/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090525.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, May 25, 2009, Vol. 13, No. 143 Headlines 7622 MEDICAL CENTER: Case Summary & 17 Largest Unsecured Creditors ABITIBIBOWATER INC: Fitch Withdraws 'D' Issuer Default Rating ADVANCED HEALTH: Involuntary Chapter 11 Case Summary AMERICAN COMMUNITY: Sale Protocol Approved; May 28 Auction Set AMERICAN COMMUNITY: Taps Administar Services as Claims Agent AMERICAN INT'L: CEO to Step Down as Soon as Successors Are Named AMERISTAR CASINOS: Issue Increase Won't Move Moody's 'Ba3' Rating AMERISTAR CASINOS: S&P Raises Issue-Level Rating to 'BB-' ANTONIO ROBERSON: Voluntary Chapter 11 Case Summary APPLIED SOLAR: Quercus Loan Calls for Ch. 11 Filing By June 17 ATHENS BIODIESEL: Case Summary & 20 Largest Unsecured Creditors BAY AREA REAL: Case Summary & Largest Unsecured Creditor BELLISIO FOODS: Moody's Downgrades Corporate Family Rating to 'B2' BENT REBAR: Case Summary & 20 Largest Unsecured Creditors BEST ROOFING: Case Summary & 20 Largest Unsecured Creditors BEVERLY HILLS WASTE: Case Summary & 5 Largest Unsecured Creditors BEXAR COUNTY: Moody's Cuts Rating on $14.6 Mil. Bonds to 'Ba3' BIOHEART, INC: Posts $15.7MM Deficit; Warns of Possible Bankruptcy BOCA HOLLY: Lender to Sell Pledged Collateral at June 2 Auction BRODER BROS: Moody's Downgrades Default Rating to 'Ca/LD' BRUNO'S SUPERMARKETS: Court Sets June 19 General Bar Date BRUNO'S SUPERMARKETS: Wants Plan Deadline Extended to June 26 CAREFREE MULE: Hires Marcus & Millichap to Seek Buyers for Resort CHEM-AWAY: Case Summary & 2 Largest Unsecured Creditors CHRYSLER LLC: Indiana Pensioners Want Examiner or Ch. 11 Trustee CHRYSLER LLC: Terms of Court-Approved $4.96-Bil. DIP Financing CHRYSLER LLC: Indiana Pensioners Say Govt.-Backed Sale Illegal CHRYSLER LLC: R. Manzo's Updated Liquidation Analysis CHRYSLER LLC: Dealers Object to Contract Rejections, Assumption CHRYSLER LLC: Spending Bill Amendment Dropped to Allow Gov't Aid CIRCUIT CITY: Court Sets June 30 Administrative Expense Bar Date CITIZENS NATIONAL: Closed by Regulators; MCB Assumes Deposits CITY OF VALLEJO: To Pay City Manager $390,000 to Resign CLAIRE STORES: S&P Cuts Ratings on $200 Mil. Facility to 'B-' COEUR D'ALENE: Split-Adjusted Common Stock Begins Trading May 27 COLIBRI GROUP: Former Workers Sues for Outstanding Wages COMPASS MINERALS: Moody's Gives Positive Outlook on 'B1' Rating COMPASS MINERALS: S&P Gives Positive Outlook; Holds 'BB' Rating CONSECO INC: Directors Receive Stock Through Incentive Plan CONSECO INC: Unveils Final Results of Shareholder Voting CORD BLOOD: Issues $1.35MM Convertible Promissory Note Due 2012 CORD BLOOD: March 31 Balance Sheet Upside-Down by $7.84 Million COUNTRY CLUB (LANSING): Files for Chapter 11 Protection COUNTRY CLUB (LANSING): Case Summary & Unsecured Creditors COYOTES HOCKEY: Arizona Wants Hockey Team to Play in Home Town COYOTES HOCKEY: Las Vegas Businessman Mulls Bid for Team COYOTES HOCKEY: SOF Investments Backs Jim Balsillie's $212.5MM Bid CRESCENT RESOURCES: Weak Economy Cues Moody's to Junk Ratings DANA HOLDING: S&P Downgrades Corporate Credit Rating to 'SD' DENBAR TRANSPORTATION: Case Summary & 20 Largest Unsec. Creditors DERRY'S HARVEST: Case Summary & 4 Largest Unsecured Creditors E*TRADE FINANCIAL: S&P Junks Counterparty Credit Rating From 'B' EGAMES INC: Net Revenues for 1Q is Down by 20% from 2008 ENDEAVOR HIGHRISE: Proposes Matthew Hoffman as Bankruptcy Counsel ENERGYTEC INC: Files for Chapter 11 in Sherman EVERETT MARITIME: Files for Chapter 11 Bankruptcy Protection EVERETT MARITIME: Case Summary & 20 Largest Unsecured Creditors FAMILY TREEHOUSE: Has $20,500 Bids for New Castle, Pa., Property FIRST METALS: Proposal Accepted by Creditors; Annual Report Late FLYING J: May Enter Into Amendment to ML Financing Agreement FLYING J: Seeks to Enter into New USW Collective Bargaining Pact FOAMEX INT'L: First Lien Lenders Oppose Sale to MatlinPatterson FOAMEX INT': Auction Restarted Due to Lenders' Objection FORD MOTOR: Extends Deadline for Worker Buyouts by 5 Weeks FRESH WORLD ONE: Case Summary & 20 Largest Unsecured Creditors GATEWAY ETHANOL: Plan Filing Period Extended Until August 1 GENERAL MARITIME: S&P Downgrades Corporate Credit Rating to 'BB-' GENERAL MOTORS: Gets $4BB Loan From Gov't; Chinese Co. Eyes Units GENERAL MOTORS: German Gov't Willing to Shield Opel From Creditors GENERAL MOTORS: Reaches Pact With UAW to Cut Obligations, Costs GENERAL MOTORS: S&P Puts 14 Classes' Ratings on Negative Watch GENERAL MOTORS: Spending Bill Amendment Dropped to Allow Gov't Aid GEORGIA GULF: Missed Interest Payment Cues S&P's Rating Cut to 'D' GMAC FINANCIAL: Key Actions to Improve Capital, Access to Cash GMAC LLC: Tells Employees It Needs to Cut $1 Billion in Costs GOLF CLUB: Case Summary & 20 Largest Unsecured Creditors GOTTSCHALKS INC: Forever 21 Submits Bid for Closed Stores GRAHAM PACKAGING: Moody's Assigns 'B1' Rating on New Facility HALLWOOD ENERGY: Files Chapter 11 Plan and Disclosure Statement HALLWOOD ENERGY: May Use Cash Collateral of HPI Until May 31 HALLWOOD ENERGY: May Use FEI Shale Cash Collateral HARTMARX CORP: Three Firms Eyeing Company's Assets HARTMARX CORP: Wells Fargo Should Sell Company, Gov. Quinn Says HAYES LEMMERZ: Court Grants Interim Approval to DIP Loan HENDRICKS COMPANIES: Case Summary & 20 Largest Unsecured Creditors HERBST GAMING: Files Amended Stipulation on Cash Collateral Use HERITAGE BUILDING: Portland Dev't Commission May Buy Bank Loan HLA INC: Files Chapter 11 Petition in Georgia HUGHES NETWORK: S&P Assigns 'B' Rating on $125 Mil. Senior Notes HUGHES NETWORK: To Sell New 9-1/2% Notes at 90.935% of Face Value IDEARC INC: Files Chapter 11 Plan; Claimants to Receive Stock IMPERIAL BUSINESS: Court Confirms Ch. 11 Plan of Reorganization INDALEX HOLDINGS: Files Schedules of Assets and Liabilities INTERPUBLIC GROUP: Restructures $335-Million Credit Line ION MEDIA: Chapter 11 Filing Cues S&P's Rating Downgrade to 'D' ION MEDIA: Receives Court Approval for $25MM Initial Funding LEAR CORP: Bankruptcy Looms on Failure to Cut Debt, Analysts Say LIBERTY GLOBAL: S&P Affirms Corporate Credit Rating at 'B+' LIMITED BRANDS: Moody's Cuts Corporate Family Rating to 'Ba2' LISBON VALLEY: Accepts Involuntary Bankruptcy; Secures Financing LNR PROPERTY: S&P Downgrades Counterparty Credit Rating to 'B-' LUMINENT MORTGAGE: Delays Filing of March 31 Quarterly Report MAGNA ENTERTAINMENT: Sept. 8 Auction for Santa Anita, 3 Others MARS GRAPHICS: Voluntary Chapter 11 Case Summary MCCLATCHY COMPANY: Announces Deep Discount Exchange Offer MCCLATCHY COMPANY: Amends for $1.15-Bil. Credit Agreement MCCLATCHY COMPANY: Fitch Downgrades Issuer Default Rating to 'C' MCCLATCHY COMPANY: Moody's Downgrades Default Rating to 'Caa3' MESA CENTERPOINTE: Voluntary Chapter 11 Case Summary METALS USA: John Hageman Steps Down as SVP & Chief Legal Officer MGM MIRAGE: Capital Raise Prompts Fitch to Take Rating Actions MIDWAY GAMES: Time Warner to Buy U.S. Assets for $33 Million MIDWAY GAMES: Proposes Warner Bros.-Led Auction on June 29 MILACRON INC: Gets Go-Signal to Test DDJ's $175MM Buyout Offer MILACRON INC: Holders of 11-1/2% Notes Participate in DIP Loan MILACRON INC: Won't File March 31 Quarterly Report MONEYGRAM INT'L: Amends Employment Agreement with Patsley MORTGAGES LTD: Court Confirms Investors Committee Amended Plan NCI BUILDING: S&P Downgrades Corporate Credit Rating to 'B+' NEWELL RUBBERMAID: S&P Reinstates 'BB' Rating on $430 Mil. Notes NEXPAK CORP: Seeks Strategic, Financial Parties to Bid for Assets NICOLE ENERGY: Court Denies Withdrawal of Reference of Complaint NORTHEAST BIOFUELS: Sells Oswego Plant to Sunoco for $8.5 Mil. NORTHEAST BIOFUELS: Wants Sept. 14 Deadline to File Plan NORTHEAST PAPER: Case Summary & 20 Largest Unsecured Creditors NORWOOD PROMOTIONAL: Seeks to Sell All Assets for $132 Million NPS PHARMA: To Increase Shares by 1.8MM thru Incentive Plan NY TIMES: S&P Downgrades Corporate Credit Rating to 'B' ORCHARDS VILLAGE: State Court Receivership Didn't Bar Bankruptcy PEABODY ENERGY: Fitch Affirms Issuer Default Rating at 'BB+' PEOPLES COMMUNITY: To Sell Assets to First Financial for $12MM PHILADELPHIA NEWSPAPERS: Lawsuit Removal Hearing Set for June 16 PLASSEIN INT'L: Fee Paid to Raise LBO Money Not Avoidable POTLATCH CORPORATION: Fitch Withdraws 'BB+' Issuer Default Rating PREMIER SOCCER: Files for Chapter 7 Protection; Closes Stores PRIMUS TELECOM: Posts $14MM Net Income for First Quarter 200 QUEBECOR WORLD: Creditors to Vote on Canadian Plan June 18 QUEBECOR WORLD: Court Extends Exclusive Periods Until July 21 QUEBECOR WORLD: Plan Confirmation Hearing Set for June 30 RAM REINSURANCE: S&P Downgrades Senior Unsecured Debt to 'BB-' REGENT COMMUNICATIONS: Qualified Opinion Cues Default Interest RENEW ENERGY: Files Schedules of Assets and Liabilities SAKS INCORPORATED: Fitch Assigns 'B/RR3' on $105 Mil. Notes SHERIDAN GROUP: S&P Cuts Corporate Credit Rating to 'B' From 'B+' S&K FAMOUS: Starts Going-Out-of-Business-Sale SONIC AUTOMOTIVE: S&P Raises Corporate Credit Rating to 'CCC+' SONIC AUTOMOTIVE: Moody's Junks Corporate Family Rating from 'B2' SOYO GROUP: Files for Chapter 7 Bankruptcy Protection SPECTRUM BRANDS: Projects 4% Hike In Revenue by 2013 STOCK BUILDING: Taps Shearman & Sterling as Bankruptcy Counsel STRATEGIC CAPITAL: Closed by Regulators; Midland Assumes Deposits TEPPCO PARTNERS: Fitch Affirms Junior Subordinated Rating at 'BB+' TH PROPERTIES: Taps Montgomery McCracken as Bankruptcy Counsel TIME WARNER: Fitch Affirms Preferred Membership Units at 'BB+' TLC VISION: Fires 3 Execs to Cut Costs; Conway Del Genio Steps In TRONOX INC: Defaulted on $125-Mil. DIP Loan; Gets Waiver TVI CORP: DIP Facility Calls for 6-Months' Bankruptcy Process TVI CORP: Files Schedules of Assets and Liabilities UNIPROP MANUFACTURED: Defers Interest Payment for Six Months US AIRWAYS: Pays $13 Mil.+ to Directors and Officers in 2008 US AIRWAYS: To Hold Annual Meeting of Stockholders on June 10 VERILINK CORP: Investment Banker Has No Liability VINEYARD CHRISTIAN: Jeffrey Golden Appointed Chapter 11 Trustee VITERRA INC: S&P Affirms Corporate Credit Rating at 'BB+' VOYAGEUR EDUCATIONAL: Files for Chapter 7 Bankruptcy Protection WA BOTTING: Files for Chapter 11 Bankruptcy Protection WARNER MUSIC: S&P Changes Outlook to Stable, Affirms 'BB-' Rating WCI COMMUNITIES: SEC Charges Trader for Manipulate Stock Price WCI COMMUNITIES: Wants to Sell 18-Story Hotel and Condo Units WELLCARE HEALTH: S&P Changes Outlook to Positive; Keeps B- Rating WESTERN ALLIANCE: Moody's Gives Stable Outlook on 'Ba3' Rating WHITE ENERGY: Can Access Cash Securing West LB Loan Until July 3 WHITE ENERGY: Can Hire Garden City as Claims and Noticing Agent WILD WILLIES: Case Summary & 18 Largest Unsecured Creditors WP EVENFLO: S&P Cuts Issue-Level Rating on Facilities to 'CCC' WR GRACE: Court to Rule on Default Interest at Plan Hearing YELLOWSTONE CLUB: Settles With Credit Suisse to Permit Sale YOUNG BROADCASTING: Panel Wants Allen & Co. as Financial Advisors YOUNG BROADCASTING: Still Lacks Lead Bidder for June 19 Auction * 2 Illinois Banks Closing Hike 2009 Failed Banks to 36 * BOND PRICING -- For the Week From May 18 to 22, 2009 ********* 7622 MEDICAL CENTER: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: 7622 Medical Center, P.C. dba 7622 Medical Center dba Allied Medical Group dba 1900 S.G. Associates 7620-24 Ogontz Avenue Bankruptcy Case No.: 09-13782 Chapter 11 Petition Date: May 21, 2009 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Jami B. Nimeroff, Esq. Brown Stone Nimeroff LLC 1818 Market Street, Suite 2300 Philadelphia, PA 19103 Tel: (267) 861-5330 Fax: (267) 350-9050 Email: jnimeroff@bsnlawyers.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 17 largest unsecured creditors is available for free at: http://bankrupt.com/misc/paeb09-13782.pdf The petition was signed by Arnold S. Lincow, president of the Company. ABITIBIBOWATER INC: Fitch Withdraws 'D' Issuer Default Rating ------------------------------------------------------------- Fitch Ratings has affirmed and simultaneously withdrawn the ratings on AbitibiBowater Inc. following Fitch's April 17, 2009 downgrade of the company's Issuer Default Rating to 'D'. The downgrade approximately coincided with ABH's voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Code. The company's Canadian subsidiaries similarly filed for reorganization under the Companies' Creditors Arrangement Act. Fitch has withdrawn these ratings: AbitibiBowater Inc. -- IDR 'D'. Abitibi-Consolidated Inc. and Subsidiaries -- IDR 'D'; -- Senior secured term loan 'CCC/RR2'; -- Secured notes 'CCC/RR2'; -- Long-term unsecured 'C/RR6'. Bowater Incorporated -- IDR 'D'; -- Secured revolver 'CCC/RR2'; -- Senior unsecured debt 'C/RR6'. Bowater Canadian Forest Products Inc. -- IDR 'D'; -- Secured revolver 'CCC/RR2'; -- Senior unsecured debt 'C/RR6'. AbitibiBowater Inc., together with Bowater, Abitibi-Consolidated Inc. and subsidiaries, produces a wide range of newsprint, commercial printing papers, market pulp and wood products. AbitibiBowater Inc. owns or operates 23 pulp and paper facilities and 30 wood product facilities in the United States, Canada, the United Kingdom and South Korea. ADVANCED HEALTH: Involuntary Chapter 11 Case Summary ---------------------------------------------------- Alleged Debtor: Advanced Health Scan of Inland Empire Medical LP 741 E. Ball Rd. #205 Anaheim, CA 92805 Case Number: 09-14642 Involuntary Petition Date: May 18, 2009 Court: Central District of California (Santa Ana) Judge: Erithe A. Smith Petitioner's Counsel: Stephen R. Wade, Esq. dp@srwadelaw.com The Law Offices of Stephen R. Wade 400 N Mountain Ave., Ste. 214B Upland, CA 91786 Tel: (909) 985-6500 Fax: (909) 985-2865 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Alain Lazard breach of contract $25,000 19895 Wildwood W. Dr. Penn Valley, CA 95946 AMERICAN COMMUNITY: Sale Protocol Approved; May 28 Auction Set -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved bid procedures for the sale of substantially all of the assets of American Community Newspapers LLC, et al., free and clear of all liens and encumbrances, to the qualified bidder submitting the highest and best offer at an auction. The bid deadline is May 26, 2009, at Noon (ET). If necessary, an auction will take place on May 28, 2009, at 10:00 a.m. (ET) at the offices of the Debtors' Delaware counsel, Landis Rath & Cobb LLP, 919 Market Street, Suite 1800, Wilmington, Delaware 19801. The hearing to approve the sale of the Purchased Assets to the Successful Bidder will take place on June 2, 2009, at 11:00 a.m. (ET). Objections, if any, to the sale must be filed with the Clerk of the Bankruptcy Court for the District of Delaware on or before May 29, 2009, at 4:00 p.m. (ET). A full-text copy of the approved sale procedures is available at: http://bankrupt.com/misc/ACN.SaleProcedures.pdf As reported by the TCR on May 1, 2009, the Debtors' secured lenders, owed $107 million on a term loan and revolving credit, have offered to buy ACN's operation in exchange for $32 million they're owed. The buyers also will pay the cost of curing default on contracts they take over. In addition, the buyers will pay off amounts outstanding on the $5 million DIP loan provided by Bank of Montreal and GE Capital. Headquartered in Addison, Texas, American Community Newspapers LLC -- http://www.americancommunitynewspapers.com/-- claims to be one of the top community newspaper publishers in the United States based on circulation, and operates in four of the most attractive major U.S. markets: Minneapolis -- St. Paul, Columbus, Dallas -- Fort Worth and Suburban Washington, D.C. -- Northern Virginia. The Company's award winning group of 86 newspapers and fourteen niche publications reaches approximately 1.4 million households in the suburban communities surrounding these major cities and enjoys market leading circulation penetration in all of its markets. The Company and four of its affiliates filed for Chapter 11 protection on April 28, 2009 (Bankr. D. Del. Lead Case No. 09- 11446). Landis Rath & Cobb LLC and Lowenstein Sandler PC represents the Debtors in their restructuring efforts. The Debtor proposed Carl Marks & Co. Inc. as financial advisor, and Graubard Miller as special corporate counsel. When the Debtors filed for protection from their creditors, they listed assets between $50 million and $100 million, and debts between $100 million and $500 million. AMERICAN COMMUNITY: Taps Administar Services as Claims Agent ------------------------------------------------------------ The U.S. States Bankruptcy Court for the District of Delaware authorized American Community Newspapers LLC and its debtor- affiliates to employ Administar Services Group LLC as noticing and claims agent. Administar is expected to: a) prepare and serve required notices in the Chapter 11 cases; b) assist the Debtors in the preparation of their schedules of assets and liabilities and statements of financial affairs if requested; and c) create and maintain official claims registers. The Debtors are authorized to pay in quarter-hour increments on a monthly basis. The court document did not specify the hourly rates of Administar personnel. To the best of the Debtors' knowledge, Administar is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About American Community Newspapers Headquartered in Addison, Texas, American Community Newspapers LLC -- http://www.americancommunitynewspapers.com/-- claims to be one of the top community newspaper publishers in the United States based on circulation, and operates in four of the most attractive major U.S. markets: Minneapolis -- St. Paul, Columbus, Dallas -- Fort Worth and Suburban Washington, D.C. -- Northern Virginia. The Company's award winning group of 86 newspapers and fourteen niche publications reaches approximately 1.4 million households in the suburban communities surrounding these major cities and enjoys market leading circulation penetration in all of its markets. The Company and four of its affiliates filed for Chapter 11 protection on April 28, 2009 (Bankr. D. Del. Lead Case No. 09- 11446). Landis Rath & Cobb LLC and Lowenstein Sandler PC represents the Debtors in their restructuring efforts. The Debtor proposed Carl Marks & Co. Inc. as financial advisor, and Graubard Miller as special corporate counsel. When the Debtors filed for protection from their creditors, they listed assets between $50 million and $100 million, and debts between $100 million and $500 million. AMERICAN INT'L: CEO to Step Down as Soon as Successors Are Named ---------------------------------------------------------------- Liam Pleven and Joann S. Lublin at The Wall Street Journal report that American International Group Inc. said AIG Chairperson and CEO Edward Liddy will resign as soon as successors are chosen. It could take three to six months to look for Mr. Liddy's successors, WSJ says, citing people familiar with the matter. According to WSJ, Mr. Liddy said that the decision to leave AIG was his and that the Company had reached an "inflection point." AIG needs a CEO who can make a long term commitment, WSJ states, citing Mr. Liddy. According to the report, Mr. Liddy plans to leave within a year. WSJ states that Mr. Liddy came out of retirement to take the CEO job and agreed to a salary of $1 per year. Mr. Liddy told WSJ that his successor as CEO should be paid "commensurate with the complexity of the Company." WSJ relates that the chairperson and CEO jobs are likely to be separated when Mr. Liddy leaves AIG. The new board chief is likely to play an important behind-the-scenes role in Congress, the report states, citing Mr. Liddy. As reported by the Troubled Company Reporter on May 20, 2009, AIG named six nominees for election to its board of directors. The candidates have extensive experience in corporate America and serve on other corporate boards. The candidates include Robert S. "Steve" Miller, Delphi Corp.'s executive chairperson and former CEO; Laurette T. Koellner, a former senior vice president at Boeing Co.; Douglas Steenland, former CEO of Northwest Airlines Corp.; Christopher Lynch, a retired KPMG partner; Harvey Golub, a former head of American Express Co.; and Arthur Martinez, who ran Sears, Roebuck & Co. Citing a person familiar with the matter, WSJ reports that the newly nominated AIG directors are expected to start looking for the next CEO informally before their election. A background in insurance would be good to have for the next AIG CEO, "but not necessary," WSJ relates quoted Mr. Liddy as saying. According to the report, Mr. Liddy said leadership skills are important as is experience in financial services generally. 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 factors 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, 2008, 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. Certain of AIG's domestic life insurance subsidiaries subsequently 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 more 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 U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMERISTAR CASINOS: Issue Increase Won't Move Moody's 'Ba3' Rating ----------------------------------------------------------------- Moody's Investors Service said that Ameristar Casinos, Inc's ratings are not affected by the increase in the company's proposed senior unsecured note issuance to $650 million from $500 million. The increased size of the note offering did, however, result in a minor change to the point estimates of both the senior unsecured notes due 2014 (to LGD 5, 87% from LGD 5, 89%) and the senior secured facilities (to LGD 3, 34% from LGD 3, 38%). The net proceeds from the new notes will be used to repay a portion of the $1.26 billion currently outstanding under the company's $1.4 billion revolver that expires in November 2010. The last rating action for Ameristar took place on May 11, 2009, when Moody's assigned a B2 rating to Ameristar's proposed $500 million senior unsecured notes due 2014 and affirmed the company's Ba3 Corporate Family Rating. At the same time, Moody's raised Ameristar's Probability of Default Rating to Ba3 from B1, its $1.4 billion senior secured revolver and $388 million senior secured term loan ratings to Ba2 from Ba3, and its Speculative Grade Liquidity rating to SGL-2 from SGL-3. Ameristar Casinos, Inc. owns and operates eight hotel/casinos in six jurisdictions. The company generates approximately $1.3 billion of consolidated net revenues. AMERISTAR CASINOS: S&P Raises Issue-Level Rating to 'BB-' --------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on Ameristar Casinos Inc.'s 9.25% senior notes due 2014 to '5', indicating S&P's expectation of modest (10% to 30%) recovery for lenders in the event of a payment default, from '6'. In addition, S&P raised its issue-level rating on this debt to 'BB-' (one notch lower than the 'BB' corporate credit rating on the company) from 'B+', in accordance with S&P's notching criteria for a '5' recovery rating. The company has added on an additional $150 million to this issuance. At the same time, as outlined in S&P's May 11, 2009 media release, S&P revised its recovery rating on the company's senior secured credit facilities to '1', indicating S&P's expectation of very high (90% to 100%) recovery for lenders in the event of a payment default, from '2'. In accordance with S&P's notching criteria for a recovery rating of '1', S&P raised its issue-level rating on these loans to 'BBB-' (two notches higher than the 'BB' corporate credit rating) from 'BB+'. The corporate credit rating on Ameristar remains unchanged at 'BB', and the rating outlook is stable. "The issue-level and recovery rating changes on Ameristar's debt reflect the planned prepayment and permanent reduction in the commitment of the revolving credit facility by the amount of the net proceeds of the 9.25% notes," explained Standard & Poor's credit analyst Melissa Long. "This results in improved recovery prospects for the senior secured credit facilities and the senior notes as a result of the smaller amount of senior secured debt in S&P's simulated default scenario." The 'BB' corporate credit rating reflects Ameristar's high levels of competition in many of its markets, generally weak operating condition in the U.S. gaming industry due to the pullback in consumer spending, and high debt leverage. The company's relatively diversified portfolio of gaming operations, its leading market share in several of its markets, and S&P's expectation that credit measures will improve over the intermediate term, as the company has completed a majority of its capital spending initiatives, temper company weaknesses. ANTONIO ROBERSON: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Antonio Roberson 417 11th Street NE Washington, DC 20002 Bankruptcy Case No.: 09-00437 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court for the District of Columbia (Washington, D.C.) Debtor's Counsel: Andre P. Barber, Esq. Barber & Associates PC 355 i street SW, Suite 201 Washington, DC 20024 Tel: (202) 479-0325 Fax: (202) 479-2024 Email: andrepbarber@verizon.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Mr. Roberson. APPLIED SOLAR: Quercus Loan Calls for Ch. 11 Filing By June 17 -------------------------------------------------------------- Applied Solar, Inc., on Friday said it had begun the process of restructuring its operations. Certain of the Company's directors have resigned. On May 12, 2009, the Company's primary investor, The Quercus Trust, has advised the Company that it is unwilling to fund the Company's operations at its current expense level. Since that time, the Company has continued its efforts to identify potential financing sources. On May 18, 2009, the Company entered into a definitive loan and security agreement with its primary investor, The Quercus Trust, pursuant to which the Company delivered a secured promissory note in the original principal amount of $698,000 and received loan proceeds of $698,000. All principal and accrued and unpaid interest under the Note is due and payable on June 15, 2009, and no interest or principal payments are due prior to such time. The Note bears interest at a rate equal to 10% per annum. The proceeds from the Loan will be used solely as: (a) $297,558.18 will be paid to Suntech America, Inc.; and (b) the remaining funds will be used to pay the expenses associated with a bankruptcy proceeding and for working capital purposes. The Note is secured by a security interest in all of the Company's assets. If any event of default occurs under the Loan Documents, Quercus may (1) require the Company to immediately repay the Loan in full, (2) foreclose on the Collateral, and (3) assert all other rights and remedies of a lender under applicable law. The Loan Agreement contains representations and covenants customary for a secured loan transaction. As a condition of the financing, the Loan Agreement requires that the Company file for reorganization and protection from creditors pursuant to Chapter 11 of the U.S. Bankruptcy Code by June 17, 2009. The Company is currently engaged in discussions with potential financing sources, including The Quercus Trust, concerning the extension of debtor-in-possession or "DIP" financing to support the Company's operations during its reorganization. At the present time, no binding commitment to provide such DIP financing by The Quercus Trust or any other party has been received and there can be no guarantee that the Company will obtain such financing. David Field, President and CEO of the company remarked, "Despite very promising macro and micro business trends affecting the company, including solid relationships with its business partners, the current state of the financial markets combined with a difficult and complicated capital structure have made it extremely challenging for the company to secure needed financing. We are hopeful that a restructuring will enable the company to emerge stronger and in a better position to capitalize on the anticipated future growth in the solar industry." Applied Solar, in its most recent quarterly report for the period ended February 28, 2009, reported that it had a working capital deficit of $8 million, and that it would need to raise additional funds through financing transactions to continue to support it operations beyond May 31, 2009. A full-text copy of the parties' Loan and Security Agreement is available at no charge at http://ResearchArchives.com/t/s?3d32 A full-text copy of Applied Solar's Secured Promissory Note is available at no charge at http://ResearchArchives.com/t/s?3d33 As of February 28, 2009, Applied Solar had $17.5 million in total assets and $18.9 million in total liabilities, resulting in $1.4 million in stockholders' deficit. The Company posted a net loss of $4.3 million for the three months ended February 28, 2009. Applied Solar, Inc., a Nevada Corporation, is a next-generation solar energy company. The Company develops, commercializes and licenses clean energy solutions, innovative solar products and energy management applications. Effective January 16, 2009, Open Energy Corporation changed its name to Applied Solar. Shares of the Company's common stock currently trade on the OTC Bulletin Board under the symbol "APSO.OB". ATHENS BIODIESEL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Athens Biodiesel, LLC 25716 Airport Road Athens, AL 35614 Bankruptcy Case No.: 09-82055 Type of Business: The Debtor operates a biodiesel manufacturing facility. Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court Northern District Of Alabama (Decatur) Debtor's Counsel: Mary Rebecca Hill, Esq. Johnston, Moore & Thompson 400 Meridian Street, Suite 301 Huntsville, AL 35801 Tel.: (256) 533-5770 Fax : (256) 533-5890 Email: rhill@jmmtlawfirm.com Total Assets: $15,006,500.00 Total Debts: $11,271,508.88 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Byrd Maintenance Services $1,903,701 P.O. Box 1009 Decatur, AL 35601 McLain-Patel Alternative Business Loan $300,000 Energy, LLC P.O. Box 2199 Huntsville, AL 35804 Integrity Electric $275,838 3498 Highway 20 West, Ste. 1 Decatur, AL 34601 M&W Equipment $125,220 Internal Revenue Service 941 Taxes $125,000 K-4 Ventures $119,500 Sentinel, Inc. $105,000 Industrial Chemical $81,665 Key Engineering $69,857 Premier System Integrators $65,571 HydraSep $61,944 First Insurance Funding Corp. $54,344 Morin Process Equipment $47,581 American Pipe & Supply $32,034 Athens Utilities $29,508 BC/BS of Alabama $19,536 Hielscher $15,940 Industrial Rubber & Supply $13,927 Mid-South Refrigeration $9,575 CDPA $9,449 The petition was signed by Melvin Kilgore, manager. BAY AREA REAL: Case Summary & Largest Unsecured Creditor -------------------------------------------------------- Debtor: Bay Area Real Estate Group, LLC 201 Spear Street, Suite 1100 San Francisco, CA 94105 Bankruptcy Case No.: 09-31357 Chapter 11 Petition Date: May 21, 2009 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Basil J. Boutris, Esq. Law Offices of Vaught and Boutris 80 Swan Way #320 Oakland, CA 94621 Tel: (510) 430-1518 Email: basil@vaughtboutris.com Total Assets: $1,900,000 Total Debts: $1,436,560 A full-text copy of the Debtor's petition, including a list of its largest unsecured creditor, is available for free at: http://bankrupt.com/misc/canb09-31357.pdf The petition was signed by James Kennedy, member manager of the Company. BELLISIO FOODS: Moody's Downgrades Corporate Family Rating to 'B2' ------------------------------------------------------------------ Moody's Investors Service downgraded Bellisio Foods, Inc.'s Corporate Family Rating to B2 from B1, and its Probability of Default Rating to B3 from B1. The B1 rating of its $155 million first lien senior secured credit facilities remained unchanged. The rating outlook is stable. The downgrade of the CFR to B2 reflects Bellisio's weak operating performance that was well below Moody's expectation, evidenced by its eroded market share in the retail segment, sharply contracted operating margin and negative free cash flow. The performance shortfall forced the company to obtain an amendment under its recently consummated credit facilities, in order to avoid a covenant violation under its credit agreement. Moody's expects the challenging operating environment, such as a low consumer confidence and very competitive landscape in a protracted recession, will further pressure the company's revenues and operating profit over the intermediate term, resulting in a credit profile that is not consistent with a B1 rating. Favorably, the B2 CFR incorporates its established position as value player in the single serve entr�e category and respectable name recognition. The downgrade of PDR to B3 encompasses Moody's concern regarding the company's prospective ability to stay compliant with the revised covenants. These covenants will tighten gradually in the coming quarters. Should the company not be able to improve its financial performance steadily, the cushion under these covenants would become tenuous again. While some further deterioration in operating and credit metrics is likely, the stable outlook anticipates stabilization in the revenue base, market share and operating margin over the medium term, reflecting expected run-rate credit metrics that would be solid for the B2 rating category. Moody's expects Bellisio's EBITA/Interest would approximate 1.5x and Debt/EBITDA below 4.5x on a normalized basis. The rating actions are: Ratings downgraded: * Corporate Family Rating -- to B2 from B1 * Probability of Default Rating -- to B3 from B1 Ratings remain unchanged: * $25 million senior secured revolving credit facility -- B1 (LGD2,27%) * * $130 million senior secured term loan -- B1 (LGD2, 27%) * Outlook: stable * LGD rate was revised to LGD2, 27% from LGD3, 43% based on Moody's Loss Given Default Methodology Bellisio's last rating action occurred on August 26, 2008, when Moody's affirmed its CFR at B1 and assigned B1 rating to the proposed credit facilities. Headquartered in Minneapolis, Minnesota, Bellisio Foods, Inc. is the third largest producer of frozen entrees in the United States. Bellisio's brand portfolio includes Michelina's, Fusion Culinary and, most recently, Joy of Cooking. The company also produces private label goods. Sales for the twelve months ended December 31, 2008 were approximately $367 million. BENT REBAR: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Bent Rebar, LLC dba Bent Rebar Company 410 Annie Street Coeur D Alene, ID 83815 Bankruptcy Case No.: 09-20528 Chapter 11 Petition Date: May 21, 2009 Court: United States Bankruptcy Court District of Idaho (Coeur dAlene) Judge: Chief Judge Terry L. Myers Debtor's Counsel: Bruce A. Anderson, Esq. 1400 Northwood Ctr Ct #C Coeur d'Alene, ID 83814 Tel: (208) 667-2900 Fax: (208) 667-2150 Email: baafiling@ejame.com Estimated Assets: $0 to $50,000 Estimated Debts: $100,001 to $500,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/idb09-20528.pdf The petition was signed by Christopher L. Uecke, president and managing member of the Company. BEST ROOFING: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Best Roofing Technology, Inc. 1462 Trindle Road Carlisle, PA 17015 Bankruptcy Case No.: 09-03856 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court Middle District of Pennsylvania (Harrisburg) Debtor's Counsel: Robert L. Knupp, Esq. Knupp Law Offices, LLC 407 North Front Street PO Box 630 Harrisburg, PA 17108 Tel: (717) 238-7151 Fax: (717) 238-5258 Email: knuppbkcy@yahoo.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/pamb09-03856.pdf The petition was signed by Dwight West, president of the Company. BEVERLY HILLS WASTE: Case Summary & 5 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Beverly Hills Waste Management Corporation 670 W. Colbert Court Beverly Hills, FL 34465-8761 Bankruptcy Case No.: 09-04074 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Jason B. Burnett, Esq. GrayRobinson, P.A. 50 N. Laura Street, Suite 1100 Jacksonville, FL 32202 Tel: (904) 598-9929 Email: jburnett@gray-robinson.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-04074.pdf The petition was signed by John W. Patton III, president of the Company. BEXAR COUNTY: Moody's Cuts Rating on $14.6 Mil. Bonds to 'Ba3' -------------------------------------------------------------- Moody's Investors Service has downgraded the rating on the $14.6 million Bexar County Housing Finance Corporation's Multifamily Housing Revenue Bonds (Dymaxion & Marbach Park Apartments Project) Series 2000A to Ba3 from Ba2 and has downgraded the $1.4 million 2000C to B2 from B1. The downgrades were based upon declines in debt service coverage and an under funded debt service fund for 2000C. The outlook on the bonds is negative due to weak forecasts for occupancy and rent growth. Legal Security: The bonds are limited obligations payable solely from the revenues, receipts and security pledged in the Trust Indenture. Recent Developments The weighted average monthly occupancy for calendar year 2008 is 88.1%. The low weighted average occupancy is due to the 84.1% occupancy at Marbach Park, while Dymaxion is performed satisfactorily with an occupancy of 94.4%. According to Torto Wheaton Research, occupancy for 2008 averaged 93.5% in northwest San Antonio where Dymaxion is located and averaged 91.8% in south Santo Antonio where Marbach Park is located. Debt service coverage for fiscal year 2008 was satisfactory at 1.27x for 2000A and 1.13x for 2000C. Nine months of actual unaudited financials for fiscal 2009 indicate coverage has dropped substantially. The decrease is due to a decline in rental revenues but is also due to a substantial drop in investment income. While debt service reserve funds are invested in guaranteed investment contracts and earn fixed rates, other investments earn current market rates and have dropped sharply. Interim 2009 financial statements indicate 2000A debt service coverage will remain above 1.0x; 2000C coverage is below 1.0x. The trustee reports the debt service fund for 2000A is fully funded while the debt service fund for 2000C is under funded by $57,593.75 as of 5/19/2009. Torto Wheaton Research forecasts indicate occupancy in the Northwest San Antonio submarket will decrease slightly to 92.8%% in 2009 from 93.5% in 2008. Rent growth is forecasted to decline 0.5% for the same period. The TWR forecast for the South San Antonio submarket is weaker with occupancy to remain at the 2008 average of 91.8% in 2009. Rent growth in South San Antonio is forecasted to be particularly weak in 2008, with a 1.6% decline projected. Moody's believes limited rent growth will likely have a negative impact on debt service coverage levels. The last rating action was on January 30, 2008 when Series 2000A was downgraded to Ba2 and 2000C was downgraded to B1. Outlook The outlook on the bonds is negative from due to forecasted declines in occupancy and weak rent growth in the submarkets where the properties are located. What Could Cause the rating to go UP A sustained improvement in debt service coverage and a solid rent growth forecast. What Could Cause the rating to go DOWN A decline in debt service coverage and/or a tapping of a debt service reserve fund. BIOHEART, INC: Posts $15.7MM Deficit; Warns of Possible Bankruptcy ------------------------------------------------------------------ Bioheart, Inc., and its subsidiaries filed a form Form 10-Q with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2009, listing $1,416,467 in total assets, $17,096,081 in total liabilities, and $15,679,614 in deficit. The Company said that it has generated substantial net losses and negative cash flow from operations since inception and anticipate incurring significant net losses and negative cash flows from operations for the foreseeable future as the Company continues clinical trials, undertake new clinical trials, apply for regulatory approvals, make capital expenditures, add information systems and personnel, make payments pursuant to its license agreements upon its achievement of certain milestones, continue development of additional product candidates using its technology, establish sales and marketing capabilities and incur the additional cost of operating as a public company. The Company recognized revenues of $109,000 in the three-month period ended March 31, 2009, compared to revenues of $26,000 in the three-month period ended March 31, 2008. In both periods, all revenue was generated from the shipment of MyoCath catheters to parties other than Advanced Cardiovascular Systems, Inc. "In the three-month period ended March 31, 2008, we recognized $61,500 in development revenues from cell-culturing services provided pursuant to the clinical supply agreement entered with BHK, Inc. No such revenues were recognized in the three-month period ended March 31, 2009," the Company added. Cost of sales was $49,000 in the three-month period ended March 31, 2009, compared to $3,000 in the three months ended March 31, 2008. The cost per catheter sold in the three-month periods ended March 31, 2009, and 2008 were approximately the same. However, a portion of the catheters sold in 2008 had no inventory cost as they had been written off in prior years. Research and development expenses were $626,000 for the three- month period ended March 31, 2009 compared to $1.4 million in the three-month period ended March 31, 2008, a decrease of $732,000. The decrease was primarily attributable to a reduction in the amount of sponsored research and a reduction in costs related to our SEISMIC, MYOHEART, and MARVEL Trials. "The timing and amount of our planned research and development expenditures is dependent on our ability to obtain additional financing," the Company said. Marketing, general and administrative expenses were $647,000 for the three-month period ended in March 31, 2009, compared to $1.1 million in the three-month period ended March 31, 2008, a decrease of $425,000. The decrease in marketing, general and administrative expenses is attributable, to a decrease in stock- based compensation expense, salaries & wages, legal fees and accounting fees. Interest income consists of interest earned on our cash and cash equivalents. Interest income was $10 in the three months ended March 31, 2009 compared to interest income of $34,000 in the three-month period ended March 31, 2008. The decrease in interest income was primarily attributable to lower cash balances in the three-month period ended March 31, 2009, compared to the three- month period ended March 31, 2008. Interest expense primarily consists of interest incurred on the principal amount of the BlueCrest and the Bank of America Loans, accrued fees and interest earned by the guarantors of the Bank of America Loan, the amortization of related deferred loan costs and the amortization of the fair value of warrants issued in connection with the BlueCrest and Bank of America Loans. The fair value of the warrants originally issued in connection with the Bank of America Loan was amortized by the end of January 2008. "Our debt carries interest rates ranging from 4.75% to 13.50% as of March 31, 2009," the Company said. Interest expense was $558,000 in the three-month period ended March 31, 2009, compared to $933,000 in the three-month period ended March 31, 2008. Interest incurred on the principal amount of our outstanding loans and interest and fees earned by the guarantors totaled $277,000 and $315,000 in the three-month periods ended March 31, 2009 and 2008, respectively. Amortization of deferred loan costs and amortization of the fair value of warrants issued in connection with the BlueCrest and Bank of America Loans totaled $77,000 and $616,000 in the three-month periods ended March 31, 2009, and 2008. The three-month period ended March 31, 2009, also includes $200,000 of interest expense related to the discount associated with the convertible debt issued and converted during the period. "In 2009, we continue to finance our considerable operational cash needs with cash generated from financing activities," the Company said. Net cash used in operating activities was $101,000 in the three months ended March 31, 2009, as compared to $4.5 million of cash used in the three months ended March 31, 2008. "Our use of cash for operations in the three months ended March 31, 2009, reflected a net loss generated during the period of $1.8 million. However, our net loss was significantly offset by a decrease in prepaid expenses and other current assets of $441,000, an increase in accounts payable of $494,000 and an increases in accrued expenses of $445,000. The decrease in prepaid expenses and other current assets was due to the refund of upfront payments under an agreement with the contract research organization that we are utilizing for the MARVEL Trial. "Accounts payable increased as we have sought to conserve cash until significant additional financing is obtained," the Company said. The Company said, "Our use of cash for operations in the three months ended March 31, 2008, reflected a net loss generated during the period of $3.3 million and an increase in prepaid expenses and other current assets of $2.5 million. The increase in prepaid expenses and other current assets was due to upfront payments under an agreement with the contract research organization that we are utilizing for the MARVEL Trial. Partially offsetting these uses of cash were amortization of the fair value of warrants granted in connection with the BlueCrest Loan and Bank of America Loan of $457,000, an increase in accrued expenses and deferred rent of $264,000, an increase in accounts payable of $259,000, stock-based compensation of $212,000 and amortization of loan costs incurred in connection with the BlueCrest Loan and Bank of America Loan of $159,000." No cash was used in investing activities in the three-month period ended March 31, 2009. Net cash used in investing activities was $18,000 in the three-month period ended March 31, 2008. "All of the cash utilized in investing activities in the three-month period ended March 31, 2008, related to our acquisition of property and equipment," the Company said. Net cash provided by financing activities was $222,000 in the three-month period ended March 31, 2009, compared to $3.8 million in the three-month period ended March 31, 2008. "In the three-month period ended March 31, 2009, we received net proceeds of $190,000 in connection with the issuance of convertible debt and shares of common stock. The lenders converted the convertible debt to shares of common stock during the three-month period ended March 31, 2009. In the three-month period ended March 31, 2009, we also received $32,000 from the exercise of stock options," the Company said. On February 22, 2008, the Company completed its IPO of common stock pursuant to which it sold 1,100,000 shares of common stock at a price per share of $5.25 for net proceeds of $1.45 million. The Company said, "The Consolidated Statement of Cash Flows for the three months period ended March 31, 2008, reflects our receipt of approximately $4.27 million of 'Proceeds from initial public offering of common stock, net.' The $4.27 million cash proceeds figure is approximately $2.82 million higher than the $1.45 million IPO net proceeds figure identified above due to our payment of $2.82 million of various offering expenses prior to January 1, 2008." In the three-month period ended March 31, 2008, the Company repaid $398,000 of principal on the BlueCrest Loan and paid $95,000 of costs incurred in connection with the extension of the maturity date of the Bank of America Loan. The Company's MyoCell product candidate has not received regulatory approval or generated any material revenues. "We do not expect to generate any material revenues or cash from sales of our MyoCell product candidate until 2010, if ever. We have generated substantial net losses and negative cash flow from operations since inception and anticipate incurring significant net losses and negative cash flows from operations for the foreseeable future. Historically, we have relied on proceeds from the sale of our common stock and our incurrence of debt to provide the funds necessary to conduct our research and development activities and to meet our other cash needs," the Company said. At March 31, 2009, the Company had cash and cash equivalents totaling $171,000; however, the Company's working capital deficit as of that date was $12.7 million. The Company has incurred significant operating losses over the past several years and has a deficit accumulated during the development stage of $98.6 million as of March 31, 2009. In addition, as of March 31, 2009, the Company's current liabilities exceed current assets by $12.7 million. Current liabilities include notes payable of $5.4 million. The Company also has an obligation of $3 million to its chairman and his spouse. The Company does not have sufficient cash to support its operations through December 2009. The Company will need to secure significant additional sources of capital in June 2009 to develop its business and product candidates as planned. Possible Bankruptcy The Company currently has no commitments or arrangements from third parties for any additional financing to fund research and development and other operations. The Company is seeking substantial additional financing through public and private financing, which may include equity and debt financings, research grants, and through other arrangements, including collaborative arrangements. The Company may seek loans from certain of our executive officers, directors and current shareholders. However, financing may not be available to the Company or on terms acceptable to the Company. The Company's inability to obtain additional financing would have a material adverse effect on its financial condition and ability to continue operations. Accordingly, the Company could be forced to significantly curtail or suspend operations, default on its debt obligations, file for bankruptcy or seek to sell some or all of its assets. The Company said that its continuation as a going concern is uncertain. The Company's financial statements are available at: http://ResearchArchives.com/t/s?3d28 Based in Sunrise, Florida, Bioheart Inc. -- http://www.bioheartinc.com/-- develops intelligent devices and biologics that help monitor, diagnose and treat heart failure and cardiovascular diseases. Its lead product candidate, MyoCell(r), is an innovative clinical muscle-derived stem cell therapy designed to populate regions of scar tissue within a patient's heart with new living cells for the purpose of improving cardiac function in chronic heart failure patients. The Company's pipeline includes multiple product candidates for the treatment of heart damage, including Bioheart Acute Cell Therapy, an autologous, adipose tissue-derived stem cell treatment for acute heart damage, and MyoCell(r) SDF-1, a therapy utilizing autologous cells that are genetically modified to express additional potentially therapeutic growth proteins. BOCA HOLLY: Lender to Sell Pledged Collateral at June 2 Auction --------------------------------------------------------------- In a legal notice, Madeleine L.L.C., Lender, advises that it will sell at a public auction on June 2, 2009, at 11:00 a.m. EDT, the collateral securing the obligations owed to it by Boca Holly Hill LP, Ltd., because of Events of Default, which defaults are continuing, under that certain Loan Agreement dated as of July 6, 2006, and that certain Pledge Agreement also dated as of July 6, 2006. The auction will take place at the law offices of Lender's counsel, Orrick, Herrington & Sutcliffe LLP, 666 Fifth Avenue, New York, NY. The collateral to be sold at the auction consists of (a) an undivided 99.0% limited partnership interest in Holly Hill Associates, Ltd., and (b) an undivided 1.0% general partnership in Holly Hill Associates, Ltd., together will all accounts, general intangibles, instruments and investment property constituting or relating to the foregoing, and all proceeds, income and profits thereof. Interested parties may contact Lender's counsel: Jill D. Block, Esq. Tel: (212) 506-5080 email: jblock@orrick.com BRODER BROS: Moody's Downgrades Default Rating to 'Ca/LD' --------------------------------------------------------- Moody's Investors Service lowered its Probability of Default Rating on Broder Bros., Co. to Ca/LD from Ca. The company's Corporate Family Rating was affirmed at Ca and the rating on the company's $225 million senior unsecured notes was affirmed at C. The rating outlook is stable. The rating action results from Broder's announcement that it has completed a financial restructuring. The company retired an aggregate of $213.5 million in principal amount of its 11.25% senior notes due 2010 in exchange for $94.9 million in aggregate principal amount of newly issued notes due in 2013 and shares of the company's common stock, which shares in the aggregate represent approximately 96% of its common stock outstanding. Moody's considers this exchange a distressed exchange that is tantamount to an out of court restructuring. Moody's will shortly withdraw all ratings assigned to Broder. This rating was lowered and will be withdrawn shortly: -- Probability of Default Rating to Ca/LD from Ca These ratings were affirmed, and will be withdrawn shortly: -- Corporate Family Rating at Ca -- $225 million senior unsecured notes due 2010 at C (LGD 5, 73%) The last rating action on Broder Bros., Co. was on March 4, 2009 when the company's Corporate Family and Probability of Default Ratings were lowered to Ca from Caa3. Broder Bros., Co., based in Trevose, Pennsylvania, is a leading distributor of imprintable sportswear and accessories in the U.S. BRUNO'S SUPERMARKETS: Court Sets June 19 General Bar Date --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Alabama has established 5:00 p.m. (Pacific Time) on June 19, 2009, as the last day for filing of proofs of claim in Bruno's Supermarkets, LLC, et al's bankruptcy cases. The governmental bar date is 5:00 p.m. (Pacific Time) on August 14, 2009. Proofs of claim must be filed so as to be received on or before the applicable bar dates, by mail, overnight courier or messenger at: Bruno's Claims Processing c/o Kurtzman Carson Consulants LLC 2335 Alaska Avenue El Segundo, CA 90245 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. BRUNO'S SUPERMARKETS: Wants Plan Deadline Extended to June 26 ------------------------------------------------------------- Bruno's Supermarkets, LLC, asks the U.S. Bankruptcy Court for the Northern District of Alabama for a short extension of its exclusive period to propose a plan to June 26, 2009, and its exclusive period to solicit acceptances of a plan until August 28, 2009. The Debtor tells the Court that the extension of its exclusive periods will increase the likelihood that the plan that is ultimately proposed will maximize distributions to all creditors. 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. CAREFREE MULE: Hires Marcus & Millichap to Seek Buyers for Resort ----------------------------------------------------------------- Curtis Riggs at Sonoran News reports that real-estate investment firm Marcus & Millichap has been hired to find buyers for an upcoming auction of Carefree Mule Train Ventures LLC's 146-room Carefree Resort & Villas. Sonoran News quotes Carefree Town Administrator Gary Neiss as saying, "The resort is in Chapter 11 so they will most likely sell the business." The Carefree Resort is the only profitable property owned by Tiburon Capital Corp, the news source points out. The town of Carefree, Arizona, will try to ensure that Carefree Resort's viability during the transition from bankruptcy reorganization, while making sure any future renovations fit into surrounding neighborhoods well, Sonoran News states, citing Mr. Neiss. According to the report, Mr. Neiss averred that the resort is a major-contributor to the town's sales-tax base. Carefree Mule Train Ventures LLC owns and operates the Carefree Resort and Villas in Carefree, Arizona. Located in the Sonoran desert, the resort has 369 rooms, has a golf course and spa. The company filed for Chapter 11 on November 21, 2008 (Bankr. D. Ariz. Case No. 08-16838). In its bankruptcy petition, the Company estimated assets of less than $50 million and debts exceeding $50 million. CHEM-AWAY: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Chem-Away, Inc. 1502 Westbrook Ct Modesto, CA 95358 Bankruptcy Case No.: 09-91450 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court Eastern District of California (Modesto) Judge: Robert S. Bardwil Debtor's Counsel: David F. Brown, Esq. 719 14th St Modesto, CA 95354 Tel: (209) 605-3312 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 2 largest unsecured creditors is available for free at http://bankrupt.com/misc/caeb09-91450.pdf The petition was signed by Sharon M. Hamilton, president of the Company. CHRYSLER LLC: Indiana Pensioners Want Examiner or Ch. 11 Trustee ---------------------------------------------------------------- The Indiana Pensioners asks the U.S. Bankruptcy Court for the Southern District of New York to appoint a Chapter 11 trustee under Sections 1104 and 1112(b) of the Bankruptcy Code, and an examiner pursuant to Section 1104(c) of the Bankruptcy Code, in Chrysler LLC and its debtor-affiliates' Chapter 11 cases. The Indiana Pensioners consist of the Indiana State Teachers Retirement Fund, the Indiana State Police Pension Trust, and the Indiana Major Moves Construction Fund, which are holders of the Debtors' Senior Secured Debt. The Debtors' Senior Secured Debt pertains to the Amended and Restated First Lien Credit Agreement, dated as of August 3, 2007, between the Debtors, JPMorgan Chase Bank N.A., as administrative agent, and certain lenders party thereto from time to time, under which the Senior Secured Lenders are owed $6.9 billion, secured by a first lien on substantially all of the Debtors' assets, including their plants, equipment, inventory, bank accounts, and almost every other U.S. asset owned by the Debtors. Glenn M. Kurtz, Esq., at White & Case LLP, in New York, serves as counsel for the Indiana Pensioners. Thomas E. Lauria, Esq., a partner at White Case LLP, is also representing the Indiana Pensioners. Mr. Lauria represented the Non-TARP Lenders, which strongly opposed the Chrysler-Fiat Transaction. The Non-TARP Lenders was reported to have disbanded a few weeks ago. The Wall Street Journal says the legal strategy of the Indiana Pensioners resembles a plan that lawyers presented to the Non-TARP Lenders before the group disbanded, according to people familiar with the matter. "It is imperative that this Court appoint a chapter 11 trustee to ensure that an independent, disinterested person makes business decisions that are in the best interests of these estates and that are in keeping with their statutory fiduciary duties to stakeholders," Mr. Kurtz asserts. "This remedy is warranted by the unprecedented degree to which the Debtors have been unable or unwilling to perform their basic fiduciary responsibilities in the face of pressure and instruction from the U.S. government to do otherwise," he said. My. Kurtz relates that the Debtors have ceded control over their business and their restructuring efforts to the United States Treasury Department. The Indiana Pensioners believe that the Treasury Department -- through the Debtors -- is in turn attempting to use the bankruptcy cases as a device to impose a sub rosa plan of reorganization that improperly rewards creditor groups the government deems politically important to the detriment, and at the expense of, Chrysler's Senior Secured Lenders. In so doing, Mr. Kurtz says, the Debtors are ignoring fundamental principles of bankruptcy law by allocating distributions according to the government's political agenda rather than the creditors' legal priority. "So defective is the strategy that if it were presented in a chapter 11 plan, and subjected to all the creditor protections afforded thereby, it clearly could not be confirmed," he contends. Mr. Kurtz notes that the Treasury Department has taken these actions under the purported authority of the Troubled Asset Relief Program. But neither TARP nor the Emergency Economic Stabilization Act under which TARP was promulgated authorizes the Treasury Department to make loans to, or take control of, an automotive company. Nor does any federal statute authorize the Treasury Department to use its control to destroy the property rights of creditors, he says. To the contrary, Mr. Kurtz continues, TARP expressly prohibits those actions. A second, and independent, basis for the appointment of a trustee exists under Sections 1112 and 1104 of the Bankruptcy Code, Mr. Kurtz explains. "These provisions require the Court to appoint a chapter 11 trustee (or convert the case to chapter 7) where the Debtors' business is suffering 'substantial or continual decline' with no reasonable chance of rehabilitation. Here, the Debtors' own filings establish that this is the case." Mr. Kurtz further notes that the Court should immediately appoint an examiner to investigate the manner in which the government has: -- exceeded its authority; -- caused the Debtors to breach their fiduciary duties; -- dominated and controlled all of the key decisions and assessments the Debtors are required to make; and -- otherwise utilized the bankruptcy process to advance its own agenda at the expense of the Debtors' estates. "[T]he Debtors and the government are not only trampling on the legal rights of Chrysler creditors, they are also in clear violation of TARP, the EESA, and the Constitution of the United States," Mr. Kurtz complains. "This cannot be allowed to continue. The Court must appoint a trustee to put the Debtors back into the hands of disinterested management that will run the Debtors' businesses for the best interest of the estates and in accordance with the Debtors' fiduciary obligations to their creditors. In the interim, an examiner should also be appointed to investigate and report on the role of the government in these proceedings." Request to Withdraw Reference In a separate request, the Indiana Pensioners seek entry of an order withdrawing the reference made to the United States Bankruptcy Court with respect to: (i) the issues the Pensioners have raised, (ii) the Debtors' proposed sale of substantially all of its assets to Fiat S.p.A., and (iii) the Pensioners' request to convert cases or appoint a Chapter 11 Trustee and for immediate appointment of an Examiner. The mandatory withdrawal statute, Section 157(d) of the Judiciary Procedures Code, "require[s] withdrawal to the district court of cases or issues that would otherwise require a bankruptcy court judge to engage in significant interpretation, as opposed to simple application, of federal laws apart from the bankruptcy statutes." That standard is readily met when novel issues or constitutional questions are raised, Mr. Kurtz asserts. "Such issues are plainly raised by what the Government is attempting to do in [Chrysler's] bankruptcy proceeding, including through the pending Sale Motion and by the issues set forth in the Trustee/Examiner Motion," he adds. "Adopting a raw 'the ends justify the means' rationale, the Treasury Department has taken constructive possession of Chrysler and is requiring it to adopt a sale plan in bankruptcy that violates the most fundamental principles of creditor rights -- that first tier secured creditors have absolute priority, including over junior and unsecured creditors," Mr. Kurtz asserts. "Remarkably, the Government has orchestrated a plan that pays the secured lenders only 29% of their claims, while providing par recovery to certain unsecured creditors. This result, while perhaps reflecting a political compromise, has no basis in the law," he says. Mr. Kurtz informs the Court that the Government's action is not authorized by any statute, including TARP, and violates the unambiguous provisions of the Emergency Economic Stabilization Act and the Constitution of the United States. "These critical issues must be decided by the district court and withdrawal of the reference is therefore required," he maintains. It is also clear from the face of the EESA that what the Government is doing by favoring certain unsecured creditors -- that is, the United Auto Workers and trade creditors -- to the detriment of others, including the Indiana Pensioners, is expressly prohibited by the statute, Mr. Kurtz argues. What the Treasury Secretary is attempting to do constitutes a taking in violation of the Fifth Amendment to the United States Constitution, he asserts. According to Mr. Kurtz, the powers granted to the Executive Branch under TARP do not include the extraordinary actions taken by the Government to date. Whatever powers the Treasury Department may have under TARP, it does not have the power to control the entire restructuring of a company to the detriment of the company's secured creditors and for the benefit of other interest groups so that certain broader policy and political objectives may be achieved. "One of the biggest ironies of the Government's misuse of its TARP authority here is that the very statute that was intended to free up lending in this country is being used to improperly discriminate against, and thereby ultimately deter, the very people who are critical to fully and properly functioning financial system -- secured lenders," he says. In light of the Government's conduct, which has infected the Debtors' Chapter 11 proceeding and caused the Debtors' complete abdication of its own fiduciary duties to act in the best interests of all creditors, the Indiana Pensioners have filed their Trustee/Examiner Motion and are seeking the appointment of independent parties who will act impartially, in the interests of all creditors, and according to the law as written. The Indiana Pensioners assert that the Trustee/Examiner Motion and the Sale Motion cannot be approved without consideration of these issues, all of which are novel issues of federal law outside of the Bankruptcy Code, and several of which raise constitutional challenges. "This entire bankruptcy proceeding is fundamentally predicated on, and cannot be decided without, consideration of these issues. Even the Government has recognized that its approach here is extraordinary and unprecedented," he asserts. "Mandatory withdrawal of the reference to the district court is, therefore, required." Todd A. Gluckman, Esq., at White & Case LLP, filed with the Court a declaration in support of the Indiana Pensioners' Motion to Withdraw the Reference. Bankruptcy Court Denies Stay of Proceedings At a hearing held May 20, 2009, Judge Arthur J. Gonzalez denied an emergency request filed by the Indiana Pensioners for a stay of proceedings, and for preliminary relief to enjoin the proceedings, pending determination of their request to Withdraw the Reference. Citing In re Interco, Inc., 135 B.R. 359, 361 (Bankr. E.D. Mo. 1991), Judge Gonzalez said, "the rule clearly states that the bankruptcy court is not required to stay proceedings pending the district court's decision on the motion to withdraw the reference." To prevail on the Emergency Stay Request, the Indiana Pensioners must demonstrate (a) the likelihood of prevailing on the merits, (b) that it will suffer irreparable harm if the stay is denied; (c) that the Debtors will not be substantially harmed by the stay; and (d) that the public interest will be served by granting the stay. Judge Gonzalez pointed out that the Indiana Pensioners: * have not proven that they will suffer irreparable harm, in the absence of a stay of the proceedings; * failed to demonstrate that "irreparably injury is likely in the absence of an injunction"; * have not established that the absence of a stay will result in a diminution in recovery of the value of their claim against the estate; * failed to establish that the absence of a stay will result in a monetary loss; * has not established that the imposition of a stay would not result in substantial harm to the Debtors; and * failed to clearly demonstrate that they have a substantial likelihood of succeeding on their Motion to Withdraw Reference. The record clearly indicates that conducting the Sale Hearing on May 27, 2009 is imperative to the future of the Debtors and any delay could result in substantial and irreparable harm to the Debtors and the estate, notes Judge Gonzalez. Staying the proceedings would vitiate several vital agreements negotiated amongst the Debtors and various constituents; thereby augmenting the harm to the estate should the Sale Hearing not go forward as contemplated, he said. Moreover, Indiana Pensioners' papers do not address the fundamental issue of whether they have standing to challenge any governmental action, Judge Gonzalez pointed out. "[The Indiana Pensioners] is permitted to seek stay any sale authorization pending appeal. If the [Pensioners] takes this step, then the reversal or modification of any sale authorization on appeal can affect the validity of a sale, thereby preserving the [Pensioners'] rights," Judge Gonzalez noted. IP Turns to District Court for a Stay Order The Indiana Pensioners' Motion to Withdraw the Reference was delivered to the U.S. District Court for the Southern District of New York on May 20, 2009, and the Clerk assigned Case No. 09-cv-04743 to the proceeding. The district court judge assigned to the matter is Judge Loretta A. Preska. Judge Thomas P. Greisa, as part 1 judge, will be handling matters related to the Withdrawal Motion during the week of May 25, 2009. Following Judge Gonzalez's denial of their request for a stay, the Indiana Pensioners asked Judge Preska for a stay of the Fiat Sale Hearing scheduled for May 27 pending the resolution of their request to Withdraw the Reference. "A brief stay of the bankruptcy proceeding should be granted so that Judge Preska has an opportunity to rule upon the serious statutory and constitutional questions that are raised in the bankruptcy proceeding and by the Indiana Pensioners' objections to the proposed sale of all of Chryslers' assets," explains Mr. Kurtz. "The Debtors' assertion that any stay past May 27 will irreparably harm the Debtors is simply not supported by the undisputed record here. Rather, the Debtors' own filings with the bankruptcy court establish that the proposed sale of assets need not be completed until July 15, 2009," he points out. Mr. Kurtz contends that absent a stay, the Bankruptcy Court will adjudicate the Indiana Pensioners' Sale Objection -- including their nonbankruptcy federal law objections -- at the May 27 hearing. The seven day period does not give the Indiana Pensioners any meaningful opportunity to engage in discovery or develop a factual record with which to challenge the proposed Sale, he says. "The Indiana Pensioners will be effectively deprived of their right to challenge the Debtors' factual basis for supporting a transaction that transfers billions of dollars worth of assets and leaves the bankruptcy estates essentially empty." "Because the Indiana Pensioners' Sale Objection raises substantial issues of non-bankruptcy federal law, they are entitled to have their objection adjudicated in this Court," Mr. Kurtz told Judge Preska. "The ability to appeal an adverse ruling from the Bankruptcy Court is no substitute for this right, which will be forever lost if the sale hearing is held before this Court decides if the reference should be withdrawn." About Chrysler LLC 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. 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 U.S. Government told Chrysler March 31, 2009, it would provide up to $6 billion in financing if (i) Chrysler and Fiat SpA could complete a deal by the end of April -- on top of the $4 billion Chrysler has already received -- and (ii) Chrysler would obtain concessions from constituents to establish a viable out-of-court plan. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case No. 09-50002). U.S. President Barack Obama said that Chrysler had to file for bankruptcy after the automaker's smaller lenders, including hedge funds that he didn't name -- "a small group of speculators" -- refused to make the concessions agreed to by the Company's major debt holders and workers. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler says that as of December 31, 2008, it had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Terms of Court-Approved $4.96-Bil. DIP Financing -------------------------------------------------------------- Judge Arthur J. Gonzales of the U.S. Bankruptcy Court for the Southern District of New York has authorized, on a final basis, Chrysler LLC and its affiliates to: (a) enter into the Second Lien Secured Priming Superpriority Debtor-in-Possession Credit Agreement dated as of April 30, 2009, by and among Chrysler LLC, as borrower, and The United States Department of the Treasury and Export Development Canada, as lenders, as amended by the First Amendment; and (b) obtain postpetition financing on a secured, priming and super-priority basis pursuant to the terms and conditions of the DIP Facility, up to a maximum aggregate amount of $4,960,000,000. All objections asserted against the approval of the DIP Financing not withdrawn or resolved are overruled on the merits in all respects, said the Court. At the DIP hearing held May 20, 2009, Judge Gonzalez denied the Indiana Pensioners' request to object to the DIP Financing. Judge Gonzalez held that the Indiana Pensioners have not filed an objection by the deadline. A full-text copy of the DIP Final Order is available for free at: http://bankrupt.com/misc/Chrysler_Final_DIP_Order.pdf As previously reported, the Debtors obtained interim approval on May 4, 2009, to obtain as much as $1.4 billion in initial postpetition loan from The U. S. Treasury and EDC. The U.S. Treasury and EDC committed to provide the Debtors $4.1 billion in postpetition loan under their Second Lien Secured Priming Superpriority DIP Credit Agreement. The amount, however, was increased to $4.96 billion, according to Bloomberg News, to provide $600 million to cover for GMAC LLC's losses that may be incurred due to GMAC's taking over on Chrysler Financial Services Americas LLC's financing commitments to the Debtors' dealers. Richard H. Engman, Esq., at Jones Day, in New York, was quoted by Bloomberg as saying that another $260 million will replace funds transferred to Chrysler Canada. The Court also granted the DIP Lenders an allowed super-priority administrative expense claim for all loans, reimbursement obligations and any other indebtedness, which may be owed by any of the Debtors to the DIP Lenders under the DIP Facility. Judge Gonzalez further ruled that except for the Carve-Out, no costs or expenses of administration of the Debtors' bankruptcy cases will be imposed or charged against, or recovered from, the DIP Lenders. An amount of the Commitment equal to $600,000,000 will be funded soley by the United States Department of the Treasury to finance the Initial Transfer and the Second Transfer -- each as defined in and pursuant to the Master Transaction Agreement dated as of May __, 2009 among the United States Department of the Treasury, GMAC LLC, U.S. Dealer Automotive Receivables LLC and Chrysler LLC. Prior to the entry the Final DIP Order, the Debtors responded to the objections filed against the approval of the DIP Financing. The Debtors told Judge Gonzalez that they do not believe that the objections pose an impediment to entry of the DIP Final Order. However, to avoid any confusion and to address the concerns raised in the objections, the Debtors have (i) deleted the reference to "Permitted Encumbrances" and replaced it with "Permitted Liens," and (ii) further clarified the meaning of "Permitted Liens" by including certain language to the Final DIP Order. In addition, to resolve consensually the objections pertaining to the Budget, the Debtors revised their budget and removed certain disclaimers. Benteler Automotive Corporation has also withdrawn its joinder on Robert Bosh LLC, et al.'s objection prior to the entry of the Final DIP Order. No reason was cited for the withdrawal. First Amendment According to the "First Amendment to Second Lien Secured Priming Superpriority Debtor-In-Possession Credit Agreement," dated as of May 5, 2009, the DIP Facility's commitment amount is changed from $4.1 billion to $4.96 billion. The First Amendment adds new terms to the DIP credit agreement, including terms related to the First Amendment and GMAC LLC. The First Amendment also redefines certain terms, including Guarantor, Master Transaction Agreement, Primed Liens and Transaction Documents, among others. Any advance, other than any of the $600 million GMAC Loan, made by the Lenders after the First Amendment's effective date will be made according to these percentages, or other agreed percentages, provided that the percentages total 100% of that advance: Lender Percentage ------ ---------- EDC 26.7765% Treasury 73.2235% Any GMAC Loan requested to be made in accordance with the DIP Facility will be subject only to the satisfaction of these conditions, which may be waived by the Treasury in its sole discretion: (i) the Treasury will have received a Use of Proceeds Statement, which is a Borrower's certificate indicating in reasonable detail the intended use of the requested Loan; provided that the GMAC Loans may be used only for the purpose specified in the GMAC Master Agreement; and (ii) the DIP Final Order will have been entered increasing the aggregate amount of the Commitments by $860,000,000. Copies of executed DIP Agreement, the First Amendment and the 9- week DIP Budget are available for free at: * http://bankrupt.com/misc/CHRYSLER_DIP_Pact_Executed.pdf * http://bankrupt.com/misc/Chrysler_1stAmendment_DIP_Pact.pdf * http://bankrupt.com/misc/Chrysler_9-Week_DIP_Budget.pdf The First Amendment will become effective upon the date on which these conditions have been satisfied: (a) Each Lender will have received the First Amendment, executed and delivered by a duly authorized officer of the Borrower and the Lenders; (b) Each Lender will have received an acknowledgment and consent duly executed and delivered by each Guarantor; (c) The Treasury will have received an amended and restated Initial Note in a principal amount equal to $3,800,000,000, and the Canadian Lender will have received an amended and restated Initial Note in a principal amount equal to $1,160,000,000; (d) The Treasury will have received an amended and restated Additional Note in a principal amount equal to $253,460,000, and the Canadian Lender will have received an amended and restated Additional Note in a principal amount equal to $77,372,000; (e) Each Lender will have received an executed legal opinion of Jones Day, New York counsel to the Borrower and its Subsidiaries as to New York law, United States federal law and the Delaware Limited Liability Companies Act, and in-house counsel to the Borrower and its Subsidiaries; (f) Each Lender will have received resolutions duly adopted by the board of directors, or equivalent, of each Loan Party authorizing the execution, delivery, and performance of the First Amendment and the DIP Credit Agreement and the Loan Documents to which it is party; and (g) The Final Order will be entered by the Court and will authorize the Credit Agreement as amended by the First Amendment, including, the increase of the Commitments of the Lenders as secured by the DIP Liens. About Chrysler LLC 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. 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 U.S. Government told Chrysler March 31, 2009, it would provide up to $6 billion in financing if (i) Chrysler and Fiat SpA could complete a deal by the end of April -- on top of the $4 billion Chrysler has already received -- and (ii) Chrysler would obtain concessions from constituents to establish a viable out-of-court plan. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case No. 09-50002). U.S. President Barack Obama said that Chrysler had to file for bankruptcy after the automaker's smaller lenders, including hedge funds that he didn't name -- "a small group of speculators" -- refused to make the concessions agreed to by the Company's major debt holders and workers. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler says that as of December 31, 2008, it had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Indiana Pensioners Say Govt.-Backed Sale Illegal -------------------------------------------------------------- With barely a week from the May 27 hearing, Chrysler LLC hit another snag in its bid to sell most of its assets to the new company formed by Fiat S.p.A. A group of Indiana pension funds holding first priority secured claims filed an objection with the U.S. Bankruptcy Court for the Southern District of New York, saying that Chrysler and its affiliated debtors are requesting approval of an "illegal sub rosa plan." The opposition is led by the Indiana State Teachers Retirement Fund, the Indiana State Police Pension Trust and the Indiana Major Moves Construction Fund, which together own about $42.5 million of Chrysler's $6.9 billion in secured debt. "[Chrysler's] position that its business is effectively a melting ice cube provides no grounds of approval of an illegal sub rosa plan," says Glenn Kurtz, Esq., at White & Case LLP, in New York. He points out that courts can approve the sale of "melting" assets but there is no authority for approving a distribution scheme in a sale pursuant to the bankruptcy law. The Indiana Pensioners also complain that the proposed sale seeks to extinguish the property rights of the secured lenders. "[Chrysler's] proposed restructuring of stakeholders' rights seeks to make payments of billions of dollars to unsecured creditors while paying the secured creditors only 29 cents on the dollar," Mr. Kurtz says in court papers. Mr. Kurtz also describes the financing proposed by the sale as illegal, pointing out that the U.S. Treasury Department is accessing funds under the Troubled Asset Relief Program which was implemented to provide funds "only for the purchase of troubled assets from financial institutions." "Chrysler is an automotive company, not a financial institution. The Treasury Department is also improperly controlling Chrysler, without authority, before it even purports to purchase any assets," Mr. Kurtz says. The proposed sale of Chrysler's assets also drew criticisms from these parties: * ZF Friedrichshafen AG, * Wayne Dodge Inc. * Bruce Abrahamson, et al. * Superior Acquisition, Inc * GSL Development LLC * Timothy Michetti * Revenue Collector for St. Louis County, Missouri * Hoegh Autoliners AS * Advanced Tooling Systems, Inc. * Bradford Steven & Cynthia Gail Freeland * Thomas Ziemczyk, Judith Stopak, Charles G. Brasili * Donald Miltz * Thomas McAlear * Shuert Industries Inc. * Liccardi Motors Inc. * Hazen Transport Inc. * Mike Pile Auto Group Ltd * Palmer Moving & Storage Co. * Committee of Chrysler Affected Dealers * E.I. du Pont de Nemours and Company * Ohio Module Manufacturing Co., LLC * Venice Dodge, et al. * St. Pete Jeep Eagle Inc. * Bruss North America Inc. * Millerstown Chrysler Inc. * Mid-West Forge Corporation * Avibank Manufacturing Inc. * NSS Technologies Inc. The parties say that the information provided so far is not sufficient to grant approval of the sale; Chrysler did not clarify what assets to be sold; the sale would put unsecured interests ahead of tort judgment holders and would reduce retirement benefits; and there was lack of adequate notice to affected dealers, among others. Meanwhile, the Illinois Workers' Compensation Commission and the Illinois Self-Insurers Advisory Board asked the Court to grant them leave to file their objection to the proposed sale. They explain that say that were not able to comply with the deadline due to the shortened time period and difficulties encountered in obtaining information. Sale Notice Published in 3 Newspapers Staff of The New York Times, The Wall Street Journal, Financial Times and USA Today said that Chrysler's notice of sale of its assets had already been published. The notice of sale was published in the May 13 editions of Financial Times and USA Today, and in the May 12 editions of the two other newspapers. About Chrysler LLC 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. 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 U.S. Government told Chrysler March 31, 2009, it would provide up to $6 billion in financing if (i) Chrysler and Fiat SpA could complete a deal by the end of April -- on top of the $4 billion Chrysler has already received -- and (ii) Chrysler would obtain concessions from constituents to establish a viable out-of-court plan. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case No. 09-50002). U.S. President Barack Obama said that Chrysler had to file for bankruptcy after the automaker's smaller lenders, including hedge funds that he didn't name -- "a small group of speculators" -- refused to make the concessions agreed to by the Company's major debt holders and workers. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler says that as of December 31, 2008, it had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: R. Manzo's Updated Liquidation Analysis ----------------------------------------------------- Robert Manzo, executive director of Capstone Advisory Group LLC, submitted with the Court a liquidation analysis, dated May 20, 2009. Capstone Advisory is a consultancy firm that started working with Chrysler LLC in November 2008, and helped the Company prepare for its bankruptcy filing. Mr. Manzo submitted a liquidation analysis on the Petition Date. Mr. Manzo says that the new Liquidation Analysis reflects more recently available operating results and account balances for the Debtors, and the ending cash balance as of the Petition date. The Liquidation Analysis is based on unaudited book values of Chrysler's assets as of March 31, 2009. The Liquidation Analysis, however, does not include recoveries resulting from any potential preference claims, fraudulent conveyance litigation, or other avoidance actions. Under a liquidation scenario, Mr. Manzo anticipates these costs: Total Estimate Low High -------------- -------------- Wind down costs $792,000,000 $586,000,000 Plant maintenance 1,395,000,000 958,000,000 Bankruptcy costs 280,000,000 278,000,000 -------------- -------------- $2,466,000,000 $1,822,000,000 ============== ============== Mr. Manzo also reveals these potential recoveries to Secured Lenders, with calculated annual interest rate of 6.17% for the First Lien Lenders, and 5% for U.S. Treasury: Total Estimate Low High -------------- -------------- First Lien Lenders ------------------ Net Assumed Proceeds ($407,000,000) $1,378,000,000 Secured Claims at filing 6,904,000,000 6,904,000,000 Percent Recovery N/A 20% NPV of Assumed Proceeds N/A 1,218,000,000 Percent Recovery N/A 18% U.S. Treasury ------------- Net Assumed Proceeds 142,000,000 252,000,000 Secured Claims at filing 4267,000,000 4267,000,000 Percent Recovery 3% 6% NPV of Assumed Proceeds 126,000,000 228,000,000 Percent Recovery 3% 5% ============== ============== A full-text copy of the Liquidation Analysis is available for free at: http://bankrupt.com/misc/Chrysler_LiquidationAnalysis_052009.pdf About Chrysler LLC 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. 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 U.S. Government told Chrysler March 31, 2009, it would provide up to $6 billion in financing if (i) Chrysler and Fiat SpA could complete a deal by the end of April -- on top of the $4 billion Chrysler has already received -- and (ii) Chrysler would obtain concessions from constituents to establish a viable out-of-court plan. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case No. 09-50002). U.S. President Barack Obama said that Chrysler had to file for bankruptcy after the automaker's smaller lenders, including hedge funds that he didn't name -- "a small group of speculators" -- refused to make the concessions agreed to by the Company's major debt holders and workers. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler says that as of December 31, 2008, it had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Dealers Object to Contract Rejections, Assumption --------------------------------------------------------------- Chrysler LLC's plan to scrap 789 dealership agreements has been hit by objections from dealers and other parties. Aside from dealership groups that said that Chrysler's proposal to reduce its dealership network would hurt sales, other dealers have conveyed objections to the proposal: -- Dave Croft Motors, Inc., a dealer that is also under bankruptcy protection, contends that the Debtors must first seek relief from the automatic stay in its bankruptcy case before they may be allowed to seek rejection of Croft's agreements. -- Des Moines Chrysler argues that the request is void of any facts evidencing that the Debtors would suffer a loss or be deprived of an economic benefit unless DMC's dealership is terminated. Some dealers whose contracts will be assumed and assigned to a Fiat S.p.A. owned company in connection with the sale transaction backed by the U.S. and Canadian governments are objecting to the proposed amounts necessary to cure defaults under their dealership contracts. These parties argue that the Debtors' proposed cure amounts are way below the actual amounts owed: Proposed Asserted Creditors/Dealers Cure Amount Cure Amount ----------------- ----------- ----------- Behr America, Inc. 0 62,300,000 Flex-N-Gate Corporation -- 30,000,989 Pilkington North America, Inc. -- 2,800,074 United Road Services 0 1,217,284 Fluid Routings Solutions, Inc. 304,023 896,908 Sierra Mountain Express, Inc. 187,444 657,992 Supreme Auto Transport, Inc. 105,994 321,136 Dura Mold, Inc. 202,655 259,261 Findlay Industries, Inc. 0 240,784 Rush Trucking Corporation 135,578 207,389 Cooper Industries, LLC 75,628 202,454 Wolverine Fire Protection Co. $107,605 113,268 Createc Corporation 46,692 61,451 E.R. Wagner Manufacturing Co. 12,771 26,023 Prestige Stamping, Inc. 17,861 22,058 Schaeffer Group USA Inc. 2,994,729 TBD LUK GMBH & Co. 1,159,004 TBD CEVA Freight Management 32,303 TBD Gibraltar Industries Inc. asserts that its agreement with Chrysler LLC cannot be assumed assigned without an "adequate showing of future performance." "Although adequate assurance of future performance may have been established in the motion and other pleadings filed in this case as it relates to Fiat, et al., the proposed assignee may not yet even be known, much less is its ability to perform established," Gibraltar Industries says. Gibraltar also complains that the pre-bankruptcy cure amount the Debtors proposed to pay to the company as part of the assumption and assignment is understated by $27,230. The company says that it is owed $1,512,097 in cure costs. CEVA Freight Management asks the Court to direct the Debtors to, among other things, clarify as to the exact CEVA contracts they intend to designate for assumption and assignments. Ametek, Inc., contends that the Debtors' proposed cure amounts may be inaccurate and insufficient because Ametek has not been given enough time to conduct and conclude a thorough search of its books and records to determine all open executory contracts with the Debtors and the accurate amount of all unpaid invoices and other charges that would constitute "cure amounts." As reported by the TCR on May 15, 2009, Chrysler LLC and its affiliates submitted to Judge Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York a motion seeking authority to reject, effective as of June 9, 2009, Chrysler, Jeep, Dodge or Dodge Truck dealership agreements with 789 dealers. A list of the 789 Dealership Agreements is available for free at: http://bankrupt.com/misc/Chrysler_Rejected_Delears.pdf Chrysler has identified dealership contracts that it will assign, together with its key operating assets to a New Chrysler, a company to be 20% owned by Fiat S.p.A., in connection with the 11 U.S.C. Sec. 363 transaction. A list of these contracts is available at: http://bankrupt.com/misc/Chrysler_Designated_Dealer_Agreements.pdf Chrysler Gives Update on Dealer Network Condition "Chrysler is treating the rejected dealers fairly by assisting in the redistribution of remaining vehicle and parts inventory, paying incentive and warranty payments due," said Steven J. Landry, Executive Vice President, North American Sales and Marketing, Service and Parts -- Chrysler LLC, in a statement dated May 21, 2009. The automotive industry cannot support the number of dealers currently in the marketplace, noted Mr. Landry. From 1990 until 2007, the industry averaged roughly 16 million new vehicles sold each year. In 2009, new vehicles sold are expected to be 10.5 million units, he pointed out. "It was not an easy decision to ask the court to reject a portion of our dealer contracts, but the reality is Chrysler's viability depends on a vibrant, profitable dealer network," he said. "As presently configured, Chrysler's dealer network does not meet that test. If the sale to Fiat is not approved by the Bankruptcy Court, the stark reality is all 3,181 dealers will face elimination." According to Mr. Landry, the process to evaluate dealers was a thorough, rigorous process that used a data-driven metric that included these factors: * Minimum Sales Responsibility * A scorecard that measured sales, share, shipments, customer satisfaction index, service satisfaction index and warranty repair * Facility (capacity, Millennium II standards) * Location (optimum retail area) * Dual (Dealer is dualed with a competing manufacturer) * The market's total sales potential Under this plan, he said, 2,392 dealers across the United States move forward with the new company. It doesn't mean that the 789 rejected dealers will close if this motion is approved by the Court: * 44 percent of the 789 "rejected" dealers are dualed with another (competing) new vehicle franchise and can continue to sell those makes of vehicles * 83 percent of the 789 "rejected" dealers sell more used than new vehicles, many of these dealers will continue selling and servicing pre-owned vehicles "Chrysler began the process to consolidate dealerships and locate all three brands under one roof more than 10 years ago. The Company made the decision it was cost prohibitive to continue to manufacture and market overlapping products. Going forward, we will not do that, so it is critical the majority of our dealers offer customers all three brands under one roof," Mr. Landry relates. Senators Push to Slow Chrysler Dealer Closures Senator Kay Bailey Hutchison said that Chrysler LLC has made assurances that it would help dealers facing closure dispose of their inventory and other assets beyond the June 9 deadline, according to a May 21 report by Reuters. Sen. Hutchison made the announcement on Thursday following her talks with Chrysler President and Vice Chairman James Press. "Mr. Press said that they will certainly continue to help until every part of this transition of this inventory is disposed of and the help will be there after June 9, that was the assurance that was given," Reuters quoted Sen. Hutchison as saying. The senator reportedly received a letter from Mr. Press, saying the affected dealers would "receive a fair and equitable value for virtually all of their outstanding vehicle and parts inventory." As the letter did not include a specific assurance about helping the dealers after June 9, Sen. Hutchison reportedly called Mr. Press for clarification. "We will know in two weeks if the good faith that is represented in this letter is in fact implemented," Reuters quoted Sen. Hutchison as saying. Sen. Hutchison received the letter after she proposed an amendment to a war funding bill that would block federal aid for Chrysler or General Motors if dealers are not given at least 60 days notice before closing. The proposed amendment, according to a May 20 report by Freep.com, drew support from five other senators namely, Sherrod Brown of Ohio, Barbara Mikulski of Maryland, Thad Cochran of Mississippi, Claire McCaskill and Kit Bond of Missouri. Hearing on Auto Industry The fate of dealers at Chrysler and General Motors was discussed at a House Judiciary Committee hearing last week in Washington, where Michigan Representative John Conyers said the automakers' reduced dealer networks may undermine their ability to recover, according to a report by Bloomberg News. Rep. Conyers said at the hearing that consumers will worry about whether their dealer will stay in business long enough to service their car with contracts being summarily terminated. "Some say it makes absolutely no economic sense to terminate these dealerships, and that doing so could actually undermine the ability of our nation's auto industry to regain its financial stability," Bloomberg quoted Rep. Conyers as saying. About Chrysler LLC 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. 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 U.S. Government told Chrysler March 31, 2009, it would provide up to $6 billion in financing if (i) Chrysler and Fiat SpA could complete a deal by the end of April -- on top of the $4 billion Chrysler has already received -- and (ii) Chrysler would obtain concessions from constituents to establish a viable out-of-court plan. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case No. 09-50002). U.S. President Barack Obama said that Chrysler had to file for bankruptcy after the automaker's smaller lenders, including hedge funds that he didn't name -- "a small group of speculators" -- refused to make the concessions agreed to by the Company's major debt holders and workers. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler says that as of December 31, 2008, it had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Spending Bill Amendment Dropped to Allow Gov't Aid ---------------------------------------------------------------- Todd Spangler and Justin Hyde at Detroit Free Press reports that Sen. Kay Bailey Hutchison has dropped an amendment to the spending bill that would have blocked government money from going to Chrysler LLC or General Motors Corp. unless they ensured that dealerships about to be cut off were given at least 60 days' notice before termination. President Barack Obama, says The NY Times, had signed the omnibus spending bill, which is a $787 billion measure meant to rejuvenate a sluggish economy. It increases spending on domestic programs by an average of 8% in the current fiscal year, which started in October 2008, The NY Times relates. Austin Business Journal reports that Sen. Hutchison had introduced an amendment that would grant more time for Chrysler dealerships in the U.S. that face closure. Business Journal notes that had the amendment been passed, dealers slated for closing on June 9 would have an extra 60 days to close down operations and sell remaining inventory. According to Free Press, Sen. Hutchison believes that Chrysler will do as much as it can to help 789 dealers targeted for closure by June 9 get a return on their inventory. Sen. Hutchison, Free Press relates, said that she and Michigan Sen. Debbie Stabenow had spoken with Chrysler President Jim Press. The report states that Mr. Press promised that Chrysler would try to give dealers "fair and equitable value for virtually all cars and parts" and that help to those dealerships being shed would extend after June 9. Chrysler has 200 representatives in the field working to move inventory from dealers who face termination on June 9, the report says, citing Mr. Press. The U.S. Treasury Department's decision to inject another $7.5 billion into GMAC LLC was significant because it can help fund loans to dealers and to clients, making it easier to get inventory off lots and generate a return to dealers losing Chrysler and GM business, Free Press reports, citing Senators Hutchison and Stabenow. GMAC, says the report, is GM's financing arm that does business with Chrysler. 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. 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 U.S. Government told Chrysler March 31, 2009, it would provide up to $6 billion in financing if (i) Chrysler and Fiat SpA could complete a deal by the end of April -- on top of the $4 billion Chrysler has already received -- and (ii) Chrysler would obtain concessions from constituents to establish a viable out-of-court plan. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D. N.Y (Mega-case), Lead Case No. 09-50002). U.S. President Barack Obama said that Chrysler had to file for bankruptcy after the automaker's smaller lenders, including hedge funds that he didn't name -- "a small group of speculators" -- refused to make the concessions agreed to by the Company's major debt holders and workers. In connection with the bankruptcy filing, Chrysler has reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Chrysler has hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler's says that as of December 31, 2008, it had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Court Sets June 30 Administrative Expense Bar Date ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia has established June 30, 2009, at 5:00 p.m. (Pacific Time) as the administrative expense bar date in Circuit City Stores, Inc., et al.'s bankruptcy cases. Requests for payment of Administrative Expenses must be filed so as to be received on or before the administrative expense bar date at: Circuit City Stores, Inc., et al. Claims Processing Dept. Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 Any holder of a 503(b)(9) administrative claim, who was required to file his claim/expense by December 19, 2008, pursuant to the order of the Court, is not now permitted to file an Administrative Expense Request. As set forth in the order establishing the 503(b)(9) Bar Date, any person or entity holding a claim/expense pursuant to Bankruptcy Code section 503(b)(9) that failed to file a claim/expense request on or before December 19, 2008, is forever barred and estopped from asserting a claim/expense pursuant to section 503(b)(9) against the Debtors, their estates, or property of any of them, absent further order of the Court. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITIZENS NATIONAL: Closed by Regulators; MCB Assumes Deposits ------------------------------------------------------------- Citizens National Bank, Macomb, Illinois, was closed May 22 by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Morton Community Bank, Morton, Illinois, to assume all of the deposits of Citizens National Bank, excluding those from brokers. Citizens National Bank was scheduled to reopen Saturday, May 23, 2009, as branches of Morton Community Bank. Depositors of Citizens National Bank will automatically become depositors of Morton Community Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until Morton Community Bank can fully integrate the deposit records of Citizens National Bank. As of May 13, 2009, Citizens National Bank had total assets of $437 million and total deposits of approximately $400 million. Morton Community Bank agreed to purchase approximately $240 million of assets. The FDIC will retain the remaining assets for later disposition. Morton Community Bank will purchase all deposits, except about $200 million in brokered deposits, held by Citizens National Bank. The FDIC will pay the brokers directly for the amount of their funds. Customers who place money with brokers should contact them directly for more information about the status of their deposits. The FDIC and Morton Community Bank entered into a loss-share transaction on approximately $200 million of Citizens National Bank's assets. Morton Community Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss- sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. Customers who have questions about the May 22 transaction can call the FDIC toll-free at 1-866-954-9529. The phone number will be operational this evening until 9:00 p.m., Central Time (CT); on Saturday from 9:00 a.m. to 6:00 p.m., CT; on Sunday from noon to 6:00 p.m., CT; and thereafter from 8:00 a.m. to 8:00 p.m., CT. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/citizensnational.html. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $106 million. Morton Community Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Citizens National Bank is the 36th FDIC-insured institution to fail in the nation this year, and the fifth in Illinois. The last FDIC-insured institution to be closed in the state was Strategic Capital Bank, Champaign, earlier on May 22. CITY OF VALLEJO: To Pay City Manager $390,000 to Resign ------------------------------------------------------- Matthai Kuruvila at San Francisco Chronicle reports that the City of Vallejo will pay its city manager, Joe Tanner, about $390,000 to resign. Under the proposed settlement, the city seeks the resignation of Mr. Tanner effective June 1 and in exchange, is willing to pay him three annual installments of $130,000. San Francisco Chronicle notes that Mr. Tanner has been criticized for his $341,000 annual salary, which makes him the fourth- highest-paid city manager in California. Mr. Tanner has been under attack by Vallejo's police and fire unions because he identified their contracts as playing a large role in Vallejo's fiscal shortfalls, the report states, citing councilwoman Stephanie Gomes. According to the report, Ms. Gomes said the campaigns of four city council members were funded heavily by the city's police and fire unions, and it was their interests that ultimately won out by firing Mr. Tanner. The council gave Mr. Tanner in February 2009 a one-year notice that they weren't going to renew his contract, San Francisco Chronicle states. The generous severance terms of Mr. Tanner's contract meant that Vallejo had a financial incentive to come to a resolution quickly, and that the city saved money with the settlement agreement, the report states, citing Mayor Osby Davis. San Francisco Chronicle relates that Mr. Davis said that if Mr. Tanner had resigned August 31, as Mr. Tanner had wanted, he would have walked away with a $435,000 package. Vallejo -- http://www.ci.vallejo.ca.us/GovSite-- is a city in Solano County, in California. As of the 2000 census, the city had a total population of 116,760. It is located in the San Francisco Bay Area on the northern shore of San Pablo Bay. The City is a charter city organized and exercising governmental functions under its charter and the laws and constitution of the state. Its governing body is its City Council. The City filed for protection under Chapter 9 of the U.S. Bankruptcy Code on May 23, 2008 (Bankr. E.D. Calif. Case No. 08-26813). Marc A. Levinson, Esq., and Norman C. Hile, Esq., at Orrick, Herrington & Sutcliffe LLP in Sacramento, California, represent the City. According to Vallejo's comprehensive annual report for the year ended June 30, 2007, the city has $983 million in assets and $358 million in debts. CLAIRE STORES: S&P Cuts Ratings on $200 Mil. Facility to 'B-' ------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered the rating on Claire's Stores Inc.'s $200 million revolving credit facility and $1.45 billion term loan to 'B-' from 'B', and revised the recovery rating on the secured issues to '4' from '2'. The '4' recovery rating indicates S&P's expectation for average (30%-50%) recovery in the event of a payment default. At the same time, S&P affirmed all other ratings on the company, including the 'B-' corporate credit rating. The outlook is negative. "The revision of the recovery rating follows diminished prospects of recovery for the company due to S&P's expectation that the recent poor performance is likely to continue over at least the near term," said Standard & Poor's credit analyst David Kuntz. COEUR D'ALENE: Split-Adjusted Common Stock Begins Trading May 27 ---------------------------------------------------------------- The Board of Directors of Coeur d'Alene Mines Corporation has authorized a one-for-ten reverse split of its common stock, which was approved by Coeur stockholders at the Company's annual stockholders meeting on May 12, 2009, and which will be effective at 6:01 p.m. EDT on May 26, 2009. The 1-for-10 reverse stock split will convert 10 shares of the Company's common stock into 1 share of common stock. The reverse stock split affects all issued and outstanding shares of the Company's common stock immediately prior to the effectiveness of the reverse stock split. The same 1-for-10 reverse stock split ratio will be used to effect the reverse split of the Company's CHESS Depositary Interests or CDIs. The Company's common stock will start trading on a split-adjusted basis on the New York Stock Exchange at market open on May 27, 2009. Coeur's common stock will begin trading on the Toronto Stock Exchange on a split-adjusted basis two to three trading days following the date upon which letters of transmittal are sent to stockholders. Letters of transmittal are expected to be sent to stockholders on or about May 29, 2009. The number of shares of Coeur common stock issued and outstanding will be reduced from approximately 686,320,000 shares, to approximately 68,632,000 shares post-split, without accounting for fractional shares. The number of shares reserved for issuance under Coeur's equity compensation plans will also be reduced proportionately. Coeur will not issue any fractional shares of its common stock as a result of the reverse stock split. Instead, stockholders who would otherwise hold fractional shares will be entitled to receive cash in lieu of those fractional shares in an amount equal to the fraction to which the shareholder would otherwise be entitled multiplied by the closing sales price of Coeur's common stock as reported on the NYSE or TSX, as applicable, on May 26, 2009, as adjusted for the reverse stock split. About Coeur d'Alene Coeur d'Alene Mines Corp. (NYSE:CDE) (TSX:CDM) -- http://www.coeur.com/-- is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile, Bolivia and Australia. * * * As the Troubled Company Reporter reported on May 20, 2009, Standard & Poor's Ratings Services placed its ratings, including its 'CCC' corporate credit rating, on Coeur d'Alene Mines Corp. on CreditWatch with positive implications. The CreditWatch listing reflects S&P's assessment that near term operating cash flow generation will likely increase due to the combination of higher metal volumes and continued favorable gold and silver prices. Idaho-based Coeur d'Alene completed construction of its Palmarejo mine and successfully started operating it in the first quarter of 2009, which is increasing volumes. COLIBRI GROUP: Former Workers Sues for Outstanding Wages -------------------------------------------------------- Kelsey Abbruzzese at The Associated Press reports that former workers of The Colibri Group have filed a lawsuit against the Company, claiming that they were denied of two months of pay and benefits after its abrupt closing. The AP relates that the workers said that they are entitled to the pay and benefits under federal law, which requires a company to notify employees 60 days before closing. The AP states that Colibri Group closed in January 2009 and laid off 280 workers. According to The AP, the workers said that they received an e-mail the night before and many didn't find out until they arrived at work. Based in Providence, Rhode Island, The Colibri Group designs, manufactures and markets jewelry, lighters, smoking accessories, and clocks. The Company was founded in 1928 with the invention of the world's first automatic lighter. The Company sells its products through 20,000 U.S. outlets, including major national chains and independent retailers, as well as broad-based international distribution. As reported by the Troubled Company Reporter on January 20, 2009, Colibri Group shut down its operation, laid off about 280 workers, and went under receivership. COMPASS MINERALS: Moody's Gives Positive Outlook on 'B1' Rating --------------------------------------------------------------- Moody's Investors Service changed the outlook on Compass Minerals International, Inc.'s ratings to positive and assigned a B1 rating to its proposed $100 million senior unsecured notes due 2019. The positive outlook reflects the expectation of a sustained increase in earnings from its fertilizer segment. Proceeds from the new notes will be used to refinance $89.8 million of the 12% senior subordinated notes due 2013. Additionally Moody's affirmed Compass Minerals' other ratings (Corporate Family Rating of Ba2). The Ba2 Corporate Family Rating reflects Compass Minerals' low leverage, the company's entrenched position as the leading North American producer of highway deicing salt with an annual production capacity of 13.37 million tons (15.37 million tons including European operations), its access to extensive and high quality salt deposits, its efficient distribution network characterized by access to lower cost water transportation, as well as its position as the leading North American producer of sulfate of potash. The company's low leverage is due to an upturn in its salt business along with a substantial increase in earnings from its fertilizer business; Debt to EBITDA is at 1.6 times for the LTM ended March 31, 2009 (ratio incorporates Moody's global standard analytical adjustments). The ratings are tempered by the volatility in sales due to weather conditions and the mature nature of the highway deicing business, characterized by low single digit volume growth rates. Additionally, the ratings recognize that volatile natural gas and energy costs (which represented 11% of the company's total production costs in 2008) can put pressure on operating margins. Moody's also notes that Compass Minerals pays a significant dividend to shareholders and is expected to use a substantial portion of its 2009 gross cash flow for capital expansion projects. The refinancing of the last portion of the 12% notes due 2013, the last of the firm's high coupon notes, will lower the firm's cost of debt and is a positive for the rating. Compass Minerals has also reduced its leverage over the past three years by repaying over $290 million of debt. Further debt reduction is not expected due to the company's low leverage. The move to a positive outlook is supported by the substantial increase in earnings from its fertilizer business due to the global increase in potash prices and the ability of salt producers to achieve double digit price increases in the past two years that may continue in 2009. Moody's expects the favorable pricing environment in potash will cause a sustained increase in the company's specialty fertilizer business and this profitability increase will continue in 2009 despite the anticipated reduction in sales volumes due to the higher prices. The ratings could be upgraded if financial metrics remain elevated, the company successfully completes its planned capacity additions in 2009 and refinances its revolver maturing in December 2010. These summarizes the rating actions taken: Ratings assigned: Compass Minerals International, Inc. * $100mm gtd sr unsec notes due 2019 -- B1 (LGD5, 89%) Ratings affirmed: Compass Minerals International, Inc. * Corporate Family Rating -- Ba2 * Probability of Default Rating -- Ba2 * $396.2mm gtd sr sec term loan facility due 2012 -- Ba2 (LGD3, 41%) from Ba2 (LGD3, 40%) * $125mm gtd sr sec revolving credit facility due 2010 -- Ba2 (LGD3, 41%) from Ba2 (LGD3, 40%) Debt not rated by Moody's (amount as of 3/31/2009): * $89.8 mm 12% sr sub discount notes due 2013 Moody's most recent announcement concerning the ratings for Compass Minerals was on June 24, 2008, when the firm's CFR was raised to Ba2 from Ba3 as a result of improvement in its leverage profile and credit metrics. Compass Minerals International, Inc., headquartered in Overland Park, Kansas, is a leading North American producer of salt used for highway deicing, food grade applications, water conditioning, and other industrial uses. The company is also North America's largest producer of sulfate of potash used in specialty fertilizers. The company had revenues and net sales of $1,097 million and $796 million, respectively, for the LTM ended March 31, 2009. COMPASS MINERALS: S&P Gives Positive Outlook; Holds 'BB' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Overland Park, Kansas-based Compass Minerals International Inc. to positive from stable. At the same time, S&P affirmed its ratings on Compass Minerals, including its 'BB' corporate credit rating. Concurrently, S&P assigned a 'B+' issue-level rating (two notches below the corporate credit rating) and a '6' recovery rating to the company's new $100 million senior unsecured notes issue due 2019, based on preliminary terms and conditions. The ratings indicate that lenders can expect negligible (0% to 10%) recovery in the event of a payment default. Proceeds from the notes will be used to repay the company's existing senior subordinated discount notes due 2013. "The outlook revision reflects the company's improved credit profile, which has benefited from solid performance in the road salt business and growth in its fertilizer operations," said Standard & Poor's credit analyst Marie Shmaruk. As a result, S&P believes that credit measures are strong for the current rating, given the company's weak business profile, with debt to EBITDA under 2x and funds from operations (FFO) to total debt above 30%. Currently, S&P's rating and outlook incorporate the expectation that the fertilizer business has weakened and the road salt business can vary significantly from year to year. However S&P would not expect EBITDA to dip below $250 million for a sustained period. The ratings on Compass Minerals reflect the seasonality of its salt-production business, its limited product and mine diversity and the inherent cyclicality of its fertilizer business. Still, the company maintains a leading position in the recession- resistant salt industry, possesses high margins, and has generated steady annual cash flow. Compass Minerals is the largest producer of salt in North America and in the U.K. It produces salt for highway deicing, food-grade applications, water conditioning, and other industrial uses. Although salt sales are highly seasonal, they are not cyclical. In addition, it is the largest North American producer of sulfate of potash specialty fertilizer, a more volatile niche market that accounted for only about 17% of revenues in 2007 but has benefited from rapid growth through the end of 2008. Still, though S&P expects this segment to trend lower in the current downturn given recent volume declines, S&P anticipate a positive contribution to EBITDA. CONSECO INC: Directors Receive Stock Through Incentive Plan ----------------------------------------------------------- Several directors of Conseco Inc. filed with the Securities and Exchange Commission separate Form 4s disclosing their acquisition of Conseco common stock through the Conseco, Inc. Amended and Restated Long-Term Incentive Plan: -- Director Doreen A. Wright holds 24,588 shares of common stock after acquiring 12,281 shares on May 20; -- Director John Turner holds 43,788 shares of common stock after acquiring 12,281 shares on May 20; -- Director Michael Tokarz holds 35,788 shares of common stock after acquiring 12,281 shares on May 20; -- Director Neal C. Schneider holds 38,288 shares of common stock after acquiring 12,281 shares on May 20; -- Director Debra J. Perry holds 37,262 shares of common stock after acquiring 12,281 shares on May 20; -- Director Donna James holds 33,088 shares of common stock after acquiring 12,281 shares on May 20; -- Director Glenn R. Hilliard directly holds 132,428 shares of common stock after acquiring 21,491 shares on May 20; and -- Director Roger Keith Long directly holds 112,281 shares of common stock after acquiring 12,281 shares on May 20. Mr. Hilliard indirectly holds 601,238 shares through GRAT. Mr. Long indirectly holds 610,450 shares through Otter Creek Partners I, LP, and 716,600 shares through Otter Creek International Ltd. Mr. Long owns Otter Creek Management, Inc., the general partner of Otter Creek Partners I, LP. About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. * * * As reported in the Troubled Company Reporter on January 6, 2009, Fitch Ratings has downgraded the ratings assigned to Conseco Inc. The rating outlook on Conseco Inc. and its subsidiaries remains negative. Fitch downgraded these ratings: (i) issuer default rating to 'BB-' from 'BB'; (ii) senior secured bank credit facility to 'BB-' from 'BB+'; and (iii) senior unsecured debt to 'B' from 'BB-'. On March 4, 2009, A.M. Best downgraded the financial strength ratings of Conseco's primary insurance subsidiaries to "B" from "B+" and such ratings have been placed under review with negative implications. Conseco reported a first quarter 2009 net income of $24.5 million compared to a net loss of $7.2 million in the year-earlier quarter. Conseco had $28.5 billion in total assets, $26.9 billion in total liabilities, and $1.59 billion in stockholders' equity as of March 31, 2009. Conseco said it has significant indebtedness which will require over $165 million in cash to service in the next 12 months (including the additional interest expense required after the modification to its Second Amended Credit Facility. Pursuant to Conseco's Second Amended Credit Facility, Conseco must maintain certain financial ratios. The levels of margin between the financial covenant requirements and the Company's financial status, both at March 31, 2009, and the projected levels for the next 12 months, are relatively small and a failure to satisfy any of the financial covenants at the end of a fiscal quarter would trigger a default under the Second Amended Credit Facility. Achievement of the Company's operating plans is a critical factor in having sufficient income and liquidity to meet debt service requirements for the next 12 months and other holding company obligations and failure to do so would have material adverse consequences for the Company. CONSECO INC: Unveils Final Results of Shareholder Voting -------------------------------------------------------- Conseco Inc. on Thursday reported the final voting results of certain agenda on the company's May 12 annual meeting of shareholders. All preliminary results disclosed that day were confirmed: * Nine individuals, R. Glenn Hilliard, Donna A. James, R. Keith Long, Debra J. Perry, C. James Prieur, Neal C. Schneider, Michael T. Tokarz, John G. Turner and Doreen A. Wright were elected to serve as the Company's directors, with terms to expire at the date of next year's annual meeting; * Adoption of a Section 382 Stockholders Rights Plan was approved; * The company's Amended and Restated Long-Term Incentive Plan was approved; and * The appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for 2009 was ratified. Because of the proxy contest at this year's meeting, results of the vote could not be finalized and officially reported until certification by the election inspector, Corporate Election Services. That certification occurred Wednesday. About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. * * * As reported in the Troubled Company Reporter on January 6, 2009, Fitch Ratings has downgraded the ratings assigned to Conseco Inc. The rating outlook on Conseco Inc. and its subsidiaries remains negative. Fitch downgraded these ratings: (i) issuer default rating to 'BB-' from 'BB'; (ii) senior secured bank credit facility to 'BB-' from 'BB+'; and (iii) senior unsecured debt to 'B' from 'BB-'. On March 4, 2009, A.M. Best downgraded the financial strength ratings of Conseco's primary insurance subsidiaries to "B" from "B+" and those ratings have been placed under review with negative implications. Conseco reported a first quarter 2009 net income of $24.5 million compared to a net loss of $7.2 million in the year-earlier quarter. Conseco had $28.5 billion in total assets, $26.9 billion in total liabilities, and $1.59 billion in stockholders' equity as of March 31, 2009. Conseco said it has significant indebtedness which will require over $165 million in cash to service in the next 12 months (including the additional interest expense required after the modification to its Second Amended Credit Facility. Pursuant to Conseco's Second Amended Credit Facility, Conseco must maintain certain financial ratios. The levels of margin between the financial covenant requirements and the Company's financial status, both at March 31, 2009, and the projected levels for the next 12 months, are relatively small and a failure to satisfy any of the financial covenants at the end of a fiscal quarter would trigger a default under the Second Amended Credit Facility. Achievement of the Company's operating plans is a critical factor in having sufficient income and liquidity to meet debt service requirements for the next 12 months and other holding company obligations and failure to do so would have material adverse consequences for the Company. CORD BLOOD: Issues $1.35MM Convertible Promissory Note Due 2012 --------------------------------------------------------------- The Cord Blood America, Inc., issued a $1,350,000 Convertible Promissory Note to a private investor, bearing interest in the form of a one-time 10% interest charge, payable with the Company Note's principal amount on the maturity date, May 5, 2012. All or a portion of Company Note principal and interest is convertible, at the option of the investor/holder from time to time, into shares of the Company's common stock, at a per share conversion price equal to 85% of the average of the 5 lowest traded prices for the Company's common stock in the 20 trading days previous to the effective date of each such conversion. At the same time, the same private investor issued and delivered to the Company a second "Secured & Collateralized Promissory Note", which served as sole consideration to the Company for the Company's issuance of the Company Note to the investor. The full-text copy of the Secured & Collaterized Promissory Note is available for free at http://ResearchArchives.com/t/s?3d14 The Investor Note is in the principal amount of $1,300,000, and bears interest in the form of a one-time 10.38% interest charge. Interest is payable with the Note's principal on its maturity date, May 5, 2012. The Investor Note is to be secured by 1,300,000 units of an unspecified Investment Fund, or other assets with a value of at least $1,300,000. Immediately after Cord Blood's exchange of its Company Note for the Investor Note, the investor delivered to the Company $300,000 in cash as pre-payment on the Investor Note. While no further mandatory principal or interest payments are due until its maturity date, the Investor Note contemplates further voluntary pre-payments by the investor to the Company at the approximate rate of $100,000 per month, beginning 6 months after the Investor Note issuance or about November 6, 2009; provided that (i) all requests by the investor for conversion of principal and interest on the Company Note are honored; and (ii) the Company's common stock issued upon those conversions of portions of the principal and interest on the Company Note is freely tradable in the hands of the investor under Federal Securities laws and regulations. The Company used the initial $300,000 prepayment on the Investor Note for working capital purposes. About Cord Blood Headquartered in West Hollywood, California, Cord Blood America Inc. (OTC BB: CBAI) -- http://www.cordblood-america.com/-- is an umbilical cord blood stem cell preservation company with a particular focus on the acquisition of customers in need of family based products and services. The Company also provides television, radio and internet advertising services to businesses that sell family based products and services. The company operates two core businesses: -- Cord Partners Inc., CorCell Co. Inc., CorCell Ltd. operates the umbilical cord blood stem cell preservation operations, and -- Career Channel Inc. dba. Rainmakers International operates the television and radio advertising operations. CORD BLOOD: March 31 Balance Sheet Upside-Down by $7.84 Million --------------------------------------------------------------- The Cord Blood America, Inc., filed on Tuesday with the Securities and Exchange Commission its quarterly report on Form 10-Q for the three month period ended March 31, 2009. The Company posted a net loss of $1.72 million on $941,938 in revenues for the quarter ended March 31, 2009. The Company listed $4.58 million in total current assets and $12.43 million in total current liabilities, resulting in $7.84 million in stockholders' deficit. Cord Blood America notes that it experienced recurring net losses from operations, which losses have caused an accumulated deficit of approximately $26.7 million as of March 31, 2009. In addition, CBAI has a working capital deficit of approximately $12.2 million as of March 31, 2009. These factors, among others, raise substantial doubt about CBAI's ability to continue as a going concern. The Company's management has been able, thus far, to finance the losses and the growth of the business through private placements of its common stock, the issuance of debt and proceeds from an Equity Distribution Agreement, a Shelter Securities Purchase Agreement and an Enable Securities Purchase Agreement. CBAI continues to attempt to increase revenues within its core businesses. CBAI is also exploring alternate ways of generating revenues through acquiring other businesses in the stem cell industry. In June 2008, the Company disclosed the signing of a Securities Purchase Agreement with Tangiers Investors, LP, whereby Tangiers may purchase up to $4 million of the Company's common stock. The Company filed a registration statement to register certain shares of common stock issuable pursuant to the Securities Purchase Agreement. The Securities and Exchange Commission declared the Registration Statement effective on November 4, 2008. In January, 2009, Tangiers purchased $100,000 of common stock. The Company says it continues to monitor its overall spending. The ongoing execution of CBAI's business plan is expected to result in operating losses over the next twelve months. There are no assurances that CBAI will be successful in achieving its goals of increasing revenues and reaching profitability. In view of these conditions, CBAI's ability to continue as a going concern is dependent on its ability to meet its financing requirements and to ultimately achieve profitable operations. Management believes that its current and future plans provide an opportunity to continue as a going concern. A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?3d24 About Cord Blood Headquartered in West Hollywood, California, Cord Blood America Inc. (OTC BB: CBAI) -- http://www.cordblood-america.com/-- is an umbilical cord blood stem cell preservation company with a particular focus on the acquisition of customers in need of family based products and services. The Company also provides television, radio and internet advertising services to businesses that sell family based products and services. The company operates two core businesses: -- Cord Partners Inc., CorCell Co. Inc., CorCell Ltd. operates the umbilical cord blood stem cell preservation operations, and -- Career Channel Inc. dba. Rainmakers International operates the television and radio advertising operations. COUNTRY CLUB (LANSING): Files for Chapter 11 Protection ------------------------------------------------------- Susan Vela at Lansing State Journal reports that The Country Club of Lansing has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Western District of Michigan. According to Lansing State Journal, The Country Club had fallen behind in its mortgage payments, which amounts to $6 million on a mortgage taken in 1999. The Country Club's board of governors said in a statement, "Our mortgage debt was originally structured based on a much higher membership base than we currently have. As a result, we have been working diligently to stabilize and restructure the finances of the club for the last several months. At this point, despite our best efforts, we are compelled to seek the legal protection and the time we need to reorganize and restructure our debt that Chapter 11 will provide us. We are confident that, in tandem with the Court and our lender, National City, we will reach a mutually beneficial agreement." The Country Club of Lansing is a site for golf and social entertainment for the last century. It is located at 2200 Moores River Drive, in Lansing, Michigan. COUNTRY CLUB (LANSING): Case Summary & Unsecured Creditors ---------------------------------------------------------- Debtor: Country Club of Lansing 2200 Moores River Drive Lansing, MI 48911 Bankruptcy Case No.: 09-06092 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Debtor's Counsel: Harold E. Nelson, Esq. Nantz, Litowich, Smith & Girard 2025 East Beltline, SE, Suite 600 Grand Rapids, MI 49546 Tel: (616) 977-0077 Fax: (616) 977-0529 Email: bkhen@nlsg.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/miwb09-06092.pdf The petition was signed by Joseph D. Reid III, president of the Company. COYOTES HOCKEY: Arizona Wants Hockey Team to Play in Home Town -------------------------------------------------------------- The City of Glendale, Arizona, seeks a preliminary injunction from the U.S. Bankruptcy Court for the District of Arizona to require Coyotes Hockey LLC to perform its obligations under an arena management, use and lease agreement dated Nov. 29, 2001, with the City. The City relates that the Debtor agreed to sell its principal asset, the Phoenix Coyotes professional hockey franchise, to a certain investor who will move the team to Southern Ontario in Canada. The proposed hockey team relocation would be in direct breach of a binding contract, which would cause it and the general public severe and irreparable harm, the City asserts. The City argues that the Debtor must follow the contractual obligations under the Lease Agreement and require the hockey team to play all home games at the Arizona Arena and not in any other location. Brown Rudnick LLP represents the City. Dewey Ranch, together with affiliates Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC, filed for Chapter 11 bankruptcy protection on May 5, 2009 (Bankr. D. Ariz. Case No. 09-09488), to implement a court-approved sale of Phoenix Coyotes under the Bankruptcy Code. The filing included a proposed sale of the franchise to PSE Sports & Entertainment, LP, which would move the franchise to southern Ontario, Canada. Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, assists the Debtors in their restructuring efforts. Dewey Ranch listed $100 million to $500 million in assets and $100 million to $500 million in debts. COYOTES HOCKEY: Las Vegas Businessman Mulls Bid for Team -------------------------------------------------------- Sporting News reports that Las Vegas businessman John Breslow is seeking to build a syndicate to acquire the Phoenix Coyotes hockey team and keep it in Glendale, Arizona. According Sporting News, Mr. Breslow already owns 2% of Phoenix Coyotes. Mr. Breslow states he is supporting the National Hockey League's plan to block Phoenix Coyotes' sale in an auction. As reported by the Troubled Company Reporter on May 19, 2009, Earl Scudder of Phoenix Coyotes is seeking to sell the team to Canadian Blackberry magnate Jim Balsillie for $212.5 million on the condition that the team be moved to Hamilton in southern Ontario. The lead attorney for the Phoenix Coyotes noted that NHL commissioner Gary Bettman would rather return the Phoenix Coyotes to Winnipeg than transfer it to southern Ontario. Attorneys representing Phoenix Coyotes owner Jerry Moyes emphasized that blocking the move to Canada would breach U.S. and Canadian antitrust law. NHL maintained that its authority has been upheld by U.S. and Canadian courts. Citing attorneys for the city of Glendale, the Phoenix Business Journal relates that an offer to keep the team in Arizona for $130 million would be financially more viable than a move to Canada. Phoenix Business says Glendale, a Phoenix West Valley suburb, would have at least a $500 million claim against the Phoenix Coyotes and a buyer who seeks a move of the team would have to pay out $22 million in deferred compensation to Wayne Gretzky, the league's Hall of Famer who owns a slice of Phoenix Coyotes and is the team's coach. Phoenix Coyotes have a 30-year lease with Glendale and if the team moves, the city hopes to collect on penalties for breaking that lease. Sporting News relates that NHL and Mr. Gretzky appear to support a purchase by Jerry Reinsdorf, owner of baseball's Chicago White Sox and the NBA's Chicago Bulls. According to the report, Mr. Reinsdorf's offer is reportedly about $80 million less than Mr. Balsillie's offer. According to Sporting News, the Hon. Redfield Baum of the U.S. Bankruptcy Court for the District of Arizona ruled that Mr. Reinsdorf's bid will remain confidential. Judge Baum told the NHL and representatives for Mr. Moyes to mediate a solution for selling Phoenix Coyotos, Sporting News discloses. Judge Baum, the news source relates, scheduled a hearing on the status of those talks for May 27. A sale is likely to come through an auction. Judge Baum will likely decide if the team can be moved by a new owner at the June 22 hearing, according to Sporting News. Glendale, Arizona-based Dewey Ranch Hockey LLC and its affiliates own the Phoenix Coyotes team and franchise in the National Hockey League. Dewey Ranch, together with affiliates Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC, filed for Chapter 11 bankruptcy protection on May 5, 2009 (Bankr. D. Ariz. Case No. 09-09488), to implement a court-approved sale of Phoenix Coyotes under the Bankruptcy Code. The filing included a proposed sale of the franchise to PSE Sports & Entertainment, LP, which would move the franchise to southern Ontario, Canada. Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, assists the Debtors in their restructuring efforts. Dewey Ranch listed $100 million to $500 million in assets and $100 million to $500 million in debts. COYOTES HOCKEY: SOF Investments Backs Jim Balsillie's $212.5MM Bid ------------------------------------------------------------------ TheStar.com reports that SOF Investments, L.P., the single-largest secured creditor in the Phoenix Coyotes' bankruptcy case has supported Jim Balsillie's $212.5 million bid for the Company. SOF Investments said in court documents that Mr. Balsillie's bid "would result in substantial recovery of the amounts owed to the debtors' creditors, including SOF, which would be paid in full in cash." SOF Investments, according to TheStar.com, seems submissive to the possibility that the Phoenix Coyotes would play hockey in Glendale, Arizona, next season. TheStar.com relates that SOF Investments urged Phoenix Coyotes to begin marketing itself as if it were. As reported by the Troubled Company Reporter on May 18, 2009, Mr. Balsillie defended his attempt to purchase and move the Phoenix Coyotes to Hamilton. The National Hockey League called Mr. Balsillie's effort to purchase the Phoenix Coyotes out of Chapter 11 bankruptcy and relocate it to Hamilton a "sham." Mr. Balsillie has twice tried and failed to acquire an NHL team in Pittsburgh and Nashville and move it to southern Ontario. Mr. Balsillie said that his offer is conditional on moving the team to southern Ontario in Canada and goes the furthest in "satisfying creditors' claims." The Associated Press relates that John Breslow, who owns 3% of Phoenix Coyotes, told the NHL that he has formed a group interested in submitting a bid for the team. The report states that Mr.Breslow wants to keep Phoenix Coyotes in Glendale, Arizona. Glendale, Arizona-based Dewey Ranch Hockey LLC and its affiliates, including Coyotes Hockey LLC, own the Phoenix Coyotes team and franchise in the National Hockey League. Dewey Ranch, together with affiliates Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC, filed for Chapter 11 bankruptcy protection on May 5, 2009 (Bankr. D. Ariz. Case No. 09-09488), to implement a court-approved sale of Phoenix Coyotes under the Bankruptcy Code. The filing included a proposed sale of the franchise to PSE Sports & Entertainment, LP, which would move the franchise to southern Ontario, Canada. Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, assists the Debtors in their restructuring efforts. Dewey Ranch listed $100 million to $500 million in assets and $100 million to $500 million in debts. CRESCENT RESOURCES: Weak Economy Cues Moody's to Junk Ratings ------------------------------------------------------------- Moody's Investors Service lowered the ratings to Caa2 from B1 on Crescent Resources, LLC's senior bank facility and corporate family rating. The Caa2 ratings reflect Moody's updated opinion in the context of limited information available to support the ratings. Subsequent to the rating action, the ratings are being withdrawn because Moody's believes that it lacks sufficient information to maintain a rating going forward. The rating action reflects Moody's view that the weak economy and the associated general decline in real estate values have substantially reduced demand for Crescent's development projects, particularly in the residential sector, undercutting revenues and raising concerns about the company's ability to meet its debt obligations when due. The last rating action with respect to Crescent Resources was on July 16, 2008 when its ratings were lowered to B1 from Ba3 with a negative outlook. These ratings were downgraded and will be withdrawn: * Crescent Resources, LLC -- Caa2 senior debt from B1; Caa2 corporate family rating from B1. Crescent Resources, LLC is a private land and commercial property development company based in Charlotte, North Carolina, USA. The firm is jointly owned by Duke Energy and Morgan Stanley Real Estate. DANA HOLDING: S&P Downgrades Corporate Credit Rating to 'SD' ------------------------------------------------------------ Standard & Poor's Ratings Services said it has lowered its corporate credit rating on Toledo, Ohio-based Dana Holding Corp. to 'SD' (selective default) from 'CC' and lowered its rating on the company's outstanding $1.26 billion term loan bank facility to 'D' from 'CCC-'. Dana announced that it has completed its dutch auction tender offer in which it repurchased less than 10% of this facility at a substantial discount to par (at a price of 40% to 44% of face value), which S&P views as a distressed debt exchange and tantamount to a default. The recovery rating on the term loan is unchanged, at '2', indicating S&P's expectation that lenders would receive substantial (70% to 90%) recovery in the event of a payment default. S&P also lowered the issue rating on Dana's asset-backed loan revolving facility to 'B+' from 'BB-', but left the recovery rating unchanged, at '1', indicating S&P's expectation that lenders would receive very high (90% to 100%) recovery in the event of a payment default. "The rating actions reflect completion of the tender offer," said Standard & Poor's credit analyst Nancy Messer. "The rating action on the ABL revolving facility reflects the expectation that S&P will subsequently raise the corporate credit rating on Dana to 'B-' and assign a negative outlook," she continued. S&P also expects to raise S&P's rating on the company's outstanding $1.2 billion term loan bank facility to 'B', leaving the recovery rating unchanged at '2'. DENBAR TRANSPORTATION: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Denbar Transportation Company, Inc. 33 Plantation Drive Asheville, NC 28806 Bankruptcy Case No.: 09-10587 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court Western District of North Carolina (Asheville) Judge: George R. Hodges Debtor's Counsel: David G. Gray, Esq. 81 Central Avenue Asheville, NC 28801 Tel: (828) 254-6315 Email: judyhj@bellsouth.net Total Assets: $2,309,540 Total Debts: $3,603,925 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ncwb09-10587.pdf The petition was signed by Dennis R. Goodwin, president of the Company. DERRY'S HARVEST: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Derry's Harvest Estates, LLC 247 Rockingham Road Derry, NH 03038 Bankruptcy Case No.: 09-11852 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Mead Comercial Properties, LLC 09-11854 Chapter 11 Petition Date: May 21, 2009 Court: United States Bankruptcy Court District of New Hampshire (Manchester) Debtor's Counsel: Kenneth E. Churbuck, Esq. 142 Main Street, Suite 220 Nashua, NH 03060-0603 Tel: (603) 883-5280 Fax: (603)-883-9867 Email: office@churbck.mv.com Total Assets: $2,200,300 Total Debts: $1,768,400 A full-text copy of the Debtor's petition, including a list of its 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nhb09-11852.pdf The petition was signed by Ronald F. Mead, general managing member of the Company. E*TRADE FINANCIAL: S&P Junks Counterparty Credit Rating From 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its ratings, including the long-term counterparty credit and senior debt ratings, on E*TRADE Financial Corp. to 'CCC-' from 'B'. S&P also lowered S&P's counterparty credit and certificate of deposit ratings on E*TRADE Bank to 'CCC+' from 'BB-'. S&P has revised the CreditWatch to negative from developing, where the ratings were placed on December 22, 2008. "The rating actions reflect our concerns that E*TRADE urgently needs to reduce its heavy debt burden and inject equity into its subsidiary, E*TRADE Bank. Failure to do so could lead to supervisory action by the Office of Thrift Supervision, its chief banking regulator. Even without the threat of supervisory action, E*TRADE's financial capacity to service its outstanding debt remains weak," said Standard & Poor's credit analyst Charles Rauch. The company has entered into a distribution agreement to sell, from time to time, up to $150 million of common stock. But this increase in equity will not sufficiently improve the company's credit profile. E*TRADE has disclosed that the primary method for reducing its debt will be through debt-for-equity exchanges. In this case, S&P is applying its criteria for distressed exchange offerings. S&P expects any debt-for-equity exchange will be done at less than par value. S&P further believes that without a sizable debt-for-equity exchange there is a high likelihood the OTS will take supervisory action against E*TRADE Bank in the near future. E*TRADE, at the request of its regulators, is in the process of moving E*TRADE Securities LLC, the retail broker-dealer unit and the company's most valuable asset, to become a subsidiary of E*TRADE Bank. While this would provide extra protection to the bank's creditors, it would be to the detriment of the holding company's senior noteholders if the OTS placed the bank into receivership. E*TRADE and E*TRADE Bank face a number of difficulties servicing the large amount of high-cost debt at the holding company. The company has not been profitable during the past two years. S&P expects profitability and operating cash flow coverage of interest expense will remain very weak in 2009 as the company continues to address asset quality problems in its large first-mortgage and home equity loan books. In contrast to the problems within the bank, the retail brokerage franchise, which remains the heart and soul of the company, continues to thrive. S&P expects the retail broker to remain profitable, but not enough to offset the continued losses at the bank over the next few quarters. The CreditWatch negative placement reflects S&P's expectation that E*TRADE will either conduct a distressed exchange offering for a meaningful amount of outstanding debt, at prices below par, or face a high risk of negative supervisory action. "In the case of the debt-for-equity exchange, S&P would rate the affected debt issues 'D' and the counterparty credit rating 'SD' (selective default) upon completion of the exchange offer, assuming E*TRADE continues to honor its other financial obligations. If E*TRADE is successful in completing its debt-for-equity exchange, S&P will review the company's new capital structure, its ability to service remaining debt, as well as its progress resolving the bank's problems loans and restoring the company to profitability," Mr. Rauch added. EGAMES INC: Net Revenues for 1Q is Down by 20% from 2008 -------------------------------------------------------- eGames, Inc., released financial results for the periods three and nine months ended March 31, 2009. eGames disclosed that its net revenues decreased by $212,000, or 20%, to $872,000 for the quarter ended March 31, 2009, compared to $1,084,000 for the same period last year. The $212,000 decrease in net revenues resulted from decreases in traditional product revenues of $177,000, licensing revenues of $43,000 and liquidation product revenues of $51,000. These revenue decreases were related to declines in consumer demand for PC games at many of the major retailers as well as to worldwide economic conditions. eGames' net revenues benefited from a $59,000 increase in Internet revenues due to increased consumer installations of the eGames toolba and greater PC game sales the Company's website. Net loss was $217,000, or $0.02 per diluted share, for the quarter ended March 31, 2009, compared to a net loss of $165,000, or $0.01 per diluted share, for the comparable quarter a year earlier. This $52,000 increase in the net loss for the quarter ended March 31, 2009 was comprised of an $84,000 decrease in gross profit, related to lower net revenues and a 4.4% improvement in the gross profit margin, along with a $33,000 decrease in operating expenses. The $33,000 decrease in operating expenses related to a $96,000 decrease in product development expense, due to the Company's more focused product development plan, partially offset by a $63,000 increase in other operating expenses related primarily to a bad debt provision for a North American licensee who filed for bankruptcy during this reporting period. Nine Months ended March 31, 2009 Net revenues decreased by $259,000, or 9%, to $2,722,000 for the nine months ended March 31, 2009, compared to $2,981,000 for the similar nine-month period a year earlier. This $259,000 decrease in net revenues resulted from net revenue declines of $421,000 in traditional product revenues and $12,000 in licensing revenues, which were partially offset by net revenue increases of $167,000 in Internet revenues and $7,000 in liquidation product revenues. Net loss was $1,071,000, or $0.09 per diluted share, for the nine months ended March 31, 2009, compared to a net loss of $436,000, or $0.04 per diluted share, for the nine months ended March 31, 2008. This $635,000 increase in the net loss resulted from a $275,000 decrease in gross profit and a $360,000 increase in operating expenses, primarily related to product development costs during the nine months ended March 31, 2009. Liquidity Condition At March 31, 2009, eGames had $516,000 in cash compared to $874,000 in cash at June 30, 2008. At March 31, 2009, eGAmes had a working capital deficit, current assets minus current liabilities, of $95,000 compared to positive working capital of $938,000 at June 30, 2008. Considering the Company's net losses for the most recent quarters and for fiscal years 2008, 2007 and 2006, and the fact that eGames does not currently have access to a credit facility, eGames are continuing to evaluate eGames options to fund future operations if eGames does not become cash flow positive from operations in the future. eGames, Inc., headquartered in Langhorne, PA, develops, publishes and markets a diversified line of Family Friendly(tm), value- priced consumer entertainment PC software games. The Company promotes the eGames(tm), Game Master Series(tm), and Outerbound(tm) brands in order to generate customer loyalty, encourage repeat purchases and differentiate eGames software products to retailers and consumers. eGames -- Where the "e" is for Everybody! Additional information regarding eGames, Inc., can be found on the Company's Web site at http://www.egames.com/ ENDEAVOR HIGHRISE: Proposes Matthew Hoffman as Bankruptcy Counsel ----------------------------------------------------------------- Endeavor Highrise, L.P., asks the U.S. Bankruptcy Court for the Southern District of Texas for authority to employ Matthew Hoffman, P.C. as counsel. The firm will render general legal services to the Debtor including, but not limited to, preparation of schedules and statements of financial affairs, handling of contested matters and adversary proceedings and the negotiation, proposal and confirmation of a Plan of reorganization. Matthew Hoffman, Esq., a principal of the firm, tells the Court that the firm received a $1,250 retainer on April 29, 2009, for initial consultation. The firm received an additional $40,000 for services to be rendered and expenses to be incurred in connection with the Debtor's Chapter 11 case. The Debtor agreed to pay the firm on a monthly basis. The hourly rates of the firm's personnel are: Matthew Hoffman $240 James C. Lee, associate $115 Paralegals $60 Clerks $40 Mr. Hoffman assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Hoffman can be reached at: Matthew Hoffman, P.C. 2777 Allen Parkway, Suite 1000 Houston, TX 77019 Tel: (713) 654-9990 Fax: (713) 654-0038 Headquartered in Seabrook, Texas, Endeavour Highrise, L.P., is a single-asset, real estate company. The Company filed for Chapter 11 on May 4, 2009 (Bankr. S. D. Tex. Case No. 09-33151). The Law Offices of Matthew Hoffman, p.c., represents the Debtor in its restructuring Efforts. The Debtor has assets and debts ranging from $10 million to $50 million. ENERGYTEC INC: Files for Chapter 11 in Sherman ---------------------------------------------- Energytec, Inc., has filed for bankruptcy protection before the U.S. Bankruptcy Court for the Eastern District of Texas (Sherman). Energytec has $1.5 million in financing from Red River Resources Inc. to fund its Chapter 11 case, Bloomberg's Bill Rochelle said. The Plano, Texas-based Energytec Inc. is an oil and gas producer that redevelops mature properties in Texas and Wyoming. Energytec and affiliate Comanche Well Service Corporation filed for Chapter 11 on May 13 (Bankr. E.D. Texas Case No. 09-41477). In its Chapter 11 petition, Energytec listed assets of $33.7 million against debt totaling $12.5 million. EVERETT MARITIME: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------ The Associated Press reports that Everett Maritime, LLC, has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Illinois. According to court documents, Everett Maritime listed more than $10 million in debts. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar assists the Company in its restructuring efforts, Trollerbk says. Everett Maritime, LLC, is a subsidiary of Maritime Trust of Chicago and is the developer of a $400 million Everett waterfront. EVERETT MARITIME: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Everett Maritime, LLC 505 East Illinois Street, Suite ONE Chicago, IL 60611 Bankruptcy Case No.: 09-18224 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Susan Pierson Sonderby Debtor's Counsel: David K. Welch, Esq. Crane Heyman Simon Welch & Clar 135 S Lasalle St Suite 3705 Chicago, IL 60603 Tel: (312) 641-6777 Fax: (312) 641-7114 Email: dwelch@craneheyman.com Estimated Assets: $100 million to $500 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Shawgate Market MFB, LLC $3,109,584 C/o Broadacre Mgmt. Co. 505 E. Illinois St., Suite One Chicago, IL 60611 Ronald J. Thauer $1,146,794 440 S. LaSalle Street 20th Floor Chicago, IL 60605 The Port of Everett $1,089,758 Attn: Executive Director PO Box 538 Everett, WA 98206 Three Sons Asset $1,052,169 RDS Investments LP $601,880 GGLO $546,164 Hoffman Construction Co. $542,440 Methodologie $156,321 DLA Piper US LLP $151,092 Kosnick Engineering $57,901 Landau Associates $49,862 Clifton Gunderson LLP $45,217 Mithun $32,109 Don Fleming $30,146 Parson Brinckerfhoff, Inc. $29,444 Williams Marketing, Inc. $22,330 Foster Pepper $21,382 RMC Architects $18,984 Fikso Kretschmer Smith $15,885 The CWD Group, Inc. $15,335 The petition was signed by Francis Freeman, managing member. FAMILY TREEHOUSE: Has $20,500 Bids for New Castle, Pa., Property ---------------------------------------------------------------- On April 30, 2009, the Family Treehouse, Inc., filed it Motion for an Order Authorizing the Debtor to Sell Property Free and Clear of Liens Pursuant to 11 U.S.C. Sec. 363(f) concerning property located at: * 212 North Ray Street New Castle, Pennsylvania 16101 Parcel Identification No. 03-147-500 * 416 Reynolds Street New Castle, Pennsylvania 16101 Parcel Identification No. 05-056000 Family Treehouse has received a $4,000 bid for the Ray Street property and a $16,500 offer for the Reynolds Street property. Subject to higher and better offers, the Bankruptcy Court has scheduled a hearing on June 9, 2009, at 10:00 a.m. to consider the Sale Motion and to confirm the results of the sales. The Sale Hearing may, however, be adjourned in open court from time to time, without further notice. The Sale Hearing will be held before the Honorable Jeffery A. Deller in Pittsburgh. Requests for information concerning the Motion or the assets subject to sale should be directed to Family Treehouse's counsel: Christopher A. Boyer, Esq. Leech Tishman Fuscaldo & Lampl, LLC Citizens Bank Building 525 William Penn Place, 30th Floor Pittsburgh, PA 15219 Telephone (412) 261-1600 Family Treehouse, Inc., sought Chapter 11 protection (Bankr. W.D. Penn. Case No. 08-26272) on September 23,2008. A free copy of the debtor's Chapter 11 petition is available at: http://bankrupt.com/misc/pawb08-26272.pdf FIRST METALS: Proposal Accepted by Creditors; Annual Report Late ---------------------------------------------------------------- First Metals Inc. was not able to file its annual financial statements for the year ending December 31, 2008, before the March 31, 2009 prescribed deadline. In accordance with NP 12-203, the Corporation has submitted an application for a Management Cease Trade Order in respect of the late financial filing, which has been accepted by the Ontario Securities Commission. First Metals' failure to file its audited financial statements within the prescribed deadline was due to ongoing restructuring proceedings commenced by the Company under the Bankruptcy and Insolvency Act. A meeting of First Metals' creditors was held May 6, 2009, at which time the Company's proposal was accepted by its creditors. The Company expects its motion for approval of the proposal will be heard on or about June 11, 2009. The Company expects to file its audit financial statements for the fiscal year ended December 31, 2008, on or before the date of the court approval motion. Moreover, the Company confirms that it intends to satisfy the requirements to file the appropriate Default Status Reports as prescribed by NP 12-203 so long as it remains in default of its requirements to file its financial statements within the prescribed period of time. First Metals Inc. has approximately 42.8 million shares issued and outstanding. Based in Toronto, Ontario, First Metals Inc. (CA:FMA) -- http://www.firstmetalsinc.com-- produces copper from its Fabie Mine, near Rouyn-Noranda and has the advanced Magusi Copper, Zinc, Gold and Silver deposit, located approximately 1.2 km from the Fabie Mine. The Company has approximately 42.8 million shares issued and outstanding. FLYING J: May Enter Into Amendment to ML Financing Agreement ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has granted Flying J Inc. and affiliate Longhorn Pipeline, Inc., authority to enter into a first amendment to its debtor-in-possession financing agreement with Merrill Lynch Commodities, Inc. As reported in the Troubled Company Reporter on April 16, 2009, Merrill Lynch agreed to provide an increased lending commitment of up to $11.5 million, at a modified rate of LIBOR + 700 (with a floor of 3%). In addition, Merrill Lynch agreed to extend the DIP facility's maturity date through rolling 30-day extensions, subject to approval of both the LPI DIP Debtors and Merrill Lynch, each in its respective sole discretion. A summary of the significant terms of the First Amendment is available at http://bankrupt.com/misc/FlyingJ.MLDIPFinancing.pdf The Debtors told the Court that the amendment allows them to continue to access loans during the process of selling their 700- mile common pipeline. The pipeline extends from the Gulf Coast near Houston to El Paso, Texas. Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is engaged in the exploration and refining of petroleum products. It also operates about 200 travel plazas in 41 states and six Canadian provinces. The Company and six of its affiliates filed for Chapter 11 protection on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FLYING J: Seeks to Enter into New USW Collective Bargaining Pact ---------------------------------------------------------------- Flying J Inc. asks the U.S. Bankruptcy Court for the District of Delaware for authority to enter into a new collective bargaining agreement with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service International Union (the "USW"). The Debtors tell the Court Big West Oil, LLC, currently employs approximately 105 employees represented by the USW. The salient terms of the agreement are: a. Term. The term of the Agreement will be from April 17, 2009, through April 16, 2012. b. Wage Increases. i) Effective April 17, 2009, all hourly classification 8-hour base wage rates will increase 3% rounded to the nearest cent; and ii) Effective April 17, 2010, all hourly classification 8-hour base wage rates will increase 3% rounded to the nearest cent. iii) Effective April 17, 2011, all hourly classification 8-hour base wage rates will increase 3% rounded to the nearest cent; c. Signing Bonus. A $2,00 signing bonus payment will be made to all Union Employees active as of April 16, 2009, provided, however, that payment will be deferred to the earlier of (a) April 16, 2011 or (b) the effective date of a Chapter 11 plan. The Debtors relate that the collective bargaining agreement is necessary to raise the morale of the Union Employees and to ensure that these employees stay in their jobs during this critical stage of their reorganization. Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is engaged in the exploration and refining of petroleum products. It also operates about 200 travel plazas in 41 states and six Canadian provinces. The Company and six of its affiliates filed for Chapter 11 protection on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FOAMEX INT'L: First Lien Lenders Oppose Sale to MatlinPatterson --------------------------------------------------------------- Bill Rochelle at Bloomberg reports that Foamex International Inc. is facing opposition from its first-lien lenders over plans to sell its business to MatlinPatterson Global Advisers LLC, the stalking horse bidder, for $105 million offer. Matlin's $105 million offer includes the assumption of $26.6 million in liabilities, with most of the remainder representing financing for the Company's reorganization process. The DIP lenders say the Company's debt is currently $54.9 million. According to Bloomberg, the lenders who are owed about $325 million contended that they would be left with as little as $25 million, or about 8 cents on the dollar, because proceeds from the sale would be reduced (i) by $5 million to pay professional fees, and (ii) by payment of the debtor-in-possession financing, which is provided MatlinPatterson. The first-lien lenders argue that Foamex may not have enough cash and assets after the sale to pay expenses incurred during the Chapter 11 process, a situation known as administrative insolvency. The lenders note that they may have a higher recovery if they liquidate their collateral. The U.S. Trustee, Mr. Rochelle relates, also objected to the asset sale, saying it is improper to carve out money to pay professionals when other expenses of the Chapter 11 case go unpaid. The U.S. Trustee asserts that there is no basis for selling the stock of non-bankrupt affiliates, while precluding creditors of the affiliates from collecting their claims against companies not in bankruptcy. About Foamex International Foamex International Inc. (FMXL) -- http://www.foamex.com/-- headquartered in Media, PA, produces polyurethane foam-based solutions and specialty comfort products. The Company services the bedding, furniture, carpet cushion and automotive markets and also manufactures high-performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. Foamex and eight affiliates first filed for Chapter 11 protection on September 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05- 12693). On February 2, 2007, the U.S. Bankruptcy Court for the District of Delaware confirmed the Debtors' reorganization plan. The Plan became effective and the Company emerged from Chapter 11 bankruptcy on February 12, 2007. Foamex missed $7.3 million in interest payments due at the end of the January 21 grace periods on the Company's $325 million first- lien term loan and the $47 million second-lien term loan. On February 18, 2009, Foamex International Inc. and seven affiliates filed separate voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 09-10560). The Hon. Kevin J. Carey presides over the cases. Ira S. Dizengoff, Esq., Phillip M. Abelson, Esq., and Brian D. Geldert, Esq., at Akin Gump Strauss Hauer, in New York, represent the Debtors as counsel. Mark E. Felger, Esq., and Jeffrey R. Waxman, Esq., at Cozen O'Connor, in Wilmington, Delaware, represent the Debtors as Delaware counsel. Investment Banker is Houlihan Lokey; accountant is McGladrey & Pullen LLP; and claims and noticing agent is Epiq Bankruptcy Solutions LLC. Sharon L. Levine, Esq., at Lowenstein Sandler, represents the Official Committee of Unsecured Creditors as counsel. David M. Fournier, Esq., Evelyn J. Meltze, Esq., and Leigh-Anne M. Raport, Esq., at Pepper Hamilton LLP, represent the Committee as Delaware counsel. As of September 28, 2008, the Debtors had $363,821,000 in total assets, and $379,710,000 in total debts. FOAMEX INT': Auction Restarted Due to Lenders' Objection -------------------------------------------------------- Bloomberg News reports that the Hon. Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware has ruled to restart the auction of Foamex International Inc.'s assets. According to Bloomberg, Wayzata Capital Investment Partners LLC won that auction with a $141.5 million bid. Bloomberg relates that lenders owed $325 million challenged the outcome of the auction. Judge Carey, according to Bloomberg, gave the lenders permission to offer a credit bid when the auction resumes. The lenders would trade the debt they are owed for equity in a reorganized Foamex if they win the auction, Bloomberg states. Foamex International Inc. (FMXL) -- http://www.foamex.com/-- headquartered in Media, PA, produces polyurethane foam-based solutions and specialty comfort products. The Company services the bedding, furniture, carpet cushion and automotive markets and also manufactures high-performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. Foamex and eight affiliates first filed for Chapter 11 protection on September 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05- 12693). On February 2, 2007, the U.S. Bankruptcy Court for the District of Delaware confirmed the Debtors' reorganization plan. The Plan became effective and the Company emerged from Chapter 11 bankruptcy on February 12, 2007. Foamex missed $7.3 million in interest payments due at the end of the January 21 grace periods on the Company's $325 million first- lien term loan and the $47 million second-lien term loan. On February 18, 2009, Foamex International and seven affiliates filed separate voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 09-10560). The Hon. Kevin J. Carey presides over the cases. Ira S. Dizengoff, Esq., Phillip M. Abelson, Esq., and Brian D. Geldert, Esq., at Akin Gump Strauss Hauer, in New York, represent the Debtors as counsel. Mark E. Felger, Esq., and Jeffrey R. Waxman, Esq., at Cozen O'Connor, in Wilmington, Delaware, represent the Debtors as Delaware counsel. Investment Banker is Houlihan Lokey; accountant is McGladrey & Pullen LLP; and claims and noticing agent is Epiq Bankruptcy Solutions LLC. Sharon L. Levine, Esq., at Lowenstein Sandler, represents the Official Committee of Unsecured Creditors as counsel. David M. Fournier, Esq., Evelyn J. Meltze, Esq., and Leigh-Anne M. Raport, Esq., at Pepper Hamilton LLP, represent the Committee as Delaware counsel. As of September 28, 2008, the Debtors had $363,821,000 in total assets, and $379,710,000 in total debts. FORD MOTOR: Extends Deadline for Worker Buyouts by 5 Weeks ---------------------------------------------------------- Matthew Dolan at The Wall Street Journal reports that Ford Motor Co. is moving the deadline to buyout workers by five weeks. According to WSJ, Ford Motor first gave the hourly workers until last Friday to accept a job-buyout package first handed out on April 1. Almost all of Ford Motor's 42,000 hourly workers received the package, says WSJ. Several hundred employees working specialty trades, including electricians, didn't receive the package, the report states. The extension was granted until June 26 so that workers can have more time making up their minds, WSJ relates, citing Ford Motor spokesperson Angie Kozleski. WSJ notes that the extended deadline also gives Ford Motor more time to watch the fates of its competitors including GM, which could file for bankruptcy next week, and Chrysler LLC. WSJ relates that a deadline extension could be a sign that Ford Motor hasn't yet achieved the number of worker buyouts that company officials originally targeted. WSJ reports that the buyout package offers: * for employees eligible for retirement -- a lump sum of $40,000 for those working in skilled trade; and -- a $20,000 payout for those in production. * for workers with as little as one year of service: -- lump sum of $50,000 or two-year education package including $15,000 in annual tution assistance, living expenses based on half of their previous wages and continuing health insurance. * for those retiring or leaving Ford Motor without the education assistance: -- a $25,000 gift certificate for a new Ford Motor vehicle. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FRESH WORLD ONE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Fresh World One, Inc 6901 Hechinger Drive Springfield, VA 22151 Bankruptcy Case No.: 09-13986 Chapter 11 Petition Date: May 20, 2009 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- Fresh World VA-b 09-13989 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Debtor's Counsel: Richard J. Stahl, Esq. Stahl Zelloe, P.C. 11350 Random Hills, Road, Suite 700 Fairfax, VA 22030 Tel: (703) 691-4940 Fax: (703) 691-4942 Email: r.stahl@stahlzelloe.com Total Assets: $0 Total Debts: $3,843,059 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/vae09-13986.pdf The petition was signed by Kenneth Kim, president of the Company. GATEWAY ETHANOL: Plan Filing Period Extended Until August 1 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Kansas has extended Gateway Ethanol, LLC's exclusive period to file a plan until August 1, 2009, and its exclusive period to solicit acceptances of that plan until September 30, 2009. This is the third extension of the Debtor's exclusive periods. In papers filed with the Court, the Debtor related that extension of the exclusive periods is to permit it additional time to resolve pending objections to the sale of its assets to Dougherty Funding LLC, its primary secured lender, close the sale, and develop a Plan, if necessary. As reported in the Troubled Company Reporter on December 22, 2008, the Court approved the sale of substantially all of Debtor's assets to Dougherty. Dougherty, an investment bank which holds more than $63 million loans on Gateway Ethanol's property in Pratt, purchased the plant's assets for "just north of $60 million," the Wichita Eagle related, citing Larry Frazen, an attorney for Bryan Cave and who handled the sale. According to the report, Dougherty presented a $59.93 million bid. Dougherty was the sole bidder. The Debtor's chairperson of the board of directors, Ted Loomis, said that these firms objected to the sale: -- Indeck Power for boiler lease, -- Lurgi PSI for mechanics liens, and -- RC Holdings for maintenance building issues. The Pratt Tribune quoted Mr. Loomis as saying, "Right now there's nothing that's final. It's up to Dougherty and those three parties to come to a resolution. So we're waiting." Pratt, Kansas-based Gateway Ethanol, LLC, operates an ethanol plant that has a capacity of 55 million gallons a year, according to Orion Ethanol's Web site. The Company filed for bankruptcy protection on October 5, 2008 (Bankr. D. Ks., Case No. 08-22579). Laurence M. Frazen, Esq., Megan J. Redmond, Esq., and Tammee E. McVey, Esq., at Bryan Cave, LLP, represent the Debtor in its restructuring efforts. In its schedules, the Debtor listed total assets of $94,545,022, and total debts of $93,353,654. GENERAL MARITIME: S&P Downgrades Corporate Credit Rating to 'BB-' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate rating on General Maritime Corp. to 'BB-' from 'BB'. The outlook remains negative. The downgrade reflects the company's weaker financial profile due to expected reduced earnings; there was limited room in the previous rating following substantial and ongoing dividends in 2007 and 2008. S&P expects increasing earnings and cash flow pressures from falling tanker rates, compounded by the expiration of significant portions of fixed-rate time-charter agreements, which provide more stable and predictable revenues. The current operating environment will likely cause some of General Maritime's time- charter agreements to be renewed at lower rates. "The negative outlook reflects our expectations that there could be a more meaningful deterioration in the company's cash generation and financial profile if tanker rates continue to decline over the next year," Standard & Poor's credit analyst Funmi Afonja said. "The negative outlook also reflects our concerns regarding the limited cushion under the company's financial covenant requirements." GENERAL MOTORS: Gets $4BB Loan From Gov't; Chinese Co. Eyes Units ----------------------------------------------------------------- Sharon Terlep and Norihiko Shirouzu at The Wall Street Journal report that General Motors Corp. said that it has received $4 billion in financial assistance from the U.S. government. GM said in a filing with the U.S. Securities and Exchange Commission that it had asked the U.S. Treasury Department to add $2.6 billion to the $15.4 billion that the Company had received from the government before June 1 and about $9 billion after that date for working-capital needs. According to WSJ, the new loan that the government granted is about $1.4 billion more than what the Company requested, as part of its plan to pay suppliers and dealers before a June deadline. GM forecasts that it will require an additional $1.4 billion (over the previously forecasted $2.6 billion) prior to June 1, primarily to fund various amounts originally forecasted for after June 1. As a result of the accelerated borrowing of $1.4 billion, GM forecasts that under its Viability Plan it will require an additional $7.6 billion of funding from the Treasury after June 1. All references in the prospectus and prospectus supplement to the pre- and post-June 1 funding forecasts are amended and restated consistent with the foregoing. All references to the U.S. Treasury Financing Commitment with respect to a total of $11.6 billion of additional financing after the date of the original prospectus remain unchanged. As a result of the $4.0 billion of borrowings on May 22, 2009, GM currently estimates that it will have $21.4 billion of U.S. Treasury Debt outstanding at June 1. On May 20, 2009, GM entered into Amendment Number Three to the Loan and Security Agreement dated as of December 31, 2008, between GM as Borrower and the Treasury. Amendment Three increased the aggregate maximum amount available for GM to borrow under the Loan Agreement by $4.0 billion to $19.4 billion. On May 22, GM borrowed $4.0 billion under the Loan Agreement and delivered an additional note payable to the Treasury in a principal amount of $266.8 million as additional compensation for the Advance, pursuant to the terms of the Warrant Agreement dated as of December 31, 2008, between GM and the Treasury. As required by the Loan Agreement, prior to receiving the Advance, GM provided a statement describing its intended use of the proceeds of the Advance, which was considered acceptable by the Treasury. Tentative Union Labor Arrangements On May 22, 2009, GM said that it reached certain tentative agreements with the United Auto Workers union with respect to the 2007 collective bargaining agreement and a non-binding understanding with the Treasury and the UAW with respect to modifications to the UAW Voluntary Employee Beneficiary Association agreements. On May 21, 2009, the Canadian Auto Workers and General Motors tentatively agreed to a new labor contract. WSJ says that both the UAW and the CAW agreed to a contract that includes a freeze in: -- wages, -- increase in workers' share of medical costs, and -- bar pension increases until 2015. The new agreements are subject to conditions, including union ratification by its membership and the commitment of additional financing from the Canadian government. Details of the terms are not expected to be publicly disclosed by GM until after definitive terms have been agreed and CAW member ratification is complete. WSJ notes that the bondholders are the remaining major impediment in any fast exit from bankruptcy, as they have opposed a plan to pay them 10% of GM's equity. A bankruptcy filing by GM is now "very likely," but the Company still hopes for an out-of-court restructuring but wouldn't try to void the deal in bankruptcy court, WSJ relates, citing CAW President Ken Lewenza. Chinese Co. Eyeing Opel Norihiko Shirouzu at WSJ states that an undisclosed Chinese firm sent a letter to GM expressing its interest in the Company's Opel and Vauxhall European operations. A person familiar with the matter said that the letter was sent a day after the bid deadline, WSJ relates. The source said that the interested company wasn't Geely Holding Group or Shanghai Automotive Industrial Corp., according to WSJ. Citing a person familiar with the matter, WSJ says that GM is most likely not to pursue getting a bid from the Chinese company. According to the report, the source said that GM already has solid bids from three parties -- Fiat SpA, Magna International Inc., and RHJ International -- and the process is too far along to consider a fourth offer, WSJ reports. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of $6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of $3.3 billion in the year-ago quarter. Excluding special items, the Company reported an adjusted net loss of $5.9 billion in the first quarter of 2009 compared to an adjusted net loss of $381 million in the first quarter of 2008. As of March 31, 2009, GM had $82.2 billion in total assets and $$172.8 billion in total liabilities, resulting in $90.5 billion in stockholders' deficit. On April 27, General Motors presented the U.S. Department of Treasury with an updated plan as required by the loan agreement signed by GM and the U.S. Treasury on December 31, 2008. The plan addresses the key restructuring targets required by the loan agreement, including a number of the critical elements of the plan that was submitted to the U.S. government on December 2, 2008. Among these are: U.S. market competitiveness; fuel economy and emissions; competitive labor cost; and restructuring of the company's unsecured debt. It also includes a timeline for repayment of the Federal loans, and an analysis of the Company's positive net present value. The plan details the future reduction of GM's vehicle brands and nameplates in the U.S., further consolidation in its workforce and dealer network, accelerated capacity actions and enhanced manufacturing competitiveness, while maintaining GM's strong commitment to high-quality, fuel-efficient vehicles and advanced propulsion technologies. GM also launched a bond exchange offer for roughly $27 billion of unsecured public debt. If successful, the bond exchange would result in the conversion of a large majority of this debt to equity. GM is also in talks with the UAW to modify the terms of the Voluntary Employee Benefit Association, and with the U.S. Treasury regarding possible conversion of its debt to equity. The current bond exchange offer is conditioned on the converting to equity of at least 50% of GM's outstanding U.S. Treasury debt at June 1, 2009, and at least 50% of GM's future financial obligations to the new VEBA. GM expects a debt reduction of at least $20 billion between the two actions. In total, the U.S. Treasury debt conversion, VEBA modification and bond exchange could result in at least $44 billion in debt reduction. GM filed with the Securities and Exchange Commission a registration statement related to its exchange offer. The filing incorporates the revised Viability Plan. A full-text copy of the filing is available at http://ResearchArchives.com/t/s?3c09 A full-text copy of GM's viability plan presented in February 2009 is available at http://researcharchives.com/t/s?39a4 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. GENERAL MOTORS: German Gov't Willing to Shield Opel From Creditors ------------------------------------------------------------------ Reuters reports that the German government is willing to shield General Motors Corp.'s Adam Opel GmbH from creditors until a sale to investors is finalized. GM Europe's chief Carl-Peter Forster, Reuters relates, said that if GM decides to file for Chapter 11 bankruptcy protection, Opel wouldn't be included. Opel's liquidity would last into the third quarter of 2009, the report says, citing Mr. Forster. According to Reuters, the German government wants to place Opel's assets with a trustee. Reuters notes that GM and the U.S. government would have to accept this model, but the parent company has so far been reluctant to surrender its European business. Sustainable offers for Opel, the news source relates, are the German government's precondition for the trusteeship model for the company. The U.S. government and GM will have the last word on which company wins the race. Reuters discloses that Germany is willing to supply Opel EUR1.5 billion in bridge financing through state bank KfW and four states to keep the company running until a takeover is completed. Reuters relates that the bridge loan will tide Opel over until October 2009. According to Reuters, GM has also asked European governments for loan guarantees of EUR3.3 billion. Citing people familiar with the matter, Reuters states that Opel's sale is expected to be finalized later this year. Reuters reports that Opel could also be put into insolvency, which could see healthy parts of the company stripped out of GM and sold to investors. According to the report, GM said in March that an insolvency wasn't on the agenda for Opel. Decisions on the future of Opel are likely to be made by the end of this week or the beginning of next week, says Reuters. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of $6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of $3.3 billion in the year-ago quarter. Excluding special items, the Company reported an adjusted net loss of $5.9 billion in the first quarter of 2009 compared to an adjusted net loss of $381 million in the first quarter of 2008. As of March 31, 2009, GM had $82.2 billion in total assets and $$172.8 billion in total liabilities, resulting in $90.5 billion in stockholders' deficit. On April 27, General Motors presented the U.S. Department of Treasury with an updated plan as required by the loan agreement signed by GM and the U.S. Treasury on December 31, 2008. The plan addresses the key restructuring targets required by the loan agreement, including a number of the critical elements of the plan that was submitted to the U.S. government on December 2, 2008. Among these are U.S. market competitiveness; fuel economy and emissions; competitive labor cost; and restructuring of the company's unsecured debt. It also includes a timeline for repayment of the Federal loans, and an analysis of the Company's positive net present value. The plan details the future reduction of GM's vehicle brands and nameplates in the U.S., further consolidation in its workforce and dealer network, accelerated capacity actions and enhanced manufacturing competitiveness, while maintaining GM's strong commitment to high-quality, fuel-efficient vehicles and advanced propulsion technologies. GM also launched a bond exchange offer for roughly $27 billion of unsecured public debt. If successful, the bond exchange would result in the conversion of a large majority of this debt to equity. GM is also in talks with the UAW to modify the terms of the Voluntary Employee Benefit Association, and with the U.S. Treasury regarding possible conversion of its debt to equity. The current bond exchange offer is conditioned on the converting to equity of at least 50% of GM's outstanding U.S. Treasury debt at June 1, 2009, and at least 50% of GM's future financial obligations to the new VEBA. GM expects a debt reduction of at least $20 billion between the two actions. In total, the U.S. Treasury debt conversion, VEBA modification and bond exchange could result in at least $44 billion in debt reduction. GM filed with the Securities and Exchange Commission a registration statement related to its exchange offer. The filing incorporates the revised Viability Plan. A full-text copy of the filing is available at http://ResearchArchives.com/t/s?3c09 A full-text copy of GM's viability plan presented in February 2009 is available at http://researcharchives.com/t/s?39a4 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. GENERAL MOTORS: Reaches Pact With UAW to Cut Obligations, Costs --------------------------------------------------------------- John D. Stoll and Sharon Terlep at The Wall Street Journal report that General Motors Corp. has reached an agreement with the United Auto Workers to cut retiree health-care obligations and labor costs. WSJ relates that GM sought a deal with the union to reduce by at least half the $20 billion in cash it owes for retiree health care benefits, and cut at least $1 billion off annual hourly labor costs that reached $8 billion last year. Details of the agreement weren't disclosed. UAW, says WSJ, wants to first present the agreement to 60,000 GM workers on Tuesday. WSJ states that about one-third of those employees will lose their jobs. WSJ relates that UAW officials will gather on Tuesday in Detroit to review the agreement. Citing people familiar with the matter, WSJ reports that the agreement largely mirrors concessions the UAW granted Chrysler LLC in April. According to the report, sources say that the agreement includes: -- a suspension of cost-of-living allowances, bonuses, and some holidays; -- further consolidation of job classifications, but wages are expected to remain unchanged; -- a provision for future job buyouts; and -- ban of strikes until 2015. WSJ relates that GM, in exchange for receiving the right to use stock instead of cash to fund half of its $20 billion liability to a retiree health-care trust, offered the union about 39% of the Company's equity and representation on its board. Matthew Dolan, Kris Maher and, Alex P. Kellogg at WSJ note that UAW could emerge from the restructurings of GM and Chrysler LLC in a relatively solid financial position. WSJ points out that although the trust funds for retired union members' health care will own big stakes in the two automakers, and veteran workers will continue to make an average of $28 an hour, the union will be left with dramatically reduced influence and a limited ability to resist future job and benefits cuts. "Right now, the position of a worker in Chrysler and GM is a lot less influential than 15 or 20 years ago," WSJ quoted U.S. Rep. Peter Hoekstra as saying. WSJ, citing people familiar with the matter, says that GM executives are aiming to file for bankruptcy by the June 1 deadline because they have been unable to reach a debt-for-equity agreement with bondholders. The sources said that GM executives aim to conclude the reorganization and get the Company out of court by as soon as the last week of June, the WSJ states. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of $6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of $3.3 billion in the year-ago quarter. Excluding special items, the Company reported an adjusted net loss of $5.9 billion in the first quarter of 2009 compared to an adjusted net loss of $381 million in the first quarter of 2008. As of March 31, 2009, GM had $82.2 billion in total assets and $$172.8 billion in total liabilities, resulting in $90.5 billion in stockholders' deficit. On April 27, General Motors presented the U.S. Department of Treasury with an updated plan as required by the loan agreement signed by GM and the U.S. Treasury on December 31, 2008. The plan addresses the key restructuring targets required by the loan agreement, including a number of the critical elements of the plan that was submitted to the U.S. government on December 2, 2008. Among these are: U.S. market competitiveness; fuel economy and emissions; competitive labor cost; and restructuring of the company's unsecured debt. It also includes a timeline for repayment of the Federal loans, and an analysis of the Company's positive net present value. The plan details the future reduction of GM's vehicle brands and nameplates in the U.S., further consolidation in its workforce and dealer network, accelerated capacity actions and enhanced manufacturing competitiveness, while maintaining GM's strong commitment to high-quality, fuel-efficient vehicles and advanced propulsion technologies. GM also launched a bond exchange offer for roughly $27 billion of unsecured public debt. If successful, the bond exchange would result in the conversion of a large majority of this debt to equity. GM is also in talks with the UAW to modify the terms of the Voluntary Employee Benefit Association, and with the U.S. Treasury regarding possible conversion of its debt to equity. The current bond exchange offer is conditioned on the converting to equity of at least 50% of GM's outstanding U.S. Treasury debt at June 1, 2009, and at least 50% of GM's future financial obligations to the new VEBA. GM expects a debt reduction of at least $20 billion between the two actions. In total, the U.S. Treasury debt conversion, VEBA modification and bond exchange could result in at least $44 billion in debt reduction. GM filed with the Securities and Exchange Commission a registration statement related to its exchange offer. The filing incorporates the revised Viability Plan. A full-text copy of the filing is available at http://ResearchArchives.com/t/s?3c09 A full-text copy of GM's viability plan presented in February 2009 is available at http://researcharchives.com/t/s?39a4 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. GENERAL MOTORS: S&P Puts 14 Classes' Ratings on Negative Watch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 14 classes from four GMAC dealer floorplan asset-backed securities trusts on CreditWatch with negative implications. The CreditWatch actions reflect S&P's view that a General Motors Corp. Chapter 11 bankruptcy filing within the next several weeks, which has been reported as increasingly likely in the financial press, could deplete the transactions' credit support as non- essential dealers are eliminated and residual values come under pressure to the extent the vehicles are not disposed in an orderly manner. GM recently announced plans to reduce the number of its dealers by 42% -- to 3,605 from 6,246 -- by the end of 2010. This process, which could take place regardless of whether GM files for bankruptcy, represents both a more substantial and accelerated reduction in dealers than the company announced in February of 2009. It is unclear if GM will provide support to the dealers whose franchise agreements are scheduled to be terminated, and to the extent support is provided, how long the support will last. As such, S&P believes it is possible that there could be an increase in the number and frequency of dealer defaults. This may lead to deterioration in credit enhancement as dealer support through sales incentives, including rebates, subvention of consumer auto loans, and occasional voluntarily repurchases of cars from distressed dealers, could be eliminated. In addition, GM has announced that it will focus its resources on four core brands: Chevrolet, Cadillac, Buick, and GMC. GM has also announced it will phase out the Pontiac brand by the end of 2010. Furthermore, GM plans to resolve the future of Saab, Saturn, and Hummer by the end of 2009. Aside from the general reduction in vehicle prices that can be expected when a manufacturer is in bankruptcy, it is possible there could be further severity of loss on the brands that are being phased out or sold. Because the transactions with ratings S&P placed on CreditWatch negative are structured without a GM Chapter 11 bankruptcy trigger, a filing by GM will not result in an early amortization event. Thus, S&P does not expect a bankruptcy filing to initially lead to cash accumulation and increase in credit support (as a percent of the investor's share of principal receivables), which would otherwise offset the potential increase in losses as described above. Standard & Poor's will follow all developments related to a possible GM bankruptcy filing, monitor how the health of the dealer base and the value of collateral is being affected, and take rating actions when S&P deem appropriate. Ratings Placed On Creditwatch Negative SWIFT Master Auto Receivables Trust Rating ------ Series Class To From ------ ----- -- ---- 2007-1 A AA+/Watch Neg AA+ 2007-1 B A-/Watch Neg A- 2007-1 C BBB-/Watch Neg BBB- 2007-1 D BB/Watch Neg BB 2007-2 A AA+/Watch Neg AA+ 2007-2 B A-/Watch Neg A- 2007-2 C BBB-/Watch Neg BBB- 2007-2 D BB/Watch Neg BB Superior Wholesale Inventory Financing Trust 2007-AE1 Rating ------ Series Class To From ------ ----- -- ---- 2007-AE1 A AA+/Watch Neg AA+ 2007-AE1 B A-/Watch Neg A- 2007-AE1 C BBB-/Watch Neg BBB- 2007-AE1 D BB/Watch Neg BB 2007-AE1 RN1 AA+/Watch Neg AA+ Superior Wholesale Inventory Financing Trust 2007-Bridge Rating ------ Series Class To From ------ ----- -- ---- 2007 A AA+/Watch Neg AA+ GENERAL MOTORS: Spending Bill Amendment Dropped to Allow Gov't Aid ------------------------------------------------------------------ Todd Spangler and Justin Hyde at Detroit Free Press reports that Sen. Kay Bailey Hutchison has dropped an amendment to the spending bill that would have blocked government money from going to Chrysler LLC or General Motors Corp. unless they ensured that dealerships about to be cut off were given at least 60 days' notice before termination. President Barack Obama, says The NY Times, had signed the omnibus spending bill, which is a $787 billion measure meant to rejuvenate a sluggish economy. It increases spending on domestic programs by an average of 8% in the current fiscal year, which started in October 2008, The NY Times relates. Austin Business Journal reports that Sen. Hutchison had introduced an amendment that would grant more time for Chrysler dealerships in the U.S. that face closure. Business Journal notes that had the amendment been passed, dealers slated for closing on June 9 would have an extra 60 days to close down operations and sell remaining inventory. According to Free Press, Sen. Hutchison believes that Chrysler will do as much as it can to help 789 dealers targeted for closure by June 9 get a return on their inventory. Sen. Hutchison, Free Press relates, said that she and Michigan Sen. Debbie Stabenow had spoken with Chrysler President Jim Press. The report states that Mr. Press promised that Chrysler would try to give dealers "fair and equitable value for virtually all cars and parts" and that help to those dealerships being shed would extend after June 9. Chrysler has 200 representatives in the field working to move inventory from dealers who face termination on June 9, the report says, citing Mr. Press. The U.S. Treasury Department's decision to inject another $7.5 billion into GMAC LLC was significant because it can help fund loans to dealers and to clients, making it easier to get inventory off lots and generate a return to dealers losing Chrysler and GM business, Free Press reports, citing Senators Hutchison and Stabenow. GMAC, says the report, is GM's financing arm that does business with Chrysler. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of $6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of $3.3 billion in the year-ago quarter. Excluding special items, the Company reported an adjusted net loss of $5.9 billion in the first quarter of 2009 compared to an adjusted net loss of $381 million in the first quarter of 2008. As of March 31, 2009, GM had $82.2 billion in total assets and $$172.8 billion in total liabilities, resulting in $90.5 billion in stockholders' deficit. On April 27, General Motors presented the U.S. Department of Treasury with an updated plan as required by the loan agreement signed by GM and the U.S. Treasury on December 31, 2008. The plan addresses the key restructuring targets required by the loan agreement, including a number of the critical elements of the plan that was submitted to the U.S. government on December 2, 2008. Among these are: U.S. market competitiveness; fuel economy and emissions; competitive labor cost; and restructuring of the company's unsecured debt. It also includes a timeline for repayment of the Federal loans, and an analysis of the Company's positive net present value. The plan details the future reduction of GM's vehicle brands and nameplates in the U.S., further consolidation in its workforce and dealer network, accelerated capacity actions and enhanced manufacturing competitiveness, while maintaining GM's strong commitment to high-quality, fuel-efficient vehicles and advanced propulsion technologies. GM also launched a bond exchange offer for roughly $27 billion of unsecured public debt. If successful, the bond exchange would result in the conversion of a large majority of this debt to equity. GM is also in talks with the UAW to modify the terms of the Voluntary Employee Benefit Association, and with the U.S. Treasury regarding possible conversion of its debt to equity. The current bond exchange offer is conditioned on the converting to equity of at least 50% of GM's outstanding U.S. Treasury debt at June 1, 2009, and at least 50% of GM's future financial obligations to the new VEBA. GM expects a debt reduction of at least $20 billion between the two actions. In total, the U.S. Treasury debt conversion, VEBA modification and bond exchange could result in at least $44 billion in debt reduction. GM filed with the Securities and Exchange Commission a registration statement related to its exchange offer. The filing incorporates the revised Viability Plan. A full-text copy of the filing is available at http://ResearchArchives.com/t/s?3c09 A full-text copy of GM's viability plan presented in February 2009 is available at http://researcharchives.com/t/s?39a4 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: Missed Interest Payment Cues S&P's Rating Cut to 'D' ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Atlanta, Georgia-based Georgia Gulf Corp. to 'D' from 'CC'. At the same time, S&P lowered its issue rating on the company's $500 million 9.5% senior notes due 2014 to 'D' from 'C', and revised S&P's recovery rating to '6' from '5'. The revised ratings indicate S&P's expectation of negligible recovery (0%-10%) on these notes. S&P also lowered its issue rating on the company's $200 million 10.75% senior subordinated notes due 2016 to 'D' from 'C' and retained the '6' recovery rating, indicating S&P's expectation of negligible recovery (0%-10%). In addition, S&P lowered the rating on the company's first-lien senior secured credit facilities to 'C' from 'CCC' and removed the rating from CreditWatch with developing implications. S&P revised the recovery rating on the facilities to '2' from '1', indicating S&P's expectation for substantial recovery (70%-90%) in the event of a payment default. S&P's issue rating on the $100 million 7.125% senior notes due 2013 remains at 'C', and S&P revised the recovery rating on this debt to '6' from '5', indicating S&P's expectation of negligible recovery (0%-10%) in the event of a payment default. The downgrade follows the company's announcement that it missed $34.5 million in interest payments due on the $500 million 9.5% senior notes due 2014 and the $200 million 10.75% senior subordinated notes due 2016. A 30-day grace period for payment of interest due on April 15, 2009, expired on May 15. Earlier on April 1, 2009, S&P lowered its corporate credit rating to 'CC' following Georgia Gulf's announcement of a tender offer for its $100 million 7.125% senior notes, $500 million 9.5% senior notes, and its $200 million 10.75% senior subordinated notes. The exchange offer is scheduled to expire on June 1, 2009, under which the company plans to exchange existing notes for second-lien notes, and in some instances equity, at values well below face value. The company has entered into forbearance agreements with its noteholders to prevent the acceleration of notes on account of the missed interest payment. Georgia Gulf also amended its senior secured credit agreement to allow the company to withhold the $34.5 million interest payment, without constituting a default as defined in its agreement. The forbearance agreements and amendment to the secured credit facility expire on June 15, 2009. S&P could lower its ratings on the senior secured credit facilities and the 7.125% senior notes to 'D' after June 15, when the amendment and the forbearance agreements expire, if the company's creditors take action to accelerate its debt obligations or if the company is forced into a bankruptcy proceeding. S&P will review the situation if the exchange offer is completed successfully as planned on June 1. Georgia Gulf is an integrated producer of chlorovinyl products, polyvinyl chloride building and home improvement products, and aromatic chemicals with annual revenue of slightly below $3 billion as of Dec. 31, 2008. In October 2006, Georgia Gulf acquired the Royal Group business for approximately $1.6 billion in a debt-financed acquisition. GMAC FINANCIAL: Key Actions to Improve Capital, Access to Cash -------------------------------------------------------------- GMAC Financial Services reported several key actions that significantly improve the company's capital position and access to liquidity. The actions include a $7.5 billion capital investment from the U.S. Department of the Treasury, approval by the Federal Deposit Insurance Corporation to participate in the Temporary Liquidity Guarantee Program, and an expanded exemption granted by the Federal Reserve to originate GM-related assets at GMAC's bank, recently renamed Ally Bank. GMAC also reconstituted its board of directors and named two appointees from the U.S. Treasury, with three independent directors to be promptly named by the board. "These actions represent another major step in stabilizing and strengthening GMAC," said GMAC Chief Executive Officer Alvaro G. de Molina. "Much like last year, 2009 is proving to be a time of landmark actions for GMAC -- executing the Chrysler agreement, launching a new brand for our bank, and now taking a meaningful step forward in permanently improving our access to cost-effective funding." Capital Investment In connection with the government's capital investment, GMAC has sold $7.5 billion of mandatorily convertible preferred (MCP) membership interests and warrants to the U.S. Treasury. The investment included $4 billion of MCP related to GMAC's agreement with Chrysler LLC to provide automotive financing to Chrysler dealers and customers and $3.5 billion of MCP toward the Supervisory Capital Assessment Program (S-CAP) requirement. The U.S. Treasury immediately exercised the warrants and GMAC issued an additional $375 million of MCP. GMAC previously announced an agreement with Chrysler to provide automotive finance products and services to Chrysler dealers and customers. The agreement was approved by the U.S. Bankruptcy Court on May 12, 2009. GMAC will begin offering wholesale and retail credit to Chrysler dealers and customers immediately. In order to ensure an orderly transition of wholesale financing activities, GMAC has signed a cooperation agreement with Chrysler Financial Services Americas LLC. GMAC has also entered into a transition support agreement with Chrysler LLC and the U.S. Treasury to aid in managing the risks related to expeditiously extending credit to Chrysler dealers and customers. The agreement provides GMAC with credit support for certain losses that may be incurred during the transition period, which allows time for GMAC to evaluate the creditworthiness of each Chrysler dealer. As previously disclosed under the S-CAP program, GMAC is required to raise $11.5 billion of Tier 1 common or contingent common capital, $9.1 billion of which must be new Tier 1 capital. The $3.5 billion investment by the U.S. Treasury is new capital for the company toward this program and reduces the level of new capital required to $5.6 billion. Consistent with the S-CAP program requirements, GMAC intends to submit a Capital Plan to the Federal Reserve Bank of Chicago by June 8, 2009 with respect to the remaining capital required. While the U.S. Treasury has indicated that it may be willing to provide additional new capital, GMAC will evaluate other alternatives to meet its capital requirements. The MCP issued to the U.S. Treasury has an annual distribution rate of nine percent payable quarterly. These interests mandatorily convert to common membership interests after seven years and may be converted in advance of that time by GMAC with the approval of the Federal Reserve if such conversion would not result in the U.S. Treasury owning in excess of 49 percent of GMAC's common membership interests. GMAC may only convert additional mandatorily convertible membership interests to common membership interests if certain other conditions are met. The MCP is also convertible by the U.S. Treasury upon the occurrence of certain events. Temporary Liquidity Guarantee Program GMAC has received approval to participate in the FDIC's TLGP for up to $7.4 billion, which would permit the company to issue new FDIC-guaranteed debt. In connection with receiving FDIC approval, GMAC is developing a funding plan which it has committed to provide to the FDIC and the Federal Reserve. The plan will reflect GMAC's management of Ally Bank's funding and deposit costs with a focus on diversifying funding sources and reducing the Bank's overall cost of deposit funding. GMAC and the Bank have also committed to maintain Bank capital at a level well above the regulatory minimums. Ally Bank Exemption GMAC received an expanded exemption from the Federal Reserve to allow Ally Bank, formerly GMAC Bank, to originate a limited amount of GM-related retail and wholesale assets, subject to certain conditions. Previously, GMAC was more limited in the GM-related assets that could be originated in the Bank due to section 23A of the Federal Reserve Act. Providing relief on these restrictions will enable GMAC to have more funding available for a majority of its automotive finance assets, which provides a sustainable long- term funding channel for the business. The extension of credit to Chrysler dealers and customers is not subject to the section 23A restriction. GMAC recently launched Ally Bank, a new brand for its U.S. bank that represents an improved banking experience. The new brand is part of an effort to broaden and expand the company's customer base at the Bank. Governance In connection with GMAC's approval to become a bank holding company, GMAC was required to reconstitute its board of directors. The new board will now consist of nine directors, four of whom have been named, two by the U.S. Treasury and two current directors. Three additional independent directors have been selected and will be promptly appointed by the new board. The two appointees of the U.S. Treasury are Robert T. Blakely and Kim S. Fennebresque. GMAC CEO Alvaro G. de Molina will remain on the board along with Stephen Feinberg as the Cerberus appointee. Two additional independent directors will be named at a later date. In connection with the previously announced GMAC governance changes, the following independent and GMAC management directors on the board resigned, effective immediately, T.K. Duggan, Douglas A. Hirsch, Robert Hull, Samuel Ramsey and Robert W. Scully. About GMAC GMAC Financial Services -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a bank holding company with operations in North America, South America, Europe and Asia- Pacific. GMAC specializes in automotive finance, real estate finance, insurance, commercial finance and online banking. As of December 31, 2008, the company had $189 billion in assets and serviced 15 million customers around the world. GMAC is the biggest lender to GM's 6,500 dealers nationwide, most of which get the financing they need to operate and buy vehicle inventory from the automaker, CNNMoney.com notes. GMAC Financial Services is wholly owned by GMAC LLC. Cerberus Capital Management LP led a group of investors that bought a 51% stake in GMAC LLC from General Motors Corp. in December 2006 for $14 billion. On December 24, 2008, GMAC Financial Services' application to become a bank holding company under the Bank Holding Company Act of 1956, as amended, was approved by the Board of Governors of the Federal Reserve System. In addition, GMAC Bank received approval from the Utah Department of Financial Institutions to convert to a state bank. * * * As reported in the Troubled Company Reporter on May 5, 2009, Standard & Poor's Ratings Services maintains its CCC/Negative/C rating on GMAC LLC despite the Company's announcement that it entered into an agreement with Chrysler Financial Services Americas LLC to provide future automotive financing products and services to Chrysler dealers and customers. GMAC LLC: Tells Employees It Needs to Cut $1 Billion in Costs ------------------------------------------------------------- GMAC LLC has told workers it needs to cut $1 billion in costs -- 20% of its expenses -- by year-end, Aparajita Saha-Bubna and Dan Fitzpatrick at The Wall Street Journal report, citing people familiar with the matter. WSJ relates that Christopher Marshall, the senior adviser to GMAC Chief Executive Al de Molina, is leading the cost cutting effort, which could fundamentally reshape GMAC. According to WSJ, Mr. Marshall is being asked to examine every part of GMAC and to look at possible structural changes, asset sales, and ways to make the Company more efficient. The Treasury, after confirming that it would inject $7.5 billion in GMAC, said that it would swap about $884 million of its existing preferred-stock investment for common stock, giving the government a 35.4% equity stake in the Company, WSJ reports. The stake, says WSJ, could increase to more than half if GMAC was to convert the government's investments into common equity. GMAC Financial Services -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a bank holding company with operations in North America, South America, Europe and Asia- Pacific. GMAC specializes in automotive finance, real estate finance, insurance, commercial finance and online banking. As of Dec. 31, 2008, the company had $189 billion in assets and serviced 15 million customers around the world. GMAC is the biggest lender to GM's 6,500 dealers nationwide, most of which get the financing they need to operate and buy vehicle inventory from the automaker, CNNMoney.com notes. GMAC Financial Services is wholly owned by GMAC LLC. Cerberus Capital Management LP led a group of investors that bought a 51% stake in GMAC LLC from General Motors Corp. in December 2006 for $14 billion. On December 24, 2008, GMAC Financial Services' application to become a bank holding company under the Bank Holding Company Act of 1956, as amended, was approved by the Board of Governors of the Federal Reserve System. In addition, GMAC Bank received approval from the Utah Department of Financial Institutions to convert to a state bank. * * * As reported in the Troubled Company Reporter on May 5, 2009, Standard & Poor's Ratings Services maintains its CCC/Negative/C rating on GMAC LLC despite the Company's announcement that it entered into an agreement with Chrysler Financial Services Americas LLC to provide future automotive financing products and services to Chrysler dealers and customers. GOLF CLUB: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: The Golf Club at Bridgewater, L.L.C. 6200 State Road 33 North Lakeland, FL 33805 Bankruptcy Case No.: 09-10430 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: David S. Jennis, Esq. Jennis & Bowen, P.L. 400 N Ashley Drive, Suite 2540 Tampa, FL 33602 Tel: (813) 229-1700 Fax: (813) 229-1707 Email: ecf@jennisbowen.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb09-10430.pdf The petition was signed by John Greer, restructuring officer of the Company. GOTTSCHALKS INC: Forever 21 Submits Bid for Closed Stores --------------------------------------------------------- The Associated Press reports that Forever 21 has submitted a bid to take over Gottschalks Inc.'s closed stores. According to The AP, Gottschalks supports Forever 21's $17.7 million offer to purchase three stores and acquire leases for 13 stores from California to Alaska. Forever 21 then dropped the River Park Gottschalks from its bid, The Fresno Bee relates. Shopping center representatives, The Fresno Bee states, objected because some tenants have contracts that require a full-service, upscale department store in River Park. Forever 21 said that it would rather focus on plans for Fashion Fair mall, The Fresno Bee says. The Fresno Bee relates that Forever 21 filed a "stalking horse" bid for the stores. Gottschalks, says The Fresno Bee, would have to pay Forever 21 $354,000 if it accepts a different bid for the stores. Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com-- is a regional department store chain, operating 58 department stores and three specialty apparel stores in six western states. Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., will serve as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts as of January 3, 2009. GRAHAM PACKAGING: Moody's Assigns 'B1' Rating on New Facility ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the new revolving credit facility and term loan C of Graham Packaging, L.P. Moody's also affirmed the B2 Corporate Family Rating and stable outlook. The rating is in response to the company's announcement that it had amended the terms and maturity of its term loan and revolver. The amendment extended the maturity of a $1,200 million of Graham's existing term loans from October 2011 to April 2014 and extended the maturity of $125 million of Graham's existing $250 million revolving credit facility from October 2010 to October 2013. The interest rate on the new facilities is 425 basis points above LIBOR. Additional instrument ratings are detailed below. Moody's took these ratings: -- Assigned $1,200 million senior secured first lien term loan C due 4/15/2014, B1 (LGD 3, 43%) -- Assigned $125 million senior secured first lien revolver due 4/14/2014, B1 (LGD 3, 43%) -- Affirmed $250 million senior secured first lien revolver due 10/07/2010, B1 (LGD 3, 38%) will be withdrawn within three days -- Affirmed $1,870 million senior secured first lien term loan B due 10/07/2011, B1 (to LGD 3, 43% from LGD 3, 37%) will be reduced to $670 million within three days -- Affirmed $250 million 8.5% senior unsecured notes due 10/15/2012, Caa1 (LGD 5, 84%) -- Affirmed $375 million senior subordinated notes due 10/15/2014, Caa1 (LGD 6, 93%) -- Affirmed Corporate family rating, B2 -- Affirmed Probability of Default Rating, B2 -- Affirmed the Speculative Grade Liquidity Rating of SGL-2 The ratings outlook is stable. The ratings are subject to receipt and review of the final documentation. The ratings are supported by the company's strong competitive position, success in its performance improvement initiative and good liquidity including a large cash balance. The company is expected to continue to make further progress in its performance improvement program as well as annualize benefits from actions taken in 2008. Moody's anticipates that cash on hand will be held short term to bolster liquidity and used longer term for deleveraging. Despite near term pressures, Moody's believes the company will maintain metrics within the rating category. The ratings are constrained by Graham's high customer concentration, low growth and free cash flow to debt that is weak for the rating category. Graham is dependent upon further success in its performance improvement program to offset near term pressures and maintain its credit metrics. Moody's last rating action on Graham occurred on June 6, 2008 when Moody's revised the ratings outlook to stable from negative and affirmed the B2 corporate family rating. Based in York, Pennsylvania, Graham Packaging Company, L.P. is a global designer and manufacturer of customized blow-molded plastic containers for branded food and beverages, household and personal care products, and automotive lubricants. Blackstone Capital Partners of New York is the majority owner. Revenue for the last twelve months ended March 31, 2009 was approximately $2.5 billion. HALLWOOD ENERGY: Files Chapter 11 Plan and Disclosure Statement --------------------------------------------------------------- Hallwood Energy L.P., and its debtor affiliates delivered to the U.S. Bankruptcy Court for the Northern District of Texas a disclosure statement explaining their Joint Plan of Reorganization. The Plan contemplates the Debtors participating in a limited partnership, to be known as "Hallwood Penn Partners, L.P." Penn Partners will be funded by new investors investing up to $25 million in exchange for limited partnership interests in Penn Partners. Hallwood Energy, L.P., will serve as the general partner and the new investors will be the limited partners. As Penn Partners' general partners, Hallwood Energy will contribute, among other things, certain acreage, seismic data, and leases to Penn Partners. The returns to the general partner will be used to make distributions to holders of Allowed Claims and Interests. Revenue from the Debtors' currently producing properties also will be utilized to make distributions to holders of Allowed Claims or Interests. The Plan assumes the equitable subordination and recharacterization of the claims of Hall Phoenix/Inwood, Ltd. and convertible debt holders to equity in Class 4. Pursuant to the Plan terms, mechanics liens and materialman's liens under Class 1 will be paid in full within 15 days after the Plan's Effective Date. General unsecured claims under Class 3 will receive their Pro Rata Share of 30% of available cash within 30 days after the Plan's Effective Date and additional distributions occurring at 120 days intervals thereafter. Holders of allowed equity interests under Class 4 will have all of their interests cancelled and extinguished on the Plan's Effective Date and in exchange will receive an equity interest in the Reorganized Debtor on a pro rata basis of the total amount of allowed equity interests. Holders of allowed Class 4 claims will receive distributions after all amounts due under the Plan to unclassified claims and Classes 1-3 have been satisfied. Equity Interests under Class 5 and 6 will be cancelled and extinguished upon the Plan's Effective Date and are deemed to reject the Plan and are not entitled to vote. Classification and Treatment of Claims and Interests Estimated Class Description Amount Treatment ----- ---------------- ---------- ---------------------- 1 Allowed Secured $6,000,000 Impaired. Paid within M&M Lien Claims 15 days. 2 Allowed Priority $219,000 Impaired. Paid within Non-Tax Claims 15 days 3 Allowed General $8,000,000 Impaired. Unsecured Claims 4 Allowed Equity $276,000 Impaired. Interests 5 Class A Equity $201,000,000 Impaired. Deemed to Interests Reject. 6 Class B Equity $1,000,000 Impaired. Deemed to Reject. Holders of claims in Classes 1-4 are entitled to vote. Holders of Interests in Classes 5 and 6 will be deemed to have rejected the Plan and are not entitled to vote. The Debtors reserve the right to seek confirmation of the Plan under the "cramdown" provisions of Section 1129 of the Bankruptcy Code, which provides that if fewer than all classes of impaired claims and interests vote to accept a plan it may still be confirmed if the plan does not "discriminate unfairly" and is "fair and equitable" with respect to each impaired class of claims or interests rejecting the plan. A full-text copy of the Debtors' disclosure statement explaining their Joint Plan of Reorganization is available at: http://www.bankrupt.com/misc/Hallwood.DS.pdf Based in Dallas, Hallwood Energy, L.P. -- http://www.hallwoodenergy.com/-- is an upstream energy corporation engaging in the exploration, acquisition, development and production of oil and gas properties. The Company and five (5) of its debtor-affiliates filed separate petitions for Chapter 11 relief on March 1, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31253). Scott Mark DeWolf, Esq., Kathleen M. Patrick, Esq., and Sean Joseph McCaffity, Esq., at Rochelle McCullough L.L.P., represent the Debtors as counsel. Brian A. Kilmer, Esq., at Okin Adams & Kilmer LLP, represents the official committee of unsecured creditors as counsel. The Debtors' business consultant and CRO is Blackhill Partners LLC. When the Debtors filed for Chapter 11 protection, they listed assets of between $50 million and $100 million, and debts of between $100 million and $500 million. HALLWOOD ENERGY: May Use Cash Collateral of HPI Until May 31 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas issued on May 12, 2009, a final order granting Hallwood Energy, L.P., and its debtor affiliates' emergency motion to use cash collateral of Hall Phoenix/Inwood, Ltd., from March 1, 2009, through May 31, 2009, to fund operating expenses of certain wells, in accordance with a cash collateral budget. As partial adequate protection, HPI is granted replacement liens in all property and assets of the Debtors' estates, subject to any interest of working interest owners and royalty owners in funds in the Debtors' bank account. To the extent that the adequate protection is insufficient, HPI is also granted a super-priority administrative expense claim which will have priority over all costs and expense of administration of any kind. Hallwood owes $115 million under two credit agreements with HPI, secured by a first lien on all or substantially all of the assets of the Debtors. A copy of the Cash Collateral Budget is available at: http://www.bankrupt.com/misc/Hallwood.HPIBudget.pdf Based in Dallas, Hallwood Energy, L.P. -- http://www.hallwoodenergy.com/-- is an upstream energy corporation engaging in the exploration, acquisition, development and production of oil and gas properties. The Company and five (5) of its debtor-affiliates filed separate petitions for Chapter 11 relief on March 1, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31253). Scott Mark DeWolf, Esq., Kathleen M. Patrick, Esq., and Sean Joseph McCaffity, Esq., at Rochelle McCullough L.L.P., represent the Debtors as counsel. Brian A. Kilmer, Esq., at Okin Adams & Kilmer LLP, represents the official committee of unsecured creditors as counsel. The Debtors' business consultant and CRO is Blackhill Partners LLC. When the Debtors filed for Chapter 11 protection, they listed assets of between $50 million and $100 million, and debts of between $100 million and $500 million. HALLWOOD ENERGY: May Use FEI Shale Cash Collateral -------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has granted Hallwood Energy, L.P., et al.'s emergency motion to use cash collateral of FEI Shale, L.P., in the Project Account under the FEI Shale Farmount Agreement, to pay operating expenses, except the Debtors may not use cash collateral in the Project Account for line item "CHK" for $125,000 each in weeks 9-13 of the cash collateral budget. The Project Account contains approximately $6.7 million as of the petition date. As adequate protection, the Court ordered the Debtors to execute any required assignments to FEI Shale under the Farmount Agreement for interests earned by FEI Shale, including any (a) curative assignments that are not otherwise subject to dispute and/or require approval under FED. R. BANKR. P. 9019 and (b) assignments necessary for any recently drilled wells. FEI Shale advanced approximately $95 million under the Farmount Agreement and has received approximately 20% of Hallwood's interest in substantially all of its assets. A copy of the budget is available at: http://www.bankrupt.com/misc/Hallwood.FEIBudget.pdf Based in Dallas, Hallwood Energy, L.P. -- http://www.hallwoodenergy.com/-- is an upstream energy corporation engaging in the exploration, acquisition, development and production of oil and gas properties. The company and five (5) of its debtor-affiliates filed separate petitions for Chapter 11 relief on March 1, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31253). Scott Mark DeWolf, Esq., Kathleen M. Patrick, Esq., and Sean Joseph McCaffity, Esq., at Rochelle McCullough L.L.P., represent the Debtors as counsel. Brian A. Kilmer, Esq., at Okin Adams & Kilmer LLP, represents the official committee of unsecured creditors as counsel. The Debtors' business consultant and CRO is Blackhill Partners LLC. When the Debtors filed for Chapter 11 protection, they listed assets of between $50 million and $100 million, and debts of between $100 million and $500 million. HARTMARX CORP: Three Firms Eyeing Company's Assets -------------------------------------------------- Sandra M. Jones at Chicago Tribune reports that three companies have expressed interest in Hartmarx Corp.'s assets. Chicago Tribune relates that possible buyers for Hartmarx include: -- Emerisque Brands, -- Mistral Equity Partners, and -- Yucaipa Cos. of California. Chicago Tribune states that Emerisque Brands revived its bid for Hartmarx, saying that it is interested in "acquiring substantially all of the assets" of Hartmarx and its affiliates. According to the report, Emerisque Brands said that the latest offer is its third and final bid. The offer, says the report, expires on Thursday. According to Chicago Tribune, Emerisque Brands said that it wants to operate the business "as a single going concern." Mistral Equity Partners, Chicago Tribune relates, said that it wants to acquire Hartmarx's women's apparel business, which includes denim line Christopher Blue and Exclusively Misook. Chicago Tribune says that Mistral Equity made an initial offer for Hartmarx but withdrew it after unions started holding demonstrations to fight for their members' jobs. The unions were worried that a new owner could close some of Hartmarx's U.S. factories, according to the report. Citing a source familiar with the matter, Chicago Tribune reports that Yucaipa Cos. is eyeing Hartmarx's tailored brands. 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 CORP: Wells Fargo Should Sell Company, Gov. Quinn Says --------------------------------------------------------------- Erik Larson at Bloomberg News reports that Illinois Gov. Pat Quinn said that Wells Fargo & Co. should sell Hartmarx Corp. to avoid liquidating the bankrupt company. Gov. Quinn said in a statement that though a "serious bidder" has expressed interest in Hartmarx, Wells Fargo is threatening to liquidate the Company. According to Gov. Quinn's statement, selling Hartmarx would save almost 4,000 U.S. jobs, including 1,000 jobs in Illinois. Gov. Quinn said in a statement, "U.S. taxpayers are investing billions of their tax dollars to rescue the country's banking system, including Wells Fargo. It's only right and just that this bank do everything in its power to make an agreement now that will ultimately benefit the lender, Illinois workers and the entire country." Wells Fargo, according to Bloomberg, received $25 billion in federal assistance from the government's Troubled Assets Relief Program. Bloomberg relates that Wells Fargo has been under pressure from unions and lawmakers, including House Financial Services Committee Chairman Barney Frank, not to close the Company. 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. HAYES LEMMERZ: Court Grants Interim Approval to DIP Loan -------------------------------------------------------- According to Bloomberg's Bill Rochelle, Hayes Lemmerz International Inc. has received interim approval from the U.S. Bankruptcy Court for the District of Delaware of its proposed debtor-in-possession financing. Pending a final hearing on June 10, Hayes will be able to access $30 million from the proposed $100 million debtor-in-possession loan. The loan includes another $100 million of pre-bankruptcy debt that will be rolled up as a DIP financing. As reported by the Troubled Company Reporter on May 15, 2009, Hayes Lemmerz and its affiliates asked the Bankruptcy Court for authority to borrow up to $100,000,000 in new money priority term loans and up to $100,000,000 in roll-up loans, pursuant to the Second Amended and Restated Credit Agreement, dated May 30, 2007, as amended. The Debtors have also sought authority to use their prepetition secured lenders' cash collateral and grant adequate protection to the prepetition lenders. $200 Million DIP Facility The Debtors have obtained from certain of their Prepetition Lenders a superpriority priming delayed draw term loan facility in an aggregate principal amount of up to $200,000,000 and other financial accommodations allocated as: (1) A superpriority priming delayed draw term loan facility in an aggregate principal amount of $80,000,000 to be used to fund the operating and working capital needs of the Debtors and the Non-U.S. Guarantors in accordance with a 13-week budget; (2) A standby uncommitted multiple draw term loan facility in excess of full utilization of New Money Priority Term Loan Commitments, in one or more series, in an aggregate amount not exceeding $20,000,000. Participating lenders have the right to roll-up on a dollar-for- dollar basis the principal amount of their Prepetition Loans. Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, the Debtors' proposed counsel, says a bankruptcy majority of the Prepetition Lenders -- i.e., more than 50% in number and 2/3 in amount -- have committed to fund or have consented to the DIP Facility. The other Prepetition Lenders say they support the Debtors' restructuring efforts and do not want them to discontinue business operations or liquidate their assets, which would be the unavoidable consequence if the DIP Facility or some other immediate financing is not approved very soon. The maturity date of the Priority Term Facility will be the earliest of (i) a date which is six months following interim approval of the DIP facility, or (ii) the effective date of a Chapter 11 plan for any Debtor. The Maturity Date may be extended by up to three months by the Requisite DIP Lenders upon payment by the U.S. Borrower to the DIP Lenders of a non-cash fee satisfactory to the Requisite DIP Lenders. The Priority Tem Lenders will have a lien in all assets of the Debtors, including a claim or cause of action arising under Sections 544, 545, 547, 548, 549, 553(b), 723(a), or 724(a) of the Bankruptcy, subject to a carve-out for U.S. Trustee fees and Clerk of the Bankruptcy Court fees, as well as for fees payable to professionals retained in the Debtors' cases. The Debtors also propose to remit to the Priority Term Facility Agent 100% of all accounts receivable collections, proceeds of sales of inventory, fixed assets, and any other assets, including sales in and outside the ordinary course of business, and all other cash or cash equivalents. The Debtors propose to pay these fees: * An upfront fee of 4% of New Money Priority Term Loans payable to the account of the DIP Lenders. * An exit fee of 3% of New Money Priority Term Loans payable to the account of the DIP Lenders. * The Prepetition Lenders that did not commit to participate in the Priority Term Facility, but consented to enter into the DIP Credit Agreement will be entitled to a consent fee of 8.5% of the issued common stock of the reorganized company upon consummation of the transactions, actions, proceedings or cases contemplated by a Plan Term Sheet filed with the Court. * Agency Fees as agreed with the DIP Administrative Agent. Citicorp North America, Inc., is the Administrative Agent under the Debtors' $495,000,000 prepetition credit facility. Deutsche Bank Securities Inc. acts as Prepetition Syndication Agent; and Citicorp North America, Inc., acts as Prepetition Documentation Agent. Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. serve as Joint Book-Running Lead Managers and Joint Lead Arrangers for the Prepetition Facilities. Deutsche Bank Trust Company Americas acts as Administrative Agent under the Debtors' $80,000,000 Senior Secured Superpriority DIP Credit Facility and $80,000,000 Senior Secured Superpriority Roll- Up Credit Facility. Deutsche Bank Securities Inc. and General Electric Capital Corporation serve as Joint Book-Running Lead Managers, Joint Lead Arrangers and Syndication Agents for the DIP Facilities. Dennis F. Dunne, Esq., Abhilash M. Raval, Esq., and Brian Kinney, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York; and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, serve as counsel to the DIP Agent. The Debtors' prepetition credit facilities consist of a term loan facility of EUR260 million maturing in 2014 borrowed by Hayes Luxembourg; a revolving credit facility of $125 million maturing in 2013 available to HLI Operating Company, Inc., and Hayes Luxembourg; and a synthetic letter of credit facility of EUR15 million available to both borrowers. Hayes' non-debtor affiliates are indebted pursuant to short term bank borrowings and other notes in the aggregate amount of $46.6 million as of January 31, 2009. Hayes also had a domestic accounts receivable securitization facility with a normal program limit of $25 million during Fiscal 2007 and 2008. The facility has an expiration date of May 30, 2013. Due to concentration limits and restrictions on financing certain receivables, the majority of the program has not been available. There were $6 million of borrowings under the programs as of January 31, 2009, which was the maximum amount available under this facility. The facility limit was reduced to $5 million in April 2009 and no future advances will be made under the facility. If the borrowing base falls below $5 million, amounts currently advanced in excess of the borrowing base will need to be repaid. As of January 31, 2009, Hayes had approximately $670.1 million of total indebtedness. Lenders Dictate Plan Process The Debtors will have provided as of May 21 a milestone schedule satisfactory to the Requisite DIP Lenders regarding efforts to effectuate a sale of substantially all of the assets of the Debtors, whether pursuant to one or more sales under Section 363 of the Bankruptcy Code, a plan of reorganization, liquidation or any other change in control transaction. If requested, the Debtors will provide weekly updates to the DIP Lenders and their advisors regarding the progress of the Debtors towards meeting the sale transaction milestones and facilitating a sale transaction. The Debtors will simultaneously pursue both the transactions contemplated by the Plan Term Sheet and the Sales Transactions which will include the active marketing of assets to potential financial and strategic purchasers. The DIP Lenders will later determine whether the Debtors should pursue transactions contemplated by the Plan Term Sheet or the Sales Transactions. The Plan Term Sheet proposes to give: -- 87.25% of the shares of new common stock to be issued by the Reorganized Company to the DIP Lenders in full satisfaction of their claims; -- 8.5% of the shares of New Common Stock to consenting prepetition secured lenders; -- 4% of the New Common Stock to the Holders of Prepetition Secured Obligations other than Lenders that participated in the DIP Facility, in full satisfaction of their claims; and -- 0.25% of the New Common Stock to the Holders of the 2015 notes issued by Hayes Luxembourg in full satisfaction of their claims. Other Unsecured Creditors will share on a $250,000 cash pool. Holders of equity interest are out of the money. If the DIP Lenders elect the transactions contemplated by the Plan Term Sheet, the Debtors will immediately suspend all efforts concerning the Sale Process unless the Debtors determine that proceeding with the Sales Transactions maximizes the value of their estates. If the DIP Lenders elect the Sales Transactions, the Debtors will immediately suspend all efforts concerning transactions contemplated by the Plan Term Sheet and proceed solely with the Sales Transactions. In connection with the Sales Transaction, the Debtors' Lenders may "credit bid" their claims to serve as a "stalking horse bid." The DIP Lenders require the Debtors to cause confirmation of a chapter 11 plan of reorganization before the 150th day following the Petition Date or consummate an acceptable Chapter 11 plan prior to the Maturity Date. "None of the Prepetition Lenders have argued that liquidating the Debtors is better than reorganizing them or selling their business as a going concern," Mr. Clark says. "Nonetheless, there may be unresolved intercreditor issues raised by certain of the Prepetition Lenders regarding the terms of the DIP Facility and the allocation of value among the Prepetition Lenders under a potential plan of reorganization or going concern sale. If liquidation is to be avoided, these issues must be resolved, whether by agreement or through litigation, now." About Hayes Lemmerz International, Inc. Originally founded in 1908, Hayes Lemmerz International, Inc. (NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. The Company is also a supplier of automotive powertrain components. The Company has global operations with 23 facilities, including business, sales offices and manufacturing facilities, located in 12 countries around the world. The Company sells products to every major North American, Asian and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world. The Company and certain affiliates filed for bankruptcy on May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching agreements with lenders holding a majority of the Company's secured debt. The Company's principal bankruptcy attorneys are Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co., LLC serves as the Company's financial advisors. AlixPartners, LLP serves as the Company's restructuring advisors. The Garden City Group, Inc., serves as the Debtors' claims and notice agent. As of January 31, 2009, the Debtors had total assets of $1,336,600,000 and total debts of $1,405,200,000. This is the Company's second trip to the bankruptcy court, dubbed a Chapter 22. Hayes Lemmerz and its direct and indirect domestic subsidiaries and one subsidiary in Mexico filed for bankruptcy in December 2001 before the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 filings were precipitated by declining market conditions and the Company's excessive debt burdens, according to Mr. Clawson, who also served as chairman and chief executive officer at that time. The Court confirmed the Company's reorganization plan in May 2003, allowing the Company to exit bankruptcy in June 2003. In accordance with the 2003 Plan, approximately $2.1 billion in pre- petition debt and other liabilities were discharged. The Plan provided for holders of prepetition secured claims to receive $478.5 million in cash and 53.1% of the reorganized company common stock. Holders of senior note claims were to receive $13 million in cash and 44.9% of the New Common Stock, and holders of general unsecured claims were to receive 2% of the New Common Stock. Hayes Lemmerz' prior common stock and securities were cancelled as of June 3, 2003. HENDRICKS COMPANIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Hendricks Companies, Inc. 26532 Railroad Avenue Loxley, AL 36551 Bankruptcy Case No.: 09-12332 Chapter 11 Petition Date: May 21, 2009 Court: United States Bankruptcy Court Southern District of Alabama (Mobile) Debtor's Counsel: Jeffery J. Hartley, Esq. Helmsing, Leach, Herlon, Newman & Rouse P.O. Box 2767 Mobile, AL 36652-2767 Tel: (251)432-5521 Email: jjh@helmsinglaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/alsb09-12332.pdf The petition was signed by S. Kenneth Hendricks, chairman and CEO of the Company. HERBST GAMING: Files Amended Stipulation on Cash Collateral Use --------------------------------------------------------------- Herbst Gaming, Inc., together with its debtor affiliates, and Wilmington Trust Company, as Administrative Agent for the Company's lenders, seek approval from the U.S. Bankruptcy Court for the District of Nevada of an amended stipulation authorizing the Debtors' use of cash collateral, including certain disputed cash collateral, and granting adequate protection. The parties agree that the Debtors will transfer cash to their account at U.S. Bank National Association within three business days of the Court's approval of the stipulation, in lieu of the requirement of an acceptable forbearance agreement and the transfer of all of the Debtors' cash in Community Bank of Nevada to the U.S. Bank account within 10 days after the effective date of a certain Lockup Agreement. The transferred cash will then be available for use by the Debtors. The Lock-Up refers to the pre-negotiated restructuring agreement dated March 9, 2009, with lenders holding more that 68% of the outstanding claims due under the Credit Agreement, which provides for a restructuring of the Debtors to be effectuated pursuant to a plan of reorganization which, together with a proposed disclosure statement, will be filed in these cases. The Debtors acknowledge that the Administrative Agent and their Lenders have a valid, enforceable and perfected security interest on their personal property and real property. They, however, dispute that the Administrative Agent has a perfected security interest in their cash on hand, deposit accounts and postpetition cash. In light of the immediate and irreparable harm to the Debtors' continued operations that may result from their inability to use the Disputed Cash Collateral, the Lenders have consented to the use of both the Disputed Cash Collateral and the Cash Collateral, subject to the terms of the parties' stipulation and the entry of a Court approval of the stipulation. The use of Cash Collateral and Disputed Cash Collateral will be limited to payment of ordinary, reasonable and necessary expenses actually paid by the Debtors in connection with the operation of their businesses, pursuant to a budget. The Debtors' authority to use Cash Collateral, including Disputed Cash Collateral, will be effective from the date of the entry of a Court order approving the terms of the stipulation through the date that is 5 business days following notice to the Debtors of an occurrence of an Event of Default or the Effective Date of a plan of reorganization, whichever occurs first. Events of Default include, among others, the entry of a Court order dismissing the Debtors' Chapter 11 cases, converting the case to Chapter 7, or appointing a Chapter 11 trustee or examiner with expanded powers; the sale of any portion of the Debtors' assets outside the ordinary course of business without the prior written consent of the Administrative Agent; and a termination of the Lockup Agreement. As adequate protection of the Lenders' interests in the Prepetition Collateral against any diminution in value as a result of its use and the imposition of the automatic stay, the Administrative Agent will be granted additional, replacement security interests in all of the Collateral, except for causes of action under Chapter 5 of the Bankruptcy Code, the Cash on Hand, Deposit Accounts and Postpetition Cash. The Administrative Agent on behalf of the Lenders will also be entitled to adequate protection payments in an amount equal to the Debtors' cash and cash equivalents in excess of $100 million. A full-text copy of the parties' Amended and Restated Stipulation for further Cash Collateral use and grant of adequate protection, including the budget, is available at: http://www.bankrupt.com/misc/Herbst.AmendedStipulation.pdf About Herbst Gaming Inc. Headquartered in Reno, Nevada, Herbst Gaming Inc. -- http://www.herbstgaming.com/-- is an established casino and slot route operator that operates casinos located in Nevada, Missouri and Iowa. The Debtors own and operate approximately 6,800 slot machines in its slot route business and is a slot machine operator in Nevada. The Company and 17 of its affiliates filed for Chapter 11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09- 50752). Gerald M. Gordon, Esq., and Thomas H. Fell, Esq., at Gordon Silver, represent the Debtors in their restructuring efforts. As of September 30, 2008, the Debtors have $1,021,956,000 in total assets and $1,241,937,000 in total debts. HERITAGE BUILDING: Portland Dev't Commission May Buy Bank Loan -------------------------------------------------------------- Ryan Frank at The Oregonian reports that the Portland Development Commission officials said that they want to take over Heritage Building L.L.C.'s loan with Albina Community Bank to get the rest of the building leased and to protect its own investment in the property in the event of another loan default. The Oregonian states that the Portland Development Commission has made more than $2.4 million in low-interest loans on the project. According to The Oregonian, the Portland Development Commission will consider purchasing the private bank loan to avoid a second foreclosure on the Heritage Building. The agency's board, The Oregonian says, will vote on the loan at its meeting on Wednesday. The Portland Development Commission, according to The Oregonian, hoped the renovation of the Heritage Building would attract more people to reinvest in real estate lining Northeast Martin Luther King Jr. Boulevard. It granted the building to private developers led by Eric Wentland to renovate and lease it to shops, restaurants, and employers, but the project has struggled in the recession, the report states. The Oregonian relates that since the Heritage Building finished the work in September 2007, it has defaulted once on the loan with Albina Community, leading to the Company's bankruptcy filing in 2008. Citing the Portland Development Commission, The Oregonian reports that the building remains 56% leased. Mr. Wentland, according to The Oregonian, said that he didn't know why the Portland Development Commission wanted to take over the private loan. The Oregonian relates that the building previously fell into foreclosure but not due to missed payment, but because the Company's ability to cover its debt service was below requirements set in the Albina Community loan agreement. The Oregonian states that Mr. Wentland said that he and his four partners have personally guaranteed the loan. The Heritage Building, L.L.C., is based in Portland, Oregon. The Company filed for Chapter 11 bankruptcy protection on July 21, 2008 (Bankr. D. Ore. Case No. 08-33599). Albert N. Kennedy, Esq., who has an office in Portland, Oregon, assists the Company in its restructuring efforts. The Company listed $4,828,350 in assets and $4,434,493 in debts. HLA INC: Files Chapter 11 Petition in Georgia --------------------------------------------- HLA Inc. filed a Chapter 11 petition before the U.S. Bankruptcy Court for the Northern District Georgia in Gainesville, listing assets less than $10 million and debt exceeding $10 million. HLA Inc. is the operator of Hidden Lake Academy, a therapeutic boarding school in Dahlongea, Georgia. The school is run in association with the Georgia juvenile justice system. The Company filed for Chapter 11 on May 14 (Bankr. N.D. Ga. Case No. 09-22026). HUGHES NETWORK: S&P Assigns 'B' Rating on $125 Mil. Senior Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a 'B' issue- level rating to Hughes Network System LLC's $125 million of 9.5% senior notes due 2014. S&P also assigned a '4' recovery rating to this unsecured issue, indicating expectations for average (30%- 50%) recovery in the event of a payment default. These notes are being issued with terms and covenants that are substantially identical to the existing 9.5% senior notes. Issue proceeds will be used for general corporate purposes. At the same time, S&P affirmed all ratings, including the 'B' corporate credit rating, on the parent, Hughes Communications Inc. However, S&P revise the outlook on the company to stable from positive. "The change in outlook reflects our view that, as a result of the new notes, the improvements in leverage and free cash flow that S&P expected in 2009 will be delayed for at least a year," said Standard & Poor's credit analyst Naveen Sarma. Adjusted leverage, pro forma for the new notes, will rise to 5.4x from 4.7x. S&P had expected leverage to improve to the mid-4.0x area and the company to begin generating some positive free cash flow in 2009. However, this is not expected to occur until at least 2010. HUGHES NETWORK: To Sell New 9-1/2% Notes at 90.935% of Face Value ----------------------------------------------------------------- Hughes Network Systems, LLC, and its subsidiary, HNS Finance Corp., announced the pricing for the offering of their $150.0 million aggregate principal amount of 9-1/2% senior notes due 2014. The proposed 9-1/2% senior notes will be issued under a new indenture and will not be part of the same class as HNS' existing 9-1/2% senior notes. The notes will be sold at a price equal to 90.935% of their face value, plus accrued interest from April 15, 2009, with an effective yield of 12.000%. The offering is expected to close on May 27, 2009, subject to the satisfaction or waiver of customary closing conditions. HNS and HNS Finance Corp. are subsidiaries of Hughes Communications, Inc. The notes were offered in a private placement and will be guaranteed on a senior unsecured basis by each of HNS' current and future domestic subsidiaries that guarantee any of HNS' indebtedness or indebtedness of other HNS subsidiary guarantors, including the indebtedness under HNS' revolving credit facility, unsecured term loan facility and existing 9-1/2% senior notes. The net proceeds of the offering are intended to be used for general corporate purposes, which could include working capital needs, corporate development opportunities (which may include acquisitions) and opportunistic satellite fleet expansion. In its quarterly report for the period ended March 31, 2009, filed on Form 10-Q with the Securities and Exchange Commission, the Company said it is significantly leveraged as a result of its indebtedness. As of March 31, 2009, the Company's cash and cash equivalents was $102.6 million and its total debt was $584.3 million. The Company had $1.06 billion in total assets and $828 million in total liabilities, resulting in $234 million in stockholders' equity. The notes were offered and sold in the United States only to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended, and in offshore transactions to non-United States persons in reliance on Regulation S of the Securities Act. The offering of the notes was not registered under the Securities Act, and the notes may not be offered or sold within the United States, or to, or for the account or benefit of, any United States persons absent that registration or an applicable exemption from that registration requirement. About Hughes Network Systems Hughes Network Systems, LLC -- http://www.hughes.com/-- provides broadband satellite networks and services for enterprises, governments, small businesses, and consumers. To date, Hughes has shipped more than 1.9 million systems to customers in over 100 countries. Headquartered in Germantown, Maryland, USA, Hughes maintains sales and support offices worldwide. * * * The Company's existing $450 million of 9.50% senior notes maturing on April 15, 2014, are currently rated B1 and B by Moody's and Standard & Poor respectively. Interest on the Senior Notes is paid semi-annually in arrears on April 15 and October 15. At March 31, 2009 and 2008, interest accrued on the Senior Notes was $19.7 million. The Company's secured $50 million revolving credit facility, which matures on April 22, 2011, is currently rated Ba1 and BB- by Moody's and S&P, respectively. As of March 31, 2009, the total outstanding letters of credit under the Revolving Credit Facility was $3.6 million. The available borrowing capacity under the Revolving Credit Facility as of March 31 was $46.4 million. The Company's $115 million 2007 senior unsecured credit agreement from a syndicate of banks is currently rated B1 and B by Moody's and S&P. The Term Loan Facility matures April 15, 2014. The Term Loan Facility has a fixed interest rate of 7.62% per annum. The net interest payments based on the Swap Agreement and the Term Loan Facility are estimated to be approximately $8.8 million for each of the years ending December 31, 2009, through 2013 and $3.3 million for the year ending December 31, 2014. IDEARC INC: Files Chapter 11 Plan; Claimants to Receive Stock ------------------------------------------------------------- Idearc Inc. and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Northern District of Texas a disclosure statement in support of their joint Chapter 11 plan of reorganization dated May 15, 2009. The Debtors related that the Plan proposes: -- the payment of cash by Idearc and the issuance by Idearc of new senior secured term loans and new common stock in exchange for the portion of claims arising under, in connection with, or related to the Debtors' senior credit facility debt and swap obligations to the extent that it is secured; -- the issuance of new common stock and distributions from a litigation trust in exchange for the Debtors' unsecured notes, general unsecured claims that have not been classified as convenience claims, and the portion of the claims arising under, in connection with, or related to the Debtors' senior credit facility debt and swap obligations that is not secured; -- the cash payment equal to the lesser of the aggregate amount of such claims and [$__] to holders of general unsecured claims that have elected to classify such claims as convenience claims; -- the discharge of previously subordinated claims arising from previously issued securities of the Debtors; and -- the cancellation of existing Idearc public equity. Furthermore, all intercompany claims between and among the Debtors will be deemed resolved, and all other creditors and interests will be unimpaired. Under the Plan, claims are treated generally in accordance with the priorities established under the Bankruptcy Code, except that: (i) holders of allowed secured credit facility claims will receive their pro rata share of 95% of the new common stock to be issued by Idearc pursuant to the Plan; and (ii) holders of allowed unsecured note claims, allowed unsecured credit facility claims and allowed general unsecured claims which have not been classified as convenience claims, together as a single class, will receive their pro rata share of 5% of the new common stock to be issued by Idearc pursuant to the Plan and their pro rata share of any distributions made from a litigation trust. In addition, holders of general unsecured claims may elect to have all of their general unsecured claims classified as convenience claims and in that case, will receive a single cash payment equal to the lesser of the aggregate amount of those claims and [$__] and will be deemed to have voted in favor of the Plan. Subordinated claims arising from previously issued securities of the Debtors will be discharged. All intercompany claims between and among the Debtors will be deemed resolved. The Subsidiary Debtors' equity interests will remain in place, but the existing public equity of Idearc will be cancelled. All other claims will be paid in full or will be reinstated. Moelis & Company LLC, the Debtors' financial advisor, has determined the estimated range of reorganization value of the Reorganized Debtors on a going concern basis is between $3.025 billion and $3.7 billion as of an assumed effective date of June 30, 2009, excluding an estimated $150 million of cash on hand and after payment by the Debtors of an estimated $250 million of distributable cash pursuant to the plan. A full-text copy of Idearc's disclosure statement is available for free at http://ResearchArchives.com/t/s?3d1f A full-text copy of Idearc's Chapter 11 plan is available for free at http://ResearchArchives.com/t/s?3d20 About Idearc Inc. Headquartered in DFW Airport, Texas, Idearc Inc. (NYSE: IAR) -- http://www.idearc.com/-- fka Verizon Directories Disposition Corporation, provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, their information directory for wireless subscribers. 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. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on an official committee of unsecured creditors of Idearc Inc. and its debtor-affiliates. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co-counsel. 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. IMPERIAL BUSINESS: Court Confirms Ch. 11 Plan of Reorganization --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Pennsylvania has confirmed the Chapter 11 Plan of Imperial Business Park, L.P. As reported in the Troubled Company Reporter on January 28, 2009, the Debtor filed the Plan and a disclosure statement explaining the Plan on December 30, 2008. The disclosure statement was conditionally approved on January 6, 2009. The Plan contemplates the sale of the Debtor's 98 acres of partially developed real estate and the adjacent undeveloped 227 acres owned by IBP II, L.P., a related Debtor. The partial developed property includes five buildings which are fully constructed and contain 187,000 square feet of warehouse space. This real estate generates approximately $85,000 per month in rental revenue. The Debtor believes that the property can be sold for more than $13,500,000, the amount owed to the Debtor's senior secured lender, LaSalle Bank. The Distributions to be made pursuant to the Plan will be paid from the Net Proceeds from the sale of the Debtor's property and successful recovery of Litigation Claims. The Law Firm of Rudov & Stein, P.C., shall act as the Disbursing Agent. The Debtor envisions that the sale will occur after the confirmation of the Plan. Net Proceeds realized from the avoidance of transfer stamps and all proceeds realized from Litigation Recoveries shall be used to fund non-secured claims according to statutory priorities. Classes and Treatment of Claims The Plan segregates the Claims against and Interests in the Debtors into 7 classes: Class 1 - Secured Claim of LaSalle Bank Class 2 - Secured Claim of Redevelopment Authority of Allegheny County Class 3 - Secured Claim of Independent Enterprises, Inc. Class 4 - Secured Claim of Taylour Interior Systems Class 5 - Priority Claims of Township of North Fayette Class 6 - Unsecured Creditors Class 7 - Partnership Interests The Claim of LaSalle Bank under Class 1 shall be paid from the Net Proceeds from the sale of the Debtor's property after payment of all Allowed Administrative Claims and Fee Claims. The Claim of Redeveloment Authority of Allegheny County under Class 2 shall be paid from the Net Proceeds from the sale of the Debtor's property after payment of all Allowed Administrative and Fee Claims and the Allowed Secured Claim of Class 1. The Claim of Independent Enterprises Incorporated under Class 3 shall be paid from the Net Proceeds from the sale of the Debtor's property after payment of all Allowed Administrative and Fee Claims and the Allowed Secured Claims of Classes 1 and 2. The Claim of Taylour Interiors Systems, Inc. under Class 4 shall be paid from the Net Proceeds from the sale of the Debtor's property after payment of all Allowed Administrative and Fee Claims and the Allowed Secured Claims of Classes 1, 2, and 3. The Priority Claim of Township of North Fayette under Class 5 will be paid from the Net Proceeds from the sale of the Debtor's property after payment in full of all allowed Administrative and Fee Claims and the Allowed Secured Claim of Classes 1, 2, 3, and 4. In the event that the property is not sufficient to fully satisfy the Claims under Classes 1, 2, 3, 4, and 5, the remaining Allowed Claims shall be treated as an Unsecured Claim and paid on a Pro Rata Basis with all Unsecured Creditors. Unsecured Creditors under Class 6 will receive a Pro Rata Distribution of the Net Proceeds from the sale that remain after payment in full of all Allowed Administrative and Fee Claims and the Allowed Claims of Classes 1, 2, 3, 4, and 5. Moreover Class 6 Unsecured Creditors (including deficiency Secured Claims) shall be entitled to a Pro Rata Distribution of the Net Proceeds received from the Litigation Claims. Partnership Interests under Class 7 shall receive a Pro Rata Distribution from the Net Proceeds from the sale of the Debtor's property or the Litigation Claims that remain after payment in full of all Allowed Administrative and Fee Claims and the Allowed Claims of Classes 1, 2, 3, 4, 5, and 6. All Classes are impaired under the Plan and entitled to vote to accept or reject the Plan. A full-text copy of the Debtor's proposed Plan of Reorganization under Chapter 11 of the Bankruptcy Code is available for free at: http://bankrupt.com/misc/ImperialBusinessChapter11Plan.pdf About Imperial Business Oakdale, Pennsylvania-based Imperial Business Park, L.P. -- http://www.imperialbusinesspark.net/-- owns an industrial and business park. The company filed for Chapter 11 protection on October 2, 2008 (Bankr. W. D. Pa. Case No. 08-26580). David K. Rudov, Esq., at Rudov & Stein, represents the Debtor as counsel. Robert S. Bernstein, Esq., and Scott S. Schuster, Esq., at Bernstein Law Firm, P.C., represent the offical committee of unsecured creditors as counsel. The company listed assets of $16,064,823 and debts of $18,078,619. INDALEX HOLDINGS: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Indalex Holdings Finance, Inc., 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 -------------- ------------ ------------ Indalex Holdings Finance, Inc. $0 $310,606,421 Indalex Holding Corp. $139,368,249 $310,606,421 Indalex Inc. $176,695,865 $385,408,582 Caradon Lebanon, Inc. $0 $310,606,421 Dolton Aluminum Company, Inc. $0 $310,606,421 Copies of Indalex Holdings Finance, Inc., et al.'s SALs are available at: http://bankrupt.com/misc/IndalexHoldingsFinance.SAL.pdf http://bankrupt.com/misc/IndalexHoldingCorp.SAL.pdf http://bankrupt.com/misc/IndalexInc.SAL.pdf http://bankrupt.com/misc/CaradonLebanonInc.SAL.pdf http://bankrupt.com/misc/DoltonAluminumCompany.SAL.pdf About Indalex Holdings Indalex Holding Corp., a wholly-owned subsidiary of Indalex Holdings Finance Inc., through its operating subsidiaries Indalex Inc. and Indalex Ltd., with headquarters in Lincolnshire, Illinois, is the second largest producer of soft alloy extrusion products in North America. The company's aluminum extrusion products are widely used throughout industrial, commercial and residential applications and are customized to meet specific end- user requirements. Indalex operates 10 extrusion facilities, 29 extrusion presses with circle sizes up to 20 inches, a variety of fabrication and close tolerance capabilities, two anodizing operations, two billet casting facilities, and six electrostatic paint lines, including powder coat capability. Indalex is indirectly controlled by private-equity investor Sun Capital Partners Inc. Sun Capital purchased Indalex in 2005 from Honeywell International Inc. for $425 million. Indalex is the 12th investment by Boca Raton, Florida-based Sun Capital to file in Chapter 11 since January 2006. Indalex Holdings and four affiliates filed for Chapter 11 on March 20 (Bankr. D. Del., Lead Case No. 09-10982). Donald J. Bowman, Jr., Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, has been tapped as counsel. Epiq Bankruptcy Solutions LLC is the claims and noticing agent. In its bankruptcy petition, Indalex listed assets of $356 million against debt totaling $456 million. INTERPUBLIC GROUP: Restructures $335-Million Credit Line -------------------------------------------------------- The Interpublic Group of Companies, Inc., in a filing with the U.S. Securities and Exchange Commission, relates that it is restructuring its $335 million three-year line of credit to try to minimize the impact of a potential General Motors bankruptcy. AAF SmartBrief relates that Interpublic, GM's biggest marketing services partner, reportedly hasn't included in many of its agreements with the automaker "sequential liability clauses" that are used to shield shops from being held accountable for their clients' financial obligations. On May 13, 2009, Interpublic entered into Amendment No. 1 to the 3-Year Credit Agreement dated as of July 18, 2008, among IPG, Citibank, N.A., as administrative agent, and certain banks, financial institutions and other institutional lenders parties. A copy of the Amendment is available at : http://ResearchArchives.com/t/s?3d1b The Amendment is intended to preserve the Company's ability to use the Credit Agreement in the event of any bankruptcy or related event with respect to GM or any of its affiliates. It modifies the definition of EBITDA under the Credit Agreement in order to exclude from the determination of consolidated EBITDA for all purposes under the Credit Agreement any effects on IPG's consolidated EBITDA arising from any bankruptcy or other adverse event with respect to GM and any of its affiliates, provided that the new exclusion effected by the amendment is limited to an aggregate of $150,000,000 of cash charges and an aggregate amount of $100,000,000 of non-cash charges. The Company has entered into the Amendment solely as a matter of sound financial management. While the Company maintains committed credit facilities to increase its financial flexibility, it has not drawn on any of its corporate credit facilities since 2003, although it uses them to obtain letters of credit to support commitments on behalf of certain clients. The Company has no non- public information concerning any GM-related bankruptcy proceeding or related event and continues to operate to the full extent of its business relationship with GM. The Interpublic Group of Companies, Inc. (NYSE: IPG), is one of the big four global advertising holding companies (the others being Omnicom, WPP and Publicis). It is headquartered in New York City and is the parent company of Universal McCann media agency and McCann-Erickson. IPG was created in 1960 as the first marketing services management holding company, with McCann-Erickson and McCann-Marschalk as its two subsidiaries. Since then, it has grown tremendously, with over 185 companies purchased in a two-year span from 1999 to 2001. Comparisons have been made to AOL Time Warner, as both are media conglomerates that have trouble managing their holdings. The advertising firm Campbell-Ewald is also a subsidiary of IPG. As reported by the Troubled Company Reporter on March 9, 2009, Standard & Poor's Ratings Services said that it revised the rating outlook on Interpublic Group of Companies Inc. to stable from positive. All ratings on the company, including the 'B+' corporate credit rating, were affirmed. According to the TCR on May 4, 2009, Fitch Ratings affirmed Interpublic Group of Companies' 'BB+' Issuer Default Rating. Fitch also affirmed the 'BB+' senior unsecured notes (including convertibles); 'BB+' bank credit facility rating; 'BB+' Enhanced Liquidity Facility rating; and 'BB-' cumulative convertible perpetual preferred stock. The Rating Outlook is Positive. Approximately $2.1 billion in total debt and $525 million in preferred stock as of March 31, 2009, is affected. ION MEDIA: Chapter 11 Filing Cues S&P's Rating Downgrade to 'D' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on West Palm Beach, Florida-based ION Media Networks Inc. to 'D' from 'CC'. The issue-level ratings on ION Media's debt were also lowered to 'D'. In addition, the recovery rating on the company's first-lien senior secured debt was revised to '6', indicating S&P's expectation of negligible (0% to 10%) recovery for first-lien debtholders, from '4'. The '6' recovery rating on the company's second-lien senior secured debt is unchanged. The rating downgrade reflects ION Media's announcement that it has filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. The company has pre-negotiated a financial restructuring that would extinguish over $2.7 billion of legacy indebtedness and preferred stock through a debt-to-equity conversion. The revision of the recovery rating on the first-lien debt reflects management's proposed $300 million super-priority debtor- in-possession facility. S&P also updated its first-lien recovery estimates to account for approximately $120 million in outstanding interest-rate swap obligations. ION Media is a TV network that owns and operates 60 TV stations reaching about 95 million homes in the largest TV markets in the U.S. ION MEDIA: Receives Court Approval for $25MM Initial Funding ------------------------------------------------------------ The United States Bankruptcy Court for the Southern District of New York has granted all of ION Media Networks, Inc., owner and operator of the ION Television network. Court approval includes continued use of cash on hand, as well as access to an additional $25 million of initial funding from a majority of the company's first lien secured lenders. This funding is part of a proposed financial restructuring that contemplates a significant de-leveraging and additional capital for growth. "We are pleased with the process thus far and appreciate the support from our senior lenders to reduce our legacy indebtedness and provide cash funding for growth," said Brandon Burgess, ION's Chairman and CEO. "We look forward to working with all of our senior lenders to quickly implement a restructuring that finally provides a clean balance sheet, allowing the company to execute its growth strategy." The Company also confirmed that it is in active discussions for the acquisition of further content for the 2009/10 television season, including both off-network syndicated content as well as opportunistic original productions, which it anticipates announcing in coming weeks. ION's business model is focused on capturing growth through improved programming and distribution. Ratings for ION Television showed double digit increases in the first quarter, driven by new programming additions, including NCIS, Boston Legal, and popular motion pictures. Additional syndicated shows, such as Criminal Minds and Ghost Whisperer, will join the network line-up in the second half of the year, along with several original show premieres, including the crime drama Durham County, starring Hugh Dillon. The company also continues to enhance its strong nationwide distribution, as seen in recent expanded carriage deals with DirecTV and Dish Network. ION will continue its operations in the ordinary course through the financial restructuring process and provide uninterrupted service to its viewers and clients. In light of the pre-negotiated restructuring supported by holders representing a majority of its outstanding first lien debt outstanding, ION expects to complete the process on an accelerated basis. Moelis & Company LLC is serving as financial advisor to ION and Kirkland & Ellis LLP is serving as legal counsel for the restructuring. About ION Media New York-based ION Media Networks, Inc. -- http://www.ionmedia.com/-- owns and operates the nation's largest broadcast television station group and ION Television, which reaches over 96 million U.S. television households via its nationwide broadcast television, cable and satellite distribution systems, and features popular TV series and movies from the award- winning libraries of RHI Entertainment, CBS Television, NBC Universal, Sony Pictures Television, Twentieth Television and Warner Bros., among others. Using its digital multicasting capability, the Company has launched several digital TV brands, including qubo, a channel for children focusing on literacy and values, and ION Life, a channel dedicated to active living and personal growth. It also has launched Open Mobile Ventures Corporation, a business unit focused on the research and development of portable, mobile and out-of-home transmission technology using over-the-air digital television spectrum. Ion Media and more than 100 subsidiaries filed for Chapter 11 on May 19, 2009 (Bankr. S. D. N.Y. Case No. 09-13124). Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, has been tapped as bankruptcy counsel. Holland & Knight LLP is the corporate counsel, and Moelis & Company LLC is the financial advisor. Ernst & Young LLP has been also hired as tax advisor. Kurtzman Carson Consultants LLP is the notice, claims and balloting agent. Ion Media said it has $1,855,000,000 in assets and $1,936,000,000 in liabilities as of April 30, 2009. LEAR CORP: Bankruptcy Looms on Failure to Cut Debt, Analysts Say ---------------------------------------------------------------- Analysts say that Lear Corp. may have to file for Chapter 11 bankruptcy protection if it fails to reduce its debt, Jewel Gopwani at Detroit Free Press reports. According to Free Press, Lear's executives said the Company intends to cut its debt outside of bankruptcy. Citing Barclays Capital auto analyst Brian Johnson, Free Press notes that Lear might have to decide whether it will file for bankruptcy in June as deadlines from its bondholders and banks loom. Free Press relates that several analysts expect Lear to ask bondholders to swap part of that debt for cash and stock. Free Press quoted KDP Advisors analyst Kip Penniman as saying, "We cannot envision an offer to bondholders that would prove attractive enough to succeed." Free Press states that Lear has negotiated two waivers with its lenders after falling out of compliance on the terms of a $1.2 billion credit line. According to Free Press, the latest of those waivers lasts until June 30. Lear owes bondholders some $38 million in interest, which is due on June 1 and has a 30-day grace period, Free Press notes. The news source says paying that debt would void Lear's waivers. Based in Southfield, Michigan, Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear is traded on the New York Stock Exchange under the symbol [LEA]. * * * Lear had approximately $1.2 billion in cash and cash equivalents as of April 4, 2009, as compared to approximately $1.6 billion as of December 31, 2008. The decline reflects negative free cash flow in the first quarter, as well as the termination of an accounts receivable factoring facility in Europe. Lear had total assets of $6.4 billion, current liabilities of $4.4 billion and long-term liabilities of $2.0 billion, resulting in $41.4 million in stockholders' deficit at April 4, 2009. In January, Moody's Investors Service lowered the Corporate Family and Probability of Default ratings of Lear, to Caa2 from B3. In a related action, the rating of the senior secured term loan was lowered to Caa1 from B2, and the rating on the senior unsecured notes was lowered to Caa2 from B3. The ratings remain on review for further possible downgrade. Standard & Poor's Ratings Services also lowered its corporate credit rating on Lear to 'B-' from 'B'. At the same time, S&P also lowered its issue-level ratings on the company's debt. The ratings remain on CreditWatch, where they had been placed with negative implications on November 13, 2008. LIBERTY GLOBAL: S&P Affirms Corporate Credit Rating at 'B+' ----------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B+' long-term corporate credit rating on U.S.-listed, international cable-TV operator and broadband services provider Liberty Global Inc. and its subsidiaries, following the successful extension of debt maturities and the publication of strong results for the first quarter of 2009. At the same time, the rating was removed from CreditWatch, where it was placed with positive implications on April 22, 2009. The outlook is positive. In addition, Standard & Poor's affirmed its 'B+' issue ratings on the senior secured loan facilities issued by UPC Broadband Holding B.V. and UPC Financing Partnership (not rated). The ratings were removed from CreditWatch, where they were placed with positive implications on April 22, 2009. The recovery rating of '3' on these senior secured loan facilities is unchanged, indicating S&P's expectation of meaningful (50%-70%) recovery for senior secured loan holders in the event of a payment default. S&P also affirmed the 'B-' debt ratings on the senior notes issued by UPC Holding B.V. and the EUR500 million unsecured convertible notes (about EUR400 million currently outstanding) issued by UnitedGlobalCom Inc. The recovery rating of '6' on these notes is also unchanged, indicating S&P's expectation of negligible (0%- 10%) recovery for subordinated bondholders in the event of a payment default. At the same time, S&P assigned a 'B-' rating to the new 9.75% senior notes issued by UPC Holding B.V. for the original amounts of EUR65.6 million and EUR184.4 million (a combined total of EUR250 million of principal). The recovery rating on this debt is '6', indicating S&P's expectation of negligible (0%-10%) recovery in the event of a payment default. The positive outlook and the rating affirmation reflect S&P's view of LGI's strong operating performance against the backdrop of the global economic downturn, the ongoing improvement in the group's credit metrics, and the successful extension of its debt maturities. That said, an upgrade is not warranted at this point because, in S&P's view, LGI has yet to fully establish a track record in terms of a conservative financial policy. Furthermore, an upgrade would likely be based on enhanced free operating cash flow and a further reduction in leverage. The ratings on LGI are constrained by a highly leveraged capital structure (4x-5x total debt to EBITDA) and weak FOCF due to sizable investments in subscriber equipment and capacity expansion, and adjustments to reflect partial ownership of certain major operations. Further rating constraints are intense competition in most of LGI's markets; its continuing appetite for acquisitions; and its aggressive returns to shareholders, despite its relatively low free cash flow generation. The ratings are supported, however, by LGI's diversified asset portfolio, which has some utility-like characteristics in the CATV business; sustained revenue and EBITDA growth; and proactive liquidity and long-dated debt maturities. "In our opinion, the diversified nature of LGI's asset portfolio, with the utility-like CATV business, should enable the group remain largely resilient to the global economic downturn," said Standard & Poor's credit analyst Raam Ratnam. "LGI's main growth drivers remain the steady take-up of double- play and triple-play products (including digital CATV, telephony, and Internet broadband) and the progressive migration of the group's analog subscriber base to digital services," added Mr. Ratnam. These trends should translate into further positive momentum for the group in the short to medium term because only about 39% of LGI's customers subscribe to more than one service and digital penetration is relatively low (at about 39% across LGI's markets). The positive outlook reflects S&P's view that the ratings on LGI could be raised over the medium term. S&P would consider an upgrade if the group were able to build a track record of conservative financial policy and continue to build its operations, increase its proportionally consolidated free operating cash flows, and improve its adjusted leverage metrics despite the tough macroeconomic conditions. Specifically, this would involve the group increasing its FOCF to significantly more than the current level of less than 1% of adjusted debt after proportionate consolidation adjustments; and reducing leverage further, toward fully adjusted debt to EBITDA of 4x. Accordingly, before considering an upgrade S&P would anticipate management to build up headroom in LGI's capitalization measures, such that distributions to shareholders or acquisitions would not materially weaken the group's leverage position. Evidence of a more aggressive financial policy, or a material acquisition (which S&P does not expect at this stage), would likely lead S&P to revise the outlook to stable. LIMITED BRANDS: Moody's Cuts Corporate Family Rating to 'Ba2' ------------------------------------------------------------- Moody's Investors Service downgraded Limited Brands, Inc.'s Corporate Family rating and Probability of Default rating to Ba2 from Ba1. The rating outlook is stable. The downgrade reflects Limited Brands' ongoing sales and earnings declines. While Limited Brands' reported earnings exceeded its guidance, sales and operating income continued to decline. Operating income for the first quarter 2009 fell by 35% to $65 million versus the first quarter of 2008. The downgrade also reflects Moody's expectation that Limited Brands' operating performance will continue to decline over the next six months versus the prior year and performance during the 2009 Holiday season will at best remain flat. This level of operating performance makes it highly likely that Limited Brands' credit metrics will worsen and will remain at these weaker levels for a sustained period. Limited Brands' Ba2 corporate family rating reflects its high concentration in two product lines which are highly vulnerable to the weak consumer spending environment, its high seasonality, moderately weak credit metrics, and historically shareholder friendly financial policy. It also acknowledges that the company's recent weak performance is largely correlated to the current weak consumer spending environment. However, it also reflects Moody's concern that its two predominant brands may have reached maturity, which may potentially limit future domestic sales growth. The rating is supported by Limited Brand's very good liquidity which provides it with the flexibility to weather the current economic environment. Positive ratings consideration is also given to the company's solid merchandising skills and well recognized market leading brand names. The stable outlook reflects Limited Brand's very good liquidity which provides it with the financial flexibility to weather the current economic storm. In addition, the stable outlook reflects Moody's expectation that the company will maintain credit metrics appropriate for the Ba2 rating. These ratings were downgraded: -- Corporate family rating to Ba2 from Ba1; -- Probability of default rating to Ba2 from Ba1; -- Senior unsecured notes rating to Ba3 (LGD5, 80%) from Ba2; -- Senior unsecured shelf rating to (P)Ba3 from (P)Ba2; -- Senior subordinated shelf rating to (P)B1 from (P)Ba2; -- Preferred stock shelf rating to (P)B2 from (P)Ba3. This rating was affirmed: Commercial paper rating at Not Prime. The last rating action on Limited Brands was on February 27, 2009 when its senior unsecured rating was downgraded to Ba2 and all ratings were placed on review for possible downgrade. Headquartered in Columbus, Ohio, Limited Brands, Inc. operates 3,014 specialty stores under the Victoria's Secret, Bath & Body Works, C.O. Bigelow, La Senza, White Barn Candle Co., and Henri Bendel name plates. The company's products are also available online. Revenues are about $9.0 billion. LISBON VALLEY: Accepts Involuntary Bankruptcy; Secures Financing ---------------------------------------------------------------- San Juan Record reports that Lisbon Valley Mining Co., LLC, has secured financing from Renewal Capital LLC after consenting to an involuntary Chapter 11 bankruptcy proceeding that creditors filed against the Company. According to San Juan Record, Renewal Capital will provide financing to allow Lisbon Valley Mining to exit Chapter 11 and implement its mine plan. San Juan Record quoted Lisbon Valley Mining General Manager Robert Frayser as saying, "The Chapter 11 filing and the financing we have obtained are the next steps in our plan to restart the mine." Lisbon Valley Mining officials, San Juan Record relates, said, "The mining plan will result in consistent production rates, positive cash flows under a range of copper prices, and an expected mine life of 18 years." Lisbon Valley Mining disclosed in a press statement a series of "significant positive developments . . . . That effort has resulted in a proposed financing that would allow the Company to recommence mining operations during 2009 . . . . Production of LME Grade A Cathode of 15 to 18 million pounds per year at planned mining and processing rates is anticipated. The mining operations at Lisbon Valley are in the process of restarting with necessary steps being taken to insure proper production and the long term sustainability of the mine as well as ensuring a safe working environment. Since the appointment of Robert Frayser as the company general manger in February, 2008, the company has produced positive cash flow for each of the preceding 15 months, reducing debt by approximately $18.65 million notwithstanding low copper market prices, higher bulk commodity prices, economic uncertainty, and the financial condition of its parent corporation." "Approximately $7.5 million of debt retired over the past 15 months was 'past due' vendor debt affecting local economy and communities. New management has placed a priority on paying these vendors as quickly as possible. The balance of the debt repayment was paid to Investec Bank UK Limited for previous Constellation Copper Corporation and Summo USA defaulted hedge positions. Management will continue to work with the Company's vendors and all of its constituents and wishes to maintain their ongoing support while the Company works through the Chapter 11 process," Lisbon Valley Mining stated. Mr. Frayser, according to San Juan Record, said, "We have spent the past nine months evaluating different mining scenarios, project improvement opportunities, and cost control alternatives. Extensive and detailed due diligence work has validated our efforts and we look forward to being a viable company resulting in a positive impact to our communities, counties, and the State of Utah." San Juan Record relates that Lisbon Valley Mining owes more than $1.2 million in unpaid property taxes to local taxing entities. Wheeler Machinery, Fenner Dunlop, and Fraley & Co. filed on May 4, 2009, the involuntary petitions to send the Company to Chapter 11 (Bankr. D. Utah Case Number 09-24486). LNR PROPERTY: S&P Downgrades Counterparty Credit Rating to 'B-' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its long- term counterparty credit rating on LNR Property Holdings Ltd. and LNR Property Corp. to 'B-' from 'B+'. The ratings were removed from CreditWatch Negative, where they were placed March 26, 2009. The outlook is negative. At the same time S&P revised the recovery rating on LNR's senior secured credit facilities to '4' from '1'. In accordance with S&P's notching criteria for a recovery rating of '4', S&P lowered its issue-level rating on these loans to 'B-', from 'BB'. "The downgrade reflects deterioration in the CRE market, which is pressuring LNR's cash flows from both investment income and special-servicing income," said Standard & Poor's credit analyst Adom Rosengarten. At the same time, LNR's debt-to-EBITDA covenant is becoming more restrictive annually in accordance with the senior credit agreement, leaving LNR with less flexibility. Finally, the impairment of assets and losses from unconsolidated entities in which LNR has investments have led to a significant decline in capital, shrinking the loss cushion available to senior lenders. Ideally, cash flows from interest income and special servicing should work as a natural hedge. As one is in decline, the other should ramp up. The deterioration in the CRE market that has cut into interest cash flows, however, has also made it more challenging to liquidate special-servicing assets. Furthermore, liquidation values have declined and resolution times have lengthened substantially. Although S&P has witnessed an increase in special-servicing assets since fourth-quarter 2008, S&P expects a significant lag in the timing of liquidation of those assets, and therefore a lag in the cash flows generated. In addition, the depressed values of the assets will generate lower recovery values at liquidation than S&P previously expected. The negative outlook reflects S&P's expectation of continued deterioration in the CRE market. If deterioration in the CRE market is not as severe as S&P expects and LNR's investment cash flows increase, S&P could change the outlook to stable. In addition, if LNR's special-servicing cash flows increase substantially as special-servicing assets begin to liquidate, S&P could change the outlook to stable. On the other hand, if LNR's EBITDA levels continue to decline, placing the covenant under pressure, or if LNR's liquidity levels decrease significantly, then S&P could lower the rating. LUMINENT MORTGAGE: Delays Filing of March 31 Quarterly Report ------------------------------------------------------------- Luminent Mortgage Capital, Inc., said it is currently considering various strategic alternatives available to facilitate its restructuring and is operating with a reduced accounting and finance staff. Because of the significant efforts required by the remaining accounting and finance staff to prepare the analysis and documentation related to analyzing those potential alternatives, preparing required periodic reports to the U.S. Bankruptcy Court for the District of Maryland, and considering the potential impact of the various options to its financial condition and its ability to continue as a going concern, Luminent said it is not able to file its Form 10-Q for the period ended March 31, 2009, within the prescribed time period. Luminent nevertheless disclosed that its Form 10-Q for the quarter ended March 31, 2009, will report a significant change from its report as of March 31, 2008 due to its sales and transfers of assets to repay debt since March 31, 2008. Since March 2008, Luminent said, it sold securities and transferred securities to repurchase agreement lenders to repay short-term debt and entered into several term-note agreements for balances due on repurchase agreement debt. Subsequent to entering into those term-note agreements, Luminent's remaining repurchase agreement lender declared an event of default to have occurred on its repurchase agreement with them due to its inability to deliver additional securities or cash necessary to fulfill its obligations under the terms of the agreement. As a result of the event of default, the repurchase agreement lender took possession of all remaining mortgage-backed securities of value, including securities that were retained from its whole loan securitizations. The transfers of securities resulted in the de-recognition of all of Luminent's remaining mortgage-backed securities from its balance sheet and the deconsolidation of all of its securitization trusts because Luminent no longer has the rights to receive principal and interest cash payments from the securities. As of the date Luminent's repurchase agreement lender took possession of its remaining securities, its operations effectively ceased while it considers strategic alternatives. Luminent is unable to provide a reasonable estimate of the changes from the prior year report until the preparation of the key elements of the financial statements is completed. About Luminent Mortgage Luminent Mortgage Capital, Inc. (OTCBB: LUMCE), is a real estate investment trust, or REIT, which, together with its subsidiaries, has historically invested in two core mortgage investment strategies. Under its Residential Mortgage Credit strategy, the company invests in mortgage loans purchased from selected high- quality providers within certain established criteria as well as subordinated mortgage-backed securities and other asset-backed securities that have credit ratings below AAA. Under its Spread strategy, the company invests primarily in U.S. agency and other highly-rated single-family, adjustable-rate and hybrid adjustable- rate mortgage-backed securities. Luminent and nine subsidiaries filed on September 5, 2008, for relief under Chapter 11 of the U.S Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland, Baltimore Division (Lead Case No. 08-21389). Immediately prior to the filing, the Debtor executed a Plan Support and Forbearance Agreement with secured creditor Arco Capital Corp., Ltd., WAMU Capital Corp. and convertible noteholders representing 100% of the outstanding principal amount of its convertible notes. Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, represents the Debtors as counsel. The U.S. Trustee for Region 4 appointed creditors to serve on an Official Committee of Unsecured Creditors. Jeffrey Neil Rothleder, Esq., at Arent Fox LLP, represents the Creditors Committee as counsel. In its operating report for the month of September 2008, Luminent Mortgage Capital, Inc., reported $1,960,516 in total assets and $374,868,632 in total liabilities, resulting in a $372,908,116 stockholders' deficit. Full-text copies of the Debtors' operating report for September 2008 are available for free at: http://researcharchives.com/t/s?345b At March 31, 2008, Luminent Mortgage Capital, Inc.'s consolidated balance sheet showed $3,757,205,000 in total assets, $3,980,417,000 in total liabilities, and $223,212,000 in stockholders' deficit. Luminent and its debtor-subsidiaries continue to operate their business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. MAGNA ENTERTAINMENT: Sept. 8 Auction for Santa Anita, 3 Others -------------------------------------------------------------- The U.S. Bankruptcy Court approved on May 11, 2009, amended bidding procedures for the sale of the certain assets of Magna Entertainment Corp., its affiliated debtors, and non-debtor subsidiaries. The assets include racetracks, certain partnership interests and other properties: a) Racetracks: Santa Anita Park, Thistledown, Remington Park and Portland Meadows b) Interests: The partnership interests of MEC Texas Racing, Inc. and Racetrack Holdings, Inc. in MEC Lone Star, LP and the Debtors and non-debtor subsidiraries' joint venture interests in The Shops at Santa Anita. c) Other Property: The Ocala Property, the Dixon Property, Fex Straw Manufacturing and Streufex. Any party wishing to make a preliminary bid for the assets other than "the Other Properties" must do so no later than May 27, 2009, at 5:00 p.m. (prevailing Eastern Time). Parties who wish to make definitive bids have until July 31, 2009, at 5:00 p.m. (prevailing Eastern Time) to do so. Based on definitive bids that might be received, the Debtors, in their own business judgment, and upon consultation with the official committee of unsecured creditors, will enter into final negotiations with the bidders who represent the highest and best value for the assets, in whole or in part, with the intent of entering into a "stalking horse" agreement no later than August 7, 2009. In the event the Debtors enter into a "stalking horse" agreement with respect to one or more of the assets, they will hold an auction on September 8, 2009, at 9:00 a.m. (prevailing Eastern Time) at the offices of Weil, Gotshal & Manges LLP, at 767 Fifth Avenue, 25th Floor, in New York, New York 10153. The sale hearing to consider approval of the sale of the assets to the winning bidder will be held on September 14, 2009, at 10:30 a.m. (prevailing Eastern Time). Objections, if any, to the sale must be filed with the clerk of the Bankruptcy Court so as to be received no later than 5 days prior to the sale hearing. A full-text copy of the Bid Procedures Order is available for free at http://www.bankrupt.com/misc/Magna.ProceduresOrder.pdf About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a fifty percent interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. As of December 31, 2008, the Company had total assets of $1,049,387,000 and total debts of $958,591,000. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., 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. MARS GRAPHICS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Mars Graphics, Inc. 1 Deadline Drive Westville, NJ 08093 Bankruptcy Case No.: 09-22958 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court District of New Jersey (Camden) 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 its 20 largest unsecured creditors when it filed its petition. The petition was signed by Michael A. Smith, president of the Company. MCCLATCHY COMPANY: Announces Deep Discount Exchange Offer --------------------------------------------------------- The McClatchy Company is commencing a private exchange offer to exchange $1.15 billion of outstanding senior unsecured and unguaranteed debt for up to $60 million in cash and up to $175 million of newly issued 15.75% Senior Notes due 2014. The New Notes will be senior unsecured obligations and will be guaranteed by McClatchy's existing and future material domestic subsidiaries. Consequently, any Old Securities not tendered by holders or not accepted for exchange or otherwise left outstanding following the consummation of the Exchange Offer will be structurally subordinated to the New Notes and all existing and future debt and other liabilities of the Guarantors, including trade payables and the Guarantees. The amounts of each series of securities that are exchanged in the Exchange Offer will be determined in accordance with the priorities set forth in the column "Acceptance Priority Level based on the Maximum Tender Amount" in the table above. There will be sufficient cash and New Notes for us to accept all of the 2011 Notes and 2014 Notes properly tendered and accepted in the exchange. The amount of 2017 Notes, 2027 Debentures and 2029 Debentures that are exchanged may be prorated as set forth in the offer documents. Holders of these securities must validly tender their Old Securities on or before 5:00 p.m., New York City time, on June 22, 2009. To be able to receive an "early participation premium", holders must tender on or before 5:00 p.m., New York City time, on June 8, 2009, unless extended. For Each $1,000 in Principal Of Notes/Debentures Exchanged ----------------------------- Outstanding Consideration Consideration Securities to Face Amount After Early Prior to Be Exchanged (millions) Tender Date Tender Date ------------- 7.125% notes due 2011 $170.0 $250 $330 4.625% notes due 2014 180.0 195 275 5.750% notes due 2017 400.0 190 270 7.150% debentures due 2027 100.0 180 260 6.875% debentures due 2019 300.0 180 260 Old Securities tendered prior to the Early Tender Date may be withdrawn prior to 5:00 p.m., New York City time, on June 8, 2009 unless extended. Holders may withdraw tendered Old Securities at any time prior to the Withdrawal Deadline but holders may not withdraw their tendered Old Securities on or after the Withdrawal Deadline. The Exchange Offer is conditioned on an aggregate principal amount of $50 million of New Notes being issued in the Exchange Offer. However, the acceptance by the Company of any validly tendered and not withdrawn 2011 Notes for cash will not be affected by the Minimum Note Amount Condition. About The McClatchy Company Headquartered in Sacramento, California, The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, with 30 daily newspapers, approximately 50 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, the Charlotte Observer, and The (Raleigh) News & Observer. McClatchy also owns a portfolio of premium digital assets, including 14.4% of CareerBuilder, an online job site, and 25.6% of Classified Ventures, a newspaper industry partnership that offers the auto website, cars.com, and the rental site, apartments.com. On September 17, 2008, Moody's Investor Services downgraded the Company's corporate credit rating to 'B2' from 'Ba2'. On February 6, 2009, Standard & Poor's lowered its corporate credit rating on the Company to 'CCC+' from `B', with a negative rating outlook. The ratings on the Company's bonds were lowered from 'CCC+' to 'CCC-'. The Troubled Company Reporter said Feb. 10, 2009, that Fitch Ratings downgraded the Issuer Default Rating and outstanding debt ratings of McClatchy: -- Issuer Default Rating to 'CCC' from 'B-'; -- Senior secured credit facility to 'CCC/RR4' from 'B+/RR2'; -- Senior secured term loan to 'CCC/RR4' from 'B+/RR2'; -- Senior unsecured notes/debentures to 'C/RR6' from 'CCC/RR6'. As reported by the Troubled Company Reporter on April 20, 2009, McClatchy reported that on April 14, 2009, it was notified by the New York Stock Exchange that it is not in compliance with the exchange's continued listing standard for total market capitalization and shareholders' equity. NYSE continued listing standards applicable to the Company include average market capitalization of no less than $75 million over a 30-trading-day period and stockholders' equity of no less than $75 million. McClatchy has 45 days from the receipt of the notice to submit a plan to the NYSE demonstrating how it intends to comply with the NYSE's continued listing standards within 18 months from the receipt of the notice. McClatchy intends to develop a plan to bring the company in compliance with the listing standards within the required timeframe. MCCLATCHY COMPANY: Amends for $1.15-Bil. Credit Agreement --------------------------------------------------------- The McClatchy Company entered into an amendment to its $1.150 billion bank credit facility which, among other things, allows it to use its revolving credit facility for up to $60 million to repurchase its 7.125% Notes due June 1, 2011 or its 4.625% Notes due November 1, 2014, subject to certain conditions. The cash may also be used in connection with a debt exchange offer so long as any new notes issued in such an offer have a stated maturity of no earlier than July 1, 2014. As of May 20, 2009, McClatchy had $140.8 million available under its credit facilities. McClatchy today separately announced a private exchange offer to exchange certain outstanding notes and debentures for a combination of cash and new debt securities. Pat Talamantes, McClatchy's chief financial officer, said, "In addition to the outstanding efforts made by our papers to weather this downturn, we believe that being able to have more flexibility in the use of our revolving credit facility will allow us to put the company in a stronger financial position to manage our capital structure through this downturn. This enhanced flexibility is clearly a positive development." Among other things, the amended Credit Agreement: -- Allows the company to use its revolving credit facility for up to $60 million to repurchase its 7.125% Notes due June 1, 2011 or its 4.625% Notes due November 1, 2014, subject to certain conditions. -- Implements a reduction in the revolving credit commitment now totaling $600 million to $560 million (to a total facility of $1.1 billion) in increments through December 31, 2009; and a further reduction of $10 million through June 30, 2010. The final maturity of the revolving credit commitment and the term loan remains June 27, 2011. -- Increases pricing on all outstanding loans to interest at the London Interbank Offered Rate (LIBOR) plus a spread ranging from 325 basis points to 475 basis points, based upon the total leverage ratio. -- Interest will increase by 50 basis points to LIBOR plus 400 basis points when leverage is between 5.0 and 6.0 times. As of March 29, 2009, the company's leverage ratio, as defined, was 5.90 to 1.00. -- Amends the requirements for mandatory prepayments from certain sources of cash and further limits the payment of dividends, repurchases of stock and the ability to retire those bonds that come due after 2011. About The McClatchy Company Headquartered in Sacramento, California, The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, with 30 daily newspapers, approximately 50 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, the Charlotte Observer, and The (Raleigh) News & Observer. McClatchy also owns a portfolio of premium digital assets, including 14.4% of CareerBuilder, an online job site, and 25.6% of Classified Ventures, a newspaper industry partnership that offers the auto website, cars.com, and the rental site, apartments.com. On September 17, 2008, Moody's Investor Services downgraded the Company's corporate credit rating to 'B2' from 'Ba2'. On February 6, 2009, Standard & Poor's lowered its corporate credit rating on the Company to 'CCC+' from `B', with a negative rating outlook. The ratings on the Company's bonds were lowered from 'CCC+' to 'CCC-'. The Troubled Company Reporter said Feb. 10, 2009, that Fitch Ratings downgraded the Issuer Default Rating and outstanding debt ratings of McClatchy: -- Issuer Default Rating to 'CCC' from 'B-'; -- Senior secured credit facility to 'CCC/RR4' from 'B+/RR2'; -- Senior secured term loan to 'CCC/RR4' from 'B+/RR2'; -- Senior unsecured notes/debentures to 'C/RR6' from 'CCC/RR6'. As reported by the Troubled Company Reporter on April 20, 2009, McClatchy reported that on April 14, 2009, it was notified by the New York Stock Exchange that it is not in compliance with the exchange's continued listing standard for total market capitalization and shareholders' equity. NYSE continued listing standards applicable to the Company include average market capitalization of no less than $75 million over a 30-trading-day period and stockholders' equity of no less than $75 million. McClatchy has 45 days from the receipt of the notice to submit a plan to the NYSE demonstrating how it intends to comply with the NYSE's continued listing standards within 18 months from the receipt of the notice. McClatchy intends to develop a plan to bring the company in compliance with the listing standards within the required timeframe. MCCLATCHY COMPANY: Fitch Downgrades Issuer Default Rating to 'C' ---------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating and outstanding debt ratings of The McClatchy Company: -- IDR to 'C' from 'CCC'; -- Senior secured credit facility to 'C/RR4' from 'CCC/RR4'; -- Senior secured term loan to 'C/RR4 from 'CCC/RR4'. Fitch also affirms this: -- Senior unsecured notes/debentures at 'C/RR6'. Approximately $2.1 billion of debt is affected by this action. Fitch has believed that McClatchy has an untenable capital structure relative to the prospects for its future cashflow generation. In downgrading McClatchy to 'CCC' in February 2009, Fitch was particularly concerned about the potential for a Coercive Debt Exchange offer that would represent a material reduction in terms for unsecured bond holders. This morning, the company announced a debt exchange offer for its $1.15 billion of unsecured debt. The offer would constitute a Restricted Default under Fitch's CDE criteria for two main reasons. First, the deeply below-par offer and partial maturity extension represent a material reduction in terms, Fitch's opinion. Secondly, Fitch views the offer as coercive, because old bondholders that do not participate in the exchange risk being further subordinated to the proposed $175 million of new notes. Also, in Fitch's view there are exceptionally high levels of credit risk and a real threat of bankruptcy. Fitch notes that more than five newspaper groups have filed for bankruptcy protection in the past six-months. If the offer is successful, Fitch would downgrade the company's IDR to 'RD' to reflect the Restricted Default under Fitch's criteria. Subsequently, based on the pro forma capital structure and other aspects of the credit profile, Fitch would revise the IDR to reflect McClatchy's level of credit risk. Given the more than $1 billion of debt the company would still retain and Fitch's skepticism regarding the company's capacity to repay or refinance its debt when it comes due, it is not likely the IDR would be higher than 'CCC' (ratings in the 'CCC' category reflect that default is a real possibility), and Fitch notes the IDR could remain in the 'C' category (meaning default remains imminent or inevitable). In computing recovery, Fitch has historically assumed a 2.5 times (x) EBITDA multiple to calculate the distressed enterprise value for McClatchy. Given the challenge of estimating the sustainable level of EBITDA generation, Fitch may further reduce the multiple or lower its estimate of sustainable EBITDA in arriving at recovery ratings. Presently, Fitch's distressed enterprise valuation is between $400-$435 million. While there is no certainty whether the exchange offer will be accepted, considering the modest increase in bank debt that would be incurred as part of the exchange it is unlikely the bank debt would be any higher than its previous level equal to the IDR at 'RR4' which reflects a 31- 50% recovery. Additionally, there is a possibility it could be notched below the IDR. With the first priority debt not fully recovered, Fitch expects that all unsecured debt (including any new debt issued under this exchange) would get zero recovery, be assigned an 'RR6' rating and be notched down two or three notches from the IDR. McClatchy's liquidity was supported by revolver availability of $144.8 million and $36.6 million in cash balances as of March 29, 2009. Fitch estimates that leverage through the banks is 3.2x and total leverage is 6.9x. Fitch's metrics assume no adjustments to EBITDA for restructuring charges although such adjustments can be made for the purpose of computing total covenant leverage. As of March 29, 2009, the company's total covenant leverage was 5.9x compared to a threshold of 7.0x. Fitch notes that liquidity will remain a concern as the company generates less free cashflow, and the bank group could continue to ratchet back the overall capacity in future negotiations. MCCLATCHY COMPANY: Moody's Downgrades Default Rating to 'Caa3' -------------------------------------------------------------- Moody's Investors Service downgraded The McClatchy Company's Probability of Default rating to Caa3 from Caa1 following the company's announcement that it has commenced a private offer to exchange up to $1.15 billion of outstanding senior unsecured and unguaranteed notes and debentures for up to $60 million in cash and up to $175 million of new 15.75% senior unsecured guaranteed notes due 2014. Moody's also downgraded the existing senior unsecured note ratings to Ca (2011 notes) and C (2014, 2017, 2027 and 2029 notes), reflecting the expected loss from the exchange offer and the high near term probability of default. Moody's updated the loss given default assessments on the notes to reflect the likely realized loss assuming the exchange offer is completed at the early tender prices. The loss given default assessments for the notes and McClatchy's credit facility are subject to change based on the mix of debt upon completion of the exchange offer. The Caa1 Corporate Family Rating is unchanged and the rating outlook is negative. Moody's has taken these actions: Downgrades: IssuerMcClatchy Company (The) -- Probability of Default Rating, Downgraded to Caa3 from Caa1 -- Senior Unsecured Notes due 2011, Downgraded to Ca, LGD4 - 67% from Caa2, LGD5 - 75% -- Senior Unsecured Notes due 2014 and 2017, Downgraded to C, LGD5 - 73% from Caa2, LGD5 - 75% -- Senior Unsecured Notes due 2027 and 2029, Downgraded to C, LGD5 - 74% from Caa2, LGD5 - 75% The downgrade of the PDR to Caa3 reflects Moody's view that McClatchy's proposed exchange offer, if completed, will constitute a distressed exchange, which is an event of default under Moody's definition of default. Moody's believes the most likely outcome is for a Caa1 CFR upon completion of the exchange offer, reflecting the significant pressure on newspaper advertising revenue and debt-to-EBITDA leverage that would remain very high at approximately 7.5-8.0x (incorporating Moody's standard adjustments and reducing EBITDA by the amount of cash severance). The completion of the exchange offer would beneficially reduce debt and cash interest expense, potentially reduce the amount of the next bond maturity in 2011, and increase cushion under the company's credit facility financial maintenance covenants. Moody's currently expects to change the PDR to Caa1/LD if the exchange offer closes and to Caa1 approximately three days thereafter. Moody's anticipates the credit facility rating would remain at B1 upon completion of the exchange offer assuming a Caa1 CFR and PDR, and that any exchanges are made at the early tender price. A credit facility rating of B2 is possible if a significant portion of bonds are tendered after the early tender date at the lower stipulated offering prices, but Moody's does not believe this is likely. McClatchy's SGL-4 speculative-grade liquidity rating is not affected but could be upgraded based on an improved covenant cushion if the exchange offer closes. The last rating action on McClatchy was on April 24, 2009 when Moody's downgraded the company's CFR and PDR from B2 to Caa1. McClatchy, headquartered in Sacramento, California, is the third- largest newspaper company in the U.S., with 30 daily newspapers and approximately 50 non-dailies. McClatchy also owns McClatchy Interactive and holds equity investments in CareerBuilder, Classified Ventures, and other newspaper and online properties. Annual revenue approximates $1.8 billion. MESA CENTERPOINTE: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Mesa Centerpointe Plaza, LLC 6040 S. Durango Drive, Suite 105 Las Vegas, NV 89113 Bankruptcy Case No.: 09-10875 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Debtor's Counsel: William R. Richardson, Esq. Richardson & Richardson, P.C. 1745 S. Alma School Rd., #100 Mesa, AZ 85210-3010 Tel: (480) 464-0600 Fax: (480) 464-0602 Email: wrichlaw@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Andy Pham, president of the Company. METALS USA: John Hageman Steps Down as SVP & Chief Legal Officer ---------------------------------------------------------------- John A. Hageman resigned from his position as Senior Vice President and Chief Legal Officer of Metals USA Holdings Corp., Flag Intermediate Holdings Corporation and Metals USA, Inc., effective as of May 14, 2009. Metals USA Inc. -- http://www.metalsusa.com/-- provides products and services in the heavy carbon steel, flat-rolled steel, non- ferrous metals, and building products markets. Metals USA posted a net loss of $20.6 million on net sales of $330.2 million for the three months ended March 31, 2009, compared to a net income of $9.6 million on net sales of $489.0 million for the same period in 2008. Metals USA had $877.4 million in total assets and $722.1 million in total liabilities as of March 31, 2009, resulting in $155.3 million in stockholders' equity. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services lowered its corporate credit ratings on Houston-based Metals USA Holdings Corp. and on its wholly owned subsidiary, Metals USA Inc., to 'CCC+' from 'B-'. At the same time, S&P lowered its rating on the senior secured notes and the senior unsecured pay-in-kind toggle notes to 'CCC-' from 'CCC'. The recovery rating remains at '6' on these issues, indicating negligible (0%-10%) recovery in the event of a payment default. The outlook is negative. All ratings are removed from CreditWatch, where they were placed with negative implications on March 18, 2009, due to the sharp deterioration in steel market conditions in North America over the past several months and S&P's expectation that operating conditions will remain challenging in the near-term. MGM MIRAGE: Capital Raise Prompts Fitch to Take Rating Actions -------------------------------------------------------------- Following the completion of MGM MIRAGE's $2.5 billion capital raise, Fitch Ratings has updated its Recovery Rating analysis and taken these rating actions, which were discussed in Fitch's May 13, 2009 press release: -- Senior secured notes due 2014 and 2017 rated 'B+/RR1' (91- 100% recovery band); -- Senior secured notes due 2013 upgraded to 'B+/RR1' (91-100%) from 'B/RR2' (71-90%); -- Senior credit facility affirmed at 'B-/RR3' (51%-70%); -- Senior unsecured notes affirmed at 'CCC/RR4' (31%-50%); -- Senior subordinated notes affirmed at 'C/RR6' (0%-10%). MGM received $1.1 billion of net proceeds from its equity issuance and $1.42 billion from its $1.5 billion secured notes issuance, which was issued in two tranches, one maturing in 2014 and the other in 2017. MGM's credit facility amendment also became effective with the completion of the equity and bond offerings. The upgrade of the 2013 secured notes is due to improved recovery prospects because the notes share equally and ratably in the security interest in Bellagio and The Mirage, which was provided as collateral for the $1.5 billion secured notes issuance. The recovery prospects for the senior credit facility and senior unsecured notes were negatively impacted by the security interest in Bellagio and The Mirage that was provided to 2014 and 2017 secured note holders, although the impact was partially offset by associated debt repayment. Despite the reduced recovery expectations for the credit facility and senior unsecured debt, there was no ratings impact because the revised recovery expectations fall within the same recovery bands. Fitch estimates outstanding recovery in the 91%-100% range for the MGM's secured notes, including the 2013 notes issued in November 2008, and the $1.5 billion issuance with split maturities in 2014 and 2017. The recovery expectation results in 'B+/RR1' rating, or a three-notch positive differential from MGM's 'CCC' IDR. Fitch estimates full recovery for both the 2013 notes and the 2014/2017 notes. All of the secured notes have a security interest in the Bellagio and The Mirage, but the 2013 notes have a stronger collateral package with an additional security interest in the New York-New York property. Fitch continues to estimate good recovery in the 51%-70% range for MGM's senior credit facility, which results in the 'B-/RR3' rating, or a one-notch positive differential from MGM's 'CCC' IDR. Following the $1.5 billion secured note issuance and $825.6 million permanent paydown of the facility, Fitch's recovery estimate declined but remained within its existing recovery band. The credit facility RR benefits from a security interest in MGM's properties in Detroit and Tunica, as well as some Las Vegas land. Separately, as part of the CityCenter financing agreement on April 29, MGM pledged the assets of Circus Circus and adjacent land to support its obligations with respect to CityCenter construction costs, including $224 million in letters of credit and potential cost overruns. Fitch continues to estimate average recovery in the 31%-50% range for MGM's senior unsecured notes, which results in the 'CCC/RR4' rating, on par with MGM's 'CCC' IDR. The recovery prospects for the unsecured notes were negatively impacted by the collateral granted in the $1.5 billion secured note issuance, which is offset by the unsecured tender offer that Fitch assumes is completed as expected in its recovery analysis. Fitch's unsecured debt recovery estimate declined but remained within its existing recovery band. Fitch continues to estimate poor recovery in the 0%-10% range for MGM's subordinated debt, resulting in the 'C/RR6' rating, which is a two-notch negative differential from MGM's 'CCC' IDR. The subordinated debt RR was not affected by MGM's recent transactions because of the pre-existing expectation of minimal recovery. MIDWAY GAMES: Time Warner to Buy U.S. Assets for $33 Million ------------------------------------------------------------ Midway Games Inc. has signed a deal to sell its U.S. assets to Warner Bros. Entertainment Inc., a subsidiary of Time Warner, Inc. (NYSE:TWX) for $33 million, subject to higher and better offers at an auction. Pursuant to the asset purchase agreement signed by the partis, Warner Bros. Entertainment would acquire substantially all of the Company's U.S. assets including its Mortal Kombat franchise and its development studios in Chicago and Seattle for a purchase price of $33,000,000, subject to adjustment as of the closing for changes in inventory, plus the agreed value of the Company's U.S. account receivables. The agreement does not include the Company's development studio in San Diego and the TNA franchise games, nor does it include the Company's development studio in Newcastle which had developed the Company's recently released Wheelman game. The salient terms of the APA reached by Midway and Warner Bros. are: -- Warner Bros. will pay $33 million cash at closing, subject to adjustments based on inventory valuation, and exclusive of Warner's payment of cure amounts and the accounts receivable amount. -- Assets to be sold include (i) all previously released titles, all video games based on the Mortal Kombat universe and This is Vegas universe, all Game Party video games, all Touchmaster video games, all Area 51 video games, all Spy unter video games, all Wheelman video games, and all of Midway's arcade and coin-operated games including, but not limited to, Gauntlet, Rampage, Joust, and Rampart, and all "back catalog" and "classic intellectual property" library video games (ii) all assigned contracts, including all leasehold interests in and to the real property located at the acquired studios in: (a) 3131 Elliot Avenue, Seattle, Washington, USA 98121; (b) 2633 W. Roscoe St., Chicago, Illinois, USA 60618; and (c) 2727 W. Roscoe St., Chicago, Illinois, USA 60618 (iii) any rights, claims or causes of action of Midway against Warner Bros. relating to the assets, properties, business or operations of Midway arising out of events occurring on or prior to the closing date, including, but not limited to, causes of action under Chapter 5 of the Bankruptcy Code. -- Excluded assets include: * all shares of capital stock, limited liability company membership interests and other equity interests, of Midway and all its subsidiaries; * assets of any foreign subsidiary, unless otherwise specified; * all cash and cash equivalents of Midway; * all causes of actions of Midway against third parties other than Warner Bros. relating to assets of Midway arising out of events occurring on or prior to the closing date, including causes of action in connection with the complaint brought by the Creditors Committee against National Amusements, Inc., et al. * all TNA Wrestling, NBA/NHL/MLB, Lord of the Rings, and Mechanic Master video games. * the Wheelman Distribution Agreement between Ubisoft Entertainment and Midway Home Entertainment Inc.; platform agreements; an agreement of Purchase and sale dated July 7, 2008, between Midway, as seller, and Lexington Homes LLC, as buyer, relating to property located at 2633 W. Roscoe St., Chicago, Illinois, USA 60618, and a related redevelopment agreement between the City of Chicago and Midway; and (i) any contracts that relate to properties located at: (i) the New Castle Studio, (ii) Heimaranstrasse 35, Munich, Germany 80339; (iii) 13 Rue Vivienne, Paris, France 75002; (iv) 43 Worship Street, London, EC21 2DX United Kingdom; and (v) any other property located outside the United States. -- Warner Bros. will hire certain of Midway's employees, including key designers and employees on design teams for certain of Midway's games that are included in the sale. -- The cure amounts for certain of Midway's games are: Game Cure Amount ---- ----------- Happy Feet $359,218 Ant Bully $166,126 Mortal Kombat vs. DC Universe $7,342,476 -- Closing conditions include: * With respect to the Unreal Engine 3 License Agreement dated January 14, 2005, between Midway Home Entertainment Inc. and Epic Games, inc., Warner Bros. will receive all Midway's rights and benefits under the Unreal Engine License. * Sony Computer Entertainment America Inc. and Sony Computer Entertainment Europe Ltd., (with respect to the PlayStation platforms) and Microsoft Licensing GP (with respect to the Xbox platforms) will each approve Warner Bros. as the "publisher of record" with respect to all the games included in the APA. -- Either party may terminate the agreement if closing has not occurred by July 15, 2009. Warner Bros. has claims against Midway pursuant to prepetition agreements pertaining to the games Mortal Kombat v. DC Universe, Happy Feet and Ant Bully. Midway owes Warner Bros. an aggregate of $7,867,820 on a prepetition basis in connection with these games. The claim will be waived Copies of the Asset Purchase Agreement and its related exhibits are available at; http://bankrupt.com/misc/Midway_WarnerExhB.1.pdf http://bankrupt.com/misc/Midway_WarnerExhB.2.pdf http://bankrupt.com/misc/Midway_WarnerExhB.3.pdf About Warner Brothers While Warner Bros has been known as a leader in filmed entertainment and television programming, it claims to have a significant presence in the videogame industry. Among the WBEI subsidiaries that comprise the Warner Bros. group is Warner Bros. Home Entertainment Inc. which, through its Warner Bros. Interactive Entertainment division, develops, publishes and licenses interactive videogames for a variety platforms based on Warner Bros., DC Comics properties and original game properties. Games published by WB Interactive include the LEGO Star Wars videogame franchise, LEGO Batman, Speed Racer and Guinness World Records, and LEGO Indiana jJOnes, which it co-publishes. The Warner Bros. Entertainment Group of companies produce and distribute theatrical motion pictures, television shows, animation and other programming and video games; distribute home video product and license rights to feature films, television programming and characters. Warner Bros. is a world leader in filmed entertainment and in 2008 released internationally 14 English-language motion pictures and 35 local language films, including titles as The Dark Knight, I Am Legend, 10,000 B.C., The Bucket List and Sex and the City: The Movie. Its television programs include prime time series such as Two and a Half Men, Without a Trace, Cold Case, ER and Smallville. In 2008, Warner Bros. generated revenues of $11.398 billion, $1,228 billion in operating income before depreciation and amortization, and over $800 million in operating income. About Midway Games Midway Games Inc. (OTC Pink Sheets: MWYGQ), headquartered in Chicago, Illinois, with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. More information about Midway and its products can be found at http://www.midway.com/ The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09- 10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. MIDWAY GAMES: Proposes Warner Bros.-Led Auction on June 29 ---------------------------------------------------------- Midway Games Inc. has signed a deal with Warner Bros. Entertainment Inc. under which the Time Warner Inc. unit will be stalking horse bidder for at an auction for substantially all its U.S. assets on June 29, 2009. Absent higher and better offers, Midway Games, on July 1, will seek approval from the U.S. Bankruptcy Court for the District of Delaware to sell its U.S. assets at the agreed price of $33 million. If Warner Brothers loses at the auction and the Debtor consummates the sale with the winning party, Warner will receive a break-up fee of $1,000,000 and $100,000 in expense reimbursement. Midway Games says that since it filed for bankruptcy, it has continued to operate its business while continuing to market its assets for sale as a going concern. Midway, with the help of Lazard Freres & Co, LLC, has contacted over 80 individual entities, to determine potential interest for the business. Multiple buyers and investors have performed extensive due diligence and have submitted expressions of interest with respect to some or all of the assets. Midway asks the Court to approve these bidding procedures: -- Initial bids will be due June 24, 2009 at 4:00 p.m. Eastern time. -- An auction will be held June 29, 2009, at 10:00 a.m. if Midway receive a conforming qualified bid in addition to Warner Bros. -- Counterparties to contracts to be included in the sale will receive notice from the Debtor and the computed cure amounts for the assumption of their contracts. Objections to the cure amounts are due June 24 -- The Debtor will present the successful bid to the Court on July 1, 2009 at 1:00 p.m. Bids must be served on these parties: (i) Counsel for the Debtors: Blank Rome LLP, The Chrysler Building, 405 Lexington Avenue, New York, NY 10174 Attn: Pamela Flaherty, Esq., Fax (212) 885-5001 and 1201 North Market Street, Suite 800, Wilmington, Delaware 19899, Attn: Michael D. DeBaecke, Esq. Fax: (302) 425-6464 (ii) Counsel for the lender: Kramer Levin Naftalis & Frankel, LLP, 1177 Avenue of the Americas, New York NY 10036, Attn: Gordon NOvod, Esq., Fax (212) 715-8192 (iii) Counsel for the Creditors Committee Milbank, Tweed, Hadley & McCloy LLC, 601 South Figueroa Street, 30th Floor, Los Angeles, Calif. 70017 Attn: David B. Zolkin, Esq., Fax (213) 892, 4767 (iv) The OUST, 855 North King Street, Suite 2207, Wilmington, DE 19801, Attn: David Buchbinder, Esq. Fax (302) 573-497 (v) Counsel for WBEI Andrews Kurth LLP, 601 South Figueroa Street, Los Angeles, CA 90017 Attn: Jon L.R. Dalberg, Esq. Fax (213) 896-3137. The Court will convene a hearing to consider the proposed sale process on June 2, 2009, at 2:00 p.m. (EDT). Objections are due May 29 at 4:00 p.m. Following the auction, the Court will hold another hearing on July 1, 2009, at 1:00 p.m., to consider approval of the sale to the highest bidder. Objections to the sale are due June 24, 2009, at 4:00 p.m. About Midway Games Midway Games Inc. (OTC Pink Sheets: MWYGQ), headquartered in Chicago, Illinois, with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. More information about Midway and its products can be found at http://www.midway.com/ The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09- 10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. MILACRON INC: Gets Go-Signal to Test DDJ's $175MM Buyout Offer -------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of Ohio has given Milacron Inc. the green light to pursue a sale of substantially all of its assets pursuant to competitive bidding and auction procedures. As reported by the Troubled Company Reporter on May 7, 2009, Milacron signed a definitive agreement to sell substantially all of its assets to a company formed by certain affiliates of Avenue Capital Group, certain funds or accounts managed by DDJ Capital Management LLC and certain other entities that together hold approximately 93% of the company's 11-1/2% Senior Secured Notes for total consideration estimated at approximately $175 million. The definitive agreement is on substantially the same terms as the agreement in principle for such a sale announced on March 10, the same day Milacron filed for Chapter 11 protection. In return for Milacron's assets, the purchasers will, among other things, repay or assume Milacron's debtor-in-possession loan facilities, assume certain of the company's other liabilities, including ordinary course liabilities and other debt, credit bid $6.1 million of pre- petition secured notes and provide additional consideration to noteholders who are not part of the purchasing syndicate. The acquisition is part of a comprehensive financial restructuring, intended to permit Milacron to continue as a going concern with substantially less debt. Interested parties may submitted bids on or before 5:00 p.m. (Eastern Standard Time) on June 24, 2009. If at least one Qualified Bid, other than the Stalking Horse Bidder's bid, is received on or before the Initial Bid Deadline, all Qualified Bidders will have until 5:00 p.m. (Eastern Standard Time) July 13, 2009, to deliver Qualified Bid Documents to the Debtors. The auction, if applicable, for the sale of the Milacron Assets will be held July 17, 2009. If no Qualified Bid -- other than the Stalking Horse Bid -- is received on or before the Initial Bid Deadline, the hearing to approve the sale of the Milacron Assets to the Stalking Horse Bidder will be held on or before June 26, 2009. If an Auction is held, the Sale Hearing will be held on or before July 20, 2009. If the Stalking Horse Bidder is not the successful bidder at the Auction, the Sale Hearing may be held on or before July 27, 2009, at the request of the Successful Bidder. Any objections to the Sale must be filed and served by no later than 5:00 p.m. prevailing Eastern time on June 21, 2009 on: (a) Counsel for the Debtors Dinsmore & Shohl LLP 255 East Fifth Street, Suite 1900 Cincinnati, OH 45202 Attn: Kim Martin Lewis, Esq. Tim J. Robinson, Esq. and Patrick D. Burns, Esq. (b) The United States Trustee 36 East Seventh Street, Suite 2030 Cincinnati, OH 45202 Attn: Monica Villarejos Kindt, Esq. (c) Financial advisors to the Debtors Rothschild Inc. 1251 Avenue of the Americas, 51st floor New York, NY 10020 Attn: Neil Augustine and Stephen Antinelli -- and -- Conway, Del Genio, Gries & Co., LLC Olympic Tower, 645 Fifth Avenue New York, NY 10022 Attn: Robert A. Del Genio (d) Counsel to the Creditors' Committee Taft Stettinius & Hollister LLP 425 Walnut Street, Suite 1800 Cincinnati, OH 45202 Attn: Timothy J. Hurley, Esq. and W. Timothy Miller, Esq. (e) Counsel to postpetition lenders under the DIP Term Loan Facility Shearman & Sterling LLP 599 Lexington Avenue New York, NY 10022 Attn: Michael H. Torkin, Esq. and Solomon J. Noh, Esq.) -- and -- Squire Sanders & Dempsey LLP 221 E. Fourth St., Suite 2900 Cincinnati, OH 45202-4098 Attn: P. Casey Coston, Esq. (f) Counsel to the Debtors' prepetition secured lenders and postpetition secured DIP ABL Lenders Paul, Hastings, Janofsky & Walker LLP 600 Peachtree Street, N.E., 24th Floor Atlanta, GA 30308 Attn: Jesse H. Austin III, Esq. and J. Craig Lee, Esq.) and -- and -- Frost Brown Todd LLC 201 E. Fifth Street, Suite 2200 Cincinnati, OH 45202 Attn: Ronald E. Gold, Esq. and (g) Pension Benefit Guaranty Corporation Office of the Chief Counsel 1200 K Street, N.W., Suite 340 Washington, D.C. 20005 Attn: Lawrence F. Landgraff, Esq. The Stalking Horse Bidder will be paid a break up fee equal to $4.05 million and reimbursed for up to $1.75 million of reasonable out-of-pocket expenses not reimbursed under the DIP Facility incurred in connection with the Stalking Horse Bidder's attempted purchase of the Milacron Assets, including but not limited to reasonable costs and expenses incurred in connection with any consultant hired to evaluate, analyze or model the Debtors' business or otherwise assist in strategic planning. The Bid Protection Amount will be secured by a first priority, unprimable security interest in the Transaction Deposits of the Successful Bidder and the Runner-Up Bidder and deemed to be a superpriority administrative expense of the Debtors' estates with respect to which the Stalking Horse Bidder has a Superpriority Claim. A full-text copy of the Bidding Procedures Order dated May 15 is available at no charge at http://ResearchArchives.com/t/s?3d34 About Milacron Inc. Headquartered in Batavia, Ohio, Milacron Inc. (Pink Sheets: MZIAQ) supplies plastics-processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron is also manufactures synthetic water-based industrial fluids used in metalworking applications. The company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead Case No. 09-11235). On the same day, the company filed an ancillary proceeding for reorganization of its Canadian subsidiary under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. The Petitions include the company and its U.S. and Canadian subsidiaries and its non-operating Dutch holding company subsidiary only, and do not include any of the company's operating subsidiaries outside the U.S. and Canada. Kim Martin Lewis, Esq., Tim J. Robinson, Esq., and Patrick D. Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. Conway, Del Genio, Gries Co., LLC is the Debtors' financial advisor. Rothschild Inc. is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the noticing, balloting and disbursing agent for the Debtors. Paul, Hastings, Janofsky & Walker LLP, represents DIP Lender General Electric Capital Corp. Taft Stettinius & Hollister LLP is counsel for the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $500 million to $1 billion. MILACRON INC: Holders of 11-1/2% Notes Participate in DIP Loan -------------------------------------------------------------- Milacron Inc. disclosed in a regulatory filing with the Securities and Exchange Commission that the Company and its debtor-affiliates have entered into: * Amendment No. 1 to the $80 Million Senior Secured Superpriority Priming Debtor-In-Possession Credit Facility dated as of March 11, 2009 with Avenue Investments, L.P., and DDJ Capital Management, LLC; * a First Amendment to the $55 Million Senior Secured, Super Priority Debtor-In-Possession Credit Agreement dated as of March 11, 2009, with General Electric Capital Corporation; * Amendment No. 1 to an Intercreditor Agreement between General Electric Capital Corporation and DDJ Capital Management, LLC; And * a Senior Secured Superpriority Priming Debtor-In-Possession Note Purchase Agreement. The Debtors amended certain provisions of the Financing Agreements principally to conform to changes reflected in bankruptcy court filings and to facilitate participation by certain holders of the Company's 11-1/2% Senior Secured Notes in the DIP Term Loan Agreement. Certain investment funds affiliated with, or managed by, JPMorgan Investment Management, Bayside Capital Inc. and Symphony Asset Management, LLC -- Electing Noteholders -- have elected to participate in the DIP Term Loan Facility. The Electing Noteholders have requested to purchase up to $1,759,000 aggregate principal amount of DIP Term Notes, including Roll-Up DIP Term Notes, in lieu of making advances under the DIP Term Credit Agreement. A full-text copy of the Amendment No. 1 to Senior Secured Superpriority Priming Debtor-In-Possession Credit Agreement, dated May 12, 2009, is available at no charge at: http://ResearchArchives.com/t/s?3d35 A full-text copy of the Amendment No. 1 to Intercreditor Agreement, dated May 12, 2009, is available at no charge at: http://ResearchArchives.com/t/s?3d36 A full-text copy of the First Amendment to Senior Secured, Super- Priority Debtor-In-Possession Credit Agreement, dated May 12, 2009, is available at no charge at: http://ResearchArchives.com/t/s?3d37 A full-text copy of the Senior Secured Superpriority Priming Debtor-In-Possession Note Purchase Agreement, dated May 12, 2009, is available at no charge at: http://ResearchArchives.com/t/s?3d38 Milacron also said that on May 14, 2009, certain of the Company's European subsidiaries, namely Cimcool Europe B.V, Cimcool Industrial Products B.V., D-M-E Europe CVBA, Ferromatik Milacron Maschinenbau GmbH, Milacron Kunststoffmaschinen Europa GmbH, Milacron B.V., and Milacron Nederland B.V. entered into a Variation Agreement to an Asset Based Finance Agreement dated March 12, 2008, with Lloyds TSB Bank, Nederland Branch and Belgium Branch and Lloyds TSB Commercial Finance Limited. Among other things, the Deed of Variation sets forth Lloyds' intention, subject to certain conditions, not to exercise its rights, which include rights of acceleration, in respect of the European Subsidiaries' breach of certain financial covenants in the Finance Agreement for an initial period ending July 31, 2009, sets forth an amortization schedule for the $10.5 million property facility term loan outstanding thereunder (as reduced by the Deed of Variation) and adds and amends certain financial covenants. At April 30, 2009, $15.2 million of borrowings and other obligations were outstanding under the Finance Agreement and related documents. A full-text copy of the Variation Agreement to an Asset Based Finance Agreement dated March 12, 2008, dated May 14, 2009, is available at no charge at: http://ResearchArchives.com/t/s?3d39 Headquartered in Batavia, Ohio, Milacron Inc. (Pink Sheets: MZIAQ) supplies plastics-processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron is also manufactures synthetic water-based industrial fluids used in metalworking applications. The company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead Case No. 09-11235). On the same day, the company filed an ancillary proceeding for reorganization of its Canadian subsidiary under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. The Petitions include the company and its U.S. and Canadian subsidiaries and its non-operating Dutch holding company subsidiary only, and do not include any of the company's operating subsidiaries outside the U.S. and Canada. Kim Martin Lewis, Esq., Tim J. Robinson, Esq., and Patrick D. Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. Conway, Del Genio, Gries Co., LLC is the Debtors' financial advisor. Rothschild Inc. is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the noticing, balloting and disbursing agent for the Debtors. Paul, Hastings, Janofsky & Walker LLP, represents DIP Lender General Electric Capital Corp. Taft Stettinius & Hollister LLP is counsel for the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $500 million to $1 billion. MILACRON INC: Won't File March 31 Quarterly Report -------------------------------------------------- John C. Francy, Milacron Inc.'s Vice President - Finance, Chief Financial Officer and Treasurer, said the Company is not in a position to file its periodic report on Form 10-Q for the quarter ended March 31, 2009. During its chapter 11 proceeding, the Company will not have financial or human resources to prepare a Form 10-Q, as they will be needed to meet administrative and operating expenses and to provide substantial information to the Court and others, he said. During the pendency of the chapter 11 proceeding, the Company intends to file copies of each of the monthly financial reports it files with the Bankruptcy Court, he said. Mr. Francy said Milacron's results of operations for the March 31 quarter were materially worse than for the comparable quarter of 2008, principally due to the conditions that led to its chapter 11 and substantial costs related to the chapter 11 proceeding. About Milacron Inc. Headquartered in Batavia, Ohio, Milacron Inc. (Pink Sheets: MZIAQ) supplies plastics-processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron is also manufactures synthetic water-based industrial fluids used in metalworking applications. The company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead Case No. 09-11235). On the same day, the company filed an ancillary proceeding for reorganization of its Canadian subsidiary under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. The Petitions include the company and its U.S. and Canadian subsidiaries and its non-operating Dutch holding company subsidiary only, and do not include any of the company's operating subsidiaries outside the U.S. and Canada. Kim Martin Lewis, Esq., Tim J. Robinson, Esq., and Patrick D. Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. Conway, Del Genio, Gries Co., LLC is the Debtors' financial advisor. Rothschild Inc. is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the noticing, balloting and disbursing agent for the Debtors. Paul, Hastings, Janofsky & Walker LLP, represents DIP Lender General Electric Capital Corp. Taft Stettinius & Hollister LLP is counsel for the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $500 million to $1 billion. MONEYGRAM INT'L: Amends Employment Agreement with Patsley --------------------------------------------------------- The Board of Directors of MoneyGram International, Inc., entered into an amendment of its employment agreement with the Company's executive chairman, Pamela H. Patsley, to provide her an annual bonus of (i) 100%, as opposed to 50%, of her base salary if the defined base target is achieved and (ii) 200%, as opposed to 100%, of her base salary if the maximum defined target is achieved. On May 12, 2009, the MoneyGram Board granted Ms. Patsley non- qualified stock options to purchase 1,000,000 shares of common stock of the Company, with an exercise price of $1.59 or the fair market value of the stock as of May 12. The stock option grant to Ms. Patsley was made under MoneyGram's 2005 Omnibus Incentive Plan. The full-text copy of the Omnibus Plan is available for free at: http://ResearchArchives.com/t/s?3d16 Options for 50% of the shares are considered "time vested" and options for 50% of the shares are considered "performance vested." The Time Vested options will vest in equal installments over four years on the anniversary of the grant date. The Performance Vested options will vest as: -- options for 50% of the shares will vest when the value of the common stock of the Company has reached $3.18 per share for a period of 20 consecutive trading days during the 5- year period following the grant date; and -- options for 50% of the shares will vest when the value of the common stock of the Company has reached $4.77 per share for a period of 20 consecutive trading days during the 5- year period following the grant date. If the shares of Company common stock are not publicly traded, then vesting for the options that are Performance Vested will be vested in the manner set forth in the stock option agreement. About MoneyGram International Headquartered in Minneapolis, Minnesota, MoneyGram International Inc. (NYSE: MGI) -- http://www.moneygram.com/-- is a global payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with approximately 157,000 global money transfer agent locations in 180 countries and territories. * * * As reported by the Troubled Company Reporter on April 1, 2009, Fitch Ratings has affirmed the Issuer Default Ratings for MoneyGram International Inc. and MoneyGram Payment Systems Worldwide, Inc., at 'B+'. MORTGAGES LTD: Court Confirms Investors Committee Amended Plan -------------------------------------------------------------- The Hon. Randolph J. Haines of the U.S. Bankruptcy Court for the District of Arizona confirmed a first amended Chapter 11 plan of reorganization for Mortgages Ltd. filed by the Official Committee of Investors on March 12, 2009. Prior to the confirmation of the plan, the Debtors together with a group of investors, creditors, and parties-in-interest, delivered to the Court a Chapter 11 plan of reorganization, which provides that the Debtor's assets and operations will be separated into two entities, Phoenix Loan Services LLC and ML Grantor Trust, according to the Troubled Company Reporter on May 15, 2009. PLS is essentially the reorganized debtor and will continue to manage the ML loans under the existing agency agreements through which the servicing rights will be assigned to Hillspoint Asset Management, the new servicer, TCR noted. TCR added that the entities that co-proposed the Plan, designated as the Mahakian Parties, are comprised of Carol Mahakian, Allen B. Bickart, Vicki Greiff, Nicholas Esposito, Carolyn A. Bickart, H. Victor Rubin, Minas Zistatsis, Arianthi Zistatsis, Koumbas, L.L.C., Wendy Abrahams, Leo P. Malone, Kim Westberg, Laverne Westberg, and Adele Abrahams. The Investors Committee was selected by the United States Trustee to represent the interests of the investors who hold fractional interests in the notes and deeds of trusts or hold member interests in various MP Fund LLCs that hold fractional interests in notes and deeds of trusts serviced by Mortgages Ltd, according to the TCR on March 5, 2009. The Committee is made up of pass- through participants and members of various MP Fund LLCs, TCR added. The Investors Committee's plan accomplishes these major goals: A. The creation of a Liquidating Trust Upon the Plan Effective Date, a liquidating trust will be set up to which all of the Debtor's non-loan assets will be transferred. A liquidating trustee will be tasked with selling the Debtor's real estate and collecting two note receivables previously owned by the Debtor, which have been transferred to the liquidating trust. The liquidating trustee will also be tasked with pursuing all of the Debtor's causes of action and avoidance actions against third parties. The liquidating trust may employ counsel to pursue law suits and brokers to sell or refinance the real property. The creditors, RBLLC and the investors will have beneficial interests in the liquidating trust and will be entitled to distributions. The liquidating trustee will be accountable to and must obtain the consent of a trust board, which will be made up of people selected by the Official Committee of Unsecured Creditors, Investors Committee, and RBLLC. Unsecured Committee RBLLC will select one trust board member each and the Investors Committee will select the remaining three trust board members and the liquidating trustee. The Investors Committee will set up a selection process to seek out candidates for trust board membership and the Liquidating trustee position and will interview candidates before making decisions. B. The Settlement of Major Bankruptcy Issues, rather than Continued Litigation The Plan contemplates the settlement of major issues in the Debtor's case, including: -- the validity of RBLLC's security interest in the Debtor's loan assets, which will be transferred to RBLLC in satisfaction of a portion of its debt; -- the acknowledgment of the ownership of the fractional interests in the notes and deeds of trust by the Investors; -- the allowance of investor damages by the Investors and participation of those unsecured claims in the Liquidating Trust; -- the sharing of RBLLC's collateral with the Unsecured Creditors, excluding the Investors, Borrowers and RBLLC Claims, to allow a greater recovery for Unsecured Creditors; -- the settlement of avoidance actions and causes of action against investors, excluding insiders and RBLLC; and -- if not already approved, the settlement between the VTL Fund and the MP Funds. C. Limited Continued Operations of a Reorganized Debtor. The Debtor's existing stock will be cancelled and extinguished. New stock will be issued to the liquidating trust. The Reorganized Debtor, which will be renamed ML Servicing Co. Inc., will be owned, controlled and operated by the liquidating trust, but will continue to provide loan servicing and litigation support to both the liquidating trust and the Loan LLCs. The Reorganized Debtor will not make or originate new loans. An operating budget will be adopted and a new servicing agreement will be entered into for 2009, whereby the costs of operations of the Reorganized Debtor can be paid on a break even basis. Some of the current employees of Debtor will be retained in the Reorganized Debtor as employees or consultants and may be paid retention bonuses to stay with the Reorganized Debtor. The institutional memory and experience of the current employees such as George Everette and Chris Olson, as well as the up and running computer systems and software programs, will be used to service the Loans, provide litigation support and make claims distributions under the supervision of the Reorganized Debtor and the liquidating trust. D. Investor-controlled and Professionally-managed Workout and Collection of Loans The fractional interests in the notes and deeds of trust will be transferred to newly formed Loan LLCs so that 100% of a loan can be owned by and administered by a limited liability company set up just for that loan. Each pass-through investor, the MP Funds and RBLLC will transfer their fractional ownership interests in the Note and Deed of Trust to the new applicable Loan LLC set up for that loan. The board managers, which consist of five investors, will be a newly formed ML Manager LLC. RBLLC and the Revolving Opportunity investors will select one board member each. The Investors Committee will select the remaining three board members. The Investors Committee will establish a process for selection, seeking out and interviewing candidates. In addition to using the Reorganized Debtor for servicing the loans and providing support services, the Board of Managers for the ML Manager LLC may employ one or more professional portfolio or asset managers to provide expertise on workouts of the loans and the collection of the maximum amount from the Borrowers and may hire counsel where needed and appropriate. The Reorganized Debtor will not do the workout or settlements or foreclosures on the Loans, but will assist the ML Manager LLC and its portfolio or asset, managers as requested. All major decisions on a loan must be approved by a written vote of a majority in dollar amount of the members of the applicable Loan LLC. There will be investor control, but there will also be professional management of the loans and workouts. Borrowers will have one Loan LLC, managed by ML Manager LLC, to work with rather than hundreds of investors. The Investors Committee's Plan segregates the Claims Against and Interests in the Debtors into 13 Classes and describes the treatment for each Class: Class 1 -- Priority Non-Tax Claims Class 2 -- Secured Tax Claims Class 3 -- Stratera Secured Claims Class 4 -- Artemis Secured Claims Class 5 -- Arizona Bank Secured Claims Class 6 -- Mechanics Lien Claims and Other Misc. Sec. Claims Class 7 -- RBLLC Secured Claims Class 8 -- MP Funds and MP Fund Investors Claims Class 9 -- VTC Fund Claims Class 10 -- Pass-Through Investors Claims Class 11 -- General Unsecured Creditor Claims Class 12 -- Borrowers Claims Class 13 -- Equity Interest Under the plan, general unsecured creditors including RBLLC, MP Funds and Investors other holders of unsecured claims will be made by the liquidating trust out of the liquidation fund in accordance with the terms of the plan and the liquidating trust agreement. Sufficient reserves and reasonable estimations of claims will be set and maintain for each distribution so as to protect the investors, the MP Funds and Radical Bunny. RBLLC's unsecured claim and beneficiary interest in the liquidating trust will be entitled to receive an accelerated recovery in the amount of $25 million from the liquidating trust along with the revolving opportunity investor's unsecured claims and beneficiary interests' accelerated recovery in the amount of $10 million until RBLLC and the revolving opportunity investors receive an accelerated recovery, which totals $35 million at which time they will return to their then pro rata share of the liquidating trust. In addition, the ordinary course trade creditors will be entitled to receive a priority payment of $2 million of their beneficiary interests in the liquidating trust after the liquidating trust repays the exit financing, the secured claims on non-loan assets and pays its operating expenses, which shall be prior to payment of any other beneficiary interests including any accelerated recovery. The remaining beneficiary interests will be paid along with other beneficiary interests of the general unsecured claims. A full-text copy of the Investors Committee's Amended Plan is available for free at http://ResearchArchives.com/t/s?3d25 About Mortgages Ltd. Phoenix, Arizona-based Mortgages Ltd. -- http://www.mtgltd.com/ -- acted as a full service private lender prior to filing for bankruptcy. Through its licensed broker dealer, Mortgages Ltd. Securities, ML received money raised from approximately 2,700 investors for placement into loans secured by real estate located solely in Arizona. These accredited investors financed the lending operations of ML and received as collateral for their funding direct fractional interests in "pass through" loans and deeds of trust or membership interests in "Opportunity Funds" which held fractionalized interests in loans and deeds of trust. Mortgages Ltd. was the subject of an involuntary chapter 7 petition dated June 20, 2008, filed by KGM Builders Inc. -- a contractor for Grace Communities, a borrower of the company -- in the U.S. Bankruptcy Court for the District of Arizona. Central & Monroe LLC and Osborn III Partners LLC, divisions of Grace Communities, sought the appointment of an interim trustee for Mortgages Ltd. in the chapter 7 proceeding. Mortgages Ltd. is also facing lawsuits filed by Grace Communities and Rightpath Limited Development Group for its alleged failure to fully fund loans. Mortgages Ltd. denied the charges. It has filed a motion to dismiss the Rightpath suit. The Debtor's case was converted to a chapter 11 proceeding on June 24, 2008 (Bankr. D. Ariz. Case No. 08-07465). Judge Sarah Sharer Curley presides over the case. Carolyn Johnsen, Esq., and Bradley Stevens, Esq., at Jennings, Strouss & Salmon P.L.C., replaced Todd A. Burgess, Esq., at Greenberg Traurig LLP, as counsel to the Debtor. As of Dec. 31, 2007, the Debtor had total assets of $358,416,681 and total debts of $350,169,423 NCI BUILDING: S&P Downgrades Corporate Credit Rating to 'B+' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on NCI Building Systems Inc. The corporate credit rating was lowered to 'B+' from 'BB'. All ratings remain on CreditWatch with negative implications where they were placed on March 11, 2009. The downgrade reflects S&P's heightened concerns regarding the impact that weakening nonresidential construction activity is having on the company's operating performance. NCI announced that it had obtained waivers from senior lenders relative to financial maintenance covenants governing its bank facility. Furthermore, the company must address the June 18, 2009, maturity of its unused $125 million revolving credit facility and the expected Nov. 15, 2009, first put on its $180 million convertible senior subordinated notes. While NCI announced that is has made significant progress with a leading private equity firm with regard to a substantial equity investment, any transaction will require cooperation from its existing lenders. Absent a successful refinancing, S&P believes it is unlikely NCI will have sufficient cash to fund the $180 million convertible senior subordinated notes that S&P expects lenders to exercise at the first put date. In resolving S&P's CreditWatch listing, S&P will monitor NCI's plans to refinance its revolving credit facility due June 18, 2009, and to address the likely first put under its convertible notes on November 15, 2009. In addition, S&P will assess the outlook for the next six to 12 months for earnings and the related impact on credit measures and cash flow generation. NEWELL RUBBERMAID: S&P Reinstates 'BB' Rating on $430 Mil. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services' said it reinstated its 'BB' rating on Newell Rubbermaid Inc.'s $430 million 5.25% Convertible Quarterly Income Preferred Securities due 2027. Due to an administrative error, the rating was incorrectly removed. NEXPAK CORP: Seeks Strategic, Financial Parties to Bid for Assets ----------------------------------------------------------------- NexPak Corporation, which experienced liquidity issues caused by the slowing entertainment market and general economic malaise that deteriorated the availability of working capital, is seeking strategic and financial parties interested in the acquisition of its business, either in part or in its entirety. Actual Projected 2006 2007 2008 2009 Revenue $131,166 $132,521 $100,786 $93,544 Gross Profit 3,296 285 2,560 5,759 EBITDA 6,402 4,734 1,792 1,875 Strategic Buyer Synergies (1) Direct and Indirect Labor Cost Saving 5,710 Rent Cost Savings 1,800 R&M, Rationalization & Other SG&A Savings 4,900 Corporate Salaries 2,800 Other Corporate SG&A 2,200 Subtotal 17,410 Strategic Buyer Adjusted EBITDA $19,285 Financial Buyer Synergies (2) Direct and Indirect Labor Cost Savings 5,050 Rent Cost Savings 1,800 R&M, Rationalization & Other SG&A Savings 820 Corporate Salaries 1,100 Other Corporate SG&A 1,500 Subtotal 10,270 Financial Buyer Adjusted EBITDA $12,145 (1) Assumes rationalization of select high volume/low margin production and transfer of remaining Atlanta capacity to OH facility. (2) Assumes further rationalization of select high volume/ low margin production and transfer of remaining Atlanta capacity to OH facility. The Company gives strategic U.S. and International investors an opportunity to acquire or improve packaging capability or attain rationalized volume and margin with minimal investment and the potential for rapid payback. 1) NexPak produces a full product line grouped into eight product classes and two main categories. High Volume -- primarily sold to replicators with long-term contracts * Game (PS2, Wii, Xbox, STACKpak, Sony UMD cartridge/case) * DVD (Blu Ray, SLIMpak) * CD (Standard Jewel Case, CD Multicase) Specialty -- value added security and custom colors; customized nature, short production runs, higher margin * DVD Specialty (WynCase, Benefit Denial, SecureCaseOne) * CD Specialty (TRIMpak, CD Polybox) * Specialty Game Cases * VHS Cases and * Other 2) New Product Development -- Nexpak has a reputation as an innovator and provider of creative cost effective solutions. Significant new product pipeline. 3) Premier customer base: * Music labels (Sony Music, BMG, EMI Music, Universal Music, Independents) * Movie Studios (Sony Pictures Entertainment, MGM, Warner Home Video, 21st Century Fox, Universal, Buena Vista, Paramount) * Game Studios (supporting Playstation, Xbox, Nintendo); EAS, Activision * Tier 1 Replicators (Sony DADC, Cinram, Arvato, Technicolor, JVC) * Distributors (Ingram Entertainment, Polyline, Mid West Tape, Demco) * Video Rental Chains (Blockbuster, Hollywood, Movie Gallery) 4) Consolidate operations to Canton, OH facility and rationalize Atlanta plant, volume and SG&A; retain global footprint and capability. 5) For financial U.S. and International investors it's the opportunity to acquire high margin products and consolidate operations. A stalking horse bidder has not been selected as of May 21, 2009. The purchase will be subject to both Bankruptcy Court approval and any higher and better offers that might be received during the solicitation and auction process. Qualified Bids (as defined in the Court-proposed Sale Procedures) are required to be submitted on or before 5:00 p.m. (EST) on June 15, 2009, with an auction sale to be conducted on June 18, 2009 if multiple Qualified Bids are received. The winning bid will be submitted for bankruptcy court approval on June 23, 2009. The Financial Advisor to the Official Committee of Unsecured Creditors can be reached at: Ted Gavin, CTP Principal NachmanHaysBrownstein, Inc. 919 Market Street, Suite 1410 Wilmington, DE 19801 Tel: (302) 655-8997 (office) (484) 432-3430 (mobile) E-mail: tgavin@nhbteam.com Michael Savage, CIRA Managing Director NachmanHaysBrownstein, Inc. Tel: (617) 778-2460 ext. 31 (office) (617) 378-7158 (mobile) E-mail: msavage@nhbteam.com The Official Committee of Unsecured Creditors is a party in interest in the proceedings. About Nexpak Headquartered in Duluth, Georgia, Nexpak Corporation -- http://www.nexpak.com/-- manufactures and supplies packaging for DVD, CD, video, audio, and professional media formats. The Company and its debtor-affiliates filed for Chapter 11 protection on April 10, 2009 (Bankr. D. Del. Lead Case No. 09-11244). William A. Hazeltine, Esq., at Sullivan Hazeltine Allinson LLC represents the Debtors in their restructuring efforts. The Debtors assets range from $10 million to $50 million and its debts from $100 million to $500 million. NICOLE ENERGY: Court Denies Withdrawal of Reference of Complaint ---------------------------------------------------------------- The Hon. George Smith of the U.S. District Court for the Southern District of Ohio declined to withdraw the reference of an adversary proceeding in the Chapter 11 bankruptcy proceedings of Nicole Energy Services Inc., according to Law360. Headquartered in Westerville, Ohio, Nicole Energy Services Inc. provides natural gas, electric power & energy management. The company filed for Chapter 11 protection on March 12, 2004 (Bankr. S.D Ohio Case No. 04-53678). Jay W. Maynard, Esq., represents the Debtor. When the Debtor filed for protection from its creditors, it listed asset less than $50,000 and debts between $1 million and $10 million. NORTHEAST BIOFUELS: Sells Oswego Plant to Sunoco for $8.5 Mil. -------------------------------------------------------------- Northeast Biofuels LP and its debtor-affiliates are selling their ethanol production facility in Oswego County, New York, to Sunoco Inc. for $8.5 million. The sale transaction also the assumption of certain contracts and liabilities of Northeast Biofuels by Sunoco pursuant to an asset purchase agreement filed on May 19, 2009. Law360 reported that the U.S. Bankruptcy Court for the Northern District of New York has approved Sunoco's $8.5 million offer. The sale is expected to close (i) 10 days after the Court's entry of the sale order, or (ii) June 15, 2009. The closing will take place at the Offices of Duane Morris LLP, at 30 South 17th Street, in Philadelphia, Pennsylvania. The Debtors filed a revised proposed order authorizing the sale of their assets after several entities objected to the sale, including Constellation NewEnergy Inc.; New York State Department of Environmental Conservation; Lurgi Inc., Official Committee of Unsecured Creditors; and Diana G. Adams, the U.S. Trustee for Region 3. Among others, the U.S. Trustee said that although several bids for the Debtors' assets were received, most bids fall considerable short of even satisfying the secured creditors claims of over $165 million. The likelihood of any benefit to the estates from the sale, barring a minimal recovery to the secured creditors, is clearly remote in his instance, the U.S. Trustee contended. A full-text copy of Sunoco's asset purchase agreement is available for free at http://ResearchArchives.com/t/s?3d1d A full-text copy of the revised sale order is available for free at http://ResearchArchives.com/t/s?3d1e Business Magazine states that Sunoco will face expenses of about $14 million to fix up the plant. The report, citing Mr. Roach, notes that the plant has struggled to operate since starting up due mainly to pipe design problems reportedly difficult to clean and breed bacteria. About Northeast Biofuels Headquartered in Fulton, New York, Northeast Biofuels LP aka Northeast Biofuels LLC -- http://www.northeastbiofuels.com-- Operate as ethanol plants. The company and two of its affiliates filed for Chapter 11 protection on January 14, 2009 (Bankr. N.D. N.Y. Lead Case No. 09-30057). Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C., represents the Debtors in their restructuring efforts. Blank Rome LLP will serve as the Debtors' counsel. The U.S. Trustee for Region 2 appointed creditors to serve on an Official Committee of Unsecured Creditors. Sara C. Bond, Esq., and Stephen A. Donato, Esq., Bond, Schoeneck & King, PLLC, represent the Committee. When the Debtors filed for protection from their creditors, they listed assets and debt between $100 million to $500 million each. NORTHEAST BIOFUELS: Wants Sept. 14 Deadline to File Plan -------------------------------------------------------- Northeast Biofuels LP and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of New York to extend the exclusive periods for them to: -- file a Chapter 11 plan until Sept. 14, 2009; and -- solicit acceptances of that plan until Nov. 13, 2009. The Debtors' exclusive plan filing period expired on May 14, 2009. The Debtors argue that the 120-day initial time proves to be an inadequate time frame with which they can file a plan that addresses the treatment of their creditors. A hearing is set for June 18, 2009, at 11:30 a.m., to consider the Debtors' extension request for their exclusive periods. Headquartered in Fulton, New York, Northeast Biofuels LP aka Northeast Biofuels LLC -- http://www.northeastbiofuels.com-- Operate as ethanol plants. The company and two of its affiliates filed for Chapter 11 protection on January 14, 2009 (Bankr. N.D. N.Y. Lead Case No. 09-30057). Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C., represents the Debtors in their restructuring efforts. Blank Rome LLP will serve as the Debtors' counsel. The U.S. Trustee for Region 2 appointed creditors to serve on an Official Committee of Unsecured Creditors. Sara C. Bond, Esq., and Stephen A. Donato, Esq., Bond, Schoeneck & King, PLLC, represent the Committee. When the Debtors filed for protection from their creditors, they listed assets and debt between $100 million to $500 million each. NORTHEAST PAPER: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Northeast Paper Services, Inc. fdba Merrill Domestic Distribution, Inc. 10 Parkway Drive, Building #16 Scarborough, ME 04074 Bankruptcy Case No.: 09-20728 Chapter 11 Petition Date: May 20, 2009 Court: United States Bankruptcy Court Maine (Portland) Debtor's Counsel: Leonard M. Gulino, Esq. Bernstein, Shur, Sawyer & Nelson P.O. Box 9729 Portland, ME 04104-5029 Tel: (207) 774-1200 Email: lgulino@bernsteinshur.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/meb09-20728.pdf The petition was signed by Ralph J. Carpenter, owner of the Company. NORWOOD PROMOTIONAL: Seeks to Sell All Assets for $132 Million -------------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware approved bidding procedures to govern the auction of substantially all of the assets of Norwood Promotional Products Holdings Inc. and its debtor-affiliates. Promotional Holdings LLC has agreed to purchase all of the Debtors' assets, for $132,488,489, subject to adjustment. The buyer also agreed to assume certain of Norwood's liabilities. Promotional Holdings is also the designated stalking horse bidder. All bids for the Debtors' assets together with a good faith deposit of $13,173,000 must be filed by June 16, 2009. If more than one qualified bid is received, an auction will be held on June 18, 2009, at the offices of Kirkland & Ellis LLP, at Citigroup Center, 153 East 53rd Street in New York. A sale hearing is scheduled to be held the following day at 824 North Market Street, in Wilmington, Delaware. The Debtors' prepetition lenders may credit bid on the assets to be sold, the Court ruled. The lenders' agent is not required to post a deposit in order be a deemed a qualified bidder. However, if the lenders are the successful bidders and they do not close the transaction, their allowed secured claims will be reduced on a pro rata basis by amount of the deposit. If the Debtors close a sale with a bidder other than Promotional Holdings, the termination payment will no be more than $3,323,000, the Court clarified. The Debtors previously proposed a $3,900,000 termination payment to consist of a $2,900,000 break-up fee and $1,000,000 expense reimbursement. On May 20, 2009, Bank of New York Mellon argued that the purchase price for the assets is overstated and thus, provides an improper advantage to the stalking-horse bidder in that it chills competitive bidding, creates an artificially high threshold for competing bids, and disproportionate break-up fee. The purchase price, the Bank asserted, should be $77,000,000, plus the assumption of certain debts. The Debtors, citing a teaser by Houlihan Lokey, their adviser, explained that the purchase price contemplates paying $101,000 in cash subject to estimated downward working capital; and financial performance adjustments of between $15,000,000 and $20,000,000; plus the assumption of about $31,000,000 in debt including $20 million in account payable and accrued liabilities and a $11,500,000 gross pension liability. As laid in the bidding procedures, initial qualified bids must top the stalking horse's bid by at least $4,900,000, plus the good faith deposit. A full-text copy of the Debtors' asset purchase agreement is available for free at http://ResearchArchives.com/t/s?3d26 A full-text copy of the Houlihan Lokey's teaser is available for free at http://ResearchArchives.com/t/s?3d27 About Norwood Promotional Norwood Promotional Products -- http://www.norwood.com/-- is an industry leading supplier of imprinted promotional products. The company offers nearly 5,000 products and is a market leader in several of the industry's major product categories. Norwood also offers hundreds of products on 24-Hour service at no extra charge. Norwood Promotional Products Holdings, Inc. and five affiliates filed for Chapter 11 on May 5 (Bankr. D. Del. Case No. 09-11547). Judge Peter Walsh is handling the case. The Debtors hired Margaret Whiteman Greecher, Esq., and Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor, as counsel. Kirkland & Ellis LLP is general counsel and Mackinax Partners LLC is the restructuring consultant. Epiq Bankruptcy Solutions, LLC, has been hired as claims and noticing agent. The Company said its assets are $150 million while debt totals $295 million. NPS PHARMA: To Increase Shares by 1.8MM thru Incentive Plan ----------------------------------------------------------- Stockholders of NPS Pharmaceuticals, Inc., approved an amendment to the company's 2005 Omnibus Incentive Plan to increase by 1,800,000 the shares reserved for issuance under the Plan. The full-text copy of the Incentive Plan is available without charge at http://ResearchArchives.com/t/s?3d1a Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing specialty therapeutics company for gastrointestinal and endocrine disorders with high unmet medical need. The Company is currently advancing two late-stage programs. Teduglutide, a proprietary analog of GLP-2, is in Phase 3 clinical development for intestinal failure associated with short bowel syndrome as GATTEX(TM) and in preclinical development for gastrointestinal mucositis and necrotizing enterocolitis. At March 31, 2008, the Company's balance sheet showed total assets of $200.7 million, total liabilities of $425.9 million, resulting in a stockholders' deficit of about $225.5 million. NY TIMES: S&P Downgrades Corporate Credit Rating to 'B' ------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured issue-level ratings on New York City-based newspaper publisher The New York Times Co. to 'B' from 'B+'. These ratings were removed from CreditWatch, where they were placed with negative implications April 22, 2009. The rating outlook is stable. "The ratings downgrade reflects our view that over the next two years, ad revenue and EBITDA declines will likely result in total lease- and pension-adjusted leverage increasing to the low-8x area by 2010--our lease and pension adjustments add a multiple of almost 4x to leverage by 2010," said Standard & Poor's credit analyst Emile Courtney. "This is notwithstanding our belief that The New York Times' liquidity profile -- in terms of positive cash flow generation, adequate revolver availability, EBITDA coverage of cash interest in the mid-2x area, and a lack of meaningful debt maturities until 2011 -- over the period will likely remain adequate." This level of expected leverage is not consistent with the previous 'B+' rating, particularly given the secular industry challenges the company faces. Also, expected 2010 adjusted leverage in the low-8x area does not factor in potential proceeds from the sale of the company's 17.75% stake in New England Sports Venture (owner of the Boston Red Sox, Fenway Park, and about 80% of New England Sports Network). S&P think a sale of the company's stake is likely over the intermediate term. This, combined with otherwise adequate liquidity for the current 'B' rating, is the reason for the stable rating outlook. ORCHARDS VILLAGE: State Court Receivership Didn't Bar Bankruptcy ---------------------------------------------------------------- WestLaw reports that the non-interference provisions of a state court order appointing a receiver for a financially troubled limited liability company (LLC) that operated an adult assisted- living community, which prohibited the LLC's members from doing anything, directly or indirectly, to interfere with the receiver's management and operation of the debtor's assets, could not be interpreted to prohibit the LLC's members from filing a Chapter 11 petition on its behalf. Allowing the terms of the state court's order to dictate the availability of federal bankruptcy relief would be fundamentally inconsistent with the constitutional grant to Congress of the right to enact uniform laws on the subject of bankruptcy. In re Orchards Village Investments, LLC, --- B.R. --- -, 2009 WL 1227729 (Bankr. D. Ore.). Orchards Village Investments, LLC, filed for Chapter 11 bankruptcy protection on February 13, 2009 (Bankr. D. Ore. Case No. 09- 30893). Anita G. Manishan, Esq., in Portland, Oregon, assists the Company in its restructuring effort. The company estimated $10 million to $50 million in assets and debts when it filed for bankruptcy. Press reports at the time of the filing indicated that the adult assisted-living community has 107 units, and two- thirds were occupied. PEABODY ENERGY: Fitch Affirms Issuer Default Rating at 'BB+' ------------------------------------------------------------ Fitch Ratings has affirmed these ratings for Peabody Energy Corporation: -- Issuer Default Rating at 'BB+'; -- Senior unsecured notes at 'BB+'; -- Senior unsecured revolving credit and term loan at 'BB+'; -- Convertible junior subordinated debentures due 2066 at 'BB-'. The Rating Outlook is Stable. Peabody's credit ratings reflect large, well diversified operations, good control of low-cost production, strong liquidity and moderate leverage. Liquidity at quarter's end was strong, with cash on hand of $526.7 million and availability under the company's revolver of $1.5 billion. Total debt with equity credit/EBITDA for the latest 12 months ended March 31, 2009, was 1.5 times. Peabody has substantial legacy liabilities and adjusted leverage was 2.3x for the year ended Dec. 31, 2008. Capital expenditures in 2009 are expected to be up to $450 million, excluding federal coal reserve lease payments, which are estimated at $130 million for 2009. Interest is expected to be about $215 million for the year. Fitch expects operating cash flows will cover capital expenditures, scheduled maturities of debt ($17 million in 2009 and $14 million in 2010), and dividends of about $64 million per year, amply over the next 12-18 months. Peabody should remain well within its financial covenants of a maximum consolidated leverage ratio of 3.25x and a minimum interest coverage ratio of 2.50x. Although earnings are expected to decline in 2009, Peabody should generate free cash flow as a result of more modest expenditures. Fitch would consider a positive rating action if leverage looks to be sustainably reduced. Fitch expects any significant acquisitions to be financed in a balanced manner with some cash on hand and/or equity. Fitch expects total debt with equity credit/EBITDA to remain below 2.5x over the next 18 months absent material production or shipment disruptions. Fitch would consider a negative rating action if there were a substantial recapitalization or a significant debt financed acquisition. Peabody is the largest U.S. coal producer, fueling 10% of domestic electricity generation and the fifth largest coal producer in Australia. In 2008, Peabody sold 255.5 million tons of coal and had year-end reserves of 9.2 billion tons. PEOPLES COMMUNITY: To Sell Assets to First Financial for $12MM -------------------------------------------------------------- Peoples Community Bancorp, Inc., and its wholly owned subsidiary, Peoples Community Bank, entered into a Purchase and Assumption Agreement with First Financial Bank, N.A., the wholly owned subsidiary of First Financial Bancorp., for the sale of certain of People Community's assets for approximately $12 million. The Assets to be sold includes 17 of People Community's branch offices located in southwestern Ohio and southeastern Indiana; approximately $260 million of certain business and consumer loans and other assets; and the assumption of approximately $310 million of the Bank's deposits and certain other liabilities by First Financial. The purchase price for the Assets and the deposits being sold by Peoples Community will be offset against the amount owed by the Bank to the Buyer for assuming the Bank's liabilities pursuant to the Agreement. It is currently anticipated that the aggregate balance of Peoples Community's liabilities will exceed the estimated purchase price. Completion of the proposed transaction is subject to the approval of the Office of Thrift Supervision. The transaction contemplated by the Agreement is expected to close during the third quarter of 2009, subject to the receipt of all necessary regulatory approvals and the satisfaction of certain other closing conditions as set forth in the Agreement. Peoples Community was considered critically undercapitalized under the regulatory framework for prompt corrective action. Following completion of the proposed transaction, the Bank expects to return to a well capitalized status in accordance with the capital restoration plan filed by the Bank with the Office of Thrift Supervision on April 30, 2009. The Bank will continue to conduct banking operations from its two branches in Lebanon, Ohio, and expects to retain approximately $325 million in assets, including certain loans, investment securities and real estate assets as well as certain liabilities. The full-text copy of the Agreement is available at no charge at: http://ResearchArchives.com/t/s?3d19 Integra Bank Consent Letter In connection with the Sale Agreement, Peoples Community received a written consent from Integra Bank, N.A, regarding the Company's $17.5 million obligation under an outstanding line of credit from Integra that was due and payable on June 30, 2008. Under the letter, Integra consented to the Agreement and agreed to, among other things, forbear and refrain from initiating or prosecuting any action in any court to exercise any rights with respect to the Bank's common stock, which is pledged to Integra to secure the Company's line of credit, or exercise any other rights or remedies available to Integra that would have the effect of hindering or delaying the closing of the transactions contemplated under the Agreement or effect the ability of the parties to consummate the transactions contemplated by the Agreement. The Consent is irrevocable until the earlier of the closing date of the Agreement or the termination of the Agreement. Going Concern Doubt The report of BKD, LLP, in Cincinnati, Ohio, the Company's independent registered public accounting firm for the year ended December 31, 2007, contained an explanatory paragraph as to the Company's ability to continue as a going concern primarily due to the Company's current lack of liquidity to repay its obligation under an outstanding line of credit with Integra Bank, N.A. The line of credit is secured by all outstanding shares of common stock of the Bank. The audit report of Plante & Moran, PLLC, in Columbus, Ohio, for the year ended December 31, 2008, also contained an explanatory paragraph as to the Company's ability to continue as a going concern. For the year 2008, Peoples Community posted a net loss of $68.5 million compared to a net loss of $33.3 million for year 2007. At December 31, 2008, Peoples Community had $712.4 million in total assets, $727.2 million in total liabilities, resulting in $14.8 million in stockholders' deficit. On April 2, 2008, the Company and the Bank each consented to the terms of Cease and Desist Orders issued by the OTS, which require the Company and the Bank to, among other things, file with the OTS updated business plans. The Orders prohibit the Bank from paying cash dividends to the Company without the prior consent of the OTS and the Company will be able to rely upon only a limited amount of existing cash and cash equivalents for its liquidity. Without the ability to rely on dividends from the Bank, the Company will require funds from other capital sources to meet its obligations such as restructuring or replacing the line of credit. Peoples Community is evaluating various funding strategies to meet its obligations, including restructuring its outstanding debt and selling branch offices. Any increase in the Company's outstanding indebtedness will also require OTS approval. The Company cannot provide assurance that it will succeed in obtaining funds to meet its financial obligations. Failure to do so will have a material adverse effect on, and impair the Company's business, financial condition and ability to operate as a going concern. Integra Loan Default As of December 31, 2007, Peoples Community was not in compliance with certain covenants of its line of credit with Integra. On June 30, 2008, the loan matured and was due in full. Effective July 24, 2008, the Company entered into a forbearance agreement with Integra regarding its $17.5 million line of credit. The forbearance was negotiated to extend the repayment period and allow the Company to structure a transaction which would result in repayment of the $17.5 million line of credit. On September 12, 2008, the Company entered into a purchase and assumption agreement with a buyer and a third party, which provided for the purchase of a substantial portion of the Bank's assets, as well as the assumption of the Bank's deposits and certain other liabilities. The Company or the buyer could terminate the Agreement if the closing of the transactions did not occur by December 31, 2008. By a letter dated December 29, 2008, the buyer terminated its obligations under the Purchase Agreement. By December 31, 2008, the Company and the third party entered into a first amendment to the Purchase Agreement to extend the Company's and third party's obligations under the Agreement to January 31, 2009. The Company and the third party reaffirmed their representations and warranties and acknowledged that the third party will require another financial institution acceptable to the Office of Thrift Supervision to perform its or their obligations under the Agreement. No agreement was reached by January 31, 2009. On December 31, 2008, the Company and Integra extended the forbearance period to January 31, 2009. The forbearance period has expired and the Company is in default on its line of credit with Integra. The matter remains unresolved. OTS Tightens Grip On April 28, 2009, the Bank consented to an Amended Order to Cease and Desist issued by the OTS. The Amended Order became effective on April 29, 2009. The Amended Order supplements and amends the previously issued Cease and Desist Order issued by the OTS against the Bank on April 2, 2008. The Amended Order requires that the Bank achieve by July 14, 2009 and maintain: (i) a Tier 1 (Core) Capital Ratio of at least 8%; and (ii) a Total Risk-Based Capital Ratio of at least 12%. On April 30, 2009, the Bank filed its Thrift Financial Report for the quarter ended March 31, 2009. The report reflected the Bank's capital under the framework for prompt corrective action at the "critically undercapitalized" level. The Bank may take these corrective actions: -- Enter into any material transactions other than in the usual course of business, including any investment, expansion, acquisition, sale of assets, or similar action with respect to which the Bank is required to give notice to OTS; -- Extend credit for any highly leveraged transaction; -- Amend its charter or bylaws, except to the extent necessary to carry out any other requirement of any law, regulation, or order; -- Make any material change in accounting methods; -- Engage in any covered transaction; -- Pay excessive compensation or bonuses; or -- Make payments on subordinated debt. On May 4, 2009, Peoples Community received written notification from The Nasdaq Stock Market that based on the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2008, as filed with the U.S. Securities and Exchange Commission on May 1, 2009, Nasdaq has determined that the Company now complies with Nasdaq's Marketplace Rule 5250(c)(1). Accordingly, the Company's common stock is no longer subject to delisting. Headquartered in West Chester, Ohio, Peoples Community Bancorp Inc. (NasdaqGM: PCBI) -- http://www.pcbionline.com/-- is the holding company for Peoples Community Bank, a federally chartered savings bank with 19 full service offices in Butler, Warren and Hamilton counties in southwestern Ohio and Dearborn and Ohio counties in southeastern Indiana. PHILADELPHIA NEWSPAPERS: Lawsuit Removal Hearing Set for June 16 ---------------------------------------------------------------- John P. Connolly at The Bulletin reports that the Hon. Jean FitzSimon of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania has denied Philadelphia Newspapers LLC's motion for an expedited hearing to push back a deadline to remove cases against the Company by 120 days. According to The Bulletin, Philadelphia Newspapers has several lawsuits pending against it, and many of those cases are being stayed until the Bankruptcy Court can determine how able the Company is to deal with them. The Bulletin relates that the request for removal would remove the cases from their current courts, so that the Bankruptcy Court can consider them. Philadelphia Newspapers failed to adequately notify all parties beforehand, The Bulletin quoted Judge FitzSimon as saying. According to The Bulletin, Judge FitzSimon asked why Philadelphia Newspapers had waited until the week of the deadline to file its request for an extension. The report says that Judge FitzSimon decided to schedule a full hearing on the request for June 16, 2009. The Court also orders the Company to have all parties properly notified of the motion and hearing. The Bulletin notes that the current preliminary injunction staying the lawsuits against Philadelphia newspapers lasts until July 7, and any deadline for removal notices should match that date. Judge FitzSimon requires Philadelphia Newspapers to address the matter on whether or not it is involved in the cases in question with specificity by June 5. Judge FitzSimon said that if she grants an extension, it won't be more than 90 days. 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, 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 certain affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. 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. The United States Trustee has appointed a three-member Official Committee of Unsecured Creditors, which is represented by Ben Logan, Esq., and other lawyers at O'Melveny & Myers LLP. PLASSEIN INT'L: Fee Paid to Raise LBO Money Not Avoidable --------------------------------------------------------- WestLaw reports that a $1 million acquisition fee that a corporate Chapter 7 debtor paid prior to its bankruptcy filing to a company that raised the $79.8 million in capital that the debtor needed to complete its leveraged buyout of other companies was supported by "reasonably equivalent value," and was not avoidable by the Chapter 7 trustee as constructively fraudulent to creditors under Delaware law. The fee was negotiated in good faith and at arm's length and constituted less than 1.3% of the capital raised. In re Plassein International Corp., --- B.R. ----, 2009 WL 1334578 (Bankr. D. Del.). Headquartered in Willington, Connecticut, Plassein International Corp., a specialty plastic film and packaging company filed for chapter 11 protection on May 14, 2003 (Bankr. D. Del. Case No. 03-11489). Adam G. Landis, Esq., at Klett Rooney Lieber & Schorling and Daniel C. Cohn, Esq., at Cohn Khoury Madoff & Whitesell LLP represent the Debtors. When the Company filed for protection from its creditors, it listed more than $50 million in assets and debts of over $100 million. On Oct. 24, 2003, the Court converted the Debtors' cases to chapter 7 liquidation proceedings. William A. Brandt, Jr., serves as the Chapter 7 Trustee. POTLATCH CORPORATION: Fitch Withdraws 'BB+' Issuer Default Rating ----------------------------------------------------------------- Fitch Ratings has affirmed and simultaneously withdrawn the ratings on Potlatch Corporation. Fitch will no longer provide analytical coverage on PCH. The Rating Outlook on all ratings is Stable. Ratings affirmed and withdrawn include: -- Long-term IDR 'BB+'; -- Senior secured bank revolver 'BBB-'; -- Secured debentures and secured medium term notes 'BBB-'; -- Unsecured revenue bonds 'BB+'. PREMIER SOCCER: Files for Chapter 7 Protection; Closes Stores ------------------------------------------------------------- David Ranii at The News & Observer reports that Premier Soccer has filed for Chapter 7 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of North Carolina. According to court documents, Premier Soccer listed $100,001 to $500,000 in assets and $100,001 to $500,000 in liabilities. The News & Observer relates that Premier Soccer has closed its equipment and apparel stores in Raleigh and Cary and will to liquidate its assets. Court documents say that the two stores generated more than $1 million in revenue in 2007 and $966,498 in 2008. TheNews & Observer states that this year's revenue to date totaled $157,464. The News & Observer quoted Bill Hanckel -- president and co-owner of Hanckel Capital Group, the business that owns the two stores -- as saying, "It's a matter of the economy taking a downturn and people being a lot more careful with their money. T he discretionary spending wasn't there." According to the News & Observer, Mr. Hanckel said that he had talked with Premier Soccer's creditors about keeping the business going as it entered the busy season, but "some of them would not work with us." Mr. Hanckel said that he was worried about accepting orders for local soccer clubs and failing to deliver the goods down the road, the News & Observer states. "I didn't want to get into July and August and then not deliver to customers who have been customers of mine for seven years now. It didn't make sense, morally," the report quoted Mr. Hanckel as saying. Premier Soccer is based in Virginia. PRIMUS TELECOM: Posts $14MM Net Income for First Quarter 200 ------------------------------------------------------------ PRIMUS Telecommunications Group, Incorporated, reported its financial results for the quarter ended March 31, 2009. "First quarter 2009 net revenue was $194 million, down $9 million from $203 million in the prior quarter and down $31 million from the year ago quarter. The $9 million revenue decrease as compared to the prior quarter was comprised of a $5 million decrease from the strengtheningof the United States dollar and a $7 million decrease in retail services revenue, partially offset by a $3 million increase in wholesale services revenue," said Thomas R. Kloster, Chief Financial Officer. "Exclusive of the effect from foreign currency movements, the retail revenue declined in our major operating units primarily as a result of reduced levels of advertising and sales & marketing expenditures in the later part of the fourth quarter 2008 and throughout the first quarter of 2009 and less absolute days and less business days in the quarter ended March 31, 2009, as compared to the quarter ended December 31, 2008. Despite fewer days in the quarter, we continue to experience strong growth and demand for our wholesale services due to our expanded routing and pricing capabilities." The year-over-year decline of $31 million is comprised of a $41 million decline from foreign currency movements and a $7 million decline from retail operations offset by a $17 million increase in wholesale revenue. The mix of net revenue for the quarter ended March 31, 2009 was 72% retail (48% residential and 24% business) and 28% wholesale. The first quarter retail revenue mix of 72% compares to 74% and 82% in the prior and year-ago quarters, respectively. Geographic retail revenue mix, as a percent of total revenue, was comprised of 27% from Australia, 27% from Canada, 7% from Europe and 11% from the United States. Net revenue less cost of revenue was $65 million or 33.5% of net revenue in the first quarter as compared to $67 million and 33.1% in the prior quarter and $84 million and 37.3% in the year-ago quarter. The sequential margin percentage improvement reflects continued focus on network cost reduction. The margin percentage decline as compared to the prior year was partially influenced by a higher percentage of total revenue from lower-margin wholesale revenue. Selling, general and administrative (SG&A) expense in the first quarter was $45 million (23.2% of net revenue), a decrease from the prior quarter expense of $52 million (25.6% of net revenue) and down $24 million from $69 million (30.7% of net revenue) in the year-ago quarter. The first quarter 2009 SG&A expense improvement as compared to the prior quarter reflects a $3 million decline in advertising and other sales and marketing expenses, a $2 million decline in salaries and benefits as a result of continued headcount and related cost reductions, a $1 million decline in occupancy, professional fees and other general and administrative expenses and a $1 million decrease from the strengthening of the United States dollar. Income from operations was $14 million in the first quarter, an increase of $7 million from the prior quarter and an increase of $4 million from the year-ago quarter due to the margin percentage and SG&A expense improvement. First quarter 2009 Adjusted EBITDA, as calculated in the attached schedule, was $20 million, as compared to $15 million in the prior quarter and year-ago quarters. The improvements are primarily from reductions made to SG&A expenses. Interest expense for the first quarter 2009 was $11 million, down $2 million from the prior quarter and down $4 million from the year-ago quarter. The sequential and year-over-year decrease is attributable to debt reduction transactions in prior periods and a lower variable interest rate on our secured term loan. Additionally, as per SOP 90-7, interest for debt obligations that are subject to compromise under the proposed consensual financial restructuring has not been accrued since the Petition Date. Net income was $14 million in the first quarter 2009 (including a $17 million gain from reorganization items as a result of the bankruptcy filing and a $3 million loss on foreign currency transactions primarily from intercompany debt agreements), as compared to net losses of $35 million in the fourth quarter 2008 (including a $34 million loss on foreign currency transactions) and of $3 million in the first quarter 2008 (including a $2 million gain on foreign currency transactions). Basic and diluted net income per common share were $0.10 and $0.08, respectively, in the first quarter 2009 as compared to basic and diluted net loss per common share of ($0.25) in the prior quarter and basic and diluted net loss per common share of ($0.02) in the year-ago quarter. Adjusted Diluted Net Income Per Common Share, as calculated in the attached schedule, was $0.00 for the first quarter 2009 compared to a loss of ($0.02) for the fourth quarter 2008 and ($0.07) in the year-ago quarter. Liquidity and Capital Resources PRIMUS ended the first quarter 2009 with an unrestricted cash balance of $32 million, down $5 million from $37 million as of the end of the fourth quarter 2008. Cash uses were comprised of $11 million on debt coupon and other interest payments, $4 million for reorganization costs, $4 million for working capital and the effect of foreign currency exchange rates, $3 million for capital expenditures and $3 million for scheduled debt principal reductions. These declines were offset by $20 million of Adjusted EBITDA. As of March 31, 2009, the Company had $306.0 million in total assets and $$749.3 million in total liabilities, resulting in $443.3 million in stockholders' deficit. Free Cash Flow for the first quarter 2009, as calculated in the attached schedule, was $2 million (with $5 million provided by operating activities and $3 million utilized for capital expenditures) as compared to negative $1 million in the prior quarter and negative $14 million in the year-ago quarter. The principal amount of PRIMUS's long-term debt obligations (both current and non-current portions) as of March 31, 2009, was $136 million, which excludes liabilities that are subject to compromise under the Company's plan of reorganization. Per SOP 90-7, obligations subject to compromise under the reorganization, totaling $451 million, have been accounted for as Liabilities Subject to Compromise on the consolidated balance sheet and therefore excluded from long-term obligations. However, not all of the $451 million of the Liabilities Subject to Compromise are expected to be relieved. The Company's proposed plan of reorganization contemplates $124 million of debt, in addition to the $136 million, to be reinstated. About Primus Telecom PRIMUS Telecommunications Group, Incorporated (OTCBB: PRTL) -- http://www.primustel.com-- is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and Western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. The Company and four its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. D. Del. Lead Case No. 09- 10867). George N. Panagakis, Esq., and T Kellan Grant, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, are the Debtors' proposed counsel. Davis L. Wright, Esq., Eric M. Davis, Esq., and Anthony Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, are the Debtors' proposed local counsel. The Debtor proposed CRT Investment Banking LLC as financial adviser and investment banker. When the Debtors filed for protection from their creditors, they listed assets between $100 million and $500 million, and debts between $500 million and $1 billion. QUEBECOR WORLD: Creditors to Vote on Canadian Plan June 18 ---------------------------------------------------------- The Honorable Robert Mongeon of the Quebec Superior Court of Justice authorized Quebecor World, Inc., to convene a meeting of creditors on June 18, 2009, for the solicitation of votes for acceptance of QWI's Plan of Reorganization and Compromise. Judge Mongeon ruled that any claims filed against QWI will be dealt with in accordance with the claims procedure order, the Compromise Plan, and the Canadian Companies' Creditors Arrangement Act. Any claims against Quebecor World (USA), Inc., and its affiliates who filed reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code will be dealt with in accordance with the U.S. Plan of Reorganization. On or before June 10, 2009, Ernst & Young, Inc., as the appointed monitor of QWI's CCAA proceeding, will have filed a report on the Canadian Plan and on QWI's business and financial affairs with the Canadian Court. If the Canadian Plan has been accepted by the required majorities, QWI will file a motion before the Canadian Court on June 30, 2009, seeking an order sanctioning the Canadian Plan. Any person intending to object to the Sanction Motion must file with the Canadian Court an objection on June 25. A full-text copy of the Creditors' Meeting Order is available for free at http://bankrupt.com/misc/creditorsmeetingorder.pdf A full-text copy of the Canadian Plan, dated May 18, 2009, is available for free at: http://bankrupt.com/misc/qwi_may18ccaaplan.pdf A full-text copy of the Liquidation Analysis accompanying the Canadian Plan is available for free at: http://bankrupt.com/misc/qwiliquidationanalysis.pdf A full-text copy of the Financial Projections accompanying the Canadian Plan is available for free at: http://bankrupt.com/misc/qwifinlprojections.pdf Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Court Extends Exclusive Periods Until July 21 ------------------------------------------------------------- Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York extended until July 21, 2009, the period within which Quebecor World (USA), Inc., and its debtor-affiliates have exclusive rights to file a plan of reorganization and solicit acceptances of that plan. As reported by the Troubled Company Reporter on May 19, 2009, the Quebecor World, Inc., and certain of its affiliates, who filed insolvency proceedings under the Canadian Companies' Creditors Arrangement Act, have filed a parallel request with the Quebec Superior Court of Justice to further extend the period in which they have exclusive right to file a plan of reorganization and solicit votes to accept or reject the Plan through and including July 21, 2009. Ernst & Young, Inc., the court-appointed monitor of the CCAA proceedings, supports the Applicants' Motion. The Honorable Robert Mongeon of the Quebecor Superior Court (Commercial Division) has extended the stay period and stay termination date for the Canadian affiliates of Quebecor World under the Canadian Companies' Creditors Arrangement Act until July 21, 2009. Judge Peck will convene a hearing on June 30, 2009, at 10:00 a.m., to consider confirmation of the plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates. Objections to the confirmation of the Plan are due June 19. Judge Peck approved on May 18, 2009, the Disclosure Statement explaining the Debtors' Plan after determining that the Disclosure Statement contains adequate information as defined in Section 1125(a) of the Bankruptcy Code. Approval of the Disclosure Statement is a greenlight for the Debtors to start soliciting votes for acceptance of their Plan. The Bankruptcy Court also approved the Debtors' request to enter into a $750 million exit financing. The Debtors have received an unsolicited bid from R.R. Donnelley & Sons Company to buy all or substantially all of QWI's assets for $1.35 billion. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Plan Confirmation Hearing Set for June 30 --------------------------------------------------------- Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on June 30, 2009, at 10:00 a.m., to consider confirmation of the plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates. Objections to the confirmation of the Plan are due June 19. Judge Peck approved on May 18, 2009, the Disclosure Statement explaining the Debtors' Plan after determining that the Disclosure Statement contains adequate information as defined in Section 1125(a) of the Bankruptcy Code. Approval of the Disclosure Statement is a greenlight for the Debtors to start soliciting votes for acceptance of their Plan. Judge Peck designates May 8, 2009, as be the Voting Record Date for determining (a) the creditors and interest holders, including "holders of stocks, bonds, debentures, notes and other securities" that are entitled to receive the Solicitation Package pursuant to the Solicitation Procedures; (b) the creditors and interest holders entitled to vote to accept or reject the Plan; and (c) whether claims or interests have been properly transferred to an assignee pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedures that that the assignee can vote as the holder of the claim or equity interest. Plan & Disclosure Statement Amendments Consistent with the cross-border nature of the operation and management of the Debtors' and Quebecor World, Inc.'s business, the Plan of Reorganization, together with the Plan of Compromise filed in QWI's Canadian Companies' Creditors Arrangement Act proceedings, contemplates a coordinated resolution and restructuring of the obligations of the Debtors and QWI. On May 18, 2009, the Debtors filed a third amended Plan and Disclosure Statement to incorporate agreements the Debtors entered into with several major parties of their bankruptcy case. The Third Amended U.S. and Canadian Plan together provides that the lenders under the Syndicate Agreement and the holders of the SocGen Claims, together with the holders of the Senior Notes and the other holders of claim against the non-operating Debtors and QWI, will share in the New Equity Securities to be issued on the Effective Date. The Syndicate Claims other than the BNPP F/X Claim will be finally allowed in an aggregate amount equal to $725,538,481, instead of $725,410,852 as contemplated by the Second Amended Plan. After giving effect to the Syndicate Compromise but prior to giving effect to the Syndicate Private Notes Contribution, the holders of Allowed Syndicate Claims will receive on the Effective Date a total Class 1 Recovery of (i) $47,155,754 shares of New Common Stock, (ii) the portion of the Syndicate/SocGen Cash Distribution allocable to the holders of Class 1 Claims constituting Syndicate Claims, except as reduced to the extent permitted under the definition of "Syndicate/SocGen Cash Distribution;" and (iii) the portion of the minimum of 12,500,000 shares of New Preferred Stock allocable to the holders of Class 1 Claims constituting Syndicate Claims. In this regard, holders of the Syndicate Claims and the SocGen Claims are being allocated a disproportionately greater number of New Equity Securities than the number being allocated to holders of the Senior Notes and the other holders of unsecured claims against the non-operating Debtors and QWI on account of the lien and guarantee rights asserted by the holders of the Syndicate and SocGen Claims. Holders of Claims against the non-operating Debtors will, and in lieu of a share of the New Equity Securities, receive an enhanced recovery in the form of New Unsecured Notes that will be issued by QWCC and guaranteed by Reorganized QWI. With respect to the SocGen Claims, the Debtors are disputing those Claims and the Plan provides that the recovery would otherwise be distributable to the holders of the SocGen Claims on the Effective Date will instead be reserved until final resolution of the validity and priority of the SocGen Claims. The Amended Plan also provides for a class of Convenience Claims into which each creditor may elect and receive, on account of all Claims of those creditors, the greater aggregate of those Claims or $2,500. Secured Claims are unimpaired and will receive a full recovery. The Amended Plan further contemplates the formation of a Litigation Trust to continue a currently pending adversary proceeding against the holders of the Private Notes, which proceeding seeks the recovery of approximately $376 million paid to those noteholders within 90 days prior to the Petition Date, with any recovery to be shared among the holders of the Syndicate Claims, the SocGen Claims, the holders of the Senior Notes, and the other holders of unsecured claims against the non-operating Debtors and QWI. A blacklined version of the 3rd Amended Plan is available for free at http://bankrupt.com/misc/qwi3rdplan.pdf A blacklined version of the 3rd Amended Disclosure Statement is available for free at http://bankrupt.com/misc/qwi3rdds.pdf Voting & Balloting Procedures Okayed Judge Peck also approved solicitation procedures and a timeline for the solicitation and confirmation of the Debtors' Plan: June 8, 2009 -- Deadline for filing Plan Exhibits June 18, 2009 -- Voting Deadline June 19, 2009 -- Deadline for filing Plan Objections June 26, 2009 -- Debtors' Deadline to file reply to Plan Objections June 30, 2009 -- Confirmation Hearing The Debtors may extend the Voting Deadline, if necessary, without further Court order, to a date that is no later than six Business days before the Confirmation Hearing; provided that notice of the extension will be provided to voting creditors. Plan objections must (a) be in writing; (b) state with particularity the grounds for the objection; (c) state the name and address of the objecting party and the notice of the claim or interest of the party; and (d) be filed with the Court and served on the following Notice Parties so that it is actually received by the Plan Objection Deadline. Pursuant to the Solicitation Procedures, in light of the Debtors' election to treat their estates as consolidated for purposes of tabulating voting results, all Ballots will be counted as if filed against a single consolidated estate, and any obligation of any of the Debtors, and all guarantees thereof by or enforceable against any other Debtors, and, for voting purposes, any joint and several liability of the Debtors, will be treated as a single obligation in the amount of the obligation of the primary obligor. The Voting Agent is authorized to provide for the tabulation of acceptances and rejections of the Plan on a Debtor-by-Debtor basis so that the Debtors may tabulate votes on a non- consolidated basis if necessary. In that event, the Debtors will not be required to re-solicit votes, as the Debtors will tabulate votes as if each Debtor proposed a separate plan of reorganization. To the extent that any creditor entitled to vote in a given Class has filed duplicate claims to be voted in that Class, that creditor will be provided, to the extent possible, with only one Solicitation Package and one Ballot on account of that those duplicate claims, which Ballot will be attributed a single vote in the amount of one of those duplicate claims. The Court also approved the forms of Ballots in substantially the same format as the Official Form No. 14, the Non-Voting Notice, the Disputed Claim Notice, and the Confirmation Hearing Notice. The Plan provides that holders of General Unsecured Claims that (a) otherwise would be classified in Class 3 or Class 4 under the Plan and (b) have an aggregate face amount of more than $2,500 may elect to reduce the aggregate amount of all Class 3 or Class 4 claims to $2,500, and obtain treatment of all of Class 3 or Class 4 claims, as reduced, as a single Claim in Class 5 for purposes of distribution under the Plan. All Ballots must be properly executed, completed and delivered by (a) first class mail, in the return envelope provided with each Ballot, (b) overnight courier, or (c) personal delivery, so that the Ballots are actually received, in any case, by the Voting Agent, no later than the Voting Deadline at these addresses: If by regular mail: Donlin, Recano & Company, Inc. Re: Quebecor World (USA) Inc., et al. Attn.: Voting Department P.O. Box 2034, Murray Hill Station New York, NY 10156-0701 If by hand delivery or overnight courier: Donlin, Recano & Company, Inc. Re: Quebecor World (USA) Inc., et al. Attn.: Voting Department 419 Park Avenue South, Suite 1206 New York, NY 10016 Procedures for Assumption/Rejection of Contracts and Leases The Court also approved procedures for assumption, assumption and assignment, and rejection of contracts and leases. The Debtors will file, as an exhibit to the Plan, a schedule of contracts and leases to be assumed, assigned, or rejected. The schedule will identify each contract and lease, the counterparty, and the Debtors' calculation of the cure amount, if any, in connection with the assumption of contracts and leases, among others. The Debtors will serve a copy of the Schedule of Assumed and Rejected Contracts and Leases upon each of the counterparties listed on the Schedules, together with Notices of Assumption or Rejection of Contracts and Leases. The Debtors may amend the Schedules to add or remove contracts and leases. The Cure Amount, if any, associated with each of the Assumed Contracts and Leases will be satisfied, pursuant to Section 365(b)(1), at the option of the applicable Debtor or Reorganized Debtor (a) by payment of the Cure Amount in Cash on the Effective Date; or (b) on other terms as are agreed to by the parties to the Assumed Contract or Assumed Lease. Any Claim for damages arising from the rejection of a Rejected Contract or Rejected Lease must be filed within 30 days after the date of an order authorizing the Debtors to reject the Rejected Contract or Rejected Lease, or all rights to rejection damages under the Rejected Contract or Lease will be deemed waived. If a counterparty to an Assumed or Rejected Contract or Assumed Lease disputes or objects to (a) the Cure Amount, (b) the ability of the applicable Debtor or any assignee to provide "adequate assurance of future performance" under the Assumed Contract or Assumed Lease, or (c) any other matter pertaining to the assumption or rejection of the contract or lease, the counterparty to the Assumed Contract or Assumed Lease must file an objection with the Bankruptcy Court and serve that objection on: -- counsel to the Debtors; -- counsel to the Official Committee of Unsecured Creditors -- counsel to the Ad Hoc Group of Noteholders; -- counsel to the Prepetition Agent, as administrative agent for the Prepetition Bank Lenders; and -- counsel to the Monitor for Quebecor World, Inc.'s proceedings under the Canadian Companies' Creditors Arrangement Act. An Assumption Objection based solely on the Debtors' proposed Cure Amount will not prevent or delay the Debtors' assumption and assignment of any Assumed Contract or Assumed Lease. In the event that a counterparty objects to the assumption of an Assumed Contract or Assumed Lease based solely on the Cure Amount, the Debtors may, in their sole discretion, reserve an amount equal to the Cure Amount shown on the Schedule of Assumed Contracts and Leases, pending further order of the Bankruptcy Court determining the appropriate Cure Amount. Any counterparty to an Assumed or Rejected Contract or Lease that fails to object timely to the Cure Amount or the proposed assumption or rejection will be deemed to have consented to the Cure Amount and to the proposed assumption, assignment, or rejection. The Debtors will reserve the right to reject and nullify the assumption of any executory contract or unexpired lease no later than five days after entry of a Final Order determining the Cure Amount or the nature of any adequate assurance of future performance required to assume the Assumed Contract or Assumed Lease. The Cure Amount for an Assumed Contract or an Assumed Lease will be paid directly to the counterparty to the Assumed Contract or Assumed Lease and not to the current holder of a Claim underlying or related to the Cure Amount. The Debtors, prior to the entry of the order approving the solicitation procedures, filed a revised Disclosure Statement Order, providing, among others, that holders of General Unsecured Claims that would be classified in Class 3 or 4 under the Plan and have an aggregate face amount of more than $2,500 may elect to reduce the aggregate amount of all the Class 3 or 4 Claims to $2,500 and obtain treatment of all Class 3 or 4 Claims, as reduced, as a single Claim in Class 5 for purposes of distribution under the Plan. Holders of Senior Note Claims will not be entitled to make the Convenience Class Election. A blacklined version of the Revised Proposed Disclosure Statement Order is available for free at: http://bankrupt.com/misc/qwirevisedproposeddsord.pdf About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) RAM REINSURANCE: S&P Downgrades Senior Unsecured Debt to 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its counterparty credit, financial strength, and financial enhancement ratings on RAM Reinsurance Co. Ltd. to 'BBB-' from 'A+'. Standard & Poor's also said that it lowered its senior unsecured debt and preference stock ratings on holding company RAM Holdings Ltd. to 'BB-' and 'C', respectively, from 'BBB' and 'BB+'. In addition, Standard & Poor's placed most of these ratings on CreditWatch with negative implications. These rating actions are a result of RAM Re's recent strategic and tactical decisions. "Specifically, RAM Re has adopted a strategy of not writing any new business until market conditions stabilize, effectively putting the company into run-off," noted Standard & Poor's credit analyst Dick P. Smith. "Our criteria typically limit the financial strength ratings on operating companies in run-off to no higher than 'BBB'." In S&P's opinion, the company's decision to cease being an SEC- registered company, which means that it no longer will be required to file financial statements regularly, has hurt its financial flexibility. More importantly, RAM Re recently announced that it had suspended dividends on the holding company's preference shares and will suspend dividends following the June 2009 payment on the operating company's preference shares. Although these actions will preserve capital, they also reduce the company's financial flexibility and appear to favor common shareholder interests over those of other stakeholders. As a result, we've also lowered S&P's rating on RAM Holdings Ltd.'s preference shares, reflecting the immediate suspension of the dividend. In addition, S&P lowered the rating on RAM Re's preference shares, reflecting the company's announcement that dividends will be suspended following the June 15, 2009, payment. "We placed the ratings on CreditWatch negative pending a full review of the company's capital position," Mr. Smith added. Recently, the company has completed commutations and reinsurance take-backs that have dramatically altered its outstanding portfolio and capital base. S&P will review whether these actions have resulted in a change to S&P's assessment of the company's capital adequacy to the point where it is no longer consistent with these revised ratings. REGENT COMMUNICATIONS: Qualified Opinion Cues Default Interest -------------------------------------------------------------- Regent Communications, Inc., said that on May 8, 2009, it received a letter from Bank of America, N.A., as the administrative agent of certain lenders under the Company's Credit Agreement dated as of November 21, 2006, as amended. The letter stated that BofA intends to impose a default rate of the interest under the Credit Agreement because of a going concern opinion by the auditor. The Company was previously notified by BofA on April 1, 2009, that BofA considers the Company's delivery of audited financial statements for the fiscal year ended December 31, 2008, which contained a going concern limitation in the auditors' report, to be a "Specified Default" under the Credit Agreement. Because the Specified Default continued unremedied for 30 days after the April 1st Notice, the BofA Letter asserts the existence of an Event of Default under the Credit Agreement for the Company's failure to comply with the terms contained in Section 7.1(a) of the Credit Agreement for the fiscal year ended December 31, 2008. BofA informed the Company that in accordance with the terms of the Credit Agreement, it has elected to impose the default rate of interest under the Credit Agreement. From and after May 8, 2009 for so long as any one or more Events of Default will be continuing (a) the entire unpaid principal amount of all of the Loans will bear interest at a rate per annum equal to the rate otherwise applicable plus the additional 2% default rate, and (b) all other overdue amounts will bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin for Revolving Loans that are Base Rate Loans plus the additional 2% default rate, in each case, as more particularly described in the Credit Agreement. The BofA Letter further informed the Company that (a) unless and until the Specified Default is remedied in accordance with the terms of the Credit Agreement, the lenders will make no additional Credit Extensions pursuant to the terms of the Credit Agreement, and (b) the lenders have not waived the Specified Default or the conditions to making additional Credit Extensions. On behalf of the lenders and secured parties, BofA specifically reserved all of the continuing rights and remedies of the secured parties under the Credit Agreement and related Loan Documents and with respect to the Collateral and under applicable law as a result of the occurrence and continuation of any Event of Default. A copy of the BofA Letter is available at: http://researcharchives.com/t/s?3d01 Negotiations with Lenders Ongoing The Company said it is currently in negotiations with BofA and the other parties to the Credit Agreement to amend certain of the financial ratios and other covenants contained in the Credit Agreement in order to regain compliance. The Company, however, cannot guarantee that it will be able to negotiate an amendment to the Credit Agreement. If the Company is unable to negotiate an amendment, the lenders and secured parties to the Credit Agreement could accelerate the full amount of the outstanding debt to currently payable and proceed against available collateral pledged pursuant to the terms of the Credit Agreement and related Loan Documents. If the Company is able to negotiate an amendment to the Credit Agreement, that amendment could contain terms unfavorable to the Company and could result in the imposition of additional finance fees and higher interest charges. Those charges could have a material effect on the Company's future cash flows, results of operations or financial condition. First Quarter Results Regent Communications reported a net loss of $32,507,000 on broadcast revenues, net of agency commissions, of $18,263,000 for three months ended March 31, 2009. It reported a $3,010,000 net loss on revenues of $20,833,000 during the same period in 2008. The Company had assets of $182,632,000 against debts of $214,958,000 as of March 31, 2009. A copy of the Company's Form 10-Q is available for free at: http://researcharchives.com/t/s?3d02 During the year ended Dec. 31, 2008, the Company incurred a net loss of $118,991,000 on revenues of revenues of $96,340,000. Operating loss was $43,333,000. The Company noted that its credit agreement contains certain financial and other covenants, which, among other things, require Regent to maintain specified financial ratios, and imposes certain limitations on the Company with respect to lines of business, mergers, investments and acquisitions, additional indebtedness, distributions, guarantees, liens and encumbrances. Indebtedness under the credit agreement is secured by a lien on substantially all of the Company's assets and of the subsidiaries, by a pledge of the operating and license subsidiaries' stock and by a guarantee of the subsidiaries. Regent's ability to meet certain of these financial ratios has been affected by economic trends that have caused a general downturn in the advertising sector, including advertising on the Company's radio stations. The likelihood that the Company would not be able to meet certain financial ratios during the 2009 year and the possibility that the Company's lenders could require that repayment of the outstanding debt under the credit agreement be accelerated to currently payable, created substantial doubt about the Company's ability to continue as a going concern. Accordingly, the Report of Independent Registered Public Accounting Firm issued by the Company's auditors for the 2008 year contained an explanatory paragraph regarding the uncertainty. Under the terms of the credit agreement, any audit report containing going concern language constitutes a default under the agreement. About Regent Communications Regent Communications, Inc., is a radio broadcasting company focused on acquiring, developing and operating radio stations in mid-sized markets. The Company owns 49 frequency modulation (FM) and 13 amplitude modulation (AM) radio stations in 13 markets in Colorado, Illinois, Indiana, Kentucky, Louisiana, Michigan, Minnesota, New York and Texas. The Company's revenue is generated from the sale of local, regional and national advertising for broadcast on its radio stations. During the year ended December 31, 2008, approximately 86% of the Company's net broadcast revenue was generated from the sale of locally driven advertising. Deloitte & Touche LLP, Regent's auditors, had raised doubt whether the company could continue as a going concern in its 10-K, based on their lack of certainty whether Regent could remain within financial covenant compliance in 2009. As reported by the TCR on April 29, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating on Covington, Kentucky-based Regent Communications Inc. to 'CCC' from 'CCC+'. RENEW ENERGY: Files Schedules of Assets and Liabilities ------------------------------------------------------- Renew Energy LLC submitted to the U.S. Bankruptcy Court for the Western District of Wisconsin their schedules of assets and liabilities, and statements of financial affairs, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $7,210,323 B. Personal Property $181,743,647 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $157,756,499 E. Creditors Holding Unsecured Priority Claims $265,510 F. Creditors Holding Unsecured Non-priority Claims $36,388,564 ----------- ------------ TOTAL $188,953,970 $194,410,573 A full-text copy of the Debtors' schedules of assets and debts is available for free at http://ResearchArchives.com/t/s?3d21 A full-text copy of the Debtors' statements of financial affairs is available for free at http://ResearchArchives.com/t/s?3d22 Headquartered in Jefferson, Wisconsin, Renew Energy LLC Jefferson Junction LLC -- http://www.renewenergyllc.com/-- operates an ethanol plant facility. The company filed for Chapter 11 protection on January 30, 2009 (Bankr. W.D. Wis. Case No. 09-10491). Christopher Combest, Esq., at Quarles & Brady LLP, represents the Debtor in its restructuring efforts. William T. Neary, the United States Trustee for Region 11, appointed five creditors to serve on an Official Committee of Unsecured Creditors of Renew Energy LLC. When the Debtor filed for protection from its creditors, it listed asset and debts between $100 million to $500 million each. SAKS INCORPORATED: Fitch Assigns 'B/RR3' on $105 Mil. Notes ----------------------------------------------------------- Fitch Ratings has assigned a 'B/RR3' rating to Saks Incorporated $105 million 7.5% convertible notes due to Dec. 1, 2013. The Rating Outlook is Negative. Proceeds from the issuance will be used to pay down amounts outstanding under its $500 million credit facility and for general corporate purposes. Fitch currently rates Saks: -- Long-term Issuer Default Rating 'B-'; -- Senior secured bank credit facility 'BB-/RR1'; -- Senior unsecured notes 'B/RR3'. The ratings reflect the considerable weakness in luxury department store sales and the resulting pressure on operating margins, free cash flow and credit metrics. The Negative Outlook reflects that in a more severe or prolonged challenging sales environment, liquidity could be pressured. While the new convertible bonds provide additional liquidity and first quarter results were encouraging from a gross margin and cost management perspective - which resulted in a small operating (EBIT) profit of $2.5 million after three consecutive quarters of declining profitability - the operating environment remains highly uncertain. Comparable store sales have declined in the mid-20s for the first four months of 2009 and Fitch expects that comparable store sales for the luxury retailers could decline in the low-to-high teens range for the remainder of 2009. In this case, Saks' EBITDA and credit metrics will remain under significant pressure this year. These expectations incorporate the recent actions Saks has taken to manage inventory levels, store expenses and capital expenditures. For the 12 months ended May 2, 2009, Saks' EBITDA was negative $28 million and adjusted debt/EBITDAR deteriorated to 20.0 times (from 13.0x at the end of 2008 and 4.2x at the end of 2007) and EBITDAR coverage of interest and rents stood at 0.5x (from 0.8x and 2.3x, respectively). The ratings on the company's $500 million secured bank facility and the senior unsecured notes are derived from the IDR and the relevant recovery rating. Fitch's recovery analysis assumes a liquidation value in a distressed scenario of approximately $900 million. Saks' senior credit facility, which is secured by inventories and certain receivables, is rated 'BB-/RR1', indicating outstanding (90%-100%) recovery prospects. The facility terminates in September 2011 and is not subject to any covenants unless the availability falls below $60 million. At that time, it is subject to a fixed-charge coverage ratio of at least 1:1. With the company's current fixed-charge coverage ratio below 1.0x, borrowings on the facility are limited to the lower of a) $440 million or b) its calculated borrowing base minus $60 million (which could be lower during seasonally low inventory periods given the significant decline in inventory receipts this year). As of May 2, 2009, Saks had approximately $195 million in borrowings under its credit facility. The senior unsecured notes are rated 'B/RR3', indicating good recovery prospects (51%-70%). Debt maturities are $0 in 2009, $46 million in December 2010 and $142 million in October 2011. The company's significant real estate holdings, which include its Fifth Avenue New York City store, provide a source of liquidity for the company. SHERIDAN GROUP: S&P Cuts Corporate Credit Rating to 'B' From 'B+' ----------------------------------------------------------------- Standard & Poor's Ratings Service lowered its corporate credit and senior secured debt ratings on Hunt Valley, Maryland-based The Sheridan Group Inc., to 'B' from 'B+'. At the same time, S&P placed the ratings on CreditWatch with negative implications. The ratings downgrade reflects S&P's updated view that operating performance in 2009 will be worse than S&P previously expected. While S&P believes management has made strides in managing expenses, S&P is concerned that a weak operating environment will continue to pressure earnings. "Our ratings now assume that EBITDA in 2009 will fall in the midteens percent area, resulting in leverage of around 5x, which is weak for the previous rating given our current view of the company's business profile," said Standard & Poor's credit analyst Ariel Silverberg. "Our expectation for 2009 performance stems from our assumption that Sheridan will continue to experience volume declines across all of its segments, including books and journals, resulting in a midteens percent revenue decline in 2009," she continued. As of March 31, 2009, adjusted debt to EBITDA was 4.3x, and EBITDA coverage of interest was 2.1x. The CreditWatch listing reflects the uncertain status around Sheridan's revolving credit facility. Standard & Poor's had previously expected lenders to renew or significantly extend it before its May 15, 2009, maturity date. Current lenders extended the facility maturity date to June 25, 2009, while the company continues to negotiate a longer-term solution with its banks. In resolving S&P's CreditWatch listing, S&P will monitor management's progression with respect to negotiating a new revolving facility, and assess the new terms of the facility. S&K FAMOUS: Starts Going-Out-of-Business-Sale --------------------------------------------- Eric Anderson at Times Union reports that S&K Famous Brands Inc. started a going-out-of-business sale on Thursday. Times Union quoted S&K Famous chief restructuring officer Jonathan Tibus as saying, "In spite of our best efforts, the current economic climate left us with no choice but to close down the business. We'd like to thank all of our employees for their hard work and all of our loyal customers for their years of patronage." S&K Famous has stores at Crossgates Mall, Rotterdam Square Mall, and Wilton Mall. Headquartered in Glen Allen, Virginia, S & K Famous Brands, Inc. - - http://www.skmenswear.com/-- sells men's swimwear. The Debtor filed for Chapter 11 protection on February 9, 2009 (Bank. E.D. Va. Case No. 09-30805). Lynn L. Tavenner, Esq., Paula S. Beran, Esq., at Tavenner & Beran, PLC and McGuireWoods LLP represent the Debtor in its restructuring efforts. Its financial advisor is Alvarez & Marsal North America LLC. The Debtor's DIP Lender is Wells Fargo Retail Finance LLC as administrative and collateral agent. The Debtor listed total assets of $41,440,100 and total debts of $35,499,00. SONIC AUTOMOTIVE: S&P Raises Corporate Credit Rating to 'CCC+' -------------------------------------------------------------- Standard & Poor's Ratings Services said it has raised its corporate credit rating on Charlotte, North Carolina-based Sonic Automotive Inc. to 'CCC+' from 'SD' (selective default). The rating action reflects S&P's assessment of the company's new capital structure, maturity schedule, liquidity profile, and other financial and business risk factors following its recently completed debt exchange, which S&P deemed tantamount to a default. The outlook is developing. At the same time, S&P assigned its 'CCC-' issue rating and a '6' recovery rating to the company's $86 million second-lien senior secured convertible notes due May 15, 2012. Sonic recently exchanged its 5.25% convertible senior notes, due May 7, 2009, for a mix of new debt securities, common equity, and cash. S&P withdrew the rating on the 5.25% convertible debt. "The ratings on Sonic reflect the company's very tight liquidity and high leverage while the recession has reduced profitability," said Standard & Poor's credit analyst Nancy Messer. Light-vehicle sales for the North American auto retailers have reached a multi- decade low, and the continuing recession has caused consumers to defer some vehicle parts and service visits that are key profit and cash flow makers for the rated auto retailers. Furthermore, S&P believes the Chrysler LLC bankruptcy and the possible bankruptcy of General Motors Corp. in the weeks ahead have created additional uncertainty in the auto market. Although Sonic successfully completed an exchange for its May 2009 maturity, serious near-term financing maturities remain. The weak credit markets, in S&P's view, make the near-term outlook for speculative-grade debt issuance or refinancing more challenging. The ratings on Sonic also reflect the company's high debt, low cash flow protection measures, and a weak business risk profile as one of several large consolidators in the highly competitive U.S. auto retailing industry. Sonic operates dealership franchises in about 15 states, including in the fast-growing but now pressured markets in the Southeast, West, and Southwest. More than 80% of Sonic's total new-vehicle revenue comes from import and luxury vehicles, which tend to have a fairly loyal customer base for vehicle maintenance. The rated auto retailer group faces heightened business challenges in the recession, including: -- Structural changes to the domestic auto market; -- Deeper-than-typical cyclical auto sales declines; -- Tight consumer credit, poor consumer sentiment, and high unemployment; -- Tough competition for retail sales fostered by excess production capacity; -- Thin profit margins, typical of retail businesses; and -- Weak bargaining power with automakers because of heavy dependence on a few large manufacturers. As a result of these factors, 2008 vehicle sales dropped sharply year over year, and S&P expects new light-vehicle sales to drop an additional 27% in 2009, to 9.6 million units. S&P estimate new- vehicle sales will improve to 11.4 million units in the U.S. in 2010, but this would still be well below the weak levels of 2008. In this downturn, all the large auto retailers, including Sonic, are depending on their diverse revenue streams to mitigate lower vehicle sales revenues. For first-quarter 2009, Sonic's revenue stream consisted of new-vehicle retail sales (50%), used-vehicle sales (27%), P&S sales (20%), and finance and insurance (3%). In S&P's view, Sonic could generate a small amount of positive free cash flow because S&P expects it to spend very little on acquisitions, capital expenditures, and stock repurchases this year, but S&P does not expect any free cash flow to be sufficient to reduce debt significantly. Divestiture of certain dealerships could provide cash, but S&P thinks current depressed market prices will limit cash realization prospects. The company suspended its dividend to shareholders in early 2009. The developing outlook reflects the likelihood that S&P could raise or lower the ratings in the year ahead. The outlook reflects S&P's concern that the duration of the economic downturn and tight credit markets could impede Sonic's ability to refinance its various near-term debt obligations. S&P could lower the rating if the company is unable to refinance its credit facility commitment before February 2010, when it expires. S&P could also lower the rating if Sonic is not able to refinance at least 85% of its 4.25%, $150 million convertible notes by August 2010, when the holders of the new $86 million notes have the right to put their obligation to the company for payment. S&P could also lower the rating if economic pressures on profitability lead to a covenant violation. Alternatively, S&P could raise the rating if Sonic is able to complete its refinancing of the credit facility in the next several months and 85% of the $158 million of convertible notes before August 2010, and if S&P believes the company has established a viable path to intermediate-term deleveraging through either debt repayment or increased EBITDA. The former might be achieved with higher proceeds from divestitures than S&P currently expect. The company could achieve the latter if the economy improves. SONIC AUTOMOTIVE: Moody's Junks Corporate Family Rating from 'B2' ----------------------------------------------------------------- Moody's Investors Service downgraded to Caa1 from B2 the Corporate Family rating of Sonic Automotive Holdings, Inc., and upgraded the probability of default rating to Caa1 from Caa3. The outlook is negative. The upgrade of the Probability of Default rating was largely the result of Sonic's successful refinancing of its $105 million bond issue that matured on May 7, 2009, which temporarily alleviated a potential liquidity squeeze and possible distressed exchange. The downgrade of the Corporate Family Rating was due to the creation of what Moody's believes to be a fragile, and very short term, capital structure. "While the bond refinancing removed one potential hurdle, significant refinancing risks remain" stated Moody's Senior Analyst Charlie O'Shea. The company's $1.3 billion revolver expires in February 2010. Additionally, the company's $86 million senior secured convertible notes could be put back to the company in August 2010 if, before that time, it is unable to successfully refinance its $160 million convertible notes which mature in November 2010. "Sonic is now in the position of having to successfully deal with these maturities while also stabilizing its business operations, which have been struggling the past several quarters" stated O'Shea. Sonic's credit metrics, with LTM leverage of over 7.5 times, are weak , and barring improvement during the balance of 2009, further downward rating action could occur. In addition, failure to make substantive progress with respect to the upcoming revolver expiration over the next few months would create significant downward rating pressure. In the event liquidity is improved via a fairly comprehensive solution to the upcoming maturities, ratings could be upgraded modestly. Ratings downgraded include: -- Corporate family rating to Caa1 from B2; -- Senior guaranteed subordinated notes to Caa3 (LGD5, 85%) from Caa1 (LGD5, 79%), and -- Senior convertible subordinated notes at Caa3 (LGD6, 95%) from Caa1 (LGD 6, 91%). Ratings upgraded include: -- Probability of default rating to Caa1 from Caa3; New rating assigned: -- Senior secured convertible notes at Caa2 (LGD 5, 73%). The most recent rating action for Sonic was the April 1, 2009 downgrade of the corporate family rating to B2 and the probability of default rating to Caa3, with all ratings left on review for possible downgrade. Sonic Automotive, Inc., headquartered in Charlotte, North Carolina is a leading auto retailer with 122 franchises, and generates annual revenues of around $6 billion. SOYO GROUP: Files for Chapter 7 Bankruptcy Protection ----------------------------------------------------- Soyo Group, Inc., has filed for Chapter 7 bankruptcy protection in the U.S. Bankruptcy Court for the Central District of California. On May 5, 2008, the Company discontinued all operations and filed for Chapter 7 bankruptcy protection. A Chapter 7 trustee has been appointed by the Bankruptcy Court to administer the Company's assets and liabilities. Kenneth Krasne has been appointed as receiver for those assets of the Company that constitute collateral for its loan from United Commercial Bank, which collateral includes almost all of the Company's accounts receivables and inventory, and equipment. Erica Ogg at CNET News reports that Soyo's exit from the TV business was forced by mounting losses, in this case, more than $25 million in loans. The Company said that it has defaulted on all loans owed to creditors, including loans in the approximate outstanding balances of $24,000,000 and $1,500,000 owed to UCB, the Company's primary creditor. The Company has not paid interest or principal on the loans since March of 2009. On May 10, 2009, the Company accepted the resignation of Nancy Chu as the Company's Chief Financial Officer and a member of the Board of Directors. On April 30, 2009, Vasquez & Company LLP resigned as the Company's auditors. Vasquez didn't issue an audit report for the year ended 2008. During the audit for the year ended 2008, Vasquez had a disagreement or difference of opinion with employees and senior management of the Company because they significantly expanded the scope of their audit for further investigation going as far back as the year ended 2007 and interim quarterly periods ended in 2007. Vasquez advised the Company that "our audit report for the year ended 2007 and our pre-issuance review procedures for the interim quarterly periods ended in 2007 and interim quarterly periods ended in 2008 should no longer be relied upon." Soyo Group, Inc., is the maker of Honeywell TVs. Soyo makes LCD monitors, portable hard drives, and Bluetooth ear pieces, but is probably most recognizable since it owns the license to sell TVs under the Honeywell brand name. SPECTRUM BRANDS: Projects 4% Hike In Revenue by 2013 ---------------------------------------------------- Spectrum Brands Inc. filed its projected income and cash flow statements showing a 4% increase in revenue by 2013 resulting in $113 million in net income that fiscal year, Bloomberg's Bill Rochelle said. The U.S. Bankruptcy Court for the Western District of Texas in San Antonio is scheduled to convene a hearing on June 15 to consider Spectrum Brands' proposed Chapter 11 plan. The Plan offers to pay unsecured creditors in full on their $28 million in claims while noteholders receive new stock and $218 million in new notes in exchange for $1.09 billion in debt, for a projected recovery between 55 percent and 70 percent. Holders of $160 million under an existing asset-backed loan also are slated for full payment. The existing secured credit of $1.35 billion is to be reinstated while existing stock is to be canceled. Secured creditors are objecting to the plan, saying they are adversely affected even thought the plan says defaults will be cured and the debt reinstated. About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) STOCK BUILDING: Taps Shearman & Sterling as Bankruptcy Counsel -------------------------------------------------------------- Stock Building Supply Holdings, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Shearman & Sterling LLP as counsel. Shearman & Sterling will, among other things,: -- advise the Debtors with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business and management of their properties; -- prepare on behalf of the Debtors all necessary petitions, applications, motions, objections, responses, and answers, orders, reports and other legal papers; and -- ensure the confirmation of the Plan and approval of the corresponding solicitation procedures and disclosure statement. Douglas P. Bartner, a partner at Shearman & Sterling, tells the Court that the hourly rates of Shearman & Sterling personnel are: Partners $740 - $995 Of-Counsel and Specialists $535 - $850 Legal Assistants $100 - $245 Pre-bankruptcy, Shearman & Sterling received $1,397,6188 on account of services and expenses in connection with the Debtors' reorganization efforts and the commencement and prosecution of the Chapter 11 cases. Shearman & Sterling received an advanced retainer of $250,000 for services and expenses from April 27, 2009, to May 5, 2009. After application of amounts of payments of any additional prepetition expenses, the excess amounts will be held by Shearman & Sterling for application for postpetition fees and expenses. Mr. Bartner assures the Court that Shearman & Sterling is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Bartner can be reached at: Shearman & Sterling LLP 599 Lexington Avenue New York, NY 10022 Tel: +1 212 848 4000 Fax: +1 212 848 7179 About Stock Building Supply Holdings LLC Headquartered in Raleigh, North Carolina, Stock Building Supply Holdings LLC -- http://www.stockbuildingsupply.com/-- supplies building products to builders, contractors and other customers in the United States. The Company and 25 of its affiliates filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11554). Shearman & Sterling LLP and Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors selected FTI Consulting as restructuring consultant. When the Debtors' sought for protection from their creditors, they listed assets between $50 million and $100 million, and debts between $10 million and $50 million STRATEGIC CAPITAL: Closed by Regulators; Midland Assumes Deposits ----------------------------------------------------------------- Strategic Capital Bank, Champaign, Illinois, was closed May 22 by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Midland States Bank, Effingham, Illinois, to assume all of the deposits of Strategic Capital Bank. Due to the Memorial Day holiday weekend, the office of Strategic Capital Bank will reopen on Tuesday, May 26, 2009, as a branch of Midland States Bank. Depositors of Strategic Capital Bank will automatically become depositors of Midland States Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until Midland States Bank can fully integrate the deposit records of Strategic Capital Bank. As of May 13, 2009, Strategic Capital Bank had total assets of $537 million and total deposits of approximately $471 million. In addition to assuming all of the deposits of the failed bank, Midland States Bank agreed to purchase approximately $536 million of assets. The FDIC will retain the remaining assets for later disposition. The FDIC and Midland States Bank entered into a loss-share transaction on approximately $420 million of Strategic Capital Bank's assets. Midland States Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss- sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. Customers who have questions about the May 22 transaction can call the FDIC toll-free at 1-866-954-9527. The phone number will be operational this evening until 9:00 p.m., Central Time (CT); on Saturday from 9:00 a.m. to 6:00 p.m., CT; on Sunday from noon to 6:00 p.m., CT; and thereafter from 8:00 a.m. to 8:00 p.m., CT. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/strategiccapital.html. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $173 million. Midland States Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Strategic Capital Bank is the 35th FDIC-insured institution to fail in the nation this year, and the fourth in Illinois. The last FDIC-insured institution to be closed in the state was Heritage Community Bank, Glenwood, on February 27, 2009. TEPPCO PARTNERS: Fitch Affirms Junior Subordinated Rating at 'BB+' ------------------------------------------------------------------ Fitch Ratings has affirmed the Issuer Default Rating and outstanding debt ratings for TEPPCO Partners, L.P.: -- Long-term IDR at 'BBB-'; -- Senior unsecured at 'BBB-'; -- Junior subordinated at 'BB+'. The Rating Outlook is Stable. This action affects approximately $2 billion of total long-term debt at March 31, 2009. The ratings affirmation and Stable Outlook is supported by the scale of TPP's refined products transportation assets, growth in natural gas production via the company's Jonah gas gathering joint venture and favorably positioned upstream crude oil storage operations. Despite current economic conditions and weak commodity prices, Fitch projects 2009 EBITDA growth of approximately 5% due to the expected strong performance of the upstream segment in contango market conditions, increased propane throughput in first quarter-2009, FERC rate adjustments that help to offset volume weakness for refined products and continued growth in the cash flows from Jonah due to recent capacity expansions. Partially offsetting these gains, Fitch expects weaker performance in the marine transportation segment due to rate and demand pressures from current economic conditions and delays in the start-up date for Motiva's Pt. Arthur refinery to provide some downward pressure on credit ratios. TPP's decision to dissociate from the Texas Offshore Port System partnership further supports the current ratings and Stable Outlook. Faced with weak commodity fundamentals and a low level of contractual commitments, had TPP moved forward with the project, the estimated weakening in credit ratios could have negatively affected ratings. Fitch estimates consolidated 2009 Debt/EBITDA of 4.3 times (x) with an equity issuance in 2009 or 4.5x without equity. EBITDA interest coverage is estimated at 3.9x. While ratios are still within Fitch's parameters for the rating, TPP's credit profile is weaker than many of its 'BBB-' master limited partnership peers. Credit ratios should remain relatively unchanged through 2010 with a projected improvement in 2011 based on Fitch's assumptions for economic recovery and the cash flow improvement resulting from the commencement of operations at the Motiva refinery. In calculating its credit metrics, Fitch adjusts EBITDA to exclude equity earnings and include cash distributions from affiliates and debt to account for the 75% equity treatment assigned to TPP's $300 million junior subordinated notes. Fitch believes TPP will need to issue equity to help fund its estimated 2009 growth capital expenditure program of approximately $300 million. Projected weak distribution coverage will limit TPP's ability to retain cash to fund its needs and while there is adequate capacity on TPP's revolver, access to the equity capital markets will be needed for TPP to maintain credit quality consistent with its ratings category. Fitch is concerned that weak distribution coverage may prohibit TPP from increasing its distributions. While some of TPP's peers have successfully issued equity during periods of no distribution growth, the action may negatively affect the company's ability to issue equity. As the economy recovers and demand for refined products improves, distribution coverage and credit metrics are expected to improve. Fitch's ratings action does not take into account the proposed acquisition of TPP by Enterprise Products Partners, L.P. On April 29, EPD announced that it made an offer to TPP to acquire TPP at an exchange rate of 1.043 EPD limited partner units per TPP limited partner unit, plus $1 cash consideration per unit. Based on current TPP units outstanding the cash consideration would have been approximately $105 million. The offer represented a 4.8% premium to TPP's units based on the 10-day average closing prices on March 6, 2009, the business day prior to the date on which EPD made the proposal to TPP. EPD did not specify the consideration that would be paid for TPP's general partner interests. Immediately following EPD's announcement, TPP released a statement declining the proposal as presented but clarifying that a special committee of independent directors that are members of the Audit, Conflicts and Governance Committee of the TPP Board of Directors remains open to a possible acquisition by EPD, albeit at a different value. TPP creditors could benefit from a combination of the two companies through reduced operating risks due to the greater diversification of assets at the combined entity and better prospects for long-term cash flow growth given the scale of the combined assets and the potential for organic growth. Additionally, Fitch expects the combined company to have a stronger liquidity position and, possibly, a reduced cost of both equity and debt capital which could lead to better returns on TPP- initiated growth projects. Fitch will continue to monitor developments and will assess the impact of any potential transaction following the release of additional information from both EPD and TPP. TH PROPERTIES: Taps Montgomery McCracken as Bankruptcy Counsel -------------------------------------------------------------- TH Properties, L.P., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Pennsylvania for authority to employ Montgomery, McCracken, Walker & Rhoads, LLP, as counsel. MMWR will provide legal advice to the Debtors in connection with the Debtors' efforts to respond to their financial circumstances, including possible restructuring of their financial affairs and capital structure, and ac necessary, preparation of documents related to, and representation as debtors-in-possession in any reorganization cases. The Debtors propose to employ these professionals in the Chapter 11 cases: Robert C. Reeves as real estate consultant; and Amper Politziner, P.C., as accountants. The Debtors ask MMWR to take steps to avoid duplication of efforts. MMWR received (i) a $200,000 retainer for the advance payment of prepetition fees and expenses and (ii) $5,195 payment for filing fees. After application of fees and expenses, MMWR holds a $101,588 retainer balance in its escrow account. The hourly rates of MMWR personnel are: Partners $370 - $605 Of Counsel $325 - $600 Associates $215 - $375 Legal Assistants $115 - 225 The MMWR professionals principally involved in rendering services to the Debtors are Natalie D. Ramsey, Richard G. Placey, Joseph O'Neil, Jr. and Laurie A. Krepto. To the best of the Debtors' knowledge, MMWR is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Montgomery, McCracken, Walker & Rhoads, LLP 123 South Broad St. Philadelphia, PA 19109-1030 Tel: (215) 772-7354 Fax: 215-772-7620 About T.H. Properties, L.P. Philadelphia-based T.H. Properties, L.P., has 12 working developments in Pennsylvania and New Jersey. Timothy Hendricks and his brother Todd started the firm in 1992. T.H. Properties and its affiliates filed for Chapter 11 bankruptcy protection on April 30, 2009 (Bankr. E.D. Pa. Case No. 09-13201). Barry E. Bressler, Esq., at Schnader, Harrison, Segal & Lewis, LLP, and Natalie D. Ramsey, Esq., at Montgomery McCracken Walker and Rhoads LLP represent the Debtors in their restructuring efforts. T.H. Properties listed $100,000,001 to $500,000,000 in assets and $10,000,001 to $50,000,000 in debts. TIME WARNER: Fitch Affirms Preferred Membership Units at 'BB+' -------------------------------------------------------------- Fitch Ratings has affirmed the 'BBB' Issuer Default Rating for Time Warner Cable, Inc. and its indirect wholly owned subsidiary Time Warner Entertainment Co., L.P. Fitch also affirmed the individual issuer ratings of TWC and its subsidiaries. The Rating Outlook is Stable. Approximately $23.5 billion of debt outstanding as of March 31, 2009 is affected. Following the close of a series of transactions that formally separated TWC from Time Warner, Inc. on March 12 and the incurrence of additional debt to fund the $10.9 billion special dividend, TWC's leverage, as expected, swelled to 3.7 times as of March 31, 2009. While TWC's current credit profile is weak within the current rating category, Fitch expects that TWC will use a substantial portion of expected free cash flow generation to de- lever its balance sheet to a level more reflective of the company's current rating. Following the generation of nearly $1.8 billion of free cash flow in 2008(defined as cash flow from operations less capital expenditures), TWC produced free cash flow of approximately $372 million during first quarter-2009 (1Q'09) reflecting a 9.4% year over year increase. The free cash flow growth reported during 1Q is notable given the 70% year over year increase in cash interest costs experienced during the quarter. Fitch believes that TWC is positioned to generate material amounts of free cash flow during the ratings horizon. TWC's leverage metric will improve to the company's longer-term target of approximately 3.25x within a year from the close of the separation transaction. Overall, Fitch's ratings reflect TWC's strong competitive position as the second largest cable multiple systems operator (fourth largest multichannel video program distributor) in the United States, strong subscriber clustering profile and the company's growing revenue diversity owing to the success of TWC's triple play service offering and growing commercial business. Within the context of existing competitive pressures and weak economic conditions, the ratings incorporate Fitch's expectation that TWC will continue to generate solid operating metrics, sustainable EBITDA and free cash flow growth over Fitch's rating horizon. From Fitch's perspective, TWC's scale and system clustering provide the company with competitive advantages in terms of driving higher operating efficiencies through its cable plant. This takes cost out of customer premise equipment, lowering programming costs growth, and positions TWC to enhance its product offerings so that it can differentiate them from the competition's offering. Ratings concerns center on TWC's ability to maintain its relative competitive position given the changing competitive and economic environment, growing residential revenues beyond its core 'Triple Play' service offering, continued expansion into the commercial services market, efficiently manage its cable plant bandwidth to maximize desirable high-definition content and continuing to balance investing in its business with improving its overall credit profile. Following a 12% decline in RGU additions during all of 2008, TWC added 556,000 RGUs during 1Q'09 a 38% reduction when compared with the same period last year. Fitch expects that the current economic conditions and tougher competition will translate into slower RGU growth and that these factors will continue to weigh on TWC's operating results during 2009 and 2010 resulting in slower RGU (particularly phone subscribers due to low housing starts and increased wireless substitution), revenue and EBITDA growth as customers become increasingly price sensitive and less inclined to upgrade services. However, Fitch believes that TWC has sufficient capacity within the current ratings to withstand an expected moderation of its historical growth profile. TWC's liquidity position and overall financial flexibility are strong and are supported by expected free cash flow generation, nearly $3.3 billion of available borrowing capacity from the company's $5.9 billion revolver and favorable near term maturity schedule. TWC does not have a maturity scheduled until 2011, when the company's term loan and revolver are set to mature. The Stable Outlook reflects Fitch's expectation that TWC's credit protection metrics will strengthen now that the separation transactions are closed and that the company's financial policy will continue to reflect a 'BBB' rating. Additionally the Stable Outlook also factors in expectations that TWC's operating profile will not materially decline during the near term in the face of competition and slowing economic conditions. Fitch has affirmed these ratings for TWC and subsidiaries with a Stable Outlook: TWC -- IDR at 'BBB'; -- Senior unsecured notes at 'BBB'; -- Short-term IDR at 'F2'; -- Commercial paper at 'F2' Time Warner Entertainment Co., L.P.: -- IDR at 'BBB'; -- Senior unsecured notes at 'BBB'. Time Warner NY Cable, LLC -- Preferred membership units at 'BB+'. TLC VISION: Fires 3 Execs to Cut Costs; Conway Del Genio Steps In ----------------------------------------------------------------- As part of its efforts to reduce costs, TLC Vision Corporation has terminated the employment of three of its executive officers: * Steven P. Rasche, Chief Financial Officer; * Brian L. Andrew, General Counsel and Secretary; * Larry D. Hohl, President of Refractive Centers. William J. McManus, a managing director of Conway, Del Genio, Gries & Co. LLC, a financial advisory firm based in New York, has been appointed to the position of Interim Chief Financial Officer. Mr. Andrew's non-legal responsibilities as well as Mr. Hohl's responsibilities will be assumed by James B. Tiffany, President and Chief Operating Officer of TLC Vision. Mr. Andrew's legal responsibilities will be assumed on an interim basis by Company attorneys and external counsel. "We wish Steve, Brian and Larry well in their future endeavors, and thank them for their contributions to TLC Vision," commented Mr. Tiffany. "We continue to focus on the strategic direction of the company and we continue to work constructively with our lenders to develop a more flexible capital structure for the company going forward." About TLCVision Based in St. Louis, Missouri, TLC Vision Corporation -- http://www.tlcv.com/and http://www.tlcvision.com/-- is North America's premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality patient care. TLCVision maintains leading positions in Refractive, Cataract and Eye Care markets. TRONOX INC: Defaulted on $125-Mil. DIP Loan; Gets Waiver -------------------------------------------------------- According to Tiffany Kary at Bloomberg, Tronox Inc. defaulted on its $125 million in debtor-in-possession financing and seeks authority to enter into a waiver agreement with its lenders to avoid liquidation. Tronox warned that if it doesn't pay lenders fees to allow it the waiver, it won't be able to keep drawing on the DIP loan and its reorganization effort would collapse. In addition to the fees, the Company has agreed to speed up the process of selling the business, Bloomberg's Bill Rochelle said. As reported by the TCR on May 13, 2009, Tronox filed an adversary complaint against Kerr-McGee Corporation and its successor, Anadarko Petroleum Corporation, in its Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York. The complaint asserts that Kerr-McGee defrauded Tronox's creditors through its separation and spin-off of its former chemical subsidiary in 2006. Tronox seeks recovery for fraudulent transfers involving valuable oil and gas assets and massive actual and contingent environmental, tort, retiree and other liabilities. About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D. N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TVI CORP: DIP Facility Calls for 6-Months' Bankruptcy Process ------------------------------------------------------------- TVI Corporation is required under its debtor-in-possession credit facility with Branch Banking and Trust Company to: (a) deliver a draft disclosure statement and plan of reorganization within June 30, 2009 -- 90 days after the Petition Date, (b) file a disclosure statement and a plan of reorganization with the Bankruptcy Court, within July 30, 2009 -- 120 days after the Petition Date; (c) obtain court approval of a disclosure statement within August 29, 2009 -- 150 days after the Petition Date; and (d) confirm the plan within September 28, 2009 -- 180 days after the Petition Date. The DIP Lender may extend those dates, in the exercise of its sole and absolute discretion. TVI is also required to provide the DIP Lender with a new budget on or before June 15, 2009. The U.S. Bankruptcy Court for the District of Maryland entered on May 5, 2009, a final order approving the Agreement for PostPetition Financing, among the Debtors and Branch Banking and Trust and other financing documents among the parties, including: -- the Third Amended and Restated Revolving Credit Note dated as of April 6, 2009, -- the Second Amended and Restated Term Note dated as of April 6, 2009, and -- the Amendment to the Commercial Credit Agreement dated as of April 6, 2009. The DIP Credit Agreement provides for a revolving credit commitment to the Debtors of up to $19 million. The proceeds from the loans and other financial accommodations incurred under the DIP Credit Agreement will be used, among other things, to provide the Debtors with working capital for general corporate purposes. The DIP Credit Agreement contains events of default and includes certain financial covenants. Prior to the Petition Date, the BB&T made loans and advances to the Debtors secured by certain of the Debtors' assets and properties. As of March 31, 2009, the Debtors owed $10.2 million under the revolving loan portion and $17.1 million under the term loan portion of the prepetition facility. As reported in the Troubled Company Reporter on April 7, 2009, the salient term of the DIP agreement are: Interim Borrowing Limit: $1,800,000 above the prepetition revolver balance. Final Borrowing Limit: $19,000,000, subject to a borrowing base and other terms and conditions of the DIP financing documents. Interest Rate: Prime rate plus 2.0% per annum, subject to a floor of 5.25% per annum. Maturity: 180 days after the commencement of the Chapter 11 Case, subject to early termination events including, without limitation, the occurrence of one or more events of default and confirmation of plan of reorganization. Unused Line Fee: Quarterly fee of 0.25% per annum. Letter of Credit Fee: 2.0% per annum payable at opening and on each anniversary. Post Default Rate: 200 basis points per annum. Post-Petition Financing Commitment Fee: $25,000 payable at the time the interim financing order is entered. Servicing Fee: $500 per month. A full-text copy of the parties' April 2009 AGREEMENT FOR POST- PETITION FINANCING is available at no charge at: http://ResearchArchives.com/t/s?3d29 Headquartered in Glenn Dale, Maryland, TVI Corporation -- http://www.tvicorp.com/-- supplies military and civilian emergency first responder and first receiver products, personal protection products and quick-erect shelter systems. The products include powered air-purifying respirators, respiratory filters and quick-erect shelter systems used for decontamination, hospital surge systems and command and control. The users of these products include military and homeland defense/homeland security customers. The Company and two of its affiliates filed for Chapter 11 protection on April 1, 2009 (Bankr. D. Md. Lead Case No. 09-15677). Christopher William Mahoney, Esq., at Duane Morris LLP, represents the Debtors in their restructuring efforts. The Debtors tapped Buccino & Associates, Inc., as their financial advisors and consultants. TVI CORP: Files Schedules of Assets and Liabilities --------------------------------------------------- TVI Corporation disclosed in a Securities and Exchange Commission filing that on May 7, 2009, the Company and its debtor-affiliates filed Schedules of Assets and Liabilities and Statements of Financial Affairs, and Global Notes and Statements of Limitations, Methods and Disclaimer Regarding the Debtors' Schedules and Statements with the U.S. Bankruptcy Court for the District of Maryland. The Bankruptcy Materials contain unaudited summary financial information relating to the Debtors' assets and liabilities in the form required under the Bankruptcy Code and the rules and regulations. The Bankruptcy Materials contain financial information that has not been audited or reviewed by independent registered accountants and is not presented in accordance with generally accepted accounting principles. The information contained in the Bankruptcy Materials has been prepared in accordance with the Bankruptcy Code and the rules and regulations thereunder and was not prepared for the purpose of providing a basis for an investment decision relating to any securities of the Debtors. Entity Total Assets Total Debts ------ ------------ ----------- TVI Corporation $4,711,957.49 $29,528,521.16 Signature Special Event Services, Inc. $2,794,238.53 $29,916,926.78 CAPA Manufacturing Corp. $0.00 $27,606,957.02 Safety Tech International, Inc. $10,774,711.09 $29,701,745.22 TVI Corp. owns 100% of STI, SSES, and CAPA, respectively. A full-text copy of TVI Corporation's Schedules of Assets and Liabilities is available at no charge at: http://ResearchArchives.com/t/s?3d2a A full-text copy of TVI Corporation's Statement of Financial Affairs is available at no charge at: http://ResearchArchives.com/t/s?3d2b A full-text copy of Signature Special Event Services, Inc.'s Schedules of Assets and Liabilities is available at no charge at: http://ResearchArchives.com/t/s?3d2c A full-text copy of Signature Special Event Services, Inc.'s Statement of Financial Affairs is available at no charge at: http://ResearchArchives.com/t/s?3d2d A full-text copy of CAPA Manufacturing Corp.'s Schedules of Assets and Liabilities is available at no charge at: http://ResearchArchives.com/t/s?3d2e A full-text copy of CAPA Manufacturing Corp.'s Statement of Financial Affairs is available at no charge at: http://ResearchArchives.com/t/s?3d2f A full-text copy of Safety Tech International, Inc.'s Schedules of Assets and Liabilities is available at no charge at: http://ResearchArchives.com/t/s?3d30 A full-text copy of Safety Tech International, Inc.'s Statement of Financial Affairs is available at no charge at: http://ResearchArchives.com/t/s?3d31 Headquartered in Glenn Dale, Maryland, TVI Corporation -- http://www.tvicorp.com/-- supplies military and civilian emergency first responder and first receiver products, personal protection products and quick-erect shelter systems. The products include powered air-purifying respirators, respiratory filters and quick-erect shelter systems used for decontamination, hospital surge systems and command and control. The users of these products include military and homeland defense/homeland security customers. The Company and two of its affiliates filed for Chapter 11 protection on April 1, 2009 (Bankr. D. Md. Lead Case No. 09-15677). Christopher William Mahoney, Esq., at Duane Morris LLP, represents the Debtors in their restructuring efforts. The Debtors tapped Buccino & Associates, Inc. as their financial advisors and consultants. UNIPROP MANUFACTURED: Defers Interest Payment for Six Months ------------------------------------------------------------ Uniprop Manufactured Housing Communities Income Fund has entered into a Forbearance Agreement with its first mortgage lender. The Agreement calls for interest payments to be deferred for a six- month period. During this time, the Fund will attempt to close on the sale of Aztec Estates. Aztec Estates is presently under contract for sale at a price that will be sufficient to fully repay the first mortgage. If the Fund is unsuccessful in selling Aztec Estates or otherwise defaults on the Agreement, the lender will have the ability to record deeds on both Aztec Estates and Old Dutch Farms that will transfer ownership of the two properties to the lender. The default on the National City loan has been cured by the loan Guarantor. The Consulting Agreement with the Fund's Consultant was terminated by the Consultant. On March 30, 2009, the Board of Directors of the General Partner of the Fund unanimously approved a motion to accept a purchase offer from an unrelated third party for the sale of Aztec Estates in Margate, Florida. The Agreement of Purchase and Sale was subsequently entered into on March 31, 2009. Because the Fund is in default on its first mortgage loan, the lender also needed to consent to the sale. This consent was granted on the condition that the Fund enters into a forbearance agreement with the lender. Should the sale of Aztec Estates not close as contemplated, the lender will acquire ownership of the two properties. Should the sale of Aztec Estates close at the contracted price, the proceeds will be sufficient to satisfy the entire debt amount with the first mortgage lender. In this event, the Fund will continue to own its Old Dutch Farms property. About Uniprop Manufactured Headquartered in Birmingham, Michigan, Uniprop Manufactured Housing Communities Income Fund -- http://www.uniprop.com/-- a Michigan Limited Partnership, was originally formed to acquire, maintain, operate and ultimately dispose of income producing residential real properties consisting of four manufactured housing communities. The general partner of the partnership is P.I. Associates Limited Partnership. For the nine months ended September 30, 2008, the Partnership incurred a net loss from continuing operations of $150,381. As of September 30, 2008, the Partnership had an accumulated deficit of $5,027,579 and insufficient cash on hand to meet its expected liquidity requirements after the next two to three months. These factors raise substantial doubt as to the Partnership's ability to continue as a going concern. As of September 30, 2008, the Company's balance sheet showed total assets of $10,532,555 and total liabilities of $15,560,134, resulting in total partners' deficit of $5,027,579. US AIRWAYS: Pays $13 Mil.+ to Directors and Officers in 2008 ------------------------------------------------------------ US Airways disclosed in a Proxy Statement filed with the U.S. Securities and Exchange Commission that its executive compensation in 2008 reflected the intense operations focus and the efforts of its management team, which generated the airline's solid turnaround operational performance and moved it into first position in terms of on-time performance as measured by the Department of Transportation among the six largest airlines. US Airways related that its 2008 executive compensation also reflects the efforts of its management team to successfully raise liquidity during extraordinarily challenging economic and market conditions. Douglas W. Parker, chairman of the board and chief executive officer of US Airways Group, Inc, said the Company did not achieve the 2008 financial targets under its annual incentive program. He added a significant part of the value of the compensation for the Company's named executive officers is tied to the price of the Company's common stock, which was directly impacted by economic and market conditions in 2008. The Company's cash-settled long term incentive compensation program pays out based on its relative "total stockholder return," or "TSR," ranking over the three-year period ending in 2008 against a pre-defined airline peer group. Payouts in 2008 reflected the Company's ranking above the threshold TSR level but below target level. US Airways' top executives and their 2008 salary are: Name Position 2008 Salary ---- -------- ----------- W. Douglas Parker Chairman of the Board, CEO $5,426,702 J. Scott Kirby President 3,638,463 Robert D. Isom, Jr. Exec. Vice President, COO 2,041,980 Derek J. Kerr Exec. Vice President, CFO 1,258,120 Elise R. Eberwein Senior Vice President for People and Communications 1,213,718 Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -- http://www.usairways.com/-- primary business activity is the ownership of the common stock of US Airways Inc., Allegheny Airlines Inc., Piedmont Airlines Inc., PSA Airlines Inc., MidAtlantic Airways Inc., US Airways Leasing and Sales Inc., Material Services Company Inc., and Airways Assurance Limited LLC. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it listed $8,805,972,000 in total assets and $8,702,437,000 in total debts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * According to the TCR in September 2008, Michael Lowry, project manager for AVIATION WEEK's latest Top-Performing Companies, said USAir has a "high risk" for a bankruptcy filing in 2009. As reported by the Troubled Company Reporter on May 12, 2009, Fitch Ratings affirmed the Issuer Default Rating of US Airways Group, Inc. at 'CCC'. Fitch also revised LCC's Senior secured credit facility rating to 'B+/RR1' from 'B/RR1'; and Senior unsecured rating to 'C/RR6' from 'CC/RR6'. Fitch assigned a rating of 'C/RR6' to the company's new 7.25% senior unsecured convertible notes. The new notes mature in 2014 and have an initial conversion price of approximately $4.57 per share. Proceeds from the new notes will be used for general corporate purposes. Fitch no longer has a Rating Outlook on LCC. LCC's Rating Outlook had been 'Negative.' LCC's ratings reflect ongoing concern regarding the airline's liquidity position over the medium term, especially given the potential for prolonged weakness in demand driven by the global recession. US AIRWAYS: To Hold Annual Meeting of Stockholders on June 10 ------------------------------------------------------------- US Airways Group, Inc., disclosed in a prospectus filed with the Securities and Exchange Commission that it will hold its Annual Meeting of Stockholders on June 10, 2009 at 9:30 a.m., local time. The meeting will be held at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, at Four Times Square, in New York. The purpose of the Meeting is to consider and vote upon: (a) a proposal to elect four directors in Class I to serve until 2012 Annual Meeting of Stockholders; (b) a proposal to ratify the appointment of KPMG LLP as the independent registered public accounting firm of US Airways Group, Inc., for the fiscal year ending December 31, 2009; (c) a proposal to consider and vote upon a stockholder proposal relating to cumulative voting; (d) a proposal to approve an amendment to US Airways Group, Inc.'s amended and restated certificate of incorporation to increase its authorized capital stock; and (e) other business as properly may come before the Annual Meeting. Douglas W. Parker, chairman of the board and chief executive officer of US Airways Group, Inc., relates that if a stockholder does not expect to attend the meeting in person, he or she is requested to vote: * by telephone; * over the Internet; or * by completing, signing and dating the proxy card and returning it without delay. Voting by phone, Internet or mail will not prevent a stockholder from later revoking that proxy and voting in person at the Annual Meeting. If a stockholder wants to vote at the Annual Meeting but his/her shares are held by an intermediary, like a broker or bank, he/she will need to obtain proof of ownership as of April 13, 2009 and a proxy to vote the shares from the intermediary. About US Airways Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -- http://www.usairways.com/-- primary business activity is the ownership of the common stock of US Airways Inc., Allegheny Airlines Inc., Piedmont Airlines Inc., PSA Airlines Inc., MidAtlantic Airways Inc., US Airways Leasing and Sales Inc., Material Services Company Inc., and Airways Assurance Limited LLC. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it listed $8,805,972,000 in total assets and $8,702,437,000 in total debts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * According to the TCR in September 2008, Michael Lowry, project manager for AVIATION WEEK's latest Top-Performing Companies, said USAir has a "high risk" for a bankruptcy filing in 2009. As reported by the Troubled Company Reporter on May 12, 2009, Fitch Ratings affirmed the Issuer Default Rating of US Airways Group, Inc. at 'CCC'. Fitch also revised LCC's Senior secured credit facility rating to 'B+/RR1' from 'B/RR1'; and Senior unsecured rating to 'C/RR6' from 'CC/RR6'. Fitch assigned a rating of 'C/RR6' to the company's new 7.25% senior unsecured convertible notes. The new notes mature in 2014 and have an initial conversion price of approximately $4.57 per share. Proceeds from the new notes will be used for general corporate purposes. Fitch no longer has a Rating Outlook on LCC. LCC's Rating Outlook had been 'Negative.' LCC's ratings reflect ongoing concern regarding the airline's liquidity position over the medium term, especially given the potential for prolonged weakness in demand driven by the global recession. VERILINK CORP: Investment Banker Has No Liability ------------------------------------------------- WestLaw reports that the doctrine of in pari delicto barred the claims asserted by a liquidating trustee in a Chapter 11 case against an investment banking firm that provided services to the corporate debtor in connection with its acquisition of another company. The trustee could only assert claims against the firm in connection with the acquisition that the debtor could have asserted itself at the time of its bankruptcy filing, and such claims would have been barred under the doctrine based upon the knowledge and conduct of the debtor's officers and directors, which were fully imputable to the debtor under Alabama law. In re Verilink Corp., --- B.R. ----, 2009 WL 1241604 (Bankr. N.D. Ala.) The Honorable Jack Caddell issued his ruling on April 15, 2009, in an adversary proceeding (Bankr. N.D. Ala. Adv. Pro. No. 08-80072) brought by Darryl S. Laddin, in his capacity as the liquidating trustee, against Leigh S. Belden, Steven C. Taylor, Timothy Anderson, C.W. Smith, Powell Goldstein LLP, and Raymond James & Associates, Inc., arising out of the acquisition by Verilink of Larscom Incorporated. The Trustee contended that the acquisition of Larscom caused the financial demise of Verilink, and Raymond James brought a motion to dismiss the Trustee's complaint. The Trustee's claims against the officers and directors and Powell Goldstein are still active. About Verilink Corp. Verilink and its subsidiary Larscom Incorporated filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on April 9, 2006 (Bankr. N.D. Ala. Case Nos. 06-80566 and 06-80567). On December 7, 2006, the Company submitted a Second Amended Joint Plan of Reorganization to the Court for consideration. On January 31, 2007, the Court issued an order confirming the Plan in its entirety. The Plan was deemed effective January 31, 2007. The Debtors disclosed to the Bankruptcy Court $37,221,000 in total assets and $23,913,000 in total debts. The Plan provided for the orderly liquidation of the Company's assets to provide a distribution to its creditors. The Plan provides for the creation of a Liquidating Trust to transfer all remaining assets for liquidation, administration and distribution in accordance with the Plan. The assets transferred to the Liquidating Trust include, without limitation, all Causes of Action that the Debtors had or had power to assert immediately prior to the Order confirming the Plan. Since June 2006, Verilink has been inactive and currently exists as a publicly held "shell" company, whose sole purpose is to locate and consummate a merger or acquisition with a private entity. J. Hayden Kepner, Jr., Esq., at Arnal Golden Gregory LLP, in Atlanta, Georgia, represents the Liquidating Trustee. VINEYARD CHRISTIAN: Jeffrey Golden Appointed Chapter 11 Trustee --------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has approved the appointment of Jeffrey I. Golden as Chapter 11 trustee in Vineyard Christian Fellowship of Malibu's bankruptcy case. The Court also fixed the Chapter 11 trustee's bond at $10,000. Jeffrey I. Golden, Esq., a partner at Weiland, Golden, Smiley, Wang Ekvail & Strok, LLP, told the Court that he is not a creditor, equity security holder or insider of the Debtor and that he does no have an interest materially adverse to the interest of the estate. Malibu, California-based Vineyard Christian Fellowship of Malibu owns real property in Malibu, California, on which it operates a multi-purpose office building and recording studio. The company filed for Chapter 11 protection on September 12, 2008 (Bankr. C.D. Calif. Case No. 08-16951). James Stang, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtor as counsel. Reem J. Bello, Esq., at Weiland, Golden, Smiley, Wang Ekval & Strok, LLP, represents the Chapter 11 trustee as counsel. In its schedules, the Debtor listed total assets of $34,344,046 and total debts of $18,670,082. VITERRA INC: S&P Affirms Corporate Credit Rating at 'BB+' --------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its ratings, including its 'BB+' long-term corporate credit rating, on Regina, Sask.-based Viterra Inc. The outlook is positive. "The affirmation follows the company's announcement to acquire Australian grain handler ABB Grain Ltd.," said Standard & Poor's credit analyst Donald Marleau. The affirmation is predicated on the transaction being closed as currently proposed. "We believe that the ABB acquisition enhances Viterra's credit profile by strengthening its business with only a small increase in debt leverage. The acquisition expands the geographical diversity of Viterra's operations, deepens its penetration of markets in Asia, and mitigates some of the inherent seasonality of earnings and cash flow," Mr. Marleau added. Moreover, Viterra's credit measures will deteriorate only slightly, as the acquisition adds earnings and cash flow with what S&P see as only a modest increase in debt from ABB's revolving credit facilities. The ratings on Viterra reflect S&P's view of the company's strong positions in the Canadian and Australian grain handling and agribusiness industries, and solid and increasingly stable profitability, as well as the company's intermediate capital structure. In Standard & Poor's opinion, however, the ratings are constrained by execution risk related to Viterra's strategy of growth through acquisitions, exposure to cyclical crop conditions in western Canada and Australia, and the commodity nature of most of its business. S&P views the ABB acquisition as the continuation of Viterra's growth and diversification strategy. The company's acquisition of Agricore United in June 2007 consolidated Viterra's leading position in the Canadian grain handling and agribusiness industries, while the ABB acquisition extends the company geographically. Notwithstanding the pending integration of ABB, S&P expects that Viterra will maintain its acquisitive stance in this consolidating industry, not the least of which could include increasing its exposure to Australia. The positive outlook reflects what Standard & Poor's views as favorable industry trends and S&P's expectation that Viterra will preserve its investment-grade capital structure while executing and integrating complementary acquisitions, such as ABB. S&P could raise the ratings following the successful integration of acquisitions that enhance the company's market position and meaningfully reduce its exposure to western Canadian crops without materially weakening its capital structure. Alternatively, sizable acquisitions that result in weaker credit metrics or integration difficulties could put downward pressure on the ratings. As well, S&P could revise the outlook to stable if poor crop conditions or a change in market dynamics led to a material deterioration of the operating performance. VOYAGEUR EDUCATIONAL: Files for Chapter 7 Bankruptcy Protection --------------------------------------------------------------- Dianne Williamson at Telegram.com reports that Voyageur Educational Tours has filed for Chapter 7 bankruptcy protection. Citing Voyageur Educational's lawyer James Ehrhard, Telegram.com states that steep increases in airline fuel prices led to the Company's collapse. Mr. Ehrhard said that Voyageur Educational's bankruptcy affects 42 high schools, Telegram.com relates. According to Telegram.com, Voyageur Educational filed for bankruptcy after collecting from clients hundreds of thousands of dollars in fees that will likely never be recovered. Telegram.com, citing Detective Sgt. Gary Quitadamo, relates that detectives in Worcester launched a probe on Voyageur after receiving calls from irate teachers and parents from school districts in Florida, Louisiana, and Michigan. According to the report, Mr. Quitadamo said that Voyageur Educational continued to accept payments for trips in April, just weeks before filing for bankruptcy. The police, says Telegram.com, are directing victims to contact the Massachusetts attorney general's office. Worcester-based Voyageur Educational Tours had been in business for 18 years. It is owned by Paul Colella of Spencer and Joseph Cancelmo. WA BOTTING: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------ Eric Pryne at Seattle Times reports that W.A. Botting Co. has filed for Chapter 11 bankruptcy protection. Botting listed $1 million to $10 million in assets and $10 million to $50 million in debts owed to between 200 and 1,000 creditors. Seattle Times relates that Marc Barreca, who represents the Debtor in its restructuring efforts, said that the recent downturn in new construction was a factor in Botting's troubles, but the Company had lost money on several earlier jobs "so they were entering the downturn in not a great cash position." Citing Mr. Barreca, the report states that those losses drained the company's liquidity, which affected its ability to get bonding. Botting has a number of pending jobs. According to Seattle Times, Mr. Barreca said that owners will sell Botting in the near future, and that the Company's bank has agreed to provide financing to see the Company through the sale process. Botting has been on the market for several weeks, but there is no leading suitor yet, the news source points out. W.A. Botting Co. is Seattle's oldest locally owned mechanical contractor. It was founded in 1911 by Bert, Bill and Ernest Botting. It is licensed in Washington, Oregon, Idaho, Montana, and Alaska. WARNER MUSIC: S&P Changes Outlook to Stable, Affirms 'BB-' Rating ----------------------------------------------------------------- Standard & Poor's Rating Services revised its rating outlook on New York City-based Warner Music Group Corp. to stable from negative, reflecting reduced leverage and the elimination of covenant pressure. Existing ratings on the company, including the 'BB-' rating, were affirmed. S&P also assigned WMG Acquisition Corp.'s new $1.1 billion senior secured notes due 2016 an issue-level rating of 'BB' (one notch higher than the 'BB-' corporate credit rating on the company) with a recovery rating of '2', indicating S&P's expectation of substantial (70% to 90%) recovery for noteholders in the event of a payment default. "We revised the rating outlook to stable as a result of WMG using $300 million in cash to repay its term debt," said Standard & Poor's credit analyst Tulip Lim. "It also reflects the absence of covenant pressure because the company will be repaying all of its term loan and cancelling its revolving credit facility under its senior secured credit agreement." S&P believes that WMG intends to use proceeds from the new notes to repay borrowings under the senior secured credit facilities. S&P expects the notes to benefit from the same security and guarantee package securing the company's senior secured credit facilities and, as a result, to rank pari passu with them. In the second fiscal quarter ended March 31, 2009, revenue and EBITDA (excluding noncash stock compensation expense) decreased 16.5% and 14%, respectively. Revenue and EBITDA at the recorded music segment declined 18% and 34%, respectively, reflecting the timing of releases, as well as ongoing secular pressure on physical sales that has been exacerbated by the weak economy. Despite continued declines in physical sales, WMG has consistently gained U.S. market share from its competitors, increasing its album share to 21.8% in the quarter from 20.7% in the year-ago quarter. Lease-adjusted debt to EBITDA was 5.1x for the 12 months ended March 31, 2009--down from 5.5x in the previous-year period. Pro forma for the $300 million debt repayment, lease-adjusted leverage was 4.5x. EBITDA coverage of total interest expense was healthy at about 2.5x. EBITDA coverage of cash interest was better, at about 3.3x. The company must begin paying cash interest on its 9.5% holding company discount notes starting June 15, 2010, at which point the notes' accreted value will equal roughly $258 million. Cash interest expense will increase by roughly $12.25 million for the holding company notes' semiannual interest payment on June 15, 2010. WMG converted a very healthy 83% of EBITDA to discretionary cash flow for the 12 months ended March 31, 2009. Strong EBITDA conversion is a characteristic of the industry, although free cash flow in the first six months of 2009 further benefited from working capital swings, as cash usage in last year's holiday quarter was high due to physical sales associated with Josh Groban's "Noel" album. Assuming that EBITDA stabilizes, S&P expects that the company will continue to generate healthy discretionary cash flow, which can fluctuate with the timing of releases and less predictable royalty advances. WCI COMMUNITIES: SEC Charges Trader for Manipulate Stock Price -------------------------------------------------------------- The Securities and Exchange Commission charged a trader from Fort Myers, Florida, with fraud for writing and disseminating a fake press release that, when reported in the media, caused a company's stock price to soar and allowed him to reap thousands of dollars in illicit profits. The SEC alleges that Richard Karp created the phony press release as an announcement from WCI Communities, Inc., and he faxed it to media outlets in an effort to manipulate the stock price of the Florida-based luxury home building company, whose stock was traded on the New York Stock Exchange. The bogus press release falsely stated that WCI's board of directors received a buyout offer potentially worth $220 million. After the fake news was picked up by media outlets, WCI's share price increased dramatically and Mr. Karp quickly sold his shares to generate his illegal profits. "As alleged in our complaint, Karp actively traded in WCI's stock while hoping that a major shareholder would make a buyout offer," said David Nelson, Director of the SEC's Miami Regional Office. "When that didn't happen, Karp tried to take the news into his own hands to enrich himself and cheat the investing public." The SEC's complaint, filed in the U.S. District Court for the Middle District of Florida, alleges that Mr. Karp drafted and disseminated the bogus WCI press release so that he could sell his WCI stock at an inflated price. Mr. Karp had actively traded the stock of WCI throughout late 2007 and early 2008, and in early July he bought 42,000 shares of WCI for approximately $54,700. However, on July 14, WCI announced that it was no longer engaged in discussions with affiliates regarding alternative restructuring proposals. The SEC alleges that Mr. Karp attempted to drive up WCI's share price by creating and faxing the bogus press release to Southwest Florida and national media outlets on a Saturday evening, July 19. The fake news was consequently reported by at least four Fort Myers media outlets. WCI's share price increased dramatically the following Monday morning, July 21. Mr. Karp sold his shares in pre-market trading that day, generating approximately $29,000 in illegal profits. The SEC's complaint charges Mr. Karp with violating Section 17(a) of the Securities Act of 1933, Sections 9(a)(4) and 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The Commission seeks a permanent injunction, disgorgement of ill- gotten gains plus prejudgment interest and the imposition of a financial penalty. About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. (Pink Sheets:WCIMQ) -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company. It has operations in Florida, New York, New Jersey, Connecticut, Massachusetts, Virginia and Maryland. The company directly employs roughly 1,800 people, as well as roughly 1,800 sales representatives as independent contract employees. The company and 126 of its affiliates filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No. 08-11643 through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard, P.A, are the Debtors' local bankruptcy counsel. Lazard Freres & Co. represents the Debtors as financial advisors. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims & notice agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. WCI COMMUNITIES: Wants to Sell 18-Story Hotel and Condo Units ------------------------------------------------------------- WCI Communities, Inc., et al., ask the U.S. Bankrutpcy Court for the District of Delaware to approve bid procedures for the sale of certain real property and personal property located in Miami-Dade Country, Florida to Elevations Communities, LLC, free and clear of all liens and encumbrances, subject to higher and better offers. The Debtors propose the following timetable for the sale of the assets: Bid Procedures Objection Deadline: May 22, 2009, at 4:00 p.m. Bid Procedures Hearing Date : May 27, 2009, at 2:00 p.m. Sale Approval Objection Deadline : June 11, 2009, at 4:00 p.m. Initial Bid Deadline : The 2nd business day prior to the date of the auction Auction Date : June 17, 2009, at 1:00 p.m. Sale Hearing Date : June 18, 2009, at 2:00 p.m. The property to be sold includes: -- the Hotel Lot, the Restaurant lot, and Spa Lot, which include the 18-story luxury hotel known as the "The Regent Bal Harbour", a full service fine dining food and beverage facility and a full service spa facility. -- 51 hotel condominium units, inclusive of 7 ADA compliant units, one presidential suite and connecting studio unit. Elevation Communites has agreed to pay $14,600,000 for the property. The Debtors also ask the Court for authority to pay Elevation Communities a break-up fee $146,000 out of the proceeds of the consummated sale, if the property is sold to another buyer other than the purchaser. A full-text copy of the Asset Purchase Agreement is available at: http://bankrupt.com/misc/WCI.ElevationAPAPart1.pdf http://bankrupt.com/misc/WCI.ElevationAPAPart2.pdf About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. (Pink Sheets:WCIMQ) -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company. It has operations in Florida, New York, New Jersey, Connecticut, Massachusetts, Virginia and Maryland. The company directly employs roughly 1,800 people, as well as roughly 1,800 sales representatives as independent contract employees. The Company and 126 of its affiliates filed for Chapter 11 protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No. 08-11643 through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., and Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida, represents the Debtors as counsel. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, represent the Debtors as Delaware counsel. Lazard Freres & Co. LLC is the Debtors' financial advisor. Epiq Bankruptcy Solutions LLC is the claims and notice agent for the Debtors. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP; and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. WELLCARE HEALTH: S&P Changes Outlook to Positive; Keeps B- Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on WellCare Health Plans Inc. to positive from negative. At the same time, S&P affirmed its 'B-' counterparty credit rating on the company. "The positive outlook reflects our expectation that WellCare will sustain its business and financial profile development, which could improve the company's overall creditworthiness, given the recent resolution with various government agencies," said Standard & Poor's credit analyst Hema Singh. "It also reflects our expectation that WellCare will not be barred, by regulatory or legislative intervention, from operating in its key markets." Furthermore, the company's liquidity and financial flexibility are now less constrained because WellCare has no outstanding debt. And, the company has fully repaid its term loan and settled and/or set up accruals for most of the expected financial penalties/settlements that resulted from the government investigation. WellCare will pay $80 million as part of a deferred prosecution agreement with the U.S. Attorney's Office for the Middle District of Florida and the Florida Attorney General's Office to resolve allegations that it tried to defraud Florida's Medicaid and Healthy Kids programs under certain contracts (2004-2007). The company has paid most of the $80 million, and S&P expects it to pay the remaining $19.8 million no later than December 31, 2009. The company also has announced that it is engaged in resolutions with other government agencies, including the SEC, and has accrued $50 million for an additional estimated settlement. The rating reflects the concentration of WellCare's revenue in government-sponsored programs in the Medicaid and Medicare business segment and the risk of exposure to unfavorable regulatory/legislative intervention. The rating also reflects geographic market concentrations in Florida and Georgia, which constituted about 74% and 73% of Health Plan Medicaid and Medicare revenue and membership (excluding Part D members and revenue), respectively. WESTERN ALLIANCE: Moody's Gives Stable Outlook on 'Ba3' Rating -------------------------------------------------------------- Moody's Investors Service changed the rating outlook on Western Alliance Bancorporation and its subsidiary, Bank of Nevada, to stable from negative. Western Alliance Bancorporation has an issuer rating of Ba3. Bank of Nevada is rated D+ for bank financial strength and Ba1 for long-term deposits. The short-term ratings of the bank are Not Prime. The change in outlook was based on the improved financial flexibility the company obtained by raising approximately $200 million of common equity. This capital raise improves Western Alliance's tangible common equity, as defined by Moody's, by four percentage points to 10.1% of risk-weighted assets on a pro-forma basis as of March 31, 2009, while Tier 1 risk-based capital increases to an estimated 13.4% Moody's had downgraded Western Alliance's ratings on April 6, 2009 (BFSR to D+ from C-, and long-term deposits to Ba1 from Baa2) in response to the capital pressures it was likely to experience because of its large real estate lending concentration in some of the weakest U.S. markets, specifically Nevada, Arizona, and California. Western Alliance's improved capital position provides a significantly larger capital cushion to absorb expected losses. As noted, Moody's views the additional capital as a positive development, but remains concerned by both the company's concentration in commercial real estate in three of the most distressed real estate markets in the U.S., as well as the asset quality deterioration that Western Alliance has experienced through the first quarter of 2009. Western Alliance's CRE exposure, excluding owner-occupied properties, equals about $1.5 billion or 3 times TCE, including the additional equity. Over the last 5 quarters, Western Alliance's nonperforming assets, including 90 days past due, have steadily increased. In the first quarter of 2009, NPAs doubled for the second consecutive quarter to 30% of proforma TCE and reserves as of March 31, 2009. Net charge-offs in the first quarter were 1.7%, moderately higher than those in the prior quarter. In addition, Moody's said that it believes the expected rise in credit costs will significantly pressure Western Alliance's ability to return to profitability. This performance, together with uncertainty about the long-term franchise characteristics of a firm that has historically been focused on CRE, currently limits Moody's views on upward pressure for Western Alliance's ratings. Western Alliance Bancorporation, which is headquartered in Las Vegas, Nevada reported total assets of $5.3 billion as of March 31, 2009. WHITE ENERGY: Can Access Cash Securing West LB Loan Until July 3 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized, on an interim basis, White Energy, Inc., and its debtor-affiliates to: -- use cash securing repayment of loan from West LB AG until July 3, 2009; and -- grant adequate protection to the Debtors' prepetition secured parties. A final hearing on the Debtors' motion is set for May 29, 2009, at 1:00 p.m. Objections, if any are due on May 26, 2009, at 4:00 p.m. As of White Energy's petition date, the Debtors owed $300 million to West LB AG, New York Branch, as administrative agent, and the prepetition lenders under the amended and restated credit agreement dated as of July 31, 2006, as amended, in respect to loans made and letters of credit issued and other financial accommodations made. The Debtors pledged security interests in the Debtors' assets to the prepetition lenders. The Debtors are authorized to grant: -- adequate protection liens on any and all presently owned and hereafter acquired personal property, real property and all other assets of the Debtors; -- superpriority claims; and -- adquate protection payments About White Energy, Inc. Headquartered in Dallas, Texas, White Energy, Inc. -- http://www.white-energy.com/-- builds and acquires ethanol production projects. The company and its debtor-affiliates filed for Chapter 11 on May 7, 2009, (Bankr. D, Del. Lead Case No.: 09-11601) Michael R. Lastowski, Esq. at Duane Morris LLP represents the Debtors in their restructuring efforts. The Debtor proposes to employ The Garden City Group Inc. as claims agent. The Debtors' assets and debts both range from $100 million to $500 million. WHITE ENERGY: Can Hire Garden City as Claims and Noticing Agent --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized White Energy, Inc., and its debtor-affiliates to employ The Garden City Group, Inc. as claims, noticing and balloting agent. Garden City is expected to: i) transmit certain notices to creditors and parties in interest in the Chapter 11 cases; ii) receive, docket, scan, maintain and photocopy proofs of claim filed against the Debtors; iii) oversee the distribution of solicitation material; iv) receive, review and tabulate ballots; and v) assist the Debtors with administrative functions relating to the Chapter 11 Plan. The Debtors will pay Garden City monthly for services rendered during the preceding month. The court document did not specify the rates of the Garden City personnel. To reduce the administrative expenses, the Debtors are authorized to compensate Garden City without formal fee applications or other filings with this Court. To the best of the Debtors' knowledge, Garden City is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About White Energy, Inc. Headquartered in Dallas, Texas, White Energy, Inc. -- http://www.white-energy.com/-- builds and acquires ethanol production projects. The company and its debtor-affiliates filed for Chapter 11 on May 7, 2009 (Bankr. D, Del. Lead Case No. 09-11601). Michael R. Lastowski, Esq. at Duane Morris LLP represents the Debtors in their restructuring efforts. The Debtor proposes to employ The Garden City Group Inc. as claims agent. The Debtors' assets and debts both range from $100 million to $500 million. WILD WILLIES: Case Summary & 18 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Wild Willies Custom Accessories, Inc. dba WIld Wilies 1242 Green Street Conyers, GA 30012 Bankruptcy Case No.: 09-72858 Chapter 11 Petition Date: May 19, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Kevin J. Cowart, Esq. Morris Lober & Dobson LLC 1511 Eatonton Road, Suite 202 Madison, Georgia 30650 Tel: (706) 342-8014 Total Assets: $1,109,401 Total Debts: $1,186,422 A full-text copy of the Debtor's petition, including a list of its 18 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb09-72858.pdf The petition was signed by James W. Jordan, CEO and president of the Company. WP EVENFLO: S&P Cuts Issue-Level Rating on Facilities to 'CCC' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its issue- level rating and revised its recovery rating on WP Evenflo Holdings Inc.'s first-lien senior secured debt facilities. S&P lowered the issue-level rating on WP Evenflo's first-lien facilities, consisting of a $40 million revolving credit facility and $120 million term loan (about $115 million currently outstanding) to 'CCC' (the same as the corporate credit rating), from 'CCC+'. In addition, S&P revised the recovery rating to '3' from '2'. The '3' recovery rating indicates the expectation of meaningful (50%-70%) recovery in the event of a payment default. The 'CC' issue-level rating on the $45 million second-lien term loan remains unchanged (two notches lower than the corporate credit rating) with a recovery rating of '6', indicating that S&P would expect negligible (0%-10%) recovery in the event of a payment default. "However, S&P is now withdrawing the corporate credit, and senior secured first and second-lien debt ratings on the company due to lack of information," said Standard & Poor's credit analyst Susan Ding. The rating downgrades on the first-lien facilities are the result of S&P's downward revision of the valuation multiple S&P used in its simulated default scenario to arrive at an estimated emergence enterprise value. S&P lowered the multiple to 4x from 6x, reflecting concerns pertaining to brand valuations following several product recalls. WR GRACE: Court to Rule on Default Interest at Plan Hearing ----------------------------------------------------------- Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court for District of Delaware entered a decision, ruling that the bank lenders aren't entitled to a default rate of interest insofar as the allowance of the claim is concerned. She said she won't decide until the confirmation hearing on W.R. Grace & Co.'s proposed reorganization plan whether the standards for approving a Chapter 11 plan require paying a higher interest than what is called for in W.R. Grace's proposed plan. While the Court's decision on May 19 favored W.R. Grace, the issue still could blow up approval of the reorganization plan intended to end a more than eight-year bankruptcy scheduled for a final phase of confirmation hearings in September, Bloomberg's Bill Rochelle said. The bank lenders, who will be paid in full under the Plan, contend that they are entitled to the default rate of interest called for in their loan agreements. The Plan offers to pay post-bankruptcy interest at 6.09 percent to bank lenders through December 2005 and at a floating prime rate for later periods. The bank lenders contend that they are entitled to more interest. Judge Fitzgerald noted how bankruptcy law says the so-called legal rate of interest is required if unsecured creditors are to be paid in full. The judge said that the default rate in the loan agreement wouldn't be the legal rate, which likely would be smaller. Judge Fitzgerald said that the banks still might win when she decides whether the plan satisfies confirmation standards known as the best interests and the fair and equitable tests. The plan is based a settlement from April 2008 resolving A full-text copy of the proposed Disclosure Statement for Proposed Joint Plan of Reorganization of W. R. Grace & Co. and its debtor subsidiaries dated as of February 27, 2009, is available at no charge at: http://ResearchArchives.com/t/s?3a0a A full-text copy of the Proforma and Prospective Financial Information is available at no charge at: http://ResearchArchives.com/t/s?3a0b Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Court scheduled a two-phase confirmation hearing: -- Hearings on June 22 to 25 to deal with objections by insurance companies; and -- Hearings on September 8 to 11 for objections related to claims from the facility in Libby, Montana. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) YELLOWSTONE CLUB: Settles With Credit Suisse to Permit Sale ----------------------------------------------------------- Yellowstone Mountain Club LLC reached a settlement with the secured lender Credit Suisse Group AG, the official committee of unsecured creditors and private-equity investor CrossHarbor Capital Partners LLC. Pursuant to the settlement, the purchase price for Yellowstone's assets will be raised to $115 million. CrossHarbor, the buyer, will provide a note of $80,000,000 and pay $35 million in cash. Credit Suisse and other prepetition lenders will have the right to invest in CrossHarbor's acquisition through a purchase of up to 15% of the equity capitalization, estimated to be $30 million. The U.S. Bankruptcy Court for the District of Montana began hearings on Yellowstone's Chapter 11 plan on May 18. The Court has directed the Debtors to modify their Plan to incorporate the terms of the Settlement. The Debtors will also re-solicit votes from certain classes in light of the developments. A full-text copy of the Settlement is available for free at: http://bankrupt.com/misc/Yellowstone_CS_Termsheet.pdf As reported by the TCR on May 15, 2009, Credit Suisse provided secured loans to Yellowstone for $375,000,000. Credit Suisse contemplated in acquiring the assets of Yellowstone with a credit bid. However, in light of Credit Suisse's "overreaching and predatory lending practices" that caused the Company to incur heavy debt, the Bankruptcy Court ruled that Credit Suisse's allowed secured claim of $232 million is equitably subordinated to: (1) CrossHarbor's debtor-in-possession financing; (2) approved administrative fees and costs of the bankruptcy estate; and (3) the allowed claims of unsecured creditors. Located near Big Sky, Montana, Yellowstone Club -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Mountain Club LLC and its affiliates filed for Chapter 11 on November 10, 2008 (Bankr. D. Montana, Case No. 08- 61570). The Company's owner affiliate Edra D. Blixseth, filed for Chapter 11 on March 27, 2009 (Case No. 09-60452). Connie Sue Martin, Esq., David A. Ernst, Esq., Lawrence R Ream, Esq., Richard G. Birinyi, Esq., Stephen Deatherage, Esq., Thomas L. Hutchinson, Esq., and Troy Greenfield, Esq., at Bullivant Houser Bailey PC; and James A. Patten, Esq., at Patten, Peterman, Bekkedahl & Green PLLC, represent the Debtors as counsel. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors in the case are represented by J. Thomas Beckett, Esq., and David P. Billings, Esq., at Parsons, Behle and Latimer, as counsel, and James H. Cossitt, Esq., at local counsel. Credit Suisse, the prepetition first lien lender, is represented by Skadden, Arps, Slate, Meagher & Flom. YOUNG BROADCASTING: Panel Wants Allen & Co. as Financial Advisors ----------------------------------------------------------------- The official committee of unsecured creditors of Young Broadcasting Inc. asks the U.S. Bankruptcy Court for the Southern District of New York for authority to retain Allen & Company LLC as its financial advisors, nunc pro tunc to March 3, 2009. Allen will assist the committee both in evaluating any proposed sale or plan of reorganization proposed by the Debtors and in possibly evaluating an alternative restructuring strategy. The Committee and Allen have agreed to this compensation structure: a) Monthly Fees: Allen will be paid in advance a nonrefundable monthly cash fee of $150,000. The first payment will be made upon approval of the Court and will include a monthly fee for each month from the Retention Date through the month in which payment is made. b) Restructuring Fee: The Debtors will pay an additional cash fee of $1 million dollars upon the confirmation of any restructuring, sale of substantial assets or similar transaction; provided, however, that in the event of the confirmation of a plan in which the unsecured creditors play a significant role and participate materially in providing new capital, the Restructuring Fee will instead be $2 million. c) New Capital: Should the Debtors seek to engage Allen in connection with the raising of debt or equity capital from any person who is not an unsecured creditor of the Debtors, said engagement will be the subject of an additional written agreement between Allen and one or more of the Debtors, with terms, including with respect to fees to be customary for an engagement of this type. Thomas Kuhn, a managing director at Allen, assures the Court that it does not hold any interest adverse to the Debtors or their estates, and that it is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. About Young Broadcasting Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV - Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV -Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO-TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV - Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Company and its affiliates filed for Chapter 11 protection on February 13, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10645). Jo Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP, represents the Debtors in their restructuring efforts. Andrew N. Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP, represents the official committee of unsecured creditors as counsel. The Debtors selected UBS Securities LLC as consultant; Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker as chief restructuring officer. At February 28, 2009, the Debtors had $334.9 million in total assets and $936.7 million in total liabilities. YOUNG BROADCASTING: Still Lacks Lead Bidder for June 19 Auction --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved on April 2, 2009, bidding procedures for either (a) a potential refinancing or equity investment in Young Broadcasting Inc. in support of a plan of reorganization, or (b) the sale, as a going concern, of all or part of the Debtors' businesses and/or assets. Pursuant to the bid procedures, the Debtors would select a stalking horse bidder, in advance of the June 17 deadline for competing bids and the June 19 auction. According to a May 18 report by Bloomberg's Bill Rochelle, Young Broadcasting said in a court filing last week that it still hasn't selected a lead bidder to submit the offer at the auction for the business June 19. Under the court-approved procedures, the stalking-horse bidder will be entitled to a $300,000 expense reimbursement and a break-up fee of 3% of the purchase price. Young, Bill Rochelle relates, also said it hasn't yet "finalized" the terms of a Chapter 11 plan. The company nevertheless wants the exclusive right to propose a plan extended until September 14. Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV - Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV -Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO- TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV-Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Company and its affiliates filed for Chapter 11 protection on February 13, 2009 (Bankr. S.D. N.Y. Lead Case No.:09-10645). Jo Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP, represents the Debtors in their restructuring efforts. Andrew N. Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP, represents the Official Committtee of Unsecured Creditors as counsel. The Debtors selected UBS Securities LLC as consultant; Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker chief restructuring officer. The Debtors listed total assets of $575,600,070 and total debts of $980,425,190. * 2 Illinois Banks Closing Hike 2009 Failed Banks to 36 ------------------------------------------------------- Bank closures have reached thirty 36 after two banks from Illinois, Strategic Capital Bank, in Champaign, and Citizens National Bank, in Macomb, were closed May 22. BankUnited, FSB, in Coral Gables, Florida, was closed Thursday, and bought by an investor group. While Citizens National and Strategic Capital were bought by Illinois banks, BankUnited was bought by an investor group led by WL Ross. Bank United, FSB, with assets of $12.80 billion and deposits of $8.6 billion as of May 2, 2009, has been the largest bank closed this year. John Kanas and a consortium of investors that include WL Ross & Co. LLC; Carlyle Investment Management L.L.C.; Blackstone Capital Partners V L.P.; Centerbridge Capital Partners, L.P. LeFrak Organization, Inc; The Wellcome Trust; Greenaap Investments Ltd.; and East Rock Endowment Fund, have signed a deal with FDIC to buy $12.7 billion in assets and $8.3 billion in nonbrokered deposits from BankUnited, FSB. The buyers will also provide $900 million in new capital for their purchased bank, to be named BankUnited, a newly chartered federal savings bank. Wilbur Ross, founder of WL Ross, had said in September 2008 that he expects as many as a thousand U.S. bank could close. The bank closings in 2009 have way outpaced 2008 levels -- there were only 25 closed banks that year. The number of closed banks could rise further this year as there were 252 financial institutions in the Federal Deposit Insurance Company's "Problem List" as of the end of 2008, compared with only 76 in the prior year. WL Ross made his fortune making investments on distressed industries. He has restructured $200 billion in failed companies' assets around the world, starting with the purchase of bankrupt Bethlehem Steel Corp to form a merger with his International Steel Group, then sell the company to Indian mogul Lakshmi Mittal to for $4.5 billion. $250,000 Insurance Until 2013 The FDIC said May 20 that deposits at its insured institutions are now insured up to at least $250,000 per depositor through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except for IRAs and other certain retirement accounts which will remain at $250,000 per depositor. Bloomberg reported last week that the FDIC board was scheduled to meet May 22 to consider an emergency assessment to replenish its insurance fund, which has been depleted by bank failures in 16 months. The FDIC expects bank failures could cost $65 billion through 2013. The assessment the board proposed Feb. 27 was 20 cents per $100 in insured deposits. Meanwhile, the FDIC Office of Public Affairs, clarified on May 15 that Chairman Sheila Bair, in an interview with Bloomberg, did not suggest that the federal government will remove the CEOs. The FDIC statement said that Ms. Bair only said that management changes could happen based on the capital plans that an institution must submit to the government. She did not refer to CEOs specifically and the comment was in the context of capital plans submitted by the institutions, according to the release. Failed Banks List The banks closed this year by regulators are: Bank Closing Date ---- ------------ Citizens National Bank, Macomb, IL 05/22/09 Strategic Capital Bank, Champaigne IL 05/22/09 BankUnited FSB, Macomb, IL 05/21/09 Westsound Bank, Bremerton, WA 05/08/09 America West Bank, Layton, UT 05/01/09 Citizens Community Bank, Ridgewood, NJ 05/01/09 Silverton Bank, N.A., Atlanta, GA 05/01/09 First Bank of Idaho, Ketchum, ID 04/24/09 First Bank of Beverly Hills, Calabasas, CA 04/24/09 Heritage Bank, Farmington Hills, MI 04/24/09 American Southern Bank, Kennesaw, GA 04/24/09 Great Basin Bank of Nevada, Elko, NV 04/17/09 American Sterling Bank, Sugar Creek, MO 04/17/09 New Frontier Bank, Greeley, CO 04/10/09 Cape Fear Bank, Wilmington, NC 04/10/09 Omni National Bank, Atlanta, GA 03/27/09 TeamBank, National Association, Paola, KS 03/20/09 Colorado National Bank, Colorado Springs, CO 03/20/09 FirstCity Bank, Stockbridge, Georgia 03/20/09 Freedom Bank of Georgia, Commerce, GA 03/06/09 Security Savings Bank, based in Henderson, Nevada 02/27/09 Heritage Community Bank, Glenwood, Ill. 02/27/09 Silver Falls Bank, Silverton, OR 02/20/09 Pinnacle Bank of Oregon, Beaverton, OR 02/13/09 Corn Belt Bank and Trust Company, Pittsfield, IL 02/13/09 Riverside Bank of the Gulf Coast, Cape Coral, FL 02/13/09 Sherman County Bank, Loup City, NE 02/13/09 County Bank, Merced, CA 02/06/09 Alliance Bank, Culver City, CA 02/06/09 FirstBank Financial Services, McDonough, GA 02/06/09 Ocala National Bank, Ocala, FL 01/30/09 Suburban Federal Savings Bank, Crofton, MD 01/30/09 MagnetBank, Salt Lake City, UT 01/30/09 1st Centennial Bank, Redlands, CA 01/23/09 Bank of Clark County, Vancouver, WA 01/16/09 National Bank of Commerce, Berkeley, IL 01/16/09 The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of the closed banks: Buyer's FDIC Cost Assumed to Insurance Deposits Fund Closed Bank Buyer (millions) (millions) ----------- ---- -------- ----- Citizens National Morton Community $200.0 $106.0 Strategic Capital Midland States Bank $471.0 $173.0 BankUnited FSB WL Ross-Led Investors $8,300.0 $4,900.0 Westsound Bank Kitsap Bank $295.1 $108.0 America West Cache Valley Bank $284.1 $119.4 Citizens Community N.J. Community Bank $43.7 $18.1 Silverton Bank -- No Buyer -- - $1,300.0 First Bank of Id US Bank, Minneapolis $261.2 $191.2 First Bank of BH -- No Buyer -- - $394.0 Heritage Bank Level One Bank $101.7 $71.3 American Southern Bank of North Georgia $55.6 $41.9 Great Basin Bank Nevada State Bank $221.4 $42.0 American Sterling Metcalf Bank, Lee Summit $171.9 $42.0 New Frontier Bank -- No Buyer -- - $670.0 Cape Fear Bank First Federal, Charleston $403.0 $131.0 Omni National -- No Buyer -- - $290.0 TeamBank, N.A. Great Southern Bank $474.0 $98.0 Colorado National Herring Bank, Amarillo, TX $82.7 $9.0 FirstCity Bank -- No Buyer -- - $100.0 Freedom Bank Nat'l Georgia Bank, Lavonia $161.0 $36.2 Security Savings Bank of Nevada, L.V. $175.2 $59.1 Heritage Community MB Financial Bank, N.A. $218.6 $41.6 Silver Falls Citizens Bank $116.3 $50.0 Pinnacle Bank Washington Trust Bank $64.0 $12.1 Corn Belt Bank Carlinville Nat'l Bank $142.4 $100.0 Riverside Bank TIB Bank $281.4 $201.5 Sherman County Heritage Bank $85.1 $28.0 County Bank Westamerica Bank $1,300.0 $135.0 Alliance Bank California Bank & Trust $951.0 $206.0 FirstBank Regions Bank $279.0 $111.0 Ocala National CenterState Bank $205.2 $99.6 Suburban Federal Bank of Essex $302.0 $126.0 MagnetBank -- No Buyer -- - $119.4 1st Centennial First California Bank $302.1 $227.0 Bank of Clark Umpqua Bank $523.6 $120-145 Nat'l Commerce Republic Bank of Chicago $402.1 $97.1 A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html 252 Banks in Problem List No advance notice is given to the public when a financial institution is closed. The FDIC has a "problem list" of banks, although the list is not divulged to the public. As previously reported by the TCR, the number of FDIC-insured commercial banks and savings institutions reporting financial results fell to 8,305 at the end of 2008, down from 8,384 at the end of the third quarter. The net decline of 79 institutions was the largest since the first quarter of 2002. Fifteen new institutions were chartered in the fourth quarter, the smallest number in any quarter since the third quarter of 1994. Seventy- eight insured institutions were absorbed into other institutions through mergers, and 12 institutions failed during the quarter (five other institutions received FDIC assistance in the quarter). For all of 2008, there were 98 new charters, 292 mergers, 25 failures and 5 assistance transactions. Five institutions with total assets of $1.3 trillion were assisted by the FDIC in 2008. This is the largest number of failed and assisted institutions in a year since 1993, when there were 50. At year-end, 252 insured institutions with combined assets of $159 billion were on the FDIC's "Problem List." These totals are up from 171 institutions with $116 billion in assets at the end of the third quarter, and 76 institutions with $22 billion in assets at the end of 2007. The Problem List's 252 institutions at the end of the fourth quarter of 2008 is the largest number since the middle of 1995. "Problem" institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. They are rated by the FDIC or Office of the Thrift Supervision as either a "4" or "5", based on a scale of 1 to 5 in ascending order of supervisory concern. A copy of FDIC's Quarterly Banking Profile is available at: http://researcharchives.com/t/s?3aa5 * BOND PRICING -- For the Week From May 18 to 22, 2009 ------------------------------------------------------ Company Coupon Maturity Bid Price ------- ------ -------- --------- ACCURIDE CORP 8.50 % 2/1/2015 30.00 ADVANTA CAP TR 8.99 % 12/17/2026 9.50 AHERN RENTALS 9.25 % 8/15/2013 35.50 ALERIS INTL INC 9.00 % 12/15/2014 1.50 ALERIS INTL INC 10.00 % 12/15/2016 2.75 ALION SCIENCE 10.25 % 2/1/2015 28.50 ALLIED CAP CORP 6.00 % 4/1/2012 43.90 ALLIED CAP CORP 6.63 % 7/15/2011 46.60 AMBASSADORS INTL 3.75 % 4/15/2027 31.63 AMER AXLE & MFG 5.25 % 2/11/2014 26.00 AMER CAP STRATEG 8.60 % 8/1/2012 46.50 AMER GENL FIN 3.10 % 6/15/2009 73.60 AMER GENL FIN 3.88 % 10/1/2009 91.27 AMER GENL FIN 4.00 % 6/15/2009 98.11 AMER GENL FIN 4.30 % 6/15/2009 88.00 AMER GENL FIN 4.35 % 6/15/2009 90.00 AMER GENL FIN 4.35 % 6/15/2009 80.17 AMER GENL FIN 4.88 % 5/15/2010 80.38 AMER GENL FIN 5.00 % 10/15/2010 35.00 AMER GENL FIN 5.00 % 12/15/2010 36.00 AMER GENL FIN 5.00 % 1/15/2011 40.00 AMER GENL FIN 5.10 % 6/15/2009 98.18 AMER GENL FIN 5.15 % 6/15/2009 98.18 AMER GENL FIN 5.25 % 6/15/2009 95.00 AMER GENL FIN 5.25 % 6/15/2009 98.18 AMER GENL FIN 5.30 % 6/15/2009 98.22 AMER GENL FIN 5.35 % 7/15/2010 50.00 AMER GENL FIN 5.38 % 9/1/2009 97.00 AMER GENL FIN 5.50 % 6/15/2009 98.20 AMER GENL FIN 8.13 % 8/15/2009 93.56 AMER INTL GROUP 4.70 % 10/1/2010 73.40 AMER MEDIA OPER 8.88 % 1/15/2011 41.88 AMR CORP 9.20 % 1/30/2012 48.00 AMR CORP 10.40 % 3/15/2011 46.00 ANTHRACITE CAP 11.75 % 9/1/2027 20.50 ANTIGENICS 5.25 % 2/1/2025 25.50 APPLETON PAPERS 9.75 % 6/15/2014 35.06 ARCO CHEMICAL CO 9.80 % 2/1/2020 24.26 ARCO CHEMICAL CO 10.25 % 11/1/2010 23.00 ARVINMERITOR 8.75 % 3/1/2012 43.50 AVENTINE RENEW 10.00 % 4/1/2017 12.00 BALLY TOTAL FITN 14.00 % 10/1/2013 2.00 BANK NEW ENGLAND 8.75 % 4/1/1999 10.13 BANK NEW ENGLAND 9.88 % 9/15/1999 9.70 BANKUNITED CAP 3.13 % 3/1/2034 4.75 BARRINGTON BROAD 10.50 % 8/15/2014 20.00 BEAZER HOMES USA 4.63 % 6/15/2024 50.63 BEAZER HOMES USA 8.38 % 4/15/2012 50.25 BEAZER HOMES USA 8.63 % 5/15/2011 59.00 BELL MICROPRODUC 3.75 % 3/5/2024 24.00 BLOCKBUSTER INC 9.00 % 9/1/2012 48.50 BORDEN INC 8.38 % 4/15/2016 18.62 BORDEN INC 9.20 % 3/15/2021 23.00 BOWATER INC 6.50 % 6/15/2013 16.00 BOWATER INC 9.38 % 12/15/2021 16.56 BOWATER INC 9.50 % 10/15/2012 15.25 BRODER BROS CO 11.25 % 10/15/2010 30.13 BROOKSTONE CO 12.00 % 10/15/2012 38.00 C&D TECHNOLOGIES 5.50 % 11/15/2026 44.66 CALLON PETROLEUM 9.75 % 12/8/2010 34.00 CAPMARK FINL GRP 7.88 % 5/10/2012 30.00 CAPMARK FINL GRP 8.30 % 5/10/2017 25.00 CASE NEW HOLLAND 6.00 % 6/1/2009 100.00 CCH I LLC 9.92 % 4/1/2014 0.75 CCH I LLC 10.00 % 5/15/2014 1.00 CCH I LLC 11.13 % 1/15/2014 0.75 CCH I LLC 11.75 % 5/15/2014 0.75 CCH I LLC 12.13 % 1/15/2015 1.06 CCH I LLC 13.50 % 1/15/2014 1.00 CCH I/CCH I CP 11.00 % 10/1/2015 10.00 CCH I/CCH I CP 11.00 % 10/1/2015 11.50 CHAMPION ENTERPR 2.75 % 11/1/2037 24.25 CHARTER COMM HLD 9.92 % 4/1/2011 0.56 CHARTER COMM HLD 10.00 % 5/15/2011 1.00 CHARTER COMM HLD 11.75 % 5/15/2011 1.50 CHARTER COMM HLD 12.13 % 1/15/2012 1.50 CHARTER COMM HLD 13.50 % 1/15/2011 1.50 CHARTER COMM INC 6.50 % 10/1/2027 14.63 CIT GROUP INC 4.50 % 7/15/2009 91.00 CIT GROUP INC 4.85 % 12/15/2011 40.00 CIT GROUP INC 4.88 % 6/15/2013 34.00 CIT GROUP INC 5.05 % 11/15/2010 55.00 CIT GROUP INC 5.05 % 7/15/2013 33.60 CIT GROUP INC 5.30 % 7/15/2014 26.50 CIT GROUP INC 5.40 % 9/15/2013 30.00 CIT GROUP INC 6.25 % 2/15/2010 81.05 CIT GROUP INC 6.60 % 2/15/2011 60.00 CIT GROUP INC 7.60 % 2/15/2013 39.25 CLAIRE'S STORES 10.50 % 6/1/2017 32.00 CLEAR CHANNEL 4.40 % 5/15/2011 22.00 CLEAR CHANNEL 4.50 % 1/15/2010 54.75 CLEAR CHANNEL 4.90 % 5/15/2015 14.25 CLEAR CHANNEL 5.00 % 3/15/2012 19.00 CLEAR CHANNEL 5.50 % 9/15/2014 13.50 CLEAR CHANNEL 5.50 % 12/15/2016 14.00 CLEAR CHANNEL 5.75 % 1/15/2013 14.00 CLEAR CHANNEL 6.25 % 3/15/2011 31.50 CLEAR CHANNEL 6.88 % 6/15/2018 15.00 CLEAR CHANNEL 7.25 % 10/15/2027 14.00 CLEAR CHANNEL 7.65 % 9/15/2010 40.00 CLEAR CHANNEL 10.75 % 8/1/2016 21.38 COMMERCIAL VEHIC 8.00 % 7/1/2013 32.10 COMPREHENS CARE 7.50 % 4/15/2010 75.13 COMPUCREDIT 3.63 % 5/30/2025 34.50 CONEXANT SYSTEMS 4.00 % 3/1/2026 29.75 CONSTAR INTL 11.00 % 12/1/2012 6.00 COOPER-STANDARD 7.00 % 12/15/2012 19.00 COOPER-STANDARD 8.38 % 12/15/2014 12.09 CREDENCE SYSTEM 3.50 % 5/15/2010 40.73 DAE AVIATION 11.25 % 8/1/2015 35.25 DECODE GENETICS 3.50 % 4/15/2011 5.50 DELPHI CORP 6.50 % 8/15/2013 1.50 DELPHI CORP 8.25 % 10/15/2033 0.60 DELTA PETROLEUM 3.75 % 5/1/2037 38.00 DEX MEDIA INC 8.00 % 11/15/2013 15.50 DEX MEDIA INC 9.00 % 11/15/2013 13.19 DEX MEDIA INC 9.00 % 11/15/2013 16.25 DEX MEDIA WEST 8.50 % 8/15/2010 61.00 DEX MEDIA WEST 9.88 % 8/15/2013 24.50 DUNE ENERGY INC 10.50 % 6/1/2012 42.00 EDDIE BAUER HLDG 5.25 % 4/1/2014 20.25 ENCOMPASS SERVIC 10.50 % 5/1/2009 5.00 ENERGY PARTNERS 8.75 % 8/1/2010 35.00 EPIX MEDICAL INC 3.00 % 6/15/2024 19.13 FAIRPOINT COMMUN 13.13 % 4/1/2018 33.00 FIBERTOWER CORP 9.00 % 11/15/2012 40.50 FINISAR CORP 2.50 % 10/15/2010 58.25 FINLAY FINE JWLY 8.38 % 6/1/2012 3.09 FIRST DATA CORP 5.63 % 11/1/2011 44.00 FLOTEK INDS 5.25 % 2/15/2028 25.25 FONTAINEBLEAU LA 11.00 % 6/15/2015 23.00 FORD MOTOR CRED 4.80 % 7/20/2009 91.09 FORD MOTOR CRED 5.00 % 8/20/2009 90.28 FORD MOTOR CRED 5.50 % 6/22/2009 95.00 FORD MOTOR CRED 5.50 % 2/22/2010 79.32 FORD MOTOR CRED 5.70 % 3/22/2010 72.50 FORD MOTOR CRED 7.00 % 7/1/2010 71.50 FORD MOTOR CRED 7.72 % 5/17/2010 70.53 FORD MOTOR CRED 8.00 % 12/20/2010 62.00 FRANKLIN BANK 4.00 % 5/1/2027 0.01 FREESCALE SEMICO 10.13 % 12/15/2016 27.50 FRONTIER AIRLINE 5.00 % 12/15/2025 8.00 GENCORP INC 2.25 % 11/15/2024 39.00 GENCORP INC 4.00 % 1/16/2024 77.27 GENERAL MOTORS 6.75 % 5/1/2028 8.50 GENERAL MOTORS 7.13 % 7/15/2013 6.25 GENERAL MOTORS 7.20 % 1/15/2011 6.13 GENERAL MOTORS 7.40 % 9/1/2025 5.13 GENERAL MOTORS 7.70 % 4/15/2016 8.75 GENERAL MOTORS 8.10 % 6/15/2024 4.95 GENERAL MOTORS 8.25 % 7/15/2023 4.95 GENERAL MOTORS 8.38 % 7/15/2033 4.95 GENERAL MOTORS 8.80 % 3/1/2021 4.48 GENERAL MOTORS 9.40 % 7/15/2021 4.55 GENERAL MOTORS 9.45 % 11/1/2011 8.50 GENWORTH GLOBAL 6.10 % 4/15/2033 15.25 GEORGIA GULF CRP 7.13 % 12/15/2013 22.25 GGP LP 3.98 % 4/15/2027 29.82 GMAC LLC 4.95 % 10/15/2009 87.00 GMAC LLC 5.05 % 7/15/2009 93.56 GMAC LLC 5.10 % 8/15/2009 92.50 GMAC LLC 5.25 % 6/15/2009 98.00 GMAC LLC 5.25 % 7/15/2009 95.00 GMAC LLC 5.25 % 11/15/2009 84.50 GMAC LLC 5.35 % 6/15/2009 98.00 GMAC LLC 5.35 % 12/15/2009 82.33 GMAC LLC 5.40 % 6/15/2009 97.50 GMAC LLC 6.25 % 6/15/2009 86.50 GMAC LLC 6.25 % 6/15/2009 98.50 GMAC LLC 6.25 % 7/15/2013 31.00 GMAC LLC 6.30 % 6/15/2009 91.00 GMAC LLC 6.30 % 6/15/2009 98.10 GMAC LLC 6.30 % 7/15/2009 84.50 GMAC LLC 6.50 % 2/15/2013 32.00 GMAC LLC 6.65 % 7/15/2009 92.76 GMAC LLC 6.65 % 2/15/2013 33.12 GMAC LLC 6.70 % 7/15/2009 95.50 GMAC LLC 6.70 % 5/15/2014 23.39 GMAC LLC 6.75 % 11/15/2009 75.50 GMAC LLC 6.80 % 7/15/2009 96.00 GMAC LLC 6.90 % 12/15/2009 83.88 GMAC LLC 7.00 % 7/15/2009 93.00 GMAC LLC 7.00 % 12/15/2009 85.00 GMAC LLC 7.05 % 10/15/2009 88.00 GMAC LLC 7.13 % 8/15/2009 93.00 GMAC LLC 7.25 % 1/15/2010 66.00 GMAC LLC 7.50 % 9/15/2010 57.00 GMAC LLC 7.63 % 11/15/2012 34.50 GMAC LLC 8.25 % 9/15/2012 34.00 GMAC LLC 8.50 % 5/15/2010 75.50 GMAC LLC 8.50 % 8/15/2015 28.00 GREAT LAKES CHEM 7.00 % 7/15/2009 43.75 HAIGHTS CROSS OP 11.75 % 8/15/2011 57.88 HANNA (MA) CO 6.52 % 2/23/2010 70.06 HARRY & DAVID OP 9.00 % 3/1/2013 35.75 HAWAIIAN TELCOM 9.75 % 5/1/2013 3.00 HEADWATERS INC 2.88 % 6/1/2016 31.00 HILTON HOTELS 7.50 % 12/15/2017 20.18 HINES NURSERIES 10.25 % 10/1/2011 14.00 IDEARC INC 8.00 % 11/15/2016 2.78 INCYTE CORP 3.50 % 2/15/2011 55.00 INN OF THE MOUNT 12.00 % 11/15/2010 14.00 INTCOMEX INC 11.75 % 1/15/2011 38.50 INTERDENT SVC 10.75 % 12/15/2011 52.40 INTL LEASE FIN 3.25 % 2/15/2010 65.00 INTL LEASE FIN 3.55 % 7/15/2009 95.45 INTL LEASE FIN 3.88 % 2/15/2010 75.38 INTL LEASE FIN 4.00 % 10/15/2009 75.25 INTL LEASE FIN 4.00 % 12/15/2009 74.50 INTL LEASE FIN 4.25 % 8/15/2009 93.11 INTL LEASE FIN 4.25 % 10/15/2010 60.50 INTL LEASE FIN 4.30 % 8/15/2010 51.20 INTL LEASE FIN 4.38 % 8/15/2009 91.75 INTL LEASE FIN 4.40 % 8/15/2009 92.70 INTL LEASE FIN 4.80 % 6/15/2010 73.00 INTL LEASE FIN 4.85 % 9/15/2010 67.00 INTL LEASE FIN 5.00 % 6/15/2012 42.00 INTL LEASE FIN 5.25 % 8/15/2009 90.73 INTL LEASE FIN 5.50 % 4/15/2012 33.25 INTL LEASE FIN 7.25 % 2/15/2010 78.00 INTL LEASE FIN 7.75 % 2/15/2010 82.00 ISTAR FINANCIAL 5.13 % 4/1/2011 51.00 ISTAR FINANCIAL 5.13 % 4/1/2011 51.00 ISTAR FINANCIAL 5.15 % 3/1/2012 41.00 ISTAR FINANCIAL 5.50 % 6/15/2012 47.00 ISTAR FINANCIAL 5.80 % 3/15/2011 54.50 ISTAR FINANCIAL 6.00 % 12/15/2010 61.00 JAZZ TECHNOLOGIE 8.00 % 12/31/2011 24.50 JEFFERSON SMURFI 7.50 % 6/1/2013 26.63 JEFFERSON SMURFI 8.25 % 10/1/2012 26.50 K HOVNANIAN ENTR 7.75 % 5/15/2013 38.00 K HOVNANIAN ENTR 8.88 % 4/1/2012 48.27 KAISER ALUM&CHEM 12.75 % 2/1/2003 8.10 KELLWOOD CO 7.63 % 10/15/2017 5.00 KEMET CORP 2.25 % 11/15/2026 30.75 KEMET CORP 2.25 % 11/15/2026 31.00 KEYSTONE AUTO OP 9.75 % 11/1/2013 35.59 KKR FINANCIAL 7.00 % 7/15/2012 43.25 KNIGHT RIDDER 4.63 % 11/1/2014 24.50 KNIGHT RIDDER 6.88 % 3/15/2029 19.00 KNIGHT RIDDER 7.13 % 6/1/2011 33.50 LANDAMERICA 3.13 % 11/15/2033 11.52 LANDAMERICA 3.25 % 5/15/2034 12.25 LEAR CORP 5.75 % 8/1/2014 34.00 LEAR CORP 8.50 % 12/1/2013 25.50 LEAR CORP 8.75 % 12/1/2016 25.75 LEHMAN BROS HLDG 1.50 % 3/23/2012 12.50 LEHMAN BROS HLDG 4.25 % 1/27/2010 14.00 LEHMAN BROS HLDG 4.38 % 11/30/2010 12.88 LEHMAN BROS HLDG 4.50 % 7/26/2010 13.63 LEHMAN BROS HLDG 4.50 % 8/3/2011 8.50 LEHMAN BROS HLDG 4.80 % 2/27/2013 7.00 LEHMAN BROS HLDG 4.80 % 3/13/2014 14.88 LEHMAN BROS HLDG 4.80 % 6/24/2023 7.25 LEHMAN BROS HLDG 5.00 % 1/14/2011 12.25 LEHMAN BROS HLDG 5.00 % 1/22/2013 6.25 LEHMAN BROS HLDG 5.00 % 2/11/2013 9.50 LEHMAN BROS HLDG 5.00 % 3/27/2013 7.00 LEHMAN BROS HLDG 5.00 % 8/3/2014 7.25 LEHMAN BROS HLDG 5.00 % 8/5/2015 6.00 LEHMAN BROS HLDG 5.00 % 12/18/2015 10.00 LEHMAN BROS HLDG 5.00 % 5/28/2023 8.25 LEHMAN BROS HLDG 5.00 % 5/30/2023 7.00 LEHMAN BROS HLDG 5.00 % 6/10/2023 7.76 LEHMAN BROS HLDG 5.00 % 6/17/2023 7.25 LEHMAN BROS HLDG 5.10 % 1/28/2013 6.00 LEHMAN BROS HLDG 5.10 % 2/15/2020 7.00 LEHMAN BROS HLDG 5.15 % 2/4/2015 9.50 LEHMAN BROS HLDG 5.20 % 5/13/2020 8.01 LEHMAN BROS HLDG 5.25 % 2/6/2012 13.50 LEHMAN BROS HLDG 5.25 % 1/30/2014 7.13 LEHMAN BROS HLDG 5.25 % 2/11/2015 9.55 LEHMAN BROS HLDG 5.25 % 3/8/2020 10.00 LEHMAN BROS HLDG 5.25 % 5/20/2023 7.38 LEHMAN BROS HLDG 5.35 % 3/13/2020 7.50 LEHMAN BROS HLDG 5.35 % 6/14/2030 7.55 LEHMAN BROS HLDG 5.38 % 5/6/2023 9.25 LEHMAN BROS HLDG 5.40 % 3/6/2020 9.50 LEHMAN BROS HLDG 5.40 % 3/20/2020 7.28 LEHMAN BROS HLDG 5.40 % 3/30/2029 7.25 LEHMAN BROS HLDG 5.40 % 6/21/2030 8.01 LEHMAN BROS HLDG 5.45 % 3/15/2025 6.39 LEHMAN BROS HLDG 5.45 % 4/6/2029 7.00 LEHMAN BROS HLDG 5.45 % 2/22/2030 6.93 LEHMAN BROS HLDG 5.45 % 7/19/2030 8.00 LEHMAN BROS HLDG 5.45 % 9/20/2030 8.00 LEHMAN BROS HLDG 5.50 % 4/4/2016 13.50 LEHMAN BROS HLDG 5.50 % 2/4/2018 6.34 LEHMAN BROS HLDG 5.50 % 2/19/2018 5.60 LEHMAN BROS HLDG 5.50 % 11/4/2018 7.25 LEHMAN BROS HLDG 5.50 % 2/27/2020 7.75 LEHMAN BROS HLDG 5.50 % 8/19/2020 7.25 LEHMAN BROS HLDG 5.50 % 3/14/2023 6.00 LEHMAN BROS HLDG 5.50 % 4/8/2023 7.00 LEHMAN BROS HLDG 5.50 % 4/15/2023 8.20 LEHMAN BROS HLDG 5.50 % 4/23/2023 9.25 LEHMAN BROS HLDG 5.50 % 8/5/2023 4.95 LEHMAN BROS HLDG 5.50 % 10/7/2023 7.50 LEHMAN BROS HLDG 5.50 % 1/27/2029 8.00 LEHMAN BROS HLDG 5.50 % 2/3/2029 7.00 LEHMAN BROS HLDG 5.50 % 8/2/2030 7.50 LEHMAN BROS HLDG 5.55 % 2/11/2018 7.00 LEHMAN BROS HLDG 5.55 % 3/9/2029 7.25 LEHMAN BROS HLDG 5.55 % 1/25/2030 7.55 LEHMAN BROS HLDG 5.55 % 9/27/2030 8.12 LEHMAN BROS HLDG 5.55 % 12/31/2034 8.01 LEHMAN BROS HLDG 5.60 % 1/22/2018 7.75 LEHMAN BROS HLDG 5.60 % 2/17/2029 7.55 LEHMAN BROS HLDG 5.60 % 2/24/2029 8.00 LEHMAN BROS HLDG 5.60 % 3/2/2029 8.01 LEHMAN BROS HLDG 5.60 % 2/25/2030 7.50 LEHMAN BROS HLDG 5.60 % 5/3/2030 7.61 LEHMAN BROS HLDG 5.63 % 1/24/2013 14.50 LEHMAN BROS HLDG 5.63 % 3/15/2030 7.66 LEHMAN BROS HLDG 5.65 % 11/23/2029 9.50 LEHMAN BROS HLDG 5.65 % 8/16/2030 8.01 LEHMAN BROS HLDG 5.65 % 12/31/2034 7.00 LEHMAN BROS HLDG 5.70 % 1/28/2018 6.50 LEHMAN BROS HLDG 5.70 % 2/10/2029 5.55 LEHMAN BROS HLDG 5.70 % 4/13/2029 7.00 LEHMAN BROS HLDG 5.70 % 9/7/2029 8.01 LEHMAN BROS HLDG 5.70 % 12/14/2029 7.88 LEHMAN BROS HLDG 5.75 % 4/25/2011 14.50 LEHMAN BROS HLDG 5.75 % 7/18/2011 14.00 LEHMAN BROS HLDG 5.75 % 5/17/2013 14.00 LEHMAN BROS HLDG 5.75 % 3/27/2023 7.15 LEHMAN BROS HLDG 5.75 % 9/16/2023 9.00 LEHMAN BROS HLDG 5.75 % 10/15/2023 8.50 LEHMAN BROS HLDG 5.75 % 10/21/2023 7.75 LEHMAN BROS HLDG 5.75 % 11/12/2023 6.85 LEHMAN BROS HLDG 5.75 % 11/25/2023 6.00 LEHMAN BROS HLDG 5.75 % 12/16/2028 9.75 LEHMAN BROS HLDG 5.75 % 12/23/2028 7.75 LEHMAN BROS HLDG 5.75 % 8/24/2029 7.00 LEHMAN BROS HLDG 5.75 % 9/14/2029 5.66 LEHMAN BROS HLDG 5.75 % 10/12/2029 9.50 LEHMAN BROS HLDG 5.75 % 3/29/2030 8.75 LEHMAN BROS HLDG 5.80 % 9/3/2020 7.90 LEHMAN BROS HLDG 5.80 % 10/25/2030 6.50 LEHMAN BROS HLDG 5.85 % 11/8/2030 9.00 LEHMAN BROS HLDG 5.88 % 11/15/2017 13.00 LEHMAN BROS HLDG 5.90 % 5/4/2029 7.12 LEHMAN BROS HLDG 5.90 % 2/7/2031 7.00 LEHMAN BROS HLDG 5.95 % 12/20/2030 7.50 LEHMAN BROS HLDG 6.00 % 7/19/2012 13.90 LEHMAN BROS HLDG 6.00 % 1/22/2020 9.00 LEHMAN BROS HLDG 6.00 % 2/12/2020 8.60 LEHMAN BROS HLDG 6.00 % 1/29/2021 8.10 LEHMAN BROS HLDG 6.00 % 10/23/2028 8.01 LEHMAN BROS HLDG 6.00 % 11/18/2028 7.00 LEHMAN BROS HLDG 6.00 % 5/11/2029 8.01 LEHMAN BROS HLDG 6.00 % 7/20/2029 6.93 LEHMAN BROS HLDG 6.00 % 4/30/2034 5.96 LEHMAN BROS HLDG 6.00 % 7/30/2034 7.67 LEHMAN BROS HLDG 6.00 % 2/21/2036 7.76 LEHMAN BROS HLDG 6.00 % 2/24/2036 8.66 LEHMAN BROS HLDG 6.00 % 2/12/2037 7.50 LEHMAN BROS HLDG 6.05 % 6/29/2029 7.45 LEHMAN BROS HLDG 6.10 % 8/12/2023 8.76 LEHMAN BROS HLDG 6.15 % 4/11/2031 6.75 LEHMAN BROS HLDG 6.20 % 9/26/2014 15.38 LEHMAN BROS HLDG 6.20 % 6/15/2027 8.02 LEHMAN BROS HLDG 6.20 % 5/25/2029 7.25 LEHMAN BROS HLDG 6.25 % 2/5/2021 6.73 LEHMAN BROS HLDG 6.25 % 2/22/2023 6.50 LEHMAN BROS HLDG 6.40 % 10/11/2022 7.25 LEHMAN BROS HLDG 6.40 % 12/19/2036 12.50 LEHMAN BROS HLDG 6.50 % 2/28/2023 5.88 LEHMAN BROS HLDG 6.50 % 3/6/2023 7.35 LEHMAN BROS HLDG 6.50 % 10/18/2027 5.93 LEHMAN BROS HLDG 6.50 % 10/25/2027 7.00 LEHMAN BROS HLDG 6.50 % 11/15/2032 7.35 LEHMAN BROS HLDG 6.50 % 1/17/2033 7.00 LEHMAN BROS HLDG 6.50 % 12/22/2036 7.50 LEHMAN BROS HLDG 6.50 % 2/13/2037 8.50 LEHMAN BROS HLDG 6.50 % 6/21/2037 7.00 LEHMAN BROS HLDG 6.50 % 7/13/2037 7.00 LEHMAN BROS HLDG 6.60 % 10/3/2022 7.75 LEHMAN BROS HLDG 6.63 % 1/18/2012 13.65 LEHMAN BROS HLDG 6.75 % 7/1/2022 5.50 LEHMAN BROS HLDG 6.75 % 3/11/2033 7.63 LEHMAN BROS HLDG 6.75 % 10/26/2037 9.00 LEHMAN BROS HLDG 6.80 % 9/7/2032 7.25 LEHMAN BROS HLDG 6.85 % 8/16/2032 9.50 LEHMAN BROS HLDG 6.88 % 5/2/2018 16.81 LEHMAN BROS HLDG 6.88 % 7/17/2037 0.01 LEHMAN BROS HLDG 6.90 % 9/1/2032 8.75 LEHMAN BROS HLDG 7.00 % 4/16/2019 5.88 LEHMAN BROS HLDG 7.00 % 5/12/2023 7.09 LEHMAN BROS HLDG 7.00 % 9/27/2027 15.25 LEHMAN BROS HLDG 7.00 % 10/4/2032 9.50 LEHMAN BROS HLDG 7.00 % 7/27/2037 8.34 LEHMAN BROS HLDG 7.00 % 9/28/2037 7.70 LEHMAN BROS HLDG 7.00 % 11/16/2037 7.45 LEHMAN BROS HLDG 7.00 % 12/28/2037 8.60 LEHMAN BROS HLDG 7.00 % 2/7/2038 9.00 LEHMAN BROS HLDG 7.00 % 2/8/2038 6.00 LEHMAN BROS HLDG 7.10 % 3/25/2038 7.25 LEHMAN BROS HLDG 7.25 % 2/27/2038 6.00 LEHMAN BROS HLDG 7.25 % 4/29/2038 8.75 LEHMAN BROS HLDG 7.35 % 5/6/2038 9.75 LEHMAN BROS HLDG 7.73 % 10/15/2023 5.83 LEHMAN BROS HLDG 7.88 % 8/15/2010 11.00 LEHMAN BROS HLDG 8.05 % 1/15/2019 5.06 LEHMAN BROS HLDG 8.50 % 8/1/2015 13.00 LEHMAN BROS HLDG 8.80 % 3/1/2015 11.90 LEHMAN BROS HLDG 8.92 % 2/16/2017 11.50 LEHMAN BROS HLDG 9.50 % 12/28/2022 6.20 LEHMAN BROS HLDG 9.50 % 1/30/2023 4.13 LEHMAN BROS HLDG 9.50 % 2/27/2023 7.50 LEHMAN BROS HLDG 10.00 % 3/13/2023 6.00 LEHMAN BROS HLDG 10.38 % 5/24/2024 7.80 LEHMAN BROS HLDG 11.00 % 10/25/2017 7.33 LEHMAN BROS HLDG 11.00 % 6/22/2022 7.50 LIFETIME BRANDS 4.75 % 7/15/2011 43.00 LOCAL INSIGHT 11.00 % 12/1/2017 24.50 MAGNA ENTERTAINM 8.55 % 6/15/2010 14.05 MAJESTIC STAR 9.50 % 10/15/2010 60.00 MAJESTIC STAR 9.75 % 1/15/2011 4.00 MASHANTUCKET PEQ 8.50 % 11/15/2015 22.13 MERCER INTL INC 9.25 % 2/15/2013 31.50 MERISANT CO 9.50 % 7/15/2013 7.06 MERRILL LYNCH 0.35 % 3/9/2011 87.09 METALDYNE CORP 11.00 % 6/15/2012 10.00 MILACRON ESCROW 11.50 % 5/15/2011 20.50 MILLENNIUM AMER 7.63 % 11/15/2026 7.00 MOMENTIVE PERFOR 11.50 % 12/1/2016 23.50 MORRIS PUBLISH 7.00 % 8/1/2013 5.00 NATL FINANCIAL 0.75 % 2/1/2012 38.00 NEFF CORP 10.00 % 6/1/2015 22.00 NETWORK COMMUNIC 10.75 % 12/1/2013 20.50 NEW PLAN EXCEL 4.50 % 2/1/2011 55.25 NEW PLAN EXCEL 7.40 % 9/15/2009 85.50 NEW PLAN EXCEL 7.50 % 7/30/2029 14.00 NEW PLAN REALTY 6.90 % 2/15/2028 13.13 NEW PLAN REALTY 6.90 % 2/15/2028 16.26 NEW PLAN REALTY 7.65 % 11/2/2026 18.18 NEW PLAN REALTY 7.68 % 11/2/2026 11.00 NEW PLAN REALTY 7.97 % 8/14/2026 16.00 NEWPAGE CORP 10.00 % 5/1/2012 53.00 NEWPAGE CORP 12.00 % 5/1/2013 30.50 NORTEK INC 8.50 % 9/1/2014 23.25 NORTH ATL TRADNG 9.25 % 3/1/2012 18.60 NORTHSTAR REAL 7.25 % 6/15/2027 42.11 NTK HOLDINGS INC 0.00 % 3/1/2014 10.00 OUTBOARD MARINE 9.13 % 4/15/2017 3.50 PALM HARBOR 3.25 % 5/15/2024 36.50 PANOLAM INDUSTRI 10.75 % 10/1/2013 5.00 PARK PLACE ENT 7.50 % 9/1/2009 71.31 PHH CORP 6.70 % 4/15/2010 77.58 PLY GEM INDS 9.00 % 2/15/2012 23.00 PREIT ASSOCIATES 4.00 % 6/1/2012 36.50 PRIMUS TELECOM 3.75 % 9/15/2010 2.63 PRIMUS TELECOM 8.00 % 1/15/2014 8.50 PRIMUS TELECOMM 14.25 % 5/20/2011 38.69 QUALITY DISTRIBU 9.00 % 11/15/2010 31.04 RADIAN GROUP 7.75 % 6/1/2011 58.26 RADIO ONE INC 6.38 % 2/15/2013 18.00 RADIO ONE INC 8.88 % 7/1/2011 39.50 RAFAELLA APPAREL 11.25 % 6/15/2011 19.75 RATHGIBSON INC 11.25 % 2/15/2014 23.25 RAYOVAC CORP 8.50 % 10/1/2013 11.11 READER'S DIGEST 9.00 % 2/15/2017 10.13 REAL MEX RESTAUR 10.00 % 4/1/2010 78.00 REALOGY CORP 10.50 % 4/15/2014 33.70 REALOGY CORP 12.38 % 4/15/2015 26.00 REALOGY CORP 12.38 % 4/15/2015 25.75 RENTECH INC 4.00 % 4/15/2013 29.52 RESIDENTIAL CAP 8.00 % 2/22/2011 36.50 RESTAURANT CO 10.00 % 10/1/2013 40.00 RH DONNELLEY 6.88 % 1/15/2013 7.50 RH DONNELLEY 6.88 % 1/15/2013 4.88 RH DONNELLEY 6.88 % 1/15/2013 7.75 RH DONNELLEY 8.88 % 1/15/2016 9.00 RH DONNELLEY 8.88 % 10/15/2017 8.25 RH DONNELLEY INC 11.75 % 5/15/2015 20.75 RITE AID CORP 8.13 % 5/1/2010 74.00 ROTECH HEALTHCA 9.50 % 4/1/2012 15.75 SALEM COMM HLDG 7.75 % 12/15/2010 30.00 SHENGDATECH INC 6.00 % 6/1/2018 56.04 SIMMONS BEDDING 7.88 % 1/15/2014 15.75 SINCLAIR BROAD 3.00 % 5/15/2027 69.88 SINCLAIR BROAD 6.00 % 9/15/2012 28.75 SIX FLAGS INC 4.50 % 5/15/2015 14.00 SIX FLAGS INC 8.88 % 2/1/2010 18.00 SIX FLAGS INC 9.63 % 6/1/2014 16.00 SIX FLAGS INC 9.75 % 4/15/2013 12.00 SPACEHAB INC 5.50 % 10/15/2010 59.00 SPANSION LLC 2.25 % 6/15/2016 1.44 SPHERIS INC 11.00 % 12/15/2012 37.75 STALLION OILFIEL 9.75 % 2/1/2015 22.88 STANDARD MTR 6.75 % 7/15/2009 90.50 STATION CASINOS 6.00 % 4/1/2012 31.00 STATION CASINOS 6.50 % 2/1/2014 4.88 STATION CASINOS 6.63 % 3/15/2018 6.35 STATION CASINOS 6.88 % 3/1/2016 7.00 STONE CONTAINER 8.38 % 7/1/2012 26.88 TEKNI-PLEX INC 12.75 % 6/15/2010 75.00 TEXAS UTILITIES 7.46 % 1/1/2015 31.02 THORNBURG MTG 8.00 % 5/15/2013 5.00 TIMES MIRROR CO 6.61 % 9/15/2027 2.60 TIMES MIRROR CO 7.25 % 3/1/2013 5.00 TIMES MIRROR CO 7.25 % 11/15/2096 4.25 TIMES MIRROR CO 7.50 % 7/1/2023 4.25 TOUSA INC 7.50 % 3/15/2011 1.00 TRIBUNE CO 4.88 % 8/15/2010 6.50 TRIBUNE CO 5.25 % 8/15/2015 5.25 TRIBUNE CO 5.67 % 12/8/2008 4.25 TRICO MARINE SER 6.50 % 5/15/2028 30.75 TRONOX WORLDWIDE 9.50 % 12/1/2012 19.88 TRUMP ENTERTNMNT 8.50 % 6/1/2015 8.88 UAL CORP 4.50 % 6/30/2021 40.00 UAL CORP 5.00 % 2/1/2021 45.00 UNISYS CORP 6.88 % 3/15/2010 82.75 UNISYS CORP 8.00 % 10/15/2012 48.25 US LEASING INTL 6.00 % 9/6/2011 45.25 USFREIGHTWAYS 8.50 % 4/15/2010 38.00 VERASUN ENERGY 9.38 % 6/1/2017 5.00 VERENIUM CORP 5.50 % 4/1/2027 17.00 VERSO PAPER 11.38 % 8/1/2016 35.00 VICORP RESTAURNT 10.50 % 4/15/2011 1.00 VION PHARM INC 7.75 % 2/15/2012 28.75 VISTEON CORP 7.00 % 3/10/2014 4.50 VISTEON CORP 12.25 % 12/31/2016 6.88 VOUGHT AIRCRAFT 8.00 % 7/15/2011 41.00 WASH MUT BANK NV 5.50 % 1/15/2013 0.00 WASH MUT BANK NV 5.55 % 6/16/2010 22.94 WASH MUT BANK NV 5.95 % 5/20/2013 0.90 WASH MUTUAL INC 4.20 % 1/15/2010 81.50 WASH MUTUAL INC 8.25 % 4/1/2010 61.25 WCI COMMUNITIES 4.00 % 8/5/2023 0.83 WCI COMMUNITIES 6.63 % 3/15/2015 2.00 WCI COMMUNITIES 7.88 % 10/1/2013 1.00 WCI COMMUNITIES 9.13 % 5/1/2012 0.25 WII COMPONENTS 10.00 % 2/15/2012 41.00 WILLIAM LYON 7.63 % 12/15/2012 24.25 WILLIAM LYONS 7.50 % 2/15/2014 24.37 WILLIAM LYONS 7.63 % 12/15/2012 23.50 WILLIAM LYONS 10.75 % 4/1/2013 31.00 XM SATELLITE 13.00 % 8/1/2013 43.38 ********* 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 ***