDA DEVELOPMENT: S&P Gives Negative Outlook on 'BB-' Rating FLUID ROUTING: Court OKs Corporate Name Change to Carolina Fluid FLUID ROUTING: Gets Final Nod to Borrow $8MM from Customer Group GENERAL MOTORS: Magna International Presents Offer for Opel GEORGIA GULF: Bank Debt Trades at 38% Off in Secondary Market GOODY'S LLC: Again Attempts Auction for Trademarks and Trade Names GREGORY ABBETT: Case Summary & 6 Largest Unsecured Creditors HARTMARX CORPORATION: U.S. Trustee Amends Committee Members HARTMARX CORPORATION: Wants July 27 as Creditors' Claims Bar Date HAWKER BEECHCRAFT: Bank Debt Sells at Almost 50% Discount HELLER EHRMAN: Committee Sues Bank of America for $58 Million HELLER EHRMAN: Former Staff Amend $32MM Suit to Include Partners HELLER EHRMAN: Obtains Court Authority to Dispose Client Files HERITAGE GATEWAY: Voluntary Chapter 11 Case Summary HERITAGE-MONTGOMERY: Voluntary Chapter 11 Case Summary HERTZ CORP: Bank Debt Sells at Almost 20% Off in Secondary Market HOMEBANC MORTGAGE: Trustee Taps Counsel for Bear Stearns Suit HORNBECK OFFSHORE: Moody's Gives Stable Outlook; Keeps Ba3 Rating HUNTSMAN CORP: Bank Debt Sells at 25% Discount in Secondary Market IDEARC INC: Bank Debt Sells at 60% Discount in Secondary Market INGLES MARKETS: S&P Changes Outlook to Stable; Puts 'BB-' Rating INTELSAT JACKSON: Bank Debt Sells at 22% Off in Secondary Market IXI MOBILE: Chief Financial Officer Gil Steps Down JAMES FULLER: Voluntary Chapter 11 Case Summary JEFFERSON COUNTY: Failure to Make Payments Cue Moody's Junk Rating KARAWIA INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors KENNETH W. FURRY: Case Summary & 20 Largest Unsecured Creditors KIRK ARGIRO: Case Summary & 12 Largest Unsecured Creditors LAS VEGAS SANDS: Bank Debt Sells at Almost 50% Discount LAS VEGAS SANDS: Venetian Macau Bank Debt Sells at 31% Discount LEHMAN BROTHERS BANKHAUS: Voluntary Chapter 15 Case Summary LEHMAN BROTHERS: LBSF Unit Sues Metropolitan West to Recover $46MM MAGNA ENTERTAINMENT: Won't File Reports with SEC While in Ch. 11 MANITOWOC CO: Bank Debt Sells at 22% Off in Secondary Market MEHDI RAVAN: Case Summary & 7 Largest Unsecured Creditors METALDYNE CORP: Bank Debt Sells at Almost 90% Discount MGM MIRAGE: Lenders Extend Waiver Period Through June 30 MICHAEL BRET HOUSE: Case Summary & 20 Largest Unsecured Creditors MICHAELS STORES: Bank Debt Sells at 34% Off in Secondary Market MINDEN GATEWAY: Case Summary & 18 Largest Unsecured Creditors MORTON INDUSTRIAL: Section 341(a) Meeting Set for May 5 MORTON INDUSTRIAL: U.S. Trustee Forms Three-Member Creditors Panel MOTOR COACH: Secures $75MM in Senior Credit From GE Capital NEWPAGE CORPORATION: Moody's Cuts Corporate Family Rating to 'B2' NOBLE INTERNATIONAL: Section 341(a) Meeting Set for May 19 NORTHERN TRUST: Fitch Removes Issuer Rating from Negative Watch OILEXCO INC: U.K. Subsidiary Files Chapter 15 in New York OM FINANCIAL: S&P Downgrades Counterparty Credit Rating to 'BB+' PHILADELPHIA NEWSPAPERS: Files Schedules of Assets and Debts PREVENTION LABORATORIES: Wants Access to Nicolasi Cash Collateral PTS CARDINAL: Bank Debt Sells at 33% Off in Secondary Market REVOCABLE LIVING TRUST: Case Summary & 3 Largest Unsec. Creditors RITZ CAMERA: Files Schedules of Assets and Liabilities RITZ CAMERA: May Employ Thomas & Libowitz as Conflicts Counsel ROBERT DRAPER: Case Summary & 20 Largest Unsecured Creditors ROYAL CARIBBEAN: Moody's Affirms 'Ba2' Corporate Family Rating S&B SURGERY CENTER: Case Summary & 20 Largest Unsecured Creditors SEMGROUP ENERGY: SEC Charges Attorney With Insider Trading SEMGROUP LP: Gets Green-Light to Extend Maturity Date of DIP Loan SEMGROUP LP: SEC Charges Attorney With Insider Trading SMURFIT-STONE: Bank Debt Trades at 25% Off in Secondary Market SOURCE INTERLINK: Chapter 11 Filing Cues Moody's Rating Cut to 'D' STEEL DYNAMICS: Moody's Reviews 'Ba1' Corporate Family Rating SUN MICROSYSTEMS: Posts $201MM Net Loss in Third Quarter 2009 SWIFT TRANSPORTATION: Bank Debt Sells at 46% Discount TETON MOTOR: Case Summary & 20 Largest Unsecured Creditors TEXAS PETROCHEMICALS: S&P Withdraws 'B-' Corporate Credit Rating TEXTRON INC: Fitch Downgrades Issuer Default Ratings to 'BB+' TROPICANA ENTERTAINMENT: Assumes Leases to Avoid $250MM Claim TROPICANA ENTERTAINMENT: Confirmation Hearing Moved to May 5 TROPICANA ENTERTAINMENT: Deal for Atlantic City Casino Completed TROPICANA ENTERTAINMENT: Objects to IRS and Atlantic City Claims TROPICANA ENTERTAINMENT: Panel Objects to Sussex and Wimar Claims TROPICANA ENTERTAINMENT: Atlantic City Casino Files to Close Sale TROPICANA ENTERTAINMENT: Adamar's Chapter 11 Case Summary TRW AUTOMOTIVE: Fitch Cuts Issuer Rating to 'B' on GM Shutdowns US SHIPPING: Files for Bankruptcy Protection in Manhattan US SHIPPING: Case Summary & 30 Largest Unsecured Creditors US STEEL: S&P Downgrades Corporate Credit Rating to 'BB' VENETIAN MACAU: Bank Debt Sells at 31% Off in Secondary Market VICTOR OOLITIC: Case Summary & 20 Largest Unsecured Creditors VITAMIN SHOPPE: Sales Growth Cues Moody's to Retain 'B3' Rating WASHINGTON MUTUAL: Sues JPMorgan on Control of $4 Bil. in Deposits WATERFORD WEDGWOOD: U.S. Affiliate Files to Liquidate WESTGATE PROPERTIES: Case Summary & 10 Largest Unsecured Creditors WL HOMES: Discloses $372-Mil. in Assets, $911-Mil. in Debts WL HOMES: Emaar Commitment to Provide DIP Loans Extended to May 7 WYNDHAM WORLDWIDE: Moody's Downgrades Senior Ratings to 'Ba2' YRC WORLDWIDE: Loan Amendments Permit Debt for Equity Swaps YRC WORLDWIDE: Signs Sale/Leaseback Deal with Estes Express YRC WORLDWIDE: Posts $257.4 Million Net Loss for 1st Quarter 2009 * Chairman Bair Says FDIC Should Have Broader Resolution Powers * Home Prices Fall Again in February, Though at Slower Rate * Ex-Energy Dept. General Counsel David Hill Joins Sidley Austin * James Seery Jr. Joins Sidley Austin's Bankruptcy Practice * Perry Mandarino Joins PricewaterhouseCoopers * Simpson Thacher Expands Representation on Behalf of Debtors * Sonnenschein Accidentally Discloses Rates for Treasury Work * Chapter 11 Cases With Assets and Liabilities Below $1,000,000 ********* 750 GARLAND: Wants Access to Cash Securing Chinatrust Loan ---------------------------------------------------------- 750 Garland, LLC, asks the U.S. Bankruptcy Court for the Central District of California to (i) authorize the use of cash securing repayment of Chinatrust Bank (U.S.A.) loan and (ii) grant adequate protection for the secured lender. The Debtor also asks the Court to allow it to use cash collateral pending a final hearing on its cash collateral use motion. The Debtor requires the use of $145,028 cash collateral until May 30, 2009, when the Court is scheduled to hold a final hearing on the motion. The Debtor's property is subject to a first deed of trust in favor of Chinatrust in the principal amount of $24 million. The property is also subject to a deed of trust of $3 million that secures a line of credit also in favor of the bank. The Company met with the bank to negotiate a loan restructuring to address its financial crisis. When the discussions broke down, the bank moved for appointment of a receiver which precipitated to the Chapter 11 filing. The Debtor relates that the value of the real estate is $30 million based on the appraisal obtained by the lender. Accordingly, the Debtor believes that the bank is adequately protected by an equity cushion in the property even if the Debtor does not make adequate protection payments. Notwithstanding the equity cushion, the Debtor proposes to grant the bank a replacement lien on property of the estate of the same description as their prepetition lien with the same validity and priority as their prepetition lien against the Debtor's assets. In addition, the bank will receive monthly interest payments commencing in May 2009. Aside from secured debt to Chinatrust, the Debtor also faces $106,000 in unsecured claims related to the trade debt. Chinatrust's Objection Secured creditor Chinatrust Bank (U.S.A.) submits its objection to the Debtor's emergency motion authorizing use of cash collateral. The bank states that the Debtor had no rights to the rents from the property when it filed its bankruptcy petition. Thus, there is no cash collateral available for the Debtor's use and there is no sufficient income to fund a successful reorganization. About 750 Garland LLC Headquartered in Los Angeles, California, 750 Garland LLC is a limited liability company which owns a 205 unit apartment building in Los Angeles. The Company filed for Chapter 11 on April 22, 2009 (Bankr. C. D. Calif. Case No. 09-19104). Helen R. Frazer, Esq., at Atkinson Andelson Loya Ruud & Romo represents the Debtor in its restructuring efforts. The Debtor listed total assets of $30,015,000 and total debts of $27,342,806. 2558 NORTH JERUSALEM: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: 2558 North Jerusalem Road, Inc. 2558 North Jerusalem Road North Bellmore, NY 11710 Bankruptcy Case No.: 09-72957 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court Eastern District of New York (Central Islip) Judge: Alan S. Trust Debtor's Counsel: Alan C. Stein, Esq. 479 South Oyster Bay Road Plainview, NY 11803 Tel: (516) 932-1800 Fax: (516) 932-0220 Email: alan@alanstein.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor attached schedules of assets and liabilities to its petition, disclosing a fee interest worth $1,300,000 in a commercial building as its sole real property asset and $631,318 in secured debt to Rebeil Consulting Corp. The Debtor did not file a schedule of unsecured claims or a list of 20 largest unsecured creditors. The petition was signed by Eric Paulsen, president of the Company. ACCENTIA BIOPHARMA: Final DIP Hearing Moved to May 13 ----------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida has issued its fourth interim order granting Biovest International, Inc., permission to obtain up to $3,000,000 in postpetition financing from Corps Real, LLC, solely for the purposes set forth in a budget. The DIP loan will be secured by liens on and security interests in all property of Biovest, which liens and security interests will be senior to all prepetition and postpetition liens on property of Biovest. The DIP Lender has provided interim financing pursuant to previous interim orders in the amount of $1,000,000. The loan will bear interest at 16% p.a. Interest in the amount of 10% will be paid monthly, and interest in the amount of 6% will be accrued and be paid at maturity of the loan. Unless previous paid pursuant to previous interim orders, Biovest is also authorized to pay the DIP Lender, in cash, at the closing an amount equal to 4% of the initial $1,000,000 of the DIP Facility, or $40,000. Biovest will also pay to the DIP Lender $40,000 upon the advance of the second $1,000,000 of the DIP Facility, and another $40,000 upon the advance of the third $1,000,000 of the DIP Facility. All amounts due under the DIP Facility will become due on the earlier of (i) December 31, 2010, (ii) dismissal of Biovest's Chapter 11 case, (iii) conversion of Biovest's Chapter 11 case, (iii) conversion of Biovest's Chapter 11 case to a case under Chapter 7, (iv) the effective date of Biovest's plan of reorganization. A final hearing on the motion is set for May 13, 2009, at 3:00 p.m. Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc. (Nasdaq: ABPI) -- http://www.accentia.net/-- is a vertically integrated biopharmaceutical company focused on the development and commercialization of drug candidates that are in late-stage clinical development and typically are based on active pharmaceutical ingredients that have been previously approved by the FDA for other indications. The company's lead product candidate is SinuNase(TM), a novel application and formulation of a known therapeutic to treat chronic rhinosinusitis. Additionally, the Company has acquired the majority ownership interest in Biovest International Inc. and a royalty interest in Biovest's lead drug candidate, BiovaxID(TM) and any other biologic products developed by Biovest. The company also has a specialty pharmaceutical business, which markets products focused on respiratory disease and an analytical consulting business that serves customers in the biopharmaceutical industry. Accentia Biopharmaceuticals and nine affiliates filed for Chapter 11 protection on November 10, 2008 (Bankr. M.D. Florida, Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P. Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida; Jonathan B. Sbar, Esq., at Rocke, McLean & Sbar, P.A., represent the Debtors as counsel. Adam H. Friedman, Esq., at Olshan Grundman Frome Rosenzweig, and Paul J. Battista, Esq., at Genovese Joblove & Battista PA, represent the Official Committee of Unsecured Creditors as counsel. Based in Tampa, Florida, Biovest International Inc. (OTC BB: BVTI) -- http://www.biovest.com/-- is a pioneer in the development of advanced individualized immunotherapies for life-threatening cancers of the blood system. Biovest is a majority-owned subsidiary of Accentia Biopharmaceuticals Inc., with its remaining shares publicly traded. Biovest International Inc.'s consolidated balance sheet at June 30, 2008, showed $5.9 million in total assets, $36.8 million in total liabilities, and $4.6 million in non-controlling interests in variable interest entities, resulting in a $35.5 million total stockholders' deficit. ACCENTIA BIOPHARMA: Court Sets June 1 Claims Bar Date ----------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida established June 1, 2009, as the last day for the filing of proofs of claim in Accentia Biopharmaceuticals, Inc., et al.'s bankruptcy cases. Proofs of claim must be filed so as to be actually received on or before the claims bar date to: United States Bankruptcy Court Sam M. Gibbons United States Courthouse 801 North Florida Avenue Tampa, Florida 33602 Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc. (Nasdaq: ABPI) -- http://www.accentia.net/-- is a vertically integrated biopharmaceutical company focused on the development and commercialization of drug candidates that are in late-stage clinical development and typically are based on active pharmaceutical ingredients that have been previously approved by the FDA for other indications. The company's lead product candidate is SinuNase(TM), a novel application and formulation of a known therapeutic to treat chronic rhinosinusitis. Additionally, the Company has acquired the majority ownership interest in Biovest International Inc. and a royalty interest in Biovest's lead drug candidate, BiovaxID(TM) and any other biologic products developed by Biovest. The company also has a specialty pharmaceutical business, which markets products focused on respiratory disease and an analytical consulting business that serves customers in the biopharmaceutical industry. Accentia Biopharmaceuticals and nine affiliates filed for Chapter 11 protection on November 10, 2008 (Bankr. M.D. Florida, Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P. Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida; Jonathan B. Sbar, Esq., at Rocke, McLean & Sbar, P.A., represent the Debtors as counsel. Adam H. Friedman, Esq., at Olshan Grundman Frome Rosenzweig, and Paul J. Battista, Esq., at Genovese Joblove & Battista PA, represent the Official Committee of Unsecured Creditors as counsel. Based in Tampa, Florida, Biovest International Inc. (OTC BB: BVTI) -- http://www.biovest.com/-- is a pioneer in the development of advanced individualized immunotherapies for life-threatening cancers of the blood system. Biovest is a majority-owned subsidiary of Accentia Biopharmaceuticals Inc., with its remaining shares publicly traded. Biovest International Inc.'s consolidated balance sheet at June 30, 2008, showed $5.9 million in total assets, $36.8 million in total liabilities, and $4.6 million in non-controlling interests in variable interest entities, resulting in a $35.5 million total stockholders' deficit. ACCENTIA BIOPHARMA: Can Use Cash Collateral Until May 13 -------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized Accentia BioPharmaceuticals, Inc., et al., to continue to use Cash Collateral from April 1, 2009, and continuing through and including May 13, 2009, to pay ordinary, necessary and reasonable operating expenses incurred by the Debtors in connection with the operation of their businesses, in accordance with a budget. The use of Cash Collateral has been consented to by Valens Offshore and Valens US and the Official Committee of Unsecured Creditors. As adequate protection, each of the Lenders was granted a replacement lien on postpetition collateral of the same description as that subject to the lenders' prepetition liens. A hearing on the continued use of Cash Collateral for the period following the expiration date, shall be held on May 13, 2009. A copy of the budget is available at: http://bankrupt.com/misc/Accentia.Budget.pdf Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc. (Nasdaq: ABPI) -- http://www.accentia.net/-- is a vertically integrated biopharmaceutical company focused on the development and commercialization of drug candidates that are in late-stage clinical development and typically are based on active pharmaceutical ingredients that have been previously approved by the FDA for other indications. The company's lead product candidate is SinuNase(TM), a novel application and formulation of a known therapeutic to treat chronic rhinosinusitis. Additionally, the Company has acquired the majority ownership interest in Biovest International Inc. and a royalty interest in Biovest's lead drug candidate, BiovaxID(TM) and any other biologic products developed by Biovest. The company also has a specialty pharmaceutical business, which markets products focused on respiratory disease and an analytical consulting business that serves customers in the biopharmaceutical industry. Accentia Biopharmaceuticals and nine affiliates filed for Chapter 11 protection on November 10, 2008 (Bankr. M.D. Florida, Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P. Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida; Jonathan B. Sbar, Esq., at Rocke, McLean & Sbar, P.A., represent the Debtors as counsel. Adam H. Friedman, Esq., at Olshan Grundman Frome Rosenzweig, and Paul J. Battista, Esq., at Genovese Joblove & Battista PA, represent the Official Committee of Unsecured Creditors as counsel. Based in Tampa, Florida, Biovest International Inc. (OTC BB: BVTI) -- http://www.biovest.com/-- is a pioneer in the development of advanced individualized immunotherapies for life-threatening cancers of the blood system. Biovest is a majority-owned subsidiary of Accentia Biopharmaceuticals Inc., with its remaining shares publicly traded. Biovest International Inc.'s consolidated balance sheet at June 30, 2008, showed $5.9 million in total assets, $36.8 million in total liabilities, and $4.6 million in non-controlling interests in variable interest entities, resulting in a $35.5 million total stockholders' deficit. AIRBORNE HEALTH: Nonpayment of Loan Cues S&P's Rating Cut to 'D' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Minneapolis-based Airborne Health Inc. to 'D' from 'CCC'. S&P also lowered the ratings on its $160 million senior secured term loan and $20 million senior secured revolver to 'D' from 'CCC-'. The '5' recovery rating on the senior secured facility remains unchanged. The company had about $140 million in balance sheet debt at Feb. 28, 2009. The downgrade follows the company's disclosure of its failure to pay a scheduled $3 million Jan. 31, 2009, principal payment on its term loan due 2012 and its request for a forbearance agreement and amendment with its senior secured lenders. Under the proposed amendment, as long as the forbearance period is continuing, Airborne may request borrowings under its revolver and is subject to limited amounts. In addition, the company is required to engage an investment banking firm to explore strategic alternatives. The requested forbearance period may end on the earliest of Aug. 31, 2009, or in the occurrence or existence of any default or event of default other than the specified defaults in the proposed amendment, or failure to comply with new covenants and/or an occurrence of an unpermitted budget variance, as defined in the proposed amendment. The company's next principal payment of $3 million is due on April 30, 2009, which would be covered during the forbearance period. If passed, the forbearance agreement would become effective May 1, 2009, at which point S&P may review the ratings. "We will continue to monitor the situation and make updates as additional information becomes available," said Standard & Poor's credit analyst Bea Chiem. ALLISON TRANSMISSION: PIK Payment Won't Affect S&P's 'B' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Allison Transmission Inc. (B/Negative/--) are not affected by the company's election to make a payment-in-kind interest payment on its 11.25% senior unsecured toggle notes due 2015. The decision affects the interest payment scheduled for Nov. 1, 2009, and will result in an increase to the principal amount of the notes as of that date (and possibly on future dates if Allison elects not to resume cash payments for future interest periods). So-called "toggle notes" are designed to facilitate a switching back and forth between cash and PIK distributions, often at the issuer's discretion. Under S&P's criteria for toggle notes, S&P will not treat use of the PIK option as warranting a 'D' rating on that issue -- provided there are sufficient disclosures at issuance to give investors the expectation of receiving PIK distributions at various stages of the security's life, and where the issuer is rated speculative grade at the time of issuance. In analyzing Allison's recovery prospects, S&P previously assumed that the PIK option would likely be used prior to a bankruptcy and that this would thus translate into higher unsecured debt outstanding at the time of default. Allison remains challenged by very weak industry demand for commercial vehicles in North America. S&P expects decreased revenue to lead to increased leverage of more than 9x, including S&P's adjustments, by the end of this year, compared to about 7.5x as of the end of 2008. The company had a 34% EBITDA cushion with respect to its senior secured leverage test as of the end of 2008. S&P expects the company to remain in compliance with its covenants through the end of 2009, although S&P project the cushion to narrow substantially because of lower EBITDA and stepdowns in the leverage test to 7x from 7.75x over the course of the year. The increased debt from PIK interest does not hinder covenant compliance because only secured debt is included in the calculation. AIRBORNE HEALTH: Nonpayment of Loan Cues S&P's Rating Cut to 'D' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Minneapolis-based Airborne Health Inc. to 'D' from 'CCC'. S&P also lowered the ratings on its $160 million senior secured term loan and $20 million senior secured revolver to 'D' from 'CCC-'. The '5' recovery rating on the senior secured facility remains unchanged. The company had about $140 million in balance sheet debt at Feb. 28, 2009. The downgrade follows the company's disclosure of its failure to pay a scheduled $3 million Jan. 31, 2009, principal payment on its term loan due 2012 and its request for a forbearance agreement and amendment with its senior secured lenders. Under the proposed amendment, as long as the forbearance period is continuing, Airborne may request borrowings under its revolver and is subject to limited amounts. In addition, the company is required to engage an investment banking firm to explore strategic alternatives. The requested forbearance period may end on the earliest of Aug. 31, 2009, or in the occurrence or existence of any default or event of default other than the specified defaults in the proposed amendment, or failure to comply with new covenants and/or an occurrence of an unpermitted budget variance, as defined in the proposed amendment. The company's next principal payment of $3 million is due on April 30, 2009, which would be covered during the forbearance period. If passed, the forbearance agreement would become effective May 1, 2009, at which point S&P may review the ratings. "We will continue to monitor the situation and make updates as additional information becomes available," said Standard & Poor's credit analyst Bea Chiem. ALLISON TRANSMISSION: PIK Payment Won't Affect S&P's 'B' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Allison Transmission Inc. (B/Negative/--) are not affected by the company's election to make a payment-in-kind interest payment on its 11.25% senior unsecured toggle notes due 2015. The decision affects the interest payment scheduled for Nov. 1, 2009, and will result in an increase to the principal amount of the notes as of that date (and possibly on future dates if Allison elects not to resume cash payments for future interest periods). So-called "toggle notes" are designed to facilitate a switching back and forth between cash and PIK distributions, often at the issuer's discretion. Under S&P's criteria for toggle notes, S&P will not treat use of the PIK option as warranting a 'D' rating on that issue -- provided there are sufficient disclosures at issuance to give investors the expectation of receiving PIK distributions at various stages of the security's life, and where the issuer is rated speculative grade at the time of issuance. In analyzing Allison's recovery prospects, S&P previously assumed that the PIK option would likely be used prior to a bankruptcy and that this would thus translate into higher unsecured debt outstanding at the time of default. Allison remains challenged by very weak industry demand for commercial vehicles in North America. S&P expects decreased revenue to lead to increased leverage of more than 9x, including S&P's adjustments, by the end of this year, compared to about 7.5x as of the end of 2008. The company had a 34% EBITDA cushion with respect to its senior secured leverage test as of the end of 2008. S&P expects the company to remain in compliance with its covenants through the end of 2009, although S&P project the cushion to narrow substantially because of lower EBITDA and stepdowns in the leverage test to 7x from 7.75x over the course of the year. The increased debt from PIK interest does not hinder covenant compliance because only secured debt is included in the calculation. ALON REFINING: S&P Raises Corporate Credit Rating to 'B' -------------------------------------------------------- Standard & Poor's Ratings Services raised the corporate credit rating on refining and marketing company Alon Refining Krotz Springs Inc. to 'B' from 'B-'. At the same time, S&P revised the CreditWatch listing to positive implications from negative. Additionally, S&P raised the senior secured rating on Krotz Springs' $302 million term loan to 'B+' from 'B'. The recovery rating of '2' on the loan remains unchanged. The rating actions reflect much improved debt leverage and liquidity levels following the announcement that Krotz Springs monetized hedges on heating oil for total proceeds of about $185 million including the release of $50 million cash collateral. Proceeds reduced debt levels by almost half ($185 million), and the company should be well within its amended financial covenants. Proceeds were used to repay outstanding debt on its $302 million term loan (about $135 million) and credit facility (about $50 million). Additionally, liquidity will further improve thanks to revised crude oil purchasing terms that will allow Krotz Springs to post letters of credit rather than post cash collateral on its $250 million credit facility. S&P expects this change to be completed by June 30. Furthermore, Alon USA and Alon Israel (parent of Alon USA Energy) have provided an additional equity investment of $25 million and $25 million of letter of credit support. AMERICAN AXLE: Declining Auto Markets Cue Fitch's Junk Rating ------------------------------------------------------------- Fitch Ratings has downgraded American Axle's ratings: American Axle & Manufacturing Holdings, Inc. -- Long-term Issuer Default Rating to 'CCC' from 'B-'. American Axle & Manufacturing, Inc. -- Long-term IDR to 'CCC' from 'B-'; -- Senior secured bank facility to 'B-/RR3' from 'B+/RR2'; -- Senior unsecured notes to 'C/RR6' from 'CCC/RR6'. All remain on Rating Watch Negative where they were originally placed on Dec. 11, 2008. The Negative Watch remains in effect due to the uncertain production or sales ramifications of near-term events at General Motors and/or Chrysler, including potential bankruptcy filings. Fitch's rating actions affect approximately $1.3 billion of debt. The downgrade is driven by the further extended shutdowns scheduled by GM, and the probability of a leverage covenant default under the company's bank agreement. The downgrade is driven by continued deterioration in the auto and truck markets, and the related announcement by GM, AXL's key customer, that it will shut down 13 of its manufacturing plants in North America during the second and third quarters of 2009. The shutdown for some plants may begin as early as mid-May. GM is taking more extended summer shutdowns than usual this year to reduce vehicle inventory, which was 767,000 at the end of March; with this planned shutdown the company hopes to have inventory of 525,000 at the end of July. The announced plant closures will challenge all of GM's suppliers, but AXL is likely to suffer more than most of its peers in the auto supply sector given its lack of customer diversification. As of 2008, 74% of its sales were to General Motors and 12% were to Chrysler. A potential bankruptcy filing by General Motors and/or Chrysler is incorporated into the ratings, and further rating actions will depend on the impact of any filing on GM's and Chrysler's production, as well as on negotiations with the company's bank group. Fitch believes that in the event of a filing by GM or Chrysler, the U.S. government would provide additional financial assistance in an attempt to support an orderly bankruptcy. This expected support from the government would be done in an effort to keep the fragile supplier base intact and prevent wider industry repercussions. Importantly, the rating remains on Negative Watch since the supplier base may not withstand the fallout of a GM bankruptcy despite potential efforts to prevent negative consequences. At the end of 2008, AXL had liquidity of $376 million. Cash on hand was $199 million and availability on its secured revolver was $129 million; AXL also had $48 million available on foreign credit facilities. In addition to liquidity of $376 million, AXL had $77 million invested in short-term investments. This is money that was invested with the Reserve Funds which halted redemptions in September 2008; consequently, it is unknown when or how much of the money will become available to AXL. However, from year-end 2008 through mid-March, $59 million of the funds were dispersed to AXL. The company's liquidity position has decreased materially from the end of 2007 when it was $922 million. Part of the lower liquidity is attributable to the reduced revolver which was previously an unsecured $600 million revolver maturing in April 2010. When AXL amended this facility for covenant relief and to extend the tenor in November 2008, the facility was reduced by 25% to $477 million and became secured. The commitment remains $477 million until April 2010; after that it is reduced to $370 million and it expires in December 2011. Aside from having a reduction in the size of the revolver in 2010 and its final maturity in 2011, AXL does not have any debt maturities until its $250 million term loan is due in 2012. Fitch believes that AXL could violate its secured leverage ratio covenant later in 2009 because of the more negative outlook for earnings in 2009 and the elevated amount of debt. Over the course of 2008, debt increased by $282 million to $1.14 billion. At the end of 2008, the senior secured leverage ratio (as defined by the credit agreement) could be no greater than 2.5 times (x). The maximum secured leverage ratio in future periods is: first quarter-2009 (1Q'09) 3.0x, 2Q'09 3.5x, 3Q'09 3.0x, and it tightens to 2.75x after that. If AXL has enough cash on hand, it may use that to reduce secured borrowings at the end of each quarter to prevent violations. The cash interest coverage ratio must be greater than 2.5x at year-end 2008, 2.25x 1Q'09, 1.75x 2Q'09, 2.0x 3Q'09, 2.25x 4Q'09 through 3Q'10 and 3.0x thereafter. Fitch believes that if AXL does violate a covenant, its lenders would be willing to provide additional relief. This is based on AXL's role as a key supplier to many of GM's popular platforms which Fitch expects to remain in production whether or not the automaker files. Fitch also believes that AXL could possibly benefit from difficulties at some of its key competitors. Fitch projects that AXL will not generate free cash flow in 2009 following the negative free cash flow of $322 million in 2008, despite significant improvement and flexibility to its fixed cost structure. Dividends were suspended in January 2009 and cost- cutting efforts were made before and during the global automotive slump; however, Fitch does not expect these initiatives to be enough to prevent the company's financial profile from deteriorating given the weak state of the automotive industry. Additional headwinds will come from the company's need to make pension contributions in 2009; AXL expects to contribute between $15 and $20 million to the plan during the year. At the end of 2008, the pension plan was 55% funded. Other post employment benefits contributions are expected to be $15 million during 2009. The Recovery Ratings reflect Fitch's expectations under a scenario in which the distressed enterprise value is allocated to various debt classes. The secured lenders recovery rating has been downgraded from 'RR2' to 'RR3' which indicates a 51%-70% recovery based on collateral coverage in the amount permitted to be drawn. The RR was lowed for the secured rating given the deterioration of the outlook for sales and the significant devaluation of global automotive asset values. The unsecured notes remain 'RR6' which indicates are recovery of 0%-10% in the event of a default. Fitch is seeing this possible low recovery outcome for unsecured creditors throughout the automotive sector. AMERICAN CONTINENTAL: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: American Continental Resources Corporation 23500 North 7th Street Phoenix, AZ 85024 Bankruptcy Case No.: 09-08743 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Rock Source, LLC 09-08744 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Donald W. Powell, Esq. Carmichael & Powell, P.C. 7301 N. 16TH ST., #103 Phoenix, AZ 85020 Tel: (602) 861-0777 Fax: (602) 870-0296 Email: d.powell@cplawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors when it filed its petition. The petition was signed by Reynold E. Kraft, president of the Company. AMERICAN HOME: Former CEO to Pay $2.45MM to Settle Fraud Charges ---------------------------------------------------------------- The Securities and Exchange Commission charged two former executives at American Home Mortgage Investment Corporation for engaging in accounting fraud and making false and misleading disclosures to conceal from investors the company's worsening financial condition in early 2007 as the subprime crisis emerged. The SEC alleges that former chairman and CEO Michael Strauss and former CFO Stephen Hozie fraudulently understated American Home Mortgage's first quarter 2007 loan loss reserves by tens of millions of dollars, converting the company's loss into a fictional profit. The SEC alleges that Messrs. Strauss and Hozie also misled investors about the financial condition of the company, including the riskiness of the mortgages originated and held by American Home Mortgage. The SEC additionally charged Mr. Strauss, Mr. Hozie and the company's former controller, Robert Bernstein, with misleading American Home Mortgage's auditor among other violations. Mr. Strauss has settled the SEC's charges by agreeing to pay more than $2.45 million and consenting to a five-year officer and director bar. "These senior executives did not just occupy a front row seat to the mortgage meltdown - they were part of the show," said Robert Khuzami, Director of the SEC's Division of Enforcement. "As the housing market imploded, these executives kept secret that the company's holdings were collapsing like a house of cards." James A. Clarkson, Acting Director of the SEC's New York Regional Office, said, "As alleged in our complaint, these defendants suppressed the warning signs of the mortgage crisis and its impact on American Home Mortgage's business to the detriment of investors and the broader market." According to the SEC's complaint, Messrs. Strauss and Hozie intentionally understated the company's reserves despite knowing that American Home Mortgage's own internal analysis showed that the company needed at least $38 million in additional reserves. The analysis also showed that the company's losses on its delinquent second liens were mounting quickly and that American Home Mortgage would lose at least 72 percent of the value of these loans after the properties went through foreclosure. Messrs. Strauss and Hozie knowingly failed to reserve adequately for the expected losses caused by the company's delinquent loans. Messrs. Strauss, Hozie and Bernstein also misled American Home Mortgage's auditor about the adequacy of the reserves for the first quarter of 2007. The SEC further alleges that Messrs. Strauss and Hozie misled investors about the company's liquidity, including failing to disclose that American Home Mortgage was forced to sell the majority of its multi-billion dollar mortgage-backed securities portfolio in April 2007 to meet pressing liquidity demands. Messrs. Strauss and Hozie also made misleading disclosures about the riskiness of the mortgages that the company originated and held. American Home Mortgage actually originated the majority of its loans in 2006 on a "stated income" basis without verifying the borrower's income. The SEC's complaint seeks a final judgment permanently enjoining the defendants from future violations of the federal securities laws and ordering them to pay financial penalties and disgorgement of ill-gotten gains plus prejudgment interest. The complaint also seeks a judgment barring Messrs. Strauss and Hozie from serving as officers or directors of any public company. Mr. Strauss agreed to settle the SEC's charges without admitting or denying the allegations. He will be permanently enjoined from violating the antifraud, reporting, record-keeping, and internal controls provisions of the federal securities laws and will pay approximately $2.2 million in disgorgement and prejudgment interest and a $250,000 penalty. Mr. Strauss also will be barred from serving as an officer or director of a public company for five years. The litigation against the other defendants is ongoing. A full-text copy of the SEC's complaint is available at no charge at http://sec.gov/litigation/complaints/2009/comp21014.pdf About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for Chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. American Home filed a de-consolidated plan of liquidation on Aug. 15, 2008. The former home mortgage lender's liquidating Chapter 11 plan was confirmed in February 2009 (American Home Bankruptcy News; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN INT'L: Rush Sale May Not Net Highest Price for AIU ----------------------------------------------------------- Lilla Zuill at Reuters reports that American International Group Inc. may not get the highest possible price from a rushed public sale of its property-casualty business, AIU Holdings. According to Reuters, AIG said last week that it is speeding up plans to sell its property-casualty operations, most likely through an initial public offering. Reuters says that AIG wants to repay the roughly $80 billion it owes the U.S. government. Reuters notes that it is a lousy market to sell any financial asset, but the longer AIG waits, the higher the risk that the business becomes more tainted by the rest of the Company's troubles. Reuters quoted AIG CEO Edward Liddy as saying, "Over time, people just get AIG fatigue. A buyer of insurance just doesn't want to deal with: Is AIG bankrupt? Are they solvent? Are they going to be around? And if I can't turn this situation around, we run the risk that that business does atrophy." Reuters states that AIG's property-casualty businesses, which contributed almost half of the Company's overall $83.5 billion in premium last year, has deteriorated since the Company's federal rescue in September, and numerous high-level executives have quit. According to Reuters, the general insurance operations' net written premiums dropped 22% in the fourth quarter. Reuters relates that AIG warned that it was seeing fewer new clients and had lost existing business partly due to concerns over the Company's financial strength. "We are expecting revenue to be down in the quarter as premiums written were already down pretty significantly in the last quarter," Reuters quoted Gradient Analytics analyst Pete Larson as saying. According to the report, Mr. Larson expects AIG to be hit by more losses this year from soured mortgage investments and on derivative guarantees that drove much of its $100 billion in losses over the past year. Citing Bernstein Research analyst Todd Bault, Reuters says that under a best-case scenario, an IPO of AIU Holdings could be valued as high as $58 billion. Reuters notes that the ultimate value for an AIU Holdings IPO would be determined by investors, who in this market are already wary after large losses from the credit crisis. 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. AMERICAN INT'L: Names Matthew E. Winter as Vice Chairperson ----------------------------------------------------------- American International Group, Inc., reported that Matthew E. Winter -- AIG Senior Vice President, President and CEO of American General Life Companies -- has been named Vice Chairperson, Transition Planning and Administration, reporting to AIG Chairperson and CEO Edward M. Liddy. In this position, Mr. Winter succeeds Richard H. Booth, who has retired. Mr. Winter will continue to serve as President and CEO of American General Life Companies, a position he has held since joining AIG in 2006. He was elected AIG Senior Vice President in March 2007. Previously he served as Executive Vice President and member of the Office of the CEO for MassMutual Financial Group. Jeffrey Hurd has also been named AIG Vice President and Chief Administrative Officer and will oversee AIG's global operations and systems, corporate administration and a variety of special projects, reporting to Mr. Winter. Mr. Hurd will continue to serve as Senior Vice President and Head of Asset Management Restructuring, reporting to Paula Reynolds. He joined AIG in 1998 in the Corporate Legal Department, and was most recently AIG Investments Senior Managing Director, Chief Administrative Officer and General Counsel. Commenting on the appointments, Mr. Liddy said Mr. Winter and Mr. Hurd will play key roles in AIG's efforts to restructure its businesses and repay the government assistance it has received. "We continue to make progress every day," Mr. Liddy said. "With their excellent management skills, Matt and Jeff will help continue our momentum." 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. AMERICAN NATURAL ENERGY: Cash-Strapped, Going-Concern Doubt Raised ------------------------------------------------------------------ Malone & Bailey, PC, in Houston, Texas, the independent registered public accounting firm of American Natural Energy Corporation has raised substantial doubt about the Company's ability to continue as a going concern. American Natural Energy has sustained substantial losses in 2008 and 2007, totaling approximately $61,000 and $3.2 million, respectively, and had a working capital deficiency at December 31, 2008 of approximately $20.3 million. Production from the Company's drilling program increased during 2008 compared to 2007; however, its revenue has not been sufficient to fund operations. As of December 31, 2008, American Natural Energy does not have any available borrowing capacity under existing credit facilities, and its current assets are $154,000 compared with current liabilities of $20.4 million. American Natural Energy's current liabilities include approximately $10.8 million of secured indebtedness, which was due September 2006 and is currently in default and accounts payable, revenues payable, notes payable, and other current obligations aggregating to approximately $9.6 million. In October 2003, American Natural Energy completed a borrowing of $12.0 million used for repayment of outstanding short-term secured debt, for exploration and development activities on the oil and gas leases within its ExxonMobil joint development project in St. Charles Parish, Louisiana, and for general corporate purposes. As of December 31, 2007, a total of $1.175 million of Debentures was converted to common stock. The remaining $10.825 million borrowing was due to be repaid on September 30, 2006. In addition, as of December 31, 2007, American Natural Energy is in default in the payment of $1.5 million of interest on the Debentures. The loan is collateralized by a lien against all American Natural Energy's oil and natural gas properties and undeveloped leaseholds and bears interest at 8% per annum, payable quarterly commencing December 31, 2003. As a consequence of the indebtedness being in default, American Natural Energy said creditors could foreclose against substantially all of its assets. Under these circumstances, the holders of the Company's common stock could realize little or nothing from their investment in the Company shares. "There can be no assurance that we will be successful in paying such amounts or refinancing this indebtedness or that the terms of such refinancing may not be disadvantageous to the holders of our common stock or result in material dilution," American Natural Energy said in a regulatory filing with the Securities and Exchange Commission. "Our inability to pay or refinance this indebtedness could lead to the creditors foreclosing on all our assets which could result in the loss of a stockholder's entire investment." American Natural Energy also said it has substantial needs for funds to pay outstanding payables and debt due during 2009. "All the foregoing lead to questions concerning our ability to meet our obligations as they come due. We also have a need for substantial funds to develop our oil and gas properties. We have financed our activities using private debt and equity financings, and we have no line of credit or other financing agreement providing borrowing availability with a commercial lender," American Natural Energy said. "As a result of the losses incurred and current negative working capital and other matters . . . there is no assurance that the carrying amounts of our assets will be realized or that liabilities will be liquidated or settled for the amounts recorded. Our ability to continue as a going concern is dependent upon adequate sources of capital and the ability to sustain positive results of operations and cash flows sufficient to pay our current liabilities and to continue to explore for and develop our oil and gas reserves." American Natural Energy posted a net loss of $61,498 on total revenues of $2.19 million for the year ended December 31, 2008. The Company had $3.29 million in total assets and $22.3 million in total liabilities, resulting in $19.0 million in stockholders' deficit. A full-text copy of the Company's Annual Report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?3c2c About American Natural Energy Based in Tulsa, Oklahoma, American Natural Energy Corporation is engaged in the acquisition, development, exploitation and production of oil and natural gas. The Company acquired the assets and outstanding stock of Couba Operating Company in December 2001, after Couba was forced into chapter 7 bankruptcy in March 2000. The case was later converted to Chapter 11 and in May 2001, the Company joined with Couba in submitting to the Bankruptcy Court a plan of reorganization whereby the Company would acquire substantially all the assets -- consisting of physical oil and gas facilities -- and capital stock of Couba. The plan was finally confirmed November 16, 2001. ARTHUR ANDERSEN: Settles Enron Creditors' Lawsuit for $16 Million ----------------------------------------------------------------- Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, Enron Recovery Corp. asks Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement and mutual release it entered into with Arthur Andersen. Under the settlement, Arthur Andersen will pay to Enron $16,000,000 and the parties will mutually release each other from all claims. In December 2003, the Official Committee of Unsecured Creditors of Enron Corp. filed a complaint, on behalf of Enron, against Arthur Andersen alleging that certain of its former officers needed the approval of Arthur Andersen, as Enron's former independent auditor and financial advisor, to engage in gross misconduct and breaches of their fiduciary duties in the form of misstating and manipulating Enron's financial condition for the former executives' own benefit. The Complaint also alleged that the accounting firm failed to fully and candidly apprise Enron's Board of Directors with respect to certain high risk transactions orchestrated by the former Enron officers and failed to fulfill its obligations to Enron, the Board, and its Audit Committee by placing the firm's own interests ahead of Enron's and by acceding to the inappropriate transactions designed by the Enron Insiders. According to the Complaint, Arthur Andersen was involved in virtually every aspect of Enron's financial operations and internal control structure, giving rise to their own fiduciary duties of loyalty, utmost good faith and candor, honest dealing, and full disclosure. In addition, the Complaint alleges that Arthur Andersen was paid more than $180 million in fees between 1997 and 2001. The Committee further alleged that Arthur Andersen breached these duties by, among other things: (a) placing its own financial interests ahead of Enron's; (b) failing to provide objective, impartial and truthful advice to Enron; (c) issuing audit opinions of Enron's financial statements that Arthur Andersen was negligent in failing to know contained material misstatements and omissions; (d) failing to recognize that ever increasing sophisticated and complex transactions entered into by Enron had little to do with the nature of Enron's business and everything to do with the Enron Insiders' attempt to achieve financial statements that did not reflect the reality of the company's performance or the results of the transactions itself; and (e) destroying evidence. Arthur Andersen has denied, and continues to deny, each and all claims and allegations of wrongdoing made against it and has maintained that it has meritorious defenses. Enron asserts that the settlement will clearly benefit its estate. Enron points out that the settlement will result in a substantial payment to the estate and will adequately compensate the estate for its claims against Arthur Andersen given the costs and uncertainties of litigation. Bloomberg's Bill Rochelle says the Court is scheduled to convene a hearing on the settlement on May 14. 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. Bloomberg relates that distributions to Enron creditors exceed 50%, some three times more than early estimates of the probably recovery. 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; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Amends Plan to Include Court-Approved Sterlite Deal --------------------------------------------------------------- ASARCO LLC has filed a disclosure statement explaining its fourth amended plan of reorganization. The Fourth Amended Plan incorporates the approval by the U.S. Bankruptcy Court for the Southern District of Texas of the $1.7 billion sale of ASARCO LLC's operating assets to Sterlite Industries Ltd. As reported by the Troubled Company Reporter, Judge Richard S. Schmidt approved on April 22, 2009, the proposed form of the Renewed Purchase and Sale Agreement between ASARCO LLC and and Sterlite (USA), Inc., including the agreement provisions on a conditional release of Sterlite and bid protections for Sterlite. Judge Schmidt declined to rule on the Sterlite Settlement at the hearing on April 14, saying he needed more time to consider the matter. The Sterlite sale will be approved through the confirmation of the Debtors' Plan. The TCR said the Court had directed ASARCO and Sterlite to file, no later than May 2, amendments to the Debtors' Third Amended Plan of Reorganization and Disclosure Statement describing the proposed treatment of asbestos creditors in light of statements made on the record of the hearing on April 13 and 14, 2009, and the status conference on April 20, 2009. 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) ASYST TECH: Wants Access to Cash; Lenders Deal Has Sale Milestone ----------------------------------------------------------------- Asyst Technologies, Inc., has reached an agreement Keybank National Association, as agent for the prepetition lenders, for the use cash to fund its Chapter 11 case. Asyst asks the U.S. Bankruptcy Court for the Northern District of California to approve the stipulation, which would allow it to use cash collateral securing repayment of loan from prepetition lenders. The agreement with Keybank requires the Debtor to seek approval of the sale of all assets by May 29 Entities with interest in the cash collateral are Keybank, as agent, and lenders Citibank, N.A., Silicon Valley Bank, and RBS Citizens Bank. The Debtor is indebted to the lenders pursuant to a credit agreement dated as of July 27, 2007, as amended, and the loan documents, as amended, in the principal amount of $77 million, as of the petition date, plus accrued prepetition interest, costs and fees and other obligations. Pursuant to the loan agreement, the prepetition obligations are secured by a continuing perfected lien upon all of the Debtor's assets. The agent is willing to consent the Debtor's use of cash collateral only to the extent provided in the budget until June 30, 2009. Pursuant to the stipulation, the Debtor has also agreed to grant (i) a replacement lien in favor of Keybank and other lenders; (ii) a superpriority claim; and (iii) payment of certain fees and expenses of the agent's counsel and financial advisor. The Debtor's use of cash collateral, and the agent's willingness to allow use, will immediately and automatically terminate upon the earliest to occur of these: i) May 15, 2009, if the Court has not entered a final order approving the stipulation; ii) the dismissal or conversion to Chapter 7 of the case; iii) the entry by the Court of an order granting relief from the automatic stay; iv) the appointment of any trustee or any examiner; v) the final indefeasible payment and satisfaction in full in cash of the prepetition obligations; vi) the effective date of any Chapter 11 plan of reorganization; vii) the Debtor's total expenditures at the end of any month exceed 105% of the Debtor's budgeted expenditure; viii) the failure of the Debtor to deliver to the agent any documents or other information required to be delivered pursuant to the interim order within 5 days after receiving notice from the agent; ix) the consummation of the sale of all or substantially all of the assets of the Debtor; x) the failure by the Debtor to observe or perform any of the terms or provisions contained herein or in the prepetition loan documents; xi) without the consent of the agent, the entry of an order of the court approving the terms of any debtor-in-possession financing for the Debtor unless the prepetition obligations are indefeasibly paid in full; xii) the entry of an order of any court reversing, staying, vacating or otherwise modifying in any material respect the terms of the interim order; or xiii) May 29, 2009, if the Debtor has not filed a motion to sell substantially all of its assets on or before the date, provided, however, the date mat be extended by written agreement between then agent and the Debtor on or prior to the occurrence of the date. The agent's and the lenders' liens on and security interest in the collateral will be subject only to payments not to exceed $50,000, which amount may be used only to pay fees. A full-text copy of the budget is available for free at: http://bankrupt.com/misc/ASYST_Budget.pdf About Asyst Technologies, Inc. Headquartered in Fremont, California, Asyst Technologies, Inc. -- http://www.asyst.com/-- makes, sell and support integrated hardware and software systems primarily for semiconductor and flat panel display manufacturing industries. The Company filed for Chapter 11 on April 20, 2009 (Bankr. N.D. Calif. Case No. 09-43246). Ali M.M. Mojdehi, Esq., at the Law Offices of Baker and McKenzie, represents the Debtor in its restructuring efforts. As of December 31, 2008, the Debtor had total assets of $295,782,000 and total debts of $315,364,000. ATLAS ENERGY: S&P Changes Outlook to Stable; Affirms 'B+' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Atlas Energy Resources LLC to stable from negative. At the same time, S&P affirmed the ratings on ATN, including the 'B+' corporate credit rating. The outlook revision follows the announcement that ATN and Atlas America Inc. (unrated) have executed a merger agreement, such that ATN will become a newly formed subsidiary of Atlas America, to be known as Atlas Energy Inc. As a result of the announcement, Standard & Poor's has greater confidence that the newly formed entity will not lever up and degrade its financial profile to support its sister entity, Atlas Pipeline Partners LP. The corporate credit rating on APL is 'B' and remains on CreditWatch with negative implications, due to tightening liquidity and concerns that it could breach a financial covenant. In ATN's latest investor conference call, management indicated that APL would not be allowed to burden Atlas America or ATN. Furthermore, APL has recently announced asset sales to nonaffiliated third parties, which also relieves some of the uncertainty of whether ATN would have purchased assets from APL to support the entity. The ratings on ATN reflect the company's limited scale, geographic diversity, and aggressive financial leverage. The ratings also reflect the low geological risk inherent in the company's reserve base, its long reserve life, and the fee income that the company's partnership management business generates. Standard & Poor's expects that debt to EBITDA will be in the low- 3x area and EBIT to interest coverage will be 3.5x to 4x. "If measures worsen beyond these levels, due to the funding of growth-related capital expenditures or underperformance in the company's underlying businesses, S&P will consider a ratings downgrade," said Standard & Poor's credit analyst David Lundberg. "It is unlikely that S&P will raise the ratings in the near future," he continued. AVIS BUDGET: S&P Assigns Recovery Rating on Unsecured Notes ----------------------------------------------------------- Standard & Poor's Ratings Services assigned a '6' recovery rating to Avis Budget Car Rental LLC's (CCC+/Developing/--) unsecured notes, indicating expectations of negligible (0%-10%) recovery of principal in the event of a payment default. Avis Budget Car Rental LLC is a subsidiary of Avis Budget Group Inc. (CCC+/Developing/--). The 'CCC-' rating on the notes is two notches lower than the parent company's corporate credit rating, based upon S&P's expectation that the current credit markets will continue to require higher collateralization for secured vehicle facilities, leaving less available for the unsecured lenders. Also, a shift by Avis Budget to a higher percentage of risk vehicles in its fleet, combined with a soft automotive retail market, suggests that unsecured recoveries would be lower in the event of a payment default. On April 17, 2009, S&P removed ratings on Avis Budget from CreditWatch with positive implications, and assigned a developing outlook. "The ratings on Parsippany, New Jersey-based Avis Budget Group Inc. reflect a highly leveraged financial profile; the price- competitive and cyclical nature of on-airport car rentals; its exposure to the troubled automobile manufacturing industry; and significant refinancing risk -- with close to $4 billion of debt maturities through 2010," said Standard & Poor's credit analyst Betsy Snyder. "Ratings also incorporate the company's position as a major U.S. on-airport car renter and the strong cash flow this business generates," the analyst continued. (For the corporate credit rating rationale on Avis Budget, see the research update published on April 20, 2009, on RatingsDirect. An updated recovery analysis on Avis Budget will be published on RatingsDirect following release of this article.) Ratings List Avis Budget Group Inc. Avis Budget Car Rental LLC Corporate Credit Rating CCC+/Developing/-- Ratings Affirmed/Recovery Rating Assigned Avis Budget Car Rental LLC To From -- ---- Senior Unsecured CCC- CCC- Recovery Rating 6 BANK OF AMERICA: CalPERS to Oppose Re-election of 18 Directors -------------------------------------------------------------- Kerry E. Grace at The Wall Street Journal reports that the California Public Employees' Retirement System or CalPERS said that it will oppose the re-election of all 18 Bank of America Corp. directors, including Chairperson and CEO Ken Lewis, during the Company's annual meeting. According to WSJ, more holders -- including Calpers, which owns 22.7 million BofA shares, and proxy-advisory firms like Egan-Jones -- are expressing their displeasure with BofA's current leaders and are calling for a boardroom makeover. WSJ quoted Calpers board President Rob Feckner as saying, "The entire board failed in its duties to shareowners and should be removed." WSJ relates that BofA's shares were recently down 8% at $8.21 on a Wall Street Journal report that regulators have told BofA and Citigroup Inc. that they may have to raise more capital based on early results of the government's stress tests of lenders. According to the report, BofA has already taken $45 billion in capital from the federal government, some of it used to help the bank cover losses stemming from its purchase of Merrill Lynch. Mr. Lewis is likely to win re-election to BofA's board by a wide margin, Dan Fitzpatrick at WSJ states, citing people familiar with the preliminary results of shareholder votes set to be announced at the meeting in Charlotte. WSJ says that as of Tuesday, with about 75% of the shares outstanding counted, slightly more than 50% favored splitting the chairperson and CEO positions. Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. BANK OF AMERICA: Shareholders Oust Kenneth D. Lewis as Chairperson ------------------------------------------------------------------ Bank of America Corp. shareholders called for new leadership and greater accountability as 50.3% voted in favor of a resolution forcing Kenneth D. Lewis to resign as Chairman of the Board during the bank's annual shareholder meeting. "Today, we saw a vote of no confidence in Ken Lewis who has overseen record losses in stock value and whose short-sited business plans have put personal gain ahead of shareholders and the long-term health of the company," said SEIU Master Trust Chairman Andy Stern. SEIU Master Trust is a consortium of funds that has total assets of more than $1.3 billion and is an active proponent of sound corporate governance as a vital means to protect and enhance shareholder value. "Boards operate independently from management for good reason -- to ensure proper oversight, to balance the inherently biased views of staff, and to provide the long view," continued Mr. Stern. "As shareholders, we're pleased that Bank of America has acted swiftly to implement the by-law change and we're hopeful that the new Chair will bring independent leadership, protect the interests of shareholders and get the bank back on track." The vote follows more than three years of SEIU Master Trust advocacy and engagement with Bank of America to improve its corporate governance practices. In what is the first time ever that shareholders have been able to amend the corporate by-laws in a proxy vote of an S&P 500 company, the SEIU Master Trust resolution required that the Board of Directors appoint an independent Chairman to its board. Before filing this year's successful resolution, the SEIU Master Trust filed a similar resolution last year winning 38 (37.6) percent support from shareholders. "Bank of America investors are calling for swift, fundamental reform of a bank that has lost its way. Appointment of a new Chair is just the first step; in coming weeks, Bank of America must make fundamental changes to restore shareholder trust and to build a banking governance model that will succeed over the long term," concluded Mr. Stern. At a meeting of the Board of Directors, after a recommendation from the Governance Committee, Dr. Walter E. Massey was elected chairman. Mr. Lewis will be president and CEO. The board unanimously expressed its support for Mr. Lewis to continue in that role. All 18 directors were elected to the board by comfortable margins. In addition, management proposals regarding executive compensation and the retention of PricewaterhouseCoopers LLC as the Company's independent accounting firm were approved. Seven shareholder proposals were not approved. An eighth shareholder proposal to change the company's by-laws to require an independent chairman was narrowly approved. Mr. Massey is president emeritus at Morehouse College in Atlanta. He served as president of Morehouse from August 1995 to June 2007. He has been a director of the board since 1998 and is a member of the board's Audit Committee. He was a director of BankAmerica Corporation from 1993 to 1998 and currently also serves as a director of McDonald's Corporation. Mr. Massey formerly was also a director of Delta Airlines, Motorola, BP PLC. Prior to Morehouse, Mr. Massey held a range of administrative and academic positions. He is former director of the National Science Foundation, a position to which he was appointed by former President George H.W. Bush. The Foundation is the government's lead agency for support of research and education in mathematics, science and engineering. Mr. Massey also served as vice president for research and professor of physics at the University of Chicago, as director of the Argonne National Laboratory, dean of the College and professor of physics at Brown University and as assistant professor of physics at the University of Illinois. Immediately prior to Morehouse, Mr. Massey was provost and senior vice president for academic affairs at the University of California. In this position, the second most senior position in the UC system, he was responsible for academic and research planning and policy, budget planning and allocations, and programmatic oversight of the three national laboratories the University manages for the Department of Energy: Lawrence Livermore National Laboratory, Los Alamos National Laboratory and Lawrence Berkeley Laboratory. After earning a bachelor of science in physics and mathematics in 1958 from Morehouse, Mr. Massey received his master's and doctorate in physics in 1966 from Washington University in St. Louis, Missouri Mr. Massey's research has involved the study of quantum liquids and solids. His written work has also addressed science and math education, the role of science in a democratic society, and university-industry interactions and technology transfer in national and international settings. Active with a range of organizations, Massey is a past chair of the Secretary of Energy Advisory Board (SEAB) and was a member of the President's Council of Advisors on Science and Technology. The recipient of more than 30 honorary degrees from institutions such as Yale University, Northwestern University, Amherst and the Ohio State University, Massey's leadership in education includes his service as a member of the Gates Millennium Scholars Advisory Council and the National Commission on Mathematics and Science Teaching for the 21st Century. He is a fellow and past president of the American Association for the Advancement of Science, a fellow and past vice president of the American Physical Society, and a member of the American Academy of Arts and Sciences, the American Philosophical Society and the Council on Foreign Relations. During the meeting, Mr. Lewis said the company's long-term vision for profitable growth is being advanced by the acquisitions of Merrill Lynch & Co. and Countrywide Financial Corp. despite the challenging economic environment. "We are building this company and managing for the long term," Lewis told shareholders at the company's annual meeting. "I continue to believe we have built the best financial company in the industry, and that our results over the long term will bear that out. Let me acknowledge that 2008 was a very difficult year for the economy, for the financial services industry and for our company in particular. Our company's shareholders have carried a heavy burden recently. We are doing everything within our power every day to fight through today's adversity and drive toward tomorrow's promise." "Merrill will help the company move toward its goal of developing stronger, deeper and more profitable customer relationships over the long term through its leading positions in capital markets and wealth management," Mr. Lewis said. "Countrywide helped Bank of America gain a high-quality franchise and customer base along with significant market share in mortgages -- a cornerstone financial product," he added. "My strong feeling is that organizational integration -- and a renewed focus on organic growth -- will be the almost exclusive focus of our efforts in the coming years," Mr. Lewis said. Bank of America Chief Financial Officer Joe Price told shareholders the company's core strengths in its business become more evident in challenging economic times. "Our broad customer and client reach and geographic diversity form a powerful engine for revenue generation and earnings," Mr. Price said. "Our business diversity is equally important, providing balance as some businesses perform well while others are confronted with challenges." With the earnings power added from recent acquisitions including Countrywide, Merrill, LaSalle Bank and MBNA, along with the cost savings opportunities, Mr. Price said although he can't predict future results, he believes the company has the potential to produce approximately $30 billion in annual net income under more normal economic conditions. "As demonstrated by our history of revenue and earnings, and despite today's challenges, the model we have built is working, and we expect it to be even more powerful in the future," Mr. Price said. Items of Business Voting Final Results Directors % For % Against William Barnet, III 93.19 6.81 Frank P. Bramble, Sr. 78.32 21.68 Virgis W. Colbert 85.64 14.36 John T. Collins 93.32 6.68 Gary L. Countryman 87.33 12.67 Tommy R. Franks 93.43 6.57 Charles K Gifford 92.58 7.42 Kenneth D. Lewis 67.33 32.67 Monica C. Lorenzo 75.34 24.66 Walter E. Massey 92.72 7.28 Thomas J. May 93.32 6.68 Patricia E. Mitchell 87.92 12.08 Joseph W. Prueher 85.69 14.31 Charles O. Rossotti 86.37 13.63 Thomas M. Ryan 84.06 15.94 O. Temple Sloan 62.60 37.40 Robert L. Tillman 75.66 24.34 Jackie M. Ward 71.79 28.21 Management Proposals % For % Against Ratification of Accounting Firm 96.70 3.30 Executive Compensation (non-binding) 71.28 28.72 Shareholder Proposals % For % Against Government Employment Disclosure 7.81 92.19 Executive Compensation Advisory Vote 40.08 59.92 Cumulative Voting 37.78 62.22 Special Stockholder Meetings 49.35 50.65 Independent Board Chairman 50.34 49.66 Credit Card Practices 33.38 66.62 Healthcare Reform Principles 7.52 92.48 Limits on Executive Compensation 26.77 73.23 Bank of America Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. BASIC ENERGY: Moody's Assigns 'Ba1' Ratings on Tranche B -------------------------------------------------------- Moody's assigned a Ba1 and LGD 2 (the point estimate is changing from 19% to 23%) rating to Basic Energy Services, Inc.'s Tranche B of the company's amended secured revolving credit facility, while affirming the Ba1 rating of the Facility's Tranche A. Moody's also affirmed Basic's Ba3 Corporate Family Rating and the Ba3 Probability of Default Rating and the B1, LGD 5 rating on the senior unsecured notes (though the point estimate is changing from 74% to 77%). The outlook has changed to negative from stable. The $225 million first lien revolving credit facility is being separated into two tranches. Since part of the facility, Tranche B (between $135 million and $157 million), will be pari passu with Tranche A but extended to 2012, Moody's are assigning a Ba1 rating to it. Moody's have also affirmed the Ba1 rating on the remaining part, Tranche A ($68 million and $90 million) that will keep its December 2010 maturity. In addition, the covenants are being amended to increase the leverage ration (net Debt/EBITDA) to 3.75x from the existing 3.25x and the amended facility will also permit the prepayment of up to $50 million of unsecured debt. "The negative outlook reflects the underlying weak fundamentals of the North American services business and the impact this will have on the company's operating performance over the next 12 to 18 months" said Moody's Vice President Ken Austin. Although BAS is amending its leverage ratio and has a significant amount of cash on hand ($111 million at 12/31/08), which keeps net leverage within a reasonable range Moody's believes the company could see a material decline in EBITDA which in turn will result in an increase in gross leverage (Debt/EBITDA) that is beyond the 3.5x expectations of the Ba3 CFR. Given the significant weakness in capital spending by the E&P sector, Moody's believe this downcycle could extend into 2010 and keep BAS' leverage on the higher end for the rating. Despite the company's aggressive cost cutting measures, with workover rig utilizations down below 50% and pricing having declined by as much as 25% in some markets, Moody's believe BAS' 2009 EBITDA could fall by more than 50% for 2009 compared to 2008. While Moody's would expect the workover business to stabilize and possibly recover later this year, the timing and pace are not clear. In addition, the company still has significant exposure to more volatile drilling related activity. Moody's estimates that approximately 50% of BAS' 2008 revenues and EBITDA were generated from drilling/completion related activity, which is down considerably in North America as evidenced by the Baker Hughes rig count having declined by nearly 60% since August of 2008. While BAS is well positioned in the North American well services industry with a company estimated 11% market share, this business has been hit extraordinarily hard this downcycle compared to previous downcycles. Typically, the well services/workover business is considered to be more durable in the downcycle than most oilfield services businesses as E&P companies would continue to focus on maintaining existing production or even increase production through more cost effective workover methods compared to drilling new wells. However, the capital and liquidity pressure facing many E&P companies due to lower commodity prices and capital markets volatility is resulting in much lower workover business. In addition, the current costs to the producer still make the incremental economics challenging at this time to pursue workover activity, which may put additional pressure on Basic's and its competitor's ability to hold prices from further declines. Further, with commodity prices still pressured, particularly natural gas, and the prospect of further borrowing base reductions facing many producers in the coming fall season, Moody's believes that this business could see sustained weakness throughout 2009. Basic's liquidity profile is adequate to cover its cash needs over the next four quarters. The company had $111 million of cash on hand at 12/31/08. Moody's expects this cash balance to rise as the slowdown of activity since year-end should result in a liquidation of much of its working capital. This cash, along with EBITDA in the range of $85 million to $95 million and approximately $29 million available under the revolving credit facility, should be sufficient to cover its planned capex of about $40 million, interest costs of about $29 million and lower working capital needs for 2009. The amended credit facility will allow for additional covenant room for the company as it is increasing the debt/EBITDA covenant from 3.25x to 3.75x. It is important to note that the covenant is measured on a net debt basis, which provides cushion against volatility in its EBITDA given the cash balances expected, should provide the company with flexibility in meeting the amended covenant in the event The last rating action for Basic was on July 16, 2008, when Moody's confirmed the company's ratings. Basic Energy Services is headquartered in Midland, Texas. BEARINGPOINT INC: Obtains Final OK to Use Lenders' Cash Collateral ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has granted BearingPoint, Inc., and its affiliated debtors final authority to use cash collateral of Wells Fargo Bank, N.A., as agent for itself and the secured lenders, in accordance with a previously approved budget. Along with the cash collateral, the lenders hold first-priority liens on substantially all of the Debtors' property and a pledge of 65% of the stock in certain of BearingPoint's first-tier foreign subsidiaries. As adequate protection, to the extent of any diminution in the value of their interest in the pre-petition collateral, the Agent, on behalf of the secured lenders, is granted adequate protection liens equivalent to a lien granted under Section 364(c) of the Bankruptcy Code in substantially all of the assets of the Debtors in existence prior and subsequent to the commencement of the Debtors' bankruptcy filing, excluding avoidance actions, subject only to the Carve Out and any prior liens. In addition to the adequate protection liens, the Agent, on behalf of the secured lenders, is also granted an adequate superpriority claim under Sections 503(b)(1), 507(a), and 507(b) of the Bankruptcy Code. As additional adequate protection, the Debtors will pay to the Agent, on behalf of the secured lenders, cash payment of interest at the non-default rate at the times required under the Credit Agreement, including, without limitation, the reasonable fees and expenses of Paul, Hastings, Janofsky & Walker, LLP, Lazard Freres & Co., LLC, and any other professional fees to the extent provided for under the Credit Agreement. A copy of the initial approved budget is available for free at: http://bankrupt.com/misc/BE.InitialApprovedBudget.pdf As reported on the Troubled Company Reporter on April 8, 2009, the Bankruptcy Court adjourned to April 15, 2009, at 2:00 p.m., the final hearing on BearingPoint, Inc., et al.'s request for the contined use of its lender's cash collateral. The Debtor rescheduled the final hearing by about two weeks after its official committee of unsecured creditors conveyed objections to the proposal. The panel said that while all parties agree that cash collateral is necessary to fund operations, it balks at a suite of provisions -- the hair-trigger budget controls, default conditions, automatic stay relief grants, and confirmation milestones -- designed to lock in a plan favorable to the senior lenders and thereby control the reorganization. According to Bloomberg's Bill Rochelle, although the hearing was reset for March 30 as requested, some of the objectionable provisions in the cash-use arrangement were modified. Among them, the lenders can't cut off use of cash without 24 hours' notice and can't exercise any remedies unless the bankruptcy court modifies the so-called automatic stay. About BearingPoint BearingPoint, Inc. -- http://www.BearingPoint.com-- is currently one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP -- has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 on February 18, 2009 (Bankr. S.D. N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal & Manges LLP, has been tapped as counsel. Greenhill & Co., LLC, and AP Services LLC, have also been tapped as advisors. Davis Polk & Wardell is special corporate counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of September 30, 2008. Contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter to implement the terms of their agreement with the secured lenders. Under the Plan, the Debtors propose to exchange general unsecured claims for equity in the reorganized company. Existing shareholders are out of the money. The Plan and the explanatory disclosure statement remain subject to approval by the Bankruptcy Court. BERNARD L MADOFF: Castor Pollux Wins Market-Making Business ----------------------------------------------------------- The trustee for Bernard L. Madoff Investment Securities Inc. said April 28 that Castor Pollux Securities LLC won the auction for the market-making business, according to a report by Bloomberg's Bill Rochelle. Bloomberg relates that with three bidders at the auction, Castor Pollux made the best proposal with an offer of $1 million in cash to be paid at closing plus as much as another $24.5 million based on gross revenue through December 2013. Irving Picard, the liquidating trustee, previously signed a deal to sell the Madoff market making operations to Castor Pollux for $500,000 cash plus another $15 million based on a percentage of gross revenue through 2012, but the offer was still subject to competing bids at an auction on April 27. Castor Pollux's original offer was worth $15,500,000, computed as (i) $500,000 as Closing Payment; plus (ii) certain additional payments totaling up to $3,000,000 as 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 was to receive a $15,000 break-up fee in the event the Trustee terminates the APA. 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. BCBG MAX: S&P Raises Corporate Credit Rating to 'B-' From 'SD' -------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on Los Angeles-based BCBG Max Azria Group Inc. to 'B-' from 'SD.' The outlook is negative. At the same time, S&P raised its issue-level rating on the existing senior secured first-lien debt issue to 'B' from 'D'. The recovery rating on this issue remains at '2', indicating S&P's expectation of substantial (70%-90%) recovery for lenders in the event of payment default. The upgrade follows the conclusion of S&P's review of the company's new capital structure following the recent settlement of BCBG's two Dutch auctions whereby the company borrowed additional second-lien debt to repurchase first-lien debt below par. The company has indicated it will not hold a third auction. S&P viewed these auctions as tantamount to default given the distressed financial condition of the company. The post-exchange capital structure reflects approximately $516 million in total debt-a net reduction of about $21 million as a result of the two Dutch auctions. Prior to the debt exchange, BCBG amended its credit agreement to include spreading out its $20 million March 2009 and March 2010 term loan amortization payments over the respective year, as well as the receipt of less stringent financial covenants for both BCBG and Max Rave. In addition, the company received approximately $30 million of additional second-lien funds to be used for general liquidity purposes. "The result is an improved liquidity position for the company, including approximately $36 million of available cash and revolver borrowing availability as of mid-April 2009," said Standard & Poor's credit analyst Jackie E. Oberoi. In addition, S&P expects the company to maintain approximately 15% EBITDA cushion over its financial covenant throughout fiscal 2009. BIG 10 TIRES: Sun Capital to Buy Stores Using Secured Debt ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved a sale process under which Big 10 Tire Stores Inc. will be sold to an affiliate of its owner Sun Capital Partners Inc., Bloomberg's Bill Rochelle says. Sun Capital's bid is subject to higher offer at a June 15 auction. Bill Rochelle notes that originally, Big 10 wanted other bids by May 11. The court-approved schedule is one month later, with other bids due June 11 and the sale-approval hearing on June 19. According to Bloomberg, rather than using cash, the Sun Capital affiliate will pay for the business using its pre-bankruptcy secured loans totaling almost $25 million and as much as $3 million in secured financing provided for the Chapter 11 effort. As reported by the Troubled Company Reporter on April 20, the Bankruptcy Court has allowed Big 10 Tire Stores and its debtor- affiliates to access, on an interim basis, $1 million of postpetition financing under a credit agreement with Sun BT Finance Holdings LLC, as administrative and collateral agent. Proceeds of the loan will be used to fund the Debtors' business operations and preserve the value of the Debtors' assets, including the payment of amounts owed to employees, vendors, suppliers and customers. The DIP facility provided under the Credit Agreement consists of (i) a $3 million senior revolving credit facility with $1 million available immediately upon closing and up to an additional $2 million available; (ii) tranche A term loan in an amount equal to the obligations outstanding under the prepetition senior credit agreement; and (iii) a tranche B term loan in an amount equal to the obligations outstanding under the prepetition junior credit agreement. The loans are expected to terminate 120 days after the Debtors' bankruptcy filing. Pre-bankruptcy, Sun Finance provided a $5.4 million senior revolving line of credit and a $17.5 million term loan to the Debtors under a the credit agreement dated Dec. 18, 2006. As of their bankruptcy filing, the Debtors owe $12.8 million under the agreement. On the one hand, Cratos Capital Management LLC also provided $12 million under the second lien credit agreement dated Dec. 18, 2006, to the Debtors. The Debtors owe $12 million under the second lien agreement as of their bankruptcy filing. Headquartered in Mobile, Alabama, Big 10 Tires Stores Inc. -- http://www.big10tires.com/-- offers an array of tire products consists of performance, light truck and sport utility and all- season touring tires in Alabama, Georgia and Florida. The Company and three of its affiliates filed for 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. When the Debtors filed for protection from their creditors, they listed assets and debts between $10 million and $50 million in their filing. BOMBARDIER INC: Fitch Affirms Issuer Default Rating at 'BB+' ------------------------------------------------------------ Fitch Ratings has affirmed the Issuer Default Rating and senior unsecured debt rating for Bombardier Inc. at 'BB+'. The Rating Outlook is revised to Negative from Stable. Fitch affirms these: -- IDR at 'BB+'; -- Senior unsecured debt at 'BB+'; -- Preferred stock at 'BB-'. The ratings affect outstanding debt and preferred stock of approximately $4.3 billion of as of Jan. 31, 2009. The Negative Outlook reflects concerns about the impact of a sharp decline in demand for business jets on BBD's aerospace business and free cash flow. Although BBD has the capacity to weather a temporary downturn, a sustained downturn could hurt the company's financial performance beyond fiscal year 2010. BBD currently plans to reduce business jet deliveries by 25% in FY2010 compared to FY2009. Fitch calculates that business jet production at BBD will decline by a larger amount than deliveries, due to the carryover of business jets completed but not sold in FY2009 as a result of cancellations. Business jets accounted for slightly more than one-quarter of BBD's revenues in FY2009, but Fitch estimates that they accounted for a higher percentage of profits. The Negative Outlook recognizes the uncertainty surrounding conditions in the business jet market including future orders, cancellations and deferrals, and the impact on services revenues. It also takes into account global economic weakness that could have a negative impact on BBD's overall business. In addition, orders for regional jets have slowed due to lower passenger traffic and financial difficulties at the airlines, and BBD plans to reduce production of regional jets late in FY2010 to a sustainable rate until demand improves. Concerns about the business jet market are partly offset by an increase in planned deliveries of commercial aircraft in FY2010, particularly the fuel-efficient Q400, which has experienced solid demand. Free cash flow after dividends in FY2009 declined to $141 million compared to $1.9 billion in FY2008. The change was driven by higher inventories, lower advances, and higher capital expenditures. Free cash flow in FY2010 is likely to be pressured by lower business jet deliveries, growing inventories of used aircraft, ongoing pension contributions estimated at $400 million in FY2010, and higher capital expenditures to support new product development for key programs, especially the CSeries, NextGen and Learjet 85 aircraft. Expenditures for other programs will be closely controlled, however, given the difficulties that face BBD's aerospace business. Furthermore, BBD has taken steps to reduce the number of employees by 14% at an estimated cost of $30 million. By comparison, BBD's transportation business, Bombardier Transportation, has generated steady results, including positive free cash flow. Its high backlog could support favorable results in FY2010. However, budget pressures at BT's major customers, or challenges faced by customers in obtaining financing, could potentially limit the amount of support provided by BT to BBD's total free cash flow. Other rating concerns include inherent risks pertaining to new aircraft launches, project risk on Transportation contracts, the effect of currency exchange rate volatility on financial results and planning, and large pension contributions. Contingent liabilities related to past aircraft financing represents another concern. However, these contingencies are spread out over time. Furthermore, BBD's direct customer financing has declined significantly and the company expects to provide little, if any, such financing in the foreseeable future. The ratings could be downgraded if demand for business jets remains depressed for a sustained period, if BBD's transportation markets are affected significantly by market conditions, or if cash deployment for capital expenditures or other uses contributes to higher leverage or a reduction in BBD's liquidity. On the other hand, the Rating Outlook could return to Stable if conditions in BBD's aerospace markets stabilize and begin to improve or if BBD is able to reduce its cost structure sufficiently to rebuild its free cash flow. BBD is better positioned than in the past to adjust to the difficult operating environment due to previous debt reduction and high cash balances (BBD does not have a bank credit facility). The ratings are further supported by a large backlog, business diversification, leading market positions and a gradual improvement in operating performance through most of FY2009. Despite a gradual increase in profit margins at both the Aerospace and Transportation segments, margins are still lower than those of some of BBD's peers. The company remains focused on building a stronger capital structure and further reducing leverage, which would help reduce its cost of funds and improve the company's financial and strategic flexibility. Economic challenges are likely to prevent much improvement in the short term, however. Total debt has declined by over $1 billion during the past two years. At Jan. 31, 2009, BBD maintained approximately $3.5 billion of unrestricted cash balances, not including $777 million of restricted cash related to its letter of credit facilities. Restricted cash balances are not available for liquidity purposes or for the benefit of unsecured bondholders. Bombardier's unrestricted cash balances are the company's sole source of liquidity as it does not have a bank facility available. Credit facilities are restricted to the issuance of LOCs. BBD's liquidity benefits from a debt structure in which there are few maturities until 2012. BBD's credit protection measures at Jan. 31, 2009 included Debt/EBITDA of 2.0 times (x) and FFO Interest Coverage of 5.5x. Cash deployment is primarily directed toward capital expenditures that are concentrated on new aircraft. One of BBD's most important programs is the CSeries which is scheduled to enter service in 2013 and is targeted at the low end of the 100-149-seat range. Expenditures estimated at $3.2 billion will be shared among BBD, suppliers and various governments. BBD should be able to fund its portion using internally generated cash or cash balances. In March 2009 BBD announced firm purchase orders valued at $3 billion from two customers, Deutsche Lufthansa AG and Lease Corporation International. Risks related to the program include normal challenges surrounding execution of the development and certification plan, potential financing of deliveries by Bombardier Aerospace, market demand and potential competitor responses. BERRY PETROLEUM: Moody's Confirms 'B1' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service confirmed the ratings for Berry Petroleum Company including the B1 Corporate Family Rating, the B1 Probability of Default Rating and Berry's B3 (LGD 6, 91%) changed from (LGD 6, 90%) senior subordinated notes rating. This concludes the review for possible downgrade initiated on 02/02/09. Berry's Speculative Grade Liquidity Rating was upgraded to SGL-3 from SGL-4. The outlook is negative. The confirmation of the B1 CFR reflects the company's liquidity position, which has been solidified through asset sales and additional credit facilities following the announcement of a new $140 million senior secured second lien revolving credit facility and the confirmation of the newly re-determined $1.05 billion senior secured first lien revolving credit facility. These measures should provide some cushion against continued weakness in its cash flows from lower production and commodity prices and has enabled the company to reduce debt. In addition, the confirmation reflects the company's replacement of its California heavy oil production sales contracts with new contracts that should further assist the company in its efforts to further reduce debt throughout 2009. The confirmation of the B1 CFR also reflects the company's overall profile which is in-line with the B1 rated peer group and the company's ongoing transition from a pure California heavy oil player to a midsize Rocky Mountain and East Texas natural gas producer. Despite year-end 2008 negative reserve revisions based on lower year end commodity prices and widening California differentials, the company was still able to demonstrate an increase in scale and diversification. Berry's proved reserves of 246 MMBoe at 12/31/08 is amongst the highest in the B1 ranked peer group and compares favorably with 250 MMBoe median proved reserves for the Ba3 peer group coupled with the durable nature of its assets consisting of long-lived California reserves needing low levels of capital spending to sustain production. Berry's heavy exposure to oil provides a good balance to the weaker natural gas economics it is facing in its Rocky Mountain and E. Texas properties. The negative outlook reflects the expectation that Berry's production will decline over the next 12 months as the reduced capital spending program will be insufficient to keep production at least flat. This lower spending will also likely result in lower reserves additions as the company has ceased drilling its Piceance properties and has drastically reduced drilling in the E. Texas area, acquired in 2008. In spite of improved oil prices and a narrower heavy oil differential since year-end that could result in the re-booking of reserves that were negatively revised in 2008, the significantly reduced spending plan is unlikely to fund full replacement of production for the year. Like many other high yield E&P companies, Berry is facing lower cash flows from the drop in commodity prices on its unhedged production and prospect of lower cashflows on its future production. As a result Berry has curtailed its capital expenditure budget for 2009 to $100 million, which Moody's believe is below replacement needs. While the company is spending below the level needed to keep production flat, Berry is expected to complete its current inventory of drilled but yet to be completed wells in its Piceance basin which should help slow the production decline over the course of the year. However, in the long run the capital spending shortfall in 2009 will inevitably lead to weaker operational metrics both in terms of production and its ability to replace reserves while generating competitive returns at year end 2009 and may continue its course throughout 2010. While the company still compares favorably to the B1 peer group, if production and reserves trends deteriorate further than anticipated or Berry fails to commence improving it operations metrics during 2010, a downgrade would be considered. The negative outlook also reflects the challenges that Berry has experienced while transitioning from a pure California heavy oil producer to also becoming a Rocky Mountain region and East Texas natural gas producer in a weak commodity price and tightening credit markets environment. Berry's diversification strategy has been accomplished through several sizeable debt funded acquisitions. The rating also takes into account Berry's reserves and cost structure, including a very high (45%) component of proven undeveloped reserves which requires a significant amount of capital to develop and can lead to further increases in leverage as the firm funds drilling and development on its high proportion of PUD reserves. Moody's estimates pro-forma leverage on the PD reserve for the recently completed DJ asset diversification at December 31, 2008 to be approximately $8.84/boe compared to $4.55/boe at year end 2007. Although higher, this leverage is still in-line with the B1 peer group. To achieve a stable outlook Berry must demonstrate that its production and reserves replacement trends have stabilized and that has sufficiently lower operating and a sustaining capital costs structure for cash flow to cover leveraged full-cycle costs by a comfortable margin. Furthermore, Berry must also demonstrate that it is at least meeting it debt repayment targets for 2009, with momentum for further debt reduction in 2010. Future acquisition and extensive PUD development costs should be funded with adequate equity portions while Berry continues with its original strategy of acquisition debt repayment. The upgrade of the SGL rating to SGL-3 reflects the expectation that overall liquidity will be adequate over the next twelve months following the placement of the $140 million second lien revolving credit facility. The first lien secured credit facility has a borrowing base of $1.05 billion, most of which was outstanding. However, with the proceeds from the new second lien facility, combined with the proceeds from the DJ Basin asset sale, Berry will have pro forma availability of about $275 million. The SGL-3 also reflects the expectation that the company will be cash flow positive in 2009 and reduce debt by approximately $60 million more throughout the rest of 2009. The amended credit facility and the new facility have an increased leverage maintenance covenant of Debt/EBITDA less than 4.75x for 2009 which steps down to 4.5x in 2010 and 4.0x in 2011. Moody's expects Berry will remain in compliance with those ratios, thus ensuring accessibility. The SGL-3 could be pressured if Berry's next borrowing base re- determination process in October 2009 results in a lowering of the borrowing base. Moody's last rating action for Berry dates from February 2, 2009, at which time Moody's placed the ratings for Berry on review for possible downgrade. The ratings affected were Berry's B1 Corporate Family Rating, B1 Probability of Default Rating, and Berry's B3 (LGD 6, 90%) senior subordinated notes rating. Berry Petroleum Company based in Denver, Colorado, is an independent energy company engaged in the exploration, development, production, acquisition, and exploitation of crude oil and natural gas. The company's reserves and production are located in California, the Rocky Mountain, and Mid- Continent. BERRY PLASTICS: Moody's Changes Default Rating to 'B3' ------------------------------------------------------ Moody's Investors Service revised Berry Plastics Corp.'s probability of default rating to B3 from Ca/LD and changed ratings on the company's debt securities consistent with Moody's LGD (loss given default methodology) following a distressed exchange and a limited default. The probability of default rating was lowered to Ca/LD on April 23 after the company disclosed it agreed to repurchase approximately $415 million in principal amount of Berry Plastics Group, Inc. senior unsecured term loan due 2014 by the end of fiscal 2009. The company also disclosed it repurchased $24 million principal of its 10.25% senior subordinated notes. The open market transactions were at a significant discount to par and constitute a distressed exchange and a limited default by Moody's definition. Moody's practice is to remove the limited default designation approximately three days after the initial rating action and apply the LGD methodology to the company's remaining debt instruments based on a pro forma capitalization structure that takes into account announced debt repurchases. Moody's took these rating actions for Berry Plastics Corporation: -- Corporate Family Rating affirmed at B3; -- Probability of Default Rating revised to B3 from Ca/LD; -- $1,200 million senior secured term loan due in 2015 revised to B1 (LGD 3, 31%) from B1 (LGD 2, 27%); -- $680 million first priority senior secured floating rate notes due 2015 revised to B1 (LGD 3, 31%) from B1 (LGD 2, 27%); -- $525 million second priority senior secured notes due 2014 revised to Caa1 (LGD 4, 69%) from Caa1 (LGD 4, 63%); -- $225 million second priority senior secured notes due in 2014 revised to Caa1 (LGD 4, 69%) from Caa1 (LGD 4, 63%); -- $265 million senior subordinated notes due 2016 revised to Caa2 (LGD 6, 90%) from Ca (LGD 5, 71%) Speculative Grade Liquidity Rating affirmed at SGL-3 Moody's took these rating actions for Berry Plastics Group, Inc.: -- $500 million senior unsecured term loan due 2014 revised to Caa2 (LGD 6, 96%) from Ca (LGD 4, 68%). The rating outlook is negative. Moody's last rating action on Berry Plastics Corp occurred on April 23, 2008 when Moody's lowered the company's PDR to Ca/LD, changed ratings outlook to negative and SGL rating to SGL-3. Based in Evansville, Indiana, Berry Plastics Corporation is a supplier of rigid and flexible plastic packaging products, serving customers in the food and beverage, healthcare, household chemicals, personal care, home improvement, and other industries. Net sales for the twelve months ended December 31, 2008 totaled approximately $3.6 billion. BEST BRANDS: Moody's Changes Outlook on 'Caa3' Ratings to Positive ------------------------------------------------------------------ Moody's Investors Service changed the rating outlook of Best Brands Corporation to positive from negative, based on the execution of amendments to its credit facilities. The company's ratings were affirmed, including its corporate family and probability of default ratings at Caa3. Ratings affirmed, and LGD assessments adjusted: -- Corporate family rating at Caa3 -- Probability of default rating at Caa3 -- $25 million first lien asset based revolving credit agreement expiring December 2012 and $111 million first lien term loan maturing December 2012 at Caa2 (LGD3); LGD% to 35% from 34% -- $80 million second lien term loan maturing June 2013 at Ca (LGD5); LGD% to 83% from 81% The change in outlook to positive reflects receipt of amendments that set the revolving credit commitment at $25 million and revised financial covenants. With the receipt of the amendments, Best Brands was no longer in default. Moody's anticipates that the revolving credit facility will be sufficient to fund peak working capital needs, and that cushion under financial covenants will be comfortable. The affirmation of the Best Brands' ratings with a positive outlook incorporates Moody's expectation that price increases and cost savings will result in improved profitability and better credit metrics. Moody's most recent rating action on November 25, 2008 confirmed Best Brands' ratings with a negative outlook. Headquartered in Minnetonka, Minnesota, Best Brands Corporation is a manufacturer and distributor of specialty bakery products in the U.S., specializing in frozen laminated dough, frozen baked cakes, frozen muffins and bakery mixes, as well as other value-added services sold to in-store bakeries and institutional baking clients. Revenues for the twelve months ending December 27, 2008 were approximately $576 million. Its parent company is Value Creation Partners, Inc. BIRMINGHAM-JEFFERSON CIVIC: Moody's Raises Bond Ratings from 'B3' ----------------------------------------------------------------- Moody's Investors Service has upgraded to Aa3 from B3 the rating on the Birmingham-Jefferson Civic Center Authority's Special Tax Refunding Bonds, Series 2002. The upgrade reflects the fulfillment of the county's obligation to remit a portion of its Occupational License Tax to secure the bonds; the bonds are now solely secured by the City of Birmingham's (G.O. rated Aa3) Occupational License Tax collections. The rating reflects the overall credit strength of the city, strong legal provisions, and the strong coverage from collected revenues. The upgrade to Aa3 reflects a change in the security of the bonds. The original security for the bonds included Jefferson County's (G.O. rated Caa1) annual remittance of $10 million of the Occupational License Tax collected by the county as well as $3 million of Occupational License Tax annually collected by the City of Birmingham. The county's obligation was fulfilled with its last required payment at the end of 2008 and the bonds are now solely secured by the city's annual remittance of the tax, pursuant to the Trust Indenture and Pledge and Appropriation Agreement between the city and the BJCCA. The issue has strong legal provisions that include a first lien on the city's collections of the tax. The Trust Indenture also substantially limits the amount of future debt under the proposed security structure. Aside from any debt refunding, the authority has covenanted not to issue any additional debt under the indenture. In addition to the closed-lien provisions included in the indenture, the pledged revenue stream from the city expires in conjunction with the maturity of the debt. In the absence of the closed-lien indenture provisions, any additional debt issued or extended beyond the maturity of the current issue (2013) would require the city to extend their pledge of a primary revenue source which Moody's believes is unlikely. The convention center debt remains subject to an additional bonds test and a rate covenant of 1.5 times. The city's tax is a license fee levied at 1.0% of the gross receipts of each person engaged in or following a trade, occupation or profession within the city. The city's tax collections have grown at an average annual rate 3.6% since 2003, although fiscal 2008 collection growth slowed considerably in fiscal 2008, growing a modest 0.8% to $76.9 million. Although Moody's expects a likely drop in the tax for fiscal 2009, current collections provide very strong debt service coverage of over 25 times, allowing ample coverage even in the case of significant decreases in collections. The last rating action was on September 24, 2008 when the issue was downgraded to B3. BOYD LOGISTICS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Boyd Logistics, Inc. P.O. Box 960728 El Paso, TX 79996 Bankruptcy Case No.: 09-30895 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court Western District of Texas (El Paso) Judge: Leif M. Clark Debtor's Counsel: E. P. Bud Kirk, Esq. 6006 N. Mesa, #806 El Paso, TX 79912 Tel: (915) 584-3773 Email: budkirk@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors when it filed its petition. The petition was signed by Keith Boyd, sole shareholder and director of the Company. BROADRIDGE FINANCIAL: S&P Raises Counterparty Rating From 'BB+/B' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term counterparty credit rating on Broadridge Financial Solutions Inc. (Broadridge) to 'BBB-/A-3' from 'BB+/B'. The outlook on the long- term rating is positive. "The rating action follows our full annual review of the company's financial performance, competitive position, and enterprise risk- management policies and procedures. The rating action takes into account the company's consistently stable operating profitability and focus on debt reduction, as well as its thus-far successful navigation of the challenging market environment," said Standard & Poor's credit analyst Robert Hansen. The rating also reflects management's increased emphasis on the firm's risk-management practices and policies as they relate to approving and monitoring potential exposures, notably at its regulated broker-dealer, Ridge Clearing & Outsourcing Solutions Inc. However, S&P believes that there is room for further improvement in Broadridge's risk management and corporate governance, which S&P will continue to evaluate. The ratings also reflect the company's strong interest coverage and relatively modest credit risk. S&P thinks the company's financial profile is strong for the rating. Specifically, S&P views its operating cash flows as relatively stable, aided by the high proportion of revenue within the investor communications segment considered recurring (that is, repeated annually under long-term contracts). S&P expects operating cash flows will significantly exceed dividends and share repurchases, and contribute to management's focus on debt repayment. The counterparty credit ratings on Broadridge reflect its very strong and well-established competitive position in the industry despite its limited history as a public, stand-alone company. Consolidation within the financial services industry could present modest risks to its client base, given the company's significant customer concentration. In this context, S&P views favorably the fact that its profitability has not been substantially affected by the loss of Lehman Brothers, a major client, which was largely offset by a renewed contract with Barclays PLC (which acquired Lehman) and the addition of investment management firm Neuberger Berman Inc. as a client. "The positive outlook reflects our opinion that the rating could be raised in the next few months if Broadridge's financial performance stays consistent, and if it continues to improve its risk management policies and procedures. S&P expects operating profitability to remain satisfactory in fiscal 2009, bolstered by its continued strength in investor communications services. On the other hand (but not, in S&P's opinion, likely), S&P could lower the rating if its profitability declines, its leverage increases materially, or the credit risk increases materially in its clearing business," Mr. Hansen added. BRODER BROS: Amends Terms of Exchange Offer for 11.25% Sr. Notes ---------------------------------------------------------------- Broder Bros., Co., has amended certain of the terms of its pending exchange offer for all of its 11.25% senior notes due 2010 to, among other things, change the consideration payable to holders who validly tender their Existing Notes and deliver their consents to become a party to the mutual release and the proposed amendments to the indenture governing the Existing Notes on or prior to the consent time such that the holders will now receive an amount in cash equal to $20.00 per $1,000 principal amount of the Existing Notes tendered, of which $10.00 will be paid on the early settlement date and $10.00 will be paid on October 1, 2009. Prior to the amendment, the consent payment for each $1,000 in principal amount of Existing Notes tendered prior to the consent time consisted of $10.00 in cash and $10.00 in principal amount of additional exchange notes, in each case payable on the early settlement date. The consent time is currently scheduled to occur upon the earlier of (i) 5:00 p.m., New York City time, on April 30, 2009, and (ii) 5:00 p.m., New York City time, on the date on which at least $220,500,000 in aggregate principal amount of the Existing Notes have been tendered, subject to extension. Tenders of Existing Notes may be withdrawn and agreements to be bound by the mutual releases and consents may be revoked at any time before the consent time, but not thereafter. The Company has distributed to eligible holders a supplement to its offering memorandum and mutual release and consent solicitation statement, dated April 17, 2009 and the accompanying letter of transmittal, mutual release and consent that describes all of the amendments to the exchange offer. Other amendments include: (i) changing the expiration time of the exchange offer from 5:00 p.m., New York City time, on May 14, 2009, to 11:59 p.m., New York City time, on that date and (ii) permitting natural persons who are "accredited investors" within the meaning of Rule 501(a)(5) and (6) under the Securities Act of 1933, as amended, to participate in the exchange offer and mutual release and consent solicitation. In connection with the amendments, the Company and the lenders under the revolving credit facility have amended the revolving credit facility to permit the October portion of the consent payment if the Company is in compliance with certain conditions of the revolving credit facility. Except as set forth in the supplement, the terms of the exchange offer, mutual release and consent solicitation remain the same as set forth in the Offering Documents previously distributed to eligible holders. D.F. King & Co., Inc., is serving as exchange agent and information agent for the exchange offer and may be contacted at (800) 8598508 or (212) 2695550. The new securities issued pursuant to the exchange offer have not been and will not be registered under the Securities Act or any state securities laws. Therefore, the new securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws. About Broder Bros., Co. Headquartered in Trevose, Pennsylvania, Broder Bros., Co. -- http://www.broderbrosco.com/,http://www.broderbros.com/, http://www.alphashirt.com/and http://www.nesclothing.com/-- owns and operates "Broder," "Alpha" and "NES", three brands in the imprintable sportswear industry. The Company supplies imprintable apparel and accessories to screenprinters, embroiderers, promotional products distributors, athletic dealers, and other businesses. * * * As reported by the Troubled Company Reporter on April 20, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating on Broder Bros. to 'SD' from 'CC'. S&P also lowered the ratings on the Company's $225 million 11.25% senior notes due 2010 to 'D' from 'C'. The recovery rating on these notes remains at '6', indicating expectations for negligible (0% to 10%) recovery in the event of payment default. As of December 31, 2008, S&P estimates Broder had about $375 million in reported debt outstanding. The TCR said March 6, 2009, that Moody's Investors Service downgraded Broder's Probability of Default and Corporate Family Ratings to Ca from Caa3. Moody's also lowered the rating on the Company's senior unsecured notes to 'C' from 'Ca'. The rating outlook remains negative. BRUNO'S SUPERMARKETS: Workers Push For Buyer That Would Keep Jobs ----------------------------------------------------------------- Members of United Food and Commercial Workers Local 1657 joined elected officials, concerned shoppers, and community leaders at Kelly Ingram Park in Birmingham in a rally to address the importance of selling Bruno's Supermarkets, LLC's stores to a Company that will protect good jobs. Speakers called for sale of the stores to a company that would preserve living wages and fair benefits for thousands of Bruno's employees. The rally came after the U.S. Bankruptcy Judge Benjamin Cohen's decision to reject Bruno's motion to void the contract between the Company and its hourly employees. "Judge Cohen's decision was not only the right legal decision, it was the right decision for Alabama and Florida," said Elaise Fox, president of UFCW Local 1657, at the rally. "We've seen Bruno's in the hands of good owners and bad. The only decision left to be made is what kind of new employer this community wants in its neighborhoods." UFCW Local 1657 members were joined at the rally by religious leaders, allied workers, and elected officials. UFCW Local 1657 represents more than 3,500 grocery and health care workers in Alabama and Florida. "The Bruno's name is one respected and loved by many in this community," said Sheila Smoot, Jefferson County Commissioner for District 2. "The employees who built this company from the ground up have earned the right to be partners in Bruno's revival. The citizens of Birmingham look forward to a new owner of Bruno's that will make a long-term commitment to this city and these workers." 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 February 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 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 Chapter 11 protection from its creditors, it listed assets and debts of between $100 million and $500 million each. BURLINGTON COAT: S&P Changes Outlook to Stable; Keeps 'B-' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised the outlook on Burlington Coat Factory Warehouse Corp. to stable from negative. Concurrently, S&P affirmed the 'B-' corporate credit rating on the company. "The outlook change reflects our belief that BCF's cushion over financial covenants of its senior term loan will be a minimum of 13% over the next year," said Standard & Poor's credit analyst Diane Shand, "despite the leverage covenant becoming more restrictive in the fourth quarter of 2009 at May 29, 2009." The cushion is higher than our previous forecast as BCF's profitability improved in its fiscal third quarter as a result of its cost-cutting initiatives. The company projects its cost structure will decrease $60 million during the third and fourth quarters of 2009. The majority of the expense reduction was due to lower labor costs. The company has implemented strategies to match labor needs with store volumes and has also reduced head count. "Standard & Poor's believes the company will be successful with reducing sales, general and administrative expenses over the next year or so," added Ms. Shand. CAPITAL GROWTH: Receives State Approval for Financial Closing ------------------------------------------------------------- Capital Growth Systems, Inc. has received all the state and federal regulatory approvals deemed necessary to finalize the technical closing of the acquisition of Vanco Direct USA, LLC, through its wholly-owned subsidiary, Capital Growth Acquisition, Inc. On November 20, 2008, the Company and CGAI completed the Financial Closing phase of its acquisition of all of the outstanding membership interests of Vanco Direct. The certificate for the Interests was placed in escrow to be transferred to CGAI upon the date of transfer of ownership of the Interests to CGAI. The Final Closing was to occur upon the approval by the FCC and the state regulatory commissions -- in charge of state licensure for Vanco Direct telecommunications operations -- of the change in beneficial ownership of Vanco Direct to the Company. The Company received all necessary regulatory approvals effective April 14, 2009, and the certificate for the Interests was released from escrow. In conjunction with the regulatory approval, there will also be an official name change of Vanco Direct to Global Capacity Direct, LLC. The Company has delayed the filing of its annual report on Form 10-K for the year ended December 31, 2008. Management cited several key factors that have contributed to the delay. "One factor revolves around the intricacies of the technical accounting for the Company's complex debt instruments -- which is compounded by the fact that the Company is still subject to the application of the challenging pronouncements that required it to originally adopt variable accounting," Patrick Shutt, the Company's Chief Executive Officer, said at a conference call on April 15. "In addition, as the public is aware, the Company entered into an acquisition of Vanco Direct USA in November 2008. This transaction required Global Capacity to file two years of audited statements for the previously unaudited Vanco entity, prior to commencing the audit of the 2008 consolidated financial statements. The last major factor contributing to the delay was the need to bring the new independent accountants retained for 2008 up to speed with the complexity of the Company. All of these factors contributed to the delay (which is the Company's first ever miss on its compliance calendar) and, as stated earlier, the Company is committed to completing the audit and publishing its financial statements as soon as possible." About Capital Growth Systems Based in Chicago, Illinois, Capital Growth Systems Inc. (OTC BB: CGSY) doing business as Global Capacity Group Inc., delivers telecom integration services to systems integrators, telecommunications companies, and enterprise customers worldwide. It provides an integrated supply chain management system that streamlines and accelerates the process of designing, building, and managing customized communications networks. The company also provides connectivity services for network integrators who bundle telecommunication solutions to enterprise customers; offers global pricing and quotation software and management services for data communications; and assists customers to reduce connectivity costs and attain understanding and control of their deployed communications network. Going Concern Doubt Plante & Moran, PLLC, in Elgin, Ill., expressed substantial doubt about Capital Growth Systems Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses, negative cash flows from operations and net working capital deficiency. Capital Growth Systems, Inc., posted a $6,236,000 net loss for the three months ended September 30, 2008. As of September 30, 2008, the company's balance sheet showed total assets of $34,820,000 and total liabilities of $60,411,000, resulting in total shareholders' deficit of $25,591,000. CAPMARK FINANCIAL: Going Concern Cues Moody's to Junk Rating ------------------------------------------------------------ Moody's Investors Service downgraded the senior unsecured ratings of Capmark Financial Group Inc. to Caa1 from B2. The ratings remain under review for possible downgrade. The rating action reflects the explanatory note in Capmark's 10-K filing in which its auditors raise doubt about the company's ability to continue as a going concern, as well as the still unresolved nature of Capmark's efforts to modify the terms of its bridge loan agreement and senior credit facility, which could have implications for its liquidity and funding. Capmark's business has been under increasing pressure due to the frozen debt capital markets, which have hindered the ability of its borrowers to refinance maturing obligations as well as the company's ability to originate new loans and generate related fees and income. Furthermore, commercial real estate fundamentals are deteriorating and Moody's expects Capmark will be challenged with increasing credit-related losses and other operating pressures throughout 2009. Capmark has indicated that unless the lenders of the bridge loan agreement and senior credit facility continue to waive or eliminate the leverage covenant ratio beyond May 8, 2009 and further extend the maturity of the bridge loan, the company will be in default under these agreements. Should the lenders then demand payment, the default could accelerate other debt obligations, including $2.5 billion of senior notes. At year-end 2008, Capmark had readily available cash and U.S. Treasury securities classified as trading (excluding restricted cash and cash held by Capmark Bank) of about $1.7 billion and $10.1 billion of debt (excluding $7.1 billion of debt at Capmark Bank). Moody's ratings review will monitor the progression of Capmark's discussions with its lenders, its liquidity outlook in light of borrower refinancing difficulties, as well the prospects for its earnings and franchise. Moody's indicated that a return to stable outlook would be predicated upon Capmark resolving its discussions with lenders and obtaining modification in terms to its bank facility and bridge loan agreements so that it has adequate operating flexibility and cushion within its financial covenants going forward. The stable outlook would also necessitate maintenance of adequate liquidity. A downgrade would occur, possibly by multiple notches, if the debt holders were to declare an event of default or if Capmark were to experience further liquidity pressures. These ratings were downgraded and remain under review for possible downgrade: * Capmark Financial Group Inc. -- senior unsecured debt to Caa1 from B2. Moody's last rating action with respect to Capmark Financial Group was on April 7, 2009 when Moody's downgraded the company to B2 from Ba2. The ratings remained under review for possible downgrade. Capmark Financial Group Inc., formerly known as GMAC Commercial Holding Corp., is an industry leader in the commercial real estate finance, investments and services, with 55 offices worldwide. It is headquartered in Horsham, Pennsylvania, USA. Capmark Financial Group's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Capmark's core industry and the company's ratings are believed to be comparable to those of other issuers of similar credit risk. CESAR O. DIEGO: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------- Joint Debtors: Cesar O. Diego Joy Lina Diego aka Joy Lina C. Diego aka Edna Lina Diego 467 Tiller Lane Redwood Shores, CA 94065 Bankruptcy Case No.: 09-31084 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtors' Counsel: Craig V. Winslow, Esq. Law Offices of Craig V. Winslow 630 N San Mateo Dr. San Mateo, CA 94401 Tel: (650) 347-5445 Email: CVWinslow@aol.com Total Assets: $1,508,241 Total Debts: $2,427,449 A full-text copy of the Debtors' petition, including their list of 19 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/canb09-31084.pdf The petition was signed by the Joint Debtors. CHARTER COMMUNICATIONS: Disclosure Statement Hearing on May 5 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has moved the hearing to consider approval of the disclosure statement explaining Charter Communications Inc. and its affiliates' plan of reorganization to May 5, 2009. The Disclosure Statement hearing was originally scheduled for April 29, 2009. At the hearing, the Court must determine whether the Disclosure Statement contains adequate information as required under Section 1125 of the Bankruptcy Code. A disclosure statement must contain information concerning the assets, liabilities, and business affairs of the debtor sufficient to enable a hypothetical creditor to make an informed judgment about the debtor's plan. Meanwhile, Diana G. Adams, the United States Trustee for Region 2, has objected to the Disclosure Statement. Bankruptcy Law360 reports that the U.S. trustee has criticized the Disclosure Statement as "deficient" and has asked the Court to withhold approval. As reported by the Troubled Company Reporter on March 30, 2009, Charter Communications and certain of its subsidiaries filed for bankruptcy with a bankruptcy plan in hand aimed at reducing company debt by roughly $8 billion. On February 12, 2009, the Company reached agreements-in-principle with members of a committee of certain of the Company's debt holders. The agreements-in-principle contemplate the investment by members of the Bondholder Committee of more than $3 billion, including up to $2 billion in equity proceeds, $1.2 billion in roll-over debt and $267 million in new debt to support the overall refinancing. Charter expects the proposed restructuring to position the Company to generate positive free cash flow through significant interest expense reductions. The Company worked closely with the Bondholder Committee to finalize a pre-arranged plan of reorganization and related documents and agreements based upon the agreements-in-principle. Consistent with the terms of the agreements-in-principle, Charter filed its Pre-Arranged Plan and Chapter 11 petitions with the Court. Charter's Pre-Arranged Plan is supported by Paul G. Allen and affiliates of Paul G. Allen and by the Bondholder Committee consisting of (a) parties holding approximately 73% in principal amount of the 11.00% Senior Secured Notes due 2015 of CCH I, LLC and (b) parties holding approximately 52% in principal amount of the 10.25% Senior Notes due 2010 and 2013 of CCH II, LLC. Paul G. Allen will continue as an investor, and will retain the largest voting interest in the Company. Trade creditors are to be paid in full under Pre-Arranged Plan. The Plan calls for the reinstatement of the current debt of Company subsidiaries CCO Holdings, LLC and Charter Communications Operating, LLC. The Company has paid, and intends to continue to pay, on a current basis in accordance with existing terms on the secured debt. The unsecured notes at CCO Holdings, LLC will continue to accrue interest that will be paid upon emergence. A full-text copy of the Restructuring Agreement is available for free at http://ResearchArchives.com/t/s?3996 A full-text copy of the Commitment Letter is available for free at http://ResearchArchives.com/t/s?3997 A full-text copy of the Term Sheet For Proposed Joint Chapter 11 Plan of Reorganization, filed with the Securities and Exchange Commission in February, is available for free at http://ResearchArchives.com/t/s?3998 Aside from filing for bankruptcy by April 1, 2009, the Restructuring Agreements and Commitment Letters require the Debtors to obtain: -- approval of a disclosure statement reasonably acceptable to Charter and the holders of a majority of the CCH I Notes held by the ad-hoc committee of certain Noteholders by the 50th day following the bankruptcy petition date; and -- confirmation of a bankruptcy plan reasonably acceptable to Charter and the Requisite Holders by the 130th day after the Bankruptcy petition date. About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- 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 December 31, 2008, the Debtors had total assets of $13,881,617,723, and total liabilities of $24,185,668,550. A committee of certain of the Company's debt holders is represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel, and its financial advisors are Houlihan Lokey Howard & Zukin Capital, Inc., and UBS Securities LLC. Charter also appointed Gregory L. Doody as its Chief Restructuring Officer, to help oversee the financial restructuring process. 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 New Objections to Plan Terms --------------------------------------------------------- Charter Communications Inc. is facing objections from "both sides" to the disclosure statement explaining its Chapter 11 plan, which is based on the reinstatement of $11.8 billion in debt, Bill Rochelle at Bloomberg News reported. The U.S. Bankruptcy Court for the Southern District of New York is schedule to hold a hearing on May 5 to consider whether the disclosure statement contains adequate information necessary for creditors to make an informed judgment of the Chapter 11 plan. According to the Bloomberg report, an ad hoc committee of holder of $2 billion of the first-lien debt slated for reinstatement, argued in an April 27 court filing that the bankruptcy judge should slow down the process of approving the disclosure statement until litigation concludes on whether the debt may be kept in place. The first-lien lenders, according to the report, point to how the plan accomplishes a "purely financial reorganization" where the business isn't being restructured, liquidation is "unlikely" and jobs aren't at risk. On the other hand, an indenture trustee for $479 million in 6.5% convertible senior notes filed papers on April 27 also opposing the disclosure statement, although for different reasons. Law Debenture Trust Co., as indenture trustee for the so-called CCI noteholders, says the disclosure statement is deficient for not shedding light on a transaction in October 2008 in which a solvent subsidiary transferred $97 million to the holding company. Instead of holding the funds for the CCI noteholders, the holding company instead committed what the indenture trustee calls a "fraudulent transfer." The Law Debenture papers say the holding company used $99 million to buy notes "at nearly full value" that are to be paid less than 1 percent under the plan. The indenture trustee complains that the $24 million slated for payment to the CCI noteholders isn't as lucrative a result as the ability to pursue claims against solvent affiliates. According to Mr. Rochelle, the U.S. Trustee already filed an objection to the proposed explanation of the prepackaged reorganization, saying the plan would improperly cut off claims against third-party individuals, including claims for securities law violations. Pre-Negotiated Plan Charter filed for Chapter 11 on March 27 with a previously negotiated plan designed to cancel $8 billion in debt, reduce annual interest expense by $830 million and reinstate $11.8 billion in debt obligations. The plan would be funded with $2 billion in new equity, a $1.2 billion refinancing and $276 million generated from the sale of new notes. Microsoft Corp. Founder Paul G. Allen, who currently holds 49% of the equity on a fully converted basis, would see his interest reduced to 35 percent while all other shareholders would be wiped out. Charter designed the plan specifically to avoid a change in control that would require repricing its loans from JPMorgan Chase & Co. As reported by the Troubled Company Reporter on February 19, 2009, Charter reached an agreement in principle with holders of certain of its subsidiaries' senior notes holding roughly $4.1 billion in aggregate principal amount of notes issued by subsidiaries CCH I, LLC and CCH II, LLC. In addition to the Restructuring Agreements, the Noteholders entered into commitment letters with Charter, pursuant to which they have agreed to exchange and purchase, as applicable, certain securities of Charter. A full-text copy of the Restructuring Agreement is available for free at http://ResearchArchives.com/t/s?3996 A full-text copy of the Commitment Letter is available for free At http://ResearchArchives.com/t/s?3997 A full-text copy of the Term Sheet For Proposed Joint Chapter 11 Plan of Reorganization, filed with the Securities and Exchange Commission in February, is available for free at http://ResearchArchives.com/t/s?3998 Aside from filing for bankruptcy by April 1, 2009, the Restructuring Agreements and Commitment Letters require the Debtors to obtain: -- approval of a disclosure statement reasonably acceptable to Charter and the holders of a majority of the CCH I Notes held by the ad-hoc committee of certain Noteholders by the 50th day following the bankruptcy petition date; and -- confirmation of a bankruptcy plan reasonably acceptable to Charter and the Requisite Holders by the 130th day after the Bankruptcy petition date. About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- 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: Panel Wants to Intervene in JPMorgan Suit ----------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the bankruptcy cases of Charter Communications Inc. is asking the U.S. Bankruptcy Court for the Southern District of New York for permission to intervene in a lawsuit filed by JPMorgan Chase & Co., as administrative agent for the Debtors' prepetition lenders. The Committee said its interests would be significantly impaired if it is denied participation in the lawsuit, Bankruptcy Law360 reports. JPMorgan Lawsuit 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, Bruce D. Angiolillo, Esq., at Simpson Thacher & Bartlett LLP, in New York, said 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 said. 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 said. He asserted 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 As reported by the Troubled Company Reporter on April 15, 2009, the Debtors have asked Bankruptcy Judge James Peck to dismiss the complaint. Under the terms of its prearranged plan of reorganization, Charter Communications 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, said. He argued 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 said. "The entire purpose of this complaint is to obtain declaratory relief that might block reinstatement and derail confirmation," he argued. Mr. Cieri said 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 argued. He said 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 said. He pointed 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. 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) CHEMTURA CORP: Creditors Oppose $400 Million DIP Financing ---------------------------------------------------------- The official committee of unsecured creditors of Chemtura Corp. has asked the U.S. Bankruptcy Court for the Southern District of New York to deny the proposed $400 million in secured financing for Chemtura, Bloomberg's Bill Rochelle reported. Chemtura is seeking to access a $250 million term loan and a $63.5 million revolving credit from lenders led by Citibank NA as agent The DIP facility includes $86.5 million of prebankruptcy debt that would be converted into a post-bankruptcy secured loan. According to Bloomberg, quoting from Chemtura's own papers, the Creditors Committee argues that the lenders are unsecured by almost $133 million -- the shortfall resulting from the loan agreement, which prohibits the lenders from having secured debt larger than 10% of tangible net assets. Were the secured debt larger, other creditors would have been entitled to have their claims secured by the same collateral on an equal basis, the report relates. In addition, the Creditors Committee says it is prepared to file a lawsuit challenging the validity of the security interest the lenders were given within 90 days before bankruptcy in return for a waiver of breaches in the loan agreement. The Committee says the recently given security interest is voidable as a so-called preference. According to Mr. Rochelle, a preference can occur if previously unsecured debt is covered by a security interest within 90 days of the bankruptcy filing. Liquidity Crisis Chemtura and its debtor affiliates have told the Court they are in dire need of liquidity. The Debtors said they currently have $6 million cash on hand to operate their businesses. Absent access to immediate financing, the Debtors said their estates will deteriorate at a rapid pace. Since February 2009, the Debtors retained Lazard Freres & Company LLC to explore potential sources of immediate liquidity. Lazard approached several potential lenders. Initial discussions though revealed that the Debtors had limited options for financing. Upon analysis, the Debtors determined that the proposal from Citibank was the most favorable. Citibank is also the agent under the Debtors' Prepetition Credit Facility. Although the DIP Facility included a partial roll-up of the Debtors' prepetition debt, it could be available without further diligence by the Prepetition Lenders, M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, the Debtors' proposed counsel, pointed out. Subsequently, the Debtors and the DIP Agent finalized a DIP Loan Agreement and commenced these Chapter 11 cases on the same day, March 18, 2009. The salient terms of the Proposed DIP Facility are: Borrower: Chemtura Corporation Guarantors: All Debtors DIP Agent: Citibank, N.A. Sole Lead Arranger: Citigroup Global Markets Inc. Lenders: Citibank and other lenders party Committed Facilities: A $400 million senior secured superpriority credit facility, which will consist of a term facility and a rollup and a non-rollup revolving credit facility. Term: The earlier of: -- one year after the DIP Loan Effective Date, -- effective date of a reorganization plan, or -- termination of the DIP Loan commitments. Use of Proceeds: The Non-Rollup Revolving Credit Facility and the Term Facility will be used to (i) : -- refinance the Existing Receivables Facility, and -- pay costs and expenses in connection with the refinancing and the Chapter 11 cases. The Non-Rollup Revolving Credit Facility will also be used to provide financing for working capital, letters of credit, capital expenditures and other general corporate purposes of the Debtors. The Term Facility will also be used to repay or convert the Non-Rollup Revolving Credit Advances previously made under the Interim Order. The Rollup Revolving Credit Facility will be used to refinance the Debtors' prepetition secured debt and for other general corporate purposes. Interest Rates: Base Rate. The higher of (a) 4% per annum and (b) a fluctuating interest rate per annum equal to the higher of (i) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank's base rate, and (ii) 1/2 of 1% per annum above the Federal Funds Rate. Eurodollar Rate. The higher of (a) 3% per annum and (b) the rate per annum obtained by dividing the LIBOR rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for that period. Default Interest: On an Event of Default, the Debtors will pay interest on the unpaid principal amount of each Advance owing to each Lender, at a rate per annum equal at all times. Fees: * Commitment Fees. At 1.5% per annum on the average daily unused portion of each of (a) the Unused Non-Rollup Revolving Credit Commitment and (b) the Unused Rollup Revolving Credit Commitment. * Initial Lender Fees. At 3% of the Term Facility, 3% of the Non-Rollup Revolving Credit Facility and other fees as may be agreed among the Loan Parties. * Letter of Credit Fees. At a rate equal to each Lender's Pro Rata Share of the average daily Available Amount per month of all Rollup Letters of Credit and Non-Rollup Letters of Credit outstanding. * Exit Fees for Roll Up Revolving Credit Lenders. Equal to 2% of any amount of the Rollup Revolving Credit Commitments so reduced or terminated. * Exit Fees for Term Lenders and Non-Rollup Revolving Credit Lenders. Equal to 3% of any amount of Rollup Revolving Credit Commitments so reduced or terminated. Covenants: The Debtors are required to maintain consolidated EBITDA for each of these periods of not less than the stated amounts: Month Ending Minimum EBITDA ------------ -------------- March 2009 ($15,000,000) April 2009 ($8,000,000) May 2009 $3,000,000 June 2009 $30,000,000 July 2009 $53,000,000 August 2009 $77,000,000 September 2009 $93,000,000 October 2009 $107,000,000 November 2009 $125,000,000 December 2009 $150,000,000 January 2010 $171,000,000 February 2010 $193,000,000 Minimum Availability should also not be less than $40 million on any business day after the Final Term Advance Date. DIP Liens: The Debtors seek to grant these liens as collateral securing all DIP Loan Obligations, subject to the Carve-Out: -- First priority liens on all Unencumbered Property of the Debtors -- Junior Liens on property of the Debtors that are subject to valid and perfected liens in existence on the Petition Date -- Priming Liens on all of the Debtors' property that presently secure the Prepetition Secured Debt. The DIP Collateral includes all property and assets of the Debtors and their estates, including all causes of action. It does not, however, include actions for preferences, fraudulent conveyances, and other avoidance power claims under Sections 544, 545, 547, 548, 550, and 553 of the Bankruptcy Code. The DIP Liens are first priority and superior to any security, interest or lien or claim to the DIP Collateral, subject only to the Carve-Out, certain permitted prior liens, and liens expressly permitted under the DIP Loan Documents. The DIP Liens are senior in priority to any and all adequate protection liens of the Prepetition Lenders. The DIP Obligations are also granted an allowed administrative expense claim with priority, subject and subordinate to the Carve-Out, under sections 364(c)(1) and 507(b) of the Bankruptcy Code. Carve Out: Refers to: -- all fees required to be paid to the Clerk of the Bankruptcy Court and to the U.S. Trustee under Section 1930(a) of the Judiciary Procedures Code, -- professional fees of the Debtors and the Committee that are incurred prior to an Event of Default, and -- professional fees in an aggregate amount of $8,000,000 incurred after the occurrence of an Event of Default. Events of Default: Customary Events of Default, including the failure of the Debtors to pay outstanding debt as it comes due. A full-text copy of the DIP Credit Agreement is available for free at: http://bankrupt.com/misc/Chemtura_DIPCreditPact.pdf About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D. N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Task Force Deadline for Fiat Alliance Today --------------------------------------------------------- Chrysler LLC is facing a deadline today to form an alliance with Fiat SpA, to be able to qualify for further U.S. aid and avert bankruptcy. Chrysler in the past week accomplished certain of the goals set by the U.S. Treasury, including cost-saving labor agreements with its unions and a tentative agreement with lenders to resolve the vast majority of its bank debt. Bloomberg says the agreement with the bank lenders has a sticking point that may lead to a bankruptcy filing. Mike Ramsey at Bloomberg notes that some of Chrysler's 46 lenders may balk at exchanging their $6.9 billion in debt for $2 billion in cash. If one of them does, it may force Chrysler to seek court protection, Mr. Ramsey says. On April 29, Bloomberg cited President Barack Obama as saying that he is "hopeful" that Chrysler will come up with a solution that will let a merger with Fiat go through and keep the automaker in business. According to the report, details of a deal aren't finished. If Chrysler has to go through bankruptcy, it will be a "quick" process, he said. Chrysler Won't Liquidate in Chapter 11 The option preferred by Chrysler, Fiat and the U.S. is to avoid bankruptcy, Mark Ramsey at Bloomberg News said, citing people familiar with the talks. However, Chrysler has not yet reached a deal on an alliance with Fiat. The Treasury has said it will lend Chrysler $6 billion on top of the $6 billion it already loaned if Chrysler forms an alliance with Fiat. If the alliance can't be accomplished, Chrysler would be put into bankruptcy and quickly purchased by a new company formed by the government that would have an ownership structure similar to that envisioned without a bankruptcy filing, Bloomberg stated, citing one of the people familiar with the matter. Fiat will form an alliance with Chrysler even if the Company goes into bankruptcy, Bloomberg said, citing people familiar with the talks. "It is increasingly clear that Chrysler will be restructured and avoid liquidation," Brian Johnson, a Barclays Capital analyst based in Chicago, wrote in a note to investors April 28, Bloomberg said. According to the Washington Post, the Obama administration's plan to send Chrysler into bankruptcy -- in the event the deal with Fiat fails to push through -- includes replacing Robert Nardelli as chief executive. The report relates that while government officials hope that bankruptcy can be averted, the administration ahs drawn up a detailed court strategy in which the ownership of Chrysler would be dramatically reordered, the U.S. and Canadian governments would contribute billions more, and the leadership of Italian automaker Fiat would take over management. Meanwhile, Mike Ramsey at Bloomberg reports that General Motors Corp. said in a regulatory filing that it is considering a bankruptcy process that would be very similar to the one contemplated for Chrysler LLC should GM's out-of-court restructuring fail: The government would form a new company and buy GM's best assets from the bankrupt entity. 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 Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures 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. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. Late in 2008, Daimler attempted to sell its remaining stake to Cerberus, but talks have been stalled. A report by The Wall Street Journal in March 2009 said Cerberus is set to shed its stake in Chrysler as part of the conditions surrounding the company's bailout arrangement with the U.S. government. An anonymous source within the Obama administration told WSJ Cerberus' equity stake no longer holds value. The source told WSJ Cerberus will still hold on to a controlling stake in Chrysler Financial, but its stake in the automaker itself will likely be eviscerated. Pursuant to the U.S. Government's Automotive Industry Financing Program, the U.S. Department of the Treasury made emergency loans to General Motors Corp., Chrysler Holding LLC, and Chrysler Financial Services Americas LLC. The Treasury purchased senior preferred stock from GMAC LLC. In exchange, Chrysler and GM submitted restructuring plans to the Treasury on February 17, 2009. Upon submission, President Obama's Designee on the Auto Industry determined that the restructuring plans did not meet the threshold for long-term viability. However, on March 30, 2009, both GM and Chrysler were granted extensions to complete the restructuring plans to comply with the requirements set forth under the Automotive Industry Financing Program. The Government has told Chrysler it would provide up to $6 billion in financing if Chrysler and Fiat SpA could complete a deal by the end of April -- on top of the $4 billion Chrysler has already received. Fiat originally agreed to take 35% of Chrysler, but it was subsequently reduced to 20%. GM faces a June 1 deadline to complete restructuring plans that satisfy the government's auto task force. So far, GM has received $13.4 billion in federal loans. The Office of the Special Inspector General for the Troubled Asset Relief Program has said GM may receive up to $5 billion and Chrysler up to $500 million in additional working capital. The additional loans are part of the modification to the existing loan program. GM and Chrysler admitted in their viability plans submitted in February 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 * * * As reported by the Troubled Company Reporter on April 14, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on Chrysler's senior secured first-lien term loan due 2013 to 'CC' (the same as the 'CC' corporate credit rating on Chrysler) from 'CCC'. The recovery rating was revised to '4' from '1', indicating S&P's view that lenders can expect average (30% to 50%) recovery in the event of a payment default. The corporate credit rating is unchanged, at 'CC', which reflects S&P's view of the likelihood of default -- from either a bankruptcy or a distressed debt exchange. Moody's Investors Service said February 18 that the risk of a bankruptcy filing by GM and Chrysler remains high. The last rating action on GM and Chrysler was a downgrade of their Corporate Family Ratings to Ca on December 3, 2008. CHURCH & DWIGHT: S&P Assigns 'BB' Initial Senior Debt Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned its preliminary 'BB' senior unsecured debt rating (one notch below the 'BB+' corporate credit rating) and preliminary 'BB-' subordinated debt rating (two notches below the corporate credit rating) to Princeton, New Jersey-based Church & Dwight Co. Inc.'s Well-Known Seasoned Issuer shelf registration. The outlook on the company is stable. Total reported debt as of Dec. 31, 2008, was about $856.1 million. The shelf registration covers senior unsecured and subordinated debt, as well as common and preferred stock. The company expects to use drawings under the new shelf for general corporate purposes, including working capital, acquisitions, repurchases of common stock, capital expenditures, and the repayment of indebtedness. The preliminary shelf ratings assume that additional indebtedness issued at the senior unsecured level would likely result in Standard & Poor's lowering the current subordinated debt rating to the 'BB-' level. However, if the company issues additional secured debt, or refinances and pays off existing secured debt, Standard & Poor's would reevaluate all existing and preliminary issue-level ratings. Ratings List Church & Dwight Co. Inc. Corporate credit rating BB+/Stable/-- Ratings Assigned Senior Unsecured Shelf (prelim) BB Subordinated Shelf (prelim) BB- CITIGROUP INC: Sumitomo Mitsui to Acquire Some Nikko Operations --------------------------------------------------------------- Yuka Hayashi at The Wall Street Journal reports that Sumitomo Mitsui Financial Group has agreed to acquire a large chunk of Citigroup Inc.'s Japanese operations, which includes Nikko Cordial Securities and some Nikko Citigroup operations. According to WSJ, people familiar with the matter relates that details of the deal would be disclosed later this week. WSJ states that it wasn't clear how much Sumitomo Mitsui had agreed to pay for the Citigroup operations. The report says that the amount is likely to be a fraction of the JPY1.6 trillion that Citigroup paid for Nikko Cordial in a series of deals completed in 2008. WSJ relates that Sumitomo Mitsui prevailed over Japanese banks, Mitsubishi UFJ and Mizuho Financial Group, in the bidding for Nikko Cordial, Japan's second-largest brokerage firm in terms of customer assets after Nomura Securities. WSJ states that Nikko Cordial reported that it has 2.4 million client accounts and about JPY24.9 trillion in client assets as of December 2008. Citigroup, says WSJ, will maintain its presence in Japan through its commercial-banking unit and part of the investment-banking operations. 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 issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. CITIGROUP INC: Wants to Free Phibro from Restrictions on Bonuses ---------------------------------------------------------------- Citigroup Inc. has sought the U.S. Treasury Department's permission to pay special bonuses to many key employees, David Enrich and Ann Davis at The Wall Street Journal report, citing people familiar with the matter. WSJ states that the Treasury is poised to become Citigroup's largest shareholder in May, owning as much as 36% of its common stock. According to WSJ, Citigroup CEO Vikram Pandit made the case for the stock-based bonuses during a meeting with Treasury Secretary Timothy Geithner. Citing people familiar with the matter, WSJ states that executives are describing the bonuses as "retention" awards designed to perk up employees' morale. The sources said that Citigroup is worried that its workers, whose past bonuses were wiped out by the collapse of Citigroup's share price, would leave the Company for rival firms, according to WSJ. WSJ relates that people at Citigroup's energy-trading unit Phibro are threatening to leave due to pay caps tied to the U.S. bailout of Citigroup. WSJ states that Phibro has been Citigroup's source of hundreds of millions of dollars in profits and has paid out hefty compensation to its workers, including a $100 million windfall in 2008 for the unit's leader, Andrew Hall. Phibro employees, WSJ says, are paid based on how much revenue they produce, but the government's pay restrictions put a ceiling on that compensation. Sources said that Citigroup is seeking to free Phibro from the federal restrictions, including a spinoff of the unit, the report states. According to the report, sources said that Mr. Hall has been considering leaving Phibro to avoid pay curbs. WSJ, citing people familiar with the matter, reports that Citigroup is discussing plans to either spin off Phibro into an independent hedge fund or open it to outside investors. Phibro currently invests Citigroup's capital, says the report. According to WSJ, sources said that top Citigroup executives including Mr. Pandit and John Havens -- who runs Citigroup's investment-banking division -- have been briefing managers on the possible one-time bonuses, but the Company hasn't settled on a specific bonus plan, with several possibilities currently being discussed. 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 issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. CLICO BAHAMAS: Seeks Recognition of Insolvency Case in Bahamas -------------------------------------------------------------- Clico (Bahamas) Limited filed for bankruptcy protection under Chapter 15 of the U.S. Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of Florida (Miami). Chapter 15 allows a company to seek protection from creditors in the United States while its primary bankruptcy case is pending in another country. If the U.S. court grants the Chapter 15 petition, the assets in the U.S. can be liquidated or reorganized through the foreign proceeding. According to Dawn McCarty at Bloomberg, Clico is asking the Miami Court to recognize the insolvency proceedings pending before the Commercial Division of the Supreme Court of the Bahamas as the "foreign main proceeding." The Company listed assets and debt of as much as $500 million each. The Company, Bloomberg said, citing court papers, loaned more than $70 million to affiliated companies which Clico's liquidator "believes has found its way into real estate developments." Craig A. Gomez was appointed by the Bahamian court as liquidator of Clico, Bloomberg reported, citing court documents. Clico (Bahamas) Limited is a Bahamian company that was involved in life and health insurance, pensions and annuities. CONQUEST VACATIONS: Files for Bankruptcy in Toronto --------------------------------------------------- Chris Sorensen at TheStar.com reports that Conquest Vacations has filed for bankruptcy in Toronto, Canada, after closing its business on April 15, 2009. TheStar.com states that Conquest Vacations listed $21.5 million in liabilities, many of which owed to unsecured creditors like travel agencies and hotels. Conquest Vacations, according to the report, listed $2 million in assets. According to TheStar.com, Conquest Vacations blamed its collapse on a tough market and credit card processing companies' "unreasonable demands." Jefrey Carhart, the lawyer representing the trustee, said that two days after Conquest Vacations shut operations, CanJet Airlines secured a court injunction that froze the Company's Canadian assets, TheStar.com relates. Court documents say that CanJet's claims are listed as just $1, but that figure is meant to be a placeholder in the proceedings and doesn't include any amount that may be received through litigation. A "major objective" of Conquest's bankruptcy is to "facilitate members of the public claiming refunds for trips booked but not received," Ira Smith, the trustee in Conquest Vacations' bankruptcy, said in a statement. Conquest Vacations is a packaged holiday business. CRESCENT RESOURCES: Weak Credit Metrics Cue S&P's Junk Rating ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Crescent Resources LLC to 'CCC+' from 'B'. At the same time, S&P lowered the rating assigned to the senior secured bank loan to 'CCC+' from 'B+' and revised the related recovery rating to '3' from '2'. In addition, S&P placed the ratings on Crescent on CreditWatch with negative implications. "The downgrades anticipate further deterioration in Crescent's already weak credit metrics, given our opinion that the current economic recession will continue to weigh on the company's transaction-driven revenues," said Standard & Poor's credit analyst George Skoufis. "We also believe Crescent's liquidity may be strained because of potentially weaker cash flow, the company's historically heavy revolver use, difficult credit markets, and the capital-intensive nature of Crescent's business." The CreditWatch placements further reflect a lack of recent financial information on the company (its year-end financials are due by the end of April), potential covenant pressures, and the possibility that Crescent may need to amend or restructure its rated bank loan agreement. S&P is concerned that the severity of the current recession, difficult credit markets, and weak consumer confidence will continue to pressure cash flow and liquidity and could potentially result in a covenant violation or render the company unable to meet its debt service obligations. S&P expects to resolve the CreditWatch placements over the next few weeks pending receipt of year-end financials and a management update on the company's operational and financial performance. Potential outcomes of the CreditWatch listing include an affirmation of the current ratings, a further downgrade, or a withdrawal of the ratings if additional information is not forthcoming. CRUSADER ENERGY: Forest Claims Recoupment Right ----------------------------------------------- Forest Oil Corp. says that it has the right to the first $4 million from the proceeds of several wells in Texas that it jointly owns with Crusader Energy Group, Inc. According to Bill Rochelle at Bloomberg News, Denver-based Forest says that it shares with Crusader Energy, 50-50 joint ownership, development and operating interests in several Texas wells. Under Texas law, Forest says it has the right to "recoup" the $4 million for operating expenses before Crusader may receive any proceeds from the wells' production. Mr. Rochelle relates that ordinarily in bankruptcy, the "automatic stay" prevents a creditor from collecting a debt without bankruptcy court permission. However, he notes, if Texas laws bestows a right of recoupment, the automatic stay doesn't apply and Forest could collect what it's owed without court permission. 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. Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, L.L.P., represent the Debtors as counsel. Holland N. Oneil, Esq., Michael S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne & Sewell, represent the Official Committee of Unsecured Creditors as counsel. DEREK M. LARSON: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Derek M. Larson dba Coldwell Banker - Larson Realty 1151 S. 4th Avenue PO Box 108 Park Falls, WI 54552 Bankruptcy Case No.: 09-12739 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court Western District of Wisconsin Judge: Thomas S. Utschig Debtor's Counsel: James T. Runyon, Esq. P.O. Box 519 Tomahawk, WI 54487 Tel: (715) 453-5387 Email: runyonlawoffices@verizon.net Total Assets: $3,110,318 Total Debts: $1,424,027 According to its schedules of assets and liabilities, $1,176,195 of the debt is owing to secured creditors, $65,800 for taxes owed to governmental units, and the remaining debt to creditors holding unsecured nonpriority claims. A full-text copy of Mr. Larson's petition, including his list of 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wiwb09-12739.pdf The petition was signed by Mr. Larson. DORIS PANOS: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------- Teresa Novellino at National Jeweler reports that Doris Panos Designs, Ltd., has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of New York. Court documents say that on April 17 indicate that Doris Panos listed $1 million to $10 million in assets, and $1 million to $10 million in debts owed to 50 to 99 creditors. According to National Jeweler, a list of Doris Panos' top 20 unsecured claims include two loans -- one in the name of its parent company for $310,413 and another for $150,000 owed to trustee Joseph Rosen in New York. According to court documents, trade debt listed in the voluntary petition includes: -- $296,173 owed to Erol Jewelry of New York, -- $286,469 owed to diamond dealer I. Morgenstein of New York, and -- $143,855 owed to Chopard USA, which is listed as a landlord claim. Melville, New York-based Doris Panos Designs, Ltd., is a jewelry manufacturer. It filed for Chapter 11 bankruptcy protection on April 17, 2009 (Bankr. E.D. N.Y. Case No. 09-72685). Richard G. Gertler, Esq., at Thaler & Gertler LLP represents the Company in its restructuring efforts. DREIER LLP: Marc Dreier to Plead Guilty to Money Laundering ----------------------------------------------------------- Chad Bray at The Wall Street Journal reports that Gerald L. Shargel, Marc Dreier's lawyer, said his client will plead guilty to all the charges in a superseding indictment unsealed in March - - conspiracy, securities fraud, money laundering, and five counts of wire fraud -- on May 11. As reported by the Troubled Company Reporter on March 30, 2009, Mr. Dreier, the New York law firm founder charged with defrauding hedge funds, was accused of money laundering in a newly unsealed indictment. Mr. Dreier sold more than $700 million in phony promissory notes to at least 13 hedge funds and three individuals. Victims lost more than $400 million, according to the charges. Citing Mr. Shargel, WSJ relates that Mr. Dreier will plead guilty without a deal in place with the government. WSJ states that the U.S. District Judge Jed S. Rakoff in Manhattan denied on Monday a motion by Mr. Dreier to dismiss the securities- fraud charge. Mr. Dreier has been charged with selling more than $700 million in phony notes to at least 13 hedge funds and three individuals. According to Bankruptcy Law360, Mr. Dreier's counsel, Gerald Shargel, Esq., told the U.S. District Court for the Southern District of New York on Monday that his client would be pleading guilty to all counts. Bankruptcy Law360 says Mr. Dreier will leave his fate "in the hands of a judge who must decide whether to throw the book at or show mercy to the tarnished New York attorney who allegedly defrauded investors of more than $100 million." The Troubled Company Reporter, citing a report by Bloomerg News, said on April 1, 2009, that Mr. Dreier pleaded not guilty to a charge that he laundered $700 million as part of the alleged scheme. The money-laundering charge was added to the criminal case against Dreier on March 17. Bob Van Voris of Bloomberg said Mr. Dreier previously pleaded not guilty to conspiracy, securities fraud and wire fraud. Source says that in a hearing in federal court in New York, U.S. District Judge Jed Rakoff set a June 15 trial date in the case. Mr. Shargel has said he expects his client to plead guilty before trial. About Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On December 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier has been charged by the U.S. government for conspiracy, securities fraud and wire fraud before the U.S. District Court for the Southern District of New York (Manhattan) (Case No. 09-cr-00085-JSR). Dreier LLP filed for Chapter 11 on December 16, 2008 (Bankr. S.D. N.Y., Case No. 08-15051). Judge Robert E. Gerber handles the case. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, has been retained as counsel. The Debtor listed assets between $100 million and $500 million, and debts between $10 million and $50 million in its filing. Wachovia Bank National Association, Sheila M. Gowan as trustee for Chapter 11 estate of Dreier LLP, and Steven J. Reisman as post- confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that sent Mr. Dreier to bankruptcy under Chapter 7 on January 26, 2009 (Bankr. S.D. N.Y., Case No. 09-10371). DRUG FAIR: Gets Court Approval for Sale of 31 Stores to Walgreen ---------------------------------------------------------------- Drug Fair Group Inc. won authorization from the U.S. Bankruptcy Court for the District of Delaware to sell 31 stores for about $54 million to drugstore chain Walgreen Co. Walgreen Co. has almost 6,700 stores generating $59 billion in revenue in 2008. Drug Fair returns to bankruptcy court today, April 30, for approval of a $476,000 incentive and severance program for two top executives and non-management workers. According to Mr. Rochelle, Drug Fair said that Walgreen Co., the lead bidder for 32 stores, will pick up $175,000 of the cost of the severance program. The report notes that the executive bonuses won't be paid until the assets are sold to Walgreen or another buyer and the first-lien debt is paid in full. Drug Fair signed a deal last month to sell 32 stores in central and northern New Jersey to a unit of Deerfield, Illinois-based Walgreen Co. for about $54 million. Walgreen's offer may rise to as much as $65.1 million, depending on a valuation of the stores' inventory. Walgreen's offer was open to competing bids, if any, at an auction on April 24. Drug Fair has signed an agreement with Hudson Capital Partners LLC for going-out-of-business sales in 22 other stores. About Drug Fair Group 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. The Company, with stores in central and northern New Jersey, is indirectly owned by Sun Capital Partners Inc., a private-equity investor based in Boca Raton, Florida. Drug Fair 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. E*TRADE FINANCIAL: Posts $233 Million First Quarter Net Loss ------------------------------------------------------------ E*TRADE FINANCIAL Corporation has released results for its first quarter ended March 31, 2009, reporting a net loss of $233 million, or $0.41 per share, compared with a net loss of $276 million, or $0.50 per share, in the prior quarter and a net loss of $91 million, or $0.20 per share, a year ago. The Company reported total DARTs of 194,000 in the first quarter, an 8% year-over-year increase, although a 10% decrease from the record levels of the prior quarter. The Company added 63,000 net new brokerage accounts during the period. At quarter end, E*TRADE reported a record 4.5 million customer accounts, which included a record 2.7 million brokerage accounts. Customer net new assets were $3.5 billion during the quarter. Total customer cash and deposits increased $2.1 billion, in part due to the continued growth of the Complete Savings Account despite a 1.56 percentage point drop in annual percentage yield during the quarter. Margin receivables declined from $2.8 billion to $2.4 billion. "E*TRADE's growth in net new brokerage accounts and customer assets was the result of a renewed focus on our core investor base, strong activity by existing customers across a full range of products, and a gain in market share versus traditional brokerage firms," said Donald H. Layton, Chairman and CEO, E*TRADE FINANCIAL Corporation. "Transaction volumes were also strong in the first quarter on continued volatility and late-quarter rising markets." Commissions, fees and service charges, principal transactions and other revenue for the first quarter were $202 million, which compared with $224 million in the fourth quarter. This reflects lower revenue from the decline in DARTs from last quarter's record levels, fewer trading days in the quarter and lower revenue from principal transactions, partially offset by an increase in average commission per trade. The Company reported net interest income of $279 million, an increase from $274 million in the fourth quarter, as a result of maintaining the level of interest earning assets and a slight increase in the interest income spread to 234 basis points. Total operating expense declined by $27 million to $294 million from the prior quarter and declined by $60 million year over year. The Company continued to make progress during the first quarter in reducing balance sheet risk, shrinking its bank loan portfolio by approximately $1 billion from last quarter, of which approximately $700 million was related to prepayment or scheduled principal reductions. In the home equity portfolio, which represents the Company's greatest exposure to loan losses, special mention delinquencies (30-89 days) decreased 25%in the quarter, while "at risk" delinquencies (30-179 days) declined five percent. Total special mention delinquencies for the Company's loan portfolio, which also includes one- to four-family and consumer and other loans, declined by 10%in the quarter. "We continue to believe that E*TRADE's loan portfolio is further advanced in the credit cycle than the broader industry," said Mr. Layton. "Our home equity portfolio is showing signs of improving performance, with declines in special mention delinquencies in each month of the quarter; however, continued deterioration in the one- to four-family and consumer and other portfolios necessitated further reserve building this quarter." First quarter provision for loan losses decreased $59 million from the prior quarter to $454 million. Total allowance for loan losses increased $120 million to $1.2 billion, or five%of gross loans receivable, as the Company increased its one- to four-family and consumer and other portfolio reserves. Total net charge-offs in the quarter were $334 million, an increase of $27 million from the prior quarter. The Company reported Bank Tier-1 and risk-based capital ratios of 5.63%and 11.85 percent, respectively. The Bank had excess Tier-1 capital of $288 million and excess risk-based capital (i.e., above the level regulations define as well-capitalized) of $451 million as of March 31, 2009. The Company noted that subsequent to the end of the quarter, it injected an additional $150 million of capital into the Bank. "Given the uncertainties of the current environment, we believe that it is necessary to further improve the Company's capital position," said Mr. Layton. "We have been increasing our efforts to reduce the size of the Bank's balance sheet and the associated risk, to deleverage the Parent company's capital structure, and also to generate additional capital to inject into the Bank." The Company noted that such efforts would involve public market issuance and/or private investors and would create significant dilution to current shareholders; deleveraging of the Parent would also substantially reduce its interest expense. The Company also noted that its primary banking regulator, the Office of Thrift Supervision, has advised the Company to address these capital requirements in the near term, including both raising new capital for E*TRADE Bank and reducing the leverage of the Parent holding company. One alternative that the Company continues to pursue is the U.S. Treasury's TARP Capital Purchase Program which, if it is made available, would likely have additional conditions that would also produce significant dilution. The Company can not predict when or if its application will be acted upon. E* TRADE FINANCIAL CORPORATION AND SUBSIDIARIES Consolidated Statement of Loss (In thousands, except per share amounts) (Unaudited) Three Months Ended ---------------------------------------- March 31, December 31, March 31, 2009 2008 2008 ---------- -------------- ------------ Revenue: Operating interest income $ 486,637 $ 540,204 $ 699,591 Operating interest expense (207,975) (266,107) (373,220) -------- --------- -------- Net operating interest income 278,662 274,097 326,371 -------- --------- -------- Commission 125,626 141,548 122,255 Fees and service charges 46,715 44,441 54,941 Principal transactions 17,642 25,336 20,490 Gain (loss) on loans and securities, net 16,507 (11,410) (8,567) Other revenue 12,191 12,421 13,604 -------- --------- -------- Total non-interest income 218,681 212,336 202,723 -------- --------- -------- Total net revenue 497,343 486,433 529,094 -------- --------- -------- Provision for loan losses 453,963 512,874 233,871 Operating expense: Compensation and benefits 84,172 80,531 123,128 Clearing and servicing 42,671 47,970 44,885 Advertising and market development 43,591 44,684 57,448 Communications 21,561 24,169 25,094 Professional services 19,630 27,814 23,645 Occupancy and equipment 19,541 23,100 20,498 Depreciation and amortization 20,274 19,876 21,653 Amortization of other intangibles 7,436 7,764 10,910 Facility restructuring and other exit activities (112) 977 10,566 Other 35,220 44,564 16,506 -------- --------- -------- Total operating expense 293,984 321,449 354,333 -------- --------- -------- Loss before other income (expense), income tax benefit and discontinued operations (250,604) (347,890) (59,110) Other income (expense): Corporate interest income 424 1,591 2,426 Corporate interest expense (87,315) (87,898) (95,241) Gain (loss) on sales of investments, net (433) (4,537) 502 Loss on early extinguishment of debt (2,999) - (2,851) Equity in income (loss) of investments and venture funds (3,129) (6,608) 4,699 -------- --------- -------- Total other income (expense) (93,452) (97,452) (90,465) -------- --------- -------- Loss before income tax benefit and discontinued operations (344,056) (445,342) (149,575) Income tax benefit (111,371) (169,117) (56,648) -------- --------- -------- Loss from continuing operations (232,685) (276,225) (92,927) Discontinued operations, net of tax: Income from discontinued operations - - 1,734 Gain on disposal of discontinued operations - 662 - -------- --------- -------- Income from discontinued operations, net of tax - 662 1,734 -------- --------- -------- Net loss $(232,685) $ (275,563) $ (91,193) ======== ========= ======== Basic loss per share from continuing operations $ (0.41) $ (0.50) $ (0.20) Basic earnings per share from discontinued operations - 0.00 0.00 -------- --------- -------- Basic net loss per share $ (0.41) $ (0.50) $ (0.20) ======== ========= ======== Diluted loss per share from continuing operations $ (0.41) $ (0.50) $ (0.20) Diluted earnings per share from discontinued operations - 0.00 0.00 -------- --------- -------- Diluted net loss per share $ (0.41) $ (0.50) $ (0.20) ======== ========= ======== Shares used in computation of per share data: Basic 567,833 548,638 460,857 Diluted(1) 567,833 548,638 460,857 E* TRADE FINANCIAL CORPORATION AND SUBSIDIARIES Consolidated Balance Sheet (In thousands, except share amounts) (Unaudited) March 31, December 31, 2009 2008 ------------ -------------- ASSETS Cash and equivalents $ 4,492,306 $ 3,853,849 Cash and investments required to be segregated under federal or other regulations 1,900,235 1,141,598 Trading securities 46,309 55,481 Available-for-sale mortgage-backed and investment securities 11,823,392 10,806,094 Margin receivables 2,436,611 2,791,168 Loans, net 23,271,969 24,451,852 Investment in Federal Home Loan Bank stock 183,863 200,892 Property and equipment, net 321,934 319,222 Goodwill 1,952,326 1,938,325 Other intangibles, net 378,699 386,130 Other assets 2,639,232 2,593,604 ---------- ---------- Total assets $49,446,876 $48,538,215 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits $27,641,485 $26,136,246 Securities sold under agreements to repurchase 6,946,160 7,381,279 Customer payables 4,181,332 3,753,332 Other borrowings 4,083,033 4,353,777 Corporate debt 2,752,673 2,750,532 Accounts payable, accrued and other liabilities 1,384,042 1,571,553 ---------- ---------- Total liabilities 46,988,725 45,946,719 ---------- ---------- Shareholders' equity: Common stock, $0.01 par value, shares authorized: 1,200,000,000; shares issued and outstanding: 572,051,743 at March 31, 2009 and 563,523,086 at December 31, 2008 5,721 5,635 Additional paid-in-capital 4,084,643 4,064,282 Accumulated deficit (1,078,452) (845,767) Accumulated other comprehensive loss (553,761) (632,654) ---------- ---------- Total shareholders' equity 2,458,151 2,591,496 ---------- ---------- Total liabilities and shareholders' equity $49,446,876 $48,538,215 ========== ========== Segment Reporting Three Months Ended March 31, 2009 ------------------------------------------------------- Trading Balance and Sheet Investing Management Eliminations(2) Total ---------- ---------- ------------------- ---------- Revenue: (In thousands) Operating interest income $ 259,626 $ 444,292 $ (217,281) $ 486,637 Operating interest expense (97,951) (327,305) 217,281 (207,975) -------- -------- --------- ---- -------- Net operating interest income 161,675 116,987 - 278,662 -------- -------- --------- ---- -------- Commission 125,626 - - 125,626 Fees and service charges 45,055 1,660 - 46,715 Principal transactions 17,642 - - 17,642 Gain (loss) on loans and securities, net (22) 16,529 - 16,507 Other revenue 8,894 3,297 - 12,191 -------- -------- --------- ---- -------- Total non-interest income 197,195 21,486 - 218,681 -------- -------- --------- ---- -------- Total net revenue 358,870 138,473 - 497,343 -------- -------- --------- ---- -------- Provision for loan losses - 453,963 - 453,963 Operating expense: Compensation and benefits 69,643 14,529 - 84,172 Clearing and servicing 20,776 21,895 - 42,671 Advertising and market development 43,586 5 - 43,591 Communications 21,462 99 - 21,561 Professional services 12,908 6,722 - 19,630 Occupancy and equipment 19,673 (132) - 19,541 Depreciation and amortization 17,705 2,569 - 20,274 Amortization of other intangibles 7,436 - - 7,436 Facility restructuring and other exit activities (87) (25) - (112) Other 23,618 11,602 - 35,220 -------- -------- --------- ---- -------- Total operating expense 236,720 57,264 - 293,984 -------- -------- --------- ---- -------- Segment income (loss) $ 122,150 $(372,754) $ - $(250,604) ======== ======== ========= ==== ======== Three Months Ended December 31, 2008 ------------------------------------------------------- Trading Balance and Sheet Investing Management Eliminations(2) Total ---------- ---------- ------------------- ---------- Revenue: (In thousands) Operating interest income $ 319,679 $ 483,290 $ (262,765) $ 540,204 Operating interest expense (134,621) (394,251) 262,765 (266,107) -------- -------- --------- ---- -------- Net operating interest income 185,058 89,039 - 274,097 -------- -------- --------- ---- -------- Commission 141,484 64 - 141,548 Fees and service charges 44,238 203 - 44,441 Principal transactions 25,336 - - 25,336 Loss on loans and securities, net (57) (11,353) - (11,410) Other revenue 9,186 3,243 (8) 12,421 -------- -------- --------- --- -------- Total non-interest income (loss) 220,187 (7,843) (8) 212,336 -------- -------- --------- --- -------- Total net revenue 405,245 81,196 (8) 486,433 -------- -------- --------- --- -------- Provision for loan losses - 512,874 - 512,874 Operating expense: Compensation and benefits 62,809 17,722 - 80,531 Clearing and servicing 22,957 25,021 (8) 47,970 Advertising and market development 44,684 - - 44,684 Communications 23,791 378 - 24,169 Professional services 15,709 12,105 - 27,814 Occupancy and equipment 22,135 965 - 23,100 Depreciation and amortization 16,441 3,435 - 19,876 Amortization of other intangibles 7,764 - - 7,764 Facility restructuring and other exit activities 141 836 - 977 Other 36,122 8,442 - 44,564 -------- -------- --------- ---- -------- Total operating expense 252,553 68,904 (8) 321,449 -------- -------- --------- --- -------- Segment income (loss) $ 152,692 $(500,582) $ - $(347,890) ======== ======== ========= ==== ======== Three Months Ended March 31, 2008 ------------------------------------------------------ Trading Balance and Sheet Investing Management Eliminations(2) Total ---------- ---------- ------------------- ---------- Revenue: (In thousands) Operating interest income $ 416,684 $ 590,121 $ (307,214) $ 699,591 Operating interest expense (209,378) (471,056) 307,214 (373,220) -------- -------- --------- ---- -------- Net operating interest income 207,306 119,065 - 326,371 -------- -------- --------- ---- -------- Commission 121,669 586 - 122,255 Fees and service charges 50,877 4,064 - 54,941 Principal transactions 20,376 114 - 20,490 Loss on loans and securities, net (2) (8,565) - (8,567) Other revenue 9,753 3,867 (16) 13,604 -------- -------- --------- --- -------- Total non-interest income 202,673 66 (16) 202,723 -------- -------- --------- --- -------- Total net revenue 409,979 119,131 (16) 529,094 -------- -------- --------- --- -------- Provision for loan losses - 233,871 - 233,871 Operating expense: Compensation and benefits 90,932 32,196 - 123,128 Clearing and servicing 20,347 24,554 (16) 44,885 Advertising and market development 57,444 4 - 57,448 Communications 24,102 992 - 25,094 Professional services 14,852 8,793 - 23,645 Occupancy and equipment 19,640 858 - 20,498 Depreciation and amortization 16,910 4,743 - 21,653 Amortization of other intangibles 10,910 - - 10,910 Facility restructuring and other exit activities 182 10,384 - 10,566 Other 30,637 (14,131) - 16,506 -------- -------- --------- ---- -------- Total operating expense 285,956 68,393 (16) 354,333 -------- -------- --------- --- -------- Segment income (loss) $ 124,023 $(183,133) $ - $ (59,110) ======== ======== ========= ==== ======== About E*Trade Financial E*Trade Financial Corp. -- https://www.etrade.com/ -- is a global financial services company, offering a range of financial solutions to customers under the brand E*TRADE FINANCIAL. Its financial solutions include a suite of trading, investing, banking and lending products. Its primary retail products and services consist of trading and investing, banking and lending products. Trading and investing includes automated order placement and execution of United States and international equities, currencies, futures, options, exchange-traded funds, mutual funds and bonds. Banking includes checking, savings, sweep, money market and certificates of deposit products that offer online bill pay, quick transfer, unlimited automated teller machines transactions on eligible accounts and wireless account access. Lending includes mortgage, home equity, margin and credit card products that offer online loan status and quick transfer. The company's primary institutional product is market making. As reported by the Troubled Company Reporter on December 26, 2008, Standard & Poor's Ratings Services said that its 'B' long-term counterparty credit rating on E*TRADE Financial Corp. and its 'BB-' long-term counterparty credit rating on E*TRADE Bank, which had been on CreditWatch Negative since November 13, 2007, were placed on CreditWatch with developing implications pending the outcome of the company's application to the U.S. Treasury's Troubled Asset Relief Program and a review of the overall health of the franchise. As reported by the TCR on November 10, 2008, Moody's Investors Service lowered E*TRADE Financial Corporation's long-term senior debt rating to B2 from Ba3, and also lowered the long-term deposit rating of its lead thrift subsidiary, E*TRADE Bank, to Ba3 from Ba2. E*TRADE Bank's short term deposit rating and rating on other short-term senior obligations were affirmed at Not Prime, and the thrift's Bank Financial Strength Rating (BFSR) was downgraded to D- from D. The outlook for all long-term ratings at E*TRADE and E*TRADE Bank, including the BFSR, remains negative. ENRON CORP: Arthur Andersen Settles for $16 Million --------------------------------------------------- Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, Enron Recovery Corp. asks Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement and mutual release it entered into with Arthur Andersen. Under the settlement, Arthur Andersen will pay to Enron $16,000,000 and the parties will mutually release each other from all claims. In December 2003, the Official Committee of Unsecured Creditors of Enron Corp. filed a complaint, on behalf of Enron, against Arthur Andersen alleging that certain of its former officers needed the approval of Arthur Andersen, as Enron's former independent auditor and financial advisor, to engage in gross misconduct and breaches of their fiduciary duties in the form of misstating and manipulating Enron's financial condition for the former executives' own benefit. The Complaint also alleged that the accounting firm failed to fully and candidly apprise Enron's Board of Directors with respect to certain high risk transactions orchestrated by the former Enron officers and failed to fulfill its obligations to Enron, the Board, and its Audit Committee by placing the firm's own interests ahead of Enron's and by acceding to the inappropriate transactions designed by the Enron Insiders. According to the Complaint, Arthur Andersen was involved in virtually every aspect of Enron's financial operations and internal control structure, giving rise to their own fiduciary duties of loyalty, utmost good faith and candor, honest dealing, and full disclosure. In addition, the Complaint alleges that Arthur Andersen was paid more than $180 million in fees between 1997 and 2001. The Committee further alleged that Arthur Andersen breached these duties by, among other things: (a) placing its own financial interests ahead of Enron's; (b) failing to provide objective, impartial and truthful advice to Enron; (c) issuing audit opinions of Enron's financial statements that Arthur Andersen was negligent in failing to know contained material misstatements and omissions; (d) failing to recognize that ever increasing sophisticated and complex transactions entered into by Enron had little to do with the nature of Enron's business and everything to do with the Enron Insiders' attempt to achieve financial statements that did not reflect the reality of the company's performance or the results of the transactions itself; and (e) destroying evidence. Arthur Andersen has denied, and continues to deny, each and all claims and allegations of wrongdoing made against it and has maintained that it has meritorious defenses. Enron asserts that the settlement will clearly benefit its estate. Enron points out that the settlement will result in a substantial payment to the estate and will adequately compensate the estate for its claims against Arthur Andersen given the costs and uncertainties of litigation. Bloomberg's Bill Rochelle says the Court is scheduled to convene a hearing on the settlement on May 14. 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. Bloomberg relates that distributions to Enron creditors exceed 50%, some three times more than early estimates of the probably recovery. 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; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EUROFRESH INC: Gets Interim OK to Access Prepetition Lenders' Cash ------------------------------------------------------------------ The Hon. Charles G. Case, II, of the U.S. Bankruptcy Court for the District of Arizona authorized, on an interim basis, Eurofresh, Inc. and affiliate Eurofresh Produce Ltd. to: a) use cash securing repayment of prepetition creditors loan until May 29, 2009; and b) grant adequate protection to prepetition secured parties. The prepetition lenders have agreed to the Debtors' use of cash collateral, provided, among other things, that an agreed budget is followed, and the Debtors file a reorganization plan by May 25. Prior to Eurofresh's petition date, (i) the Debtors, the administrative agent and SPCP Group LLC as lender entered into certain agreements pursuant to which SPCP Group LLC made loans and extended credit and other financial accommodations to the Debtors, including, without limitation, that certain credit and guaranty agreement, dated as of March 25, 2008, and other related credit documents including, without limitation, the forbearance agreement dated April 2, 2009, and executed and delivered by the Debtors in respect of the prepetition loan documents and (ii) EFI as lessee and SP Eurofresh LLC as lessor entered into certain agreements pursuant to which the lessor separately leased and subleased certain real and personal property to EFI, including, without limitation, that certain lease agreement dated as of March 25, 2008, and related other operative documents. SPCP Group LLC has sold, assigned, syndicated or otherwise transferred to affiliates or other managed funds of Silver Point Capital and Wells Fargo Foothill the credit and other financial accommodations made by SPCP Group LLC to the Debtors under the prepetition loan documents. As of April 17, 2009, the Debtors owe the Administrative Agent and Prepetition Lenders amounts totaling $54,490,855 plus accrued interest, fees, costs and other charges and that the Debtors have no offset, defenses or counterclaims to the prepetition loan obligations. As of April 17, 2009, the Debtors relate that Eurofresh, Inc., is indebted to the lessor $14,494,500 for fixed rent, not less than $536,006 for variable rent plus accrued interest, fees, costs and other charges and that the Debtors have no offset, defenses or counterclaims to the prepetition capital lease obligations. To secure the repayment of the prepetition loan obligations, the Debtors granted to the collateral agent for the ratable benefit of itself, a security interest in and lien upon all of Debtors' property. The Debtors maintain an account at Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. in order to have cash accessible for the payment of certain obligations originating overseas that require payment in foreign currency. In order to stabilize the business and move towards a Plan of Reorganization, the Debtors engaged in significant prepetition negotiations with a group of senior noteholders representing more than 66-2/3% in amount of the senior notes and subordinated noteholders representing in excess of a majority in amount of the subordinated notes, and on April 20, 2009, a term sheet was executed by the Debtors, the signing noteholder and Johan Van Den Berg. The noteholder term sheet provides for the conversion of approximately $210 million in debt to equity, along with the infusion of $10 million in new money, $7.5 million of which will go to pay down the amounts owing to the prepetition creditors. Summary of Key Terms of Consensual Use of Cash Collateral From the petition date until May 29, 2009, the Debtors will use $20,613,000 of cash collateral consistent with the 13-week cash flow. The Prepetition Lenders have agreed to the use of their cash collateral, on an interim basis, for the Debtors to have sufficient liquidity to operate their business while negotiating a plan of reorganization and disclosure statement, subject to the entry by the Court of a stipulated interim order that contains the these provisions: 1. The Debtors will pay to the prepetition creditors an amount equal to (i) interest on the prepetition loan obligations on a weekly basis at the non-default rate plus any letter of credit fees, (ii) an amount equal to fixed rent and variable rent due under the prepetition capital lease documents, and (iii) an amount equal to reasonable postpetition fees and expenses of the administrative agent and prepetition creditors incurred in connection with the cases or the prepetition credit obligations or in the protection of the prepetition lenders' rights and interests in the collateral and the prepetition credit documents; the rights of the administrative agent, prepetition creditors, Debtors and other parties in interest are reserved with respect to the adequate protection payments. 2. The Debtors grant, assign and pledge to the collateral agent for the benefit of the secured parties additional or replacement liens upon and a security interest in all of the assets of the Debtors and their estates and all the proceeds thereof, excluding avoidance actions and the proceeds thereof. 3. The replacement liens granted will be subject and subordinate in priority to goods properly consigned to the Debtors or goods subject to valid and enforceable purchase money security interests. 4. In the event of a diminution in the value of the collateral, including the cash collateral, from and after the petition date, in excess of the value of the replacement liens granted herein, then the prepetition lenders will have an administrative expense claim with priority over all other administrative expense claims. e. The Debtors will the provide the collateral agent and prepetition creditors with all inspection rights and collateral reports as required by the prepetition credit documents. The Debtors' authority to use cash collateral will immediately terminate upon: a) the use of cash collateral not authorized by this Order; b) the appointment of a Chapter 11 trustee or examiner with expanded powers in the case; c) conversion of the case to one under Chapter 7 of the Bankruptcy Code; d) the occurrence of a material adverse event that materially impairs the value of the collateral; e) the failure to file a plan of reorganization and disclosure statement by May 25, 2009; and f) without the prior consent of the collateral agent, the entry of an order authorizing the Debtors to grant to a party other than one or more of the secured parties a security interest in and lien upon the Collateral that has priority which is senior to, or equal with, the prepetition or replacement liens and security interests of the secured parties in the collateral. A full-text copy of the Budget is available for free at: http://bankrupt.com/misc/EUROFRESH_Budget.pdf About Eurofresh, Inc. Headquartered in Snowflake, Arizona, Eurofresh, Inc. -- http://www.eurofresh.com/-- produces and sells tomatoes. The Company and Eurofresh Produce Ltd., its affiliate, filed for Chapter 11 on April 21, 2009 (Bankruptcy D. Ariz. Lead Case No. 09-07970). Craig D. Hansen, Esq., at Squire, Sanders & Dempsey L.L.P., represents the Debtors in their restructuring effort. Eurofresh Inc. listed $50 million to $100 million in assets and $100 million to $500 million in debts in its bankruptcy petition. EUROFRESH INC: Wants Alvarez & Marsal N.A. as Financial Advisor --------------------------------------------------------------- The Hon. Charles G. Case, II, of the U.S. Bankruptcy Court for the District of Arizona authorized, on an interim basis, Eurofresh, Inc. and Eurofresh Produce Ltd. to employ Alvarez & Marsal North America, LLC, as financial advisor. A final hearing on the motion is scheduled for May 27, 2009, at 10:00 a.m. (prevailing Pacific Time) before the Court. Objections are due May 20. A&M-NA is expected to: a) assist in the preparation of the Debtors' revised business plan and operating plan and cash flow forecast and presentation of the plan and forecast to the Debtors' executives, board of directors and creditors; b) assist in the identification of cost reduction and cash conversion opportunities; c) assist in the development of a revised cash management process; d) assist in the development and implementation of a plan of reorganization; e) assist in creditor and customer issues including assistance in preparation of reports and liaison with creditors, creditor advisors, customers and key vendors; f) assist with bankruptcy reporting and filing requirements; and g) provide other services as are approved by the Debtors' executives or requested by the board of directors. Emmett O. Bergman, director of A&M-NA, told the Court that his hourly rate is $650 and the hourly rates for other professionals working on the Chapter 11 cases are: Managing Directors $625-$850 Directors $475-$625 Associates $325-$475 Analysts $225-$300 Mr. Bergman added that A&M-NA received a $175,000 prepetition retainer. A&M-NA will retain all remaining amounts of the retainer in trust during the pendency of the Chapter 11 cases. For the year prior to Eurofresh's petition date, the Debtors paid A&M-NA $426,904 for pre-petition services rendered. A&M-NA has been fully compensated for all fees and expenses incurred prior to the petition date after applying $61,214 from the retainer, leaving the Debtors with a net unapplied retainer balance of $113,785 held by A&M-NA as of the petition date. Mr. Bergman assured the Court that A&M-NA is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Eurofresh, Inc. Headquartered in Snowflake, Arizona, Eurofresh, Inc. -- http://www.eurofresh.com/-- produces and sells tomatoes. The Company and Eurofresh Produce Ltd., its affiliate, filed for Chapter 11 on April 21, 2009 (Bankruptcy D. Ariz. Lead Case No. 09-07970). Craig D. Hansen, Esq., at Squire, Sanders & Dempsey L.L.P., represents the Debtors in their restructuring effort. Eurofresh Inc. listed $50 million to $100 million in assets and $100 million to $500 million in debts in its bankruptcy petition. EUROFRESH INC: Wants to Hire A&M Sec. for Reorganization/Financing ------------------------------------------------------------------ The Hon. Charles G. Case, II, of the U.S. Bankruptcy Court for the District of Arizona authorized, on an interim basis, Eurofresh, Inc. and affiliate Eurofresh Produce Ltd. to employ Alvarez & Marsal Securities, LLC, as investment banker. A final hearing on the motion is scheduled for May 27, 2009, at 10:00 a.m. (prevailing Pacific Time) before the Court. Objections are due May 20. A&M-S is expected to: i. review the Debtors' business, operations, financial projections, business plans and strategies, asset and business value and financial position; ii. analyze existing direct and contingent liabilities of the Debtors, including debt obligations and other liabilities; iii. assist the Debtors in ascertaining the debt servicing capability of the Debtors and any additional funding requirement; iv. assist with the formulation, evaluation and implementation of various options for a capital structure restructuring, financing, reorganization, merger, or sale of the Debtors, or their assets or businesses, including, in the case of a restructuring, the value of securities, if any, that may be issued to certain creditors or equity holders thereunder; v. assist the Debtors in the preparation of solicitation materials with respect to a restructuring and any securities to be issued in connection therewith; vi. assist the Debtors in negotiations with creditors, bondholders, shareholders and other appropriate parties-in- interest; vii. provide investment banking services to the Debtors in connection with developing, seeking approval for, a restructuring Plan, which may be a Plan under Chapter 11 of the Bankruptcy Code; viii. if the Debtors pursue a sale transaction, A&M will: (a) if necessary, assist in preparing an offering memorandum for distribution and presentation to prospective purchasers; (b) advise the Debtors on any proposed purchase price and form of consideration; (c) assist in soliciting interest in a transaction among prospective purchasers; (d) assist in evaluating proposals received from prospective purchasers; (e) advise the Debtors as to the structure of the sale transaction, including valuation of any non-cash consideration; (f) assist in negotiating the financial terms and structure of a sale transaction; and (g) provide other investment banking services reasonably necessary to accomplish the foregoing and consummate a sale transaction; ix. if the Debtors pursue a financing transaction A&M will: (a) if necessary, assist in preparing a private placement memorandum and management presentation for distribution and presentation to prospective Investors; (b) assist in identifying and contacting prospective investors well as in soliciting indications of interests in a financing transaction among prospective investors; (c) assist in evaluating indications of interest received from prospective investors; (d) assist in negotiating the financial terms and structure of a financing transaction; and (e) provide other investing banking services reasonably necessary to accomplish the foregoing and consummate a financing transaction. The Debtors propose to pay A&M-S on these terms: (a) A&M-S will receive a monthly fee of $200,000; (b) In addition to the other fees to be paid A&M-S, the Debtors will pay A&M-S these transaction fees: (i) Restructuring Transaction Fee equal to $1,050,000 less, $75,000 times the number of Monthly Fees paid in cash to A&M-S; (ii) Financing Transaction Fee equal to: (x) 1.5% of the aggregate principal amount of all secured financing, plus; (y) 3.0% of the aggregate amount of all unsecured and subordinated debt, raised or committed, plus; (z) 5.0% of the aggregate amount of equity and equity- linked securities, including convertible securities, securities with attached, detachable or other warrants or other equity-linked features and preferred stock, placed or committed. (c) A&M-S will be reimbursed for its reasonable out-of-pocket expenses incurring in connection the provision of its services. In addition, A&M-S will be reimbursed for the reasonable fees and expenses of its counsel incurred. (d) A&M-S received a prepetition retainer of $33,333. Prior to Eurofresh's petition date, the Debtors paid A&M-S $706,907 for prepetition services rendered inclusive of the retainer. Upon information and belief, A&M-S has been fully compensated for all fees and expenses incurred prior to the petition date, leaving the Debtors with a net unapplied retainer balance of $33,333 held by A&M-S as of the petition date. To the best of the Debtors' knowledge, A&M-S is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Eurofresh, Inc. Headquartered in Snowflake, Arizona, Eurofresh, Inc. -- http://www.eurofresh.com/-- produces and sells tomatoes. The Company and Eurofresh Produce Ltd., its affiliate, filed for Chapter 11 on April 21, 2009 (Bankruptcy D. Ariz. Lead Case No. 09-07970). Craig D. Hansen, Esq., at Squire, Sanders & Dempsey L.L.P., represents the Debtors in their restructuring effort. Eurofresh Inc. listed $50 million to $100 million in assets and $100 million to $500 million in debts in its bankruptcy petition. FAIRPOINT COMMUNICATIONS: Bank Debt Sells at Almost 51% Discount ---------------------------------------------------------------- Participations in a syndicated loan under which Fairpoint Communications Inc. is a borrower traded in the secondary market at 49.06 cents-on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.50 percentage points from the previous week, the Journal relates. The loan matures March 31, 2015. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and S&P's B rating. Headquartered in Charlotte, North Carolina, FairPoint Communications, Inc., provides a full range of communications services to residential and business customers including local and long distance voice, data, Internet, television and broadband. FairPoint Communications is traded on the New York Stock Exchange under the symbol FRP. FairPoint operates 32 local exchange companies in 18 states. With roughly 1.9 million access line equivalents, FairPoint is the eighth largest telecommunications company in the United States. FLEETWOOD ENTERPRISES: To Sell Oregon Travel Trailer Plant ---------------------------------------------------------- According to Bloomberg's Bill Rochelle, Fleetwood Enterprises Inc. has signed a deal for the sale of a plant in La Grande, Oregon for $1.8 million to Arbutus RV & Marine Sales Ltd., the largest recreational-vehicle dealer in British Columbia. The Debtor will further market test the plant through an auction. Mr. Rochelle reports that Arbutus insists, however, on completing the purchase by May 15 to produce travel trailers for the summer season. Consequently, Fleetwood is proposing a truncated sale process, under which, competing bids are due by May 8, and the auction would occur at a May 13 hearing for approval of the sale. Fleetwood has earlier said that it will seek to consummate strategic sales of assets, including its manufactured housing and motor home divisions. Fleetwood's Quarterly Report was filed past the deadline. Fleetwood cited its bankruptcy filing as reason for the delay. A full-text copy of Fleetwood's Quarterly Report is available at no charge at http://ResearchArchives.com/t/s?3c17 Fleetwood has an $80 million in Debtor-in-Possession from lenders, led by Bank of America, N.A. as agent. Headquartered Riverside, California, Fleetwood Enterprises -- http://www.fleetwood.com/-- produces recreational vehicles and manufactured homes. The Company has 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., at Gibson, 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. FLORIDA DEVELOPMENT: S&P Gives Negative Outlook on 'BB-' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services has revised the rating outlook on Florida Development Finance Corp.'s revenue bonds, issued on behalf of Palm Bay Academy Inc. Charter School, to negative from stable due to operating pressures placed on financial operations related to decreasing enrollment levels; the school expects it could need to use some trustee-held reserves in order to make debt service payments next year. With debt service expected to reach near maximum annual debt service levels in the next few years, additional pressure likely will be placed on the school to add and maintain enrollment; the uncertainty of Florida school funding fluctuations adds to this pressure. Standard & Poor's has affirmed its 'BB-' long-term rating on the bonds. "The negative outlook reflects our view of the considerable challenges facing the school regarding enrollment, which has a direct impact on its financial position," said Standard & Poor's credit analyst Jane Hudson Ridley. "If enrollment goals are met, and maintained, and structural balance is maintained, the outlook could be revised to stable. If enrollment levels negatively affect financial position and special reserves are needed to fund operations, the rating could be revised downward," she noted. The rating reflects a need, in Standard & Poor's view, to continue to increase student count in order to generate sufficient revenues to make debt service payments on the bonds; a recent midyear loss of enrollment that the school attributes to the troubled Florida economy, but that has resulted in lower enrollment figures this year and the sapping of the school's waiting list; a need to increase enrollment in grades Standard & Poor's views as more of a challenge to fill, such as middle school and the upper grades of the immersion program (grades one and two); and a trend of revising enrollment projections downward over time. Additional rating factors include the lack of a formal business plan to guide and ground decisions and expansion plans, without which the future direction and plans of the school appear likely to change from the current course; dependence on the founder and head of the school to continue to guide and operate the facility, which could be exacerbated by the addition of programs and campuses; a critical need, in Standard & Poor's view, to retain students in new curriculum-specific classes (specifically language immersion) where filling classes in the grades three to five could prove challenging; and the inherent uncertainty associated with charter renewals given that the final maturity of the bonds exceeds the time horizon of the existing charter. Offsetting factors include the length of the charter through 2012 following a 10-year renewal in 2002; good student demand, particularly in the lower grades; above-average test scores that are among the highest in the state; and adequate legal provisions, although the school can issue subordinate debt with a MADS test of 1x. A pledge of loan repayments by the borrower, Palm Bay Academy Inc. Charter School, secures the bonds. Securing the loan payments is a general full faith and credit pledge of the academy, including pledged revenues (fees, rentals, charges, and other income), with a first-lien mortgage on the property as additional security. A debt service reserve fund has been funded at the standard three- prong test. A separate restricted reserve was also established and funded with bond proceeds; it can be used for debt service. Per-pupil operating revenues flow through the county to the school before being remitted to the trustee for payment on the bonds. The school's operating revenues are based on 100% of the per-pupil revenues for the Brevard County schools, minus a 5% holdback fee kept by the district for administration of the school's charter. Palm Bay Academy was established in 1998 with an initial three- year charter granted by Brevard County Board of Education. The charter was renewed for a 10-year term in 2002 and runs through the 2012 school year. Palm Bay's focus is an academically rigorous alternative to the local public schools, and test scores demonstrate significant strengths in student achievement. Enrollment has grown to 505 students across grades K-8 in the 2008-2009 school year from 100 students in grades K-3 in the 1998- 1999 school year. Approximately $12 million in debt is affected. FLUID ROUTING: Court OKs Corporate Name Change to Carolina Fluid ---------------------------------------------------------------- The U.S. Bankuptcy Court for the District of Delaware has granted the motion of Fluid Routing Solutions Intermediate Holding Corp. and its debtor-affiliates for the change of their corporate names: From To ---- ---- Fluid Routing Solutions Carolina Fluid Handling Intermediate Holding Corp. Intermediate Holding Corp. Fluid Routing Solutions, Inc. Carolina Fluid Handling, Inc. Fluid Routing Solutions Carolina Fluid Handling Automotive, LLC Automotive, LLC The Court also ordered that the caption of the Debtors' Chapter 11 cases be modified to reflect the foregoing corporate name changes. In its motion, the Debtors told the Court that the corporate name changes are necessary as a result of the approval and closing of the sale of substantially all of the assets of the Debtors' hose extrusion and fuel assembly service business to FRS Holding Corp. pursuant to an Asset Purchase Agreement dated as of February 6, 2009. The sale closed on March 27, 2009. FRS Holding offered to pay $11,000,000, subject to adjustments, for the fuel systems business. The Fluid Reouting Debtors have amended their certificates of incorporation and bylaws as necessary to comply with this name change requirement. As reported in the Troubled Company Reporter on April 1, 2009, Fluid Routing Solutions completed the sale of its fuel systems and hose extrusion operations to an affiliate of Sun Capital Partners, Inc. To facilitate the restructuring process and allow for a sale of the ongoing business, an affiliate of Sun Capital agreed to provide a debtor-in-possession loan facility to FRS upon the bankruptcy filing. The DIP financing allowed FRS to continue to pay employees and vendors, thus providing operational and financial stability as it proceeded with the sale process of the fuel and hose extrusion businesses. An affiliate of Sun Capital served as the stalking horse bidder for the fuel and hose extrusion assets under Section 363 of the U.S. Bankruptcy Code, won the auction, and the Bankruptcy Court approved the sale on March 24, 2009. The fuel and hose business will retain the FRS name. About Fluid Routing Headquartered in Rochester Hills, Michigan, Fluid Routing Solutions Inc. -- http://www.markivauto.com/-- makes automobile parts and accessories. The company has manufacturing facilities located in Lexington, Tennessee; Big Rapids, Michigan; Oscala, Florida; and Easley, South Carolina. The company's Detroit facility closed in 2008. The company had 1,039 employees before it filed for bankruptcy. Fluid Routing Solutions, Inc., and three affiliates filed for Chapter 11 on Feb. 6, 2009 (Bank. D. Del. Lead Case No. 09-10384). Judge Christopher Sonchi handles the case. Neil E. Herman, Esq., Kimberly A. Taylor, Esq., Oksana Lashko, Esq., Kizzy L. Rosenblatt, Esq., Alexis L. Allen, Esq., Rachel Jaffe Mauceri, Esq., and Luaren Hofmann, Esq., at Morgan Lewis & Bockuis LLP, represent the Debtors as counsel. Michael R. Nestor, Esq., and Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors as Delaware counsel. Mesirow Financial Interim Management, LLC, is the Debtors' restructuring advisor. In its bankruptcy petition, Fluid Routing listed assets of $10 million to $50 million and debts of $50 million to $100 million. FLUID ROUTING: Gets Final Nod to Borrow $8MM from Customer Group ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted Fluid Routing Solutions Intermediate Holding Corp., and its affiliated debtors authority, on a final basis, to obtain post- petition financing of up to $8 million from General Motors Corporation, Chrysler LLC, on behalf of itself and Chrysler Motors LLC, Chrysler Canada Inc., and Ford Motor Corporation (each a "Customer" and collectively the "Customer Group"), to fund the operations and administration of the Debtors' estates. Absent a written extension, the post-petition financing will be due and payable on the earliest of: (a) July 31, 2009; (b) the occurrence of an Event of Default; (c) the closing of a sale of all or substantially all of the Debtors' Fluids Business; or (d) the effective date of any confirmed plan of reorganization for the Debtors. As reported previously, the Bankruptcy Court for the District of Delaware granted the Debtors permission, on an interim basis, to obtain up to $3.7 million under the Interim Agreement with the Customer Group, dated March 30, 2009. As security for the post-petition financing, the Customer Group is granted a first and senior security interest in the inventory on hand on the Fuel Business closing date loaned against using the proceeds of the post-petition financing, a first and senior security interest in all other assets acquired after the closing date, and a security interest in all other assets of the Debtors acquired prior to the closing date, which shall be junior and subordinate to DIP Lender Sun Fluid Routing Finance LLC's senior and first priority lien on said assets. The Customer Financing will bear interest at the rate of 15% p.a. In exchange for providing the financing, the Customer Group has requested certain accommodations from the Debtors and Sun Fluid Routing Finance which are set forth in the Interim Agreement, dated as of March 30, 2009. The Debtors relate that on March 27, in conjunction with the approval and closing of the sale of the Fuel Business, the Sun FR DIP Facility expired. At the same time, Sun FR swept all cash of the Debtors and informed the Debtors that all amounts received by them representing payment of the accounts should be paid to Sun FR. On March 30, 2009, the Debtors shut down the operations of the Fluids Business due to inadequate financing. On March 27, 2009, the sale of the Fuel Business to FRS Holding Corp. closed. On March 30, 2009, the Debtors shut down the operations of the Fluids Business due to inadequate financing. A copy of the budget is available for free at: http://bankrupt.com/misc/FluidRouting.Budget.pdf A copy of the Interim Agreement is available at: http://bankrupt.com/misc/FluidRouting.IFA.pdf About Fluid Routing Headquartered in Rochester Hills, Michigan, Fluid Routing Solutions Inc. -- http://www.markivauto.com/-- makes automobile parts and accessories. The company has manufacturing facilities located in Lexington, Tennessee; Big Rapids, Michigan; Oscala, Florida; and Easley, South Carolina. The company's Detroit facility closed in 2008. The company had 1,039 employees before it filed for bankruptcy. Fluid Routing Solutions, Inc., and three affiliates filed for Chapter 11 on Feb. 6, 2009 (Bank. D. Del. Lead Case No. 09-10384). Judge Christopher Sonchi handles the case. Neil E. Herman, Esq., Kimberly A. Taylor, Esq., Oksana Lashko, Esq., Kizzy L. Rosenblatt, Esq., Alexis L. Allen, Esq., Rachel Jaffe Mauceri, Esq., and Luaren Hofmann, Esq., at Morgan Lewis & Bockuis LLP, represent the Debtors as counsel. Michael R. Nestor, Esq., and Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors as Delaware counsel. Mesirow Financial Interim Management, LLC, is the Debtors' restructuring advisor. In its bankruptcy petition, Fluid Routing listed assets of $10 million to $50 million and debts of $50 million to $100 million. GENERAL MOTORS: Magna International Presents Offer for Opel ----------------------------------------------------------- Gregory Corcoran posted on The Wall Street Journal blog that Magna International has submitted an offer for General Motors Corp.'s Adam Opel. According to Mr. Corcoran, Magna is apparently interested in investing alongside Fiat SpA. Mr. Corcoran states that Opel has said it needs $5.3 billion to get through the economic crisis and that any move depends on GM. The Associated Press relates that GM CEO Fritz Henderson said that he is negotiating with potential parties over Opel's future and that a decision could come at the end of May. 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. For the 2008 calendar year, GM reported an adjusted net loss, excluding special items, of $16.8 billion. This compares to an adjusted net loss of $279 million. Including special items, the company reported a loss of $30.9 billion, compared to a reported loss of $43.3 billion in 2007, which included a non-cash special charge of $38.3 billion in the third quarter related to the valuation allowance against deferred tax assets. As of December 31, 2008, GM reported $91,047,000,000 in total assets, $176,387,000,000 in total liabilities, and $86,154,000,000 in stockholders' deficit. GM 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. Going Concern Doubt Deloitte & Touche LLP, has said there is substantial doubt about GM's ability to continue as a going concern after reviewing GM's 2008 financial report. Deloitte cited the Company's recurring losses from operations, stockholders' deficit and failure to generate sufficient cash flow to meet the Company's obligations and sustain the its operations. It said GM's future is dependent on the Company's ability to execute the Company's Viability Plan successfully or otherwise address these matters. If the Company fails to do so for any reason, the Company would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code. Standard & Poor's Ratings Services on April 10 lowered its issue- level rating on GM's $4.5 billion senior secured revolving credit facility to 'CCC-' (one notch above the 'CC' corporate credit rating on the company) from 'CCC'. It 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 its view of the likelihood that GM will default -- through either a bankruptcy or a distressed debt exchange. Moody's Investors Service said February 18 that the risk of a bankruptcy filing by GM and Chrysler remains high. The last rating action on GM and Chrysler was a downgrade of their Corporate Family Ratings to Ca on December 3, 2008. GEORGIA GULF: Bank Debt Trades at 38% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Georgia Gulf is a borrower traded in the secondary market at 61.67 cents-on-the- dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.97 percentage points from the previous week, the Journal relates. The loan matures on October 3, 2013. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's CCC rating. About Georgia Gulf Georgia Gulf Corporation is a manufacturer and international marketer of two integrated chemical product lines, chlorovinyls and aromatics. The Company's primary chlorovinyls products are chlorine, caustic soda, vinyl chloride monomer (VCM), vinyl resins and vinyl compounds. Its aromatics products are cumene, phenol and acetone. The Company has four business segments: chlorovinyls; window and door profiles, and moldings products; outdoor building products, and aromatics. As of December 31, 2008, the Company's balance sheet showed total assets of $1.61 billion and total liabilities of $1.75 billion resulting in total stockholders' deficit of $139.92 million. As of December 31, 2008, the Company had $90 million of cash on hand as well as $143 million of borrowing capacity available under its revolving credit facility. The Company reduced net debt by $83 million during 2008 and was in compliance with its debt covenants for the quarter ended December 31, 2008. * * * On March 16, 2009, Georgia Gulf entered into a fifth amendment to its senior secured credit facility provided by a syndicate of banks and other financial institutions led by Bank of America, N.A., as administrative agent. The Credit Facility Amendment became effective on March 17, 2009. The Credit Facility Amendment permits the Company prior to September 30, 2009, to exchange certain equity or debt securities for its 7-1/8% and 9.5% senior notes and its 10.75% senior subordinated notes. GOODY'S LLC: Again Attempts Auction for Trademarks and Trade Names ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved, for the second time, procedures for auctioning off for Goody's LLC's trademarks and trade names. According to Bloomberg's Bill Rochelle, bids will be due May 27, an auction will be held June 2, and the sale hearing will be held June 4. Bloomberg relates that Goody's LLC was initially authorized in February to sell trademarks and trade names. The Company requested and received a postponement of the auction to give it more time for marketing the intellectual property. Once a moderately priced family apparel retailer with 282 stores, Goody's filed under Chapter 11 again in January, only three months after confirming a reorganization plan. Goody's liquidated after the new filing by conducting going-out-of-business sales. Prentice Capital Management bought the chain in January 2006 and kept all the stock in the previous reorganization in exchange for the second- and third-lien loans. The new petition listed assets of $206 million against debt of $202 million. In the second Chapter 11 case, debt for the Knoxville, Tennessee-based company includes a $29 million secured revolving credit along with second-, third- and fourth-lien term loans for $10 million, $20 million and $15 million, respectively. The first case is In re Goody's Family Clothing Inc., No. 08-11133, and the new case is Goody's LLC, 09-10124, both in U.S. Bankruptcy Court, District of Delaware (Wilmington). A copy of the approved bidding procedures is available for free at http://bankrupt.com/misc/Goody's.BP.pdf About Goody's LLC Headquartered in Wilmington, Delaware, Goody's LLC, successor to Goody's Family Clothing Inc., operates a chain of clothing stores. Goody's LLC and 13 of its affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. D. Del. Lead Case No. 09-10124). M. Blake Cleary, Esq., at Young, Conaway, Stargatt & Taylor, LLP; Paul G. Jennings, Esq., Gene L. Humphreys, Esq., Edward C. Meade, Esq., and Kristen C. Wright, Esq., at Bass Berry & Sims PLC represent the Debtors as counsel. Skadden, Arps, Slate Meagher & Flom, LLP is the Debtors' special counsel; FTI Consulting Inc. is the Debtors' financial advisor. Goody's Family Clothing Inc., as of May 31, 2008, operated 355 stores in several states with approximately 9,868 personnel of which 170 employees are covered under a collective bargaining agreement. Goody's Family and 19 of its affiliates filed for Chapter 11 protection on June 9, 2008 (Bankr. D. Del. Lead Case No. 08-11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings, Esq., at Bass, Berry & Sims PLC, represented the Debtors. The Company emerged from bankruptcy October 20, 2008, after closing more than 70 stores. The reorganized entity was named Goody's LLC. GREGORY ABBETT: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Gregory W. Abbett 110 Hollyann Dr Folsom, CA 95630 Bankruptcy Case No.: 09-28058 Chapter 11 Petition Date: April 27, 2009 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Thomas Holman Debtor's Counsel: Walter R. Dahl, Esq. 2304 N St. Sacramento, CA 95816-5716 Tel: (916) 446-8800 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Denise Abbett unstated $275,036 Guardian Ad Litem Miles Abbet Trust & Morgan Abbett Trust 28 Eucalyptus Rd. Belvedere CA 94210 Jeffrey B Abbett Personal Loan 100,000 16 SCinnamon Teal Novato CA Dep't. of Child Child Support 38,390 Support Services PO Box 989067 West Sacramento, CA Dep't. of Child Child Support 26,672 Support Services Douglas N. Akay Legal Services 12,500 Zuckerman & McQuiller Legal Services 4,678 HARTMARX CORPORATION: U.S. Trustee Amends Committee Members ----------------------------------------------------------- William T. Neary, United States Trustee for Region 11, amended the members of the Official Committee of Unsecured Creditors of Hartmarx Corporation and its debtor-affiliates. The members of the revamped Committee are: 1) Deutsche Bank National Trust Company Attn: Jeffrey J. Powell 222 South Riverside Plaza, 25th Floor Chicago, IL 60606-5808 2) GMAC Commercial Finance LLC Attn: Arthur Brown 1290 Ave. Of the Americas New York, NY 10104 3) Hibernian Direct, LLC Attn: Patrick Duggan One North LaSalle, Suite 2151 Chicago, IL 60602 4) Pacific Garment USA Attn: Ken Yager Morris Anderson & Assoc 719 South Los Angeles St., #708 Los Angeles, CA 90014 5) Pension Benefit Guaranty Corporation Attn: John Holland Ginsberg, Esq. Office of the Chief Counsel 1200 K. Street, N.W., Suite 320 Washington, D.C. 20005 6) Teklink International, Inc. Attn: Pankaj Gupta 823 Fieldcrest Drive Naperville, IL 60540 7) Textile Import LLC Attn: Anthony Di Talia 1410 Broadway 22nd Floor New York, NY 10018 8) Trisula Center Attn: Herman Roup JL Linkar Luar Barat Blok A No. 1 Rawa Buaya - Cengkareng Jakarta Barat 11740 Indonesia 9) Warren Corp. Attn: Mark Radtke 711 Fifth Avenue New York, NY 10022 Chicago, IL 60610 10) Woo Yang Co. Attn: Tracy Klestadt Klestadt & Winters, LLP 699-3 Banyea 4 Dong, Haeundae - Gu Busan, Korea The members of the Committee have been amended three times. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Based in Chicago, Illinois, Hartmarx Corporation (HTMXQ) -- http://www.hartmarx.com/-- produces and markets business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey-Freeman, Palm Beach, Coppley, Monarchy, Manchester Escapes, Society Brand, Racquet Club, Naturalife, Pusser's of the West Indies, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace, Eye, Christopher Blue, Worn, One Girl Who . . . and b.chyll. In addition, the company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Burberry men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Lyle & Scott, Golden Bear, Jag and Dr. Martens. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. Hartmarx and certain affiliates filed for bankruptcy protection on January 23, 2009 (Bankr. N.D. Ill. Lead Case No. 09-02046). George N. Panagakis, Esq., Felicia Gerber Perlman, Esq., and Eric J. Howe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed $483,108,000 in total assets and $261,220,000 in total debts as of August 31, 2008. HARTMARX CORPORATION: Wants July 27 as Creditors' Claims Bar Date ----------------------------------------------------------------- Hartmarx Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Illinois to set July 27, 2009, as deadline for creditors to file proofs of claim. All original proofs of claim must be filed to: Hartmarx Corporation Claims Processing c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245; A hearing is set for May 5, 2009, at 2:00 p.m., to consider the request. Objections, if any, are due May 1. Based in Chicago, Illinois, Hartmarx Corporation (HTMXQ) -- http://www.hartmarx.com/-- produces and markets business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey-Freeman, Palm Beach, Coppley, Monarchy, Manchester Escapes, Society Brand, Racquet Club, Naturalife, Pusser's of the West Indies, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace, Eye, Christopher Blue, Worn, One Girl Who . . . and b.chyll. In addition, the company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Burberry men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Lyle & Scott, Golden Bear, Jag and Dr. Martens. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. Hartmarx and certain affiliates filed for bankruptcy protection on January 23, 2009 (Bankr. N.D. Ill. Lead Case No. 09-02046). George N. Panagakis, Esq., Felicia Gerber Perlman, Esq., and Eric J. Howe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed $483,108,000 in total assets and $261,220,000 in total debts as of August 31, 2008. HAWKER BEECHCRAFT: Bank Debt Sells at Almost 50% Discount --------------------------------------------------------- Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 51.56 cents-on- the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.06 percentage points from the previous week, the Journal relates. The loan matures on March 26, 2014. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B rating. Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, is a leading manufacturer of business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. * * * As reported by the Troubled Company Reporter on April 17, 2009, Standard & Poor's Ratings Services lowered its ratings on Hawker Beechcraft Inc., including the corporate credit rating to 'B-' from 'B+'. The outlook is negative. S&P also lowered its issue- level ratings on senior secured and unsecured debt of Hawker Beechcraft Acquisition Co. LLC, a wholly owned subsidiary of Hawker Beechcraft and the borrower under the credit facility and the issuer of notes. S&P lowered the rating on the senior secured debt to 'B', one notch higher than the corporate credit rating on Hawker Beechcraft Inc., from 'BB'. S&P revised the recovery rating on this debt to '2' from '1', indicating expectations on substantial (70%-90%) recovery of principal in the event of payment default. S&P lowered the issue-level rating on the senior unsecured and subordinated debt to 'CCC' from 'B-'. The recovery rating on this debt remains '6', indicating expectations of negligible (0%-10%) recovery. The TCR related on April 6, 2009, that Moody's Investors Service lowered Hawker Beechcraft Acquisition Company's Corporate Family Rating to Caa2 from B3 and the Probability of Default to Caa2/LD from B3. The actions follow disclosure that the company acquired in open market transactions at significant discounts to par some $222 million of its debt obligations. Moody's considers the event to be a distressed exchange. At the same time, the company's Speculative Grade Liquidity rating was changed to SGL-3, representing adequate liquidity. The outlook was revised to stable from negative. HELLER EHRMAN: Committee Sues Bank of America for $58 Million ------------------------------------------------------------- The official committee of unsecured creditors of Heller Ehrman LLC, the San Francisco-based law firm that once had 730 attorneys, sued Bank of America NA to recover $58 million paid to the lender before and after bankruptcy on account of a secured claim that may turn out to be defective, Bloomberg's Bill Rochelle said. Bill Rochelle states that when the firm filed under Chapter 11 in late December, the papers explained how Bank of America, the secured lender, mistakenly terminated its financing statement in October 2007, leaving the bank as an unsecured creditor at the time. The bank, according to Mr. Rochelle, discovered the mistake a year later and filed another financing statement less than 90 days before bankruptcy, saying it was a continuation of the earlier filing and that the termination of the previous financing statement was a clerical error. Given authority earlier this month by the bankruptcy court in San Francisco, the Creditors Committee filed suit last week asking for a declaration that the refiling was a "preference", which can be invalidated under bankruptcy law, Bloomberg reported. Mr. Rochelle relates that once the bank is reduced to the status of an unsecured creditor, the Committee is asking for the return of $6.6 million paid to the bank since the Chapter 11 filing and $51.4 million paid in the 90 days before bankruptcy. Heller Ehrman said it filed the Chapter 11 petition when it did in December to preserve the preference claim against Charlotte, North Carolina-based Bank of America, Bloomberg further reported. According to Mr. Rochelle, the bank can defend the preference claim by showing that that the law firm was solvent at the time it filed the new financing statement. A preference claim can only be made if the bankrupt company was insolvent when the transaction took place. The firm said it resorted to bankruptcy following the departure of key partners, which caused a violation of the bank loan agreement and ultimately led the firm to decide to dissolve in September. As reported by the TCR on April 21, 2009, Peter J. Benvenutti, a member of the Company's Dissolution Committee, told the U.S. Bankruptcy Court for the Northern District of California that the negotiation between the Debtor and the Creditors Committee regarding a liquidating plan cannot go forward until the report of Development Specialists, Inc., is completed. Mr. Benvenutti says that it is the Debtor's hope that DSI's report will serve as a common reference point for negotiation regarding the appropriate contribution, if any, to be made by the shareholders of the Debtor's partners to a consensual liquidating plan. DSI was employed by the Debtor and the Creditors Committee to perform a series of investigative tasks, including among other things the preparation of a written report identifying the Debtor's point of insolvency. Headquartered in San Francisco, California, Heller Ehrman, LLP LP -- http://www.hewm.com/-- was an international law firm of more than 730 attorneys in 15 offices in the United States, Europe, and Asia. The firm filed a voluntary petition under Chapter 11 of the Bankruptcy Code on December 28, 2008 (Bankr. N.D. Calif., Case No. 08-32514). Members of the firm's dissolution committee led by Peter J. Benvenutti approved a plan dated September 26, 2008, to dissolve the firm. The Hon. Dennis Montali presides over the case. John D. Fiero, Esq., and Miriam Khatiblou, Esq., at Pachulski, Stang, Ziehl, Young and Jones, represent the Debtors as counsel. Thomas A. Willoughby, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP, represents the official committee of unsecured creditors of the Debtor. The firm listed assets and debts between $50 million and $100 million each in its bankruptcy petition. According to reports, the firm still has roughly $63 million in assets and 54 employees at the time of its filing. HELLER EHRMAN: Former Staff Amend $32MM Suit to Include Partners ---------------------------------------------------------------- Bankruptcy Law360 reports that former workers at Heller Ehrman LLP filed an amended complaint before the U.S. Bankruptcy Court for the Northern District of California on Friday to include related professional corporations and shareholder attorneys as defendants. The report says the former Heller Ehrman staff seeks to recover $32 million in vacation pay for those who were terminated when the firm went belly up. Headquartered in San Francisco, California, Heller Ehrman, LLP LP -- http://www.hewm.com/-- was an international law firm of more than 730 attorneys in 15 offices in the United States, Europe, and Asia. The firm filed a voluntary petition under Chapter 11 of the Bankruptcy Code on December 28, 2008 (Bankr. N.D. Calif., Case No. 08-32514). Members of the firm's dissolution committee led by Peter J. Benvenutti approved a plan dated September 26, 2008, to dissolve the firm. The Hon. Dennis Montali presides over the case. John D. Fiero, Esq., and Miriam Khatiblou, Esq., at Pachulski, Stang, Ziehl, Young and Jones, represent the Debtors as counsel. Thomas A. Willoughby, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP, represents the official committee of unsecured creditors of the Debtor. The firm listed assets and debts between $50 million and $100 million each in its bankruptcy petition. According to reports, the firm still has roughly $63 million in assets and 54 employees at the time of its filing. HELLER EHRMAN: Obtains Court Authority to Dispose Client Files -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California has entered an order authorizing Heller Ehrman LLP, formerly Heller Ehrman White & McAuliffe, LLP, to dispose of certain client files remaining in its possession pursuant to certain file disposition procedures. Parties who believe that their files are in the possession of the Debtor and desire to retrieve those files are requeted to follow thes file disposition proceeds. To retrieve a client file, the former client on whose behalf services were render, a qualified agent of said client, or the attorney formerly or presently responsible for the file, will complete and return a File Retrieval Form, according to the instructions contained therein, which form can be obtained by contacting the Debtor at: Records Request@Hellerman.com or Heller Ehrman Attn: Records Request Tel: +1 (415) 772-6000 Fax: +1 (415) 772-6268 Forms must be received by the Debtor by July 30, 2009. If adequate arrangements are not made for the retrieval of the files by September 30, 2009, the files may be destroyed without further notice. Headquartered in San Francisco, California, Heller Ehrman, LLP LP -- http://www.hewm.com/-- was an international law firm of more than 730 attorneys in 15 offices in the United States, Europe, and Asia. The firm filed a voluntary petition under Chapter 11 of the Bankruptcy Code on December 28, 2008 (Bankr. N.D. Calif., Case No. 08-32514). Members of the firm's dissolution committee led by Peter J. Benvenutti approved a plan dated September 26, 2008, to dissolve the firm. The Hon. Dennis Montali presides over the case. John D. Fiero, Esq., and Miriam Khatiblou, Esq., at Pachulski, Stang, Ziehl, Young and Jones, represent the Debtors as counsel. Thomas A. Willoughby, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP, represents the official committee of unsecured creditors of the Debtor. The firm listed assets and debts between $50 million and $100 million each in its bankruptcy petition. According to reports, the firm still has roughly $63 million in assets and 54 employees at the time of its filing. HERITAGE GATEWAY: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Heritage Gateway Center, LP 2500 York Rd Jamison, PA 18929 Bankruptcy Case No.: 09-20595 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Gloria M. Burns Debtor's Counsel: Albert A. Ciardi, III, Esq. Ciardi Ciardi & Astin, P.C. One Commerce Square 2005 Market Street Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: (215) 557-3551 Email: aciardi@ciardilaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors when it filed its petition. The petition was signed by Richard R. Carroll, Jr. HERITAGE-MONTGOMERY: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Heritage-Montgomery Center, LP 2500 York Rd Jamison, PA 18929 Bankruptcy Case No.: 09-20593 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Gloria M. Burns Debtor's Counsel: Albert A. Ciardi, III, Esq. Ciardi Ciardi & Astin, P.C. One Commerce Square 2005 Market Street Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: (215) 557-3551 Email: aciardi@ciardilaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of 20 largest unsecured creditors when it filed its petition. The petition was signed by Richard R. Carroll, Jr. HERTZ CORP: Bank Debt Sells at Almost 20% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which Hertz Corp. is a borrower traded in the secondary market at 80.80 cents-on-the- dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a decrease of 1.83 percentage points from the previous week, the Journal relates. The loan matures on December 21, 2012. The Company pays 150 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba1 rating and S&P's BB- rating. About Hertz Corp. The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc. (NYSE: HTZ), based in Park Ridge, New Jersey, is the world's largest general use car rental brand, operating from approximately 8,000 locations in 147 countries worldwide. Hertz also operates one of the world's largest equipment rental businesses, Hertz Equipment Rental Corporation, through more than 375 branches in the United States, Canada, France, Spain and China. * * * As reported by the Troubled Company Reporter on April 2, 2009, Standard & Poor's Ratings Services lowered its ratings on Hertz Corp., including lowering the long-term corporate credit rating to 'B' from 'BB-'. All ratings were removed from CreditWatch, where they were placed with negative implications on Dec. 22, 2008. The outlook is now negative. S&P also lowered its issue-level rating on the company's unsecured notes to 'CCC+' from 'B+'. At the same time, S&P revised the recovery rating on this debt to '6' from '5', indicating expectations of negligible (0%-10%) recovery of principal in the event of a payment default, based upon S&P's expectation that the current credit markets will continue to require higher collateralization for secured vehicle facilities, leaving less available for the unsecured lenders. Also, a shift by Hertz to a higher percentage of risk vehicles in its fleet, combined with a soft automotive retail market, suggests that unsecured recoveries would be lower in the event of a payment default. HOMEBANC MORTGAGE: Trustee Taps Counsel for Bear Stearns Suit ------------------------------------------------------------- Bankruptcy Law360 reports George L. Miller, the Chapter 7 trustee appointed to oversee HomeBanc Mortgage Corp.'s Chapter 7 liquidation, has asked the U.S. Bankruptcy Court for the District of Delaware for permission to employ Kaufman Coren & Ress PC as special counsel. The firm will assist the Chapter 7 Trustee in his litigation against Bear Stearns Cos. Inc. over securities repurchase agreements between Bear Stearns and HomeBanc. Bankruptcy Law360 also reports that Judge Kevin J. Carey has approved a settlement among HomeBanc, Fifth Third Bank and JPMorgan Chase Bank NA over the alleged mishandling of certain construction loans that were slated to be converted into mortgages. As reported by the Troubled Company Reporter on February 27, 2009, the Court granted the Debtors' request to convert their Chapter 11 cases to Chapter 7 liquidation effective February 24, 2009, despite the objections of Fifth Third Bank that liquidation would jeopardize collection funds to which the bank says it is entitled. In their motion, the Debtors told the Court that while their Plan and Disclosure Statement have been filed, the hearing to approve the Disclosure Statement has been continued several times to resolve matters impacting whether the Plan is feasible. Accordingly, the Debtors have not begun soliciting acceptances of the Plan. The Debtors also informed the Court that during the approximately 16 months that they have been in Chapter 11, they have conducted an orderly liquidation of their assets to maximize the value of their assets for the benefit of their creditors. The wind-down process, they stated, has been successful, and that they have sold almost all of their assets. The Debtors said they have also engaged in substantial and lengthy discussions with their secured lenders and with the Official Committee of Unsecured Creditors with regard to the viability and feasibility of the Plan. However, the Debtors subsequently reached the conclusion, that, given their current resources, a feasible, confirmable Chapter 11 Plan does not appear to be achievable. The Debtors related that while the Debtors have available cash on hand to satisfy all administrative claims, and thus do not believe these cases are administratively insolvent, their ability to pay priority unsecured claims in full (which would be necessary to confirm a Chapter 11 Plan), is uncertain, and will likely remain so for some time. In particular, the class action suit involving the Warn Act assets claims in excess of $3 million, which, if successful would result in substantial additional priority unsecured claims against the Debtors' estates. Further, while the Debtors believe that their secured prepetition lenders have received sufficient value to render their secured debt satisfied, the secured lenders continue to assert that they are entitled to a substantial adequate protection claim, which, if allowed, would result in even less funds being available to satisfy the claims of priority unsecured creditors. Despite best efforts, the parties have been unable to reach a resolution of such issues. Because the Debtors will have liquidated or disposed of virtually all of their non-cash assets, and have no ongoing business operations, there is no reasonable likelihood of rehabilitation. Moreover, given the issues, the Debtors are unable to effectuate a feasible plan of reorganization at the current time and believe that the interests of their estates would be best served by converting these cases to Chapter 7 cases. About HomeBanc Headquartered in Atlanta, Georgia, HomeBanc Mortgage Corporation -- http://www.homebanc.com/-- was a mortgage banking company focused on originating primarily prime purchase money residential mortgage loans in the Southeast United States. HomeBanc Mortgage together with five affiliates filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079 through 07-11084). Joel A. Waite, Esq., at Young, Conaway, Stargatt & Taylor was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors selected the firm Otterbourg, Steindler, Houston and Rosen, P.C. as its counsel. As reported in the Troubled Company Reporter, at July 31, 2008, HomeBanc Mortgage Corporation and subsidiaries had total assets of $16,850,000, total liabilities of $182,525,000, minority interest of $64,000, and stockholders deficit of $165,739,000. HORNBECK OFFSHORE: Moody's Gives Stable Outlook; Keeps Ba3 Rating ----------------------------------------------------------------- Moody's changed Hornbeck Offshore Services Inc.'s outlook to stable from negative and affirmed the Ba3 CFR and the Ba3, LGD 4 (although the point estimate is changing to 66% from 55%) senior unsecured note ratings. The stable outlook reflects a reduction in leverage to levels more consistent with current ratings driven by increased cash flows as vessels from the new generation fleet targeting the very active deepwater market complimented by the company's newbuild program have been successfully placed into service. The stable outlook also reflects the anticipated completion of the bulk of the newbuild program spending during 2009 with capital spending returning to more moderate levels in 2010 along with increased financial flexibility. The Ba3 CFR reflects HOS's strong market position within its business lines as it ranks among the top two providers for GOM deepwater and ultra deepwater OSVs. Though HOS is relatively small in terms of total assets compared to its Ba-rated peers and is geographically concentrated, the quality of the asset base and its market position are above average for the Ba-rated peer group. The Ba3 ratings also consider the high quality and versatility of its fleet particularly as the company completes its newbuild program, an increasing focus on international expansion and diversification, and growing military work. HOS's profitability and returns rank high among its Ba-rated peer group as the offshore drilling markets have experienced continued strong demand even in the current low commodity price environment. The TTB segment's contribution to consolidated operating income has declined to 8% for 2008 as the company focuses more on its OSV operations, and will likely not be a significant factor in HOS's overall rating going forward. HOS has adequate liquidity to meet its cash needs over the next twelve months. With approximately $100 million of availability under its $250 million senior secured borrowing base facility as of March 31, 2009 and just over $20 million of cash on hand, the company should have sufficient liquidity as it outspends cash flow during 2009 to fund the tail end of its newbuild program. After the completion of the newbuild program, HOS intends to utilize free cash flow generated by more moderate capital spending to reduce revolver debt. With only a portion of its fleet pledged as collateral for the borrowing base facility, HOS would have the option of selling vessels as a source of back-door liquidity. The lack of notching between HOS's CFR and its senior unsecured notes, despite the proportionally large senior secured borrowing base facility reflects the collateral coverage available for bondholders and the expectation that revolver borrowings will be repaid over the next several quarters. The senior secured credit facility is collateralized by 24 OSVs, 4 ocean going tugs, and 4 tank barges, leaving the rest of the fleet (27 OSVs, 4 MPSVs, 12 tugs, and 17 tank barges) including the higher valued newbuilds, as well as working capital unencumbered and available to bondholders. Moody's estimates the value of the unencumbered fleet to be well over 2x the face value of all of the unsecured notes in the company's capital structure. However, in the event the credit facility is upsized, or the asset profile changes materially, Moody's would consider notching the notes below the CFR. The last rating action on HOS was on November 14, 2006, at which time HOS's outlook was changed to negative from stable. Hornbeck Offshore Services, Inc., a diversified marine service company headquartered in Covington, Louisiana, is a leading provider of technologically advanced, new generation OSVs primarily in the GoM and select international markets, and is a leading transporter of petroleum products through its fleet of ocean-going tugs and tank barges primarily in the northeastern U.S., the GoM and in Puerto Rico. Hornbeck currently owns a fleet of over 80 vessels primarily serving the energy industry. HUNTSMAN CORP: Bank Debt Sells at 25% Discount in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Huntsman ICI is a borrower traded in the secondary market at 74.64 cents-on-the- dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.76 percentage points from the previous week, the Journal relates. The loan matures on April 23, 2014. The Company pays 150 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba1 rating and S&P's B+ rating. About Huntsman Huntsman Corp. -- http://www.huntsman.com/-- is a global manufacturer and marketer of differentiated chemicals. Its operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging. Originally known for pioneering innovations in packaging and, later, for rapid and integrated growth in petrochemicals, Huntsman has more than 12,000 employees and operates from multiple locations worldwide. The Company had 2008 revenues exceeding $10 billion. * * * As reported by the Troubled Company Reporter on April 20, 2009, Huntsman International LLC, a wholly owned subsidiary of Huntsman Corporation, entered into a waiver to its $650 million revolving credit facility dated August 16, 2005, with Deutsche Bank AG New York Branch, as administrative agent, and the financial institutions party thereto as lenders. The waiver relaxes the senior secured leverage ratio covenant from 3.75 to 1.00 to 5.00 to 1.00 for the period measured June 30, 2009, through June 30, 2010. The waiver, among other things, also modifies the definition of Consolidated EBITDA and permits Huntsman International LLC to add back any lost profits attributable to Hurricanes Gustav and Ike that occurred in 2008. Additionally, the amount of Permitted Non-Cash Impairment and Restructuring Charges was increased from $100 million to $200 million. As reported by the TCR on March 19, 2009, Standard & Poor's Ratings Services said it lowered its ratings on Huntsman Corp., including its corporate credit rating to 'B' from 'BB-'. The ratings remain on CreditWatch with negative implications. At the same time, S&P assigned its '5' recovery rating, indicating the expectation of modest recovery (10%-30%) in the event of a default, to Huntsman International LLC's existing $300 million senior unsecured notes. S&P also assigned a '6' recovery rating, indicating the expectation of negligible recovery (0%-10%) in the event of a default, to Huntsman International LLC's existing subordinated notes aggregating $1.285 billion. IDEARC INC: Bank Debt Sells at 60% Discount in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Idearc is a borrower traded in the secondary market at 38.57 cents-on-the- dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a decrease of 1.85 percentage points from the previous week, the Journal relates. The loan matures on November 17, 2014. The Company pays 200 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt. S&P has assigned a default rating in view of Idearc's bankruptcy filing. 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. Idearch is the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. Idearc uses the Verizon brand on their print directories in their incumbent markets, well as in their expansion markets. Idearc and its 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 December 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. INGLES MARKETS: S&P Changes Outlook to Stable; Puts 'BB-' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook for Ingles Markets Inc. to stable from negative. This action reflects S&P's expectation that the completion of Ingles Markets' proposed refinancing plans would resolve near-term liquidity concerns. At the same time, Standard & Poor's assigned an issue-level rating of 'BB-' to the company's proposed $500 million senior unsecured note issuance due 2017. S&P rated the issue the same as the corporate credit rating with a recovery rating of '4', indicating expectations for average (30%-50%) recovery in the event of a default. S&P also affirmed the 'BB-' corporate credit rating on the company. Ingles Markets' proposed refinancing plans include the issuance of $500 million of senior unsecured notes due 2017. Proceeds of the note issuance will also be used to fund: -- A tender offer for its existing roughly $350 million of 8.875% senior subordinated notes due 2011; -- An additional $20 million of cash on its balance sheet; -- Repayment of around $72 million of notes payables; and -- Fees and other expenses. In addition, the company's plans include refinancing its bank facilities to include: -- A $125 million senior unsecured revolving credit facility due in 2012; and -- A total of $15 million in bank facilities with one-year terms that the company plans to rollover each year. "Pro forma for the refinancing transaction, Ingles Markets will have resolved S&P's near-term maturity concerns," said Standard & Poor's credit analyst Stella Kapur, "and the company's next debt maturity will not be until 2012." Covenants under its new $155 million revolving credit facility will include a maximum net debt leverage covenant of 5.0x and a minimum EBITDAR interest covenant of 1.1x. INTELSAT JACKSON: Bank Debt Sells at 22% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Intelsat Jackson Holdings Ltd. is a borrower traded in the secondary market at 77.45 cents-on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.76 percentage points from the previous week, the Journal relates. The loan matures on February 5, 2014. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's BB- rating. Intelsat Jackson Holdings is an indirect subsidiary of Intelsat Ltd. Headquartered in Penbroke, Bermuda, Intelsat is the largest fixed satellite service operator in the world and is privately held by financial investors. * * * As reported by the Troubled Company Reporter on February 6, 2009, Moody's Investors Service assigned a B3 rating to Intelsat Ltd.'s new $400 million note issue (in the name of Intelsat's indirect, wholly-owned subsidiary, Intelsat Subsidiary Holding Company, Ltd.; terms and conditions of the new notes mirror those of an existing senior unsecured 8.875% note issue that matures January 15, 2015). Moody's also adjusted Intelsat's probability of default rating to Ca from Caa1. IXI MOBILE: Chief Financial Officer Gil Steps Down -------------------------------------------------- IXI Mobile, Inc., last week said Motti Gil, its Chief Financial Officer, notified the Company on April 19 that he would leave his position at the end of a 60-day notice period. The Company expects to name a successor for this position prior to Mr. Gil's departure. In March 2009, IXI Mobile said Amnon Shachar has resigned as its President. Dr. Zion Hadad assumed the role as interim President until a permanent successor is named. About IXI Mobile Headquartered in Belmont, California, IXI Mobile Inc. (OTC BB: IXMO.0B) -- http://www.ixi.com/-- provides devices and hosted services to mobile operators, mobile virtual network operators, and Internet service providers in a number of international markets. Research and development activities are conducted primarily in its facilities in Israel and Romania. * * * As reported by the Troubled Company Reporter on August 28, 2008, IXI Mobile's consolidated balance sheet at June 30, 2008, showed $29,504,000 in total assets and $40,856,000 in total liabilities, resulting in a $11,352,000 stockholders' deficit. The company reported a net loss of $11,387,000 on total revenues of $2,221,000 for the second quarter ended June 30, 2008, compared with a net loss of $21,508,000 on total revenues of $3,171,000 in the same period ended June 30, 2007. The Company has yet to file its quarterly report on Form 10-Q for the period ended September 30, 2008, and its annual report on Form 10-K for the year ended December 31, 2008. JAMES FULLER: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: James Fuller 673 Central Avenue Needham, MA 01729 Bankruptcy Case No.: 09-13765 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Debtor's Counsel: George J. Nader, Esq. Riley & Dever, P.C. Lynnfield Woods Office Park 210 Broadway, Suite 101 Lynnfield, MA 01940-2351 Tel: (781) 581-9880 Fax : (781) 581-7301 Email: nader@rileydever.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor did not file a list of creditors together with his petition. JEFFERSON COUNTY: Failure to Make Payments Cue Moody's Junk Rating ------------------------------------------------------------------ Moody's Investors Service has downgraded to Caa1 from B3 the rating on Jefferson County's (Alabama) $270 million in outstanding general obligation debt and to Caa2 from Caa1 the rating on $86.7 million in outstanding lease revenue warrants issued through the Jefferson County Public Building Authority; both ratings have been removed from Watchlist and the outlooks have been revised to negative. At this time, Moody's has also confirmed the Caa3 rating on the county's approximately $3.2 billion in outstanding sewer revenue debt, removed the rating from Watchlist and revised the outlook to negative. Moody's has also confirmed the B3 rating on the county's $996.8 million in limited obligation school warrants secured by sales tax revenues and the B3 rating on $40.86 million in debt issued by the Birmingham-Jefferson Civic Center Authority secured by special revenues including a beverage tax and lodging tax; both ratings have been removed from Watchlist and the outlooks revised to negative. Please see Moody's report dated April 27, 2009 regarding the BJCCA's Special Tax Refunding Bonds, Series 2002. Moody's downgrade of the general obligation ratings reflects the county's continued failure to make full principal payments on general obligation Bank Warrants held by liquidity providers, the first of which was due on September 15, 2008, constituting an Event of Default under the Trust Indenture and the Liquidity Facilities. Based on the terms of repayment schedule outlined in the Standby Warrant Purchase Agreement, the second such payment was due on March 15, 2009, which the county failed to pay in full. Although the liquidity banks have entered into and extended a forbearance agreement with the county through June 20, 2009, in exchange for partial principal payments, Moody's believes that, given the continued lack of resolution of the county's fiscal crisis, it is more likely that GO Bank Warrant holders will face some loss of full repayment than at the time of Moody's last rating action in September, 2009. Moody's also believe that there is still a heightened risk that the county will avail itself of federal bankruptcy protection. For these reasons, Moody's have downgraded the general obligation rating to Caa1. The Caa2 rating on the lease revenue bonds reflects the nature of the security, which is subject to annual budget and appropriation of the county and therefore is weaker than the general obligation rating. Both ratings have been removed from Watchlist and assigned negative outlooks because it is not clear that a solution to the county's financial crisis, either through successful negotiation with creditors, bankruptcy or other means, will come within the Watchlist timeframe. Moody's has confirmed the Caa3 rating on the sewer revenue debt and removed it from Watchlist as the county, the liquidity banks, and bond insurers continue to actively negotiate terms of repayment of the outstanding sewer debt, of which approximately $800 million are in the form of variable rate demand obligations held by liquidity banks as Bank Warrants; the remainder of the sewer debt is in auction rate mode held by bondholders. The county has failed to make scheduled principal payments on the Bank Warrants required every three months since April of 2008, constituting an Event of Default under the Trust Indenture and the Liquidity Facilities, although interest payments continue to be made on all sewer debt. The county and liquidity banks have continued to extend forbearance agreements on the Bank Warrant principal payments; the latest agreement extends the forbearance through May 29, 2009. In addition, counterparties have terminated interest rate swaps associated with the county's sewer debt, for a total notional amount of $5.2 billion, requiring termination payments estimated of approximately $750 million. Moody's has removed the rating from Watchlist and assigned the negative outlook because it is not clear that a solution to the county's financial crisis, either through successful negotiation with creditors, bankruptcy or other means, will come within the Watchlist timeframe. Moody's has confirmed the B3 ratings on the sales tax-secured limited obligation school warrants and BJCCA debt secured by a beverage tax and lodging tax and removed both ratings from Watchlist, also reflecting the heightened risk that the county may file for bankruptcy. Given the lack of history of municipal bankruptcy, it is unclear which county revenues, assets and debt obligations could be affected by bankruptcy proceedings and that a bankruptcy filing could weaken the county's ability to meet these other debt obligations. Moody's has not downgraded these ratings, as it has with the general obligation ratings, because Moody's believe there is a lower risk, in the case of a disruption of payments to warrant holders due to a bankruptcy filing, that those warrant holders will face the loss of full repayment. While a portion of the sales tax-secured debt is currently held by a liquidity provider in the form of Bank Warrants, repayment of the warrants under the standby bond purchase agreement is not accelerated, reducing the risk of loss to warrant holders in the event of default. Given that the BJCCA debt is fixed rate, Moody's believe that the risk of loss under a bankruptcy scenario is also lower than the general obligation debt. KARAWIA INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Karawia Industries, Inc. 3771 W. 242nd Street Torrance, CA 90505 Bankruptcy Case No.: 09-19846 Chapter 11 Petition Date: April 27, 2009 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Ellen Carroll Debtor's Counsel: Ron Bender, Esq. 10250 Constellation Blvd. Ste. 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Email: rb@lnbrb.com 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 ------ --------------- ------------ Strategic Outsourcing Inc. - $263,737 5260 Parkway Plaza Blvd. #140 Charlotte, NC 28224 Prindle, Decker, Amaro - 250,000 Cognisa Security - 160,000 ABM Security Services - 104,809 The Resource Collections Inc. - 50,000 First Insurance Funding - 27,331 CEBAsm fbo ISI - 26,071 Kaiser Foundation Health - 24,936 Wright Express FLT Fuelin - 24,390 Orange County Valet - 21,576 Dell Business Credit - 20,979 Star Protection Agency, LLC - 17,086 Executive Car Leasing - 15,775 VP Security Services Inc. - 12,564 U.S. Healthworks Medical Group, PC - 11,778 Espy Security Patrol Inc. - 11,339 Valiant Communications - 8,995 Royal Security Services, Inc. - 7,393 KENNETH W. FURRY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Joint Debtors: Kenneth W. Furry fdba Furry Enterprises, Inc. dba Furry Enterprises (sole proprietorship) Lee E. Furry 8610 Antique Road Du Quoin, IL 62832 Bankruptcy Case No.: 09-40715 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court Southern District of Illinois (Benton) Judge: Kenneth J. Meyers Debtors' Counsel: Jay B. Howd, Esq. Bankruptcy Clinic 811 W Main St Carbondale, IL 62901 Tel: (618) 549-0567 Email: notice@bankruptcy-clinic.com Total Assets: $1,410,879 Total Debts: $1,348,069 A full-text copy of the Debtors' petition, including their list of 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilsb09-40715.pdf The petition was signed by the Joint Debtors. KIRK ARGIRO: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Kirk Argiro 11617 Norbeck Farm Drive Olney, MD 20832 Bankruptcy Case No.: 09-17485 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtor's Counsel: Richard B. Rosenblatt, Esq. The Law Offices of Richard B. Rosenblatt 30 Courthouse Square Ste. 302 Rockville, MD 20850 Tel: (301) 838-0098 Email: rrosenblatt@rosenblattlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Mr. Argiro's petition, including his list of 12 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-17485.pdf The petition was signed by Mr. Argiro. LAS VEGAS SANDS: Bank Debt Sells at Almost 50% Discount ------------------------------------------------------- Participations in a syndicated loan under which Las Vegas Sands is a borrower traded in the secondary market at 56.73 cents-on-the- dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.80 percentage points from the previous week, the Journal relates. The loan matures on May 1, 2014. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B- rating. On the other hand, participations in a syndicated loan under which Venetian Macau US Finance Co. LLC is a borrower traded in the secondary market at 68.64 cents-on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.69 percentage points from the previous week, the Journal relates. The loan matures May 25, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B- rating. On April 15, 2009, Las Vegas Sands Corp., Las Vegas Sands, LLC, a wholly-owned subsidiary of the Company, The Bank of Nova Scotia, as administrative agent and Goldman Sachs Lending Partners LLC, as auction manager, entered into a First Amendment to Credit and Guaranty Agreement to amend its $5.0 billion senior secured credit facility under the Company's Credit and Guaranty Agreement, dated as of May 23, 2007, with Bank of Nova Scotia as administrative agent, Goldman Sachs Credit Partners L.P., Lehman Brothers Inc., and Citigroup Global Markets, Inc., as joint lead arrangers, joint bookrunners and syndication agents, and JPMorgan Chase Bank, N.A., as documentation agent. The Amendment permits the Company from time to time to purchase term loans of the Borrower outstanding under the Credit Agreement pursuant to modified Dutch auctions conducted on the Company's behalf by the Auction Manager. The Amendment provides that any term loans of the Borrower so purchased by the Company shall be immediately forgiven and cancelled. The Amendment further provides that the aggregate stated principal amount of term loans that can be repurchased shall not be more than $800.0 million and all such repurchases shall close on or prior to September 30, 2010. The Amendment also sets forth the terms and mechanics to be utilized while conducting the modified Dutch auctions, including providing for a minimum tender amount of $25.0 million in aggregate stated principal amount per each modified Dutch auction. As a result of the Amendment, the Company has the option to repurchase outstanding term loans of the Borrower under the Credit Agreement via one or more modified Dutch auctions. There can be no assurances that the Company will conduct any auctions or that, if the Company does conduct one, the Company will be able to successfully purchase outstanding term loans at a price less than their aggregate stated principal amount. Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo and convention center. The company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China. On March 10, 2009, Moody's Investors Service lowered the Company's Corporate Family Rating to B3 from B2 and assigned a negative rating outlook. LAS VEGAS SANDS: Venetian Macau Bank Debt Sells at 31% Discount --------------------------------------------------------------- Participations in a syndicated loan under which Venetian Macau US Finance Co. LLC is a borrower traded in the secondary market at 68.64 cents-on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.69 percentage points from the previous week, the Journal relates. The loan matures May 25, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B- rating. Meanwhile, participations in a syndicated loan under which Las Vegas Sands is a borrower traded in the secondary market at 56.73 cents-on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.80 percentage points from the previous week, the Journal relates. The loan matures on May 1, 2014. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B- rating. Venetian Macau is a wholly-owned subsidiary of Las Vegas Sands. VML owns the Sands Macau in the People's Republic of China Special Administrative Region of Macau and is also developing additional casino hotel resort properties in Macau. Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo and convention center. The company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China. On March 10, 2009, Moody's Investors Service lowered the Company's Corporate Family Rating to B3 from B2 and assigned a negative rating outlook. LEHMAN BROTHERS BANKHAUS: Voluntary Chapter 15 Case Summary ----------------------------------------------------------- Chapter 15 Petitioner: Dr. Michael C. Frege as insolvency administrator and putative foreign representative Chapter 15 Debtor: Lehman Brothers Bankhaus AG Barckhausstr. 12-16 D-60325 Frankfurt Germany Chapter 15 Case No.: 09-12704 Type of Business: The Debtor offers financial services excluding (i) mortgage backed lending, (ii) the business of building societies, and (iii) the mutual investment fund business. Chapter 15 Petition Date: April 29, 2009 Court: Southern District of New York (Manhattan) Judge: James M. Peck Chapter 15 Petitioner's Counsel: David Farrington Yates, Esq. fyates@sonnenschein.com Sonnenschein, Nath & Rosenthal LLP 1221 Avenue of the Americas 24th Floor New York, NY 10020 Tel: (212) 768-6700 Fax: (212) 768-6800 Estimated Assets: More than $1 billion Estimated Debts: More than $1 billion LEHMAN BROTHERS: LBSF Unit Sues Metropolitan West to Recover $46MM ------------------------------------------------------------------ American Bankruptcy Institute reports that Lehman Brothers Special Financing Inc. has filed a lawsuit against its credit default swap partner, Metropolitan West Asset Management LLC. LBSF accused Metropolitan West Asset Management of illegally withholding $46 million from the specialty unit to offset an unrelated claim against Lehman's bankrupt parent company, the report says. 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) MAGNA ENTERTAINMENT: Won't File Reports with SEC While in Ch. 11 ---------------------------------------------------------------- Magna Entertainment Corp. filed its second bi-weekly default status report under National Policy 12-203 of the Canadian Securities Administrators, pursuant to which the Company announced that it would not be filing its Annual Report on Form 10-K for the fiscal year ended December 31, 2008, nor would it file quarterly reports on Form 10-Q, with the U.S. Securities and Exchange Commission or the Canadian securities regulators during the period it continues to operate its business as a debtor-in-possession under the United States Bankruptcy Code. The filing of the status report occurred after the two-week period following Magna Entertainment's previous status report pending its agreement to terminate MI Development Inc.'s stalking horse bid to acquire certain assets of the Company, and the final order of the U.S. Bankruptcy Court approving the Company's debtor-in-possession financing, all of which was announced by the Company on April 22, 2009. Otherwise, Magna Entertainment reports that since disclosing the original notice of default on March 26, 2009, and filing its first default status report on April 7, 2009, there have not been any material changes to the information contained therein, nor any failure by the Company to fulfill its intentions stated therein, and there are no additional defaults or anticipated defaults subsequent to such announcement. The Company intends to file its next default status report on May 11, 2009. Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks, based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a fifty percent interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. As of December 31, 2008, the Company had total assets of $1,049,387,000 and total debts of $958,591,000. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del., Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. L. Katherine Good, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC, has been tapped as financial advisor and Kurtzman Carson Consultants LLC, as claims agent. MANITOWOC CO: Bank Debt Sells at 22% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which Manitowoc Co. Inc. is a borrower traded in the secondary market at 77.67 cents-on- the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a decrease 1.93 percentage points from the previous week, the Journal relates. The loan matures on April 14, 2014. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba2 rating and S&P's BB+ rating. Headquartered in Maniwotoc, Wisconsin, The Manitowoc company Inc. (NYSE: MTW) -- http://www.manitowoc.com/-- provides lifting equipment for the global construction industry, including lattice- boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. As a leading manufacturer of ice-cube machines, ice/beverage dispensers, and commercial refrigeration equipment, the company offers the broadest line of cold-focused equipment in the foodservice industry. In addition, the company is a provider of shipbuilding, ship repair, and conversion services for government, military, and commercial customers throughout the maritime industry. The company has regional offices in Mexico and Brazil. In March 2009, Moody's Investors Service lowered the ratings of Manitowoc Company's Corporate Family and Probability of Default Ratings to Ba3 from Ba2. The outlook is negative. MEHDI RAVAN: Case Summary & 7 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Mehdi Ravan P.O. Box 6565 Albany, CA 94706 Bankruptcy Case No.: 09-43424 Chapter 11 Petition Date: April 27, 2009 Court: United States Bankruptcy Court Northern District of California (Oakland) Judge: Edward D. Jellen Debtor's Counsel: Duane L. Tucker, Esq. Law Offices of Duane L. Tucker 27793 Tampa Ave. Hayward, CA 94544 Tel: (510) 670-0668 Email: tucker@pacbell.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 7 largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb09-43424.pdf The petition was signed by Mr. Ravan. METALDYNE CORP: Bank Debt Sells at Almost 90% Discount ------------------------------------------------------ Participations in a syndicated loan under which Metaldyne is a borrower traded in the secondary market at 12.20 cents-on-the- dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.95 percentage points from the previous week, the Journal relates. The loan matures on January 1, 2014. The Company pays 500 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating and S&P's CCC- rating. Metaldyne Corporation is a wholly-owned subsidiary of Metaldyne Holdings LLC, a Delaware limited liability company whose sole member is Asahi Tec Corporation, a Japanese corporation. The Company is a leading global manufacturer of highly engineered metal components for the global light vehicle market. The Company's products include metal-formed and precision-engineered components and modular systems used in vehicle engine, transmission, and chassis applications. MGM MIRAGE: Lenders Extend Waiver Period Through June 30 -------------------------------------------------------- MGM MIRAGE has entered into an amendment to its senior credit facility, including a waiver through June 30, 2009, of the requirement that the Company comply with the senior credit facility's financial covenants. Under the terms of the amendment and waiver, the Company will be able to fulfill its remaining equity contributions to CityCenter through the issuance of an irrevocable letter of credit in the amount of $224 million. The Company is also permitted to enter into revised completion guarantees related to CityCenter. "Our company's ability to obtain this amendment and waiver demonstrates the strong support of our lenders, and their belief in the importance of completing CityCenter," said Jim Murren, Chairman and Chief Executive Officer of MGM MIRAGE. "We continue to work with our advisors and lenders to reach a long-term restructuring of MGM MIRAGE's indebtedness and those discussions remain positive and constructive. Our next step will be to finalize our restructuring plans and position MGM MIRAGE for future growth and success." Under the terms of the amendment, the Company repaid $100 million under the senior revolving credit facility, which amount is not available for re-borrowing without the consent of the requisite lenders. In addition, the Company has agreed to grant the lenders security interests in the assets of Gold Strike Tunica and certain undeveloped land on the Las Vegas Strip, subject to requisite gaming and other approvals, to secure debt under the facility in an amount up to $300 million. MGM Grand Detroit, which is a co- borrower under the senior credit facility, has agreed to grant the lenders a security interest in its assets to secure its borrowings under the facility, subject to gaming and other approvals. The Company intends to work with its lenders to obtain additional waivers or amendments prior to June 30, 2009, to address future noncompliance with the senior credit facility; however, the Company can provide no assurance that it will be able to secure such waivers or amendments. If additional waivers or amendments are not obtained, following expiration of the waiver on June 30, 2009, the Company will be subject to an event of default related to any noncompliance with financial covenants under the senior credit facility. Under the terms of the senior credit facility, noncompliance with financial covenants is an event of default, allowing the lenders (with a vote of lenders holding more than 50% of the borrowings outstanding under the senior credit facility) to exercise any or all of their remedies, including demanding immediate repayment of all outstanding borrowings under the senior credit facility. In addition, MGM MIRAGE says there are provisions in the indentures governing the Company's senior and senior subordinated notes under which (a) the event of default under the senior credit facility, or (b) the exercise of remedies under an event of default under the senior credit facility, would cause an event of default under the relevant senior and senior subordinated notes, which would also allow holders of the senior and senior subordinated notes to demand immediate repayment and decline to release subsidiary guarantees. If the lenders exercise any or all such rights, the Company may determine to seek relief through a filing under the U.S. Bankruptcy Code. About MGM Mirage Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. MGM MIRAGE reported a net loss of $1.14 billion on revenues of $1.62 billion for the three months ended December 31, 2008. MGM MIRAGE reported a net loss of $855.2 million on revenues of $7.20 billion for year 2008. MGM MIRAGE had $23.2 billion in total assets, including $1.53 billion in total current assets; $3.0 billion in total current liabilities; and $12.4 billion in long-term debt. A full-text copy of the Annual Report on Form 10-K is available at no charge at: http://researcharchives.com/t/s?3ae0 The Company does not expect to be in compliance with the financial covenants under its senior credit facility at March 31, 2009. On March 17, Company obtained an amendment to the senior credit facility, which included a waiver of the requirement to comply with the financial covenants through May 15, 2009. Following expiration of the waiver on May 15, 2009, the Company will be subject to an event of default related to the expected noncompliance with financial covenants under the senior credit facility at March 31, 2009. The report of Deloitte & Touche, LLP, MGM MIRAGE's independent registered public accounting firm on the Company's consolidated financial statements for the year ended December 31, 2008, contains an explanatory paragraph with respect to the Company's ability to continue as a going concern. * * * As reported by the Troubled Company Reporter on March 23, 2009, Moody's Investors Service downgraded MGM MIRAGE's Probability of Default Rating to Caa3 from Caa2 and its Corporate Family Rating to Caa2 from Caa1. According to the TCR on March 23, 2009, Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Las Vegas-based MGM MIRAGE and its subsidiaries by two notches; the corporate credit rating was lowered to 'CCC' from 'B-'. These ratings were removed from CreditWatch, where they were initially placed with negative implications on Jan. 30, 2009. S&P said that the rating outlook is negative. The TCR reported on March 25, 2009, that Fitch Ratings took these rating actions for MGM MIRAGE following the lawsuit filed against MGM by City Center JV partner Dubai World, and the two-month covenant waiver obtained from its bank lenders: -- Issuer Default Rating downgraded to 'C' from 'CCC'; -- Senior secured notes downgraded to 'CCC/RR2' from 'B/RR2'; -- Senior unsecured credit facility downgraded to 'CC/RR3' from 'B-/RR3'; -- Senior unsecured notes downgraded to 'CC/RR3' from 'B-/RR3'; -- Senior subordinated notes affirmed at 'C/RR6'. MICHAEL BRET HOUSE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Joint Debtors: Michael Bret House Kathryn Aline House 7670 Jacaranda Bay St. Las Vegas, NV 89139 Bankruptcy Case No.: 09-16476 Chapter 11 Petition Date: April 27, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtors' Counsel: Ambrish S. Sidhu, Esq. Sidhu Law Firm 810 S. Casino Center Blvd. Suite 104 Las Vegas, NV 89101 Tel: (702) 384-4436 Fax: (702) 384-4437 Email: asidhu@sidhulawfirm.com Total Assets: $3,691,486 Total Debts: $7,296,404 A full-text copy of the Debtors' petition, including their list of 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-16476.pdf The petition was signed by the Joint Debtors. MICHAELS STORES: Bank Debt Sells at 34% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Michaels Stores Inc. is a borrower traded in the secondary market at 65.93 cents- on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.87 percentage points from the previous week, the Journal relates. The loan matures on October 31, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B rating. Headquartered in Irving, Texas, Michaels Stores, Inc., is the largest arts and crafts specialty retailer in North America. As of March 9, 2009, the company operated 1,105 "Michaels" retail stores in the United States and Canada and 161 Aaron Brothers Stores. As of January 31, 2009, Michaels Stores had $1.62 billion in total assets and $4.51 billion in total liabilities resulting in $2.88 billion in stockholders' deficit. For fiscal year 2008 -- ended January 31, 2009 -- the Company posted a $5 million net loss on $3.81 billion in net sales. MINDEN GATEWAY: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Minden Gateway Center, LLC 1880 Meadowview Lane Reno, NV 89509-5217 Bankruptcy Case No.: 09-51269 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court District of Nevada (Reno) Debtor's Counsel: Alan R. Smith, Esq. 505 Ridge St. Reno, NV 89501 Tel: (775) 786-4579 Email: mail@asmithlaw.com 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 ------ --------------- ------------ Series AGI Minden of Proissory Note $3,550,000 Appian Grp 220 Montgomery St., Ste. 2100 San Francisco, CA 94104 Keith, Diane Loan 307,910 2857 Paradise Road P.H. 2404 Las Vegas, NV 89109 Skywest Investments Developer Fees 182,000 1880 Meadowview Lane Loan 15,000 Reno, NV 89509 Emerald Assets, LP Loan 135,000 Douglas County Treasurer Tax 10,680 Douglas County Treasurer Tax 8,520 Lewis & Roca Legal Fees 7,950 Douglas County Treasurer Tax 7,365 Douglas County Treasurer Tax 6,245 Douglas County Treasurer Tax 5,450 Douglas County Treasurer Tax 3,855 Construction Design Services Trade Debt 2,280 No. Nevada Fence Road Trade Debt 1,631 Aspen Engineering Trade Debt 650 Black Eagle Trade Debt 544 MacWest Marketing Trade Debt 531 Town of Minden Trade Debt 240 Ferguson Enterprises, Inc. - Unknown MORTON INDUSTRIAL: Section 341(a) Meeting Set for May 5 ------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will convene a meeting of creditors of Morton Industrial Inc. and its debtor-affiliates on May 5, 2009, at 1:30 p.m., at J. Caleb Boggs Federal Building, 5th Floor, Room 5209, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. About Morton Industrial Headquartered in Morton, Illinois, MMC Precision Holdings Corp. -- http://www.mortongroup.com/-- and its affiliates are contract metal fabricators serving an array of Original Equipment Manufacturers. The Debtors operate five manufacturing facilities located in the Midwestern and Southeastern United States. The Debtors' customers are Caterpillar Inc., Deere & Co., JLG Industries, Inc., Hallmark Cards, Kubota Manufacturing of America and Winnebago Industries, Inc. MMC Precision, and Morton Industrial Inc. and other affiliates filed for Chapter 11 protection on March 22, 2009 (Bankr. D. Del. Lead Case No. 09-10998). Paul, Hastings, Janofsky & Walker LLP represents the Debtors in their restructuring efforts. The Debtors propose to hire Paul N. Heath, Esq., at Richards, Layton & Finger PA as co-counsel, AlixPartners, LLP as restructuring advisors, Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. The Debtors listed assets of $50 million to $100 million and estimated debts of $100 million to $500 million. MORTON INDUSTRIAL: U.S. Trustee Forms Three-Member Creditors Panel ------------------------------------------------------------------ Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed three members to serve on the Official Committee of Unsecured Creditors of Morton Industrial Group Inc. and its debtor-affiliates. The members of the Committee are: 1) Deere & Company Attn: James J. Vandecasteele One John Deere Place Moline, IL 61265 Tel: (309) 765-5855 Fax: (309) 765-5676 2) Ryerson & Son Attn: James A. Doseck 4400 Peachtree Industrial Blvd. Norcross, GA 30071 Tel: (678) 291-4162 Fax: (678) 291-4163 3) Feralloy Corporation Attn: Michael Borzych 8755 West Higgins Rd., Suite 970 Chicago, IL 60631 Tel: (773) 380-1500 Fax: (773) 380-1535 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Morton Industrial Headquartered in Morton, Illinois, MMC Precision Holdings Corp. -- http://www.mortongroup.com/-- and its affiliates are contract metal fabricators serving an array of Original Equipment Manufacturers. The Debtors operate five manufacturing facilities located in the Midwestern and Southeastern United States. The Debtors' customers are Caterpillar Inc., Deere & Co., JLG Industries, Inc., Hallmark Cards, Kubota Manufacturing of America and Winnebago Industries, Inc. MMC Precision, and Morton Industrial Inc. and other affiliates filed for Chapter 11 protection on March 22, 2009 (Bankr. D. Del. Lead Case No. 09-10998). Paul, Hastings, Janofsky & Walker LLP represents the Debtors in their restructuring efforts. The Debtors propose to hire Paul N. Heath, Esq., at Richards, Layton & Finger PA as co-counsel, AlixPartners, LLP as restructuring advisors, Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. The Debtors listed assets of $50 million to $100 million and estimated debts of $100 million to $500 million. MOTOR COACH: Secures $75MM in Senior Credit From GE Capital ----------------------------------------------------------- Motor Coach Industries, which emerged from its Chapter 11 reorganization, obtained a $200 million equity investment by Franklin Mutual Advisors, LLC, as well as $75 million in senior credit from GE Capital, and an additional $155 million second lien loan from existing debtholders. Motor Coach completed a financial restructuring and has emerged from bankruptcy in only seven months following its Chapter 11 filing in September 2008. The centerpiece of the Plan of Reorganization was a $200 million investment by funds managed by Franklin Mutual Advisers, which also converted their existing third lien secured debt into common stock and are now the Company's majority shareholders. Motor Coach's Plan of Reorganization was approved earlier this year by Judge Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware, following months of litigation challenging the pre-negotiated plan by the company's unsecured creditors. "We are extremely pleased to have helped Motor Coach work through difficult plan confirmation litigation and a complex financing in a challenging environment in order to exit Chapter 11 with fresh equity and stable balance sheet in so short a time," said Ken Ziman, the Simpson Thacher bankruptcy partner who led the firm's engagement. NEWPAGE CORPORATION: Moody's Cuts Corporate Family Rating to 'B2' ----------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of NewPage Corporation to B2 from B1. At the same time, Moody's downgraded the company's other debt ratings as listed below. NewPage's speculative grade liquidity rating was downgraded to SGL-4 from SGL-2. The ratings outlook is negative. The downgrade of NewPage's ratings reflects the company's weak operating performance as challenging industry conditions have made it difficult for the company to achieve the debt protection metrics anticipated when the Stora Enso North America acquisition was consummated just over a year ago. The downgrade of the company's speculative grade liquidity rating reflects Moody's expectation that maintaining an adequate liquidity position will become more challenging for NewPage as it faces a continued drop in demand and pricing for coated paper. Although the company remains in compliance with its financial covenants, covenant headroom is limited and is anticipated to decrease as several of the company's financial covenants tighten later in the year. The lack of covenant headroom also limits the amount the company can draw on its credit facility. The B2 corporate family rating of NewPage reflects the weakening financial flexibility given the company's large debt load and limited product and geographic diversification amid highly challenging industry conditions. Over the near term, Moody's anticipates that NewPage's operating cash flow will be challenged as coated paper prices and volumes will continue to be weak due to the lack of demand. Despite production discipline by NewPage and other key industry player's to match production levels with demand, coated paper prices have dropped by almost 10% over the past year. NewPage's rating is supported by its large scale and leading market position in coated papers, its low cost vertically integrated asset base, the company's stable operating margins and management's focus on ongoing productivity improvements and cost reduction. The company's low cost mill system in combination with moderating input costs and realization of synergy benefits from the SENA acquisition are expected to provide some partial offset to the challenging industry conditions. The SGL-4 liquidity rating indicates that NewPage has weak liquidity. The SGL rating incorporates near-term covenant compliance challenges given a modest cushion and expectations that financial covenants may have to be amended to maintain orderly access to the funding lines if operating margins worsen in the next few quarters or if debt reduction does not occur. The liquidity rating is supported by expectations of modest free cash flow generation over the next four quarters, the company's seasonal reliance on its operating facilities and no significant debt maturities until 2012. The negative rating outlook reflects the risk of continued deterioration in the company's operating performance and credit metrics as well as the potential for constrained liquidity due to covenant violations. Downgrades: Issuer: NewPage Corporation -- Probability of Default Rating, Downgraded to B2 from B1 -- Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-2 -- Corporate Family Rating, Downgraded to B2 from B1 -- Senior Subordinated Regular Bond/Debenture, Downgraded to Caa1, LGD6, 90% from B3, LGD6, 91% -- Senior Secured Bank Credit Facility, Downgraded to Ba3, LGD2, 25% from Ba2, LGD2, 27% -- Senior Secured Regular Bond/Debenture, Downgraded to B3, LGD5, 72% from B2, LGD5, 75% Moody's last rating action was on December 7, 2007 when Moody's assigned a Ba2 rating to NewPage's new $1.6 billion senior secured term loan and a B2 rating to the company's new $456 million second lien notes, and confirmed the B2 rating on the company's existing second lien notes and the B3 rating on the company's existing senior subordinated notes. NewPage, headquartered in Miamisburg, Ohio, is the largest coated paper producer based on production capacity in North America with 20 paper machines at 10 paper manufacturing mills and annual capacity of approximately 4.4 million tons. NOBLE INTERNATIONAL: Section 341(a) Meeting Set for May 19 ---------------------------------------------------------- Daniel M. McDermott, the United States Trustee for Region 9, will convene a meeting of creditors of Noble International Ltd. and its debtor-affiliates on May 19, 2009, 2:00 p.m., Prevailing Eastern Time, at 211 West Fort Street Building, Room 315-D in Detroit, Michigan. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. About Noble International Headquartered in Warren, Michigan, Noble International, Ltd. -- http://www.nobleintl.com/home.html/-- provides flat, tubular, shaped and enclosed formed structures to automotive original equipment manufacturers and their suppliers, for use in automobile applications, including doors, fenders, body side panels, pillars, bumpers, door beams, load floors, windshield headers, door tracks, door frames, and glass channels. Noble Int'l and its affiliates filed for Chapter 11 protection on April 15, 2009 (Bankr. E. D. Mi. Case No. 09-51720). The Debtors proposed Foley & Lardner LLP as their general bankruptcy counsel. Daniel M. McDermott, the United States Trustee for Region 9, appointed three creditors to serve on an official committee of unsecured creditors. The Debtors disclosed total assets of $190,763,000 and total debts of $38,691,000, as of January 10, 2009. NORTHERN TRUST: Fitch Removes Issuer Rating from Negative Watch --------------------------------------------------------------- Northern Trust Corporation, has raised sufficient sources of cash at the parent to provide a high level of financial flexibility to meet expected needs and allow for unexpected events. As a result Fitch Ratings has removed NTRS's Issuer Default Rating from Rating Watch Negative. The parent's long-term IDR is affirmed at `AA-', and an `AA-' long-term rating is assigned to the pending issuance of parent senior debt. The Rating Outlook is Negative. Fitch has also affirmed the ratings of lead bank The Northern Trust Company at `AA-.' The Rating Outlook remains Negative. NTRS has announced issuance of $750 million of equity and $500 million of senior debt. It has applied to regulators to be allowed to repay $1.5 billion in preferred stock issued to the U.S. Treasury in late 2008 as part of the U.S. government's Capital Purchase Program. If regulators approve, the proceeds will be used to repay the preferred stock. In the event regulators do not approve repayment, Fitch expects the proceeds will be used for general corporate purposes. Fitch does not expect the proceeds to be used for a major acquisition, due to the current uncertain market environment as well as the fact that management has traditionally preferred to pursue organic growth strategies. NTRS's parent-level long-term and short-term IDRs were originally placed on Rating Watch on Sept. 30, 2008 after the company disclosed significant charges to support clients who had invested in money market funds, securities lending collateral pools or auction-rate securities. Fitch's concern was that client support might deplete parent cash and overall flexibility to a level unsuitable for a company rated 'F1+', in an environment where credit markets were not easily accessible. Since that time, the issuance of the CPP preferred stock restored parent cash to levels that provide sufficient ability to meet likely needs for cash as well as a cushion for unexpected events. NTRS has indicated its desire to repay the CPP preferred, and pending issuance allows it to do so without reducing parent flexibility. Fitch's ratings will not be affected by any regulatory decision to allow or deny repayment of the CPP preferred. A Negative Rating Outlook has been assigned to NTRS and the Rating Outlook remains Negative for NTC. In Fitch's view, NTRS and its lead bank face a number of earnings headwinds over the next one to two years. These headwinds include reduced trust, investment and servicing fees due to equity market declines, the potential for net interest margin compression if short-term rates remain low for a prolonged period, volatile earnings related to securities lending and foreign exchange, and the possible choice to provide further client support. While Fitch expects NTRS's credit quality to remain much better than that of most commercial banks, loss provisions may well rise in the current distressed credit environment. Fitch also notes that NTRS has considerable counterparty exposure with large global banks. While these institutions remain highly rated, the concentration to an industry under stress creates another potential area of vulnerability in an uncertain market. Fitch has affirmed these ratings, removed them from Rating Watch Negative, and assigned a Negative Rating Outlook: Northern Trust Corporation -- Long-term IDR at 'AA-'; -- Long-term senior unsecured at 'AA-'; -- Short-term IDR at 'F1+'; -- Short-term at 'F1+'; -- Preferred stock at 'A+'; NTC Capital I NTC Capital II -- Trust Preferred Securities at `A+'. Fitch has affirmed these ratings, with a Negative Outlook: Northern Trust Corporation -- Individual at `B'; -- Support at '5'; -- Support Floor at `NF'. The Northern Trust Company -- Long-term deposits at 'AA'; -- Long-term IDR at 'AA-'; -- Individual at `B'; -- Long-term senior at 'AA-'; -- Long-term subordinated at 'A+'; -- Short-term deposits at 'F1+'; -- Short-term IDR at 'F1+'; -- Support at '3' -- Support Floor at `BB+'. OILEXCO INC: U.K. Subsidiary Files Chapter 15 in New York --------------------------------------------------------- Oilexco North Sea Ltd., the U.K. unit of a Canadian oil and gas exploration and production company, filed a Chapter 15 petition yesterday in New York seeking recognition of insolvency proceedings in the U.K. as the "foreign main proceeding," Bloomberg's Bill Rochelle said. Chapter 15 allows a company to seek protection from creditors in the United States while its primary bankruptcy case is pending in another country. If the U.S. court grants the Chapter 15 petition, the assets in the U.S. can be liquidated or reorganized through the foreign proceeding. To qualify for Chapter 15, the Oilexco unit must show that the U.K. is the company's nerve center, Bloomberg said. On January 7, 2009, Oilexco North Sea entered Administration and R Bailey, A Bloom, T Burton, and C Dempster were appointed Joint Administrators. The appointment was made by the directors under the provisions of paragraph 22 of Schedule B1 to the Insolvency Act of 1986. Oilexco North Sea Ltd continues to trade under the supervision of the Joint Administrators "whilt they endeavour to realise a sale of Oilexco North Sea Ltd or its business and assets." The Company has an offer to sell the assets for $505 million to Premier Oil Plc, Mr. Rochelle said. On April 28, Oilexco Inc. provided its second bi-weekly Default Status Report as per National Policy 12-203 - Cease Trade Orders For Continuous Disclosure Defaults. On March 30, 2009, the Company announced that the filing of its audited financial statements, management discussion and analysis, annual information form, and related CEO and CFO certifications for the year ending December 31, 2008, will be delayed beyond the statutory deadline of March 31, 2009. Since the previous announcement issued April 13th, the Company reports that no material changes have occurred. The Company continues to develop a re-organization plan. The existing court order that protects the Company under the Companies' Creditors Arrangement Act (Canada) is set to expire April 30, 2009. The Company intends to petition the court for an extension of this order. Oilexco Inc. intends to issue the next default status report on May 11, 2009 if the year end regulatory documents are not filed before this date. About Oilexco Inc. Oilexco Incorporated is an oil and gas exploration and production company headquartered in Calgary, Canada. Oilexco was founded in 1994, and trades on the TSX Venture Exchange and the London Stock Exchange. The Company's trading symbol for both exchanges is "OIL". Oilexco North Sea Limited filed for Chapter 15 on April 28, 2009 (Bankr. S.D. N.Y. Case No. 09-12641). Roy Bailey, Alan Robert Bloom, Colin Peter Dempster and Thomas Merchant, as joint administrators, filed the Chapter 15 petition. The petitioners are represented by Howard Seife, Esq., at Chadbourne & Parke LLP. OM FINANCIAL: S&P Downgrades Counterparty Credit Rating to 'BB+' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its counterparty credit, financial strength, and financial enhancement ratings on OM Financial Life Insurance Co. to 'BB+' from 'BBB-'. Standard & Poor's also said that the outlook on OMFL is negative. "The downgrade reflects a weakening in OMFL's capital position because of increased credit losses, weak risk management, and strained financial flexibility," explained Standard & Poor's credit analyst Jeremy Rosenbaum. In addition, three factors are narrowing the competitive position in OMFL's targeted niche market: the company's exit of certain products and product lines, the concerted effort to slow sales growth in 2009, and a regulatory proposal that, if adopted, could significantly hurt sales of its core product. The current rating reflects OMFL's good competitive position and liquidity as well as its capital, which S&P expects the maintain at a level that supports the rating. In 2008, OMFL had a statutory operating profit before realized capital losses of $67 million. However, after more than $350 million dollars of realized capital losses, the company needed three capital injections totaling $355 million from its parent company to achieve its target risk-based capital ratio of 300%. S&P's expectation is for the credit markets to erode further in 2009, creating the potential for additional losses in the company's investment portfolio. The negative outlook reflects S&P's concern that OMFL's capitalization will drop on a quarterly basis below the targeted level of a 300% risk-based capital ratio, which S&P expects to maintain the current ratings. As such, if management indicates that the target level of capitalization will deviate from this level going forward, S&P would likely downgrade OMFL. The number of notches S&P would lower the rating would depend on the size of the deficiency relative to the previous target. Alternately, S&P could revise the outlook to stable if OMFL were to demonstrate the ability to fund itself from positive statutory earnings. This unsolicited rating(s) was initiated by Standard & Poor's. It may be based solely on publicly available information and may or may not involve the participation of the issuer's management. Standard & Poor's has used information from sources believed to be reliable, but does not guarantee the accuracy, adequacy, or completeness of any information used. PHILADELPHIA NEWSPAPERS: Files Schedules of Assets and Debts ------------------------------------------------------------ Philadelphia Newspapers LLC and its debtor-affiliates filed with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania their schedules of assets and liabilities, and statements of financial affairs: Company Name Assets Liabilities ------------ ------------ ------------ Philadelphia Newspapers LLC $333,691,775 $432,482,027 PMH Aquisition, LLC $148,793,650 $421,525,545 Philly Online, LLC $13,460,814 $463,749,236 Broad Street Publishing, LLC $4,609,437 $424,207,251 Broad Street Video, LLC $144,507 $421,603,295 Philadelphia Direct, LLC $118,157 $421,537,913 Philadelphia Media, LLC $0 $421,588,827 PMH Holdings, LLC $0 $421,525,545 A full-text copy of Philadelphia Newspapers' schedules of assets and liabilities is available for free at: http://ResearchArchives.com/t/s?3c24 A full-text copy of Philadelphia Newspapers' statement of financial affairs is available for free at: http://ResearchArchives.com/t/s?3c25 A full-text copy of PMH Aquisition's schedules of assets and liabilities is available for free at: http://ResearchArchives.com/t/s?3c28 A full-text copy of PMH Aquisition's statement of financial affairs is available for free at: http://ResearchArchives.com/t/s?3c29 A full-text copy of Philly Online's schedules of assets and liabilities is available for free at: http://ResearchArchives.com/t/s?3c26 A full-text copy of Philly Online's statement of financial affairs is available for free at: http://ResearchArchives.com/t/s?3c27 A full-text copy of Broad Street Publishing's schedules of assets and liabilities is available for free at: http://ResearchArchives.com/t/s?3c1e A full-text copy of Broad Street Publishing's statement of financial affairs is available for free at: http://ResearchArchives.com/t/s?3c1f A full-text copy of Broad Street Video's schedules of assets and liabilities is available for free at: http://ResearchArchives.com/t/s?3c1c A full-text copy of Broad Street Video's statement of financial affairs is available for free at: http://ResearchArchives.com/t/s?3c1d A full-text copy of Philadelphia Direct's schedules of assets and liabilities is available for free at: http://ResearchArchives.com/t/s?3c20 A full-text copy of Philadelphia Direct's statement of financial affairs is available for free at: http://ResearchArchives.com/t/s?3c21 A full-text copy of Philadelphia Media's schedules of assets and liabilities is available for free at: http://ResearchArchives.com/t/s?3c22 A full-text copy of Philadelphia Media's statement of financial affairs is available for free at: http://ResearchArchives.com/t/s?3c23 A full-text copy of PMH Holdings's schedules of assets and liabilities is available for free at: http://ResearchArchives.com/t/s?3c2a A full-text copy of PMH Holdings's statement of financial affairs is available for free at: http://ResearchArchives.com/t/s?3c2b Philadelphia Newspapers, LLC -- http://www.philly.com/-- owns and operates 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 -- http://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. PREVENTION LABORATORIES: Wants Access to Nicolasi Cash Collateral ----------------------------------------------------------------- Prevention Laboratories, L.L.C., asks the U.S. Bankruptcy Court for the Southern District of Illinois to: a) authorize the use of cash securing repayment for the Daniel Nicolosi loan; and b) grant Daniel Nicolosi postpetition liens on its inventory and accounts receivable to the extent that the Debtor uses the cash collateral; and Pre-bankruptcy, the Debtor granted to People's National Bank a mortgage on its property at 5110 Hwy 34 North, Raleigh, Illinois and a security interest in these assets -- all inventory, equipment, accounts, chattel paper, instruments, letter-of-credit rights, letters of credit, documents, deposit accounts, investment property, money, other rights to payment and performance, and general intangibles. On December 26, 2006, People's National Bank assigned its mortgage and security interest to Daniel Nicolosi. The prepetition indebtedness due to Mr. Nicolosi, as of April 20, 2009, is $756,244. The Nicolosi security interest was properly perfected by People's National Bank by filing a UCC financing statement on April 17, 2006, and is a first lien on the Debtor's personal property. The Internal Revenue Service has liens on Debtor's personal property. It has three unreleased tax liens filed with the Illinois Secretary of State's office. Additionally, the IRS has served non-wage garnishments on Debtor's bank accounts at Old National Bank on April 3, 2009. 3 accounts were garnished for a total amount of $740. As of Prevention Laboratories' petition date, the value of these collateral of Mr. Nicolosi loan and the IRS liens were: A. 5110 Hwy 34 North -- $756,000 B. Accounts Receivable -- $174,733 C. Existing Patents and Trademarks -- $6,550,000 D. Pending Patents -- $15,000,000 E. Inventory -- $930,829 F. Manufacturing Equipment -- $207,477 On November 26, 2008, Ricky Dean Thompson and Tammy Jean Thompson were granted judgment against Debtor in the Circuit Court of the First Judicial Circuit, Saline County, Illinois. The judgment against Debtor amounts to $165,000. The Thompsons have subsequently garnished Debtor's accounts receivable by serving non-wage garnishments on Debtor's customers. The Debtor relates the Thompson wage garnishments are inferior to the liens of Nicolosi and the IRS. The Debtor relates that the IRS and the Thompsons are adequately protected by the large equity cushion and the replacement lien being granted to Mr. Nicolosi. About Prevention Laboratories Headquartered in Marion, Illinois, Prevention Laboratories, L.L.C. -- http://www.preventionlabs.com/-- makes and sells hygiene products. The Company filed for Chapter 11 on April 21, 2009 (Bankr. S. D. Ill. Case No. 09-40678). Douglas A. Antonik, Esq.. represents the Debtor in its restructuring efforts. The Debtor listed total assets of $38,275,349 and total debts of $6,430,386. PTS CARDINAL: Bank Debt Sells at 33% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which PTS Cardinal Health is a borrower traded in the secondary market at 66.40 cents-on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.90 percentage points from the previous week, the Journal relates. The loan matures April 10, 2014. The Company pays 225 basis points to borrow under the facility. The bank debt carries Moody's Ba3 rating and S&P's BB+ rating. In April 2007, Cardinal Health completed the sale of its Pharmaceutical Technologies and Services segment to The Blackstone Group for approximately $3.3 billion. PTS provides advanced technologies and outsourced services for the pharmaceutical, biotechnology and consumer health industry. PTS develops, manufactures and packages pharmaceutical and other products. REVOCABLE LIVING TRUST: Case Summary & 3 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Revocable Living Trust of Dean A. Baker 1524 Johnson Street Elkhart, IN 46514 Bankruptcy Case No.: 09-31913 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court Northern District of Indiana (South Bend Division) Debtor's Counsel: James R. Byron, Esq. Thorne, Grodnik LLP 228 West High Street Elkhart, IN 46516 Tel: (574) 294-7473 Fax: (574) 294-5390 Email: jbyron@tglaw.us Total Assets: $1,600,000.00 Total Debts: $331,889.84 A full-text copy of the Debtor's petition, including its list of 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/innb09-31913.pdf The petition was signed by Dean A. Baker, trustee of the Company. RITZ CAMERA: Files Schedules of Assets and Liabilities ------------------------------------------------------ Ritz Camera Centers, Inc., filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ------------ A. Real Property $27,303,886 B. Personal Property $249,666,745 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $48,133,265 E. Creditors Holding Unsecured Priority Claims $38,765 F. Creditors Holding Unsecured Non-priority Claims $123,947,990 ----------- ------------ TOTAL $276,970,631 $172,120,021 The Debtor's schedules contain unaudited information that is subject to further review and potential adjustment. A copy of the Debtor's schedule of assets and liabilities is available at http://bankrupt.com/misc/RitzCamera.SAL.pdf Headquartered in Beltsville, Maryland, Ritz Camera Centers, Inc. - - http://www.ritzcamera.com/-- sells digital cameras and accessories, and electronic products. The Company filed for Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case No. 09-10617). Karen M. McKinley, Esq., and Norman L. Pernick, Esq., at Cole Scholtz Meisel Forman Leonard, P.A., represent the Debtor in its restructuring efforts. The Debtor proposed Thomas & Libowitz PA as corporate counsel; FTI Consulting Inc. t/a FTI Palladium Partners as financial advisor; and Kurtzman Carson Consultants LLC as claims agent. When the Debtor filed for protection from its creditors, it listed assets and debts between $100 million and $500 million. RITZ CAMERA: May Employ Thomas & Libowitz as Conflicts Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted Ritz Camera Centers, Inc. permission to employ Thomas & Libowitz, P.A. as its special corporate counsel and conflicts counsel, nunc pro tunc to February 22, 2009. Thomas & Libowitz will: a) prepare on the Debtor's behalf all necessary and appropriate corporate resolutions and other documents and keeping all corporate minutes; b) advise the Debtor concerning all business, corporate, transactional, and tax matters; c) provide legal services for the Debtor in matters where the Debtor's lead bankruptcy counsel has a conflict of interest that precludes counsel from representing the Debtor; and d) perform all other legal services for and on behalf of the Debtor which may be necessary or appropriate. Robert A. Snyder, Jr., Esq., a partner at Thomas & Libowitz, assured the Court that the firm does not hold or represent any interest adverse to the Debtor or its estate and that the firm is a "disinterested person" as that term is defined under Sec. 101(14) of the Bankruptcy Code. Mr. Snyder told the Court that it was retained by the Debtor as corporate counsel prior to the commencement of the Debtor's bankruptcy case. Pre-petition, the firm received a retainer from the Debtor of $35,000. Of said retainer, $20,326 was applied to pay pre-petition fees and expenses and the remaining $14,674 consitutes a security retainer to be held by the firm for the duration of the case. The Thomas & Libowitz's professionals that are expected to perform significant work in this case and their current rates are: Professionals Hourly Rate ------------- ----------- Robert A. Snyder, Esq. $425 John R. Wise, Esq. $385 C. Wayne Davis, Esq. $380 John R. Paliga, Esq. $345 Headquartered in Beltsville, Maryland, Ritz Camera Centers, Inc. - - http://www.ritzcamera.com/-- sells digital cameras and accessories, and electronic products. The Company filed for Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case No. 09-10617). Irving E. Walker, Esq., Gary H. Leibowitz, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Baltimore, represent the Debtor as counsel. Norman L. Pernick, Esq., and Karen M. Mckinley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, represent the Debtor as local counsel. Thomas & Libowitz, P.A. is Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc, acts as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and noticing agent. Attorneys at Cooley Godward Kronish LLP represent the official committee of unsecured creditors as lead counsel. The Committee selected Bifferato LLC as Delaware counsel. When the Debtor filed for protection from its creditors, it listed assets and debts between $100 million and $500 million. In its schedules, the Debtor listed total assets of $277 million and total debts of $172.1 million. ROBERT DRAPER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Robert N Draper 1419 Oaklawn Pl. Lakeland, FL 33803 Bankruptcy Case No.: 09-08289 Chapter 11 Petition Date: April 27, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: David W.Steen, Esq. David W .teen, PA 602 South Boulevard Tampa, FL 33606-2630 Tel: (813) 251-3000 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 ------ --------------- ------------ SunTrust Litigation $5,200,000 c/o Laure Valiente Foley & Lardner PO Box 3391 Tampa, FL Suntrust Residence 1,005,985 P. O. Box 628214 (1,675,000 Orlando, FL 32896 secured) (1,479,280 senior lien) Joe Rodriguez Mortgage 1,000,000 c/o Pure Platinum 3411 N. Federal Hwy. Fort Lauderdale, FL 33306 Colonial Bank Foreclosure 800,000 Guaranty Countrywide Home Loans Loan 245,000 Premier Financial Services Lease 200,000 Mercedes-Benz Financial Lease 200,000 Mrs. Malick Lease 45,500 Bank of America (Visa) Credit Card 22,000 Discover Credit Card 14,000 Rober M. Brush, Esq. Litigation 6,000 Moffitt Lifetime Cancer Medical Bills 3,000 Care Credit Dental Bills 2,500 Kohls Credit Card 1,500 Target Credit Card 900 Sears Credit Card 800 Macy's Credit Card 500 Belk Credit Card 400 Talbot Credit Card 400 NY & co. Credit Card 200 ROYAL CARIBBEAN: Moody's Affirms 'Ba2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service upgraded Royal Caribbean Cruises, Ltd.'s Speculative Grade Liquidity rating to SGL-3 (adequate liquidity) from SGL-4 (weak liquidity). All of the company's other ratings are affirmed. The upgrade reflects an improvement in the company's liquidity profile. RCL received commitments for financing of its Oasis of the Seas ship that is scheduled to be delivered and enter service in the fourth quarter of 2009. As a result, RCL is expected to cover all of its capital spending and mandatory debt amortization needs from internal cash flow, cash balances, committed ship financings and availability under its $1.2 billion revolving credit facility. The SGL analysis does not assume access to debt markets or export credit financings until legal commitments for a specific ship financings are executed. RCL's SGL-3 Speculative Grade Liquidity rating reflects adequate liquidity, and considers the combined effect of lower earnings and increasing funding needs for its committed shipbuilding program. Moody's estimates that the company's cash flow, cash balance and current revolver availability are currently adequate to cover all mandatory debt amortization and capital spending needs over the next 12 months. RCL has comfortable headroom under financial covenants. Moody's notes, however, that RCL will face a liquidity shortfall by the fourth quarter of 2010 unless the company increases its external liquidity sources. Therefore, the company's SGL rating could face downward pressure later in 2009. The company is currently negotiating financing commitments for the Allure ship that is scheduled to be delivered and enter service in the fourth quarter of 2010. RCL's ratings and negative outlook were affirmed. First quarter earnings were better than expected due to a smaller then expected drop in cruise pricing and solid cost control. However, cruise pricing remains under significant pressure in the current difficult economic environment as all operators have been forced to lower prices to fill ships. RCL reported an approximate 29% drop in EBITDA in the first quarter amid a 13.5% drop in net revenue yields while net cruise costs per available passenger cruise day declined 7%. This EBITDA decline combined with higher absolute debt levels increased debt/EBITDA to 5.3 times from 4.9 times reported at the end of fiscal 2008. In addition to the weakened earnings environment, the negative rating outlook reflects the risk that that industry supply growth could exacerbate downward price pressure and delay upward momentum when economic conditions improve and thereby depress earnings beyond 2009. Ratings upgraded: Royal Caribbean Cruises Ltd. -- Speculative Grade Liquidity rating to SGL-3 from SGL-4 Ratings affirmed and LGD point estimates adjusted: -- Corporate Family Rating at Ba2 -- Probability of Default Rating at Ba2 -- Senior Unsecured Notes and Debentures at Ba2 (LGD 4, 51% from LGD 4, 52%) -- Euro 1.0B Senior Unsecured Global Notes at Ba2 (LGD 4, 51% from LGD 4, 52%) -- Senior unsecured shelf registration at (P) Ba2 (LGD 4, 51% from LGD 4, 52%) -- Preferred stock shelf registration at (P) B1 (LGD 6, 97%) Moody's last action on Royal Caribbean Cruises, Ltd. occurred on January 30, 2009 when Moody's downgraded RCL's CFR to Ba2 from Ba1. Royal Caribbean Cruises Ltd. is a global cruise vacation company that operates five cruise brands -- the largest being Royal Caribbean International and Celebrity Cruises - and 38 cruise ships and six under construction. Revenues for the fiscal year ended December 31, 2008 were about $6.5 billion. S&B SURGERY CENTER: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: S&B Surgery Center dba S&B Surgery Center II 120 South Spalding Drive Suite 301 Beverly Hills, CA 90212 Bankruptcy Case No.: 09-19825 Chapter 11 Petition Date: April 27, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Samuel R. Maizel, Esq. Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Blvd Ste 1100 Los Angeles, CA 90067 Tel: (310) 277-6910 Email: smaizel@pszjlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including its list of 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-19825.pdf The petition was signed by James Sherman, M.D., chief executive officer of the Company. SEMGROUP ENERGY: SEC Charges Attorney With Insider Trading ---------------------------------------------------------- The Securities and Exchange Commission has charged Tulsa, Oklahoma-based attorney Matthew J. Browne, Esq., with insider trading, alleging that he sold all of the stock he owned in a local energy company on the basis of confidential information that he learned while providing legal services to a client. The SEC alleges that Mr. Browne avoided losses of more than $80,000 by selling all of his shares in SemGroup Energy Partners, LP, on the same day he found out that its privately held parent company and largest customer, SemGroup LP, was experiencing liquidity issues and defaulted on a $50 million margin call. The SGLP stock dropped nearly two-thirds in value by the end of that week after a public announcement was made by the company. Mr. Browne has agreed to pay more than twice the amount of his avoided losses to settle the SEC's charges, without admitting or denying the allegations. "By secretly trading on confidential information, Mr. Browne took advantage of his client, the law firm at which he was then employed, and the public at-large," said Rose Romero, Director of the SEC's Fort Worth Regional Office. "Attorneys should know better that the use of client information to profit from securities trading breaches their duties of trust and confidence." According to the SEC's complaint, filed in the U.S. District Court for the Northern District of Oklahoma, Mr. Browne learned the non- public information on the morning of July 14, 2008, and immediately sold his entire position in SGLP (5,200 shares) at an average price of $24.06 per share. After the close of trading on July 17, SGLP announced that SemGroup LP was "experiencing liquidity issues" and was considering bankruptcy. On July 18, SGLP's unit price closed at $8.30 per share, 65.5 percent lower than Browne's average sale price earlier that week. According to the SEC's complaint, by liquidating his SGLP holdings on July 14, Mr. Browne avoided losses of $81,773. In settling the SEC's charges, Mr. Browne consented to pay disgorgement equal to the $81,773 loss he avoided by his illegal trading, plus prejudgment interest of $1,505.98 and a penalty of $81,773. Mr. Browne also agreed to a permanent injunction against future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Mr. Browne consented to a five-year suspension from appearing or practicing before the Commission under Rule 102(e) of the Commission's Rules of Practice. The SEC's investigation is ongoing. A full-text copy of the SEC's complaint is available at no charge at http://sec.gov/litigation/complaints/2009/comp21015.pdf About SemGroup Energy Partners SemGroup Energy Partners -- http://www.SGLP.com/-- owns and operates a diversified portfolio of complementary midstream energy assets. SemGroup Energy Partners provides crude oil and liquid asphalt cement terminalling and storage services and crude oil gathering and transportation services. SemGroup Energy Partners is based in Tulsa, Oklahoma. SGLP's common units are currently traded on the Pink Sheets, which is an over-the-counter securities market, under the symbol SGLP.PK. The general partner of SemGroup Energy Partners is a subsidiary of SemGroup, L.P. 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). 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, represent the Debtors in their restructuring efforts. 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: Gets Green-Light to Extend Maturity Date of DIP Loan ----------------------------------------------------------------- SemCrude, LP, its parent, SemGroup, L.P., and its debtor affiliates sought and obtained 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 Sylvia A. Mayer, Esq., at Weil, Gotshal & Manges LLP, in Dallas, Texas, said absent extension of the Credit Agreement, the Debtors will be unable to continue to operate their businesses, thwarting their efforts to successfully reorganize. 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). 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, represent the Debtors in their restructuring efforts. 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: SEC Charges Attorney With Insider Trading ------------------------------------------------------ The Securities and Exchange Commission has charged Tulsa, Oklahoma-based attorney Matthew J. Browne, Esq., with insider trading, alleging that he sold all of the stock he owned in a local energy company on the basis of confidential information that he learned while providing legal services to a client. The SEC alleges that Mr. Browne avoided losses of more than $80,000 by selling all of his shares in SemGroup Energy Partners, LP, on the same day he found out that its privately held parent company and largest customer, SemGroup LP, was experiencing liquidity issues and defaulted on a $50 million margin call. The SGLP stock dropped nearly two-thirds in value by the end of that week after a public announcement was made by the company. Mr. Browne has agreed to pay more than twice the amount of his avoided losses to settle the SEC's charges, without admitting or denying the allegations. "By secretly trading on confidential information, Mr. Browne took advantage of his client, the law firm at which he was then employed, and the public at-large," said Rose Romero, Director of the SEC's Fort Worth Regional Office. "Attorneys should know better that the use of client information to profit from securities trading breaches their duties of trust and confidence." According to the SEC's complaint, filed in the U.S. District Court for the Northern District of Oklahoma, Mr. Browne learned the non- public information on the morning of July 14, 2008, and immediately sold his entire position in SGLP (5,200 shares) at an average price of $24.06 per share. After the close of trading on July 17, SGLP announced that SemGroup LP was "experiencing liquidity issues" and was considering bankruptcy. On July 18, SGLP's unit price closed at $8.30 per share, 65.5 percent lower than Browne's average sale price earlier that week. According to the SEC's complaint, by liquidating his SGLP holdings on July 14, Mr. Browne avoided losses of $81,773. In settling the SEC's charges, Mr. Browne consented to pay disgorgement equal to the $81,773 loss he avoided by his illegal trading, plus prejudgment interest of $1,505.98 and a penalty of $81,773. Mr. Browne also agreed to a permanent injunction against future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Mr. Browne consented to a five-year suspension from appearing or practicing before the Commission under Rule 102(e) of the Commission's Rules of Practice. The SEC's investigation is ongoing. A full-text copy of the SEC's complaint is available at no charge at http://sec.gov/litigation/complaints/2009/comp21015.pdf About SemGroup Energy Partners SemGroup Energy Partners -- http://www.SGLP.com/-- owns and operates a diversified portfolio of complementary midstream energy assets. SemGroup Energy Partners provides crude oil and liquid asphalt cement terminalling and storage services and crude oil gathering and transportation services. SemGroup Energy Partners is based in Tulsa, Oklahoma. SGLP's common units are currently traded on the Pink Sheets, which is an over-the-counter securities market, under the symbol SGLP.PK. The general partner of SemGroup Energy Partners is a subsidiary of SemGroup, L.P. 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). 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, represent the Debtors in their restructuring efforts. 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) SMURFIT-STONE: Bank Debt Trades at 25% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Smurfit-Stone Container Corp. is a borrower traded in the secondary market at 74.90 cents-on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.20 percentage points from the previous week, the Journal relates. The loan matures on November 1, 2011. The Company pays 200 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on Smurfit-Stone. S&P has assigned a default rating on the Company. Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed to reorganize under Chapter 11 on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC, acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SOURCE INTERLINK: Chapter 11 Filing Cues Moody's Rating Cut to 'D' ------------------------------------------------------------------ Moody's Investors Service downgraded Source Interlink Companies Inc.'s Probability of Default rating to D from Caa1, the Corporate Family rating to Ca from Caa1, and associated debt ratings as detailed below. The downgrades follow Source Interlink's announcement on April 28, 2009 that it filed a lender-approved pre-packaged Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy Code. Details of the rating action are: Ratings downgraded: * Corporate Family rating - to Ca from Caa1 * Probability of Default rating - to D from Caa1 * Senior secured asset based revolving credit facility due 2013 -- to Caa1, LGD2, 19% from B1, LGD2, 21% * Senior secured term loan B due 2014 - to Caa3, LGD3, 37% from B3, LGD3, 39% * Senior unsecured facility due 2017 -- to C, LGD6, 100% from Caa2, LGD5, 76% Source Interlink's SGL-4 rating is unaffected by this rating action. Moody's last rating action on Source Interlink occurred on February 5, 2009 when it lowered the company's CFR and PDR to Caa1. Source Interlink's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and the competitive position of the company versus others in its industry, ii) the capital structure and the financial risk of the company, iii) the projected financial and operating performance of the company over the near- to-intermediate term, and iv) management's track record and tolerance of risk. These attributes were compared against other issuers both within and outside of Source Interlink's core industry and Source Interlink's ratings are believed to be comparable to those of other issuers of similar credit risk. Source Interlink is one of the largest providers of integrated marketing, merchandising, publishing and fulfillment of media- related products in the US. Headquartered in Bonita Springs Florida, the company reported pro-forma sales of approximately $2.5 billion for the LTM period ended October 31, 2008. STEEL DYNAMICS: Moody's Reviews 'Ba1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service placed the ratings of Steel Dynamics Corporation (Corporate Family Rating Ba1) under review for possible downgrade. The review results from the challenges facing the company as steel industry conditions remain difficult with very weak demand and low capacity utilization levels. In the first quarter of 2009 the company's steel mills operated at roughly 46% of capacity, ferrous metals recycling at around 42% of processing capacity and its fabricating operations at approximately 45%. Moody's does not expect that these run rates will materially improve in 2009 given weak demand levels. Moody's expects these conditions to continue longer than initially expected. In addition, the company's first quarter loss was larger than anticipated, increasing the risk that the company may breach the leverage covenant in its existing bank credit facility. While SDI has reduced production in an attempt to better match the low demand levels, low operating rates and lower prices are expected to challenge earnings until conditions improve significantly. The review will focus on the company's ability to further reduce controllable costs, the impact of current operating rates on earnings and cash flow, and liquidity available to meet ongoing requirements, including any necessary capital investments. The review will also consider SDI's potential covenant violation in the ensuing quarters, and its ability to secure a waiver prior to such event. On Review for Possible Downgrade: Issuer: Steel Dynamics, Inc. -- Probability of Default Rating, Ba1 -- Corporate Family Rating, Ba1 -- Senior Unsecured Regular Bond/Debenture, Ba2, LGD 5 -72% Outlook Actions: Issuer: Steel Dynamics, Inc. -- Outlook, Changed To Rating Under Review From Stable The last rating action on SDI was April 15, 2008, when a Ba2 rating was assigned to its note issue. Headquartered in Fort Wayne, Indiana, Steel Dynamics had total consolidated steel shipments of approximately 5.6 million tons and generated revenues of $8 billion in 2008. SUN MICROSYSTEMS: Posts $201MM Net Loss in Third Quarter 2009 ------------------------------------------------------------- Sun Microsystems, Inc., has released results for its third quarter of fiscal 2009, which ended March 29, 2009. Revenues for the third quarter of fiscal 2009 were $2.614 billion, as compared with $3.266 billion for the third quarter of fiscal 2008, and compared with $3.220 billion for the second quarter of fiscal 2009. Total gross margin as a percent of revenues was 42.7, a decrease of 2.2 percentage points as compared with the third quarter of fiscal 2008 and an increase of 0.8 percentage points as compared with the second quarter of fiscal 2009. Net loss for the third quarter of fiscal 2009 on a GAAP basis was $201 million, or $(0.27) per share on a diluted basis, as compared with a net loss of $34 million, or $(0.04) per share, for the third quarter of fiscal 2008, and compared with a net loss of $209 million, or $(0.28) per share, for the second quarter of fiscal 2009. GAAP net loss per share includes a restructuring charge of $46 million primarily related to the restructuring announcement of November 2008. On a non-GAAP basis, net loss for the third quarter of fiscal 2009 was $52 million, or $(0.07) per share on a diluted basis, as compared with a non-GAAP net income of $132 million, or $0.17 per share, for the third quarter of fiscal 2008, and compared with a non-GAAP net income of $114 million, or $0.15 per share, for the second quarter of fiscal 2009. Non-GAAP net income per share excludes purchased in-process research and development, amortization of acquisition-related intangibles, stock-based compensation, restructuring and related impairment of long-lived assets, net gain or loss on equity investments and the tax effect of these non-GAAP adjustments. Sun ended the quarter with a cash and marketable debt securities balance of $2.990 billion and generated cash flow from operations for the third quarter of fiscal 2009 of $178 million -- the third consecutive quarter of positive cash flow from operations in fiscal 2009, and following upon 19 consecutive years of positive cash flow from operations. Third Quarter Highlights The Company grew billings nearly four percent year-over-year in combined key growth categories of Total Software, Open Storage, SolarisTM-based SPARC(R) CMT Servers, and X64 Servers. The Company combined key growth categories accounted for 40 percent of total billings in the third quarter of fiscal 2009 versus 30 percent in the third quarter of fiscal 2008. Total Software billings grew 28 percent year-over-year. Open Storage billings grew 63 percent year-over-year. Solaris-based SPARC CMT Servers billings grew 3 percent year-over-year. Reduced R&D and SG&A expenses nearly 15 percent year-over-year. SUN MICROSYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in millions, except per share amounts) Three Months Ended Nine Months Ended ------------------------- ------------------- ------ March 29, March 30, March 29, March 30, 2009 2008 2009 2008 ------------ ----------- ------------ ----- ------ Net revenues: Products $ 1,519 $ 2,003 $ 5,222 $ 6,232 Services 1,095 1,263 3,602 3,868 --- ------ ------ --- ------ - ------ Total net revenues 2,614 3,266 8,824 10,100 Cost of sales: Cost of sales-products 877 1,106 3,200 3,296 Cost of sales-services 621 692 1,957 2,022 --- ------ ------ --- ------ - ------ Total cost of sales 1,498 1,798 5,157 5,318 --- ------ ------ --- ------ - ------ Gross margin 1,116 1,468 3,667 4,782 Operating expenses: Research and development 393 457 1,227 1,366 Selling, general and administrative 843 989 2,679 2,923 Restructuring charges and related impairment of long-lived assets 46 14 331 159 Purchased in-process research and development 3 24 3 25 Impairment of goodwill - - 1,445 - --- ------ ------ --- ------ - ------ Total operating expenses 1,285 1,484 5,685 4,473 --- ------ ------ --- ------ - ------ Operating income (loss) (169) (16) (2,018) 309 Gain on equity investments, net 3 - 8 22 Interest and other income (expense), net (2) 34 (3) 145 --- ------ ------ --- ------ - ------ Income (loss) before income taxes (168) 18 (2,013) 476 Provision for income taxes 33 52 74 161 --- ------ ------ --- ------ - ------ Net income (loss) $ (201) $ (34) $ (2,087) $ 315 === ====== ====== === ====== ======= Net income (loss) per common share-basic $ (0.27) $ (0.04) $ (2.80) $ 0.38 === ====== ====== === ====== ======= Net income (loss) per common share-diluted $ (0.27) $ (0.04) $ (2.80) $ 0.38 === ====== ====== === ====== ======= Shares used in the calculation of net income (loss) per common share-basic 745 785 746 821 === ====== ====== === ====== ======= Shares used in the calculation of net income (loss) per common share-diluted 745 785 746 837 === ====== ====== === ====== ======= SUN MICROSYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) March 29, June 30, 2009 2008(1) ------------- -- -------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,569 $ 2,272 Short-term marketable debt securities 1,134 429 Accounts receivable, net 2,265 3,019 Inventories 561 680 Deferred and prepaid tax assets 185 216 Prepaid expenses and other current assets, net 1,036 1,218 -------- - ----- Total current assets 6,750 7,834 Property, plant and equipment, net 1,670 1,611 Long-term marketable debt securities 287 609 Goodwill 1,740 3,215 Other acquisition-related intangible assets, net 357 565 Other non-current assets, net 458 506 -------- - ----- $ 11,262 $14,340 ======== ====== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,049 $ 1,387 Accrued payroll-related liabilities 595 734 Accrued liabilities and other 1,142 1,105 Deferred revenues 2,190 2,236 Warranty reserve 160 206 Current portion of long-term debt 562 - -------- - ----- Total current liabilities 5,698 5,668 Long-term debt 695 1,265 Long-term deferred revenues 548 683 Other non-current obligations 970 1,136 Stockholders' equity: Common stock and additional paid-in-capital 7,541 7,391 Treasury stock, at cost (2,680) (2,726) Retained earnings (accumulated deficit) (1,819) 430 Accumulated other comprehensive income 309 493 -------- - ----- Total stockholders' equity 3,351 5,588 -------- - ----- $ 11,262 $14,340 ======== ====== (1) Derived from audited financial statements. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in millions) Nine Months Ended ------------------- ------- March 29, March 30, 2009 2008 ----------- ----- -------- Cash flows from operating activities: Net income (loss) $ (2,087) $ 315 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 321 354 Amortization of acquisition-related intangible assets 224 224 Stock-based compensation expense 150 157 Purchased in-process research and development 3 25 Impairment of goodwill 1,445 - (Gain) loss on investments and other, net 23 (54) Deferred taxes 2 8 Changes in operating assets and liabilities: Accounts receivable, net 752 603 Inventories 118 (205) Prepaid and other assets, net 177 (105) Accounts payable (341) (114) Other liabilities (405) 31 ------ ------ Net cash provided by operating activities 382 1,239 ------ ------ Cash flows from investing activities: Decrease (increase) in restricted cash (19) 22 Purchases of marketable debt securities (1,535) (1,292) Proceeds from sales of marketable debt securities 423 1,404 Proceeds from maturities of marketable debt securities 684 764 Proceeds from sales of equity investments, net 7 25 Purchases of property, plant and equipment, net (404) (297) Payment for acquisitions, net of cash acquired (55) (923) ------ ------ Net cash used in investing activities (899) (297) ------ ------ Cash flows from financing activities: Purchase of common stock under stock repurchase plans (130) (2,300) Proceeds from issuance of options and ESPP purchases, net 24 121 Principal payments on borrowings and other obligations (12) (20) ------ ------ Net cash used in financing activities (118) (2,199) ------ ------ Effect of changes in exchange rates on cash and cash equivalents (68) - ------ ------ Net decrease in cash and cash equivalents (703) (1,257) Cash and cash equivalents, beginning of period 2,272 3,620 ------ ------ Cash and cash equivalents, end of period $ 1,569 $ 2,363 ====== ====== SUN MICROSYSTEMS, INC. CALCULATION OF NON-GAAP NET INCOME (LOSS) (unaudited) (in millions, except per share amounts) Three Months Ended ----------------------------------- ------- March 29, March 30, December 28, 2009 2008 2008 ----------- ----------- --------- ------- Calculation of non-GAAP net income (loss): GAAP loss $ (201) $ (34) $ (209) Purchased in-process research and development 3 24 - Amortization of acquisition related intangibles 72 76 72 Stock-based compensation 49 57 52 Restructuring and related impairment of long-lived assets 46 14 222 (Gain) loss on equity investments, net (3) - 3 Tax effect of non-GAAP adjustments (18) (5) (26) ------ ------ ---- ---- Non-GAAP net income (loss) $ (52) $ 132 $ 114 ------ ------ ---- ---- Diluted non-GAAP net income (loss) per share $ (0.07) $ 0.17 $ 0.15 ------ ------ ---- ---- Shares used in the calculation of non-GAAP net income (loss) per common share -- diluted 745 797 746 ------ ------ ---- ---- About Sun Microsystems Headquartered in Santa Clara, California, Sun Microsystems Inc. (NASDAQ: JAVA) -- http://sun.com/-- provides network computing infrastructure product and service solutions worldwide. Sun Microsystems conducts business in 100 countries around the globe, including Brazil, Argentina, India, Hungary, United Kingdom, among others. * * * As reported by the Troubled Company Reporter on April 22, 2009, Moody's placed the Ba1 corporate family and probability of default ratings of Sun Microsystems, Inc., on review for possible upgrade following the company's announcement that it has entered into a definitive agreement to be purchased by Oracle for $9.50 per share or approximately $7.4 billion in cash ($5.6 billion net of the company's cash and debt). The transaction, which has been approved by Sun's board of directors, is expected to close this summer, subject to shareholder and regulatory approval as well as standard closing conditions. According to the TCR on April 22, 2009, Standard & Poor's Ratings Services said that it revised its CreditWatch listing, including that for its 'BB+' corporate credit rating, on Santa Clara, California-based Sun Microsystems Inc. to CreditWatch with positive implications from CreditWatch with developing implications. SWIFT TRANSPORTATION: Bank Debt Sells at 46% Discount ----------------------------------------------------- Participations in a syndicated loan under which Swift Transportation Co. Inc. is a borrower traded in the secondary market at 57.08 cents-on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.79 percentage points from the previous week, the Journal relates. The loan matures March 15, 2014. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B- rating. Swift Transportation Co, Inc., headquartered in Phoenix, Arizona, is the largest provider of truckload transportation services in the United States, with line-haul, dedicated and inter-modal freight services. The Troubled Company Reporter said on December 5, 2008, that Moody's Investors Service has lowered the ratings of Swift Transportation's Corporate Family Rating to Caa1 from B3. The rating of the first lien credit facility was lowered to B3 from B1, while the second lien notes' ratings were lowered to Caa3 from Caa2. The rating outlook remains negative. TETON MOTOR: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Teton Motor Sports, LLC dba Racin Station 544 Moraine Court Driggs, ID 83422 Bankruptcy Case No.: 09-40596 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court District of Idaho Judge: Jim D. Pappas Debtor's Counsel: Brent T. Robinson, Esq. POB 396 Rupert, ID 83350 Tel: (208) 436-4717 Email: btr@idlawfirm.com Total Assets: $2,840,768 Total Debts: $6,286,650 A full-text copy of the Debtor's petition, including its list of 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/idb09-40596.pdf The petition was signed by C. Dennis Robison, managing member of the Company. TEXAS PETROCHEMICALS: S&P Withdraws 'B-' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its ratings, including its 'B-' corporate credit rating, on Houston, Texas-based Texas Petrochemicals L.P. at the company's request. TEXTRON INC: Fitch Downgrades Issuer Default Ratings to 'BB+' ------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Ratings and long- term debt ratings for Textron Inc. and Textron Financial Corporation to 'BB+' from 'BBB-'. Fitch has also downgraded the short-term IDRs and commercial paper ratings to 'B' from 'F3'. The Rating Outlook is Negative. In addition, Fitch expects to assign a 'BB+' rating to TXT's planned issuance of convertible senior unsecured notes due May 1, 2013. The rating downgrades reflect deteriorating operating results at TXT and continuing concerns about TFC's asset quality and execution risks surrounding plans to exit TFC's non-captive finance business. These concerns more than offset the positive impact on TXT's liquidity from its planned issuance of debt and equity. Fitch will provide a detailed analysis of its downgrade on TXT and TFC shortly. Debt and preferred securities totaled nearly $11 billion at Jan. 3, 2009, including $2.5 billion at TXT and $8.3 billion at TFC. Fitch has downgraded TXT and TFC: TXT -- IDR to 'BB+' from 'BBB-'; -- Senior unsecured bank facilities to 'BB+' from 'BBB-'; -- Senior unsecured debt to 'BB+' from 'BBB-'; -- Short-term IDR to 'B' from 'F3'; -- Commercial paper to 'B' from 'F3'. TFC -- IDR to 'BB+' from 'BBB-'; -- Senior unsecured bank facilities to 'BB+' from 'BBB-'; -- Senior unsecured debt to 'BB+' from 'BBB-'; -- Junior subordinated notes to 'B+' from 'BB'; -- Short-term IDR to 'B' from 'F3'; -- Commercial paper to 'B' from 'F3'. Due to the existence of a support agreement and other factors, TFC's ratings are linked to TXT's ratings. The support agreement requires TXT to maintain TFC's floor net worth and fixed charge coverage at $200 million and 1.25 times, respectively. TROPICANA ENTERTAINMENT: Assumes Leases to Avoid $250MM Claim ------------------------------------------------------------- Tropicana Entertainment LLC and its debtor affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to: (i) assume and assign the Amended and Restated Net Lease Agreement dated January 9, 1990, between Park Cattle Co., and Wimar Tahoe Corporation, and the Net Lease Agreement dated September 13, 1990, between Park Cattle and Wimar Tahoe, relating to property known as Lake Tahoe Horizon Casino and Resort; and (ii) assume the Amended and Restated Net Lease Agreement dated January 1, 2000, between Park Cattle and Desert Palace, Inc., relating to property known as the MontBleu Resort Casino & Spa. Originally under Wimar Tahoe and Desert Palace, the Horizon Leases and the MontBleu Lease were later assigned to the Debtors. During the past several months, the Debtors and Park Cattle have engaged in ongoing negotiations in an attempt to consensually resolve their differences while the Debtors determined whether they should assume or reject the Park Cattle Leases. The Debtors have sought various lease concessions from Park Cattle and have now reached an agreement in principle to assume and assign the Horizon Leases, as amended, and assume the MontBleu Lease, as amend, according to Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. In a supplemental filing, the Debtors notified the Court that they have now completed the term sheets memorializing their agreement in principle with Park Cattle regarding the treatment of the Park Cattle Leases. Full-text copies of the term sheet on amendments to the MontBleu Lease and the term sheet on amendments to the Lake Tahoe Leases, including exhibits, are available at no charge at: http://bankrupt.com/misc/Tropi_TermSheetHorizonLeases.pdf http://bankrupt.com/misc/Tropi_TermSheetMontBleuLease.pdf The Debtors told Judge Kevin Carey that they considered two paramount factors in deciding what to do with the Park Cattle Leases: (1) The declining gaming market in which both sets of leases are located; and (2) The annual rents under the Leases are well above current market rates, and that they impose onerous capital expenditures requirements and other related provisions. In view of these factors, the Debtors concluded that it is not in their best interest to continue to operate both the MontBleu and Horizon facilities on a long term basis under the Park Cattle Leases. The Debtors relate that they have elected to continue operating the MontBleu Facility because it is a better quality asset and in a better position for future growth. Moreover, the MontBleu Facility is a newer property, the Debtors aver. The Debtors also note that they were able to negotiate better rent concessions and address other onerous terms under the original MontBleu Lease. The Debtors expect the new terms, in conjunction with lower capital expenditure requirements, to allow them to operate the MontBleu Facility more efficiently and with fewer adverse effects from their Chapter 11 cases, while allowing them to maintain their economic position in the Lake Tahoe casino market. Authorizing the Debtors to assume and assign the Horizon Leases allows the Debtors to reach the optimal resolution of only retaining one facility in the Lake Tahoe market pursuant to their business plan, yet avoids the risk of any potential legal and monetary obligations if they were forced into rejecting one or both the leases, according to Mr. Kaufman. Moreover, to avoid potential unsecured rejection damages claim totaling $250,000,000 or more, the Debtors contended that it is in their best interest to assume and assign the Horizon Leases to Columbia Sussex Corporation. The Debtors have been able to successfully negotiate consensual terms acceptable to Park Cattle that will not trigger any default of the Stipulation of Judgment with respect to the Horizon Leases. Mr. Kaufman states that the assignment of the Horizon Leases will be effectuated in a manner and over a period of time that provides for continuous operation subject to approval of a suitable casino operator by the Nevada gaming authorities. During this interim period before a suitable casino operator can take over the operations, the Debtors intend to continue to manage the Horizon casino on behalf of Park Cattle until an acceptable new operator is approved by the Nevada gaming authorities. The Debtors do not intend to maintain a business relationship with Columbia Sussex at any time during the interim period or once the transaction is concluded. Moreover, pursuant to the Horizon Term Sheet, Columbia Sussex has agreed, as part of the agreement, to a significant reduction in the number of slot machines and casino games at Horizon, which removes capacity in the market, according to Mr. Kaufman. Yung Party Reserve Rights Columbia Sussex Corporation, Wimar Tahoe Corporation, formerly Tropicana Casinos and Resort, Inc., and William J. Yung reserve their right to object to the Debtors' Motion upon review of the final documentation with respect to the terms of the agreement in principle among the Debtors, Park Cattle, and the Yung Parties. In the event the Debtors amend the Motion to seek the rejection of either the Horizon Leases or the MontBleu Lease, the Yung Parties also reserve their rights to object to that Motion and to proceed with their Motion to Compel. 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: Confirmation Hearing Moved to May 5 ------------------------------------------------------------ Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware has rescheduled the confirmation hearings of the First Amended Joint Plans of Reorganization of (i) Tropicana Las Vegas Holdings LLC and certain affiliates or the "LandCo Debtors" and (ii) Tropicana Entertainment LLC and certain debtor affiliates or the "OpCo Debtors" to May 5, 2009, at 10:30 a.m., EDT. The Confirmation Hearings were originally scheduled for April 27, 2009. Tropicana's Pre-trial Statement in Support of Plans The Debtors noted in a pre-trial memorandum they delivered to the Court on April 23, 2009, that they believe the vast majority of objections lodged against the OpCo Plan and LandCo Plan have been resolved or will be resolved before the Confirmation Hearing. Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, said only the Yung Entities submitted a "preliminary" witness list for the Confirmation Hearing. Moreover, he said, the Yung Entities' objections to the Plans have since been resolved in principle and the Debtors anticipate a full resolution by the time the Confirmation Hearing will be conducted. No one, except for the Debtors, has submitted an exhibit list or a final witness list. Also, no depositions were taken, Mr. Kaufman added. The Debtors do not expect any of the evidence they presented to be meaningfully challenged by their constituents. The Debtors expect a streamlined presentation of their case, during which their counsel will make remarks supporting the Plans and address any pending objections, and submit evidence of several declarations supporting the confirmation of the Plans. Mr. Kaufman said the "declarations" will be filed before the Confirmation Hearing. According to Mr. Kaufman, each of these declarants is a potential trial witness and each plans to attend the Confirmation Hearing to answer and address any issue: (a) Scott C. Butera as the Debtors' president and chief executive officer and a member of the Debtors' board of managers will provide testimony to address the negotiations that led to the proposed Plans. (b) Daniel M. Aronson as the Debtors' financial advisor and a managing director at restructuring group Lazard Freres & Company LLC will provide testimony relation to the valuation of the Debtors and the OpCo Exit Facility. (c) John R. Castellano as the managing director at the restructuring group AlixPartners, LLP, will provide live testimony on the Liquidation Analysis related to the Plans, the feasibility of the Plans and the classification of claims. (d) Joe P. Morrow as a senior consultant of Kurtzman Carson Consultants LLC will provide testimony on the solicitation of votes on the Plans and the voting results. (e) Jane Sullivan as an executive director of Financial Balloting Group LLC will provide testimony on the OpCo Plan Solicitation. The Debtors also told the Court that they continue to attempt to resolve all pending objections, and are presently unaware of any material factual disputes. Deposition Notices In connection with the plan discovery process, the Debtors took the oral depositions of Joseph Scherer on April 21, 2009, and of Ted Mitchell on April 20, 2009, in the offices of Kirkland & Ellis LLP, located at 300 North LaSalle Street, in Chicago, Illinois. Mr. Mitchel was appointed as chief financial officer and treasurer of Tropicana Casinos and Resorts in November 2007. The deposition can be continued day by day until fully completed. The Debtors also sought from Messrs. Mitchel and Scherer the production of certain documents, including documents that support the objection of William Yung and his related entities to the Debtors' Chapter 11 Plans. Onex Corporation and certain of its affiliates also served requests for production of documents on Wimar Tahoe Corporation, formerly known as Tropicana Casinos and Resorts, Inc., and Columbia Sussex Corporation on April 20, 2009. The document requests were transmitted to the respondents' counsel, John W. Weiss, Esq., Maria J. DiConza, Esq., and Nancy A. Peterman, Esq., of Greenberg Traurig LLP. April 22 Voting Deadline for OpCo Classes 3 & 6 Claims Solely with respect to ballots cast on account of Class 3 OpCo Credit Facility Secured Claims and Class 6 OpCo Credit Facility Deficiency Claims, the OpCo Debtors agreed to accept ballots actually received by their Claims and Noticing Agent by 5:00 p.m., prevailing Eastern time, until April 22, 2009. The OpCo Plan Voting Deadline was originally set for April 17, 2009. Plan Objections As reported by the Troubled Company Reporter on April 15, 2009, several entities filed formal opposition to the confirmation of the Debtors' Reorganization Plans: (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. The IRS complains that the Plan does not provide for the payment of interest on its tax claims should the Debtors opt to pay in installments over time. ACE wants certain "insurance neutrality" language 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. The Louisiana Revenue Dept. to the treatment of its prepetition priority claims against certain OpCo Debtors, totaling $1,607,459. 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. Justin R. Alberto, Esq., at Bayard, P.A., in Wilmington, Delaware, said 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. The Yung Parties said 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 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. 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, including: (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. Onex Corporation and certain of its affiliates, the Steering Committee of the Debtors' Lenders, and Starbucks Corporation hae reserved their rights to object to the Plans. 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: Deal for Atlantic City Casino Completed ---------------------------------------------------------------- A proposed purchase agreement for the Tropicana Atlantic City has finally been completed by negotiators, according to pressofAtlanticCity.com. This could allow a lender group led by Carl C. Icahn to buy the casino for the bargain price of $200,000,000, PAC said. A copy of the proposed purchase agreement was released by the New Jersey Casino Control Commission, but certain related documents containing "proprietary financial, operating and marketing information" have been withheld or redacted, PAC reported. The 98-page proposed purchase agreement is pending the approval of the New Jersey gaming regulators. The gaming regulators will also need to authorize the sale of Tropicana Atlantic City in a bankruptcy auction, PAC added. According to PAC, Tropicana Atlantic City includes 140,000 square feet of gaming space, 2,129 hotel rooms, and a mall-like retail and entertainment center called The Quarter. The Quarter was built in 2004 and cost $284,000,000, which is higher than the Icahn group's bid of $200,000,000 for the Tropicana Atlantic City, PAC noted. 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: Objects to IRS and Atlantic City Claims ---------------------------------------------------------------- Tropicana Entertainment LLC and its debtor affiliates ask the U.S. Bankruptcy Court for the District of Delaware to disallow and expunge 25 claims, aggregating $201,965,750. The Debtors contend that the Claims to amend and supersede other claims filed against them. These claims include: Claimant Claim No. Claim Amt. -------- --------- --------- Treasury Dept. Internal Revenue Service 434 $12,595,600 Treasury Dept. Internal Revenue Service 2302 12,570,600 Treasury Dept. Internal Revenue Service 263 8,721,833 A list of the Amended and Replaced Claims is available for free at http://bankrupt.com/misc/Tropi_Omni8AmendedClms.pdf The Debtors also ask the Court to disallow and expunge four claims, aggregating $513,817, that appear to assert one or more duplicate claims against the same Debtor for the same liability in the same amount. The Duplicate Claims are: Claimant Claim No. Claim Amt. -------- --------- --------- Mark Wiener 2323 $250,000 Mark Wiener 2331 250,000 So Tahoe Newspaper Agency 26 4,399 So Tahoe Newspaper Agency 25 9,418 The Debtors further ask the Court to deem two claims asserted against the Tropicana Entertainment, LLC, to be correctly filed against Hotel Ramada of Nevada. The Wrong Debtor Claims are: Claimant Claim No. Claim Amt. -------- --------- --------- Lexington Technology 760 $448 ADS Sales Co. Inc. 870 439 Separately, the Debtors ask the Court to adjust the amounts asserted by these claims: Modified Claimant Claim No. Claim Amt. Amt. -------- --------- --------- -------- Denise Cirrone 941 $3,000 $750 Louisiana Dept of Revenue 2329 21,924 452 Mississippi State Tax Comm. 2162 550,122 214,739 The Tape Co. 486 538 404 The Debtors also urge the Court to expunge 25 claims, aggregating $39,838,776, which have no factual or legal basis. Among the No- Basis Claims are: Claimant Claim No. Claim Amt. -------- --------- --------- City of Atlantic City 1219 $2,999,248 City of Atlantic City 1217 3,935,459 City of Atlantic City 1216 5,755,948 City of Atlantic City 1105 2,891,198 A complete list of the No-Basis Claims is available for free at: http://bankrupt.com/misc/Tropi_Omni9NoBasisClms.pdf 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: Panel Objects to Sussex and Wimar Claims ----------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the bankruptcy cases of Tropicana Entertainment LLC and its affiliates object to the request of Columbia Sussex Corporation and Wimar Tahoe Corporation, formerly Tropicana Casino & Resorts, Inc., for payment of administrative expense claims. Columbia Sussex is seeking the allowance and payment of (i) a priority claim of at least $631,361 under Section 507(a)(5) of the Bankruptcy Code as contributions to an employee benefit plan within 180 days before the Petition Date, and (ii) an administrative expense claim of at least $5,296,496 under Sections 503(b)(1) and (b)(3)(D) of the Bankruptcy Code. Columbia Sussex's Claim Motion fails to adduce sufficient information and evidence to enable the Creditors Committee or the U.S. Bankruptcy Court for the District of Delaware to support the relief requested, the panel's counsel, John A. Sensing, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware, points out. The Creditors Committee is aware that the Debtors and Columbia Sussex are currently engaged in discussions and informal discovery with respect to the asserted administrative and priority claims, and that formal discovery and briefing may follow to the extent necessary and appropriate. The Creditors Committee thus reserves its rights to engage in the informal or formal discovery and briefing. It further reserves the right to participate in all future proceedings related to the administrative and priority claims asserted by Columbia Sussex and its non-debtor affiliates. Meanwhile, Wimar Tahoe seeks the allowance and payment of administrative expense claims of at least $2,055,259 under Section 503(b)(1)(A) of the Bankruptcy Code purportedly on account of postpetition services rendered to certain of the Debtors. Wimar's Administrative Claim Motion fails to adduce sufficient information and evidence to enable the Creditors Committee or the Court to support the relief requested, Mr. Sensing contends. The Creditors Committee is aware that the Debtors and Wimar are currently engaged in discussions and informal discovery with respect to the asserted administrative and priority claims, and that formal discovery and briefing may follow to the extent necessary and appropriate. The Creditors Committee thus reserves its rights to engage in the informal or formal discovery and briefing. It also reserves the right to participate in all future proceedings related to the administrative and priority claims asserted by Wimar and its non- debtor affiliates. Contract Rejection Judge Kevin Carey has authorized the Debtors to reject their service agreements with Columbia Sussex Corporation effective as of April 30, 2009. The Court's order is without prejudice to the rights and remedies of Columbia Sussex and Wimar Tahoe Corporation with respect to any claims they have asserted or may assert against the Debtors, including claims asserted by Columbia Sussex and Wimar Tahoe in their motions for payment of administrative expense claims and any claims for damages with respect to the Service Agreements. The Debtors, however, reserve the right to object to those claims for any reason. Columbia Sussex and Wimar Tahoe are authorized to terminate any services being provided to the Debtors under the Service Agreements as of April 30, 2009. The Debtors will not be required to make any payment on account of any services provided after April 30, 2009, provided that Columbia Sussex will continue to maintain the Debtors' 401(k) Plan through July 1, 2009, and the Debtors or the Reorganized Debtors, as applicable, will pay all fees and expenses related to the maintenance of the 401(k) Plan. 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: Atlantic City Casino Files to Close Sale ----------------------------------------------------------------- According to Beth Jinks and Steven Church at Bloomberg News, the Tropicana casino in Atlantic City, New Jersey, filed for bankruptcy on April 29 after winning permission to try to sell the resort to Carl Icahn and a group of other investors. Bloomberg quoted retired judge Gary Stein as saying that the bankruptcy should allow an auction of the casino before the end of June. Mr. Stein added that bankruptcy is necessary for a "free and clear" sale of the casino. Mr. Stein has been appointed by the New Jersey Casino Control Commission as trustee for the property, an affiliate of Tropicana Entertainment LLC. According to Bloomberg, the auction may generate multiple bids. The report notes that unless a more valuable offer comes in, lenders including Mr. Icahn, many of whom bought the debt at a discount, may take over the Atlantic City hotel in exchange for canceling at least $200 million in Tropicana debt. A proposed purchase agreement for the Tropicana Atlantic City has finally been completed by negotiators, pressofAtlanticCity.com earlier reported. This could allow a lender group led by Carl C. Icahn to buy the casino for the bargain price of $200,000,000, PAC said. A copy of the proposed purchase agreement was released by the New Jersey Casino Control Commission, but certain related documents containing "proprietary financial, operating and marketing information" have been withheld or redacted, PAC reported. The 98-page proposed purchase agreement is pending the approval of the New Jersey gaming regulators. The gaming regulators will also need to authorize the sale of Tropicana Atlantic City in a bankruptcy auction, PAC added. According to PAC, Tropicana Atlantic City includes 140,000 square feet of gaming space, 2,129 hotel rooms, and a mall-like retail and entertainment center called The Quarter. The Quarter was built in 2004 and cost $284,000,000, which is higher than the Icahn group's bid of $200,000,000 for the Tropicana Atlantic City, PAC noted. 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: Adamar's Chapter 11 Case Summary --------------------------------------------------------- Lead Debtor: Tropicana Entertainment, LLC 740 Centre View Boulevard Crestview Hills, KY 41017 Bankruptcy Case No.: 08-10856 Debtor-affiliates filing separate Chapter 11 petitions on April 29, 2009: Entity Case No. ------ -------- Adamar of New Jersey, Inc. dba Tropicana Casino 09-20711 and Resort Debtor-affiliates filing separate Chapter 11 petitions in 2008: Entity ------ Adamar Garage Corp. Adamar of Nevada Argosy of Louisiana, Inc. Atlantic-Deauville, Inc. Aztar Corporation Aztar Development Corporation Aztar Indiana Gaming Company, LLC Aztar Indiana Gaming Corporation Aztar Missouri Gaming Corporation Aztar Riverboat Holding Company, LLC Catfish Queen Partnership in Commendam Centroplex Centre Convention Hotel, L.L.C. Columbia Properties Laughlin, LLC Columbia Properties Tahoe, LLC Columbia Properties Vicksburg, LLC CP Baton Rouge Casino, L.L.C. CP Laughlin Realty LLC Hotel Ramada of Nevada Jazz Enterprises, Inc. JMBS Casino LLC Ramada New Jersey Holdings Corporation Ramada New Jersey, Inc. St. Louis Riverboat Entertainment, Inc. Tahoe Horizon, LLC Tropicana Development Company, LLC Tropicana Enterprises Tropicana Entertainment Holdings, LLC Tropicana Entertainment Intermediate Holdings, LLC Tropicana Express, Inc. Tropicana Finance Corp. Tropicana Las Vegas Holdings, LLC Tropicana Las Vegas Resort and Casino, LLC Tropicana Real Estate Company, LLC Type of Business: The Debtors are privately-held gaming entertainment providers in the U.S. See http://www.tropicanalvsales.com/ Chapter 11 Petition Date: May 5, 2008 Court: District of Delaware (Delaware) Debtors' Counsel: Mark D. Collins, Esq. Email: collins@RLF.com Richards Layton & Finger One Rodney Square, P.O. Box 551 Wilmington, DE 19899 Tel: (302) 651-7700 Fax: (302) 651-7701 http://www.RLF.com/ Debtors' Consolidated Financial Condition as of February 29, 2008: Total Assets: $2,845,847,596 Total Debts: $2,429,890,642 Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wilmington Trust Co. (as Notes $995,676,667 successor indenture trustee for the 9-5/8% Senior Subordinated Notes due 2014 ) Attn: Patrick J. Healy Rodney Square North 1100 North Market St. Wilmington, DE 19890 Tel: (212) 750-6474 Fax: (212) 750-1361 2 Park Cattle Co. Settlement $125,000,000 1300 Buckeye Rd. Ste. A Minden, NV 89423 Tel: (775) 782-2144 Fax: (775) 588-0408 Mapp Construction Trade $3,041,955 344 Third St. Baton Rouge, LA 70801 Tel: (225) 757-0111 Fax: (225) 757-0480 US Foodservice, Inc. Trade $881,587 3682 Collections Center Dr. Chicago, IL 60693 Tel: (312) 733-6050 Fax: (312) 733-0738 IGT Trade $358,267 9295 Prototype Dr. Reno, NV 89521 Tel: (775) 448-7777 Fax: (775) 448-0719 Bally Gaming, Inc. Trade $308,018 6601 S. Bermuda Rd. Las Vegas, NV 89119 Tel: (702) 896-7860 Fax: (702) 896-7860 Sierra Pacific Power Co. Utility $306,608 875 East Long St. Carson City, NV 89701 Tel: (800) 782-2506 Fax: (775) 834-4202 Mission Industries Trade $229,342 NV MegaJackpots Trade $223,007 Marcor Remediation, Inc. Trade $219,427 CSG Direct, Inc. Trade $157,979 Wes Design & Supply Co., Ltd. Trade $146,707 Jamestown Metal Marine Sales Trade $132,876 WMS Gaming, Inc. Trade $118,229 Diane Allen and Associates Trade $117,388 Outwest Meat Co. Trade $102,127 Wilkes Group Trade $101,091 Lamar Cos. Trade $88,119 Fixture Dimensions, Inc. Trade $88,084 Gaming Support Trade $83,643 Agilysys NV LLC Trade $79,267 Briggs Electric, Inc. Trade $78,236 Mayer Brown LLP Trade $72,062 Micros Systems, Inc. Trade $71,094 HMR Enterprises, Inc. Trade $65,823 Oswald Promotions Trade $64,989 Vail Resorts, Inc. Trade $61,800 Shuffle Master, Inc. Trade $60,396 Protiviti, Inc. Trade $59,287 News West Publishing Co. Trade $56,877 TRW AUTOMOTIVE: Fitch Cuts Issuer Rating to 'B' on GM Shutdowns --------------------------------------------------------------- Fitch Ratings has downgraded TRW's ratings: TRW Automotive Holdings Corp. -- Issuer Default Rating to 'B' from 'B+'. TRW Automotive Inc. -- IDR to 'B' from 'B+'; -- Senior secured revolving credit facility to 'BB-/RR2' from 'BB/RR2'; -- Senior secured term loan A facility to 'BB-/RR2' from 'BB/RR2'; -- Senior secured term loan B facility to 'BB-/RR2' from 'BB/RR2'; -- Senior unsecured notes to 'CCC/RR6' from 'B-/RR6'. All ratings remain on Rating Watch Negative where they were placed on Dec. 11, 2008. The Negative Watch remains in effect due to the uncertain production or sales ramifications of near-term events at General Motors and/or Chrysler, including potential bankruptcy filings. The ratings cover approximately $4 billion in outstanding debt. The downgrades are driven by the further extended shutdowns scheduled by General Motors later this year, the deteriorating outlook for auto sales in Europe which accounted for 56% of sales in 2008, and Fitch's view that TRW will need to seek an amendment to its credit agreement for covenant relief in 2009. GM recently announced that it will shut down 13 of its manufacturing plants in North America during the second and third quarters of 2009. The shutdown for some plants may begin as early as mid-May. GM is taking more extended summer shutdowns than usual this year to reduce vehicle inventory which was 767,000 at the end of March; with this planned shutdown the automaker hopes to have inventory of 525,000 at the end of July. The announced plant closures will challenge all of GM's suppliers including TRW which received 13.5% of it sales from GM globally in 2008. TRW received 9.6% of sales from Chrysler. If industry conditions worsen through 2009, the company could pressure its leverage covenants and Fitch expects that TRW will need to work with its lenders for an amendment later in 2009. TRW's credit agreement was established in May 2007 and unlike many other auto suppliers, TRW has not yet had to seek an amendment. The secured credit facility requires that the net leverage ratio be no more than 3.75 times (x) as of fourth-quarter 2008 (Q4'08) until Q3'09; from Q4'09 and beyond it may be no greater than 3.5x. Fitch expects lenders would be willing to work with TRW to provide covenant relief given the company's position as a global auto supplier with a diverse customer mix and product offering. As part of any covenant relief, Fitch expects that lenders might require a reduction in the size of the facility, or additional restrictions. Fitch estimates that the current facility might not get full recovery in a distressed scenario, supporting the expectation that the facility could be reduced if covenants are modified. A potential bankruptcy filing by General Motors and/or Chrysler is incorporated into the ratings, and further rating actions will depend on the impact of any filing on GM's and Chrysler's production, as well as on negotiations with the company's bank group. Fitch believes that in the event of a filing by GM or Chrysler, the U.S. government would provide additional financial assistance in an attempt to support an orderly bankruptcy. This expected support from the government would be done in an effort to keep the fragile supplier base intact and prevent wider industry repercussions. Importantly, the rating remains on Watch Negative since the supplier base may not withstand the fallout of a General Motors bankruptcy despite potential efforts to prevent negative consequences. In February 2009, TRW announced it drew down the bulk of its $1.4 billion revolving credit facility, and the proceeds were placed on the balance sheet to build liquidity. The company indicated that this was done to provide it with some protection due to the uncertainty regarding the government's financial support of General Motors and Chrysler. TRW's liquidity was ample at the end of 2008, totaling nearly $2.1 billion. This liquidity consisted of $756 million of cash, $1,113 million of availability under the company's revolving credit facility, and $249 million under several receivables securitization facilities. Fitch also notes that Q4 is a seasonally high period for cash due to working capital. TRW has no near-term debt maturities and the revolver extends through 2012. Fitch calculates leverage (total net debt to operating EBITDA) at yearend 2008 to be 2.1x. If TRW wants to improve its liquidity, it could utilize the U.S. government's supplier support program, which is a program that Fitch believes to be limited and costly for auto suppliers that are already operating in a low EBITDA margin environment. The support program falls short of the request from the Original Equipment Suppliers Association for $18.5 billion in relief. Factors supporting the ratings include TRW's relatively diverse customer base, a global manufacturing presence, the company's technology-driven products including products for vehicle safety which tend to offer better margins and opportunities for growth, a track record of successfully restructuring before and during the global automotive slump, and its liquidity position. TRW also benefits from the refinancing actions it took in 2007, which lowered the company's interest costs and extended debt maturities. Additionally, Fitch believes TRW has the ability to decrease capital expenditures in 2009, which may be necessary if cash flows are constrained. Furthermore, Fitch forecasts modest negative free cash flow in 2009 under the current auto production assumptions. The Recovery Ratings reflect Fitch's recovery expectations under a scenario in which distressed enterprise value is allocated to the various debt classes. RRs on the senior secured facilities (revolving credit facility, Term Loan A, and Term Loan B) were affirmed with a rating of 'RR2' which implies a recovery in the range of 71%-90%. The senior unsecured notes were affirmed with an RR of 'RR6' which implies a recovery in the range of 0%-10%. With the downturn in the automotive industry, Fitch's analysis indicates that the unsecured debt of all of the auto suppliers Fitch covers falls in the 0%-10% recovery range. At the end of 2008, Blackstone owned 46% of TRW. US SHIPPING: Files for Bankruptcy Protection in Manhattan --------------------------------------------------------- U.S. Shipping Partners L.P. and 26 affiliates filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. According to Christopher Scinta at Bloomberg, in March, U.S. Shipping's lenders approved a forbearance agreement, saying they wouldn't take action after the Company missed debt payments. Based in Edison, New Jersey, the Company listed $717.4 million In assets and $606.6 million in debt. Jefferies & Co. was listed as the largest unsecured creditor with a $2.25 million claim. According to Bloomberg, U.S. Shipping, a transporter of oil, petrochemicals and commodities, follows Armada (Singapore) Pte, London-based Britannia Bulk Holdings Inc. and its Danish unit, Denmark Britannia Bulkers A/S, in seeking court protection after a 92% plunge in commodity shipping rates last year. About U.S. Shipping Partners L.P. U.S. Shipping Partners L.-- http://www.usslp.com/-- provides long-haul marine transportation services for refined petroleum, petrochemical and commodity chemical products in the U.S. domestic "coastwise" trade. Its existing fleet consists of twelve tank vessels: five integrated tug barge units; one product tanker; three chemical parcel tankers and three ATBs. U.S. Shipping has embarked on a capital construction program to build additional ATBs and, through a joint venture, additional tank vessels that upon completion will result in U.S. Shipping having one of the most modern versatile fleets in service. The Troubled Company Reporter reported on Feb. 2, 2009, that Standard & Poor's Ratings Services withdrew its 'D' corporate credit and other ratings on U.S. Shipping Partners L.P. S&P lowered all ratings on U.S. Shipping to 'D' on Jan. 6, 2009, after the company's announcement on Jan. 5, 2009, that it was in default under the terms of its senior credit agreement, after failing to make principal and interest payments due on Dec. 31, 2008. US SHIPPING: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: U.S. Shipping Partners L.P. 399 Thornall Street, 8th Floor Edison, NJ 08837 Bankruptcy Case No.: 09-12711 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- USS Product Carriers LLC 09-12712 USS Product Manager LLC 09-12713 Other Debtor-affiliates filing subject to Chapter 11 petitions but with no case numbers assigned yet: USS Product Manager LLC US Shipping General Partner LLC U.S. Shipping Operating LLC ITB Baltimore LLC ITB Groton LLC ITB Jacksonville LLC ITB Mobile LLC ITB New York LLC ITB Philadelphia LLC USS Chartering LLC USCS Chemical Chartering LLC USCS Chemical Pioneer, Inc. USCS Charleston Chartering LLC USCS Charleston LLC USCS ATB LLC USS ATB 1 LLC USS ATB 2 LLC USS ATB 3 LLC USS ATB 4 LLC USCS Sea Venture LLC USS M/V Houston LLC USS JV Manager Inc. USS PC Holding Corp. U.S. Shipping Finance Corp. USS Vessel Management LLC Type of Business: The Debtors offer marine transportation services for refined petroleum products in the United States. See http://www.usslp.com/ Chapter 11 Petition Date: April 29, 2009 Court: Southern District of New York (Manhattan) Debtor's Counsel: Alfredo R. Perez, Esq. alfredo.perez@weil.com Weil Gotshal & Manges 700 Louisiana, Suite 1600 Houston, TX 77002 Tel: (713) 546-5040 Fax: (713) 224-9511 The Debtors' financial conditions as of September 30, 2008: Total Assets: $717,443,000 Total Debts: $606,534,000 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Jeffries & Company trade $2,250,000 520 Madison Avenue 12th Floor New York, NY 10022 Vendor #542761 Hamish Norton Tel: (212) 323-3330 (212) 284-2300 Fax: (917) 421-1941 Paul Gridley trade $977,343 370 Seventh Avenue Suite 1128 New York, NY 10036 Vendor # Tel: (212) 400-6370 Albert Bergeron trade $852,500 1 Alan Drive Short Hills, NJ 07078 Tel: (732) 673-0102 Guarino & Cox, LLC trade $401,519 Intercontinental Engr-MFG trade $154,100 Corp. State of California - Board government $113,391 of Equalization I.C.I. trade $33,147 Grainger, Inc. trade $29,552 Electronic Marine Systems, trade $25,801 Inc. Brady Marine Repair Co. trade $25,536 Mackay Communications Inc. trade $20,951 American Ship Repair trade $20,661 Company Inc. Ashland Chemical/Drew trade $15,026 Marine Fire Protection Service Inc. trade $14,582 Radio Holland USA, Inc. trade $14,160 Alpha Mar Co. - I.M.W. trade $12,476 Bludworth Marine trade $12,202 Man Diesel North America Inc. trade $10,094 Valley Power Products, Inc. trade $9,990 Aspen Controls Inc. trade $9,250 W & O Supply Inc. trade $7,936 Eagle Insulations trade $7,567 Schat Harding trade $7,232 ABS Oil Testing Services trade $7,090 Telemar USA LLC trade $6,752 Wilson Walton International trade $6,227 Inc. West Coast Valve Services trade $6,100 Swiss Diesel, Inc. trade $5,360 Arm Marine Supply, LLC trade $4,602 Hydraulic & Automation trade $4,500 Controls, Inc. The petition was signed by Ronald L. O'Kelley, president and chief executive officer. US STEEL: S&P Downgrades Corporate Credit Rating to 'BB' -------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings, including its corporate credit rating, on Pittsburgh- based United States Steel Corp. to 'BB' from 'BB+'. The ratings were removed from CreditWatch with negative implications where they were placed on April 16, 2009. The outlook is stable. At the same time, Standard & Poor's assigned a 'BB' issue level rating (same level as the corporate credit rating) and '3' recovery rating to the company's proposed $300 million senior convertible notes due 2014, issued under the company's shelf registration filed on March 6, 2007. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. Proceeds from the proposed notes, combined with a concurrent offering of 18 million shares of common stock, will be used to repay outstanding bank debt and other general corporate purposes. "The downgrade reflects our 2009 operating assumption that given the challenging steel industry conditions, 2009 revenues for the company could be down by as much as 50% compared with 2008, resulting in a financial profile that is no longer consistent with the prior rating," said Standard & Poor's credit analyst Marie Shmaruk. "Moreover, given the unpredictable timing of a rebound and S&P's expectations for a long, slow recovery, improvements thereafter will likely result in credit metrics that S&P would consider to be more consistent with a 'BB' rating." Specifically, S&P estimate that if revenues improved by 20% and EBITDA margins approximated 7% in 2010, both still reflective of a very weak steel market, adjusted debt to EBITDA will remain more than 5x and funds from operations about 20%, levels more appropriate for a 'BB' rating. Although in S&P's view U.S. Steel has taken steps to adjust its operations in response to market conditions and ensure liquidity (including reducing capital spending and its dividend, shuttering capacity, suspending share repurchases, and executing capital markets transactions), it is S&P's assessment that measures taken to date will unlikely be sufficient to improve financial metrics to levels consistent with a 'BB+' rating before 2011. Ratings on U.S. Steel Corp. reflect the integrated steel producer's capital-intensive operations, exposure to highly cyclical and competitive markets, a high degree of operating leverage, and aggressive financial leverage (including underfunded post-retirement benefit obligations). The ratings also reflect the company's good liquidity, good scope and breadth of product and operations, and benefits of its backward integration into iron ore and coke production. The outlook is stable. Despite S&P's expectation that operating conditions during the next several quarters will remain difficult for the company, as well as for others operating in the steel sector, resulting in a very weak financial profile and credit metrics for U.S. Steel, the company has taken significant steps to enhance its liquidity position, which S&P expects at this time should be sufficient to fund operations through the current downturn. However, a negative rating action could result from the combination of a more pronounced or prolonged downturn in the steel sector than currently factored into the rating, S&P's assessment of operating prospects as 2009 progresses and the company's liquidity position deteriorates at less than $1 billion as a result of needing to fund continued operating losses. A revision of the outlook to positive would likely be contingent upon a sustained improvement in market conditions allowing the company to improve its adjusted debt to EBITDA to less than 4x and funds from operations to total debt of more than 30%. VENETIAN MACAU: Bank Debt Sells at 31% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Venetian Macau US Finance Co. LLC is a borrower traded in the secondary market at 68.64 cents-on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.69 percentage points from the previous week, the Journal relates. The loan matures May 25, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B- rating. Meanwhile, participations in a syndicated loan under which Las Vegas Sands is a borrower traded in the secondary market at 56.73 cents-on-the-dollar during the week ended April 24, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.80 percentage points from the previous week, the Journal relates. The loan matures on May 1, 2014. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B- rating. Venetian Macau is a wholly-owned subsidiary of Las Vegas Sands. VML owns the Sands Macau in the People's Republic of China Special Administrative Region of Macau and is also developing additional casino hotel resort properties in Macau. Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo and convention center. The company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China. On March 10, 2009, Moody's Investors Service lowered the Company's Corporate Family Rating to B3 from B2 and assigned a negative rating outlook. VICTOR OOLITIC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Victor Oolitic Stone Company 7850 South Victor Pike Bloomington, IN 47402 Bankruptcy Case No.: 09-05786 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Victor Oolitic Holdings, Inc. 09-05787 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court Southern District of Indiana (Indianapolis) Judge: Frank J. Otte Debtor's Counsel: Henry A. Efroymson, Esq. ICE MILLER LLP One American Square, Suite 2900 Indianapolis, IN 46282-0200 Tel: (317) 236-2397 Fax: (317) 592-4643 Email: henry.efroymson@icemiller.com 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 ------ --------------- ------------ M&I Marshall & Ilsley Bank, Trade Debt $53,000,000 as Administrative Agent 135 North Pennsylvania Street Indianapolis, IN 46204-2400 Freeport Loan Fund LLC Loan 18,200,000 c/o Freeport Financial LLC 500 West Madison, Suite 1710 Chicago, IL 60661 The Parthenon Group Consultation Fees 195,889 200 State Street Boston, MA 02109 Ropes & Gray Legal Fees 60,000 McGladrey & Pullen, LLP Trade Debt 23,500 RSM McGladrey, Inc. Trade Debt 8,1500 Landers Explosives, Inc. Trade Debt 5,863 BTI Crushed Stone Sales Trade Debt 5,191 John J. Barry Trade Debt 3,547 Stillions Sawmill Trade Debt 2,828 Stone Belt Freight Lines, Inc. Trade Debt 1,913 United Parcel Service Trade Debt 1,362 Fort Dearborn Life Trade Debt 1,349 Verizon Wireless Trade Debt 1,330 Hawkins Bailey Warehouse, Inc. Trade Debt 1,043 Quill Corporation Trade Debt 778 MacAllister Machinery Trade Debt 775 Valley Electric Supply Co. Trade Debt 721 Kirby Risk Supply Co. Trade Debt 699 Industrial Serv. & Supply, Inc. Trade Debt 638 VITAMIN SHOPPE: Sales Growth Cues Moody's to Retain 'B3' Rating --------------------------------------------------------------- Moody's Investors Service said Vitamin Shoppe Industries, Inc.'s ratings, including the B3 corporate family rating, and the positive outlook remain unchanged, reflecting the company's continued sales growth and earnings improvement, but also its sizeable store opening program, high financial leverage and the maturity of the revolving credit facility within the rating horizon. The last rating action on Vitamin Shoppe was on May 9, 2008, when Moody's affirmed the B3 corporate family rating and changed the outlook to positive from stable. Vitamin Shoppe, headquartered in North Bergen, New Jersey, retails vitamins, minerals, and nutritional supplements through direct marketing (catalogue and internet) and 414 stores located in 37 states and the District of Columbia. Net revenues for the fiscal year ended December 27, 2008 were nearly $602 million. WASHINGTON MUTUAL: Sues JPMorgan on Control of $4 Bil. in Deposits ------------------------------------------------------------------ Bankruptcy Law360 reports that Washington Mutual Inc. fired back at JPMorgan Chase & Co. with its own lawsuit in a dispute over control of more than $4 billion in demand deposits currently being held by JPMorgan Chase. Washington Mutual is asking the U.S. Bankruptcy Court for the District of Delaware to declare that JPMorgan Chase has no ground for withholding the more than $4 billion in demand deposits. According to Bloomberg's Bill Rochelle, WaMu's complaint emphasizes how JPMorgan Chase took all the banks' assets in exchange for assuming liabilities to the banks' depositors. WaMu contends that JPMorgan Chase "wrongfully withheld" its cash assets under spurious claims based on setoff or a security interest in the WaMu accounts. Keeping the $4 billion in deposits would be "an enormous windfall of unprecedented dollar amounts" for JPMorgan Chase, even beyond the $1.9 billion that WaMu says was a "fire-sale" price. Bill Rochelle notes that three separate lawsuits are now on file involving bank holding company Washington Mutual and its efforts to recover property lost in September when its bank subsidiaries were taken over by the Federal Deposit Insurance Corp. and immediately transferred JPMorgan Chase for $1.9 billion. According to the report, WaMu said last week that it can't formulate a Chapter 11 plan until disputes with JPMorgan Chase and the FDIC are resolved. Recovering the $4 billion is the "foundation" for a Chapter 11 plan, WaMu said. Washington Mutual filed suit in March against the FDIC in U.S. District Court in Washington after its claim in the bank receivership was denied. The Debtor seeks to recover $6.5 billion in capital contributions, $4 billion in preferred securities and $3 billion in tax refunds. The lawsuit contends the FDIC sold the bank for substantially less than the assets were worth. The holding company believes the bank's assets were worth more than the bank's debt. JPMorgan, which acquired Washington Mutual Bank, has filed an adversary complaint against Washington Mutual and WMI Investment Corp., and Federal Deposit Insurance Corporation, seeking (i) to ensure that it is not divested of the assets and interests purchased in good faith from the FDIC, as receiver for WMB; and (ii) for indemnification and recovery against the Debtors for certain liabilities that may be asserted against JPMorgan, as successor by merger to WMB, pursuant to a Purchase and Assumption Agreement dated September 25, 2008, with the FDIC. The Troubled Company Reporter said on April 14, 2009, that a pretrial conference will be held on May 20, 2009, at 11:30 a.m., relating to the Complaint. The TCR reported on March 27, 2009, that the Debtors filed a lawsuit against the FDIC, in its corporate capacity and in its capacity as the receiver of WMB. The Lawsuit, filed before the United States District Court for the District of Columbia, is in light of the FDIC's disallowance of the Debtors' claims, aggregating more than $13.6 billion. 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; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) WATERFORD WEDGWOOD: U.S. Affiliate Files to Liquidate ----------------------------------------------------- Waterford Wedgwood Finance Inc., filed a petition in New York on April 24 for liquidation under Chapter 7 where a trustee was appointed, Bloomberg's Bill Rochelle said. Waterford Wedgwood Finance is an affiliate of Dublin-based Waterford Wedgwood Plc. Bloomberg states that the Dublin parent went into receivership in January. The U.K. and Irish affiliates were sold in March to KPS Capital Partners LP. The petition listed assets of $131 million against debt of $447 million. WESTGATE PROPERTIES: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Westgate Properties, Ltd. PO Box 2255 Sandusky, OH Bankruptcy Case No.: 09-32764 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Westgate Development Co., LLC 09-32766 Chapter 11 Petition Date: April 28, 2009 Court: United States Bankruptcy Court Northern District of Ohio (Toledo) Judge: Richard L. Speer Debtor's Counsel: Jonathan P. Blakely, Esq. Bernlohr Wertz, L.L.P. The Nantucket Building 23 S. Main Street, Third Floor Akron, OH 44308 Tel: (330) 434-1000 Fax: (330) 434-1001 Email: jblakely@b-wlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Westgate Properties' petition, including its list of 10 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohnb09-32764.pdf The petition was signed by Joseph F. Yost, III, managing member of the Company. WL HOMES: Discloses $372-Mil. in Assets, $911-Mil. in Debts ----------------------------------------------------------- WL Homes LLC and its debtor-affiliates filed with the U.S. Bankruptcy Court for the District of Delaware, their schedules of assets and liabilities, disclosing: Name of Debtor Assets Liabilities -------------- ------------ ------------ WL Homes LLC (Lead Debtor) $372,211,417 $910,904,787 Laing Texas LLC $6,670,631 $7,289,804 WL Texas LP $4,380,461 $4,608,154 JLH Realty and Construction $1,455,162 $15,645 WL Homes Texas LLC $332,490 $332,910 JLH Arizona Construction $232,755 $270,577 Copies of WL Homes, et al.'s SALs are available at: http://bankrupt.com/misc/WLHomes.SAL.pdf http://bankrupt.com/misc/LaingTexas.SAL.pdf http://bankrupt.com/misc/WLTexas.SAL.pdf http://bankrupt.com/misc/JLHRealty.SAL.pdf http://bankrupt.com/misc/WLHomesTexas.SAL.pdf http://bankrupt.com/misc/JLHArizona.SAL.pdf The Debtors say their books and records have not been audited, thus they cannot warrant the absolute accuracy of these documents. To the extent additional information becomes available, the Debtors will amend and supplement the schedules accordingly. About WL Homes LLC Headquartered in Irvine, California, WL Homes LLC dba John Laing Homes -- sells and builds houses. The Debtor and five of its affiliates filed for Chapter 11 protection on February 19, 2009 (Bankr. D. Del. Lead Case No. 09-10571). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors' in their restructuring efforts. When the Debtors sought protection from their creditors, they listed assets of more than $1 billion, and debts between $500 million and $1 billion. WL HOMES: Emaar Commitment to Provide DIP Loans Extended to May 7 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has further extended to May 7, 2009, WL Homes and its debtor-affiliates' authority to use proceeds of their post-petition financing from Emaar America Corporation under the Court's First Interim Order dated February 24, 2009. The commitment of Emaar America to provide financing under the First Interim Order is also amended such that the commitment will terminate if the final order is not entered by May 9, 2009, or the Debtors fail to confirm a Plan by that date. The final hearing to consider final approval of the Debtors' request for up to $30,884,000 in DIP financing is scheduled for May 7, 2009, at 11:00 a.m. prevailing Eastern time. Pursuant to the First Interim Order, proceeds of the DIP Facility will be used solely for (a) working capital and general corporate purposes, (b) payment of costs of administration of the Chapter 11 cases, (c) payment of interest and fees under the DIP Financing Agreements, (d) payments of costs and expenses of the DIP Lender in connection with the Chapter 11 cases, and (e) if approved at the Final Hearing, the repayment of the pre-petition secured obligations, in strict compliance with a budget. As security for the DIP facility, DIP Lender was granted a first priority lien on certain tangible and intangible property of each Debtor that is unencumbered or encumbered only by the pre-petition liens. A copy of the amended DIP Operating Budget is available for free at http://bankrupt.com/misc/WL.DIPBudget.pdf As reported in the Troubled Company on February 26, 2009, Judge Brendan Shannon authorized the Debtors to access, on an interim basis, $5,287,000 in debtor-in-possession financing under the DIP Credit Agreement dated Feb. 18, 2009, with Emaar America Corporation as lender. Emaar America's parent Dubai-based Emaar Properties PJSC acquired WL Homes in 2006 for $1.05 billion cash, according to Bloomberg's Bill Rochelle. The DIP facility will incur interest at Prime Rate plus 1% per annum. In addition, the facility has a maximum duration of 12 months, subject to certain early termination provisions, such as for defaults and the Debtors' termination of the commitment. Pre-Petition Obligations The Debtors' prepetition obligations consist of a secured note in the principal amount $5,884,000 in favor of Emaar America and unsecured obligations aggregating $401,400,000 in principal in favor of Emaar America and Emaar Hungary KFT. About WL Homes LLC Headquartered in Irvine, California, WL Homes LLC dba John Laing Homes -- sells and builds houses. The Debtor and five of its affiliates filed for Chapter 11 protection on February 19, 2009 (Bankr. D. Del. Lead Case No. 09-10571). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors' in their restructuring efforts. When the Debtors sought protection from their creditors, they listed assets of more than $1 billion, and debts between $500 million and $1 billion. WYNDHAM WORLDWIDE: Moody's Downgrades Senior Ratings to 'Ba2' ------------------------------------------------------------- Moody's Investors Service downgraded Wyndham Worldwide Corporation's senior unsecured ratings to Ba2, and assigned a Ba1 Corporate Family rating and Ba1 Probability of Default rating. The downgrade reflects Moody's concerns that Wyndham's earnings will drop and remain constrained for a more prolonged period relative to past economic downturns due to factors that continue to negatively impact consumer discretionary spending. These include such things as high and rising unemployment, and depressed home and equity values. Therefore, there is a distinct possibility that consumers will continue to cut back on travel services such as those provided by Wyndham, and that the company's earnings could remain at depressed levels into 2010. Additionally, Wyndham's liquidity cushion has eroded and the company is reliant on the structured finance market to securitize consumer loans made to purchasers of its vacation ownership (e.g. timeshare) product. Moody's notes that Wyndham has taken steps to downsize its vacation ownership business, thereby reducing its reliance on the structured finance market. Nevertheless, the company remains exposed to this market at a time of significant market stress. The company's timeshare conduit facility is scheduled to be renewed in November 2009 which supports the timeshare business. In light of these challenges, Wyndham is more appropriately positioned in the Ba1 Corporate Family rating category. The senior unsecured rating is rated one notch below the CFR due to the existence of a secured revolving credit facility for the company's Australian timeshare business which ranks ahead of the company's unsecured debt. The ratings consider Wyndham's leading market share in each of its three business segments, and the high margins and low capital intensity of its hotel franchise and vacation exchange and rental segments. This helps to offset some of the risk of the lower margin and more capital intensive vacation ownership (e.g. "timeshare") segment. Key credit concerns include continued access to the securitization market to recycle timeshare receivables and risks associated with extending credit to purchasers of vacation ownership intervals. The rating outlook is stable reflecting Moody's expectation that Wyndham will take steps to increase availability under its $900 revolving credit facility and that the company's credit metrics will remain in line with a Ba1 rating despite earnings pressure. Wyndham Worldwide Corporation Ratings downgraded, and LGD assessments assigned: -- Senior unsecured bonds to Ba2, (LGD 4, 64%) from Baa3 Ratings assigned: -- Corporate Family rating at Ba1 -- Probability of Default rating at Ba1 Moody's last rating action on Wyndham was on December 18, 2008 when the company's ratings were downgraded to Baa3 and placed on review for further possible downgrade. Wyndham Worldwide Corporation operates in three segments of the hospitality industry -- lodging, vacation exchange and rental, and vacation ownership. The company operates well known brand names such as, Wyndham Hotels & Resorts, Ramada, Days Inn, and RCI, among others. Annual revenues exceeded $4 billion in 2008. YRC WORLDWIDE: Loan Amendments Permit Debt for Equity Swaps ----------------------------------------------------------- YRC Worldwide Inc. and certain of its subsidiaries entered into Amendment No. 4 to their credit agreement dated as of August 17, 2007, with JPMorgan Chase Bank, National Association, as agent, and the other lenders. The Credit Agreement continues to provide the Company with a $950 million senior revolving credit facility, including sublimits available for borrowings under certain foreign currencies and for letters of credit, and a senior term loan in an aggregate outstanding principal amount of roughly $111.5 million. Prior to the loan amendments, YRC Worldwide subsidiaries YRC Inc., USF Holland Inc., and New Penn Motor Express, Inc., were working to finalize discussions with the International Brotherhood of Teamsters, representatives of multi-employer defined benefit pension funds to which the Company contributes; and JPMorgan. The Company sought to provide certain of the Company's real estate as collateral to the Pension Funds in lieu of making payments of contributions for certain to-be-agreed-upon months. Depending on employment levels -- which, in turn, are driven by freight levels and seasonal changes in those levels -- the Company makes multi- employer pension contributions of $34 million to $45 million per month. The Company had said it does not expect any agreed-upon transactions to impact the current or future benefits of employees participating in these Pension Funds. The Company also sought for its lenders under the Credit Agreement to permit the release of specified real estate to secure deferred Pension Fund payments as a non-mutually exclusive alternative to allowing the Company to sell real estate or enter into sale/leaseback transactions. The Company has said it believes the alternatives can allow the Company to utilize the real estate to its maximum benefit as opportunities arise. Accordingly, the Credit Agreement Amendment includes: -- permits the Company and its subsidiaries to defer the payment of certain of their multiemployer benefit fund contributions to a date no earlier than January 1, 2010; -- permits the Company and its subsidiaries to grant first priority liens on identified owned real property to secure the Deferred Payments; -- permits subsidiary guarantors under the Credit Agreement to guarantee the Deferred Payments solely to the extent that such subsidiary guarantors own any real property subject to a permitted lien securing the Deferred Payments; -- prohibits the Company and its subsidiaries from voluntarily making any Deferred Payment prior to August 15, 2009, except for payments solely with net cash proceeds from the sale of collateral securing the Deferred Payments; -- decreases the amount of net cash proceeds from the Specified Sale and Leaseback Transaction (as defined in the Credit Agreement) which may be retained by the Company by an amount proportionate to the net book value of the collateral securing the Deferred Payments; provided, that such reduction shall not exceed $50.0 million; -- reduces the permitted asset sale basket for the fiscal year ending December 31, 2009 by an amount proportionate to the net book value of the collateral securing the Deferred Payments; provided, that such reduction shall not exceed $50.0 million; and -- allows the Company to undertake debt for equity swaps and to pay certain indebtedness with the net cash proceeds from the issuance of equity. About YRC Worldwide Inc. Headquartered in Overland Park, Kansas, YRC Worldwide Inc. -- http://www.yrcw.com/-- a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of brands including Yellow Transportation, Roadway, Reimer Express, YRC Logistics, New Penn, USF Holland, USF Reddaway, and USF Glen Moore. The enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. YRC Worldwide employs roughly 58,000 people. * * * As reported in the Troubled Company Reporter on April 28, 2009, Standard & Poor's Ratings Services revised the implications of its CreditWatch review on YRC Worldwide Inc. (CCC/Watch Neg/--) to negative from positive. The CreditWatch revision reflects weak conditions in the less-than-truckload sector. "Despite YRC's ongoing integration of the Yellow Transportation and Roadway networks and cost-saving initiatives, its first-quarter financial results were weaker than expected. Further, S&P expects declining tonnage and industry overcapacity to continue to put pressure on earnings for the duration of 2009," said Standard & Poor's credit analyst Anita Ogbara. This raises concerns that the company may not be able to meet its recently amended bank covenants. The company's success in securing the amendments was the basis for S&P's revising the CreditWatch implications on the ratings to positive from developing on Feb. 17, 2009. YRC WORLDWIDE: Signs Sale/Leaseback Deal with Estes Express ----------------------------------------------------------- YRC Inc. and USF Reddaway, Inc., each a subsidiary of YRC Worldwide Inc., entered into real estate sales contracts with Estes Express Lines on April 22, 2009, to sell and simultaneously lease back a pool of such subsidiaries' facilities located throughout the United States, including facilities originally a part of the transaction with NATMI Truck Terminals, LLC. The aggregate purchase price for the subject facilities is roughly $32 million and initial annual lease payments for the subject facilities would be roughly $2.9 million in the aggregate. The terms of the New Estes Contracts and related leases are consistent with the terms of the Prior Estes Contracts. The Company expects to close the sale and leaseback transactions under the New Estes Contracts during the second quarter of 2009, subject to the satisfaction of normal and customary due diligence and related conditions, including Estes' right to terminate each Contract in its sole discretion during the inspection period, and the ability of the subsidiaries to obtain lien releases from JPMorgan Chase Bank, National Association, the collateral agent to the Company's credit agreement dated August 17, 2007, as amended. The New Estes Contracts are in addition to the real estate sales contracts entered into on February 13, 2009, between Estes and subsidiaries of the Company for an aggregate purchase price of roughly $122 million. Other Sale and Financing Leasebacks On April 23, 2009, YRC Inc., USF Holland Inc. and New Penn Motor Express, Inc., entered into real estate sales contracts with new investors to sell and simultaneously lease back a pool of the such subsidiaries' facilities located throughout the United States, including a facility originally a part of the transaction with NATMI. The aggregate purchase price for the subject facilities is roughly $70 million and initial annual lease payments for the subject facilities would be roughly $6.1 million in the aggregate. The Company expects to close the sale and leaseback transactions under the Sale Contracts during the second quarter of 2009, subject to the conditions for the New Estes Contracts. NATMI Sale and Financing Leasebacks The Company and NATMI entered into a Real Estate Sales Contract, effective December 19, 2008, as amended, pursuant to which certain subsidiaries of the Company would sell and simultaneously lease back a pool of facilities located throughout the United States. The aggregate purchase price for the subject facilities was roughly $150.4 million, of which $111 million was closed during the first quarter of 2009. The Company and NATMI have agreed to modify the NATMI Contract to remove certain facilities that have not closed and extend the closing date for certain facilities with an aggregate purchase price of roughly $16 million. The Company expects to close on these facilities during the second quarter of 2009, subject to the conditions for the New Estes Contracts. About YRC Worldwide Inc. Headquartered in Overland Park, Kansas, YRC Worldwide Inc. -- http://www.yrcw.com/-- a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of brands including Yellow Transportation, Roadway, Reimer Express, YRC Logistics, New Penn, USF Holland, USF Reddaway, and USF Glen Moore. The enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. YRC Worldwide employs roughly 58,000 people. * * * As reported in the Troubled Company Reporter on April 28, 2009, Standard & Poor's Ratings Services revised the implications of its CreditWatch review on YRC Worldwide Inc. (CCC/Watch Neg/--) to negative from positive. The CreditWatch revision reflects weak conditions in the less-than-truckload sector. "Despite YRC's ongoing integration of the Yellow Transportation and Roadway networks and cost-saving initiatives, its first-quarter financial results were weaker than expected. Further, S&P expects declining tonnage and industry overcapacity to continue to put pressure on earnings for the duration of 2009," said Standard & Poor's credit analyst Anita Ogbara. This raises concerns that the company may not be able to meet its recently amended bank covenants. The company's success in securing the amendments was the basis for S&P's revising the CreditWatch implications on the ratings to positive from developing on Feb. 17, 2009. YRC WORLDWIDE: Posts $257.4 Million Net Loss for 1st Quarter 2009 ----------------------------------------------------------------- YRC Worldwide Inc. posted a net loss of $257.4 million for the three months ended March 31, 2009. YRC Worldwide reported cash, cash equivalents and restricted cash of $266 million at March 31, 2009. YRC Worldwide had $3.63 billion in total assets and $3.41 billion in total liabilities. The Company reported a loss per share for the first quarter 2009 of $2.63, excluding significant charges, and a loss per share of $4.34 when including the charges. The company's loss per share in the first quarter of 2008 was $0.82. "We made significant investments in our company during the first quarter to enhance our position in the market and improve our future operating performance," stated Bill Zollars, Chairman, President and CEO of YRC Worldwide. "Unfortunately, the economy progressively weakened throughout the quarter making it more challenging to get ahead of the volume declines. With that said, the March 1 integration of our national networks allowed us to remove substantial capacity and reset the volume needs of our network, while significantly enhancing our service offering to the customer." The company raised $176 million of cash through sale and financing leaseback transactions and sales of excess properties during the first quarter. On April 22, 2009, the company entered into additional sale and financing leaseback agreements with Estes Express Lines for $32 million. When combined with the company's previous transactions with Estes, it results in an expected total of approximately $150 million during 2009. "We remain pleased with the number of investors who are interested in our very attractive real estate and the long-term lease commitments that we are able to negotiate," stated Tim Wicks, Executive Vice President and CFO of YRC Worldwide. "We will continue to evaluate these opportunities and enter agreements as they make sense from a financial and operational perspective." Segment Information Key segment information for the first quarter 2009 compared to the first quarter 2008 included: * YRC National Transportation total tonnage per day down 29.5% and total revenue per hundredweight, including fuel surcharge, down 6.5%. * YRC Regional Transportation total tonnage per day down about 22%, when adjusting for the network changes in the first quarter 2008, and down 27.7% without adjusting for the network changes. Total revenue per hundredweight, including fuel surcharge, down 8.6%. "Our volumes were impacted by multiple factors, most notably the economy and business diversion due to customer anxiety surrounding the integration of Yellow and Roadway," said Zollars. "Some customers have already returned business, which was temporarily diverted, but it is difficult to predict at what levels or how quickly the rest will come back." "During this unprecedented economic recession, we remain focused on key business initiatives and making strategic decisions to enhance our position in the market," stated Mr. Zollars. "We have integrated our national networks, fundamentally reduced our infrastructure, and lowered our breakeven point, while enhancing service. We remain on track to remove a run-rate of over $600 million of costs that should position us well when the economy improves." Mr. Zollars continued by saying, "Our limited visibility to the economy makes it challenging to provide specific earnings guidance, though we will give you updates as the line of sight becomes more clear." The company continues to expect gross capital expenditures of about $130 million in 2009 with $100 million of cash proceeds from sales of excess properties. In addition, sale and financing leaseback transactions are expected to generate around $350 million of proceeds in 2009. About YRC Worldwide Inc. Headquartered in Overland Park, Kansas, YRC Worldwide Inc. -- http://www.yrcw.com/-- a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of brands including Yellow Transportation, Roadway, Reimer Express, YRC Logistics, New Penn, USF Holland, USF Reddaway, and USF Glen Moore. The enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. YRC Worldwide employs roughly 58,000 people. * * * As reported in the Troubled Company Reporter on April 28, 2009, Standard & Poor's Ratings Services revised the implications of its CreditWatch review on YRC Worldwide Inc. (CCC/Watch Neg/--) to negative from positive. The CreditWatch revision reflects weak conditions in the less-than-truckload sector. "Despite YRC's ongoing integration of the Yellow Transportation and Roadway networks and cost-saving initiatives, its first-quarter financial results were weaker than expected. Further, S&P expects declining tonnage and industry overcapacity to continue to put pressure on earnings for the duration of 2009," said Standard & Poor's credit analyst Anita Ogbara. This raises concerns that the company may not be able to meet its recently amended bank covenants. The company's success in securing the amendments was the basis for S&P's revising the CreditWatch implications on the ratings to positive from developing on Feb. 17, 2009. * Chairman Bair Says FDIC Should Have Broader Resolution Powers --------------------------------------------------------------- Sheila C. Bair, chairman of the Federal Deposit Insurance Corp., said the FDIC should have broader powers to take over and close a variety of financial institutions to prevent taxpayers from shouldering the losses on firms deemed too big to fail. "The FDIC's resolution powers are extremely effective when a smaller bank fails. But they fall short when it comes to very large financial organizations. Why? The main problem is that we don't have the ability to resolve bank holding companies. We can only resolve the insured depository institution within the holding company," Chairman Bair said at The Economic Club of New York on April 27. Ms. Bair explained that when a failing bank is part of a large, complex holding company, many of the essential services for the bank's operations lie in other parts of the company, outside the FDIC's reach. The loss of essential services can make it difficult to run the bank, she said. According to Ms. Bair, the FDIC resolution mechanism has worked in prior eras, when the vast majority of financial activity occurred inside insured depository institutions. "The reality is the bulk of the financial activity which has driven the current crisis falls outside of FDIC insured banks. The past 25 years have seen vast changes in how credit is provided and in the types of firms which provide financial intermediation," she said. "Unfortunately, our laws for dealing with financial crises have not kept pace with these changes. As a consequence, we have very different laws to resolve the different parts of a financial firm. This makes a coordinated resolution of entire financial organizations -- which may or may not include an FDIC insured bank -- almost impossible." Ms. Bair said the bankruptcy process simply does not work for large, systemically important financial institutions in a way that can preserve stability and avoid disruptions in the financial system. Ms. Bair further noted that because of the complex network of corporate relationships, holding companies often wield critical control over bank and non-bank subsidiaries, as well as mutually dependent business activities. It's not unusual for many corporate services to operate in both the insured and non-insured affiliates, without regard to legal separation. "In some cases, the insured depository may be so dependent on its holding company that it is difficult, if not impossible, to operate without holding company cooperation. This can hamstring the FDIC and our ability to preserve the bank's franchise value, and minimize losses to the Deposit Insurance Fund (which is our number one mandate)," Ms. Bair said. "Taking control of just the bank is not a practical solution. A basic change to give us the ability to resolve both banks and their holding companies would remove a key limitation in the tools we currently have to deal with non-viable large institutions." Ms. Bair also noted that the FDIC's resolution powers don't apply to financial firms that are not depository institutions. The firms -- like bank holding companies -- must be resolved through bankruptcy. "This can be a messy business in the case of systemically important non-bank financial firms. Bankruptcy is designed to protect the interests of creditors, not to prevent a meltdown of the financial system when a systemically important financial firm gets into trouble," Ms. Bair continued. "When a firm is placed into bankruptcy, an automatic stay is put on most creditor claims to allow management time to develop a reorganization plan. This can create liquidity problems for creditors who must wait to get their money. For financial firms, bankruptcy can trigger a rush to the door, as counterparties to derivatives contracts exercise their rights to immediately terminate the contracts, net out their exposures, and sell any supporting collateral." According to Ms. Bair, the goal should be to create a new resolution process that imposes losses on the appropriate parties without interrupting essential operations. Bankruptcy doesn't meet these objectives, she said. "For instance, the FDIC has special resolution authority to prevent immediate close-out netting and settlement of an insured depository's financial contracts. We have 24 hours after appointment as receiver to decide whether to transfer the contracts to another bank or to an FDIC-operated bridge bank . . . or to cancel the contracts. This remedial authority prevents instability and contagion, which is what you can get from a bankruptcy. The lack of a resolution mechanism has required the government to improvise for each individual situation, making it very difficult to address systemic problems in a coordinated manner," she said. "On top of that, there is the matter of fairness. There needs to be a clearly laid out process in place. Government should not be in the business of arbitrarily picking winners and losers. And smaller banks shouldn't be subject to one regime, while larger institutions and non-banks are subject to another. Investors and creditors have lacked strong incentives to perform due diligence because of the perception that these institutions are so large and complex that the government would have to bail them out. And they were absolutely right." According to Ms. Bair, what's needed is a new way to unwind the big institutions. When the public interest is at stake, the resolution process should support an orderly unwinding of the institution in a way that protects the broader economy and the taxpayer, not just private financial interests, she said. Better and smarter regulation is also needed, she said. Ms. Bair cited the "good bank" -- "bad bank" model for resolving troubled financial institutions. "Under this scenario, you'd take over the troubled firm, imposing losses on stockholders and unsecured creditors. Viable portions of the firm would be placed into the 'good bank' using a structure similar to the FDIC's bridge bank. The nonviable or troubled portions of the firms would remain behind in a 'bad bank,' and would be unwound or sold over time, she explained. "The cost of the bad bank would be partially paid for by the losses imposed on the stockholders and unsecured creditors. Any additional costs would be borne by assessments on other systemically risky firms. This has the benefit of quickly recognizing the losses in the firm and beginning the process of cleaning up the mess. "The stockholders and managers of some big banks might not like this process. They might prefer a too-big-to-fail subsidy or investment from the government. (And some regulators might fear it because it would give an independent body the ability to close institutions for which they are responsible.) Ms. Bair also said a new resolution authority could include assessments on larger firms to fund a reserve that would be tapped to absorb losses for a failure. "I believe it's only fair that the industry that benefits should pay . . . just as banks pay for deposit insurance," she said. * Home Prices Fall Again in February, Though at Slower Rate ----------------------------------------------------------- Bloomberg's Bill Rochelle reports that according to S&P/Case- Shiller index released April 28, the decline in home prices abated in February for the first time since 2007. Mr. Rochelle relates that February's 18.6% decline from a year earlier compares with the 19% drop in the previous month. The index has fallen every month since January 2007. According to Bloomberg, prices in February were down 2.2% from the previous month. The source notes that in January, the month-to- month decline was 2.8 percent. Prices in all 20 cities in the S&P/Case-Shiller index fell in February, Bloomberg relates. Phoenix had the largest decline with 35%, followed by Las Vegas with 32% and San Francisco with 31%. The S&P/Case-Shiller index may be accessed at: http://www2.standardandpoors.com/spf/pdf/index/SA_CSHomePrice_Hist ory_042841.xls * Ex-Energy Dept. General Counsel David Hill Joins Sidley Austin ---------------------------------------------------------------- Sidley Austin LLP last week said David R. Hill, former General Counsel of the U.S. Department of Energy, will join the firm as a partner and co-head of Sidley's global energy practice, resident in its Washington, D.C. office. Mr. Hill will also play a leading role in Sidley's environmental and climate change practices. Mr. Hill served DOE as General Counsel and Regulatory Policy Officer from August 2005 to January 2009, and as Deputy General Counsel for Energy Policy from March 2002 to August 2005. In those positions, he provided counsel in DOE's four primary mission areas -- energy, environmental management, science and national defense -- on a wide range of legal and policy matters, including legislation, rulemaking, litigation, procurement and policy development. "Very few energy lawyers have the experience and have earned the respect that David has," said Carter Phillips, managing partner of Sidley's Washington, D.C. office. "For the past seven years, he has been at the forefront of the major legal and policy discussions involving energy, environment, climate change, clean tech, resource development and financing sustainable and renewable resources from both domestic and global perspectives." Mr. Hill was one of the principal authors of the regulations and solicitations for the multi-billion dollar Loan Guarantee Program for innovative energy projects, which was established by Title XVII of the Energy Policy Act of 2005. He also had significant input into DOE's analysis of the loan and grant programs established by the Energy Independence and Security Act of 2007. Mr. Hill had many key roles in connection with the Department's electricity, energy efficiency and renewable energy, nuclear and environmental programs and policies. He was significantly involved in the Department's designation of National Interest Electric Transmission Corridors under new authority provided to DOE in the Energy Policy Act of 2005, and worked extensively with DOE's four Power Marketing Administrations, which together market more than 20,000 megawatts of electric power and operate thousands of miles of electric transmission facilities. He had a key role in many of DOE's nuclear programs, including the development of regulations for the program to provide risk insurance for new nuclear power plants. He worked extensively on the Department's energy efficiency and renewable energy programs, including the promulgation of new energy efficiency standards for consumer appliances and industrial equipment. In the environmental area, Mr. Hill played a lead role for DOE in interagency teams developing and writing major Clean Air Act and other environmental policies and regulations, including with respect to greenhouse gas emissions. He also had supervisory responsibility for the Department's compliance with the National Environmental Policy Act. Mr. Hill will join Sidley's team of experienced energy and environmental professionals who represent a diverse range of clients before the Federal Energy Regulatory Commission, Environmental Protection Agency (EPA), the U.S. Departments of Energy, Transportation, State and Commerce, federal and state courts and state regulatory commissions. The team includes Roger Martella, who served EPA as General Counsel from 2006 to 2008 before rejoining Sidley in July 2008. "David is a great addition to our practice, and I welcome him as co-head of the energy group. His enormous range and depth of experience will enhance and expand our service to clients in regulatory, litigation and corporate matters. David will also assist clients in dealing with the changing landscape of energy and environmental regulations and in taking advantage of new funding opportunities, among other areas," said Eugene Elrod, head of Sidley's global energy practice. "I am excited to be joining Sidley," said Mr. Hill. "Sidley has an outstanding team of lawyers in the environment, energy, corporate, litigation and international practice areas, and I look forward to working with them." Mr. Hill received his J.D., cum laude, Order of the Coif, from Northwestern University School of Law, where he was editor-in- chief of the Northwestern University Law Review, and his B.S., magna cum laude, from the University of Missouri. Prior to joining DOE, Mr. Hill was a partner in private practice in major law firms in Washington, D.C. and Kansas City where he focused on energy matters. Sidley Austin LLP is one of the world's largest full-service law firms, with more than 1800 lawyers practicing in 16 U.S. and international cities, including Beijing, Brussels, Frankfurt, Geneva, Hong Kong, London, Shanghai, Singapore, Sydney and Tokyo. Every year since 2003, Sidley has been named to Legal Business' Global Elite, its designation for the 18 firms "that define the pinnacle of the legal profession." BTI, a Boston-based consulting and research firm, has named Sidley to their Client Service Hall of Fame as one of only two law firms to rank in the Client Service Top 10 for seven years in a row, and to the BTI Power Elite as one of only seven law firms demonstrating the best client relationships for the fourth consecutive year. * James Seery Jr. Joins Sidley Austin's Bankruptcy Practice ----------------------------------------------------------- Sidley Austin LLP said James P. Seery, Jr., formerly Managing Director of Barclays Capital, has joined as a partner in the firm's Corporate Reorganization and Bankruptcy practice, resident in the New York office. Prior to joining Barclays Capital, Mr. Seery was the Global Head of Lehman Brothers' Fixed Income Loan Business. In that position, he was responsible for managing the Lehman Brothers Fixed Income investment grade and high yield loan businesses and the distribution and trading of loan products through a network of senior trading and sales professionals in the U.S. and Europe. "We are very pleased to have Jim join us," said James Conlan, who, with Larry Nyhan, chairs Sidley's firmwide Corporate Reorganization and Bankruptcy practice. "We are committed to expanding our share, and remaining on the leading edge, of the national and global restructuring practice. The addition of Jim Seery is a further demonstration of that commitment. Jim is well known within the inner circles of sophisticated restructuring professionals, and he will be a powerful addition to our team. His experience and reputation as a bankruptcy lawyer and as an investment banker in and around large scale restructuring provides Jim with a truly unique perspective and skill set among restructuring and bankruptcy lawyers." Prior to managing the Lehman Brothers' loan business in 2005, Mr. Seery was a senior member of the Lehman distressed group responsible for investing and managing proprietary distressed positions. From 2000 to 2003, Mr. Seery ran Lehman Brothers' restructuring and workout businesses with responsibility for management of distressed corporate investments made by Lehman Brothers as well as financings originated or held by Lehman Brothers. In that position, he played key roles in designing and realizing on many of Lehman's more complicated and successful distressed investments and restructurings, including, Lehman Brothers' investments in Regal Cinemas' bank and bond debt, as well as the exit facility, United Companies' subordinated debt, the Pacific Gas and Electric holding company senior rescue financing and restructuring and the highly successful Williams Companies senior secured rescue financing, among others. David Kurtz, global co-head of the Restructuring Group of Lazard Freres & Co. LLC, said, "Jim's deep experience and considerable talents are well known and highly respected. His hiring will further strengthen what is widely regarded as one of the top restructuring law firms." "Sidley's restructuring practice is widely recognized as one of the top practices of its kind," said Mr. Seery. "I look forward to joining Jim and Larry, as well as the rest of my colleagues, to continue my work on restructurings in private practice." Sidley's corporate reorganization practice is one of the largest in the world and is comprised of more than 150 lawyers resident in the firm's Chicago, London, Los Angeles, New York and Washington, D.C. offices. Tribune Companies, Smurfit-Stone Container, Merisant, Federal-Mogul, Budget Car Rental, and Owens-Corning are examples of major restructurings led by Sidley. While the firm is involved in all aspects of restructuring for various constituencies, Sidley's role is typically a major one. The largest component of the practice is acting as lead counsel to the Company and the second largest is acting as lead counsel to the senior debt syndicate. Large companies are often cross border companies and Sidley is one of a small number of firms that lead in the area of cross border restructuring. Mr. Seery received his J.D. from New York Law School, magna cum laude, and his B.A. from Colgate University. In 1999, he was selected as one of the Top Restructuring Lawyers in the U.S. Under 40 by Turnarounds and Workouts. He spent nearly a decade in private practice before joining the Lehman High Yield business in 1999. Sidley Austin LLP is one of the world's largest full-service law firms, with more than 1800 lawyers practicing in 16 U.S. and international cities, including Beijing, Brussels, Frankfurt, Geneva, Hong Kong, London, Shanghai, Singapore, Sydney and Tokyo. Every year since 2003, Sidley has been named to Legal Business' Global Elite, its designation for the 18 firms "that define the pinnacle of the legal profession." BTI, a Boston-based consulting and research firm, has named Sidley to their Client Service Hall of Fame as one of only two law firms to rank in the Client Service Top 10 for seven years in a row, and to the BTI Power Elite as one of only seven law firms demonstrating the best client relationships for the fourth consecutive year. * Perry Mandarino Joins PricewaterhouseCoopers ---------------------------------------------- PricewaterhouseCoopers LLP (PwC) reports that Perry Mandarino has joined the firm's U.S. Restructuring and Recovery practice as a partner and will serve on the leadership team along with PwC partners Paul Ellis and Cyrus Pardiwala. PwC's Restructuring and Recovery practice offers fully integrated financial and operational services to help clients find practical solutions to complex operating issues, develop strategies to improve profit and cash flow and maximize value for stakeholders. Mr. Mandarino brings deep restructuring and bankruptcy sector experience to the practice. "Clearly now more than ever, businesses need to think proactively about how potential disruptions could affect their businesses, and in turn, how they can minimize the negative effects of such events while preserving value," said Mr. Ellis. Mr. Pardiwala added, "We look forward to working with Perry as we continue to grow our restructuring services group and provide services to help our clients through every stage of financial and operational difficulty. Perry brings a wealth of practical experience and creativity to the restructuring market in the U.S." New hire Perry Mandarino has advised over 300 clients in the areas of strategic planning, complex debt restructurings, preparation of turnaround and business plans, cash flow analyses, preference investigations, fraud and fraudulent conveyance investigations, collateral evaluation and claims resolution. He has assisted companies in the negotiation, development and implementation of Plans of Reorganization, and has a broad range of restructuring and bankruptcy industry experience, including retail, distribution, communications, business services, manufacturing, healthcare, construction and real estate companies. Mr. Mandarino previously served as a senior managing director of Traxi, LLC, as a managing director in restructuring at the investment bank Berenson Minella & Co., and a partner in the Global Corporate Finance-Corporate Restructuring Group of Arthur Andersen LLP. "Given the rapidly changing economic climate, businesses are now contemplating a variety of highly complex transactions," said Perry Mandarino. "PwC is responding to this growing need -- our goal is to help clients be as well-positioned as possible for the future." PricewaterhouseCoopers' restructuring and recovery services professionals work with companies and their stakeholders prior to and during times of crisis to restore the performance and value of the business. PwC professionals help develop contingency and turnaround business plans and forecasts, advise on liquidity management and margin enhancement, and evaluate loan covenants and debt capacity. The practice also helps clients (companies, investor groups or individual creditors) during the bankruptcy restructuring process to maximize the value of their particular position. With early involvement, and a focus on the key operational and financial areas requiring restructuring, PwC can assist in navigating the challenges facing healthy and troubled companies and their investors. About PricewaterhouseCoopers PricewaterhouseCoopers -- http://www.pwc.com-- provides industry- focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. * Simpson Thacher Expands Representation on Behalf of Debtors ------------------------------------------------------------- Simpson Thacher, long known for representing senior lenders in major bankruptcies, has recently grown its representation on behalf of debtors. The firm is also counsel to Qimonda Richmond LLC, the U.S. subsidiary of German semiconductor parts manufacturer Qimonda AG, which filed for Chapter 11 protection in late February. The firm recently added noted bankruptcy and restructuring partner Sandeep (Sandy) Qusba to its ranks. Simpson Thacher also recently represented UBS as lead agent in an $8 billion debtor-in- possession financing for bankrupt Lyondell Chemical Co., in what was reportedly the largest DIP facility on record. In addition to Mr. Ziman, Elisha Graff, a senior associate, played a key role on bankruptcy matters, and Senior Counsel Soogy Lee led the financing aspects of the engagement. In addition, the Simpson Thacher team advising Motor Coach included partners Mary Beth Forshaw, Bryce Friedman (litigation), Gary Horowitz (corporate), Steven Todrys (tax) and Andrea Wahlquist (executive compensation & employee benefits). * Sonnenschein Accidentally Discloses Rates for Treasury Work ------------------------------------------------------------- Bankruptcy Law360 reports that because of a redacting error, Sonnenschein Nath & Rosenthal LLP's rates for its work on behalf of the U.S. Department of the Treasury related to the struggling auto industry are no longer a secret. The report says the firm's partners are charging the government up to $645 an hour, and associates billing around $355 an hour. According the report, on Monday, the firm's contract, posted online, made public what the partners were charging the federal government per hour. * Chapter 11 Cases With Assets and Liabilities Below $1,000,000 --------------------------------------------------------------- In Re Video Communications, Inc. Bankr. N.D. Calif. Case No. 09-30994 Chapter 11 Petition filed April 20, 2009 See http://bankrupt.com/misc/canb09-30994p.pdf See http://bankrupt.com/misc/canb09-30994c.pdf In Re Basmar LLC aka Miami Grille Bankr. S.D. Calif. Case No. 09-05168 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/casb09-05168.pdf In Re Anthony Alan Cucuzza ods Cucuzza Construction, Inc. dba Anthony Homes Ltd. ods Pinewood Property, Inc. mem Vincent Development, LLC mem Forest Plaza Management, LLC Judith Zeolla Cucuzza ods Pinewood Property, Inc. ods Frontier Designs, Inc. Bankr. D. Colo. Case No. 09-17060 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/cob09-17060p.pdf See http://bankrupt.com/misc/cob09-17060c.pdf In Re Cafe Bleu Restaurant and Lounge, Inc. Bankr. N.D. Ga. Case No. 09-70279 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/ganb09-70279.pdf In Re 4 Seasons Tire and Auto, Inc. Bankr. N.D. Ill. Case No. 09-14042 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/ilnb09-14042.pdf In Re Andy's Tire Shop, Inc. Bankr. N.D. Ill. Case No. 09-14045 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/ilnb09-14045.pdf In Re Prototech Engineering, Inc. Bankr. N.D. Ill. Case No. 09-14074 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/ilnb09-14074.pdf In Re Thundervision, LLC, d/b/a Louisiana Homes & Gardens Bankr. E.D. La. Case No. 09-11145 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/laeb09-11145p.pdf See http://bankrupt.com/misc/laeb09-11145c.pdf In Re Call & Wait Auto Inc. Bankr. D. Mass. Case No. 09-13462 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/mab09-13462.pdf In Re Paul Waznis Bankr. D. Mass. Case No. 09-13467 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/mab09-13467.pdf In Re Creative Image Advertising & Design, Inc. Bankr. E.D. N.Y. Case No. 09-72755 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/nyeb09-72755.pdf In Re Twin Lakes Country Club Bankr. N.D. Ohio Case No. 09-51628 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/ohnb09-51628.pdf In Re Eva J. Simpson Bankr. E.D. Pa. Case No. 09-12929 Chapter 11 Petition filed April 21, 2009 Filed as Pro Se In Re Gia Fernandez Bankr. E.D. Pa. Case No. 09-12930 Chapter 11 Petition filed April 21, 2009 Filed as Pro Se In Re Hobbs Trucking Company, Inc. Bankr. E.D. Tenn. Case No. 09-12461 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/tneb09-12461p.pdf See http://bankrupt.com/misc/tneb09-12461c.pdf In Re Jose Roberto De la Cruz dba Javelina Steel aka Robert De la Cruz Magdalena De la Cruz aka Maggie De la Cruz Bankr. S.D. Tex. Case No. 09-70296 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/txsb09-70296.pdf In Re GMT, Inc. Bankr. E.D. Va. Case No. 09-71603 Chapter 11 Petition filed April 21, 2009 See http://bankrupt.com/misc/vaeb09-71603.pdf In Re Ontario International Investment Corp. Bankr. C.D. Calif. Case No. 09-17750 Chapter 11 Petition filed April 22, 2009 See http://bankrupt.com/misc/cacb09-17750.pdf In Re Quest Home Loans Inc. Bankr. C.D. Calif. Case No. 09-11450 Chapter 11 Petition filed April 22, 2009 See http://bankrupt.com/misc/cacb09-11450.pdf In Re Brickell Bay 5-100, LLC Bankr. S.D. Fla. Case No. 09-17426 Chapter 11 Petition filed April 22, 2009 See http://bankrupt.com/misc/flsb09-17426.pdf In Re Sparky's Enterprises, Inc. Bankr. D. Mass. Case No. 09-13538 Chapter 11 Petition filed April 22, 2009 See http://bankrupt.com/misc/mab09-13538.pdf In Re Cadillac Lodging, Inc. Bankr. W.D. Mich. Case No. 09-04769 Chapter 11 Petition filed April 22, 2009 See http://bankrupt.com/misc/miwb09-04769.pdf In Re 44 Brushy Neck Ltd. Bankr. E.D. N.Y. Case No. 09-72777 Chapter 11 Petition filed April 22, 2009 Filed as Pro Se In Re Flowers for Entertaining, LTD. Bankr. S.D. N.Y. Case No. 09-12456 Chapter 11 Petition filed April 22, 2009 See http://bankrupt.com/misc/nysb09-12456.pdf In Re HR Electric Company, Inc. Bankr. S.D. N.Y. Case No. 09-22647 Chapter 11 Petition filed April 22, 2009 Filed as Pro Se In Re Double South, Inc. Bankr. W.D. Pa. Case No. 09-22847 Chapter 11 Petition filed April 22, 2009 See http://bankrupt.com/misc/pawb09-22847.pdf In Re John F. Burke Bankr. W.D. Pa. Case No. 09-22832 Chapter 11 Petition filed April 22, 2009 See http://bankrupt.com/misc/pawb09-22832.pdf In Re Marlowe Law Offices PLLC Bankr. M.D. Tenn. Case No. 09-04512 Chapter 11 Petition filed April 22, 2009 See http://bankrupt.com/misc/tnmb09-04512.pdf In Re Hammoud, Inc. Bankr. W.D. Tex. Case No. 09-11004 Chapter 11 Petition filed April 22, 2009 See http://bankrupt.com/misc/txwb09-11004.pdf In Re Victor Elias Trujillo Michelle Marie Trujillo Bankr. D. Ariz. Case No. 09-08297 Chapter 11 Petition filed April 23, 2009 Filed as Pro Se In Re Isaac Estrada Guillen Norma Alicia Guillen Bankr. C.D. Calif. Case No. 09-19352 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/cacb09-19352.pdf In Re O M A Fellowship Inc. fka Corporation O M A Bankr. C.D. Calif. Case No. 09-19488 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/cacb09-19488.pdf In Re Olfelia Castellanos Trustee of the Castellanos Family Trust Bankr. C.D. Calif. Case No. 09-13584 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/cacb09-13584.pdf In Re West Coast Auto Supply Inc. Bankr. C.D. Calif. Case No. 09-14614 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/cacb09-14614.pdf In Re Napier's Log Cabin Horse & Animal Sanctuary, Inc. Bankr. M.D. Fla. Case No. 09-07964 Chapter 11 Petition filed April 23, 2009 Filed as Pro Se In Re Roger Lee Perkerson Bankr. M.D. Fla. Case No. 09-07976 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/flmb09-07976.pdf In Re Double Nickel, Inc. dba Farmer Girl Restaurant Bankr. S.D. Fla. Case No. 09-17511 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/flsb09-17511.pdf In Re La Veredita II LLC Bankr. S.D. Fla. Case No. 09-17497 Chapter 11 Petition filed April 23, 2009 Filed as Pro Se In Re Cleary Pallett Sales, Inc. Bankr. N.D. Ill. Case No. 09-71617 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/ilnb09-71617.pdf In Re Godland Corporation Bankr. N.D. Ill. Case No. 09-14499 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/ilnb09-14499.pdf In Re Martinique Day Spa, Inc. Bankr. N.D. Ill. Case No. 09-14586 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/ilnb09-14586.pdf In Re N.K.C. Custom Apparel, Inc. Bankr. W.D. Mo. Case No. 09-41790 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/mowb09-41790.pdf In Re The Chop Shop, LLC dba Reno Chop Shop Bankr. D. Nev. Case No. 09-51206 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/nvb09-51206.pdf In Re Tuscarora Rigging, Inc. Bankr. M.D. Pa. Case No. 09-03075 Chapter 11 Petition filed April 23, 2009 See http://bankrupt.com/misc/pamb09-03075.pdf In Re Gilberto Marquez Martinez aka Gilbert Marquez Bankr. D. P.R. Case No. 09-03190 Chapter 11 Petition filed April 23, 2009 Filed as Pro Se In Re Ryanscrest Trust Bankr. W.D. Wash. Case No. 09-42761 Chapter 11 Petition filed April 23, 2009 Filed as Pro Se In Re 20/21 Enterprises, Inc. aka Zig Zag Enterprises Bankr. N.D. Ala. Case No. 09-81668 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/alnb09-81668.pdf In Re Mark Daniels Bankr. E.D. Ark. Case No. 09-12885 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/areb09-12885.pdf In Re El Veasta Lampley Bankr. C.D. Calif. Case No. 09-13687 Chapter 11 Petition filed April 24, 2009 Filed as Pro Se In Re Marvin Patrick Morris Bankr. N.D. Calif. Case No. 09-53067 Chapter 11 Petition filed April 24, 2009 Filed as Pro Se In Re Eagle Recovery, Inc. fdba Eagle Recovery and Transport, Inc. Bankr. M.D. Fla. Case No. 09-08086 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/flmb09-08086.pdf In Re On-Call Nursing Agency and Associates of New Orleans, Inc. Bankr. E.D. La. Case No. 09-11188 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/laeb09-11188.pdf In Re Frankie Lynn Rasberry Tamela Murphy Rasberry aka Tamela Renee Hunnell Bankr. W.D. La. Case No. 09-80494 Chapter 11 Petition filed April 26, 2009 See http://bankrupt.com/misc/lawb09-80494.pdf In Re Gary J. Rubenstein, D.C., Inc. Bankr. W.D. La. Case No. 09-80489 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/lawb09-80489.pdf In Re Keith Bradley Kramer Bankr. E.D. Mich. Case No. 09-52903 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/mieb09-52903p.pdf See http://bankrupt.com/misc/mieb09-52903c.pdf In Re Dynasty Towers, LLC Bankr. D. Nev. Case No. 09-16293 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/nvb09-16293.pdf In Re Westland Group, LLC Bankr. D. Nev. Case No. 09-16294 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/nvb09-16294.pdf In Re Serena R. Smith Enterprises, Inc. dba Curves dba Curves for Women dba Curves for Women Franklinton dba Curves Franklinton Bankr. E.D. N.C. Case No. 09-03384 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/nceb09-03384.pdf In Re All Seasons Bistro, LLC Bankr. W.D. Mich. Case No. 09-04884 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/miwb09-04884.pdf In Re SignCo, Inc. Bankr. E.D. Tenn. Case No. 09-32317 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/tneb09-32317p.pdf See http://bankrupt.com/misc/tneb09-32317c.pdf In Re Tascali's, Inc. Bankr. S.D. W.Va. Case No. 09-30314 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/wvsb09-30314.pdf In Re Bruce Allen Davis Sr. Judith Lee Davis Bankr. W.D. Wash. Case No. 09-13973 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/wawb09-13973.pdf In Re Day & Nite Plumbing & Heating Inc. Bankr. W.D. Wash. Case No. 09-13972 Chapter 11 Petition filed April 24, 2009 See http://bankrupt.com/misc/wawb09-13972.pdf In Re Clarissa May Clavecilla Merchan Robin Ng Go Bankr. N.D. Calif. Case No. 09-43420 Chapter 11 Petition filed April 25, 2009 See http://bankrupt.com/misc/canb09-43420.pdf In Re Hammonton Food Services, Inc. dba Burger King Bankr. D. N.J. Case No. 09-20411 Chapter 11 Petition filed April 26, 2009 See http://bankrupt.com/misc/njb09-20411.pdf In Re English Creek Food Services, Inc. Bankr. D. N.J. Case No. 09-20412 Chapter 11 Petition filed April 26, 2009 In Re John Ray aka John Ray Enterprises LLC Bankr. N.D. Ala. Case No. 09-41195 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/alnb09-41195.pdf In Re George O'Neal Marilyn O'Neal Bankr. S.D. Ala. Case No. 09-11872 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/alsb09-11872.pdf In Re Alder Heights Limited Partnership Bankr. D. Ariz. Case No. 09-08595 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/azb09-08595.pdf In Re Alder Heights II Limited Partnership Bankr. D. Ariz. Case No. 09-08593 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/azb09-08593.pdf In Re Murphy Ray Kittrell, Jr. Bankr. D. Ariz. Case No. 09-08537 Chapter 11 Petition filed April 27, 2009 Filed as Pro Se In Re Myo Swe Chang Cassandra Suwana Chang Bankr. E.D. Calif. Case No. 09-28073 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/caeb09-28073.pdf See http://bankrupt.com/misc/flsb09-16796c.pdf In Re Alise Lacosse Bankr. N.D. Calif. Case No. 09-43441 Chapter 11 Petition filed April 27, 2009 Filed as Pro Se In Re Keysbound, Inc. Bankr. S.D. Ind. Case No. 09-05676 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/insb09-05676.pdf In Re Backstage Essentials, Inc. Bankr. E.D. La. Case No. 09-11201 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/laeb09-11201.pdf In Re Mark Adrian Wittie Bankr. E.D. La. Case No. 09-11198 Chapter 11 Petition filed April 27, 2009 Filed as Pro Se In Re Dwayne A. White Bankr. D. Mass. Case No. 09-13650 Chapter 11 Petition filed April 27, 2009 Filed as Pro Se In Re Ronald Howard Siegel Bankr. D. N.J. Case No. 09-20505 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/njb09-20505.pdf In Re Damtown Stone & Drilling, Inc. Bankr. N.D. N.Y. Case No. 09-61120 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/nynb09-61120.pdf In Re NY New Seasons Kitchen, Inc. Bankr. S.D. N.Y. Case No. 09-12612 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/nysb09-12612.pdf In Re S & R Dental Laboratories of Shelby, Inc. Bankr. W.D. N.C. Case No. 09-40337 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/ncwb09-40337.pdf In Re 2103 N7, LP Bankr. M.D. Pa. Case No. 09-03187 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/pamb09-03187.pdf In Re Johnny L. Burdette dba Burdette's Construction Beverly K. Burdette Bankr. D. S.C. Case No. 09-03170 Chapter 11 Petition filed April 27, 2009 Filed as Pro Se In Re Hunters Grove Court Joint Venture Bankr. W.D. Tex. Case No. 09-11036 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/txwb09-11036.pdf In Re SNH Services LP Bankr. W.D. Tex. Case No. 09-51504 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/txwb09-51504.pdf In Re I.B. Restaurant, Inc. Bankr. E.D. Va. Case No. 09-13277 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/vaeb09-13277.pdf In Re Michael Dale Drummond dba Mike's Air Conditioning Service Angela Burgett Drummond Bankr. N.D. Ala. Case No. 09-81715 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/alnb09-81715.pdf In Re Manuel M. Sanchez Rosa Isela Sanchez Bankr. D. Ariz. Case No. 09-08754 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/azb09-08754.pdf In Re A A K SK Electronic Corporation dba AAK Corporation dba Electronic Outlet dba EOSS Health Plaza dba EOSS dba Sanrio dba EOSS Electronic Bankr. C.D. Calif. Case No. 09-14794 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/cacb09-14794.pdf In Re Gary J. Rossi Bankr. N.D. Calif. Case No. 09-31079 Chapter 11 Petition filed April 28, 2009 Filed as Pro Se In Re Black Contractors United Foundation of Illinois Bankr. N.D. Ill. Case No. 09-15213 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/ilnb09-15213.pdf In Re James A. Meredith Bankr. N.D. Ill. Case No. 09-15131 Chapter 11 Petition filed April 28, 2009 Filed as Pro se In Re SL Financial of MA, LLC Bankr. N.D. Ill. Case No. 09-15082 Chapter 11 Petition filed April 27, 2009 See http://bankrupt.com/misc/ilnb09-15082p.pdf See http://bankrupt.com/misc/ilnb09-15082c.pdf In Re Dean Alden Baker dba Midway Transpo dba Revocable Living Trust of Dean A. Baker Bankr. N.D. Ind. Case No. 09-31916 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/innb09-31916.pdf In Re E Technology Services Inc. Bankr. E.D. N.Y. Case No. 09-43382 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/nyeb09-43382p.pdf See http://bankrupt.com/misc/nyeb09-43382c.pdf In Re Easy Street Cafe Inc. Bankr. E.D. N.Y. Case No. 09-72966 Chapter 11 Petition filed April 28, 2009 Filed as Pro Se In Re Keuka Capital Inc. Bankr. W.D. N.Y. Case No. 09-21092 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/nywb09-21092.pdf In Re Curb, Gutter & Sidewalk, Inc. Bankr. W.D. N.C. Case No. 09-31038 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/ncwb09-31038.pdf In Re GGD Corporation Bankr. W.D. Pa. Case No. 09-23012 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/pawb09-23012.pdf In Re JD & RM, Inc. dba Jezebel Bankr. W.D. Pa. Case No. 09-23022 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/pawb09-23022p.pdf See http://bankrupt.com/misc/pawb09-23022c.pdf In Re Achieve Online Inc. Bankr. E.D. Wash. Case No. 09-02385 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/waeb09-02385p.pdf See http://bankrupt.com/misc/waeb09-02385c.pdf In Re Vic Jensen and Sons Inc. Bankr. W.D. Wash. Case No. 09-14050 Chapter 11 Petition filed April 28, 2009 See http://bankrupt.com/misc/wawb09-14050p.pdf See http://bankrupt.com/misc/wawb09-14050c.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Ma. Theresa Amor J. Tan Singco, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***