/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090610.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, June 10, 2009, Vol. 13, No. 159 Headlines ACTION MOTORSPORTS: Voluntary Chapter 11 Case Summary ALSET OWNERS: Case Summary & 30 Largest Unsecured Creditors AMACORE GROUP: Sells $4.5MM Convertible Preferred Stock to Vicis AMERICAN TONERSERV: Secures New Line of Credit With Wells Fargo AMERICAN SAFETY S&P Affirms Corporate Credit Rating at 'B' ANGIOTECH PHARMACEUTICALS: Amends Credit Deal with Wells Fargo ARCADE PUBLISHING: Files for Chapter 11 Bankruptcy Protection ASARCO LLC: Court Extends Intercompany Loan Maturity to July 31 ASARCO LLC: District Court Outlines Bonding Requirements for AMC ASCENSION PAYROLL: Voluntary Chapter 11 Case Summary BANCO POPULAR: Fitch Downgrades Issuer Default Rating to 'B' BANCO POPULAR NORTH AMERICA: Fitch Cuts Issuer Default Rating to B BANK OF AMERICA: Congress to Subpoena Fed Reserve on Merrill Deal BEARINGPOINT INC: Ernst & Young Raises Substantial Doubt BERWICK BLACK: Creditors' Motion to Dismiss Is Denied BENJAMIN KADOSH: Case Summary & 20 Largest Unsecured Creditors BERRY PLASTICS: S&P Raises Corporate Credit Rating to 'B-' BLUE DRAGON PROPERTIES: Case Summary & 20 Largest Unsec. Creditors BOEGER LAND: Case Summary & Three Largest Unsecured Creditors BROOKSIDE TECH: Inks Securities Purchase Deal With Vicis Capital CC MEDIA: S&P Junks Corporate Credit Rating From 'B-' CHARTER COMMUNICATIONS: District Court Issues TRO Against DirecTV CHRYSLER LLC: Supreme Court Won't Block Sale of Assets to Fiat CHRYSLER LLC: US Trustee Objects to Release of Officers From Suits CHRSYLER LLC: Sues Logghe Stamping for Violating Automatic Stay CHRYSLER LLC: Wants to Hire Dykema Gossett as Special Counsel CITIGROUP INC: Will Launch Exchange Offers This Week CLEAR CHANNEL: S&P Junks Corporate Credit Rating CLEARWATER PAPER: Moody's Assigns 'Ba2' Corporate Family Rating CMR MORTGAGE II: Wants to Assign Interest in South S.F. Property COMMUNICATION INTELLIGENCE: Closes Phoenix Venture Financing DELPHI CORP: Deloitte & Touche Wants Retention Terminated DELPHI CORP: Court to Consider Interim Approval of GM Deal Today DELPHI CORP: Wants Goldman Partial Summary Judgment Motion Denied EMPIRE RESORTS: Board of Directors Names Joseph Bernstein as CEO ENERGY PARTNERS: U.S. Trustee Form Six-Member Creditors' Panel EPICEPT CORPORATION: Ben Tseng Resigns as Chief Scientific Officer ETHAN ALLEN: Moody's Downgrades Rating on Senior Notes to 'Ba1' FILENE'S BASEMENT: Men's Wearhouse Wins Auction With $62MM Bid FORD MOTOR: Says Government Is Giving GMAC Rival Better Deal FREEMAN ROAD: Case Summary & 30 Largest Unsecured Creditors GENERAL MOTORS: Names Edward Whitacre Jr. as Chairman of New GM GENERAL MOTORS: Auction to Be Held on June 12 to Settle Contracts GLOWPOINT INC: Directors Resign to End Multi-Year Term in Board GRANITE CAPITAL: Case Summary & 20 Largest Unsecured Creditors HARRAH'S ENT: Operating Co. Inks Amendment & Waiver to Credit Pact HARVEST OIL: Files Schedules of Assets and Liabilities HARVEST OIL: May Continue to Use Cash Collateral Until June 28 HEALTHTRONICS INC: Endocare Deal Won't Affect Moody's 'B2' Rating HERNANDO BEACH: Case Summary & 20 Largest Unsecured Creditors HILLS MARCH LLC: Case Summary & 5 Largest Unsecured Creditors HUMANA INC: Moody's Affirms 'Ba1' Subordinated Debt Shelf Rating IMAX CORPORATION: Sells 9.8 Million Common Shares to Roth Capital INTERPUBLIC GROUP: Fitch Assigns 'BB+' Rating on $500 Mil. Notes INTERPUBLIC GROUP: Moody's Assigns 'Ba3' Rating on $500 Mil. Notes INTERPUBLIC GROUP: S&P Assigns 'B+' Rating on $500 Mil. Notes J.G. WENTWORTH: Receives $100 Million in New Equity JAMES WEBSTER: Case Summary & 7 Largest Unsecured Creditors KUSHNER-LOCKE: Wants to Use Cash Collateral Until November 30 LEHMAN BROTHERS: Inks Mortgage Purchase Agreement With Americor LODGENET INTERACTIVE: Moody's Affirms 'B3' Corporate Family Rating LYONDELL CHEMICAL: To Demolish Brazoria Plant; Hearing Set July 2 MASONITE CORP: Emerges From Chapter 11 and CCAA Protection MASONITE CORP: 12 Affiliates Disclose Assets & Liabilities MCCLATCHY COMPANY: Gains Compliance With NYSE's Listing Standards MDWERKS INC: Terminates Employment of Chief Operating Officer MOMENTIVE PERFORMANCE: Nantong Inks Deals With Shanghai Hongkou MXENERGY HOLDINGS: Inks Amendment to Societe Generale Credit Deal MYRA RUTH REED: Voluntary Chapter 11 Case Summary NANBU INC: Voluntary Chapter 15 Case Summary NATIONAL DIE & BUTTON: Case Summary & 14 Largest Unsec. Creditors NAVISTAR INT'L: Board Names Cederoth as Interim Financial Officer NFJV LLC: Voluntary Chapter 11 Case Summary NORTEL NETWORKS: Seeks Court Approval of Crossroads Settlement NORTEL NETWORKS: Canadian Applicants Can Sell Stake in Korean JV NORTEL NETWORKS: Canadian Court Approves Sale of Westwinds Assets NORTEL NETWORKS: Court Permits Filing of Schedule Parts Under Seal NORTEL NETWORKS UK: Voluntary Chapter 15 Case Summary NYSAL INC: Case Summary & 20 Largest Unsecured Creditors PEANUT CORP: Plainview Peanut Files for Ch 7 Bankruptcy Protection PILGRIM'S PRIDE: Seeks $18MM DIP Financing from Liberty Mutual POPULAR INC: Fitch Downgrades Issuer Default Rating to 'B' QPC LASERS: Lender Conducts Sale of Quintessence Photonics' Assets RH DONNELLEY: Can Pay Prepetition Taxes Up to $5.5 Million RH DONNELLEY: Court OKs $2MM Payment to Shippers & Lien Claimants RH DONNELLEY: Court Permits Payment of Insurance Obligations RILEY ELLIOTTE LAMSON: Case Summary & 16 Largest Unsec. Creditors RITE AID: Moody's Assigns 'B3' Rating on $400 Mil. Senior Notes RONSON CORPORATION: Wells Fargo Extends Moratorium thru July 3 SEMGROUP LP: Court Sets Disclosure Statement Hearing for June 25 SEMGROUP LP: Examiner's Seeks Discharge From Ch. 11 Probe Duties SEMGROUP LP: AP Services Bills $5.9MM for January-March 2009 Work SEMGROUP LP: Lenders & Unsecured Creditors Group Support Plan SPECTRUM BRANDS: Exclusive Solicitation Period Extended to Oct. 2 SPECTRUM BRANDS: Court Extends Lease Decision Period to Sept. 1 SPECTRUM BRANDS: Court Defers Setting of Claims Bar Date SPECTRUM BRANDS: Equity Panel Wants Lazard Reports Excluded SROKA HOSPITALITY: Case Summary & 8 Largest Unsecured Creditors STAR TRIBUNE: Hearing on Pension Plan Postponed for Second Time SUREFIL LLC: Case Summary & 20 Largest Unsecured Creditors THERAPEDIC SLEEP: Blames Suit Against Jerry Gershaw for Collapse TLC VISION: Lenders Extend Limited Waiver for Term Loan to June 30 TRICOM SA: Two Banks Object to Approval of Disclosure Statement TWIN RIVER: To File for Bankruptcy If Talks With Lenders Fail US ONCOLOGY: Upsizing of Offering Won't Move Moody's 'Ba3' Rating VALUE CITY: Panel Seeks Rule 2004 Examination of Retail Ventures VISTEON CORP: U.S. Trustee Appoints 7-Member Creditors Committee VISTEON CORP: Wants Schedules Filing Deadline Extended to Aug. 26 VISTEON CORP: Wants to Hire Kirkland & Ellis as Counsel VISTEON CORP: Ch. 11 Filing Triggers Default on Debt Obligation WCI COMMUNITIES: Files Reorganization Plan & Disclosure Statement WHITEHALL JEWELERS: Hires Streambank LLC to Lead IP Sale WL HOMES: Court Converts Chapter 11 Case to Chapter 7 Liquidation WORLDSPACE INC: Court Extends Plan Filing Period to July 31 * Mike Matlat Joins DJM Realty * Upcoming Meetings, Conferences and Seminars ********* ACTION MOTORSPORTS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Action Motorsports, Inc. 4125 W Summit Walk Drive Phoenix, AZ 85086 Bankruptcy Case No.: 09-12336 Chapter 11 Petition Date: June 4, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Michael S. Reeves, Esq. Reeves & Tafoya, PLC 1212 E. Osborn Phoenix, AZ 85014 Tel: (602) 604-7577 Fax: (602) 604-7555 Email: michael.reeves@azbar.org Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Roy McClure, president of the Company. ALSET OWNERS: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Alset Owners, LLC 1200 North Federal Highway, Suite 111-B Boca Raton, FL 33432 Bankruptcy Case No.: 09-11960 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Altes, LLC 09-11961 Setla, LLC 09-11962 Checkers Michigan, LLC 09-11963 Chapter 11 Petition Date: June 5, 2009 Court: District of Delaware Judge: Brendan Linehan Shannon Debtors' Counsel: Bonnie Glantz Fatell, Esq. fatell@blankrome.com Blank Rome LLP 1201 Market Street, Suite 800 Wilmington, DE 19801 Tel: (302) 425-6423 Fax: (302) 425-6464 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtors' Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Checkers Drive-In-Rest fees $3,700,000 4300 W. Cypress St., Ste. 600 Tampa, FL 33607 Tel: (727) 519-2000 Media Dex Inc. advertising $406,000 5784 Eaglesridge Lane. Cincinnati, OH 45230 Tel: (513) 642-6700 MBM PFC Customized Food trade $356,822 Distributors Inc. PO Box 6258 Rocky Mount, NC 27802 Tel: (407) 857-3960 Checkers Rally's NPF advertising $227,000 Musky Checkers tax $100,369 R&R Capital rent $70,129 Vendor Capital lease $53,707 I Supply Company trade $53,000 Theodoro Baking trade $40,600 Klostermans Baking trade $38,000 John J. Charleston Trust rent $32,500 Debra Buckner tax $29,807 Orlando Baking trade $27,100 Carolyn Rice Treasurer tax $24,905 Collector of Revenue tax $20,598 Marian Patrica Sellers rent $19,500 BFI Waste Sys. (Allied Waste) tax $18,337 Gregory F X Daily tax $17,706 ERC Parts Inc. trade $17,400 Moore Food Distributors trade $14,300 NUCO2 trade $12,000 2182 North Highway 67 LLC rent $11,166 Gilbert W. Younger rent $11,000 Malcolm Designs rent $11,000 First Place Bank/ERAM LLC rent $10,748 John and Magda Rado rent $10,733 Wonder Bread trade $10,700 City of Muskegon tax $10,014 Muzak LLC tax $10,000 The petition was signed by Leonard Levitaky, president and managing member. AMACORE GROUP: Sells $4.5MM Convertible Preferred Stock to Vicis ---------------------------------------------------------------- The Amacore Group Inc. entered into an oral agreement with Vicis Capital Master Fund, its majority stockholder, to sell Vicis $4.5 million worth of a newly designated class of convertible preferred stock. The Company anticipates that the Preferred Stock will be convertible into shares of the Company's Class A Common Stock, par value $0.001 per share, at $0.01 per share. The funds were received from Vicis on May 28, 2009, however, a Preferred Stock purchase agreement and other related transaction documents are in the process of being negotiated with Vicis and, accordingly, have not been executed at this time. The shares of Preferred Stock will be issued to Vicis upon the execution of the Transaction Documents. Based in Tampa, Florida, The Amacore Group Inc. (OTC BB: ACGI) -- http://www.amacoregroup.com/-- provides health-related membership benefit programs, insurance programs, and other innovative and high-quality solutions to individuals, families and employer groups nationwide. Through its wholly owned subsidiary, LifeGuard Benefit Solutions Inc., Amacore now has the ability to provide administrative and back-office services to other healthcare companies in addition to expanding its own call center capability through its wholly-owned subsidiary, JRM Benefits Consultants LLC and US Heath Benefits Group Inc., a call center-based marketing company. Zurvita Inc., Amacore's newly formed, wholly-owned subsidiary specializing in direct to consumer multi-level marketing, provides yet another channel for Amacore's ever-increasing range of healthcare and healthcare-related products. At March 31, 2009, the Company's balance sheet showed total assets of $19.6 million and total liabilities of $23.1 million, resulting in a stockholders' deficit of about $3.5 million. Going Concern Doubt McGladrey & Pullen, LLP, in Ft. Lauderdale, raised substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial results for for the year ended December 31, 2008. The auditors pointed that the Company has suffered recurring losses from operations and has negative working capital. AMERICAN TONERSERV: Secures New Line of Credit With Wells Fargo --------------------------------------------------------------- American TonerServ Corp. entered into a new Revolving Line of Credit with Wells Fargo Bank, which provides for maximum borrowing of $835,000 at an initial interest rate of 11.25% per annum. The Revolving Line of Credit replaces an existing facility for $835,000 from Wells Fargo Bank for the same amount for standby letters of credit that was to expire on June 30, 2009. The Revolving Line of Credit will be available through January 15, 2010. The interest rate on borrowings under the Revolving Line of Credit is the prime rate plus 8.0%, with a minimum interest rate of 11.25%. Four of the Company's directors are assisting the Company by serving as co-borrowers on the Revolving Line of Credit. In compensation for their assistance by serving as co-borrowers, these directors received warrants to purchase shares of the Company's common stock at $0.15 per share for a period of five years as: Name of Director Number of Shares Under Warrants ---------------- ------------------------------- William Robotham 2,000,000 Chuck Mache 666,667 Thomas Hakel 666,666 Daniel J. Brinker 666,666 On May 29, 2009, the Company entered into an Agreement to Advance Credit and Loan among MTS Partners, Inc., iPrint Technologies, LLC, a subsidiary of the Company, and the Company. MTS is owned by Chad Solter, a Director of the Company. Under the Agreement, MTS Partners, Inc., has provided a $200,000 loan and standby letters of credit to certain of iPrint's vendors in the aggregate of $365,000. The loan was made under a secured promissory note that is due on August 15, 2009. The total amount of interest on the note due at maturity is $15,000. The note is secured by all of iPrint's assets. As compensation for providing the standby letters of credit under the Agreement, MTS received warrants to purchase 1,000,000 shares of the Company's common stock at $0.15 per share for a period of five years. About American TonerServ Based in Santa Rosa, California, American TonerServ Corp. (OTC BB: ASVP) -- http://www.americantonerserv.com/-- is a consolidator in the highly fragmented printer supplies and services industry. ATS acquires, integrates and manages independent businesses that deliver printer supplies, services and equipment to small and mid-sized businesses. Going Concern Doubt On March 31, 2009, Perry-Smith LLP in Sacramento, California, raised substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial results for the years ended December 31, 2008, and 2007. The auditors pointed that the Company suffered recurring losses from operations resulting in an accumulated deficit of $22,219,836. Current liabilities exceed its total current assets at December 31, 2008, by $4,973,437. The Company had a loss of $277,614 and had negative cash flows from operations of $336,380 for the three month period ended March 31, 2009, and had an accumulated deficit of $22,498,000 and a working capital deficit of $5,035,789 at March 31, 2009. Cash flows from operations are insufficient to sustain the current level of operations. Thus, the Company has insufficient funds to meet its financial obligations as they become due. AMERICAN SAFETY S&P Affirms Corporate Credit Rating at 'B' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B' corporate credit rating and other ratings on privately held American Safety Razor Co. and removed the ratings from CreditWatch where they were placed on December 19, 2008. The outlook is negative. "The affirmation reflects that recent operating and financial results improved in the quarter ended March 31, 2009, from fourth- quarter 2008," said Standard & Poor's credit analyst Jayne Ross. Cedar Knolls, New Jersey-based American Safety Razor had about $546 million of total debt (adjusted for capitalized operating leases, mezzanine debt at RSA Holdings Corp, and pension and postretirement obligations). "The rating on American Safety Razor Co. reflects the company's high debt leverage, narrow product focus, aggressive financial policy, and small size in a sector dominated by companies with substantially greater financial resources," added Ms. Ross. "Although the company maintains a good market position as a private-label/value manufacturer and marketer of razors and blades, it competes against larger players in the razor and blade category." Despite American Safety Razor's defensive operating strategy (maintaining a solid private-label/value share in the consumer market and pursuing niche markets such as specialty industrial blades), the company is vulnerable to pricing actions by its bigger competitors. In 2008, the company faced operating challenges in implementing manufacturing initiatives as well as a very difficult operating environment in its razor and industrial products segments. The company has taken steps to address the factors affecting its industrial business. S&P does not expect that there will be any material improvement in this segment in the near term. However, S&P does expect to see quarter over quarter progress in the razor business, due to cost saving initiatives and new product introductions. This should result in improving operating margins and profits during the year. The outlook on American Safety Razor is negative and reflects S&P's projections that the cushion for the maximum leverage covenant could tighten to less than 5% for the quarter ending December 2009 given the step down to 4.35x from 4.9x. S&P could lower the rating if the company cannot remain in compliance with its covenants and internal and external factors result in the deterioration of the company's operating performance. The tight covenant cushion could result from a moderate decline of EBITDA from projected levels as the leverage covenant steps down in the fourth quarter. S&P would consider a stable outlook if American Safety Razor continues to improve its operating performance, maintain adequate cushion under its covenants, and remain in compliance with its covenants. ANGIOTECH PHARMACEUTICALS: Amends Credit Deal with Wells Fargo -------------------------------------------------------------- Angiotech Pharmaceuticals, Inc., and certain of its U.S. subsidiaries, as borrowers, entered into an amendment to the Credit Agreement, dated as of February 27, 2009, with Wells Fargo Foothill, LLC, as arranger, administrative agent and lender. Angiotech and certain of its subsidiaries guaranty the payment and performance of the Borrowers' obligations under the Credit Agreement and accordingly, have entered into a Consent and Reaffirmation with respect to the Amendment. Among other things, the Amendment expands the definition of "Permitted Investments," eliminates the "availability block" on the secured revolving facility so that the Borrowers have access to the full $25 million under the facility, and terminates the $10 million secured delayed draw term loan facility, which was undrawn at the time of the Amendment and was not projected by Angiotech to be used before that facility will terminate on August 31, 2009. A full-text copy of the First Amendment to the Angiotech-Wells Fargo Credit Agreement is available for free at: http://ResearchArchives.com/t/s?3db2 Based in Vancouver, British Columbia, Angiotech Pharmaceuticals Inc. (NASDAQ: ANPI, TSX: ANP)-- http://www.angiotech.com/-- is a pharmaceutical and medical device company with over 1,500 dedicated employees. Angiotech discovers, develops and markets innovative treatment solutions for diseases or complications associated with medical device implants, surgical interventions and acute injury. At March 31, 2009, the Company's balance sheet showed total assets of $401.1 million and total liabilities of $688.5 million, resulting in a stockholders' deficit of about $287.4 million. ARCADE PUBLISHING: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------- Jacqueline Palank posted on The Wall Street Journal blog Bankruptcy Beat that Arcade Publishing, Inc., has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York due to economic downturn. Arcade Publishing, says Ms. Palank, has struggled since company president Richard Seaver died in January 2009. Arcade Publishing listed $4.5 million in assets and $6.3 million in liabilities, according to court documents. Crain's New York Business relates that Little Brown & Co., which distributes Arcade Publishing's books, is one of the Debtor's biggest creditors. Arcade Publishing, the report states, owes Little Brown $243,932 for a loan and $242,876 under a distribution agreement. Crain's says that Arcade Publishing also owes Indian politician and novelist Shashi Tharoor about $25,779. New York-based Arcade Publishing, Inc., is a small, independent literary house that has published books by famous foodie James Beard, film director Ingmar Bergman, Israeli president Shimon Peres, and other authors from around the globe. It was founded by the late Richard Seaver. ASARCO LLC: Court Extends Intercompany Loan Maturity to July 31 --------------------------------------------------------------- As reported by the Troubled Company Reporter on May 18, 2009, Judge Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas authorized ASARCO LLC in September 2008 to extend a one-time intercompany loan of up to $10,000,000 to the Asbestos Subsidiary Debtors on a secured basis. The Loan terminated according to its own terms last April 1, 2009, and ASARCO notified the Asbestos Subsidiary Debtors of the termination. In response, the Official Unsecured Creditors Committee for the Asbestos Subsidiary Debtors and Robert C. Pate, the Future Claims Representative, asked the Court to abate the reorganization cases or to compel ASARCO to extend the DIP loan. At the Court's urging, ASARCO agreed to extend the maturity to May 15. The Official Unsecured Creditors Committee for the Asbestos Subsidiary Debtors and Robert C. Pate, the Future Claims Representative, asked the Court for abatement of the Debtors' bankruptcy cases or to compel ASARCO LLC to extend a $10 million intercompany loan extended to the Asbestos Subsidiary Debtors on a secured basis. ASARCO LLC objected and asked the Court to deny the request to abate, asserting that it acted in the best interest of the bankruptcy estates in electing not to renew the Intercompany DIP Credit Agreement. According to Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, at the time the DIP Credit Agreement was negotiated in August 2008, ASARCO and the Asbestos Fiduciaries had reached a global settlement of asbestos liabilities and were moving jointly towards a confirmation hearing of ASARCO's original plan of reorganization under which all asbestos claims and demands would be channeled to a trust under Section 524(g) of the Bankruptcy Code. Because the Asbestos Subsidiary Debtors have no operations and currently generate no income, the Intercompany DIP Loan provided them with funds by which they could pay their professional fees, Mr. Kinzie notes. Total professional fees for the Asbestos Subsidiary Debtors have amounted to approximately $25 million to date. "Now, circumstances have changed. The Asbestos Fiduciaries repudiated the global settlement and entered into an agreement in principle with ASARCO Incorporated and Americas Mining Corporation to support the plan of reorganization proposed by the Parent and to oppose the Debtors' Amended Sterlite Plan," Mr. Kinzie tells the Court. Rather than supporting a Section 524(g) injunction under both plans and allowing asbestos claimants to select their preference for either plan, the Asbestos Fiduciaries instead have agreed to oppose the issuance of a Section 524(g) injunction for Sterlite, thereby unleveling the playing field against the Debtors' Amended Sterlite Plan, Mr. Kinzie points out. ASARCO must act in the best interests of its bankruptcy estate and under the circumstances, ASARCO cannot justify continuing to fund an Intercompany DIP Loan for the benefit of the Asbestos Subsidiary Debtors when the Asbestos Fiduciaries are intent on destroying competition in the plan process and potentially supporting a lower recovery for creditors as a result, Mr. Kinzie contends. He reminds the Court that at the April 28, 2009 hearing on the request to abate, Judge Schmidt noted that the issue was particularly difficult. "Moreover, in the Motion to Abate, the Asbestos Fiduciaries request relief that is without merit and without authority. The Asbestos Fiduciaries cite no authority suggesting that a chapter 11 debtor's refusal to loan money to a subsidiary's estate is a basis for abating the entirety of a chapter 11 reorganization -- presumably because no such authority exits," Mr. Kinzie points out. "To be sure, the Debtors have found no authority requiring the Court to order a debtor to extend a loan to its subsidiary, a loan that otherwise expired by its own terms, so that the subsidiary may fund payment of its professional fees," he adds. After considering the arguments, the Court extended from April 1, 2009 through July 31, 2009, the authorization granted to ASARCO LLC under that certain DIP Financing Order that provides for ASARCO LLC to lend $10 million to the Asbestos Subsidiary Debtors on a secured basis. The intercompany loan terminated on its own terms on April 1. Judge Schmidt held that all borrowings under the DIP Finance Agreement during the Extension Period are (i) subject to the terms and conditions of the DIP Finance Agreement and the DIP Financing Order, and (ii) secured by the liens against the Collateral, the Super-Priority Claims and the setoff and recoupment rights under the DIP Financing Order. 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: District Court Outlines Bonding Requirements for AMC ---------------------------------------------------------------- As reported by the Troubled Company Reporter on June 5, 2009, Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, in a news release said that U.S. Judge Andrew S. Hanen of the Fifth Circuit District Court in Brownsville, Texas granted on June 2, 2009, Grupo Mexico the right to post an alternative financial guarantee to secure its Motion for Stay. In its opinion, the Court said it would allow AMC to place in escrow shares of Southern Copper Corporation stock rather than a cash bond, as was requested by ASARCO LLC, to secure the enforcement of any judgment at appeal. The appeal is expected to take at least a year. Judge Andrew S. Hanen of the U.S. District Court for the Southern District of Texas partially granted and partially denied the request of Americas Mining Corporation to stay the execution of the final judgment awarding ASARCO the return of 260,093,694 shares of Southern Copper Corporation's common stock and $1,382,307,216 in money damages and prejudgment interest, pending a decision on the Parent's appeal. The Court opined that the posting of a full cash bond would impose an undue financial burden on AMC, and that ASARCO's needs for security can be satisfied by alternative means. The Court also found that requiring a full supersedeas bond would constitute an undue burden on AMC that would likely deprive ASARCO's creditors of the benefit of entertaining a competing reorganization plan in the bankruptcy proceeding. Judge Hanen outlined the bonding requirements: (a) AMC will have to place 260,093,694 shares of SCC Common Stock, which is the non-monetary portion of the judgment, in an escrow account with a neutral third party agreed to by the parties, or if no agreement can be reached, in the Registry of the Court, subject to the terms of a mutually agreed upon escrow agreement; (b) AMC will also place additional SCC shares in an amount equal to twice the value of $1,382,307,216, which is the monetary portion of the judgment, in the same escrow account. In the event the monetary value of the shares falls below an amount equal to 1.75 times $1,382,307,216, AMC will add more SCC stock to the escrow account in the amount of the shares necessary to return the total value to double the value of $1,382,307,216; (c) At the earlier of November 5, 2009, or 60 days after the date any plan, other than the plan proposed by the Parent, is confirmed by the Bankruptcy Court, AMC will replace the security for the monetary portion of the judgment with a supersedeas bond of $1,382,307,216, and the security for any dividends deposited will be replaced with a supersedeas bond equal to the amount of the dividends; and (d) If the Bankruptcy Court is unable to confirm a plan by November 5, 2009, or for other good cause, Judge Hanen will consider an appropriate motion for an extension of the November 5 deadline, although the movant will bear the burden to show cause. According to Steven Church of Bloomberg News, the SCC common stock to be put into escrow is worth $8.84 billion. A full-text copy of Judge Hanen's memorandum and order is available for free at: http://bankrupt.com/misc/ASARCO_AMC_Memo&Order_060209.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) ASCENSION PAYROLL: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Ascension Payroll Processing, Inc. 32551 Stanford Rd. Los Fresnos, TX 78566 Bankruptcy Case No.: 09-10316 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court Southern District of Texas (Brownsville) Debtor's Counsel: Ellen C. Stone, Esq. The Stone Law Firm, P.C. 62 E Price Rd Brownsville, TX 78521 Tel: (956) 546-9398 Fax: (956) 542-1478 Email: ignbro@ellenstonelaw.com Total Assets: $592,702 Total Debts: $592,702 The Company says it does not have unsecured creditors who are not insiders when they filed their petition. The petition was signed by Gaines L. Burns, president of the Company. BANCO POPULAR: Fitch Downgrades Issuer Default Rating to 'B' ------------------------------------------------------------ Fitch Ratings has downgraded the Long-term Issuer Default Rating of Popular, Inc., to 'B' from 'BBB' and downgraded the Long-term IDRs of units Banco Popular de Puerto Rico and Banco Popular North America to 'BB-' from 'BBB'. All ratings remain on Rating Watch Negative where they were first placed on May 15, 2009. A complete listing of ratings follows this release. The action follows Popular's announcement that it is offering an exchange of its preferred stock instruments into common stock to boost its existing weak level of tangible common equity which stood at just 2.7% of tangible assets on March 31, 2009. The magnitude of this plan underscores the asset quality challenges currently being faced by Popular. The level of non-performing loans remains well above average among major and regional U.S. banks with the prospect of further deterioration. Popular's ratings remain on Watch Negative given the execution risk associated with the new exchange plan and the prospect of escalating asset quality issues. The removal from Watch Negative hinges on the success of this plan as well as a stabilization of problem loans. Particularly in a stress scenario, there is the risk that considerable funds from the holding company could be downstreamed to boost bank level capital ratios. This potential outcome could hamper the ability of the holding company (Popular) and sub- holding company (Popular North America, Inc.) to service a considerable level of holding company debt. Consequently, Fitch has widened the notching between holding company and bank level IDRs. The holding company senior debt rating has been assigned a recovery rating of 'RR4'. Investors in preferred stock are being encouraged to participate through the suspension of preferred dividends. Given this suspension, the preferred stock rating of Popular was downgraded to 'C/RR6' from 'BB+'. (See commentary 'Fitch Sees Elevated Risk of Bank Hybrid Capital Coupon Deferral in 2009' dated Feb. 4, 2009 available on Fitch's web site at 'www.fitchratings.com'). While the current plan suggests trust preferred holders will not face an immediate suspension of payments, Fitch believes the potential for future deferral is increasing. Consequently, the trust preferred rating has been downgraded to 'CCC/RR6' from 'BB+'. Fitch has downgraded these ratings, which remain on Watch Negative: Popular, Inc. -- Long-term IDR to 'B' from 'BBB'; -- Short-term IDR to 'B' from 'F2'; -- Senior unsecured to 'B/RR4' from 'BBB'; -- Short-term Debt to 'B' from 'F2'; -- Individual to 'D/E' from 'C'. Popular North America, Inc. -- Long-term IDR to 'B' from 'BBB'; -- Senior unsecured to 'B/RR4' from 'BBB'; -- Short-term IDR to 'B' from 'F2'; -- Short-term Debt to B from 'F2'; -- Individual rating to 'D/E' from 'C'. Banco Popular North America -- Long-term IDR to 'BB-' from 'BBB'; -- Long-term deposits to 'BB' from 'BBB+'; -- Short-term IDR to 'B' from 'F2'; -- Short-term deposits to 'B' from 'F2'; -- Individual rating to 'D' from 'C'. Banco Popular de Puerto Rico -- Long-term IDR to 'BB-' from 'BBB'; -- Long-term deposits to 'BB' from 'BBB+'; -- Short-term IDR to 'B' from 'F2'; -- Short-term deposits to 'B' from 'F2'; -- Individual rating to 'D' from 'C'. BanPonce Trust I -- Trust preferred to 'CCC/RR6' from 'BB+'. Popular Capital Trust I -- Trust preferred to 'CCC/RR6' from 'BB+'. Popular Capital Trust II -- Trust preferred to 'CCC/RR6' from 'BB+'. Popular North America Capital Trust I -- Trust preferred to 'CCC/RR6' from 'BB+'. Fitch has downgraded these ratings and removed them from Watch Negative: Popular -- Preferred stock to 'C' from 'BB+'. Fitch has affirmed these ratings: Popular -- Support at '5'; -- Support floor at 'NF'. Popular North America, Inc. -- Support at '5'; -- Support floor at 'NF'. Banco Popular North America -- Support at '5'; -- Support floor at 'NF'. Banco Popular de Puerto Rico -- Support at '4'; -- Support Floor at 'B'. BANCO POPULAR NORTH AMERICA: Fitch Cuts Issuer Default Rating to B ------------------------------------------------------------------ Fitch Ratings has downgraded the Long-term Issuer Default Rating of Popular, Inc., to 'B' from 'BBB' and downgraded the Long-term IDRs of units Banco Popular de Puerto Rico and Banco Popular North America to 'BB-' from 'BBB'. All ratings remain on Rating Watch Negative where they were first placed on May 15, 2009. A complete listing of ratings follows this release. The action follows Popular's announcement that it is offering an exchange of its preferred stock instruments into common stock to boost its existing weak level of tangible common equity which stood at just 2.7% of tangible assets on March 31, 2009. The magnitude of this plan underscores the asset quality challenges currently being faced by Popular. The level of non-performing loans remains well above average among major and regional U.S. banks with the prospect of further deterioration. Popular's ratings remain on Watch Negative given the execution risk associated with the new exchange plan and the prospect of escalating asset quality issues. The removal from Watch Negative hinges on the success of this plan as well as a stabilization of problem loans. Particularly in a stress scenario, there is the risk that considerable funds from the holding company could be downstreamed to boost bank level capital ratios. This potential outcome could hamper the ability of the holding company (Popular) and sub- holding company (Popular North America, Inc.) to service a considerable level of holding company debt. Consequently, Fitch has widened the notching between holding company and bank level IDRs. The holding company senior debt rating has been assigned a recovery rating of 'RR4'. Investors in preferred stock are being encouraged to participate through the suspension of preferred dividends. Given this suspension, the preferred stock rating of Popular was downgraded to 'C/RR6' from 'BB+'. (See commentary 'Fitch Sees Elevated Risk of Bank Hybrid Capital Coupon Deferral in 2009' dated Feb. 4, 2009 available on Fitch's web site at 'www.fitchratings.com'). While the current plan suggests trust preferred holders will not face an immediate suspension of payments, Fitch believes the potential for future deferral is increasing. Consequently, the trust preferred rating has been downgraded to 'CCC/RR6' from 'BB+'. Fitch has downgraded these ratings, which remain on Watch Negative: Popular, Inc. -- Long-term IDR to 'B' from 'BBB'; -- Short-term IDR to 'B' from 'F2'; -- Senior unsecured to 'B/RR4' from 'BBB'; -- Short-term Debt to 'B' from 'F2'; -- Individual to 'D/E' from 'C'. Popular North America, Inc. -- Long-term IDR to 'B' from 'BBB'; -- Senior unsecured to 'B/RR4' from 'BBB'; -- Short-term IDR to 'B' from 'F2'; -- Short-term Debt to B from 'F2'; -- Individual rating to 'D/E' from 'C'. Banco Popular North America -- Long-term IDR to 'BB-' from 'BBB'; -- Long-term deposits to 'BB' from 'BBB+'; -- Short-term IDR to 'B' from 'F2'; -- Short-term deposits to 'B' from 'F2'; -- Individual rating to 'D' from 'C'. Banco Popular de Puerto Rico -- Long-term IDR to 'BB-' from 'BBB'; -- Long-term deposits to 'BB' from 'BBB+'; -- Short-term IDR to 'B' from 'F2'; -- Short-term deposits to 'B' from 'F2'; -- Individual rating to 'D' from 'C'. BanPonce Trust I -- Trust preferred to 'CCC/RR6' from 'BB+'. Popular Capital Trust I -- Trust preferred to 'CCC/RR6' from 'BB+'. Popular Capital Trust II -- Trust preferred to 'CCC/RR6' from 'BB+'. Popular North America Capital Trust I -- Trust preferred to 'CCC/RR6' from 'BB+'. Fitch has downgraded these ratings and removed them from Watch Negative: Popular -- Preferred stock to 'C' from 'BB+'. Fitch has affirmed these ratings: Popular -- Support at '5'; -- Support floor at 'NF'. Popular North America, Inc. -- Support at '5'; -- Support floor at 'NF'. Banco Popular North America -- Support at '5'; -- Support floor at 'NF'. Banco Popular de Puerto Rico -- Support at '4'; -- Support Floor at 'B'. BANK OF AMERICA: Congress to Subpoena Fed Reserve on Merrill Deal ----------------------------------------------------------------- Kim Dixon Kim Dixon at Reuters reports that a House of Representatives committee said that it would subpoena the Federal Reserve to surrender documents regarding its role in Bank of America's takeover of Merrill Lynch. According to Reuters, BofA CEO Ken Lewis said that he told the U.S. Treasury and Fed officials that he was considering declaring a "material adverse change" which would have allowed the Company to walk away from the acquisition, but "Treasury and Federal Reserve representatives asked us to delay any such action, and expressed significant concerns about the systemic consequences." Mr. Lewis claimed that the government pressured him to pursue the deal and to withhold information about losses at Merrill from investors. Reuters relates that Fed chairperson Ben Bernanke has denied Mr. Lewis' assertions about pressure. According to the report, a spokesperson for former Treasury Secretary Henry Paulson said that Mr. Paulson told Mr. Lewis that there was no need to terminate the deal. The Fed would only let committee staff to review documents at the Washington offices, which they did for several days, Reuters states, citing the lawmakers. "Following the staff review, we conclude that we will need copies of these documents," the report quoted them as saying. Reuters says that among the documents sought are handwritten notes from a December 19, 2008 meeting between Messrs. Bernanke and Lewis. According to Reuters, a Fed spokesperson said that the bank, faced with the subpoena, will now hand over the documents. Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The Company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. BEARINGPOINT INC: Ernst & Young Raises Substantial Doubt -------------------------------------------------------- Ernst & Young LLP in McLean, Virginia, reported that uncertainties inherent in the BearingPoint Inc.'s Chapter 11 bankruptcy process raise substantial doubt about the company's ability to continue as a going concern after the firm audited the company's consolidated balance sheets as of December 2008 and December 2007. The company's consolidated balance sheets showed $1.65 billion in total assets and $2.20 billion in total liabilities resulting in a $55 million stockholders' deficit. The company reported $32.07 million net loss on revenue of $3.19 billion for year ended December 31, 2008, compared to $362.72 million net loss on revenue of $3.45 billion for the same period a year earlier. Ernst & Young related that the company's ability to generate cash will be governed by its plan of reorganization and its bankruptcy filing. A full-text copy of BearingPoint's annual report for year ended December 31, 2008, is available for free at: http://ResearchArchives.com/t/s?3db8 About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com/-- is currently one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP -- has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 protection on February 18, 2009 (Bankr. S.D. N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal & Manges LLP, has been tapped as counsel. Greenhill & Co., LLC, and AP Services LLC, have also been tapped as advisors. Davis Polk & Wardell is special corporate counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of September 30, 2008. Contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter 11 to implement the terms of their agreement with the secured lenders. BearingPoint intended a traditional reorganization by proposing to issue new stock to unsecured creditors and holders of $690 million in subordinated notes, pursuant to a Chapter 11 plan. The Debtors, however, changed their course and sold off certain units. The Debtors sold their public services group to Deloitte LLP for $350 million. BERWICK BLACK: Creditors' Motion to Dismiss Is Denied ----------------------------------------------------- WestLaw reports that the statutory power under 11 U.S.C. Sec. 1112(c)] accorded to Chapter 11 debtors, as farmers, to prevent conversion of Chapter 11 cases to cases under Chapter 7 upon a showing of the requisite "cause" under the conversion/dismissal provision prevented a court from granting creditors' motion to convert the cases over the debtors' objection, though the debtors' physical assets, including 14,000 head of cattle, had already been sold off and the debtors were no longer operating the same business, and though the only assets remaining were avoidance claims, including claims against the individual debtor's family members, and the debtor was allegedly opposing conversion in bad faith to prevent prosecution of such avoidance claims. The statute expressed no exception for cases in which a debtor's assets had been sold off, or where the debtor was no longer operating the same business enterprise, or where he was acting out of self-interest. In re Berwick Black Cattle Co., --- B.R. ----, 2009 WL 113417 (Bankr. C.D. Ill.). Six of Berwick Black Cattle Co.'s creditors, owed more than $14 million, filed an involuntary Chapter 11 petition (Bankr. C.D. Ill. Case No. 06-82166) against the Company, and the Company's assets were sold at auction by the secured lender in early 2009. BENJAMIN KADOSH: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Benjamin Kadosh dba Benjamin Properties 3823 S Maryland Pkwy Unit T-5 Las Vegas, NV 89119 Bankruptcy Case No.: 09-19686 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Barry Levinson, Esq. 2810 S. Rainbow Blvd. Las Vegas, NV 89146 Tel: (702) 836-9696 Fax: (702) 836-9699 Email: michael@lawbybarry.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Mr. Kadosh's petition, including a list of his 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-19686.pdf The petition was signed by Mr. Kadosh. BERRY PLASTICS: S&P Raises Corporate Credit Rating to 'B-' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its ratings on Berry Plastics Group Inc. S&P raised the corporate credit rating to 'B-' from 'SD' and the senior unsecured debt rating to 'CCC' from 'D'. The recovery ratings on Group's senior unsecured debt remain unchanged at '6', indicating S&P's expectation for negligible recovery (0% to 10%) in a payment default. S&P affirmed all its ratings on Group's wholly owned operating subsidiary Berry Plastics Corp. The outlook is stable. S&P had lowered the ratings on Group on May 22, 2009, following the announcement that BP Parallel LLC, a subsidiary of Group, agreed to pay about $147 million to purchase assignments of $472.9 million principal amount of Group's senior unsecured term loan. As of May 8, 2009, the company had closed on $105.9 million of these assignments, and management expects to close on the remainder in the fiscal third quarter ending approximately June 30, 2009. The principal amount of the term loan, which is currently pay-in-kind, was $580 million as of March 28, 2009. S&P viewed the transaction as a distressed exchange because debtholders received significantly less than the accreted principal amount of the loan. The ratings on Evansville, Indiana-based Berry reflect risks associated with the company's very highly leveraged financial profile and acquisition-driven growth strategy as well as its fair business risk profile. Berry is a leading producer of rigid plastic packaging products for relatively stable dairy, food, beverage, health care, and other consumer product applications. BLUE DRAGON PROPERTIES: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Blue Dragon Properties, LLC dba Albert Lea Inn 2301 East Main Street Albert Lea, MN 56007 Bankruptcy Case No.: 09-33943 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court District of Minnesota (St Paul) Judge: Gregory F. Kishel Debtor's Counsel: Michael A. Weber, Esq. 900 IDS Center 80 S. 8th Street Minneapolis, MN 55402 Tel: (651) 353-5376 Email: mweber@mweberlaw.com Total Assets: $1,901,443 Total Debts: $1,586,425 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/mnb09-33943.pdf The petition was signed by Tonya Navarro, chief manager of the Company. BOEGER LAND: Case Summary & Three Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Boeger Land Investments LLC 891 Hazel Street Gridley, CA 95948 Bankruptcy Case No.: 09-11706 Chapter 11 Petition Date: June 8, 2009 Court: Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: Paul M. Jamond, Esq. jamond@pacbell.net Law Offices of Paul M. Jamond 200 4th St. #300 Santa Rosa, CA 95401 Tel: (707) 526-4550 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Harris, Sanford & Hamman $7,000 660 Ohio Street Gridley, CA 95948 Landucci, Bick Matter & Johnson $1,000 1100 Main Street Suite 200 Woodland, CA 94595 Franchise Tax Board $800 Bankruptcy Unit PO Box 2952 Sacramento, CA 95812-2952 The petition was signed by Matt Boeger. BROOKSIDE TECH: Inks Securities Purchase Deal With Vicis Capital ---------------------------------------------------------------- Brookside Technology Holdings Corp. entered into a new Securities Purchase Agreement with its largest preferred stockholder, Vicis Capital Master Fund, a sub-trust of Vicis Capital Series Master Trust and the Company's. Pursuant to the agreement, Vicis invested an additional $1,000,000 in the Company and the Company issued to Vicis 1,000,000 shares of the Company's Series A Convertible Preferred Stock and a warrant to purchase 100,000,000 shares of Common Stock at an exercise price of $0.01 per share. Additionally, effective June 1, 2009, the Company and its senior creditor, Chatham Credit Management III, LLC, entered into a letter agreement pursuant to which, among other things, Chatham waived all existing defaults of the Company's senior credit facility, and agreed to suspend the compliance of the minimum fixed charge coverage ratio and maximum leverage ratio contained in the credit agreement. The Company is in full compliance with the Chatham credit agreement. Michael Nole, chairman and CEO of the Company, stated, "We are very pleased to have secured this additional equity infusion and the modification to our senior credit facility. We believe these actions provide us with the liquidity needed to more effectively navigate the challenges of the current economic environment and further demonstrates that Vicis and Chatham remain committed to our vision and business model." About Brookside Technology Based in Clearwater, Florida, Brookside Technology Holdings Corp. (OTC BB: BKSD) -- http://www.brooksideus.com/-- is a holding company for Brookside Technology Partners Inc., a Texas corporation, and US Voice & Data LLC, an Indiana limited liability company, and all operations are conducted through those two wholly owned subsidiaries. Headquartered in Austin, Texas, Brookside Technology Partners is a provider and global managed service company specializing in selling, designing, analyzing and implementing converged Voice over IP (VoIP), data and wireless business communications systems and solutions for commercial and state/government organizations of all types and sizes in the United States. Headquartered in Louisville, Kentucky, USVD is a regional provider of telecommunication services including planning, design, installation and maintenance for the converged voice and data systems. USVD serves the Kentucky and southern Indiana markets, operating out of offices in Louisville, Lexington and Indianapolis. Default In its financial report for three months ended March 31, 2009, the Company disclosed that it has a $2,000,000 line of credit with $250,000 outstanding and cash and cash equivalents of $1,033,141 at March 31, 2009. The Company is in default in its debt, which will limit the Company's ability to borrow under its line of credit. The Company sustained a loss for the three months ended March 31, 2009, of $1.3 million, sustained losses in 2008 and 2007 and has a retained deficit of $18.4 million. These losses were due to the amortization expense related to the accounting treatment of warrants issued in connection with the debt raised to fund the USVD acquisition. For the three months ended March 31, 2009, the Company had net cash used in operations of $59,417. CC MEDIA: S&P Junks Corporate Credit Rating From 'B-' ----------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating and issue-level ratings on CC Media Holdings Inc. and its operating subsidiary, Clear Channel Communications Inc., by two notches. (S&P rates the holding company and operating company on a consolidated basis.) The corporate credit rating was lowered to 'CCC' from 'B-'. The ratings were removed from CreditWatch, where they were placed with negative implications on May 4, 2009. In addition, S&P revised the recovery rating on Clear Channel's secured debt to '4', reflecting S&P's expectation of average (30% to 50%) recovery in the event of a payment default, from '3'. The revision of the recovery rating on the secured debt is due to the lowering of S&P's EBITDA multiple used to value the company, to 7.0x from the 7.5x S&P used in its previous analysis, as well as a lower simulated EBITDA level at the time of default due to weak operating performance that S&P expects to continue throughout 2009. (For the complete recovery analysis, see Standard & Poor's recovery report, to be published on RatingsDirect immediately following the release of this report.) "The ratings downgrade is due to uncertainty around Clear Channel's ability to meet financial covenants in the second half of 2009 without completing a debt exchange with senior lenders," explained Standard & Poor's credit analyst Michael Altberg. If senior secured lenders agree to the company's proposed debt exchange, S&P would lower its corporate credit rating to 'SD' (selective default) and then reevaluate the post-transaction capital structure. If Clear Channel is unable to complete a potential debt exchange, S&P is concerned that it could violate financial covenants and would be unable to absorb a potential interest rate increase that could accompany an amendment, forcing it into bankruptcy. The current 'CCC' rating reflects the company's highly leveraged capital structure following its 2008 LBO; the potential for a financial covenant violation in late 2009 if operating trends do not improve; cyclical pressure on radio and outdoor advertising, which S&P expects to continue throughout 2009 and perhaps into 2010; and negative secular trends in radio advertising. The company's position as the largest radio and outdoor operator and its top clusters of radio stations in large markets, which tend to be more lucrative, do not offset the negative factors. For the first quarter of 2009, revenue and EBITDA (including restructuring charges) declined 22.7% and 56%, respectively. Radio revenue declined 21.6%, while outdoor revenue was down a sizable 25%. For the first half of 2009, the company faces more difficult year-over-year comparisons at its outdoor business, as this segment did not show the same level of weakness in local advertising as other media until the third quarter of 2008. The EBITDA margin was 23.7% for the 12 months ended March 31, 2009, down from 31.8% as of March 31, 2008, due to pressure on both ad pricing and volume in both radio and outdoor. Balance sheet debt to EBITDA (including restructuring costs) was a steep 14x for the 12 months ended March 31, 2009, up from 11.4x at 2008 year-end. S&P's calculation of lease-adjusted total debt (capitalizing both operating leases and minimum franchise payments associated with outdoor operations, and including third-party debt, guaranteed letters of credit, and acquisition-related earn- out payments) to EBITDA was even higher, at 14.2x. For the 12 months ended March 31, 2009, the company converted 25% of EBITDA to discretionary cash flow, as it only had roughly eight months of increased interest expense following the July 2008 leveraged buyout. For 2009, S&P believes that discretionary cash flow could turn negative, dipping into cash balances. CHARTER COMMUNICATIONS: District Court Issues TRO Against DirecTV ----------------------------------------------------------------- Charter Communications Inc. sued rival DirecTV Inc. alleging that its competitor's advertisement is false and deceptive. Billionaire Paul G. Allen, Charter Communications, Inc.'s chairman, asserted in the lawsuit, filed May 11, 2009, before the United States District Court for the Eastern District of Missouri, that DirecTV attempted to exploit the Debtors' bankruptcy filing to win over their customers. Charter argued in papers filed in court that "DirecTV's ads are literally false, grossly misleading, cause consumer confusion, and are likely to deceive Charter's current and prospective customers." Charter, therefore, asked the Missouri Court to restrain DirecTV from running the offending ads and reimburse Charter for any lost profits and costs incurred in running counter-advertising. "We have certainly targeted some of the Charter markets for a while so that gave us a new dimension," Reuters quoted DirecTV's chief financial officer, Pat Doyle, as saying at a conference held in early May 2009. Missouri District Judge Rodney W. Sippel issued a temporary restraining order preventing DirecTV from running TV, radio or print ads that question whether Charter can deliver the most up-to-date technologies and most high-definition channels to its subscribers, according to Bloomberg News. "We are pleased that a temporary restraining order against DirecTV's clearly false and misleading advertisements was granted," Charter's general counsel, Grier Raclin, Esq., said in an e-mailed statement to Bloomberg. "While we are well-positioned for competition, we believe competition should remain fair and truthful," he also stated. BankruptcyLaw360 reported on June 9, 2009, that Judge Rodney W. Sippel of the U.S. District Court for the Eastern District of Missouri refused to grant DirecTV's motion to dismiss the lawsuit filed by Charter Communications Inc. 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) CHRYSLER LLC: Supreme Court Won't Block Sale of Assets to Fiat -------------------------------------------------------------- The U.S. Supreme Court has rejected an appeal by consumer groups and three Indiana pension plans to block Chrysler LLC's sale to Fiat SpA. A group led by Fiat could complete its purchase of most of Chrysler's assets on June 10 or June 11, after the Supreme Court rejected objections on the sale, Bloomberg News reports, citing people familiar with the matter. Bloomberg relates that the new company would be called Chrysler Group LLC. As reported by the Troubled Company Reporter on June 9, 2009, the Indiana Pensioners -- led by the Indiana State Teachers Retirement Fund, the Indiana State Police Pension Trust and the Indiana Major Moves Construction Fund -- asked Supreme Court to put the sale on hold after it lost its appeal at the Second Circuit U.S. Court of Appeals last Friday. The emergency stay request came late Saturday after the Second Circuit 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. The Supreme Court temporarily put the sale on hold on Monday, leaving Chrysler's fate unsettled for at least one more day. "[T]he terse language of the order left it nearly impossible to draw any conclusions on the court's next move," The Wall Street Journal's Mark H. Anderson, Neil King Jr. and Alex P. Kellogg pointed out. It only said the transaction is on hold "pending further order of the undersigned or of the court," they noted. The Associated Press relates that the Supreme Court issued a brief, unsigned opinion saying that to obtain a delay, or stay, someone must show that at least four of the nine justices find that the issue raised is serious enough to warrant hearing a full appeal and that a majority of the court will conclude the lower court decision was wrong. "The applicants have not carried that burden," The AP quoted the court as saying. According to The AP, Indiana Treasurer Richard Mourdock was disappointed with the decision and said options seem limited for opponents of the sale. The report quoted him as saying, "The United States government has, I continue to believe, acted egregiously by taking away the traditional rights held by secured creditors." Sale of Assets The Indiana Pensioners questioned the government's use of funds from a federal bailout to help Chrysler when the funds were allocated to help only struggling financial institutions. It also questioned the move of the automaker to put the rights of junior creditors ahead of the rights of the senior lenders. The Indiana Pensioners hold $42.5 million of $6.9 billion in Chrysler secured loans. The AP relates that the Indiana Pensioners tried to persuade the justices that there was no reason to rush to meet the June 15 deadline. According to the report, Fiat officials had said that they wouldn't walk away from the deal even if June 15 were to pass without completing the sale. Chrysler argued that the sale is necessary to stanch losses of $100 million a day. The automaker said the deal would help save 38,500 jobs, plus those of workers at its suppliers. Dealer Cuts The AP also reports that Chrysler returned to the bankruptcy court on Tuesday to get approval to terminate 789 dealer franchises. The AP relates that the court ruled that the franchises, which represent about 25% of Chrysler's dealer base, can no longer act as authorized Chrysler, Dodge, and Jeep dealers, effective immediately. The AP states that a written ruling explaining the decision would be filed later. According to The AP, more than 25 attorneys representing hundreds of dealers from across the country opposed Chrysler's request, saying that little would be gained by ending the franchises. Chrysler said that the dealer cuts are part of its plan to lessen costs and quickly emerge from Chapter 11 bankruptcy. Bankruptcy Law360 relates that Sen. Bob Corker is asking the Congress to consider legislation that would force Chrysler and General Motors Corp. to use some of the U.S. Treasury funds they received to reimburse the dealers. 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: US Trustee Objects to Release of Officers From Suits ------------------------------------------------------------------ Tiffany Kary at Bloomberg News reports that U.S. Trustee Diana G. Adams has filed an objection in the U.S. Bankruptcy Court for the Southern District of New York on Chrysler LLC's bid to release its officers and directors from lawsuits. According to Bloomberg, Chrysler made the request as part of a motion to appoint a new board and supply it with directors and officers' insurance. "The motion barely attempts to explain why the release provisions are justified, except as set forth that they provide 'comfort' to the debtors' directors and officers," Bloomberg quoted Ms. Adams as saying. Bloomberg states that Ms. Adams said she doesn't oppose Chrysler's move to insure its new board. Plaintiffs Want Lawsuit to Move Forward in Appeals Court Bankruptcy Law360 reports that plaintiffs who won a $55 million judgment in a case against Daimler Chrysler Corp. over a death they said was caused by a defect in a Dodge truck have asked the Court to move the company's challenge to the judgment to a California appeals court. Chrysler, says Bankruptcy Law360, also secured Court approval of a deal with former parent Daimler AG, in which the German firm will forgive $2 billion in Chrysler debt and inject $600 million into the Company's ailing pension plans over the next two years. The terms of the deal was negotiated in April between Daimler, Chrysler, Cerberus Capital Management LP, and federal pension guarantor the Pension Benefit Guaranty Corp., Bankruptcy Law360 states. 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: Sues Logghe Stamping for Violating Automatic Stay --------------------------------------------------------------- Chrysler LLC has filed a complaint against Logghe Stamping Co. for willful and intentional violations of the automatic stay applicable in the Debtors' Chapter 11 cases. In addition, Chrysler seeks an order directing Logghe to turn over a number of tools it previously used to manufacture parts for Chrysler. According to Albert Togut, Esq., at Togut Segal & Segal LLP, in New York, pursuant to an agreement between Chrysler and Logghe, Chrysler has an express, unconditional and exclusive ownership interest in all the Tools, and Chrysler has an express an unconditional right to possess the Tools immediately. He notes that Chrysler has terminated its supply contract with Logghe and advised Logghe that Chrysler intends to resource production of the component parts to another supplier. Mr. Togut contends that if Chrysler does not transfer production of its parts to an alternate supplier, then New CarCo Acquisition LLC, a company formed by Fiat S.p.A., will lose production of numerous small metal stampings like brackets that are used across Chrysler's entire product line, halting production of virtually all manufacturing, idling up to 15 plants and forcing the layoff of more than 10,000 workers. Logghe refuses to allow Chrysler access to its Tools because, Mr. Togut says, upon information and belief, Logghe is upset that Chrysler is resourcing production of the parts that Logghe previously manufactured, and is refusing to return the Tools to gain unfair and illegal leverage over the Debtor in an effort to force Chrysler to negotiate a new contract with Logghe. To the extent Logghe asserts a possessory or other lien against the parts produced using the Tools, Chrysler has offered to provide Logghe with adequate protection in the form of a cash escrow, which Logghe has refused, Mr. Togut tells the U.S. Bankruptcy Court for the Southern District of New York. Preliminary injunctive relief is necessary to ensure that Logghe continues to comply with its contractual obligation to Chrysler and applicable provisions of the Bankruptcy Code, Mr. Togut asserts. He adds that Chrysler's request is essential to protect and preserve Chrysler's ability to transfer its assets to New Chrysler. Accordingly, Chrysler asks the Court to enter an order compelling Logghe to turn over the Tools to Chrysler, immediately cease violating the automatic stay by interfering with Chrysler's property and contract rights, and award Chrysler damages that result from Logghe's actions illegally withholding the Tools. Chrysler Seeks Injunction In separate filings, the Debtors ask the Court (i) for a preliminary injunction prohibiting Logghe from refusing to surrender and turn over to Chrysler the Tools in its possession that are the property of Chrysler, and (ii) to schedule a hearing to consider their request. The Debtors also ask the Court to impose "coercive civil sanctions" to compel Logghe to perform under the Production Purchasing General Terms and Conditions in effect between Chrysler and Logghe, and to stop violating the automatic stay. The Debtors ask that the injunction remain in effect until the Court rules on the underlying merits of the complaint, to prevent immediate and irreparable injury to the Debtors. Mr. Togut contends that the Debtors are likely to succeed on the merits of its Complaint because: (a) the Tools are property of Chrysler's bankruptcy estate, and Logghe is required to turn over the Tools pursuant to Section 542(a) of the Bankruptcy Code; (b) Chrysler's contract rights under the GTC are property of Chrysler's bankruptcy estate, and therefore may not be breached without relief from the automatic stay imposed by Section 362(a) of the Bankruptcy Code; (c) the failure of Logghe to turn over the Tools means that Chrysler will be unable to deliver the Tools to a new supplier for the benefit of New Chrysler; and (d) Sections 105(a) and 362 of the Bankruptcy Code, and Rule 7065 of the Federal Rules of Bankruptcy Procedure, provide that the Court has the authority to grant the relief requested. Pursuant to the Fiat sale transaction documents, the Tools will become property of New Chrysler upon closing, Mr. Togut avers. He asserts that New Chrysler intends to continue production of numerous models, which requires its Tier 1 supplier to have the Tools used for the necessary parts. If Chrysler is not able to deliver the Tools so that New Chrysler can manufacture vehicles, Chrysler will be in breach of its contract with New Chrysler, resulting in enormous damages and harm to the estate, he adds. "Any possible harm to Logghe from granting Chrysler injunctive relief is greatly outweighed by the injury to Chrysler absent such relief," Mr. Togut points out. "Moreover, Logghe will not be prejudiced by the relief requested because it is contractually obligated to turn over the Tools to Chrysler upon demand. Logghe's only claim against Chrysler is for money: a claim for an unpaid tooling invoice, and a claim for parts delivered," he adds. Logghe Responds On behalf of Logghe Stamping Co., Steven Alexsy, Esq., at Alexsy Law Group P.C., in Detroit, Michigan, contends that Chrysler's representation that Logghe had previously been notified that it would no longer be a Tier 1 supplier is false. He says that Logghe's first notice was a written notice on May 15, 2009, indicating that it intended to resource production of more than 200 tools and dies located at Logghe's plant. Logghe did not refuse to turnover the tools and dies, Mr. Alexsy asserts. To the contrary, he says, Logghe continues to acknowledge that Chrysler is the owner of almost all of the Tools. However, he adds, Logghe -- as is the case with all suppliers to Chrysler -- "has never encountered a fast track bankruptcy case and did not know that Chrysler had changed the rules." Mr. Alexsy explains that in the ordinary course of business, tools and dies are removed from one supplier and delivered to another supplier and prior to the move, the new supplier typically inspects the capital equipment to make the determination of the requirements for running the part and may, in some cases, subcontract with the supplier in possession of the Tools. He notes that based on past practice and because of the complexity of setting up and manufacturing the required parts, Logghe asked Chrysler for the names of the suppliers. "In a departure from the ordinary course of business, Chrysler refused to provide the names of those suppliers," Mr. Alexsy explains. For two weeks, there have been numerous phone calls, meetings and e-mails between Logghe and Chrysler's representatives, Mr. Alexsy tells the Court. He says that the parties exchanged e-mails that set out the terms of the return of the Tools. Logghe advised Chrysler that Chrysler may not own certain of the Tools, but at no time did Logghe indicate that it would not expeditiously return the Tools, Mr. Alexsy maintains. Mr. Alexsy says that it was in the mutual best interest of Chrysler and Logghe to discuss subcontracting with the new suppliers in accordance the industry practice and Chrysler's representatives finally relented and provided the names of the suppliers and agreed to allow discussions between Logghe and the new suppliers. However, Chrysler gave Logghe less than two hours to negotiate with those suppliers, Mr. Alexsy says. Chrysler also instructed each supplier to arrive at one-hour intervals. Given the short window of time, most of the new suppliers ended up being there at the same time. Chrysler also threatened legal action if Logghe did not return the Tools in the short time frames unilaterally set by Chrysler, he relates. Mr. Alexsy discloses that during the course of discussion with one of the suppliers, Logghe was advised that Chrysler's representatives had told the suppliers that if the suppliers worked with Logghe, that supplier would not receive any of the Tools. Once Logghe realized that negotiations would be futile, Logghe worked hard to comply with Chrysler's demands working Saturday and overnight into Sunday and completed the move ahead of Chrysler's schedule, he said. For this reason, this adversary proceeding and motion are unnecessary, Mr. Alexsy submits. He explains that no injunctive relief is required against a party that is cooperating with the unrealistic and unreasonable demands of Chrysler. According to Mr. Alexsy, Chrysler failed to inform the Court of the actual status of Logghe's cooperation. He says that Chrysler ignored the fact that for 60 years, Logghe has complied with Chrysler's requirements. "[Logghe] had a difficult time realizing that as a result of the filing of this bankruptcy case, Chrysler had, in effect, turned on [Logghe] and was requiring a 60 year relationship to unwind in less than two weeks," Mr. Alexsy says. Against this backdrop, Logghe asks the Court to deny Chrysler's requests. 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: Wants to Hire Dykema Gossett as Special Counsel ------------------------------------------------------------- Chrysler LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy for the Southern District of New York to employ Dykema Gossett PLLC as their special counsel, nunc pro tunc to their petition date, to represent them in connection with certain supplier and environmental matters. The Debtors anticipate that Dykema will: (a) assist them with managing, analyzing, responding to or resolving production supplier demands and disputes, including demands under the Uniform Commercial Code and demands for new contract terms; (b) develop and maintain a system for the intake, logging and categorization of various supplier demands; (c) provide certain ongoing environmental legal services; and (d) provide other services as they may request. Dykema was under time pressure to continue rendering Services to the Debtors, including in numerous supplier matters that required immediate attention after the Petition Date, discloses Holly E. Leese, senior vice president, general counsel and secretary Chrysler LLC. The Debtors will pay Dykema based on its hourly rates: Professional Hourly Rate ------------ ----------- Partners $250 - $570 Counsel $250 - $250 Associates $195 - $350 Paralegals $90 - $240 The Debtors will also reimburse the firm for reasonable out-of- pocket expenses it will incur. Ronald L. Rose, Esq., a member Dykema, disclosed that in the period from April 30, 2008, to the Petition Date, Dykema received $3,527,294 in compensation from the Debtors for prepetition advice and assistance. As of the Petition Date, the Debtors owed $259,170 to Dykema on account of prepetition services rendered and expenses incurred on behalf of the Debtors. According to Mr. Rose, Dykema has agreed that, for so long as it serves as special counsel to the Debtors, it will not serve on any creditors' committee, or otherwise act in the Chapter 11 cases on account of the Debtors' prepetition obligations to it, other than by filing a proof of claim or otherwise prosecuting or defending its entitlement to payment for postpetition legal services provided to the Debtors. Dykema's status as a prepetition creditor of the Debtors is not an impediment to its retention under Section 327(e) of the Bankruptcy Code, Mr. Rose says. Mr. Rose further disclosed that Dykema has performed services for certain of the nondebtor affiliates of the Debtors. Mr. Rose says Dykema intends to continue performing services for the Nondebtor Entities from and after the Petition Date and to bill the Nondebtor Entities separately for the services. Fees for services performed for the Nondebtor Entities and the reimbursement of related expenses will be paid from assets outside of the Debtors' bankruptcy estates. Nevertheless, out of an abundance of caution, Dykema will include (a) the amount of the fees and expenses sought from the Nondebtor Entities and (b) brief narrative descriptions of the services performed for the Nondebtor Entities in its fee statements and fee applications submitted during the pendency of the Chapter 11 cases. In addition to the Debtors, General Motors Corporation and Ford Motor Company accounted for more than 1% of Dykema's total revenue in 2008, Mr. Rose notes. Mr. Rose assures the Court that Dykema has no connection with the Debtors, their creditors or other parties-in-interest in the Debtors' Chapter 11 cases, or their attorneys or other professionals, or any employee of the U.S. Trustee. Mr. Rose further assures that none of Dykema's members, counsel or associates represent or hold any interest adverse to the Debtors' estates with respect to the matters upon which Dykema is proposed to be employed. The Court will convene a hearing on June 18, 2009, at 10:00 a.m. (New York time) to hear Dykema's Application. Objections are due on June 14, 2009 at 4:00 p.m. (New York time). 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) CITIGROUP INC: Will Launch Exchange Offers This Week ---------------------------------------------------- Citigroup Inc. expects to launch its exchange offers later this week. David Enrich, Damian Paletta, and Randall Smith at The Wall Street Journal relate that Citigroup's plan to convert billions of dollars of preferred shares into common stock, which had been delayed, will clear the way for the government to own as much as 34% of the Company. According to WSJ, the $58 billion conversion, which was disclosed in February 2009 when Citigroup shares were trading almost $1, was first scheduled for April. WSJ states that the deal is aimed at reducing worries about Citigroup's capital levels. Citigroup said in May that it would expand the conversion to help plug the $5.5 billion capital hole found by the Federal Reserve in its stress tests. The conversion, according to WSJ, was delayed by talks between Citigroup and federal officials over details of the complicated transaction. Citigroup said in a statement that the offers require numerous different federal and other approvals, and press reports suggesting that federal banking agencies delayed approvals are entirely incorrect. The Company, with the encouragement and support of the federal banking agencies, has worked diligently to launch the exchange offers. Citigroup's Conflict With FDIC The Federal Deposit Insurance Corporation, WSJ relates, believes that Citigroup's top executives lack adequate commercial-banking experience. WSJ states that the FDIC has recently requested copies of any financial documents Citigroup provided to other regulators and has asked the Company to walk FDIC examiners through parts of Citigroup's balance sheet. People familiar with the matter said that federal officials have discussed possible replacements for Citigroup CEO Vikram Pandit and his deputies, WSJ reports. Nevertheless, regulators at the Office of the Comptroller of the Currency, part of the Treasury Department, feel that Mr. Pandit's team deserves more time to execute on its plans and that a management shake-up would be destabilizing, WSJ relates, citing people familiar with the matter. According to WSJ, some federal officials expect continuing government assessments of bank governance and risk-management practices to help them decide on a more-unified approach toward dealing with Citigroup. Citigroup hasn't asked government officials for permission to repay any of the at least $45 billion in taxpayer-funded capital it has received, WSJ notes. Citigroup was dropped from the Dow Jones Industrial Average on Monday, WSJ cites. Klayman & Toskes Files Arbitration Claim Vs. Citigroup The Securities Law Firm of Klayman & Toskes filed an arbitration claim against Citigroup Global Markets, Inc., on behalf of two investors, for losses sustained as a result of unsuitable investment recommendations. The lawsuit was filed with the Financial Industry Regulatory Authority's Department of Arbitration. The Investors allege that instead of recommending a conservative investment strategy to reduce their risk, Citigroup recommended a strategy that concentrated the investors' assets in preferred financial stocks, including Citigroup, Fannie Mae, Bank of America, Deutsche Bank, HSBC, ING Groep, Barclays, Credit Suisse, and Merrill Lynch. This unsuitable strategy resulted in accounts that were over-concentrated in a single sector, Klayman & Toskes notes. As a result, the investors sustained damages of more than $2.5 million, the firm states. The claim filed against Citigroup focuses on the broker's recommendation to purchase numerous preferred banking stocks, representing that they were conservative fixed income products. However, what resulted was an over-concentration in the financial sector. When the markets crashed in 2008, the majority of the clients' accounts also declined significantly in value, given the substantial exposure to the financial sector. In addition to the over-concentration claim, the preferred stocks had no downside protection whereby risk management strategies could have been used to prevent extreme losses. Retail and institutional investors who have sustained investment losses can contact K&T to explore their legal rights and options. The attorneys at K&T are dedicated to pursuing claims on behalf of investors who have suffered investment losses. K&T, an experienced, qualified and nationally recognized securities litigation law firm, practices exclusively in the field of securities arbitration and litigation. It continues its representation of investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citigroup had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of September 30, 2008. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CLEAR CHANNEL: S&P Junks Corporate Credit Rating ------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating and issue-level ratings on CC Media Holdings Inc. and its operating subsidiary, Clear Channel Communications Inc., by two notches. (S&P rates the holding company and operating company on a consolidated basis.) The corporate credit rating was lowered to 'CCC' from 'B-'. The ratings were removed from CreditWatch, where they were placed with negative implications on May 4, 2009. In addition, S&P revised the recovery rating on Clear Channel's secured debt to '4', reflecting S&P's expectation of average (30% to 50%) recovery in the event of a payment default, from '3'. The revision of the recovery rating on the secured debt is due to the lowering of S&P's EBITDA multiple used to value the company, to 7.0x from the 7.5x S&P used in its previous analysis, as well as a lower simulated EBITDA level at the time of default due to weak operating performance that S&P expects to continue throughout 2009. (For the complete recovery analysis, see Standard & Poor's recovery report, to be published on RatingsDirect immediately following the release of this report.) "The ratings downgrade is due to uncertainty around Clear Channel's ability to meet financial covenants in the second half of 2009 without completing a debt exchange with senior lenders," explained Standard & Poor's credit analyst Michael Altberg. If senior secured lenders agree to the company's proposed debt exchange, S&P would lower its corporate credit rating to 'SD' (selective default) and then reevaluate the post-transaction capital structure. If Clear Channel is unable to complete a potential debt exchange, S&P is concerned that it could violate financial covenants and would be unable to absorb a potential interest rate increase that could accompany an amendment, forcing it into bankruptcy. The current 'CCC' rating reflects the company's highly leveraged capital structure following its 2008 LBO; the potential for a financial covenant violation in late 2009 if operating trends do not improve; cyclical pressure on radio and outdoor advertising, which S&P expects to continue throughout 2009 and perhaps into 2010; and negative secular trends in radio advertising. The company's position as the largest radio and outdoor operator and its top clusters of radio stations in large markets, which tend to be more lucrative, do not offset the negative factors. For the first quarter of 2009, revenue and EBITDA (including restructuring charges) declined 22.7% and 56%, respectively. Radio revenue declined 21.6%, while outdoor revenue was down a sizable 25%. For the first half of 2009, the company faces more difficult year-over-year comparisons at its outdoor business, as this segment did not show the same level of weakness in local advertising as other media until the third quarter of 2008. The EBITDA margin was 23.7% for the 12 months ended March 31, 2009, down from 31.8% as of March 31, 2008, due to pressure on both ad pricing and volume in both radio and outdoor. Balance sheet debt to EBITDA (including restructuring costs) was a steep 14x for the 12 months ended March 31, 2009, up from 11.4x at 2008 year-end. S&P's calculation of lease-adjusted total debt (capitalizing both operating leases and minimum franchise payments associated with outdoor operations, and including third-party debt, guaranteed letters of credit, and acquisition-related earn- out payments) to EBITDA was even higher, at 14.2x. For the 12 months ended March 31, 2009, the company converted 25% of EBITDA to discretionary cash flow, as it only had roughly eight months of increased interest expense following the July 2008 leveraged buyout. For 2009, S&P believes that discretionary cash flow could turn negative, dipping into cash balances. CLEARWATER PAPER: Moody's Assigns 'Ba2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service assigned a Ba2 corporate family rating to Clearwater Paper Corporation and a Ba3 rating to the company's proposed $150 million unsecured note offering. Clearwater intends to use the proceeds from the proposed note offering to refinance its $100 million debenture which the company inherited when it was spun-out of Potlatch Corporation (Ba1 stable) in December 2008, and will retain the remaining proceeds for general corporate purposes. Moody's has also assigned Clearwater a speculative grade liquidity rating of SGL-1, reflecting Moody's expectation that Clearwater will have very good liquidity over the next twelve months. This is the first time that Moody's has rated Clearwater. The rating outlook is stable. Clearwater's Ba2 corporate family rating reflects the company's significant position as one of the leading producers of private label "at-home" tissue products and the relatively stable operating performance and conservative capital structure which has generated strong debt protection metrics. The company has good committed liquidity arrangements, with no near-term debt maturities as the proposed seven year note offering refinances all of the company's current debt. Offsetting these strengths is the company's modest scale and the risks associated with operating a limited number of mill sites. Credit challenges also include the company's lack of geographic diversification, relatively weak margins and low returns, the potential for significantly higher capital expenditures and the company's dependence on a few large customers for a substantial portion of its business. The proposed notes are senior unsecured obligations of Clearwater and are rated Ba3, one notch below the corporate family rating, in accordance with Moody's loss-given-default methodology. The proposed notes will rank behind the company's senior secured bank facility (not rated), which is secured with a first priority lien on the company's accounts receivable, inventory and cash. The proposed notes will rank equally in right of payment with all of the company's existing and future senior unsecured indebtedness. The SGL-1 liquidity rating indicates that Clearwater has very good liquidity supported by expectations of modest internally generated cash flow with no significant near-term debt maturities or dividend payments, adequate cash balance and sufficient availability under its four year committed bank facility. A minimum fixed charge covenant ratio is the only financial covenant requirement under the credit facility and is triggered when an event of default exists or when availability under the facility falls below 20%. Clearwater is currently in compliance with this covenant and Moody's expects Clearwater will remain in compliance over the near term. The stable rating outlook reflects Moody's expectations that Clearwater will be able to sustain acceptable credit protection metrics given the company's low leverage and as decreasing input costs and productivity improvements partially offset the impacts of falling demand and product prices. Assignments: Issuer: Clearwater Paper Corporation -- Corporate Family Rating, Assigned Ba2 -- Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (68 - LGD4) -- Speculative Grade Liquidity Rating, Assigned SGL-1 Headquartered in Spokane Washington, Clearwater is a producer of bleached paperboard for the high-end segment of the packaging industry and a leading producer of private label tissue products sold in grocery stores in the United States. The company had revenues of approximately $1.25 billion in 2008, of which approximately 54% was from the company's pulp and paperboard segment, 40% was from the consumer products segment and 6% was from the company's lone lumber mill. CMR MORTGAGE II: Wants to Assign Interest in South S.F. Property ---------------------------------------------------------------- CMR Mortgage Fund II, LLC, asks the U.S. Bankruptcy Court for authorization to assign a 550,000/10,000,000th interest from its deed on trust against the property located at 950 Linden Avenue in South San Francisco, California, to the Third Party Lenders in exchange for a $550,000 loan, and to execute a subordination of the remaining unassigned portion of its deed of trust to the Third Party Lenders for their advance. The Third Party Lenders are Delbert R. Lewis Jr. Family Trust U/A 12/31/97, Delbert R. Lewis, Jr. and Heather N. Sarsam-Lewis, Unquieta Smythe Family Trust, Karen Chopra Living Trust U/A Koren Chopra, Trustees. On April 9, 2008, the Debtor foreclosed its deed of trust against the property and directed the foreclosure trustee to issue the trustee's deed in the name of 15 SSFDEV, LLC, a real estate owned entity formed by the Debtor and its related real estate funds to hold title to and operate real estate. 15 SSFDEV is not a debtor in the case. The loan will be advanced to 15 SSFDEV. On September 24, 2008, the Third Party Lenders loaned 15 SSFDEV the sum of $1,500,000 and recorded a deed of trust against the property to secure a promissory note in that amount on condition that the senior $10 million deeds of trust subordinate to the position of the Third Party Lenders. Fund I and Fund III recorded subordinations of their deeds of trust against the property on September 26, 2008. The property is currently listed for sale at $3,995,000. Although property is owned by a non-debtor third-party, court approval is needed since assignment of a portion of Debtor's lien is a transaction out of the ordinary course of business. The terms of this loan are: -- interest will be 12 per annum, and payments will be for interest only. -- term of repayment will be 29 months. -- the Debtor will execute a subordination as to the unassigned portion of its lien to permit the Third Party Lenders' lien to remain in first position for all sums owed to them. San Francisco, California-based CMR Mortgage Fund II, LLC is a a limited liability company organized for the purpose of making or investing in business loans secured by deeds of trust or mortgages on real properties located primarily in California. The Company previously funded lending activities through loan pay downs or pay offs, as well as by selling its membership interests, and by selling all or a portion of interests in the loans to individual investors. The company commenced operations in February 2004. The Company ceased accepting new members in the third quarter of 2006. The Company filed for Chapter 11 protection on March 31, 2009 (Bankr. N. D. Calif. Case No. 09-30788). Robert G. Harris, Esq., at the Law Offices of Binder and Malter, represents the Debtor as counsel. The Debtor listed assets of $10 million to $50 million, and debts of $10 million to $50 million. COMMUNICATION INTELLIGENCE: Closes Phoenix Venture Financing ------------------------------------------------------------ Communication Intelligence Corporation closed a financing on May 28, 2009, led by Phoenix Venture Fund LLC. Under the terms of the financing, which was effected as a supplement to the financing closed by the Company in June of 2008, the Company received gross proceeds of $1.1 million from and issued warrants to the Investors to purchase shares of the Company's common stock. In addition, the Company amended the terms of the notes and warrants from the June 2008 financing such that the aggregate debt of approximately $4.8 million accrues interest at the rate of 8% per annum and is due December 31, 2010, and the associated warrants are exercisable for a total of 80,154,217 shares at an exercise price of $0.06 per share through June 30, 2012. The Company intends to use the proceeds from the financing for growth and general corporate purposes, in each case in the ordinary course of business. An affiliate of one of the investors acted as placement agent for the transaction and for such service received $22,000 and warrants to purchase 3,947,917 shares of the Company's common stock on the same terms as those issued to the Investors. The Company expects fees and expenses, including the cash component of the placement agent's fee, in connection with the current financing not to exceed $200,000. Founded in 1981 and headquartered in Redwood Shores, California, Communication Intelligence Corporation (OTC BB: CICI.OB) -- http://www.cic.com/-- and its joint venture, Communication Intelligence Computer Corporation, develops and markets electronic signature solutions and biometric signature verification for business process automation in the financial industry worldwide. The company also supplies natural input/text entry software for handheld computers and smartphones. It supplies its core technologies in two categories, Transaction and Communication Enabling Technologies, and Natural Input Technologies. The company's products include SignatureOne, iSign, and Jot multi- lingual handwriting recognition software. Going Concern Doubt On March 10, 2009, GHP Horwath, P.C. in Denver, Colorado raised substantial doubt about the Company's ability to continue as a going concern after auditing its financial results for the periods ended December 31, 2008, and 2007. The auditors pointed to the Company's significant recurring operating losses and accumulated deficit. At March 31, 2009, the Company had a working capital deficit of $227,000, including cash and cash equivalents of $317,000. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company funded losses through the sale of debt and equity securities. DELPHI CORP: Deloitte & Touche Wants Retention Terminated --------------------------------------------------------- Deloitte & Touche LLP asks the U.S. Bankruptcy Court for the Southern District of New York to terminate its retention by Delphi Corporation and its debtor-affiliates as independent auditors and accountants pursuant to Sections 327(a), 328(a) and 1107(b) of the Bankruptcy Code. Pursuant to the Court-approved application of the firm, Deloitte & Touche performed auditing and accounting services for the Debtors, including: (i) performing an audit of the Debtors' financial statements for the fiscal year ended December 31, 2005; (ii) providing an opinion as to management's assessment of the effectiveness of the Debtors' internal controls over financial reporting as of December 31, 2005; (iii) performing reviews of interim financial statements for the three and nine-month periods ended September 30, 2005; (iv) assisting the Debtors in their preparation of certain mandatory governmental reports; and (v) rendering certain other accounting services as may have been necessary. Gregory Schwed, Esq., at Loeb & Loeb LLP, in New York, notes that Deloitte & Touche completed the 2005 Audit in July 2006 and has not done any significant work except in connection with the issuance of its last audit consent, which was completed in March 2008. Moreover, Mr. Schwed notes, the Debtors have sought and obtained the Court's authority to employ Ernst & Young LLP to replace Deloitte & Touche as their auditors for the fiscal year ended December 31, 2006 and December 31, 2007. Against this backdrop, the Debtors and Deloitte nevertheless agreed to continue the firm's employment for the sole purpose of ensuring that Deloitte & Touche could issue audit consents if necessary and appropriate. However, based on the number of years elapsed since the 2005 Audit, it is no longer necessary to publish or reproduce Deloitte & Touche's report in connection with the 2005 Audit or any other reports or documents prepared by Deloitte & Touche in connection with its engagement by the Debtors, the Debtors reason. There will also be no need for Deloitte's issuance of any further audit consents in connection with the Debtors' Chapter 11 cases, Mr. Schwed says. Mr. Schwed points out that if the Motion to Terminate is granted, Deloitte & Touche would be able to perform professional services for third parties in connection with the Debtors, including a current potential purchaser of assets, for which some preliminary work has been done, subject to applicable professional and internal Deloitte standards and confidentiality safeguards. He says that the tax planning assistance could benefit the Debtors' estates by clearing the way for that purchaser to make a bid. He assures the Court that termination of Deloitte & Touche's employment would not prejudice the Debtors' estates because the firm would not accept any Delphi-related third-party engagement unless the engagement would be appropriate under applicable professional standards. He also maintains that Deloitte & Touche will abide by its customary procedures and policies to appropriately protect the confidential information obtained by the firm in the course of its engagement for the Debtors. He notes that any confidential information by Deloitte & Touche through its work for the Debtors is, at this point, likely to be stale. Given the changed landscape in the Debtors' Chapter 11 cases since 2006, any information obtained by Deloitte & Touche through the course of its employment is likely to be of greatly diminished value, Mr. Schwed relates. Mr. Schwed adds that despite termination of Deloitte & Touche's employment, the firm's fees will still remain subject to the Court's approval after the filing of a final fee application. Deloitte & Touche, however, defers filing of a final fee application until time as (i) the Debtors' other professionals may do so or (ii) directed by the Court. 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) 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: Court to Consider Interim Approval of GM Deal Today ---------------------------------------------------------------- Delphi Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York's interim and final approval of certain amendments to the arrangement they previously entered into with General Motors Corporation. Executed on June 1, 2009, the Amended and Restated GM-Delphi Arrangement provides for a $250 million increase of GM's total commitment under the parties' agreement, subject to the certain terms and conditions. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, relates that the Debtors filed a motion in March 2009, seeking the Court's approval of a fourth amendment and a fifth amendment to the GM Arrangement, which amendments would have provided the Debtors with an additional $150 million of liquidity support. Amendment No. 4 provided for an increase of GM's total commitment under the GM Arrangement from $300 million to $350 million, and Amendment No. 5 provided for a subsequent increase of GM's total commitment under the GM Arrangement from $350 million to $450 million, subject to certain terms and conditions. The Debtors also filed on March 4, 2009, a motion seeking approval of GM's exercise of the "Unsold Business Option" under the Amended Master Restructuring Agreement with respect to Delphi's global steering and halfshaft business. The Motion and the Steering Option Exercise Motion were scheduled to be heard on March 24, 2009. However, the U.S. Department of Treasury's Auto Task Force notified GM and the Debtors that it objects to the approval of the agreements until it had further opportunity to review the details of those transactions and alternatives to Delphi's emergence from Chapter 11. Subsequently, the Court adjourned hearing on the GM-related matters several times, with the last adjournment set for June 2, 2009. In this regard, Mr. Butler notes that the Debtors' complex and difficult negotiations with their key stakeholders and the Auto Task Force have culminated in the transactions set forth in the supplement to the Plan Modification Motion. Specifically, the Debtors have reached an agreement with Parnassus Holdings II, LLC, and GM Components Holdings, LLC, whereby the Debtors would sell certain of their North American assets to GM Components and effectuate transactions through which Parnassus would acquire and operate certain of Delphi's U.S. and non-U.S. businesses going forward with emergence capital and capital commitments of $3.6 billion and without the labor-related legacy costs associated with the North American sites that are being acquired by GM Components together with Delphi's Global Steering Business. Thus, to facilitate the sale transactions and the Debtors' emergence from Chapter 11 at this time, the Auto Task Force has authorized GM to provide the Debtors with $250 million of critical interim financing through the Amended and Restated GM Arrangement dated June 1, 2009, Mr. Butler says. The key terms of the Amended and Restated GM-Delphi Arrangement are: A. The Amended GM-Delphi Arrangement will supplant the Amendment Nos. 4 and 5 and will provide for an overall increase of $250 million in GM's unsecured commitments under the GM Arrangement from $300 million to $550 million in the form of a new "Tranche C Commitment." The new $250 million Tranche C Commitment is intended to provide the Debtors with the interim liquidity they require while they seek to consummate the Sale Transactions and emerge from Chapter 11. B. The Tranche C Commitment is scheduled to terminate on the earlier of: (i) September 30, 2009; (ii) the date on which the Debtors seek to amend or modify the plan of reorganization filed on October 3, 2008, in a manner not satisfactory to GM; (iii) the date the DIP Facility is repaid in full; (iv) the effective date of the Modified Plan; (v) the earlier of (a) the date the Court denies the motion seeking approval of the Sale Transactions, (b) July 23, 2009, unless the Court has approved the Sale Transactions by that date, or (c) seven days after the Court enters an order enjoining, restraining, or restricting the Debtors from seeking approval of the Modified Plan or Stand Alone Sale, if the order has not been reversed; (vi) the date on which the Sale Agreement terminates; or (vii) the date on which the Sale Transactions are consummated. C. The existing $300 million Tranche B Commitment, which the Court approved in December 2008, is scheduled to terminate on June 30, 2009, unless terminated earlier as set forth in the Amended and Restated GM Arrangement. D. If the Modified Plan or the Sale Transactions have been consummated on or before the June 30, 2009 Tranche B Termination Date and September 30, 2009 Tranche C Termination Date, the loans outstanding under the Amended and Restated GM-Delphi Arrangement would be automatically cancelled and the Debtors would not be required to pay GM the $550 million principal amount with respect to the loans. E. The Debtors would not be required to pay accrued interest with respect to each of the Tranche B and the Tranche C Commitments if the Modified Plan or Sale Transactions are consummated on or before the Tranche B and Tranche C Termination Date. F. The effectiveness of the Amended and Restated GM-Delphi Arrangement is subject to certain precedent conditions, including: -- GM's approval of the amendments or modifications to the DIP Credit Agreement, DIP Accommodation Agreement, or the Confirmed Plan; -- the Court's entry of an interim order approving the Amended and Restated GM-Delphi Arrangement; and -- neither JPMorgan Chase Bank, N.A., DIP Agent nor any DIP Lender having taken any action to exercise remedies under the DIP Credit Agreement or the related security documents with respect to any collateral, other than: (a) with respect to cash collateral held in cash collateral accounts as of the effective date of the Tranche C Commitments as provided in the DIP Credit Agreement and other Loan Documents, which is known as Tranche C Effective Date; and (b) the giving of notice and direction by the DIP Lenders to the DIP Agent with respect to actions contemplated under the Modified Plan. G. As a condition to the effectiveness of the Amended GM-Delphi Arrangement, the Debtors should have executed the documents in connection with the Sale Transactions and they should seek approval of the Sale Transactions concurrently through a plan of reorganization and a standalone Section 363 sale. As required under the GM-Delphi Arrangement, the Debtors filed with the Court a motion seeking approval of (i) proposed modifications to their Confirmed Plan, or (ii) entry into sale documents under Section 363 of the Bankruptcy Code, independent of any reorganization plan. Moreover, the Amended and Restated GM-Delphi Arrangement requires that on or prior to June 10, 2009, the Court enter an order, in form acceptable to GM, approving the Solicitation Motion and scheduling a hearing for the approval of the Modified Plan or the Stand Alone Sale on or before July 23, 2009. H. The Debtors must achieve certain milestones in order to borrow with respect to the new Tranche C Commitments. On the date of each Trance C Advance sought on and after each of the dates set forth, these conditions will have to be satisfied: * On the 10th day after the Tranche C Effective Date, the Interim Order will not be stayed, modified or reversed or subject to any appeal; * The Solicitation Order will have become final and non-appealable within 10 days of the Tranche C Effective Date; * By July 2, 2009, the Debtors will have filed the 363 Implementation Agreement with the Bankruptcy Court pursuant to the Solicitation Order; * A hearing will have been held on July 23, 2009, to approve the Modified Plan or the Stand Alone Sale, and the Bankruptcy Court will have entered an order, in a form acceptable to GM, approving the Modified Plan or the Stand Alone Sale; and * Within 10 days of the entry after the Sale Transactions Order and in any event no later than August 3, 2009, the Sale Transactions Order will have become final and non-appealable. I. The Debtors' ability to borrow with respect to the Tranche C Commitment is contingent on these conditions: -- No amendment or other modification to the DIP Credit Agreement or the DIP Accommodation Agreement will be made and no motion to approve any amendment or modification will be filed that is not reasonably acceptable to GM. -- No new agreement or amendment, extension, or other modification will be made and no motion to approve any new agreement, amendment, extension, or other modification will be filed that requires payment of interest on account of the Tranche C loans under the DIP Credit Agreement. -- Neither the DIP Agent nor any DIP Lender will have taken any action to exercise remedies under the DIP Credit Agreement or the related security documents with respect to any collateral other than: (a) with respect to cash collateral held in cash collateral accounts as of the Tranche C Effective Date as provided in the DIP Credit Agreement and the other Loan Documents; and (b) giving of notice and direction by the DIP Lenders to the Agent with respect to actions contemplated under the Modified Plan. -- Mo motion or other pleading will be filed, without GM's consent, seeking approval of or entry of an order confirming a plan of reorganization, other than the Modified Plan. -- No stay, amendment, reversal, or other modification will be made, in a manner that is not reasonably acceptable to GM, to (a) the interim or final order approving the Amended and Restated GM-Delphi Arrangement; (b) the Solicitation Order; or (c) the Sale Transactions Order. -- No stay, reversal, or other modification will be made in a manner that is not reasonably acceptable to GM to any future order relating to or approving amendments to the DIP Credit Agreement or Accommodation Agreement. -- No default, material breach by the Debtors, or termination will have occurred under any of the Sale Documents, and the Debtors will not have taken any action or filed any motion to terminate, modify, or reject any of the Sale Documents. -- On the date of each advance under the Amended and Restated GM-Delphi Arrangement, no Event of Default or event on which notice or lapse of time or both would constitute an Event of Default will have occurred and be continuing under the Amended and Restated GM-Delphi Arrangement. A full-text copy of the Amended and Restated GM-Delphi Arrangement dated June 1, 2009 is available for free at: http://bankrupt.com/misc/Delphi_AmGMDelphiAgr.pdf Mr. Butler asserts that at this critical juncture, the Debtors require short-term bridge financing to fund their operations as they proceed to effectuate the Sale Transactions and take the steps necessary to obtain confirmation of the Plan Modifications within the tight time frames imposed by the current circumstances. He points out that without favorable financing, the Sale Transactions and the Plan Modifications could not succeed, risking great loss of value to the Debtors' estates and their stakeholders. Moreover, he maintains, without access to capital from other sources and with the termination of the Accommodation Period under the DIP Accommodation Agreement looming, the unsecured financing being offered to the Debtors through the Amended and Restated GM Arrangement is the only viable option available to the Debtors to fund operations while completing the Sale Transactions. Not only would the Amended and Restated GM Arrangement preserve the going-concern value of the Debtors' estates by facilitating the Sale Transactions, the cancellation of the obligations would add substantial value to the Debtors estates as well, he emphasizes. The Court will consider approval of the Amended and Restated GM- Delphi Arrangement on an interim basis on June 10, 2009. Interim objections are due June 9. The Court will convene final hearing on June 16, 2009. Final Objections are due June 12. 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: Wants Goldman Partial Summary Judgment Motion Denied ----------------------------------------------------------------- Delphi Corporation and its debtor-affiliates filed under seal with the U.S. Bankruptcy Court for the Southern District of New York on May 26, 2009, papers in opposition to Goldman Sachs & Co.'s Motion for Partial Summary Judgment under the Appaloosa Adversary Proceeding. The Summary Judgment Opposition Papers filed under seal include a memorandum of law against Goldman Sachs' Partial Summary Judgment Motion, a declaration of Andrew W. Schilling, and a response to statement of Goldman Sachs under to Rule 7056 of the Federal Rules of Bankruptcy Procedure and Rule 7056-1 of the Local Bankruptcy Rules of the Southern District of New York. Subsequently, in a stipulation between the Debtors and Goldman Sachs entered on May 28, 2009, Goldman Sachs agreed to waive its confidentiality designation with respect to "exhibit 6" to the Schilling Declaration. In turn, the Debtors agreed to withdraw their application to file in redacted form and under seal the Summary Judgment Opposition Papers. The Debtors ask the Court to deny Goldman Sachs' Partial Summary Judgment Motion. Edward A. Friedman, Esq., at Friedman Kaplan Seiler & Adelman LLP, in New York, asserts that Goldman Sachs' Partial Summary Judgment Motion consists almost entirely of legal arguments that have been rejected by the Court pursuant to an order entered on August 11, 2008, granting in part and denying in part Goldman Sachs' previous motions to dismiss the Complaint. Mr. Friedman asserts that Goldman Sachs' argument that it did not breach the Equity Purchase and Commitment Agreement ignores the August 2008 Order and misconstrues the plain terms of the EPCA. He explains that as a legal matter, even if Goldman Sachs could establish proof that nothing it did or failed to do so breached the EPCA, that proof still would not support dismissal of the specific performance claim. Indeed, according to Mr. Friedman, discovery only confirmed what the Debtors always alleged: that Goldman Sachs did absolutely nothing to satisfy its best efforts obligation. Goldman Sachs' witnesses also could not identify a single concrete step that Goldman Sachs took to bring about a closing, other than conditionally agreeing to fund if Appaloosa Management L.P. decided to fund, he contends. Accordingly, having assumed joint and several liability with all of the Plan Investors for any willful breach, and having ceded to AMLP the responsibility for dealing with the Debtors under the EPCA, Goldman Sachs cannot avoid the consequences of that liability and of its own acts and omissions, Mr. Friedman insists. Moreover, the Court previously determined that the liability caps and other provisions in the EPCA, in contrast to certain provisions in Commitment Letters, did not unambiguously preclude the remedy of specific performance. Thus, Goldman Sachs is subject to any remedy permitted under the EPCA and decreed by the Court to redress Goldman Sachs' breach, he adds. Mr. Friedman asserts that Goldman Sachs' contention that it is not subject to specific performance because it validly exercised its right on June 30, 2008 to terminate the EPCA as to itself must also fail. The Court previously determined, Mr. Friedman explains, that the prevention or hindrance doctrine precluded the Appaloosa Defendants' argument that even if termination of the EPCA on April 4, 2008 was wrongful, they had an absolute right to terminate the EPCA on a later date because the closing had not occurred by April 4. He argues that Goldman Sachs' June 30 termination letter is thus subject to the prevention or hindrance doctrine because Goldman Sachs has joint and several liability for any willful breach committed on April 4. Thus, when AMLP terminated the EPCA, it terminated the deal as to not only itself but the other Plan Investors as well, including Goldman Sachs, he maintains. Against this backdrop, he contends, Goldman Sachs cannot take advantage of AMLP's wrongful termination in order to justify its own abandonment of its contractual commitment. Moreover, the Court previously ruled that specific performance against Goldman Sachs is not rendered moot by the unavailability of specific performance against Harbinger Capital Partners Master Fund I, Ltd., and Harbinger Del-Auto Investment Company Ltd., Pardus DPH Holding LLC and Pardus Special Opportunities Master Fund L.P. Since Goldman Sachs does not and cannot assert that it would be impossible for it to satisfy its $400 million funding commitment under the EPCA, specific performance remains an available remedy against Goldman Sachs, Mr. Friedman contends. Mr. Friedman also asserts that Goldman Sachs did not explain as to why the Debtors' claim under Section 1142 should be dismissed as a matter of law. He argues that nothing in Section 1142 precludes or limits the Court's discretion to fashion a remedy in the absence of a willful breach by Goldman Sachs itself. Given the August 2008 Order, Goldman Sachs' termination of the EPCA does not warrant dismissal of the Section 1142 claim where the prevention or hindrance doctrine renders that purported termination ineffective, Mr. Friedman reiterates. Goldman Sachs Insists on Summary Judgment Goldman Sachs asks the Court to grant it partial summary judgment by dismissing all remaining claims asserted by the Debtors against it other than the claim for damages of up to $39,215,500 under the EPCA. On behalf of Goldman Sachs, Robinson B. Lacy, Esq., at Sullivan & Cromwell LLP, in New York, points out that pursuant to the August 2008 Order, the Court found that the Debtors had not alleged a willful breach by Goldman Sachs, and that dismissal of all claims against Goldman Sachs was appropriate, except as to its contractual liability for the willful breach by the other Plan Investors and then only to the extent of $39,215,500. He asserts that the August 2008 Order does not support a theory that the Court already rejected Goldman Sachs' legal arguments. More importantly, he notes, the Court did not determine that the specific performance claim could be maintained against Goldman Sachs; Merrill Lynch, Pierce, Fenner & Smith Inc.; and UBS Securities LLC, not because of any particular wrongdoing by those parties, rather because those parties are jointly and severally liable for the willful breaches of the other Plan Investors. Mr. Lacy insists that the EPCA is clear in that the absence of a claim of willful breach by Goldman Sachs, Goldman Sachs has no liability at all apart from what it assumed joint and several liability for, which is up to a limit of $39,215,500. That limit cannot be reduced by means of a "specific performance" theory where the Debtors have renounced any claim of direct breach by Goldman Sachs and any claim was dismissed long ago. More importantly, it is undisputed that Goldman Sachs did not contractually assume joint and several liability under the EPCA for other Plan Investors' funding commitments, which are several and not joint, Mr. Lacy stresses. In this regard, he contends that the Debtors' assertion of wrongdoing by Goldman Sachs based on its supposed proxy to ADAH is unjustified. He explains that the EPCA was negotiated between the Debtors and AMLP with virtually no involvement by Goldman Sachs. He emphasizes that only ADAH is entitled to (i) waive conditions to closing on behalf of all Plan Investors; and (ii) terminate the EPCA based on a breach of its provisions prior to June 30, 2008. Moreover, Mr. Lacy argues that the prevention and hindrance doctrine is not applicable to Goldman Sachs' June 30, 2008 termination notice because the Debtors have not alleged and have no evidence to do so that Goldman Sachs took any action to prevent a timely closing under the EPCA. Indeed, he points out, the Debtors' attempt to fabricate a breach because Goldman Sachs allegedly failed to use its best efforts to a closing can not be squared with Goldman Sachs' willingness to write a check if and when the other Plan Investors funded. Parties React to Debtors' Opposition to their Summary Judgment Motions A. ADAH and AMLP AMLP and ADAH seek the Court's authority to file in redacted form and under seal their (i) reply memorandum of law in further support of their motion for partial summary judgment, seeking dismissal of the Debtors' claims against ADAH and AMLP, and (ii) reply declaration of Douglas P. Baumstein, Esq., of White & Case LLP and certain related exhibits. AMLP and ADAH do not believe that the testimony or documents cited in their reply memorandum of law or Mr. Baumstein's declaration in support of the Partial Summary Judgment Motion are "confidential" or "highly confidential" under the Stipulated Protective Order, or that information is entitled to protection under Section 107(b) of the Bankruptcy Code as confidential commercial information. ADAH and AMLP nevertheless seek the Court's authority to file the Summary Judgment Reply Papers in redacted form and under seal to comply with the Stipulated Protective Order. B. Harbinger Entities Harbinger, Pardus, Merrill Lynch, Pierce, Fenner & Smith Inc., and UBS Securities LLC jointly seek the Court's authority to file in redacted form and under seal their (i) reply memorandum of law in support of their motions for summary judgment, seeking dismissal of the Amended Complaint against the Appaloosa Parties, and (ii) declaration of Angela R. Vicari, Esq., of Kaye Scholer LLP, dated May 29, 2009 in support of the Summary Judgment Motions and accompanying exhibits. The Investors note that they referenced testimony and documents in their reply memorandum of law or the declaration of Ms. Vicari, as Harbinger's counsel, that may have been designated "confidential" or "highly confidential" pursuant to the Stipulated Protective Order. Accordingly, the Investors submit their Motion to Seal to comply with the Stipulated Protective Order and reserve the right to seek permission from the Court to unseal their Reply. The Investors intend to serve the unredacted Reply with the Court, the Debtors and other parties to the Protective Order. In a separate filing, Merrill Lynch and UBS ask the Court to them grant summary judgment, by dismissing the Debtors' claims seeking specific performance and relief pursuant to Section 1142 from them. Deborah M. Buell, Esq., at Cleary Gottlieb Steen & Hamilton LLP, in New York, argues that as a matter of law, the Debtors are not entitled to specific performance of a contract or of a plan that exists only in the mind of the Debtors. Ms. Buell points out that the Debtors sought enforcement of (i) a modified EPCA without identifying what those terms might be other than the required $2.5 billion equity investment and the delivery of stock in the Debtors; and (ii) a modified plan without specifying what that modified plan is. She explains that specific performance is also unavailable where either party is unable to fulfill their remaining obligations under a contract. In this regard, she asserts that the Debtors neither disputed that they cannot raise the exit financing required under the EPCA -- either $6.8 billion as argued by the Plan Investors, or even $6.1 billion as the Debtors assert they are required to raise -- nor did they argue that their business plan and their relationship with key stakeholders have experienced material changes that prevent returning to the April 5, 2008 status quo. Ms. Buell asserts that those elements are integral components of the transaction contemplated by the EPCA and that is why the EPCA contained provisions preventing modification of those components. Assuming that the Plan Investors' alleged breach of the EPCA exposed the Debtors to the increasing uncertainty of the credit markets and diminution in value of the Debtors, even the Debtors did not argue that it was the supposed breach that caused the decline in the credit markets and automotive industry, which are part of the circumstances that render performance impossible, MS. Buell emphasizes. "The changed circumstances in the Debtors' Chapter 11 cases rendered the Debtors' performance of any agreement that is even similar to the EPCA, much less one materially identical, impossible," Ms. Buell contends. Ms. Buell further argues that the Debtors' efforts to redefine the scope of authority granted to the Court under Section 1142 is untenable. As the Court already stated, specific performance that is not in the plan or is not the agreement incorporated into the plan cannot be ordered, she says. As with specific performance under New York law, the Debtors' arguments must fail because, as UBS and Merrill Lynch had previously argued, Section 1142 does not confer any substantive rights on a party apart from whatever the plan provides, but rather only "empowers the bankruptcy court to enforce the unperformed terms of a confirmed plan." 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) EMPIRE RESORTS: Board of Directors Names Joseph Bernstein as CEO ----------------------------------------------------------------- The board of directors of Empire Resorts, Inc., appointed Joseph E. Bernstein to serve as chief executive officer of the Company. The appointment is effective immediately and runs through an initial term ending December 31, 2009, subject to an automatic one-year renewal upon the completion of certain conditions. Mr. Bernstein will be paid an annual salary of $500,000. The Company is negotiating with Mr. Bernstein on the terms of a written employment agreement. Joseph E. Bernstein is the brother of Ralph J. Bernstein, who is a director of the Company. For the past decade, Mr. Bernstein has been a sole practitioner involved in complex litigation and strategic legal counseling. Mr. Bernstein's previous experience includes serving as a corporate tax attorney at Cahill Gordon & Reindel, as an international tax attorney at Rosenman & Colin and, in 1981, forming his own law firm, Bernstein Carter & Deyo, focusing on foreign direct investment in the United States. In addition, in 1981, Mr. Bernstein founded and has since that time served as a managing director of Americas Partners, a real estate investment and development group of companies which has been involved in the acquisition or development of three million square feet involving over $1 billion of commercial property in Manhattan. For the past ten years, Mr. Bernstein has also been active in the pre- development of golf resorts and an entertainment city project on government land in Israel. Mr. Bernstein is the co-trustee of the Catskill Litigation Trust, which is pursuing a $3 billion judgment enforcement action against Harrah's Operating Company, Inc. on behalf of 12,000 enrolled members of the St. Regis Mohawk Tribe and former shareholders of the Company. Mr. Bernstein served as a director of the Company from August 2004 until June 2007. He was the founder of the company which previously owned the Monticello Raceway and part of the group that merged the Raceway into the Company in 2004. On June 1, 2009, the board of directors of the Company appointed each of Nancy Palumbo and Kenneth Dreifach as Class II directors, effective immediately, to serve until the 2011 annual meeting of stockholders. In addition, the board of directors of the Company appointed Ms. Palumbo to serve on each of the Audit Committee and Compensation Committee of the Company's board of directors and appointed Mr. Dreifach to serve on each of the Audit Committee and the Corporate Governance and Nominations Committee of the Company's board of directors. About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. -- http://www.empireresorts.com/-- operates the Monticello Gaming & Raceway and is involved in the development of another gaming resort project in the Catskills. At March 31, 2009, the Company's balance sheet showed total assets of $45.4 million and total liabilities of $79.5 million, resulting in a stockholders' deficit of about $34.1 million. Going Concern Doubt In its 2008 annual report filed in March 2009, the Company said its ability to continue as a going concern is dependent upon its ability to negotiate a renewal or extension of the maturity dates or to arrange financing to repay its credit facility with the Bank of Scotland when it matures on May 29, 2009, and the holders of the Senior Convertible Notes if they demand repayment of the notes on July 31, 2009. The Company said there is no assurance that it will be successful in obtaining a result that will avoid a default on its obligations under its credit facility or the terms of the Senior Convertible Notes. Friedman LLP in New York, the Company's independent registered public accounting firm, included an explanatory paragraph in its report dated March 13, 2009, regarding its concerns about the Company's ability to continue as a going concern. The Company entered into a credit facility with Bank of Scotland on January 11, 2005. The credit facility provides for a $10 million senior secured revolving loan. In addition, the Company issued on July 26, 2004, about $65 million of 5.5% senior convertible notes presently convertible into approximately 5.2 million shares of common stock, subject to adjustment upon the occurrence or non-occurrence of certain events. The notes were issued with a maturity date of July 31, 2014, and the holders have the right to demand that we repurchase the notes at par plus accrued interest on July 31, 2009. Interest is payable semi- annually on January 31 and July 31. ENERGY PARTNERS: U.S. Trustee Form Six-Member Creditors' Panel -------------------------------------------------------------- Charles F. McVay, the United States Trustee for Region 7, appointed six creditors to serve on the Official Committee of Unsecured Creditors of Energy Partners Ltd. and its debtor- affiliates. The members of the Committee: a) Wexford Capital, LP. as investment advisor to Wexford Funds c/o Arthur Amron 411 West Putnam Avenue Greenwich CT 06830 Tel: (203) 863-7012 Fax: (203) 862-7312 b) The K2 Principal Fund, LP. c/o Shawn Kimel 200-444 Adelaide St. West, Suite 200 Toronto, ON M5V1S7 Tel: (416) 365-2155 Fax: (416) 703-4443 c) Carlson Capital LP c/o Christopher W. Haga 2100 McKinney Avenue, 16th Floor Dallas, TX 75201 Tel: (214) 932-9653 Fax: (214) 932-9601 d) Third Point LLC c/o Josh Targoff 390 Park Avenue New York, NY 10022 Tel: (212) 224-7400 Fax: (212) 318-3106 e) Farallon Capital Management LLC c/o Michael Linn One Maritime Plaza, Suite 2100 San Francisco CA 94111 Tel: (415) 421-2132 Fax: (415) 616-6087 f) Whitebox Advisors c/o Jacob P. Mercer 3033 Excelsior Blvd, Suite 300 Minneaplois, MN. 55416 Tel: (612) 253-6049 Fax: (612) 253-6149 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Energy Partners Based in New Orleans, Louisiana, Energy Partners, Ltd., (Pink Sheets: ERPL.PK) is an independent oil and natural gas exploration and production company. The Company had interests in 24 producing fields, six fields under development and one property on which drilling operations were then being conducted, all of which are located in the Gulf of Mexico Region. Energy Partners, Ltd. and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. S. D. Tex. Lead Case No. 09-32957). Paul E. Heath, Esq., at Vinson & Elkins LLP represents the Debtors in their restructuring efforts. The Debtors propose to employ Parkman Whaling LLC as financial advisor. The Debtors' financial condition as of December 31, 2008, showed total assets of $770,445,000 and total debts of $708,370,000. EPICEPT CORPORATION: Ben Tseng Resigns as Chief Scientific Officer ------------------------------------------------------------------ EpiCept Corporation disclosed in a filing with the Securities and Exchange Commission that effective May 29, 2009, Ben Tseng, Ph.D. stepped down from his position as chief scientific officer. Mr. Tseng's resignation was a result of the Company's decision to discontinue all drug discovery activities and close its San Diego facility. Based in Tarrytown, New York, EpiCept Corporation (Nasdaq and OMX Nordic Exchange: EPCT) -- http://www.epicept.com/-- is a specialty pharmaceutical company focused on the development of pharmaceutical products for the treatment of cancer and pain. The company has a portfolio of five product candidates in active stages of development. It includes an oncology product candidate submitted for European registration, two oncology compounds, a pain product candidate for the treatment of peripheral neuropathies and another pain product candidate for the treatment of acute back pain. The two wholly owned subsidiaries of the company are Maxim, based in San Diego, California, and EpiCept GmbH, based in Munich, Germany, which are engaged in research and development activities. At March 31, 2009, the Company's balance sheet showed total assets of $12.8 million and total liabilities of $18.1 million, resulting in a stockholders' deficit of about $5.3 million. Going Concern Doubt On March 11, 2009, Deloitte & Touche LLP in Stamford, Connecticut raised substantial doubt about the Company's ability to continue as a going concern after auditing financial results for the periods ended December 31, 2008, and 2007. The auditors pointed to the Company's recurring losses from operations and stockholders' deficit. ETHAN ALLEN: Moody's Downgrades Rating on Senior Notes to 'Ba1' --------------------------------------------------------------- Moody's Investors Service downgraded its rating on Ethan Allen's senior unsecured notes one notch to Ba1 due to the continuing weakness in discretionary consumer spending and expectations that revenue will not meaningfully recover over the next couple of years. At the same time, Moody's assigned a Ba1 corporate family rating, a Ba1 probability of default rating and an SGL 2 speculative grade liquidity rating. These actions conclude a review for possible downgrade initiated on May 13, 2009, which was the last rating action. The rating outlook is negative. The downgrade reflects Ethan Allen's diminished operating performance over the last year, especially in the third quarter of fiscal 2009, as discretionary consumer spending continues to be very weak. Moody's expects that revenue in fiscal 2009 will be below $750 million, representing an almost 25% decrease from fiscal 2008 revenue, and Moody's does not expect a significant rebound in revenue over the next couple of years, although EBITDA is expected to improve in fiscal 2010 as over $100 million of cost saving initiatives are realized. The SGL 2 liquidity rating reflects Ethan Allen's good liquidity profile with cash balances over $50 million at March 31, 2009, and full access under its new 3 year $40 million ABL revolving credit facility, which has a $20M accordion feature. Importantly, the company is not required to comply with any financial covenants provided availability does not fall below $9 million, and is unlikely to need to use its revolving credit facility, other than for letters of credit, given the cash and expected cash flow of the company. The company has no material debt maturities until 2015. "The negative outlook reflects Moody's concern that discretionary consumer spending will remain weak for the foreseeable future, recognizing that the velocity of the decline seems to be showing some recent signs of moderating" said Kevin Cassidy, Senior Credit Officer, at Moody's Investors Service. The negative outlook also reflects Moody's concerns over the fragility of the U.S. consumer and their willingness to resume spending on discretionary items. Moody's subscribers can find further details in the Ethan Allen Credit Opinion published on Moodys.com. Ratings assigned: -- Corporate Family Rating at Ba1; -- Probability of Default Rating at Ba1; -- Speculative Grade Liquidity rating at SGL-2; Ratings downgraded/assessments assigned: -- 200 million senior unsecured notes, due 2015, to Ba1 (LGD 4, 58%) from Baa3 Ethan Allen is a manufacturer, wholesaler, and retailer of the furniture, upholstery, and accessories in the U.S. Revenues approximated $775 million for the twelve months ended March 31, 2009. FILENE'S BASEMENT: Men's Wearhouse Wins Auction With $62MM Bid -------------------------------------------------------------- Filene's Basement said that an affiliate of Men's Wearhouse (NYSE:MW) emerged as the winning bidder in a nine-hour bankruptcy auction for assets of the off-price chain that was held in Manhattan on Friday. The affiliate is K&G Acquisition Corp. Men's Wearhouse Inc. made an offer of $62 million for 17 leases, the inventory, trade name, and a warehouse. The hearing to approve the sale will be held today, June 10. Bloomberg News relates that Crown Acquisitions, the initial bidder approved to purchase Filene's assets, is objecting the Company's sale to K&G Acquisition. Crown Acquisitions said in court documents that that bidding procedures hadn't been properly followed in an auction for the Filene's assets. About Filene's 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. FORD MOTOR: Says Government Is Giving GMAC Rival Better Deal ------------------------------------------------------------ Keith Naughton and Alison Fitzgerald at Bloomberg News reports that Ford Motor Co. is worried that federal support for GMAC LLC is giving the rival auto lender cheaper borrowing costs. According to Bloomberg, Ford paid in recent competing bond offerings about $107.5 million more than GMAC for every $1 billion it borrowed. Fair treatment for Ford is among the issues the Senate Banking Committee could examine at a June 10 hearing on how the auto task force is restructuring the industry, Bloomberg relates, citing Chairperson Christopher Dodd's spokesperson, Justine Sessions. Ms. Sessions said in a statement that the hearing will include "whether government assistance to certain companies is unfairly disadvantaging other domestic competitors and their customers." Bloomberg reports that congressional Republicans have been concerned on the savings GMAC is gaining through its government support, which includes $13.5 billion in U.S. funds and the federal guarantee of some of its debt, which gives the company lower borrow costs than Ford can get through the Term Asset-Backed Securities Loan Facility. Bloomberg quoted Representative Mike Rogers as saying, "Ford is the healthiest company in the intensive-care unit right now, and you don't want to push them over the edge. I don't want the third company to go into bankruptcy because the government put them there by making them artificially uncompetitive." The U.S. Treasury could help Ford by expanding an effort to thaw consumer credit to include financing for car dealers' inventory, Bloomberg says, citing Mr. Rogers. Ford Wants New Labor Deal With Canadian Union Automotive Business Review relates that Ford Canada seeks to hold talks for a new labor deal with the Canadian Auto Workers union, to gain a competitive edge and outdo competitors. Ford Canada, according to Automotive Business, said that cost-cutting labor agreements that Chrysler Canada and General Motors Canada reached with the union are hurting the Company's ability to compete. Automotive Business quoted Ford Canada President and CEO David Mondragon as saying, "We are very anxious to sit down with the CAW. We've got to bring ourselves in line, not only with our competitors here in Canada, but with our other manufacturing facilities in the United States." About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FREEMAN ROAD: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Freeman Road Development, LLC 201 Juniper Circle Streamwood, IL 60107 Bankruptcy Case No.: 09-20836 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- Bloomfield West, L.L.C. 09-20839 Chapter 11 Petition Date: June 8, 2009 Court: Northern District of Illinois (Chicago) Judge: Carol A. Doyle Debtor's Counsel: David L. Kane, Esq. dkane@mpslaw.com Forrest B. Lammiman, Esq. flammiman@mpslaw.com Meltzer, Purtill & Stelle LLC 300 South Wacker Drive, Suite 3500 Chicago, IL 60606 Tel: (312) 987-9900 Estimated Assets: $50 million to $100 million Estimated Debts: $50 million to $100 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Donald L. Kirk debt $5,702,856 1024 Hibbard Road Wilmette, IL 60091 Tel: (847) 256-0424 Donald Kirk Investment Co. LLP debt $2,297,144 5336 N. Glenwood Road Chicago, IL 60640 Tel: (773) 784-1985 Cole Taylor trust $1,788,887 as agent to the ESOP noteholders 225 W. Washington St. 9th Floor Chicago, IL 60606 Tel: (312) 960-5372 Lenny Szarek Inc. trade $596,042 Coleman Floor Company trade $328,438 Service Drywall & Decorating trade $311,340 Profession Plumbing Inc. trade $251,225 SCE Unlimnited Inc. trade $193,552 R&D Thiel Inc. trade $166,633 Blanchard trade $154,231 Stock Building Supply trade $143,904 Ghezzi Masonry Construction trade $124,863 Tempco Heating & Air trade $120,587 Conditioning Company Alright Concrete trade $109,811 Art Nissen & Son trade $81,630 Patriot Concrete & Asphalt trade $78,551 CCR Tops Inc. trade $67,994 Northwest Insulation trade $67,708 Inland Electric Corp. trade $60,669 Jim Link Services Inc. trade $53,004 JB Concrete Contractors Inc. trade $52,526 Mackie Consultants trade $48,892 Harry Wolsky Inc. of Illinois trade $48,067 Tim Cote, Inc. trade $45,238 Professional Drywall & trade $44,350 Decorating LLC T. Manning Concrete Inc. trade $41,905 Wilkor Construction Inc. trade $39,055 Whirpool trade $38,692 Ryan Incorporated Cenrtal trade $34,969 Sund Masonry trade $33,857 The petition was signed by John P. Carroll, president & chief executive officer. GENERAL MOTORS: Names Edward Whitacre Jr. as Chairman of New GM --------------------------------------------------------------- Edward E. Whitacre, Jr., former chairman and CEO of AT&T Inc., will become chairman of the New GM when the company is launched later this summer, GM's interim Chairman Kent Kresa disclosed on June 9, 2009. Mr. Kresa will continue to serve as interim chairman until the launch. Messrs. Whitacre and Kresa, along with current board members Philip A. Laskawy, Kathryn V. Marinello, Erroll B. Davis, Jr., E. Neville Isdell and President and Chief Executive Officer Frederick A. Henderson, will serve as the nucleus of the New GM board, providing management oversight and a continuing commitment to transparency and world-class standards of corporate governance. The six other members of the current board will most likely retire no later than the approval of the sale of GM assets to the new entity. A selection process is currently underway for four more directors to serve on the board of the New GM. In addition, the Canadian government and the new UAW Voluntary Employee Benefit Association will each nominate one director, bringing the total number of New GM directors to 13. Mr. Whitacre, 67, was chairman and CEO of AT&T Inc. and its predecessor companies from 1990 to 2007. During his tenure, which began with Southwestern Bell, Mr. Whitacre led the company through a series of mergers and acquisitions--including that of AT&T in 2005--to create the nation's largest provider of local, long distance and wireless services. He serves on the boards of ExxonMobil Corporation and the Burlington Northern Santa Fe Corporation and holds a degree in industrial engineering from Texas Technological University. "The appointment of Ed Whitacre as chairman represents a very auspicious beginning for the New GM," said Mr. Kresa. "We look forward to working with him to complete the reinvention of GM and maximize the enormous potential of this new enterprise." "I am honored to be able to serve GM at this critical juncture and take part in its reinvention," said Mr. Whitacre. 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: Auction to Be Held on June 12 to Settle Contracts ----------------------------------------------------------------- Shannon D. Harrington reports that a committee of dealers and investors will hold an auction on June 12 to settle contracts protecting debt sold by General Motors Corp. According to Bloomberg, people familiar with the matter said that credit-default swaps traders are expediting an auction to ensure payouts are made before bonds disappear in GM's restructuring. Citing sources, Bloomberg relates that due to a plan in which bondholders would exchange debt for equity in the new company, traders decided to accelerate the auction. Bloomberg says that auctions typically are held about a month after a default. According to the report, dealers purchase and sell bonds of the defaulting companies during the auction to set one price by which holders of the derivatives settle. The report states that sellers of the contracts pay the buyer face value, less the value of the underlying bonds. According to data from the Depository Trust & Clearing Corp., banks, hedge funds, insurance companies, and other investors had acquired or sold a net $2.31 billion of default protection on GM's debt as of May 27. Depository Trust says that another $776 million was bought through contracts on indexes that include GM. Citing Citigroup Inc. analysts, Pierre Paulden and Sannon D. Harrington at Bloomberg relate that investors that bought GM loans and speculated on declines in its bonds may be in line for "one of the greatest payoffs in the history of long- short investing." The report states that these investors included BlueMountain Capital Management LLC, which purchased pieces of GM loans and purchased derivatives linked to its unsecured debt that would pay out if the Company defaulted. According to Bloomberg, the trade is paying off since GM filed for bankruptcy June 1. Bondholders will have a claim to about 10% of a restructured GM and another 15% in stock warrants. Citigroup analysts said that it appears GM's $6 billion secured loan will be repaid at face value, the report states. 800 Dealers Yet to Agree to Offers Sharon Terlep at Dow Jones Newswires reports that around 800 of GM's 6,000 dealers have yet to agree to the Company's offers to either shut down or remain in business ahead of a Friday deadline. Dow Jones relates that GM sent letters to dealers last week offering a new contract or a settlement to close down. Citing GM spokesperson Susan Garontakos, Dow Jones says that 1,350 dealers received wind-down letters and that 75% have accepted the offer. Ms. Garontakos said that 4,000 dealers received offers to stay with GM, and about 90% of them agreed, Dow Jones relates. Some 500 dealers will either be ending or selling and are receiving different offers, Dow Jones says. Asbestos Claimants Seek Status as Separate Committee Bankruptcy Law360 relates that the ad hoc committee of asbestos personal injury claimants filed a motion asking the U.S. Bankruptcy Court for the Southern District of New York for official designation. Bankruptcy Law360 states that the Committee wants to have an official status as a committee, saying that the claimants' specific interests would be overlooked if they were forced to be represented by a more general committee. 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) GLOWPOINT INC: Directors Resign to End Multi-Year Term in Board --------------------------------------------------------------- Shareholders Glowpoint, Inc., approved the proposal amending the Company's certificate of incorporation at the annual meeting of shareholders held on May 28, 2009. The proposal was aimed to eliminate the classification of the board of directors. With the approval of that proposal, all directors resigned to end their multi-year terms from the board and all related committees. These directors were then each elected to a one year term -- James S. Lusk, Peter Rust, Grant Dawson, Joseph Laezza, and David W. Robinson. Bami Bastani and Dean Hiltzik are no longer members of the board or any committee of the board. There was no disagreement between the Company and the resigning directors. In connection with their resignations, the Company amended the option agreements of the resigning board members to extend the exercisability of their options to 180 days after their resignation and amended their restricted stock award agreements, if any, to accelerate the vesting of restricted stock awards by one year. Based in Hillside, New Jersey, Glowpoint Inc. (OTC: GLOW.OB) -- http://www.glowpoint.com/-- is an IP-based managed video communications services provider. Glowpoint is innovating video communications with services supporting traditional video conferencing, Telepresence VNOC, Broadcast Content Acquisition & Delivery, and Call Center Applications. Going Concern Doubt On March 31, 2009, Amper, Politziner & Mattia, LLP, in Edison, New Jersey, raised substantial doubt about the Company's ability to continue as a going concern after auditing its financial results for the period ended December 31, 2008, and 2007. The auditors pointed that the Company has a working capital deficiency and recurring net losses, and is in the process of seeking additional capital. The Company has not yet secured sufficient capital to fund its operations. At March 31, 2009, the Company's balance sheet showed total assets of $8.4 million and total liabilities of $14.2 million, resulting in a stockholders' deficit of about $5.8 million. GRANITE CAPITAL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Granite Capital, LLC dba Crystal Clear Ice Wholesale 2030 West Mountain View Phoenix, AZ 85021 Bankruptcy Case No.: 09-12608 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Donald W. Powell, Esq. Carmichael & Powell, P.C. 7301 N. 16th St., #103 Phoenix, AZ 85020 Tel: (602) 861-0777 Fax: (602) 870-0296 Email: d.powell@cplawfirm.com Total Assets: $2,536,000 Total Debts: $1,152,122 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/azb09-12608.pdf The petition was signed by Alan S. Bernstein. HARRAH'S ENT: Operating Co. Inks Amendment & Waiver to Credit Pact ------------------------------------------------------------------ Harrah's Operating Company Inc., a wholly owned subsidiary of Harrah's Entertainment Inc., entered into an amendment and waiver to its credit agreement dated January 28, 2008 to, among other things: -- allow for one or more future issuances of additional secured notes or loans, including the $1,375,000,000 principal amount of 11 1/4% senior secured notes due 2017 being offered in the previously announced offering, which may include, in each case, indebtedness secured on a pari passu basis with the obligations under its senior secured credit facilities, so long as, in each case, an agreed amount of the net cash proceeds from any issuance are used to prepay term loans and revolving loans under the senior secured credit facilities at par; -- exclude from the maintenance covenant under its senior secured credit facilities (x) notes secured with a first priority lien on the assets of the company and the subsidiaries that secure the senior secured credit facilities that collectively result in up to $2 billion of net proceeds and (y) up to $250 million aggregate principal amount of consolidated debt of subsidiaries that are not wholly owned subsidiaries; -- subject to specified procedures, allow the Company to buyback loans from individual lenders at negotiated prices, which may be less than par; and -- subject to the requirement to make those offers on a pro rata basis to all lenders, allow the Company to agree with individual lenders to extend the maturity of their term loans or revolving commitments, and for the Company to pay increased interest rates or otherwise modify the terms of their loans or revolving commitments in connection with such an extension. About Harrah's Entertainment Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com/-- operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. At September 30, 2008, the Company's consolidated condensed balance sheets showed total assets of $37.0 billion, total liabilities of $33.4 billion and stockholders' equity of $3.6 billion. For three months ended September 30, 2008, the company reported net loss of $129.7 million compared with net income of $244.4 million for the same period in the previous year. For nine months ended September 30, 2008, the company posted net loss of $100.9 million compared with net income of $667.2 million for the same period in the previous year. The Company's cash and cash equivalents, including funds borrowed during the quarter under its credit facilities, totaled approximately $1.0 billion at September 30, 2008, compared to $654.7 million at September 30, 2007. * * * Troubled Company Reporter noted on June 2, 2009, that Moody's Investors Service changed the rating on the proposed $1.375 billion first lien notes due 2017 to be issued by Harrah's Operating Escrow LLC and Harrah's Escrow Corporation to Caa1 from Caa3. Both companies are wholly owned subsidiaries of Harrah's Operating Company, Inc. Harrah's Entertainment, Inc.'s Caa3 Corporate Family Rating, Caa3 Probability of Default Rating, and SGL-4 Speculative Grade Liquidity were affirmed. The outlook remains negative. The rating of the proposed first lien notes are subject to final documentation. Furthermore, Moody's Investors Service changed the rating on the proposed $1.375 billion first lien notes due 2017 to be issued by Harrah's Operating Escrow LLC and Harrah's Escrow Corporation to Caa1 from Caa3. Both companies are wholly owned subsidiaries of Harrah's Operating Company, Inc. Harrah's Entertainment, Inc.'s Caa3 Corporate Family Rating, Caa3 Probability of Default Rating, and SGL-4 Speculative Grade Liquidity were affirmed. The outlook remains negative. The rating of the proposed first lien notes are subject to final documentation. As reported by the Troubled Company Reporter on May 29, 2009, Standard & Poor's Ratings Services placed its 'CCC' corporate credit rating for Las Vegas-based gaming company Harrah's Entertainment Inc. and its wholly owned subsidiary, Harrah's Operating Co. Inc., along with all issue-level ratings on Harrah's debt, on CreditWatch with positive implications. The TCR also reported that Moody's Investors Service assigned a Caa3 rating to the proposed $1.0 billion first lien notes due 2017 to be issued by Harrah's Operating Escrow LLC and Harrah's Escrow Corporation, both wholly owned subsidiaries of Harrah's Operating Company, Inc. Proceeds from the new first lien notes will be used to repay outstanding bank debt. HARVEST OIL: Files Schedules of Assets and Liabilities ------------------------------------------------------ Harvest Oil & Gas, LLC, et al., filed with the U.S. Bankruptcy Court for the Western District of Louisiana its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ------------ A. Real Property $146,118,745 B. Personal Property $25,659,388 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $110,028,878 E. Creditors Holding Unsecured Priority Claims $1,371,749 F. Creditors Holding Unsecured Non-priority Claims $32,632,048 ------------ ------------ TOTAL $171,778,133 $144,032,675 A copy of Harvest Oil's schedules of assets and debts is available at http://bankrupt.com/misc/HarvestOil.SAL.pdf About Harvest Oil and Gas, LLC Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC -- http://www.harvest-oil.com/-- is engaged on acquisition, development and exploration of energy resources. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. W. D. La. Lead Case No. 09-50397). Robin B. Cheatham, Esq., at Adams & Reese LLP represents the Debtors in their restructuring efforts. The Debtors listed assets of $100 million to $500 million and debts of $100 million to $500 million. HARVEST OIL: May Continue to Use Cash Collateral Until June 28 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Louisiana has granted Harvest Oil & Gas, LLC, and its debtor-affiliates' authority, on an interim basis, to access cash collateral on which Wayzata Investments Partners, LLC, as agent for certain lenders and Macquarie Bank Limited and its affiliates assert security interests and liens, to meet payroll, ongoing operational expenses and other business costs and expenses in accordance with a budget. The Debtors are authorized to use the cash collateral from May 29, 2009, through June 28, 2009. This is the Court's fourth amended interim order authorizing the Debtors to use cash collateral. The pre-petition lenders will retain their security interests and liens on the cash collateral to the fullest extent and relative priority as set forth in their respective prepetition security agreements. As partial adequate protection for any use or diminution in the value of their collateral, the prepetition lenders are granted security interests and liens in all of the property and assets of the Debtors' estates, as may be acquired postpetition, including all cash collateral in the DIP Account. A final hearing on the Debtors' emergency cash collateral motion will be heard on June 29, 2009, at 10:00 AM, at the U.S. Bankruptcy Court, Courtroom, First Floor, U.S. Courthouse, 214 Jefferson Street, Suite 100, Lafayette, Louisiana. About Harvest Oil and Gas, LLC Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC -- http://www.harvest-oil.com/-- is engaged on acquisition, development and exploration of energy resources. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. W. D. La. Lead Case No. 09-50397). Robin B. Cheatham, Esq., at Adams & Reese LLP represents the Debtors in their restructuring efforts. The Debtors listed assets of $100 million to $500 million and debts of $100 million to $500 million. HEALTHTRONICS INC: Endocare Deal Won't Affect Moody's 'B2' Rating ----------------------------------------------------------------- Moody's commented on HealthTronics, Inc's. proposed acquisition of Endocare, announced on June 8, 2009. Moody's does not anticipate any immediate impact to HealthTronics' ratings, following the acquisition announcement. The increase in financial leverage as a result of the acquisition is within Moody's expectations and is already reflected in the B2 Corporate Family Rating. The last rating action was October 21, 2008, when Moody's downgraded HealthTronics Corporate Family Rating to B2 from B1 and changed to the outlook to stable from negative. HealthTronics' 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 of tolerance for risk. These attributes were compared against other issuers both within and outside of HealthTronics' core industry and the company's ratings are believed to be comparable to those other issuers of similar credit risk. Headquartered in Austin, Texas, HealthTronics is a leading provider of urology services and products in the U.S. The company provides urologists with cost-effective access to lithotripters (used in the treatment of kidney stones) and other capital equipment as well as partnership management services. The company operates primarily through partnerships with urology practices in which HealthTronics owns a minority stake. For the twelve months ended March 31, 2009, the company generated revenues of approximately $176 million. HERNANDO BEACH: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Hernando Beach, Inc. dba Southern Pines Condominium 8075 Southern Pines Drive Brooksville, FL 34601 Bankruptcy Case No.: 09-12037 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: Caryl E. Delano Debtor's Counsel: Sheila D. Norman, Esq. Norman and Bullington, P.A. 1905 West Kennedy Blvd Tampa, FL 33606 Tel: (813) 251-6666 Fax: (813) 254-0800 Email: sheila@normanandbullington.com Total Assets: $6,772,442 Total Debts: $3,575,531 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/flmb09-12037.pdf The petition was signed by Charles M. Sasser, Jr., president of the Company. HILLS MARCH LLC: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Hills March LLC 4308 Agnes Ave Studio City, CA 91604 Bankruptcy Case No.: 09-16924 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Kent Salveson, Esq. 28391 Avenida La Mancha San Juan Capist, CA 92675 Tel: (949) 291-7393 Total Assets: $4,000,000 Total Debts: $9,018,837 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/cacb09-16924.pdf The petition was signed by Brad Gerszt, managing member of the Company. HUMANA INC: Moody's Affirms 'Ba1' Subordinated Debt Shelf Rating ---------------------------------------------------------------- Moody's Investors Service affirmed Humana Inc.'s (senior debt at Baa3) ratings as well as the A3 insurance financial strength ratings of its operating companies: Humana Insurance Company and Humana Medical Plan, Inc. The rating outlook on Humana and its subsidiaries remains negative. Moody's said the affirmation of Humana's ratings reflects the company's successful remediation of the pricing/benefit design flaws in certain stand alone Part D prescription drug products ('Enhanced PDP'), which depressed 2008 earnings. Notably, Humana's 2008 results were in line with rating expectations -- allowing for the PDP losses -- and first quarter 2009 results indicate that the pricing for the company's 2009 PDP product offerings should not produce similar losses. Notwithstanding the improvement in the PDP results, the rating agency noted that it has decided to maintain a negative outlook on the ratings as a result of legislative changes and reimbursement cuts that could have a significant adverse impact on Humana's sizeable Medicare Advantage business over the medium term. In particular, Moody's cited two primary areas of concern. First, Humana's MA private fee-for-service membership is at risk due to legislation passed in July 2008 requiring healthcare companies to convert most of this business to a network based product by 2011. As of March 31, 2009, approximately 39% of Humana's MA membership was PFFS. While Humana has demonstrated moderate success in converting its PFFS membership during the most recent open enrollment period to one of its network MA products and a large percentage of the remaining PFFS membership has access to a Humana MA network product, the block of PFFS members that remains is sizeable and could be at risk. Second, the announced reduction in the MA reimbursement rates for 2010 will force all healthcare companies to redesign their MA products by increasing premiums, reducing benefits, or a combination of both. While Humana is expected be in a position to offer a competitive and profitable product, there are uncertainties, such as what Humana's competitors will do and how seniors will react. In addition to these MA issues, Moody's added that Humana's five year TRICARE South Region contract (representing approximately 15% of the government segment's premiums and fees) is at risk as the Department of Defense evaluates proposals for awarding a new five year contract. The contract has currently been extended for a one year period ending on March 31, 2010. While Humana appears to be in a good position to retain this contract, the loss of this business, would have a negative impact on earnings and would pressure ratings. Offsetting these concerns, Moody's said that Humana's improved commercial segment and growing specialty business have provided diversity to Humana's risk profile. In addition, Humana's risk- based capital remains strong, while financial leverage (debt to capital including operating leases) is being managed at a moderate level for the company's rating level. Moody's indicated that given the negative outlook, a rating upgrade would be unlikely. However, if after-tax margins improve to at least 3%, the combined organic commercial and Medicare membership growth rate is at least 1%, Medicare premiums account for no more than 65% of total premium and fees, and RBC is maintained at or above 200% the outlook could be returned to stable. Conversely, these could result in a rating downgrade: Medicare membership decreasing by 25% or more; RBC decreasing to below 150% CAL; adjusted financial leverage increasing to 40%; after-tax margins falling below 1.0%; Medicare premiums accounting for over 65% of total premium and fees; or a loss or impairment of one of its government contracts. These ratings were affirmed with a negative outlook: -- Humana Inc.: senior unsecured debt rating at Baa3; senior unsecured debt shelf rating at (P)Baa3; subordinated debt shelf rating at (P)Ba1; preferred stock shelf rating at (P)Ba2; -- Humana Insurance Company: insurance financial strength rating at A3; -- Humana Medical Plan, Inc.: insurance financial strength rating at A3. Humana Inc., based in Louisville, Kentucky, is a leading managed care company serving over 8.3 million medical members (excluding 2.1 million Standalone PDP members) as of March 31, 2009. For the first three months of 2009, the company reported consolidated GAAP revenues of approximately $7.7 billion with shareholders' equity as of March 31, 2009, of approximately $4.7 billion. Moody's most recent rating action on Humana was on March 13, 2008, when Humana's ratings were affirmed (senior debt at Baa3) and the outlook was changed to negative from stable as a result of anticipated losses on its Medicare Part D Prescription Drug business. IMAX CORPORATION: Sells 9.8 Million Common Shares to Roth Capital ------------------------------------------------------------------ IMAX Corporation entered into an underwriting agreement with Roth Capital Partners, LLC, for the sale of 9,800,000 of IMAX's common shares, no par value, for $7.15 per share, less the underwriting commission. Under the terms of the Underwriting Agreement, IMAX has granted the Underwriter an option to purchase up to an additional 1,470,000 common shares at the public offering price, less the underwriting commission, within 30 days from the date of the Prospectus Supplement to cover over-allotments, if any. A full-text copy of the Underwriting Agreement, dated June 2, 2009, between IMAX Corporation and Roth Capital Partners, LLC, is available for free at: http://ResearchArchives.com/t/s?3db3 A full-text copy of the free writing prospectus is available for free at: http://ResearchArchives.com/t/s?3db4 About IMAX Headquartered in Ontario, Canada, IMAX Corporation (Nasdaq: IMAX)(TSX: IMX) -- http://www.imax.com/-- is a digital entertainment and technology company. As of December 31, 2007, there were 299 IMAX theatres operating in 39 countries. The Company's groundbreaking IMAX DMR digital remastering technology allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality. At March 31, 2009, the Company's balance sheet showed total assets of $226.9 million, and total liabilities of $325.5 million, resulting in a stockholders' deficit of about $98.6 million. INTERPUBLIC GROUP: Fitch Assigns 'BB+' Rating on $500 Mil. Notes ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Interpublic Group of Companies' $500 million proposed senior unsecured notes issuance due 2017. The proceeds are expected to be used to partially fund a tender offer for upcoming maturities. The company will have approximately $2.6 billion in pro forma total debt ($2.1 billion as of March 31, 2009 and $500 million proposed; excluding the affect of potential tenders) and $525 million in preferred stock. IPG's ratings are: -- Issuer Default Rating 'BB+'; -- Senior unsecured notes 'BB+'; -- Bank credit facility 'BB+'; -- Enhanced Liquidity Facility 'BB+'; -- Preferred stock 'BB-'. The Rating Outlook remains Positive. The proposed notes are governed under the base indenture dated Nov. 12, 2004 (and subsequent supplementals) and rank pari passu with other senior unsecured indebtedness of the company. There are no financial covenants, but there is a change of control (50% of total voting power and majority of board, among other provisions), cross acceleration (payment default on greater than $50 million in debt) and negative pledge (10% of total assets, as defined). The proceeds of the notes issuance are expected to be used to fund a tender offer for all of its senior unsecured debt due 2009 (approximately $250 million outstanding) and up to $500 million of the approximately $750 million in total debt that comes due in 2011 (approximately $500 million) and 2010 (approximately $250 million). The 2011 notes have a higher acceptance priority level than the 2010 notes, meaning that if all the 2009 notes and 2011 notes validly tender, the 2010 notes would remain outstanding. The company also disclosed that it has amended its three-year credit agreement. The amendment allows for covenant flexibility during the potential time period where the company would have newly issued debt but may not have completed the tender. The leverage ratio at specified time periods depends on the amount of new senior debt issued. At June 30, 2009, the specified covenant leverage ratio is 3.25 times (x) in each of three debt issuance scenarios specified in the amendment (<$300 million, between $300 million and $450 million, and at least $450 million). The amendment eliminates the previous leverage step-down (to 3.0x from 3.25x) on Sept. 30, 2010, if the company issues at least $450 million of new debt. The amendment also provides for interest coverage covenant flexibility through June 30, 2010, from 4.5x, previously, to 3.75x under the amendment (assuming the company issues more than $300 million in new notes). If the company issues at least $450 million of new notes the interest coverage covenant remains at 3.75x through the expiration of the agreement. In addition, the amendment allows for minimum EBITDA flexibility through June 30, 2010; amended from $600 million previously to $550 million (if at least $300 million in new notes are issued). The company amended its credit agreement on May 18, 2009, to preserve its ability to use the facility in the event of a bankruptcy of General Motors. The agreement excludes from the determination of consolidated EBITDA any affects from a GM bankruptcy up to $150 million of cash charges and $100 million of non-cash charges. On June 5, 2009, the company disclosed that it estimates its U.S. GM exposure to be around $50 million meaning these exclusions included in the amendment should provide ample flexibility within the company's covenant thresholds. The ratings continue to reflect these: -- IPG's position in the industry as one of the largest global advertising holding companies, its diverse client base, the company's ample liquidity and the continued progress it has made toward winning new accounts and driving organic growth within its existing client base. Fitch believes the main issues that led to the numerous credit rating downgrades from 2003-2005 are behind the company. -- IPG's business risk profile and credit metrics could begin to reflect investment-grade characteristics in late 2009 or 2010. Fitch believes management has the willingness, ability and incentive to achieve investment-grade ratings. -- Credit metrics have improved significantly from 2005 levels (leverage is down from 12.4x to 2.7x). While 2009 is expected to be challenging for IPG and all global advertising agency holding companies, Fitch has always incorporated a potential downturn into IPG's ratings. The industry's scalable cost structure and IPG disciplined cost reduction initiatives will provide some offset to organic revenue declines. In considering a potential upgrade, Fitch will focus on several factors over the next 12 to 24 months: -- IPG's ability to achieve 2009 organic revenue trends in-line with the industry (with the expectation that IPG and peers will experience revenue deterioration in 2009 and assuming the industry organic revenue declines are no more than mid to high single digits per annum); -- The scalability of the cost structure and IPG's ability to maintain margin compression in-line with the industry; and -- The degree of working capital volatility and IPG's ability to manage working capital swings such that they do not meaningfully minimize Free Cash Flow generation. IPG announced that first quarter 2009 (1Q'09) revenues decreased by 11%, driven by declines in organic revenue of 5.6%, foreign exchange impact of 7.3% and slightly offset by 2.1% growth from acquisitions. As of 1Q'09, IPG's liquidity position is supported by the $1.7 billion in cash and equivalents and $335 million available under its undrawn bank credit facility due July 2011 and $622 million available under the company's $750 million ELF facility (reduced by $128.1 million in letters of credit). The ELF facility expires in July 2009, and Fitch does not expect IPG to renew or replace the expiring capacity. IPG's ratings were affirmed in a comprehensive press release distributed April 30, 2009. Fitch will also publish a full 14- page report this morning which includes indenture summaries, an organizational debt diagram, liquidity overview and key rating drivers. INTERPUBLIC GROUP: Moody's Assigns 'Ba3' Rating on $500 Mil. Notes ------------------------------------------------------------------ Moody's assigned a Ba3 rating to The Interpublic Group of Companies, Inc.'s proposed $500 million senior unsecured notes due 2017. The notes, issued by IPG, rank equally with other existing unsecured debt and the covenant package is the same as for the company's existing bonds. Proceeds from the bond offering will be used by the company to repay some of its existing debt. IPG simultaneously announced a tender offer to repurchase all of its $250 million 5.4% senior unsecured notes due 11/15/2009, and up to $500 million of its $250 million floating rate senior unsecured notes due 11/15/2010 and $500 million 7.25% senior unsecured notes due 8/15/2011. Loss given default assessments were updated to reflect changes to the capital structure. The rating outlook remains positive. IPG also amended its $335 million revolving credit facility, relaxing the interest coverage, leverage ratio and minimum EBITDA covenants, which now provide additional cushion for operational setbacks in the current economic climate. The company also announced last week an amendment to exclude from the bank EBITDA calculation any adverse effects arising from General Motors Corporation's (CFR Ca/developing) bankruptcy. Moody's believes the financing, tender and amendment reflect the company's proactive approach to maintaining a flexible balance sheet and managing its debt maturity schedule in a prompt and timely manner. IPG's positive outlook continues to reflect the company's long term steady improvement in operating performance and organic revenue growth and Moody's expectation that when the economy turns, IPG is well-positioned to improve its credit profile, and is presently managing reasonably well verses its peers amid a very tough operating environment. The Ba3 CFR is supported by the company's good free cash flow generation and moderate debt-to- EBITDA leverage (Moody's adjusted) of 4.5x at 3/31/2009 (4.3x pro forma for the announced transactions). IPG's speculative grade liquidity rating of SGL-1 is supported by the company's large cash balance of $1.6 billion at 3/31/09 ($412 million, net of working capital deficit), an unused $335 million revolving credit facility due 7/18/2011 and a largely unencumbered balance sheet. Moody's believes IPG has sufficient, although not ample, headroom under financial maintenance covenants. The last rating action for IPG was on July 23, 2008, when Moody's assigned a Ba3 rating to the company's $335 million senior unsecured revolving credit facility. IPG's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, 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. Moody's compared these attributes against other issuers both within and outside IPG's core industry and believes IPG's ratings are comparable to those of other issuers with similar credit risk. The Interpublic Group of Companies, Inc., with its headquarters in New York is among the world's largest advertising, marketing and corporate communications holding companies in the world. Revenues approximate $6.8 billion. INTERPUBLIC GROUP: S&P Assigns 'B+' Rating on $500 Mil. Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned New York City-based advertising firm Interpublic Group of Companies Inc. proposed offering of $500 million senior unsecured notes due 2017 its issue-level rating of 'B+' (at the same level as the 'B+' corporate credit rating on the company). S&P also assigned this debt a recovery rating of '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for noteholders in the event of a payment default. In addition, S&P has revised its recovery rating on Interpublic's existing senior unsecured debt to '3' from '4'. This revision reflects a change in S&P's simulated default scenario assumptions, which now include a lower debt balance at default and a modestly higher emergence enterprise value. The corporate credit rating on Interpublic is 'B+' and the rating outlook is stable. The rating reflects S&P's concern about the potential severity of recessionary pressures (including potential increases in bad-debt expense and the challenge of reducing costs ahead of revenue declines) on the company's credit metrics. Interpublic's broad business mix of traditional advertising and marketing services, very strong cash balances, and recent account gains are positive considerations that somewhat temper these concerns. Ratings List Interpublic Group of Cos. Inc. Corporate Credit Rating B+/Stable/-- New Ratings Interpublic Group of Cos. Inc. $500M sr unsecd nts due 2017 B+ Recovery Rating 3 Revised Recovery Rating Interpublic Group of Cos. Inc. To From -- ---- Senior Unsecured B+ B+ Recovery Rating 3 4 J.G. WENTWORTH: Receives $100 Million in New Equity --------------------------------------------------- J.G. Wentworth has consummated the reorganization plan which was confirmed last week by the U.S. Bankruptcy Court for the District of Delaware, including the infusion of $100 million of capital. The three non-operating parent holding company level affiliates, JGW Holdco, LLC, J.G. Wentworth LLC, and J.G. Wentworth, Inc., have successfully emerged from bankruptcy. The Company has substantially reduced its debt load at the parent holding company level while gaining access to new equity. J.G. Wentworth conducted business without interruption during the brief reorganization process. "We are very pleased to have passed this milestone of the restructuring process," said David Miller, Chief Executive Officer of J.G. Wentworth. "We have emerged as a stronger and more financially secure enterprise, and we look forward to continuing to provide customers with financial solutions for their long-term settlement and annuity payments, especially in this challenging economy." At just under two weeks, this restructuring is one of the fastest on record, and speaks to the alignment of the Company and its creditors in the prepackaged Chapter 11 filing. "I would like to thank our employees, vendors, customers and creditors for their ongoing support as we worked to quickly complete this restructuring," Mr. Miller said. "With this support, we will use our market position and our brand to acquire new customers and grow the franchise, and to continue to provide great service to our existing clients." J.G. Wentworth, Inc. -- http://www.jgwentworth.com/-- based in Bryn Mawr, Pennsylvania, is the nation's oldest, largest and most respected buyer of deferred payments for illiquid financial assets like structured settlements and annuities. Since 1992, J.G. Wentworth has purchased over $3 billion of future payment obligations from consumers and is also the nation's largest securitizer of structured settlement and annuity backed notes. J.G. Wentworth and its affiliates filed for Chapter 11 on May 19, 2009 (Bankr. D. Del. Case No. 09-11731). Norman L. Pernick, Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, assist the Debtors in their restructuring efforts. J.G. Wentworth listed $100,001 to $500,000 in assets and $500,001 to $1,000,000 in debts. JAMES WEBSTER: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: James Webster 708 Mitchell's Lane Middletown, RI 02842 Bankruptcy Case No.: 09-12259 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court District of Rhode Island (Providence) Debtor's Counsel: Peter J. Furness, Esq. Sinapi Formisano & Co. 100 Midway Place, Suite 1 Cranston, RI 02920-5707 Tel: (401) 944-9690 Fax: (401) 943-9040 Email: pjf@sfclaw.com Total Assets: $1,325,200 Total Debts: $1,693,234 A full-text copy of the Debtor's petition, including a list of its 7 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/rib09-12259.pdf The petition was signed by Brad Gerszt, managing member of the Company. KUSHNER-LOCKE: Wants to Use Cash Collateral Until November 30 ------------------------------------------------------------- The Kushner-Locke Company and its 8 affiliated corporations ask the U.S. Bankruptcy Court for the Central District of California for authorization to continue using cash collateral of JP Morgan Chase Bank, as agent for itself and a syndicate of Lenders, for the period June 1, 2009, through November 30, 2009, in accordance with a budget. The Debtors relate that the continued use of the Lenders' collateral is necessary to enable them to consummate a plan of reorganization and to exit from Chapter 11. On July 16, 2002, the Court approved the third stipulation of the Debtors, the Agent, and the official committee of unsecured creditors with respect to the limited use of cash collateral until a final order was issued by the Court. The third stipulation provided for the Debtors' use of cash collateral until October 31, 2002. Thereafter, 14 interim cash collateral orders were issued by the Court. On December 8, 2008, the Court issued its 17th order authorizing use of cash collateral through and including May 31, 2009. As adequate protection, lenders will be granted a security interest in all of the Debtors' property and rights, except for rights in and claims to causes of action under Sections 544, 545, 547, 548, 549, or 550 and any other avoidance actions under the Bankruptcy Code. The use of cash collateral will terminate upon the occurrence of certain termination events, including the dismissal or conversion of the cases and the filing by any Debtor of a Chapter 11 plan not approved by the Lenders. Headquartered in Los Angeles, California, The Kushner-Locke Company is a low-budget movie production studio. The company, along with its debtor-affiliates filed for chapter 11 protection on November 21, 2001 (Bankr. C.D. Calif. Lead Case No. 01-44828). Carol Chow, Esq., Marina Fineman, Esq., and Charles Axelrod, Esq., at Stutman, Treister & Glatt; and Mara Mornet-Ritt, Esq., at Brandon & Morner-Ritt, represent the Debtors in their restructuring efforts. Jeremy V. Richards, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the official committee of unsecured creditors as counsel. LEHMAN BROTHERS: Inks Mortgage Purchase Agreement With Americor --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has granted Lehman Brothers Holdings Inc., and certain of its affiliates permission to enter into a Mortgage Loan Purchase Agreement with Americor Mortgage, Inc., to prop up a Miami Beach residential condominium project, which LBHI largely funded. The Debtors estimate that for the life of the Mortgage Financing Program, they may purchase approximately $100 million to $200 million worth of residential loans pursuant to the Purchase Agreement. Beginning in 2006, LBHI and its indirect non-debtor subsidiary, LB Carillon Construction LLC, loaned more than $522 million to certain borrowers to finance the construction of the Canyon Ranch Living Miami Beach Condominiums, located in Miami Beach, Florida. In connection with the Construction Loans, LB Carillon borrowed $238,850,000 from Fortress Credit Corp. Since construction was completed in 2008, only 209 out of the 580 condominium units located at Canyon Ranch Miami have been sold. Purchase contracts for an additional 193 condominium units have been signed, but failed to close due to the current difficult financing environment. Accordingly, to facilitate the closing of the existing contracts and sale of the remaining 178 available condominium units and thereby assist the borrowers under the Construction Loans and Mezzanine loan, the Debtors developed the Mortgage Financing Program pursuant to a Mortgage Loan Purchase Agreement with Americor. Under the terms of the Purchase Agreement, Americor will provide residential condominium mortage loans to all individuals desiring to purchase the condominium units, and LBHI agrees to purchase said residential loans from Americor. LBHI agrees, among other things, to purchase all residential loans originated by Americor that meet the underwriting criteria agreed to by LBHI and Americor and have been approved for purchase by LBHI. On the date Americor closes each residential loan that has been approved by LBHI for purchase, LBHI will purchase the subject residential loan at a purchase price equal to the sum of the outstanding principal, the accrued and unpaid interest, plus a premium, as defined in the Agreement. The Purchasing Agreement may be terminated without cause at any time by either party after 60 days' prior written notice. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for Chapter 11 on September 15, 2008 (Bankr. S.D. N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On September 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on September 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units have combined liabilities of JPY4 trillion or US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on September 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LODGENET INTERACTIVE: Moody's Affirms 'B3' Corporate Family Rating ------------------------------------------------------------------ Moody's affirmed LodgeNet Interactive Corporation's B3 corporate family rating, Caa1 probability of default rating and SGL-4 speculative grade liquidity rating (indicating poor liquidity). The rating continues to be influenced primarily by liquidity matters stemming from the company's very limited financial covenant compliance cushion. In turn, these stem from results being adversely impacted by the recessionary suppression of discretionary consumer and business travel. This matter may have longer term implications. On one hand, should the company have to seek accommodation from its bank lenders, the applicable interest rate will be re-set and there will be a permanent reduction in free cash flow generation. Should the company avoid an interest rate re-set, the capital rationing required to achieve the outcome may have come at the cost of network shortcomings that jeopardize contractual relationships with key hotel partners. As a consequence of these matters, the rating outlook continues to be negative. Ratings and Outlook Actions: Issuer: LodgeNet Interactive Corporation -- Corporate family rating, unchanged at B3 -- Probability of default rating, unchanged at Caa1 -- Senior secured credit facility, unchanged at B3 (LGD3, 33%) -- Speculative Grade Liquidity Rating, unchanged at SGL-4 Outlook, unchanged at negative Moody's most recent rating action concerning LodgeNet was taken on November 24, 2008, at which time the company's CFR and PDR were downgraded to B3 and Caa1, respectively. LodgeNet's ratings were assigned by evaluating factors Moody's believes are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of LodgeNet's core industry and LodgeNet's ratings are believed to be comparable to those of other issuers of similar credit risk. LodgeNet Interactive Corporation, headquartered in Sioux Falls, South Dakota, provides cable, video-on-demand and video game entertainment services to the lodging industry. LYONDELL CHEMICAL: To Demolish Brazoria Plant; Hearing Set July 2 ----------------------------------------------------------------- Lyondell Chemical Co. has decided to shut down and demolish a high-density polyethylene production facility in Brazoria County, Texas, known as the Chocolate Bayou plant, Bloomberg's Bill Rochelle reports. Lyondell has decided to cease production at the end of July. The plant, owned by affiliate Equistar Chemicals LP, has higher production costs than similar Lyondell facilities, court papers indicate. The Company's motion for authority to demolish the plant is scheduled for a hearing on July 2, according to the report. Lyondell and Equistar filed for Chapter 11 in January 2009, listing assets of $33.8 billion and debt totaling $30.3 billion. The parent LyondellBasell Industries AF SCA filed for Chapter 11 on April 24. Including the parent and European subsidiaries, the assets were $40 billion on Sept. 30. Total revenue in 2007 was $44 billion. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc., filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately $8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan (comprising $3.25 billion in new loans and a $3.25 billion roll-up of existing loans) and a $1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009 in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MASONITE CORP: Emerges From Chapter 11 and CCAA Protection ---------------------------------------------------------- Masonite International Corporation on June 9, 2009, said it has successfully completed its financial restructuring and emerged from protection under both Chapter 11 of the U.S. Bankruptcy Code and the Companies' Creditors Arrangement Act in Canada, only 85 days following its initial filings on March 16, 2009. By working constructively with its lenders, who voted overwhelmingly in support of its restructuring plan, Masonite reduced its debt from $2.2 billion in March to $11.3 million of Term Debt and less than $2 million of other debt at foreign subsidiaries at emergence. Immediately upon emergence, Masonite will pay off the $11.3 million of Term Debt, leaving less than $2 million of debt on the balance sheet with cash-on-hand of over $140 million. In addition, the Company expects to close shortly on an asset-backed, revolving line of credit facility of up to $150 million. "This restructuring process has made Masonite a financially healthier and stronger company better positioned for the future," said Fred Lynch, President and Chief Executive Officer of Masonite. "We achieved our goal to successfully complete our debt restructuring plan and emerge from Chapter 11 and CCAA within 120 days of filing in no small part because of the extraordinarily constructive work we undertook with our lenders to develop an outstanding capital structure to support our long-term business objectives." At respective court hearings regarding confirmation of the Plan of Reorganization Plan in the U.S. and the CBCA Plan in Canada, Judge Peter J. Walsh of the United States Bankruptcy Court and Justice Colin L. Campbell of the Ontario Superior Court of Justice each praised Masonite and its lenders for working cooperatively during the restructuring. Judge Walsh said of Masonite's restructuring: "In terms of deleveraging the balance sheet and in terms of the absence of any serious disputes and in terms of the vote, I haven't seen one like this in ten years." Justice Campbell commented: "This case should be a model for cooperative cross-border restructurings." Tony DiLucente, Chief Financial Officer of Masonite, said: "The successful financial restructuring, together with the closure of the ABL facility in the near future, provides Masonite with significant financial flexibility to meet our liquidity needs while simultaneously funding future growth opportunities. It is also important to note that Masonite will emerge from the financial restructuring process with significant cash reserves on hand." Mr. Lynch added: "At Masonite, we have many parties to thank for this successful outcome, including our employees, our advisors, our Board, our lenders, and everyone else who have remained steadfast in their support for the company. With the financial restructuring now behind us, we look forward to continuing to provide outstanding products and service to our loyal customers around the world." Masonite emerged from Chapter 11 and CCAA protection after meeting all closing conditions to the Company's Plan of Reorganization in the U.S. and the Canadian corporate plan of arrangement. The Plan of Reorganization was confirmed by the U.S. Bankruptcy Court in Wilmington, Delaware on May 29. The Ontario Superior Court of Justice approved the CBCA Plan on June 1. As previously announced, both Masonite's term lenders and bond holders voted overwhelmingly in support of the Plans. Of the term lenders and bond holders who voted, 100% of the senior secured debt -- US$1.4 billion, 161 term lenders -- and 99.99% of the bondholders -- US$665 million, 101 bondholders -- voted to accept. The term lenders have converted 99% of their $2.2 billion in debt holdings into equity. Masonite's financial adviser was Perella Weinberg Partners. Its legal advisers were Kirkland & Ellis in the U.S. and Goodmans LLP in Canada. Its restructuring adviser was Alvarez & Marsal. 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: 12 Affiliates Disclose Assets & Liabilities ---------------------------------------------------------- Twelve debtor-affiliates of Masonite Corporation reported these assets and liabilities: Debtor Assets Debts ------ ------ ----- Premdor Finance, LLC $971,812 $0 Eger Properties 129,468 0 Masonite Holding Corporation 10,008 0 Masonite Corporation Foreign Holdings 100 0 Woodland Millwork I, Ltd. 535 1,903 Cutting Edge Tooling, Inc. 0 643,330 WMW, Inc. 0 0 Door Installation Specialist Corp. 0 0 Masonite Holding Company Limited 0 0 Masonite International Inc. 0 0 Pintu Acquisition Company, Inc. 0 0 Masonite Air, LLC 0 0 Two years before the Petition Date, the 12 debtor-affiliates reported these earnings from the operation of their businesses: Debtor Income (Loss) ------ ------------- Premdor Finance, LLC $13,286,421 Pintu Acquisition Company, Inc. ($552,261) Woodlands Millwork I, Ltd. ($237,758) Masonite Air, LLC ($63,649) Eger Properties None Masonite Holding Corporation None Masonite Corporation Foreign Holdings None Cutting Edge Tooling, Inc. None WMW, Inc. None Door Installation Specialist Corp. None Masonite Holding Company Limited None Masonite International Inc. None The Debtors did not record stand-alone income from their business operations and other sources during the two-year period preceding the Petition Date. Debtor Premdor Finance, LLC, disclosed that it made payments or transfers totaling $4,641,993 to creditors within 90 days immediately before the Petition Date. Premdor Finance also disclosed that it paid $13,002 to "insiders" as defined in Section 101(31) of the Bankruptcy Code, within one year immediately preceding the Petition Date. The 12 Debtors are directly or indirectly owned by these entities: Debtor Stockholder Stake ------ ----------- ----- Cutting Edge Tooling Florida Made Door Co 100% Woodlands Millwork I Masonite Corporation 100% WMW, Inc. Masonite Corporation 100% Premdor Finance, LLC Masonite International Corp. 100% Pintu Acquisition Masonite Corporation 100% Masonite Int'l. Inc. Masonite Holding Corp 100% Masonite Holding Corp. KKR Millennium Fund 76.49% Sculptor Investments, S.a.r.l. 8.49% AlpInvest Partners CS Investments 5.04% Masonite Holding Castlegate Entry 100% Company Limited Systems Masonite Corporation Masonite Corporation 100% Foreign Holdings, Ltd. Masonite Air, LLC Masonite Corporation 100% Eger Properties Masonite Corporation 100% Door Installation Masonite Corporation 100% Specialist Corp. 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. The Debtors emerged from Chapter 11 and CCAA protection on June 9. 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) MCCLATCHY COMPANY: Gains Compliance With NYSE's Listing Standards ----------------------------------------------------------------- The McClatchy Company was notified by the New York Stock Exchange that the company is now in compliance with the exchange's continued listing standard for total market capitalization and stockholders' equity. The NYSE received approval from the Securities and Exchange Commission to amend the NYSE's continued listing standard applicable to average market capitalization and shareholders equity through October 31, 2009. The average market capitalization requirement has been lowered from no less than $75 million over a 30-trading-day period to no less than $50 million over a 30-trading-day period and the stockholders' equity requirement has been lowered from no less than $75 million to no less than $50 million. As a result of these changes, McClatchy is now considered in compliance under the NYSE's amended continued listing standard for market capitalization and stockholders' equity. In February 2009, McClatchy was notified by the NYSE that it was not in compliance with the NYSE's continued listing standard for the average price per share of the company's Class A publicly traded common shares of less than $1 over a consecutive 30-trading-day period. Subsequently, the NYSE announced that this standard was temporarily suspended through June 30, 2009. As a result, McClatchy has until December 7, 2009, to bring the company into compliance with this listing standard. About The McClatchy Company Headquartered in Sacramento, California, The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, with 30 daily newspapers, approximately 50 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, the Charlotte Observer, and The (Raleigh) News & Observer. McClatchy also owns a portfolio of premium digital assets, including 14.4% of CareerBuilder, an online job site, and 25.6% of Classified Ventures, a newspaper industry partnership that offers the auto website, cars.com, and the rental site, apartments.com. * * * As reported in the Troubled Company Reporter on May 25, 2009, Moody's Investors Service downgraded The McClatchy Company's Probability of Default rating to Caa3 from Caa1 following the company's announcement that it has commenced a private offer to exchange up to $1.15 billion of outstanding senior unsecured and unguaranteed notes and debentures for up to $60 million in cash and up to $175 million of new 15.75% senior unsecured guaranteed notes due 2014. Moody's also downgraded the existing senior unsecured note ratings to Ca (2011 notes) and C (2014, 2017, 2027 and 2029 notes), reflecting the expected loss from the exchange offer and the high near term probability of default. MDWERKS INC: Terminates Employment of Chief Operating Officer ------------------------------------------------------------- MDwerks Inc. disclosed in a filing with the Securities and Exchange Commission that the Company terminated the employment of Stephen M. Weiss, its chief operating officer. Based in Deerfield Beach, Florida, MDwerks Inc. (OTC BB: MDWK) -- http://www.mdwerks.com/-- provides healthcare professionals with automated electronic insurance claims management solutions and advance funding of medical claims. Going Concern Doubt On April 2, 2009, Sherb & Co., LLP in Boca Raton, Florida raised substantial doubt about MDwerks Inc.'s ability to continue as a going concern after auditing its financial results for the periods ended December 31, 2008, and 2007. The auditors pointed that the Company has suffered recurring losses from operations; the Company has a stockholders' deficiency of $6,138,432 and a working capital deficiency of $1,504,676 at March 31, 2009. MOMENTIVE PERFORMANCE: Nantong Inks Deals With Shanghai Hongkou --------------------------------------------------------------- Momentive Performance Materials (Nantong) Co. Ltd., a wholly owned indirect subsidiary of Momentive Performance Materials Inc. , entered into two agreements with the Shanghai Hongkou sub-branch of China Construction Bank Corporation Limited and its affiliate dated June 3, 2009 -- a Supplementary Agreement, which amends the Loan Agreement among the parties entered into on April 27, 2007, and a Fee Agreement. Pursuant to the Supplemental Agreement, the parties (i) amended the first measurement date for the financial covenants under the Loan Agreement from December 31, 2008, to December 31, 2010, and (ii) deferred principal repayments originally due on June 30, 2009, and December 31, 2009, aggregating to approximately $6.2 million, until the final maturity date of the debt under the Loan Agreement on June 30, 2014. Pursuant to the Fee Agreement, MPM Nantong agreed to pay certain additional fees. As a result of the Agreements, MPM Nantong is in compliance with all of its obligations, including its financial covenants, under the Loan Agreement. Momentive also expects to classify the principal amount due under the Loan Agreement as long-term debt, rather than current debt, in its next quarterly financial statements. About Momentive Performance Momentive Performance Materials Inc. is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of December 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. * * * According to the Troubled Company Reporter on June 8, 2009, Moody's Investors Service assigned a B3 rating to the proposed $200 million 12.5% second lien notes of Momentive Performance Materials Inc. that will be issued as part of a debt exchange offer announced on May 12, 2009 for all senior unsecured and subordinated notes validly tendered by June 9, 2009. As of May 26, 2009, $515 million in aggregate principal amount of outstanding unsecured and subordinated notes had been tendered. The outlook is negative. MXENERGY HOLDINGS: Inks Amendment to Societe Generale Credit Deal ------------------------------------------------------------------ MXenergy Inc. and MXenergy Electric Inc., subsidiaries of MXenergy Holdings Inc., as borrowers, entered into an amendment and waiver dated and effective as of May 29, 2009, to the Third Amended and Restated Credit Agreement dated as of November 17, 2008, with Societe Generale, as administrative agent, and certain lender parties. Certain of MXenergy's subsidiaries guaranteed the Company's obligations under the Credit Agreement. Pursuant to the Credit Agreement Amendment, the borrowers under the Credit Agreement are required to post $65,000,000 in cash to be held on deposit with the Administrative Agent as collateral until the earlier of: 1) June 29, 2009, so long as no default will have occurred and be continuing; and 2) termination of the Credit Agreement, repayment in full of all the related obligations, termination of all outstanding letters of credit, and termination of all revolving commitments under the Agreements. Prior to the entry of the Credit Agreement Amendment, the Company was required to post $60,000,000 in cash as collateral, which was held on deposit with the Administrative Agent. Pursuant to the terms of the Credit Agreement, the Company was required to achieve specified milestones related to the consummation of a Liquidity Event. Pursuant to the Credit Agreement Amendment, the date by which the Company is required to deliver an executed agreement for a Liquidity Event was extended to June 8, 2009, from May 29, 2009. Additionally, the date by which the Company is required to consummate the Liquidity Event was also extended to June 8, 2009 from May 31, 2009. MXenergy also entered into an Eleventh Amendment to Master Transaction Agreement dated and effective as of May 29, 2009, with the Company and certain of its subsidiaries, as guarantors, and Societe Generale, as hedge provider, amending certain provisions of that certain Master Transaction Agreement dated as of August 1, 2006. The Hedge Agreement Amendment amends or waives certain provisions of the Hedge Agreement to: (1) extend the date for delivery of an executed agreement for a Liquidity Event to June 8, 2009; (2) extend the date for consummation of a Liquidity Event to June 8, 2009; (3) reduce the limitation on maximum total outstanding hedging positions to 12 Bcf from a limitation of 25 Bcf previously; and (4) extend the date by which new natural gas hedging transactions may be entered into, only if the Counterparty or any successor to an existing Counterparty, at the date, is acceptable to the Hedge Provider in its sole discretion, from May 29, 2009, to June 8, 2009. A full-text copy of the Third Amendment and Waiver to Third Amended and Restated Credit Agreement is available for free at: http://ResearchArchives.com/t/s?3db5 A full-text copy of the Eleventh Amendment to Master Transaction Agreement is available for free at: http://ResearchArchives.com/t/s?3db6 About MXenergy Holdings MXenergy is a retail natural gas and electricity supplier in North America, serving approximately 500,000 customers in 39 utility territories in the United States and Canada. Founded in 1999 to provide natural gas and electricity to consumers in deregulated energy markets, MXenergy helps residential customers and small business owners control their energy bills by providing both fixed and variable rate plans. At March 31, 2009, the Company's balance sheet showed total assets of $316.4 million and total liabilities of $362.4 million, resulting in a stockholders' deficit of about $46.0 million. MYRA RUTH REED: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Myra Ruth Reed aka Myra Ruth Ancelet 3664 Perserve Road Panama City, FL 32408 Bankruptcy Case No.: 09-50379 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court Northern District of Florida (Panama City) Debtor's Counsel: Mark Freund, Esq. Igler & Dougherty, PA 500 North Westshore Blvd., Suite 1010 Tampa, FL 33609 Tel: (813) 289-1020 Fax: (813) 289-1070 Email: mf@idlaw.biz Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Ms. Reed. NANBU INC: Voluntary Chapter 15 Case Summary -------------------------------------------- Chapter 15 Petitioner: Tsunehiro Sasanami Chapter 15 Debtor: Nanbu, Inc. aka Nanbu Sekkei Kaihatsu, Inc. c/o Tsunehiro Sasanami Takusyou Sogo Horitsu Jimusho Maru Bldg. 12F Section #1201 4-1, Marunouchi 2-chome Chiyoda-ku, Tokyo, Japan 100-6312 Chapter 15 Case No.: 09-01274 Chapter 15 Petition Date: June 8, 2009 Court: District of Hawaii (Honolulu) Judge: Robert J. Faris Estimated Assets: $1 million to $10 million Estimated Debts: $50 million to $100 million NATIONAL DIE & BUTTON: Case Summary & 14 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: National Die & Button Mould Co., Inc. 462 Barell Ave. Carlstadt, NJ 07072 Bankruptcy Case No.: 09-24786 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court District of New Jersey (Newark) Debtor's Counsel: Stephen Ravin, Esq. Forman Holt Eliades & Ravin 80 Route 4 East Paramus, NJ 07652 Tel: (201) 845-1000 Email: sravin@formanlaw.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 14 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-24786.pdf The petition was signed by Louis Eisenpresser, president of the Company. NAVISTAR INT'L: Board Names Cederoth as Interim Financial Officer ----------------------------------------------------------------- The Board of Directors of Navistar International Corporation appointed A.J. Cederoth to serve as the company's interim principal financial officer, replacing William A. Caton who served in that capacity during the medical leave of absence taken by the its chief financial officer Terry M. Endsley. The company related on April 15, 2009, that Mr. Endsley had passed away after a brief but difficult battle with cancer and that Mr. Cederoth would be handling the day-to-day financial and accounting responsibilities. The appointment of Mr. Cederoth as interim principal financial officer coordinates the accounting and financial functions under his leadership pending the search for a new chief financial officer. Mr. Cederoth, age 44, serves as the company's senior vice president for Corporate Finance since June 2009. He previously served as the company's Vice President for Corporate Finance from April 2009 to June 2009; Vice President and Chief Financial Officer of the Engine Division of Navistar Inc., the company's manufacturing subsidiary, from 2007 to April 2009; Vice President for Finance of Navistar's Engine Division from 2006 to 2007; Vice President and Treasurer of Navistar Financial Corporation, the Company's captive finance subsidiary, from 2005 to 2006; and Treasurer of NFC from 2001 to 2005. About Navistar International Based in Warrenville, Illinois, Navistar International Corporation (NYSE: NAV) -- http://www.navistar.com/-- produces International(R) brand commercial and military vehicles, MaxxForce(TM) brand diesel engines, IC brand school and commercial buses, and Workhorse(R) brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Navistar is also a provider of truck and diesel engine parts. Another affiliate offers financing services. Navistar reported $9.62 billion in total assets and $11.09 billion in total liabilities as of January 31, 2009, resulting in $1.49 billion in stockholders' deficit. * * * According to the Troubled Company Reporter on April 15, 2009, Fitch Ratings has affirmed the Issuer Default Ratings of Navistar International Corporation and Navistar Financial Corp. at 'BB-', the Rating Outlook remains Negative. The ratings cover approximately $1.8 billion of debt at NAV and $3.2 billion debt at NFC as of January 31, 2009. NFJV LLC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: NFJV, LLC 10480 Markison Road Dallas, TX 75238 Bankruptcy Case No.: 09-33621 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Nextech Solutions, Inc. 09-33622 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Kevin D. McCullough, Esq. Rochelle McCullough L.L.P. 325 N. St. Paul St., Ste. 4500 Dallas, TX 75201 Tel: (214)953-0182 Fax: (214)953-0185 Email: kdm@romclawyers.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Tony Di Napoli, president and CEO of the Company. NORTEL NETWORKS: Seeks Court Approval of Crossroads Settlement -------------------------------------------------------------- Before the Petition Date, Nortel Networks Inc. entered into a number of agreements with Crossroads Wireless, Inc., and Crossroads Holding, LLC. The contracts include a purchase and license agreement dated June 30, 2008, with Crossroads Holding, and a security agreement dated August 13, 2008, with both Crossroads Entities. Under the Agreements, Crossroads Wireless and Crossroads Holding granted NNI interest in certain equipment they ordered from NNI as well as in some of their spectrum licenses to further secure their obligations to NNI. As a result, NNI holds secured claims against the Crossroads Entities that are secured by property in which the Crossroads Entities assert an interest. On February 13, 2009, Crossroads Holding became the subject of an involuntary petition under Chapter 7 of the Bankruptcy Code. The case was eventually converted to one under Chapter 11 pursuant to an order issued by the U.S. Bankruptcy Court for the Western District of Oklahoma. In the same month, Crossroads Wireless filed a voluntary petition under Chapter 11. In its schedules of assets and liabilities, Crossroads Wireless disputed NNI's security interests in spectrum licenses. In light of their Chapter 11 bankruptcy cases, the Crossroads Entities held negotiations with the Debtors to discuss the resolution of their dispute and have subsequently entered into a stipulation. Under the stipulation, Crossroads Wireless and Crossroads Holding agree, subject to approval by the bankruptcy courts overseeing the parties' Chapter 11 cases, to: (i) transfer to NNI all rights, title and interest in the Equipment, free and clear of any interest of any entity other than the Norte1 companies; (ii) ask the U.S. Bankruptcy Court for the District of Delaware to order immediate delivery to NNI of the equipment held by any party; and (iii) release all claims they have or may have against NNI. In exchange, NNI agree to release all claims it has or may have against the Crossroad Entities, including its claims to a security interest in any spectrum licenses, and to accept and acknowledge the transfer as full satisfaction of its claims against the Crossroads Entities. Andrew Remming, Esq. at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware, relates that while NNI is prepared to litigate the dispute, litigation costs can be expensive and there is no assurance it would achieve a better result for NNI than the one achieved under the stipulation. "The anticipated costs to NNI in pursuing a claim are high in light of the limited additional upside that could be gained from pursuing the claim compared to the stipulation. Litigation to pursue the issues otherwise resolved by the stipulation would result in the expenditure of substantial legal fees," Mr. Reming says. The hearing to consider approval of the settlement is scheduled for June 11, 2009. Creditors and other concerned parties have until June 4, 2009 to file their objections. BMU Municipal Utilities Object Brookings Municipal Utilities ask the U.S. Bankruptcy Court for the District of Delaware to deny the Debtors' request, saying it attempts to unilaterally determine the property rights of parties to the equipment. "The proposed compromise would effectively determine competing interests and claims in the equipment without providing appropriate due process protections to those parties who may be in possession of the equipment and their creditors who may assert an interest in it, including BMU," says Lyle Nelson, Esq., at Elias Books Brown and Nelson P.C., in Oklahoma City. Mr. Nelson says that under the bankruptcy law, an adversary action must be filed in order to determine the interest of various parties to this equipment including the interest of BMU and its creditors. "The proposed compromise proposes to grant relief which is precluded by law. Specifically, the Court does not have the authority to eliminate the claims and interest of any other parties which may have a claim to the equipment via a motion," Mr. Nelson says. 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: Canadian Applicants Can Sell Stake in Korean JV ---------------------------------------------------------------- Nortel Networks Corporation and its Canadian affiliates sought and obtained permission from the Ontario Superior Court of Justice to conduct a sales process to market their interest in LG-Nortel Co. Ltd. Nortel Networks Limited owns 50% of the outstanding common shares plus one common share in the joint venture, while LG Electronics owns the balance of the outstanding common shares. Each of the companies holds two preferred shares in the joint venture. As part of the sale, NNL and LGE entered into the LG-Nortel Joint Venture Sale Process Protocol Agreement dated May 27, 2009, to provide the guidelines of their respective roles during the sale process. NNL Chief Strategy Officer George Riedel said that establishing a protocol for the sale is considered necessary by both parties to address their interests and in recognition of the fact that LGE's involvement in any sale of the joint venture is critical. "The protocol is also designed to preserve LGE's right to approve any transaction and also to preserve both parties' rights under the original [Joint Venture] Agreement," Mr. Riedel averred. In connection with the sale, the CCAA Applicants also sought and obtained approval to hire Goldman, Sachs &. Co as their financial advisor pursuant to the terms of an engagement letter dated May 27, 2009. A motion to enforce the Canadian Court's sales process order had also been filed in the Chapter 15 cases of the CCAA Applicants. The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on June 11, 2009, to consider the sale request. LG-Nortel is a profitable, standalone business with a strong balance sheet, and has not filed for creditor protection. The joint venture has enjoyed solid revenues and profits since its establishment in November 2005, with several significant customer wins in Korea and abroad. The business achieved a Management Operating Margin of $341 million, or 27%, in 2008, and Management Operating Margin for the first quarter of 2009 of 26%. "This proposed divestiture represents the best path forward for LG-Nortel, its customers and employees," said Peter MacKinnon, LG- Nortel's Chairman and General Manager. "LG-Nortel is a strong, independent, technologically astute and commercially savvy organization. With a competitive portfolio of wireless, wireline and enterprise solutions, LG-Nortel is a market leader in Korea and select international markets. Our number one priority is the continued success of LG-Nortel and our customers." "LG-Nortel is a successful business with an accomplished leadership team, a culture of innovation, a dedicated employee base and a drive to succeed," said Mike Zafirovski, President and CEO, Nortel. "As we work to evaluate the ultimate path forward for all of our businesses, this decision will allow LG-Nortel to embark on the next phase of its journey and realize its full potential." 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: Canadian Court Approves Sale of Westwinds Assets ----------------------------------------------------------------- The Ontario Superior Court of Justice approved the sale of Nortel Networks Corporation and its four Canadian affiliates' property in Calgary to the city government. The properties to be sold include two facilities, known as the Westwinds Systems House and the Westwinds Innovation Centre, and 8.9 acres of land. The buildings, which are owned by Nortel Networks Limited, were constructed as an Office Technology Centre, where most of the occupants are involved in research and development. Under the deal, the properties will be sold to the city government for C$97 million. NNL will be responsible for adjustment charges prior to the sale closing while the city government will take the responsibility for the charges after the closing. The sale is required to be completed on or about June 15, 2009. As reported by the Troubled Company Reporter on May 19, 2009, the purchase price is C$97 million. The CCAA Applicants, through the assistance of DTZ Barnicke, marketed the properties since August 2008. They received three purchase offers, with which the offer from the Calgary City Government as the highest bid. The parties executed a sale agreement on April 27, 2009. Allan Lane, asset manager of U.S.-based Nortel Networks Inc., said the Applicants don't expect further marketing efforts to result in a higher price for the Westwinds Property, given the amount of time that the Property had been on the market and the decline of the real estate market in Calgary. 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: Court Permits Filing of Schedule Parts Under Seal ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized Nortel Networks Inc., Nortel Networks Capital Corporation, Alteon WebSystems Inc., and Nortel Networks International Inc. to file some portions of their schedules of assets and liabilities and related certificates of service under seal. As reported by the Troubled Company Reporter on May 19, 2009, attorney for the Debtors, Ann Cordo, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware, said the Schedules may contain information about the Debtors' customers and the Debtors' executory contracts. "If the customer information were to become publicly available, the Debtors would risk unfair competition with respect to business that the Debtors have fought extremely hard to procure and service over the years. Competitors of the Debtors could easily use the customer information to solicit each of the customers, undermining the Debtors' relationship with their customers during this crucial period," Ms. Cordo said. The Debtors informed the Court they intend to provide access of the unredacted copy of the Schedules and Certificates to the U.S. Trustee and attorneys of the Official Committee of Unsecured Creditors. In their schedules of assets and liabilities, the four debtors disclosed: Total Assets Total Debts ------------ ----------- Nortel Networks Inc. $5,789,547,765 $5,042,245,337 Nortel Networks Capital $8,533,270 $157,143,611 Nortel Altsystems Inc. $44,705,040 $53,484,244 Nortel Networks International $6,648,393 $65,657,756 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 UK: Voluntary Chapter 15 Case Summary ----------------------------------------------------- Chapter 15 Petitioner: Stephen John Harris Chapter 15 Debtor: Nortel Networks UK Limited Maidenhead Office Park, Westacott Way Littlewick Green Maidenhead Berkshire SL6 3QH UK Chapter 15 Case No.: 09-11972 Type of Business: The Debtor operates a telecommunication company. See http://www.nortel.com/ Chapter 15 Petition Date: June 8, 2009 Court: District of Delaware (Delaware) Judge: Kevin Gross Chapter 15 Petitioner's Counsel: Edwin J. Harron, Esq. bankfilings@ycst.com Young, Conaway, Stargatt & Taylor LLP The Brandywine Building 1000 West Street, 17th Floor PO Box 391 Wilmington, DE 19899-0391 Tel: (302) 571-6600 Fax: (302) 571-1253 Estimated Assets: More than $1 billion Estimated Debts: More than $1 billion NYSAL INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Nysal, Inc. dba Waterman Shell 295 East 40th St. San Bernardino, CA 92404 Bankruptcy Case No.: 09-22505 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Sheri Bluebond Debtor's Counsel: Franklin C. Adams, Esq. Best Best & Krieger LLP 3750 University Ave, Ste 400 Riverside, CA 92502 Tel: (951) 686-1450 Fax: (951) 686-3083 Email: franklin.adams@bbklaw.com Total Assets: $989,000 Total Debts: $1,489,089 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/cacb09-22505.pdf The petition was signed by Rahat Khan, president of the Company. PEANUT CORP: Plainview Peanut Files for Ch 7 Bankruptcy Protection ------------------------------------------------------------------ KCBD NewsChannell 11 reports that Peanut Corporation of America's subsidiary, Plainview Peanut Company, has filed for Chapter 7 bankruptcy protection. KCBD relates that the Plainview Peanut Plant, along with its sister plant in Blakely, Georgia, have been blamed for a nationwide outbreak of Salmonella poisoning that reports say sickened more than 700 people and killed nine. According to KCBD, Plainview Peanut's creditors include: -- Atmos and Xcel, -- the city of Plainview, -- the IRS, and Texas Comptroller, -- several local banks, and -- Plainview Peanut President Stuart Parnell. A court hearing is set for June 24, says KCBD. Peanut Corporation of America -- http://www.peanutcorp.com/-- filed a Chapter 7 bankruptcy in February 2009 (Bankr. W.D. Va. No. 09-60452). The Company listed both assets and liabilities in the range of $1 million to $10 million. PILGRIM'S PRIDE: Seeks $18MM DIP Financing from Liberty Mutual -------------------------------------------------------------- Pilgrim's Pride has filed with the U.S. Bankruptcy Court for the Northern District of Texas a motion seeking authorization and approval of a postpetition debtor-in-possession surety facility with Liberty Mutual Insurance Company, BankruptcyData.com reports. The principal terms of the facility include: (i) the establishment of an $18 million D.I.P. surety facility; (ii) the assumption of the liabilities and obligations under the prepetition general agreement of indemnity dated Dec. 24, 2002; and (iii) a posting of additional collateral in the approximate amount of $6.2 million to secure the Debtors' obligations under the D.I.P. surety facility. About Pilgrim's Pride Corp. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the Company owns 34 processing plants in the United States and 3 processing plants in Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The Company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi, and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The Company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. POPULAR INC: Fitch Downgrades Issuer Default Rating to 'B' ---------------------------------------------------------- Fitch Ratings has downgraded the Long-term Issuer Default Rating of Popular, Inc., to 'B' from 'BBB' and downgraded the Long-term IDRs of units Banco Popular de Puerto Rico and Banco Popular North America to 'BB-' from 'BBB'. All ratings remain on Rating Watch Negative where they were first placed on May 15, 2009. A complete listing of ratings follows this release. The action follows Popular's announcement that it is offering an exchange of its preferred stock instruments into common stock to boost its existing weak level of tangible common equity which stood at just 2.7% of tangible assets on March 31, 2009. The magnitude of this plan underscores the asset quality challenges currently being faced by Popular. The level of non-performing loans remains well above average among major and regional U.S. banks with the prospect of further deterioration. Popular's ratings remain on Watch Negative given the execution risk associated with the new exchange plan and the prospect of escalating asset quality issues. The removal from Watch Negative hinges on the success of this plan as well as a stabilization of problem loans. Particularly in a stress scenario, there is the risk that considerable funds from the holding company could be downstreamed to boost bank level capital ratios. This potential outcome could hamper the ability of the holding company (Popular) and sub- holding company (Popular North America, Inc.) to service a considerable level of holding company debt. Consequently, Fitch has widened the notching between holding company and bank level IDRs. The holding company senior debt rating has been assigned a recovery rating of 'RR4'. Investors in preferred stock are being encouraged to participate through the suspension of preferred dividends. Given this suspension, the preferred stock rating of Popular was downgraded to 'C/RR6' from 'BB+'. (See commentary 'Fitch Sees Elevated Risk of Bank Hybrid Capital Coupon Deferral in 2009' dated Feb. 4, 2009 available on Fitch's web site at 'www.fitchratings.com'). While the current plan suggests trust preferred holders will not face an immediate suspension of payments, Fitch believes the potential for future deferral is increasing. Consequently, the trust preferred rating has been downgraded to 'CCC/RR6' from 'BB+'. Fitch has downgraded these ratings, which remain on Watch Negative: Popular, Inc. -- Long-term IDR to 'B' from 'BBB'; -- Short-term IDR to 'B' from 'F2'; -- Senior unsecured to 'B/RR4' from 'BBB'; -- Short-term Debt to 'B' from 'F2'; -- Individual to 'D/E' from 'C'. Popular North America, Inc. -- Long-term IDR to 'B' from 'BBB'; -- Senior unsecured to 'B/RR4' from 'BBB'; -- Short-term IDR to 'B' from 'F2'; -- Short-term Debt to B from 'F2'; -- Individual rating to 'D/E' from 'C'. Banco Popular North America -- Long-term IDR to 'BB-' from 'BBB'; -- Long-term deposits to 'BB' from 'BBB+'; -- Short-term IDR to 'B' from 'F2'; -- Short-term deposits to 'B' from 'F2'; -- Individual rating to 'D' from 'C'. Banco Popular de Puerto Rico -- Long-term IDR to 'BB-' from 'BBB'; -- Long-term deposits to 'BB' from 'BBB+'; -- Short-term IDR to 'B' from 'F2'; -- Short-term deposits to 'B' from 'F2'; -- Individual rating to 'D' from 'C'. BanPonce Trust I -- Trust preferred to 'CCC/RR6' from 'BB+'. Popular Capital Trust I -- Trust preferred to 'CCC/RR6' from 'BB+'. Popular Capital Trust II -- Trust preferred to 'CCC/RR6' from 'BB+'. Popular North America Capital Trust I -- Trust preferred to 'CCC/RR6' from 'BB+'. Fitch has downgraded these ratings and removed them from Watch Negative: Popular -- Preferred stock to 'C' from 'BB+'. Fitch has affirmed these ratings: Popular -- Support at '5'; -- Support floor at 'NF'. Popular North America, Inc. -- Support at '5'; -- Support floor at 'NF'. Banco Popular North America -- Support at '5'; -- Support floor at 'NF'. Banco Popular de Puerto Rico -- Support at '4'; -- Support Floor at 'B'. QPC LASERS: Lender Conducts Sale of Quintessence Photonics' Assets ------------------------------------------------------------------ QPC Lasers, Inc., disclosed in a filing with the U.S. Securities and Exchange Commission that Laser Operations, LLC, conducted on June 1, 2009, a public sale of certain assets that secured Quintessence Photonics Corporation's obligations under the $6 million Secured Promissory Note dated September 18, 2006, made by Quintessence in favor of Finisar Corporation. As of April 30, 2009, the current amount due on the Note is $5,423,683, plus accrued interest of approximately $638,148. On October 21, 2008, Quintessence received a written notice of default from Finisar in connection with Quintessence's failure to make a required payment due under the Note. As a result, an Event of Default exists under the Note. On May 13, 2009, pursuant to a Loan Sale Agreement, Laser Operations acquired all of Finisar's rights and remedies under the Note and a security agreement which granted Finisar a security interest in the Collateral representing substantially all of the assets of Quintessence. Quintessence is a subsidiary of the Company. The Collateral constitutes essentially all of the Company's assets. The Company has been advised that at the Asset Sale, Laser Operations purchased the Collateral by issuing a successful bid of approximately $750,000. The successful bid amount is less than the amount due under the Note. As a result, Quintessence will not receive any proceeds from the Asset Sale. After the Asset Sale, Quintessence has no operating assets. The Company anticipates that it will in the near future file for protection under Chapter 7 of the federal bankruptcy laws and that its common stock will have no value after liquidation of the Company is completed. About QPC Lasers, Inc. QPC Lasers, Inc., designs and manufactures laser diodes through its wholly-owned subsidiary, Quintessence Photonics Corporation. Quintessence was incorporated in November 2000 by Jeffrey Ungar, Ph.D. and George Lintz, MBA. The Founders began as entrepreneurs in residence with DynaFund Ventures in Torrance, California and wrote the original business plan during their tenure at DynaFund Ventures from November 2000 to January 2001. The business plan drew on Dr. Ungar's 17 years of experience in designing and manufacturing semiconductor lasers and Mr. Lintz's 15 years of experience in finance and business; the primary objective was to build a state of the art wafer fabrication facility and hire a team of experts in the field of semiconductor laser design. RH DONNELLEY: Can Pay Prepetition Taxes Up to $5.5 Million ---------------------------------------------------------- In the ordinary course of business, R.H. Donnelley Corp. and its debtor-affiliates incur certain sales, use, property, franchise and other taxes and governmental charges that are payable either directly to various state and local taxing authorities or to third parties that remit the payments to taxing authorities. The Debtors also lease facilities and engage in advertising sales in many states and are accordingly obligated to pay Taxes to numerous state and local Taxing Authorities. Although the Debtors believe that they are current on all Taxes that were due and payable as of the Petition Date, many of the obligations are paid on a periodic basis and in arrears, their proposed counsel, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, relates. As a result, in many instances there is a lag between the time when the Debtors incur an obligation to pay Taxes and the date the Taxes actually become due and payable under applicable, Mr. Conlan notes. He says certain Taxing Authorities could therefore have claims against the Debtors for Taxes that have accrued but will become due during the pendency of the Chapter 11 cases. By this motion, the Debtors seek authority from the U.S. Bankruptcy Court for the District of Delaware, to be exercised in their discretion, to pay to the relevant Taxing Authorities (i) any prepetition Taxes that accrued and were due and owing prior to the Petition Date but remain unpaid as of the Petition Date and (ii) any prepetition Taxes that accrued prior to the Petition Date and will become due and owing during the pendency of the Chapter 11 cases in the ordinary course of business. The Debtors estimate that, as of the Petition Date, their accrued and unpaid liabilities for Taxes were approximately $5,000,000. The Debtors propose to pay any accrued and unpaid liabilities for prepetition Taxes in the ordinary course of business up to an aggregate amount not to exceed $5,500,000. The Debtors also ask the Court to authorize banks and other financial institutions to honor and process transfers, deposits, or checks issued by any of the Debtors on account of any prepetition Taxes that have not cleared as of the Petition Date, and to rely on the representations of the Debtors as to which checks are issued and authorized to be paid without any duty of further inquiry and without liability for following the Debtors' instructions. Mr. Conlan asserts that it is important for the Debtors to be current in their payment of taxes because these taxes, if unpaid, may be entitled to priority status under Section 507(a)(8) of the Bankruptcy Code and would therefore have to be paid in full under any plan of reorganization. In some or all of the states in which the Debtors do business, liens can attach to real and personal property on which the Debtors have unpaid property Taxes, thus potentially entitling the relevant Taxing Authorities to a secured claim against property of the relevant Debtor's estate and the payment of postpetition interest and penalties, Mr. Conlan points out. Payment of the Taxes should therefore affect only the timing of the payments and not the amounts that would ultimately be payable to the applicable Taxing Authorities, and may, in some instances, allow the Debtors to avoid the payment of unnecessary interest and penalties. Certain Taxing Authorities, Mr. Conlan adds, may assert that sales, use and other Taxes are so-called "trust fund" taxes that the Debtors are required to collect from third parties and hold in trust for the benefit of the Taxing Authorities. To the extent that the Debtors collect sales, use and other Taxes from their customers on behalf of the Taxing Authorities, the Taxes may not constitute property of the estate. As a consequence, the Debtors would not have an equitable interest in the Taxes and, assuming that the Taxes could be adequately identified and traced, the amounts would not constitute property of the Debtors' estates and would not be subject to the automatic stay. Accordingly, because the Debtors may have no equitable interest in any so-called trust fund Taxes, payment of the Taxes would not prejudice the rights of any of the Debtors' other creditors, and the Debtors should be authorized to pay any Taxes that constitute trust fund taxes as they become due and payable. Even if some of the Taxes would not ordinarily be considered "trust fund" taxes in a particular jurisdiction, payment of the Taxes should be authorized because some Taxing Authorities may audit the Debtors if the Taxes are not timely paid, Mr. Conlan tells the Court. The audits would needlessly divert the Debtors' attention from their reorganization efforts. In addition, some Taxing Authorities may also seek to impose liens on the Debtors' assets on account of unpaid Taxes, which liens would require time, effort and expense for the Debtors to challenge and remove. An improper lien or the failure to pay certain Taxes might also affect the Debtors' good standing in a particular state, potentially affecting the Debtors' ability to continue operating in the ordinary course and resulting in unnecessary distractions for the Debtors and their management. Timely payment of the Taxes is necessary to avoid the distractions and would be in the best interests of the Debtors and their estates. Importantly, Mr. Conlan tells the Court, some states hold responsible officers personally liable in various circumstances for unpaid sales and use taxes. * * * The Court approved the Debtors' request and authorized them to pay the Taxes in the ordinary course of their business up to an amount aggregating $5,500,000. 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: Court OKs $2MM Payment to Shippers & Lien Claimants ----------------------------------------------------------------- R.H. Donnelley Corp. and its debtor-affiliates depend on reputable common carriers or shippers to transport their printed directories to third party vendors who distribute the directories on behalf of the Debtors. The Debtors utilize the services of approximately six Shippers to ensure the timely delivery of printed directories to the Distribution Vendors. As a result, in the ordinary course of business, the Shippers regularly have possession of finished goods published by the Debtors. The Debtors expect that, as of the Petition Date, certain of the Shippers will have outstanding invoices for goods that were delivered prior to the Petition Date. Under most state laws, a Shipper has a lien on goods in its possession, which lien secures the charges or expenses incurred in connection with the transportation or storage of the goods. Pursuant to Section 363(e) of the Bankruptcy Code, the Shippers may be entitled to adequate protection in the form of a possessory lien. As a result, certain Shippers may refuse to deliver or release goods in their possession or control, as applicable, before any prepetition amounts owed to them by the Debtors have been satisfied and their liens released. The Debtors' proposed counsel, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, contends that timely distribution of the Debtors printed directories is essential to the Debtors' business operations. He says that in many instances, the Debtors cannot collect revenue from advertisers until a directory has been published and distributed. Thus, a failure to timely publish and deliver the Debtors' printed directories could have a significant impact on the Debtors' cash flows. Mr. Conlan also asserts that any delay of the delivery of the print directories would likely negatively impact the Debtors' ability to maintain relationships with their current advertising customers, as well as their ability to attract new advertising customers. The Debtors believe that the value of the goods that currently in the Shippers' possession exceeds the amount of Shipping Claims asserted by the Shippers. "Indeed, even if the Shippers did not have valid liens under applicable state law, their possession of the Debtors' printed directories would severely harm the Debtors' relationships with the advertising customers," Mr. Conlan says. For these reasons, the Debtors believe that it is necessary and essential to their reorganization efforts and to the preservation of the value of their estates that they be permitted to pay the Shipping Claims in the ordinary course of business. Accordingly, the Debtors seek authority from the U.S. Bankruptcy Court for the District of Delaware to pay certain prepetition claims of Shippers in amounts the Debtors determine necessary or appropriate to (i) obtain releases of critical or valuable goods that may be subject to liens, (ii) maintain a reliable, efficient and smooth distribution system, and (iii) induce the Shippers to continue to transport goods and make timely deliveries. The Debtors propose to pay the Shippers' claims in an amount not exceeding $1,000,000. Lien Claimants In addition to the Shippers, the Debtors also routinely transact business with third parties who, under applicable state law, potentially have the ability to assert liens against property of the Debtors if the Debtors fail to timely pay for the goods provided or services rendered by the Lien Claimants prior to the Petition Date. The Lien Claimants are contractors who provide equipment and perform services for the Debtors, primarily involving tenant improvement and space optimization projects relating to build- outs of certain of the Debtors' leased facilities. Although the Debtors customarily make timely payments to all potential Lien Claimants, as of the Petition Date, some of Lien Claimants may not have been paid in full for certain prepetition goods, equipment or services provided to the Debtors, which may result in the Lien Claimants having the ability to assert, and perfect, Statutory Liens against the Debtor's properties, notwithstanding the automatic stay under Section 362. Pursuant to Section 362(b)(3), the act of perfecting Statutory Liens, to the extent consistent with Section 546(b) is expressly excluded from the automatic stay. Under Section 546(b), a debtor's lien avoidance powers "are subject to any generally applicable law that . . . permits perfection of an interest in property to be effective against an entity that acquires rights in such property before the date of perfection." Mr. Conlan tells the Court that certain Lien Claimants may refuse to perform their ongoing obligations to the Debtors unless their claims are paid in full and could delay the Debtors receiving tenant improvement allowances that could be awarded by certain landlords. The Debtors lease approximately 98 facilities located in 28 states throughout the country. At any given time, certain Lien Claimants may be providing services at one or more of the facilities, and may therefore have the right to perfect Statutory Liens related to the leased property, Mr. Conlan explains. In cases like this, the existence and perfection of the Statutory Liens on the leased property could potentially cause the Debtors to violate the terms of the lease, thereby potentially giving the landlord a postpetition claim against the applicable Debtor or causing the landlord to ask the Court to lift the automatic stay to permit the landlord to exercise remedies. To avoid undue delay, the Debtors seek authority to pay and discharge, on a case-by-case basis and in their discretion, the claims of all Lien Claimants that have given or could give rise to a Statutory Lien against the Debtors' property, or properties leased by the Debtors, regardless of whether the Lien Claimants have already perfected their interests in a total amount not exceeding $1,000,000. However, with respect to each Lien Claimant Claim, the Debtors will not be authorized to pay a Lien Claimant Claim unless the Lien Claimant has perfected or, in the Debtors' judgment, is capable of perfecting in the future, one or more Statutory Liens in respect of the Lien Claimant Claim. Nor will any payment be deemed to be a waiver of any rights regarding the extent, validity, perfection or possible avoidance of such Statutory Liens. Because the Debtors will only pay Lien Claimants that have perfected Statutory Liens or are capable of perfecting Statutory Liens against the Debtors' property, the payment will not affect the amount of any distribution to such creditors, but only the timing, Mr. Conlan submits The Debtors also seek authorization for the applicable banks asked to process, honor and pay any and all checks on account of claims with respect to Shippers and Lien Claimants to rely on the representations of the Debtors as to which checks are issued and authorized to be paid in accordance with this Motion without any duty of further inquiry and without liability for following the Debtors' instructions. * * * The Court approved the Debtors' request. 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: Court Permits Payment of Insurance Obligations ------------------------------------------------------------ In connection with their business operations, R.H. Donnelley Corp. and its debtor-affiliates maintain multiple insurance policies providing coverage for, among others, property, directors and officers, general liability, automobile liability, crime insurance, fiduciary liability, umbrella or excess liability, employment practices liability, and errors and omissions liability. For the policy period of 2008 to 2009, the total annual premiums under the Insurance Policies were $8,054,314. A schedule of the Insurance Policies is available for free at: http://bankrupt.com/misc/rhdinsurance.pdf The Debtors do not have premium financing arrangements in place with respect to any of the Insurance Policies. The Debtors are required to pay the premiums in advance based on the rates established and billed by each Insurance Carrier. The Debtors believe that all Insurance Premiums have been paid in full prior to the Petition Date. Pursuant to the Debtors' general liability, workers' compensation liability, and automobile liability policies with Zurich American Insurance Company for the policy period 2007-2008, the Debtors were being assessed an additional premium payment of $67,000. The Debtors are currently disputing the accuracy of the adjustment but will likely owe a portion of the amount in additional premium payments. To prevent any disruption of the Debtors' insurance coverage and any attendant harm to the Debtors' business that that disruption would cause, the Debtors sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to honor the terms of their Insurance Policies. The Debtors also sought and obtained the Court's permission to make any prepetition premium payments as necessary and perform any other prepetition obligations that may be necessary to maintain the Insurance Policies in effect. The Debtors also sought and obtained the Court's permission to pay the 2008 Adjustment Amount and pay any adjusted premium amounts that may come due under the Zurich Policies. 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) RILEY ELLIOTTE LAMSON: Case Summary & 16 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Riley Elliotte Lamson 8202 SE Cumberland Circle Hobe Sound, FL 33455 Bankruptcy Case No.: 09-21383 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman Jr. Debtor's Counsel: John B. Culverhouse, Sr., Esq. 320 S Indian River Dr # 100 Ft Pierce, FL 34950 Tel: (772) 465-7572 Email: bradculverhouselaw@gmail.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 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-21383.pdf The petition was signed by Rahat Khan, president of the Company. RITE AID: Moody's Assigns 'B3' Rating on $400 Mil. Senior Notes --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Rite Aid Corporation's proposed $400 million senior secured first lien notes due 2016. All other ratings including the company's Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-4 Speculative Grade Liquidity rating were affirmed. The rating outlook remains negative. The proceeds from the proposed $400 million senior secured notes will be used to repay and reduce the amount of commitments under its $1.75 billion asset based revolving credit facility. The Caa2 Corporate Family Rating reflects Rite Aid's highly leveraged capital structure -- debt/EBITDA is currently about 10 times -- which Moody's believe is unsustainable over the medium term at the company's current level of operating performance. The ratings also acknowledge that Rite Aid only generates a small amount of free cash flow which will make it challenging for the company to reduce its significant debt burden. The negative outlook considers Rite Aid's weak operating results along with the uncertainty regarding its ability to successfully refinance its upcoming debt maturities as planned. The company is in process of a comprehensive refinancing plan to address the September 2010 maturity of its $1.75 billion asset based revolver. Rite Aid successfully completed the first step of this plan by obtaining a $525 million senior secured term loan and the necessary amendments to its credit facilities to allow the refinancing plan. It is currently in process of step two; raising $400 million of senior secured first lien notes and a $1 billion asset based revolving credit facility. Rating assigned: -- $400 million senior secured first lien notes due 2016 at B3 (LGD 2, 28%) Ratings affirmed -- Corporate Family Rating at Caa2 -- Probability of Default Rating at Caa2 -- First-lien bank facilities at B3 (LGD 2, 28%) -- Second-lien secured notes at Caa2 (LGD 4, 59%) -- Guaranteed senior notes to Caa3 (LGD 5, 80%) -- Senior notes and debentures to Ca (LGD 6, 95%) -- Speculative Grade Liquidity rating at SGL-4 The last rating action on Rite Aid was on May 29, 2009 when a B3 was assigned to the new $525 million senior secured term loan and the company's Corporate Family Rating was affirmed at Caa2. Rite Aid Corporation is the third largest domestic drug store chain with about 4,900 stores in 31 states and the District of Columbia. Annual revenues are about $26 billion. RONSON CORPORATION: Wells Fargo Extends Moratorium thru July 3 -------------------------------------------------------------- Ronson Corporation disclosed in a filing with the Securities and Exchange Commission that its primary lender, Wells Fargo Bank, National Association, has further extended the moratorium during which the Bank will not assert rights relating to existing events of default, through July 3, 2009, or the earlier date permitted under the Company's agreement with the bank. During the extended moratorium, Wells Fargo will continue to provide advances under the Company's revolving credit line, in amounts up to $2,500,000, in addition to an over-advance facility which was increased from $500,000 to $750,000. Wells Fargo has also agreed with the Company to extend the moratorium to August 5, 2009, and to increase its overadvance facility to $1,000,000, if one of two conditions is satisfied. The moratorium will be extended and the overadvance facility increased, if the purchaser's financing contingency under the Company's agreement to divest its aviation division is satisfied prior to July 3, 2009. Similarly, the moratorium will be extended, and the overadvance facility increased, if, prior to July 3, 2009, the Company has procured a firm letter of intent for the divestiture of its consumer products division under terms that would permit it to discharge its indebtedness to Wells Fargo. Although the Company is actively seeking to consummate the sale of its aviation division and to identify opportunities to maximize the value of its consumer products division, there can be no assurance that the conditions to extend the moratorium further will be met. A full-text copy of the Fourth Amendment to the Ronson-Wells Fargo Forbearance Agreement is available for free at: http://ResearchArchives.com/t/s?3db7 Based in Somerset, New Jersey, Ronson Corporation's operations -- http://www.ronsoncorp.com-- include its wholly owned subsidiaries: 1) Ronson Consumer Products Corporation in Woodbridge, N.J., and Ronson Corporation of Canada Ltd., both manufacturers and marketers of Ronson consumer products; and 2) Ronson Aviation, Inc., a fixed-base operator at Trenton-Mercer Airport, Trenton, New Jersey, providing fueling, services of aircraft, avionics and hangar/office leasing. SEMGROUP LP: Court Sets Disclosure Statement Hearing for June 25 ---------------------------------------------------------------- SemCrude, L.P., its parent, SemGroup, L.P., and their debtor- affiliates ask Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware to approve the Disclosure Statement explaining their Chapter 11 Plan of Reorganization as containing adequate information pursuant to Section 1125 of the Bankruptcy Code. Martin A. Sosland, Esq., at Weil, Gotshal & Manges, LLP, in Dallas, Texas, asserts that the Disclosure Statement contains all or substantially all of the information typically considered by bankruptcy courts, including: * an overview of the Plan; * the operation of the Debtors' businesses; * the Debtors' indebtedness and information regarding pending claims and administrative expenses; * key events leading to the commencement of the Debtors' Chapter 11 cases; * significant events that occurred during the Chapter 11 cases; * the proposed capital and debt structure of the reorganized Debtors; * information regarding the future management of the Debtors; * information regarding pending and potential litigation involving the Debtors; * financial projections and valuation analysis; * a liquidation analysis; * information regarding securities issued under the Plan; * risk factors affecting the Debtors; * requirements for confirmation of the Plan; * tax consequences of the Plan; * the litigation trust to provide compensation to certain creditors; and * voting procedures. Objections to the Disclosure Statement, the Debtors propose, must be filed no later than 4:00 p.m. on June 18, 2009, and must be in writing; state the name and address of the objecting party and the nature of the claim or interest of that party; state with particularity the basis and nature of any objection and include, where appropriate, the proposed language to be inserted in the Disclosure Statement to resolve the objection; and be filed, together with a proof of service, with the Court and served on: (a) counsel to the Debtors Weil Gotshal & Manges LLP Attn: Martin A. Sosland, Esq. 200 Crescent Court, Suite 300 Dallas, Texas Richards, Layton & Finger, P.A. Attn: John H. Knight, Esq. One Rodney Square 920 N. King Street Wilmington, Delaware (b) counsel to the Debtors' Prepetition secured lenders Kaye Scholer LLP Attn: Margot B. Schonholtz, Esq. 425 Park Avenue, New York Potter Anderson & Corroon, LLP Attn: Laurie Selber Silverstein, Esq. Hercules Plaza, 6th Floor 1313 North Market Street Wilmington, Delaware (c) counsel to the Official Committee of Unsecured Creditors Quinn Emanuel Urquhart Oliver & Hedges, LLP Attn: Susheel Kirpalani, Esq. 51 Madison Avenue, 22nd Floor New York Blank Rome LLP Attn: Bonnie Glantz Fatell, Esq. 1201 Market Street, Suite 800 Wilmington, Delaware (d) counsel to the Official Producers' Committee Andrews Kurth LLP Attn: Hugh M. Ray, Esq. 600 Travis, Suite 4200 Houston, Texas Cole, Schotz, Meisel, Forma & Leonard P.A. Attn: Karen M. McKinley, Esq. 500 Delaware Avenue, Suite 1410 Wilmington, Delaware (e) U.S. Trustee for Region 3 Attn: William K. Harrington 844 King Street, Suite 2207 Wilmington, Delaware The Court will consider approval of the Disclosure Statement on June 25, 2009 at 11:30 a.m. (Eastern Time). Solicitation Procedures The Debtors also ask the Court to approve to begin soliciting votes on their Chapter 11 Joint Plan of Reorganization in accordance with a proposed solicitation schedule and protocol. The Debtors ask the Court to set June 25, 2009, as the voting record date for (i) purposes of determining which creditors are entitled to vote on the Plan, and (ii) for determining which creditors and equity interest holders in non-voting classes are entitled to receive an appropriate notice of non-voting status. The Debtors propose to mail solicitation packages no later than August 15, 2009, to creditors entitled to vote on the Plan. The Voting Classes consist of holders of impaired claims, including holders of producer secured claims, senior working capital lender claims, secured revolver and term lender claims, White Cliffs Credit Agreement claim, Senior notes claim, lender deficiency claims, and general unsecured claims. The Solicitation Package will consist of (a) the Disclosure Statement Order; (b) the confirmation hearing notice; (c) a CD containing the Disclosure Statement, together with the Plan; and (d) the appropriate form of ballot to accept or reject the Plan. The Debtors seek to distribute a notice of confirmation hearing and a notice of non-voting status to holders of unimpaired classes, including holders of priority non-tax claims, secured tax claims, other secured claims, and intercompany equity interests. Confirmation Hearing & Plan Objection Deadline The Debtors propose to set the hearing to consider confirmation of the Plan on September 16, 2009, which may be adjourned or continued from time to time by the Court without further notice. They propose to provide all parties-in-interest that receive a Solicitation Package with a notice of the confirmation hearing on or before August 15. Objections to confirmation of the Plan, or to proposed modifications to the Plan, if any, must be filed so as to be actually received no later than 4:00 p.m. (Eastern Time) on September 2, 2009, in writing, stating the name and address of the objecting party and the nature of the claim or interest of the party, stating with particularity the basis and nature of any objection, and sent to the Court and served on: * Weil Gotshal & Manges LLP * Richards, Layton & Finger, P.A. * Kaye Scholer LLP * Potter Anderson & Corroon, LLP * Quinn Emanuel Urquhart Oliver & Hedges, LLP * Blank Rome LLP * Andrews Kurth LLP * Cole, Schotz, Meisel, Forma & Leonard P.A., and * the U.S. Trustee for Region 3. The Debtors, together with the Creditors' Committee, and agent to the Debtors' secured lenders, propose to respond to any objections no later than September 11, 2009. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Examiner's Seeks Discharge From Ch. 11 Probe Duties ---------------------------------------------------------------- Louis J. Freeh, Esq., the appointed examiner of the Chapter 11 cases of SemGroup L.P. and its debtor-affiliates, asks Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court the District of Delaware for a discharge from his obligations as Examiner, and for the Court to address certain procedural issues pertaining to the termination of his examination of the Debtors. The Examiner asserts that he has fulfilled his duties and obligations as the Court-appointed Examiner, in accordance with the terms of his appointment. The Examiner filed with the Court his report on March 24, 2009, culminating his duties under the Examiner order. The Examiner Report disclosed Mr. Freeh's findings on the circumstances surrounding the Debtors' trading strategy, insider transactions, and potential improper use of funds, among others. The Examiner further asks the Court to: -- prohibit discovery that the Examiner expects will be propounded on him and his professionals; -- provide for his exculpation and those of his professionals, in a manner consistent with the exculpation of professionals in a typical Chapter 11 reorganization plan; and -- establish deadlines for the submissions, objections filing, and hearing on the final fee applications for his professionals. Notwithstanding his request for discharge, the Examiner seeks that he be allowed, subject to limitations imposed by confidentiality agreements, and without obligation to provide any information that is subject to privilege or protection, to: (a) continue to cooperate with certain parties, including governmental agencies, the U.S. Trustee for Region 3, and representatives of the Debtors' estates; (b) cause interim and final fee applications for the Examiners' professionals to be filed and prosecuted; and (c) dispose of documents pertaining to the examination. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: AP Services Bills $5.9MM for January-March 2009 Work ----------------------------------------------------------------- Professionals employed and retained in SemGroup L.P. and its debtor-affiliates' Chapter 11 cases filed applications for allowance of fees and reimbursement of expenses, pursuant to Section 331 of the Bankruptcy Code: Firm Period Fees Expenses ---- ------ ---- -------- Weil, Gotshal 01/01/09 - & Manges LLP 01/31/09 $2,477,608 $61,973 Blackstone Advisory 04/01/09 - Services L.P. 04/30/09 275,000 26,192 AP Services, LLC 01/01/09 - 03/31/09 5,940,084 330,939 Deloitte Financial Advisory 03/03/09 - Services LLP 04/30/09 822,854 70,246 PA Consulting 04/01/09 - Group, Inc. 04/30/09 196,528 10,293 Warren H. Smith & 05/01/09 - Associates, P.C. 05/31/09 36,638 18 Hunton & 04/01/09 - Williams LLP 04/30/09 11,400 0.91 Jeffrey J. 04/16/09 - Burns, C.P.A. 05/15/09 15,308 57 Professionals of AP Services, the Debtors' crisis manager, spent 13,844 hours during the three-month period from January 1 to March 31, 2009, and professionals of Weil Gotshal expended 220 hours within the same period. Blank Rome LLP, co-counsel to the Official Committee of Unsecured Creditors seek allowance of $84,665 of fees earned, and $1,484 of expenses incurred for the period from April 1 to 30, 2009. These professionals relate that they did not receive timely objection to fee applications for the indicated periods: Firm Period ------ ------ Warren H. Smith & Associates, P.C. 04/01/09-04/30/09 Houlihan Lokey Howard & Zukin Capital 02/01/09-02/28/09 Houlihan Lokey Howard & Zukin Capital 03/01/09-03/31/09 Houlihan Lokey Howard & Zukin Capital 08/01/08-11/30/08 Lain, Faulkner, & Co., P.C. 11/04/08-03/31/09 Blank Rome, LLP 04/01/09-04/30/09 Cole, Schotz, Meisel, Forman & Leonard 02/01/09-02/28/09 Cole, Schotz, Meisel, Forman & Leonard 03/01/09-03/31/09 Cole, Schotz, Meisel, Forman & Leonard 11/04/08-03/31/09 Bifferato, LLC 07/22/08-11/30/08 About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Lenders & Unsecured Creditors Group Support Plan ------------------------------------------------------------- Two of the three largest creditor groups in Semgroup L.P.'s Chapter 11 case -- the unsecured creditors and the lenders -- have tentatively agreed to back Semgroup's plan of reorganization, according to lawyers representing both groups. The agreement in principle is a step toward ending Semgroup's bankruptcy so it can leave court protection, attorneys for SemGroup's lenders and unsecured creditor committee told Judge Gropper during the June 2, 2009, hearing on the case, Bloomberg News reported. The deal has not yet been put into writing, the news agency said. SemGroup and its debtor-affiliates filed a Joint Plan of Reorganization on May 15, 2009, that would pay creditors with cash and stock in the reorganized company. The Plan, which is valued at $2.27 billion, proposes to let unsecured creditors recover 0.0% to 3.83% of their claims, which Semgroup estimates at $537 million. Specifically, under the Plan, if a Class of General Unsecured Claims votes to accept the Plan, then each holder of an Allowed General Unsecured Claim in that Class will receive an estimated recovery of up to 3.71%. If the Class votes to reject the Plan, each holder of an Allowed General Unsecured Claim will receive an estimated recovery of 0.09%. The payment will consist of a Pro Rata Share of (i) New Common Stock, subject to dilution from the Warrants and the Management Stock, (ii) Warrants, subject to dilution from the Management Stock, and (iii) Litigation Trust Interests. Semgroup's lenders, who are owed about $2.5 billion, agreed to increase the amount that unsecured creditors would recover, SemGroup's attorney Martin Sosland, Esq., at Weil, Gotshal & Manges LLP told Judge Shannon, Bloomberg said. The extra money to pay the unsecured creditors would come from the lenders' share, Mr. Sosland said. "Now that at least three legs of this chair are together, we would like to get the fourth leg in place," the Semgroup Official Committee of Unsecured Creditors' counsel, Susheel Kirpalani, Esq., at Quinn Emmanuel Urquhart Oliver & Hedges, LLP, told Bloomberg. A group composed of crude oil suppliers, which compose Semgroup's third largest group of creditors, did not participate in the agreement to back Semgroup's reorganization plan. Peter S. Goodman, Esq., at Andrews Kurth LLP, who represents the Official Producers' Committee appointed in Semgroup's case told Bloomberg that they weren't included in the talks that led to the agreement between the unsecured creditors and the lenders. "There have been no discussions, none," Mr. Goodman said. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SPECTRUM BRANDS: Exclusive Solicitation Period Extended to Oct. 2 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas, after due deliberation and after finding sufficient cause, extended Spectrum Brands Inc. and its debtor-affiliates' exclusive solicitation period to and including October 2, 2009. As reported by the Troubled Company Reporter on May 6, 2009, according to D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, the Debtors sought to extend their Exclusive Periods to ensure that, notwithstanding any intervening events, they have the intended benefits of exclusivity for a reasonable period of time. Mr. Baker averred that the sheer size and complexity of the Debtors' businesses and Chapter 11 cases constitute cause to extend the Exclusive Periods. Although the Debtors are confident that their pending plan will be confirmed within the initial Exclusive Solicitation Period, they recognize that there are no guarantees, Mr. Baker told the Court. If future events necessitate the filing of a new or amended plan, the Debtors should not risk either litigation over the status of their exclusive rights or loss of their exclusive rights, he added. Furthermore, Mr. Baker assured the Court that the extension of the Exclusive Periods will not prejudice the legitimate interests of any creditor or other party-in-interest. To the contrary, the extension will advance the Debtors' efforts to preserve value and avoid unnecessary and wasteful motion practice, he emphasized. 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: Court Extends Lease Decision Period to Sept. 1 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas extended the period within which Spectrum Brands Inc. and its debtor-affiliates must decide whether to assume, assume and assign, or reject their Unexpired Leases to and including the earlier of September 1, 2009, or the effective date of the Debtors' joint plan of reorganization. As reported by the Troubled Company Reporter on May 6, 2009, the Debtors are lessees under more than 40 unexpired leases of nonresidential real, the vast majority of which are leases used by the Debtors for their manufacturing operations, packaging and distribution centers, warehousing, and sales and administrative offices. The facilities and premises leased under the Unexpired Leases form the platform of the Debtors' ongoing business operations and are, thus, key assets of the Debtors' estates. The Debtors filed a plan of reorganization on the Petition Date and a hearing on confirmation of that plan is scheduled to commence on June 15, 2009. The Debtors' plan proposes to assume all of their unexpired nonresidential real property leases not previously rejected. The Debtors, with the assistance of their advisors, have identified the Unexpired Leases that will be critical to their reorganization in the context of their current plan. While the Debtors expect their plan to be confirmed, it would not be in the best interests of the Debtors stakeholders to make binding assumption and rejection decisions prior to achieving confirmation of their plan. Therefore, the Debtors needed an extension of the Section 365(d)(4) deadline to avoid being compelled, prematurely, to assume substantial, long-term liabilities under the Unexpired Leases or forfeit benefits associated with some Unexpired Leases to the detriment of the Debtors' ability to operate and preserve the going-concern value of their business for the benefit of all creditors and other parties-in-interest. 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: Court Defers Setting of Claims Bar Date -------------------------------------------------------- At the request of Spectrum Jungle Labs Corporation, Spectrum Brands, Inc., and their debtor-affiliates, Judge Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas deferred the setting of a bar date by which proofs of claim may be filed pending the Court's consideration of the Debtors' Plan of Reorganization. The Court also permitted the Debtors to waive the setting of a General Bar Date if the Plan is confirmed. As reported by the Troubled Company Reporter on May 6, 2009, D.J. Baker, at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, related that the Debtors have made significant progress during their Chapter 11 cases. The Court has approved the Disclosure Statement and the process of soliciting votes on, and providing notice of, the Plan has commenced. The hearing to consider confirmation of the Plan is scheduled to commence on June 15, 2009. Mr. Baker asserted that deferment of the setting of a bar date in the Debtors' bankruptcy cases is warranted given the terms of the Plan, which proposes a restructuring of the noteholder claims that has the support of holders of approximately 70% of the notes, and that leaves unimpaired the remaining classes of creditors that are entitled to payment. Noteholder claims are deemed allowed by the Plan, so no proof of claim process is required as to those claims, Mr. Baker averred. Furthermore, Mr. Baker noted that under the Plan, the Debtors intend to treat most other claims in the same manner they would outside of bankruptcy - - if they are valid, they will be paid on agreed terms, and if not valid, they will be disputed and potentially settled or litigated. As to the interests and claims of stockholders, the Plan provides for no distributions to the stockholders in accordance with the Bankruptcy Code's subordination provisions and the absolute priority rule. Consequently, not only is the need for filing proofs of claim prevented for all claims and interests, but a bankruptcy claims and objection process will cause unnecessary delay and expense to the Debtors' estates for no useful purpose, Mr. Baker asserted. 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: Equity Panel Wants Lazard Reports Excluded ----------------------------------------------------------- The Official Committee of Equity Security Holders in Spectrum Brands Inc. and its debtor-affiliates' Chapter 11 cases asks the U.S. Bankruptcy Court for the Western District of Texas, pursuant to Rule 403 of the Federal Rules of Evidence, to exclude the expert report of Lazard Freres & Co. LLC and to exclude the expert testimony of Barry W. Ridings of Lazard from being admitted as evidence during the hearing for the confirmation of the Debtors' Joint Plan of Reorganization. Harbinger Capital Partners designated Barry W. Ridings as testifying expert witness on May 18, 2009. The Debtors have designated Joshua Scherer, a Managing Director of Perella Weinberg Partners LP as a testifying expert witness on May 4. According to the Equity Committee's counsel, William Hao, Esq., at Alston & Bird LLP, in New York, the Federal Rules of Evidence allow the exclusion of evidence that would be needlessly cumulative or the consideration of which would be a waste of time. Mr. Hao asserts that the Harbinger Report and the Debtors' Report are needlessly cumulative because they present the same valuation of Spectrum, thus the consideration of both would be a waste of time and a needless presentation of cumulative evidence. Similarly, Mr. Hao contends that the testimonies of both Messrs. Scherer and Ridings are needlessly cumulative because they delivered the needlessly cumulative Harbinger Report and Debtors' Report, thus hearing both their testimonies would also be a waste of time and needlessly cumulative. 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) SROKA HOSPITALITY: Case Summary & 8 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Sroka Hospitality, Inc. 648 67th Street Circle East Bradenton, FL 34208 Bankruptcy Case No.: 09-12034 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Bernard J. Morse, Esq. Morse & Gomez PA 11268 Winthrop Main Street, Suite 102 Riverview, FL 33578 Tel: (813) 341-8400 Fax: (813) 463-1807 Email: chipmorse@morsegomez.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 8 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb09-12034.pdf The petition was signed by Grazyua Grad-Sroka, president of the Company. STAR TRIBUNE: Hearing on Pension Plan Postponed for Second Time --------------------------------------------------------------- The Minneapolis Star Tribune and the drivers' union has put off, for a second time, the hearing to terminate what the newspaper called a "critically underfunded" multi-employer pension plan, Bloomberg's Bill Rochelle reports. The new hearing date for the pension fund is June 22. The Associated Press reports that Bob Moore, business agent for Teamsters Local 638, says the newspaper asked for more information about the drivers' pension. As reported in the Troubled Company Reporter on June 3, 2009, the Teamsters union has threatened to strike if Star Tribune Holdings Corp. is permitted to reject its collective bargaining agreement with unionized drivers. Headquartered in Minneapolis, Minnesota, The Star Tribune Company -- http://www.startribune.com/-- operates the largest newspaper in the U.S. state of Minnesota and published seven days each week in an edition for the Minneapolis-Saint Paul metropolitan area. The Company and its affiliate, Star Tribune Holdings Corporation, filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10245). Marshall Scott Huebner, Esq., James I. McClammy, Esq., and Lynn Poss, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Blackstone Advisory Services L.P. is the Debtors' financial advisor. Diana G. Adams, the U.S. Trustee for Region 2, selected seven members to the official committee of unsecured creditors in the Debtors' Chapter 11 cases. Scott Cargill, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC, represents the Committee as counsel. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. * * * The Court has extended the Debtors' exclusive periods to file a plan of reorganization until August 13, 2009. SUREFIL LLC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Surefil, LLC 4560 Danvers Drive, S.E. Grand Rapids, MI 49512 Bankruptcy Case No.: 09-06914 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- Surefil Properties, LLC 09-06916 Chapter 11 Petition Date: June 8, 2009 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Jeffrey R. Hughes Debtor's Counsel: Harold E. Nelson, Esq. Nantz, Litowich, Smith & Girard 2025 East Beltline, SE, Suite 600 Grand Rapids, MI 49546 Tel: (616) 977-0077 Fax: (616) 977-0529 Email: bkhen@nlsg.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/miwb09-06914.pdf The petition was signed by W B Hunt Corporation, manager of the Company. THERAPEDIC SLEEP: Blames Suit Against Jerry Gershaw for Collapse ---------------------------------------------------------------- Therapedic Sleep Products, Inc. CEO Stuart Carlitz has blamed the financial burden of prolonged litigation against former partner, Jerry Gershaw, for the Company's bankruptcy, David Perry at Furniture Today reports. Mr. Carlitz, Furniture Today relates, said that the cost of the litigation, along with the industry downturn, forced him to make a Chapter 11 filing for Therapedic Sleep. According to the report, Mr. Carlitz said that the legal fight with Mr. Gershaw, which is ongoing, has cost him more than $4 million in legal fees. "All of this litigation is against Therapedic and Therapedic is paying the legal fees," the report quoted Mr. Carlitz as saying. Therapedic Sleep Products is a Therapedic licensee based in North Brunswick, New Jersey. The Company filed for Chapter 11 bankruptcy protection on June 3, 2009 (Bankr. D. N.J. Case No. 09- 24351). Adam D. Wolper, Esq., Sam Della Fera, Esq., and Thomas Michael Walsh, Esq., at Trenk, DiPasquale, Webster, Della Fera & Sodono P.C. assist the Company in its restructuring efforts. The Company listed $1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000 in debts. TLC VISION: Lenders Extend Limited Waiver for Term Loan to June 30 ------------------------------------------------------------------ TLC Vision Corporation secured from its lenders an extension of the limited waiver with respect to its credit facility through June 30, 2009. The Credit Agreement, dated June 21, 2007, as amended on February 28, 2008, and March 31, 2009, provides for an $85 million term loan and a $25 million revolving credit line. As of May 31, 2009, the amount outstanding under the credit facility was approximately $100.1 million. No additional amounts may be borrowed under the credit facility. The extension agreement is included in a Limited Waiver, Consent and Amendment No. 3 to the Credit Agreement, dated as of June 5, 2009, which (i) provides a limited waiver through June 30, 2009, of defaults identified to the lenders, (ii) amends certain terms of the Credit Agreement, (iv) consents to the dissolution of several inactive subsidiaries, (v) provides for the payment by the company of certain fees and expenses incurred by the lenders, (vi) requires a payment to the lenders on the day after the waiver period of $1,434,000, and (vii) releases any claims the company may have had against the lenders. Jim Tiffany, president and chief operating officer of TLC Vision, commented, "We have now reached agreement for an extension of the previously announced limited waiver to June 30, 2009. We will continue to work constructively with our lender group in order to reach a more flexible structure for our capital needs." About TLC Vision Based in St. Louis, Missouri, TLC Vision Corporation (NASDAQ:TLCV; TSX:TLC) -- http://www.tlcv.com/and http://www.tlcvision.com/-- is North America's premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality patient care. TLCVision maintains leading positions in Refractive, Cataract and Eye Care markets. At March 31, 2009, the Company's balance sheet showed total assets of $149.9 million and total liabilities of $170.2 million, resulting in a stockholders' deficit of $20.3 million. TRICOM SA: Two Banks Object to Approval of Disclosure Statement --------------------------------------------------------------- Two banks have filed objections to the approval of Tricom SA's disclosure statement with respect to its first amended plan, saying that the disclosure statement fails to satisfy the "adequate information" requirement of Section 1125 of the Bankruptcy Code. On April 17, 2009, the Debtors filed their amended plan, dated April 16, 2009. On May 8, 2009, the Debtors filed the amended disclosure statement, dated May 8, 2009. Banco Multiple Leon, S.A., with asserted claims of not less than $166,019,348, says that the amended plan and disclosure statement do not accurately set forth all of the terms and conditions of the Banco Leon Settlement being discussed between the parties. Banco Leon says that the settlement is a substantial component of the amended plan and, in their current forms, the amended disclosure statement should not be approved. On the other hand, Richard E. L. Fogerty and G. James Cleaver, the Joint Official Liquidators and recognized Foreign Representatives of Bancredit Cayman Limited (in Official Liquidation), the debtor in a Chapter 15 case in the U.S. Bankruptcy Court for the Southern District of New York, say that the Debtors' first amended plan retains many fatal flaws of the original pre-packaged plan and that the disclosure statement is inadequate in terms of describing said flaws. The Plan, Bancredit says, still favors the Debtors' existing insiders GFN Parties, former chairman and CEO Manuel Arturo Pellerano Pena, and other affiliated creditors. Yet, Bancredit adds, the disclosure statement fails to disclose information on the relationships among these insiders. Even more importantly, Bancredit relates that Mr. Pellerano has filed indemnification claims against each Debtor, which, if not otherwise provided for, would present a seemingly insurmountable impediment to the Plan's feasibility. As reported in the Troubled Company Reporter on May 13, 2009, Tricom S.A. and its primary operating subsidiaries, TCN Dominicana, S.A., and Tricom USA, Inc., filed with the U.S. Bankruptcy Court for the Southern District of New York a First Amended Disclosure Statement relating to its First Amended Prepackaged Joint Chapter 11 Plan of Reorganization. The Debtors held extensive discussions and negotiations with, among others, (i) an ad hoc committee consisting of certain holders of Unsecured Financial Claims; (ii) certain affiliates of Tricom's largest shareholders; and (iii) Banco Multiple Leon S.A., which negotiations lead to significant amendments to the original plan. A full-text copy of Tricom's Amended Disclosure Statement is available at no charge at: http://bankrupt.com/misc/TricomAmendedDS.PDF A full-text copy of Tricom's Amended Plan is available at no charge at: http://bankrupt.com/misc/TricomAmendedPlan.PDF About Tricom S.A. Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on February 29, 2008 (Bankr. S.D. N.Y. Case No. 08- 10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of $327,600,000 and total debts of $764,600,000. TWIN RIVER: To File for Bankruptcy If Talks With Lenders Fail ------------------------------------------------------------- The Associated Press reports that Twin River said that it will file for Chapter 11 bankruptcy protection at the end of June if it fails to reach new terms from the state and its lenders. Twin River said in a statement on Monday that it has tried for more than a year to renegotiate a deal, without success. Twin River officials said the Company would file for bankruptcy if a new plan to repay creditors isn't reached before the General Assembly adjourns later this month. Twin River spokesperson Patricia Doyle said in a statement, "Twin River seeks to reassure its patrons that, even while in bankruptcy, the casino will be fully able to pay all amounts won by customers and that every effort will be made to ensure customers' experience at Twin River will not be diminished." According to The AP, Departments of Administration and Revenue director Gary Sasse said that the state continues to work with Twin River to reach an agreement. Mr. Sasse said in a statement, "However throughout our discussions with Twin River and their lenders, we have always been clear that the State would not support a bailout at the expense of Rhode Island taxpayers." Twin River is a slot parlor that serves as a major source of revenue for Rhode Island's government. Lincoln greyhound track and slot parlor Twin River is run by a subsidiary of BLB Investors, a holding company composed of Kerzner International, Starwood Capital Group, and Waterford Group LLC. US ONCOLOGY: Upsizing of Offering Won't Move Moody's 'Ba3' Rating ----------------------------------------------------------------- Moody's Investors Service stated that the upsizing of US Oncology, Inc.'s offering of senior secured second lien notes does not impact Moody's rating action of June 4, 2009. Moody's understands that the incremental debt will be used to retire the 9.0% senior notes due 2012. Moody's last rating action was on June 4, 2009, when a Ba3 rating was assigned to the company's second lien secured note offering, the company's existing senior notes were upgraded to Ba3, and the B2 CFR was affirmed. US Oncology, headquartered in The Woodlands, Texas, provides services to physicians, manufacturers and payers that expand patient access to advanced cancer care in the United States. US Oncology supports a cancer treatment and research network that promotes the availability and use of evidence-based medicine and shared best practices. US Oncology's experience throughout most aspects of the cancer care delivery system, from drug development to distribution and outcomes measurement, improves the efficiency and safety of cancer care. US Oncology is a wholly owned subsidiary of US Oncology Holdings, Inc., a holding company. US Oncology recognized revenue of approximately $3.3 billion in the twelve months ended March 31, 2009. VALUE CITY: Panel Seeks Rule 2004 Examination of Retail Ventures ---------------------------------------------------------------- The official committee of unsecured creditors of Value City Holdings Inc. and its debtor subsidiaries wants to conduct an examination on Retail Ventures Inc. pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, to identify potential assets for the benefit of the Debtors' estates and their creditors. The Committee says that certain information related to the Debtors' prepetition financial affairs has already been provided by the Debtors' counsel in informal discovery, but most information concerning the financial affairs of the Debtors during the period prior to June 23, 2008, is in the possession of RVI, not the Debtors. Before January 23, 2008, RVI was 100% owner of the Debtors, and managed and controlled the Debtors' financial affairs. The motion, which was filed Friday in the U.S. Bankruptcy Court for the Southern District of New York, says Retail Ventures received more than $2 million in transfers during the period from April 8, 2008, through July 11, 2008, and that during the year before the petition date RVI received from the Debtors more than $250 million in transfers of account of "daily cash sweeps" of the Debtors' bank accounts. About Value City Headquartered in Columbus, Ohio, Value City Holdings Inc. -- http://www.valuecity.com/-- operates a chain of department stores in the United States. The company and eight of its affiliates filed for Chapter 11 protection on Oct. 26, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-14197). John Longmire, Esq., and Lauren C. Cohen, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors' in their restructuring efforts. Epiq Bankruptcy Solutions LLC is the claims, noticing and balloting agent for the Debtors. Glenn R. Rice, Esq., at Otterbourg Steindler Houston & Rosen, PC, represents the official committee of unsecured creditors as counsel. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. In November 2008, Judge James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York granted Value City Holdings permission to conduct going-out-of-business sales to be managed by liquidator and financial consultant Tiger Capital Group LLC. VISTEON CORP: U.S. Trustee Appoints 7-Member Creditors Committee ---------------------------------------------------------------- Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Roberta A. DeAngelis, the acting U.S. Trustee for Region 3, appointed seven members to the Official Committee of Unsecured Creditors in Visteon Corporation and its debtor-affiliates' Chapter 11 cases. The Committee members are: (a) Pension Benefit Guaranty Corporation Attn: Adi Berger 1200 K Street, N.W., Washington, D.C. 20005-4026 Tel: 202-326-4070 Fax: 202-842-2643 (b) Law Debenture Trust Company of New York Attn: James D. Heaney 400 Madison Avenue, New York NY 10017 Tel: 212-750-6474 Fax: 212-750-1361 (c) Freescale Semiconductor Attn: Randy Hyzak 6501 William Cannon Drive West, Austin, TX 78735 Tel: 512-895-7517 Fax: 512-895-3982 (d) Central States Southeast and Southwest Areas Pension Fund Attn: Timothy Reuter 9377 W. Higgins Rd., 10th Floor Rosemont, IL 60018 Tel: 847-518-9800 Fax: 847-518-9797 (e) K & S Wiring Systems, Inc. Attn: Robert Mitchell 323 Mason Rd., Suite A, Lavergne TN 37086 Tel: 615-287-2303 Fax: 615-287-7850 (f) Siemens Product Lifecycle Management Software, Inc. Attn: Thomas Eberle 2000 Eastman Drive, Milford OH 45150 Tel: 513-576-5952 Fax: 513-576-5696 (g) Nissan Trading Corp, USA. Attn: Mr Kenichi Takatsuki, 1974 Midway Lane Smyrna, TN 37167 Tel: 615-220-7100 Fax: 615-220-8878 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Section 341 Meeting on July 1 The U.S. Trustee also asked the Clerk of the Court to schedule a meeting of the creditors of Visteon Corporation and its debtor- affiliates at 2:00 p.m., on July 1, 2009, at J. Caleb Boggs Federal Building, Room 2112, at 844 King Street, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in Visteon's bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers creditors a one-time opportunity to examine a debtor's representative under oath about that debtor's financial affairs and operations that would be of interest to the general body of creditors. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corp. and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Wants Schedules Filing Deadline Extended to Aug. 26 ----------------------------------------------------------------- Pursuant to Section 521 of the Bankruptcy Code and Rule 1007(c) of the Federal Rules of Bankruptcy Procedure, a debtor ordinarily would be required to file Schedules of Assets and Liabilities and Statements of Financial Affairs within 15 days after the Petition Date. However, Rule 1007-1(b) of the Local Rules of Bankruptcy Practice and Procedure of the U.S. Bankruptcy Court for the District of Delaware provides that the deadline for filing the Schedules and Statements is automatically extended for an additional 15 days if the debtor has more than 200 creditors and the petition is accompanied by a creditor list. Because Visteon Corp. and its debtor-affiliates have more than 40,000 potential creditors and have delivered to their proposed notice and claims agent a consolidated list of creditors on the Petition Date, the Debtors have until 30 days from the Petition Date to file the Schedules and Statements. Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, proposed co-counsel for the Debtors, tells the Court the Debtors have not completed compiling the information required to complete their Schedules and Statements due to the: (a) nature of the Debtors' businesses; (b) limited staff available to perform the required internal review of their business affairs; (c) pressure incident to the commencement of the Debtors' Chapter 11 cases; and (d) fact that certain prepetition invoices have not been received or entered into the Debtors' financial accounting system. Thus, the Debtors ask the Court to extend the deadline by which they must file the Schedules and Statements to August 26, 2009, without prejudice to their ability to seek additional time for cause shown. "Focusing the attention of key personnel on critical operational and chapter 11 compliance issues during the early days of these cases will facilitate the Debtors' transition into chapter 11 and, therefore, maximize the value of their estates for the benefit of creditors and all parties in interest," Mr. Billion says. "Nevertheless, recognizing the importance of the Schedules and Statements in the cases, the Debtors intend to complete the Schedules and Statements as quickly as possible under the circumstances." About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corp. and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Wants to Hire Kirkland & Ellis as Counsel ------------------------------------------------------- Visteon Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Kirkland & Ellis as their attorneys. The Debtors have selected Kirkland & Ellis to represent them because of the firm's recognized expertise and extensive experience and knowledge in the field of debtors' protections, creditors' rights, and business reorganizations under Chapter 11 of the Bankruptcy Code. According to the Debtors, Kirkland & Ellis has advised them on various legal matters since 2004, including negotiation and administration of financing arrangements, compliance with securities law, employee benefit and labor issues, and the negotiation of commercial disputes. Thus, the Debtors assert, Kirkland & Ellis is intimately familiar with their financing and business operations in general, as well as many of the legal issues that may arise in the context of their Chapter 11 cases. Moreover, the Debtors tell the Court that Kirkland & Ellis has advised them with respect to all aspects of preparation for their Chapter 11 cases, including analysis of their capital structure, commercial agreements, employee obligations, and negotiation and documentation related to efforts to secure a debtor in possession financing facility as well as issues related to the Debtors' cash collateral. As counsel to the Debtors, Kirkland & Ellis will: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties; (b) advise and consult on the conduct of the Chapter 11 cases, including all of the legal and administrative requirements of operating in Chapter 11; (c) attend meetings and negotiate with representatives of the creditors and other parties-in-interest; (d) take all necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors and representing the Debtors' interest in negotiations concerning litigation in which the Debtors are involved, including objections to claims against the Debtors' estates; (e) prepare all pleadings, including motions, applications, answers, orders, reports and papers necessary or otherwise beneficial to the administration of the Debtors' estates; (f) represent the Debtors in connection with obtaining postpetition financing; (g) advise the Debtors in connection with any potential sale of its assets or business; (h) appear before the Court and any appellate courts to represent the interests of the Debtors' estates; (i) consult with the Debtors regarding tax, environmental, employment, pension, real estate and other matters; (j) take any necessary action on behalf of the Debtors to negotiate, prepare on behalf of the Debtors and obtain approval of a Chapter 11 plan and all documents; and (k) perform all other necessary or otherwise beneficial legal services for the Debtors in connection with the prosecution of the Chapter 11 cases, including (i) analysis of the Debtors' leases and contracts and the assumptions, rejections or assignments; (ii) analysis of the validity of liens against the Debtors; and (iii) advice on corporate and litigation matters. The Debtors propose to pay for Kirkland & Ellis' services based on the firm's customary hourly rates: Professional Rate/Hour ------------ --------- Partners $550-$965 Of Counsel $500-$965 Associates $320-$660 Paraprofessionals $120-$280 James H.M. Sprayregen, Marc Kieselstein, and James J. Mazza are the Kirkland & Ellis professionals presently expected to have primary responsibility for providing services to the Debtors. The Debtors will also reimburse Kirkland & Ellis for reasonable expenses, including postage, overnight mail, courier delivery, transportation and overtime expenses. The Debtors tell the Court they have paid Kirkland & Ellis a total of $1,000,000 as classic retainer as of May 27, 2009. Marc Kieselstein, P.C., a partner of Kirkland & Ellis LLP, in Chicago, Illinois, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corp. and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Ch. 11 Filing Triggers Default on Debt Obligation --------------------------------------------------------------- Visteon Corporation's Chief Financial Officer William Quigley III relates in a regulatory report with the U.S. Securities and Exchange Commission that the filing of the Chapter 11 cases of Visteon Corporation and certain of its affiliates created an event of default under each of the Company's debt instruments, which include: -- term loan facilities, -- an asset-based lending credit facility, -- 8.25% Notes due August 1, 2010, -- 7.00% Notes due March 10, 2014, and -- 12.25% Notes due December 31, 2016. As previously reported, Visteon and its affiliates filed voluntary petitions in the U.S. Bankruptcy Court for the District of Delaware on May 28, 2009, seeking reorganization relief under the provisions of Chapter 11 of the Bankruptcy Code. The Debtors' cases have been assigned to the Honorable Christopher S. Sontchi and are being jointly administered. The Debtors continue to operate their business as debtors-in- possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The Debtors' Term Loan Credit Facilities dated April 2007 provides for (1) a $1.0 billion term loan due June 13, 2013 and (2) a $500 million term loan due December 13, 2013. The ABL Facility dated August 2006 provides for available borrowings of up to $350 million, depending on various factors including outstanding letters of credit, the amount of eligible receivables, inventory and property and equipment. The Term Loan Credit Facilities are secured by first priority liens on certain assets of the Company and certain of its foreign subsidiaries, intellectual property, foreign intercompany debt, capital stock of foreign stock holding companies and 65% of the capital stock of certain of its foreign subsidiaries, as well as a second priority lien on substantially all other assets of the Company and its domestic subsidiaries. On the other hand, the ABL Credit Facility is secured by a first priority lien on certain assets of the Company and its domestic subsidiaries and their equity interests, domestic intercompany debt, aircrafts, certain cash accounts and any real property owned or leased by the Company and its domestic subsidiaries as well as a second priority lien on the Term Loan Priority Collateral. Upon the filing of the Chapter 11 Cases, the outstanding principal of all loans, accrued interest and other obligations of the Company under the Term Loan Credit Facilities and the ABL Credit Facility became immediately due and payable without any action on the part of the administrative agent or the lenders. Moreover, the trustee or the holders of not less than 25% in aggregate principal amount of all of the securities outstanding under the indenture governing the 8.25% Notes due 2010 and the 7.00% Notes due 2014 may declare the entire principal amount of those securities immediately due and payable upon written notice to the Company as a result of the Chapter 11 filing.. Under the 12.25% Notes due 2016, the entire principal amount of notes outstanding became immediately due and payable without any action on the part of the trustee or the note holders as a result of the Chapter 11 filing. Mr. Quigley notes that the ability of Visteon's creditors to seek remedies to enforce their rights under the Credit Facilities is stayed as a result of the filing of the bankruptcy cases, and the creditors' rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corp. and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) WCI COMMUNITIES: Files Reorganization Plan & Disclosure Statement ----------------------------------------------------------------- WCI Communities, Inc., has filed a Plan of Reorganization and related Disclosure Statement for the Company and approximately 130 of its wholly owned subsidiaries in the U.S. Bankruptcy Court for the District of Delaware. "The filing of our Plan is a major milestone in WCI's restructuring events and our goal of emerging from Chapter 11 in the third quarter of 2009," said David L. Fry, WCI Interim President and Chief Executive Officer. "Under the Plan, WCI will emerge as a deleveraged lifestyle community developer and land holding company with the flexibility to navigate its business during these unprecedented times and beyond. Consistent with the decision made earlier in the year, the Company intends to continue to suspend all Florida homebuilding new construction activities indefinitely, pending market recovery. However, the Company will continue to complete homes under construction and will continue the ongoing maintenance of our communities and amenities operations." Under the Plan, it is anticipated that the Company's senior secured lenders will receive new first lien debt in the aggregate amount of $450 million, which includes a $150 million payment-in- kind (PIK) component and an initial 95% equity stake in the reorganized company. The remaining 5% would be shared by the Company's unsecured creditors. The unsecured creditors' share would begin to increase when the new debt is fully retired and would reach a maximum of 35% after the secured lenders have received payments that are equivalent to the amount currently owed to them (approximately $770 million). Although the proposal has not been approved or recommended by either the Steering Committee for the secured lenders or the official Unsecured Creditors Committee in the case, it is reflective of the positions taken in lengthy negotiations that have occurred since early 2009. In that regard, the Company determined that the parties' positions were sufficiently close, therefore it was appropriate to get a plan on file with the bankruptcy court reflecting a fair and reasonable proposed resolution of the open issues so discussions could continue against a definitive timeline for exit. "While we would have preferred to have a filed plan that was fully consensual with our secured lenders and our official committee, we felt it was in the best interest of all of our stakeholders to commence the Plan approval process, which is likely to take about three months," Mr. Fry said. The court will consider the adequacy of the information contained in the Disclosure Statement on July 17, 2009. In closing, Mr. Fry stated, "It is our intention that the Plan be largely agreed to at that time." About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. (Pink Sheets:WCIMQ) -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company. It has operations in Florida, New York, New Jersey, Connecticut, Massachusetts, Virginia and Maryland. The company directly employs roughly 1,800 people, as well as roughly 1,800 sales representatives as independent contract employees. The Company and 126 of its affiliates filed for Chapter 11 protection on August 4, 2008 (Bankr. D. Del. Lead Case No. 08- 11643 through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., and Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida, represents the Debtors as counsel. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, represent the Debtors as Delaware counsel. Lazard Freres & Co. LLC is the Debtors' financial advisor. Epiq Bankruptcy Solutions LLC is the claims and notice agent for the Debtors. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP; and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. WHITEHALL JEWELERS: Hires Streambank LLC to Lead IP Sale -------------------------------------------------------- Streambank, LLC, an intangible asset consulting firm servicing healthy and distressed clients, has been retained to undertake the marketing and sales efforts for the intellectual asset portfolio of Whitehall Jewelers Holdings, Inc. Whitehall filed voluntary Chapter 11 bankruptcy petitions in June 2008. A court-ordered liquidation followed unsuccessful attempts to sell the retail chain or obtain additional financing. "Whitehall Jewelers provided engagement and wedding rings for tens of thousands of happy couples, as well as jewelry for other special occasions," said Gabe Fried, Managing Member and Founder of Streambank. "With such a legacy, we believe there is substantial value in the company's name and other intangible assets." Whitehall was founded in 1895 under the name Marks Bros. Jewelers. The national specialty retailer offered a selection of diamonds, gold, precious and semi-precious jewelry and watches. At the time of the bankruptcy filing, Whitehall reported it operated 373 stores in regional and super-regional malls in 39 states under the names Whitehall and Lundstrom. All stores were leased, and ranged from 540 square feet to 3,800 square feet. The Company had approximately 2,850 employees. "Creating a new concept in jewelry is very difficult, which is why we're optimistic about possible interest in Whitehall's proprietary Whitestar cut of diamond," said Margaret Birlem, Partner at Streambank. "We look forward to working closely with Whitehall and leveraging our expertise to help the company realize the full value of its intangible assets." Streambank has notable experience working with stakeholders in distressed situations, and has been retained in several liquidations of well-known retailers. The company was selected by KB Toys and Circuit City to assist in the marketing and sale of the companies' IP assets, and in similar engagements by Goody's Family Clothing, apparel retailer Mervyns, automotive supplier Collins & Aikman, and music retailer Tower Records. The marketing of Whitehall Jewelers' assets is underway. An auction date will be determined in the near future. About Streambank Needham, Massachusetts-based Streambank, LLC -- www.streambankllc.com -- is an intellectual property consulting firm, specializing in the valuation, sales and marketing of intangible assets. Serving healthy and distressed businesses, Streambank identifies, preserves, and extracts value for clients through the application of experience, diligence and creativity. The firm's experience spans a broad range of industries including apparel, automotive, consumer products, food, manufacturing, medical technologies, retail and textiles. Through partnerships with brand consultancies, turnaround-management firms, attorneys, and finance professionals, Streambank provides sound advice on value maximization strategies and liquidity options. About Whitehall Jewelers Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings, Inc. -- http://www.whitehalljewellers.com/-- owns and operates 375 stores jewelry stores in 39 states. Whitehall is owned by hedge funds Prentice Capital Management and Millennium Partners LP, both of New York, and Holtzman Opportunity Fund LP of Wilkes- Barre, Pa. The company operates stores in regional and regional shopping malls under the names Whitehall and Lundstrom. The Debtors' retail stores operate under the names Whitehall (271 locations), Lundstrom (24 locations), Friedman's (56 locations, and Crescent (22 locations). As of June 23, 2008, the Debtors have about 2,852 workers. The company and its affiliate, Whitehall Jewelers Inc., filed for Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case No. 08-11261). James E. O'Neill, Esq., Kathleen P. Makowski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, and Scott K. Rutsky, Esq., at Proskauer Rose LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims, noticing and balloting agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Moses & Singer LLP and Bayard, P.A., represent the Committee. WL HOMES: Court Converts Chapter 11 Case to Chapter 7 Liquidation ----------------------------------------------------------------- Court documents say that the Hon. Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware has converted WL Homes LLC's Chapter 11 reorganization case to Chapter 7 liquidation, at the behest of the official committee of unsecured creditors. Dawn McCarty at Bloomberg News relates that the Creditors Committee sought the conversion because WL Homes closed its operations and planned to liquidate assets rather than reorganize. Headquartered in Irvine, California, WL Homes LLC, dba John Laing Homes, sells and builds houses. The Debtor and five of its affiliates filed for Chapter 11 protection on February 19, 2009 (Bankr. D. Del. Lead Case No. 09-10571). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors' in their restructuring efforts. The U.S. Trustee for Region 2 appointed creditors to serve on the Official Committee of Unsecured Creditors of the Debtors' Chapter 11 cases. Ashby & Geddes represens the Committee. When the Debtors sought protection from their creditors, they listed assets of more than $1 billion, and debts between $500 million and $1 billion. WORLDSPACE INC: Court Extends Plan Filing Period to July 31 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has extended WorldSpace, Inc.'s exclusive period to propose a plan thtough July 31, 2009, and the Company's exclusive period to solicit acceptances of that plan through September 29, 2009. This is the second extension the Debtor sought for its exclusive periods. Under its request, WorldSpace asserted that it will not be in position to finalize a plan until the sale of its assets to Yenura Pte. Ltd. is consummated pursuant to an Asset Purchase Agreement. The Debtors anticipate to consummate the sale prior to the July 31 termination date as provided under the APA. As reported in the Troubled Company Reporter on March 23, 2009, the Bankruptcy Court approved the sale of substantially all of the assets related to the satellite radio business of WorldSpace, Inc. and its U.S. subsidiaries, WorldSpace Systems Corporation and AfriSpace, Inc. to Yenura Pte. Ltd. Yenura is purchasing the assets pursuant to an asset purchase agreement for a total purchase price of $28 million cash, the assumption of certain liabilities, and the subordination and release of certain claims. The parties expect the sale to close following the issuance of necessary regulatory approvals. Yenura is a company controlled by WorldSpace founder, chairman and chief executive officer Noah A. Samara. Based in the Washington, DC metropolitan area, WorldSpace, Inc. (WRSPQ.PK) -- http://www.1worldspace.com/-- provides satellite- based radio and data broadcasting services to paying subscribers in 10 countries throughout Europe, India, the Middle East, and Africa. 1worldspace(TM) satellites cover two-thirds of the earth and enable the Company to offer a wide range of services for enterprises and governments globally, including distance learning, alert delivery, data delivery, and disaster readiness and response systems. 1worldspace(TM) is a pioneer of satellite-based digital radio services. The Debtors and their affiliates operate two geostationary satellites, AfriStar and Asia Star, which are in orbit over Africa and Asia. The Debtor and two of its affiliates filed for Chapter 11 bankruptcy protection on Oct. 17, 2008 (Bankr. D. Del., Case No. 08-12412 - 08-12414). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors as counsel. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. Neil Raymond Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena, Esq., at Elliot Greenleaf represent the Committee as counsel. When the Debtors filed for bankruptcy, they listed total assets of $307,382,000 and total debts of $2,122,904,000. * Mike Matlat Joins DJM Realty ------------------------------ DJM Realty has hired Mike Matlat to handle special situations that cover all aspects of real estate including retail, office, industrial, hospitality, vacant land and multi-use properties. He specializes in the disposition of both leased and fee owned real estate, the restructuring of leases, the negotiation of lease terminations and concessions. Throughout his 15 year career in real estate, Mr. Matlat has been instrumental in business development, management and execution of multi-million dollar real estate transactions. These transactions have included sales and restructurings of diverse properties. Mr. Matlat has been a member of The Turnaround Management Association for more than a decade, and was a former President of the Long Island Chapter. Prior to joining DJM Realty, Mr. Matlat worked for Keen Realty, later acquired by KPMG Corporate Finance. DJM Realty -- http://www.djmrealty.com-- a Gordon Brothers Group company, specializes in real estate dispositions, renegotiation of occupancy costs, acquisitions, valuations and capital solutions. DJM Realty has serviced the U.S.'s most recognizable brands in healthy and distressed situations. DJM Realty is a leader in finding innovative ways to consolidate and reconfigure real estate to achieve the highest possible value. DJM Realty was founded in 1992 and is headquartered in New York with offices in Los Angeles, Boston and Chicago. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- June 10-13, 2009 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 25th Annual Bankruptcy & Restructuring Conference The Ritz-Carlton Orlando Grande Lakes Orlando, Florida Contact: http://www.aria.org/ June 11-14, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ July 29-August 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Westin Hilton Head Island Resort & Spa, Hilton Head Island, S.C. Contact: http://www.abiworld.org/ August 6-8, 2009 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Conference Hotel Hershey, Hershey, Pa. Contact: http://www.abiworld.org/ Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ December 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ August 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ December 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ December 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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 ***