/raid1/www/Hosts/bankrupt/TCR_Public/090609.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, June 9, 2009, Vol. 13, No. 158
Headlines
ABITIBIBOWATER INC: Wins Final Approval of $600 Million DIP Loan
ALERIS INT'L: U.S. Trustee Balks at Employment of Deloitte Tax
ALPHAROCK LLC: Voluntary Chapter 11 Case Summary
AMERICAN ACHIEVEMENT: S&P Downgrades Corp. Credit Rating to 'CC'
AMERICAN ACHIEVEMENT: Initiates Tender Offer for 12.75% Sr. Notes
AMERICAN HOME: Bancorp Inc. Agrees to Acquire American Home Bank
AMERICAN AXLE: Regains Compliance with NYSE Listing Standard
ARCADE PUBLISHING: Case Summary & 20 Largest Unsecured Creditors
ASARCO LLC: Parent Files 4th Amended Plan & Bids $2.9BB for Assets
ASARCO LLC: Court Adjourns Disclosure Statement Hearing to June 23
ASARCO LLC: Court Approves $3.5BB Environmental Claims Settlement
ASARCO LLC: Asbestos Panel Balks at Harbinger Disclosure Statement
BARBERO BAKERY: Case Summary & 20 Largest Unsecured Creditors
C&O ENTERPRISES: Case Summary & 6 Largest Unsecured Creditors
CANADIAN SUPERIOR: Secures CCAA Protection Extension
CANTRONIC SYSTEMS: To Delay Filing of Annual Financial Statements
CANWEST LIMITED: Moody's Downgrades Default Rating to 'Ca/LD'
CAPMARK FINANCIAL: Inks New $1.5 Billion Term Loan Facility
CHALLENGER ENERGY: Secures Extension of CCAA Protection
CHARTER COMMUNICATIONS: Seeks Extension of Removal Period
CHARTER COMMUNICATIONS: Can Tap Hogan & Hartson as Special Counsel
CHARTER COMMUNICATIONS: Can Hire Sherman & Howard as M&A Counsel
CHARTER COMMUNICATIONS: Board Names Raclin, Et Al., to New Posts
CHIPPEWA COUNTY: S&P Gives Stable Outlook; Affirms 'BB+' Rating
CHRYSLER LLC: Pensioners Ask High Court to Freeze Sale Order
CHRYSLER LLC: Court Approves Daimler PBGC Settlement Agreement
CHRSYLER LLC: Gets Final OK to Hire Greenhill as Investment Banker
CHRYSLER LLC: Court Okays Cahill's Employment as Special Counsel
CLEARWATER PAPER: S&P Raises Corporate Credit Rating to 'BB'
CONCORDIA LAND: Case Summary & 3 Largest Unsecured Creditors
CROSS LAKE: Completes Restructuring Pursuant to Arrangement Plan
DALE HERBERT THOMPSON: Case Summary & 20 Largest Unsec. Creditors
DANA HOLDING: Moody's Downgrades Corporate Family Rating to 'Caa2'
DEL-ZARA SYSTEMS: Case Summary & 17 Largest Unsecured Creditors
DELPHI CORP: Preliminary Hearing on Plan Modifications Set June 10
DELPHI CORP: Files Liquidation Analysis Under June 1 Modified Plan
DELPHI CORP: Seeks Approval of Modified Disclosure Statement
DELPHI CORP: To Close Saginaw, Michigan Plant on June 26
DISH NETWORK: Loss in Litigation Won't Affect S&P's 'BB-' Rating
DUNE ENERGY: Gets Waiver from Senior Lender Over Covenant Breach
EDRA BLIXSETH: Court Converts Chapter 11 Case to Ch 7 Liquidation
EJ'S SHOES: Case Summary & 19 Largest Unsecured Creditors
ENNIS ENTERPRISES: Case Summary & Two Largest Unsecured Creditors
ENOS LANE: Wants to Hire William Alexander as Special Counsel
FAYEZ NABIH NAHHAS: Case Summary & 16 Largest Unsecured Creditors
FERRELLGAS LP: Moody's Withdraws Ba3 Shelf Registration Rating
FILENE'S BASEMENT: To Sell Assets to K&G Acquisition for $67MM
FURNITURE SOUTH: Case Summary & 20 Largest Unsecured Creditors
GENERAL MOTORS: Inks MOU With Penske Automotive for Saturn Brand
GENERAL MOTORS: Court Permits $408MM Payment to Shippers, Et Al.
GENERAL MOTORS: Can Continue Prepetition Insurance Programs
GENERAL MOTORS: Can Pay Prepetition Taxes & Assessments
GENERAL MOTORS: Magna Expects to Complete Opel Buy in September
GENERAL NUTRITION: S&P Raises Corporate Credit Rating to 'B'
GLR RESOURCES: Files for Bankruptcy Protection
GOODCRANE CORP: Case Summary & 20 Largest Unsecured Creditors
GOTTSCHALKS INC: Landlords Object to Assignment of Leases
GREGORY SCOTT DAILY: Wants Bradley Arant as Bankruptcy Counsel
GREGORY SCOTT DAILY: Taps Morgan Lewis as Litigation Counsel
GREGORY SCOTT: Wants to Set 40 Days after Order as Claims Bar Date
HAWKER BEECHCRAFT: S&P Downgrades Corporate Credit Rating to 'SD'
HILVENTURES LP: Gets Initial Access to Wells Fargo Cash Collateral
HILVENTURES LP: Wants More Time to File Schedules Thru June 12
IFA MEDICAL CENTER: Case Summary & 20 Largest Unsecured Creditors
INTRALINKS INC: S&P Gives Stable Outlook & Affirms 'B' Rating
ION MEDIA: Wants to Hire Kirkland & Ellis as Bankruptcy Counsel
ION MEDIA: Wants to Hire Holland & Knight as Corporate Counsel
KAR HOLDINGS: S&P Affirms Corporate Credit Rating at 'B-'
LAFFOON ENTERPRISES: Case Summary & 13 Largest Unsecured Creditors
LAKESIDE 160: Wants to Hire Polsinelli Shughart as Counsel
LAKESIDE 160: Has until Today to File Schedules and Statements
LANDSOURCE COMMUNITIES: Committee Wants Cases Converted to Ch 7
LAWRENCE FRUMUSA: Case Summary & 20 Largest Unsecured Creditors
LEBANON LANDMARKS: Case Summary & 20 Largest Unsecured Creditors
LIBERTY LIGHTHOUSE: S&P Cuts Rating on Medium-Term Notes to 'BB'
LMS MEDICAL: Files for Bankruptcy Protection
MARGARET WHITE: Case Summary & 4 Largest Unsecured Creditors
MARIA TERRY: Case Summary & 20 Largest Unsecured Creditors
MARINE MILITARY: Moody's Withdraws 'B3' Rating on Revenue Bonds
MARVIN-WAXHAW: Voluntary Chapter 11 Case Summary
MASONITE CORP: Discloses New Officers & Directors of New Firm
MASONITE CORP: Court Sets July 6 as General Claims Bar Date
MAXXAM INC: 2009 Legislative Session Adjourned on June 1
MBIA INC: S&P Cuts Counterparty Credit Rating to 'BB'
MECACHROME INT'L: Voluntary Chapter 15 Case Summary
MIDWAY GAMES: Creditors Settle Lawsuit With Mark Thomas
NEWPORT TELEVISION: Moody's Changes Default Rating to 'Caa2/LD'
NORTEL NETWORKS: Has Until September 11 to File Plan
NORTEL NETWORKS: Seeks Court Approval of Flextronics Settlement
NORTEL NETWORKS: Seeks to Enter Into $30 Million Bond Facilities
NWC #2 MCCASLIN-CENTURY: Case Summary & 5 Largest Unsec. Creditors
OPTI CANADA: Moody's Junks Corporate Family Rating From 'B3'
PACIFIC ENERGY: Noble Files Complaint; Seeks Accounting of RPP
PENSKE AUTOMOTIVE: Moody's Reviews 'B2' Corporate Family Rating
PENSKE AUTOMOTIVE: S&P Puts 'B+' Rating on CreditWatch Negative
PHILIP M. BARONE: Voluntary Chapter 11 Case Summary
PHOENIX COYOTES: NFL, NBA, MLB File Amicus Brief in Arizona
PHOENIX COYOTES: Gets Four Offers to Keep Team in Arizona
PLIANT CORP: Panel Files Adversary Complaint vs. Major Lenders
PRECISION PARTS: U.S. Trustee Balks at Grant Thornton Employment
RAYMOND PORTER: Case Summary & 16 Largest Unsecured Creditors
REVELATIONS IN DESIGN: Case Summary & 20 Largest Unsec. Creditors
RH DONNELLEY: Sec. 341 Meeting of Creditors Scheduled for July 6
RH DONNELLEY: Court Approves $17MM Payment to Critical Vendors
RH DONNELLEY: Can Continue to Perform Under Customer Programs
RHODES COS: Limited Information Cues S&P to Withdraw 'D' Ratings
RIO VISTA LLC: Case Summary & 3 Largest Unsecured Creditors
ROCKWOOD SPECIALTIES: S&P Affirms 'B+' Corporate Credit Rating
SAGITTARIUS RESTAURANTS: Moody's Cuts Corporate Rating to 'Caa2'
SILVERTON BANK: FDIC Will Wind Down Bank
SOMERSET MEDICAL: Moody's Affirms 'Ba2' Rating on 2003 Bonds
SOUTHERN STATES: Holder's Consent Won't Affect Moody's 'B1' Rating
SPECTRUM BRANDS: Five Parties Object to Plan Confirmation
SPECTRUM BRANDS: Seeks to Sell Orville Assets for $1.3 Million
SPECTRUM BRANDS: Seeks to Sell Livingston Assets for $1.1 Million
SPECTRUM BRANDS: 19 Trade Creditors Sell Claims Totaling $255,000+
STEWART ENTERPRISES: Moody's Withdraws Rating on $125 Mil. Loan
SUNSTONE HOTEL: Will Give Up W Hotel San Diego to Lenders
SYMMETRICAL STAIR: Files for Chapter 11 Bankruptcy Protection
T. GAY INVESTMENTS: Case Summary & 20 Largest Unsecured Creditors
TEEKAY CORP: S&P Affirms 'BB' Long-Term Corporate Credit Rating
TIMOTHY M. SULLIVAN: Case Summary & 2 Largest Unsecured Creditors
TOMMY D'S HOME: Case Summary & 20 Largest Unsecured Creditors
TRAVELPORT HOLDINGS: S&P Downgrades Corp. Credit Rating to 'SD'
TRONOX INC: U.S. Trustee Balks at Key Employee Incentive Plan
U.S. BEVERAGE: Files for Chapter 11 Bankruptcy Protection
VALLEY NATIONAL: S&P Withdraws 'B' Corporate Credit Rating
VISHAY INTERTECHNOLOGY: S&P Cuts Corp. Credit Rating to 'BB-'
W&T OFFSHORE: Moody's Withdraws Shelf Registration Rating
WESTERN NEW YORK: Case Summary & 20 Largest Unsecured Creditors
W.J. RIEGEL & SONS: Case Summary & 16 Largest Unsecured Creditors
WOODY'S ENTERPRISES: Case Summary & 11 Largest Unsecured Creditors
YOUNG'S INC: Case Summary & 20 Largest Unsecured Creditors
* Euler Eyes 35% Hike in Corporate Worldwide Insolvencies for 2009
* Liquidation World Appoints David Becker to Board of Directors
* UBS Hires William Newby as IBD Managing Director, Gaming Chief
* Large Companies With Insolvent Balance Sheets
*********
ABITIBIBOWATER INC: Wins Final Approval of $600 Million DIP Loan
----------------------------------------------------------------
Bloomberg's Michael Bathon reports that AbitibiBowater Inc. won
final approval from Judge Kevin Carey of the U.S. Bankruptcy Court
for the District of Delaware of as much as $600 million in
financing from Fairfax Financial Holdings Ltd. and Avenue
Investment LP to help fund operations while the company
reorganizes.
As reported in the Troubled Company Reporter on April 23, 2009,
the Debtors sought and obtained permission from the U.S.
Bankruptcy Court for the District of Delaware, on an interim
basis, to borrow up to $206 million from Fairfax Financial, Avenue
Investments, and certain lenders. The Interim DIP Loan consists
of a $166 million term loan for AbitibiBowater Inc. and Bowater
Inc. and a $40 million term loan for Bowater Canada Forest
Products Inc. The DIP Facility can be upsized to $600 million
upon the entry of a final DIP order under an incremental term loan
and an asset backed revolving credit facility.
The loan "provides much needed capital to the Bowater group,"
Kelley Cornish, a lawyer for AbitibiBowater, said when the company
got interim approval. "We need it to establish credibility," and
to prevent the company's competitors from taking away business.
Montreal-based AbitibiBowater and 31 units sought bankruptcy
protection April 16 after U.S. lenders refused to accept a
proposed debt restructuring. The company listed assets of
$9.9 billion and debt of $8.78 billion as of Sept. 30 in its
Chapter 11 petition.
"The recent downturn in the global economy has resulted in an
unprecedented decline in demand for newsprint," William G. Harvey,
AbitibiBowater's chief financial officer, said in court papers.
"Negative trends in advertising, electronic data transmission and
storage, and a continued expansion of the Internet, have
exacerbated downward pressure on revenue."
AbitibiBowater also sought protection from its creditors in
Canada. Quebec Superior Court Judge Clement Gascon on May 6
approved a $100 million bankruptcy loan, which will be provided by
the Bank of Montreal and backed by the Quebec government's
economic development agency. The DIP financing will allow Abitibi
to pay in full all receivables owed, according to a SEC filing.
About AbitibiBowater Inc.
Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/-- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 27
pulp and paper facilities and 34 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea.
Marketing its products in more than 90 countries, the Company is
also among the world's largest recyclers of old newspapers and
magazines, and has more third-party certified sustainable forest
land than any other company in the world.
Out-of-Court Restructuring Effort
AbitibiBowater tried to renegotiate a $2.9 billion debt of its
Canadian unit, Abitibi-Consolidated, and a $1.8 billion debt of
its U.S. unit, Bowater Inc. On March 13, AbitibiBowater and
Abitibi-Consolidated commenced a recapitalization proposal, which
was intended to reduce the Company's net debt by roughly $2.4
billion, lower its annual interest expense by roughly $162 million
and raise roughly $350 million through the issuance of new notes
of ACI and common stock and warrants of the Company.
On February 9, Bowater Finance II LLC, an indirect wholly owned
subsidiary of AbitibiBowater, commenced private offers with
respect to six series of outstanding debt securities issued by
either Bowater Incorporated or Bowater Canada Finance Corporation,
a wholly owned subsidiary of Bowater, to exchange the old notes
for new notes. BowFin also intended for a concurrent private
offering of new 15.5% First Lien Notes due November 15, 2011, to
holders of Bowater Notes who tender notes in the exchange offers.
The Company moved the exchange offer deadlines several times after
failing to garner enough support from bondholders. It ultimately
abandoned the exchange offer on March 31.
Bankruptcy Filing
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey
presides over the case. The Company and its Canadian affiliates
commenced parallel restructuring proceedings under the Companies'
Creditors Arrangement Act before the Quebec Superior Court
Commercial Division the next day. Alex F. Morrison at Ernst &
Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles
the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T.
Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in
Wilmington, represent the Chapter 15 Debtors.
As of September 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Abitibibowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ALERIS INT'L: U.S. Trustee Balks at Employment of Deloitte Tax
--------------------------------------------------------------
Roberta A. De Angelix, the Acting United States Trustee for Region
3, objects to the motion of Aleris International Inc. to hire
Deloitte Tax LLP as its tax services provider, saying that the
Company has presented no evidence of any "extraordinary
circumstances" or any justification to warrant the retroactive
approval of the application.
The U.S. Trustee said that if the application is granted at all,
it should not be given retroactive effect as there were no reasons
given for the delay in the filing.
As reported in the Troubled Company Reporter on May 27, 2009,
Aleris sought approval of its motion for the employment of
Deloitte Tax LLP as tax services provider to be take effect
retroactive to March 18, 2009. The Company filed the employment
request on May 20, 2009.
About Aleris International
Aleris International, Inc., produces and sells aluminum rolled and
extruded products. Aleris operates primarily through two
reportable business segments: (i) global rolled and extruded
products and (ii) global recycling. Headquartered in Beachwood,
Ohio, a suburb of Cleveland, the Company operates over 40
production facilities in North America, Europe, South America and
Asia, and employs approximately 8,400 employees. Aleris operates
27 production facilities in the United States with eight
production facilities that provided rolled and extruded aluminum
products and 19 recycling production plants.
Aleris International, Inc., aka IMCO Recycling Inc., and various
affiliates filed for bankruptcy on February 12, 2009 (Bankr. D.
Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon
presides over the cases. Stephen Karotkin, Esq., and Debra A.
Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve
as lead counsel for the Debtors. L. Katherine Good, Esq., and
Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In
Wilmington, Delaware, serves as local counsel. Moelis & Company
LLC, acts as financial advisors; Alvarez & Marsal LLC a as
restructuring advisors, and Kurtzman Carson Consultants LLC as
claims and noticing agent for the Debtors. As of December 31,
2008, the Debtors had total assets of $4,168,700,000; and total
debts of $3,978,699,000.
Bankruptcy Creditors' Service, Inc., publishes Aleris
International Bankruptcy News. The newsletter tracks the chapter
11 proceeding undertaken by Aleris International, Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000)
ALPHAROCK LLC: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: AlphaRock LLC
c/o BarRock Capital, LLC
12A Mica Lane
Wellesley Hills, MA 02481
Bankruptcy Case No.: 09-11888
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Alpha 300952 LLC 09-11891
Alpha 301419 LLC 09-11892
Alpha 330453 LLC 09-11894
Alpha 331290 LLC 09-11897
Alpha 332002 LLC 09-11899
Alpha 332003 LLC 09-11900
Alpha 335407 LLC 09-11902
Alpha 340479 LLC 09-11903
Alpha 340986 LLC 09-11904
Alpha 341164 LLC 09-11905
Alpha 341222 LLC 09-11906
Alpha 341223 LLC 09-11907
Alpha 341938 LLC 09-11908
Alpha 341948 LLC 09-11910
Alpha 343785 LLC 09-11912
Alpha 344058 LLC 09-11914
Alpha 344304 LLC 09-11915
Alpha 344768 LLC 09-11916
Alpha 344825 LLC 09-11917
Alpha 345156 LLC 09-11918
Alpha 346802 LLC 09-11919
Alpha CML LLC 09-11920
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Catherine Peek McEwen
Debtor's Counsel: Edward J. Peterson, III, Esq.
Stichter, Riedel, Blain & Prosser, PA
110 East Madison Street, Suite 200
Tampa, FL 33602
Tel: (813) 229- 0144
Fax: (813) 229-1811
Email: epeterson.ecf@srbp.com
Estimated Assets: $0 to $50,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by William P. Daly, managing member of the
Company.
AMERICAN ACHIEVEMENT: S&P Downgrades Corp. Credit Rating to 'CC'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Austin, Texas-based American Achievement Corp. to 'CC'
from 'CCC+'. The rating outlook is negative. At the same time,
S&P lowered the issue-level rating on ultimate parent company
American Achievement Group Holding Corp.'s 12.75% senior PIK notes
to 'C' from 'CCC-'. These actions follow the company's announced
cash tender offer for the PIK notes.
S&P placed the 'B' issue-level rating for AAC's senior secured
credit facilities, the 'CCC+' issue-level rating for the company's
8.25% senior subordinated notes, and the 'CCC-' rating for
intermediate holding company AAC Group Holding Corp.'s 10.25%
senior discount notes on CreditWatch with positive implications.
S&P expects to raise these ratings if the tender offer is
successful. S&P also revised the recovery rating on the 8.25%
subordinated notes to '3', indicating the expectation for
meaningful (50% to 70%) recovery in the event of a payment
default, from '4'. This is due to the reduction in the company's
senior secured indebtedness from the repayment of about
$28.5 million of term debt during the first half of fiscal 2009,
and the reduction of the revolver commitment to $25 million
resulting from the recent amendment to the company's credit
facility.
The rating actions follow the company's announcement of the
commencement of a cash tender offer to purchase any and all of its
$110 million outstanding 12.75% senior PIK notes at an offer price
of approximately $210.11 per $1,000 per principal amount of the
notes. A premium in the amount of $20.00 per $1,000 per principal
amount will be offered to those holders tendering their notes on
or prior to June 18, 2009.
S&P views the tender offer as being tantamount to a default given
the distressed financial condition of the company and S&P's
previously stated concerns that AAC will be challenged to sustain
its capital structure over the intermediate term, absent the
success of the announced tender offer. S&P previously raised its
corporate credit rating on the company to 'CCC+' from 'SD'
(selective default) on March 5, 2009, following the repurchase of
$104 million of the 12.75% senior PIK notes. (See Standard &
Poor's research report on American Achievement published March 5.)
Upon a successful closing of the current tender offer, S&P would
lower its rating on the existing 12.75% senior PIK notes that
participate in the tender to 'D', and the corporate credit rating
to 'SD'. As soon as is practical thereafter, S&P will reassess
AAC's capital structure and assign new ratings based on the amount
of notes successfully tendered.
"It is our preliminary expectation that, in the event 100% of the
holders of the senior PIK notes tender their holdings, S&P would
raise the corporate credit rating to 'B-'," noted Standard &
Poor's credit analyst Michael Listner. "This preliminary view
recognizes that the post-tender capital structure would lower
AAC's consolidated debt balances and eliminate the accretion of
debt balances in excess of our expectations for free cash flow."
In the event the tender is successful, S&P expects that the
company would likely have greater flexibility to service and repay
its debt obligations. S&P also believes the company would have
adequate cushion under its covenants to warrant the one-notch
upgrade from the prior 'CCC+' corporate credit rating. The issue-
level ratings on the company's debt at the operating company and
intermediate company levels will remain on CreditWatch until the
conclusion of the tender offer and S&P's review of the outcome.
AMERICAN ACHIEVEMENT: Initiates Tender Offer for 12.75% Sr. Notes
-----------------------------------------------------------------
American Achievement Group Holding Corp. commenced a cash tender
offer to purchase any and all of the $110,090,828 outstanding
principal amount of its 12.75% Senior PIK Notes due 2012 pursuant
to an Offer to Purchase dated June 4, 2009, and a related letter
of transmittal.
The offer will expire at 11:59 p.m., New York City time, on
July 2, 2009, unless extended or earlier terminated. Subject to
the terms of the offer, holders of notes who validly tender and do
not withdraw their Notes, on or prior to the Offer Expiration
Date, will receive $210.11 per $1,000 per principal amount of the
notes. Holders who desire to receive an early tender premium in
the amount of $20.00 per $1,000 per principal amount of the notes
in addition to the offer consideration must validly tender, and
not withdraw, their notes, on or prior to 5:00 p.m., New York City
time, on June 18, 2009, unless extended or earlier terminated. No
additional amounts will be payable with respect to any accrued or
unpaid interest on the Notes as of April 1, 2009. Holders may
withdraw tendered Notes at any time prior to June 18, 2009, at
5:00 p.m., New York City time.
On February 25, 2009, the Company repurchased $104,301,834 of the
aggregate principal amount of the Notes for an aggregate purchase
price of $24,000,000. For no additional consideration, the
sellers of the notes, representing a majority in principal amount
of the Notes, consented to a second supplemental indenture, which
was entered into by the Company and the trustee under the
Indenture on February 25, 2009. The second supplemental indenture
removed substantially all of the restrictive and reporting
covenants under the indenture, as well as certain events of
default and related provisions. Holders of notes that receive the
total consideration pursuant to the offer will receive
approximately the same consideration per $1,000 of principal
amount of Notes as was received by the February sellers in the
repurchase transaction.
The Company said it intends to fund payment for the notes that it
purchase in the offer with a combination of one or more of:
(i) cash borrowed by our subsidiary American Achievement
Corporation under its revolving line of credit and
distributed to the company;
(ii) proceeds of the sale of new preferred stock by a newly
formed subsidiary American Achievement Intermediate Holding
Corp.; and
(iii) cash on hand.
Any new preferred issued by Newco will be structurally senior to
any remaining Notes.
Goldman, Sachs & Co. is acting as the dealer manager for the
Offer. The depositary and information agent for the Offer is
Global Bondholder Services Corporation.
About American Achievement
Based in Austin, Texas, American Achievement Group Holding Corp.
together with its wholly owned subsidiary, AAC Group Holding Corp.
and its indirect wholly owned subsidiary, American Achievement
Corporation, manufacture and supply class rings, yearbooks and
other graduation-related scholastic products for the high school
and college markets and of recognition products, such as letter
jackets, and affinity jewelry designed to commemorate significant
events, achievements and affiliations. Products are and services
are marketed primarily in the United States and operates in four
reporting segments: class rings, yearbooks, graduation products
and other.
* * *
According to the Troubled Company Reporter on June 5, 2009,
Moody's Investors Service upgraded American Achievement Group
Holding Corp.'s corporate family rating to Caa1 from Caa2 and its
probability of default rating to Caa2 from Caa3. The upgrade is
due largely to debt reduction and improved liquidity as a result
of the company's amended Credit Agreement which provides, most
importantly, an extension of the company's revolving credit
facility (albeit at a smaller amount of $25 million) until March
2011 and more flexibility under its financial covenants. In
addition, Moody's upgraded the AAC Group Holdings senior discount
notes to Caa2 from Caa3 and American Achievement Corporation's
senior subordinated notes to B2 from B3 also based on the Loss
Given Default methodology and changes to the capital structure
following the repayment of $28 million of the company's term loan.
The rating outlook is stable.
AMERICAN HOME: Bancorp Inc. Agrees to Acquire American Home Bank
----------------------------------------------------------------
Bancorp Inc. disclosed Thursday it will acquire American Home
Bank, a unit of bankrupt American Home Mortgage Holdings Inc.,
Bankruptcy Law360 reports. Bancorp had earlier entered into a
stock purchase agreement with American Home Mortgage to acquire
all of the outstanding shares of capital stock of American Home
Bank.
According to the Banking Business Review, the total consideration
Bancorp expects to pay is between $7 and $11 million and
consummation of the acquisition is expected in the third quarter
of 2009.
Betsy Z. Cohen, Chief Executive Officer of Bancorp, said, "The
acquisition of American Home Bank will enhance our platform and
regulatory structure to support the continued growth of Bancorp's
prepaid card issuing and private client business lines."
Bancorp's acquisition of American Home Bank was approved by the
United States Bankruptcy Court for the District of Delaware on
May 15, 2009.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for Chapter 11
protection on August 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq., at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors selected Hahn & Hessen LLP as
its counsel. As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000.
American Home filed a de-consolidated plan of liquidation on
August 15, 2008. The former home mortgage lender's liquidating
Chapter 11 plan was confirmed in February 2009 (American Home
Bankruptcy News; Bankruptcy Creditors' Service, Inc., Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
AMERICAN AXLE: Regains Compliance with NYSE Listing Standard
-------------------------------------------------------------
American Axle & Manufacturing Holdings Inc has regained compliance
with the New York Stock Exchange's continued listing standards.
The NYSE received approval from the Securities and Exchange
Commission for a pilot program, retroactive to May 12, 2009, that
lowers the continued listing thresholds related to average market
capitalization and stockholders' equity to $50 million.
As of May 12, 2009, the Company's 30-day average market
capitalization was $83 million. The Company is thus in compliance
with the NYSE continued listing standards.
About American Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- is a world
leader in the manufacture, engineering, design and validation of
driveline and drivetrain systems and related components and
modules, chassis systems and metal-formed products for trucks,
sport utility vehicles, passenger cars and crossover utility
vehicles. In addition to locations in the United States
(Michigan, New York, Ohio and Indiana), the company also has
offices or facilities in Brazil, China, Germany, India, Japan,
Luxembourg, Mexico, Poland, South Korea, Thailand and the United
Kingdom.
* * *
According to the Troubled Company Reporter on May 14, 2009,
Moody's Investors Service lowered American Axle & Manufacturing
Holdings, Inc.'s Probability of Default Rating to Caa3 from Caa1,
and its Corporate Family Rating to Ca from Caa1. In a related
action Moody's also lowered the rating on the company's secured
bank credit facilities to Caa2 from B2, lowered the rating on the
unsecured guaranteed notes to Ca from Caa2, and lowered the rating
on the unsecured convertible notes to Ca from Caa2. The
Speculative Grade Liquidity Rating was affirmed at SGL-4. The
outlook is negative.
Deloitte & Touche LLP, American Axle's auditors, have raised
substantial doubt about the ability of the Company to continue as
a going concern. Deloitte noted the significant downturn in the
domestic automotive industry which has an adverse impact on
American Axle's two largest customers.
As reported by the Troubled Company Reporter on April 30, 2009,
Fitch Ratings downgraded American Axle & Manufacturing Holdings,
Inc.'s Long-term Issuer Default Rating to 'CCC' from 'B-'; and
American Axle & Manufacturing, Inc.'s Long-term IDR to 'CCC' from
'B-'; Senior secured bank facility to 'B-/RR3' from 'B+/RR2'; and
Senior unsecured notes to 'C/RR6' from 'CCC/RR6'.
ARCADE PUBLISHING: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Arcade Publishing, Inc.
116 John Street, Suite 2810
New York, NY 10038
Bankruptcy Case No.: 09-13636
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Martin Glenn
Debtor's Counsel: Sanford Philip Rosen
Sanford P. Rosen & Associates, P.C.
747 Third Avenue
New York, NY 10017-2803
Tel: (212) 223-1100
Fax: (212) 223-1102
Email: rpc@rosenpc.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/nysb09-13636.pdf
The petition was signed by Jeannette M. Seaver, vice president of
the Company.
ASARCO LLC: Parent Files 4th Amended Plan & Bids $2.9BB for Assets
------------------------------------------------------------------
Asarco Incorporated and Americas Mining Corporation delivered to
the U.S. Bankruptcy Court for the Southern District of Texas a
Fourth Amended Plan of Reorganization and Disclosure Statement
for ASARCO LLC, Southern Peru Holdings, LLC, AR Sacaton, LLC, and
ASARCO Master, Inc., on June 1, 2009. ASARCO Inc. and AMC, are
affiliates of Grupo Mexico SAB de C.V., are the parent company of
ASARCO LLC.
In response to questions and concerns raised by various parties in
filed objections and informal comments with respect to the
Parent's Third Amended Plan, the Parent has made revisions that
address and resolve numerous objections and, significantly improve
the proposed treatment of creditors.
Clean and blacklined copies of the Parent 4th Amended Plan are
available for free at:
http://bankrupt.com/misc/ASARCOInc_4th_AmendedPlan.pdf
http://bankrupt.com/misc/ASARCOInc_4thPlan_Redlined.pdf
The Parent said in a statement that its Plan offers more money to
creditors, pays the creditors faster, and provides the greatest
certainty of confirmation by the Court.
Under the terms of the Amended Parent Plan, AMC will contribute
$1.55 billion to ASARCO, which, in addition to the cash ASARCO
currently holds, totals approximately $2.9 billion in cash plus
other considerations. The $2.9 billion is available for
distribution to creditors on the effective date of the Parent
Plan.
In exchange for the Parent Contribution, ASARCO USA Incorporated
or its designee will receive New Equity Interests in Reorganized
ASARCO on the Effective Date.
In contrast, the Parent notes, the competing plan offered by
Vedanta Resources plc's subsidiary, Sterlite (USA), Inc., offers
only $1.1 billion in cash and a non-interest bearing so-called
"copper note," which Vedanta values at $200 million, backstopped
only by a $100 million letter of credit. As previously reported,
AMC has funded an escrow with $1.3 billion to backstop its plan.
A third plan offered by Harbinger Capital Partners amounts to
$500 million in cash with interests in litigation against Vedanta
and AMC that may never be realized.
Plan Sponsor Consideration Cash Infusion Collateral
------------ ------------- ------------- ----------
AMC/Asarco Inc. $2.9 billion $1.3 billion $1.3 billion
in Escrow
Vedanta/Sterlite $2.4 billion $1.1 billion $100 million
Letter of
Credit
Harbinger $1.8 billion $500 million None
The Parent contends that under U.S. bankruptcy law, any
reorganization plan must be deemed "feasible" to be approved by
the Court. AMC believes that the $1.3 billion escrow provides
far more certainty than the $100 million letter of credit Vedanta
has proposed to backstop its own plan, half of which was in place
when Vedanta breached its prior agreement to buy ASARCO.
The Parent Plan offers to pay ASARCO's creditors up to 95% of
their claims, and includes payment of $1.303 billion to AMC plus
a $250 million secured note to pay asbestos claims. The total
value of its new Plan, the Parent points out, is $2.9 billion, of
which $2.703 billion will be paid on the date the Plan is
confirmed, and the remaining $250 million to be paid a year
later.
The Parent points out that the Sterlite Plan offers to pay only
$2.4 billion on the date of Confirmation and then provide
payments through an interest-free note over nine years that are
dependent on the price of copper. The "copper note" is currently
valued at $200 million. Furthermore, the Parent Plan includes
considerations of certain debts and tax credits between AMC and
ASARCO. In total, the AMC plan offers an additional $420 million
in cash to be distributed to creditors than the Vedanta plan.
The Parent's Fourth Amended Plan also reflects these noteworthy
changes:
-- The Parent will work with Reorganized ASARCO to make the
disputed Tax Refund available for distribution to
creditors;
-- Creditors in Class 3 Bondholder Claims, Class 5 General
Unsecured Claims, and Class 6 Environmental Unsecured
Claims will receive a Pro Rata share of the Available Plan
Funds, plus a Pro Rata share of 50% of the net proceeds of
a Litigation Trust to be funded with, among other things,
the Debtors' claims against Sterlite Industries (India)
Ltd. Recoveries by the three Classes are no longer capped
at 75%. The remaining 50% of the net proceeds of the
Litigation Trust are retained by Reorganized ASARCO as
working capital for the eventual benefit of reinstated
creditors of Reorganized ASARCO;
-- If Class 6 Environmental Unsecured Claims accepts the
Parent Plan and expresses a preference for the Plan, or is
neutral with respect to all three plans for the Debtors,
then on the Effective Date:
* Environmental Custodial Trusts substantially identical to
those under the Debtors' Plan will be established;
* Title to the Designated Sites will be conveyed and
transferred into the Trusts for the sole benefit of the
beneficiaries;
* Environmental Custodial Trust Claims will be treated as
Administrative Claims and the Trusts will be funded in
cash in the full amount set forth in the Debtor' Plan;
and
* The Parent's opposition to the pending approval of
environmental settlement agreements will be withdrawn and
any then pending appeals or from the District Court order
denying withdrawal of the reference to the Bankruptcy
Court in connection with the Settlement Motion will be
dismissed;
-- If Class 6 rejects the Parent Plan or expresses a
preference for the Debtors' Plan or the Harbinger Plan,
however, the Parent will continue to pursue its opposition
to the Settlement Motion, and will treat all Claims with
respect to Designated Sites and the Environmental Unsecured
Claims that are addressed in the Settlement Motion as
Disputed Claims. Pending a final order of a court
resolving the Disputed Claims, the Parent's Plan
Administrator will maintain the Environmental Custodial
Trust Assets and appropriate cash to the Disputed Claims
Reserve;
-- A Convenience Class has been added to the Parent's Plan,
and holders of Allowed Convenience Class Claims will be
paid in full; and
-- Late Filed and Subordinated Claims in Classes 9 and 10 will
receive distributions of Available Plan Funds and
Distributed Litigation Trust Interests remaining, if any,
after Classes 3, 5 and 6 receive the full amounts of their
Allowed Claims.
The Parent tells Judge Schmidt that it continues to work with the
Debtors on a joint disclosure statement that, among other things,
describes the expected recoveries to creditors under the Fourth
Amended Plan, and compares and contrasts that recovery to
anticipated recoveries under the Debtors' Plan and the Harbinger
Plan.
A whole article is added to the Parent's Fourth Amended Plan for
the creation and governance of a Litigation Trust, which will be
established as a statutory trust for the purpose of pursuing the
Litigation Trust Claims, liquidating all assets of the Litigation
Trust for the benefit of the Litigation Trust Beneficiaries,
receiving all Litigation Trust Claim recoveries, and distributing
the resulting proceeds and other Cash of the Litigation Trust to
the Litigation Trust Beneficiaries after payment of all expenses
of the Litigation Trust.
The Litigation Trust will have no objective or authority to
continue or engage in the conduct of a trade or business, except
to the extent reasonably necessary to, and consistent with, the
liquidating purpose of the Litigation Trust. Accordingly, the
Litigation Trustee will, in an expeditious but orderly manner,
prosecute, settle, or otherwise dispose of Litigation Trust
Claims, make timely distributions in accordance with the terms of
the Litigation Trust Agreement, and not unduly prolong the
Litigation Trust's duration.
On the Effective Date, the Parent Plan provides that:
(a) the Parent Contribution will be delivered to the Parent's
Plan Administrator;
(b) Reorganized ASARCO will transfer the Distributable Cash to
the Parent's Plan Administrator;
(c) the Tax Refund will be delivered to the Parent's Plan
Administrator according to the Plan;
(d) Reorganized ASARCO will deliver the ASARCO Note, the
ASARCO Security Agreement and the ASARCO Deed of Trust to
the Section 524(g) Trust; and
(e) ASARCO USA Incorporated or its designee that holds the
equity interests in Reorganized ASARCO will deliver the
Parent Pledge Agreement to the Section 524(g) Trust.
On the Effective Date, as further consideration for the New
Equity Interests, the Parent and its affiliates will waive all
Administrative and General Unsecured Claims they hold against the
Debtors through the Effective Date, including claims for
reimbursement pursuant to the Tax Sharing Agreement for any
period prior to the Effective Date.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
$2.6 billion. By October 2008, ASARCO LLC informed the Court that
Sterlite refused to close the proposed sale and thus, the Original
Plan could not be confirmed. The parties has since renewed their
purchase and sale agreement and ASARCO LLC has obtained Court
approval of a settlement and release contained in the new PSA for
the sale of the ASARCO assets for $1.1 billion in cash and a $600
million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to $2.7 billion in cash and a
$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Court Adjourns Disclosure Statement Hearing to June 23
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
further resets to June 23, 2009, the hearing dates that will
govern:
(i) approval of the disclosure statements filed by Americas
Mining Corporation and Asarco Incorporated, and Harbinger
Capital Partners Master Fund I, Ltd., and Citigroup
Global Markets, Inc., or alternatively, the Joint
Disclosure Statement; and
(ii) scheduling of the confirmation hearing with respect to
ASARCO LLC and its debtor-affiliates' Plan of
Reorganization, the Parent's Plan of Reorganization, and
Harbinger's Plan of Reorganization.
The Disclosure Statement Hearing was previously set for June 5.
At the Debtors' request, the Court held a status conference on
June 3 to consider approval of the Disclosure Statements and
other confirmation-related matters. The expedited status
conference was requested to discuss the status of the Joint
Disclosure Statement and issues in light of the Parent's recently
filed Fourth Amended Plan and expected changes from Harbinger.
The confirmation hearing is tentatively rescheduled for August 10
through August 21, 2009. Each of the requests related to the
Disclosure Hearing previously set for June 5 will be carried to
June 23.
Before the resetting of the Disclosure Statement Hearing, the
Court issued a second revised case management order that sets the
deadline to file objections to the confirmation of any of the
three Plans for July 3, 2009, with the Confirmation Hearing set to
commence July 15.
The Second Revised Confirmation CMO also sets these schedules and
deadlines:
June 8, 2009 Deadline for Harbinger to serve responses,
admissions and objections to confirmation
discovery requests
June 8, 2009 Deadline for the Debtors, the Parent, and the
Confirmation Participants to produce all non-
objectionable and non-privileged documents
responsive to Confirmation Discovery Requests
June 12, 2009 Deadline for the Debtors, the Parent, Harbinger,
and any Confirmation Participant to file and
serve a list of all witnesses, whose testimony
the party anticipates presenting at the
Confirmation Hearing
June 15, 2009 Deadline for the Debtors, the Parent, Harbinger,
and the Confirmation Participants to exchange
among themselves their lists identifying the
witnesses they wish to depose in connection with
the Confirmation Hearing
June 16, 2009 The Debtors, the Parent, Harbinger, and
Confirmation Participants will meet to agree on
the date, time, and place where deposition of
witnesses will be held
June 18, 2009 Commencement of the deposition of fact witnesses
June 19, 2009 Deadline for the Debtors, the Parent, Harbinger,
and each Confirmation Participant to file and
serve expert reports
June 26, 2009 Deadline for the Debtors, the Parent, Harbinger,
and each Confirmation Participant to identify
any rebuttal experts
June 29, 2009 Deadline for filing and serving rebuttal expert
reports or responsive reports of previously
identified experts
June 30, 2009 Deadline for conducting depositions of expert
witnesses
July 6, 2009 Deadline to complete all Confirmation
Depositions, unless extended by the Court
A full-text copy of the Revised Confirmation CMO can be obtained
for free at:
http://bankrupt.com/misc/ASARCO_Revised_DS_Schedules_060109.pdf
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
$2.6 billion. By October 2008, ASARCO LLC informed the Court that
Sterlite refused to close the proposed sale and thus, the Original
Plan could not be confirmed. The parties has since renewed their
purchase and sale agreement and ASARCO LLC has obtained Court
approval of a settlement and release contained in the new PSA for
the sale of the ASARCO assets for $1.1 billion in cash and a $600
million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to $2.7 billion in cash and a
$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Court Approves $3.5BB Environmental Claims Settlement
-----------------------------------------------------------------
Judge Richard S. Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas granted ASARCO LLC and its debtor-
affiliates' request to settle certain environmental claims and
accordingly, approved five separate settlement agreements that
together resolve approximately $3.5 billion of environmental
claims filed against the Debtors' bankruptcy estates.
The Settlement Agreements are:
(1) The Residual Environmental Settlement Agreement, which
sets forth a settlement among the United States of
America, ASARCO LLC and the states of Washington and
Nebraska, with respect to three sites for which the
federal and state governments claimed approximately $3
billion in response costs and natural resources damages;
(2) The Multi-State Custodial Trust Settlement Agreement,
which resolves claims at 18 sites in 11 states and sets
forth a settlement of environmental claims among the
United States of America, ASARCO LLC, ASARCO Master, Inc.,
AR Sacaton, LLC, CAPCO, Alta Mining and Development
Company, the states of Alabama, Arizona, Arkansas,
Colorado, Illinois, Indiana, New Mexico, Ohio, Oklahoma,
Utah, and Washington, LePetomane XXV, and St. Paul
Travelers. The Multi-State Custodial Trust will receive a
settlement payment totaling $70,955,493, which will be
treated as an administrative expense priority claim, and
will be allowed a $177,486 general unsecured claim;
(3) The Montana Custodial Trust Settlement Agreement, which
resolves claims at five sites in Montana, and sets
forth a settlement of environmental claims among the
United States of America, the state of Montana, ASARCO
LLC, ASARCO Consulting, Inc., American Smelting and
Refining Company, ASARCO Master, Inc., and the Montana
Environmental Trust Group, LLC. The Montana Custodial
Trust will receive a custodial trust settlement payment
totaling $138.3 million, which will be treated as an
administrative expense priority claim, and the state of
Montana will be allowed a $5 million general unsecured
claim;
(4) The Texas Custodial Trust Settlement Agreement, which
resolves claims at two sites in Texas and sets forth a
settlement of environmental claims among the United States
of America, ASARCO LLC, American Smelting and Refining
Company, and the Texas Commission on Environmental
Quality. The Texas Custodial Trust settlement payments
totaling $52.08 million will be treated as administrative
expense priority claims; and
(5) The Miscellaneous Federal and State Environmental
Settlement Agreement, which relates to 26 sites in 12
states and sets forth a settlement of environmental
among the United States of America, ASARCO LLC, the states
of Arizona, Colorado, New Jersey, Oklahoma and Washington,
and the New Jersey Department of Environmental Protection.
"[T]he Settlement Agreements are well within the range of
reasonableness, fair and equitable, and in the best interest of
the estate as they resolve genuine and substantial disputes among
the parties related to each of the covered sites, avoid risks of
adverse judgments, and avoid the significant costs of continued
litigation and appeals associated with estimating each of the
claims," Judge Schmidt says in his 102-page findings of fact and
conclusions of law, a copy of which can be obtained for free at:
http://bankrupt.com/misc/ASARCO_Findings_Settlement_060509.pdf
The objections of Mitsui & Co. USA, Inc., the city of El Paso,
and Blue Tee Corp., were subsequently settled. The Court found
that other objections to the Settlement Motion that were not
resolved or waived are without merits.
Response Briefs
Before the Court entered its ruling, the state of Montana
submitted a brief supporting the approval of the Settlement
Agreements. Asarco Incorporated, the Debtors' parent, submitted a
reply to the opposition of the United States of America to the
pre-hearing request for ruling on the applicability of the
Comprehensive Environmental Response, Compensation, and Liability
Act on the review of the Environmental Settlements pertaining to
the Omaha Lead Site, Coeur d'Alene, and Custodial Trust Sites.
The Parent also submitted a reply to the Government's post-
hearing brief, and evidence summaries of deposition testimony
taken from several witnesses in relation to the hearing on the
approval of the Settlement Agreements.
The Debtors have also filed a corrected page of their findings of
fact and conclusions of law for the approval of the Settlement
Motion. They also submitted an objection to the Parent's
designation of certain deposition transcripts.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
$2.6 billion. By October 2008, ASARCO LLC informed the Court that
Sterlite refused to close the proposed sale and thus, the Original
Plan could not be confirmed. The parties has since renewed their
purchase and sale agreement and ASARCO LLC has obtained Court
approval of a settlement and release contained in the new PSA for
the sale of the ASARCO assets for $1.1 billion in cash and a $600
million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to $2.7 billion in cash and a
$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Asbestos Panel Balks at Harbinger Disclosure Statement
------------------------------------------------------------------
Asbestos claimants in the bankruptcy case of mining company ASARCO
LLC have objected to a disclosure statement explaining the Chapter
11 plan filed by Harbinger Capital Partners Master Fund I, Ltd,
contending that the document leaves out crucial information about
its reorganization proposal, Bankruptcy Law360 reports.
As reported in the Troubled Company Reporter on June 2, 2009,
Harbinger delivered to the U.S. Bankruptcy Court for the Southern
District of Texas a Chapter 11 Plan of Reorganization and
Disclosure Statement for ASARCO LLC, Southern Peru Holdings, LLC,
AR Sacaton, LLC, and ASARCO Master, Inc., on May 27, 2009.
Harbinger is one of the Debtors' major bondholders.
The Harbinger Plan provides for the purchase of ASARCO LLC's
assets for $500 million and the assumption of certain
liabilities. Aside from the $500 million purchase of ASARCO LLC's
assets by an entity to be designated by Harbinger, the Harbinger
Plan also contemplates the assumption of certain of the Debtors'
liabilities.
Majority of the proceeds from the sale of the ASARCO LLC assets
to Harbinger, together with other available plan consideration,
will be paid to holders of Allowed Claims largely in accordance
with the priorities established by the Bankruptcy Code.
Under the Harbinger Plan, holders of Allowed Unsecured Asbestos
Personal Injury Claims and Unknown Asbestos Claims will receive
100% of the interests in Reorganized Covington and their pro rata
share of the Plan Consideration, which will include cash as well
as the Liquidation Trust Interests and the SCC Litigation Trust
Interests.
Unlike the Debtors' Plan and the Parent's Plan, the Harbinger Plan
does not provide for a channeling injunction pursuant to Section
524(g) of the Bankruptcy Code. Rather, holders of Unsecured
Asbestos Personal Injury Claims and Unknown Asbestos Claims must
first be satisfied by recourse against the Asbestos Trust.
Copies of the Harbinger Plan and Disclosure Statement, as well a
redlined copy of the Harbinger Plan versus the Debtors' Plan, are
available for free at:
http://bankrupt.com/misc/ASARCO_Harbinger_Plan_05272007.pdf
http://bankrupt.com/misc/ASARCO_Harbinger_DS_05272007.pdf
http://bankrupt.com/misc/ASARCO_Harbinger_ComparedPlan.pdf
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
$2.6 billion. By October 2008, ASARCO LLC informed the Court that
Sterlite refused to close the proposed sale and thus, the Original
Plan could not be confirmed. The parties has since renewed their
purchase and sale agreement and ASARCO LLC has obtained Court
approval of a settlement and release contained in the new PSA for
the sale of the ASARCO assets for $1.1 billion in cash and a $600
million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to $2.7 billion in cash and a
$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
BARBERO BAKERY: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Barbero Bakery Inc.
61 Conrad Street
Trenton, NJ 08611
Bankruptcy Case No.: 09-24647
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
District of New Jersey (Trenton)
Judge: Michael B. Kaplan
Debtor's Counsel: Scott Eric Kaplan, Esq.
Malsbury, Armenante & Kaplan
12 North Main St.
PO Box 157
Allentown, NJ 08501
Tel: (609) 259-7944
Email: kaplan@malsarmlaw.com
Total Assets: $263,310
Total Debts: $1,043,695
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/njb09-24647.pdf
C&O ENTERPRISES: Case Summary & 6 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: C&O Enterprises, LLC
70340 Highway 21
Covington, LA 70433
Bankruptcy Case No.: 09-11686
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Eastern District of Louisiana (New Orleans)
Judge: Jerry A. Brown
Debtor's Counsel: Robin R. DeLeo, Esq.
800 Ramon St.
Mandeville, LA 70448
Tel: (985) 727-1664
Fax: (985) 727-4388
Email: jennifer@northshoreattorney.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
6 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/laeb09-11686.pdf
The petition was signed by Kanetha Chau, managing member of the
Company.
CANADIAN SUPERIOR: Secures CCAA Protection Extension
----------------------------------------------------
Canadian Superior Energy Inc.'s application on June 4, 2009, to
the Court of Queen's Bench of Alberta for an Order under the
Companies' Creditors Arrangement Act (Canada) to extend its CCAA
protection has been granted, allowing the Company to continue to
prepare a plan of arrangement for its creditors, and staying all
claims and actions against the Company and its assets.
As reported by the Troubled Company Reporter on March 10, 2009,
Canadian Superior said its application to the Court of Queen's
Bench of Alberta for an Order under the CCAA was successful,
allowing the Company to prepare a plan of arrangement for its
creditors, and staying all claims and actions against the Company
and its assets. The Order was made under section 11 of the CCAA
and it was in effect until March 25, 2009.
The extension under the Order granted will be in effect until
July 24, 2009, at which time the matter will be reviewed by the
Court.
The order permits Canadian Superior to remain in possession and
control of its property, carry on its business, and retain
employees and other service providers. While the Order is in
effect the Company will continue to work with its Court appointed
Monitor. The previously announced Independent Committee, working
with its financial advisor, Jennings Capital Inc., continues to
assess all strategic alternatives available to the Company with a
view of meeting the best interests of all stakeholders and
maximizing shareholder value. The alternatives being considered
include the previously announced sale of an undivided 45% interest
in its Block 5(c) asset in Trinidad and Tobago to Centrica plc.
and recapitalization proposals. All of these initiatives are well
underway and the Company expects to re-structure in an organized
manner and emerge from CCAA protection in due course.
Canadian Superior Energy Inc. (TSX: SNG)(NYSE Alternext US: SNG)
-- http://www.cansup.com/-- is a Calgary, Alberta, Canada-based
diversified global energy company engaged in the exploration and
production of oil and natural gas, and liquefied natural gas
projects, with operations offshore Trinidad and Tobago, offshore
Nova Scotia, Canada, in Western Canada, in the United States and
in North Africa. Canadian Superior has approximately 20,000
shareholders worldwide, including some of the top institutional
shareholders in North America.
CANTRONIC SYSTEMS: To Delay Filing of Annual Financial Statements
-----------------------------------------------------------------
Cantronic Systems Inc. won't be in a position to file its audited
annual financial statements, management's discussion and analysis,
and related certifications for the fiscal year ended January 31,
2009, on or before June 1, 2009, as required, as a result in large
part of the extremely busy period the Issuer has experienced
during the past two months as a result of the H1N1 human swine flu
epidemic. The Issuer has been trying to meet unparalleled demand
for its FeverScan M3000 Thermal Imaging Camera and its management
and employees have been working unusually long hours and under
extreme time pressures to meet customer demand and to provide
support for its products.
Accordingly, the Issuer has requested the issuance of a management
cease trade order under the provisions of National Policy 12-203
Cease Trade Orders for Continuous Disclosure Defaults so as to
permit the continued trading in the Issuer's Common Shares by
persons other than insiders and employees of the Issuer. The
Issuer is working closely with its auditors, Ernst & Young LLP,
and the Issuer expects to be able to have the audit of the
Statements completed, and the Statements filed, by mid June, 2009
and in any event no later than June 30, 2009.
The Issuer said that it intends to satisfy the provisions of
section 4.4 of NP 12-203 and issue bi-weekly default status
reports for so long as the Issuer remains in default of the
financial statement filing requirement, containing any material
changes to the information in this release; all actions taken by
the Issuer to remedy the default; particulars of any failure by
the Issuer to fulfill these provisions; any subsequent defaults of
the Issuer requiring a default announcement; and, any other
material information concerning the affairs of the Issuer not
previously disclosed. The Issuer intends to issue the first
default status report on June 10, 2009. The Issuer is not subject
to any insolvency proceedings nor is there in other material
information concerning the affairs of the Issuer that has not been
generally disclosed.
Based in Vancouver, British Columbia, Cantronic Systems Inc. (TSX
VENTURE: CTS) -- http://www.cantronics.com/-- manufactures
instruments with infrared night vision technology, specializing in
passive and active infrared cameras, infrared illuminators, low
light infrared sensitive CCD cameras and long-range night vision
surveillance systems for demanding homeland security applications.
Cantronic, through its U.S. subsidiary QWIP Technologies, Inc.,
holds a worldwide exclusive license from the California Institute
of Technology to produce and sell infrared detectors and sensors
based on Caltech's Quantum Well Infrared Photodetector technology.
CANWEST LIMITED: Moody's Downgrades Default Rating to 'Ca/LD'
-------------------------------------------------------------
Moody's Investors Service downgraded Canwest Limited Partnership's
probability of default rating to Ca/LD and its corporate family to
Caa3 on news the company "has decided to not make payments
totaling approximately $10 million due under its senior secured
credit facility" on May 29, 2009, the end of the company's fiscal
quarter. This suggests that CLP has chosen to force the issue
with its bank lenders, and is also likely an indication that
ongoing negotiations with the bank lenders were not going well.
Given the recent experience of CLP's parent company, Canwest Media
Inc., this step was likely unavoidable. Since the payment
includes a principal component and there is no cure period, the
bank credit facility is now in default. The lenders have not
accelerated repayment.
The PDR's LD suffix indicates a limited default, i.e. only a
component of the company's debt structure is in default. The
company's bond indenture contains cross default/acceleration
provisions with a $25 million threshold. The missed payment is
less than the threshold. Should subsequent payments take the
aggregate of missed payments beyond the threshold or should bank
lenders accelerate maturity -- the entire (approximately)
C$1.065 billion bank credit facility is in default -- the bonds'
cross default/acceleration will be triggered. The bond indenture
has a 60 day (post notice) cure for a default and a 30 day (post
notice) cure for acceleration. Given the significant potential
for the company's defaults to eventually involve all creditors,
the ratings outlook is negative. The rating actions effectively
conclude a review initiated on April 13, 2009.
Rating and Outlook Actions:
Issuer: Canwest Limited Partnership
-- Probability of Default Rating, Downgraded to Ca/LD from Caa2
-- Corporate Family Rating, Downgraded to Ca from Caa2
-- Senior Secured Bank Credit Facility, Downgraded to Caa3
(LGD3, 30%) from B3 (LGD3, 30%)
-- Senior Subordinated Regular Bond/Debenture, Downgraded to C
(LGD5, 84%) from Ca (LGD5, 88%)
-- Outlook, Changed To Negative From Under Review
Moody's most recent rating action concerning Canwest LP was taken
on April 13, 2009 at which time the company's CFR and PRD were
assigned as Caa2 and placed on review.
Canwest Limited Partnership is a Winnipeg, Manitoba based
newspaper publishing company that is wholly owned through Canwest
Media Inc. by Canwest Global Communications Corp. (a publicly
traded international media company with interests in broadcast
television, publications, radio, specialty television channels,
out-of-home advertising and interactive operations in Canada,
Australia, Malaysia, Singapore, Indonesia, the United Kingdom and
the United States).
CAPMARK FINANCIAL: Inks New $1.5 Billion Term Loan Facility
-----------------------------------------------------------
Capmark Financial Group Inc. has entered into a new $1.5 billion
term loan facility and has entered into amendments to its existing
senior credit facility and bridge loan agreement.
Proceeds from the New Loan Facility, along with $75 million in
cash, were used to refinance a portion of the loans outstanding
under the Existing Credit Agreements. The Facility is secured by
a perfected first priority pledge and security interest on all of
Capmark's U.S. and Canadian mortgage loan assets and foreclosed
real estate, excluding assets held by Capmark Bank, and the
proceeds of any of those assets. The New Facility is guaranteed
by each of the guarantors under the Existing Credit Agreements and
certain additional material domestic wholly owned subsidiaries of
Capmark.
Amounts borrowed under the New Facility bear interest at an
initial rate of approximately 4%. Capmark is required to prepay
loans under the Facility with the proceeds of any issuance of debt
or equity securities and the proceeds from the collateral securing
the Facility. The Facility contains a number of financial and
operating covenants, including a minimum liquidity covenant, a run
rate operating expense covenant, restrictions on incurring debt
and granting liens, restrictions on acquiring certain investments
and restrictions on certain payments.
The New Facility will mature March 23, 2011. It may be
accelerated by the lenders to April 2010 if 90% of Capmark's
senior notes due 2010 have not been repaid or redeemed,
refinanced, exchanged or extended beyond June 30, 2011, and
converted to equity prior to April 15, 2010.
In connection with the closing of the Facility, Capmark entered
into amendments to the Existing Credit Agreements. After giving
effect to the refinancing with the proceeds of the Facility, the
senior credit facility and bridge loan agreement will have
$4.4 billion and $234.2 million outstanding, respectively. Loans
under the Existing Credit Agreements will remain unsecured.
The amendments extend the maturity date under the bridge loan
agreement to the maturity date of the New Facility, conform the
financial covenants in those agreements to those in the New
Facility and amend certain other provisions including amendments
necessary to enter into the Facility. In addition, certain
operating covenants contained in the Facility will become
operative under the Existing Credit Agreements upon the repayment
in full of the Facility. Capmark paid the lenders certain fees in
connection with the execution of the Facility and the amendments
to the Existing Credit Agreements.
After giving effect to the closing of the Facility and the related
transactions, Capmark has more than $1 billion in unrestricted
cash, excluding cash held by Capmark Bank.
About Capmark
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- is a diversified company that provides
a broad range of financial services to investors in commercial
real estate-related assets. Capmark has three core businesses:
lending and mortgage banking, investments and funds management,
and servicing. Capmark operates in North America, Europe and
Asia.
* * *
As reported by the TCR on Apr. 30, 2009, Moody's Investors Service
downgraded the senior unsecured ratings of Capmark Financial Group
Inc. to 'Caa1' from 'B2', with the rating remaining under review
for possible downgrade. The rating action reflects the
explanatory note in Capmark's 10-K filing in which its auditors
raise doubt about the company's ability to continue as a going
concern, as well as the still unresolved nature of Capmark's
efforts to modify the terms of its bridge loan agreement and
senior credit facility, which could have implications for its
liquidity and funding.
CHALLENGER ENERGY: Secures Extension of CCAA Protection
-------------------------------------------------------
Challenger Energy Corp. has been granted an extension of the stay
of proceedings to July 24, 2009, to the previous court order that
was granted on April 20, 2009, which had extended the stay of
proceedings from April 20, 2009, to June 4, 2009, from the Court
of Queen's Bench of Alberta, Judicial District of Calgary for
protection under the Companies' Creditors Arrangement Act
(Canada).
The order permits Challenger to remain in possession and control
of its property, carry on its business, retain employees and other
service providers and continue with its previously announced
process to evaluate the various strategic alternatives available
to the Company, including a sale of Challenger or its assets. A
special committee of directors was appointed to oversee this
process and Peters & Co. Limited was retained as financial
advisor.
Challenger Energy Corp. -- http://www.challenger-energy.com/-- is
a Calgary, Alberta, Canada based oil and gas exploration company
which has spent approximately U.S. $80.1 million on exploration
Block 5(c) offshore Trinidad and Tobago.
CHARTER COMMUNICATIONS: Seeks Extension of Removal Period
---------------------------------------------------------
Section 1452 of the Bankruptcy Code provides that "a party may
remove any claim or cause of action in a civil action other than a
proceeding before the United States Tax Court or a civil action by
a governmental unit to enforce such governmental unit's police or
regulatory power, to the district court for the district where
such civil action is pending. . .."
Pursuant to Rule 9027 of the Federal Rules of Bankruptcy
Procedure, a notice of removal may be filed only within the
longest of:
(a) 90 days after the Petition Date;
(b) 30 days after the entry of an order terminating stay, if
the claim or cause of action in a civil action has been
stayed; or
(c) 30 days after a trustee qualifies in a Chapter 11
reorganization case but not later than 180 days after the
order for relief.
Pursuant to Rule 9006(b) of the Federal Rules of Bankruptcy
Procedures, the Court may extend the period within which the
Debtors may remove actions pending against them before the
Petition Date "for cause . . . at any time in its discretion . . .
if the [request is] made before the expiration of the period
originally prescribed or as extended by a previous [O]rder."
By this motion, Charter Communications, Inc., and its debtor-
affiliates ask the U.S. Bankruptcy Court for the Southern District
of New York to extend the period within which they may remove
actions to the later of:
(1) a plan of reorganization's confirmation date;
(2) the date that is 30 days after the entry of an order
terminating the automatic stay provided by Section 362 of
the Bankruptcy Code with respect to the particular action
sought to be removed; and
(3) with respect to actions commenced after the Petition Date,
the time periods set forth in Rule 9027(a)(3), which is
the shorter of:
* 30 days after receipt of a copy of the initial pleading
setting forth the claim or cause of action sought to be
removed, or
* 30 days after receipt of the summons if the initial
pleading has been filed with the court but not served
with the summons.
The Debtors further ask that the requested extension be without
prejudice to (i) any position the Debtors may take regarding the
applicability of the automatic stay, and (ii) the Debtors' right
to seek future extensions of the Removal Period.
As one of the largest providers of broadband entertainment and
communications services in the United States of America, the
Debtors are party to numerous actions, pending as of the Petition
Date, in various state and federal courts, relates Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, in New York. He adds that
the Postpetition Actions have been filed and more may still be
filed against the Debtors during the remainder of the Chapter 11
cases. He asserts that although Section 362(a) automatically
stays many of the Actions, at this juncture of the cases, the
Debtors are still completing their analysis and determining which,
if any, Actions they will seek to remove.
The Debtors' primary focus in the cases, thus far, has been
advancing their restructuring efforts with the goal of a
successful and expeditious emergence from bankruptcy, Mr. Cieri
tells the Court. To that end, he notes, since the commencement of
the cases, the Debtors have worked diligently on a number of
critical matters.
Specifically, the Debtors and its professionals have focused on:
-- stabilizing the Debtors' business operations upon
commencement of the cases;
-- obtaining approval of various motions, which enable the
Debtors to continue operating their business, including
obtaining approval to pay their trade creditors in the
ordinary course during the pendency of the cases;
-- filing the Debtors' plan of reorganization and disclosure
statement;
-- obtaining approval of the Disclosure Statement and
commencing solicitation of votes on the Plan;
-- preparing and filing the Debtors' schedules of assets and
liabilities and statements of financial affairs -- a
time-consuming undertaking given the Debtors' size and
complexity;
-- conducting extensive discovery in connection with the
adversary proceeding filed by JPMorgan Chase Bank, N.A.,
regarding reinstatement of the Debtors' prepetition credit
facilities; and
-- preparing for the confirmation hearing on approval of the
Plan.
As a result of the Debtors' attention to the critical matters, the
Debtors are still undertaking a thorough analysis of the Actions
and finalizing their strategy with respect to whether to remove
any of the Actions, Mr. Cieri points out.
Under the circumstances, in conjunction with the accelerated
timeline of the cases, the Debtors believe the requested Removal
Period extension, from the presently applicable statutory deadline
of June 25, 2009, will provide them with the necessary time to
consider and make informed, deliberate decisions concerning the
removal of any Actions.
Without the requested extension, the Debtors believe they will not
have sufficient time to consider whether removal of any of the
Actions is necessary. Accordingly, the Debtors submit that cause
exists for the relief requested.
The Debtors further submit that the rights of any party to the
Actions will not be prejudiced by the extension. Mr. Cieri
contends that pursuant to Section 362(a), the Actions are
automatically stayed as to the Debtors, even absent an extension
of the Removal Period.
If the Debtors ultimately seek to remove any of the Actions
pursuant to Rule 9027, Mr. Cieri says that any party to the
litigation can seek to have the action remanded pursuant to
Section 1452(b), which provides that the court to which the Action
is removed may remand the Action on any equitable ground. Thus,
he insists, the sought relief will not impinge upon any party's
rights under Section 1452(b).
About Charter Communications
Based in St. Louis, Missouri, Charter Communications, Inc. (Pink
OTC: CHTRQ) -- http://www.charter.com/-- is a broadband
communications company and the fourth-largest cable operator in
the United States. Charter provides a full range of advanced
broadband services, including advanced Charter Digital Cable(R)
video entertainment programming, Charter High-Speed(R) Internet
access, and Charter Telephone(R). Charter Business(TM) similarly
provides scalable, tailored, and cost-effective broadband
communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and
music entertainment services, and business telephone. Charter's
advertising sales and production services are sold under the
Charter Media(R) brand.
On March 16, 2009, Charter Communications filed its annual report
on Form 10-K, which contained a going concern modification to the
audit opinion from its independent registered public accounting
firm.
Charter Communications and more than a hundred affiliates filed
voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D. N.Y.
Case No. 09-11435). Pacific Microwave filed for bankruptcy
protection on April 20, 2009, disclosing assets of not more than
$50,000 and debts of more than $1 billion.
The Hon. James M. Peck presides over the cases. Richard M. Cieri,
Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at
Kirkland & Ellis LLP, in New York, serve as counsel to the
Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at
Togut, Segal & Segal LLP in New York, serves as Charter
Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost,
Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel.
Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the
Debtors' independent auditors. The Debtors' valuation consultants
are Duff & Phelps LLC; the Debtors' financial advisors are Lazard
Freres & Co. LLC; and the Debtors' restructuring consultants are
AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright
Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims
agent is Kurtzman Carson Consultants LLC. As of Dec. 31, 2008,
the Debtors had total assets of $13,881,617,723, and total
liabilities of $24,185,668,550.
Bankruptcy Creditors' Service, Inc., publishes Charter
Communications Bankruptcy News. The newsletter tracks the Chapter
11 proceedings undertaken by Charter Communications and more than
100 of its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
CHARTER COMMUNICATIONS: Can Tap Hogan & Hartson as Special Counsel
------------------------------------------------------------------
Charter Communications, Inc., and its debtor-affiliates sought and
obtained permission from the U.S. Bankruptcy Court for the
Southern District of New York to employ Hogan & Hartson LLP as
their special counsel, nunc pro tunc to the Petition Date, and in
accordance with the terms and conditions set forth in the
engagement letters between the parties.
As special counsel, Hogan will:
(a) advise, analyze and represent the Debtors in connection
with various programming matters, including negotiation,
analysis and preparation of agreements to obtain and
distribute television program content from various program
providers and broadcast television stations, defined as
Parcel 1 Work in the Engagement Letters;
(b) advise, analyze and represent the Debtors in connection
with litigation and claims in which the Debtors are
defendants or potential defendants, including pending
disputes asserting that the Debtors, along with other
participants in the cable television business, violated
the federal anti-trust laws as a result of the form of
agreements they entered into to obtain programming and the
terms and conditions under which programming was offered
by the Debtors to their customers;
(c) advise and represent the Debtors relating to pole
attachments with utility pole owners and other agreements
to obtain right of way and other consents and agreements
to permit the Debtors access for facilities and equipment
to assure delivery of services to their customers,
including pending negotiations in the states of Alabama,
Georgia and others; and
(d) advise concerning claims or potential litigation,
including matters relevant to the cable television
industry pending before the Federal Communications
Commission or various state regulatory agencies or local
franchising authorities.
Subject to Court approval under Section 330(a) of the Bankruptcy
Code, the Debtors propose to pay Hogan based on the firm's hourly
rates, and to reimburse the firm's expenses incurred in connection
with its retention.
Hogan's current hourly rates are:
Billing Category Billing Rate
---------------- ------------
Partners $450 - $1,050
Counsel $345 - $860
Associates $290 - $575
Paraprofessionals $135 - $290
The professionals presently expected to have primary
responsibility for providing services to the Debtors are:
Billing Category Billing Rate
---------------- ------------
David Dunn $775
J. Davidson Thomas $600
Nikki Tuttle $565
Under the Engagement Letters, Parcel 1 Work rates are based on a
fixed scale, and Hogan will perform approximately 1,350 hours per
year of Parcel 1 Work until December 31, 2010. The weighted
hourly rate for Parcel 1 Work is $449.
The Debtors also reveal that Hogan is owed $350,000 for legal
services rendered before the Petition Date.
David Dunn, Esq., a partner at Hogan & Hartson, assures the Court
that the firm does not hold, represent or have any relationship
with any person that would be adverse to the Debtors or their
bankruptcy estates. He also reveals that Hogan & Hartson has
certain connections with creditors, equity security holders and
other parties-in-interest in the Chapter 11 cases in matters
unrelated to cases. A list of the interested parties is available
for free at:
http://bankrupt.com/misc/CCI_Hogan_Clients_051009.pdf
About Charter Communications
Based in St. Louis, Missouri, Charter Communications, Inc. (Pink
OTC: CHTRQ) -- http://www.charter.com/-- is a broadband
communications company and the fourth-largest cable operator in
the United States. Charter provides a full range of advanced
broadband services, including advanced Charter Digital Cable(R)
video entertainment programming, Charter High-Speed(R) Internet
access, and Charter Telephone(R). Charter Business(TM) similarly
provides scalable, tailored, and cost-effective broadband
communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and
music entertainment services, and business telephone. Charter's
advertising sales and production services are sold under the
Charter Media(R) brand.
On March 16, 2009, Charter Communications filed its annual report
on Form 10-K, which contained a going concern modification to the
audit opinion from its independent registered public accounting
firm.
Charter Communications and more than a hundred affiliates filed
voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D. N.Y.
Case No. 09-11435). Pacific Microwave filed for bankruptcy
protection on April 20, 2009, disclosing assets of not more than
$50,000 and debts of more than $1 billion.
The Hon. James M. Peck presides over the cases. Richard M. Cieri,
Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at
Kirkland & Ellis LLP, in New York, serve as counsel to the
Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at
Togut, Segal & Segal LLP in New York, serves as Charter
Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost,
Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel.
Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the
Debtors' independent auditors. The Debtors' valuation consultants
are Duff & Phelps LLC; the Debtors' financial advisors are Lazard
Freres & Co. LLC; and the Debtors' restructuring consultants are
AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright
Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims
agent is Kurtzman Carson Consultants LLC. As of Dec. 31, 2008,
the Debtors had total assets of $13,881,617,723, and total
liabilities of $24,185,668,550.
Bankruptcy Creditors' Service, Inc., publishes Charter
Communications Bankruptcy News. The newsletter tracks the Chapter
11 proceedings undertaken by Charter Communications and more than
100 of its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
CHARTER COMMUNICATIONS: Can Hire Sherman & Howard as M&A Counsel
----------------------------------------------------------------
As cable operators that are regularly engaged in mergers and
acquisitions and other commercial activity, Charter
Communications, Inc., and its debtor-affiliates are subject to a
myriad of state and federal laws and regulations, relates Gregory
L. Doody, the Debtors' chief restructuring officer and senior
counsel. Consequently, he notes, a bankruptcy filing will require
an ongoing review and analysis of those laws and regulations, as
the laws apply to the Debtors' mergers and acquisitions activity
and ordinary commercial operations.
Therefore, the Debtors seek the authority of the U.S. Bankruptcy
Court for the Southern District of New York to employ Sherman &
Howard L.L.C. as their mergers and acquisitions and commercial
operations counsel, nunc pro tunc to the Petition Date, in
accordance with the terms and conditions set forth in an
engagement letter between the Debtors and Sherman dated
November 20, 2007.
As mergers counsel, Sherman will represent the Debtors in
connection with mergers and acquisitions activity and commercial
operations matters.
Mr. Doody informs the Court that Sherman does not bill on an
hourly basis. Rather, under the Engagement Letter, the Debtors
have contracted for 15,200 hours of professional services related
to mergers and acquisitions activities and 6,621 hours of
professional services related to commercial operations matters for
a fixed price of $5,209,762, to be paid over the 38-month term of
the engagement that began in November 2007 at a monthly rate of
$137,099.
Sherman's fixed fee, negotiated in 2007, achieves cost reduction
and predictability of outside counsel expenses for the Debtors,
Mr. Doody explains. He asserts that the fixed fee promises long-
term exclusivity and predictable cash flow for Sherman, and is not
subject to review on a monthly basis, but may be adjusted by
mutual consent of Sherman and the Debtors at two fixed dates
during the engagement -- March 1, 2009, and March 1, 2010, if
Sherman's actual hours worked are less than 90% or greater than
110% of a pro rata portion of its allocated hours under the
Engagement Letter. At February 28, 2009, Sherman's actual hours
were equal to approximately 97% of the pro rata portion of its
allocated hours, and no adjustment was appropriate in 2009.
Sherman's fixed price was based on a weighted hourly rate of $247
for mergers and acquisitions representation and $219 for
commercial operations work, Mr. Doody tells the Court. He notes
that the rates represent substantial discounts to Sherman's
standard rates, which currently range from:
Billing Category Billing Rate
---------------- ------------
Members $335 - $460
Counsel $250 - $440
Associates $190 - $305
Paraprofessionals $105 - $225
These professionals and paraprofessionals are presently expected
to have primary responsibility for providing mergers and
acquisitions services to the Debtors based on the $247 weighted
hourly rate:
* Eileen Barnhardt;
* Joan Blaik;
* Niccole Brennan;
* Haley Burton;
* Victoria Chenault;
* Martha Dague;
* Joseph Davis;
* Michael Dubetz;
* Shannon Dunham;
* Angela Gasperini;
* Terence Gill;
* Aubyn Krulish;
* Jon Lien;
* Maxi Lyons;
* Paulina Proper;
* Gregory Ramos;
* Teri Scott;
* Mary Uchida; and
* AnaLisa Valle.
These professionals and paraprofessionals are presently expected
to have primary responsibility for providing commercial operations
services to the Debtors based on the $219 weighted hourly rate:
* Leigh Augustine;
* Eileen Barnhardt;
* Deborah Buckley;
* Joseph Davis;
* Michael Dubetz;
* Shannon Dunham;
* Mark Fulford;
* Angela Gasperini;
* Christian Hendrickson;
* Aubyn Krulish;
* Gregory Ramos;
* David Schachter;
* Teri Scott;
* Thomas Sloey;
* Mary Uchida; and
* AnaLisa Valle.
Sherman will also be reimbursed for all other expenses incurred in
connection with its retention by the Debtors.
Gregory J. Ramos, Esq., a member of Sherman, tells Judge Peck that
the firm has represented and does currently represent certain
interested persons and entities, but only in matters unrelated to
its retention by the Debtors. A full-text copy of the list of the
interested persons and entities is available for free at:
http://bankrupt.com/misc/CCI_Sherman_Clients_051009.pdf
Mr. Doody reveals that Sherman has not received any payments from
the Debtors during the 12 months immediately preceding the
Petition Date for services rendered or to be rendered in
contemplation of or in connection with the Chapter 11 cases. He
adds that Sherman is owed $137,099 for legal services rendered
before the Petition Date, plus disbursements for $16,503, and
hence, Sherman has a claim against the Debtors with respect to
those prepetition amounts.
Although Sherman holds unsecured claims against the Debtors in
connection with services rendered to the Debtors prepetition, Mr.
Ramos does not believe that Sherman has an interest materially
adverse to the Debtors, their creditors or other parties-in-
interest.
* * *
The Court authorized the Debtors to employ Sherman & Howard L.L.C.
as their mergers and acquisitions and commercial operations
counsel.
About Charter Communications
Based in St. Louis, Missouri, Charter Communications, Inc. (Pink
OTC: CHTRQ) -- http://www.charter.com/-- is a broadband
communications company and the fourth-largest cable operator in
the United States. Charter provides a full range of advanced
broadband services, including advanced Charter Digital Cable(R)
video entertainment programming, Charter High-Speed(R) Internet
access, and Charter Telephone(R). Charter Business(TM) similarly
provides scalable, tailored, and cost-effective broadband
communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and
music entertainment services, and business telephone. Charter's
advertising sales and production services are sold under the
Charter Media(R) brand.
On March 16, 2009, Charter Communications filed its annual report
on Form 10-K, which contained a going concern modification to the
audit opinion from its independent registered public accounting
firm.
Charter Communications and more than a hundred affiliates filed
voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D. N.Y.
Case No. 09-11435). Pacific Microwave filed for bankruptcy
protection on April 20, 2009, disclosing assets of not more than
$50,000 and debts of more than $1 billion.
The Hon. James M. Peck presides over the cases. Richard M. Cieri,
Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at
Kirkland & Ellis LLP, in New York, serve as counsel to the
Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at
Togut, Segal & Segal LLP in New York, serves as Charter
Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost,
Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel.
Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the
Debtors' independent auditors. The Debtors' valuation consultants
are Duff & Phelps LLC; the Debtors' financial advisors are Lazard
Freres & Co. LLC; and the Debtors' restructuring consultants are
AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright
Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims
agent is Kurtzman Carson Consultants LLC. As of Dec. 31, 2008,
the Debtors had total assets of $13,881,617,723, and total
liabilities of $24,185,668,550.
Bankruptcy Creditors' Service, Inc., publishes Charter
Communications Bankruptcy News. The newsletter tracks the Chapter
11 proceedings undertaken by Charter Communications and more than
100 of its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
CHARTER COMMUNICATIONS: Board Names Raclin, Et Al., to New Posts
----------------------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission, Kevin D. Howard, vice president, controller and chief
accounting officer, disclosed that the Board of Directors of
Charter Communications, Inc., as of May 19, 2009, has appointed
these officers to their new positions:
Officer Old Position New Position
------- ------------ ------------
Grier C. Raclin Exec. vice pres., Exec. vice pres.,
general counsel and chief administrative
corporate secretary officer
Gregory L. Doody Chief restructuring Chief restructuring
officer officer and general
counsel
Richard R. Dykhouse Vice president, Vice president,
associate general associate general
counsel and counsel and
assistant secretary corporate secretary
Based in St. Louis, Missouri, Charter Communications, Inc. (Pink
OTC: CHTRQ) -- http://www.charter.com/-- is a broadband
communications company and the fourth-largest cable operator in
the United States. Charter provides a full range of advanced
broadband services, including advanced Charter Digital Cable(R)
video entertainment programming, Charter High-Speed(R) Internet
access, and Charter Telephone(R). Charter Business(TM) similarly
provides scalable, tailored, and cost-effective broadband
communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and
music entertainment services, and business telephone. Charter's
advertising sales and production services are sold under the
Charter Media(R) brand.
On March 16, 2009, Charter Communications filed its annual report
on Form 10-K, which contained a going concern modification to the
audit opinion from its independent registered public accounting
firm.
Charter Communications and more than a hundred affiliates filed
voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D. N.Y.
Case No. 09-11435). Pacific Microwave filed for bankruptcy
protection on April 20, 2009, disclosing assets of not more than
$50,000 and debts of more than $1 billion.
The Hon. James M. Peck presides over the cases. Richard M. Cieri,
Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at
Kirkland & Ellis LLP, in New York, serve as counsel to the
Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at
Togut, Segal & Segal LLP in New York, serves as Charter
Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost,
Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel.
Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the
Debtors' independent auditors. The Debtors' valuation consultants
are Duff & Phelps LLC; the Debtors' financial advisors are Lazard
Freres & Co. LLC; and the Debtors' restructuring consultants are
AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright
Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims
agent is Kurtzman Carson Consultants LLC. As of Dec. 31, 2008,
the Debtors had total assets of $13,881,617,723, and total
liabilities of $24,185,668,550.
Bankruptcy Creditors' Service, Inc., publishes Charter
Communications Bankruptcy News. The newsletter tracks the Chapter
11 proceedings undertaken by Charter Communications and more than
100 of its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
CHIPPEWA COUNTY: S&P Gives Stable Outlook; Affirms 'BB+' Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Chippewa County Hospital Finance Authority, Michigan's series 1997
revenue bonds, issued for Chippewa County War Memorial Hospital,
to stable from negative. At the same time, Standard & Poor's
affirmed its 'BB+' long-term rating on the bonds.
"The outlook revision reflects a return to operating profitability
in fiscal 2007 that was sustained and improved in fiscal 2008,"
said Standard & Poor's credit analyst Stephen Infranco.
While limited liquidity levels remain an ongoing concern, the
improved cash flow, and resulting improved coverage of maximum
annual debt service to 2.2x in fiscal 2008 provides a measure of
stability at the current rating level.
War Memorial posted solid operating income for the fiscal year
ended Dec. 31, 2008, of $4.5 million (a 4.9% margin) and excess
income of $4.8 million (5.3% margin). However, fiscal 2008
results are bolstered by a one-time low volume adjustment payment
of $2.4 million from Medicare that War Memorial received. In
fiscal 2006, War Memorial experienced an approximately 11%
decrease in discharges, and as a designated sole community
provider, filed a request for additional reimbursement under
Medicare regulations. Even without the one-time payment,
operations would have still been a positive $2.1 million and
slightly improved over the $1.8 million profit in fiscal 2007.
War Memorial had posted losses for several fiscal years including
the fiscal year ended Sept. 30, 2006, which reflected operating
losses of $1.9 million (negative 3.4% margin). Coverage of
maximum annual debt service has improved and is adequate at 2.2x
for fiscal 2008, which includes coverage of debt service on a 2007
privately placed bond issue of $5.65 million. This compared
favorably with a coverage ratio of 1.6x in fiscal 2007. War
Memorial implemented several cost savings initiatives that
contributed to the improved operations, including right-sized
coverage by employing anesthesiologists, eliminating the defined
benefit pension plan, recruiting replacement and new physicians,
and implementing other ongoing cost-containment measures.
CHRYSLER LLC: Pensioners Ask High Court to Freeze Sale Order
------------------------------------------------------------
The Indiana Pensioners have asked the U.S. Supreme Court to put
the sale of Chrysler LLC's assets to Italy-based Fiat S.p.A on
hold after it lost its appeal at the Second Circuit U.S. Court of
Appeals last Friday, reports The Wall Street Journal.
The emergency stay request came late Saturday after the Second
Circuit U.S. Court of Appeals affirmed the decision of the U.S.
Bankruptcy Court for the Southern District of New York approving
the Sale, and gave the Indiana Pensioners until June 8 to petition
a continuing stay by the U.S. Supreme Court, note the Journal's
Mark H. Anderson and Jeff Bennett. Friday's Second Circuit
holding was issued verbally and has yet to be committed to paper,
the report said.
The Pensioners, led by the Indiana State Teachers Retirement Fund,
the Indiana State Police Pension Trust and the Indiana Major Moves
Construction Fund, filed documents with Supreme Court Justice Ruth
Bader Ginsburg asking her to extend a stay on the Sale until the
Supreme Court decides whether to hear the group's appeal,
according to Bloomberg News.
"The court will be deprived of the opportunity to decide critical,
nationally significant legal issues relating to management of the
economy by the United States government," the Indiana Pensioners
said in their stay request, notes the Journal. "Chrysler's
bankruptcy carries profound implications for the nation's economy.
Nearly everyone will feel the impact."
Lawyers for the Indiana Pensioners told the Supreme Court that the
Obama administration improperly used money from a federal bailout
to help Chrysler, and said that that money was designed to help
only struggling financial institutions, CNN reported.
"The negative economic consequences of permitting an unlawful sale
to proceed may well over time dramatically outweigh Chrysler's
short-term harm," the Indiana Pensioners said in its brief.
Justice Ginsburg, who oversees the Second Circuit, may decide the
matter on her own or refer it to the full Supreme Court. The
votes of at least four of the nine justices are required for the
Supreme Court to consider the appeal. If the high court declines
to issue its own stay of the deal, Chrysler and Fiat can close the
sale immediately.
Reuters reports that the high court could issue a decision as soon
as Tuesday although the order offered no guidance on what the
justices might do next. The court could allow the stay sought by a
group of Indiana pension funds simply to elapse and Chrysler would
be free to finalize details of its sale.
The Journal notes that emergency stays are rarely granted by the
Supreme Court. Were it to be approved, however, the Chrysler deal
with Fiat could be delayed for weeks or months while the issue is
pending at the high court. A stay approval would buy time for the
pensions and consumer groups to lodge a formal appeal at the high
court, and both said they plan to file separate challenges in
coming days, according to the Journal.
Court of Appeals Ruling
Lawyers representing Chrysler, the Indiana Pensioners, the
government, Fiat and others made their arguments in a two-hour
hearing before the Second Circuit U.S. Court of Appeals last
Friday. The judges issued their decision after a 10-minute
recess, according to a report by The New York Times.
Lawyers for Chrysler and the government argued that the sale to
Fiat should be completed immediately to preserve the automaker's
viability and to save thousands of jobs. Fiat can walk away from
the deal if it is not completed by June 15.
Meanwhile, attorney for the Indiana Pensioners, Thomas Lauria,
Esq., a partner at White Case LLP, argued that the decision to
approve the sale by the Bankruptcy Court puts the concept of
secured debt at great peril, according to a report by Bloomberg.
When asked by Judge Dennis Jacobs, the chief judge on the three-
member panel, what the bankruptcy court should have done, Mr.
Lauria replied that the sale should have been denied. U.S.
Circuit Judge Amalya Kearse then told him that there were no other
bidders and it appears that the Bankruptcy Court had no
alternative, Bloomberg reported.
In a June 5 statement, Indiana State Treasurer Richard Mourdock
said he believes the Second Circuit U.S. Court of Appeals is
attempting to pass on or "punt" the issues raised by Indiana
Pensioners' lawyers.
"During the oral argument, the three-judge panel openly questioned
Indiana's attorneys regarding whether or not the points of law
being raised should be addressed by the U.S. Supreme Court.
Clearly, the question indicates the magnitude of the issues we
raised," Mr. Mourdock said.
"Such a statement is highly unusual, and I believe it can be
clearly interpreted as the Court's attempt to pass on, or punt the
issues raised by our attorneys," he further said.
Sale of Assets
Chrysler will receive $2 billion and will be able to take
advantage of Fiat's expertise in making smaller but more fuel-
efficient cars in its US-based factories if the deal is completed.
In return, Fiat will control 20% of Chrysler which could be
increased to 35% if certain milestones are met. Sixty-eight
percent will be owned by a union trust while the remaining 12%
will be shared by the U.S. and Canadian governments, which
together are providing Chrysler with more than $4.9 billion in
bankruptcy loan and the new alliance with about $6 billion of
funding to maintain operations.
If the deal is rejected, Chrysler has no option but to liquidate,
eliminating 38,500 of its jobs.
Fiat is currently preparing to move dozens of executives,
engineers and others employees to Michigan to help run Chrysler
and align its operations with those of Fiat. Fiat has hired a
real estate firm to help those people relocate but the efforts are
on hold until the deal closes.
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: Court Approves Daimler PBGC Settlement Agreement
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
granted Chrysler LLC and its debtor-affiliates' request for
authority to enter into a settlement on the terms set forth in the
"Daimler PBGC Binding Term Sheet," dated as of April 27, 2009,
among Chrysler LLC; Chrysler Holding, LLC; Daimler AG; the DC
Contributors; Cerberus investors CG Investment Group, LLC, and CG
Investor, LLC; and the Pension Benefit Guaranty Corporation.
As reported by the Troubled Company Reporter on May 21, 2009, the
Daimler PBGC Binding Term Sheet provides, among other things,
that:
(a) Daimler will forgive all of its outstanding loan of $1.5
billion to the Debtors under the Second Lien Credit
Agreement, and Cerberus will forgive all of its
outstanding loan of $500 million to the Debtors under the
Second Lien Credit Agreement;
(b) Daimler will forgive its outstanding $400 million loan to
Chrysler Holding's subsidiary; and
(c) Daimler will make scheduled cash contributions of $600
million over a two-year period for the benefit of the
Chrysler Pension Plans to reduce shortfalls in the funding
of the plans, and it will amend the PBGC Guaranty to
reduce the amount to $200 million and continue the amended
guaranty after the plans are assigned to New Chrysler, or
the New CarCo Acquisition LLC, pursuant to the Fiat
Transaction. These payments and continuing guaranty will
be made in lieu of any other obligation to contribute to
the Chrysler Pension Plans.
A copy of the summary of settlement agreement is available for
free at:
http://bankrupt.com/misc/Chrysler_PBGC_Agreement_060509.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)
CHRSYLER LLC: Gets Final OK to Hire Greenhill as Investment Banker
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York,
on a final basis, authorized Chrysler LLC and its debtor-
affiliates to employ Greenhill & Co., LLC as their investment
banker, nunc pro tunc to their petition date.
The Greenhill Agreement is approved pursuant to Section 328(a) of
the Bankruptcy Code, and the Debtors are authorized to pay,
reimburse, and indemnify Greenhill according to the terms and at
the times specified in the Greenhill Agreement, as modified by the
Order.
The Greenhill Agreement is amended to provide Greenhill a
Transaction Fee of $700,000, payable in cash (i) upon consummation
of a Transaction on which Greenhill has delivered an Opinion,
whether or not the Transaction is consummated during the term of
the Greenhill Agreement, or (ii) upon consummation of a
transaction with Fiat involving some or all of Chrysler LLC's
assets within 12 months from the date of the execution of the
Greenhill Agreement.
Greenhill will earn an additional $150,000 fee per month for
providing general bankruptcy advisory services to the Debtors
during the period beginning June 1, 2009, and ending July 31,
2009. The Monthly Advisory Fee will be payable in cash on
July 1, 2009, and August 1, 2009. The general bankruptcy advisory
services to be provided by Greenhill in connection with the
Monthly Advisory Fee will include:
(a) consultation with the Debtors regarding the disposition of
the Debtors' assets,
(b) participating in hearings before the Court with respect to
the disposition of assets,
(b) providing financial advice regarding various other
matters, as requested by the Debtors, and
(c) participating in meetings of the Board of Managers of
Chrysler LLC.
In addition to any fees that may be payable to Greenhill under the
Greenhill Agreement, and regardless of whether a Transaction
occurs, Greenhill will receive reimbursement for reasonable travel
and other out-of-pocket expenses incurred by Greenhill in
performing its services under the Greenhill Agreement, including
the reasonable fees and expenses of legal counsel.
Greenhill professionals who provide services to the Debtors (i)
will only be required to maintain time records for services
rendered after the Petition Date, in hourly increments and (ii)
will not be required to provide or conform to any schedule of
hourly rates.
The Debtors are authorized to indemnify and hold harmless
Greenhill and its affiliates against any losses, claims, damages,
demands and liabilities arising in any manner out of any
activities performed or services furnished pursuant to the
Greenhill Agreement; provided, however, that in no event will
Greenhill be indemnified in the case of its breach of fiduciary
duty, gross-negligence or willful misconduct.
As reported by the Troubled Company Reporter on May 8, 2009, the
services that Greenhill will provide to the Debtors include:
(a) rendering an opinion to the board of managers as to the
fairness, from a financial point of view, of the
consideration to be paid or received by the Debtors in
connection with a proposed transaction;
(b) participating in hearings before the Bankruptcy Court with
respect to the matters upon which Greenhill has delivered
an opinion, including, as relevant, coordinating with the
Debtors' counsel with respect to testimony in connection
therewith and testifying;
(c) evaluating proposals received by the Debtors relating to
specific assets following the Company?s filing under
Chapter 11 of the Bankruptcy Code;
(d) evaluating proposals for some or all of the Debtors'
assets as an alternative to the transaction with Fiat;
and
(e) evaluating or delivering an opinion on an amended deal
with Fiat or another potential purchaser that materially
differs from the deal in respect of which Greenhill
delivered its initial opinion.
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: Court Okays Cahill's Employment as Special Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the employment of Cahill Gordon & Reindel LLP as special
counsel for three independent members of Chrysler LLC's board of
managers effective as of April 30, 2009.
To the extent that any amounts become due and owing to Cahill are
paid by any insurance policy of the Debtors, Cahill will not seek
payment of those fees or expenses from the Debtors' estates, the
Court held.
As reported by the Troubled Company Reporter on May 26, 2009, the
Independent Managers -- James N. Chapman, George J. Zahringer
III, and Jonathan Gallen -- currently serve on the board of
managers of Chrysler. The Independent Managers are unaffiliated
with the Debtors, and in general, their role is to supervise and
review actions of the Debtors and their affiliates. Cahill has
represented the Independent Managers since December 2008.
The Debtors will engage Cahill to provide legal services to the
Independent Managers in connection with their Chapter 11 cases.
The services will relate to the responsibilities or obligations of
the Independent Managers with respect to a potential restructuring
of the Debtors through their proposed asset sale and otherwise,
and any other issues likely to be presented to or considered by
the Independent Managers, including:
(a) reviewing documents, interviewing relevant personnel, and
reporting to the Independent Managers regarding the
Debtors' Chapter 11 cases;
(b) advising the Independent Managers on bankruptcy and
corporate law and other issues relating to the Debtors'
Chapter 11 cases;
(c) advising and assisting the Independent Managers in board
and other meetings and communications with the Debtors,
the Debtors' counsel, and other entities;
(d) to the extent necessary, representing and advising the
Independent Managers in any investigations or actions that
may arise in connection with the Independent Manager's
service on the board prior to and during the Chapter 11
cases; and
(e) performing the full range of services normally associated
with matters specified.
The Debtors will request that Cahill undertake additional matters
beyond the scope of responsibilities disclosed. Should Cahill
agree in its discretion to undertake any matter, the Debtors will
take further appropriate action in connection with the new scope
of responsibilities. By contrast to the roles to be served by the
firms employed in the Debtors' Cases, Cahill's postpetition work
representing the Independent Managers will not involve the conduct
of the Chapter 11 cases themselves.
Cahill's hourly rates are:
Professional Hourly Rate
------------ -----------
Attorneys $368 and $888
Paraprofessionals $184 and $296
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)
CLEARWATER PAPER: S&P Raises Corporate Credit Rating to 'BB'
------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Clearwater Paper Corp. to 'BB' from 'BB-'. The outlook
is stable.
At the same time, S&P assigned a 'BB' issue-level rating (the same
as the corporate credit rating) to the proposed $150 million
senior unsecured notes due 2016 to be issued by Clearwater Paper,
based on preliminary terms and conditions. S&P assigned a
recovery rating of '3' to this debt, indicating expectations of
meaningful (50% to 70%) recovery in a payment default.
"The upgrade reflects the company's improved annualized operating
performance stemming from its increased penetration into converted
tissue products due to better-than-expected end-market demand, a
trend that S&P expects will continue over the next two years,"
said Standard & Poor's credit analyst Andy Sookram. As a result,
S&P expects the company's significant financial profile to
continue to be supported by credit metrics that S&P would consider
to be in line with the 'BB' rating (total adjusted debt to EBITDA
of 3.2x at March 31, 2009 compared to 4x at Dec. 31, 2008); good
financial flexibility with no near-term debt maturities and
maintenance financial covenants; and good cash flow generation
relative to operating requirements and capital expenditures.
Still, S&P expects some modest pricing pressures in the tissue and
paperboard segment, because of the decline in input costs and
S&P's expectation that customers will likely seek some price
concessions.
The Spokane, Washington-based company will use proceeds from the
proposed notes to repay a $100 million note payable to Potlatch
and for general corporate purposes, including potential
acquisitions and capital expenditures. S&P expects the notes to
be sold pursuant to Rule 144A of the Securities Act of 1933.
S&P's 'BB' rating and outlook incorporate S&P's expectations that
credit measures will remain appropriate for the higher rating
during the next several quarters. For 2009, S&P expects revenues
to decline by about 5%, to $1.2 billion, due to lower volume and
some price erosion. However, S&P expects EBITDA margin to
increase to close to 10% due to cost improvements, particularly
for fiber, chemicals, and energy. As a result, S&P expects EBITDA
to increase by about 28%, to $100 million, resulting in adjusted
debt to EBITDA of under 3.5x and funds from operations to adjusted
debt of 20%. S&P also expects the company to increase its cash
balances to around $90 million at year-end 2009, due to the
combination of higher cash flows, aggressive working capital
management and excess funds from the planned notes offering.
S&P's rating and outlook do not incorporate the pursuit of large
debt-financed acquisitions or significant shareholder initiatives.
The stable outlook reflects S&P's expectation that despite modest
pricing pressures for paperboard and weak demand for wood products
due to economic conditions, Clearwater will maintain a financial
profile consistent with the 'BB' rating. S&P's rating and outlook
incorporate a 5% decline in revenues in 2009, but a 28% increase
in EBITDA due to cost improvements. As a result, S&P expects
adjusted debt to EBITDA of less than 3.5x and FFO to adjusted debt
of 20%.
S&P could revise the outlook to positive if earnings and cash flow
are more robust than S&P anticipate. This rebound could follow a
quicker turnaround in the wood products segment due to an earlier-
than-anticipated recovery in the housing market; much better
demand and pricing for paperboard; and further penetration in the
converted tissue products business, which could result in adjusted
debt to EBITDA of below 3x on a sustained basis. S&P could revise
the outlook to negative if debt to EBITDA were to decline and stay
closer to 4x due to a higher-than-expected decline in demand, if
sales prices deteriorate significantly, if input costs increase
significantly without a corresponding lift in sales prices, or if
the company pursues an aggressive debt-financed acquisition
strategy.
CONCORDIA LAND: Case Summary & 3 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Concordia Land, LLC
980 American Pacific, Ste 111
Henderson, NV 89014
Bankruptcy Case No.: 09-19511
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Bruce A. Markell
Debtor's Counsel: Richard F. Holley, Esq.
400 S. Fourth St., 3rd Floor
Las Vegas, NV 89101
Tel: (702) 791-0308
Fax: (702) 791-1912
Email: rholley@nevadafirm.com
Estimated Assets: $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
3 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nvb09-19511.pdf
The petition was signed by Gidget Graham.
CROSS LAKE: Completes Restructuring Pursuant to Arrangement Plan
----------------------------------------------------------------
0373849 B.C. Ltd., fka Cross Lake Minerals Ltd., has completed the
restructuring transactions provided for in the amended and
restated plan of compromise and arrangement filed by the Company
on May 21, 2009, pursuant to the Companies' Creditors Arrangement
Act and the British Columbia Business Corporations Act. Pursuant
to the Plan of Arrangement:
1. All of the claims of the Company's secured and unsecured
creditors have been settled and released for payments by
the Company totaling $1,238,000, other than claims
relating to certain secured debt held by Procon, in the
aggregate principal amount of approximately $6,250,000 and
the debts and liabilities transferred to the Company's
subsidiaries pursuant to the Plan;
2. Procon Mining and Tunnelling Ltd. has made a non-interest
bearing loan of $1,650,000 to the Company;
3. The Company's interest in the Porcher Island joint venture
and certain related assets, obligations, and liabilities
have been transferred to a wholly-owned subsidiary,
0847420 B.C. Ltd., in exchange for shares of that
subsidiary and a 2% net profit royalty in respect of the
Porcher Island property;
4. The Company's interest in the QR Mine and Mill and certain
related assets, obligations and liabilities have been
transferred to a second wholly-owned subsidiary, 0847423
B.C. Ltd., in exchange for shares of that subsidiary and a
2% net profit royalty in respect of the QR Mine and Mill;
5. The Company's other mineral properties and certain related
assets, obligations and liabilities have been transferred
to a third wholly-owned subsidiary, 0847427 B.C. Ltd., in
exchange for shares of that subsidiary;
6. The Company has been released from any and all
responsibility for the liabilities and obligations
transferred to its subsidiaries pursuant to the Plan;
7. The authorized share capital of the Company has been
increased by creating an unlimited number of non-voting
shares and an unlimited number of preferred shares,
issuable in series;
8. All outstanding stock options of the Company have been
cancelled;
9. The Loan has been converted into 56,885,026 common shares
of the Company and 695,135,018,831 non voting shares of
the Company, such that Procon now holds 45% of the
(voting) common shares of the Company and 100% of the
non-voting shares of the Company, providing Procon with
the ownership of 99.99% of the total equity of the
Company;
10. PricewaterhouseCoopers LLP has been appointed as auditor
of the Company;
11. The Company's name has changed to "0373849 B.C. Ltd."; and
12. The stay of proceedings imposed on the Company by order of
the Court under the CCAA will be lifted on June 3, 2009,
and the Company will no longer be subject to the CCAA.
In addition, the Company reports that Ed Yurkowski has been
appointed as a director of the Company.
Vancouver, British Columbia -- http://www.crosslakeminerals.com/
-- is a Vancouver-based Gold Mining and Development Company
focused on continued growth through exploration and acquisitions.
Cross Lake is very pleased to be the first new gold producer in
British Columbia in many years. To increase shareholder value,
the Company will continue to search for gold projects throughout
North America that complement the QR Mine and its expertise in
gold development.
DALE HERBERT THOMPSON: Case Summary & 20 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Dale Herbert Thompson
13717 Springdale Drive
Clarksville, MD 21029
Bankruptcy Case No.: 09-20248
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
District of Maryland (Baltimore)
Judge: James F. Schneider
Debtor's Counsel: Marc Robert R. Kivitz, Esq.
201 N. Charles Street, Suite 1330
Baltimore, MD 21201
Tel: (410) 625-2300
Fax: (410) 576-0140
Email: mkivitz@aol.com
Total Assets: $3,353,576
Total Debts: $63,225,434
A full-text copy of Mr. Thompson's petition, including a list of
his 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/mdb09-20248.pdf
The petition was signed by Mr. Thompson.
DANA HOLDING: Moody's Downgrades Corporate Family Rating to 'Caa2'
------------------------------------------------------------------
Moody's Investors Service lowered the Corporate Family Rating of
Dana Holding Corporation to Caa2, raised the Probability of
Default Rating to Caa1, and adjusted the ratings of certain debt
instruments. The company's Speculative Grade liquidity Rating of
SGL-3 was affirmed, and the company's rating outlook is negative.
The positioning of Dana's PDR at Caa1 reflects ongoing pressures
the company faces from the continued erosion in the global
automotive and commercial vehicle markets. These conditions have
resulted in significant deterioration in the company's sales and
operating performance through the first quarter of 2009 and are
expected to continue to pressure the company's performance into
2010. The pressures have also resulted in Moody's employing a 40%
family recovery rate in its Loss Given Default assessment for the
company, which drives the positioning of the CFR at Caa2 under the
Loss Given Default Methodology.
On May 8, 2009, Dana commenced a tender offer for a portion of its
outstanding senior secured term loan at a deep discount to par
value. The company's PDR and the rating on the term loan were
adjusted to Ca at that time to reflect the potential for loss to
investors. With the passage of time since the May 12 target date
for concluding the tender, Moody's has now repositioned the PDR at
Caa1. The use of a 40% family recovery rate results in the
notching of the rating for the senior secured term loan to Caa1.
The rating of the Senior Secured Asset Based Revolving Credit
Facility further considers the benefits of the ABL structure and
is positioned at B3.
Dana's operations will be challenged by weak consumer demand and
ongoing restructuring actions at the company's largest customers.
Further, the commercial vehicle market is continuing at a
lackluster pace during 2009 with April vehicle orders pacing below
prior year and sequential monthly levels. Weak global economic
conditions also are expected to adversely affect Dana's off-
highway markets in 2009 with the company recently estimating that
demand in its construction and agricultural end markets could fall
by as much as 70%, and 40%, respectively, in 2009.
The negative outlook considers the ongoing difficulties in the
global automotive and commercial vehicle industries will continue
to negatively affect Dana's credit metrics and pressure the
liquidity levels. Industry conditions are further exacerbated by
the risk for further operating disruptions associated with
Chrysler's and GM's bankruptcy filing. The Detroit-3 represents
about 26% of Dana's revenues. Dana' commercial vehicle and off-
highway segments represent approximately 42% of revenues and also
are experiencing pressure given global economic conditions.
The Speculative Grade Liquidity Rating of SGL-3 continues to
reflect Moody's expectation that the deterioration of industry
conditions could result in negative free cash flow over the next
twelve months. The company maintained cash balances at March 31,
2008 $549 million, and had approximately $191 million of
availability under its $650 million asset based revolving credit,
net of letters of credit, and subject to covenant restrictions.
The company also maintains a European receivables loan facility of
Euro 170 million, maturing in July 2012, which had availability of
$85 million at March 31, 2008. Financial covenant cushions under
Dana's term loan facility are expected to reduce over the near
term. However, continuing erosion of automotive demand and
announcements of lower OEM production in North America are likely
to pressure the newly amended cushions. Alternative liquidity is
limited as all of the company's domestic assets and 66% of the
equity of the non-domestic subsidiaries secure the revolving
credit and term-loan. There is capacity to incur up to
$400 million of additional debt in the foreign subsidiaries,
subject to financial covenant limitations.
Ratings lowered:
-- Corporate Family Rating, to Caa2 from Caa1;
-- $650 million senior secured asset based revolving credit
facility, to B3 (LGD3, 43%) from B2 (LGD3, 32%);
Ratings raised:
-- Probability of Default Rating, to Caa1 from Ca;
-- $1.26 billion (remaining amount) senior secured term loan, to
Caa1 (LGD3 47%) from Ca (LGD4, 60%);
Rating affirmed:
-- Speculative Grade Liquidity rating, SGL-3
The last rating action for Dana Holding Corporation was on May 8,
2009 when the Probability of Default Rating was lowered, while the
company's ratings remained under review for downgrade.
Dana is a world leader in the supply of axles; driveshafts; and
structural, sealing, and thermal management products. The
company's customer base includes virtually every major vehicle and
engine manufacturer in the global automotive, commercial vehicle,
and off-highway markets, which collectively produce more than
65 million vehicles annually. The company employs approximately
32,000 people in 26 countries.
DEL-ZARA SYSTEMS: Case Summary & 17 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Del-Zara Systems, Inc.
dba Fanny's Restaurant
3500 Sheridan Drive
Buffalo, NY 14226
Bankruptcy Case No.: 09-12605
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Western District of New York (Buffalo)
Judge: Carl L. Bucki
Debtor's Counsel: Edwin R. Ilardo, Esq.
5899 South Park Ave.
P.O. Box 887
Hamburg, NY 14075-0887
Tel: (716) 646-1190
Email: erilardo@roadrunner.com
Total Assets: $50,700
Total Debts: $1,463,004
A full-text copy of the Debtor's petition, including a list of its
17 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nywb09-12605.pdf
The petition was signed by Michael J. Delmont, president of the
Company.
DELPHI CORP: Preliminary Hearing on Plan Modifications Set June 10
------------------------------------------------------------------
Delphi Corp. and its debtor-affiliates seek approval of certain
modifications to their Confirmed Chapter 11 Plan submitted to the
Court June 1, 2009. The June 1 proposed modifications to the
Confirmed First Amended Joint Plan of Reorganization supersede the
proposed Plan modifications submitted on October 3, 2008. The
Debtors also delivered to the U.S. Bankruptcy Court for the
Southern District of New York a supplement containing
modifications to their Disclosure Statement on June 1, 2009.
In the event the Debtors are not able to implement the
transactions contemplated in the Modified Plan, the Debtors ask
the Court to set a hearing no later than July 23, 2009, to approve
a sale of substantially all their primary assets to Parnassus
Holdings II LLC and GM Components Holdings LLC under a Master
Disposition Agreement. The Alternative Sale Hearing is intended
to ensure that if the Debtors are unable to obtain approval of
their Modified Plan on July 23, 2009, they would be in a position
to proceed on that date to seek the Court's authorization under
Sections 363 and 365 of the Bankruptcy Code to complete the
transactions set forth in the Master Disposition Agreement, to be
modified by a 363 Implementation Agreement. The 363
Implementation Agreement will be filed by July 2, 2009.
The Debtors believe that they are on the brink of emergence from
Chapter 11. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, in Chicago, Illinois, says that the Debtors
have accomplished their stated reorganization goals, maintained
their business despite a global economic recession and the failed
promises of would-be investors, and persevered in the face of
unprecedented challenges that have flooded the automotive
industry. "Due to the nature of this transaction, there is no
time to spare," he argues. "The Debtors need to act now to
effectuate the Modified Plan and the transactions incorporated
therein to allow them to maximize value to their stakeholders,"
Mr. Butler stresses.
Mr. Butler relates that following the inability of the Debtors to
implement their proposed modifications to the Confirmed Plan in
October 2008, the Debtors undertook steps in three primary areas
in which they believe have been critical to completing their
transformation and positioning the Company to emerge from
Chapter 11:
1. Reaching an agreement with Parnassus Holdings and GM
Components for the disposition of the Debtors' primary
business assets;
2. Resolving the Debtors' financing issues; and
3. Resolving the Debtors' pension issues.
Critical to achieving resolution of each of these issues, Mr.
Butler avers, has been the garnering of the U.S. Department of
Treasury's support for Delphi's plan of reorganization. As a
result of General Motors Corp. accepting Troubled Asset Relief
Program funds from the U.S. government, GM's use of capital is
subject to significant governmental oversight, particularly for
transactions valued at more than $100 million. Since support from
GM in a variety of forms was central to the resolution of each of
these three issues, it was essential for the Debtors to attain
U.S. Treasury support as well, he states. Having garnered that
support in light of the Debtors' significant relationship with GM,
the Debtors have been able to reach a consensual resolution with
their parties-in-interest to Delphi's outstanding issues, which
discussions have resulted in the agreements underlying the Plan.
In general, the proposed June 1 modifications to the Confirmed
Plan are:
Confirmed Plan Modified Plan
-------------- -------------
Plan Investor Plan Investors' Acquisition of the
commitment to invest Company's operating
up to $2.55 billion businesses by
Parnassus Holdings
II, LLC, an affiliate
of Platinum Equity
Capital Partners II,
L.P., and of certain
North American
operations and the
global steering
business by certain
affiliates of General
Motors Corporation
Rights Offering $1.75 billion No rights offering
discount rights
offering
Emergence Capital $4.7 billion No funded debt;
and Capital instead non-recourse
Commitments emergence capital
funded by GM under
the transaction
agreements
Parnassus Holdings
II LLC has obtained
$3.6 billion in
emergence capital and
capital commitments
to support the
Company's operating
businesses going
forward
Revolver $1.4 billion Not applicable
Total Enterprise Agreed plan value of Not applicable as a
Value $12.8 billion result of the Master
Disposition Agreement
and related
transactions
Defined Benefit $1.5 billion 414(l) 414(l) Transfer of
Pension Plans transfer of hourly $2.1 billion in net
pension plan to GM unfunded liabilities
was effective on
September 29, 2008.
All salaried Upon consummation of
pension plans and the Modified Plan,
hourly pension plans the remaining assets
assumed and liabilities of
Delphi's hourly
pension plan will no
longer be the
responsibility of the
Debtors, but will be
addressed by GM. The
Debtors expect that
the salaried pension
and certain
subsidiary pension
plans may be
involuntarily
terminated by the
PBGC, which will
receive a negotiated
settlement, including
an allowed unsecured
prepetition claim.
General $4.073 billion GM will purchase from
Motors Corp. consisting of: Delphi for additional
consideration certain
assets of the Company
- $1.073 billion in and will be subject
junior preferred to certain
securities obligations as set
forth in the Master
Disposition
- $1.5 billion, of Agreement, which will
which at least $750 supersede the Amended
million will be in Master Restructuring
Cash and the Agreement that will
Remainder will be be terminated,
in a second lien including providing
note with market certain funding,
terms waiving certain
claims and assuming
- $1.5 billion in various liabilities.
connection with the GM will not receive
effectuation of the any distribution on
414(l) assumption account of its
Allowed Claim
DIP Facility Paid in full on the Satisfied in full on
Revolver Claim Effective Date the Effective Date
DIP Facility Paid in full on the Satisfied in full on
First Priority Effective Date the Effective Date
Term Claim
Senior Secured Paid in the ordinary Paid in the ordinary
Hedge course of business course of business
Obligations with agreed
collateralization
upon emergence
DIP Facility Paid in full on the Satisfied in full on
Second Priority Effective Date the Effective Date
Term Claim through consummation
of a transaction that
provides for the cash
payment of $291
million, interest in
Parnassus Holdings
II, LLC in the
nominal amount of
$145.5 million with a
preferred return at a
per annum rate of
interest of 8% and to
be paid pursuant to a
waterfall formula as
part of the equity
distribution of
Parnassus Holding LLC
and any unpaid
balance to be paid
10 years after the
effective date of
Modified Plan, and
the first settlement
or other proceeds
from the
Corporation's plan
investor litigation
up to $146 million
Secured Claims Paid in Cash in full Claims will either
or reinstated (i) be paid in equal
installments of cash
over a period of
seven years from the
effective date of the
Modified Plan with
interest accruing at
the closing seven-
year Treasury Bill
rate on the effective
date, plus 200 basis
points; (ii) receive
their collateral free
and clear of liens;
or (iii) receive
other treatment
agreed upon by the
parties that is more
favorable to the
Debtors
Unsecured Par plus accrued Pro rata share of
Creditors recovery at plan deferred
value of $12.8 consideration under
billion consisting Master Disposition
of: Agreement
- 78.6% in new
common stock at
plan equity value
- 21.4% through
pro rata
participation
in discount rights
offering at a 35.6%
discount from plan
equity value
- TOPrS Claims included
in General Unsecured
class with Senior Notes,
trade claims, and SERP
claims
Postpetition Postpetition No postpetition
Interest interest to be paid interest will be
on certain General accrued or paid on
Unsecured Claims General Unsecured
Claims under the
Modified Plan
MDL Litigation Allowed claims with No recovery under
Claims same treatment as the Modified Plan
General Unsecured
Claims
Equity Direct grant of new No recovery under the
common stock of $28 Modified Plan
million and Warrants
valued at $321 million
in the aggregate, plus
the opportunity to
participate in a Par
Value Rights Offering
Moreover, Mr. Butler notes, the Modified Plan also provides for
three primary agreement subject for Court approval, the transfer
of the lenders' collateral, the creation of a post-Confirmation
Reorganized DPH Holdings Share Trust, and dismissal of certain
complaints, among others.
To implement the Modified Plan, the Debtors are seeking approval
of three primary agreements, which form the backbone of the
Modified Plan. They are the Master Disposition Agreement, the
DIP Transfer, and the PBGC Settlement.
The Modified Plan also estimates the aggregate amounts of these
claims:
Estimated
Amount Expected
Class Type of Claims Recovery
----- ---- ----------- --------
N/A DIP Claims $3.03 bil. 100%
N/A Admin Claims
(other than GM Claims) $142 mil. to
$181 mil. 100%
N/A Priority Tax Claims $17.3 mil. to
$17.4 mil. 100%
A Secured Claims $6.55 mil. to
$6.70 mil. 100%
B Flow-Through Claims -- Unimpaired
C-1 Gen. Unsecured Claims $3.4 bil. to
$3.62 bil. 38%
C-2 PBGC Claims $3.3 bil. Settlement
for approval
D GM Unsecured Claim -- $2.5 bil.
Claim
(settlement)
E Sec. 510(b) Note Claims -- $179 mil.
Claim
(settlement)
F Intercompany Claims N/A N/A
G-1 All Existing Stock N/A $108 mil.
G-2 Sec. 510(b) Equity Claims -- $179 mil.
Claim
(settlement)
H Sec. 510(b) ERISA Claims N/A $24.5 mil.
Claim
(settlement)
I Other Interests in Delphi N/A 0%
J Interests in Affiliate Debtors N/A N/A
Full-text copies of the clean and blacklined Modified Plan dated
June 1, 2009 is available for free at:
http://bankrupt.com/misc/Delphi_ModifiedPlanJune1.pdf
http://bankrupt.com/misc/Delphi_blacklinedModifiedPlan.pdf
A full-text copy of the Disclosure Statement dated June 1, 2009
is also available for free at:
http://bankrupt.com/misc/Delphi_DisclosureStatJune1.pdf
The Court will convene preliminary hearing on the Plan
Modifications on June 10, 2009. Objections are due June 9.
Delphi's Revised Plan Stirs Reactions
The delivery of Delphi's its June 1 Revised Plan has solicited
some responses or opinions from various parties, including
General Motors, the Delphi retirees and workers unions.
In a public statement dated June 1, 2009, GM said it is pleased
that Delphi has agreed to move forward with plan modifications
and it is committed to complete those transactions through a 363
sale if stakeholder support is not sufficient to achieve prompt
confirmation of the modified plan. GM noted that those
developments are an important step to resolve Delphi's bankruptcy
and in GM's restructuring. Moreover, GM has committed to finance
$2.5 billion of the $3.6 billion needed for Parnassus Holdings to
acquire Delphi's assets as set forth in the Modified Plan,
according to The Wall Street Journal. Parnassus is expected to
fund no more than $750 million on the buyout, the report notes.
The other terms of the GM loans remain confidential, the report
adds. GM recently got $30 billion in capital from the U.S.
government and the funding for Delphi's buyout is included in GM's
revised viability plan pursuant to GM's Loan and Security
Agreement with the U.S. Treasury, WSJ says. In a regulatory
filing with the Securities and Exchange Commission dated June 5,
2009, GM confirmed its capital investment and back-up financing to
a new company or "Acquisition Company" formed by Platinum Equity,
which will acquire substantially all of Delphi's remaining assets
pursuant to the Master Disposition Agreement. GM Controller and
Chief Accounting Officer Nick S. Cyprus disclosed to the SEC that
in light of agreements related to the Master Disposition
Agreement:
(1) GM agreed to acquire, prior to the consummation of the
transactions under the Master Disposition Agreement, Class
A Membership Interests in the Acquisition Company for
$2 billion of cash;
(2) Platinum Equity agreed to acquire Class B Membership
Interests in the Acquisition Company for $250 million of
cash; and
(3) Delphi agreed to acquire Class C Membership Interests in
the Acquisition Company on behalf of certain of Delphi's
junior DIP Lenders for forgiveness of a portion of its
debt.
In addition, Mr. Cyprus related that GM and Platinum Equity
agreed to establish a secured delayed draw term loan facility for
the Acquisition Company, with GM committing to provide $500
million and Platinum Equity committing to $250 million. GM will
carry all existing Delphi supply agreements and purchase orders
for North America forward to the end of the related product
program, and the Acquisition Company will provide GM with certain
protection of supply commitments as requested by GM. Under the
Master Disposition Agreement and related agreements, Platinum
Equity agreed to a termination fee if transactions contemplated
by the agreements are not consummated because of a breach by
Platinum Equity or the Acquisition Company. More importantly, Mr.
Cyprus disclosed that GM's proposed funding to Delphi and to
Acquisition Company was reflected in the: (i) revised viability
plan GM submitted to the U.S. Treasury pursuant to the Loan and
Security Agreement, as amended, between GM and the U.S. Treasury;
and (ii) budget agreed to between GM and the U.S. Treasury under
the Secured Superpriority DIP Credit Agreement among GM, the
guarantors, and the DIP Lenders. Mr. Cyprus noted that under the
Master Disposition Agreement, GM agreed to pay or assume:
-- $600 million of Delphi obligations related to Delphi's
senior DIP Credit Facility, including certain secured hedge
transactions;
-- $300 million of Delphi obligations related to Delphi's
junior DIP credit facility; and
-- $200 million of other Delphi obligations to be shared with
the Acquisition Company, including administrative claims.
Mr. Cyprus averred that GM's administrative claims associated
with (x) its credit agreement with Delphi for $300 million; and
with (y) transferred pension costs for hourly employees totaling
$1.6 billion, will be waived at the closing of the transactions
contemplated by the Master Disposition Agreement. He added that
Delphi employees at each acquired facility will be transferred to
the company that acquires that facility.
For its part, Platinum Equity did not disclose how much of the
$3.6 billion was it funding pursuant to the acquisition, The
Detroit News says.
Moreover, Michael J. Hanley, president of Delphi's UAW Local 699
union, which represents 2,400 hourly workers at Delphi's Steering
complex at Buena Vista Township, in Michigan, expressed support
to GM's acquisition of Delphi's Steering Business as part of the
Delphi Plan modifications, The Saginaw News relates in a separate
report. Mr. Hanley opined that it would be best for GM to buy
the Steering Business and stabilize Delphi's operations until
Delphi becomes independent again, the report adds. On the other
hand, Delphi Salaried Retirees Association's counsel Dean Gloster,
Esq., at Farella Braun & Martel, LLP, opined that the proposed
takeover of PBGC pursuant to the PBGC Settlement described in the
Modified Plan is horribly unfair, especially for Delphi salaried
retirees who put decades in GM and then got spun off to Delphi
just before retirement. Mr. Gloster's comment was posted in the
DSRA web site. In another report, a group of salaried retirees in
Delphi's Packard Electric Corp. in Warren, Ohio are discussing
with law firms possible legal action they can take to block
Delphi's exit from bankruptcy, Tribune Chronicle says. A class
action suit will seek to recover $3 billion in estimated pension
and health care benefits the retirees will lose should the
Modified Plan be approved, the article discloses. Dayton Business
Journal notes in a separate report that the class action suit will
be led by 100 to 200 retirees in Delphi Packard who are members of
the DSRA and will name Delphi, GM, UAW, Platinum and the U.S.
Treasury as defendants for collusion. The DSRA, however, will
only act as a support group by disseminating the information and
contacting lawmakers, and would not commence another legal action,
which might be duplicative of the Delphi Packard's retirees class
suit, the news source relates. Indeed, the DSRA urged Delphi
retirees to "fill up PBGC fax machine" with letters advocating for
the flow back of the Delphi Salaried Retiree Pension back to GM in
time for PBGC and Delphi's meeting slated for June 5, 2009. The
DSRA also argued that the PBGC should refuse to accept the Delphi
Salaried Retiree Pension Assets until the pension fund is fully
funded. For its part, a spokesperson of PBGC clarifies that the
agency has not signed the pension settlement contemplated in the
Modified Plan, The Business Journal relates. PBGC's spokesperson
further argues that the representations in the Modified Plan with
respect to the PBGC Settlement do not constitute an agreement
between PBGC and Delphi, The Business Journal says.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies. Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications. Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.
The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on December 20, 2007. The
Court confirmed the Debtors' First Amended Plan on January 25,
2008. The Plan has not been consummated after a group led by
Appaloosa Management, L.P., backed out from their proposal to
provide US$2,550,000,000 in equity financing to Delphi.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DELPHI CORP: Files Liquidation Analysis Under June 1 Modified Plan
------------------------------------------------------------------
In connection with the June 1, 2009, proposed modifications to
their confirmed Joint Chapter 11 Plan of Reorganization, Delphi
Corporation and its debtor-affiliates delivered to the U.S.
Bankruptcy Court for the Southern District of New York an updated
liquidation analysis that reflects their progress in transforming
their business operations over the past year.
The updated Liquidation Analysis assumes a Liquidation Date of
June 30, 2009, and is based on unaudited book values as of
December 31, 2008.
The Debtors summarized the changes in estimated Net Proceeds
available for distribution in the Liquidation Analysis under the
Confirmed Plan and the Modified Plan:
Low Scenario High Scenario
------------ -------------
Net Proceeds Available for
Distribution under
The Confirmed Plan $7,500,000,000 $10,400,000,000
Change in Recovery Values
Reduction in Net proceeds
Related to Investment in
Foreign Subsidiaries (4,500,000,000) (5,800,000,000)
Other Net Reductions,
Including Cash Operating
Losses (3,700,000,000) (4,000,000,000)
-------------- ---------------
Sub-Total (8,200,000,000) (9,800,000,000)
Reduction in Wind-Down Costs
and Professional and Trustee
Fees 1,700,000,000 1,200,000
-------------- ---------------
Total Change (6,600,000,000) (8,600,000,000)
-------------- ---------------
Net Proceeds Available
for Distribution under
the Modified Plan $900,000,000 $1,800,000,000
============== ==============
The decline in Net Proceeds Available for Distribution between
the Liquidation Analyses in the Confirmed Plan and the Modified
Plan is primarily attributable to a decline in estimated
recoveries associated with the Debtors' investment in the foreign
subsidiaries as well as other net reductions to recoverable
assets, offset by a decrease in projected wind-down costs,
professional and trustee fees.
The decline in other recoverable assets is primarily due to cash
expenditures for the Debtors' ongoing transformation and
operating losses offset driven by significantly reduced consumer-
driven reductions to accounts receivable and inventory, and
significant reductions in recoveries on receivables due to the
likelihood of customers' offsetting incremental costs incurred
from the shutdown of the U.S. and Mexico operations against their
payables owed to the Debtors. In addition, any recoveries on
Chapter 11 receivables as a result of "run-to-resource"
production would generally be offset by the payments to Chapter
11 administrative claimants required to execute the production.
Net Proceeds Available for Distribution are positively impacted
by reductions in wind-down costs, as well as in professional and
trustee fees. The decline in wind-down costs is primarily
due to materially different assumptions regarding the nature of
the winddown. In the Confirmed Plan Liquidation Analysis, a
consensual and gradual winddown of all Debtor operations over 18
to 24 months was assumed, with all funding coming from the
estate.
In the Modified Plan Liquidation Analysis, the winddown is
limited to the administrative costs to support the collection of
working capital, property/land, machinery and equipment, and
other asset proceeds. Professional and trustee fees have also
declined as the scope of wind-down activities in the Modified
Plan Liquidation Analysis has been significantly reduced.
Administrative and General Unsecured Claim recoveries have been
adversely affected by the decline in Net Proceeds Available for
Distribution.
Under Substantive Consolidation for All Debtors, DIP facility
term C creditors receive a 36% recovery in the higher scenario
and a 5% recovery in the lower scenario, as compared to a 100%
recovery previously. No creditors junior to the DIP facility
creditors receive recoveries under the Modified Plan Liquidation
Analysis whereas the Confirmed Plan Liquidation Analysis
indicated that general unsecured creditors would receive a
recovery of between 18% and 0%.
A full-text copy of the updated Liquidation Analysis is available
for free at:
http://bankrupt.com/misc/Delphi_June1LiquidationAnalysis.pdf
Updated Delphi financial results, including results for first
quarter ended March 31, 2009, is available for free at:
http://bankrupt.com/misc/Delphi_HistFinancialResults.pdf
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies. Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications. Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.
The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on December 20, 2007. The
Court confirmed the Debtors' First Amended Plan on January 25,
2008. The Plan has not been consummated after a group led by
Appaloosa Management, L.P., backed out from their proposal to
provide US$2,550,000,000 in equity financing to Delphi.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DELPHI CORP: Seeks Approval of Modified Disclosure Statement
------------------------------------------------------------
Delphi Corporation and its debtor-affiliates have filed a
supplement to the Disclosure Statement to explain the June 1,
2009, proposed modifications to their Confirmed First Amended
Joint Plan of Reorganization dated January 25, 2008.
Under Section 1125 of the Bankruptcy Code, the Debtors cannot
solicit votes from the affected classes, "unless, at the time of
or before such solicitation, there is transmitted to such holder
the plan or a summary of the plan, and a written disclosure
statement approved, after notice and a hearing, by the court as
containing adequate information."
The U.S. Bankruptcy Court for the Southern District of New York
previously approved the December 2007 Disclosure Statement and
determined that it contained "adequate information," as that term
is defined under Section 1125. The Debtors subsequently commenced
the solicitation of votes on the December 10 Plan and received
overwhelming support for the Plan on a class by class basis.
Since then, the Debtors have filed a Modified Disclosure Statement
to explain changes in the Confirmed Plan on October 3, 2008.
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Chicago, Illinois, relates that due to the material
modifications made to the Confirmed Plan on account of the Plan
Investors' breach and global economic downturn, the Debtors must
once again solicit votes on the Confirmed Plan, as modified on
June 1, 2009. Moreover, to comply with Section 1127(c) as it
incorporates Section 1125, the Debtors supplemented the December
10 Disclosure Statement to provide holders of claims or interests
with adequate information regarding the modifications.
Accordingly, the Debtors ask the Court to approve their modified
Disclosure Statement dated June 1, 2009, as containing adequate
information pursuant to Section 1125.
The Debtors previously filed a Plan Modification Approval Motion
on October 3, 2008, seeking Court approval of certain
modifications to the Confirmed First Amended Joint Plan of
Reorganization, related disclosures, and certain voting
procedures. The hearing on the Plan Modification Approval Motion
was originally scheduled for October 23, 2008, but has been
subsequently adjourned several times, most recently to June 10,
2009.
The Debtors propose a timeline for the re-solicitation and
approval of the Plan modifications:
Date Anticipated Event
---- -----------------
June 16, 2009 Deadline to publish notice of hearing to
approve modifications to Confirmed Plan
June 16, 2009 Deadline to commence mailing of
solicitation packages
July 2, 2009 Deadline to distribute Section 363
Implementation Agreement pursuant to the
Master Disposition Agreement
July 2, 2009 Deadline to file Notice of Non-Assumption
of Executory Contracts
July 9, 2009 Deadline to file announcement of Purchaser
July 10, 2009 Bar date for filing proofs of administrative
postpetition claims arising before June 1,
2009
July 14, 2009 Deadline to object to modifications to
Confirmed Plan and the 363 Implementation
Agreement
July 14, 2009 Voting deadline
July 20, 2009 Ballot report certification and filing
deadline at 4:00 p.m., prevailing Eastern
time
July 21, 2009 Deadline to file reply in support of the
Modified Plan and the Master Disposition
Agreement, file any proposed revisions to
Final Modification Approval Order, and
submit an alternative form of sale order under
Section 363 of the Bankruptcy Code.
July 23, 2009 Hearing to approve modifications to the
Confirmed Plan and to approve the Plan
as modified, or to approve the Master
Disposition Agreement
Mr. Butler stresses that the Debtors need to act now to effectuate
the Modified Plan and the related transactions to allow them to
maximize value for their stakeholders. He maintains that the
proposed resolicitation timeline satisfies applicable procedural
rules and at the time, acknowledges that the Debtors' current
liquidity constraints require them to emerge from reorganization
as soon as possible. Any delay in this expedited process could
result in a liquidation as contemplated by the Debtors'
hypothetical liquidation analysis, he stresses.
Accordingly, the Debtors ask the Court to approve resolicitation
of the Modified Plan pursuant to the proposed schedule.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies. Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications. Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.
The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on December 20, 2007. The
Court confirmed the Debtors' First Amended Plan on January 25,
2008. The Plan has not been consummated after a group led by
Appaloosa Management, L.P., backed out from their proposal to
provide US$2,550,000,000 in equity financing to Delphi.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DELPHI CORP: To Close Saginaw, Michigan Plant on June 26
--------------------------------------------------------
Delphi Corporation's steering division located in Saginaw,
Michigan, will wrap up production June 26, 2009, The News Courier
reports.
According to Vaughn Goodwin of Local 2195, who disclosed that
June 26 is the last date of production, a small crew will remain
to disconnect machines and clean up the Saginaw Plant, News
Courier says. The Saginaw Plant complex consists of plants 21 to
23, with Plant 23 expected to close by October 2009, the article
notes.
Delphi announced in February 2009 its plan to layoff 425 hourly
workers and 350 salaried employees in the Saginaw Plant by May
2009, due to low car demands. The 775 workers represent 20% of
the Saginaw Plant's total workforce.
According to Delphi's June 1, 2009 public statement, the Saginaw
Plant is among the company's facilities, which will wind down
production or gradually be disposed of through a reorganized
entity to be called DPH Holdings Co. Moreover, under a Master
Disposition Agreement of the Confirmed First Amended Joint Plan of
Reorganization, modified on June 1, 2009, GM Components Holdings,
LLC, an affiliate of General Motors Corp., will take over Delphi's
Global Steering Business.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies. Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications. Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.
The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on December 20, 2007. The
Court confirmed the Debtors' First Amended Plan on January 25,
2008. The Plan has not been consummated after a group led by
Appaloosa Management, L.P., backed out from their proposal to
provide US$2,550,000,000 in equity financing to Delphi.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DISH NETWORK: Loss in Litigation Won't Affect S&P's 'BB-' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that there is no immediate
effect on DISH Network Corp.'s (BB-/Stable/--) ratings or outlook
following its most recent loss in its litigation with TiVo over
DVR technology patents. Although DISH plans to appeal the case,
with nearly $1.2 billion in cash and marketable securities and
very moderate leverage for the current 'BB-' rating, DISH could
easily fund the $103 million of new judgments and penalties
without a ratings impact, if necessary. However, the longer term
effect on the company's credit profile would depend on the
strategic path that DISH takes to finally resolve this issue in
terms of its ability to offer a DVR service. If DISH were to
enter into a licensing arrangement with TiVo, which S&P view as
the most likely scenario, S&P believes there would be no effect on
DISH's 'BB-' corporate credit rating. S&P believes that a
licensing fee arrangement would likely be passed along to DISH's
DVR customers through increased monthly DVR fees. DISH currently
charges $5.98 per month (versus $6 for DIRECTV and $9.95 for
Cablevision). DISH has won a temporary stay against the order to
cease offering DVR services.
If, however, the temporary stay expired and, as a result, DISH
lost the ability to offer DVR functionality, S&P believes the
company's business profile would be hurt. In such a worst-case
scenario, the company would likely lose a sizable portion of its
higher valued DVR customers, resulting in increased churn and a
loss of revenues and cash flow. More importantly, this would
place DISH at a competitive disadvantage to the other TV service
providers, who all offer DVR services. However, DISH currently
has an ample financial cushion within its rating, which could
potentially support some deterioration in its business profile.
Depending on the severity of the business deterioration and its
long-term effect on cash flow, the company may or may not be able
to maintain its current rating and outlook. Standard & Poor's
will continue to closely monitor the lawsuit and DISH's legal and
competitive responses and assess the effect on the company's
credit profile.
DUNE ENERGY: Gets Waiver from Senior Lender Over Covenant Breach
----------------------------------------------------------------
Dune Energy Inc. has obtained a waiver from its senior lender with
respect to a breach of certain covenant which constituted an event
of default under its credit agreement dated August 4, 2007.
Under the credit agreement, certain "permitted holders" are
required to own and control 51% or more of the Company's
outstanding shares of common stock. This "Change of Control"
covenant was breached on May 6, 2009, when the Company was
notified that the holders of $5.1 million of its senior redeemable
convertible preferred stock had elected to convert those shares of
preferred stock into 8,127,044 shares of the Company's common
stock, par value $.001 per share. As a result, the Permitted
Holders no longer hold 51% or more of the Company's outstanding
common stock.
The original waiver granted by the Company's senior lender with
respect to the event of default that occurred was effective only
until June 9, 2009.
However, on June 3, 2009, the Company's senior lender agreed to
extend the period for which the waiver will be effective through
July 1, 2009. The Company is now in discussions with its senior
lender regarding amendments to its credit agreement. Among the
anticipated amendments are a revision of the definition of the
term "change of control", an increase in the size of the
commitment amount, and an extension of the term of the credit
agreement. There can be no assurances, however, that the
discussions will result in the expected amendments.
Based in Houston, Texas, Dune Energy, Inc., is an independent
energy company. Since May of 2004, it has been engaged in the
exploration, development, acquisition and exploitation of natural
gas and crude oil properties, with interests along the
Louisiana/Texas Gulf Coast. Its properties cover 100,000 gross
acres across 23 producing oil and natural gas fields
EDRA BLIXSETH: Court Converts Chapter 11 Case to Ch 7 Liquidation
-----------------------------------------------------------------
Debra Gruszecki at The Desert Sun reports that the Hon. Ralph B.
Kirscher of the U.S. Bankruptcy Court for the District of Montana
has converted Edra Blixseth's Chapter 11 reorganization case to a
Chapter 7 liquidation proceeding.
Citing Acting U.S. Trustee Robert D. Miller Jr., WSJ relates that
Ms. Blixseth ignored "repeated requests" to show that her assets,
allegedly worth millions of dollars, were insured.
The Desert Sun states that Yellowstone Club spokesperson Gary
Dunlap said on Friday that the company is no longer speaking on
behalf of Ms. Blixseth.
Coachella Valley-based Edra D. Blixseth owns exclusive resorts in
Rancho Mirage and near Yellowstone Park in Montana. She owns
Porcupine Creek Golf Club in Rancho Mirage and the Yellowstone
Club in Montana.
Ms. Blixseth filed for Chapter 11 bankruptcy protection on
March 26, 2009 (Bankr. D. Mont. Case No. 09-60452). Gary S.
Deschenes, Esq., at Deschenes & Sullivan Law Offices assists Ms.
Blixseth in her restructuring efforts. The Debtor listed
$100 million to $500 million in assets and $500 million to
$1 billion in debts.
EJ'S SHOES: Case Summary & 19 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: EJ's Shoes, Inc.
fdba Famous Brand Shoes, Inc
dba Shoe Cents
fdba Famous Brand Shoes Stores
dba EJ's Designer Shoe Outlet
dba EJ's Shoes, Inc
dba E & J's Designer Shoe Outlet
dba EJ's Shoes
8620 Olive Blvd
Saint Louis, MO 63132
Bankruptcy Case No.: 09-45350
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Eastern District of Missouri (St. Louis)
Judge: Barry S. Schermer
Debtor's Counsel: Nicholas A. Franke, Esq.
Spencer Fane Britt Browne LLP
Suite 1000, 1 North Brentwood
St. Louis, MO 63105
Tel: (314) 863-7733
Fax: (314) 862-4656
Email: nfranke@spencerfane.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $10,000,001 to $50,000,000
A full-text copy of the Debtor's petition, including a list of its
19 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/moeb09-45350.pdf
The petition was signed by Edward J. Nusrala, president of the
Company.
ENNIS ENTERPRISES: Case Summary & Two Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Ennis Enterprises 190, LLC
643 W Westwood St
Porterville, CA 93257
Bankruptcy Case No.: 09-15237
Debtor-affiliate filing separate Chapter 11 petition on Feb. 2,
2008:
Entity Case No.
------ --------
Ennis Homes Inc. 09-10848
Type of Business: The Debtors are homebuilders.
See http://www.ennishomes.com/
Chapter 11 Petition Date: June 5, 2009
Court: Eastern District of California (Fresno)
Judge: W. Richard Lee
Debtor's Counsel: Hagop T. Bedoyan, Esq.
Klein, DeNatale, Goldner, Cooper, Rosenlieb
& Kimbal LLp
5260 N Palm Ave #217
Fresno, CA 93704
Tel: (559) 438-4374
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Bank of the Sierra property $11,816,973
90 N. Main Street
Porterville, CA 93257
Ben Ennis - unknown
1540 N. Lombardi
Porterville, CA 93257
The petition was signed by Ben A. Ennis, manager.
ENOS LANE: Wants to Hire William Alexander as Special Counsel
-------------------------------------------------------------
Enos Lane Farm Properties, LLC, asks the U.S. Bankruptcy Court for
the Eastern District of California for permission to employ
William Alexander & Associates as its special counsel.
The Debtor relates that William Alexander has experience in the
field of litigation, real estate transactions and mechanic liens,
and will represent the Debtor on state and federal litigation and
transactions.
The Debtor proposes to pay William Alexander's normal hourly
rates. The court document did not disclose the firm's personnel
rates.
To the best of the Debtor's knowledge, William Alexander is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached at:
William Alexander & Associates
1925 G. Street
Bakersfield, CA 93301
Tel: (661) 316-7888
About Enos Lane Farm Properties
Bakersfield, California-based Enos Lane Farm Properties, LLC, dba
Kern River Raceway filed for Chapter 11 on May 8, 2009 (Bankr. E.
D. Calif. Case No. 09-14229). Riley C. Walter, Esq., represents
the Debtor in its restructuring efforts. The Debtor has assets
and debts both ranging from $10,000,001 to $50,000,000.
FAYEZ NABIH NAHHAS: Case Summary & 16 Largest Unsecured Creditors
-----------------------------------------------------------------
Joint Debtors: Fayez Nabih Nahhas
aka Fayez Nahhas
aka Fayez N. Nahhas
Lisa Ann Nahhas
aka Lisa A. Nahhas
aka Lisa Edwards Nahhas
aka Lisa Nahhas
aka Lisa A. Edwards
1010 Moon Lake Dr.
Weslaco, TX 78596
Bankruptcy Case No.: 09-70427
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Southern District of Texas (McAllen)
Judge: Richard S. Schmidt
Debtors' Counsel: Eduardo V. Rodriguez, Esq.
Malaise Law Firm
1265 N Expressway 83
Brownsville, TX 78521
Tel: (956) 547-9638
Fax: (956) 547-9630
Email: evrcourt@malaiselawfirm.com
Total Assets: $1,347,673
Total Debts: $1,657,112
A list of the Debtors' 16 largest unsecured creditors is available
for free at: http://bankrupt.com/misc/txsb09-70427.pdf
The petition was signed by the Joint Debtors.
FERRELLGAS LP: Moody's Withdraws Ba3 Shelf Registration Rating
--------------------------------------------------------------
Moody's Investors Service withdrew these companies' shelf
registration ratings that were inadvertently assigned and
published. This action does not affect the respective companies'
senior unsecured debt, Corporate Family Rating or other ratings.
The shelf registration ratings withdrawn are for Ferrellgas
Partners, LP, Loews Corporation and W&T Offshore, Inc.
The last rating action for Ferrellgas Partners was on June 25,
2008, when Moody's assigned a Ba3 rating to senior notes issued by
its subsidiary, Ferrellgas, LP. The last rating action on Loews
was on October 27, 2008, when Moody's affirmed the company's A3
senior unsecured ratings. The last rating action on W&T Offshore
was on March 3, 2009 when Moody's downgraded the company's
Corporate Family Rating to B3 from B2 and changed the outlook to
negative.
Loews' ratings were assigned by evaluating factors Moody's believe
are relevant to the credit profile of the issuer, such as i) the
business risk and competitive position of the company versus
others within its industry, ii) the capital structure and
financial risk of the company, iii) the projected performance of
the company over the near to intermediate term, and iv)
management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside of Loews' core industry and Loews' ratings are believed to
be comparable to those of other issuers of similar credit risk.
FILENE'S BASEMENT: To Sell Assets to K&G Acquisition for $67MM
--------------------------------------------------------------
Reuters reports that Filene's Basement Corp. will sell its trade
name, some leases, and its retail inventory to K&G Acquisition for
$67 million.
According to Reuters, K&G offered $67 million for:
-- trade name,
-- 17 store leases,
-- inventory from all Filene's Basement locations,
-- leases for the Company's headquarters in Burlington, and
-- distribution center in Auburn.
Citing Filene's basement, Reuters relates that K&G is expected to
retain most employees in the store and corporate facilities it is
acquiring.
A court hearing has been set for June 10, 2009, Reuters relates.
Filene's Basement Corp., also called The Basement, is a
Massachusetts-based chain of department stores owned by Retail
Ventures, Inc. The oldest off-price retailer in the United
States, The Basement focuses on high-end goods and is known for
its distinctive, low-technology automatic markdown system. As of
late 2006, the company operated stores in metropolitan areas of
eight U.S. states and Washington, D.C. The chain also uses a
470,000-square-foot (44,000 m2) distribution center in Auburn,
Massachusetts. The store's name is derived from the subterranean
location of its flagship store, in the basement of the former
Filene's department store at Downtown Crossing in Boston,
Massachusetts.
Filene's Basement, Inc. and its affiliates filed for Chapter 22 on
May 4, 2009, (Bankr. D. Del. Case No. 09-11525) James E. O'Neill,
Esq., Laura Davis Jones, Esq., Mark M. Billion, Esq., Michael
Seidl, Esq. and Timothy P. Cairns, Esq. at Pachulski Stang Ziehl &
Jones LLP represents the Debtors in their restructuring effort.
The Debtors listed $50,000,001 to $100,000,000 in assets and
$100,000,001 to $500,000,000 in debts.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures the following year. As reported by the Troubled
Company Reporter on October 23, 2000, the U.S. Bankruptcy Court
confirmed Filene's Basement's Amended Joint Plan of Liquidation,
filed on June 16, 2000. Retail Ventures in April 2009 transferred
the unit to Buxbaum.
FURNITURE SOUTH: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Furniture South, Inc.
PO Box 193
Sautee Nacoochee, GA 30571
Bankruptcy Case No.: 09-22352
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Northern District of Georgia (Gainesville)
Debtor's Counsel: David R. Trippe, Esq.
PO Box 193
Sautee Nacoochee, GA 30571
Tel: (706) 878-7030
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
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/ganb09-22352.pdf
The petition was signed by Ed Barker, president of the Company.
GENERAL MOTORS: Inks MOU With Penske Automotive for Saturn Brand
----------------------------------------------------------------
Penske Automotive Group, Inc., an international automotive
retailer, has signed a Memorandum of Understanding with General
Motors Corp. regarding the Saturn brand.
Under the terms of the MOU, if the transaction is completed,
Penske Automotive Group would obtain the rights to the Saturn
brand, acquire certain assets including the Saturn parts
inventory, and have the right to distribute vehicles and parts
through the Saturn Dealership network. GM would continue to
provide Saturn Aura, Vue, and Outlook vehicles on a contract basis
for an interim period.
"We have agreed upon a framework that we believe will build
momentum for the Saturn brand," said Penske Automotive Chairman
Roger Penske. "Saturn has a passionate customer base and
outstanding dealer network. For nearly 20 years Saturn has
focused on treating the customer right. We share that philosophy,
and we want to build on those strengths."
Saturn began selling cars in 1990 and has sold more than 4 million
vehicles. More than 80 percent of those vehicles are still in
operation, according to data from R.L. Polk. Saturn has regularly
scored among the industry leaders for non-luxury brands in
customer satisfaction surveys. Commenting on the proposed deal,
Saturn general manager Jill Lajdziak said, "This is the
combination of two iconic teams: Saturn and Penske. GM had the
vision to create Saturn and has the desire to see it succeed in
the future."
The closing of the transaction is expected to occur during the
third quarter of 2009 and is subject to customary conditions,
including the completion of due diligence, regulatory and other
approvals.
About Penske Automotive
Penske Automotive Group, Inc. -- http://www.penskeautomotive.com/
-- headquartered in Bloomfield Hills, Michigan, operates 310
retail automotive franchises, representing 40 different brands and
25 collision repair centers. Penske Automotive, which sells new
and previously owned vehicles, finance and insurance products and
replacement parts, and offers maintenance and repair services on
all brands it represents, has 158 franchises in 19 states and
Puerto Rico and 152 franchises located outside the United States,
primarily in the United Kingdom. Penske Automotive is also the
exclusive distributor of the smart fortwo through its wholly-owned
subsidiary smart USA Distributor LLC -- http://www.smartusa.com/
smart USA supports over 75 smart retail centers in the United
States. Penske Automotive is a member of the Fortune 200 and
Russell 1000 and has approximately 14,000 employees. smart and
fortwo are registered trademarks of Daimler AG.
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. 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. A full-text copy
of GM's viability plan presented in February 2009 is available at
http://researcharchives.com/t/s?39a4
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D. N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsels.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11
restructuring proceedings commenced by General Motors Corporation
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
GENERAL MOTORS: Court Permits $408MM Payment to Shippers, Et Al.
----------------------------------------------------------------
Before the Petition Date, as an integral part of their business,
General Motors Corporation and its debtor-affiliates used and made
payments to domestic and foreign commercial common carriers and
other third-party service providers to ship, transport, store,
engage in customs business, and facilitate the movement of goods
through customs, and deliver goods through established national
and international distribution networks, as well as a network of
third-party warehouses to store goods in transit. The Debtors
also purchase from overseas certain raw materials, parts,
components, prototypes, vehicles, and other finished goods,
tooling, machinery, and equipment that they use in the operation
of their businesses, and import those goods into the United States
and other jurisdictions.
Moreover, the Debtors use customized and specific tools, dies,
molds, and other equipment to manufacture automobiles and
automobile parts. The Debtors' Tooling is built by third parties,
which deliver and install the Tooling in their facilities as well
as in the facilities of the Debtors' Tier 1 and Tier 2 suppliers.
Tooling is not paid for in full until after the Tooling has been
designed, constructed, tested, validated, and in many instances
has already began producing essential parts and supplies. In
addition, pursuant to applicable state law, an entity that has
performed repair, construction, installation, or similar services
for the Debtors, may be granted a lien against the real or
personal property of the Debtors that was the subject of the
services to secure payment of the amounts owed by the Debtors to
the Mechanic. The Debtors, however, believe that all charges are
far less than the value of the property that is encumbered.
As of the Petition Date, the Debtors report that these charges
remain outstanding:
Tooling Charges $250 million
Shipping and Warehouse Charges $141 million
Mechanics Lien Charges $12 million
Customs Duties $5 million
Accordingly, the Debtors sought and obtained the authority of the
U.S. Bankruptcy Court for the Southern District of New York to pay
prepetition Shipping and Warehousemen Charges, Customs Duties and
other incidental prepetition import expenses, Tooling Charges and
Mechanics' Liens Charges.
The Debtors' proposed counsel, Stephen Karotkin, Esq., at Weil,
Gotshal & Manges LLP, in New York, pointed out that in light of
the Debtors' bankruptcy, certain Shippers and Warehousemen who
hold the Goods for delivery to or from the Debtors may refuse to
release the Goods pending receipt of payment for their prepetition
services, which would disrupt the Debtors' operations. He
stressed that the Debtors rely on the timely shipment of the Goods
to prevent interruptions in their supply and delivery network.
Given their dependence on the Shippers and Warehousemen, it is
essential that the commencement of the Chapter 11 cases should not
give any third-party Shippers and Warehousemen any reason or
excuse to cease performing timely services or to retain products,
equipment, or Goods, he maintained.
Mr. Karotkin argued that the Debtors' purchase of the Imported
Goods is vital to their business operations. If the Customs
Duties are not timely paid:
-- the Debtors' customs brokers may, in some instances, assert
shippers' and warehousemen's liens against the Imported
Goods;
-- the U.S. Customs Service may assert a lien against the goods
under Section 141 of Title 19 of the Code of Federal
Regulations; and
-- non-U.S. customs authorities may assert similar liens or take
other action against the Debtors in their respective
jurisdictions.
Mr. Karotkin also noted that as priority claims under Section
507(a)(8)(F) of the Bankruptcy Code, the Customs Duties must be
paid in full before the Debtors make any distributions to holders
of general unsecured claims in connection with a Chapter 11 plan.
Mr. Karotkin continued that certain Tool Makers may refuse to
continue construction on the Tooling, which is currently being
manufactured, or refuse to deliver the Tooling to the Debtors or
their Suppliers based on the assertion of a mechanics' or
toolmakers' lien, if their claims for previously delivered Tooling
are left unsatisfied. He emphasized that the Debtors' failure to
pay Suppliers or Tool Makers for the Tooling could result in a
slowdown or other threats of reduced production to the detriment
of the Debtors or their estates. Payment for any prepetition
amounts necessary to satisfy any Tool Maker's liens and claims in
order to ensure the uninterrupted development, delivery, and use
of the Tooling, he maintained.
The Court also authorized the Debtors to obtain a verification,
before payment, from a Shipper or Warehouseman stating that it
will:
(i) continue to provide services to the Debtors during the
pendency of the Chapter 11 cases on the most favorable
terms that existed prepetition; and
(ii) not cancel on less than a 90-day notice of any contract
pursuant to which it provides services to the Debtors.
If any Shipper or Warehouseman accepts payment pursuant to the
verification yet fails to comply with the conditions, any payment
to the Shipper or Warehouseman for the prepetition obligations
will be deemed an avoidable postpetition transfer under Section
549 of the Bankruptcy Code, the Court ruled. Upon recovery by the
Debtors of the payment, the claim for which payment was recovered
will be reinstated as a prepetition claim in the amount so
recovered.
At the Debtors' request, the Court also authorized all banks and
other financial institutions on which checks are drawn or
electronic funds are transferred with respect to Shipping and
Warehousing Charges, Customs Duties, Tooling Charges or Mechanics'
Lien Charges to receive, process, honor and pay, to the extent of
fund on deposit any and all checks or electronic transfers,
whether the checks or transfers were issued before or after the
Petition Date, upon the receipt by each bank of notice of
authorization without further order of the Court.
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. 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. A full-text copy
of GM's viability plan presented in February 2009 is available at
http://researcharchives.com/t/s?39a4
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D. N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsels.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11
restructuring proceedings commenced by General Motors Corporation
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
GENERAL MOTORS: Can Continue Prepetition Insurance Programs
-----------------------------------------------------------
General Motors Corporation and its debtor-affiliates maintain
various property, casualty, and management liability related
insurance programs, which provide them with insurance coverage for
liabilities relating to, among others, general commercial claims,
property damage, automobile damage, general foreign liability,
directors' and officers' liability, fiduciary liability, crime,
employers' liability, excess umbrella, and various other product
and property related and general liabilities.
The Debtors also employ various parties to assist them with the
procurement, placement, negotiation of their Insurance Programs;
the investigation and settlement of claims; and other related
services, including property inspection and actuarial reviews on
behalf of the Debtors. Each of the Insurance Service Providers is
paid a fee by the Debtors or a commission by the Insurance
Carriers or a combination of both.
The Debtors ask permission from the U.S. Bankruptcy Court for the
Southern District of New York to continue their Insurance Programs
pursuant to the practices and procedures that were in effect
before the Petition Date. The Debtors also ask the Court to
authorize payment of all undisputed premiums, deductibles,
self-insured retention amounts, administrative fees, broker fees,
and other obligations arising before the Petition Date, relating
to the Insurance Programs.
"The nature of the Debtors' businesses and the extent of their
operations make it essential for them to maintain their Insurance
Programs on an uninterrupted basis," Stephen Karotkin, Esq., at
Weil, Gotshal & Manges LLP, in New York, their proposed counsel,
contends.
The Debtors are required to pay annual premiums aggregating
$208,274,618 under the Insurance Programs, and $26,804,441 in
broker fees and related service fees to the Insurance Service
Providers to renew their insurance coverages. Lists of the
Insurance Programs and Broker Fees are available for free at:
http://bankrupt.com/misc/gm_insurance.pdf
http://bankrupt.com/misc/gm_brokerfees.pdf
Mr. Karotkin says that if the Insurance Programs lapse without
renewal, the Debtors could be exposed to substantial liability for
personal and property damages to the detriment of all parties in
interest. Moreover, the Debtors would then be required to obtain
replacement policies on an expedited basis at a significant cost
to the estates, he tells the Court.
Mr. Karotkin discloses, however, that the Debtors are not aware of
any prepetition claims for which the insurance deductibles have
not been paid, or other fees or commissions owed to the Insurance
Service Providers. Out of an abundance of caution, the Debtors
are only seeking authority to pay any undisputed obligations as
they come due, he says.
To further their request, the Debtors ask the Court to direct
applicable banks and other financial institutions to receive,
honor, process, and pay, all checks drawn or electronic fund
transfers requested or to be requested by the Debtors relating to
the Insurance Programs or the Insurance Obligations.
* * *
The Court approved the Debtors' request on a final basis.
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. 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. A full-text copy
of GM's viability plan presented in February 2009 is available at
http://researcharchives.com/t/s?39a4
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D. N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsels.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11
restructuring proceedings commenced by General Motors Corporation
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
GENERAL MOTORS: Can Pay Prepetition Taxes & Assessments
-------------------------------------------------------
In the ordinary course of business, General Motors Corporation and
its debtor-affiliates incur taxes and governmental charges that
are payable directly to the federal government and various state
and local taxing authorities.
Like most domestic Original Equipment Manufacturers, the Debtors
have various tax incentive agreements in place around the United
States that generates annual tax savings of more than
$130,000,000, and many of those agreements require the timely
payment of Property Taxes. If taxes and other government
compensation payments are not paid, the tax incentive agreements
could be automatically voided or cancelled, thus, resulting in
higher property tax payments, or even result in the repayment of
taxes previously saved in prior tax years.
Many federal, state, and local statutes impose personal liability
on the officers and directors for certain taxes owed by entities.
Thus, to the extent that the relevant Taxes and Assessments remain
unpaid by the Debtors, the Debtors' directors and officers may be
subject to prosecution during the pendency of these Chapter 11
cases, which would distract the Debtors and their directors, and
officers from devoting their full attention to the Debtors'
business and the orderly administration of these cases, Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York,
proposed Debtors' counsel, tells the U.S. Bankruptcy Court for the
Southern District of New York.
Payment of prepetition Taxes and Assessments is critical to the
Debtors' efforts to preserve enterprise value, Mr. Karotkin
asserts. Nonpayment of these obligations may cause the Taxing
Authorities to take precipitous action which would disrupt the
Debtors' day-to-day operations, he adds.
Accordingly, the Debtors sought and obtained the Court's authority
to pay, in their sole discretion, any of the Taxes and Assessments
determined to be owed for periods prior to the Petition Date and
all the Taxes and Assessments subsequently determined upon audit.
The Court also authorized all applicable Banks, to honor all
Checks or Electronic Transfers drawn on the Debtors' accounts when
the Debtors request payment of prepetition Taxes and Assessments
owed to the Taxing Authorities, provided that sufficient funds are
available.
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. 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. A full-text copy
of GM's viability plan presented in February 2009 is available at
http://researcharchives.com/t/s?39a4
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D. N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsels.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11
restructuring proceedings commenced by General Motors Corporation
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
GENERAL MOTORS: Magna Expects to Complete Opel Buy in September
---------------------------------------------------------------
Magna International Inc. said it expects to complete its
takeover of General Motors Corp.'s German unit, Opel, in September
2009 but the German government made clear that the door remained
open to rival bidders, Reuters said.
The German Government agreed on May 30, 2009, to provide EUR1.5
billion or approximately $2.14 billion in bridge financing to Opel
as part of a deal to shield Opel from GM's Chapter 11 filing in
the United States. After Magna and Russia's Sberbank (SBER03.MM)
agreed on May 29 with GM in principle to take a combined 55% stake
in Opel, European governments have been lining up a total of
EUR4.5 billion in loan guarantees.
According to Reuters, the basis for providing the funds was a
preliminary deal between Magna and GM, but Germany has stressed so
far that other bidders, including Italy's Fiat (FIA.MI) and
China's BAIC, still had a shot if they improved their bids. "The
process is still open to all the bidders," government spokesman
Ulrich Wilhelm told reporters in Berlin. A German official told
Reuters that representatives from BAIC met members of the
government on June 2 and made clear they would "seriously
consider" a more detailed bid if talks with Magna failed.
Germany's Vice-Chancellor Frank-Walter Steinmeier has said Magna
could cut some 10,000 jobs at Opel. GM Europe had previously said
Opel's staff costs needed to be cut by $1.2 billion to return the
carmaker to profitability by 2011.
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. 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. A full-text copy
of GM's viability plan presented in February 2009 is available at
http://researcharchives.com/t/s?39a4
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D. N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsels.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11
restructuring proceedings commenced by General Motors Corporation
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
GENERAL NUTRITION: S&P Raises Corporate Credit Rating to 'B'
------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on General Nutrition Centers Inc. to 'B'
from 'B-' because of improved credit metrics and favorable
operating performance. The outlook is stable.
"The ratings on Pittsburgh-based GNC reflect a capital structure
that is highly leveraged after its 2007 leveraged buyout,
resulting in weak cash flow protection measures, and participation
in the highly competitive and fragmented nutritional supplement
retail industry," said Standard & Poor's credit analyst Jackie
Oberoi.
GNC's operating performance improved in 2008 and thus far in 2009
because of good comparable-store sales growth and better margins.
A new national pricing model and marketing efforts have largely
driven the turnaround. U.S.-based company-owned stores
experienced a 5.4% increase in comparable-store sales in the first
quarter ended March 31, 2009, after growing 2.7% in 2008. For the
12 months ended March 31, 2009, EBITDA was about $253 million, a
23% increase over year-ago levels. Profitability improved about
180 basis points compared with one year ago, at about 20.7%
(excluding compensation expenses associated with the acquisition).
Despite GNC's position as a large player with a worldwide network
of about 6,630 locations as of year-end 2008, the company remains
vulnerable. The nutritional supplements industry is very
fragmented and GNC faces significant competition from other
specialty retailers, drugstore chains, and mass merchants, as well
as independents. Mass merchants and drugstores exert significant
margin pressure on commodity products, such as vitamins and
minerals, while specialty retailers like Vitamin Shoppe Industries
Inc. target sophisticated vitamin, mineral, and supplement users.
S&P believes liquidity is adequate. As of March 31, 2009, the
company had about $66 million of cash on its balance sheet. In
addition, GNC had $46 million available under its $60 million
revolver. Debt amortizations are minimal for the next several
years, at just $6.8 million annually, and S&P expects capital
spending to be about $35 million annually. Cash flow from
operations and availability under the revolving credit facility
should be sufficient to meet near-term requirements. GNC's debt
does not have financial covenants, allowing the company some
additional flexibility.
GLR RESOURCES: Files for Bankruptcy Protection
----------------------------------------------
GLR Resources Inc. has filed a Notice of Intention to make a
proposal under the Bankruptcy and Insolvency Act on May 29, 2009,
and effective June 5, 2009, filed its Proposal with the Official
Receiver.
The Proposal will be governed by and construed in accordance with
the laws of Ontario and the federal laws of Canada applicable
therein. Any disputes as to the interpretation or application of
the Proposal and all proceedings taken in connection with the
Proposal shall be subject to the exclusive jurisdiction of the
Court. All proceedings against GLR have been stayed as of the
date of filing the Notice of Intention.
The implications for creditors and other stakeholders of GLR are
not known at this time and will not be known until the
restructuring process is complete.
Paddon + Yorke Inc. has been appointed as trustee.
GLR Resources Inc. -- http://www.glrresources.com/-- is a
Canadian-based junior mining and exploration company focusing on
projects in North America with existing projects in Ontario and
Quebec. On January 7, 2009, the TSX de-listed GLR's securities
and, consequently, the Company's securities do not trade on a
recognized Canadian exchange.
GOODCRANE CORP: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Goodcrane Corporation
12221 Almeda Rd.
Houston, TX 77045
Bankruptcy Case No.: 09-34031
Type of Business: The Debtor makes crane and deck equipment for
the marine industries.
Chapter 11 Petition Date: June 5, 2009
Court: Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: Vy Thuan Nguyen, Esq.
vy.nguyen@goodcrane.com
12221 Almeda Rd.
Houston, TX 77045
Tel: (713) 434-3322
Estimated Assets: $10 million to $50 million
Estimated Debts: $1 million to $10 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
CICSA Marine contract $5,005,000
Manzana "M" Lote 1 - B
Pto. Industrial Pesquero
"Laguna Azul"
Cd. Del Carmen, Camp. 24140
Tel: (786) 252-1331
Siem Offshore contract $1,900,000
N-6141 Rovde
Norway
Tel: +47 38 14 30 06
American Alloy Steel trade debt $810,700
6239 N. Houston Rosslyn
Houston, TX 77091
Tel: (713) 462-8081
Trico Marine Services contract $497,622
DRT Fluid Power trade debt $372,300
Kenney Marr commission $300,000
Rowan Drilling contract $300,000
American International Group insurance $249,939
Nor Offhsore contract $230,000
GHX Industrial trade debt $219,000
EEW Steel trade debt $183,639
Canyon States Transporation trade debt $161,684
Cable Moore, Inc. trade debt $150,000
Stemen Environmental trade debt $80,892
HW Security Co. trade debt $38,479
Ideal Steel trade debt $56,051
Corus International trade debt $51,943
Elliott Electric Supply trade debt $49,207
Gorman Uniform trade debt $40,262
Northern Investors Co. trade debt $52,908
The petition was signed by Levi Romero, II, treasurer.
GOTTSCHALKS INC: Landlords Object to Assignment of Leases
---------------------------------------------------------
More than half a dozen objections were filed Thursday in the U.S.
Bankruptcy Court for the District of Delaware over Forever 21
Retail Inc.'s bid to take over more than a dozen leases and three
properties of bankrupt regional department store chain Gottschalks
Inc., Bankruptcy Law360 reports.
Among the objectors is 2401 Butano Drive LLC who says it is
concerned that Debtor's attempt to assume and assign the lease to
Forever 21 will result in the breach of the lease operating
covenants. Gottschalks has at least 15 years left on its lease,
according to the Fresno Bee.
2401 Butano is the owner of Country Club Plaza Shopping Center in
Sacramento, California. The Debtors' store comprises 198,446
square feet, covering close to one-half of 2401's interior mall
space at the Shopping Center.
On May 22, 2009, the Court approved bidding procedures for the
sale of Debtor's interest in its non-residential real property
leases. Pursuant to the bidding procedures order, an auction was
held on May 28, 2009, and Forever 21 Retail, Inc., was selected as
the winning bidder for the lease at the shopping center.
A court hearing to finalize the sale of the leases and real estate
is set for Wednesday in Delaware.
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.
GREGORY SCOTT DAILY: Wants Bradley Arant as Bankruptcy Counsel
--------------------------------------------------------------
Gregory Scott Daily asks the U.S. Bankruptcy Court for the Middle
District of Tennessee for permission to employ Bradley Arant Boult
Cummings LLP as counsel.
As counsel, BABC will, among other things:
(a) prepare pleadings and applications for filing and
conducting examinations incidental to any related
proceedings or to the administration of the Chapter 11
case;
(b) advise the Debtor of outs rights, duties, and obligations
as debtor operating under Chapter 11; and
(c) take any and all necessary action incident to the proper
preservation and administration of the Chapter 11 case,
including debtor-in-possession financing and the sale of
assets.
The hourly rates of BABC personnel are:
William L. Norton III $375
Austin McMullen $280
Members $180 to $500
Mr. Norton tells the Court that pre-bankruptcy, BABC received a
$50,000 retainer, $5,000 of which was applied to prepetition
services rendered and the remainder is being held to be applied to
allowed postpetition fees and expenses. Mr. Norton adds that
there are no amount of fees and expenses that are due as of the
petition date.
Mr. Norton assures the Court that BABC is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Norton can be reached at:
Bradley Arant Boult Cummings LLP
P.O. Box 340025
Nashville, TN 37203
Tel: (615) 252-2397
Fax: (615) 252-6397
The Court will hear the Debtor's motion on June 16, 2009, at 9:00
a.m., at Courtroom Three, Second Floor, Customs House, at 701
Broadway, in Nashville, Tennessee.
About Gregory Scott Daily
Nashville, Tennessee-based Gregory Scott Daily filed for
Chapter 11 on May 11, 2009 (Bankr. M. D. Tenn. Case No. 09-05337).
William L. Norton, Esq., at Bradley Arant Boult Cummings LLP
represents the Debtor in its restructuring efforts. The Debtor
listed $10,000,001 to $50,000,000 in assets and $100,000,001 to
$500,000,000 in debts.
GREGORY SCOTT DAILY: Taps Morgan Lewis as Litigation Counsel
------------------------------------------------------------
Gregory Scott Daily asks the U.S. Bankruptcy Court for the Middle
District of Tennessee for permission to employ Morgan, Lewis &
Bockius LLP as its special litigation counsel.
Morgan Lewis will work with Bradley Arant Boult Cummings LLP, the
Debtor's proposed bankruptcy counsel, regarding the claims
asserted in litigation that will likely be reasserted in the
Chapter 11 case.
The hourly rates of Morgan Lewis' personnel are:
Michael E. Molland, lead trial counsel $755
James N. Penrod, second chair trial $750
Amy Spicer, associate and third chair $495
Aaron Dura, associate $485
Seth McGibben, associate $380
KIP Adams, paralegal $240
Shelly Beavers, litigation & courtroom
technology support $220
Joe Caldarola, paralegal $150
Mr. Penrod tells the Court that as of the petition date, Morgan
Lewis is owed $3.3 million in legal fees and expenses. The
litigation has been pending for over six years and is involved in
an appeal for two and half years and a four month jury trial.
Morgan Lewis applied all funds held for the payment of fees and
expense, thus, Morgan Lewis does not have any current retainer.
Mr. Penrod assures the Court that Morgan Lewis is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Penrod can be reached at:
Morgan, Lewis & Bockius LLP
One Market, Spear Street Tower
San Francisco, CA 94105-1596
Tel: (415) 442-1000
Fax: (415) 442-1001
About Gregory Scott Daily
Nashville, Tennessee-based Gregory Scott Daily filed for
Chapter 11 on May 11, 2009 (Bankr. M. D. Tenn. Case No. 09-05337).
William L. Norton, Esq., at Bradley Arant Boult Cummings LLP
represents the Debtor in its restructuring efforts. The Debtor
listed $10,000,001 to $50,000,000 in assets and $100,000,001 to
$500,000,000 in debts.
GREGORY SCOTT: Wants to Set 40 Days after Order as Claims Bar Date
------------------------------------------------------------------
Gregory Scott Daily asks the U.S. Bankruptcy Court for the Middle
District of Tennessee to set 40 days after the Court's order
approving its request as the last day for filing proofs of claim.
The Debtor relates that claims must be accrued prior to May 11,
2009, and the claim is (i) not listed in the Debtor's schedules;
(ii) listed in the Debtor's schedules as contingent, unliquidated
or disputed; (iii) listed in the Debtor's schedules but the
creditor disagrees with the amount or classification as listed in
the schedules; or (iv) one in which an allowed exception exist, or
the claim will forever be discharged and barred.
Nashville, Tennessee-based Gregory Scott Daily filed for
Chapter 11 on May 11, 2009 (Bankr. M. D. Tenn. Case No. 09-05337).
William L. Norton, Esq., at Bradley Arant Boult Cummings LLP
represents the Debtor in its restructuring efforts. The Debtor
listed $10,000,001 to $50,000,000 in assets and $100,000,001 to
$500,000,000 in debts.
HAWKER BEECHCRAFT: S&P Downgrades Corporate Credit Rating to 'SD'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Hawker Beechcraft Inc. to 'SD' (selective
default) from 'CC'. S&P also lowered its issue-level ratings on
wholly owned subsidiary Hawker Beechcraft Acquisition Co. LLC's
senior unsecured and subordinated debt to 'D' from 'C'. S&P
removed the corporate credit rating on Hawker Beechcraft and the
issue-level ratings on HBAC from CreditWatch, where they were
placed with negative implications on May 7, 2009.
The recovery rating on senior unsecured and subordinated debt
remains '6', indicating expectations of negligible (0%-10%)
recovery. Although the tender offer price represented a higher
recovery rate, it did not cover all of each issue outstanding and
S&P's ratings reflect recovery of principal in the event of
payment default.
S&P affirmed its 'B' issue-level rating on HBAC's senior secured
debt, which was not on CreditWatch. The recovery rating on this
debt remains at '2', indicating expectations of substantial (70%-
90%) recovery of principal in the event of payment default.
The rating actions follow the Wichita, Kansas-based company's
announcement of results of its cash tender offer to purchase a
portion of its unsecured notes at values substantially below par.
The downgrades follow S&P's criteria: the 'SD' rating recognizes
that S&P expects Hawker Beechcraft to honor all its other
obligations and there is no conventional default, as there would
be in the case of a bankruptcy. The 'D' reflects S&P's view that
the distressed tender offer is a de facto restructuring with
respect to the security involved (the unsecured notes), even if
only a portion of it was subject to the offer. On May 5, 2009,
the company announced an offer to purchase for cash a portion of
its senior fixed-rate notes due 2015, senior paid-in-kind election
notes due 2015, and subordinated notes due 2017 at values
substantially below par for an aggregate purchase price of up to
$100 million, which it later increased to $150 million. In
aggregate, it accepted about $274.5 million of notes for about
$96 million of the total purchase price. The aggregate principal
amount of the notes outstanding is now about $603 million, almost
$500 million less than the amount outstanding before this tender
offer and open market purchases in the first quartet of 2009, at
combined cash cost of about $140 million to Hawker Beechcraft.
S&P subsequently expects to raise S&P's ratings, reflecting its
view of the company's risk of payment default and potential for
further distressed redemptions. "Although Hawker Beechcraft will
benefit from lower debt and interest expense, credit protection
measures will remain very weak," said Standard & Poor's credit
analyst Roman Szuper. "The contemplated upgrade assumes that the
company will continue to have adequate liquidity, remain
comfortably in compliance with financial covenants in its credit
facility, and that the business jet market does not deteriorate
beyond current expectations." S&P also expects to raise the
issue-level ratings on the remaining untendered senior unsecured
and subordinated debt.
HILVENTURES LP: Gets Initial Access to Wells Fargo Cash Collateral
------------------------------------------------------------------
Hon. Theodor C. Albert of the U.S. Bankruptcy Court for the
Central District of California authorized, on an interim basis,
HilVentures, L.P., to:
(a) use cash collateral of any secured claimants, including but
not limited to any cash collateral of Wells Fargo Bank,
N.A.; and
(b) grant its lender postpetition liens.
In July 2008, the Debtor obtained a $12 million loan from Wells
Fargo. John D. Gantes personally guaranteed the Wells Loan and
filed an individual Chapter 7 case in December 2008. The
bankruptcy filing resulted in a default in the loan even though
the Debtor was current on its payment. On May 2009, Wells Fargo
has asked for an appointment of a receiver.
The lender asserts liens against substantially all of the Debtor's
assets and on the proceeds generated from the collateral.
Accordingly, the Debtor will grant to the lender replacement liens
in its postpetition cash, accounts receivable and inventory, and
the proceeds, to the same extent and priority as any duly
perfected and unavoidable liens in cash collateral as of the
petition date.
The Court will consider final approval of the parties' agreement
on July 1, 2009, at 10:00 a.m. Objections, if any, are due no
later than June 17.
About HilVentures, L.P.
Irvine, California-based HilVentures, L.P., dba Hilton Garden Inn
filed for Chapter 11 on May 14, 2009 (Bankr. C. D. Calif. Case No.
09-14514). Its debtor affiliates filed Chapter 11 in 2008. Reem
J. Bello, Esq., at Weiland, Golden, Smiley, Wang Ekval LLP
represents the Debtors in their restructuring efforts. The
Debtors has assets and debts both ranging from $10 million to
$50 million.
HILVENTURES LP: Wants More Time to File Schedules Thru June 12
--------------------------------------------------------------
HilVentures, L.P., asks the U.S. U.S. Bankruptcy Court for the
Central District of California to extend until June 12, 2009, the
time for it to file its:
-- schedules of assets and liabilities,
-- statement of financial affairs,
-- list of executory contracts and unexpired leases,
-- list of equity security holders,
-- corporate ownership certificate,
-- venue disclosure statement, and
-- creditor matrix.
The Debtor relates that it needs more time to assemble the
information necessary to complete the Schedules.
Irvine, California-based HilVentures, L.P., dba Hilton Garden Inn
filed for Chapter 11 on May 14, 2009 (Bankr. C. D. Calif. Case No.
09-14514). Its debtor affiliates filed Chapter 11 in 2008. Reem
J. Bello, Esq., at Weiland, Golden, Smiley, Wang Ekval LLP
represents the Debtors in their restructuring efforts. The
Debtors has assets and debts both ranging from $10 million to
$50 million.
IFA MEDICAL CENTER: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: IFA Medical Center, Inc.
dba University Health Care Center
1695 SW 107 Ave
Miami, FL 33165
Bankruptcy Case No.: 09-21263
Chapter 11 Petition Date: June 7, 2009
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Debtor's Counsel: Joel M. Aresty, Esq.
13499 Biscayne Blvd #T-3
No. Miami, FL 33181
Tel: (305) 899-9876
Fax: (305) 723-7893
Email: aresty@mac.com
Total Assets: $823,236
Total Debts: $1,987,758
A list of the Company's 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/flsb09-21263.pdf
The petition was signed by Elieser Gonzalez, president of the
Company.
INTRALINKS INC: S&P Gives Stable Outlook & Affirms 'B' Rating
-------------------------------------------------------------
Standard & Poor's Ratings said it revised its outlook on New York
City-based IntraLinks Inc. to stable from negative. At the same
time, Standard & Poor's affirmed its 'B' corporate credit rating
on the company. S&P also affirmed both the senior secured bank
facility 'B+' issue-level rating (with a recovery rating of '2')
and the second-lien term loan 'CCC+' rating (with a recovery
rating of '6').
"The outlook revision reflects the company's stable operating
performance despite challenging macroeconomic conditions in two of
its key target markets -- debt capital markets and M&A," said
Standard & Poor's credit analyst Jennifer Pepper. The company's
recurring revenue base as well as expansion into new markets
helped to sustain top-line performance in 2008. A flexible cost
structure contributed to modest year-over-year improvement in
EBITDA.
ION MEDIA: Wants to Hire Kirkland & Ellis as Bankruptcy Counsel
---------------------------------------------------------------
ION Media Networks, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
authority to employ Kirkland & Ellis LLP as its counsel.
K&E will, among other things:
(a) advise the Debtors with respect to their powers and duties
as debtors-in-possession in the continued management and
operation of their business and properties;
(b) advise and consult on the conduct of the Chapter 11 cases,
including all of the legal and administrative requirements
of operating in Chapter 11; and
(c) attend meetings and negotiate with representatives of the
creditors and other parties-in-interest.
The hourly rates of K&E's personnel are:
Partners $550 - $965
Of Counsel $390 - $965
Associates $320 - $660
Paraprofessionals $110 - $280
K&E professionals having primary responsibility in these cases are
James H.M. Spraygen; Jonathan S. Henes and Joshua A. Sussberg.
Mr. Henes tells the Court that on March 16, 2009, K&E received a
$150,000 classic retainer. K&E received additional retainers
increasing the retainer balance to $600,000. As of the petition
date, the retainer balance was $600,000.
Mr. Henes assures the Court that K&E is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Henes can be reached at:
Kirkland & Ellis LLP
Citigroup Center
153 E. 53rd Street
New York, NY 10022-4675
Tel: ((212) 446-4927
Fax: ((212) 446-4900
About ION Media Networks, Inc.
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.
The Company and its affiliates filed for Chapter 11 bankruptcy
protection on May 19, 2009 (Bankr. S.D. N.Y. Case No. 09-13125).
Holland & Knight LLP is the Debtors' corporate counsel. Moelis &
Company LLC is the Debtors' financial advisor. Ernst & Young LLP
is the Debtors' tax advisor, and Kurtzman Carson Consultants LLP
is the Debtors' notice, claims and balloting agent. The Debtors
listed $1,855,000,000 in assets and $1,936,000,000 in debts as of
April 30, 2009.
ION MEDIA: Wants to Hire Holland & Knight as Corporate Counsel
--------------------------------------------------------------
ION Media Networks, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
authority to employ Holland & Knight LLP as its corporate counsel.
As corporate counsel, Holland & Knight will, among other things:
-- advise the audit committee of the Debtors' board of
directors with respect to matters within the scope of
responsibilities;
-- advise the Debtors on matters relating to the corporate
finance, including indenture and term loan covenants and
compliance, periodic reporting to lenders and noteholders,
disclosure and investor relations matters and capital market
activities; and
-- advise the Debtors on corporate organizational matters, as
dissolutions, mergers and formation of subsidiaries, advise
the Debtors with respect to articles/bylaws/other
constituent documents, provide legal services on a general
counsel basis in the absence of a full-time general counsel,
and provide legal services as to other matters as may arise
in the day to day operation of the Debtors' businesses.
David L. Perry, Jr., Esq., a partner at H&K, tells the Court that
the hourly rates of the firm's personnel are:
Partners $375 - $725
Senior Counsel $350 - $525
Associates $210 - $400
Paralegals $100 - $210
Mr. Perry adds that the firm received a $225,000 retainer for fees
and expenses incurred. As of the petition date, the Debtors did
not owe any amounts for legal services rendered before the
petition date.
Mr. Perry assures the Court that H&K is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Perry can be reached at:
Holland & Knight LLP
195 Broadway, 24th Floor
New York, NY 10007
Tel: ((212) 513-3200
Fax: ((212) 385-9010
About ION Media Networks, Inc.
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.
The Company and its affiliates filed for Chapter 11 bankruptcy
protection on May 19, 2009 (Bankr. S.D. N.Y. Case No. 09-13125).
Jonathan S. Henes, Esq., at Kirkland & Ellis LLP is the Debtors'
general bankruptcy counsel. Moelis & Company LLC is the Debtors'
financial advisor. Ernst & Young LLP is the Debtors' tax advisor,
and Kurtzman Carson Consultants LLP is the Debtors' notice, claims
and balloting agent. The Debtors listed $1,855,000,000 in assets
and $1,936,000,000 in debts as of April 30, 2009.
KAR HOLDINGS: S&P Affirms Corporate Credit Rating at 'B-'
---------------------------------------------------------
Standard & Poor's Ratings Services said it has affirmed its 'B-'
corporate credit rating on Carmel, Indiana-based KAR Holdings
Inc., as well as its 'CCC' rating and '6' recovery rating on the
company's subordinated debt. The outlook is stable.
At the same time, S&P lowered its rating on the company's senior
secured credit facilities to 'B' from 'B+' and revised the
recovery rating to '2' from '1', reflecting S&P's expectations
that lenders would receive substantial (70% to 90%) recovery in
the event of a payment default. S&P also lowered its rating on
KAR's senior unsecured debt to 'CCC' from 'CCC+' and revised the
recovery rating to '6' from '5', reflecting S&P's expectations
that lenders would receive negligible (0 to 10%) recovery.
The downgrades on the issues reflect a reduction in S&P's recovery
estimates based on S&P's use of a lower valuation multiple that
S&P believes is more reflective of future valuation prospects and
market conditions.
Total balance sheet debt as of March 31, 2009, was $2.5 billion,
including the senior credit facilities and $1 billion in junior
debt.
The ratings on KAR reflect its heavy debt from its leveraged
buyout in 2007 (adjusted debt to EBITDA is 6.8x) and prospects for
relatively low but still positive discretionary cash flow
generation, both of which largely offset a fair business position.
The business is composed of three segments: (1) KAR's ADESA
wholesale car business conducts used-car wholesale auctions and
performs various ancillary pre- and post-auction services in the
U.S. and Canada; (2) the IAAI salvage business operates salvage
vehicle auctions in North America; and (3) KAR's financing
subsidiary, unrated Automotive Finance Corp., provides inventory
financing to independent used-car dealers that purchase vehicles
from auctions conducted by ADESA and other parties.
KAR's fair business position reflects its competitive operating
environment. Fee-based KAR has limited pricing power with
customers such as large banks, daily rental companies, and large
insurance companies. The industry is mature but fragmented, so in
addition to expected market share gains, meaningful expansion over
time will require acquisitions. ADESA participates in the
Internet-based auction market, and in the long term, virtual
auctions could become a meaningful competitive threat to the
physical auction industry.
KAR's dealer financing operation, AFC, by necessity has a high-
risk customer base and requires tight management controls.
Lending to used-car dealers is risky because they are often
undercapitalized, and fraudulent actions against lenders could
occur.
The company has a secure No. 2 position in the fragmented U.S.
wholesale vehicle auction market and strong position in the more
concentrated salvage auction market (35% market share) relative to
its primary competitor, unrated Copart Inc., which has a 37%
market share. The company's fee-based business model (customers
are charged for various services) combined with a relatively high
ratio of variable to fixed costs has provided some resilience to
profitability in the recession. The revenue streams for both IAAI
and ADESA are not directly tied to automaker vehicle production or
auto sales, although new- and used-vehicle market demand
fluctuations can affect the pricing and flow of used vehicles
through ADESA's auctions.
Gross profit declined for the first quarter of 2009. Lease-
adjusted total debt to EBITDA remained very high, at 6.8x, as of
March 31, 2009. S&P expects KAR to generate positive free cash
flow in the year ahead, but because of its sizable debt and market
pressures on profitability, S&P believes leverage will remain high
for a number of years. Cost-side initiatives at ADESA should
produce net savings beginning in 2009.
At the assigned rating, S&P expects the company to maintain EBITDA
margins of 25% or better and generate positive free cash flow.
KAR's adjusted EBITDA margin for the 12 months ended March 31,
2009, eased to 26.1% from 27.4% for the previous period.
Liquidity is adequate. For the 12 months ended March 31, 2009,
KAR generated free operating cash flow of $128 million after
$121 million of capital expenditures. Working capital provided
$2.5 million of cash in the first quarter, although KAR's working
capital requirements typically peak in the first quarter.
The company has little inventory, given the fee-based character of
its business. KAR was in compliance with its capital spending
covenant at the end of the first quarter. Capital spending
requirements will be relatively low in 2009 and related to
maintenance-level physical infrastructure and systems improvement.
KAR made no acquisitions in the first quarter of 2009 compared to
14 auction companies that were acquired in the first quarter of
2009. S&P expects this reduced acquisition activity to continue
throughout 2009.
The stable outlook indicates that S&P believes KAR's relatively
steady businesses, tight financial controls, and cost-side
initiatives should enable the company to generate adequate
earnings and free cash flow during the year ahead, despite
difficult market conditions. S&P expects ADESA's margin pressures
from volatile market conditions to continue in the year ahead, and
S&P believes lower earnings and cash flow prospects will likely
prevent the company from improving credit measures materially in
that period.
S&P could revise the outlook to negative if KAR's free cash flow
turns meaningfully negative or if a worse-than-expected shortfall
in EBITDA significantly depletes availability on the revolving
credit facility. S&P could also revise the outlook to negative if
aggressive acquisition activity reduces availability under the
revolving credit facility. An outlook revision to positive seems
unlikely in the near term because of the challenges posed by the
U.S. recession.
LAFFOON ENTERPRISES: Case Summary & 13 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Laffoon Enterprises, Inc.
fdba Jimboy's Taco's #16
dba Jimboy's Tacos #220
15825 Carrie Dr
Grass Valley, CA 95949
Bankruptcy Case No.: 09-31396
Chapter 11 Petition Date: June 4, 2009
Court: United States Bankruptcy Court
Eastern District of California (Sacramento)
Judge: Christopher M. Klein
Debtor's Counsel: Julia P. Gibbs, Esq.
1329 Howe Ave #205
Sacramento, CA 95825-3363
Tel: (916) 646-2800
Fax: (916) 929-1158
Email: judy@gibbslegal.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
13 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/caeb09-31396.pdf
The petition was signed by Theodore L. Laffoon, president of the
Company.
LAKESIDE 160: Wants to Hire Polsinelli Shughart as Counsel
----------------------------------------------------------
Lakeside 160 LLC asks the U.S. Bankruptcy Code for the District of
Arizona for authority to employ Polsinelli Shughart P.C. as
counsel.
Polsinelli Shughart will, among other things:
-- prepare pleadings and applications and conduct examinations
incidental to administration;
-- advise the Debtor of its rights, duties, obligations under
the Chapter 11 of the Bankruptcy Code; and
-- take all and necessary action incident to the proper
preservation and administration of the Chapter 11 estate.
The fee for Polsinelli Shughart for legal services is $135 to $600
per hour.
To the best of the Debtor's knowledge, Polsinelli Shughart is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached at:
Polsinelli Shughart P.C.
3636 N. Central Avenue, Suite 1200
Phoenix, AZ 85012
Tel: (602) 650-2012
Fax: (602) 926-8562
About Lakeside 160 LLC
Phoenix, Arizona-based Lakeside 160 LLC filed for Chapter 11 on
May 15, 2009 (Bankr. D. Ariz. Case No. 09-10508). The Debtor has
assets and debts both ranging from $10 million to $50 million.
LAKESIDE 160: Has until Today to File Schedules and Statements
---------------------------------------------------------------
The U.S. Bankruptcy for the District of Arizona extended until
June 9, 2009, the time for Lakeside 160 LLC to file its schedules
of assets and liabilities and statements of financial affairs.
Phoenix, Arizona-based Lakeside 160 LLC filed for Chapter 11 on
May 15, 2009 (Bankr. D. Ariz. Case No. 09-10508). Mark W. Roth,
Esq., at Polsinelli Shughart P.C., represents the Debtor in its
restructuring efforts. The Debtor has assets and debts both
ranging from $10 million to $50 million.
LANDSOURCE COMMUNITIES: Committee Wants Cases Converted to Ch 7
---------------------------------------------------------------
The official committee of unsecured creditors of LandSource
Communities Development LLC asks the U.S. Bankruptcy Court for the
District of Delaware to convert the real estate developer's
Chapter 11 case to Chapter 7, saying that they would be would be
better off under a plan of liquidation than under the
reorganization plan proposed by Barclays Bank, PLC.
The Committee relates that liquidation in Chapter 7 will enable
unsecured creditors to realize a real recovery from the
Debtors'unencumbered assets and ensure that the distribution
rights and benefits provided to general unsecured creditors under
the Final DIP Financing Order are fairly and fully implemented.
As reported in the Troubled Company Reporter on June 4, 2009, the
Bankruptcy Court for District of Delaware approved the
second amended disclosure statement for the second amended plan of
reorganization for LandSource Communities Development LLC and its
affiliated debtors proposed by Barclays Bank, PLC, on June 1,
2009, subject to certain revisions.
A copy of the blacklined Disclosure Statement showing the changes
discussed on the record at the hearing as otherwise requested by
certain parties in interest, is available at:
http://bankrupt.com/misc/landsource.blackineDS.pdf
If approved by a vote of creditors and by the Court at a
confirmation hearing, Lennar Corp., which was a majority owner of
LandSource along with California Public Employees Retirement
System, will end up with 15% of the new stock, Bloomberg's Bill
Rochelle reported. Creditors participating in a $140 million
rights offering would end up with 40.3% of the stock, assuming
$103 million is purchased in the rights offering. First-lien
secured creditors, owed $1.09 billion, are to see 40.4% of the
stock, producing a recovery of 11.2%. Second-lien creditors,
having $250 million in claims, would see distribution of 2.2%
percent of the stock, representing a 2.7% recovery. Unsecured
creditors are in line for 1.1% of the stock.
The Court set July 13, 2009, as the start of the confirmation
hearing and also scheduled a hearing on the Committee's conversion
motion at that time.
About LandSource Communities
LandSource Communities Development LLC, which operates in Arizona,
California, Florida, New Jersey, Nevada and Texas, is involved in
the planning and development of master planned communities and
transforming undeveloped land into ready-to-build home sites and
commercial properties. With the exception of one development
project in Marina del Rey, California, LandSource does not build
homes or commercial properties.
LandSource and 20 of its affiliates filed for Chapter 11
bankruptcy protection before the U.S. Bankruptcy Court for the
District of Delaware on June 8, 2008 (Lead Case No. 08-11111).
The Debtors are represented by Marcia Goldstein, Esq., at Weil
Gotshal & Manges in New York, and Mark D. Collins, Esq., at
Richards Layton & Finger in Wilmington, Delaware. Lazard Freres &
Co. acts as the Debtors' financial advisors, and Kurtzmann Carson
Consultants serves as the Debtors' notice and claims agent.
According to the Troubled Company Reporter on May 22, 2008,
LandSource sought help from its lender consortium to restructure
$1.24 billion of its debt. LandSource engaged a 100-bank lender
group led by Barclays Capital Inc., which syndicates LandSource's
debt. LandSource had received a default notice on that debt from
the lender group after it was not able to timely meet its payments
during mid-April. However, LandSource failed to reach an
agreement with its lenders on a plan to modify and restructure its
debt, forcing it to seek protection from creditors.
LAWRENCE FRUMUSA: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Lawrence Frumusa
1660 Lake Road
Webster, NY 14580
Bankruptcy Case No.: 09-21527
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Western District of New York (Rochester)
Judge: John C. Ninfo II
Debtor's Counsel: James B. Glucksman, Esq.
Rattet Pasternak & Gordon-Oliver
550 Mamaroneck Avenue
Harrison, NY 10528
Tel: (914) 381-7400
Fax: (914) 381-7406
Email: jbg@rattetlaw.com
Jonathan S. Pasternak, Esq.
Rattet Pasternak & Gordon-Oliver
550 Mamaroneck Avenue
Harrison, NY 10528
Tel: (914) 381-7400
Fax: (914) 381-7406
Total Assets: $8,607,260
Total Debts: $18,885,237
A full-text copy of Mr. Frumusa's petition, including a list of
his 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nywb09-21527.pdf
The petition was signed by Mr. Frumusa.
LEBANON LANDMARKS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Lebanon Landmarks, Inc
814 Cumberland Street
Lebanon, PA 17042
Bankruptcy Case No.: 09-04373
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Middle District of Pennsylvania (Harrisburg)
Judge: Mary D. France
Debtor's Counsel: Robert E. Chernicoff, Esq.
Cunningham and Chernicoff PC
2320 North Second Street
Harrisburg, PA 17110
Tel: (717) 238-6570
Fax: (717) 238-4809
Email: rec@cclawpc.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/pamb09-04373.pdf
The petition was signed by William R. Kolovani, president of the
Company.
LIBERTY LIGHTHOUSE: S&P Cuts Rating on Medium-Term Notes to 'BB'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Liberty
Lighthouse U.S. Capital Co. LLC's medium-term notes to 'BB' from
'BBB+' and removed it from CreditWatch with negative implications.
S&P subsequently withdrew the rating.
The lowered rating reflects S&P's view of the likelihood that
Lighthouse will be able to repay the MTNs in full by their stated
maturity dates using the proceeds from asset liquidations,
maturities, and amortization.
Lighthouse currently has approximately $1.255 billion of MTNs
outstanding, with stated maturity dates ranging from Nov. 16,
2009, to April 30, 2010. The MTNs are supported by approximately
$2.309 billion (the invested amount, as reported by Lighthouse's
manager) of assets consisting of these:
-- Approximately $96 million of cash and cash equivalents;
-- Approximately $48 million of assets with legal maturity dates
before the latest scheduled MTN maturity date of April 30,
2010; and
-- Approximately $2.165 billion of assets with legal final
maturity dates subsequent to the latest scheduled MTN
maturity date of April 30, 2010.
Of the $2.165 billion of assets maturing after April 30, 2010,
approximately 42% ($900 million) consists of two securities
payable on May 28, 2010, from a 'BBB' rated entity. The remaining
58% ($1.265 billion) consists of cash flow corporate
collateralized debt obligations and collateralized loan
obligations, synthetic corporate CDOs, CDOs of asset-backed
securities, aircraft ABS, and residential mortgage-backed
securities. Based on the weighted average maturities of the
collateral underlying this portion of the assets, S&P has
estimated that $94 million of amortization cash flow will be
available to repay the MTNs on or before the latest scheduled
maturity date of April 30, 2010, leaving a balance of
$1.171 billion on those assets.
After applying $96 million of cash and cash equivalents,
$48 million of assets scheduled to mature before April 30, 2010,
and $94 million in amortization cash flows, S&P expects the MTN
balance to be reduced to $1.017 billion from $1.255 billion.
In order for the MTNs to be repaid in full on or before April 30,
2010, S&P believes the remaining $2.071 billion of assets maturing
after this date ($900 million payable from a 'BBB' rated entity
and $1.171 billion in CDOs, CLOs, synthetic corporate CDOs, CDOs
of ABS, aircraft ABS, and RMBS) would need to generate
$1.017 billion. S&P's analysis assumes that the $900 million
payable from a 'BBB' rated entity would generate between 80 and 88
cents on each dollar of invested amount, which means that the
balance of the assets would need to generate an average sales
price of between 20 and 25 cents for each dollar of invested
amount.
Based on S&P's analysis of recently observed market price
information for the asset types that comprise the $1.171 billion
of remaining assets, S&P lowered its rating on Lighthouse's MTNs
to 'BB'. S&P believes the current adverse market conditions will
likely impair Lighthouse's ability to realize liquidation proceeds
on these assets in a sufficient amount to retire the MTNs by their
stated maturity dates.
Lastly, S&P withdrew its rating on Lighthouse's MTNs due to the
lack of information needed for the surveillance of the rating.
S&P has not received requested information surrounding
Lighthouse's recent asset dispositions and the source of the
incoming cash flow to assess the potential impact on the
bankruptcy remoteness of the structure. In addition, S&P has not
received requested independent price quotes on Lighthouse's
assets.
The Liberty Hampshire Co. LLC manages Lighthouse. The manager is
responsible for purchasing assets, managing the portfolio, and
overseeing the issuance of commercial paper and MTNs. Guggenheim
Partners manages The Liberty Hampshire Co. LLC.
Rating Action
Liberty Lighthouse U.S. Capital Co. LLC
Rating
------
Class To Interim From
----- -- ------- ----
MTN NR BB BBB+/Watch Neg
NR -- Not rated.
LMS MEDICAL: Files for Bankruptcy Protection
--------------------------------------------
LMS Medical Systems and its subsidiary, LMS Medical Systems
(Canada) Ltd., have each filed a Notice of Intention to Make a
Proposal under the Bankruptcy and Insolvency Act (Canada). These
filings effect an initial 30-day stay of proceedings against all
creditors of the companies, during which the companies must file a
proposal with the court. The implications for creditors and other
stakeholders of the companies are not known at this time and will
not be known until the restructuring process is complete.
Samson Belair/Deloitte & Touche Inc. have been appointed as
trustee.
LMS Medical Systems also said that Benoit La Salle has resigned as
its director. Its other current directors will continue to
constitute the Company's board of directors.
LMS provides services in the application of advanced mathematical
modeling and neural networks for medical use. The LMS CALM Suite
provides physicians, nursing staff, risk managers and hospital
administrators with clinical information systems and risk
management tools designed to improve outcomes and patient care for
mothers and their infants during childbirth.
MARGARET WHITE: Case Summary & 4 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Margaret Grimshaw White
3419 Dove Hollow Road
Olivenhain, CA 92024
Bankruptcy Case No.: 09-07938
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Southern District of California (San Diego)
Judge: Laura S. Taylor
Debtor's Counsel: Craig E. Dwyer, Esq.
8745 Aero Drive, Suite 301
San Diego, CA 92123
Tel: (858) 268-9909
Fax: (858) 268-4230
Email: craigedwyer@aol.com
Total Assets: $1,946,250
Total Debts: $2,291,662
A full-text copy of Ms. White's petition, including a list of her
4 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/casb09-07938.pdf
The petition was signed by Ms. White.
MARIA TERRY: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Maria Terry
P.O. Box 50114
San Diego, CA 92165
Bankruptcy Case No.: 09-07974
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Southern District of California (San Diego)
Judge: Peter W. Bowie
Debtor's Counsel: Andrew H. Griffin, III, Esq.
Law Office of Andrew H. Griffin, III
275 East Douglas, Suite 112
El Cajon, CA 92020
Tel: (619) 440-5000
Fax: (619) 440-5991
Email: Griffinlaw@mac.com
Total Assets: $2,541,000
Total Debts: $3,170,795
A full-text copy of Ms. Terry's petition, including a list of her
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/casb09-07974.pdf
The petition was signed by Ms. Terry.
MARINE MILITARY: Moody's Withdraws 'B3' Rating on Revenue Bonds
---------------------------------------------------------------
Moody's Investors Service has withdrawn the B3 rating assigned to
Marine Military Academy's Revenue Bonds, Series 1995 and 1997
issued through the City of Harlingen, Texas Higher Education
Facilities Corporation. The rating action is prompted by the lack
of sufficient current financial and operating information. In the
absence of this information, Moody's believes that it us unable to
provide investors with an informed assessment of the current
credit quality of the debt outstanding. At this time, Marine
Military Academy no longer has any debt outstanding with a Moody's
rating.
The last rating action and report with respect to Marine Military
Academy was published on May 4, 2009, when the underlying rating
of B3 was placed on Watchlist with direction uncertain.
MARVIN-WAXHAW: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Marvin-Waxhaw Associates, LLC
4298 Weddington-Matthews Road
Weddington, NC 28104
Bankruptcy Case No.: 09-31455
Chapter 11 Petition Date: June 5, 2009
Court: Western District of North Carolina (Charlotte)
Judge: J. Craig Whitley
Debtor's Counsel: Richard M. Mitchell, Esq.
rmmatty@mitchellculp.com
Mitchell & Culp, PLLC
1001 Morehead Square Drive, Suite 330
Charlotte, NC 28203
Tel: (704) 333-0630
Fax: (704) 333-4975
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor did not file a list of 20 largest unsecured creditors.
The petition was signed by Louise C. Hemphill-Nolan, president.
MASONITE CORP: Discloses New Officers & Directors of New Firm
-------------------------------------------------------------
Pursuant to Section 1129(a)(5)(A)(i) of the Bankruptcy Code,
Masonite Corporation and its debtor-affiliates disclosed the
identities of the directors of New Masonite Holdings and the
Reorganized Debtors:
* Kenneth W. Freeman
* Frederick J. Lynch
* John C. Wills
* Francis M. Scricco
* Robert B. Byrne
* Jonathan F. Foster
Bank of Nova Scotia, Centerbridge, KKR Financial, Oaktree,
Carlyle, Symphony, GE Capital, and BlackRock will select a
seventh director by mutual consent.
The Officers for the Reorganized Debtors are:
* Frederick J. Lynch, President and Chief Executive Officer
* Anthony D. DiLucente, Executive Vice President and Chief
Financial Officer
* Lawrence P. Repar, Executive Vice President and Group
Chief Operating Officer of Masonite International
* Glenwood Coulter, Executive Vice President Operations of
Masonite International
* Matthew Clark, Senior Vice President Legal, General
Counsel, and Secretary
Each member of the Board of Directors of Masonite Worldwide
Holdings Inc. who is not an employee or officer of the Company or
any of its subsidiaries will be paid an annual retainer of
$40,000.
The Board will meet five times per year and that each director
will attend no fewer than four of the meetings in person. Each
Non-Employee Director will be paid $2,000 for each meeting of the
Board that he or she attends, including via telephone.
Each Non-Employee director who serves as the chairperson of the
Compensation Committee of the Board or the Audit Committee of the
Board will be paid an additional annual retainer of $12,500.
Each Non-Employee director who is a member of the Compensation
Committee or the Audit Committee, or a member or chair of the
Governance Committee, will be paid an additional annual retainer
of $5,000.
Each Non-Employee director who is a member of the Compensation
Committee, Audit Committee or Governance Committee will be paid
$1,750 for each meeting of that committee that he or she attends,
including via telephone; provided, however that if the Non-
Employee director also attends, including via telephone, a
meeting of the Board on that date and is entitled to compensation
from the Company for that attendance, then the Non-Employee
Director will in no event be entitled to any fees for the
committee meeting.
Each Non-Employee Director who is serving on the date that the
Company emerges from bankruptcy will, within 30 days of the
Emergence Date, be granted restricted stock units in an amount
equal to 0.15% of the Company's common shares on a fully diluted
basis on the Emergence Date.
About 50% of the RSUs granted to each Non-Employee Director will
be fully vested upon the date of grant, with the balance vesting
in three equal installments on the first, second and third
anniversaries of grant, subject to the Non-Employee Director's
continued service with the Company through the applicable Vesting
Date. Shares vested under the RSUs will be delivered on the
first to occur of (i) a Change in Control, (ii) the 30th day
following a separation from service, or (iii) a specified date
set forth in the grant agreement.
The RSUs will be subject to the terms of the Company's Equity
Incentive Plan and Stockholders Agreement and a form of award
agreement to be entered into with each Non-Employee Director.
About Masonite
Based in Ontario, Canada, Masonite International Corporation --
http://www.masonite.com/-- (TSE:MHM) is a vertically integrated
producer, manufacturing key components of doors, including
composite molded and veneer door facings, glass door lites and cut
stock. The Company provides these products to its customers in
more than 70 countries around the world. The Company is a wholly
owned subsidiary of Masonite International Inc. It offers a range
of interior and exterior doors. Masonite Canada operates Masonite
International's Canadian subsidiaries, well as certain other non-
United States subsidiaries.
Masonite International, Inc., and six affiliates filed petitions
on March 16, 2009, before the Ontario Superior Court of Justice
(Commercial List) under the Companies' Creditors Arrangement Act.
The Honorable Justice Campbell presides over the CCAA proceedings.
Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as
monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at
Goodmans LLP in Toronto, serve as the Applicants' counsel.
Masonite Corporation, based in Tampa, Florida, and several U.S.
affiliates filed for Chapter 11 bankruptcy protection on the same
day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh
handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes,
Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP;
and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and
Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A.,
serve as bankruptcy counsel. The Debtors' Investment Banker and
Financial Advisor is Perella Wenberg Partners LLP; the Debtors'
Restructuring Advisors is Alvarez & Marsal North American LLC; and
the Debtors' Claims Agent is Kurtzman Carson Consultants LLC.
As of January 31, 2009, the Debtors had total assets of
$1,527,495,443 and total debts of $2,641,590,842.
The Debtors filed with the Bankruptcy Court a pre-negotiated
reorganization plan together with their petitions. The Plan
provides that Masonite's existing senior secured obligations will
be converted on a pro rata basis subject to the election of each
existing holder of Senior Secured Obligations into: (i) a new
first-priority senior secured term loan; (ii) a new second-
priority senior secured PIK loan; and (iii) 97.5% of the common
equity of the reorganized Masonite. Holders of Masonite's
existing senior subordinated notes will be allocated 2.5% of the
common equity in the reorganized Masonite plus warrants for 17.5%
of the common stock of the reorganized Company, subject to
dilution under certain conditions. Holders of Class 5 General
Unsecured Claims under the Plan will be unimpaired and is expected
to recover 100% under the Plan.
Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy
News. The newsletter tracks the CCAA proceedings in Canada and
parallel chapter 11 proceedings in Delaware undertaken by company
and its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
MASONITE CORP: Court Sets July 6 as General Claims Bar Date
-----------------------------------------------------------
Except for governmental units and certain other exceptions, the
U.S. Bankruptcy Court for the District of Delaware sets July 6,
2009, at 5:00 p.m. Eastern Time, as the deadline for Proofs of
Claim to be filed in Masonite Corporation and its debtor-
affiliates' Chapter 11 cases. The Claims Bar Date applies to all
types of claims against the Debtors that arose before March 16,
2009.
All governmental units holding claims that arose before the
Petition Date must file Proofs of Claims, including claims for
unpaid taxes, whether the claims arise from prepetition tax years
or periods or prepetition transactions to which the Debtors were
a party, must file the Proofs of Claim on or before September 13,
2009 at 5:00 p.m. Eastern Time.
Each entity that asserts against any of the Debtors a claim that
arose before March 16, 2009, will be required to file an
original, written proof of claim.
The Ontario Superior Court of Justice ruled that the U.S.
Bankruptcy Court has jurisdiction to determine, compromise or
otherwise affect the interests of claimants against, including
creditors and shareholders of, the Applicants. The Canadian Court
recognizes that the Claims Process approved by the U.S. Claims Bar
Order of the Bankruptcy Court as the single Claims Process
applicable to and binding on all claimants of the Applicants.
The U.S. Claims Bar Order will be implemented in Canada in
accordance with its terms, and all persons subject to the
jurisdiction of the Canadian Court will conduct themselves
accordingly.
About Masonite
Based in Ontario, Canada, Masonite International Corporation --
http://www.masonite.com/-- (TSE:MHM) is a vertically integrated
producer, manufacturing key components of doors, including
composite molded and veneer door facings, glass door lites and cut
stock. The Company provides these products to its customers in
more than 70 countries around the world. The Company is a wholly
owned subsidiary of Masonite International Inc. It offers a range
of interior and exterior doors. Masonite Canada operates Masonite
International's Canadian subsidiaries, well as certain other non-
United States subsidiaries.
Masonite International, Inc., and six affiliates filed petitions
on March 16, 2009, before the Ontario Superior Court of Justice
(Commercial List) under the Companies' Creditors Arrangement Act.
The Honorable Justice Campbell presides over the CCAA proceedings.
Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as
monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at
Goodmans LLP in Toronto, serve as the Applicants' counsel.
Masonite Corporation, based in Tampa, Florida, and several U.S.
affiliates filed for Chapter 11 bankruptcy protection on the same
day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh
handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes,
Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP;
and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and
Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A.,
serve as bankruptcy counsel. The Debtors' Investment Banker and
Financial Advisor is Perella Wenberg Partners LLP; the Debtors'
Restructuring Advisors is Alvarez & Marsal North American LLC; and
the Debtors' Claims Agent is Kurtzman Carson Consultants LLC.
As of January 31, 2009, the Debtors had total assets of
$1,527,495,443 and total debts of $2,641,590,842.
The Debtors filed with the Bankruptcy Court a pre-negotiated
reorganization plan together with their petitions. The Plan
provides that Masonite's existing senior secured obligations will
be converted on a pro rata basis subject to the election of each
existing holder of Senior Secured Obligations into: (i) a new
first-priority senior secured term loan; (ii) a new second-
priority senior secured PIK loan; and (iii) 97.5% of the common
equity of the reorganized Masonite. Holders of Masonite's
existing senior subordinated notes will be allocated 2.5% of the
common equity in the reorganized Masonite plus warrants for 17.5%
of the common stock of the reorganized Company, subject to
dilution under certain conditions. Holders of Class 5 General
Unsecured Claims under the Plan will be unimpaired and is expected
to recover 100% under the Plan.
Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy
News. The newsletter tracks the CCAA proceedings in Canada and
parallel chapter 11 proceedings in Delaware undertaken by company
and its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
MAXXAM INC: 2009 Legislative Session Adjourned on June 1
--------------------------------------------------------
Maxxam Inc. reported that the Texas Legislature adjourned its 2009
legislative session on June 1, 2009, without the adoption of
gaming legislation.
The company said that the its horse and dog racing operations
and licenses are subject to oversight by the Texas Racing
Commission. During the 2009 legislative session, the Texas
Legislature unexpectedly failed to reauthorize the Texas Racing
Commission, which is set to expire on September 1, 2009.
The company related that it is unclear what impact, if any, this
development will have on its racing operations and licenses.
Going Concern Doubt
As reported by the Troubled Company Reporter on April 7, 2009,
Grant Thornton LLP said the uncertainty surrounding the real
estate industry and the ultimate outcome of proceedings involving
MAXXAM Inc.'s former unit, Pacific Lumber Company, and their
effect on the Company, as well as the Company's operating losses
raise substantial doubt about the ability of the Company to
continue as a going concern.
A full-text copy of MAXXAM's quarterly report is available at no
charge at http://ResearchArchives.com/t/s?3cd4
About MAXXAM Inc.
Headquartered in Houston, MAXXAM Inc. is a publicly-traded
company, with business interests in forest products, real estate
investment and development and racing operations.
MBIA INC: S&P Cuts Counterparty Credit Rating to 'BB'
-----------------------------------------------------
On June 5, 2009, Standard & Poor's Ratings Services lowered its
counterparty credit, financial strength, and financial enhancement
ratings on National Public Finance Guaranty Corp. to 'A' from
'AA-' and removed them from CreditWatch, where they were placed on
Feb. 18, 2009, with developing implications. The outlook on
National is developing.
At the same time, Standard & Poor's lowered its counterparty
credit, financial strength, and financial enhancement ratings on
MBIA Insurance Corp. to 'BBB' from 'BBB+'. Standard & Poor's also
lowered its counterparty credit rating on MBIA Inc., the group
holding company, to 'BB' from 'BB+'. The outlook on MBIA and the
holding company is negative.
In addition, Standard & Poor's lowered its counterparty credit and
financial strength ratings on Municipal Bond Insurance Assn. to
'A' from 'AA-' and removed them from CreditWatch developing. The
outlook for the association is developing. This rating action
mirrors the action S&P took on National. The association is
supported by $340 million in surety bonds from National, which
exceeds the outstanding insured par.
The downgrade of National reflects S&P's view of both its
uncertain business and capital-raising prospects. The company's
capital adequacy is marginally below S&P's 'AA' standard.
Management's stated goals are to raise additional capital to
bolster National's current resources and effectively ring-fence
National from MBIA and its more volatile book of business.
However, the ring-fencing actions it has taken so far have had
limited impact in that S&P view National as no more or less ring-
fenced than any typical bond insurance subsidiary operating in a
consolidated group. In addition, the legal challenges the company
faces as a result of its restructuring are, in S&P's opinion, an
impediment to both business prospects and capital-raising efforts.
On Feb. 17, 2009, MBIA Inc. restructured its insurance operating
companies. National became a sister company of MBIA. Management
has stated that National is now the public finance insurer within
the group and has assumed the U.S. public finance book of business
from MBIA on a reinsurance-cut-through basis. MBIA retained the
global structured finance and international infrastructure
business. This restructuring separated the more volatile
structured finance book of business from the lower-risk public
finance book.
S&P downgraded MBIA because of increased loss assumptions on its
2005-2007 vintage direct RMBS and CDO of ABS and a change in the
assumed tax benefit of tax-loss carryforwards. It is S&P's view,
based on its tax share filing status, that MBIA Inc. will not be
able to fully realize the tax benefit of MBIA's operating losses.
The effective tax rate S&P used in determining after-tax losses
was 20% compared with the 35% S&P cited in February 2009.
Through the use of Standard & Poor's capital adequacy test, MBIA's
margin of safety is in the 0.7x-0.8x range. Analytical
adjustments made to the model included:
No new business written. Stress period of model starts
immediately and lasts for four years.
No refundings.
Expenses are held constant for all four years.
In addition to Standard & Poor's normal stress assumptions for
municipal and non-RMBS asset classes, S&P tested the capital
adequacy of MBIA against a scenario that applies stressful default
assumptions to various 2005-2007 RMBS-related transactions that
the company has insured. S&P based the default rates for these
transactions on stressful cumulative net loss assumptions
published on Feb. 24, 2009 that vary by asset type and vintage.
S&P has included the Alt-A, subprime, closed-end second, HELOC,
and NIM asset types with 2005, 2006, and 2007 vintages in this
analysis.
S&P believes that there is a strong incentive for MBIA to maintain
an orderly runoff of its legacy book of business so as not to
damage the franchise value of National. To this end, from a risk-
management perspective, management has indicated that it will
retain sufficient experienced staff to support surveillance and
remediation efforts.
The outlook on National is developing. S&P could raise the rating
if there is a favorable resolution of the current litigation,
which in turn could facilitate capital-raising efforts and lead to
more tangible separation of National from MBIA and MBIA Inc.
Improving business acceptance could be an outgrowth of these
developments, which could lead to a rating in the 'AA' category.
Alternatively, an ongoing lack of market acceptance and continued
weak financial flexibility could result in a downgrade to the
'BBB' category.
The negative outlook on MBIA reflects S&P's view that adverse loss
development on the structured finance book could continue. A
revision of the outlook to stable will depend on, among other
factors, greater certainty of ultimate potential losses as well as
the orderly runoff of the book of business.
S&P's analysis of the impact of these rating actions is ongoing;
S&P will post any additional rating changes at the same locations.
Downgraded; CreditWatch/Outlook Action
National Public Finance Guarantee Corp
Municipal Bond Insurance Assn.
To From
-- ----
Counterparty Credit Rating
Local Currency A/Developing/-- AA-/Watch Dev/--
Financial Strength Rating
Local Currency A/Developing/-- AA-/Watch Dev/--
National Public Finance Guarantee Corp
To From
-- ----
Financial Enhancement Rating
Local Currency A/-- AA-/Watch Dev/--
Downgraded
Capital Markets Assurance Corp.
To From
-- ----
Counterparty Credit Rating
Local Currency BBB/Negative/-- BBB+/Negative/--
Financial Strength Rating
Local Currency BBB/Negative/-- BBB+/Negative/--
MBIA Insurance Corp.
To From
-- ----
Counterparty Credit Rating
Local Currency BBB/Negative/-- BBB+/Negative/--
Financial Strength Rating
Local Currency BBB/Negative/-- BBB+/Negative/--
Financial Enhancement Rating
Local Currency BBB/--/-- BBB+/--/--
Senior Unsecured BB+ BBB-
Preferred Stock BB BB+
MBIA Assurance S.A.
To From
-- ----
Counterparty Credit Rating
Local Currency BBB/Negative/-- BBB+/Negative/--
Financial Strength Rating
Local Currency BBB/Negative/-- BBB+/Negative/--
Financial Enhancement Rating
Local Currency BBB/--/-- BBB+/--/--
MBIA U.K. Insurance Ltd.
To From
-- ----
Financial Strength Rating
Local Currency BBB/Negative/-- BBB+/Negative/--
Financial Enhancement Rating
Local Currency BBB/--/-- BBB+/--/--
MBIA Inc.
To From
-- ----
Counterparty Credit Rating
Local Currency BB/Negative/-- BB+/Negative/--
Senior Unsecured BB BB+
MBIA Global Funding LLC
To From
-- ----
Senior Secured BBB BBB+
Senior Unsecured BBB BBB+
MECACHROME INT'L: Voluntary Chapter 15 Case Summary
---------------------------------------------------
Chapter 15 Petitioner: Ernst & Young Inc.
c/o M. Mario Denis
800, Rene-Levesque W. Blvd., Ste. 1900
Montreal, Quebec, H3B 1X9
Canada.
Chapter 15 Debtor: Mecachrome International Inc., et al.
1501 McGill College Avenue, Suite 1200
Quebec, Canada, PQ H3A 3M8
Chapter 15 Case No.: 09-24076
Type of Business: The Debtor designs, engineers, manufactures
and assembles complex precision-engineered
components for aircraft and automotive
applications, including aerostructural and
aircraft engine components, high-end
automobile engine components and motor racing
engines. The company currently operates 11
state-of-the-art facilities, principally in
France and Canada, and employs over 2,000
employees.
See http://www.mecachrome.com/
Chapter 15 Petition Date: June 5, 2009
Court: Central District Of California (Los Angeles)
Judge: Richard M. Neiter
Chapter 15 Petitioner's Counsel: Daniel H. Slate, Esq.
dslate@buchalter.com
Buchatler Nemer
1000 Wilshire Blvd., Ste 1500
Los Angeles, CA 90071-2457
Tel: (213) 891-5444
Fax: (213) 896-0400
Estimated Assets: $100 million to $500 million
Estimated Debts: $500 million to $1 billion
MIDWAY GAMES: Creditors Settle Lawsuit With Mark Thomas
-------------------------------------------------------
Michael Bathon at Bloomberg News reports that Midway Games Inc.'s
main creditor committee has settled a lawsuit with Mark E. Thomas
over his acquisition of an 87% equity interest in the Company from
Sumner Redstone.
As reported by the Troubled Company Reporter on May 15, 2009, the
official committee of unsecured creditors of Midway Games and its
debtor-affiliates sued former majority shareholder Sumner
Redstone, Mr. Thomas, and members of its board for series of
"disastrous and ill advised financial transactions" that occurred
in 2008. The Committee alleged that the defendants made certain
transactions that generated more than $700 million in tax losses,
which enabled them to obtain a massive tax refund. The
transactions, the Committee said, have caused the Debtors to lose
the ability to take advantage of their valuable accumulated net
operating losses and other tax assets. The Committee questioned
the Board's decision to seek $90 million from Mr. Redstone's
National Amusements Inc. when the Company was already in perilous
financial shape. According to the Committee, the transactions
benefited the Redstone entities, and Mr. Thomas, to detriment of
the Debtors.
Bloomberg relates that the Committee agreed to let an affiliate of
Mr. Thomas to collect as much as $5 million ahead of other
creditors, whose claims aren't backed by collateral. Bloomberg
states that Mr. Thomas and the affiliates had been seeking as much
as $70 million. Bloomberg says that in return for the $5 million
secured claim, Mr. Thomas and his affiliates will release Midway
Games of all other claims, and they will be dropped from the
lawsuit.
According to Bloomberg, Acquisition Holdings Subsidiary I LLC, an
affiliate of Mr. Thomas, would collect the $5 million from the
proceeds of the sale of Midway Games. Court documents say that
the payment would be reduced by any money Midway Games paid to Mr.
Thomas after the Company filed bankruptcy.
The Committee said in court documents that because of the
settlement, Midway Games' estate will avoid paying "substantial
additional legal fees." Court documents say that the settlement
represents a 93% cut in Mr. Thomas' claims.
Bloomberg states that the lawsuit against Mr. Redstone, his
affiliated companies, and Midway Games' Board of Directors will
proceed.
Midway Games, according to Bloomberg, received approval from the
Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of
Delaware to hold a June 29 auction for most of its assets.
Headquartered in Chicago, Illinois, Midway Games Inc. --
http://www.midway.com/-- develops video games and sell them
primarily in North America, Europe, Asia and Australia. 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.
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed five creditors to serve on an official committee of
unsecured creditors of Midway Games Inc. and its debtor-
affiliates. Milbank Tweed Hadley & McCloy LLP and Richards,
Layton & Finger PA represent the Committee. The Debtors'
financial condition as of September 30, 2008, showed $167,523,000
in total assets and $281,033,000 in total debt.
NEWPORT TELEVISION: Moody's Changes Default Rating to 'Caa2/LD'
---------------------------------------------------------------
Moody's Investors Service changed Newport Television Holdings
LLC's Probability of Default Rating to Caa2/LD, from Caa2, and
placed all ratings under review for possible downgrade. The "/LD"
designation signifies Moody's view that Newport's recently
disclosed open market debt repurchases constitute an event of
default, which also applies to future term loan repurchases
effected according to the terms of a recent tender offer. Moody's
note that the company is not currently in default under the terms
of its credit agreement. Moody's expect to remove the "/LD"
addendum designation on the PDR shortly.
Details of the rating actions are:
Ratings changed and placed under review for possible downgrade:
Newport Television Holdings LLC
* Probability of Default rating -- to Caa2/LD from Caa2
Ratings placed under review for possible downgrade:
Newport Television Holdings LLC
* Corporate Family rating - currently Caa2
* Senior Discount Notes -- currently Ca
Newport Television LLC
* Senior secured credit facility (including High Plains
Broadcasting Operating Company LLC)-- currently B3
* Senior PIK Toggle Notes -- currently Caa3
The change in the Probability of Default rating to Caa2/LD is
prompted by Newport's recent disclosure that it has repurchased
approximately $50 million of senior secured term loans at a
significant discount on the open market, which Moody's deems to be
tantamount to a default. In addition, the company has launched a
tender offer to repurchase additional term loans.
The review for possible downgrade will consider (1) the reduction
of debt which will result from currently planned debt repurchases,
(2) the impact which debt repurchases will have upon Newport's
leverage and liquidity metrics, (3) the company's ability to
remain compliant with senior secured financial covenants which
tighten markedly starting Q409, (4) the probability that Newport
can generate positive free cash flow over the near term, (5)
whether the pace of decline in market spending on national and
local TV advertising will moderate over the near term, and (6) the
likelihood that management may consider further restructuring
measures.
The last rating action was on December 15, 2008, when Moody's
downgraded Newport's CFR and PDR, each to Caa2.
Headquartered in Kansas City, Missouri, Newport Television
Holdings LLC operates TV stations in 22 markets.
NORTEL NETWORKS: Has Until September 11 to File Plan
----------------------------------------------------
Nortel Networks Inc. and its debtor-affiliates obtained an order
from the U.S. Bankruptcy Court for the District of Delaware
extending their deadline to file a Chapter 11 plan through
September 11, 2009, and their deadline to solicit votes for that
plan through November 10, 2009.
The Debtors had sought an extension of their Exclusivity Periods
to give them sufficient time to coordinate with the Official
Committee of Unsecured Creditors and other concerned parties to
formulate a global plan that will maximize value for their
business as well as develop a plan of reorganization.
In a prior court filing, the Debtors explained that they are still
in the early stage of building a consensus among their
constituencies regarding the formulation of a global plan since
they worked on other tasks necessary for the administration of
their bankruptcy cases.
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next-
generation technologies, for both service provider and enterprise
networks, support multimedia and business-critical applications.
Nortel's technologies are designed to help eliminate today's
barriers to efficiency, speed and performance by simplifying
networks and connecting people to the information they need, when
they need it. Nortel does business in more than 150 countries
around the world. Nortel Networks Limited is the principal direct
operating subsidiary of Nortel Networks Corporation.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Seeks Court Approval of Flextronics Settlement
---------------------------------------------------------------
Before their bankruptcy filing, Nortel Networks Inc. and its
U.S.-based debtor-affiliates, Nortel Networks Corporation, and
Nortel Networks Limited entered into an agreement with
Flextronics Telecom Systems Ltd. for the sale of their remaining
manufacturing facilities and related inventory. The agreement is
part of the Nortel units' transition to an outsourcing model,
whereby they transferred most of their hardware manufacturing and
other operations.
FTS and Flextronics Corporation are the largest suppliers of the
Nortel units so far. They are responsible for the supply of
about 70% of the Nortel units' hardware products, and they
provide a significant portion of the logistics and repair
services required in connection with those products.
The relationship among Flextronics Corporation, FTS and the
Nortel units is governed by a number of agreements. These
include the Amended and Restated Master Contract Manufacturing
Services Agreement dated June 29, 2004 between NNL and FTS, and
the Master Contract Manufacturing Services Agreement dated
September 30, 2003 between NNL and Solectron Corporation.
Solectron was acquired by the Flextronics Entities in 2007.
Under the Manufacturing Services Agreements, NNL and some of its
subsidiaries also entered into contracts known as Virtual Systems
House Agreements with the Flextronics Entities. The Virtual
Systems House Agreements authorize NNL and its subsidiaries to
issue purchase orders to Flextronics Corporation and FTS.
Amended Agreement
In anticipation of the Debtors' bankruptcy filing and in
recognition of the importance of Flextronics Entities' continued
performance, the parties engaged in talks to ensure continued
supply of hardware products to the Debtors postpetition. On
January 13, 2009, NNL, FTS and Flextronics Corporation reached an
agreement to amend various contracts, including the Manufacturing
Services Agreements. The Amended Agreement was approved by the
Ontario Superior Court of Justice on January 14, 2009.
Pursuant to the Amended Agreement, Flextronics Entities agreed to
continue to supply products to the Nortel units. In exchange,
NNL agreed to purchase certain Flextronics inventory totaling
$120 million, payable in four installments. NNL also agreed to
submit purchase orders on a quarterly basis for certain other
inventory, and pay on a weekly basis for goods supplied. To
date, the Nortel units have paid $100 million of the $120 million
owed under the Amended Agreement.
NNI has reportedly reimbursed NNL for certain inventory purchased
from the Flextronics Entities under the Amended Agreement. Of
the $100 million that NNL has paid to Flextronics Entities, about
$57.75 million has been allocated to NNI, which was reimbursed by
NNI to NNL.
Dispute Over Agreement Terms
Subsequent to the bankruptcy filing, a dispute ensued among
Flextronics Corporation, FTS and the Nortel units over the proper
interpretation of the Amending Agreement.
The parties, together with the Official Committee of Unsecured
Creditors, Ernst & Young Inc., and certain other parties engaged
in talks in order to resolve their dispute and eventually came up
with a settlement agreement on May 22, 2009. The agreement
specifically addresses these issues:
(i) Whether the Nortel units' obligations to purchase
inventory in accordance with existing plans of record is
in addition to or part of their obligation to purchase
from the Flextronics Entities $120 million worth of
inventory as under the Amending Agreement;
(ii) Whether the termination of the Manufacturing Services
Agreement will occur as scheduled on July 12, 2009;
(iii) Whether Nortel's quarterly purchase orders to Flextronics
Entities include inventory acquired by the latter on or
before the effective date of the Amended Agreement; and
(iv) Whether, for purposes of determining the due date for the
Nortel units' payments in accordance with the modified
weekly credit terms stated in the Amended Agreement, the
date of "delivery" means the date that the Flextronics
Entities deliver the goods in to the Incoterms location
agreed by the parties, or the date that the Nortel units
actually take possession of goods from the carrier.
A full-text copy of the NNL-Flextronics Settlement is available
without charge at:
http://bankrupt.com/misc/NortelAgreementFlextronics.pdf
Attorney for the U.S. Debtors, Ann Cordo, Esq., at Morris Nichols
Arsht & Tunnell LLP, in Wilmington, Delaware, asserts that the
parties' Settlement has been proposed in good faith and is
beneficial to the Nortel units.
"Among the most critical factors supporting the [U.S. Debtors']
restructuring is its continued ability to purchase goods and
services from its contract manufacturers in order to continue to
provide its customers with cutting edge products and services,"
Ms. Cordo says. "It is simply not feasible for NNI or any other
Nortel entity to replicate the Flextronics relationship with a
new supplier without incurring serious delays, costs and
disruptions," she avers.
Accordingly, the Debtors ask Judge Kevin Gross of the U.S.
Bankruptcy Court for the District of Delaware to approve their
settlement agreement with the Flextronics Entities.
The Debtors further seek the Court's permission to file under
seal parts of the Settlement Agreement containing sensitive
commercial information about their business relationship with
Flextronics.
The hearing to consider approval of the Debtors' requests is
scheduled for June 11, 2009. Creditors and other concerned
parties have until June 4, 2009 to file their objections.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next-
generation technologies, for both service provider and enterprise
networks, support multimedia and business-critical applications.
Nortel's technologies are designed to help eliminate today's
barriers to efficiency, speed and performance by simplifying
networks and connecting people to the information they need, when
they need it. Nortel does business in more than 150 countries
around the world. Nortel Networks Limited is the principal direct
operating subsidiary of Nortel Networks Corporation.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Seeks to Enter Into $30 Million Bond Facilities
----------------------------------------------------------------
Nortel Networks Inc. and its debtor-affiliates ask interim
approval from the U.S. Bankruptcy Court for the District of
Delaware to enter into agreements with sureties and financial
institutions for the issuance of letters of credit, surety and
performance bonds in the sum of $30 million.
Attorney for the Debtors, Ann Cordo, Esq., at Morris Nichols
Arsht & Tunnell LLP, in Wilmington, Delaware, says that the
agreements are necessary in order for the Debtors to obtain
independent sources of financing for the issuance of surety and
performance bonds on their behalf for the benefit of their U.S.
customers.
"The Debtors expect that from time to time they will need to
provide certain surety and performance bonds or letters of
credit, primarily in support of certain obligations to their
customers under customer contracts and certain other limited
purposes including customs, insurance and contractor obligations,
both as the existing bonds and letters of credit expire and in
support of new agreements," Ms. Cordo says in court papers.
Ms. Cordo relates that the Debtors have approached a number of
financial institutions and sureties regarding their willingness
to provide a facility, and have identified certain issuers and at
least one surety willing to consider issuing bonds on behalf of
the Debtors on the condition that they are fully cash
collateralized.
Ms. Cordo says that although the Debtors and potential
counterparties have yet to agree on the final terms, the Debtors
seek approval to enter into these terms in light of their need
for the financing:
(1) The Debtors will be authorized to enter into the
agreements and seek the issuance of new surety and
performance bonds and letters of credit on ordinary
commercial terms in an aggregate amount not to exceed
$30 million, of which $7.5 million would be available
following issuance of the interim approval.
(2) The purpose of the agreements is to issue surety and
performance bonds and letters of credit to support certain
obligations to the customers under customer contracts and
other limited purposes, including customs, insurance and
contractor obligations.
(3) The Debtors will be authorized to deposit cash into one or
more segregated deposit accounts and to grant the sureties
or financial institutions an automatically perfected
security interest in and first priority lien on those
accounts, in accordance with the terms of the agreements.
(4) The Debtors will be authorized to pay the sureties or
financial institutions fees in connection with the
agreements.
(5) Prior to entering into any agreement or paying the fees in
excess of $50,000 for a specific proposed facility, the
Debtors will provide the U.S. Trustee and counsel to the
Official Committee of Unsecured Creditors at least five
days prior written notice of the agreement or fees,
including the proposed issuer, the material terms of the
proposed facility and copies of the agreements. If the
U.S. Trustee or Creditors Committee provides the Debtors'
counsel with a written objection to the agreements or fees
within that period, which cannot be resolved, the Debtors
may seek court approval of the agreements and fees.
(6) Prior to requesting the issuance of any particular letter
of credit or bond in an amount of at least $500,000, the
Debtors should provide counsel to the Creditors Committee
at least five days' prior written notice of the proposed
instrument. Prior to requesting the issuance of any
particular letter of credit or bond in an amount of at
least $200,000, the Debtors should provide counsel to the
Committee at least two days' prior written notice of the
proposed instrument. If the Creditors Committee provides
the Debtors' counsel with a written objection to the
proposed instrument or transaction within that period,
then to the extent that objection cannot be resolved, the
Debtors may seek Court approval of the proposed instrument
or transaction.
The Debtors also ask the Court to convene a hearing on June 11,
2009, at 2:00 p.m., to consider interim approval of their
request, and on June 26, 2009, at 3:00 p.m., to consider final
approval of their request.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next-
generation technologies, for both service provider and enterprise
networks, support multimedia and business-critical applications.
Nortel's technologies are designed to help eliminate today's
barriers to efficiency, speed and performance by simplifying
networks and connecting people to the information they need, when
they need it. Nortel does business in more than 150 countries
around the world. Nortel Networks Limited is the principal direct
operating subsidiary of Nortel Networks Corporation.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NWC #2 MCCASLIN-CENTURY: Case Summary & 5 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: NWC #2 McCaslin-Century LLC
1035 Pearl Street, Ste. 419
Boulder, CO 80302-9746
Bankruptcy Case No.: 09-20999
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Sidney B. Brooks
Debtor's Counsel: Duncan E. Barber, Esq.
4582 S. Ulster St. Pkwy., Ste. 1650
Denver, CO 80237
Tel: (720) 488-0220
Fax: (720) 488-7711
Email: dbarber@bsblawyers.com
Steven T. Mulligan, Esq.
4582 S. Ulster St. Pkwy., Ste. 1650
Denver, CO 80237
Tel: (720) 488-0220
Email: smulligan@bsblawyers.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
5 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/cob09-20999.pdf
The petition was signed by Scott Pedersen, manager of the Company.
OPTI CANADA: Moody's Junks Corporate Family Rating From 'B3'
------------------------------------------------------------
Moody's Investors Service lowered OPTI Canada Inc.'s Corporate
Family Rating, first secured revolver rating and second secured
note ratings and placed these ratings under review for possible
further downgrade. The CFR was lowered to Caa1 from B3, the
C$350 million senior first secured revolver rating was lowered to
B1 from Ba3, and the US$1.75 billion senior second secured note
rating was lowered to Caa1 from B3. Moody's also assigned a
Probability of Default Rating of Caa1 and Loss Given Default
ratings: revolver, LGD1, 4%; notes, LGD4, 58%.
The downgrades reflect the likelihood that OPTI will not be able
to meet its first lien senior secured debt to EBITDA covenant when
it is measured at September 30, 2009 as the Long Lake steam
assisted gravity drainage and bitumen upgrader project is unlikely
to generate sufficient EBITDA for OPTI to meet the test. The
downgrade also reflects the continued protracted ramp-up of Long
Lake and uncertainty as to when it will be a reliable producer of
meaningful volumes of Premium Synthetic Crude. With approximately
C$87 million drawn on its revolver at March 31, 2009, interest
payments of US$71 million each in June and December on the
US$1.75 billion notes, capex of $29 million for OPTI's account
this year, and only US$218 million in cash on hand at March 31,
2009, OPTI will need to develop a more permanent solution to
meeting its cash requirements while Long Lake positions itself to
generate consistent cash flow.
The review will focus on: i) OPTI's ability to negotiate covenant
relief and an amended revolving credit facility, ii) OPTI's cash
requirements over the next 12 to 18 months and the sources of
cash, including a possible amended revolver, available to meet
those requirements, and iii) the ability and time frame in which
the Long Lake project can achieve a sustainable level of SAGD and
upgrader production at unit operating costs and net price
realizations sufficient to provide OPTI with a reliable source of
cash flow.
Downgrades:
Issuer: OPTI Canada Inc.
-- Corporate Family Rating, Downgraded to Caa1 from B3
-- Senior Secured Bank Credit Facility, Downgraded to B1 from
Ba3
-- Senior Secured Regular Bond/Debenture, Downgraded to Caa1
from B3
Assignments:
Issuer: OPTI Canada Inc.
-- Senior Secured Bank Credit Facility, Assigned 04 - LGD1
-- Senior Secured Regular Bond/Debenture, Assigned 58 - LGD4
Outlook Actions:
Issuer: OPTI Canada Inc.
-- Outlook, Changed To Rating Under Review From Negative
OPTI's ratings have been assigned by evaluating factors that
Moody's believes are relevant to the company's risk profile, such
as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. These attributes were compared against other
issuers both within and outside OPTI's core industry; OPTI's
ratings are believed to be comparable to those of other issuers
with similar credit risk.
The last rating action on OPTI was on February 26, 2009 when its
Corporate Family Rating was downgraded to B3 from B1, the second
secured note ratings were downgraded to B3 from B2, and the
C$350 million senior first secured bank revolver rating was
confirmed at Ba3. The outlook at that time was changed to
negative.
OPTI Canada Inc., headquartered in Calgary, Alberta, holds a 35%
interest in Long Lake, an in-situ oil sands development in
Alberta.
PACIFIC ENERGY: Noble Files Complaint; Seeks Accounting of RPP
-------------------------------------------------------------
Noble Energy Inc. has filed an adversary complaint against
bankrupt Pacific Energy Resources Ltd., accusing the Company of
failing to make good on its obligation to pay Noble up to
$1.1 million under a deal related to offshore oil and gas
interests.
The complaint, filed Wednesday in the U.S. Bankruptcy Court for
the District of Delaware, is seeking a declaration that Noble is
the owner of the reversed production payment (RPP) at the Eureka
Wells and that the Debtor has no right, title or interest in the
reserved production payment.
In addition, Noble seeks an accounting from the Debtor as to the
proceeds of the reversed production payment. To the extent the
Debtor has disposed of any proceeds of the reserved production
payment, Noble asserts a claim for conversion and seeks recovery
of an administration expense claim under Sec. 503 of the
Bankruptcy Code in the amount equal to any converted proceeds of
the reserved production payment.
Noble also asks the Court to enter a preliminary injunction
enjoining the Debtor from disposing of or encumbering the proceeds
of the reserved production payment and to enter an order requiring
the Debtor to segregate proceeds of the reserved production
payment into a separate account.
The Eureka Wells refer to existing wells in addition to any new
wells drilled on the OCS Leases from Platform Eureka, one of the
platforms transferred pursuant to the Noble assignment. The OCS
leases are located in the Outer Continental Shelf in federal
waters offshore of the State of California.
Headquartered in Long Beach, California, Pacific Energy Resources
Ltd. -- http://www.pacenergy.com/-- engages in the acquisition
and development of oil and gas properties, primarily in the United
States. The Company and seven of its affiliates filed for
Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case
No. 09-10785). Attorneys at Pachulski Stang Ziehl & Jones LLP,
represent the Debtors as counsel. The Debtors proposed Rutan &
Tucker LLP as special corporation and litigation counsel;
Schully, Roberts, Slattery & Marino, PLC, as special oil and gas
and transactional counsel; Devlin Jensen as special Canadian
counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief
restructuring officer; Lazard Freres & Co. LLC as investment
banker; and Albrecht & Associates, Inc., as agent for the Debtors
in the sale of their oil and gas properties. Omni Management
Group, LLC, is the claims, balloting, notice and administrative
agent for the Debtors. When the Debtors filed for protection from
their creditors, they listed assets and debts of between
$100 million and $500 million each.
PENSKE AUTOMOTIVE: Moody's Reviews 'B2' Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service placed all ratings of Penske Automotive
Group on review with direction uncertain. LGD assessments are
subject to change.
The rating action follows Penske's announcement that it has signed
a Memorandum of Understanding with General Motors Corporation
regarding the "Saturn" brand. Under the terms of the MOU, if the
transaction is completed, Penske Automotive Group would obtain the
rights to the Saturn brand, acquire certain assets including the
Saturn parts inventory, and have the right to distribute vehicles
and parts through the Saturn Dealership network. General Motors
would continue to provide Saturn Aura, Vue and Outlook vehicles,
on a contract basis, for an interim period.
Details of the transaction including the possible accretion to
earnings and its costs and sources of funding remain unknown. As
a result, ratings could be upgraded, confirmed, or lowered
depending on the final terms of any transaction. Ratings could
improve if the transaction were funded with a high level of equity
and as a result credit metrics improved. Alternatively if the
transaction were more aggressively funded and credit metrics
negatively impacted, ratings could be lowered. If a definitive
transaction proceeds, Moody's will review the terms of the
transaction, the sources of funding, the impact on credit metrics
and liquidity, and the integration strategy.
The business to be acquired in this transaction would not be
capital intensive as Penske would not be acquiring any
manufacturing or dealership assets, and it would further diversify
the company's earnings streams. The company has previous
experience with this business model, as it is currently the U.S.
distributor of the 'smart fortwo'. However there are likely to be
execution and integration challenges, as it is occurring at a time
when auto sales are at extremely low levels and the U.S. auto
industry remains under stress in the current economic environment.
It is also noted that Penske's existing auto dealership business
has been under pressure due to the weak macro economic
environment.
These ratings were placed under review with direction uncertain.
LGD assessments are subject to change.
-- Corporate Family Rating at B2
-- Probability of Default Rating at B2
-- $375 million Senior Subordinated Notes at Caa1 (LGD 5, 89%)
-- $306 million Convertible Senior Subordinated Notes at Caa1
(LGD 5, 89%)
Moody's last rating action on Penske Automotive Group was on
March 25, 2009, when the company's Corporate Family Rating was
lowered to B2 from B1 with a negative outlook.
Penske Automotive Group, Inc., headquartered in Bloomfield Hills,
Michigan, operates 310 retail automotive franchises, representing
40 different brands and 25 collision repair centers. Penske
Automotive, which sells new and previously owned vehicles, finance
and insurance products and replacement parts, and offers
maintenance and repair services on all brands it represents, has
158 franchises in 19 states and Puerto Rico and 152 franchises
located outside the United States, primarily in the United
Kingdom. Penske Automotive is also the exclusive distributor of
the smart fortwo through its wholly-owned subsidiary smart USA
Distributor LLC.
PENSKE AUTOMOTIVE: S&P Puts 'B+' Rating on CreditWatch Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services said it is placing its 'B+'
corporate credit and 'B-' issue ratings on Penske Automotive Group
Inc. on CreditWatch with negative implications.
The rating action follows news reports that Penske intends to
acquire General Motors Corp.'s Saturn unit for up to $200 million.
Although details of the potential transaction, including other
obligations Penske may assume, are not available, S&P view
Penske's cushion to take on additional leverage as limited at the
current rating. The Saturn transaction could exacerbate the
company's high leverage and reduce liquidity.
S&P understands the transaction will not involve Penske's becoming
a manufacturer or owning Saturn dealerships. Still, S&P would
likely view the responsibility for future vehicle product
selection and manufacturing strategy as carrying significant
execution risk.
Although S&P viewed Penske's liquidity as adequate, excluding any
effect from the proposed transaction, the company's lease-adjusted
total debt to EBITDA reached a very high 7.5x for the 12 months
ended March 31, 2009. First-quarter 2009 revenues declined 33%
because of the continuing U.S. recession, which has depressed
sales and discretionary spending by consumers. Penske's reported
EBITDA declined 41% year over year in the first quarter and 31%
for the last 12 months over the previous 12 months. The company
generated free cash flow of $154 million for the 12 months ended
March 31, but S&P believes cash generation trends will be
unfavorable for the duration of the recession.
S&P expects to resolve the CreditWatch listing after additional
details about the transaction are released and S&P has completed
S&P's analysis of the company's business strategy and financial
prospects. This analysis will incorporate financial details of
the proposed Saturn transaction, the capital structure, and S&P's
assessment of the prospective profitability of the Saturn brand
for Penske.
PHILIP M. BARONE: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Joint Debtors: Philip M. Barone
Mary E. Barone
28485 E. River Rd.
Perrysburg, OH 43551
Bankruptcy Case No.: 09-33803
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Northern District of Ohio (Toledo)
Judge: Mary Ann Whipple
Debtors' Counsel: Steven L. Diller, Esq.
124 E Main St.
Van Wert, OH 45891
Tel: (419) 238-5025
Email: dillerlaw@roadrunner.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $0 to $50,000
The Debtors say they do not have unsecured creditors who are not
insiders when they filed their petition.
The petition was signed by the Joint Debtors.
PHOENIX COYOTES: NFL, NBA, MLB File Amicus Brief in Arizona
-----------------------------------------------------------
Three U.S. professional sports leagues have received permission to
weigh in on the bankruptcy of the National Hockey League's Phoenix
Coyotes, an issue they say is of national interest, Bankruptcy
Law360 reports.
The National Football League, National Basketball Association and
Major League Baseball asked the U.S. Bankruptcy Court for the
District of Arizona Wednesday to allow them to file a single 10-
page amicus brief.
As reported in the Troubled Company Reporter on June 4, 2009,
Phil Wahba and Julie Vorman at Reuters reported that Phoenix
Coyotes may be transferred to Canada after U.S. antitrust
authorities approved James Balsillie's plan to acquire the hockey
team.
As reported by the Troubled Company Reporter on May 27, 2009, Mr.
Balsillie filed a formal application with the National Hockey
League to buy Phoenix Coyotes from majority owner Jerry Moyes.
Earl Scudder of Phoenix Coyotes is seeking to sell the team to Mr.
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 Mr. 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.
According to Reuters, Mr. Balsillie's PSE Sports and Entertainment
LP and Phoenix Coyotes said in their application to the NHL, "The
club [Phoenix Coyotes] is not, never has been and never will be
financially viable, consistently supported by fans and a leading
professional sports team in Arizona."
Reuters states that a hearing to decide whether the Phoenix
Coyotes can be relocated if no local buyer matches Mr. Balsillie's
offer is set for June 9. Reuters says that legal arguments for
the June 9 hearing must be filed by Friday.
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.
PHOENIX COYOTES: Gets Four Offers to Keep Team in Arizona
---------------------------------------------------------
National Hockey League commissioner Gary Bettman said that four
prospective buyers have filed preliminary background applications
to buy Phoenix Coyotes and keep the team in Arizona, The
Associated Press reports.
According to The AP, the prospective buyers are:
-- Jerry Reinsdorf, owner of baseball's Chicago White Sox and
the NBA's Chicago Bulls;
-- Howard Sokolowski and David Cynamon, co-owners of the
Toronto Argonauts of the Canadian Football League;
-- John Breslow, who owns 3% of the Coyotes; and
-- a buyer who requested anonymity while further
investigating the possible purchase.
The AP notes that no offer to keep Phoenix Coyotes in Arizona
would come close to Jim Balsillie's $212.5 million offer, which
includes the team's transfer to Canada. The AP relates that a
hearing on Mr. Balsillie's offer is set for June 9, 2009.
The AP states that Mr. Balsillie said he would be willing to put
off the move for a year if the NHL funded the team and covered the
inevitable losses of another season in 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.
PLIANT CORP: Panel Files Adversary Complaint vs. Major Lenders
--------------------------------------------------------------
Left virtually empty-handed under Pliant Corp.'s proposed plan of
reorganization, the official committee of unsecured creditors has
launched an adversary proceeding against the major lenders,
including Merrill Lynch Bank USA and Wilmington Trust Co., to
recoup a greater portion of the plastic film manufacturer's
assets, Bankruptcy Law360 reports.
As reported in the Troubled Company Reporter on May 19, 2009,
Pliant Corp. filed with the U.S. Bankruptcy Court for the District
of Delaware on May 12, 2009, proposed revisions to their First
Amended Joint Plan of Reorganization, which was filed with the
Court on May 1, 2009.
The hearing on the approval of the disclosure statement has been
adjourned by the Court to June 11, 2009, at 2:00 p.m., upon the
emergency motion of the official committee of unsecured creditors.
As envisioned, the Debtors' First Lien Notes will be exchanged for
100% of the Class A New Common Stock to be issued pursuant to the
Plan. To the extent classes containing the claims of Second Lien
Noteholders, Senior Subordinated Noteholders, and General
Unsecured Claims vote to accept the Plan, holders of claims in
said classes will receive a pro rata distribution of New Warrants
to be issued pursuant to the Plan. The Debtor's Prepetition
Credit Facility claims will be paid in full in cash, and claims
and interests of Pliant's existing equity holders will be
extinguished.
Estimated recovery for unsecured claims, estimated at
$274.8 million, is 0.5%.
About Pliant Corp.
Headquartered in Schaumburg, Illinois, Pliant Corporation produces
polymer-based films and flexible packaging products for food,
beverage, personal care, medical, agricultural and industrial
applications. The Company has operations in Australia, New
Zealand, Germany, and Mexico.
The Debtor and 10 of its affiliates filed for Chapter 11
protection on January 3, 2006 (Bankr. D. Del. Lead Case No.
06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon
L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway,
Stargatt & Taylor, represented the Debtors in their restructuring
efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as
Canadian counsel. As of September 30, 2005, the Company had
$604.3 million in total assets and $1.19 billion in total debts.
The Debtors emerged from Chapter 11 on July 19, 2006.
Pliant Corp. and its affiliates again filed for Chapter 11 after
reaching terms of a pre-packaged restructuring plan. The
voluntary petitions were filed February 11, 2009 (Bank. D. Del.
Case Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath
presides over the cases. Jessica C.K. Boelter, Esq., at Sidley
Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, provide bankruptcy counsel to the Debtors.
Epiq Bankruptcy Solutions LLC acts as claims and noticing agent.
The U.S. Trustee for Region 3 appointed five creditors to serve on
an official committee of unsecured creditors. The Committee
selected Lowenstein Sandler PC as its counsel. As of
September 30, 2008, the Debtors had $688.6 million in total assets
and $1.03 billion in total debts.
PRECISION PARTS: U.S. Trustee Balks at Grant Thornton Employment
----------------------------------------------------------------
Roberta A. DeAngelis, acting United States Trustee for Region 3,
has objected to PPI Holdings Inc.'s application to employ Grant
Thornton LLP as its tax advisors and auditors, saying that the
circumstances in the Debtor's case do not warrant the retroative
approval of the employment of Grant Thornton.
In addition, the U.S. Trustee says that the application does not
support a finding that Grant Thornton is disinterested in light of
the payments that it received from the Debtors within 90 days of
the filing date. Specifically, the U.S. Trustee points out that
the application contains no detail as to the $107,483 in
prepetition payments made by the Debtors to Grant Thornton.
On May 20, 2009, the Debtor sought the Court's permission to
retain Grant Thornton to serve as its tax advisors and auditors,
nunc pro tunc to March 16, 2009. As the Debtor's tax advisors,
Grant Thornton is expected to assist the Debtors with respect to
preparing and filing their tax return for 2008 and any tax
estimates required for 2009 and assist with the IRS examination of
their 2006 and 2007 federal income tax returns. Grant Thornton
will also finish the audit of the Debtor's 401(k) plan that was
substantially completed prior to bankruptcy filing.
Headquartered in Rochester Hills, Michigan, Precision Parts
International Services Corp. -- http://www.precisionparts.com/--
sells products to major north American automotive and non-
automotive original equipment manufacturers and Tier 1 and 2
suppliers. PPI and its units operate six manufacturing facilities
throughout North America, including a facility in Mexico operated
on their behalf by Intermex Manufactura de Chihuahua under a
shelter and logistics agreement.
The Company and eight of its affiliates filed for Chapter 11
protection on December 12, 2008 (Bankr. D. Del. Lead Case No.
08-13289). Attorneys at Pepper Hamilton LLP are bankruptcy
counsel to the Debtors. Alvarez & Marsal North America LLC is the
Debtor's financial advisors and Kurtzman Carson Consultants LLC is
the claims, noticing and balloting agent. When PPI Holdings, Inc.
filed for protection from its creditors, it listed assets of
between $100 million and $500 million, and the same range of debt.
RAYMOND PORTER: Case Summary & 16 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Raymond W. Porter
2917 Green Pastures Cove S.
Germantown, TN 38138
Bankruptcy Case No.: 09-26043
Chapter 11 Petition Date: June 5, 2009
Court: Western District of Tennessee (Memphis)
Judge: Paulette J. Delk
Debtor's Counsel: Russell W. Savory, Esq.
Gotten, Wilson, Savory & Beard, PLLC
russell.savory@gwsblaw.com
88 Union Avenue, 14th Floor
Memphis, TN 38103
Tel: (901) 523-1110
Total Assets: $10,352,500
Total Debts: $15,083,501
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Everbank Bank loan $6,862,306
P.O. Box 179
Jacksonville, FL 32201
Sycamore Bank Bank loan $2,731,898
P.O. Box 96
Senatobia, MS 38668
Trust One Bank Bank loan $1,300,000
1715 Aaron Brenner Drive
Suite 100
Memphis, TN 38120
Firstbank $750,000
Insouth Bank Bank loan $739,042
Insouth Bank Bank loan $510,829
Regions Bank Bank loan $454,535
Triumph Bank $350,000
Fia Card Services $61,640
Sycamore Bank Bank loan $49,000
Toyota Financial Services $35,600
Chase $21,154
Crye-Leike Commercial Trade debt $21,000
Glankler Brown, PLLC $16,055
Chase $15,325
West Tennessee Collectors Inc. Bank loan $1,064
REVELATIONS IN DESIGN: Case Summary & 20 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Revelations in Design, Inc.
725 E. Baseline Rd
Gilbert, AZ 85233
Bankruptcy Case No.: 09-12533
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: Irena Makeeta Juras, Esq.
Juras Law Firm, PLC
7150 E Camelback Rd., Suite 444
Scottsdale, AZ 85251
Tel: (480) 425-2009
Fax: (480) 452-1640
Email: irena.jurasova@azbar.org
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/azb09-12533.pdf
The petition was signed by Robert M. Galvan, president of the
Company.
RH DONNELLEY: Sec. 341 Meeting of Creditors Scheduled for July 6
----------------------------------------------------------------
Roberta A. DeAngelis, Acting United States Trustee for Region 3,
will convene a meeting of creditors of R.H. Donnelley Corporation
and its debtor-affiliates on July 6, 2009, at 2:00 p.m., at Room
2112, J. Caleb Boggs Federal Building, 2nd Floor, 844 King
Street, in Wilmington, Delaware.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases.
Attendance by the Debtor's creditors at the meeting is welcome,
but not required. The Sec. 341(a) meeting offers the creditors a
one-time opportunity to examine the Debtors' representative under
oath about the Debtors' financial affairs and operations that
would be of interest to the general body of creditors.
Headquartered in Cary, North Carolina, R.H. Donnelley Corp., fka
The Dun & Bradstreet Corp., -- http://www.rhdonnelley.com/--
(NYSE: RHD) publishes and distributes print and online directories
in the U.S. It offers print directory advertising products, such
as yellow pages and white pages directories. R.H. Donnelley Inc.,
Dex Media, Inc. and Local Launch, Inc. are the company's only
direct wholly owned subsidiaries.
KPMG LLP, the Company's independent auditor, in March 2009, raised
substantial doubt on the Company's ability to continue as a going
concern. "The Company has significant amounts of maturing debt
which it may be unable to satisfy commencing March 31, 2010,
significant negative impacts on operating results and cash flows
from the overall downturn in the global economy and higher
customer attrition, and possible debt covenant violations in 2009
that raise substantial doubt about its ability to continue as a
going concern," KPMG said in its March 27 report. R.H. Donnelley
reported a net loss of $2.29 billion for the year ended December
31, 2008, on net revenues of $2.61 billion.
As of March 31, 2009, the Company had $929,829,000 in total assets
and $1,023,526,000 in total liabilities, resulting in $93,697,000
in total shareholders' deficit.
R.H. Donnelley Corp. and 19 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11833
through 09-11852) after missing a $55 million interest payment on
its senior unsecured notes due April 15. James F. Conlan, Esq.,
Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork,
Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago,
Illinois represent the Debtors in their restructuring efforts.
Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young,
Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as
the Debtors' local counsel. The Debtors' financial advisor is
Deloitte Financial Advisory Services LLP while its investment
banker is Lazard Freres & Co. LLC.
Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of R.H. Donnelley Corp. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
RH DONNELLEY: Court Approves $17MM Payment to Critical Vendors
--------------------------------------------------------------
Certain vendors have claims against R.H. Donnelley Corp. and its
debtor-affiliates based on providing (i) essential goods to the
Debtors that were received by the Debtors prepetition, or (ii)
essential services that were rendered to, or on behalf of, the
Debtors prior to the Petition Date.
The goods and services that the Critical Vendors provide to the
Debtors can be divided into: paper, printing and distribution
services, marketing services, information technology and other
services, and internet distribution.
The Debtors sought and obtained authority from Judge Kevin Gross
of the U.S. District Court for the District of Delaware to pay the
prepetition Critical Vendors Claims in an aggregate amount not to
exceed $17 million.
The Debtors asserted that payment of the Critical Vendor Claims
is vital to their reorganization efforts because, in several
instances, the Critical Vendors are the only source from which
the Debtors can procure certain goods and services within a
timeframe and at a price that will permit the Debtors to continue
operating their businesses in the ordinary course.
The Debtors believe that failure to pay the Critical Vendor
Claims would likely result in many of the Critical Vendors
refusing to provide goods or services to the Debtors
postpetition, and may force the Debtors to obtain those goods and
services from other parties at higher prices or in a quantity or
quality that is insufficient to satisfy the Debtors'
requirements.
The Debtors will condition the payment of the Critical Vendor
Claims on the agreement of each individual Critical Vendor to
continue supplying goods and services to the Debtors on terms
that are as or more favorable to the Debtors in effect between
the Critical Vendor and the Debtors during the 12-month period
prior to the Petition Date. All payments of Critical Vendor
Claims will be applied first to the Critical Vendor's claims for
goods received by the Debtors within 20 days before the Petition
Date and the remainder, if any, to the Critical Vendor's claims
for goods received by the Debtors prior to the 20-day period.
The amount of the Critical Vendor's estimated prepetition claim
will be as mutually determined in good faith by the Critical
Vendor and the Debtors and will not be deemed an allowed.
The Critical Vendor must also agree not to file or otherwise
asset against the Debtors any lien related in any way to any
remaining prepetition amounts allegedly owed to the Critical
Vendor by the Debtors arising from goods provided to the Debtors
prior to the Petition Date. The Critical Vendor must further
agree not to separately assert or otherwise seek payment of any
reclamation claims.
If a Critical Vendor who has received payment of a prepetition
claim subsequently refuses to supply goods to the Debtors on
Customary Trade Terms or other favorable trade terms, any
payments received by the Critical Vendor on account of its
Critical Vendor Claim will be deemed to have been in payment of
then outstanding postpetition obligations. That Critical Vendor
must immediately repay to the Debtors without further Court order
any payments received on account of its Critical Vendor Claim to
the extent that the aggregate amount of the payments exceeds the
postpetition obligations then outstanding, without the right of
setoff or reclamation.
About R.H. Donnelley
Headquartered in Cary, North Carolina, R.H. Donnelley Corp., fka
The Dun & Bradstreet Corp., -- http://www.rhdonnelley.com/--
(NYSE: RHD) publishes and distributes print and online directories
in the U.S. It offers print directory advertising products, such
as yellow pages and white pages directories. R.H. Donnelley Inc.,
Dex Media, Inc. and Local Launch, Inc. are the company's only
direct wholly owned subsidiaries.
KPMG LLP, the Company's independent auditor, in March 2009, raised
substantial doubt on the Company's ability to continue as a going
concern. "The Company has significant amounts of maturing debt
which it may be unable to satisfy commencing March 31, 2010,
significant negative impacts on operating results and cash flows
from the overall downturn in the global economy and higher
customer attrition, and possible debt covenant violations in 2009
that raise substantial doubt about its ability to continue as a
going concern," KPMG said in its March 27 report. R.H. Donnelley
reported a net loss of $2.29 billion for the year ended December
31, 2008, on net revenues of $2.61 billion.
As of March 31, 2009, the Company had $929,829,000 in total assets
and $1,023,526,000 in total liabilities, resulting in $93,697,000
in total shareholders' deficit.
R.H. Donnelley Corp. and 19 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11833
through 09-11852) after missing a $55 million interest payment on
its senior unsecured notes due April 15. James F. Conlan, Esq.,
Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork,
Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago,
Illinois represent the Debtors in their restructuring efforts.
Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young,
Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as
the Debtors' local counsel. The Debtors' financial advisor is
Deloitte Financial Advisory Services LLP while its investment
banker is Lazard Freres & Co. LLC.
Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of R.H. Donnelley Corp. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
RH DONNELLEY: Can Continue to Perform Under Customer Programs
-------------------------------------------------------------
Before the Petition Date, and in the ordinary course of their
business operations, R.H. Donnelley Corp. and its debtor-
affiliates instituted and engaged in certain practices intended to
develop and sustain a positive reputation with their customers and
in the general marketplace for the Debtors' products and services.
The Customer Programs, which are typical in the Debtors' business,
primarily include adjustments and credits to resolve customer
claims, honoring pre-paid obligations, and honoring obligations
under certain affiliate and barter agreements.
The goals of the Customer Programs are to ensure customer
satisfaction, reduce the Debtors' out-of-pocket advertising
costs, and generate goodwill for the Debtors, thereby allowing
the Debtors to retain current customers, attract new ones, and
ultimately enhance the Debtors' revenue and profitability.
After the Petition Date, the Debtors intend to continue utilizing
the Customer Programs they believe are beneficial to their
business operations and that will preserve customer
relationships. According to James F. Conlan, Esq., at Sidley
Austin LLP, in Chicago, Illinois, the cost to the Debtors to
continue the Customer Programs is immaterial when compared to the
revenue that the Debtors generate from their customers, and the
goodwill that would be lost if the Debtors were precluded from
performing all obligations under the Customer Programs.
Debtors' Customer Programs
A. Customer Adjustments and Credits
The Debtors sometimes receive customer complaints over the
placement of advertisements, including incorrect image coloring
and incorrect information.
For advertisements placed in one of the Debtors' online
directories, the Debtors' typically correct the error and resolve
the dispute by agreeing to extend the term for which the
advertisement is placed on the Debtors' Web site. With respect
to print directories, because it is not possible to correct any
single advertisement after a print directory has been published,
disputes over print directory advertisements are typically
resolved by the Debtors agreeing to issue a credit against the
monthly installment payments owed by the customer to the Debtors.
Through fiscal year 2008, the Debtors accrued approximately $45.3
million in adjustments on account of Customer Claims and as of
the Petition Date, the Debtors estimate that there are
approximately $19.5 million of unresolved prepetition Customer
Claims. The Debtors further anticipate that approximately one
percent of the estimated outstanding Customer Claims represent an
actual cash liability owing to customers.
Additionally, from time to time, the Debtors owe their customers
refunds based on billing errors which typically include improper
invoicing, duplicative payment, mispricing and various other
billing and payment errors. The Debtors routinely issue credits
or refunds for reimbursement with respect to Invoicing Errors.
As of the Petition Date, the Debtors estimate that they owe
customers approximately $3.5 million on account of Invoicing
Errors.
B. Affiliate Program
The Debtors' ability to attract advertisers for their online
services is dependent upon their ability to attract consumers
directly to their online Web sites. The Debtors seek to provide
consumers with indirect access to their online services through
an "affiliate program" under which, a customer of the Debtors' or
a third party Web site may allow the Debtors to place a link to
one of their Web sites on the Affiliate's Web site. In exchange,
the Debtors agree to pay the Affiliate each time a user of the
Affiliate's Web site "clicks" the link to a Debtors' Web site.
The Debtors believe that all outstanding prepetition obligations
to Affiliates participating in the Affiliate Program do not
exceed more than $1 million in the aggregate, and that paying the
obligations is in the best interests of the Debtors and their
estates.
C. Pre-Payments
Certain customers pay the Debtors for advertising space in
advance of the Debtors publishing a particular directory.
Generally, the customers include those the Debtors' considered to
be a credit or collection risk. If a customer has made a
Pre-Payment, the Debtors have no cash liability to the customer
but simply have an obligation to place the advertising for which
the customer has already paid in a particular directory.
D. Barter Obligations
The Debtors' also advertise their print and online products and
services to potential customers through various media outlets.
One method the Debtors utilize to advertise their products and
services is to enter into barter arrangements with certain
customers. Through a Barter Arrangement, the Debtors and a
particular customer typically exchange advertising space for
advertising space, or advertising space and cash and other
consideration. Examples of Barter Arrangements include
exchanging advertising space in the Debtors' print directories
and online local search web site with a radio station that
provides the Debtors advertising on-air time, granting
advertising space in the Debtors' print directories to a hotel
chain in exchange for an exclusive agreement with the chain to
place the Debtors' directories in its guest rooms, and exchanging
advertising space through sponsorships with large venues,
professional and collegiate sports teams, and non-profit
organizations or events.
The Debtors believe that all outstanding prepetition obligations
to Barter Customers under Barter Arrangements are not more than
approximately $6.2 million in the aggregate. The Debtors believe
that failure to honor the obligations would likely result in the
Barter Customers refusing to honor their obligations under the
Barter Arrangements.
In addition to the Customer Programs, the Debtors utilize the
services of approximately 165 independent marketing
representatives to manage national advertising accounts and
maintain long term customer relationships with those customers
for their advertising products. Historically the Debtors have
paid the CMRs a year-end bonus based on the volume of
advertisements the CMRs placed with the Debtors during the
calendar year. The bonuses are typically paid by the Debtors'
issuing a credit memo to the CMR that the CMR deducts from future
invoices submitted to it by the Debtors.
The Debtors sought and obtained authority from the U.S. Bankruptcy
Court for the District of Delaware to operate in the ordinary
course of business and to:
(i) perform all of their prepetition obligations related to
the customer programs as they determine advisable;
(ii) continue, renew, replace, modify or terminate any of
the Customer Programs, as they determine advisable,
in the ordinary course of business and without further
application to the Court;
(iii) maintain their relationships with certified marketing
representatives; and
(iv) perform any prepetition obligations that the Debtors may
owe to the Certified Marketing Representatives.
Because some of the Debtors' obligations under the Customer
Programs may not have been fully performed as of the Petition
Date, the Debtors also sought and obtained authority to perform
all of their prepetition obligations owing to customers under the
Customer Programs.
Mr. Conlan told the Court that because the Debtors' customers
have numerous advertising options, some of the Debtors' customers
may cease to purchase advertising space in the Debtors' products
if the Debtors fail to timely perform their prepetition
obligations under the Customer Programs.
Unless the Debtors are able to assure current customers that they
will honor all obligations under the Customer Programs during
these chapter 11 cases, many customers may seek to advertise
their goods and services through other media outlets, which would
result in a loss of revenue for the Debtors, Mr. Conlan argues.
Mr. Conlan contends that the CMRs are essential to the Debtors'
business. He says that if the Debtors are unable to timely
perform all of their prepetition obligations owing to a CMR, the
CMR may reduce or cease its efforts to place its clients'
advertisements in the Debtors' products, which would result in a
decrease in the Debtors' sales revenues.
About R.H. Donnelley
Headquartered in Cary, North Carolina, R.H. Donnelley Corp., fka
The Dun & Bradstreet Corp., -- http://www.rhdonnelley.com/--
(NYSE: RHD) publishes and distributes print and online directories
in the U.S. It offers print directory advertising products, such
as yellow pages and white pages directories. R.H. Donnelley Inc.,
Dex Media, Inc. and Local Launch, Inc. are the company's only
direct wholly owned subsidiaries.
KPMG LLP, the Company's independent auditor, in March 2009, raised
substantial doubt on the Company's ability to continue as a going
concern. "The Company has significant amounts of maturing debt
which it may be unable to satisfy commencing March 31, 2010,
significant negative impacts on operating results and cash flows
from the overall downturn in the global economy and higher
customer attrition, and possible debt covenant violations in 2009
that raise substantial doubt about its ability to continue as a
going concern," KPMG said in its March 27 report. R.H. Donnelley
reported a net loss of $2.29 billion for the year ended December
31, 2008, on net revenues of $2.61 billion.
As of March 31, 2009, the Company had $929,829,000 in total assets
and $1,023,526,000 in total liabilities, resulting in $93,697,000
in total shareholders' deficit.
R.H. Donnelley Corp. and 19 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11833
through 09-11852) after missing a $55 million interest payment on
its senior unsecured notes due April 15. James F. Conlan, Esq.,
Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork,
Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago,
Illinois represent the Debtors in their restructuring efforts.
Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young,
Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as
the Debtors' local counsel. The Debtors' financial advisor is
Deloitte Financial Advisory Services LLP while its investment
banker is Lazard Freres & Co. LLC.
Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of R.H. Donnelley Corp. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
RHODES COS: Limited Information Cues S&P to Withdraw 'D' Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on The
Rhodes Cos. LLC due to S&P's expectation that access to financial
information will be limited going forward.
Rhodes is one of the largest private homebuilding companies in the
Las Vegas area and had been operating under acute liquidity
constraints as a consequence of the sharp housing downturn and an
undercapitalized balance sheet. On April 1, 2009, Rhodes filed a
voluntary petition for relief under Chapter 11 of the U.S.
Bankruptcy Code. S&P subsequently lowered its ratings on the
company and its rated debt obligations to 'D' on April 3, 2009.
Ratings Withdrawn
Rhodes Cos. LLC (The)
Rating
------
To From
-- ----
Corporate credit NR D/--/--
First-lien NR D (Recov. rtg: 5)
Second-lien NR D (Recov. rtg: 6)
RIO VISTA LLC: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Rio Vista, LLC
8495 Redwood Creek Lane
San Diego, CA 92126
Bankruptcy Case No.: 09-07937
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Southern District of California (San Diego)
Judge: Laura S. Taylor
Debtor's Counsel: Craig E. Dwyer, Esq.
8745 Aero Drive, Suite 301
San Diego, CA 92123
Tel: (858) 268-9909
Fax: (858) 268-4230
Email: craigedwyer@aol.com
Total Assets: $1,450,042
Total Debts: $494,320
A full-text copy of the Debtor's petition, including a list of its
3 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/casb09-07937.pdf
The petition was signed by Jeff Lundstrom, managing member of the
Company.
ROCKWOOD SPECIALTIES: S&P Affirms 'B+' Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'B+'
corporate credit rating on Rockwood Specialties Group Inc. and
removed it from CreditWatch where S&P had placed it with negative
implications on March 17, 2009.
At the same time, based on S&P's updated recovery analysis, S&P
lowered the senior secured and subordinated debt ratings and
removed them from CreditWatch and revised the recovery ratings.
In addition, based on preliminary terms and conditions, S&P
assigned a 'BB-' senior secured debt rating to Rockwood's amended
$250 million revolving credit facility maturing in 2012 and its
proposed term loans H and I maturing in May 2014, expected to
total between $500 million and $750 million. S&P also assigned
'2' recovery ratings to the facilities. Borrowings under the new
term loans would replace borrowings under existing term loans
maturing in July 2012.
"We are affirming the corporate credit rating and taking it off of
CreditWatch because, if the bank loan amendment is consummated as
currently expected, Rockwood will have significantly more
flexibility under financial covenants to weather the current
economic downturn than it does now, and its debt maturity profile
will improve," said Standard & Poor's credit analyst Cynthia
Werneth.
The company has also reduced debt by $240 million so far in 2009.
The ratings on Princeton, New Jersey-based Rockwood reflect high
debt leverage and a satisfactory business risk profile. Rockwood
has an attractive portfolio of specialty chemical businesses.
S&P's forecast suggests that credit measures will remain in an
appropriate range for the ratings during the next year. Based on
S&P's expectations, S&P anticipates that the ratio of funds from
operations to total adjusted debt will be near 10% at the bottom
of this economic cycle, before improving in 2010. If market
conditions improve and the company directs discretionary cash to
accretive acquisitions and debt reduction as S&P anticipates, S&P
could consider a slight upgrade during 2010.
S&P could lower the ratings if key measures of credit quality
deteriorate beyond the level indicated in S&P's ratings scenario,
in connection with a sizable debt-financed acquisition, or in the
unlikely event that the credit agreement is not successfully
amended.
SAGITTARIUS RESTAURANTS: Moody's Cuts Corporate Rating to 'Caa2'
----------------------------------------------------------------
Moody's Investors Service lowered the ratings of Sagittarius
Restaurants LLC, including its corporate family rating to Caa2
from Caa1 and its probability-of-default rating to Caa2 from Caa1.
In the same time, the rating on its senior secured bank credit
facility was affirmed at B2. The rating outlook is negative.
The downgrade to Caa2 reflects Sagittarius' very weak credit
metrics and eroding liquidity. The deterioration of the credit
metrics was driven by the company's weak operating performance in
2008 as its operating margin declined considerably due to sluggish
guest traffic and higher commodity cost and labor cost that could
not be fully offset by menu price increases. Although the
operating profit improved in the first quarter 2009 largely due to
lower commodity costs that more than offset the declined revenue,
Moody's expects the current operating environment will likely
remain challenging for both its Del Taco and Captain D's concepts,
as the declining guest visitation trend continues and competition
intensifies, that could lessen the benefit on food cost from
commodity price moderation. Therefore, credit metrics would
remain weak in the next 12-18 months at levels that are no longer
consistent with the Caa1 rating.
Although Sagittarius would still likely generate modestly positive
free cash flow in the coming year, the overall liquidity profile
is expected to be weak, mainly reflecting the limited headroom
under its financial covenants. The covenant levels were relaxed
during an amendment to its credit agreement that occurred in early
2008 but will gradually tighten over the next few quarters, and
will be re-set to the pre-amendment levels in the second quarter
of 2010. In absence of a substantial improvement in its operating
performance, which Moody's views as unlikely at this time, the
company will likely seek an amendment/waiver from its senior
lenders to avoid a covenant default. Further, the (Paid-in-Kind)
PIK interest on its Subordinated Notes (unrated by Moody's,
$268 million outstanding as of March 2009 PIK@13.5%) will become
half cash-pay after March 2010 and then 100% cash-pay one year
after, which will further pressure its already weak cash flow
generation.
"We are concerned about the liquidity as well as the
sustainability of its current capital structure," commented
Moody's analyst John Zhao, "At its current cash flow generation,
the existing debt load would become increasingly burdensome,
particularly in light of the resumption of cash payment of its
currently PIKed interest in the coming year. The incremental
annual cash interest burden will be around $34 million on a run-
rate basis after March 2011."
The negative outlook reflects the company's worsening guest
traffic trend witnessed by both concepts in the recent past. "If
this trend continues, it would further pressure its revenue growth
and diminish the modest margin improvement achieved in early this
year, thus a concern," added Mr. Zhao. The outlook also depicts
the company's weak liquidity and uncertainty on its capital
structure. The rating could be downgraded should a potential
covenant violation approach and/or a restructuring of balance
sheet materialize.
These ratings were affected by this rating action:
Sagittarius Restaurants LLC
-- Corporate Family Rating, downgraded to Caa2 from Caa1
-- Probability of Default Rating, downgraded to Caa2 from Caa1
-- $60 million senior secured revolving credit facility,
affirmed at B2 (LGD2, 21%)
-- $265 million senior secured term loan credit facility,
affirmed at B2 (LGD2, 21%)
The rating outlook is negative
The last rating action occurred on February 20, 2008 when the CFR
was downgraded to Caa1 from B3.
Sagittarius Restaurants LLC, headquartered in Nashville,
Tennessee, operates and franchises Mexican and seafood QSRs under
two leading brand names, Del Taco and Captain D's. The company
had 1,067 units in 31 states at the end of 2008. Revenues for the
company for the last twelve months as of March 22, 2009 were
approximately $597million.
SILVERTON BANK: FDIC Will Wind Down Bank
----------------------------------------
Peter Lattman at The Wall Street Journal reports that the Federal
Deposit Insurance Corp. has decided to wind down Silverton Bank,
instead of selling it to investors.
WSJ relates that a consortium that included Carlyle Group LLC,
Lightyear Capital LLC, Harvest Partners LLC, and Colony Capital
LLC submitted a bid for Silverton two weeks ago. WSJ quoted FDIC
as saying, "The bid underwent an evaluation and negotiation
process by the FDIC. Regrettably, an equitable offer could not be
agreed upon by all parties."
Silverton Bank was closed on May 1, 2009, by the Office of the
Comptroller of the Currency. The OCC appointed the Federal
Deposit Insurance Corporation as receiver. FDIC then created a
bridge bank to take over the operations of Silverton. The newly
created bank is Silverton Bridge Bank, National Association. The
bank had about $4.1 billion in assets and $3.3 billion in
deposits.
SOMERSET MEDICAL: Moody's Affirms 'Ba2' Rating on 2003 Bonds
------------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 rating assigned to
Somerset Medical Center's outstanding Series 2003 bonds issued by
the New Jersey Health Care Facilities Financing Authority. The
rating outlook remains negative despite a sixteen month trend of
improved operating performance and more recently improved balance
sheet metrics. The affirmation of the negative outlook, despite
the improved financial performance, reflect what Moody's believe
are the heightened risks of SMC's debt structure and a letter of
credit agreement, given SMC's nearness to liquidity covenant and
the potential for acceleration under the bank agreement.
Legal Security: First mortgage on the medical center physical
plant; Gross revenues pledge; Debt Service Reserve Fund. Cross
default provisions for the Series 2008 bonds and 2003 bonds. Bank
covenants match bond covenants for days cash on hand test (50
days) and MADS coverage (1.1 times). However, an inability to
meet these tests would constitute an event of default if remain
unremedied for thirty days after notice from the liquidity
provider under the letter of credit and option for an immediate
acceleration of the bonds.
Interest Rate Derivatives: None
Strengths
* Located in Somerset County, New Jersey in the City of Somerville
with favorable demographics characterized by population growth,
median income levels above state and national averages, and low
Medicaid population (represents 2% of gross revenues)
* Dominant inpatient market share as the only acute care hospital
in its primary service area of Somerset County. Favorable
inpatient volume growth primarily from the closure of Muhlenberg
Regional Medical Center in August 2008; approximately 3.3%
inpatient admissions growth from September 2008 through 4-months
FY 2009
* Sizable improvement in operating performance in fiscal year 2008
(-0.6% operating margin and 6.7% operating cash flow margin)
from a large operating loss generated in FY 2007 (-4.2%
operating margin and 4.5% operating cash flow margin);
performance through the first 4-months of FY 2009 (0.3%
operating margin and 6.5% operating cash flow margin) is
slightly down from the prior year performance primarily due to
$1.0 million in additional pension expense incurred through 4-
months FY 2009
* Sale of its cancer center reduced debt by $15 million and added
approximately $10 million of unrestricted cash to the balance
sheet, although the debt was exchanged for a long-term lease
that results in annual rental expense of approximately $2.0
million over 18 years
* Improved liquidity position at FYE 2008 with $38.2 million of
unrestricted cash and investments (59 days cash on hand)
compared to $26.5 million at FYE 2007 (44 days cash on hand).
As of April 30, 2009, unrestricted cash has declined to
$35 million (52 days cash on hand) due to a third payroll
distribution at the end of the month
* Conservative investment allocation with 67% invested in fixed
income securities and remainder in cash
Challenges
* Risk of debt structure that includes 24% of debt in variable
rate demand bonds supported by a letter of credit, somewhat
mitigated by SMC's cash-to-puttable debt measuring an adequate
136% as of April 30, 2009. However, SMC currently maintains
little headroom under the days cash on hand covenant under bank
agreement which increases the possibility of acceleration risk
by the liquidity provider in the event the covenant falls below
the minimum requirement
* Continued large outpatient surgery volume declines due to
increased competition from physician-owned ambulatory surgery
centers that have opened in the market; outpatient surgery
volume declined by a material 16% in FY 2008
* History of modest operating performance (FY 2008 is the sixth
consecutive year of posting an operating loss before investment
income) and cash flow generation that has inadequately offset
annual debt service requirements and resulted in weak coverage
levels
* Leveraged balance sheet measured by weak cash-to-debt of 33% and
debt-to-cash flow a high 8.85 times in FY 2008
Recent Developments/Results
SMC's current debt structure includes 24% of variable rate demand
debt supported by a letter of credit agreement with TD Bank, N.A.
(expires August 7, 2013), which exposes the organization to
renewal and acceleration risk. Under the LOC agreement, SMC is
required to maintain financial covenants including days cash on
hand (no less than 50 days measured semiannually) and debt service
coverage (minimum 1.1 times measured semiannually). As of
April 30, 2009, SMC maintains debt service coverage ratio of 1.4
times and maintains very little headroom under the required
liquidity covenant with 53 days cash on hand (based on
calculations defined under the LOC). However, the debt service
ratio coverage of 1.1 times conforms to the requirements under the
Section 6.05 of the 1994 loan agreement. The institution would
still be in compliance if the ratio fell below 1.0 times for two
consecutive fiscal years but complied with the requirement to
engage a consultant and implement the consultant's
recommendations. The potential for not meeting the liquidity
covenant is a credit concern given the minimal liquidity cushion
that currently exists, and emphasizes the need to maintain
liquidity and operating performance at least to current levels
over the intermediate term. Although, SMC's cash-to-puttable debt
is sufficient at 136% (as of April 30, 2009), the limited headroom
under the required liquidity covenant coupled with the potential
risk of acceleration by the liquidity provider in the event of a
covenant violation reflects the negative rating outlook in the
near term.
Moody's views favorably SMC's recent trend of improved operating
performance and expects performance to continue to improve and be
sustained in order to improve liquidity and debt coverage
measures. Following a large operating deficit in FY 2007, SMC
posted a sizable improvement in FY 2008 with a smaller operating
loss of $1.5 million (-0.6% margin before net investment income of
$2.5 million) from a larger $9.5 million (-4.2% margin before net
investment income of $2.3 million) operating loss in FY 2007.
Operating cash flow generation increased to a stronger
$16.7 million (6.7% margin) in FY 2008 from $10.1 million (4.5%
margin) in FY 2007. Despite declines in inpatient admissions and
continued large declines in outpatient surgical volumes, the
improved performance was attributed to favorable managed care
reimbursement contracts, cost reduction strategies including a
workforce reduction of 47 FTEs in late FY 2007 and volume growth
for profitable outpatient visit services including radiation
therapy, mammograhies, and infusion services from the expansion of
services at its Cancer Center. SMC also opened a "one stop"
cancer center boutique for patients in September 2008 and acquired
a second linear accelerator with stereotactic radiosurgery
capabilities in October 2008. Management also continues to focus
on cost-containment strategies and has engaged a consultant to
evaluate various initiatives including supply chain management and
evaluation of service lines. SMC also expects to receive sizable
rate increases under managed care contracts in FY 2010.
Volume declines continued in FY 2008 for both inpatient admissions
(1.0% decline) and outpatient surgical volumes (15.5% decline)
compared to the prior year. Management attributed the declines in
admissions to the weaker economy and continued competition from
physician-owned surgery centers that opened in the market for the
decline in outpatient surgical volumes surgery center, including a
surgery center that opened in FY 2008 by SMC's neurosurgeons,
orthopedists, and ENT physicians. However, through 4-months FY
2009, volume trends are more favorable with an increase in
admissions of 1.8% primarily due to the closure of Muhlenberg
Regional Medical Center in August 2008 and recruitment of
approximately 50 physicians from MRMC. Through 4-months of FY
2009, SMC has generated 262 or 24% increase in admissions from its
secondary service area where MRMC was located and is anticipating
SMC will exceed the 500 new admissions budgeted from the closure.
SMC also hired an executive from MRMC, who has significant
familiarity with the Muhlenberg market. As a result, through the
first 4-months of FY 2009, SMC is generating break-even operating
performance with operating income of $227,000 (0.3% margin before
net investment income of $300,000) and $5.6 million (6.5% margin)
operating cash flow. Additionally, a new New Jersey law that
prevents the future construction of free standing surgical
centers, should limit additional competition for outpatient
surgical volume and reduce further reductions in outpatient
surgical volume and revenue.
Relative to operating performance and the balance sheet, SMC is
highly leveraged. Due to improved cash flow generation in FY
2008, debt coverage levels improved with debt-to-cash flow
measuring a still high 8.9 times and Moody's adjusted maximum
annual debt service coverage measuring an improved 1.58 times
compared to an unfavorably high 26.2 times debt-to-cash flow and
less than one times MADS coverage of 0.99 times in FY 2007. MADS
is expected to decline over the next two years as SMC's three
capital loans (approximately $9.5 million outstanding) will be
fully paid by FY 2011 and annual debt service is reduced.
The sale of SMC's cancer center had a positive impact on the
balance sheet. SMC sold the cancer center property in a sale-
leaseback transaction for approximately $25 million to a health
care REIT, and used the proceeds of the sale to reduce debt by
$15 million and add approximately $10 million to unrestricted cash
to SMC's balance sheet in FY 2008. As a result, unrestricted cash
and investments increased to $38.2 million (59 days cash on hand)
at FYE 2008 from $26.4 million (44 days cash on hand) at FYE 2007.
Due to SMC's relatively high debt load relative to its liquidity
position, cash-to-debt ratio is improved, but still remains very
weak at 33% in FY 2008 from 20% in FY 2007. The operating lease
for the cancer center is a total of $37 million which equates to
approximately 23% of total debt, and adds annual rental payments
of approximately $2.0 million over 18 years. With the inclusion
of the Cancer Center lease, SMC currently has off-balance sheet
operating leases totaling a sizable $43 million. Including this
debt, Moody's adjusted debt measures result in debt service
coverage of 1.3 times and 26% cash-to-debt for FY2008.
As of April 30, 2009, unrestricted cash declined slightly to
$35.2 million due a third payroll distribution at the end of the
month, resulting in 52 days cash on hand and 31% cash-to-debt.
SMC adheres to a relatively conservative investment policy that
helps to preserve liquidity in the current market environment,
with investments primarily in fixed income securities (67%) and
cash (33%) with concentration among five fund managers.
Outlook
The rating outlook remains negative in spite of the recent trend
of improved operating performance and volume growth as it reflects
the continued low liquidity position and the increased risk of
acceleration by the liquidity provider in the event of a financial
covenant violation under the bank agreement given the limited
headroom maintained by current financial performance.
What could change the rating-UP
Growth and stability of inpatient and outpatient volume; continued
trend of improved operating performance and ability to sustain
improved levels in the near term, material improvement in debt
coverage and liquidity measures
What could change the rating-DOWN
Further declines in volumes; sustained declined in operating
performance, weakening of liquidity balance, significant
unexpected debt issuance without commensurate increase in cash and
cash flow generation
Key Indicators
Assumptions & Adjustments:
-- Based on financial statements for Somerset Medical Center
-- First number reflects audit year ended December 31, 2007
-- Second number reflects audit year December 31, 2008
-- Investment returns normalized at 6% unless otherwise noted
* Inpatient admissions: 15,868; 15,709
* Total operating revenues: $225 million; $249 million
* Moody's-adjusted net revenue available for debt service: $12.1
million; $19.1 million
* Total debt outstanding: $136.1 million; $115.3 million
* Maximum annual debt service (MADS): $12.1 million; $12.1 million
* MADS Coverage with reported investment income: 1.02 times; 1.58
times
* Moody's-adjusted MADS Coverage with normalized investment
income: 0.99 times; 1.58 times
* Debt-to-cash flow: 26.19 times; 8.85 times
* Days cash on hand: 43.7 days; 58.5 days
* Cash-to-debt: 19.5%; 33.2%
* Operating margin: (4.2)%; (0.6)%
* Operating cash flow margin: 4.5%; 6.7%
Rated Debt (debt outstanding as of March 31, 2009):
* Series 2003 (fixed rate) ($81.3 million outstanding), Ba2 rated
The last rating action was on July 31, 2008, when Somerset Medical
Center's Ba2 bond rating was affirmed and outlook remained
negative.
SOUTHERN STATES: Holder's Consent Won't Affect Moody's 'B1' Rating
------------------------------------------------------------------
Moody's Investors Service said Southern States Cooperative, Inc.
announcement that it has received consents from approximately 94%
of the holders of its $87.1 million Senior Notes does not affect
the company's B1 rating or stable outlook. The consent will,
among other things, extended the maturity date of these notes from
November 1, 2010, to November 1, 2011.
The last rating action Southern States was on October 23, 2008,
when the company's Corporate Family Rating was upgraded to B1 from
B2 and a stable outlook was assigned.
Headquartered in Richmond, Virginia, Southern States Cooperative,
Inc., is a retailer and wholesale supplier of a diversified array
of agricultural products and services, such as fertilizer, seed,
crop protectants, animal feed, petroleum, and farm and home
supplies.
SPECTRUM BRANDS: Five Parties Object to Plan Confirmation
---------------------------------------------------------
Five parties-in-interest in Spectrum Brands, Inc., and its debtor-
affiliates' Chapter 11 cases stepped in to stop the confirmation
of the Debtors' Joint Plan of Reorganization:
(a) U.S. Trustee for Region 7,
(b) the Official Committee of Equity Security Holders,
(c) Senior Secured Lenders,
(d) Cascade Investment, L.L.C., and
(e) iStar CTL-Corporate Drive - Dixon LLC
(a) U.S. Trustee
Charles F. McVay, the U.S. Trustee for Region 7, objects in part
to the provisions in the Plan providing for release, injunction
or exculpation of the Debtors and non-debtor parties, including
officers, directors, and noteholders. The U.S. Trustee is not
asserting that certain release, injunction and exculpation
provisions per se are impermissible; however, the U.S. Trustee
submits that the requested release, injunction and exculpation
provisions are too broad.
For example, the U.S. Trustee points out, Section 10.10 appears
to permanently enjoins actions against the Debtors' "respective
subsidiaries." The term "subsidiaries" is not defined under the
Plan definitions and may include non-debtor parties. Further,
the exculpation and limitation of liability language contained in
Section 10.11 appears too broad and not restricted to liability
occurring postpetition through the effective date.
The U.S. Trustee asks the U.S. Bankruptcy Court for the Western
District of Texas to deny confirmation of the Plan. In the
alternative, the U.S. Trustee asks the Court to direct the Debtors
to revise the Plan so that the U.S. Trustee's concerns will be
addressed.
(b) Senior Secured Agent
The Senior Secured Agent, as Administrative Agent on behalf of
the Senior Secured Lenders, opposes the confirmation of the
Debtors' Plan because its confirmation would "violate" specific
provisions under Section 1129 of the Bankruptcy Code, which
specifically regulates the confirmation of plans.
The Senior Secured Agent complains that the Debtors have failed
to comply with the Chapter 11 provisions governing the payment of
professional fees and costs. Specifically, Section 10.2(a) of
the Joint Plan contemplates the payment of the Noteholder Group's
attorneys' and financial advisory fees and costs without
application to the Court, without demonstration that the
"substantial contribution" requirements are satisfied, and
without Court approval. The Senior Secured Agent asserts that no
provision of the Bankruptcy Code permits the Debtors to pay the
attorneys' and other professional advisory fees and expenses
incurred by unsecured creditors unless those creditors have
demonstrated to the Court a "substantial contribution."
The Debtors have also failed to demonstrate that the Joint Plan
meets the requirements of Section 1129(a)(5), which requires
disclosure of the identity and affiliations of the individuals
proposed to serve as directors of the reorganized Debtors, and
that the appointment or continuance in office of those
individuals is consistent with the interests of creditors and
with public policy, the Senior Secured Agent asserts. Unless
that disclosure and the required showing under Section 1129(a)(5)
are made, the Joint Plan cannot be confirmed, the Senior Secured
Agent further asserts.
Moreover, the Senior Secured Agent argues that confirmation of
the Joint Plan is improper because the requirements of Section
1129(a)(8) have not been satisfied. Assuming that Class 2 votes
to reject the Joint Plan, then not all impaired classes of claims
have accepted the Joint Plan, the Senior Secured Agent contends.
(c) Cascade Investment
Cascade Investment, L.L.C., the beneficial holder of
approximately $34,500,000 in notes issued by Spectrum Brands,
complains that the Plan's terms related to the Equity Fee are
inconsistent with the Court's Final DIP Order and that
inconsistency leaves the Plan non-compliant with the applicable
provisions of the Bankruptcy Code and proposed by means forbidden
by law.
The Plan, according to Cascade, would be unconfirmable through
cramdown because it would fail to meet several requirements of
Section 1129
(d) iStar CTL
iStar CTL, a lessor of a non-residential real property occupied
by the Debtors located in Lee County Business Park in Lee County,
Illinois, disagrees with the Plan provisions that contemplates
that if the Debtors reject a previously assumed executory
contract or unexpired lease, the counterparty's damages will give
rise to a Rejection Damages Claim, which the Plan treats as a
General Unsecured Claim.
That provision, iStar CTL asserts, contravenes Section 503(b)(7)
with respect to a non-residential real property lease. In light
of this, iStar asks the Court to have Section 6.7(a)(ii) of the
Plan contain the qualifier "except as provided in Section
503(b)(7) of the Bankruptcy Code."
(e) Equity Committee
The Official Committee of Equity Security Holders' objection to
the Plan confirmation objection is filed under seal.
Plan is Feasible, Debtors Assert
The ostensible basis for the Term Lenders' objection is that
there are numerous purported technical defaults, which cannot be
cured and therefore preclude reinstatement. In truth, the
Debtors argue, the reinstatement objections are a side show
disguising the Term Lenders' real agenda: to extract a better
deal for themselves by more than tripling the interest rate on
the current Term Loan from the variable interest rate provided
for in the Credit Agreement, which currently is approximately
4.7% to an interest rate of 15% to 18%.
By the Term Lenders' own admission, the increased cost of the
exorbitant rate to the Debtors -- an additional $134-$172 million
in cash interest payments per year -- will eat up more than the
$100 million annual cash savings created under the Plan, Mark A.
McDermott, Esq., at Skadden, Arps, Slate & Meager & Flom LLP, in
New York, tells the Court.
The Debtors maintain that they have a reasonable probability of
meeting their projections and they will have sufficient liquidity
to emerge from Chapter 11 and implement the Plan.
The Debtors project their revenues to increase from $2.254 to
$2.545 billion between 2009 and 2013; EBITDA to increase from
approximately $305 to $374 million; and net income to increase
from $30 to $135 million during the same period. The Debtors
will have sufficient cash liquidity at the end of each year,
ranging from $60 million in cash in fiscal 2009 to no less than
$50 million in each of the following four fiscal years.
These projections result in part from the effects of the de-
leveraging transaction contemplated by the Plan, which will free
up approximately $100 million in annual cash flow that otherwise
would have been utilized to service the Notes, Mr. McDermott
points out. As Kent Hussey, the Debtors' Chief Executive
Officer, will testify during the Confirmation Hearing, the
Debtors' service obligations on the Notes consumed virtually all
of the Debtors' free cash flow, and were a key precipitating
factor that led to the filing of the chapter 11 cases, Mr.
McDermott relates.
The Debtors' projected results also reflect their prepetition
decision to shut down the Fertilizer and Growing Business, which
consistently sustained losses, consumed large amounts of working
capital, and whose seasonality made the process of projecting
companywide results more challenging, Mr. McDermott adds.
The Debtors will have sufficient sources of cash to fund all
their anticipated cash needs upon emergence, while also affording
ample cushion for their post-emergence operations, Mr. McDermott
assures the Court. In particular, the Debtors expect to have a
commitment, prior to the confirmation hearing, for an exit
financing facility that will, along with the Debtors' cash
resources, allow for sufficient borrowings to pay off the
outstanding balance of their debtor-in-possession financing
facility, lease rejection costs, and professional fees, related
expenses and other claims. After payment of these amounts, there
will be additional availability under the exit facility in
amounts consistent with the Debtors' historic liquidity needs.
Mr. McDermott points out that the Plan removes the single most
significant burden facing the Debtors by eliminating $800 million
of debt, thus freeing up $100 million in cash flow that can be
used to build and grow the company rather than pay interest on
its current overwhelming debt load. He adds that it is an
axiomatic principle of Chapter 11 that creditors cannot be put in
a better position than they were prepetition.
The Plan complies with Section 1129(a) of the Bankruptcy Code and
should be confirmed, the Debtors maintain. In the event the
Court declines to confirm the Plan, the Plan should be confirmed
under Section 1129(b)'s cramdown provision. In either case, the
Term Lenders' objections should be overruled, the Debtors assert.
The Debtors also filed a response to the Equity Committee's
Confirmation Objection but the response was filed under seal
pursuant to a Court-approved protective order.
Judge Ronald B. King of the United States District Court for the
Western District of Texas, San Antonio Division, will convene a
hearing on June 15, 2009, at 10:00 a.m. Central Time, to consider
confirmation of the Debtors' Plan.
The Confirmation Hearing will continue to June 16 at 9:30 a.m.
Central Time, June 22 at 10:00 a.m. Central Time, June 23 at 9:30
a.m. Central Time, and June 24 at 9:30 a.m. Central Time, as
necessary.
The Debtors, intending to streamline the issues to be heard at
the Confirmation Hearing, asked the Court to facilitate an
expedited Pretrial Conference.
Mr. McDermott asserts that a pretrial conference will benefit the
parties and the Court by allowing them the opportunity to discuss
ways to streamline the hearing process and make the most
judicious use of the Court's time. Furthermore, an expedited
pretrial conference will allow the parties to resolve as many
issues as possible in advance, Mr. McDermott avers.
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)
SPECTRUM BRANDS: Seeks to Sell Orville Assets for $1.3 Million
--------------------------------------------------------------
Spectrum Brands Inc. and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the Western District of Texas to
dispose of real and personal property interests with respect to
their facilities located in Orville, Ohio.
Specifically, the Debtors seek the Court's authority to sell the
Orville Assets, free and clear of all claims, liens, interests or
other encumbrances, substantially in accordance with the Term
Sheet to The Scotts Company LLC for approximately $1,360,000.
The Debtors also ask the Court for authority to reject three
unexpired leases of non residential real property related to the
Orville Assets:
Damage
Rejection Claim
Name Landlord Date Amount
---- -------- --------- ---------
Orville I Insite Orville, LLC 06/30/09 $854,914
Orville II Insite Orville (Schrock) 07/31/09 3,756,571
Orville III Insite Orville (Crown) 06/30/09 368,025
The Debtors seek the Court's authority to abandon to the
Landlords all Abandoned Property on the Applicable Rejection Date
and to authorize the Landlords, in their sole discretion and
without further notice, to dispose of Abandoned Property without
liability to the Debtors or any third parties claiming interest
in the Abandoned Property.
Furthermore, the Debtors ask the Court to allow for all purposes,
the Landlords' damage claims for the three leases. In addition,
the Debtors sought the Court's approval of their intent to pay
Landlord for the Orrville III Lease allowed administrative claim
of $50,000 in full satisfaction of all claims against the Debtors
that arose after the Petition Date and prior to the Applicable
Rejection Dates. This will be paid within 10 days after the
Motion is granted.
The Debtors assure the Court that they will remain current on the
Leases as to their monthly recurring lease obligations.
D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in
New York, narrates that in mid-November 2008, the Debtors
determined to shut down their fertilizer and growing media
business. From December 2001 through April 2009, the FGM
Business had sold fertilizers, enriched soils, mulch and grass
seed to customers like as Lowe's, Wal*Mart and The Home Depot.
The Orrville Properties, which consist of the three properties,
are part of the FGM Business. The Debtors formerly utilized the
Orrville Properties for fertilizer production, growing media
production, or regional distribution of FGM Business products.
The Debtors have determined that the Orrville Properties are no
longer necessary for their operations.
The Debtors recognized that their best hope of selling the
Orrville Assets rested in finding a replacement lessee for the
Orrville Properties who would use the properties for a purpose
similar to the one for which the Debtors utilized them and would,
thus, have a need for the Orrville Assets.
After significant inquiry and diligence including meeting with
the management of top fertilizer and growing media producers, the
Debtors determined that Scotts was the only market participant
that would have those needs.
Against this backdrop, the Debtors approached Scotts to gauge
their interest in not only leasing the Orrville Properties from
the Landlords but also purchasing the Orrville Assets. After
engaging in extensive, arms-length negotiations, the Debtors
ultimately reached an agreement to sell the Orrville Assets to
Scotts on the terms set forth in the term sheet.
Scotts and the Debtors have agreed, wherein Scotts would purchase
the Assets from the Debtors for a price of approximately
$1,360,000. Significantly, if the Contingencies are satisfied,
the Orrville Assets will remain at the Orrville Properties and
Scotts will enter into new leases with the Landlords to lease the
Orrville Properties once the Debtors vacate the properties.
Additionally, the Debtors have determined to abandon any other
property located at the Orrville Properties once the assets are
sold because these are either of inconsequential value or the
cost of removing and storing the property exceeds its value to
the Debtors' estates, Mr. Baker relates.
According to Mr. Baker, the Debtors believe they can sell the
Orrville Property free and clear of claims, liens and interest
because they have met the requirements pursuant to Section 363(f)
of the Bankruptcy Code by satisfying at least one of these
conditions:
-- applicable non-bankruptcy law permits the sale of the
property free and clear of interest;
-- the entity consents;
-- the interest is a lien and the price at which the
property is to be sold is greater than the aggregate value
of all liens on the property;
-- the interest is in bona fide dispute; or
-- the entity could be compelled, in a legal or equitable
proceeding, to accept a money satisfaction of the
interest.
The Debtors propose that the liens on the Assets be attached to
the net proceeds from the sale of the assets, subject to any
claims and defenses that the Debtors may possess with respect to
the sale.
The Court will convene a hearing to consider approval of the
Debtors' request on June 11, 2009.
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)
SPECTRUM BRANDS: Seeks to Sell Livingston Assets for $1.1 Million
-----------------------------------------------------------------
Spectrum Brands Inc. and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the Western District of Texas to
sell certain real and personal property located at 1349 State
Highway, Loop 116, in Livingston, Texas for $1,149,000, free and
clear of liens, claims interests or encumbrances, to Hope Agri
Products, Inc.
The Property is part of the Debtors' fertilizer and growing media
business, which they decided to shut down in mid-November 2008.
Because of that decision, the Debtors determined that the
Livingston Plant was no longer necessary for their operations and
that it made good business sense to lease the facility.
According to D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, in New York, Hope Agri is the only entity to express
interest in the Livingston Property. After engaging in
extensive, arms-length negotiations, the Debtors ultimately
reached agreement to sell the Assets to Hope Agri pursuant to the
terms of a purchase and sale agreement.
The Debtors seek permission to assume, on modified terms, the
letter agreement between the Debtors and Hope Agri dated
November 18, 2008, with respect to the transition of certain
elements of the Debtors' soil business to Hope Agri.
The Debtors also seek permission from the Court to assume certain
nonresidential real property leases with respect the "Swilley
Property," a 20-acre land-and-warehouse facility the Debtors
lease for storage of bulk materials for use in the FGM business.
The Swilley Property is adjacent to the Livingston Plant and the
Debtors intend to assign them to Hope Agri.
Under the terms of the purchase agreement, the Debtors and Hope
Agri agreed to eliminate provisions in the Transition Agreement,
which is no longer in the Debtors' best interest. The Transition
Agreement provides that Hope Agri would hire 100% of the
employees at the Livingston Plant and that, if Hope Agri should
terminate the employees, the Debtors would be obligated to
reimburse Hope Agri for any severance payments due to these
employees. Hope Agri said it would not agree to purchase the
Assets and modify the Severance Provision without the Debtors'
willingness to continue to honor the other terms of the
Transition Agreement and, thus, rejection of the Transition
Agreement is not an option, Mr. Baker clarifies.
Furthermore, Hope Agri has indicated that it wanted to utilize
the Livingston Plant and Swilley Property during this year's
growing season. Accordingly, Hope Agri insisted that the sale be
consummated no later than July 1, 2009.
In light of these, the Debtors contend that if the sales of the
Assets and the assumption and assignment of the Swilley Lease to
Hope Agri cannot be effectuated on the proposed timeline, the
Debtors (a) may be unable to sell the Equipment at any price
because of the impracticability of removing those Assets from the
Livingston Plant, and (b) the Debtors will only be able to sell
the Real Property as raw land at a significantly lower price.
Pursuant to Section 363(f) of the Bankruptcy Code, the Debtors
can sell the assets free and clear of liens, claims and
encumbrances because it has satisfied at least one of these
conditions:
-- applicable non-bankruptcy law permits sale of the property
free and clear of such interest;
-- the entity consents;
-- the interest is a lien and the price at which such
property is to be sold is greater than the aggregate value
of all liens on such property;
-- the interest is in bona fide dispute; or
-- the entity could be compelled, in a legal or equitable
proceeding, to accept a money satisfaction of that
interest.
Mr. Baker assures the Court that any party asserting Interests in
the Assets will be protected by having those Interests attach to
the net proceeds of the sale, subject to any claims and defenses
the Debtors may possess with respect to those claims, liens or
encumbrances.
A full-text copy of the Purchase and Sale Agreement is available
for free at http://bankrupt.com/misc/Spectrum_Livingston_PSA.pdf
The Court will convene a hearing to consider approval of the
requests on June 11, 2009.
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)
SPECTRUM BRANDS: 19 Trade Creditors Sell Claims Totaling $255,000+
------------------------------------------------------------------
Nineteen trade creditors in Spectrum Brands Inc. and its debtor-
affiliates' Chapter 11 cases transferred claims totaling more than
$255,000 to:
(a) Fair Harbor Capital, LLC:
Transferor Claim Amount
---------- ------------
Certified Laboratories $33,700
The Budd Group 21,355
Exegetics Inc. 19,912
MRC Polymers, Inc. 19,089
Lee Hartman & Sons 15,108
Integrated Biopharma 12,843
Green Leaf Co. 3,033
The Sater Group 2,591
Fedex Trade Networks Transport 1,733
MST 798
(b) US Debt Recovery LLC:
Transferor Claim Amount
---------- ------------
TBM Consulting Group, Inc. $115,203
Sauk valley Community College 1,370
Waters Edge 500
Intertech Precision Ltd. 106
(c) Fair Liquidity, LLC:
Transferor Claim Amount
---------- ------------
Amerisweep $1,105
Hithching Post Restaurant and Catering 2,889
John A. Jurgiel & Associates Inc. 1,673
Midwest Laboratories Inc. 3,137
(d) Creditor Liquidity, L.P.:
Transferor Claim Amount
---------- ------------
Easy Gardener Products $9,549
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)
STEWART ENTERPRISES: Moody's Withdraws Rating on $125 Mil. Loan
---------------------------------------------------------------
Moody's Investors Service withdrew the Baa3 rating on the
$125 million revolving credit facility due 2009 of Stewart
Enterprises, Inc. Stewart entered into a new $95 million
revolving credit facility due 2012 (not rated by Moody's) which
replaced the existing $125 million revolving credit facility.
The last rating action on Stewart was on June 21, 2007, at which
time Moody's affirmed the Ba3 Corporate Family Rating and assigned
a Ba3 rating to $250 million of convertible notes.
Stewart is the second largest provider of funeral and cemetery
products and services in the death care industry in the United
States.
SUNSTONE HOTEL: Will Give Up W Hotel San Diego to Lenders
---------------------------------------------------------
Kris Hudson at The Wall Street Journal reports that Sunstone Hotel
Investors Inc. will give up its W Hotel San Diego to lenders.
On May 20, 2009, the Company amended its exchangeable notes
indenture to provide that defaults by its subsidiaries on non-
recourse indebtedness less than $300.0 million wouldn't result in
an acceleration of its exchangeable notes prior to maturity. This
amendment was specifically aimed at improving the Company's
ability to manage its secured debt portfolio in the context of the
inherent inflexibilities of commercial mortgage backed securities
or CMBS debt.
As a consequence of significant and continuing deterioration in
demand for luxury lodging and the introduction of numerous new
competitive hotels in the San Diego market, including a number of
luxury boutique hotels, two additional Starwood-branded hotels and
a 1,190-room convention hotel, the operations of the Company's W
Hotel San Diego have declined materially. In the Company's
estimation, the hotel's operations have been permanently impaired.
The hotel is currently forecasting 2009 EBITDA of between $1.8 and
$2.2 million.
The hotel is encumbered by a $65.0 million, fixed-rate CMBS
mortgage that bears an interest rate of 6.14%. The mortgage
matures January 1, 2018, and is non-recourse to the Company.
Scheduled 2009 debt service on the mortgage is approximately
$4.0 million. The principal amount of the mortgage equates to
more than 30-times the hotel's 2009 forecasted EBITDA, and more
than $250,000 in debt per room.
Over the last several months, the Company has attempted to work
with the hotel's CMBS special servicer to amend the terms of the
mortgage to provide for a reduction in current interest payments.
The special servicer has recently declined the Company's proposed
modifications. As a result, the Company has elected not to make
the June 1 debt service payment on the hotel's mortgage. At this
point, the Company does not expect further negotiation with the
special servicer, and the Company is prepared to convey the hotel
to the lender in lieu of repayment.
While the Company's elective default of the W Hotel San Diego
mortgage was precipitated by a number of unique, market and hotel-
specific factors, in the future other factors may lead the Company
to pursue similar options with certain of its other mortgaged
hotels. The Company believes such cases will be limited in number
Sunstone Hotel Chief Financial Officer Ken Cruse stated, "As a
result of negative supply and demand fundamentals in the San Diego
market, we believe the intrinsic value of the W San Diego is now
meaningfully below the principal amount of its debt. While the
Company maintains more than adequate liquidity to support or repay
this mortgage, we believe a conveyance of this hotel in settlement
of the debt would be in the best interest of our stockholders as
it would deleverage the Company, and would be accretive to both
the Company's FFO per share and credit profile."
WSJ relates that the special servicer recently hired law firm
Perkins Coie LLP and industry consultant Prism Hotels & Resorts,
which has managed foreclosed hotels and overseen others as a
court-appointed receiver, to assist it in regard to the W Hotel
San Diego. Citing Sunstone Hotel, WSJ states that the W Hotel San
Diego could be much less than the $65 million balance on its
mortgage.
According to WSJ, Green Street Advisors Inc. analyst John Arabia
said that Sunstone Hotel would do well for its shareholders by
cutting its losses and turning over the hotel to its lenders.
Preliminary Operations Update Through May 31, 2009:
* May total portfolio RevPAR was $98.91, down 24.4% to prior
year.
* Quarter-to-date total portfolio RevPAR was $98.73, down
24.5% to prior year.
* Year-to-date total portfolio RevPAR was $97.53, down 19.6%
to prior year.
Arthur Buser, President and Chief Executive Officer, stated, "We
continue to run our business with the expectation that 2009 will
be one of the deepest cyclical troughs the lodging industry has
endured. We have used this cyclical decline as an opportunity to
implement permanent improvements to our hotel-level operating
models. Specifically, we have asked our operators to do as we
have done at our corporate office -- develop "zero-based" budgets
and adjust staffing models for minimum business levels. While we
are generally pleased with our results thus far this year, as our
recent revenue declines are largely the result of lower rate,
rather than reduced occupancy, we expect margin control will
become increasingly difficult. On the finance side, we have
continued to execute on a comprehensive finance plan designed to
reduce corporate risk and increase financial flexibility."
Finance Update
Year-to-date the Company has repurchased $187.5 million of its
exchangeable senior notes at a 36.4% weighted average discount to
par resulting in $70.7 million of value creation and a blended
yield to put of 20.3%; issued common equity for net proceeds of
$99.1 million; sold the Marriott Napa for $36.0 million; and
amended its exchangeable notes indenture to provide for added
flexibility in managing its secured debt. By executing on these
transactions, the Company has achieved four critical objectives:
* Addressed its expected capital needs through 2014;
* Deleveraged its capital structure;
* Enhanced its liquidity (to more than $180.0 million in
unrestricted cash); and
* Improved its ability to manage its secured debt portfolio.
Credit Facility Amendment
The Company also expects to close on an amendment to its revolving
credit facility by the end of the second quarter.
Sunstone Hotel Investors, Inc. -- http://www.sunstonehotels.com/-
- is a lodging real estate investment trust that has interests in
44 hotels comprised of 15,029 rooms primarily in the upper-upscale
segment operated under nationally recognized brands, such as
Marriott, Hilton, Hyatt, Fairmont and Starwood.
As of December 31, 2008, Sunstone Hotel Investors had total
assets of $2.80 billion in assets, $1.71 billion in debt, and
$898.3 million in equity. For 2008, the company reported net
income of $74.7 million on total revenues of $969.2 million.
At December 31, 2008, Sunstone Hotel Investors reported total
assets of $3.05 billion, total liabilities of $1.86 billion, and
stockholders' equity of $1.09 billion. Net income was
$125.7 million on $961.7 million in total revenues.
SYMMETRICAL STAIR: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------------
Paul Brinkmann at South Florida Business Journal reports that
Symmetrical Stair, Inc., and its owner, Alphonso J. Cheponis III,
have filed for Chapter 11 bankruptcy protection in the U.S.
Bankruptcy Court for the Southern District of Florida, due to the
declining housing market.
According to court documents, Symmetrical Stair listed less than
$500,000 in assets and $1 million to $10 million in liabilities.
Court documents say that Mr. Cheponis also listed less than
$500,000 in assets and $1 million to $10 million in liabilities.
Business Journal relates that Symmetrical Stair's largest
creditors include:
-- SunTrust Bank, which holds a $1 million secured claim;
-- Sample at Park Central, which holds an unsecured claim of
$33,600; and
-- Doolittle & Burroughs law firm, owed $17,000.
Mr. Cheponis listed a disputed claim of $450,000 by Mindy Discala
of Delray Beach as an "equitable distribution couched as an
alimony payment," says Business Journal.
Business Journal relates that David Merrill, Esq., at Shapiro,
Blasi, Wasserman & Gora represents Mr. Cheponis and Symmetrical
Stair.
Pompano Beach, Florida-based Symmetrical Stair, Inc., makes
staircases.
T. GAY INVESTMENTS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: T. Gay Investments, LLC.
dba Volvo Rents - Columbus
dba Volvo Rents - Americus
6247 West Hamilton Park Drive
Columbus, GA 31909
Bankruptcy Case No.: 09-40690
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Middle District of Georgia (Columbus)
Judge: John T. Laney III
Debtor's Counsel: Anna M. Humnicky, Esq.
Cohen Pollock Merlin & Small, PC
3350 Riverwood Parkway, Suite 1600
Atlanta, GA 30339
Tel: (770) 857-4770
Fax: (770) 857-4771
Email: ahumnicky@cpmas.com
Gus H. Small, Esq.
Cohen Pollock Merlin & Small, PC
3350 Riverwood Parkway, Suite 1600
Atlanta, GA 30339
Tel: (770) 857-4806
Fax: (770) 857-4807
Email: gsmall@cpmas.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/gamb09-40690.pdf
The petition was signed by Tracy Gay.
TEEKAY CORP: S&P Affirms 'BB' Long-Term Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its ratings,
including the 'BB' long-term corporate credit rating, on
Vancouver-based Teekay Corp. The outlook is stable.
S&P bases the affirmation on what S&P view as Teekay's
satisfactory business risk and aggressive financial risk profiles.
"We assess Teekay's financial risk profile as aggressive due to
debt-financed growth and the company's material, albeit reducing,
exposure in the volatile spot tanker market," said Standard &
Poor's credit analyst Greg Pau. "We believe that a number of
positive factors partially mitigate these risks including Teekay's
market-leading and defendable position in the shuttle tanker
business, increasing revenue contribution from more stable
liquefied gas and offshore segments, improving product offering,
and the higher priority it has given to restoring a more prudent
capital structure," Mr. Pau added.
This increasingly aggressive financial risk profile in the past
few years is a key constraint to the ratings on Teekay. As the
company executed its strategy to become a full-range service
provider to the midstream oil and gas industry, its growth was
largely debt-financed. While S&P recognizes that this strategy
could ultimately improve the company's market position and cash
flow stability in the medium term, it has also resulted in rapid
deterioration in its financial risk profile.
The stable outlook reflects what Standard & Poor's views as
Teekay's strengthened product offering and market positions,
although S&P considers the company's current financial risk
profile to be weak for the ratings. To maintain the ratings, S&P
expects Teekay to continue deleveraging over time, while improving
its cash flow stability through growth in the more stable fixed-
rate contracted business. Under the current weak market
conditions, S&P expects the company to maintain financial measures
similar to their current levels, with adjusted debt to EBITDA of
6x and adjusted funds from operations to debt of 17%. When market
conditions become more favorable, S&P expects further improvement
toward S&P's expectation that debt to EBITDA would fall below 5x
and FFO to debt would exceed 20%. S&P could revise the ratings or
outlook downward if the company's financial risk profile falls
materially short of the aforementioned targets. S&P is unlikely to
revise the ratings or outlook upward in the near term under
current market conditions. S&P could consider such an action if
the company improves its adjusted debt to EBITDA to below 4.5x and
adjusted FFO to debt to above 30%, while it maintains its strong
market positions and reduces its exposure to the spot tanker
business.
TIMOTHY M. SULLIVAN: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Timothy M. Sullivan
35091 Paxson Road
Round Hill, VA 20141
Bankruptcy Case No.: 09-14507
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Stephen S. Mitchell
Debtor's Counsel: Spencer D. Ault, Esq.
Law Office of Spencer D. Ault
13193 Mountain Road
Lovettsville, VA 20180
Tel: (703) 777-7800
Fax: (540) 822-3880
Email: Spencer@Aultlawyer.com
Total Assets: $2,018,050
Total Debts: $1,128,757
A full-text copy of Mr. Sullivan's petition, including a list of
his 2 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/vaeb09-14507.pdf
The petition was signed by Mr. Sullivan.
TOMMY D'S HOME: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Tommy D's Home Improvement Center, Inc.
dba Tommy D's Home Improvement Surplus
2600 Tioga Avenue
Philadelphia, PA 19134
Bankruptcy Case No.: 09-14187
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Bruce I. Fox
Debtor's Counsel: David H. Lang, Esq.
Michael FX Gillin and Assoc. PC
230 North Monroe Street
Media, PA 19063
Tel: (610) 565-2211
Fax: (610) 565-1846
Email: dlang@gillinlawoffice.com
Total Assets: $506,000
Total Debts: $2,645,266
A list of the Company's 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/paeb09-14187.pdf
The petition was signed by Thomas Delaney, president of the
Company.
TRAVELPORT HOLDINGS: S&P Downgrades Corp. Credit Rating to 'SD'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
ratings on travel distributor Travelport Holdings Ltd. (the
indirect parent of Travelport LLC), including lowering the long-
term corporate credit rating to 'SD' (selective default) from 'B-
', and the issue-level rating on the company's paid-in-kind loan
to 'D' from 'CCC'.
"The rating actions reflect confidential information that
Travelport Holdings has made available to us regarding the
purchase of its own debt, which has caused us to have a different
view than had been reflected in the previous ratings," said
Standard & Poor's credit analyst Betsy R. Snyder.
TRONOX INC: U.S. Trustee Balks at Key Employee Incentive Plan
-------------------------------------------------------------
U.S. Trustee Roberta A. DeAngelis has objected to the approval of
Tronox Inc.'s key employee incentive plan, accusing the company of
trying to do an end run around a federal law designed to restrict
insider retention bonuses, Bankruptcy Law360 reports.
As reported previously in the Troubled Company Reporter,
executives covered by the incentive program, which includes the
top four officers, are to receive bonuses if the company's
earnings meet targets or projected sales prices are realized.
The key employees, certain of whom are "insider[s]" within the
meaning of Section 101(31), are:
* Dennis L. Wanlass, Interim Chairman of the Tronox Board and
Chief Executive Officer;
* Michael J. Foster, Vice President, General Counsel and
Secretary;
* John D. Romano, Vice President for Sales and Marketing;
* Robert C. Gibney, Vice President for Human Resources and
Corporate Affairs; and
* Non-insider sales and management personnel who, in the
discretion of the Debtors' senior management, deliver
outstanding performance during the Chapter 11 cases.
Under the KEIP, each of the participants is eligible to receive a
specified percentage of cash set aside in an incentive pool. If
profitability-based or asset sale-based targets are met, cash is
allocated to the Incentive Pool. The Incentive Pool is divided
into two tiers. At the first tier, the Incentive Pool is funded
if the Debtors meet an initial set of targets. At the second
tier, additional cash is allocated to the Incentive Pool if the
Debtors meet a second and higher set of targets.
The hearing to consider approval of the KEIP is scheduled for
June 9, 2009, at 11:00 a.m. (Eastern Time).
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)
U.S. BEVERAGE: Files for Chapter 11 Bankruptcy Protection
---------------------------------------------------------
Russell Hubbard at The Birmingham News has filed for Chapter 11
bankruptcy protection in the U.S. Bankruptcy Court for the Middle
District of Alabama.
According to Birmingham News, U.S. Beverage listed $1 million to
$10 million in assets and $1 million to $10 million in debts, with
major creditors that include:
-- CapitalSouth Bancorp, which is owed $240,000;
-- Polygon Leasing, owed $400,000;
-- Supreme Manufacturing, owed $325,000; and
-- Kingdom Capital, owed $150,000.
Max Moseley, at Birmingham's Johnston Barton Proctor & Rose law
firm, said that U.S. Beverage was squeezed hard by fuel prices in
2008, Birmingham News relates.
U.S. Beverage has a restructuring plan in place and expects to
return to profitability, Birmingham News says, citing Mr. Moseley.
The report quoted him as saying, "We don't see any cutbacks. In
fact, we see an expansion coming."
Montgomery, Alabama-based U.S. Beverage, Inc., distributes
products like fruit juice and slushed ice drinks to schools. The
Company has operations in Mississippi and Tennessee, and operated
a fleet of trucks that delivered the products as far away as
neighboring states.
VALLEY NATIONAL: S&P Withdraws 'B' Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services said that it withdrew its
ratings, including its 'B' corporate credit rating, on
Independence, Ohio-based Valley National Gases Inc. at the
company's request.
Basking Ridge, New Jersey-headquartered Matheson Tri-Gas Inc.
acquired Valley National. Matheson Tri-Gas is the largest
subsidiary of global, diversified industrial gas supplier Taiyo
Nippon Sanso Corp. of Japan. S&P no longer has adequate
information to maintain surveillance on the ratings on Valley
National.
VISHAY INTERTECHNOLOGY: S&P Cuts Corp. Credit Rating to 'BB-'
-------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Malvern, Pennsylvania-based Vishay
Intertechnology Inc. to 'BB-' from 'BB' and placed the rating on
CreditWatch with developing implications.
"The downgrade and CreditWatch placement reflect S&P's concerns
that the headroom under the company's fixed-charge coverage
performance covenant may be significantly diminished by the
September quarter," said Standard & Poor's credit analyst Lucy
Patricola. While headroom is ample as of March, Standard & Poor's
expects revenue and profitability to remain at or near levels
generated in the March quarter, resulting in declining EBITDA
measured on a trailing-12-month basis. "By the September
quarter," added Ms. Patricola, "EBITDA generation could be
insufficient to meet the minimum necessary to clear the required
threshold."
W&T OFFSHORE: Moody's Withdraws Shelf Registration Rating
---------------------------------------------------------
Moody's Investors Service withdrew these companies' shelf
registration ratings that were inadvertently assigned and
published. This action does not affect the respective companies'
senior unsecured debt, Corporate Family Rating or other ratings.
The shelf registration ratings withdrawn are for Ferrellgas
Partners, LP, Loews Corporation and W&T Offshore, Inc.
The last rating action for Ferrellgas Partners was on June 25,
2008, when Moody's assigned a Ba3 rating to senior notes issued by
its subsidiary, Ferrellgas, LP. The last rating action on Loews
was on October 27, 2008, when Moody's affirmed the company's A3
senior unsecured ratings. The last rating action on W&T Offshore
was on March 3, 2009 when Moody's downgraded the company's
Corporate Family Rating to B3 from B2 and changed the outlook to
negative.
Loews' ratings were assigned by evaluating factors Moody's believe
are relevant to the credit profile of the issuer, such as i) the
business risk and competitive position of the company versus
others within its industry, ii) the capital structure and
financial risk of the company, iii) the projected performance of
the company over the near to intermediate term, and iv)
management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside of Loews' core industry and Loews' ratings are believed to
be comparable to those of other issuers of similar credit risk.
WESTERN NEW YORK: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Western New York Contractors, Inc.
2511 Browncroft Blvd., Suite 103
Rochester, NY 14625-1513
Bankruptcy Case No.: 09-21530
Chapter 11 Petition Date: June 6, 2009
Court: United States Bankruptcy Court
Western District of New York (Rochester)
Judge: John C. Ninfo II
Debtor's Counsel: Ralph A. Horton, Esq.
1171 Titus Avenue
Rochester, NY 14617
Tel: (585) 338-3770
Email: rah1171@aol.com
Total Assets: $2,619,081
Total Debts: $5,800,589
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/nywb09-21530.pdf
The petition was signed by Robert A. Valerino, president of the
Company.
W.J. RIEGEL & SONS: Case Summary & 16 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: W.J. Riegel & Sons, Inc.
46 Bridge Street
Selkirk, NY 12158
Bankruptcy Case No.: 09-12044
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Northern District of New York (Albany)
Judge: Chief Judge Robert E. Littlefield Jr.
Debtor's Counsel: Richard L. Weisz, Esq.
Hodgson Russ LLP
677 Broadway
Albany, NY 12207
Tel: (518) 465-2333
Email: Rweisz@hodgsonruss.com
Total Assets: $915,839
Total Debts: $1,867,296
A full-text copy of the Debtor's petition, including a list of its
16 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nynb09-12044.pdf
The petition was signed by John C. Riegel, president of the
Company.
WOODY'S ENTERPRISES: Case Summary & 11 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Woody's Enterprises, Inc.
PO Box 610
Grandy, NC 27939
Bankruptcy Case No.: 09-04675
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: Randy D. Doub
Debtor's Counsel: Trawick H. Stubbs, Jr., Esq.
Stubbs & Perdue, P.A.
P.O. Drawer 1654
New Bern, NC 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
Email: efile@stubbsperdue.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
11 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nceb09-04675.pdf
The petition was signed by Larry Woodhouse, president of the
Company.
YOUNG'S INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Young's, Inc.
3121 SE 6th Street
Topeka, KS 66607-2225
Bankruptcy Case No.: 09-40912
Chapter 11 Petition Date: June 5, 2009
Court: United States Bankruptcy Court
District of Kansas (Topeka)
Judge: Janice Miller Karlin
Debtor's Counsel: Tom R. Barnes, II, Esq.
2887 SW MacVicar Ave.
Topeka, KS 66611
Tel: (785) 267-3410
Email: tom@stumbolaw.com
Estimated Assets: $100,001 to $500,000
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/ksb09-40912.pdf
The petition was signed by Melvin J. Copeland, president of the
Company.
* Euler Eyes 35% Hike in Corporate Worldwide Insolvencies for 2009
------------------------------------------------------------------
Credit insurer Euler Hermes is forecasting a 35% increase in
corporate worldwide insolvencies for 2009, after +27% in 2008.
This dramatical rise is the consequence of the financial and
economic crisis.
"In the current recessionary economic environment, we will witness
a sharp worsening of the insolvency trend everywhere in the world,
at least up to the end of 2009. We expect the company's Global
Insolvency Index to rise by 35%, stated Karine Berger, head of
research, Euler Hermes. As for next year, it is unlikely that the
levels of business insolvencies will abate: they may stop rising
in some countries, but the very light winds of recovery we
anticipate will not save many more businesses in 2010 than they
will in 2009."
2008: A Significant 27% Increase in Global Insolvency Index
In its latest International Insolvencies Outlook, which is
published twice a year, Euler Hermes gives a detailed description
of registered and expected business failures for 29 countries.
The Euler Hermes Global Insolvency Index, which reflects the
change in business insolvencies across the globe, rose sharply by
27% in 2008 (against the company's forecast of +25% in the last
edition of Euler Hermes Insolvency Outlook in November 2008). The
trend of acceleration in insolvencies began in 2007 (+4%), due to
a growing number of countries already hit by an increase in
business bankruptcies: the US (+44%), Japan (+6%), France (+6%),
Spain (+3%), Ireland (+3%) and Denmark (+21%). The slowing in the
world economy in the first half of 2008 (in a difficult
environment of exploding commodity prices), and then its abrupt
and violent collapse in the second half of the year, brought a
rapid deterioration in business finances, an acceleration in
payment defaults and in the end a surge in insolvencies,
especially in the last quarter. While the scenario was almost the
same in all the major countries, except Germany, it took an
exceptional turn in a number of countries, such as Spain, where
insolvencies rose by 187%, Portugal (+67%), Ireland (+113%), the
UK (+31%), Italy (+45%, Denmark (+67%), and in the U.S. (+45%).
A Record Year for Insolvencies in 2009
After a very depressed first quarter of 2009, in line with the end
of 2008, the major global recession taking shape for the whole of
2009 -- the biggest ever seen since the end of the Second World
War -- is forcing businesses into a long and painful process of
adjustment. By prolonging its duration and spreading
progressively to most sectors of activity, the contraction of the
economies of the developed countries and at best the sharp
deceleration in the emerging economies threatens to accentuate the
rise in insolvencies. This has already been confirmed over Q1
2009, with yr/yr increased in excess of 15% in France, Austria and
Switzerland, 20% in Belgium, 30% in Portugal, 40% in the UK, and
even worse situations yet, with a doubling of insolvencies in
Ireland and Denmark, and even a tripling in Spain. With some
countries are moving towards new insolvency records, the Euler
Hermes Global Insolvency Index should rise very significantly in
2009, increasing by 35% on annual average.
"For numbers of businesses that have drawn heavily on available
cash in order to outlast the shock of the last three quarters, it
only needs a few more months of empty order books or failing sales
to send them on their way to insolvency, said Karine Berger. On
this point, we have seen a genuine change at work in the recent
months: whereas, in the company's last survey of global
insolvencies, in autumn 2008, we could state that the two major
sectors hit by the shock were finance and construction, we now see
the main part of business insolvencies in industrial sectors:
automotive, chemicals, intermediate goods and telecommunications.
Retailing, wholesaling and transport are also feeling the full
brunt of the crisis. Alongside this, the average turnover per
business insolvency has risen greatly."
In many countries, there is a close correlation between the
business cycle and insolvency figures. Generally, it takes GDP
growth of 2% to 3% to stem the rise in insolvencies, and there is
a very high elasticity of insolvencies to growth. A GDP growth
reduction of 1 percentage point implies a 5% to 10% increase in
insolvencies. In fact, the slowdown in growth posted in 2008,
below the level generally needed to keep the number of
insolvencies just stable, was accompanied by a fairly widespread,
and upwards, trend reversal in the number of business
insolvencies. Over the long term, different countries have
enjoyed very different average rates of growth, and this is
reflected in diverging long-term insolvency trends. Thus, from
1991 to 2005, insolvencies fell by half in the U.S. and the UK,
but remained fairly steady in France and rose by a factor of 4.5
in Germany. Over the same period, growth averaged 3.3% in the
U.S. and 2.8% in the UK, compared to 1.9% in France and 1.3% in
Germany.
Besides being affected by cyclical fluctuations, business
insolvency figures can experience large variations due to changes
in the provisions governing new business creations (because of the
higher insolvency risk for start-ups) and even more changes in
laws governing insolvency procedures. As in Slovakia in 2005, the
change in the U.S. bankruptcy legislation in October 2005
triggered a wave of anticipatory insolvencies in that country
followed by a sharp fall in insolvencies in the first quarter of
2006, resulting in marked volatility in the annual U.S. figures
for 2005, 2006 and 2007.
Statistics per country
% of % of Euler
World Hermes
GDP (*) Global
Insolvency
Index (*) 2008 Forecasts
Number Change 2009 2010
USA 26.2 31.7 43,546 54% 45% -4%
Canada 2.7 3.3 6,164 -2% 10% 5%
Japan 8.4 10.2 15,646 11% 15% 5%
Germany 6.4 7.7 29,291 0% 19% 11%
France 5.0 6.0 57,650 15% 30% 10%
Italy 4.0 4.9 8,800 45% 31% 15%
Spain 2.8 3.3 2,528 187% 58% -3%
Netherlands 1.5 1.8 4,635 1% 75% 10%
Belgium 0.9 1.1 8,472 10% 18% 5%
Austria 0.7 0.9 6,315 0% 15% 7%
Portugal 0.4 0.5 3,344 67% 30% 20%
Finland 0.5 0.6 2,919 14% 32% 4%
Greece 0.6 0.7 563 10% 15% 11%
Luxembourg 0.1 0.1 583 -12% 15% 4%
Ireland 0.5 0.6 773 113% 55% -8%
UK 5.2 6.3 29,994 31% 56% 11%
Denmark 0.6 0.7 3,709 54% 40% -9%
Sweden 0.9 1.1 6,298 9% 35% 5%
Norway 0.8 0.9 3,637 28% 66% -5%
Switzerland 0.8 1.0 4,221 -2% 16% 4%
Poland 0.8 1.0 430 -10% 26% 13%
Hungary 0.3 0.3 11,181 15% 30% 15%
Czech Republic 0.3 0.4 1,110 -3% 28% 5%
Slovak Republic 0.1 0.2 582 -27% 55% -11%
Lithuania 0.1 0.1 928 53% 40% -5%
Latvia 0.1 0.1 1,226 21% 50% -10%
Estonia 0.0 0.0 429 112% 40% -5%
Brazil 2.5 3.1 2,243 -18% -8% -10%
China 6.2 7.5 4,555 5% 10% 5%
Taiwan 0.7 0.9 805 -23% 18% -5%
Korea (South) 1.8 2.2 2,735 19% 25% -5%
Hong Kong 0.4 0.5 468 3% 71% 6%
Singapore 0.3 0.4 132 25% 37% 4%
* Liquidation World Appoints David Becker to Board of Directors
---------------------------------------------------------------
Liquidation World Inc. has appointed David Becker to its Board of
Directors, subject to regulatory approval. In addition to his
Director role, Mr. Becker will also assume the role of Chairman of
the Audit Committee at Liquidation World from former director
Robert Wiens, who has resigned from Liquidation World's Board.
Mr. Becker is Executive Vice President and Chief Financial Officer
of Middlebrook Pharmaceuticals Inc., a NASDAQ listed company
located in the U.S.
"We are very excited that Dave has agreed to join us as we
continue to execute on our strategy for Liquidation World," said
Chairman Bill Wolf. "Having been exposed to his skill set on
other projects, I am confident that he will be a great addition to
the Liquidation World team. I would also like to express my
appreciation and gratitude to Bob Wiens for his dedicated effort
and the many contributions that he has made to Liquidation World
over the past several years."
Prior to joining Middlebrook in September 2008, Mr. Becker served
as an independent consultant to various healthcare companies,
providing senior management support in financial and operational
roles. In addition, he sat on the board of directors at several
of these healthcare companies. From 2000 to 2007, Mr. Becker
served as the Chief Financial Officer and Treasurer of Adams
Respiratory Therapeutics, Inc., and served in various other
capacities with Adams over that period including Chief Financial
and Administrative Officer from October 2006 to February 2007, and
interim Chief Operating Officer from May 2003 to April 2004.
Prior to joining Adams, Mr. Becker was a Senior Manager in the
merger and acquisitions practice of Ernst & Young LLP from
November 1997 to September 2000. From January 1996 to November
1997, Mr. Becker served as Controller for the Salt Lake City-based
start-up company RxAmerica LLC, a pharmacy benefit management and
mail-service pharmacy operation. From 1991 to 1995, he served as
a financial auditor with Ernst & Young LLP. Mr. Becker began his
professional career in 1990 as an audit and tax accountant for the
southern California-based accounting firm of Glenn M. Gelman &
Associates. Prior to pursuing a corporate career, Mr. Becker
served in the U.S Navy for 4 years. Mr. Becker earned a
bachelor's degree in accounting in 1990 from the University of
Southern Mississippi and is a certified public accountant and
certified treasury professional.
About Liquidation World
Liquidation World liquidates consumer merchandise through 97
stores in Canada and the U.S. The Company solves asset recovery
problems in a professional manner for the financial services
industry, insurance companies, manufacturers, wholesalers and
other organizations. Liquidation World is based in Brantford,
Ontario and maintains a number of regional buying offices in
Canada and the U.S. The Company opened its first store in
Calgary, Alberta in 1986 and today, with more than 1,200
employees, is Canada's largest liquidator.
* UBS Hires William Newby as IBD Managing Director, Gaming Chief
----------------------------------------------------------------
UBS Investment Bank today announced that William Newby has joined
its Investment Banking Department as a Managing Director and Head
of Americas Gaming and Leisure coverage in the Real Estate
Investment Banking group. He is based in Los Angeles and reports
to Jackson Hsieh, Global Head of Real Estate Investment Banking.
Mr. Newby joins UBS from Bank of America, where he served as
senior client manager for Banc of America Securities' Gaming and
Leisure Group. At Bank of America, Mr. Newby was responsible for
setting up and building the gaming banking franchise into a
leading gaming industry banking group. Prior to joining Bank of
America, Mr. Newby was a Vice President with the National
Westminster Bank USA in Los Angeles.
"Despite the downturn in the economy, deal activity, including
capital raising, M&A and restructurings, is still robust in the
gaming and leisure sector. We have a strong pipeline in this
sector, which we expect will continue to grow," said Mr. Hsieh.
"Bill's experience and qualification are unparalleled in the
industry. We couldn't be happier to welcome him to UBS and the
Real Estate team."
Mr. Newby also served for eight years on the board of directors
for the American Gaming Association, the gaming industry's senior
peer council, together with 15 CEOs from the most prominent gaming
and gaming supply companies in the sector. He was the only board
member from the financial community.
Mr. Newby graduated magna cum laude with a Bachelor of Arts degree
from the University of California at Los Angeles. He also
received his MBA from UCLA's Graduate School of Management (now
the Anderson School).
About UBS
UBS is one of the world's leading financial firms, serving a
discerning international client base. Its business, global in
scale, is focused on growth. As an integrated firm, UBS creates
added value for clients by drawing on the combined resources and
expertise of all its businesses.
UBS is a global wealth manager, a global investment banking and
securities firm, and one of the largest global asset managers. In
Switzerland, UBS is the market leader in retail and commercial
banking.
UBS is present in all major financial centers worldwide. It has
offices in 50 countries, with about 38% of its employees working
in the Americas, 33% in Switzerland, 17% in the rest of Europe and
12% in Asia Pacific. UBS's financial businesses employ more than
75,000 people around the world. Its shares are listed on the
Swiss Stock Exchange (SWX), the New York Stock Exchange (NYSE) and
the Tokyo Stock Exchange (TSE).
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share- Total
Total Holders Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ ------- -------
ABSOLUTE SOFTWRE ABT CN 107 (7) 24
AFC ENTERPRISES AFCE US 131 (33) 2
AMR CORP AMR US 24,518 (3,108) (3,545)
ARBITRON INC ARB US 189 (3) (22)
ARRAY BIOPHARMA ARRY US 108 (54) 31
ARVINMERITOR INC ARM US 2,873 (719) 278
BLOUNT INTL BLT US 499 (43) 175
BOARDWALK REAL E BEI-U CN 2,318 (5) N.A.
BOARDWALK REAL E BOWFF US 2,318 (5) N.A.
BOEING CO BA US 55,339 (509) (2,160)
BOEING CO BAB BB 55,339 (509) (2,160)
BOEING CO-CED BA AR 55,339 (509) (2,160)
CABLEVISION SYS CVC US 9,551 (5,349) (367)
CARDTRONICS INC CATM US 468 (22) (33)
CENTENNIAL COMM CYCL US 1,413 (992) 148
CENVEO INC CVO US 1,501 (221) 163
CHENIERE ENERGY CQP US 1,975 (408) 79
CHENIERE ENERGY LNG US 2,892 (444) 278
CHOICE HOTELS CHH US 333 (146) (10)
CLOROX CO CLX US 4,464 (309) (866)
CYTORI THERAPEUT CYTX US 27 (5) 12
DELTEK INC PROJ US 191 (48) 42
DISH NETWORK-A DISH US 7,063 (1,666) (422)
DOMINO'S PIZZA DPZ US 473 (1,396) 99
DUN & BRADSTREET DNB US 1,614 (785) (176)
EINSTEIN NOAH RE BAGL US 168 (11) (52)
EMBARQ CORP EQ US 8,050 (527) (163)
EPICEPT CORP EPCT SS 12 (5) (2)
EXELIXIS INC EXEL US 355 (88) 53
EXTENDICARE REAL EXE-U CN 1,833 (51) 98
FORD MOTOR CO F US 207,270 (16,476) 12,631
FORD MOTOR CO F BB 207,270 (16,476) 12,631
GENTEK INC GETI US 425 (21) 88
GLG PARTNERS INC GLG US 345 (382) 101
GLG PARTNERS-UTS GLG/U US 345 (382) 101
HEALTHSOUTH CORP HLS US 1,921 (656) (53)
HOLLY ENERGY PAR HEP US 469 0 (6)
HUMAN GENOME SCI HGSI US 735 (3) 118
IMAX CORP IMX CN 226 (98) 19
IMAX CORP IMAX US 226 (98) 19
INCYTE CORP INCY US 189 (256) 123
INTERMUNE INC ITMN US 193 (82) 121
IPCS INC IPCS US 545 (41) 62
JOHN BEAN TECH JBT US 559 (6) 78
JUST ENERGY INCO JE-U CN 535 (692) (358)
KNOLOGY INC KNOL US 635 (52) 25
LIGAND PHARM-B LGND US 139 (2) 14
LINEAR TECH CORP LLTC US 1,491 (288) 995
MEAD JOHNSON-A MJN US 1,707 (897) 380
MEDIACOM COMM-A MCCC US 3,700 (463) (281)
MOODY'S CORP MCO US 1,802 (919) (482)
NATIONAL CINEMED NCMI US 604 (514) 89
NAVISTAR INTL NAV US 9,623 (1,492) 1,367
NPS PHARM INC NPSP US 200 (225) 87
OCH-ZIFF CAPIT-A OZM US 1,821 (177) N.A.
OVERSTOCK.COM OSTK US 136 (4) 33
PALM INC PALM US 656 (84) 30
PDL BIOPHARMA IN PDLI US 219 (422) 79
QWEST COMMUNICAT Q US 19,711 (1,164) (344)
REGAL ENTERTAI-A RGC US 2,563 (246) (78)
RENAISSANCE LEA RLRN US 52 (3) (11)
REVLON INC-A REV US 784 (1,095) 103
SALLY BEAUTY HOL SBH US 1,433 (702) 389
SANDRIDGE ENERGY SD US 2,670 (114) 118
SEMGROUP ENERGY SGLP US 314 (130) (431)
SOLARWINDS INC SWI US 91 (40) 23
SONIC CORP SONC US 821 (43) 26
STANDARD PARKING STAN US 231 0 (15)
STEREOTAXIS INC STXS US 53 (4) 3
SUCCESSFACTORS I SFSF US 162 (7) 0
SUN COMMUNITIES SUI US 1,197 (68) N.A.
TALBOTS INC TLB US 971 (183) (13)
TAUBMAN CENTERS TCO US 2,922 (276) N.A.
TENNECO INC TEN US 2,742 (304) 272
THERAVANCE THRX US 214 (144) 152
UAL CORP UAUA US 19,100 (2,655) (2,348)
UNITED RENTALS URI US 3,976 (56) 266
VENOCO INC VQ US 730 (107) 33
VERIFONE HOLDING PAY IT 843 (14) 299
VERIFONE HOLDING PAY US 843 (14) 299
VERIFONE HOLDING VF2 GR 843 (14) 299
VIRGIN MOBILE-A VM US 323 (281) (141)
WALTER INVESTMEN WAC US 12 (44) N.A.
WARNER MUSIC GRO WMG US 4,256 (110) (394)
WEIGHT WATCHERS WTW US 1,087 (848) (313)
WR GRACE & CO GRA US 3,726 (374) 892
*********
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 ***