/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090615.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, June 15, 2009, Vol. 13, No. 164 Headlines 2601 ASSOCIATES: Voluntary Chapter 11 Case Summary ABITIBIBOWATER INC: Union Balks at Closure of 2 Alabama Mills ADVANTA CORP: Seeks to Commence Securitization Deals AGA MEDICAL: Moody's Retains Review on 'B2' Corporate Rating AL BASKIN: JOB Investments Has $3.6MM Stalking Horse Bid ALL FAITH'S CHRISTIAN: Case Summary & 7 Largest Unsec. Creditors ALOHA AIRLINES: To Pay $5.5MM in Settlement Pact With Labor Dept AMERICAN HOUSING: Voluntary Chapter 11 Case Summary AMSTERDAM MEMORIAL: PBGC Assumes 60% Funded Pension Plan ANCHOR BLUE: U.S. Trustee Balks at Levi Strauss Sale Proposal ASG CONSOLIDATED: S&P Downgrades Corporate Credit Rating to 'B' ASYST TECHNOLOGIES: Can't File Quarterly Report on Time ASYST TECHNOLOGIES: Files Schedules & Statements AVIS BUDGET: Bank Debt Trades Near 20% Off in Secondary Market AVIZA TECH: Faces Delisting from NASDAQ after Bankruptcy Filing BANK OF AMERICA: CEO Defends Merrill Lynch Deal Before Congress BENDER SHIPBUILDING: Sent to Chapter 7 by 3 Creditors BLOCKBUSTER INC: Bank Debt Trades at 23% Off in Secondary Market BRITIANNIA BULK: Voluntary Chapter 15 Case Summary BROMWELL'S TFP: Case Summary & 12 Largest Unsecured Creditors BUILDERS FIRSTSOURCE: S&P Junks Corporate Credit Rating From 'B-' CAESARS ENTERTAINMENT: S&P Raises Subordinated Debt Issues to CCC- CALLIDUS DEBT: Moody's Downgrades Ratings on Secured Notes CAROLYN FRAME: Case Summary & 20 Largest Unsecured Creditors CHARTER COMMUNICATIONS: Bank Debt Trades at 11% Discount CHARTER COMMUNICATIONS: Balks at Goodell Class Certification CHEMTURA CORP: Inks Settlement Agreements on Antitrust Fines CHRYSLER LLC: Dealers May Advertise at iBidMotors for Free CHRYSLER LLC: Defends Dealer Cuts Before Congress CRESCENT RESOURCES: Can Borrow $35MM Portion of DIP Facility CONSTELLATION ENERGY: Moody's Reviews Ba1 Sub. Debentures Rating COOPER COS: S&P Gives Stable Outlook on Expected Revenue Growth CRESCENT RESOURCES: Chapter 11 Filing Cues S&P to Junk Rating DANA CORP: Bank Debt Trades at 44% Off in Secondary Market DANIEL BACANER: Case Summary & 20 Largest Unsecured Creditors DELPHI FINANCIAL: Moody's Affirms 'Ba1' Preferred Shelf Rating DEX MEDIA EAST: Bank Debt Trades at 22% Off in Secondary Market DOCTORS HOSPITAL: Securitization Trust Was "Initial Transferee" E*TRADE FINANCIAL: Board Selects Kenneth Griffin as Citadel CEO EDGAR MILES: Case Summary & 13 Largest Unsecured Creditors EDRA BLIXSETH: Accused of Fraud by Ex-Husband EJ'S SHOES: To Drop Under-Performing Shoe Stores ENERGY HOLDINGS: Fitch Affirms 'BB' Senior Unsecured Debt Rating FENWAL INC: S&P Affirms Corporate Credit Rating at 'B' FILENE'S BASEMENT: Rewinds Auction; Men's Wearhouse Drops Offer FONTAINEBLEAU LAS VEGAS: Receives Approval of First-Day Motions FORD MOTOR: Won't Issue Additional Equity, Says CEO GENERAL GROWTH: Court Okays Weil Gotshal's Engagement as Counsel GENERAL GROWTH: Court Okays Kirkland & Ellis Hiring as Co-Counsel GENERAL GROWTH: Can Tap AlixPartners as Restructuring Advisors GENERAL GROWTH: Can Hire Miller Buckfire as Financial Advisor GENERAL GROWTH: Hires Jenner & Block as Special Litigation Counsel GENERAL GROWTH: Creditors Committee Wants Akin Gump as Counsel GENERAL GROWTH: Pershing Square Discloses 7.5% Equity Stake GENERAL GROWTH: Lenders Demand Non-Default Contract Rate GENERAL MOTORS: Dealers May Advertise at iBidMotors for Free GENERAL MOTORS: Defends Dealer Cuts Before Congress GENERAL MOTORS: Swapalease.com Reports Increase in Demand in May GEORGIA GULF: Bank Debt Trades at 18% Off in Secondary Market GOLF CLUB: Involuntary Chapter 11 Case Summary GOTTSCHALKS INC: Has More Than 40 Properties to Dispose HARRAH'S ENTERTAINMENT: S&P Raises Corp. Credit Rating to 'CCC+' HARRAH'S OPERATING: S&P Raises Corp. Credit Rating to 'CCC+' HARTMARX CORP: Creditors Sue Banks Over $12MM Lease Settlement HAWKER BEECHCRAFT: Bank Debt Trades at 34% Off in Secondary Market HAYES LEMMERZ: Can't File Form 10-Q on Time, Expects Wider Loss HAYES LEMMERZ: Court Orders U.S. Trustee to Appoint Retiree Panel HERCULES OFFSHORE: Moody's Downgrades Corp. Family Rating to 'B2' INNOPRIZE III LLC: Case Summary & 9 Largest Unsecured Creditors ISLE OF CAPRI: June 10 Earnings Won't Affect S&P's 'B' Rating JENNIFER CHAN: Case Summary & 15 Largest Unsecured Creditors JOEL ATIENZA: Case Summary & 18 Largest Unsecured Creditors JOURNAL REGISTER: Teamsters Pension Fund Balks at Chapter 11 Plan JUANCITO LLC: Chapter 7 Trustee to Auction Liquor License KB TOYS: Former Directors Balk at Panel's Derivative Claim KINGSWAY FINANCIAL: S&P Withdraws 'B-' Counterparty Credit Rating KNIGHT-CELOTEX: Forced Into Chapter 7 Bankruptcy LANDSOURCE COMMUNITIES: Court OKs Barclays' $140MM Backstop Deal LANDSOURCE COMMUNITIES: Court Extends DIP Maturity to July 31 LANDSOURCE COMMUNITIES: Creditors Panel Seeks Collateral Valuation LANDSOURCE COMMUNITIES: Creditors Panel Challenges Lenders' Liens LANDSOURCE COMMUNITIES: Gets $39.25MM Offer for Washington Square LANDSOURCE COMMUNITIES: Pachulski Bills $307K for 4 Months' Work LATE NIGHT: Case Summary & 20 Largest Unsecured Creditors LEAR CORP: Bank Debt Trades at 28% Discount in Secondary Market LEHMAN BROTHERS: Court Okays Loan Pay-Off Pacts With 44th Street LEHMAN BROTHERS: Court Okays Letter Agreement With Deutsche Bank LEHMAN BROTHERS: Wants to Hire Pachulski Stang as Special Counsel LEHMAN BROTHERS: LBI Trustee Delivers 1st Interim Status Report LEHMAN BROTHERS: Court Denies DnB NOR Bank's Lift Stay Request LEHMAN BROTHERS: SunTrust Withdraws Request to Probe Offerings LEHMAN BROTHERS: Contests UPRS's Request to Recover $5 Million LEHMAN BROTHERS: Neuberger Berman Wants Currency Claim Settled LEHMAN BROTHERS: Ceradyne & Western Digital Seek Damages Recovery LEHMAN BROTHERS: LB 2080 Kalakaua Files Schedules & Statement LEHMAN BROTHERS: Two Former Clients Sue to Recover Securities LIBBEY INC: S&P Puts 'B' Corporate Rating on CreditWatch Negative MACY'S INC: To Open Fresno, Visalia Stores After Acquiring Leases MANITOWOC CO: Bank Debt Trades Near 9% Off in Secondary Market MARRIOTT INTERNATIONAL: Moody's Cuts Preferred Debt Shelf to 'Ba2' METRO-GOLDWYN-MAYER: Bank Debt Trades at 44% Discount MGM MIRAGE: Tender Offer for Senior Notes Maturing in 2009 Expires MICHAEL VICK: Has Until July 2 to Present Plan to Pay Creditors MILACRON INC: PBGC to Assume Pension Plan, Which Is 45% Funded MIS AMIGOS: Voluntary Chapter 11 Case Summary MOMENTIVE PERFORMANCE: Issues Final Result of Senior Notes Offers NAVISTAR INT'L: Completes $45-Mil. Purchase of Monaco Assets NEIMAN MARCUS: Bank Debt Trades at 22% Off in Secondary Market NEWPAGE CORP: S&P Downgrades Corporate Credit Rating to 'B-' NOBLE INTERNATIONAL: Court Okays $6.25MM DIP Financing OSCIENT PHARMACEUTICALS: Discontinues Sales Force Promotion PACIFIC ETHANOL: Committee Taps K&L Gates as Lead Counsel PACIFIC ETHANOL: Proposes FTI Consulting as Financial Advisors PARK-OHIO INDUSTRIES: Moody's Confirms Corp. Family Rating to 'B3' PATRICIA CAMPBELL-JAMES: Case Summary & 7 Largest Unsec. Creditors PEACH HOLDINGS: Moody's Downgrades Corporate Family Rating to 'C' POLAROID CORP: Unsecured Creditors File Liquidating Plan POPULAR INC: Moody's Cuts Unit's Primary Servicer Rating PRIMUS TELECOM: Court Confirms Plan; To Exit Chapter 11 by July 1 QBIT CORPORATION: Case Summary & 20 Largest Unsecured Creditors RASAQ HASSAN: Case Summary & 20 Largest Unsecured Creditors REALTY AMERICA: Proposes Reed & Elmquist as Bankruptcy Counsel REALTY AMERICA: Wants Schedules Deadline Moved to June 17 RIVER WOODS: Wants to Hire Foley Freeman as Bankruptcy Counsel SEMGROUP LP: Reaches Settlement With SemEuro & BNP Paribas SEMGROUP LP: Seeks Court Approval of Ogden Lease Termination Pact SILICON GRAPHICS: Changes Name to Graphics Properties Holdings SIMMONS COMPANY: PwC Raises Going Concern Doubt SIMMONS COMPANY: Likely to Restructure Debt in Bankruptcy SIX FLAGS: Files for Chapter 11 Bankruptcy in Delaware SIX FLAGS: Case Summary & 20 Largest Unsecured Creditors SIX FLAGS: Bank Debt Trades at 22% Off in Secondary Market SMURFIT-STONE: Court Approves Evergreen & Travelers Surety Bonds SMURFIT-STONE: Court Approves Zurich Insurance Agreement SMURFIT-STONE: Court Approves Settlement Pact With Southeast Fuels SMURFIT-STONE: Georgia-Pacific & GNN Seek $1 Million in Damages SMURFIT-STONE: Sidley Austin Bills $2.7MM for 1st Quarter Services SMURFIT-STONE: 4 Creditors Transfer Claims Aggregating $356,410 SOUTHERN PINES: Creditors Meeting on July 2 SPARKS REGIONAL: Moody's Does Not Take Action on 'Caa1' Rating SUN-TIMES MEDIA: Settlement With Shareholders Gets Court Approval THE LOEB-NORTON RANCH: Case Summary & 3 Largest Unsec. Creditors THEATER XTREME: JC Int'l Acquires Trademark and IP Assets TIMOTHY BOWMAN: Voluntary Chapter 11 Case Summary TOM'S FOODS: PBGC Seeks $3MM Recovery on Behalf of Pension Plan TOWN CENTER PLAZA: Case Summary & 18 Largest Unsecured Creditors TRANSMERIDIAN EXPLORATION: Wants June 24 Hearing to Consider Sale TRIBUNE CO: Bank Debt Trades at 65% Off in Secondary Market TROPICANA ENTERTAINMENT: Court OKs Casino & Resort Sale to Lenders UNIVISION COMMUNICATIONS: Tender Offer Won't Move Moody's Rating US FOODSERVICE: Bank Debt Trades at 28% Off in Secondary Market US MORTGAGE: Former President Pleads Guilty to $139MM Fraud Scheme VICTORIA CANEN: Case Summary & 20 Largest Unsecured Creditors VISTEON CORP: Bank Debt Trades at 61% Off in Secondary Market VISTEON CORP: Tex Instruments Says It Has No Contract With Debtor WR GRACE: Court Resets Phase I Pretrial Conference to June 18 WR GRACE: Fails to Get Requisite 2/3 Votes From Unsec. Creditors WR GRACE: Insurers Insist Plan Is Unconfirmable WR GRACE: Says Remaining Objections Unfounded * 22 Mintz Levin Attorneys Named Leaders in Their Fields for 2009 * Chadbourne Three International Partners in Moscow Office * NADA Welcomes Congressional Oversight of Dealership Closures * Perkins Coie Named Among Top Firms in Chambers USA * BOND PRICING -- For the Week From June 8 to 12, 2009 ********* 2601 ASSOCIATES: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: 2601 Associates LLC 4825 S. LeClaire Chicago, IL 60638 Bankruptcy Case No.: 09-21255 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: John H. Squires Debtor's Counsel: Thomas W. Drexler, Esq. Law Office of Thomas W. Drexler 77 W Washington, Suite 1910 Chicago, IL 60602 Tel: (312) 726-7335 Fax: (312) 263-0430 Email: drexler321@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Michael C. Giorango. ABITIBIBOWATER INC: Union Balks at Closure of 2 Alabama Mills ------------------------------------------------------------- A union representing maintenance employees at Bowater Alabama LLC's Westover sawmill and Goodwater planer facilities has conveyed objections to AbitibiBowater Inc.'s proposal to close the two facilities. The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union has objected to AbitibiBowater Inc. contends that Bowater Alabama is bound by federal labor law to negotiate with the union regarding the effects of the shutdown. The union said it takes no position on whether the permanent closure and decommission of the facilities is an "ordinary course" transaction within the meaning of Section 363(c) of the Bankruptcy Code or an appropriate exercise of business judgment under Section 363(b) of the Bankruptcy Code. The union says, however, that Abiti's motion must be denied to the extent that it seeks to relieve the Debtors of their obligations under the collective bargaining agreements, federal labor law and the Worker Adjustment and Retraining Notification Act. Under the WARN Act, an employer generally may not order a "mass layoff" unless the employer provides at least 60 days notice of the layoff. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes Abitibibowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ADVANTA CORP: Seeks to Commence Securitization Deals ---------------------------------------------------- Advanta Corp. has been expecting that its securitization transactions would begin early amortization in June 2009 based on the securitization trust's performance for the May monthly period. As part of an overall plan to limit the Company's credit loss exposure, in connection with the expected early amortization of the securitization transactions, the Company closed all of its customer accounts to future use effective May 30, 2009. On June 10, 2009, Advanta Business Receivables Corp., a wholly- owned subsidiary of the Company, reported with the Securities and Exchange Commission that an early amortization event has occurred for the Advanta Business Card Master Trust. The AdvantaSeries Excess Spread Amount for the May Monthly Period was negative and caused the average Excess Spread Amount for the preceding three Monthly Periods to be negative, resulting in an AdvantaSeries Pay Out Event of the AdvantaSeries Supplement. As a result of the occurrence of this AdvantaSeries Pay Out Event, beginning on the June 22, 2009 Payment Date, principal on the outstanding AdvantaSeries Notes will become payable pursuant to, and in accordance with, the terms of the Indenture. As of the date of this filing, the aggregate outstanding principal amount of the AdvantaSeries Notes is $3,670,000,000. Payments of principal to the Advanta Series Noteholders will only occur to the extent of available collections allocated to the AdvantaSeries and will be subject to the terms of the Indenture, including, among other things, the subordination provisions. Beginning on June 1, 2009 and subject to the terms of the Indenture, all ABCMT principal collections that are allocated to the AdvantaSeries are being deposited by the Servicer into the Collection Account for payment to the AdvantaSeries Noteholders. The AdvantaSeries Notes are obligations of ABCMT and are not obligations of Advanta Business Receivables Corp, Advanta Bank Corp., the Company or any of their affiliates. Collections of Finance Charge and Administrative Receivables allocated to the AdvantaSeries are being deposited by the Servicer into the Collection Account and, to the extent available, will continue to be used to make payments of interest on the AdvantaSeries Notes and other payments in accordance with the terms of the Indenture. About Advanta Corp. Advanta Corp. -- http://www.advanta.com/-- is one of the nation's largest credit card providers, through Advanta Bank Corp., in the small business market. Advanta's focus on this market as well as its size, experience, and service tailored to the needs of small businesses differentiates the company from other credit card companies. Founded in 1951, Advanta has long been an innovator in developing and introducing many of the marketing techniques that are common in the financial services industry. At March 31, 2009, the Company had $3.39 billion in total assets, $2.97 billion in total liabilities and $427.7 million in stockholders' equity. The Company had $75.9 million in net loss for the three months ended March 31, 2009, compared to net income of $18.3 million for the same period in 2008. * * * As reported by the Troubled Company Reporter on May 14, 2009, Standard & Poor's Ratings Services lowered its ratings on Advanta Corp., including lowering the long-term counterparty credit rating to 'CC' from 'CCC'. At the same time, S&P lowered the counterparty credit rating on Advanta's primary operating subsidiary, Advanta Bank Corp., to 'CC' from 'B-'. The rating on the preferred stock of Advanta Capital Trust I remains at 'C'. The outlook is negative. The rating action, S&P said, follows Advanta's announcement that its securitization trust, its primary funding vehicle, will go into early amortization on June 10, 2009. Also, the Company does not plan to fund any activity for the accounts in the trust on its balance sheet; therefore, it will shut these accounts down. Earlier in May 2009, Moody's Investors Service downgraded the long-term ratings of Advanta Corp. (senior unsecured rating to Caa3 from Caa1). The trust preferred securities rating of Advanta Capital Trust I was lowered to C from Caa3. The outlook for the senior unsecured rating is negative; the outlook for the trust preferred rating is stable. The rating action reflects Moody's view that Advanta's intrinsic credit quality has eroded as the result of continued deterioration in asset quality, heightened pressures on funding and liquidity, and the adverse effects of these factors on the firm's core profitability. Fitch Ratings also downgraded the long-term Issuer Default Rating and outstanding debt ratings of Advanta Corp. and Advanta Bank Corp. earlier in May 2009. Advanta Corp.'s Long-term IDR was lowered to 'CC' from 'BB-'; short-term IDR was lowered to 'C' from 'B'; and senior unsecured was lowered to 'CC/RR4' from 'BB-'. Advanta Bank Corp.'s long-term IDR was lowered to 'CCC' from 'BB-'; Short-term IDR was lowered to 'C' from 'B'; and Long- term Deposits were lowered to 'B-' from 'BB'. Advanta Capital Trust I's Trust preferred stock was lowered to 'C/RR6' from 'B'. Roughly $2.7 billion of debt, deposits and preferred securities are affected by these actions. The downgrade, Fitch said, reflects significant deterioration in profitability and portfolio credit quality and the heightened risk of breaching early amortization triggers on off-balance sheet ABS transactions, which could lead to a possible shut-down of the business. AGA MEDICAL: Moody's Retains Review on 'B2' Corporate Rating ------------------------------------------------------------ Moody's commented that the ratings of AGA Medical Corporation, including the B2 corporate family rating, will remain on review for downgrade following the Company's first quarter results and the release of the latest version of the S-1 filing. The prior rating action was on March 11, 2009, when the ratings were placed under review for possible downgrade. AGA Medical Corporation is a manufacturer of nitinol-based occlusion devices for the treatment of cardiovascular defects and peripheral vascular disease. The Company had approximately $175 million in revenues for the 12-month period ending March 31, 2009. AL BASKIN: JOB Investments Has $3.6MM Stalking Horse Bid -------------------------------------------------------- Chicago Tribune reports that JOB Investments LLC has offered to buy Al Baskin Co., dba Mark Shale, out of bankruptcy for $3.6 million. Court documents say that the bid from JOB Investments will be the stalking horse offer, or the opening price in the auction for Al Baskin. According to Chicago Tribune, JOB Investments' bid includes the $2 million it agreed to lend to Al Baskin in May 2009. As reported by the Troubled Company Reporter on June 1, 2009, JOB Investments has agreed to provide up to $2 million in debtor-in- possession financing to Al Baskin for a period until September 30, 2009. The loan is being used to acquire new inventory, fund payroll, and help pay down $1.6 million in debt from Bank of America NA, which together with LaSalle Bank lent Al Baskin some $5.2 million. Woodridge, Illinois-based Al Baskin Co., dba Mark Shale, filed for Chapter 11 bankruptcy protection on March 23, 2008 (Bankr. N.D. Ill. Case No. 09-09825). Adam P. Silverman, Esq., at Adelman & Gettleman, Ltd., assists the Company in its restructuring efforts. The Company listed $1 million to $10 million in assets and $10 million to $50 million in debts. ALL FAITH'S CHRISTIAN: Case Summary & 7 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: All Faith's Christian Center Church 7750 Mickens Road Baton Rouge, LA 70811 Bankruptcy Case No.: 09-10835 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court Middle District of Louisiana (Baton Rouge) Debtor's Counsel: Pamela G. Magee, Esq. 7922 Wrenwood Blvd., Suite B Baton Rouge, LA 70809 Tel: (225) 925-8770 Fax: (225) 924-2469 Email: p.magee@att.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Company's 7 largest unsecured creditors is available for free at: http://bankrupt.com/misc/lamb09-10835.pdf The petition was signed by Lynn Morrison, Jr. ALOHA AIRLINES: To Pay $5.5MM in Settlement Pact With Labor Dept ---------------------------------------------------------------- The U.S. Department of Labor said in a statement that Aloha Airlines agreed to pay a total of $5.5 million to make up for losses suffered by the airline's three pension plans. Pacific Business relates that the Labor Department alleged that Aloha Airlines and Bank of Hawaii had caused or permitted the plans to buy stock of the airline's holding company in September 2000 for more than its fair market value, breaching their fiduciary duties under the federal Employee Retirement Income Security Act. The Labor Department said in a statement that First Hawaiian Bank, an investment manager for a portion of investments that weren't involved in the transaction, facilitated the stock transaction and thus knowingly participated in the fiduciary breaches or violated its duties as a co-fiduciary. Citing federal labor officials, Pacific Business News reports that Aloha Airlines, Bank of Hawaii, and First Hawaiian will pay a total of $10.5 million to three separate settlement agreements for the money lost on investments in the stock of the Company's bankrupt holding company. According to Pacific Business, Aloha Airlines and the banks will pay another $954,546 in civil penalties to the plans, through their trustee, Pension Benefit Guaranty Corp. The banks will pay $2.5 million each in restitution and civil penalties, says Pacific Business. Based in Honolulu, Hawaii, Aloha Airgroup Inc., Aloha Airlines Inc. -- http://www.alohaairlines.com/-- and its affiliates flew passengers and freight to Hawaii's five major airports, as well as to half a dozen destinations in the western U.S. They operated a fleet of about 20 aircraft, all Boeing 737s, including three configured as freighters. Aloha filed for Chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063), and emerged from Chapter 11 bankruptcy protection in February 2006. The Company and its affiliates filed again for Chapter 11 protection on March 18, 2008 (Bankr. D. Hawaii Lead Case No. 08- 00337). Brian G. Rich, Esq., Jordi Guso, Esq., and Paul Steven Singerman, Esq., at Berger Singerman P.A., and David C. Farmer, Esq., represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors was represented by Sonnenschein Nath & Rosenthal LLP and Bronster Hoshibata, A Law Corporation. The Debtors' schedules reflected total assets of $74,600,000 against total liabilities of $197,100,000. On April 29, 2008, the Court converted the Debtors' cases into chapter 7 liquidation proceedings. The next day, the U.S. Trustee appointed Dane S. Field to serve as chapter 7 trustee for the cases. James Wagner, Esq., at Wagner Choi & Verbrugge, represents Mr. Field. AMERICAN HOUSING: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: American Housing Foundation 1800 S. Washington, Suite 311 Amarillo, TX 79102 Bankruptcy Case No.: 09-20373 Type of Business: Founded as a Texas 501(c)(3) non-profit corporation in 1989, AHF owns and operates over 12,500 residential units, making AHF one of the nation's largest entities primarily dedicated to the workforce housing market. Residents in AHF properties benefit from significantly below market rental rates. Chapter 11 Petition Date: June 11, 2009 Court: Northern District of Texas (Amarillo) Judge: Robert L. Jones Debtor's Counsel: Robert Yaquinto, Jr., Esq. rob@syllp.com Sherman & Yaquinto, LLP 509 N. Montclair Ave. Dallas, TX 75208-5498 Tel: (214) 942-5502 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor did not file a list of its 20 largest unsecured creditors. The petition was signed by Rick Crawford, president. AMSTERDAM MEMORIAL: PBGC Assumes 60% Funded Pension Plan -------------------------------------------------------- The Pension Benefit Guaranty Corporation said Thursday it has assumed responsibility for the pension plan that covers more than 830 current and former employees of Amsterdam Memorial Hospital in Amsterdam, N.Y. The PBGC stepped in because the underfunded Amsterdam Memorial Hospital Employees Pension Plan failed to meet minimum funding standards and would be unable to pay benefits when due. Additionally, the plan would be without a sponsor following the hospital's sale to a competitor. The transaction did not include the retirement plan. Amsterdam Memorial Hospital retirees will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire. The PBGC estimates that the plan is 60% funded, with assets of $13.6 million to cover benefit liabilities of $23 million. The agency will be responsible for $9.2 million of the $9.6 million shortfall. The agency will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended on April 30, 2009. The PBGC became trustee of the plan on May 26, 2009. Amsterdam Memorial Hospital was founded in 1889 and provides inpatient rehabilitation services, outpatient treatments and skilled nursing services in Montgomery and Fulton Counties in New York State. In March, Amsterdam Memorial and its affiliate Mohawk Health Alliance Inc. signed an acquisition agreement with its rival St. Mary's Hospital, also located in Amsterdam. Without the acquisition agreement, Amsterdam Memorial expected to close because it lacked sufficient capital to remain in service. As part of the transaction, the PBGC negotiated with the two hospitals and the New York State Department of Health for $7 million to be transferred into the pension plan for the benefit of its participants. Within the next several weeks, the PBGC will send notification letters to all participants in the Amsterdam Memorial Hospital Employees Pension Plan. Under provisions of the Pension Protection Act of 2006, the maximum guaranteed pension the PBGC can pay is determined by the legal limits in force on the day the plan ended. Therefore, participants in the pension plan are subject to the limits in effect on April 30, 2009, which set a maximum guaranteed amount of $54,000 for a 65-year-old. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed. Workers and retirees with questions may consult the PBGC Web site, http://www.pbgc.gov/or call toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800- 877-8339 and ask for 800-400-7242. Retirees of the hospital who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Assumption of the plan's unfunded liabilities will increase the PBGC's claims by $9.2 million and was not previously included in the agency's fiscal year 2008 financial statements The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. ANCHOR BLUE: U.S. Trustee Balks at Levi Strauss Sale Proposal ------------------------------------------------------------- Roberta A. DeAngelis, the acting United States Trustee for Region 3, has opposed the procedures for selling Anchor Blue Retail Group Inc.'s business to two buyers by the end of June, Bloomberg's Bill Rochelle reports. The U.S. Trustee questioned whether the MOST stores were "adequately marketed" given the so-called noshop clause that prohibited prospecting for other offers before bankruptcy. The U.S. Trustee also says that breakup fees or expense reimbursements on both sales are too high. The U.S. Trustee also questions the need for sales so quickly. San Francisco-based Levi Strauss is offering $72 million for 73 of MOST's 74 Levi's & Dockers outlet stores. According to the report, there is a second agreement for selling some 127 of Anchor Blue's namesake stores to current management and Ableco Finance LLC, the agent for the term loan lenders. About 50 Anchor Blue stores would be closed in going-out-of- business sales along with one of the Levi's outlets. If the outlet sale and the GOB sales reduce the term loan debt by $52 million, Ableco will serve as the so-called stalking horse at auction for the 127 Anchor Blue stores. Ableco will pay for the stores largely in exchange for secured debt, including debt provided for the Chapter 11 case. As reported in the Troubled Company Reporter on June 1, 2009, Levi Strauss & Co. said it agreed to acquire the operating rights to 73 MOST stores, the Debtor's denim outlet subsidiary, which carry Levi's(R) and Dockers(R) inventory. Levi Strauss noted that Anchor Blue and its subsidiaries filed for Chapter 11 to enter a 363 sale process to facilitate a restructuring and to seek Court approval for the sale of the Levi's(R) and Dockers(R) stores to it. Completion of the transaction is subject to a number of closing conditions, including the approval of the Bankruptcy Court, Levi Strauss noted. Subject to conditions, the transaction is expected to close in July. Anchor Blue has indicated its outlet stores will remain open for business without interruption during the period prior to closing the proposed acquisition, Levi Strauss said. About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The company markets its products in three geographic regions: Americas, Europe and Asia Pacific. According to the Troubled Company Reporter on May 29, 2009, Moody's Investors Service said Levi Strauss & Co. Inc.'s entry into an Asset Purchase Agreement with Anchor Blue Retail Group has no immediate impact on LS&Co's B1 Corporate Family Rating or the positive rating outlook. About Anchor Blue Headquartered in Ontario, Canada, Anchor Blue Retail Group Inc. operates retail stories. The Company and four of its affiliates filed for Chapter 11 protection on May 27, 2009 (Bankr. D. Del. Lead Case No. 09-11770). Chun I. Jang, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger P.A., represent the Debtors' in their restructuring efforts. In its petition, Anchor Blue listed assets less than $50,000, and debts between $100 million to $500 million. ASG CONSOLIDATED: S&P Downgrades Corporate Credit Rating to 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered all its ratings on ASG Consolidated LLC and its wholly owned subsidiary, American Seafoods Group LLC, including its corporate credit and senior unsecured debt ratings to 'B' from 'B+'. The outlook is stable. In addition, Standard & Poor's lowered its senior secured bank loan ratings on American Seafoods Group LLC's $570 million bank facility to 'BB-' from 'BB'. "The action is based on weaker-than-expected liquidity over the near term as the company faces a step down in its maximum leverage covenant in the second quarter of fiscal 2009," said Standard & Poor's credit analyst Patrick Jeffrey. "We expect that fiscal 2009 EBITDA will be well below fiscal 2008 as a result of the weak economy, further TAC reduction from 2008 levels, and the loss of two licenses, and as a result, S&P expects debt leverage to be more in line with the revised rating over the near term. About $748 million of debt was outstanding as of March 31, 2009." The ratings on ASG Consolidated LLC and its wholly-owned operating subsidiary, American Seafoods Group LLC, and the co-issuer of the company's senior discount notes, ASG Finance Inc., reflect the company's high leverage, aggressive financial policy, and participation in the competitive, commodity-oriented commercial fishing industry. ASGC has the leading position as the largest and lowest-cost producer in the industry, along with a proven track record for operating under the highly regulated environment. For analytical purposes, Standard & Poor's Ratings Services views ASGC, ASG, and ASGF as one economic entity, and they are accordingly analyzed on a consolidated basis. ASGC is a vertically integrated seafood harvesting, processing, and marketing company, operating catcher-processor vessels which participate in the largest commercial fishery in U.S. waters. The company's products are subject to supply and demand vagaries that can affect financial performance. ASGC's strong position in the Bering Sea/Aleutian Island Pollock fishery and regulatory support under the American Fisheries Act, which became permanent federal law in 2001, somewhat mitigate these concerns. The AFA created a more rational, stable, and profitable operating environment by limiting the number of vessels operating in the fishery, which reduces some of ASGC's operating risk. Still, the company's ability to expand its core Pollock harvesting operations, either through the purchase of quotas or through legislative change, remains a key rating consideration. The outlook is stable. S&P expects ASGC's liquidity to weaken in the near term as it faces a covenant step down in the second quarter of fiscal 2009. S&P also anticipates the company will generate significantly lower EBITDA levels than in fiscal 2009 due to the weak economy, lower TAC, and the loss of two CDQ licenses from 2008. As a result, S&P expects credit measures and liquidity to remain more in line with the revised ratings over the near term. S&P could consider a negative outlook or a lower rating if the company violates its bank covenants and is not able to obtain an amendment. S&P could consider a positive outlook if the company can improve and sustain debt leverage in the low 5x area, maintain adequate liquidity, and address the company's significant debt maturities in 2011. ASYST TECHNOLOGIES: Can't File Quarterly Report on Time ------------------------------------------------------- Steve Debenham, senior vice president, general counsel and secretary of Asyst Technologies, Inc., disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that the company is unable to file timely its Form 10-K for its fiscal year ended March 31, 2009, without unreasonable effort or expense, due primarily to the United States bankruptcy and Japanese reorganization proceedings, associated lack of financial and other resources necessary to prepare the Form 10-K, and the inability of the company to obtain and prepare financial information on a consolidated basis and in accordance with generally accepted accounting principles that includes its Japanese subsidiaries. Mr. Debenham relates that Asyst's common stock may have no future value and may be cancelled in connection with the bankruptcy proceeding. "Asyst does not currently expect that it will reorganize and continue as a publicly traded company after completion of the bankruptcy proceedings." Mr. Debenham adds that Asyst is not able to estimate the anticipated change in results of operations on a consolidated basis in accordance with generally accepted accounting principles. Asyst believes it is unlikely that it will be able to report results of operations on a consolidated basis for the fiscal year ending March 31, 2009. Headquartered in Fremont, California, Asyst Technologies, Inc. -- http://www.asyst.com/-- makes, sells and supports integrated hardware and software systems primarily for semiconductor and flat panel display manufacturing industries. The Company filed for Chapter 11 on April 20, 2009 (Bankr. N.D. Calif. Case No. 09-43246). Ali M.M. Mojdehi, Esq., at the Law Offices of Baker and McKenzie, represents the Debtor in its restructuring efforts. As of December 31, 2008, the Debtor reported total assets of $295,782,000 and total debts of $315,364,000. The company's Japanese subsidiaries, Asyst Technologies Japan Holdings Company, Inc., and Asyst Technologies Japan, Inc., entered into related voluntary proceedings under Japan's Corporate Reorganization Law (Kaisha Kosei Ho) on April 20, 2009. ASYST TECHNOLOGIES: Files Schedules & Statements ------------------------------------------------ Asyst Technologies, Inc., filed with the United States Bankruptcy Court for the Northern District of California in Oakland its Schedules of Assets and Liabilities dated June 4, 2009, Statement of Financial Affairs dated June 4, 2009, and Periodic Report on Subsidiaries dated June 8, 2009. Total Assets Total Liabilities ------------ ----------------- A - REAL PROPERTY $0 B - PERSONAL PROPERTY $19,876,058 C - PROPERTY CLAIMED AS EXEMPT D - CREDITORS HOLDING SECURED CLAIMS $76,500,000 E - CREDITORS HOLDING UNSECURED PRIORITY CLAIMS $239,347 F - CREDITORS HOLDING UNSECURED NON- PRIORITY CLAIMS $8,896,299 ------------ ----------------- $19,876,058 $85,396,299 A full-text copy of Asyst Technologies, Inc.'s Schedules of Assets and Liabilities is available for free at: http://researcharchives.com/t/s?3de0 A full-text copy of the Statement of Financial Affairs for Asyst Technologies, Inc., is available for free at: http://researcharchives.com/t/s?3dde A full-text copy of the Chapter 11 Periodic Report on Asyst Technologies, Inc.'s subsidiaries is available for free at: http://researcharchives.com/t/s?3ddf Asyst's Japanese subsidiaries, Asyst Technologies Japan Holdings Company, Inc. and Asyst Technologies Japan, Inc., entered into related voluntary proceedings under Japan's Corporate Reorganization Law (Kaisha Kosei Ho) on April 20, 2009. As a result of these proceedings in Japan, Asyst does not have the necessary ability to obtain current financial information from the Japanese subsidiaries and believes the current value of its equity in these subsidiaries is zero. Headquartered in Fremont, California, Asyst Technologies, Inc. -- http://www.asyst.com/-- makes, sells and supports integrated hardware and software systems primarily for semiconductor and flat panel display manufacturing industries. The Company filed for Chapter 11 on April 20, 2009 (Bankr. N.D. Calif. Case No. 09-43246). Ali M.M. Mojdehi, Esq., at the Law Offices of Baker and McKenzie, represents the Debtor in its restructuring efforts. As of December 31, 2008, the Debtor reported total assets of $295,782,000 and total debts of $315,364,000. The company's Japanese subsidiaries, Asyst Technologies Japan Holdings Company, Inc., and Asyst Technologies Japan, Inc., entered into related voluntary proceedings under Japan's Corporate Reorganization Law (Kaisha Kosei Ho) on April 20, 2009. AVIS BUDGET: Bank Debt Trades Near 20% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 80.06 cents-on-the-dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.10 percentage points from the previous week, the Journal relates. The loan matures April 1, 2012. The Company pays 125 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and S&P's CCC+ rating. Meanwhile, participations in a syndicated loan under which Dana Corp. is a borrower traded in the secondary market at 55.20 cents- on-the-dollar during the week ended June 12, 2009, an increase of 4.70 percentage points from the previous week. The loan matures January 31, 2015. The Company pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating and S&P's B rating. Participations in a syndicated loan under which Lear Corporation is a borrower traded in the secondary market at 72.00 cents-on- the-dollar during the week ended June 12, 2009, an increase of 6.82 percentage points from the previous week. The loan matures March 29, 2012. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated by both Moody's and S&P. Participations in a syndicated loan under which Visteon Corp. is a borrower traded in the secondary market at 38.69 cents-on-the- dollar during the week ended June 12, 2009, an increase of 2.90 percentage points from the previous week. The loan matures May 30, 2013. The Company pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt. S&P has assigned a default rating. About Avis Budget Based in Parsippany, New Jersey, Avis Budget Group, Inc., provides car and truck rentals and ancillary services to businesses and consumers in the United States and internationally. * * * As reported by the Troubled Company Reporter on April 30, 2009, Standard & Poor's Ratings Services assigned a '6' recovery rating to Avis Budget Car Rental LLC's (CCC+/Developing/--) unsecured notes, indicating expectations of negligible (0%-10%) recovery of principal in the event of a payment default. Avis Budget Car Rental LLC is a subsidiary of Avis Budget Group Inc. (CCC+/Developing/--). AVIZA TECH: Faces Delisting from NASDAQ after Bankruptcy Filing --------------------------------------------------------------- Aviza Technology Inc. received a Staff Determination Letter from The NASDAQ Stock Market stating that its common stock is subject to delisting from The NASDAQ Stock Market in accordance with Nasdaq Listing Rules 5100, 5110(b), and IM-5100-1. The letter was issued as a result of the company's previously announced filing for relief under Chapter 11 of the U.S. Bankruptcy Code on June 9, 2009. The company does not intend to request a hearing before the NASDAQ Listing Qualifications Panel to appeal the decision. The letter set forth the NASDAQ staff's determination to delist the company's common shares, suspend trading in the company's common stock at the opening of business on June 19, 2009, and file a Form 25-NSE with the Securities and Exchange Commission removing the company's common stock from listing and registration on The NASDAQ Stock Market. About Aviza Technology Headquartered in Scotts Valley, California, Aviza Technology Inc. (NASDAQ GM:AVZA) -- http://www.aviza.com/--designs, manufactures, sells and supports semiconductor capital equipment and process technologies for the global semiconductor industry and related markets. The company's systems are used in a variety of segments of the semiconductor market for advanced silicon for memory devices, 3-D packaging and power integrated circuits for communications. The company's manufacturing, R&D, sales and customer support facilities located in the United Kingdom, Germany, France, Taiwan, China, Japan, Korea, Singapore and Malaysia. BANK OF AMERICA: CEO Defends Merrill Lynch Deal Before Congress --------------------------------------------------------------- Bank of America CEO Kenneth Lewis said that he didn't feel that federal officials acted improperly in the Merrill Lynch & Co. deal, defending the decision to proceed with the takeover and keep Merrill's mounting losses secret. Michael R. Crittenden and Dan Fitzpatrick at The Wall Street Journal report that the House Committee on Oversight and Government Reform grilled Mr. Lewis on his decisions to seek cover from the Federal Reserve and not tell shareholders about losses at Merrill. According to an earlier report by WSJ, notes taken by bank executives in December 2008 suggested that Treasury Secretary Timothy Geithner and Lawrence Summers, President Barack Obama's top economic adviser, supported efforts to pressure BofA to consummate its merger with Merrill in 2008. According to WSJ, BofA Chief Financial Officer Joseph Price recounted in one of the notes a conversation with Mr. Lewis about the CEO's conversations with then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. WSJ says that the also mentioned about firing bank executives. WSJ relates that Mr. Lewis confirmed that the government threatened to remove him or other BofA executives. The committee needs to hear testimony from the Fed and Treasury about the negotiations that occurred in December and January before finishing the probe, WSJ reports, citing Rep. Dennis Kucinich. Fed Recommends Putting Price on Gov't Aid Bloomberg News relates that Federal Reserve officials have recommended putting a price on any government aid to BofA in connection with its takeover of Merrill. According to Bloomberg, the Fed officials predicted "significant reputational consequences" for BofA if it abandoned the deal, warning that investors would conclude the Company was too weak to complete the acquisition. 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. BENDER SHIPBUILDING: Sent to Chapter 7 by 3 Creditors ----------------------------------------------------- Kaija Wilkinson at Press-Register reports that three creditors have filed an involuntary Chapter 7 petition against Bender Shipbuilding & Repair Co. in the U.S. Bankruptcy for the Southern District of Alabama. Press-Register states that Birmingham attorney Eric Breithaupt of Christian & Small LLP filed the petition on behalf of these creditors, who are seeking payment of $44.6 million debt that Bender Shipbuilding owes them: -- Houston's GulfMark Offshore Inc.; -- Louisiana Machinery Company LLC; and -- Sirius Technical Services Inc. of Theodore. Bender Shipbuilding, according to Press-Register, said that the creditors' assertions were invalid, and that it expects the case to be dismissed. Press-Register relates that the Hon. Margaret Mahoney will hold a hearing on July 7 on the dispute. Creditors have 20 days from the bankruptcy filing on Tuesday to serve Bender Shipbuilding with documents associated with their claims, while the Debtor will have 20 days to reply, the report says. Bender Shipbuilding & Repair Co. welds the hull of an offshore oil supply boats the Mobile, Alabama. BLOCKBUSTER INC: Bank Debt Trades at 23% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Blockbuster Inc. is a borrower traded in the secondary market at 76.75 cents-on- the-dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.69 percentage points from the previous week, the Journal relates. The loan matures August 20, 2011. The Company pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and S&P's CCC+ rating. Blockbuster Inc., headquartered in Dallas, Texas, is a leading global provider of in-home movie and game entertainment with approximately 7,400 stores throughout the Americas, Europe, Asia, and Australia. Revenues are about $5.3 billion. * * * As reported by the Troubled Company Reporter, in April 2009, Moody's Investors Service downgraded Blockbuster's Probability of Default Rating to Caa3 from Caa1 and its Corporate Family Rating to Caa2 from Caa1. In addition, Moody's affirmed Blockbuster's speculative grade liquidity rating at SGL-4 and it secured bank credit facilities rating at B1. Moody's also rated the proposed $250 million revolving credit facility, which expires in September 2010, a senior secured rating of B1. The rating outlook is stable. Standard & Poor's Ratings Services lowered its corporate credit rating on Blockbuster to 'CCC' from 'B-'. S&P removed the ratings from CreditWatch with negative implications, where they were placed on March 4, 2009. At the same time, S&P lowered the issue- level ratings on both its secured debt to 'CCC+' from 'B' and its subordinated debt to 'CC' from 'CCC'. The outlook is negative. Fitch Ratings affirmed Blockbuster's long-term Issuer Default Rating at 'CCC' and said it expects to rate the amended $250 million bank credit facility at 'B/RR2'. In addition, Fitch took these rating actions ($450 million bank credit facility upgraded to 'B/RR2' from 'CCC+/RR3'; $100 million term A loan upgraded to 'B/RR2' from 'CCC+/RR3'; $550 million term B loan upgraded to 'B/RR2' from 'CCC+/RR3'; and $300 million senior subordinated notes downgraded to 'C/RR6' from 'CC/RR6'. The Rating Outlook is Stable. The company had approximately $818 million of debt outstanding as of January 4, 2009. BRITIANNIA BULK: Voluntary Chapter 15 Case Summary -------------------------------------------------- Chapter 15 Debtor: Britannia Bulk Holdings Inc. 55 Baker Street London W1U 7EU Chapter 15 Case No.: 09-13724 Chapter 15 Petition Date: June 11, 2009 Debtor-affiliates that filed separate Chapter 15 petitions in 2008: Entity Case No. ------ -------- Britannia Bulk Plc 08-14543 Britannia Bulkers A/S 08-15187 Type of Business: The Debtors' affairs, business and assets are managed by Mark Shaw, Malcolm Cohen and Shay Bannon of BDO Stoy Hayward LLP at 55 Baker Street in London, as the joint administrators. The firm can be reached at (020) 7486-5888. See: http://www.britbulk.com/ Court: Southern District of New York (Manhattan) Judge: Robert E. Gerber Chapter 15 Debtors' Counsel: Brian W. Harvey, Esq. bharvey@goodwinprocter.com Goodwin Procter LLP The New York Times Building 620 Eighth Avenue New York, NY 10018 Tel: (212) 813-8829 Fax: (212) 355-3333 Estimated Assets: $50 million to $100 million Estimated Debts: $10 million to $50 million BROMWELL'S TFP: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Bromwell's TFP, L.L.C. 2821 Mary Street Alexandria, VA 22142 Bankruptcy Case No.: 09-14672 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Debtor's Counsel: John T. Donelan, Esq. Law Offices of John T. Donelan 125 S. Royal Street Alexandria, VA 22314 Tel: (703) 684-7555 Email: jtdlaw@verizon.net Estimated Assets: $50,001 to $100,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 12 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/vaeb09-14672.pdf The petition was signed by Richard L. Cartlidge, managing member of the Company. BUILDERS FIRSTSOURCE: S&P Junks Corporate Credit Rating From 'B-' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Builders FirstSource Inc. to 'CCC+' from 'B-'. The outlook is negative. S&P also lowered the issue-level rating on the company's second- lien notes to 'CCC' (one notch below the corporate credit rating) from 'CCC+'. The recovery rating remains unchanged at '5', which indicates S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. "We are concerned that ongoing weakness in new residential construction will result in likely deterioration in the company's overall financial risk profile from an already weak level given our expectation for negative earnings and cash flow in the next few quarters," said Standard & Poor's credit analyst Andy Sookram. As a result, S&P expects BLDR's liquidity position to decline from current levels, with cash balances decreasing to well below $100 million from $103 million (before accounting for about $19 million in restricted cash set aside to support a shortfall in the calculation of the minimum liquidity covenant under the asset- based revolving credit at March 31, 2009. In addition, because of the covenant calculation shortfall, the company has no availability under its revolving credit facility due to a drop in the eligible borrowing base. The 'CCC+' corporate credit rating reflects S&P's expectation that credit protection measures and liquidity will decline to levels commensurate to the levels appropriate for the new rating. The ratings reflect the company's exposure to the new residential market that is experiencing prolonged depressed construction activity, highly competitive cyclical markets, limited end-market focus, and declining liquidity. BLDR is a supplier and manufacturer of structural and related building products and a provider of construction-related installation services. The negative outlook reflects S&P's concerns about the weak operating environment and the effect this will continue to have on the company's operating performance and cash flow. For the next several quarters, S&P expects the company to use cash on hand to fund its cash flow shortfall, which will result in a material depletion in cash balances. S&P does not expect the company to be able to borrow additional amounts under the revolving credit facility because of the significant decline in the eligible borrowing base. S&P could lower the ratings if the new residential construction market deteriorates more than S&P expect, causing a steeper decline in cash flows relative to S&P's current expectation. If this scenario occurs, negative free cash flow will likely decline by more than S&P's currently anticipated amount of about $25 million, resulting in a meaningful erosion in cash balances to fund operating requirements, including interest expense and capital expenditures. CAESARS ENTERTAINMENT: S&P Raises Subordinated Debt Issues to CCC- ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it raised its corporate credit and issue-level ratings on Las Vegas-based Harrah's Entertainment Inc. and its wholly owned subsidiary, Harrah's Operating Co. Inc., along with all issue-level ratings on Harrah's debt, as outlined in S&P's May 27, 2009 research update. S&P raised the corporate credit rating to 'CCC+' from 'CCC', reflecting S&P's assessment that the recent capital raise, combined with an amendment to certain terms of HOC's senior secured credit facilities, has alleviated S&P's concerns that given S&P's expectation for operating performance this year, HOC would not be able to remain in compliance with its senior secured leverage ratio covenant. In addition, S&P raised the issue-level rating on HOC's senior secured credit facilities to 'B' (two notches higher than the 'CCC+' corporate credit rating) from 'B-'. The recovery rating on these loans remains at '1', indicating S&P's expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. S&P also raised its issue-level ratings on HOC's second-priority senior secured and senior unsecured debt issues, as well as HET subsidiary Caesars Entertainment Inc.'s subordinated debt issues to 'CCC-' from 'CC'. The recovery rating on these securities remains at '6', indicating S&P's expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default. In addition, Standard & Poor's removed all of the ratings from CreditWatch, where S&P had placed them with positive implications on May 27, 2009, following Harrah's announcement of the planned capital raise. The outlook is developing. "While a highly leveraged financial profile, combined with our expectation that EBITDA will decline in the mid-teens percentage area in 2009 and be roughly flat in 2010, will likely result in credit measures remaining weak over the intermediate term, S&P believes that ratings upside potential exists if performance on the Las Vegas Strip and Atlantic City stabilizes in 2010 and longer-term prospects improve," said Standard & Poor's credit analyst Ben Bubeck. "However, if current weak conditions in these markets persist over an extended period, or if performance deteriorates further," he added, "Harrah's may face further challenges in servicing its current capital structure, and S&P believes the company may again seek to restructure its debt obligations." CALLIDUS DEBT: Moody's Downgrades Ratings on Secured Notes ---------------------------------------------------------- Moody's Investors Service announced that it downgraded the ratings of these notes issued by Callidus Debt Partners CLO Fund VII, Ltd.: -- US$443,000,000 Class A Senior Secured Floating Rate Notes Due 2021, Downgraded to A2; previously on 11/30/2007, Assigned Aaa; -- US$24,000,000 Class B Senior Secured Floating Rate Notes Due 2021, Downgraded to Baa2; previously on 3/13/2009, Aa2 Placed Under Review for Possible Downgrade; -- US$19,500,000 Class D Senior Secured Deferrable Floating Rate Notes Due 2021, Downgraded to Caa1; previously on 3/13/2009, Downgraded to B2 and Placed Under Review for Possible Downgrade; -- US$25,500,000 Class E Senior Secured Deferrable Floating Rate Notes Due 2021, Downgraded to Ca; previously on 3/13/2009, Downgraded to Caa3 and Placed Under Review for Possible Downgrade. In addition, Moody's has confirmed the ratings on these notes: -- US$33,000,000 Class C Senior Secured Deferrable Floating Rate Notes Due 2021, Confirmed at Ba2; previously on 3/13/2009, Downgraded to Ba2 and Placed Under Review for Possible Downgrade. According to Moody's, the rating actions taken on the notes are a result of credit deterioration of the underlying portfolio. The actions also reflect Moody's revised assumptions with respect to default probability, the treatment of ratings on "Review for Possible Downgrade" or with a "Negative Outlook," and the calculation of the Diversity Score. The revised assumptions that have been applied to all corporate credits in the underlying portfolio are described in the press release dated February 4, 2009, titled "Moody's updates key assumptions for rating CLOs." Moody's analysis also reflects the expectation that recoveries for high-yield corporate bonds and second lien loans will be below their historical averages, consistent with Moody's research. Moody's has also applied resecuritization stress factors to default probability assumptions for structured finance asset collateral as described in the press release titled "Moody's updates its key assumptions for rating structured finance CDOs," published on December 11, 2008. Credit deterioration of the collateral pool is observed through a decline in the average credit rating (as measured through the weighted average rating factor), an increase in the dollar amount of defaulted securities, and an increase in the proportion of securities from issuers rated Caa1 and below. The weighted average rating factor has steadily increased over the last year and it is currently at 2972 versus a test level of 2685 as of the last trustee report, dated May 11, 2009. Based on the same report, defaulted securities total about $10 million, accounting for roughly 2% of the collateral balance, and securities rated Caa1 or lower make up approximately 14% of the underlying portfolio. Moody's also assessed the collateral pool's elevated concentration risk in a small number of obligors and industries. This includes a significant concentration in debt obligations of companies in the banking, finance, real estate, and insurance industries, which Moody's views to be more strongly correlated in the current market environment. Moody's also observes that the transaction is exposed to a number of mezzanine and junior CLO tranches in the underlying portfolio. The majority of these CLO tranches are currently assigned low speculative-grade ratings and carry depressed market valuations that may herald poor recovery prospects in the event of default. Callidus Debt Partners CLO Fund VII, Ltd., issued in November 2007, is a collateralized loan obligation backed primarily by a portfolio of senior secured loans. CAROLYN FRAME: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Joint Debtors: Carolyn Frame dba CFA Financial Services, Inc Charles Frame 7700 Hidden Cove Rd NE Bainbridge Island, WA 98110 Bankruptcy Case No.: 09-15727 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtors' Counsel: David Carl Hill, Esq. Law Office of David Carl Hill 2472 Bethel Rd SE, Ste A Port Orchard, WA 98366 Tel: (360) 876-5015 Email: bankruptcy@hilllaw.com Total Assets: $8,157,377 Total Debts: $9,998,609 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wawb09-15727.pdf The petition was signed by the Joint Debtors. CHARTER COMMUNICATIONS: Bank Debt Trades at 11% Discount -------------------------------------------------------- Participations in a syndicated loan under which Charter Communications is a borrower traded in the secondary market at 88.78 cents-on-the-dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.53 percentage points from the previous week, the Journal relates. The loan matures March 6, 2014. The Company pays 200 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt. S&P assigned a default rating on the bank loan. 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. 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 March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMMUNICATIONS: Balks at Goodell Class Certification ------------------------------------------------------------ Charter Communications Inc. has objected to the motion of the Goodell class, a group of technicians who sued Charter prior to its Chapter 11 filing in an wage payment and overtime suit, for class certification and estimation of a proof of claim. Charter contends that the workers failed to establish the elements necessary for certification, and that the workers have not established that failure to estimate would in any way result in undue delay of the administration of the Debtors' estate. On May 28, 2009, Philip Powers, Marc Goodell, Chad Werth, Ross Blakely and Dominik Tucker, on behalf of themselves and a class of similarly situated employees and former employees of the Debtors, asked the U.S. Bankruptcy Court for the Southern District of New York to certify their proof of claim against Charter as a class claim and to permit the Goodell class members to file their proof of claim on behalf of the entire putative class. At the same time the Goodell class also requested the Court for estimation of their proof of claim related to Charter's failure to pay wages to roughly 2,800 current and former employees. Marc Goodell's class action complaint was filed in the U.S. District Court for the Western District of Wisconsin on August 28, 2008. 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 March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Inks Settlement Agreements on Antitrust Fines ------------------------------------------------------------ Chemtura Corp. has entered into settlement agreements with the United States and Canada that reduces its outstanding antitrust fines from $18.5 million to roughly $11.6 million. On March 15, 2004, Chemtura pleaded guilty to a one-count information charge of participating in a conspiracy to suppress and eliminate competition by maintaining and increasing the price of certain rubber chemicals sold in the United States and elsewhere from July 1995 to December 2001 in violation of the Sherman Antitrust Act. The United States District Court for the Northern District of California imposed a fine on Chemtura of $50 million. The remaining payment of $16 million was due and payable on May 27, 2009. On May 20, 2004, Chemtura pleaded guilty to one count of conspiring to prevent or lessen competition unduly in the production, manufacture and supply of certain rubber chemicals in Canada in violation of federal Canadian law. Chemtura was fined a fine of CDN$9 million by the Canadian federal court in Ottawa. The remaining payment of approximately CDN$2.8 million (approx. US$2.5 million) was due and payable on May 28, 2009. Under the U.S. settlement, Chemtura will pay the United States $10 million in 4 installments of $2.5 million each, in full satisfaction of the U.S. antitrust fine. Under the Canadian settlement, Chemtura will pay Canada CDN$1.8 million (approx. US$1.6 million) in 4 equal installments of CDN$450,000 in full satisfaction of the final installment of the Canadian antitrust fine. The four installments under both the U.S. and Canadian settlements are due June 30, 2009, December 31, 2009, June 30, 2010, and December 31, 2010. The U.S. and Canadian settlements are subject to the approval of the U.S. Bankruptcy Court for the Southern District of New York. Objections are due not later than 11:30 a.m. (ET) on June 30, 2009 The U.S. Settlement also provides that: -- If Chemtura confirms a plan of reorganization under Chapter 11 of the Bankruptcy Code that becomes effective and provides that general unsecured creditors of Chemtura will receive more than 62.5% of their allowed claims, then Chemtura will pay to the United States an additional payment equal to the amount to which the United States would have been entitled under said Chapter 11 plan, less any payments already made; and -- If Chemtura's Chapter 11 case converts to a Chapter 7 case, then the United States will be entitled to assert a claim for the original amount of the final installment of $16 million less any payments already made. The Canadian settlement also provides that, if the unsecured creditors of Chemtura receive a greater proportion of their claims than 62.5% pursuant to a confirmed Chapter 11 plan that becomes effective in Chemtura's Chapter 11 case, then Canada will receive payments proportionally varied to reflect the overall enhanced portion of the original outstanding amount of CDN$2.88 million. About Chemtura Corp Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D. N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Dealers May Advertise at iBidMotors for Free ---------------------------------------------------------- IBidMotors said that during the General Motors and Chrysler bankruptcy it will offer all GM and Chrysler dealers nationwide the ability to advertise their entire new and pre-owned inventory on the iBidMotors online auction site at no charge for 60 days during the bankruptcy and subsequent reorganization. "iBidMotors' commitment to GM and Chrysler during these turbulent times is unprecedented," said Bob Schiff, iBidMotors Founder and CEO. "Over 8,000 car dealers are affected by this bankruptcy, and by offering to advertise their inventory online for free, iBidMotors will help viable dealerships continue to thrive and contribute to saving jobs in communities across the country," said Mr. Schiff. iBidMotors has hired additional staff to accommodate the influx of new clients that they expect will take advantage of this extraordinary offer. Dealers have until June 30 to sign up for this program. Over the past two years the iBidMotors online auction has generated over $100 million in retail automotive sales, making them one of the fastest growing automotive sites and the platform of choice for some of the largest dealer groups in the country. Consumers who are shopping for autos can visit iBidMotors.com and search or browse through the thousands of vehicles on the site and bid, make an offer or just use the "Buy it Now" option to finalize the transaction with the local car dealer. Headquartered in Basking Ridge, New Jersey, iBidMotors -- http://ibidmotors.com/-- is a market and technology leader in online auto auction applications. The company's portfolio of applications has revolutionized the ways that auto dealers can more effectively drive revenue. iBidMotors enables auto dealers to seamlessly download their entire inventory into the iBidMotors auction site for a fixed monthly fee to provide dealers with one of the most cost effective ways to sell cars. iBidMotors also offers a private label product targeted to dealer groups. Many former NFL players and NFL Hall of Famers are part of the iBidMotors team. CHRYSLER LLC: Defends Dealer Cuts Before Congress ------------------------------------------------- Josh Mitchell at The Wall Street Journal reports that General Motors Corp. and Chrysler LLC executives defended on Friday their plans to close thousands of dealers before the Congress. According to WSJ, lawmakers criticized GM and Chrysler for treating retailers unfairly, many of them vowing to push legislation that would require automakers to honor state franchise agreements. GM Chief Executive Frederick Henderson explained that a large network forces dealers of the same brand to compete, often forcing them to cut prices, which would then lower dealer profits and erode resale value, WSJ relates. Closing almost 2,600 of GM's 6,000 U.S. dealerships by 2010 will save the Company some $2.5 billion annually, much of it associated with direct payments to dealers but also from expenses for local ads, training and vehicle service, WSJ states, citing Mr. Henderson. According to WSJ, Chrysler Deputy CEO Jim Press said that the average Chrysler dealer loses money and that "without profits, dealers can't invest in people, training and facilities." 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) CRESCENT RESOURCES: Can Borrow $35MM Portion of DIP Facility ------------------------------------------------------------ Crescent Resources LLC received approval from the U.S. Bankruptcy Court for the Western District of Texas for key "first day" motions designed to give the company the resources and flexibility to continue to manage its ongoing operations without interruption. The Court approved motions that, among other things: -- permit Crescent to pay employee wages, employee benefits and reimbursable expenses; -- grant immediate access, on an interim basis, to $35 million of the company's $110 million Debtor-in-Possession financing facility; -- allow Crescent to honor the terms of key customer agreements; and -- authorize Crescent to use its existing cash management systems and give the company access to its cash to fund ongoing operations. The first day orders, approved by the Honorable Craig A. Gargotta, Austin Division, will help ensure that Crescent Resources' continuing operations proceed without interruption. "Receiving approval of our first-day motions so quickly sets Crescent Resources on a very strong footing as we move towards restructuring the company," said Andrew Hede, chief executive officer and chief restructuring officer of Crescent Resources. "Our first day motions will enable the company to continue normal operations. We appreciate the support of our employees, customers, vendors and partners, and are pleased that we can honor key agreements with them while we create the right capital structure for the company." About Crescent Resources Crescent Resources, LLC -- http://www.crescent-resources.com/-- is a land management and real estate development company with interests in 10 states in the southeastern and southwestern United States. Based in Charlotte, North Carolina, Crescent Resources is a joint venture between Duke Energy and the Morgan Stanley Real Estate Funds. Established in 1969, Crescent creates mixed-use developments, award-winning country club communities, single- family neighborhoods, apartment and condominium communities, Class A office space, business and industrial parks and shopping centers. Crescent Resources and 120 affiliates filed separate chapter 11 petitions on June 10, 2009 (Bankr. W.D. Tex. Case No. 09-11507). The Hon. Craig A. Gargotta presides over the case. Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., serves as the Debtors' counsel. The Debtors disclosed more than $1 billion in both assets and debts when they filed for bankruptcy. CONSTELLATION ENERGY: Moody's Reviews Ba1 Sub. Debentures Rating ---------------------------------------------------------------- Moody's Investors Service said that the Maryland Public Service Commission's decision to further review the proposed transaction between Constellation Energy Group, Inc. (Baa3 senior unsecured, under review for possible downgrade) and Electricite de France (EDF: Aa3 senior unsecured, stable outlook) has no immediate rating ramifications for CEG. CEG's long and short-term ratings remain under review for possible downgrade where they were originally placed on August 20, 2008. Specifically, the MPSC ruled that the proposed transaction, whereby CEG would sell approximately 50% of its nuclear business to EDF, would provide EDF with substantial influence over the policies and actions of Baltimore Gas and Electric Company (BGE: Baa2 senior unsecured, stable outlook). As a result, CEG and EDF must obtain its approval before closing the transaction. BGE is a wholly-owned utility subsidiary of CEG. "The conclusion by the MPSC was not unexpected as it concurred with the recommendation of the Staff of the Public Service Commission filed on May 18," said Moody's Vice President Scott Solomon. "The state regulators involvement, however, creates an additional degree of uncertainty surrounding the parties' ability to consummate the transaction in its current form," continued Solomon. The completion of the proposed EDF transaction would result in a considerable cash payment to CEG that would provide the company with the ability to accelerate the restructuring of its business model and balance sheet, further replenish its liquidity position, and increase the probability of maintaining an investment grade rating. Failure to close the transaction would trigger a conversion of EDF's $1 billion preferred investment into an incremental CEG debt obligation due June 2010 and increase the probability of a downgrade. Neither CEG nor EDF were of the opinion when they entered into the proposed transaction in December 2008, that the MPSC's approval of the transaction would be a requirement. CEG has appealed MPSC's decision. The review for possible downgrade remains focused on CEG's ability to secure the regulatory approvals necessary to close the transaction with EDF, execute on the continuing restructuring of its commodity trading business and improve its liquidity profile. Furthermore, with the recent divestiture of its coal and downstream natural gas operations Moody's expect management to further clarify its on-going strategy as it relates to CEG's remaining commodity and energy supply businesses in order to properly ascertain the company's business risk profile. The remaining regulatory approval outstanding for the proposed transaction is from the Nuclear Regulatory Commission. Constellation Energy Group ratings continued under review for possible downgrade include: -- Senior unsecured debt and senior unsecured bank credit facilities, rated Baa3; -- Series A Junior Subordinated Debentures, rated Ba1; -- Short-term rating for commercial paper, rated Prime-3. Moody's last rating action on CEG occurred on December 17, 2008, when the senior unsecured rating for CEG was downgraded to Baa3 from Baa2 and remained under review for possible downgrade. CEG's ratings were assigned by evaluating factors believed to be relevant to its credit profile, such as i) the business risk and competitive position of CEG versus others within its industry or sector, ii) the capital structure and financial risk of CEG, iii) the projected performance of CEG over the near to intermediate term, and iv) CEG's history of achieving consistent operating performance and meeting financial plan goals. These attributes were compared against other issuers both within and outside of CEG's core peer group and CEG's ratings are believed to be comparable to ratings assigned to other issuers of similar credit risk. Constellation Energy Group, Inc., is a diversified energy company, whose businesses largely include merchant energy generation and trading, along with Baltimore Gas & Electric Company, a regulated electric and gas utility in central Maryland. The company is headquartered in Baltimore, Maryland. COOPER COS: S&P Gives Stable Outlook on Expected Revenue Growth --------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Cooper Cos. Inc. to stable from negative. "The rating on Pleasanton, California-based Cooper Cos. Inc. reflects its weak business risk profile, given its dependence on soft contact lenses and the need to compete against much larger players," said Standard & Poor's credit analyst Cheryl Richer. Cooper is exposed to technology changes, as evidenced by late entry into silicone hydrogel lens manufacturing; the company continues to roll out additional modalities of silicone hydrogel lenses. These risks outweigh global industry growth in contact lens sales, despite the recession, and modest revenue diversification provided by Cooper Surgical, which manufactures women's healthcare products used primarily by obstetricians and gynecologists (16% of total sales). Cooper Co. has a No. 3 position (roughly 16% global market share) in the $5.8 billion soft contact lens industry. Its dependence on the contact lens product line, Cooper Vision, exposes it to challenges from dominant industry players, such as the Vistakon division of Johnson & Johnson, which has a global market share of more than 40%. Other big competitors are CIBA Vision/Wesley Jessen, owned by Novartis AG, and Bausch & Lomb Inc., which has a market share nearly as large as Cooper's. These rivals have much greater financial resources that could be applied to marketing and/or research and development. Cooper manufactures and markets a variety of soft contact lenses, including value-added specialty products, such as toric lenses (to correct astigmatism), as well as more commodity-like spherical contact lenses. While the company already markets silicone hydrogel spheres, Avaira and Biofinity, it is only now launching its Biofinity toric line, which has handicapped the company over the past few years. Sales of (nonSiH) ProClear, particularly ProClear single use which is particularly strong in Asian markets, has helped to sustain CVI performance. CVI sales increased 4% (in constant currency) in both the first and second quarters of fiscal 2009, minimally ahead of global market growth. CSI sales increased by 3% in the quarter, weaker than previous years' performance, likely reflecting the recession's impact on physician office visits. Still, CSI's strategy to market products directly to hospitals increased hospital sales by 18% over the 2008 period, and provided some end-user diversity. Hospital sales are now 33% of CSI's total revenues. CSI's gross profit margin was 61% for the first half of 2009, compared with CVI's gross margin of 56%. Excluding corporate overhead, CSI contributed 23% of operating income for this period. Debt to EBITDA (including operating leases) was 3.4x for the 12 months ended April 30, 2009, and 3.1x if annualized for the quarter. Foreign-exchange hedges are being used to offset the negative impact of a strengthening dollar; 55% of sales are made outside the U.S. While Cooper's liquidity remains slim for the rating, the revenue trend remains positive, and the company has begun to generate free cash flow. It had $5 million of cash as of April 31, 2009, $151 million of availability on its $650 million (unrated) revolving credit facility, and about $23 million of availability on international overdraft facilities. Despite heavy capital spending over the past few quarters, S&P now expect capital expenditures to decline to under $120 million for 2009, Cooper remains in compliance with its bank loan covenants at the end of the second quarter of 2009. The cushion remains at 19% on its debt leverage covenant, and covenants do not tighten until after Nov. 1, 2009. Cooper has no debt maturities before 2012. Free operating cash flow was $24 million for the second quarter of fiscal 2009, and $51 million for the 12 months ended April 30, 2009. The company's cash flow generation benefits from a low, effective tax rate of about 15%. -- The contact lens market has proven to be somewhat recession- resistant, and several quarters of EBITDA improvement have provided additional headroom for the company to comply with its bank loan covenants. -- S&P is revising its outlook on Cooper Cos. to stable from negative. -- S&P is affirming its 'BB-' issue rating and '3' recovery rating on the company's senior notes. -- The stable outlook reflects expectations that and Cooper Surgical and Cooper Vision revenues will continue to grow, and that Cooper will generate free cash flow and continue to reduce debt. CRESCENT RESOURCES: Chapter 11 Filing Cues S&P to Junk Rating ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior secured bank loan ratings on Crescent Resources LLC to 'D' from 'CCC-'. The ratings were on CreditWatch negative before the downgrades. S&P's recovery ratings remain unchanged pending S&P's receipt of further information from the bankruptcy proceedings. "The downgrades resulted from Crescent's June 10, 2009, filing for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court in the Western District of Texas, Austin Division," said Standard & Poor's credit analyst George Skoufis. "Crescent has obtained a $110 million debtor-in-possession financing facility from a group of existing lenders, which the company believes will provide sufficient funds to continue to operate its business." S&P believes Crescent's heavy debt burden, the severity of the current recession, and the difficult credit markets have impeded the company's ability to monetize its real estate assets. S&P believes these conditions also strained cash flow and liquidity, thereby hurting the company's ability to service its large debt load and remain in compliance with its debt covenants. Crescent had approximately $1.6 billion of debt as of Sept. 30, 2008, including rated senior secured debt consisting of a $1.225 billion term loan and a $300 million revolving credit facility. The company had a $2.6 billion asset base (book value), consisting primarily of for-sale residential, multifamily rental, commercial, and land management properties. DANA CORP: Bank Debt Trades at 44% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which Dana Corp. is a borrower traded in the secondary market at 55.20 cents-on-the- dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 4.70 percentage points from the previous week, the Journal relates. The loan matures January 31, 2015. The Company pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating and S&P's B rating. Meanwhile, participations in a syndicated loan under which Lear Corporation is a borrower traded in the secondary market at 72.00 cents-on-the-dollar during the week ended June 12, 2009, an increase of 6.82 percentage points from the previous week. The loan matures March 29, 2012. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated by both Moody's and S&P. Participations in a syndicated loan under which Visteon Corp. is a borrower traded in the secondary market at 38.69 cents-on-the- dollar during the week ended June 12, 2009, an increase of 2.90 percentage points from the previous week. The loan matures May 30, 2013. The Company pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt. S&P has assigned a default rating. Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 80.06 cents-on-the-dollar during the week ended June 12, 2009, an increase of 2.10 percentage points from the previous week. The loan matures April 1, 2012. The Company pays 125 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and S&P's CCC+ rating. About Dana Corp. Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. Dana and its affiliates filed for chapter 11 protection March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP, served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC, served as counsel to the Official Committee of Non- Union Retirees. The Debtors filed their Joint Plan of Reorganization on August 31, 2007. On October 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on December 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of January 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on Jan. 15, 2009, Standard & Poor's Ratings Services lowered its ratings on Dana Holding Corp., including the corporate credit rating, which was lowered to 'B' from 'B+'. The outlook is negative. "The downgrade reflects our view that very weak market conditions in most of its business segments in 2009 will hinder the company's post-bankruptcy restructuring efforts," said Standard & Poor's credit analyst Nancy Messer. DANIEL BACANER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Joint Debtors: Daniel F. Bacaner Lisa T. Bacaner 5649 Shady Glen Memphis, TN 38120 Bankruptcy Case No.: 09-26292 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Debtors' Counsel: Eugene G. Douglass, Esq. 2820 Summer Oaks Drive Bartlett, TN 38134 Tel: (901) 388-5804 Fax: (901) 372-8264 Email: egdouglass@bellsouth.net Total Assets: $2,341,803 Total Debts: $2,298,450 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/tnwb09-26292.pdf The petition was signed by the Joint Debtors. DELPHI FINANCIAL: Moody's Affirms 'Ba1' Preferred Shelf Rating -------------------------------------------------------------- Moody's Investors Service has affirmed the ratings of Delphi Financial Group, Inc. (senior debt at Baa3) and its operating companies: Reliance Standard Life Insurance Company (Reliance Standard, insurance finance strength rating at A3) and Safety National Casualty Corporation (Safety National, IFS rating at A3). The outlook for the companies was changed to negative from stable. Moody's commented that the rating affirmation is based primarily on the company's solid, stable operating earnings and the established market position of its wholly-owned primary life insurance company, Reliance Standard, in the group employee benefits market, as well as Delphi's ownership of Safety National, an excess worker's compensation insurer. Reliance Standard is well positioned in the small to medium size case group employee benefits market and its solid underwriting discipline is demonstrated by its consistently strong combined ratio for this business. According to Moody's Senior Vice President Scott Robinson, "The negative outlook largely reflects Delphi's reliance on a bank facility for financing needs, combined with potential impairments under a severe downside scenario -- especially in the non-agency RMBS portfolio." While the company's core operations are performing well, in a severe downside scenario -- which is not Moody's expected case -- the rating agency believes that Delphi would need to contribute capital to its life subsidiary in order to manage financial covenants associated with the bank facility. Somewhat mitigating this risk, as of the end of the first quarter 2009, the company had $128 million of unused capacity available under the $350 million credit facility, which matures in October of 2011. According to Moody's, a downgrade of Delphi Financial ratings could occur if: 1) investment losses were anticipated to exceed $200 million in 2009; 2) consolidated NAIC RBC fell below 250% at Reliance Standard or 170% at Safety National; or 3) consolidated financial leverage of Delphi rose above 30%. Conversely, the outlook could be changed to stable if: 1) investment losses are anticipated to be less than $100 million for 2009, 2) financial leverage is maintained below 30%, and 3) the bank debt is refinanced. These ratings were affirmed with a negative outlook: * Delphi Financial Group, Inc. -- senior unsecured debt at Baa3, junior subordinate debt at Ba1; * Reliance Standard Life Insurance Company -- insurance financial strength rating at A3; * Safety National Casualty Corp. -- insurance financial strength rating at A3; * Reliance Standard Life Global Funding -- senior secured rating at A3; * Delphi Funding L.L.C. -- preferred shelf at (P)Ba1 The last rating action on Delphi Financial was taken on August 16, 2007 when Moody's assigned an A3 insurance financial strength rating to Safety National. Delphi Financial Group, Inc., has its operations headquartered in New York, New York. At December 31, 2008, it held $6.0 billion in assets; shareholder's equity was $821 million as of that date. Delphi Financial's net gain was $ $37 million for the year ending December 31, 2008. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to punctually pay senior policyholder claims and obligations. DEX MEDIA EAST: Bank Debt Trades at 22% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media East LLC is a borrower traded in the secondary market at 77.85 cents-on- the-dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.85 percentage points from the previous week, the Journal relates. The loan matures November 8, 2009. The Company pays 200 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt. S&P assigned a default rating on the bank loan. Dex Media East LLC is a subsidiary of Dex Media East, Inc., and an indirect wholly owned subsidiary of Dex Media, which is a direct wholly owned subsidiary of R.H. Donnelley Corporation. Dex Media East is the exclusive publisher of the "official" yellow pages and white pages directories for Qwest Corporation, the local exchange carrier of Qwest Communications International Inc., in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota -- the Dex East States. Together with its parent, RHD, Dex Media is one of the nation's largest Yellow Pages and online local commercial search companies, based on revenue. During 2006, Dex Media East's print and online solutions helped more than 200,000 national and local businesses in seven states reach consumers who were actively seeking to purchase products and services. During 2006, Dex Media East published and distributed more than 23 million print directories. Two of its largest markets are Albuquerque and Denver. 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. R.H. Donnelley and 19 of its affiliates, including Dex Media East LLC and Dex Media East Inc., 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. 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. 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) DOCTORS HOSPITAL: Securitization Trust Was "Initial Transferee" --------------------------------------------------------------- WestLaw reports that a bankruptcy court did not clearly err in determining that a trust for the holders of asset securitization corporation commercial mortgage pass-through certificates was the initial transferee of lease payments from a Chapter 11 debtor, for purpose of determining the trust's liability upon avoidance of these lease payments, to extent that they exceeded the fair rental value of the leased property, as fraudulent transfers. The trust had both legal title to the funds and legal dominion thereof, to the extent that it could use the funds to pay down the lessor's debt on the loan, a use that benefited the trust as the lender's successor. A party need not have carte blanche authority to use fraudulently transferred funds however it sees fit in order to qualify as an "initial transferee" under 11 U.S.C. Sec. 550(a)(1). Lasalle Nat. Bank Ass'n v. Paloian, --- B.R. ----, 2009 WL 721510 (N.D. Ill.). Doctors Hospital of Hyde Park, Inc., filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 00-11520) on April 17, 2000. On April 15, 2002, Doctors Hospital filed a 28-count complaint (Bankr. N.D. Ill. Adv. Pro. No. 02-00363) against a number of individuals and entities. Counts VIII, IX, and X of the complaint assert claims against LaSalle Bank National Association, f/k/a LaSalle National Bank, as trustee for certain asset certificateholders of Asset Securitization Corporation Commercial Mortgage Pass-Through Certificates, Series 1997, D5. On April 22, 2004, Gus A. Paloian, Esq., at Seyfarth Shaw LLP in Chicago, was appointed the Chapter 11 trustee for Doctors Hospital. In its claims against the Bank, Doctors Hospital sought: (A) to void as fraudulent transfers a guaranty and related security agreements that Doctors Hospital made in connection with a loan from the Bank's predecessor, Nomura Asset Capital Corporation, to Doctors Hospital's landlord; and (B) to void a lease held by the Bank as Nomura's assignee or to recover as fraudulent transfers payments of rent that Doctors Hospital had made to the Bank in excess of the property's fair market rental value. Following a bench trial, the Bankruptcy Court, 360 B.R. 787, entered a judgment in favor of the Chapter 11 trustee, and the parties moved to alter or amend the judgment. The Honorable Jack B. Schmetterer, 373 B.R. 53, denied those motions, and both parties appealed. In the District Court, the Honorable Rebecca R. Pallmeyer affirmed Judge Schmetterer's decisions, holding that: (1) the bankruptcy court did not clearly err in determining that the trust for holders of asset securitization corporation commercial mortgage pass-through certificates was the initial transferee of lease payments, for purpose of determining the trust's liability upon avoidance of payments as constructively fraudulent; (2) the bankruptcy court did not clearly err in determining that an affiliated corporation identified as the borrower on a prepetition loan collateralized by the debtor's receivables functioned as a special purpose entity; (3) an affiliated corporation was not an alter ego or instrumentality of the debtor; (4) the bankruptcy court did not clearly err in determining that, following a restructuring of cash flow whereby proceeds of a loan to the special purpose corporation were no longer available to the debtor until after some funds were deducted from a cash collateral account into which they were deposited and used by the trust to make rental payments on the debtor's lease, these rental payments no longer involved any "interest of the debtor in property"; (5) the bankruptcy court did not clearly err in adopting opinions of the Chapter 11 debtor's experts and in concluding, for fraudulent transfer avoidance purposes, that the debtor was insolvent on and after date indicated by the experts; (6) the debtor's challenged prepetition payments were "rent," which the debtor could avoid as constructively fraudulent transfers to extent that they exceeded fair rental value of leased property; and (7) federal common law, rather than Illinois law, governs any award of prejudgment interest in any strong-arm proceeding to avoid transfers as constructively fraudulent under Illinois law; and (8) the bankruptcy court did not abuse its discretion in awarding prejudgment interest from the date of the transfers, rather than from date of filing of the debtor's avoidance complaint. Gus A. Paloian, Esq., the Chapter 11 Trustee of Doctors Hospital of Hyde Park, Inc., is represented by: Jeffrey L. Gansberg, Esq. John W. Costello, Esq. John E. Frey, Esq. Scott A. Semenek, Esq. Peter N. Moore, Esq. Wildman, Harrold, Allen & Dixon, LLP 225 West Wacker Drive, Suite 3000 Chicago, IL 60606 Telephone (312) 201-2000 and LaSalle National Bank and other Defendants are represented by: Adam P. Silverman, Esq. Howard L. Adelman, Esq. Adelman, Gettleman, Merens, Berish & Carter, Ltd. 53 West Jackson Boulevard, Suite 1050 Chicago, IL 60604-3701 Telephone (312) 435-1050 - and - James M. Witz, Esq. Freeborn & Peters LLP 311 South Wacker Drive, Suite 3000 Chicago, IL 60606 Telephone (312) 360-6000 - and - Michael N. Ripani, Esq. Chuhak & Tecson PC 30 South Wacker Drive, Suite 2600 Chicago, IL 60606-7512 Telephone (312) 444-9300 - and - Robert D. Nachman, Esq. Dykema Gossett PLLC 10 South Wacker Drive, Suite 2300 Chicago, IL 60606 Telephone (312) 876-1700 - and - Jane B. McCullough, Esq. Kimberly M. Deshano, Esq. Nancy A. Peterman, Esq. Greenberg Traurig, LLP 77 West Wacker Drive, Suite 3100 Chicago, IL 60601 Telephone (312) 456-8400 - and - David T.B. Audley, Esq. Michael T. Benz, Esq. Richard A. Wohlleber, Esq. Chapman & Cutler 111 West Monroe Street Chicago, IL 60603-4080 Telephone (312) 845-3000 - and - Michael D. Warner, Esq. Warner, Stevens & Doby LLP 301 Commerce St. Fort Worth, TX 76102 Telephone (817) 810-5250 E*TRADE FINANCIAL: Board Selects Kenneth Griffin as Citadel CEO --------------------------------------------------------------- The Board of Directors of E*TRADE Financial Corporation expanded the number of members of the Board from eleven to twelve, expanded the number of Class II directors from three to four and appointed Kenneth C. Griffin, President and Chief Executive Officer of Citadel Investment Group, L.L.C., as a Director. Mr. Griffin will be a Class II member of the Board and will stand for election by the stockholders at the next annual meeting. Mr. Griffin was appointed pursuant to the right of Wingate Capital Ltd., an affiliate of Citadel, under the Master Investment and Securities Purchase Agreement dated November 29, 2007, between Wingate Capital Ltd. and E*TRADE. Also as of June 8, 2009, the Board appointed Mr. Griffin to serve as a member of its Finance and Risk Oversight Committee. Citadel is the largest holder of E*TRADE's common stock and, as of May 13, 2009, owned approximately 89.1 million shares. In addition, although Citadel is not required to disclose the amount of E*TRADE's outstanding senior debt securities it owns, E*TRADE believes Citadel owns in the aggregate more than 70% of E*TRADE's outstanding senior debt securities. E*TRADE issued common stock and 12.5% Springing Lien Notes due 2017 to Citadel pursuant to the Purchase Agreement in November 2007. As of March 31, 2009, the principal amount outstanding of the Springing Lien Notes was $2,057,000,000. During the second quarter of 2008, E*TRADE elected to make its first interest payment of approximately $121 million on the Springing Lien Notes in cash. During the fourth quarter of 2008 and second quarter of 2009, E*TRADE elected to make the second and third interest payments of approximately $121 million and $129 million respectively in the form of additional Springing Lien Notes. The Board approved the payment of a $25,000 cash annual retainer to Mr. Griffin under the terms of E*TRADE's non-employee director compensation policy as in effect from time to time, as described in E*TRADE's 2009 proxy statement. About E*TRADE FINANCIAL The E*TRADE FINANCIAL family of companies provides financial services including trading, investing and related banking products and services to retail investors. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. * * * According to the Troubled Company Reporter on May 25, 2009, Standard & Poor's Ratings Services said it lowered its ratings, including the long-term counterparty credit and senior debt ratings, on E*TRADE Financial Corp. to 'CCC-' from 'B'. S&P also lowered S&P's counterparty credit and certificate of deposit ratings on E*TRADE Bank to 'CCC+' from 'BB-'. S&P has revised the CreditWatch to negative from developing, where the ratings were placed on December 22, 2008. As reported by the Troubled Company Reporter on May 18, 2009, Moody's Investors Service downgraded to Caa3 from B2 the ratings on the senior unsecured bonds of E*TRADE. Moody's also lowered to B3 from B2 E*TRADE's long-term issuer rating. All long-term ratings including those of E*TRADE's thrift subsidiary, E*TRADE Bank (BFSR at D-, Deposit Rating at Ba3), remain on review for possible downgrade, originally commenced on April 29, 2009. E*TRADE Bank's short-term rating remains Not-Prime. The downgrade of the bond ratings to Caa3 reflects the increased probability of material credit losses for E*TRADE's senior bondholders as a result of the company's stated strategy to employ debt-for-equity exchanges as the primary tool in reducing leverage and improving the company's precarious financial condition. E*TRADE said in a regulatory filing that it "anticipate[d] that the primary method for reducing [its] debt will involve debt-for- equity exchanges." EDGAR MILES: Case Summary & 13 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Edgar Miles A. Yvonne Miles 1209 Cerrito Bonito El Paso, TX 79912 Bankruptcy Case No.: 09-31255 Chapter 11 Petition Date: June 11, 2009 Court: Western District of Texas (El Paso) Debtor's Counsel: Corey W. Haugland, Esq. chaugland@jghpc.com James & Haugland P.C. P.O. Box 1770 El Paso, TX 79949-1770 Tel: (915) 532-3911 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Compass Bank other $5,423,547 PO Box 4943 Houston, TX 77210 Miles El Paso Investments Ltd. Other $2,500,000 820 Rosinante El Paso, TX 79922 Pete Leininger other $1,180,000 12000 Heubner, Suite 103 San Antonio, TX 78230 National Enterprise System credit card $94,714 El Paso County Tax taxes $47,366 Advanta Bank Corp. credit card $24,627 Bank of America credit card $23,607 Jeff Alley fees $20,064 GECU purchase money $12,696 Capital Managements Svcs. LP credit card $7,425 Lincold County Treasurer taxes $5,578 Citi Cards credit card $1,267 Lauterbach Borschow & Co. other $1,165 EDRA BLIXSETH: Accused of Fraud by Ex-Husband --------------------------------------------- Former Yellowstone Mountain Club LLC head Tim Blixseth said in court documents that ex-wife and bankrupt Edra Blixseth repeatedly committed financial fraud. Matthew Brown at The Associated Press relates that while Ms. Blixseth blamed her former husband for driving the Yellowstone Club into bankruptcy and for spurring her own bankruptcy, Mr. Blixseth claimed that his ex-wife tried to ruin him by scuttling a bid to sell the Yellowstone Club in 2008 for about $470 million, which is more than four times the $115 million that CrossHarbor Capital Partners is now paying to acquire the Company. Ms. Blixseth had "engaged in a systematic campaign riddled with fraud, deception and illegal conduct with the singular goal of wrestling control of the (Yellowstone Club) and ruining me in all respects, at whatever the costs," Mr. Blixseth said in court documents. According to The AP, Ms. Blixseth had asked a federal judge in Butte for time to reorganize her financial affairs, to avoid a forced sale of her assets. The AP relates that Mr. Blixseth filed a motion to block that request. The AP states that Ms. Blixseth said that as part of reorganizing her affairs, she may try to reopen the divorce case, which could potentially shift some of her debts onto Mr. Blixseth. The AP reports that a hearing on the case will be held on June 16. Coachella Valley-based Edra D. Blixseth owns exclusive resorts in Rancho Mirage and near Yellowstone Park in Montana. She owns Porcupine Creek Golf Club in Rancho Mirage and the Yellowstone Club in Montana. Ms. Blixseth filed for Chapter 11 bankruptcy protection on March 26, 2009 (Bankr. D. Mont. Case No. 09-60452). Gary S. Deschenes, Esq., at Deschenes & Sullivan Law Offices assists Ms. Blixseth in her restructuring efforts. The Debtor listed $100 million to $500 million in assets and $500 million to $1 billion in debts. EJ'S SHOES: To Drop Under-Performing Shoe Stores ------------------------------------------------ EJ's Shoes, Inc., which has filed for Chapter 11 bankruptcy protection, said it intends to continue operating in "strongest retail locations while it renegotiates or drops leases in several others." EJ Shoes operates in Missouri, California, Texas, and Arizona. According to St. Louis Business Journal, EJ's Shoes will continue to operate its two St. Louis stores, and will keep its Palm Desert, California store. Angela Mueller at St. Louis Business Journal relates that EJ's Shoes would close its Texas and Arizona stories if it fails to renegotiate cheaper rents with its landlords. Business Journal quoted EJ's Shoes as saying, "In Houston, business at several stores never fully rebounded after the hurricanes hit shutting down all stores for 10 days and in Arizona, particularly the Phoenix location has been hurt by diminishing numbers of snowbird shoppers who did not return this winter." According to the report, EJ's shoes already closed its Costa Mesa, California store. Saint Louis, Missouri-based EJ's Shoes, Inc., fka Famous Brand Shoes, is a local shoe retailer founded in St. Louis in 1972 by Edward "E.J." Nusrala and his family. Mr. Nusrala and his family still are the majority shareholders in the company. It operates 15 discount shoe stores across the country under the EJ's Designer Shoe Outlet, E&J's Designer Shoe Outlet and Shoe Cents names. The Company filed for Chapter 11 bankruptcy protection on June 5, 2009 (Bankr. E.D. Mo. Case No. 09-45350). Nicholas A. Franke, Esq., at Spencer Fane Britt Browne LLP assists the Company in its restructuring efforts. The Company listed $500,001 to $1,000,000 in assets and $10,000,001 to $50,000,000 in debts. ENERGY HOLDINGS: Fitch Affirms 'BB' Senior Unsecured Debt Rating ---------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings and individual security ratings of Public Service Enterprise Group Inc., and subsidiaries PSEG Power LLC, Public Service Electric and Gas Co., and PSEG Energy Holdings LLC. The Outlook for each entity is Stable. In addition, Fitch has withdrawn the Trust preferred securities ratings of PSEG and Enterprise Capital Trust I, II, and III since these securities have been retired. Fitch has affirmed these: PSEG -- IDR at 'BBB+'; -- Short-term IDR at 'F2'; -- Commercial paper at 'F2'; -- Senior unsecured debt at 'BBB+'. PSEG Power -- IDR at 'BBB+'; -- Senior unsecured debt at 'BBB+' PSE&G -- Issuer Default Rating at 'BBB+' -- First Mortgage Bonds at 'A'; -- Preferred stock at 'BBB+'; -- Short Term IDR at 'F2' -- Commercial paper at 'F2'. Energy Holdings -- IDR at 'BB+'; -- Senior unsecured debt at 'BB'. PSEG's ratings reflect the strong cash flows and financial stability of its two major subsidiaries, PSEG Power, a wholesale power generator, and PSE&G, a regulated utility, along with a moderate level of parent and consolidated debt. The ratings also consider the potential cost of resolving the tax liability related to the leveraged lease portfolio of subsidiary PSEG Energy Holdings. As of March 31, 2009, the tax exposure is $1.2 billion, excluding interest and penalties. PSEG has already deposited $180 million of that amount with the IRS and additional payments are likely in 2009. Absent a settlement, PSEG may pursue litigation. Fitch believes PSEG has the wherewithal to fund the potential tax payments with a combination of available cash, asset sales and debt and to maintain its current credit quality. As of March 31, 2009, the ratio of debt/EBITDA was 2.3 times (x) and will remain below 3.0x even under a stress scenario where PSEG funds the entire tax liability with debt. PSEG Power's ratings reflect its strong financial profile, including moderate leverage, the favorable competitive position of its low-cost nuclear and coal generating fleet and the value of operating in markets where heat rate curves are relatively high and supplies are constrained. The Stable Outlook is supported by a regulatory scheme in New Jersey that provides a rolling three- year hedge for a significant portion of PSEG Power's baseload generating assets, and the relative strength of the electricity markets in which PSEG Power owns generating assets. In addition, forward sales of energy and capacity should mitigate the negative cash flow impact from the decline in power prices experienced since August 2008. The pricing of PSEG Power's capacity has been fixed through mid-2012, with a substantial portion of energy contracted through 2010 with lesser amounts in 2011. The primary credit concerns are the financial impact of an extended coal or nuclear plant outage and potentially stricter environmental regulations. The ratings of PSE&G reflect a credit profile that is strong relative to its peers and the relative predictability of its earnings and cash flows due to the absence of any commodity price exposure. The recent approval by the New Jersey Board of Public Utilities of approximately $700 million of new infrastructure projects together with regulatory mechanisms to recover the capital costs, including a 10% return on equity, should further improve cash flow and net margins. In addition, PSE&G is investing approximately $750 million to construct its portion of the Susquehanna to Roseland transmission line that will benefit from a FERC approved incentive ROE of 12.93% and 100% Construction Work in Progress in rate base. The ratings of Energy Holdings reflect the risk of its merchant generating business, moderate debt levels and manageable capital expenditures. The ratings and Stable Outlook also assume that resolution of the IRS tax liability, related to its leverage lease portfolio, will be funded with a combination of available cash and proceeds from asset sales without the addition of substantial leverage. The company has reserved for the liability, but the timing of a resolution is uncertain. FENWAL INC: S&P Affirms Corporate Credit Rating at 'B' ------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed all of its ratings on Lake Zurich, Illinois-based Fenwal Inc., including the 'B' corporate credit rating, and removed them from CreditWatch, where they were placed on Feb. 6, 2009. The outlook is negative. The rating affirmation reflects the June 2, 2009, ruling regarding litigation brought against Fenwal Inc. by Haemonetics Corp. alleging patent infringement. The June 2, 2009, ruling places an injunction against Fenwal for the sale of the disposable ALYX kits, effective Dec. 1, 2010, and also provided that Fenwal pay Haemonetics a 10% royalty on sales of the disposable kits for the period from Jan. 30, 2009, to Dec. 1, 2010. Since S&P expects Fenwal to begin producing its new, alternative piece later in the year, S&P does not believe that Fenwal will be affected by the injunction, although it will have to pay royalties until the new product becomes available. Fenwal is arranging a surety bond to appeal the $15.7 million in damages (with prejudgment interest and related fees, the final total approximates $16.5 million) that it was previously ordered to pay Haemonetics. The low speculative-grade ratings on Fenwal reflect the risks tied to its narrow business, tight liquidity and thin credit protection. Since its spin-off from Baxter International Inc. in the March 2007 purchase by Texas Pacific Group and Maverick Capital, Fenwal has focused on improving the efficiency of its operations in the whole blood and blood products collection field. At the same time, it has attempted to convert its relatively loyal client base to its ALYX automated red blood cell collection product, from an older manual RBC product, while also capturing new customers. Automated sales continue to take market share from manual, as customers demand the benefits of higher blood and component yield that automated collection offers; indeed, automated RBC collection sales grew 15% in 2008 compared with an 8% growth in manual. As a result, it is important for Fenwal to realize gains in automated RBC to offset the expected declines in its manual RBC business, which accounted for 54% of 2008 sales. Although the company's efforts to date have been successful (in the five years since Fenwal introduced ALYX, it has obtained 37% of the automated RBC market, compared with its sole competitor Haemonetics) the company now remains challenged, as a result of the patent infringement lawsuit, to successfully produce the new replacement piece in its ALYX disposable kits. If Fenwal cannot do this, or experiences significant delays in doing so, it risks losing future conversions of manual customers to Haemonetics. This would result in a loss of future recurring revenue and higher margins from the disposable kits. FILENE'S BASEMENT: Rewinds Auction; Men's Wearhouse Drops Offer --------------------------------------------------------------- Vinnee Tong at The Associated Press reports that Filene's Basement Inc. is reopening its auction for its chain of department stores, after prematurely declaring Men's Wearhouse Inc. as winner. As reported by the Troubled Company Reporter on June 12, 2009, Stanley Chera's Crown Acquisitions objected to the results of the auction where Filene's declared that Men's Wearhouse Inc. made the best offer for the business. Crown contended that Filene's and the official committee of unsecured creditors violated the court- approved rules for the auction. Crown said that the Company accepted an offer from Men's Wearhouse that entailed purchasing the company through confirmation of a Chapter 11 plan contrary to the Court's order that required bids for the immediate sale of the assets. Crown also argued that Men's Wearhouse didn't submit a bid by the court-imposed deadline. The tardy offer also did not comply with bid requirements, Crown claimed. Court documents say that Men's Wearhouse has dropped its $67 million offer after a consortium led by Crown Acquisitions filed a motion on Tuesday accusing the company and its lawyers at K&L Gates of breaching the rules that a bankruptcy judge had set for the auction. Crown said in court documents that Men's Wearhouse missed the bid application deadline, failed to fulfill certain conditions required of any bid -- including a quick closing date -- and conspired with Filene's and the creditors committee to change its bid in the middle of the auction. 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. FONTAINEBLEAU LAS VEGAS: Receives Approval of First-Day Motions --------------------------------------------------------------- Fontainebleau Las Vegas, LLC received approval from the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, of its first-day motions, including permission to pay employees wages, salaries and benefits incurred before and after the company voluntarily filed for Chapter 11 on June 9, 2009. The Company also received interim authorization to use up to $8.2 million to fund postpetition obligations in the ordinary course of business. A final hearing on the issue has been set for June 30. Bankruptcy Judge A. Jay Cristol scheduled a hearing for June 17 to consider the Company's request for the establishment of a fast track schedule in respect of its lawsuit against a group of banks that reneged on their contractual commitment to provide $800 million of construction funding, including consideration of the Company's motion for partial summary judgment which was filed in the Bankruptcy Court. The Company's lawsuit requests the judge to order the banks to fund $656 million they had refused to fund on March 2, 2009. That failure ultimately led to the decision by Fontainebleau Las Vegas to file for Chapter 11. "We are pleased with the Court's quick approval of our first-day orders," said Howard Karawan, Chief Restructuring Officer of Fontainebleau Las Vegas. "This is an important initial step today toward getting Fontainebleau Las Vegas back on track." About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. In its petition, Fontainebleau Las Vegas, LLC, disclosed total assets and debts of more than $1 billion. Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, said their total assets are less than $50,000 while total debts are more than $1 billion. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FORD MOTOR: Won't Issue Additional Equity, Says CEO --------------------------------------------------- Dow Jones Newswires reports that Ford Motor Corp. CEO Alan Mulally said that the Company won't tap equity markets or issue additional equity. According to Dow Jones, Mulally suggested on Thursday that Ford was considering trading more of its debt for equity and selling more common stock to boost its balance sheet. Ford would remain focused on improving its balance sheet and cutting debt, Dow Jones says, citing Mr. Mulally. 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. GENERAL GROWTH: Court Okays Weil Gotshal's Engagement as Counsel ---------------------------------------------------------------- General Growth Properties, Inc., and its debtor-affiliates obtained authority from Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York to employ Weil, Gotshal & Manges LLP as their lead bankruptcy counsel, nunc pro tunc to their petition date. As previously reported by the Troubled Company Reporter, the U.S. Trustee objected to the request, questioning the disclosures made by the firm. The Debtors, however, believe their proposed retention of Weil Gotshal satisfies applicable standards governing professional retention. Accordingly, the Debtors asked the Court to overrule the U.S. Trustee's objection and approve their application. The Official Committee of Unsecured Creditors supported the Debtors' request. Prior to the Court's ruling, the Committee held that the retention of Weil Gotshal is beneficial to the Debtors' estates and is necessary for an efficient and successful reorganization. In light of the facts and circumstances of the Debtors' Chapter 11 cases, the Committee noted that the Court's deference to the Debtors' choice of Weil Gotshal as counsel is warranted. The Committee's counsel, Michael S. Stamer, Esq., at Akin Gump Hauer & Feld LLP, in New York, noted that the retention of Weil Gotshal in no way abrogates the requirement that Weil Gotshal apply to the Court for approval of its fees and expenses and does not usurp the rights of the Court to review, and the U. S. Trustee, the Committee or any other party-in-interest to review and object to the approval. Weil Gotshal Supplements Disclosures In line with the U.S. Trustee's comments, Gary T. Holtzer, Esq., at Weil Gotshal & Manges LLP, in New York, submitted a supplemental declaration in support of the Debtors' application to employ Weil Gotshal. Mr. Holtzer disclosed that Weil Gotshal and Kirkland & Ellis remain mindful of the need to minimize the duplication of efforts. Indeed, he noted that his firm, Kirkland & Ellis and the Debtors' management have utilized specific protocol to minimize duplication and to monitor ongoing workflows, which protocol have been in place since December 2008. He said Weil Gotshal disclosed the exact percentage of revenue derived from representing Lehman Brothers, Inc., General Electric, Microsoft and Citigroup in unrelated matters, over the last 12 months, to the U.S. Trustee. He said in the absence of consent, Weil Gotshal cannot bring a lawsuit against any its current clients, including Lehman, General Electric, Microsoft, and Citigroup. To the extent that any litigation or transactional work requires that Weil Gotshal be adverse to Lehman, General Electric, Microsoft, or Citigroup in the Debtors' Chapter 11 cases, Weil Gotshal will discuss the adversity with the Debtors and Kirkland & Ellis to determine which firm is best suited to handle the matter. He added that no screening procedures have been implemented in connection with the Debtors' Chapter 11 cases. In the context of the Weil Gotshal engagement for the Debtors, Mr. Holtzer explains that the term "directly related" means that Weil Gotshal will not represent any current client in (i) any transactional matter in which the Debtors are parties, (ii) any litigation matter in which any Debtor is a named party adverse to the Current Client, or (iii) connection with the assertion by the Current Client of a claim against or equity interest in any of the Debtors. Moreover, Mr. Holtzer disclosed Weil Gotshal received periodic fee advances from the Debtors for professional services to be performed and expenses to be incurred in connection with the Debtors' Chapter 11 cases. With respect to Weil Gotshal's prepetition fee statement, the fees and expenses were satisfied by reducing the Debtors' existing credit balance. As of the Petition Date, the fees and expenses incurred by Weil Gotshal is $14,226,899, and Weil Gotshal had a remaining credit balance in favor of the Debtors for future professional services to be performed, and expenses to be incurred, for $872,821. The Remaining Fee Advance is a credit in favor of the Debtors' account for charges for professional services rendered and to be rendered and for reimbursement of expenses incurred and to be incurred. The Debtors and Weil Gotshal will determine how to apply the Remaining Fee Advance. In addition to the Debtors and the U.S. Trustee, WG&M will notify the Court as well as the Committee of any change in its billing rates. Mr. Holtzer said the Debtors and Weil Gotshal have determined not to seek to retain WG&M pursuant to Section 328 of the Bankruptcy Code. Moreover, Mr. Holtzer filed with the Court a list of clients who may be former, current or future clients of Weil Gotshal, which is available for free at http://ResearchArchives.com/t/s?3daf Mr. Holtzer maintained that his firm does not hold or represent an interest adverse to the Debtors' in the matters upon which Weil Gotshal is to be employed. He assured the Court that Weil Gotshal is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09- 11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Court Okays Kirkland & Ellis Hiring as Co-Counsel ----------------------------------------------------------------- Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York authorized General Growth Properties, Inc., and its debtor-affiliates to employ Kirkland & Ellis LLP as their co-bankruptcy counsel, nunc pro tunc to their petition date. Judge Gropper overruled the objection by the U.S. Trustee. Diana G. Adams, the United States Trustee for Region 2, had objected to the request because in the application, the Debtors seek to employ Kirkland & Ellis to represent all but six of the Debtors. The U.S. Trustee said, among others, this arrangement is generally disfavored in the Southern District of New York. James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, argued before the Court that the services to be provided by Kirkland & Ellis and Weil Gotshal & Manges, LLP, are complimentary, not duplicative. Thus, the U.S. Trustee's concern that the scope of services provided by the Debtors' counsels lacks a clear cut chain of command is unwarranted, Mr. Sprayregen said. Indeed, he pointed out that the Debtors have defined and monitored their attorneys' areas of responsibility since December 2008 by utilizing specific protocols to minimize duplication and monitor ongoing workflows, including: (1) utilizing a coordinated work in process chart to implement services provided pursuant to their defined roles; (2) holding biweekly update calls to discuss ongoing work flows and to address additional services reasonably required by the Debtors; and (3) holding regular update calls to address more specific or immediate issues that arise based on relevant filings, each with the goal of minimizing duplication and ensuring that each firm leverages off the work of the other. More importantly, Mr. Sprayregen insisted that Kirkland & Ellis satisfies the applicable standards for retention under the Bankruptcy Code. He asserted that Kirkland & Ellis does not, and will not, represent Debtors The Rouse Company, LP; Rouse LLC; General Growth Properties, LP; and General Growth Properties, Inc., as defendants in a litigation wherein Kirkland & Ellis is counsel to the plaintiffs. He explained that Weil Gotshal has served, and will continue to serve, as exclusive counsel to the Debtors involved in the State Court Action. The Debtors are too far removed from the State Court Action for this action to constitute a material liability of their estates, he pointed out. Mr. Sprayregen further explained that although Kirkland & Ellis briefly represented Caruso Affiliated Holdings in an appeal from a judgment against two adversaries that include Debtors Rouse Company Operating Partnership, LP and The Rouse Company BT, LLC, Kirkland & Ellis never filed an appearance in the Appeal. He asserted that since the parties already settled the lawsuit underlying the Appeal, resulting in its dismissal in January 2009, thus, the Appeal has no bearing on Kirkland & Ellis' retention. However, out of abundance of caution, Kirkland & Ellis does not and will not represent the two Debtors involved in the Appeal. Accordingly, Kirkland & Ellis maintains that it does not hold or represent an interest adverse to any Debtor or its estate and is "disinterested" as required by Section 327(a) of the Bankruptcy Code, Mr. Sprayregen asserted. Committee Supports Debtors The Official Committee of Unsecured Creditors joined in the Debtors' response and believes that Kirkland & Ellis does not have a conflict of interest meriting disqualification or is not a "disinterested person." According to the Committee's counsel, Michael S. Stamer, Esq., at Akin Gump Hauer & Feld LLP, in New York, Kirkland & Ellis has informed all parties-in-interest that it has implemented formal screening mechanisms and other appropriate firewalls to preserve client confidentiality and clearly separate attorneys working on the Debtors' Chapter 11 cases from those working on matters relating to the applicable Debtors. The Committee believes that the continued retention of Kirkland & Ellis is beneficial to the Debtors' estates and is necessary for an efficient and successful reorganization. Mr. Stamer asserted that while working with Weil Gotshal and Kirkland & Ellis, the Committee has observed no duplication of effort. Moreover, he pointed out that the proposed retention of Kirkland & Ellis does not (i) abrogate the requirement that it will submit application to the Court for approval of fees and expenses and; (ii) usurp the rights of the Court to review, and the U.S. Trustee, the Committee or other parties-in-interest to review and object to the approval if, among others, it turns out that Kirkland & Ellis and Weil Gotshal have duplicated efforts. K&E Supplements Disclosure To address the U.S. Trustee's concerns, Mr. Sprayregen submitted to the Court a supplemental declaration in support of Kirkland & Ellis' proposed retention. Mr. Sprayregen said Kirkland & Ellis intends fully to comply with any applicable order entered by the Court regarding interim compensation payments to professionals, including providing full disclosure with respect to all fees and expenses invoiced to the Debtors. In this regard, Kirkland & Ellis will notify the Court, the Creditors' Committee, and the U.S. Trustee immediately if the hourly rates of its professionals change. He added that if Kirkland & Ellis' billing rates are increased on an across-the- board basis, his firm will make specific disclosure of the increase in the applicable monthly fee statement. Moreover, Mr. Sprayregen clarified that less than 22% of GMAC Commercial Corporation is owned by General Motors Acceptance Corporation; the remainder is owned by Capmark Financial Group, Inc., an entity that is independent from General Motors and General Motors Corporation. He said that Kirkland & Ellis' representation of GMAC Commercial Mortgage Corporation was inactive since July 2008 and has now been closed. Accordingly, he said Kirkland & Ellis may take positions adverse to GMAC Commercial Mortgage Corporation. Moreover, he noted that since General Motors Acceptance Corporation no longer has a direct interest as either a special or master servicer with respect to the Debtors, he is not aware of any adverse interest arising from Kirkland & Ellis' connection to General Motors, General Motors Acceptance Corporation or GMAC Commercial MortgageCorporation that would create a conflict. However, he disclosed that Kirkland & Ellis will not take positions directly adverse to affiliates of Goldman Sachs Group, Inc., General Motors or General Motors Acceptance Corp. without first securing a waiver. If necessary, Kirkland & Ellis would take reasonable steps to seek a waiver, he assured the Court. Moreover, Mr. Sprayregen disclosed that two attorneys of Kirkland & Ellis had agreed to donate 2,350 shares of GGP's common stock. Although GGP is not represented by Kirkland & Ellis, at the request of the U.S. Trustee, the attorneys have divested those investments and no longer hold any interest in any shares of GGP. Court Okays K&E Retention In his ruling, Judge Gropper noted that the retention of Kirkland & Ellis pursuant to Section 327(a) is based solely on the unique facts and circumstances of the Debtors' Chapter 11 cases. For one, Judge Gropper held that Kirkland & Ellis' connections to the State Court Action and the Appeal do not constitute an interest adverse to the Debtors' estates or affect Kirkland & Ellis' retention under Section 327(a). Similarly, Kirkland & Ellis' connections to the State Court Action and the Appeal do not affect its status as a "disinterested person" pursuant to Section 101(14). Judge Gropper held that Weil Gotshal's role as exclusive counsel to the Specified Debtors is appropriate to address any conflicts that may arise from Kirkland & Ellis' connection to the State Court Action. However, Judge Gropper clarified that his order is confined to the facts and circumstances of the Debtors' Chapter 11 cases and will not be considered precedential in any other pleading or case. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09- 11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Can Tap AlixPartners as Restructuring Advisors -------------------------------------------------------------- Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York authorized General Growth Properties, Inc., and its debtor-affiliates to employ AlixPartners as their restructuring advisors. The Court will hold a hearing on July 22, 2009, to consider approval of AlixPartners' success fee. Objections to the Success Fee are due July 17. As reported by the Troubled Company Reporter on April 24, 2009, as the Debtors' restructuring advisor, AlixPartners will: * work with the senior management and other employees of the Debtors and their advisors to provide financial consulting services and restructuring advice; * provide support throughout the restructuring, including assisting the Debtors in (i) supporting the senior management team and finance organization as it plans for and works through the restructuring, including cash management, business planning, bankruptcy strategy and communication with both internal and external constituencies; and (ii) later in the Debtors' Chapter 11 cases, formulation and negotiation with respect to a plan of reorganization; * develop, with management and other advisors to the Debtors, contingency plans and financial alternatives in the event an out-of-court restructuring cannot be achieved; * assist the Debtors in developing a 13-week cash receipts and disbursements forecasting tool designed to provide on-time formulation related to the Debtors' liquidity; * assist the Debtors' investment banker in obtaining and compiling information that is needed to present the Debtors or one or more business units to prospective purchasers, investors or debt holders and to further support those efforts by assisting with matters as due diligence and obtaining or preparing supplemental information that may be required; * help to manage those professionals assisting the Debtors in the reorganization process as well as those employed by the Debtors' stakeholders in an effort to improve coordination and ensure that individual work product is consistent with the Debtors' overall restructuring goals; * assist with the preparation of the statement of affairs, schedules and other regular reports required by the Court, as well as provide assistance in areas as testimony before the Court on matters that are within the firm's area of expertise; * oversee and assist with the management of the claim and claim reconciliation process; * assist management with the development of the Debtors' revised business plan, and other related forecasts as may be required by the bank lenders and other stakeholders in connection with negotiations or by the Debtors for other corporate purposes; * assist in obtaining and presenting information required by parties-in-interest during the Debtors' Chapter 11 cases, including official committees appointed by the Court and the Court; and * assist with other matters as may be asked that fall within the firm's expertise and that are mutually agreeable. The Debtors will pay AlixPartners' professionals' customary hourly rates: Professional Rate per Hour ------------ ------------- Managing directors $685 to $995 Directors $510 to $685 Vice presidents $395 to $505 Associates $260 to $365 Analysts $235 to $260 Paraprofessionals $180 to $200 The Debtors will also reimburse AlixPartners for expenses incurred. AlixPartners seeks payment of a Success Fee upon: (i) confirmation of a Chapter 11 plan of reorganization, sponsored by certain Debtors; or (ii) closing of a sale substantially all of the assets of GGP and certain of its major subsidiaries. The Success Fee will be $2 million if the Plan is confirmed or the closing occurs within 15 months of the Petition Date. The Success Fee will be reduced to $1.5 million of the Plan is confirmed or the closing occurs between 15 and 18 months after the Petition Date. The Success Fee will be further reduced to $1.5 million less 20% of the hourly fees incurred by AlixPartners if the Plan is confirmed or the closing occurs on the 19th month after the Petition Date. James Mesterham, a managing director at AlixPartners, LLP, discloses that his firm is connected to parties-in-interest listed at http://ResearchArchives.com/t/s?3db1 Mr. Mesterham further discloses that the U.S. Trustee for Region 2 has asked AlixPartners to confirm its ability to be adverse to each entity listed in the firm's previously disclosed client contacts. He states that AlixPartners is not aware of any existing disputes with any of the Client Contacts that would require it to be adverse to the Client Contacts, except that the Debtors may have lease issues with four Client Contacts, which AlixPartners may provide general consulting services with respect to real estate strategies. In the event that any investigation or litigation required, AlixPartners may advise the Debtors that any necessary litigation support must be handled using other resources. Despite those disclosures, Mr. Mesterham maintains that AlixPartners holds no adverse interest as to the matters for which it has been employed by the Debtors. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09- 11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Can Hire Miller Buckfire as Financial Advisor ------------------------------------------------------------- Judge Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York approved the application filed by General Growth Properties Inc. and its debtor-affiliates to employ Miller Buckfire & Co., LLC, as their financial advisor and investment banker, nunc pro tunc to April 16, 2009. The Court will hold a hearing on July 22, 2009, to consider approval of the Completion Fee, Initial DIP Financing Fee, and other Financing Fees as set forth in Miller Buckfire's Employment Application. Objections to the Fees are due July 17. As reported by the Troubled Company Reporter on April 24, 2009, as the Debtors' financial advisor, Miller Buckfire will: (a) familiarize itself with the business, operations, properties, financial condition and prospects of the Debtors; (b) if the Debtors determine to undertake a transaction and Financing, advise and assist the Debtors in structuring and effecting the financial aspects of a transaction or transactions; (c) review and analyze the Debtors' business plans and financial projections prepared by the Debtors, including testing assumptions and comparing those assumptions to historical and industry trends; (d) review and analyze the Debtors' liquidity position and assist management in identifying areas and means to improve and preserve the Debtors' liquidity; (e) assist in the determination of a capital structure of the Debtors; (f) assist in the determination of a range of values for the Debtors on a going concern basis; (g) attend meetings of the Debtors' Board of Directors at its commitments; (h) provide financial advice and assistance to the Debtors in connection with a sale or in developing and seeking approval of a restructuring plan; (i) provide financial advice and assistance to the Debtors in structuring any new securities to be issued under the Plan; (j) assist the Debtors or participate in negotiations with entities or groups affected by the Plan; (k) in connection with a sale, identify potential acquirors and, at the Debtors' request, contract those potential acquirors; (l) assist the Debtors and participate in negotiations with potential acquirors; and (m) participate in hearings before the Court with respect to matters upon which Miller Buckfire has provided advice, including coordination with the Debtors' counsel with respect to testimony. The Debtors will pay Miller Buckfire: (a) a retainer of $1,2509,000, which will be applied against a monthly fee and any other fees or expenses due and payable after the filing until exhausted; (b) a financial advisory fee of $200,000, which will be due and paid by the Debtors upon execution of Miller Buckfire's engagement letter; (c) a monthly financial advisory fee of $300,000, which will be due and paid by the Debtors beginning on January 1, 2009, and thereafter on the first day of each month during the term of Miller Buckfire's engagement. Fifty percent of the aggregate monthly advisory fees paid to Miller Buckfire after January 1, 2010 will be credited against any Completion Fee; (d) a completion fee, contingent upon the consummation of a Transaction and payable at the closing, equal to $22,500,000; (e) a Financing fee of 1% of the aggregate amount of a commitment for a DIP Financing on the Petition Date, which fee will be due and payable upon closing of the DIP Financing; (f) Financing Fees in respect of any Financing payable upon closing equal to: (i) 1% of the gross proceeds of any loans issued that is secured by a first lien; (ii) 3% of the gross proceeds of any loans issued that (x) is secured by a second or more junior lien, (y) is unsecured and (z) is subordinated; and (iii) 5% of the gross proceeds of any equity or equity- linked securities or obligations issued. No fee will be payable for a Financing that involves an individual or portfolio based rollover, extension, modification or refinancing of loans at any of the Debtors' project level direct or indirect subsidiaries. (g) 50% of all Financing fees paid will be credited against the Completion Fee. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09- 11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Hires Jenner & Block as Special Litigation Counsel ------------------------------------------------------------------ General Growth Properties Inc. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Jenner & Block LLP as their special litigation counsel. As reported by the Troubled Company Reporter on April 24, 2009, as the Debtors' litigation counsel, Jenner & Block will continue to advise them with respect to pending litigation, regulatory, and insurance coverage matters, including: * Barnes v. General Growth Properties, et al., in which a former GGP employee seeks to bring a class action alleging, among other things, that the defendants breached fiduciary duties under the Employee Retirement Income Security Act in connection with the administration of the Debtors' 401(k) savings plan; * Zable v. General Growth Properties, et al. wherein a former GGP employee seeks to bring a class action alleging, among other things, that the defendants breached fiduciary duties under ERISA in connection with the administration of the Debtors' 401(k) savings plan; * Kaminske v. General Growth Properties, et al., wherein a former GGP employee seeks to bring a class action alleging, among other things, that the defendants breached fiduciary duties under ERISA in connection with the administration of the Debtors' 401(k) savings plan; * Gorham v. General Growth Properties, et al., wherein plaintiffs of the class actions seek class action certification, compensatory damages in an unspecified amount, and an award of costs and expenses; * Austin v. Bucksbaum v. General Growth Properties, et al. wherein a purported GGP shareholder, has filed a shareholder derivative lawsuit in the Chancery Division of the Circuit Court of Cook County; * Julie M. Reed et al. v. Village of West Dundee et al., wherein alleged residents of West Dundee, Illinois seek to enjoin the development of a Wal-Mart retail store in West Dundee, Illinois, alleging that the development violates certain local property and building ordinances; and * an ongoing and confidential regulatory inquiry. The Debtors will pay Jenner & Block's professionals' customary hourly rates: Professional Rate per Hour ------------ ------------- Partners $525 to $835 Associates $290 to $475 Paraprofessionals $140 to $245 Project Assistants $130 to $145 About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09- 11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Creditors Committee Wants Akin Gump as Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors in General Growth Properties Inc. and its debtor-affiliates' Chapter 11 cases seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Akin Gump Strauss Hauer & Feld LLP as its counsel, nunc pro tunc to April 24, 2009. As the Committee's counsel, Akin Gump will: (a) advise the Committee with respect to its rights, duties and powers in the Debtors' Chapter 11 cases; (b) assist and advise the Committee in its consultations with the Debtors relative to the administration of the Debtors' Chapter 11 cases; (c) assist the Committee in analyzing the claims of the Debtors' creditors and the Debtors' capital structure and in negotiating with holders of claims and equity interests; (d) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' businesses; (e) assist the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, the assumption or rejection of certain leases of non-residential real property and executory contracts, asset dispositions, financing of other transactions and the terms of one or more plans of reorganization for the Debtors and accompanying disclosure statements and related plan documents; (f) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in the Debtors chapter 11 cases; (g) represent the Committee at all hearings and other proceedings before the Court; (h) review and analyze motions, applications, orders, statements, operating reports and schedules filed with the Court and advise the Committee as to their propriety, and to the extent deemed appropriate by the Committee support, join or object thereto, as applicable; (i) advise and assist the Committee with respect to any legislative, regulatory or governmental activities; (j) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; (k) assist the Committee in its review and analysis of all of the Debtors' various agreements; (l) prepare, on behalf of the Committee, any pleadings, including statements, motions, applications, memoranda, adversary complaints, objections or comments in connection with any matter related to the Debtors or these Chapter 11 cases; (m) investigate and analyze any claims against the Debtors' non-debtor affiliates; and (n) perform other legal services as may be required or are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code, Bankruptcy Rules or other applicable law. Akin Gump's professionals will be paid according to the firm's customary hourly rates: Title Rate per Hour ----- -------------- Partners $500 to $1,100 Special Counsel and Counsel $470 to $810 Associates $290 to $580 Paraprofessionals $75 to $250 Professionals expected to have primary responsibility for providing services to the Committee are: Name Position Rate per Hour ---- -------- ------------- Michael S. Stamer, Esq. Partner $925 Russell W. Parks, Jr., Esq. Partner $855 Charles R. Gibbs, Esq. Partner $795 James R. Savin, Esq. Partner $725 David M. Dunn, Esq. Counsel $560 Dionisia Kaloudis, Esq. Counsel $560 Robert K. Ozols, Esq. Associate $420 Stefanie L. Kurlanzik, Esq. Associate $375 Moreover, the fees and expenses incurred by the Committee on account of services rendered by Akin Gump in these Chapter 11 cases will be paid as administrative expenses of the Debtors' estates pursuant to Sections 330(a), 331, 503(b) and 507(a)(1) of the Bankruptcy Code. Subject to the Court's approval, Akin Gump will charge for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date such services are rendered, subject to Section 330. Michael S. Stamer, Esq., a member at Akin Gump Strauss Hauer & Feld LLP, discloses that his firm represented Debtor General Growth Properties in 2002. Jeffrey Krause, Esq., the Akin Gump partner in charge of GGP's representation left the firm in January 2002. Akin Gump also represented Debtor GGP Ala Moana, L.L.C., in December 2001 through Mr. Krause. Akin Gump represented Beal Bank in connection with the DIP financing of certain Debtors but the DIP financing transaction was ultimately terminated prior to the Petition Date, Mr. Stamer further discloses. Beal Bank released Akin Gump to represent the Committee. Moreover, Akin Gump prepared a list of parties-in-interest it represents or has represented in matters unrelated to the Debtors' Chapter 11 cases. The list of clients is available for free at http://bankrupt.com/misc/GenGrowth_AkinGumpDisclosure.pdf Despite the disclosure, Mr. Stamer asserts that (i) Akin Gump is not an insider of the Debtors; (ii) no member of Akin Gump has been, within two years from the Petition Date, a director, officer, or employee of the Debtors; and (iii) Akin Gump does not have an interest materially adverse to the interests of the Debtors' estates or of any class of creditors or equity security holders of the Debtors. Accordingly, he maintains that Akin Gump is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09- 11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Pershing Square Discloses 7.5% Equity Stake ----------------------------------------------------------- In a Schedule 13-D/A filed with the U.S. Securities and Exchange Commission on June 8, 2009, Pershing Square Capital Management, L.P., disclosed that it beneficially owns 23,531,369 shares of General Growth Properties, Inc.'s common stock, which represents 7.5% of 313,765,799 outstanding shares of common stock as of May 5, 2009. The amendment is related to Pershing Square II, L.P.'s purchase of 270,000 shares of General Growth's common stock at $1.23 for an aggregate price of $331,425 on May 26, 2009. Pershing Square Capital also disclosed it has shared voting power and dispositive power of 23,531,369 shares of General Growth's common stock. Moreover, PS Management GP, LLC, disclosed that it beneficially owns 23,531,369 shares of common stock and has shared voting and dispositive power of 23,531,369 shares of common stock. Pershing Square GP, LLC, also owns 8,449,744 representing 2.7% of total outstanding stock. Pershing Square has shared voting and dispositive power of 8,449,744 shares of common stock. William A. Ackman, managing member of Pershing Square Entities also beneficially owns 23,531,369, representing 7.5% of total outstanding stock. Mr. Ackman has shared dispositive and voting power of 23,531,369 shares of common stock. Mr. Ackman also discloses that Pershing Square Group has additional economic exposure to $54,000,000 shares of General Growth's common stock under certain cash-settled total return swaps, bringing the Pershing Square Group's total economic exposure to 77,531,369 common shares or 24.7% of the outstanding shares of General Growth's common stock. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09- 11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Lenders Demand Non-Default Contract Rate -------------------------------------------------------- Deutsche Bank Trust Co. Americas, as administrative agent for the Fashion Show lenders and the Palazzo lenders, asks the U.S. Bankruptcy Court for the Southern District of New York to enforce its final cash collateral order dated May 14, 2009, saying that the Debtors have refused to pay the "non-default contract rate" of LIBOR plus 600 basis points, and have instead taken the position that, beginning with their June 1 interest payment, they will only pay interest of LIBOR plus 225. The lenders contend that under the final cash collateral order, the lenders are entitled to payment of "interest ... at the non- default contract rate set forth" in their credit documentation as adequate protection under Sections 361 and 363(e) of the Bankruptcy Code. Deutsche Bank requests the Court to direct Debtors to immediately pay the full amount of non-default contract rate under the Fashion Show and Palazzo loan agreements and enforce the final cash collateral order by directing the Debtors to continue paying the Fashion and Palazzo Agents monthly interest at the rate of LIBOR plus 600 basis points in accordance with the prepetition credit documentation. As reported in the Troubled Company Reporter on May 18, Judge Allan Gropper authorized, on a final basis, General Growth Properties, Inc., and its affiliates to tap the cash collateral securing their prepetition indebtedness. A full-text copy of the Final Cash Collateral Order is available for free at: http://bankrupt.com/misc/GenGrowth_FinalCashCollOrder.pdf About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D. N.Y., Case No. 09- 11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Dealers May Advertise at iBidMotors for Free ------------------------------------------------------------ IBidMotors said that during the General Motors and Chrysler bankruptcy it will offer all GM and Chrysler dealers nationwide the ability to advertise their entire new and pre-owned inventory on the iBidMotors online auction site at no charge for 60 days during the bankruptcy and subsequent reorganization. "iBidMotors' commitment to GM and Chrysler during these turbulent times is unprecedented," said Bob Schiff, iBidMotors Founder and CEO. "Over 8,000 car dealers are affected by this bankruptcy, and by offering to advertise their inventory online for free, iBidMotors will help viable dealerships continue to thrive and contribute to saving jobs in communities across the country," said Mr. Schiff. iBidMotors has hired additional staff to accommodate the influx of new clients that they expect will take advantage of this extraordinary offer. Dealers have until June 30 to sign up for this program. Over the past two years the iBidMotors online auction has generated over $100 million in retail automotive sales, making them one of the fastest growing automotive sites and the platform of choice for some of the largest dealer groups in the country. Consumers who are shopping for autos can visit iBidMotors.com and search or browse through the thousands of vehicles on the site and bid, make an offer or just use the "Buy it Now" option to finalize the transaction with the local car dealer. Headquartered in Basking Ridge, New Jersey, iBidMotors -- http://ibidmotors.com/-- is a market and technology leader in online auto auction applications. The company's portfolio of applications has revolutionized the ways that auto dealers can more effectively drive revenue. iBidMotors enables auto dealers to seamlessly download their entire inventory into the iBidMotors auction site for a fixed monthly fee to provide dealers with one of the most cost effective ways to sell cars. iBidMotors also offers a private label product targeted to dealer groups. Many former NFL players and NFL Hall of Famers are part of the iBidMotors team. GENERAL MOTORS: Defends Dealer Cuts Before Congress --------------------------------------------------- Josh Mitchell at The Wall Street Journal reports that General Motors Corp. and Chrysler LLC executives defended on Friday their plans to close thousands of dealers before the Congress. According to WSJ, lawmakers criticized GM and Chrysler for treating retailers unfairly, many of them vowing to push legislation that would require automakers to honor state franchise agreements. GM Chief Executive Frederick Henderson explained that a large network forces dealers of the same brand to compete, often forcing them to cut prices, which would then lower dealer profits and erode resale value, WSJ relates. Closing almost 2,600 of GM's 6,000 U.S. dealerships by 2010 will save the Company some $2.5 billion annually, much of it associated with direct payments to dealers but also from expenses for local ads, training and vehicle service, WSJ states, citing Mr. Henderson. According to WSJ, Chrysler Deputy CEO Jim Press said that the average Chrysler dealer loses money and that "without profits, dealers can't invest in people, training and facilities." 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: Swapalease.com Reports Increase in Demand in May ---------------------------------------------------------------- General Motors vehicles remain popular in the lease transfer marketplace despite the automaker's bankruptcy, according to Swapalease.com. Swapalease.com tracks vehicle searches on a monthly basis to monitor trends and gauge vehicle demand. For the month of May, Swapalease.com reports that searches for most Chevrolet, GMC and Cadillac models have either remained steady or increased in the past month. The Chevrolet Corvette had the most notable jump in searches last month. Spring and summer are the most popular months for sports cars and the Corvette in years past has always been strong on leasing. 1. Chevrolet Corvette 2. GMC Acadia 3. Cadillac Escalade 4. Cadillac CTS 5. Chevrolet Tahoe 6. Chevrolet Silverado 7. Cadillac Escalade EXT 8. GMC Yukon 9. Hummer H2 10. Hummer H3 Hummer models were heavily searched and only time will tell if this trend continues after GM's recent acknowledgement of the brand's sale to a Chinese manufacturing company. Part of the increase in GM vehicle searches may be attributable to their captive finance company GMAC effectively exiting leasing early in the final quarter of 2008 by no longer offering subvented leases. With fewer attractive leases originating on domestic vehicles, consumers are turning to Swapalease.com and taking advantage of those already in process. "Our user data indicates that the economy, and a recent uptick in fuel prices have not resulted in a drop in demand in our lease transfer marketplace," says Ron Joseph, co-founder of Swapalease.com. "What we are learning is that people still want to lease GM vehicles. Despite the bankruptcy and general negativity in the news, GM vehicle quality has never been better. We anticipate that as GM reemerges stronger and as the economy recovers, General Motors will once again embrace leasing based on consumer demand and the volume it can bring to the automaker." For more information about lease transfers, call 866-SWAP-NOW or visit http://www.swapalease.com/ About Swapalease.com Headquartered in Cincinnati, Ohio, Swapalease.com -- http://www.swapalease.com/-- is the world's largest automotive lease marketplace and the pioneer in facilitating lease transfers online. First conceptualized in 1997, Swapalease.com has evolved into a leading automotive consumer online destination servicing all aspects of the automotive leasing lifecycle. GEORGIA GULF: Bank Debt Trades at 18% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Georgia Gulf is a borrower traded in the secondary market at 81.54 cents-on-the- dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 9.95 percentage points from the previous week, the Journal relates. The loan matures October 3, 2013. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's C rating. About Georgia Gulf Georgia Gulf Corporation is a manufacturer and international marketer of two integrated chemical product lines, chlorovinyls and aromatics. The Company's primary chlorovinyls products are chlorine, caustic soda, vinyl chloride monomer (VCM), vinyl resins and vinyl compounds. Its aromatics products are cumene, phenol and acetone. The Company has four business segments: chlorovinyls; window and door profiles, and moldings products; outdoor building products, and aromatics. At March 31, 2009, the Company had $1.56 billion in total assets and $1.66 billion in total liabilities, resulting in $97.3 million stockholders' deficit. * * * Georgia Gulf withheld payment of $34.5 million of interest due April 15, 2009, for the 2014 notes and 2016 notes. Under the indentures governing those notes, the Company had a 30-day grace period to pay the withheld interest before the noteholders could seek remedies. On May 11, 2009, the Company announced a bank amendment that allows the Company to continue to withhold the interest payments until June 15, 2009, without constituting a default under the senior secured credit agreement. On May 13, 2009, forbearance agreements were reached with the requisite percentages of note holders for all three issues of unsecured notes in which those parties agree to not seek remedies related to the withheld interest payments until June 15, 2009. As reported in the Troubled Company Reporter on May 26, 2009, Moody's Investors Service lowered Georgia Gulf's Probability of Default Rating from Caa3 to Caa3/LD reflecting the deemed limited default due to the non-payment of interest on its 9.5% Guaranteed Sr. Unsecured Notes due 2014 and the 10.75% Sr. Subordinated Notes due 2016. GOLF CLUB: Involuntary Chapter 11 Case Summary ---------------------------------------------- Alleged Debtor: The Golf Club of Dublin, LLC 5805 Eiterman Road Dublin, OH 43016 Tel: (614) 792-3825 Case Number: 09-56569 Involuntary Petition Date: June 11, 2009 Court: Southern District of Ohio (Columbus) Petitioners' Counsel: Jerry E Peer, Jr., Esq. jep@abglawyers.com Adams, Babner & Gitlitz LLC 5003 Horizons Drive Columbus, OH 43220 Tel: (614) 451-4227 Fax: (614) 451-3156 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Adams, Babner, & Gitlitz, LLC legal fees $17,876 5003 Horizons Drive Suite 200 Columbus, OH 43220 Tel: (614) 451-4227 BizCarta, Inc. consulting $2,770 5695 Avery Road Suite E Dublin, OH 43016 Andres O'Neil & Lowe insurance fees $10,068 P.O. Box 627 Bryan, OH 43506 GOTTSCHALKS INC: Has More Than 40 Properties to Dispose ------------------------------------------------------- Tim Sheehan at The Fresno Bee reports that after the sale of its 12 store locations in California, Washington, and Alaska, Gottschalks Inc. still has to dispose of more than 40 properties. The Fresno Bee relates that Gottschalks still has its corporate headquarters in north Fresno, its Madera distribution center, and 30 stores. According to The Fresno Bee, Gottschalks CEO James Famalette said that the Company has received offers for some locations, but others will likely end up in the hands of their landlords. Gottschalks sought in May 2009 the permission of the U.S. Bankruptcy Court for the District of Delaware to cancel leases for 16 of its stores in Washington, Oregon, and Alaska, which according to Mr. Famalette returns control of those properties to landlords. Court documents say that leases for three sites bid by Forever 21 were held out of a deal approved by the court. The sites are Sacramento's Country Club Plaza, malls in Davis, and Union Gap. Mall owners at Country Club said in court documents that Forever 21 fails to meet their lease requirements for a full-scale department store. Larry Meyer, Forever 21's executive vice president, said that the company didn't pursue the Sacramento lease due to the objection and cited similar issues on the Davis and Union Gap stores, but added that Forever 21 may pursue those sites in direct talks with landlords outside the bankruptcy process, The Fresno Bee states. Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com/-- is a regional department store chain, operating 58 department stores and three specialty apparel stores in six western states. Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., will serve as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts. HARRAH'S ENTERTAINMENT: S&P Raises Corp. Credit Rating to 'CCC+' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit and issue-level ratings on Las Vegas-based Harrah's Entertainment Inc. and its wholly owned subsidiary, Harrah's Operating Co. Inc., along with all issue-level ratings on Harrah's debt, as outlined in S&P's May 27, 2009 research update. S&P raised the corporate credit rating to 'CCC+' from 'CCC', reflecting S&P's assessment that the recent capital raise, combined with an amendment to certain terms of HOC's senior secured credit facilities, has alleviated S&P's concerns that given S&P's expectation for operating performance this year, HOC would not be able to remain in compliance with its senior secured leverage ratio covenant. In addition, S&P raised the issue-level rating on HOC's senior secured credit facilities to 'B' (two notches higher than the 'CCC+' corporate credit rating) from 'B-'. The recovery rating on these loans remains at '1', indicating S&P's expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. S&P also raised its issue-level ratings on HOC's second-priority senior secured and senior unsecured debt issues, as well as HET subsidiary Caesars Entertainment Inc.'s subordinated debt issues to 'CCC-' from 'CC'. The recovery rating on these securities remains at '6', indicating S&P's expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default. In addition, Standard & Poor's removed all of the ratings from CreditWatch, where S&P had placed them with positive implications on May 27, 2009, following Harrah's announcement of the planned capital raise. The outlook is developing. "While a highly leveraged financial profile, combined with our expectation that EBITDA will decline in the mid-teens percentage area in 2009 and be roughly flat in 2010, will likely result in credit measures remaining weak over the intermediate term, S&P believes that ratings upside potential exists if performance on the Las Vegas Strip and Atlantic City stabilizes in 2010 and longer-term prospects improve," said Standard & Poor's credit analyst Ben Bubeck. "However, if current weak conditions in these markets persist over an extended period, or if performance deteriorates further," he added, "Harrah's may face further challenges in servicing its current capital structure, and S&P believes the company may again seek to restructure its debt obligations." HARRAH'S OPERATING: S&P Raises Corp. Credit Rating to 'CCC+' ------------------------------------------------------------ Standard & Poor's Ratings Services said that it raised its corporate credit and issue-level ratings on Las Vegas-based Harrah's Entertainment Inc. and its wholly owned subsidiary, Harrah's Operating Co. Inc., along with all issue-level ratings on Harrah's debt, as outlined in S&P's May 27, 2009 research update. S&P raised the corporate credit rating to 'CCC+' from 'CCC', reflecting S&P's assessment that the recent capital raise, combined with an amendment to certain terms of HOC's senior secured credit facilities, has alleviated S&P's concerns that given S&P's expectation for operating performance this year, HOC would not be able to remain in compliance with its senior secured leverage ratio covenant. In addition, S&P raised the issue-level rating on HOC's senior secured credit facilities to 'B' (two notches higher than the 'CCC+' corporate credit rating) from 'B-'. The recovery rating on these loans remains at '1', indicating S&P's expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. S&P also raised its issue-level ratings on HOC's second-priority senior secured and senior unsecured debt issues, as well as HET subsidiary Caesars Entertainment Inc.'s subordinated debt issues to 'CCC-' from 'CC'. The recovery rating on these securities remains at '6', indicating S&P's expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default. In addition, Standard & Poor's removed all of the ratings from CreditWatch, where S&P had placed them with positive implications on May 27, 2009, following Harrah's announcement of the planned capital raise. The outlook is developing. "While a highly leveraged financial profile, combined with our expectation that EBITDA will decline in the mid-teens percentage area in 2009 and be roughly flat in 2010, will likely result in credit measures remaining weak over the intermediate term, S&P believes that ratings upside potential exists if performance on the Las Vegas Strip and Atlantic City stabilizes in 2010 and longer-term prospects improve," said Standard & Poor's credit analyst Ben Bubeck. "However, if current weak conditions in these markets persist over an extended period, or if performance deteriorates further," he added, "Harrah's may face further challenges in servicing its current capital structure, and S&P believes the company may again seek to restructure its debt obligations." HARTMARX CORP: Creditors Sue Banks Over $12MM Lease Settlement -------------------------------------------------------------- The official committee of unsecured creditors of Hartmarx Corp. has sued secured lenders with a complaint asking the U.S. Bankruptcy Court for the Northern District of Illinois to declare that $12 million resulting from termination of a store lease isn't part of the lenders' collateral, Bloomberg's Bill Rochelle reports. Hartmarx Corp. had a Hickey Freeman retail store at 666 Fifth Ave. in Manhattan. With the rent below market prices, Hartmarx obtained approval from the Bankruptcy Court to terminate the lease in return for a payment of almost $12 million from the landlord and the return of a $2 million security deposit. According to the report, a dispute immediately erupted with the lenders, owed $114 million at the Chapter 11 filing, over whether the banks have liens in the lease settlement proceeds. The Committee takes the position that the lenders never had perfected security interests because they made no filings in the New York land records noting an interest in the lease. Wells Fargo & Co., as agent for the lenders, made a preliminary objection to the planned sale of Hartmarx's business, saying it would generate only $56 million cash, or less than half the bank debt. Based in Chicago, Illinois, Hartmarx Corporation (HTMXQ) -- http://www.hartmarx.com/-- produces and markets business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey-Freeman, Palm Beach, Coppley, Monarchy, Manchester Escapes, Society Brand, Racquet Club, Naturalife, Pusser's of the West Indies, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace, Eye, Christopher Blue, Worn, One Girl Who . . . and b.chyll. In addition, the company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Burberry men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Lyle & Scott, Golden Bear, Jag and Dr. Martens. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. Hartmarx and certain affiliates filed for bankruptcy protection on January 23, 2009 (Bankr. N.D. Ill. Lead Case No. 09-02046). George N. Panagakis, Esq., Felicia Gerber Perlman, Esq., and Eric J. Howe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed $483,108,000 in total assets and $261,220,000 in total debts as of August 31, 2008. HAWKER BEECHCRAFT: Bank Debt Trades at 34% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 65.80 cents-on- the-dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.80 percentage points from the previous week, the Journal relates. The loan matures March 26, 2014. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B- rating. Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, is a leading manufacturer of business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. As reported by the Troubled Company Reporter on May 11, 2009, Moody's Investors Service lowered Hawker Beechcraft's probability of default rating to Ca from Caa2. At the same time, the company's corporate family rating of Caa2, B3 rating on secured bank facilities, Ca on subordinated debt and speculative grade liquidity rating of SGL-3 were left unchanged. However, instrument ratings covering Hawker Beechcraft's unsecured fixed coupon notes were placed under review for possible downgrade, and the rating on the unsecured PIK-election notes was lowered to Ca. The actions follow announcement by the company of a tender offer to use $100 million of cash to purchase portions of its outstanding unsecured fixed coupon notes, unsecured PIK-election notes and subordinated notes at substantial discounts to par value. The tender would be financed from cash on hand which has been supplemented by borrowings under the company's revolving credit facility that is now fully drawn. The outlook is developing and is contingent upon the outcome of the tender offer and greater clarity on how the company resolves its "balance sheet management plans". On May 4, 2009, Hawker Beechcraft announced it would initiate a tender offer to acquire portions of its unsecured and subordinated notes at various prescribed prices (all at substantial discounts to par value) supplemented by early response premiums. If the tender transaction proceeds as structured, Moody's would also deem it to be a distressed exchange, which constitutes an event of default under Moody's definition of default. HAYES LEMMERZ: Can't File Form 10-Q on Time, Expects Wider Loss --------------------------------------------------------------- Patrick C. Cauley, Hayes Lemmerz International, Inc.'s vice president, general counsel and secretary, disclosed in a regulatory filing with the Securities and Exchange Commission that as a result of the demands that the bankruptcy filings have placed on the time and attention of the Company's management, including negotiating and obtaining debtor-in-possession financing, the Company has been unable to complete the work necessary to file its Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2009, within the prescribed period without unreasonable effort or expense. Mr. Cauley says the Company intends to file the Form 10-Q as soon as practicable. The Company anticipates that its results of operations to be included in the Form 10-Q will include significant changes from the results of operations reported for the fiscal quarter ended April 30, 2008. Any expected results noted for the first fiscal quarter of 2009 are not final and are subject to revision prior to the Company's filing of the Form 10-Q. "Total sales for the fiscal quarter ended April 30, 2009, are expected to be approximately $258 million, a decrease of approximately 55% from the corresponding fiscal quarter ended April 30, 2008. The reduction in sales was primarily the result of substantially lower production volumes at North American and European vehicle manufacturers, which have been negatively affected by the global recession and troubled capital and credit markets. As a result of the unprecedented decline in volumes, the Company expects a slight gross loss for the fiscal quarter, compared to a gross profit of $63.7 million in the corresponding fiscal quarter ended April 30, 2008. In addition, net losses are expected be significantly worse than the net loss of $12.8 million in the corresponding fiscal quarter in the prior year," Mr. Cauley says. Originally founded in 1908, Hayes Lemmerz International, Inc. (NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. The Company is also a supplier of automotive powertrain components. The Company has global operations with 23 facilities, including business, sales offices and manufacturing facilities, located in 12 countries around the world. The Company sells products to every major North American, Asian and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world. The Company and certain affiliates filed for bankruptcy on May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching agreements with lenders holding a majority of the Company's secured debt. The Company's principal bankruptcy attorneys are Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co., LLC serves as the Company's financial advisors. AlixPartners, LLP serves as the Company's restructuring advisors. The Garden City Group, Inc., serves as the Debtors' claims and notice agent. As of January 31, 2009, the Debtors had total assets of $1,336,600,000 and total debts of $1,405,200,000. This is the Company's second trip to the bankruptcy court, dubbed a Chapter 22, which was precipitated by an unprecedented slowdown in industry demand and a tightening of credit markets. The company plans to reduce its debt and restructure its balance sheet. Hayes Lemmerz and its direct and indirect domestic subsidiaries and one subsidiary in Mexico first filed for bankruptcy in December 2001 before the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 filings were precipitated by declining market conditions and the Company's excessive debt burdens, according to Mr. Clawson, who also served as chairman and chief executive officer at that time. The Court confirmed the Company's reorganization plan in May 2003, allowing the Company to exit bankruptcy in June 2003. In accordance with the 2003 Plan, approximately $2.1 billion in pre-petition debt and other liabilities were discharged. The Plan provided for holders of prepetition secured claims to receive $478.5 million in cash and 53.1% of the reorganized company common stock. Holders of senior note claims were to receive $13 million in cash and 44.9% of the New Common Stock, and holders of general unsecured claims were to receive 2% of the New Common Stock. Hayes Lemmerz' prior common stock and securities were cancelled as of June 3, 2003. HAYES LEMMERZ: Court Orders U.S. Trustee to Appoint Retiree Panel ----------------------------------------------------------------- With bankrupt automotive wheel maker Hayes Lemmerz International, Inc. hamstrung by massive retiree obligations, the U.S. Bankruptcy Court for the District of Delaware has given word that the various unions representing the Hayes work force will have to form a retiree committee to help the debtor trim its retiree benefits, Bankruptcy Law360 reports. On Wednesday Judge Mary F. Walrath issued an order directing the U.S. trustee to appoint the retiree committee "as expeditiously as practicable", but in no event later than July 5, 2009. As reported in the Troubled Company Reporter on May 28, 2009, to carry out their restructuring plans, Hayes Lemmerz told the Court that they are implementing cost reductions and that the cost associated with retiree medical benefits and life insurance for both union and salaried retirees is significant, and must be a part of the reduction. Accordingly, the Debtors requested the Court for an order directing the appointment of members to a Retiree Committee to serve as the sole "authorized representative" of retired employees. Originally founded in 1908, Hayes Lemmerz International, Inc. (NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. The Company is also a supplier of automotive powertrain components. The Company has global operations with 23 facilities, including business, sales offices and manufacturing facilities, located in 12 countries around the world. The Company sells products to every major North American, Asian and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world. The Company and certain affiliates filed for bankruptcy on May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching agreements with lenders holding a majority of the Company's secured debt. The Company's principal bankruptcy attorneys are Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co., LLC serves as the Company's financial advisors. AlixPartners, LLP serves as the Company's restructuring advisors. The Garden City Group, Inc., serves as the Debtors' claims and notice agent. As of January 31, 2009, the Debtors had total assets of $1,336,600,000 and total debts of $1,405,200,000. This is the Company's second trip to the bankruptcy court, dubbed a Chapter 22, which was precipitated by an unprecedented slowdown in industry demand and a tightening of credit markets. The Company plans to reduce its debt and restructure its balance sheet. Hayes Lemmerz and its direct and indirect domestic subsidiaries and one subsidiary in Mexico first filed for bankruptcy in December 2001 before the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 filings were precipitated by declining market conditions and the Company's excessive debt burdens, according to Mr. Clawson, who also served as chairman and chief executive officer at that time. The Court confirmed the Company's reorganization plan in May 2003, allowing the Company to exit bankruptcy in June 2003. In accordance with the 2003 Plan, approximately $2.1 billion in pre-petition debt and other liabilities were discharged. The Plan provided for holders of prepetition secured claims to receive $478.5 million in cash and 53.1% of the reorganized company common stock. Holders of senior note claims were to receive $13 million in cash and 44.9% of the New Common Stock, and holders of general unsecured claims were to receive 2% of the New Common Stock. Hayes Lemmerz' prior common stock and securities were cancelled as of June 3, 2003. HERCULES OFFSHORE: Moody's Downgrades Corp. Family Rating to 'B2' ----------------------------------------------------------------- Moody's Investors Service downgraded Hercules Offshore, Inc.'s Corporate Family Rating to B2 from Ba3, its Probability of Default Rating to B2 from B1, and its senior secured revolving credit facility due 2012 to B2 (LGD 3, 43%) from Ba3 (LGD 3, 33%) and its senior secured term loan B due 2013 to B2 (LGD 3, 43%) from Ba3 (LGD 3, 33%). The outlook is negative. The downgrade reflects Hercules' extremely weak operating performance, which Moody's believe will continue into 2010. Consequently, Moody's anticipates higher covenant compliance risk over the near-term. The dramatic drop in upstream spending, particularly in Hercules' historical market niche, has severely impacted demand for the company's services. In addition to its revenue decline, margins have suffered significantly. Management has responded decisively with major cost reductions to bolster liquidity through this downcycle. However, Moody's anticipates more actions will be needed. The dramatic reduction in drilling and the difficult credit market conditions have led oil and gas producers to significantly pull back their capital expenditures. Hercules' earnings are expected to steadily deteriorate over 2009 as drilling contractors contend with rapidly declining utilization and weak pricing for their services. Moody's negative outlook anticipates continued sector weakness and the expectation that covenant compliance will be pressured. Hercules' B2 CFR reflects its relatively small scale and potential covenant issues as a result of a much weaker drilling environment. The ratings also consider its high financial leverage and low tangible asset coverage of debt. These challenges are somewhat mitigated by Hercules' international drilling and liftboat businesses. The B2 rating on the company's senior secured credit facilities are notched at a level reflective of its position in Hercules' capital structure taking into account the company's senior unsecured convertible notes. Moody's last rating action on Hercules was on June 4, 2007, when Moody's upgraded the company's CFR rating to Ba3 from B2 and assigned a Ba3 rating to Hercules' proposed secured credit facilities. INNOPRIZE III LLC: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Innoprize III LLC 3120 Panorama Road Riverside, CA 92506 Bankruptcy Case No.: 09-22788 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Innoprize XVIII LLC 09-22791 Chapter 11 Petition Date: June 10, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Thomas B. Donovan Debtor's Counsel: William H. Brownstein, Esq. 1250 Sixth St., Ste 205 Santa Monica, CA 90401 Tel: (310) 458-0048 Fax: (310) 576-3581 Email: Brownsteinlaw.bill@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 9 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-22788.pdf The petition was signed by Cleo Gutierrez, managing member of the Company. ISLE OF CAPRI: June 10 Earnings Won't Affect S&P's 'B' Rating ------------------------------------------------------------- Standard & Poor's Ratings Services announced that it 'B' rating and negative outlook were not affected by the June 10, 2009 earnings announcement by St. Louis-headquartered Isle of Capri Casinos, Inc. On June 10, 2009, the Company announced fourth-quarter and fiscal- year-end 2009 results (Isle's fiscal year ends in April), which incorporated lower rates of decline than S&P previously expected. Specifically, fiscal 2009 net revenues and EBITDA decreased 4.7%, and 2.8%, respectively, after adjusting for nonrecurring and discontinued operations related revenue, as compared to fiscal 2008. Adjusted debt to EBITDA and EBITDA coverage of interest at April 30, 2009, were approximately 7.0x, and 2.0x, respectively. This compares to S&P's previous expectation for fiscal 2009 revenue to decline in the mid- to high-single digit percent area, and for EBITDA to decline in the low- to mid-teens percentage area, which would have resulted in adjusted debt to EBITDA in the low 8x-area, and interest coverage in the high 1x-area. Isle's 2009 EBITDA outperformance relative to S&P's expectation is largely explained by greater than expected cost cuts in the second half of fiscal 2009. Notwithstanding better-than-expected EBITDA performance, the negative outlook reflects S&P's continued concern that the cushion with respect to Isle's debt to EBITDA covenant in the company's credit facility will thin significantly beginning in the April 2010 quarter, once certain nonrecurring add-backs to EBITDA roll off, and given the covenant will have stepped down to 6.75x, as compared to 7.25x at the April 30, 2009, test date. The add-backs are meaningful, and include insurance proceeds received in the third quarter of fiscal 2009. S&P's expectation with respect to the covenant cushion stems from S&P's belief that fiscal 2010 revenue will fall in the low-single digit area, and that fiscal 2010 EBITDA will fall in the mid-single digit area. S&P believes weak discretionary consumer spending will continue to impair gaming industry revenues through calendar 2009, and that many gaming operators will experience high-single-digit percentage revenue declines in calendar 2009. Even though S&P expects that regional gaming markets, such as those in which Isle operates, will perform more favorably over the next several quarters than destination-oriented markets, a high level of revenue uncertainty remains for Isle's portfolio of properties. In addition, S&P believes Isle likely exhausted its ability to meaningfully reduce its cost structure, and S&P assume that the level of corporate expenses achieved in the second half of 2009 is indicative of run rate expenses. S&P will continue to monitor the revenue performance of the regional gaming markets and Isle's portfolio in coming months, and S&P may consider a stable outlook once S&P gain comfort that the covenant cushion will likely remain above 5% to 10% on a sustained basis, and that the operating environment has stabilized. JENNIFER CHAN: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Jennifer Chan 2147 Wind River Lane Rowland Heights, CA 91748 Tel: (626) 913-7398 Bankruptcy Case No.: 09-24636 Chapter 11 Petition Date: June 11, 2009 Court: Central District Of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Douglas M. Neistat, Esq. twilliams@greenbass.com Greenberg & Bass 16000 Ventura Blvd #1000 Encino, CA 91436 Tel: (818) 382-6200 Fax: (818) 986-6534 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hanmi Bank property $5,200,000 3660 Wilshire Blvd. Penthouse Suite A Los Angeles, CA 90010 DRM Enterprises LLC judgment $1,255,000 PO Box 1025 Deltran, NJ 08075 Tel: (800) 595-1936 Fax: (856) 461-1628 Countrywide property $620,000 450 American Street Simi Valley, CA 93065 Option One Mortgage property $790,000 American Servicing Corp. property $506,256 Phoenix Insurance judgment $250,000 DECASA property $219,800 Ocwen Loan Servicing property $208,000 Johhyn Chan loan $175,000 GLIP International loan $90,000 Chase credit card $40,664 American Express credit card $30,080 Discover credit card $24,518 Nordstrom/Visa credit card $14,445 Myers & Porter APC legal services $12,034 JOEL ATIENZA: Case Summary & 18 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: Joel C. Atienza Annalisa G. Atienza 4228 136th Place SE Bellevue, WA 98006 Bankruptcy Case No.: 09-15737 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtors' Counsel: Kevin T. Helenius, Esq. 40 Lake Bellevue, Ste 100 Bellevue, WA 98005 Tel: (425) 450-7011 Email: efiling@kth-law.com Total Assets: $3,464,505 Total Debts: $3,483,132 A full-text copy of the Debtors' petition, including a list of their 18 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wawb09-15737.pdf The petition was signed by the Joint Debtors. JOURNAL REGISTER: Teamsters Pension Fund Balks at Chapter 11 Plan ----------------------------------------------------------------- A Teamsters union pension fund has filed an objection to the confirmation of the reorganization plan proposed by Journal Register Co., Bloomberg's Bill Rochelle reports. The U.S. Bankruptcy Court for the Southern District of New York already approved the explanatory disclosure statement and set June 25 for the confirmation hearing to approve the plan. According to the report, the multiemployer pension fund says the plan unfairly discriminates among unsecured creditors. While trade suppliers are to be paid in full, other unsecured creditors, such as the pension fund, are to receive about 10%. The pension fund says it has an estimated and contingent $4.2 million claim for withdrawal liability. The plan is designed to give all of the new stock and $225 million in new term loans to the pre-bankruptcy secured lenders owed $695 million. The distribution is estimated to be worth 42% for the lenders. Unsecured creditors with some $27.1 million in claims are to have a 9.2% recovery under the amended plan. Existing stock will be canceled. Yardley, Pennsylvania-based Journal Register Company (PINKSHEETS: JRCO) -- http://www.JournalRegister.com/-- owns 20 daily newspapers, more than 180 non-daily publications and operates over 200 individual Web sites that are affiliated with the Company's daily newspapers, non-daily publications and its network of employment Web sites. All of the company's operations are strategically clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The Company also owns JobsInTheUS, a network of 20 employment Web sites. The Company, along with its affiliates, filed for Chapter 11 bankruptcy protection on February 21, 2009 (Bankr. S.D.N.Y. Case No. 09-10769). Marc Abrams, Esq., Rachel C. Strickland, Esq., Shaunna D. Jones, Esq., and Jennifer J. Hardy, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors as counsel. William M. Silverman, Esq., Scott L. Hazan, Esq., and Jeanette A. Barrow- Bosshart, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represent the Official Committee of Unsecured Creditors as counsel. Conway, Del Genio, Gries & Co., LLC, provides restructuring management services to the Debtors. Robert P. Conway is the company's chief restructuring officer. The Company listed $100 million to $500 million in total assets and $500 million to $1 billion in total debts. JUANCITO LLC: Chapter 7 Trustee to Auction Liquor License --------------------------------------------------------- Brian S. Thomas, the Chapter 7 Trustee overseeing the liquidation of Juancito LLC dba Gensollen's Bar Restaurant and Package Good, intends to sell the debtor's plenary retail consumption liquor license (No. 0111-33-012-002, issued by Galloway Township, N.J.) at 10:00 a.m. on June 25, 2009. The sale will be conducted at the office of counsel to the Chapter 7 Trustee: Law Office of Brian S. Thomas 327 Central Avenue, Suite 103 Linwood, NJ 08221 Telephone (609) 601-6066 The sale will be free and clear of all liens, encumbrances, and vendor claims. A 25% cash or equivalent deposit is required at the time of acceptance of the highest and best bid and the balance is payable within 30 days. The sale is subject to regulatory approvals, and the sale proceeds will be held in escrow by the Chapter 7 Trustee pending approvals. If the license cannot be transferred, due to no fault of the Trustee, 33% of the total sale price will be retained by the Chapter 7 Trustee as liquidated damages. The Chapter 7 Trustee shall have no individual liability whatsoever. Juancito, LLC, dba Gensollen's Bar Restaurant and Package Good, filed for chapter 11 protection (Bankr. D. N.J. Case No. 08-12284) on Feb. 8, 2008. A full-text copy of the debtor's petition is available at http://bankrupt.com/misc/njb08-12284.pdfat no charge. The case subsequently converted to a chapter 7 liquidation proceeding. KB TOYS: Former Directors Balk at Panel's Derivative Claim ---------------------------------------------------------- KB Toys Inc. and several former directors of the bankrupt company have objected to an effort by unsecured creditors to obtain standing to pursue a derivative claim in an adversary suit over $95 million owed to the toy retailer's owner, Prentice Capital Management Inc., Bankruptcy Law360 reports. On May 14, 2009, the official committee of unsecured creditors filed a motion with the U.S. Bankruptcy Court for the District of Delaware for the entry of an order authorizing the Committee to commence and prosecute causes of action against certain directors and officers of KB Toys, Inc. and its affiliates, on a nunc pro tunc basis and on behalf of the Debtors' estates. A copy of the proposed complaint, attached as exhibit A to the motion, is available at: http://bankrupt.com/misc/KBToys.PanelComplaint.pdf The retailer and five of its former directors, including three affiliated with Prentice Capital Management, filed the objections Wednesday in the U.S. Bankruptcy Court for the District of Delaware. The Committee said in its motion that "the $25 million transfer made to PKBT Funding LLC, PKBT Lending LLC and Prentice Capital Management, LP (the Prentice Entities) in December 2006 under the overadvance facility was made in derogation of the fiduciary duties of the directors and officers because, among other things, the Debtors were insolvent at the time and the Debtors' board of directors had contemporaneously passed a resolution prohibiting any further payments under the overadvance facility." Jonathan Duskin, Charles Phillips and Michael Zimmerman (collectively, the Prentice Directors) disputes this. The Prentice Directors say that: -- the resolution did not prohibit any payments as long as the Debtors executed acceptable amendments to the senior credit facility and the overadvance facility (each of which were amended on December 27, 2009); and -- the Debtors made the loan repayment to avoid a breach of the overadvance facility and a resulting cross-default under the $175 million senior credit facility provided by Bank of America, N.A." The Debtors, on the other hand, say that the Committee's complaint is "void of allegations sufficient to establish a colorable claim for breach of fiduciary duty." Further, the Debtors contend that the complaint is not entirely clear as to what fiduciary duty was breached and to what extent the Debtors' estates were damaged from the alleged breach. The Debtors add that the nunc pro tunc relief is not warranted or appropriate. The April 30, 2009 date is only significant because that was the deadline by which the Committee had to assert a "Challenge" as defined in the Final Cash Collateral Order dated January 28, 2009, the Debtors say. The Debtors goes on to say that as any claims for breach of fiduciary duty by the Debtors' officers and directors is not a "Challenge" as defined in the Final Cash Collateral Order, there is no deadline, outside of appliable statute of limitations, for the complaint for breach of fiduciary duty. About KB Toys Headquartered in Pittsfield, Massachusetts, KB Toys, Inc. -- http://www.kbtoys.com/-- operates a chain of retail toy stores. On Jan. 14, 2004, the Debtor and 69 of its affiliates filed for protection under Chapter 11 of the Bankruptcy Code, which were administratively consolidated under Case No. 04-10120. Two of the 200 bankruptcy cases remain open, KB Toys Inc. and KB Toy of Massachusetts Inc. In connection with the emergence of KB Toys from bankruptcy in August 2005, and the subsequent organizational restructuring, the assets and operations of many of these prior debtors were transferred among then existing debtor entities and consolidated with KB Toys Group. Furthermore, most of the entities involved were either dissolved or were merged into surviving entities, and several of them changed their names. The company, together with eight of its affiliates, again filed for Chapter 11 on December 11, 2008 (Bankr. D. Del. Lead Case No. 08-13269). Joel A. Waite, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Wilmer Cutler Pickering Hale and Dorr LLP as their co-counsel, FTI Consulting Inc. as financial and restructuring advisor, and Epiq Bankruptcy Solutions LLC as claims and noticing agent. According to Bloomberg, KB listed assets of $241 million against debt totaling $362 million in its Chapter 11 petition filed on December 11. The debts include $143 million in unsecured claims; and $200 million in secured claims, including $95.1 million owed to first-lien creditors where General Electric Capital Corp. serves as agent; and $95 million owed to second-lien creditors. As reported by the Troubled Company Reporter on December 22, 2008, the Hon. Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware allowed KB Toys Inc. to start going-out-of-business sales. KINGSWAY FINANCIAL: S&P Withdraws 'B-' Counterparty Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said it withdrew its ratings, including its interactive 'B-' long-term counterparty credit and senior unsecured debt ratings on Toronto-based specialty insurance provider Kingsway Financial Services Inc. and related entities at the request of the company. At the same time, Standard & Poor's assigned its unsolicited 'B-' long-term counterparty credit and senior unsecured debt ratings to Kingsway and related entities. The outlook is negative. "Despite the company's request to withdraw its interactive ratings, S&P believes there remains sufficient market interest in Kingsway (with about US$336 million in debt and hybrids outstanding as at March 31, 2009) to maintain a pubic rating, although on an unsolicited basis," said Standard & Poor's credit analyst Foster Cheng. This unsolicited rating(s) was initiated by Standard & Poor's. It may be based solely on publicly available information and may or may not involve the participation of the issuer's management. Standard & Poor's has used information from sources believed to be reliable, but does not guarantee the accuracy, adequacy, or completeness of any information used. KNIGHT-CELOTEX: Forced Into Chapter 7 Bankruptcy ------------------------------------------------ The Associated Press reports that Knight-Celotex, LLC spokesperson Laura Peet said that Bank of America has forced the Company into Chapter 7 liquidation. According to The AP, the Lisbon plant will remain closed until a buyer can be found. Headquartered in Northfield, Illinois, Knight-Celotex, LLC -- http://www.knightcelotex.com/-- is the largest fiberboard manufacturer in the world and the only U.S. fiberboard manufacturer that both manufactures and ships products nationally within the United States. Knight-Celotex is privately owned by Knight Industries, LLC, and has operations in Lisbon Falls, Maine; Sunbury, Pennsylvania; and Danville, Virginia. Knight-Celotex and Knight Industries, LLC, filed Chapter 11 petitions on April 6, 2009 (Bankr. N. D. Ill. Case Nos. 09-12219 to 09-12200). Scott R. Clar, Esq., at Crane Heyman Simon Welch & Clar represents the Debtor in its restructuring efforts. Knight- Celotex listed assets and debts ranging $10 million to $50 million. LANDSOURCE COMMUNITIES: Court OKs Barclays' $140MM Backstop Deal ---------------------------------------------------------------- As reported by the Troubled Company Reporter on May 14, 2009, Barclays Bank PLC, as Plan Proponent and First Lien Administrative Agent, asked the U.S. Bankruptcy Court for the District of Delaware to approve a backstop rights purchase agreement it entered into with certain investment entities, LandSource Communities Development LLC, and Newhall Holding Company, LLC, and the related Rights Offering Premium and Expense Reimbursement. Barclays also seeks approval of the marketing of the "Backstop Commitment Amounts" and payment of the Rights Offering Premium in cash in the event the Debtors either consummate an Alternative Transaction or a Termination Payment Event occurs. Barclays proposes to initiate a rights offering backstopped by certain investment entities or the "backstop parties" in order to raise up to $140,000,000 for the Reorganized Debtors, subject to adjustment. Accredited Holders of First Lien Claims, Second Lien Claims and Allowed Unsecured Claims as of the Voting Record Date will be offered an opportunity to subscribe for the Units in Holdco LLC, which are issued in connection with the Rights Offering. The price of the Rights Offering Units will be equal to the final Rights Offering Amount divided by the Rights Offering Units. BoNY Objects The Bank of New York, in its capacity as administrative agent for the Second Lien Lenders, points out that the structure of the Backstop Agreement essentially guarantees that the Backstop Parties will receive a $7,000,000 premium in cash. Andrew N. Rosenberg, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, tells the Court, on behalf of BoNY, adds that if there is any amendment or modification to the Second Amended Plan that is "not reasonably acceptable" to a backstop party, then the backstop party may terminate its individual total commitment amount. Upon that termination, each backstop party is entitled to receive its portion of the $7,000,000 premium in cash. Mr. Rosenberg says that considering that the Second Amended Plan contains certain provisions that are not legally confirmable, there will most certainly be some sort of amendment or modification with respect to the Second Amended Plan or its Exhibits. If one of the backstop parties deems those changes "not reasonably acceptable," then the backstop parties are entitled to receive their respective portion of the $7,000,000 premium in cash. If this premium is paid in cash, Mr. Rosenberg argues, it would be a totally unwarranted expenditure of the Debtors' estates' very limited resources and proposed recoveries to unsecured and undersecured creditors under the Second Amended Plan. "The $7,000,000 premium is yet another element of the First Lien Lenders' efforts to deprive the Second Lien Lenders and unsecured creditors of value, and should not be approved," Mr. Rosenberg asserts. The Official Committee of Unsecured Creditors supports the objections raised by BoNY. * * * The Court authorized Barclays Bank, as Plan Proponent, to enter into a Backstop Rights Purchase Agreement with the Debtors. The Court approves the terms of the Backstop Agreement and the related Rights Offering Premium and Expense Reimbursement. A full-text copy of the June 2 drafted Backstop Rights Purchase Agreement is available for free at: http://bankrupt.com/misc/LandS_BackstopDeal_June2Draft.pdf The marketing of the Backstop Commitment Amounts and payment of the Rights Offering Premium in cash in the event Barclays consummates an alternative transaction or if a termination payment event occurs is also approved. Objections not otherwise resolved, settled or withdrawn are overruled. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for Chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. Bankruptcy Creditors' Service, Inc., publishes LandSource Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandSource Communities Development LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) LANDSOURCE COMMUNITIES: Court Extends DIP Maturity to July 31 ------------------------------------------------------------- LandSource Communities Development LLC and its debtor-affiliates asked the U.S. Bankruptcy Court for the District of Delaware to approve certain amendments to the Final DIP Order, which authorized them to enter into a Superpriority DIP First Lien Credit Agreement dated June 16, 2008, and provided them with a revolving line of credit of up to $135 million. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that Barclays Bank, as administrative agent under the DIP Agreement, has agreed to allow the Debtors to continue to use cash collateral on certain terms and conditions set forth in a proposed amendment to the Final DIP Order. Mr. Collins tells the Court that the parties believe that if the Debtors are able to consummate certain asset sales, the proceeds of those sales, together with the cash currently held by the Debtors, should provide the Debtors with sufficient liquidity over the coming months to confirm a plan of reorganization and emerge from Chapter 11. The proposed Amendment to the DIP Facility allows the Debtors to retain the proceeds of the asset sales with Barclays' consent, Mr. Collins says. The material provisions of the parties' agreed Amendment to the DIP Facility are: * Uses of Cash Collateral. If approved, the Amendment will allow the Debtors to pay: (a) ordinary course expenses as they come due, to the extent set forth on the 13-week cash flow budget provided to the financial advisors for the First Lien Lenders, the Second Lien Lenders, and the Committee; (b) any fees and expenses due to Barclays under the documents evidencing the DIP Agreement; (c) adequate protection amounts due pursuant to the Final DIP Order; (d) any fee that comes due and payable pursuant to Sections 1930 and 156 of the Judiciary and Judicial Procedure between the Maturity Date and the Post- Maturity Termination Date; and (e) any allowed professional fees and expenses that come due and payable under Sections 328, 330, and 331 of the Bankruptcy Code between the Maturity Date and the Post-Maturity Termination Date. * Termination Date. The "Post-Maturity Termination Date" refers, under the Amendment, as the earliest to occur of: (a) the date on which Barclays provides notice of an occurrence of an Event of Default under the DIP Agreement; (b) the entry of a Court order denying confirmation of the Second Amended Joint Chapter 11 Plan Of Reorganization for LandSource Communities Development LLC and its affiliated debtors proposed By Barclays Bank PLC, as may be amended from time to time; or (c) July 31, 2009. * Carve-Out. The "Carve-Out" for unpaid professional fees and ordinary course trade expenses, as defined under the Final DIP Order, is amended so as to be triggered only upon the occurrence of the Post-Maturity Termination Date, rather than the occurrence of an Event of Default. * Fee. In consideration for its consent to the entry of the Amendment, on the effective date of a Plan, Barclays, for the account of each Revolver Facility Lender ratably, will be entitled to a fee of $1,350,000, which fee will be fully earned as of the date of the Amendment. In light of their existing capital structure and the continuing turbulence in the credit markets, the Debtors do not believe that other third party financing is available. Parties Object The Official Committee of Unsecured Creditors, the Bank of New York and DK Acquisition Partners, L.P., have expressed their opposition to the Debtors' DIP Amendment Motion. "The DIP Amendment Motion is simply an extension of a controlled liquidation process that the DIP Lenders attempted to put in place over eleven months ago and that the DIP Lenders are trying to accomplish now through their Second Amended Plan," Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, contends, on behalf of the Committee. She adds that the Debtors have no economic need for the extension and the conversion of the cases to Chapter 7 may be preferable. The Committee also asserts that the cashflow projections should be filed with the Court or the DIP Amendment Motion should be denied. "The proposed Amendment to the Final DIP Order does not benefit these estates and only serves to advance Barclays' Plan," counsel to BoNY, in its capacity as administrative agent for the Second Lien Lenders, Andrew N. Rosenberg, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, tells the Court. He counters that pursuant to Section 1129(a)(7), Barclays must show that every dissenting creditor will receive as much or more under the Second Amended Plan than they would receive if the Debtors were liquidated under Chapter 7. BoNY agrees with the Committee that at this stage, Mr. Rosenberg relates, a Chapter 7 conversion, rather than additional fees to the First Lien Lenders to carry out their own Plan, may be in the best interests of all creditors. Counsel to DK Acquisition, Martin Eisenberg, Esq., in White Plains, New York, contends that the Maturity Date cannot be extended under the DIP Agreement without the consent of each the Lenders. He adds that since the Debtors do not have to repay the loans on the Maturity Date, the consent of each of the Lenders is required under the DIP Agreement. Accordingly, Mr. Eisenberg says, Barclay's consent to the Proposed DIP Amendment is unauthorized and invalid and does not bind the Lenders. DK thus Acquisition asserts that the DIP Amendment Motion must be denied. DK loaned the Debtors $5 million under the Revolver Facility and is not a prepetition lender. * * * The Court granted the Debtors' request and amended the Final DIP Order. The Debtors are permitted to use the Cash Collateral, between the Maturity Date and the Post-Maturity Termination Date, for uses the Debtors enumerated. The Court also approves the definition of the term "Post-Maturity Termination Date" as proposed by the Debtors. Notwithstanding anything to the contrary in the Final DIP Order, the Carve-Out will be triggered upon the occurrence of the Post-Maturity Termination Date, as opposed to the occurrence of an Event Of Default. The Carve-Out has not yet been triggered. In consideration for its consent to the entry of DIP Amendment, Barclays, as Administrative Agent, for the benefit of each Revolver Facility Lender ratably, will be entitled on the Plan Effective Date to receive a $1,350,000 fee. It will also be entitled, for the period commencing June 1, 2009 forward, to interest that will accrue on each outstanding Revolver Facility Loan at a per annum rate that is 2% per annum in excess of the rate otherwise applicable under the DIP Credit Documents. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for Chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. Bankruptcy Creditors' Service, Inc., publishes LandSource Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandSource Communities Development LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) LANDSOURCE COMMUNITIES: Creditors Panel Seeks Collateral Valuation ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in LandSource Communities Development LLC and its debtor-affiliates' Chapter 11 cases, asks the U.S. Bankruptcy Court for the District of Delaware to: (a) determine, as of the Petition Date, the value of the collateral securing prepetition obligations to the Debtors' lenders; and (b) recharacterize, as an unsecured deficiency claim, the outstanding amount of the Term Loan Credit Facility Loans in excess of $750,000,000. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, asserts that evidence will show that the value of the Prepetition Collateral as of the Petition Date was significantly less than $750 million. Thus, she avers, all of the outstanding amount of the Term Loan Credit Facility Loans in excess of $750 million is an unsecured deficiency loan. The Prepetition Credit Facilities refer to (i) a First Lien Credit Agreement entered into by certain of the Debtors with Barclays Bank PLC, as administrative agent, and certain lenders; and (ii) a Second Lien Credit Agreement entered into by certain of the Debtors with The Bank of New York, as administrative agent, and certain lenders, both dated as of February 27, 2007. The First Lien Facility provides for a revolver facility, letters of credit and swingline facilities of up to $200 million and a term loan facility of $1.106 billion. The Second Lien Facility provides for a $244 million term loan facility. To secure their obligations in the Prepetition Credit Facilities, the Debtors granted the First Lien Lenders and the Second Lien Lenders a security interest in certain of the Debtors' assets. The Committee maintains that it has standing to bring its Prepetition Collateral Determination Request pursuant to Rule 3012 of the Federal Rules of Bankruptcy Procedure and the Final DIP Order. Ms. Jones reminds the Court that the Final DIP Order provides any statutory committee appointed in the Debtors' Chapter 11 cases reserves its rights for a determination of the value of the collateral securing the Debtors' prepetition obligations to the Prepetition Lenders. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for Chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. Bankruptcy Creditors' Service, Inc., publishes LandSource Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandSource Communities Development LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) LANDSOURCE COMMUNITIES: Creditors Panel Challenges Lenders' Liens ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in LandSource Communities Development LLC and its debtor-affiliates' Chapter 11 cases, asks the U.S. Bankruptcy Court for the District of Delaware for an order finding that Barclays Bank PLC, as administrative agent for the First Lien Lenders, and The Bank of New York, as administrative agent for the Second Lien Lenders, do not have liens on certain of the Debtors' real and personal property as security for certain prepetition lines of credit extended to the Debtors. According to Laura Davis Jones, Esq., at Pachulski, Stang Ziehl & Jones LLP, in Wilmington, Delaware, the Creditors Committee brings its Prepetition Lien Challenge Motion because the First Lien Lenders or the Second Lien Lenders have not provided any basis to show that they have properly perfected liens on certain deposit accounts, certain cash listed on bankruptcy schedules, certain real estate that was not properly deeded over, certain personal property listed in defective Uniform Commercial Code-1 financing statements, and certain assets that are exempt from inclusion in the prepetition collateral pool. Ms. Jones asserts that the resolution of the Lien Challenge Motion in the Committee's favor stands to recover nearly $1 million in cash for the Debtors' estates, and to resolve that the First Lien Lenders and Second Lien Lenders do not have any security interests in real and personal property of substantial, additional value. The alleged liens at issue relate to: (a) The Newhall Land and Farming Company's, Wells Fargo Adv. Fund account ending in -9981, containing $198,161 as of the Petition Date; (b) Lennar Mare Island, LLC's California Bank & Trust account ending in -1376, containing $748,033 as of the Petition Date; (c) certain real property of Debtor Stevenson Ranch Venture LLC; (d) any UCC-1 financing statement in respect of Lennar Bressi Ranch Venture, LLC; (e) any UCC-1 financing statement in the incorrect name of "LSC Associates," ostensibly relating to "LSC Associates, LLC;" and (t) any asserted security interest in Exempt Assets of Debtor Friendswood Development Company, LLC, and Debtor LSC Associates, LLC. Ms. Jones argues that because the Deposit Accounts are not in possession of Barclays or BONY and because no control agreements indicate perfection of a lien as to the Deposit Accounts, valid liens do not exist for the benefit of the First Lien Lenders or the Second Lien Lenders with respect to all of the Deposit Accounts and the $946,195 or more in those Deposit Accounts. Barclays caused to be recorded a Deed of Trust relating to the Stevenson Ranch Venture Property, ostensibly in an effort to record a security interest in that property, Ms. Jones points out. However, she cites, according to a title policy, Debtor SRV did not execute the Deed of Trust recorded on February 28, 2007, as Instrument No. 20070431208 in the Official Records of Los Angeles County, California, purportedly in favor of the First Lien Lenders. Therefore, Ms. Jones maintains, a valid lien does not exist for the benefit of the First Lien Lenders with respect to the SRV Property. Ms. Jones adds that pursuant to Section 9310 of the California Commercial Code, a properly prepared UCC-I financing statement must be timely filed in the proper office to achieve perfection of a lien. In addition, the correct name of the debtor must be included on the UCC-I. She cites that the Lenders' UCC-1s do not comport with the requirements of the UCC in that: (a) No UCC-I was filed prior to March 10, 2008, which is 90 days before the Petition Date, and thus, the first date of the time period for a preference action under Section 547 of the Bankruptcy Code, in respect of Lennar Bressi Ranch Venture, LLC; and (b) The Second Lien Lenders caused to be filed a financing statement in the incorrect name of "LSC Associates," ostensibly relating to "LSC Associates, LLC." Therefore, because the UCC-1s do not satisfy the requirements of the UCC, no valid lien exists for the benefit of the Second Lien Lenders with respect to the UCC-1s, Ms. Jones emphasizes. Ms. Jones further points out that the Final DIP Order reflects that some assets had been expressly excluded from the "grant" of a security interest in the First Lien Security Agreement and the Second Lien Security Agreement. However, Ms. Jones says, the financing statements allegedly providing the First Lien Lenders and Second Lien Lenders security in the assets of Debtor Friendswood Development Company LLC and Debtor LSC Associates LLC fail to note that the liens do not attach to Exempt Assets. Therefore, a valid lien does not exist as to the Exempt Assets that are not noted on the financing statements relating to Friendswood Development and LSC Associates, Ms. Jones maintains. The Committee further asserts that the Final DIP Order provides it standing to bring its Lien Challenge Motion to Court. Ms. Jones says the Committee sought informal discovery from the Debtors, the First Lien Lenders, and the Second Lien Lenders relating to those parties' alleged liens in property of the Debtors. Upon review of the information gathered, the Committee asserts that no documentation supports the existence of liens on the disputed property and thus, the alleged liens on the Disputed Property are invalid. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for Chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. Bankruptcy Creditors' Service, Inc., publishes LandSource Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandSource Communities Development LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) LANDSOURCE COMMUNITIES: Gets $39.25MM Offer for Washington Square ----------------------------------------------------------------- Debtor LNR-Lennar Washington Square, LLC, held an auction for the sale of a real property located in Los Angeles County, California, commonly known as Washington Square, on May 15, 2009. VII Pier Pointe Owner, LLC, with its $39.25 million offer, was subsequently declared by the Debtor as the bidder with the highest and best offer at the auction. The Debtor selected CJUF III Washington Square LLC, with its $39 million offer, is the next highest bidder for the Assets to be sold. The purchaser has submitted a good faith deposit in the amount of 20% of the purchase price. The deposit will be forfeited if the parties' Purchase and Sale Agreement is terminated by the Debtor (i) because of the purchaser failing to close the sale within the time period agreed, or (ii) because a material breach by the purchaser of the PSA that would result in a failure of a condition set forth in the PSA. The PSA provides that the closing is to occur no later than two business days after the later to occur of (i) the entry of the sale order, or (ii) the satisfaction of the closing conditions set forth in the PSA. The PSA, however, may be terminated by the purchaser or the Debtor if the closing has not occurred by October 1, 2009, due solely to the failure of the U.S. Bankruptcy Court for the District of Delaware to enter the sale order. The Debtor and the purchaser are each required to preserve and keep the records they or their affiliates hold and which relate to the Purchased Assets for a period of l0 years from the closing date. The sale is currently under advisement status. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for Chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. Bankruptcy Creditors' Service, Inc., publishes LandSource Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandSource Communities Development LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) LANDSOURCE COMMUNITIES: Pachulski Bills $307K for 4 Months' Work ---------------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, more bankruptcy professionals seek payment of fees and reimbursement of expenses for the services they rendered in LandSource Communities Development LLC and its debtor-affiliates' Chapter 11 cases for the period from November 2008 through February 2009: A. Debtors' Professionals Professional Fee Period Fees Expenses ------------ ---------- ---- -------- Warren H. Smith & 11/01/2008- $18,292 $23 Associates, P.C. 02/28/2009 Warren H. Smith notes that the amount of fees it seeks less the holdback is $14,634. B. Official Committee of Unsecured Creditors' Professionals Professional Fee period Fees Expenses ------------ ---------- ---- -------- Pachulski Stang 11/01/2008- $307,334 $28,131 Ziehl & Jones LLP 02/28/2009 Pachulski Stang says the total time expended for its fee application preparation is approximately three hours and the corresponding fee requested is approximately $1,000. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for Chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. Bankruptcy Creditors' Service, Inc., publishes LandSource Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandSource Communities Development LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) LATE NIGHT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Late Night, Inc. 404 West Hand Avenue Wildwood, NJ 08260 Bankruptcy Case No.: 09-25150 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court District of New Jersey (Camden) Debtor's Counsel: Andrew L. Unterlack, Esq. Scott H. Marcus & Assoc. 121 Johnson Road Turnersville, NJ 08012 Tel: (856) 227-0800 Fax: (856) 227-7939 Email: aunterlack@marcuslaw.net Total Assets: $301,000 Total Debts: $3,044,173 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-25150.pdf The petition was signed by Jon P. Paxton, president of the Company. LEAR CORP: Bank Debt Trades at 28% Discount in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Lear Corporation is a borrower traded in the secondary market at 72.00 cents-on- the-dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 6.82 percentage points from the previous week, the Journal relates. The loan matures March 29, 2012. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated by both Moody's and S&P. Meanwhile, participations in a syndicated loan under which Dana Corp. is a borrower traded in the secondary market at 55.20 cents- on-the-dollar during the week ended June 12, 2009, an increase of 4.70 percentage points from the previous week. The loan matures January 31, 2015. The Company pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating and S&P's B rating. Participations in a syndicated loan under which Visteon Corp. is a borrower traded in the secondary market at 38.69 cents-on-the- dollar during the week ended June 12, 2009, an increase of 2.90 percentage points from the previous week. The loan matures May 30, 2013. The Company pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt. S&P has assigned a default rating. Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 80.06 cents-on-the-dollar during the week ended June 12, 2009, an increase of 2.10 percentage points from the previous week. The loan matures April 1, 2012. The Company pays 125 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and S&P's CCC+ rating. About Lear Corporation Based in Southfield, Michigan, Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear is traded on the New York Stock Exchange under the symbol [LEA]. * * * As reported by the Troubled Company Reporter on June 3, 2009, Lear did not make the $38 million semi-annual interest payments due June 1, 2009, with respect to its 8.50% senior notes due 2013, and 8.75% senior notes due 2016. The Company utilized the 30-day grace period applicable to the interest payments as it continues discussions of a possible capital restructuring with its lenders and certain other parties. The Company entered on May 13, 2009, into an amendment and waiver under its primary credit facility, wherein the waiver of covenant defaults under the primary credit facility would terminate if the Company were to make any payments with respect to the senior notes. Lear had approximately $1.2 billion in cash and cash equivalents as of April 4, 2009, as compared to approximately $1.6 billion as of December 31, 2008. The decline reflects negative free cash flow in the first quarter, as well as the termination of an accounts receivable factoring facility in Europe. Lear had total assets of $6.4 billion, current liabilities of $4.4 billion and long-term liabilities of $2.0 billion, resulting in $41.4 million in stockholders' deficit at April 4, 2009. Moody's Investors Service has lowered Lear's Probability of Default and Corporate Family Ratings to Ca, reflecting Moody's view of the increased risk that some level of debt comprise will be required as part of the company's negotiation to amend its senior secured credit facilities. Standard & Poor's Ratings Services also has lowered its corporate credit rating on Lear Corp. to 'D' (default) from 'CCC+' and lowered the issue-level rating on the company's senior unsecured debt that did not receive the scheduled interest payment to 'D' from 'CCC'. S&P lowered the rating on the senior secured debt to 'CC' from 'B', and the rating on the other senior unsecured debt to 'C' from 'CCC'. Standard & Poor's Ratings Services also lowered its corporate credit rating on Lear to 'B-' from 'B'. At the same time, S&P also lowered its issue-level ratings on the company's debt. The ratings remain on CreditWatch, where they had been placed with negative implications on November 13, 2008. LEHMAN BROTHERS: Court Okays Loan Pay-Off Pacts With 44th Street ---------------------------------------------------------------- Beginning in 2006, Lehman Brothers Holdings Inc. provided loans, aggregating $24,432,000 to finance the construction and development of a project located at 5 East 44th Street, New York. As much as $16,650,000 in mortgage loan was provided to 44th Street Partners I LLC while up to $7,782,000 in mezzanine construction loan was provided to 44th Street Partners II LLC. LBHI also made loans aggregating $14,470,000 to finance the construction and development of a project located at 127-133 Seventh Avenue, New York. The loan consists of about $7,270,000 in senior mezzanine loan, which was provided to LeMadre Mezz LLC, and $7,200,000 in junior mezzanine loan to M&B Mezz LLC. The borrowers reportedly failed to make payments for their loans. Notwithstanding the defaults, 44th Street Partners II alleges that LBHI has outstanding funding obligations under the mezzanine loan. LBHI, Lehman Commercial Paper Inc. and their non-debtor affiliate, Lehman Re Ltd., were in dispute regarding the loans made to 44th Street Partners I, LeMadre Mezz and M&B Mezz. They disagree over the ownership status of the mortgage loan as well as the junior mezzanine loan due to certain ongoing disputes regarding whether the transactions contemplated by the Master Repurchase Agreement dated July 9, 1999, were ever properly consummated. The MRA was inked by LCPI, Lehman Re, and certain other parties, under which the Lehman units entered into contracts with respect to certain loans and other assets originated by LBHI and its affiliates. In addition, LCPI, LBHI and Lehman Re also dispute whether the senior mezzanine loan constitutes one of the assets because, in connection with satisfying certain document delivery obligations with respect to the junior mezzanine loan, LCPI erroneously delivered certain documents relating to the senior mezzanine loan to Lehman Re. Due to this erroneous delivery, Lehman Re has claimed that the senior mezzanine loan constitutes one of the assets subject to the MRA and that the company also has an ownership interest in that loan. Accordingly, the Debtors sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York for LBHI and LCPI to settle their disputes and enter into discounted pay-offs: (i) with respect to the mortgage loan and mezzanine loan by entering into a loan pay-off agreement with 44th Street Partners I and 44th Street Partners II, a copy of which is available for free at: http://bankrupt.com/misc/LehmanLoanAgreement44thStreet.pdf (ii) with respect to the senior mezzanine loan by entering into a loan pay-off agreement with LeMadre Mezz, a copy of which is available for free at: http://bankrupt.com/misc/LehmanLoanAgreementLeMadre.pdf (iii) with respect to the junior mezzanine loan by entering into a loan pay-off agreement with M&B Mezz, a copy of which is available for free at: http://bankrupt.com/misc/LehmanLoanAgreementM&B.pdf The salient terms of the loan pay-off agreements are: (1) LCPI, LBHI and Lehman Re will accept in full repayment of the mortgage loan an amount equal to the sum of $10,000,000 as well as an additional payment in an aggregate amount of no less than $400,000 and no greater than $600,000 upon the sale of certain units located in 44th Street Partners' project; (2) LBHI will release 44th Street Partners II from its payment obligations. LBHI will be released from, among other things, any claims that 44th Street Partners II may have against the company related to any alleged obligations of LBHI to provide future funding; (3) LCPI will cause the delivery of the documents related to the junior mezzanine loan to Lehman Re in exchange for the delivery by Lehman RE to LBHI of the documents related to the senior mezzanine loan; (4) LCPI, LBHI and Lehman Re agree to accept, in full repayment of the senior mezzanine loan an amount equal to $7,370,000. The $7,370,000 will be paid in full to LBHI; (5) LCPI will cause the delivery of the documents related to the junior mezzanine loan to Lehman Re in exchange for the delivery by Lehman Re to LBHI of the documents related to the senior mezzanine loan; and (6) LCPI, LBHI and Lehman Re will accept, in full repayment of the junior mezzanine loan, the amount of $1,000,000. The $1,000,000 will be paid in full to Lehman Re. 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 -- 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) LEHMAN BROTHERS: Court Okays Letter Agreement With Deutsche Bank ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the letter of agreement executed by the Debtors and Deutsche Bank AG, London Branch, in connection with the proposed assumption and assignment of a credit default swap agreement to the bank. The Court overruled all objections to the approval of the letter agreement and the proposed break-up fee that have not been withdrawn. Debtors Lehman Brothers Holdings Inc. and Lehman Brothers Special Financing are authorized to accept bids received five or more days prior to the hearing on the proposed assumption and assignment of the swap agreement. The Troubled Company Reporter previously reported that the Credit Default Swap Agreement was inked in 2006 by Debtor Lehman Brothers Special Financing and Libra CDO Limited. Under the deal, Libra sold credit protection to LBSF to limit exposure associated with losses and other credit impairment with respect to residential mortgage-backed securities. In connection with the agreement, Libra signed a senior credit default swap agreement with Societe Generale, under which SocGen is required to advance funds to Libra when needed to meet Libra's obligations to LBSF. The Debtors seek to assume and assign the credit default swap agreement to Deutsche Bank AG. In connection with the proposed assignment, LBSF, Lehman Brothers Holdings, Inc., and Deutsche Bank entered into a letter agreement, which commits Deutsche Bank to the assignment for at least 90 days beginning on May 5, 2009, and prohibits it from entering into any other transactions related to the Credit Default Swap Agreement. The letter agreement, however, does not prohibit LBSF from entering into another agreement in connection with the assignment of the Credit Default Swap Agreement that may provide greater value for its estate. In case LBSF does not assign the Credit Default Swap Agreement to Deutsche Bank and enters into a similar arrangement with another party, Deutsche Bank will be paid a break-up fee of $20 million. Under the letter agreement, if the Court does not approve the agreement including its break-up fee provision by June 19, 2009, Deutsche Bank will be released from its commitment to assume the Credit Default Swap Agreement. 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 -- 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) LEHMAN BROTHERS: Wants to Hire Pachulski Stang as Special Counsel ----------------------------------------------------------------- Lehman Brothers Holdings Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Pachulski Stang Ziehl & Jones LLP as their special counsel, nunc pro tunc to February 25, 2009. The Debtors tapped the firm to represent them in connection with the jointly-administered Chapter 11 cases of Palmdale Hills Property, LLC, and its affiliated debtors, which are pending in the U.S. Bankruptcy Court for the Central District of California. Specifically, Pachulski is tasked to: (1) represent Lehman Brothers Holdings, Inc., and Lehman Commercial Paper, Inc., in litigation pending against them in the California Bankruptcy Court filed by Palmdale Hills; (2) represent LBHI and LCPI in relation to any issues arising with respect to any disclosure statements and plan of reorganization filed by Palmdale Hills and its affiliated debtors; and (3) represent LBHI and LCPI in relation to prosecuting or defending various other motions and other matters in the bankruptcy cases of Palmdale Hills and its affiliated debtors. The Debtors will pay Pachulski at these hourly rates: Partners $795 - $850 Counsel $475 - $575 Associates $295 - $395 Paralegals $150 - $195 The Debtors will also reimburse the firm for the expenses incurred in connection with its employment. Dean Ziehl, Esq., a partner at Pachulski Stang Ziehl & Jones LLP, assures the Court that his firm does not represent or hold any interest adverse to the Debtors or their estates with respect to matters for which it is to be employed. 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 -- 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) LEHMAN BROTHERS: LBI Trustee Delivers 1st Interim Status Report --------------------------------------------------------------- James Giddens, the court-appointed trustee for Lehman Brothers Inc., submitted to the U.S. Bankruptcy Court for the Southern District of New York his first interim status report about the liquidation of the company under the Securities Investor Protection Act. The 39-page report, which covers the period September 19, 2008, to May 29, 2009, talks about the development in the administration of LBI's assets, ongoing investigation concerning the company's financial condition, and business operations, among other things. Administering and Marshalling Assets According to the status report, Mr. Giddens has marshalled and continues to administer more than $115 billion for LBI's estate and its customers. Mr. Giddens' efforts on this front include closures and sales of offices; collection and centralization of bank accounts and other deposits; pursuing thorough accountings from and otherwise investigating setoffs or seizures and liquidation of collateral by LBI's clearing banks and organizations; reviewing inter-company balances and claims; and beginning his investigation of the collapse of LBI pursuant to SIPA. The Trustee, the status report said, negotiated two interim payments totaling more than $2 billion in connection with the wind-down and closeout of LBI's accounts at the Depository Trust & Clearing Corporation. Mr. Giddens continues to work with DTCC to collect proceeds to settle LBI's obligations and liabilities. Mr. Giddens has also established certain accounts with the trust group of Union Bank, N.A. in New York. The accounts were set up to accumulate funds and securities owned by LBI for its own account or for customers. The Trustee continues to arrange for the transfer to these accounts of funds held in various LBI bank accounts in the United States and abroad. The trustee maintains three accounts at Union Bank. As of May 15, 2009, the total value of the funds and securities in those accounts exceeded $4 billion, according to the status report. Asset Analysis and Disposition Mr. Giddens also disclosed that he is engaged in identifying LBI's assets, determining their valuation and soliciting and evaluating bids by third parties to acquire various assets. "The LBI estate has relatively few recoverable assets compared to LBHI, in large part because of the purchase agreement entered into with [Barclays Capital Inc.] and the fact that, prior to the trustee's appointment, most of LBI's subsidiaries were transferred to a subsidiary of LBHI," Mr. Giddens said in the report. With respect to LBI's proprietary investments, Mr. Giddens said that he is engaged in identifying, investigating and analyzing these investments for potential sale, including various private equity investments owned by LBI. Pursuant to expedited procedures approved by the Court for asset sales with a purchase price under $10 million, Mr. Giddens sold LBI's interests in the Lehman China and India businesses to Nomura International PLC, generating a recovery of about $1.2 million for LBI's estate, according to the status report. The status report also disclosed that Mr. Giddens sold LBI's proprietary shares in The Clearing Corporation to Barclays which generated a recovery of about $6.1 million for LBI's estate, and liquidated securities related to LBI's membership on the New York Stock Exchange, generating a recovery of nearly $13 million. Mr. Giddens is determining what to do with life insurance policies on about 1,000 executives that LBI acquired prior to 1986 in order to fund deferred compensation obligations, which are expressly subordinated to claims of other creditors and of no value. The Trustee surrendered some of the smaller policies at the end of January, and is weighing options with respect to the remaining policies, according to the status report. Trustee's Investigation As part of his duties, Mr. Giddens has started pursuing numerous avenues of investigation into LBI's financial condition and business operation after obtaining court approval to issue subpoenas in connection with his investigation, according to the status report. Mr. Giddens sought to coordinate his investigative efforts with the examiner appointed in LBHI's case. The Trustee's investigative team, led by former Assistant U.S. Attorney Marc Weinstein, met with the examiner's team on several occasions to discuss their respective investigative approaches, factual background, witness interviews and depositions, among others. With participation of Securities Investor Protection Corporation, Mr. Giddens has first pursued voluntary cooperation wherever possible. In this effort, the Trustee has made document requests to financial institutions that may have information relating to the events leading to LBI's collapse. The Trustee's professionals have received and reviewed thousands of documents from these institutions and have interviewed employees of those institutions. Mr. Giddens' professionals have also reviewed internal LBI emails and other electronic data from LBI's information systems. "The materials are being reviewed with an eye toward both investigating currently-known causes of action against third parties as well as uncovering presently-unknown causes of LBI's decline, matters concerning the financial condition of LBI, and events impacting the liquidation process," the report further said. A full-text copy of the Trustee's first interim status report is available for free at: http://bankrupt.com/misc/Lehman1stStatusReportLBITrustee.pdf 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 -- 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) LEHMAN BROTHERS: Court Denies DnB NOR Bank's Lift Stay Request -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York denied the request of DnB NOR Bank ASA to lift the automatic stay. DnB asked for the lifting of the stay so that it could effect a set off of the $25,071,256 loan Lehman Brothers Holdings Inc. owed to DnB under a prepetition revolving credit facility against the more than $18,000,000 held in an account at DnB maintained by Lehman Brothers Commercial Corporation. As reported by the Troubled Company Reporter on May 22, 2009, Judge James Peck, in a memorandum decision dated May 12, 2009, ruled that the transfer of money from Lehman Brothers Holdings, Inc.'s account maintained at DnB NOR ASA was done after LBHI filed its petition for bankruptcy on September 15, 2008. LBHI and DnB had disputed over the issues relating to the right of setoff. LBCC issued two separate instructions after 3:00 p.m. on September 12, 2008, to transfer certain funds to an account maintained by LBHI at the Bank. However, the funds were not credited to LBHI's account until the morning of September 15, 2008, after LBHI already became a debtor-in-possession. The key question of the dispute is whether, for purposes of determining mutuality of obligations, the transfer should be deemed to have occurred as of the prepetition period when the transfer instructions were given or as of the postpetition moment when the funds were received and credited to the LBHI Account. Section 553 of the Bankruptcy Code preserves any right of setoff that exists under applicable non-bankruptcy law to the extent that conditions of Section 553 have been satisfied. Section 553(a) states that offset of mutual obligations involve a debt and claim, each of which "arose before the commencement of the case under this title." Judge Peck noted that the practices of DnB with respect to the transfer of funds from one account to another are relevant to evaluating whether mutuality exists. The Terms and Conditions relating to the LBHI Account establish that any transfer instructions received subsequent to the cut-off deadline of 3:00 p.m. CEST will be effected on the next business day. The Transfer Instructions were received on Friday, September 12, 2008, at 6:03 p.m. and 6:06 p.m. CEST. Consistent with DnB's practices, the transfer of funds could be effected no earlier than the next business day, which was Monday, September 15, 2008. In addition, under the Terms and Conditions, the party originating transfer or payment instructions for a transfer has the right to revoke or amend its instructions prior to 10:00 a.m. CEST. DnB's contention that despite these limitations it nonetheless could have completed the transfer prior to September 15, 2008, may be hypothetically possible, but is not at all persuasive, Judge Peck held as that transfer would be inconsistent with rights of LBCC to change it directions to DnB. DnB, Judge Peck added, is unable to overcome a truth that is plainly inconvenient to its argument and that is impossible to explain away -- the intrabank transfer to the LBHI Account was not completed prepetition. Pending the completion of the transfer, the funds were not property of LBHI's estate and were not available for setoff purposes, Judge Peck held. 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 -- 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) LEHMAN BROTHERS: SunTrust Withdraws Request to Probe Offerings -------------------------------------------------------------- SunTrust Robinson Humphrey Inc. withdrew its motion to investigate Barclays Capital Inc., Lehman Brothers Inc. and James Giddens, trustee for LBI. As reported by the Troubled Company Reporter on March 17, 2009, SunTrust Robinson Humphrey Inc., an investment-banking subsidiary of SunTrust Banks Inc., sought permission from the U.S. Bankruptcy Court for the Southern District of New York to examine, or compel for documents from, Lehman Brothers, Inc., Barclays Capital, Inc. or the trustee appointed in LBI's liquidation proceedings under the Securities Investor Protection Act of 1970. SunTrust wanted the companies and Mr. Giddens investigated about the offerings in which LBI and SunTrust had served as underwriter. SunTrust complained that it has not yet been paid of underwriting fee in the sum of $3,347,032 that was earned at the completion of the offerings. 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 -- 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) LEHMAN BROTHERS: Contests UPRS's Request to Recover $5 Million -------------------------------------------------------------- As reported by the Troubled Company Reporter on May 1, 2009, Unclaimed Property Recovery Service Inc. asked the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to permit the company to recover about $5 million from the New York State Office of Unclaimed Funds. UPRS made the move after the director of the NYS Office sought a court order to pay the $5 million to Lehman Brothers Inc. The $5 million represents unclaimed funds, which UPRS is tasked to recover from the NYS Office pursuant to the company's agreements with LBI. The New York State Comptroller serves as the custodian of unclaimed funds and oversees the return of these funds to their owners including those of LBI. LBHI Responds Lehman Brothers Holdings Inc. argues that Unclaimed Property Recovery Service Inc. should not be permitted to recover funds since those funds are properties of Lehman Brothers Holdings Inc. and its affiliates. "In light of the fact that UPRS seeks to recover property of the Debtors' estates, the automatic stay . . . clearly applies and UPRS has not demonstrated cause to lift the automatic stay in LBHI's case," Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in New York, asserts. The Debtors have filed in Court on June 8 a proposed order denying the request of UPRS. A hearing to consider the proposed order will be convened on June 24 if an objection is filed on or before June 17. The attorney for the LBI trustee, in a separate filing, argues that the request of UPRS is already moot as UPRS based its claims on four old contracts which are alleged to be "ongoing." "The trustee, in his business judgment, has determined that these executory contracts are not beneficial or necessary to the LBI estate and has noticed them for rejection," David Wiltenburg, Esq., at Hughes Hubbard & Reed LLP, in New York, says on behalf of the LBI trustee. "Upon effectiveness of this rejection, there can be no further question that UPRS has at most a prepetition claim . . . which must be pursued through the claims process," Mr. Wiltenburg says. UPRS Says LBI Agreements Not Executory Contracts UPRS maintains that it performed in good faith all of its obligations and that its agreements are not executory contracts since the company has fully performed under those agreements. "UPRS fully performed in good faith all of its obligations under the terms of the agreements. In performing all of its obligations, UPRS expected to be compensated for its services," argues Paul Batista, Esq., at Paul Batista P.C., in New York. Mr. Batista further argues that under U.S. bankruptcy law, the agreements are not executory contracts since both LBI and UPRS have substantially performed according to the terms of the agreements subsequent to LBHI's bankruptcy filing. 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 -- 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) LEHMAN BROTHERS: Neuberger Berman Wants Currency Claim Settled -------------------------------------------------------------- Neuberger Berman LLC filed a lawsuit with the U.S. Bankruptcy Court for the Southern District of New York against Lehman Brothers Inc., Lehman Brothers Commercial Corp. and PNC Bank N.A., requiring the companies to interplead concerning their claims on funds that Neuberger Berman is obligated to pay under their agreement on the exchange of currency. PNC and Neuberger Berman agreed in August 2008 to an exchange of currency. Under the deal, Neuberger Berman was required to deliver US$40,273,200 to the Lehman units in return for EUR26.4 million from PNC, which was to be delivered also to the Lehman units. The Lehman units, in turn, were to debit and credit the appropriate account or accounts of Neuberger Berman and its customers. In February 2009, PNC filed a complaint against Neuberger Berman for alleged breach of contract. The complaint, filed with the U.S. District Court for the Western District of Pennsylvania, seeks the delivery of US$40,273,200. Attorney for Neuberger Berman, Melvin Brosterman, Esq., at Stroock & Stroock & Lavan LLP, in New York, relates that based on EUR and USD exchange rates on the date for delivery of currency, the US$40,273,200 was worth more than EUR26.4 million, which means that Neuberger Berman suffered a loss from the currency exchange while PNC gained. Despite repeated requests by Neuberger Berman to the Lehman units seeking their consent to the company delivering the difference in value of US$40,273,200 and EUR26.4 million directly to PNC, LBI has not provided its consent, Mr. Brosterman says. To account for PNC's gain on the currency exchange, Neuberger Berman and PNC signed a stipulation in April 2009, agreeing that if Neuberger Berman is found to be liable to PNC for having breached the contract alleged in PNC's complaint, then in lieu of specific performance, PNC will be awarded as damages the principal sum of $6,037,680 plus accrued interest from March 16, 2009 at an agreed upon rate. Mr. Brosterman says Neuberger Berman has no interest in or claim to the funds but has an interest in the expeditious and efficient resolution of potential conflicting ownership claims to the funds that may lead to inconsistent determinations of liability and additional litigation if the claims are not resolved. "The defendants may have competing claims to the currency claim, and [Neuberger Berman] may potentially be exposed to double liability on account thereof," Mr. Brosterman says in court papers. Neuberger Berman specifically asks the Bankruptcy Court for a ruling: (i) requiring the defendants to interplead concerning their claims to the currency claim; (ii) restraining and enjoining the defendants from commencing or prosecuting any action seeking amounts from Neuberger Berman due on account of the currency claim, including PNC's complaint; and (iii) discharging and releasing Neuberger Berman from liability to the defendants on account of the currency claim upon deposit with the Bankruptcy Court of the proceeds. In connection with the lawsuit, Neuberger Berman seeks leave to pay to the Clerk of the Bankruptcy Court the proceeds for deposit into the Court Registry Investment System. Under the bankruptcy law, Neuberger Berman, as plaintiff in an interpleader action, is required to deposit the funds with the Court as a prerequisite to jurisdiction. 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 -- 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) LEHMAN BROTHERS: Ceradyne & Western Digital Seek Damages Recovery ----------------------------------------------------------------- Ceradyne Inc. and Western Digital Corporation filed separate lawsuits against Lehman Brothers Holdings Inc. to recover damages in connection with their investment in auction rate securities. Both Ceradyne and WDC alleged that they have suffered financial losses "induced by [LBHI's] deceptive sales practices with respect to ARS," a supposedly liquid financial product, as a result of an undisclosed conflict of interest between LBHI and the companies. In their complaints dated June 9, 2009, Ceradyne and WDC related that LBHI pitched ARS to them and numerous other customers, as money-market instruments or cash alternatives. LBHI explained to Ceradyne and WDC that the interest rates on ARS were set through a well-established auction market and that the instruments were readily tradable at those auctions, which typically occur every 7, 28 or 35 days, the complaint said. LBHI also reportedly represented that, as a consequence of the auctions, ARS would always be liquid, short-term investments and that the ARS were ideal for investors whose investment goals were principal preservation and liquidity. Jay Hellman, Esq., at Silverman Acampora LLP, in New York, said that the reality, well known to LBI but undisclosed to Ceradyne and WDC was that the "ARS were not supported by a broad, fully- functioning market and therefore could be subject to failed auctions and illiquidity." Mr. Hellman alleged that LBHI concealed from both companies that the auctions were not supported by arms-length transactions consummated in an open market. "In fact, the auction market was supported and directed by only a handful of investment banks," he pointed out. LBHI also allegedly concealed from both companies that it submitted a support bid for every auction for which it was a broker-dealer to ensure that the auction did not fail, and that it also set the interest rate in most of the auctions with the bids it submitted. Mr. Hellman also said that LBHI did not disclose that it "actively managed the interest rates so that they would be just high enough to move the ARS it had underwritten but not so high as to make the issuers that were its underwriting clients unhappy." He further said that the products offered to Ceradyne and WDC were products that [LBHI] had underwritten and was trying to distribute. "In other words, LBHI was serving a dual role in underwriting ARS and, at the same time, selling them to clients," Mr. Hellman pointed out. 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 -- 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) LEHMAN BROTHERS: LB 2080 Kalakaua Files Schedules & Statement ------------------------------------------------------------- LB 2080 Kalakaua Owners LLC delivered to the U.S. Bankruptcy Court for the Southern District of New York its Schedules of Assets and Liabilities, disclosing: A. Real Property 4-story retail building, Hawaii $3,650,000 77,483 sq. ft. of Class A space available for rent B. Personal Property B.2 Bank Accounts 63,291 B.9 Interests in Insurance Policies 37,440 B.16 Accounts Receivable 80,089 B.28 Office equipment, furnishings & supplies Undetermined B.29 Machinery Undetermined TOTAL SCHEDULED ASSETS $3,830,821 ======================================================== C. Property Claimed as Exempt Not Applicable D. Secured Claim Undetermined E. Unsecured Priority Claims Undetermined F. Unsecured Non-priority Claims PAMI LLC $30,920,101 Others 592,479 TOTAL SCHEDULED LIABILITIES $31,512,580 ======================================================== William Fox, senior vice-president of Lehman Brothers Holdings Inc., said that in its Statement of Financial Affairs, LB 2080 Kalakaua Owners recorded these net losses from the operation of its business: Period Amount ------ ------ 2009 Operations YTD ($10,324,953) 2007 Operations ($3,981,038) 2008 Operations ($4,241,699) Mr. Fox disclosed that within 90 days before the Petition Date, LB 2080 paid a total of $567,972 to these creditors: Creditors Amount --------- ------ Bear Stearns Funding-Kalaimoku- Kuhio Development Corp. $368,036 Board of Water-HN 10,270 CB Richard Ellis 29,491 Ernst & Young LLP 11,099 Hawaiian Building Maintenance 5,867 Hawaiian Electric Company Inc. 34,835 OceanFront Hawaii NA 59,997 Trimont Real Estate Advisors Inc. 48,374 Mr. Fox further disclosed that PAMI LLC has 100% stock ownership of LB 2080. 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 -- 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) LEHMAN BROTHERS: Two Former Clients Sue to Recover Securities ------------------------------------------------------------- Two companies are suing Lehman Brothers Holdings Inc. for more than $190 million, alleging that the failed investment bank misled them into investing in auction-rate securities then left them holding millions of dollars in assets that they can't sell, Patrick Fitzgerald of The Wall Street Journal reports. Former Lehman clients Western Digital Corp. and Ceradyne Inc. accused the investment bank of fraud by selling them supposedly safe, liquid securities while knowing that the market for the securities was drying up. In lawsuits filed Tuesday in Lehman's bankruptcy case, the two companies said they've suffered "a devastating financial impact" caused by Lehman's "deceptive sales practices," according to the WSJ. Western Digital, a maker of computer hard drives, says it holds $26 million of asset-backed securities that it can't sell, while Ceradyne, a maker of advanced ceramics for use in armor, says it has $35 million in illiquid auction-rate securities. The two former Lehman clients are also seeking punitive damages against Lehman totaling $130 million. Lehman was a major player in the market for auction-rate securities, which are short-term debt instruments in which the interest rates reset at periodic auctions. Lehman acted as both an underwriter of the securities for its customers, who wanted a low interest rate, and investors like Western Digital and Ceradyne, who sought the highest return on their investments. Lehman was faced with a conflict of interest, according to the suits, as it sought to make its underwriting clients happy while keeping the auctions afloat. The suits allege that in order to get the troubled assets off its books Lehman "embarked on a secret scheme to reduce its inventory" by selling to the customers -- like Western Digital and Ceradyne - - it should have been protecting. The Wall Street Journal reported last month the U.S. Justice Department and lawyers from the U.S. Securities and Exchange Commission have questioned several former Lehman executives as part of a criminal investigation into the auction-rate market. WSJ says the inquiry delves on whether Lehman employees defrauded customers as the market for these securities broke down in 2007. 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 -- 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 purchase 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) LIBBEY INC: S&P Puts 'B' Corporate Rating on CreditWatch Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its ratings on Toledo, Ohio-based Libbey Inc., on CreditWatch with negative implications, including its 'B' corporate credit rating. "The CreditWatch listing reflects our concerns about the difficult operating environment that Libbey faces, increased leverage, and our expectation that credit measures will continue to weaken over the near term," said Standard & Poor's credit analyst Rick Joy. S&P estimate that total adjusted debt to EBITDA has increased to significantly more than 8x for the 12 months ended March 31, 2009, from about 5.4x in the prior 12 months. Although S&P believes the company's liquidity has improved and margins and cash flow should continue to benefit from cost-saving initiatives and reduced capital expenditures this year, S&P believes Libbey will find it difficult to meaningfully improve credit measures over the near- term. This reflects S&P's expectation for continued economic weakness and a sluggish consumer spending environment. The CreditWatch placement means that S&P could lower or affirm the ratings following the completion of S&P's review, which will focus on the company's business strategy and financial prospects. Standard & Poor's will meet with management to further discuss Libbey's operating trends and forecasts to resolve the CreditWatch listing. MACY'S INC: To Open Fresno, Visalia Stores After Acquiring Leases ----------------------------------------------------------------- Business Courier of Cincinnati reports that Macy's Inc. will open two stores in California after acquiring the leases for Fresno and Visalia units through the liquidation of the former Gottschalks chain. Business Courier relates that Macy's was one of the lead bidders on 15 Gottschalks locations during a May 28 auction in California. Macy's, says Business Courier, is investing more than $2 million in the Fresno and Visalia stores. According to Business Courier, the stores will open before the holidays and employ about 250 people. Based in Cincinnati and New York, Macy's Inc. (NYSE: M) fka Federated Department Stores Inc. -- http://www.fds.com/-- is one of the nation's premier retailers. The company operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. The Company also operates macys.com, bloomingdales.com and Bloomingdale's By Mail. As of May 2, 2009, the Company reported $21,331,000,000 in total assets, $4,397,000,000 in total current debt, $8,719,000,000 in long-term debt, and $4,555,000,000 shareholders' equity. * * * As reported by the Troubled Company Reporter on April 3, 2009, Moody's Investors Service downgraded Macy's, Inc. ratings, including the senior unsecured notes to Ba2 from Baa3. In addition, Moody's assigned a Corporate Family Rating of Ba2, a Probability of Default Rating of Ba2, and a Speculative Grade Liquidity Rating of SGL-2. The rating outlook is stable. MANITOWOC CO: Bank Debt Trades Near 9% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Manitowoc Co. Inc. is a borrower traded in the secondary market at 91.05 cents-on- the-dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.13 percentage points from the previous week, the Journal relates. The loan matures April 14, 2014. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and S&P's BB rating. Based in Manitowoc, Wisconsin, The Manitowoc Company, Inc. -- http://www.manitowoc.com/-- is a multi-industry, capital goods manufacturer with over 100 manufacturing and service facilities in 27 countries. It is recognized as one of the world's largest providers of lifting equipment for the global construction industry, including lattice-boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. Manitowoc also is one of the world's leading innovators and manufacturers of commercial foodservice equipment serving the ice, beverage, refrigeration, food prep, and cooking needs of restaurants, convenience stores, hotels, healthcare, and institutional applications. MARRIOTT INTERNATIONAL: Moody's Cuts Preferred Debt Shelf to 'Ba2' ------------------------------------------------------------------ Moody's Investors Service downgraded Marriott International, Inc.'s senior unsecured rating to Baa3 from Baa2, and its commercial paper rating to Prime-3 from Prime-2. The outlook is stable. The downgrade reflects Moody's expectation of a deep and prolonged downturn in travel demand that will cause Marriott's credit metrics to remain outside levels appropriate for the former rating. According to industry reports, revenue per available room has continued to fall by nearly 20% in the second quarter of 2009. As a result, Marriott's debt/EBITDA could rise above 5.0 times (incorporating Moody's standard analytic adjustments). Given Moody's view that industry conditions will remain challenged into 2010, Marriott's credit metrics will remain at depressed levels despite expected debt reductions. Moody's anticipates that Marriott will be able to reduce debt significantly given the low capital intensity of its business model, continuing cost reductions, and an ability to securitize timeshare receivables. However, in light of the depth of the industry downturn and Moody's expectation that the recovery will be gradual and is not likely to begin until late 2010, Marriott is more appropriately positioned in the Baa3 rating category. The rating outlook is stable reflecting Marriott's relatively low capital intensity that will enable the company to generate free cash flow for continued debt reduction during this period of industry stress. Ratings downgraded: -- Senior unsecured ratings to Baa3 from Baa2 -- Senior unsecured debt shelf to (P)Baa3 from (P)Baa2 -- Preferred debt shelf to (P)Ba2 from (P)Ba1 -- Commercial paper rating to Prime-3 from Prime-2 Moody's last action on Marriott took place on April 23, 2009 when the company's Baa2 rating was placed on review for possible downgrade. Marriott International, Inc., is a global operator and franchisor of hotels in five business segments, Luxury, Full-Service Lodging, Select-Service Lodging, Extended-Stay Lodging, and Timeshare. The company is headquartered in Bethesda, Maryland. METRO-GOLDWYN-MAYER: Bank Debt Trades at 44% Discount ----------------------------------------------------- Participations in a syndicated loan under which Metro-Goldwyn- Mayer Inc. is a borrower traded in the secondary market at 56.00 cents-on-the-dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.83 percentage points from the previous week, the Journal relates. The loan matures April 8, 2012. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt is not rated by either Moody's or S&P. Metro-Goldwyn-Mayer Inc. is an independent, privately-held motion picture, television, home video, and theatrical production and distribution company. The Company owns the world's largest library of modern films, comprising approximately 4,000 titles, and over 10,400 episodes of television programming. MGM is owned by an investor consortium comprised of Providence Equity Partners, TPG Capital, Sony Corporation of America, Comcast Corporation, DLJ Merchant Banking Partners and Quadrangle Group. The Troubled Company Reporter said May 22 that Metro-Goldwyn-Mayer hired Moelis & Co. to help refinance $3.7 billion debt and was in talks with a steering committee of 140 creditors led by JPMorgan Chase & Co. as part of the process. Sue Zeidler at Reuters said the studio "was exploring options for optimizing its capital structure and has begun talks with a steering committee of its lenders as part of the process." Ms. Zeidler said bankers estimate MGM is paying north of $250 million a year in interest on debt due in 2012. Sources told Reuters MGM was potentially seeking a way to make the loan due later, or reduce it in size. Comcast paid about $5 billion in debt and equity in September 2004 to buy MGM from majority owner Kirk Kerkorian. According to Reuters, merger specialists have said MGM could be worth $2 billion to $2.5 billion. MGM, however, has reiterated its commitment to staying independent. MGM MIRAGE: Tender Offer for Senior Notes Maturing in 2009 Expires ------------------------------------------------------------------ MGM MIRAGE has disclosed the final results of the cash tender offer to purchase any and all of the 6.50% senior notes due July 31, 2009 ($226.3 million aggregate principal amount; CUSIP No. 562567 AM9) of Mandalay Resort Group, and its 6.00% senior notes due October 1, 2009 ($820.0 million aggregate principal amount; CUSIP No. 552953 AF8) collectively (the Notes). As of 11:59 p.m., New York City time, on June 10, 2009, which was the Expiration Date for the Offer, the Company received valid tenders from holders of $122.3 million in aggregate principal amount of the 6.50% senior notes (approximately 54% of the outstanding) and $762.6 million in aggregate principal amount of the 6.00% senior notes (approximately 93% of the outstanding). The Company expected to settle any tendered Notes, which have not been previously settled, on June 11. MGM in Partnership Talks With Genting Tamara Audi at The Wall Street Journal reports that MGM Mirage CEO Jim Murren said that the Company is in talks with Malaysian gambling concern Genting Bhd on a broad range of partnerships in the global gambling industry. WSJ relates that Genting recently acquired a 3.2% equity stake in MGM Mirage and purchased $100 million in the Company's bond debt. WSJ notes that a partnership with MGM could give Genting access to lucrative business in Macau, China's gambling enclave, and offer MGM Mirage entree into parts of Asia where Genting operates. WSJ quoted Mr. Murren as saying, "We're just starting to brainstorm about global marketing relationships, strategic ventures and partnerships" and a relationship with Genting "in particular holds great interest to me because they are so great at what they do. I think there's a commonality of philosophy . . . . It's a very powerful potential alliance." Citing industry observers, WSJ says that Genting is interested in MGM Mirage's stake in its Macau casino, which it operates in partnership with Pansy Ho, who was recently declared an "unsuitable" partner for MGM Mirage by New Jersey gambling officials, potentially jeopardizing the Company's ability to operate in that state. WSJ notes that Genting's possible acquisition of MGM Mirage's stake in its Macau casino would resolve any issue with gambling regulators and give Genting entry into the market. That option "was never even discussed" by MGM and Gentin, the report states, citing Mr. Murren. About MGM MIRAGE Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. The report of Deloitte & Touche, LLP, MGM MIRAGE's independent registered public accounting firm on the Company's consolidated financial statements for the year ended December 31, 2008, contains an explanatory paragraph with respect to the Company's ability to continue as a going concern. * * * As reported by the Troubled Company Reporter on May 20, 2009, Standard & Poor's Ratings Services raised its corporate credit ratings on MGM MIRAGE and its subsidiaries to 'CCC+' from 'CCC', reflecting the substantial boost to MGM MIRAGE's intermediate-term liquidity profile provided by the recent $2.5 billion capital raise (prior to any over-allotments on the equity offering). S&P also removed all ratings from CreditWatch, where they were placed with positive implications on May 13, 2009, following MGM MIRAGE's announced plans to raise at least $2.5 billion of capital. The rating outlook is developing. The TCR said May 15 that Moody's Investors Service affirmed MGM MIRAGE's Caa2 Corporate Family Rating and Caa3 Probability of Default Rating following the company's announcement it intends to issue $1.0 of new common equity and $1.5 billion of new senior secured notes. A B1 rating was assigned to the proposed $1.5 billion senior secured guaranteed notes. MGM has an SGL-4 Speculative Grade Liquidity rating and a negative rating outlook. MICHAEL VICK: Has Until July 2 to Present Plan to Pay Creditors --------------------------------------------------------------- The Associated Press reports that a new deadline has been set for Michael Vick to tell the U.S. Bankruptcy Court for the Eastern District of Virginia how he will repay creditors. The report says that the Debtor has until July 2 to present his plan. The AP relates that the Court rejected Mr. Vick's initial bankruptcy plan in April 2009. A hearing has been set for August 27 to confirm or reject the new plan. Michael Vick Loses Post in Falcons Falcons General Manager Thomas Dimitroff said in a statement that the football team has relinquished their contractual rights to quarterback Mr. Vick. "Michael remains suspended by the NFL. However, in the event NFL Commissioner Roger Goodell decides to reinstate Michael, we feel his best opportunity to re-engage his football career would be at another club. Our entire organization sincerely hopes that Michael will continue to focus his efforts on making positive changes in his life, and we wish him well in that regard," Mr. Dimitroff said. About Michael Vick Michael Dwayne Vick, born June 26, 1980 in Newport News, Virginia, is a suspended National Football League quarterback under contract with the Atlanta Falcons team. In 2007, a U.S. federal district court convicted him and several co-defendants of criminal conspiracy resulting from felonious dog fighting and sentenced him to serve 23 months in prison. He is being held in the United States Penitentiary at Leavenworth, Kansas. Mr. Vick is also under indictment for two related Virginia state felony charges for his role in the dogfighting ring and related gambling activity. His state trial has been delayed until he is released from federal prison. He faces a maximum 10-year state prison term if convicted on both counts. Mr. Vick filed a Chapter 11 petition on July 7, 2008 (Bankr. E.D. Va. Case No. 08-50775). Dennis T. Lewandowski, Esq., and Paul K. Campsen, Esq., at Kaufman & Canoles, P.C., represent the Debtor in his restructuring efforts. Mr. Vick listed assets of $10 million to $50 million and debts of $10 million to $50 million. MILACRON INC: PBGC to Assume Pension Plan, Which Is 45% Funded -------------------------------------------------------------- The Pension Benefit Guaranty Corporation said last week it was moving to assume responsibility for the underfunded pension plan covering about 8,400 employees and retirees of Milacron Inc., a bankrupt vendor of plastics technologies and industrial fluids based in Batavia, Ohio. Other Milacron facilities are in Kansas, Michigan and Pennsylvania. The pension insurer's move comes as Milacron, in chapter 11 bankruptcy, prepares to sell substantially all of its assets to a new company. At a hearing currently set for June 26, Milacron will seek bankruptcy court approval of the sale transaction that will result in the abandonment of the pension plan to a liquidating corporate shell with no assets. By taking this action before the sale, the PBGC will mature its claim for the entire pension shortfall against Milacron's foreign assets. The PBGC has previously perfected liens of about $3.6 million against these assets. The Milacron Retirement Plan is 45% funded, with $260 million in assets to cover $573 million in benefit liabilities, according to PBGC estimates. The agency expects to be liable for about $285 million of the $313 million shortfall. The pension plan has been frozen since December 31, 2007. The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ends on June 10, 2009. Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire. Until the PBGC becomes trustee of the pension plan, the plan will remain ongoing under company sponsorship. The agency will send notification letters to all plan participants when it becomes trustee. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2009 is $54,000 per year. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed. Workers and retirees with questions may consult the PBGC Web site, http://www.pbgc.gov/or call toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800- 877-8339 and ask for 800-400-7242. Milacron retirees who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Assumption of the plan's unfunded liabilities will increase the PBGC's claims by $284.5 million and was not previously included in the agency's fiscal year 2008 financial statements. PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 30,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. MIS AMIGOS: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Mis Amigos Meat Market, Inc. PO Box 8610 Woodland, CA 95695 Bankruptcy Case No.: 09-31871 Chapter 11 Petition Date: June 10, 2009 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: Mitchell L. Abdallah, Esq. Abdallah Law Group 1007 7th St #615 Sacramento, CA 95814 Tel: (916) 446-1974 Fax: (916) 446-3371 Email: mitch@abdallahlaw.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Uriel Gonzalez, president of the Company. MOMENTIVE PERFORMANCE: Issues Final Result of Senior Notes Offers ----------------------------------------------------------------- Momentive Performance Materials Inc. reported the final results of private exchange offers to exchange certain of its outstanding 9 3/4% Senior Notes due 2014, 9% Senior Notes due 2014, 10 1/8 / 10 7/8 % Senior Toggle Notes due 2014 and 11 1/2% Senior Subordinated Notes due 2016 and together with the old senior notes for approximately $200,000,000 aggregate principal amount of 12 1/2% Second-Lien Senior Secured Notes due 2014. Approximately $121 million in aggregate principal amount of 9 3/4% Senior Notes due 2014, EUR45 million in aggregate principal amount of 9% Senior Notes due 2014, $173 million in aggregate principal amount of 10 1/8 / 10 7/8 % Senior Toggle Notes due 2014 and $174 million in aggregate principal amount of 11 1/2% Senior Subordinated Notes due 2016 were validly tendered and not withdrawn in the exchange offers. The exchange offers expired at midnight, New York City time, on Tuesday, June 9, 2009. Momentive expects all old notes validly tendered below the clearing price of: -- $625 principal amount of new second lien notes per $1,000 principal amount of old senior notes and -- $400 principal amount of new second lien notes per $1,000 principal amount of old subordinated notes to be accepted for exchange. The principal amount of any 9% Senior Notes due 2014 has been converted into U.S. dollars at the rate of 1.4079 U.S. dollars per Euro in accordance with the procedures set forth in the offering memorandum. All old notes tendered at the applicable clearing price will be subject to proration. The proration factor for the old senior notes will be approximately 23.76% of the aggregate principal amount of such old senior notes tendered at the senior notes clearing price. The proration factor for old subordinated notes will be approximately 48.28% of the aggregate principal amount of such old subordinated notes tendered at the subordinated notes clearing price. The balance of old notes not accepted for exchange will remain outstanding. Momentive expects that the exchange offers will settle on June 15, 2009. The new second lien notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act. The exchange offers were made only by, and pursuant to, the terms set forth in the confidential offering memorandum delivered to eligible holders in connection with the exchange offers. 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. NAVISTAR INT'L: Completes $45-Mil. Purchase of Monaco Assets ------------------------------------------------------------ Navistar International Corporation, through its wholly owned subsidiary Workhorse International Holding Company, completed the acquisition of certain assets of Monaco Coach Corporation for about $45 million. Navistar funded the purchase price with cash on hand. Under the terms of the asset purchase agreement, Navistar acquired five manufacturing facilities, intellectual property and trademarks and certain inventory. Daniel C. Ustian, Navistar's Chairman, President and Chief Executive Officer was on the board of directors of Monaco and recused himself from any vote related to the transaction. The transaction was consummated following approval of the U.S. Bankruptcy Court for the District of Delaware. Navistar and Monaco have a previous relationship through their joint venture, Custom Chassis Products LLC. About Monaco Coach Monaco Coach Corporation, a national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. Headquartered in Coburg, Oregon, with manufacturing facilities in Oregon and Indiana, the Company offers a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, and R-Vision brand names. The Company operates motorhome-only resorts in California, Florida, Nevada and Michigan. Monaco Coach is listed on the Pink Sheets under the symbol "MCOAQ". As of September 27, 2008, the Company had $442.1 million in total assets and $208.8 million in total liabilities. Monaco Coach Corporation and its affiliates filed for Chapter 11 on March 5 (Bankr. D. Del., Lead Case No. 09-10750). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' counsel. Dennis A. Meloro, Esq., Diane E. Vuocolo, Esq., Donald J. Detweiler, Esq., Kevin Finger, Esq., Monica Loftin Townsend, Esq., and Sean Bezark, Esq., at Greenberg Traurig, LLP, represent the official committee of unsecured creditors. Omni Management Group LLC serves as the Debtors' claims, balloting, noticing and administrative agent. 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. NEIMAN MARCUS: Bank Debt Trades at 22% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Neiman Marcus Group Inc. is a borrower traded in the secondary market at 77.79 cents-on-the-dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.75 percentage points from the previous week, the Journal relates. The loan matures April 6, 2013. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's BB- rating. Headquartered in Dallas, Texas, Neiman Marcus Inc.'s -- http://www.neimanmarcusgroup.com/-- operations include the Specialty Retail Stores segment and the Direct Marketing segment. The Specialty Retail Stores segment consists primarily of Neiman Marcus and Bergdorf Goodman stores. The Direct Marketing segment conducts both online and print catalog operations under the Neiman Marcus, Horchow and Bergdorf Goodman brand names. * * * As reported by the Troubled Company Reporter on March 19, 2009, Moody's Investors Service downgraded Neiman Marcus Group Inc.'s long term ratings including its Probability of Default Rating to Caa1 from B1, its Corporate Family Rating to Caa1 from B1, and its Speculative Grade Liquidity Rating to SGL-3 from SGL-2. The rating outlook is negative. On March 5, 2009, Fitch Ratings affirmed the Issuer Default Rating on Neiman Marcus, Inc., and its subsidiary, The Neiman Marcus Group, Inc., at 'B' and revised the Rating Outlook to Negative from Stable. NMG had $3 billion of debt outstanding as of January 31, 2009. The TCR said February 9, 2009, that Standard & Poor's Ratings Services placed its ratings on six department store companies, including Neiman Marcus ("B+"), on CreditWatch with negative implications. NEWPAGE CORP: S&P Downgrades Corporate Credit Rating to 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Miamisburg, Ohio-based NewPage Corp. and placed them on CreditWatch with negative implications. S&P lowered the long-term corporate credit rating to 'B-' from 'B'. "The downgrade and CreditWatch placement reflect our assessment that NewPage will likely be in jeopardy of breaching the financial covenants governing its bank credit facility during the second half of 2009," said Standard & Poor's credit analyst Andy Sookram. For the 12 months ended March 31, 2009, EBITDA declined sharply, to $393 million from $486 million for the 12 months ended Sept. 30, 2008. The steep decline in EBITDA reflects a significant fall-off in demand for coated paper stemming from reduced advertising spending in the face of a lingering U.S. recession. The company's adjusted debt to EBITDA increased to 9.5x from 7.4x over the same timeframe, and EBITDA coverage of interest expense was a very weak 1.3x. Although S&P expects demand to increase somewhat in the seasonally peak third quarter, S&P believes these increases will be offset by persistent pricing pressures. Through May 2009, selling prices are down about 10% industrywide. While the company was in compliance with its bank facility covenants at March 31, 2009, continued pressure on EBITDA through the remainder of 2009, combined with covenant step downs, will likely erode the covenant headroom in the second half of 2009. Specifically, the total debt to EBITDA and senior debt to EBITDA covenants step down to 5x and 2.5x, respectively, at Dec. 31, 2009, from 5.75x and 3.25x, respectively, at March 31, 2009. S&P will resolve the CreditWatch listing in the near term following S&P's assessment of the company's strategies to address these business and financial issues, including its ability to preserve sufficient liquidity and covenant compliance. NOBLE INTERNATIONAL: Court Okays $6.25MM DIP Financing ------------------------------------------------------ Noble International, Ltd., Chief Executive Officer Richard P. McCracken disclosed in a regulatory filing with the Securities and Exchange Commission that on June 1, 2009, the U.S. Bankruptcy Court for the Eastern District of Michigan entered an order approving an extension of the postpetition loans provided to Noble International, Ltd., by General Motors Corporation, Ford Motor Company and Chrysler, LLC. By the terms of the Order, the outstanding amount of the DIP Financing may not exceed $6,250,000, subject to certain adjustments. The Order also extends the due date of the DIP Financing to June 30, 2009, subject to extension by further order of the Bankruptcy Court. Mr. McCracken further disclosed that on June 5, 2009, the Board of Directors of the Company appointed Jay Hansen, 46, to serve as Chief Financial Officer, effective immediately. Mr. Hansen will receive $175 per hour. Mr. Hansen currently serves as President and CEO of Hansen Enterprises Ltd LLC, providing financial, operational and strategic planning services to manufacturing, distribution and financial services businesses. Prior to founding Hansen Enterprises in 2009, Mr. Hansen was Senior Vice President of Tweddle Group, a global market leader in technical publishing, providing content development, management, and delivery to the automotive and other manufacturing industries. Mr. Hansen previously served the Company as Chief Operating Officer in 2006, Vice President and Chief Financial Officer from 2003 to 2006, and Vice President of Corporate Development from 2002 to 2003. Prior to joining the Company, Mr. Hansen was Vice President at Oxford Investment Group, a privately held merchant bank with holdings in a variety of business segments, from 1994 to 2002. Mr. Hansen served in various commercial banking capacities with Michigan National Corporation from 1985-1994. Mr. Hansen currently serves on the Board of Directors and as Chairman of the Audit Committee of Flagstar Bank (NYSE: FBC). Headquartered in Warren, Michigan, Noble International, Ltd. -- http://www.nobleintl.com/home.html/-- provides flat, tubular, shaped and enclosed formed structures to automotive original equipment manufacturers and their suppliers, for use in automobile applications, including doors, fenders, body side panels, pillars, bumpers, door beams, load floors, windshield headers, door tracks, door frames, and glass channels. Noble International and its affiliates filed for Chapter 11 protection on April 15, 2009 (Bankr. E.D.Mich. Case No. 09-51720). The Debtors proposed Foley & Lardner LLP as their general bankruptcy counsel. Conway Mackenzie, Inc., has been tapped as the Debtors' financial advisors. The official committee of unsecured creditors is represented by Jaffe Raitt Heuer & Weiss, P.C. The Debtors disclosed total assets of $190,763,000 and total debts of $38,691,000, as of January 10, 2009. OSCIENT PHARMACEUTICALS: Discontinues Sales Force Promotion ----------------------------------------------------------- Oscient Pharmaceuticals Corporation said it has sufficient cash to continue its then current operations into the third quarter of 2009, unless it was able to raise additional capital or refinance or amend the terms of its outstanding debt. The Company stated that if it was unable or could not obtain adequate financing, it may have to take measures to significantly reduce expenses which would have a material adverse effect on its business or the Company may seek bankruptcy protection. On June 11, 2009, Oscient said it would discontinue sales force promotion of its two products: ANTARA(R) (fenofibrate) capsules, a cardiovascular product and FACTIVE(R) (gemifloxacin mesylate) tablets, a fluoroquinolone antibiotic. As part of a restructuring to conserve financial resources, the Company will eliminate approximately 180 positions, including its 150-person sales force and approximately 30 additional sales, marketing and corporate positions, in the next month. Although direct selling efforts will be discontinued, the Company intends to keep its products available and on the market for physicians and their patients. Oscient has engaged Broadpoint Capital to advise the Company on strategic options, including the potential sale of the Company or its assets and that process is ongoing. About Oscient Pharmaceuticals Oscient Pharmaceuticals Corporation markets two FDA-approved products in the United States: ANTARA(R) (fenofibrate) capsules, a cardiovascular product and FACTIVE(R) (gemifloxacin mesylate) tablets, a fluoroquinolone antibiotic. ANTARA is indicated for the adjunct treatment of hypercholesterolemia (high blood cholesterol) and hypertriglyceridemia (high triglycerides) in combination with diet. FACTIVE is approved for the treatment of acute bacterial exacerbations of chronic bronchitis and community- acquired pneumonia of mild to moderate severity. PACIFIC ETHANOL: Committee Taps K&L Gates as Lead Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors in Pacific Ethanol Holding Co. LLC and its debtor-affiliates' Chapter 11 cases asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ K&L Gates LLP as its lead counsel. K&L Gates will, among other things: a) advise the Committee on all legal issues as they arise; b) represent and advise the Committee regarding the terms o any sales of assets or Plans of Reorganization or liquidation, and assist the Committee in negotiations with the Debtors and other parties; and c) investigate the Debtors' assets and pre-bankruptcy conduct. The hourly rates of K&L Gates' personnel are: Edward M. Fox, partner $900 Eric T. Moser, partner $650 Harley J. Goldstein, partner $550 Matthew E. McClintock, associate $350 Jeffrey M. Heller, associate $270 Nathaniel F. Meyers, paralegal $260 New Associates $205 Senior Partners $900 Legal Assistants $95 to $350 To the best of the Committee's knowledge, K&L Gates is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: K&L Gates LLP 599 Lexington Avenue New York, NY 10022-6030 Tel: (212) 536-3900 Fax: (212) 536-3901 About Pacific Ethanol Holding Headquartered in Sacramento, California, Pacific Ethanol Holding Co. LLC -- http://www.pacificethanol.net/-- produces and sells ethanol. The Company and other affiliates of Pacific Ethanol Inc. filed for Chapter 11 on May 17, 2009 (Bankr. D. Del. Lead Case No. 09- 11713). Lawrence C. Gottlieb, Esq., and Richard S. Kanowitz, Esq., at Cooley Godward Kronish LLP represent the Debtors in their restructuring effort. The Debtors propose to hire Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP as co-counsel and Epiq Bankruptcy Solutions LLC as claims and noticing agent. The Debtors listed $50 million to $100 million in assets and $100 million to $500 million in debts. PACIFIC ETHANOL: Proposes FTI Consulting as Financial Advisors -------------------------------------------------------------- Pacific Ethanol Holding Co. LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ FTI Consulting, Inc., as financial advisors. FTI will, among other things: a) assist the Debtors in the preparation of financial related disclosures required by the Court and Office of the U.S. Trustee, including the schedules of assets and liabilities, the statement of financial affairs and monthly operating reports; b) advise management and the board of directors of the Debtors regarding the development and evaluation of contingency plans; and c) assist to the Debtors with information and analyses required pursuant to the Debtors' debtor-in-possession financing including, but not limited to, preparation for hearings regarding the use of cash collateral and DIP financing. The hourly rates of FTI personnel are: Senior Managing Director $750 - $825 Directors/Managing Director $520 - $675 Consultants/ Senior Consultants $255 - $455 Administrative/Paraprofessionals $105 - $210 Thomas E. Lumsden, senior managing director of FTI, tells the Court that pre-bankruptcy, FTI received $699,201 for professional services and expenses. Mr. Lumsden adds that FTI received $100,000 as initial cash on account that was applied to its accrued professional fees and expenses rendered prepetition. As of the petition date, the balance remaining was $100,000. Mr. Lumsden assures the Court that FTI is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Pacific Ethanol Holding Headquartered in Sacramento, California, Pacific Ethanol Holding Co. LLC -- http://www.pacificethanol.net/-- produces and sells ethanol. The Company and other affiliates of Pacific Ethanol Inc. filed for Chapter 11 on May 17, 2009 (Bankr. D. Del. Lead Case No. 09- 11713). Lawrence C. Gottlieb, Esq., and Richard S. Kanowitz, Esq., at Cooley Godward Kronish LLP represent the Debtors in their restructuring effort. The Debtors propose to hire Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP as co-counsel and Epiq Bankruptcy Solutions LLC as claims and noticing agent. The Debtors listed $50 million to $100 million in assets and $100 million to $500 million in debts. PARK-OHIO INDUSTRIES: Moody's Confirms Corp. Family Rating to 'B3' ------------------------------------------------------------------ Moody's Investors Service lowered Cleveland, Ohio based Park-Ohio Industries Inc.'s Corporate Family Rating and Probability of Default Rating to B3 from B2, and rating on the Senior Subordinated Notes due 2014 to Caa2 from B3. The rating outlook remains negative. The downgrade of the CFR to B3 reflects Moody's expectation that Park Ohio's operating performance will deteriorate substantially during 2009 as a result of weakening demand for its products from most of its end markets, and could result in further deterioration in credit metrics and liquidity. Park-Ohio reported a roughly 32% revenue decline during the first quarter compared to the prior year period, while its quarterly EBITDA dropped by nearly 60%. Notwithstanding its current weak performance, the B3 rating is supported by the decent scale, its relatively diversified business line and customer base and a broad product portfolio. Moody's does not expect meaningful recovery in the near-to-medium term in most of Park-Ohio's end markets, in particular the auto, heavy-truck and industrial sectors. While the company has taken significant measures to reduce cost, its high operating and financial leverage have constrained its ability to adjust its cost structure quickly. Consequently, Moody's expects that credit metrics would deteriorate significantly, with adjusted debt-to- EBITDA leverage possibly rising above 7.0x and EBIT/Interest falling below 1.0x over the intermediate term. The rating action also incorporates the company's weakening liquidity position, driven by its eroding excess availability under its asset-based revolver due to declining borrowing base, as well as thinning cushion under its financial covenant as EBITDA continues to deteriorate. "If Park-Ohio continues to follow its 1Q2009 negative operating performance trend, the company's ability to remain in compliance with its bank covenant will likely become uncertain," commented Moody's Analyst John Zhao. "Its current B3 rating is subject to maintaining adequate cushion under the Debt Service Ratio and a minimum $30 million overall liquidity (cash + excess revolver availability)." While the rating action is not directly related to the recent bankruptcy filing by Chrysler and GM, Moody's does consider the adverse effect of the additional idling of both OEM's plants and potential liquidity pressure arising from receivable collection. That said, Moody's believes that Park-Ohio's direct account receivables exposure with Chrysler and GM should be fairly limited, considering its acceptance by both companies in the government backed auto supplier receivable program. However, Moody's does anticipate continued topline pressure due to lower production volume as well as modest losses incurred from its indirect exposure with Chrysler related to its A/R with a Tier-1 supplier that filed for Chapter 11 recently. The rating action is: * Corporate Family Rating -- downgraded to B3 from B2 * Probability of Default Rating -- downgraded to B3 from B2 * $210 million 8.375% Senior Subordinated Notes due 2014 -- downgraded to Caa2 (LGD5, 80%) from B3 (LGD5, 76%) * Outlook: negative The last rating action of Park-Ohio was on December 23, 2008 when its rating outlook was revised to negative. Park-Ohio Industries, Inc., headquartered in Cleveland, Ohio, is an industrial supply chain logistics and diversified manufacturing business operating in three segments: Supplier Technologies, Aluminum Products, and Manufactured Products. Park-Ohio's revenues approximate $980 million. PATRICIA CAMPBELL-JAMES: Case Summary & 7 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Patricia V. Campbell-James aka Patricia James aka Patricia V. Campbell 803 East 35th Street Brooklyn, NY 11210 Bankruptcy Case No.: 09-44929 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtor's Counsel: Narissa A. Joseph, Esq. 277 Broadway, Suite 501 New York, NY 10017 Tel: (212) 233-3060 Fax: (212) 608-0304 Email: njosephlaw@aol.com Total Assets: 1,301,408 Total Debts: $1,248,959 A full-text copy of Ms. Campbell-James' petition, including a list of her 7 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nyeb09-44929.pdf The petition was Ms. Campbell-James. PEACH HOLDINGS: Moody's Downgrades Corporate Family Rating to 'C' ----------------------------------------------------------------- Moody's Investors Service downgraded the corporate family and senior secured bank credit facility ratings of Peach Holdings Inc. to C from Caa2, with a developing outlook. The rating downgrade reflects Moody's expectation that Peach's severe liquidity constraints resulting from distressed funding and operating conditions will lead the company to need to recapitalize. Moody's believes a recapitalization could involve a distressed debt exchange, which could result in high loss severity for the rated bank debt. The developing outlook assigned to Peach's ratings is in recognition that a successful recapitalization could improve the firm's financial and operating flexibility. Moody's will closely monitor developments in this regard, including Peach's progress in re-establishing sound alternative funding sources. Moody's believes Peach must resolve its funding situation in the next few months to ensure its ability to continue operations and maintain sufficient liquidity. The last rating action was on March 13, 2009, when Moody's downgraded Peach's corporate family and senior secured bank credit facility ratings to Caa2 from B2, and left the ratings under review for possible downgrade. Peach Holdings, Inc., is located in Boynton Beach, FL; the company reported assets of approximately $477 million at March 31, 2009. POLAROID CORP: Unsecured Creditors File Liquidating Plan -------------------------------------------------------- The official committee of unsecured creditors of Polaroid Corp. has filed a proposed iquidating plan and explanatory disclosure statement in the Debtor's Chapter 11 case, Bloomberg's Bill Rochelle reports. The exclusive right of Polaroid Corp. to propose a Chapter 11 plan expired on June 8. The plan in substance provides for distributing incoming cash according to bankruptcy priorities. Unsecured creditors' recovery will depend in large part on whether the committee is successful in knocking out two secured claims, according to the report. Liquidators Hilco Merchant Resources LLC and Gordon Brothers Group LLC were authorized in April to buy Polaroid's assets after winning the auction with an $88 million bid. The sale officially closed May 7, 2009. About Polaroid Corporation Polaroid Corporation -- http://www.polaroid.com/-- makes and sells films, cameras, and other imaging products. The Company and 20 of its affiliates first filed for bankruptcy protection on October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864). Skadden, Arps, Slate, Meagher & Flom LLP represented the Debtors in their previous restructuring efforts. At that time, the Company blamed steep decline in its revenue and the resulting impact on its liquidity. On June 28, 2002, the U.S. Bankruptcy Court for the District of Delaware approved the purchase of substantially all of Polaroid's business by One Equity Partners. The bid provides for cash consideration of $255 million plus a 35% interest in the new company for unsecured creditors. Polaroid Corp., together with 11 affiliates, filed its second voluntary petition for Chapter 11 on December 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles the Chapter 22 case. George H. Singer, Esq., James A. Lodoen, Esq., and Sandra S. Smalley-Fleming, Esq., at Lindquist & Vennum P.L.L.P, are counsel to the Debtors. Cass Weil, Esq., James A. Rubenstein, Esq., and Sarah E. Doerr, Esq., at Moss & Barnett, have been tapped as special counsel. The law firms of Baker & McKenzie and C&A Law represent the Debtors as special foreign legal counsel. According to the Company, the financial structuring process and the second bankruptcy filing are the result of events at Petters Group Worldwide, which has owned Polaroid since 2005. About Petters Group Worldwide Based in Minnetonka, Minn., Petters Group Worldwide LLC is named for founder and chairman Tom Petters. The group is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Mr. Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide, LLC. Petters Company, Inc., and Petters Group Worldwide, LLC, filed separate petitions for Chapter 11 on October 11, 2008 (Bankr. D. Minn. Case No. 08-45257 and 08-45258, respectively). James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company listed debts of between $500 million and $1 billion, while its parent, Petters Group Worldwide, LLC, listed debts of not more than $50,000. As reported in the Troubled Company Reporter on October 7, 2008, Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota on October 6, 2008 (Lead Case No. 08-45136). Petters Aviation, LLC, is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's parent company. POPULAR INC: Moody's Cuts Unit's Primary Servicer Rating -------------------------------------------------------- Fitch Ratings has taken this rating action on Popular Mortgage Servicing Inc.'s U.S. residential primary servicer rating: -- Residential primary servicer rating for subprime product downgraded to 'RPS3' from 'RPS2-'. The rating is also placed on Rating Watch Negative. The rating action is based on the changed financial condition of PMSI's ultimate parent, Popular, Inc. On June 8, 2009, Fitch downgraded the long-term Issuer Default Rating of Popular to 'B' from 'BBB'. Popular's ratings remain on Rating Watch Negative. The Rating Watch Negative for PMSI's servicer rating indicates that Fitch may either downgrade or affirm the servicer rating depending upon the stability of PMSI's servicing portfolio, operational capabilities, and financial condition. Fitch recently completed its annual operational review of PMSI's servicing platform and determined that operationally the company is performing at a level near the prior year's assessment in most areas. Therefore, the servicer rating downgrade primarily reflects Fitch's concern regarding the potential impact on PMSI's servicing operations from continued pressure on Popular's financial flexibility in the increasingly challenged residential mortgage market. A company's financial condition is an important component of Fitch's servicer rating analysis. Fitch will continue to monitor Popular's financial condition and the impact on the company's servicing operations and performance. PMSI is located in Cherry Hill, New Jersey. In November 2008, Popular sold mortgage servicing assets being serviced by PMSI to various Goldman Sachs affiliates. As of March 31, 2009, PMSI's servicing portfolio consisted of just over 10,500 loans totaling $915 million, a decrease from over 82,600 loans totaling $11.6 billion as of Jan. 31, 2008. As a result, the company has seen a significant reduction in staffing levels. Management stated that a potential sale of the PMSI servicing platform is currently in process. Since Fitch's prior review, PMSI completed its transition to a stand-alone company by establishing its own information technology management and human resources functions internally, and relocating its data center to its Cherry Hill site from its parent's location in Marlton, New Jersey. However, Fitch is concerned that the internal audit function, previously handled by PMSI's parent, has not yet been established within PMSI and that no internal audit reports were issued since Fitch's prior operational review. Fitch has reviewed PMSI's servicing operations and believes that the company has the infrastructure and technology to support its current servicing portfolio. However, Fitch will continue to monitor PMSI's ability to manage its servicing performance in a high delinquency environment as it pursues its initiatives, including a potential sale of the servicing platform, and improves its internal control environment. Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. PRIMUS TELECOM: Court Confirms Plan; To Exit Chapter 11 by July 1 ----------------------------------------------------------------- Primus Telecommunications Group, Incorporated, together with three affiliated non-operating holding companies, Primus Telecommunications Holding, Inc., Primus Telecommunications International, Inc. and Primus Telecommunications IHC, Inc., said their consensual plan of reorganization has been confirmed by the U.S. Bankruptcy Court for the District of Delaware, only 88 days after the Plan and related petitions were filed. Upon emergence, expected on or about July 1, the Holding Companies' principal debt will be reduced by $316 million, or roughly 50%, interest payments will be reduced by roughly 50% and certain debt maturities will be extended. An overwhelming amount and percentage of holders of claims and interests voted in favor of the Plan. "We said at the outset that our goal was to have a swift passage through the reorganization process -- it has been," said K. Paul Singh, Chairman and Chief Executive Officer. "The confirmed Plan paves the way for the restructuring of our balance sheet and we believe that PRIMUS is now well positioned for future success in the current economic environment." As planned, none of PRIMUS' operating companies in the United States, Australia, Canada, India, Europe and Brazil were included in the bankruptcy filing. The operating units continued to manage and to operate their businesses normally during the brief financial reorganization of the Holding Companies. The significant elements of the consensual Plan include: -- Reinstatement and amendment of the $96 million in outstanding variable rate Term Loan debt due 2011; -- Modification of $173 million of outstanding 14-1/4% Senior Secured Notes due 2011 into $123 million of 14-1/4% Senior Subordinated Secured Notes of Primus Telecommunications IHC, Inc., including an extension of the maturity to 2013, and distribution to the former holders of 14-1/4% Senior Secured Notes due 2011 a pro rata share of common stock representing 48% of the equity of the reorganized company as of the effective date of the Plan, prior to exercise of warrants and options and any distributions on account of contingent value rights; -- Cancellation of $209 million outstanding principal amount of the 8% Senior Notes due 2014 and 5% Exchangeable Notes due 2010, and distribution to the former holders thereof of a pro rata share of: (1) common stock representing 48% of the equity of the reorganized company as of the effective date of the Plan, prior to exercise of warrants and options and any distributions on account of CVRs and (2) warrants exercisable for additional equity in the reorganized company at varying exercise prices based on predetermined equity values; -- Cancellation of the 12-3/4% Senior Notes due 2009, 3-3/4% Convertible Senior Notes due 2010 and 8% Step Up Convertible Subordinated Debentures due 2009, and distribution to the former holders thereof of a pro rata share of warrants exercisable for equity in the reorganized company at an exercise price based on a predetermined equity value; -- Cancellation of the existing common stock and other equity Interests of Primus Telecommunications Group, Incorporated and distribution to the former holders of common stock a pro rata share of CVRs representing the right to receive up to 15% of the fully-diluted equity of the reorganized company after the equity value reaches a certain threshold. In addition, the Plan provides that managers and employees of the reorganized company may be granted up to 10% of the equity of the reorganized company, prior to the dilution for exercise of warrants and any distribution on account of CVRs. Awards under the management compensation plan may include, but are not limited to, stock options and restricted stock units that vest upon achievement of certain performance benchmarks. "The recapitalization would not have been such a success in such a short period of time without the professionalism and dedication of our employees, the loyalty of our customers and the commitment and support of our creditor groups," concluded Mr. Singh. About Primus Telecom PRIMUS Telecommunications Group, Incorporated (OTCBB: PRTL) -- http://www.primustel.com-- is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and Western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. The Company and four its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. D. Del. Lead Case No. 09-10867). George N. Panagakis, Esq., and T Kellan Grant, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, are the Debtors' proposed counsel. Davis L. Wright, Esq., Eric M. Davis, Esq., and Anthony Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, are the Debtors' proposed local counsel. The Debtor proposed CRT Investment Banking LLC as financial adviser and investment banker. When the Debtors filed for protection from their creditors, they listed assets between $100 million and $500 million, and debts between $500 million and $1 billion. The Debtors filed their proposed plan of reorganization together with their bankruptcy petitions on March 16, 2009. An amended reorganization plan was filed April 27, 2009 and the final plan was filed on June 12, 2009. QBIT CORPORATION: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: QBIT Corporation 16 Granite Place, #484 Gaithersburg, MD 20878 Bankruptcy Case No.: 09-20589 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtor's Counsel: Richard H. Gins, Esq. The Law Office of Richard H. Gins, LLC 3 Bethesda Metro Center, Suite 530 Bethesda, MD 20814 Tel: (301) 718-1078 Fax: (301) 718-8359 Email: richard@ginslaw.com Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb09-20589.pdf The petition was signed by Daniel Kilbank, president of the Company. RASAQ HASSAN: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Rasaq Anthony Hassan 17918 Lysander Dr Carson, CA 90745 Bankruptcy Case No.: 09-24650 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Thomas B. Donovan Debtor's Counsel: Khushwant Sean Singh, Esq. Law Offices of K Sean Singh 1926 S Main St 2nd Fl Santa Ana, CA 92707 Tel: (714) 285-9960 Fax: (714) 285-9963 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Mr. Hassan's petition, including a list of his 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-24650.pdf The petition was signed by Mr. Hassan. REALTY AMERICA: Proposes Reed & Elmquist as Bankruptcy Counsel -------------------------------------------------------------- Realty America Group (Lincoln Mall), LP, asks the U.S. Bankruptcy Court for the Northern District of Texas for permission to employ Reed & Elmquist, P.C., as counsel. R&E will, among other things: a) advise the Debtor of its rights, powers, duties and obligations as debtor and debtor-in-possession in the Chapter 11 case; b) take all necessary actions to protect and preserve the Debtor's estate, including the prosecution of actions on the Debtor's behalf, the defense of actions commenced against the Debtor, the negotiation of disputes in which the Debtor is involved, and the preparation of objections with respect to claims that are filed against the estate; and c) assist the Debtor in the investigation of the acts, conduct, assets and liabilities of the Debtor, and any other matters relevant to the cases. The hourly rates of R&E personnel are: David W. Elmquist, Esq., shareholder $375 Jeff Carruth, attorney $250 Linda Kaye Paquette, paralegal $150 Mr. Elmquist tells the Court that R&E received a $15,000 retainer Freehold Capital Advisors, Ltd., an affiliate of the Debtor. Mr. Elmquist assures the Court that R&E is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Elmquist can be reached at: Reed & Elmquist, P.C. 604 Water Street Waxahachie, TX 75165 Tel: (972) 938-7339 Fax: (972) 923-0430 About Realty America Group Dallas, Texas-based Realty America Group (Lincoln Mall), LP dba Lincoln Mall filed for Chapter 11 on May 18, 2009 (Bankr. N. D. Tex. Case No. 09-33076). David W. Elmquist, Esq., at Reed & Elmquist, P.C., represents the Debtor in its restructuring efforts. The Debtor has assets and debts both ranging from $10 million to $50 million. REALTY AMERICA: Wants Schedules Deadline Moved to June 17 --------------------------------------------------------- Realty America Group (Lincoln Mall), LP, asks the U.S. Bankruptcy Court for the Northern District of Texas to extend until June 17, 2009, the time to file its equity list, schedules and statements. The Debtor explains that given the lack of operational and financial information available to its staff as a result of its receivership, it is not in a position to complete the equity list and schedules and statements. Dallas, Texas-based Realty America Group (Lincoln Mall), LP, dba Lincoln Mall, filed for Chapter 11 on May 18, 2009 (Bankr. N. D. Tex. Case No. 09-33076). David W. Elmquist, Esq., at Reed & Elmquist, P.C., represents the Debtor in its restructuring efforts. The Debtor has assets and debts both ranging from $10 million to $50 million. RIVER WOODS: Wants to Hire Foley Freeman as Bankruptcy Counsel -------------------------------------------------------------- River Woods, LLC asks the U.S. Bankruptcy Court for the District of Idaho for permission to employ Foley Freeman PLLC as counsel. Foley Freeman will: a) advise the Debtors with respect to its powers and duties in the affairs of the business and management of the Debtor's property; and b) file disclosure, Plan and other documents or help in the preparation of the same and negotiate and secure approval of a Chapter 11 Plan and file other motions, attend hearings relating to the Chapter 11 proceedings. The hourly rates of Foley Freeman's personnel are: Howard R. Foley, Esq. $200 Patrick J. Geile, Esq. $175 To the best of the Debtor's knowledge, Foley Freeman is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Foley Freeman PLLC P.O. Box 10 Meridian, ID 83680 Tel: (208) 888-9111 About River Woods, LLC Boise, Idaho-based River Woods, LLC, filed for Chapter 11 on May 11, 2009 (Bankr. D. Idaho Case No. 09-01263). Howard R. Foley, Esq., at Foley Freeman PLLC represents the Debtor in its restructuring efforts. The Debtor listed $10,000,001 to $50,000,000 in assets and in debts. SEMGROUP LP: Reaches Settlement With SemEuro & BNP Paribas ---------------------------------------------------------- SemGroup, L.P., asks the U.S. Bankruptcy Court for the District of Delaware to approve a settlement it reached with SemEuro Supply Limited and BNP Paribas Commodity Futures, Ltd., with regard to the return of the $6,585,374 SemGroup wired to BNP Paribas to cover a margin call BNP Paribas made on SemEuro's trading account. Before the Debtors' bankruptcy filing, SemEuro, one of the Debtors' wholly owned, indirect subsidiaries organized under the laws of England and Wales, opened a commodities futures trading account with BNP Paribas, pursuant to which BNP Paribas is entitled to make a margin call on SemEuro's trading accounts under certain circumstances. In the event BNP Paribas makes the margin call, SemEuro must repay the outstanding amounts on that margin trading accounts within 24 hours upon receipt of the margin call. Thereafter, SemEuro and BNP Paribas entered into a margin waiver credit facility to assist SemEuro to trade in options and futures as a hedge against commodity price movements. On the Petition Date, BNP Paribas notified SemEuro that it was withdrawing the Credit Facility and that SemEuro would be required to meet the margin call payments for its trading accounts on a cash basis. BNP Paribas then made the margin call, which SemGroup paid within 24 hours, on SemEuro's behalf. In September 2008, SemEuro began closing its trading accounts with BNP Paribas. Subsequently, the parties stipulate that BNP Paribas return the margin payment to SemGroup in exchange for BNP Paribas's release by the Debtors relating to the retention of the margin payment after the Petition Date. L. Katherine Good, Esq., at Richards, Layton, & Finger, P.A., in Wilmington, Delaware, asserts that absent the settlement, SemGroup may face the added cost of litigating the ability of the Court to exercise jurisdiction over BNP Paribas, or possibly litigating against BNP Paribas in a foreign jurisdiction, adding further expense, delay and uncertainty. 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: Seeks Court Approval of Ogden Lease Termination Pact ----------------------------------------------------------------- SemGroup L.P. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve a termination agreement between Debtor SemMaterials, L.P., and Staker & Parson Companies with respect to SemMaterial's lease of an asphalt terminal located in Ogden, Utah, from S&P, including the terminal's related improvements, fixtures, and equipment. The Debtors also ask the Court to approve a settlement and compromise reached between SemMaterials and S&P pertaining to the lease termination. Under the Lease, which commenced in November 2006 and expires in October 2011, SemMaterials pays a monthly rent of $88,000 subject to an annual producer price index adjustment. SemMaterials is also obligated to remit volume incentive rebates to S&P for any volume sold from SemMaterials' Utah plants. SemMaterials' current monthly lease payment with the PPI adjustment is $94,897. For its part, S&P is obligated pay SemMaterials a thru-put fee under the Lease. Additionally, pursuant to the Lease, S&P agreed to purchase any inventory remaining on the leased premises, or those in transit to the leased premises, upon termination of the Lease. SemMaterials currently maintains at the leased premises about 3.7 million gallons of asphalt product, the Debtors believe to be valued at $4.4 million. Furthermore, SemMaterials was authorized to undertake capital improvements during the lease term on the leased premises for purposes of incidental asphalt operations. Upon the termination of the Lease, SemMaterials may either (i) remove the capital improvements from the leased premises and restore the premises to the state they were in prior to undertaking the improvement, or (ii) sell the capital improvements to S&P at a mutually agreeable price. SemMaterials has expended some $1.3 million for implementing capital improvements on the leased premises since the inception of the Lease. The Lease is among those the Debtors sought and obtained Court approval for assumption in the Debtors' second omnibus assumption motion. Since the time of the Lease assumption, SemMaterials has sold substantially all of its assets and has commenced the orderly wind down of its business. In this light, the Lease, the excess inventory and the capital improvements are of no further use to SemMaterials. Pursuant to the Lease termination agreement: (1) S&P will remit $895,500 to SemMaterials as payment for the capital improvements; (2) In full and final settlement of all alleged postpetition obligations arising from the purchase and sale of asphalt products under the Lease, including any outstanding rebates or thru-put fees: (a) S&P will pay $10,871 to SemMaterials, and (b) during the period from June 1, 2009, through the date of the Court's entry of an order approving the motion, SemMaterials will pay S&P, and S&P will accept, a pro rata amount for all rent owed under the Lease during the interim period; (3) SemMaterials will sell, and S&P will purchase at market price, the remaining inventory at the leased premises for $4,439,730; and (4) S&P will waive any administrative claim and prepetition claim that it may have against SemMaterials in connection with the Lease or the lease termination agreement. SemMaterials believes that the terms of the Lease termination agreement are mutually beneficial to the parties and offer the most efficient, cost-effective resolution of any potential claims in connection with the lease termination and the disposition of the residual assets. Accordingly, the Debtors ask the Court to approve their request. 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) SILICON GRAPHICS: Changes Name to Graphics Properties Holdings -------------------------------------------------------------- Chief Restructuring Officer Barry Weinert disclosed with the U.S. Securities and Exchange Commission that on June 4, 2009, Graphics Properties Holdings, Inc., previously Silicon Graphics, Inc., amended its Amended and Restated Certificate of Incorporation pursuant to the Certificate of Amendment of Amended and Restated Certificate of Incorporation of Silicon Graphics, Inc., to change the name of the company from Silicon Graphics, Inc., to Graphics Properties Holdings, Inc. According to Mr. Weinert, a resolution was adopted by the Board of Directors, pursuant to Sections 141 and 242 of the General Corporation Law of the State of Delaware, on May 9, 2009, for the amendment of the Certificate of Incorporation. An order has been entered pursuant to the Federal Bankruptcy Code, 11 U .S.C. Section 101 et seq., on behalf of the Company, approving the Amendment to change the name of the Company. Stockholder approval for the Amendment is not required under Section 303 of the General Corporation Law of the State of Delaware. In a Form 3 filing, Mr. Weinert disclosed that he may be deemed to beneficially own 4,797 shares of Graphics Properties Holdings, Inc.'s common stock. Headquartered in Sunnyvale, California, Silicon Graphics Inc. -- http://www.sgi.com/-- delivers an array of server, visualization, and storage software. This is the second bankruptcy filing for Silicon Graphics. The Debtors first filed for Chapter 11 on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. The Court confirmed the Debtors' Plan of Reorganization on September 19, 2006. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. The Company and 14 of its affiliates filed for protection for the second time on April 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-11701). Mark R. Somerstein, Esq., at Ropes & Gray LLP, represents the Debtors in their restructuring efforts. The Debtors proposed AlixPartners LLC as restructuring advisor; Houlihan Lokey Howard & Zukin Capital, Inc., as financial advisor; and Donlin, Recano & Company, Inc., as claims and noticing agent. When the Debtors filed for protection from their creditors, they listed $390,462,000 in total assets and $526,548,000 in total debts as of 2008. SIMMONS COMPANY: PwC Raises Going Concern Doubt ----------------------------------------------- PricewaterhouseCoopers LLP, principal accountants, said Simmons' non-compliance with its debt covenants, its inability to make scheduled debt repayments and uncertainty about the ability to obtain alternative financing arrangements within the next twelve months raises substantial doubt about the its ability to continue as a going concern. The Company has $890 million in total assets and $1.25 billion in total liabilities resulting in a stockholders' deficit of $360 million for the fiscal year ended December 27, 2008. The company reported $492 million net loss on $1.0 million in net sales for the fiscal year ended December 27, 2008, compared with $23.4 million net loss on $1.1 million in net sales for the fiscal year ended December 29, 2007. As of December 27, 2008, the company had $54.9 million of cash and cash equivalents and no availability to borrow additional amounts from its revolving loan under Simmons Bedding's senior credit facility. The Company's outstanding borrowings consisted of its senior credit facility of $529.5 million, subordinated notes, industrial revenue bonds of $13.6 million, and discount notes. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?3ddc About Simmons Company Atlanta-based Simmons Company -- http://www.simmons.com/-- through its indirect subsidiary Simmons Bedding Company, is one of the world's largest mattress manufacturers, manufacturing and marketing a broad range of products including Beautyrest, Beautyrest Black, Beautyrest Studio, ComforPedic by Simmons, Natural Care, Beautyrest Beginnings and Deep Sleep. Simmons Bedding operates 19 conventional bedding manufacturing facilities and two juvenile bedding manufacturing facilities across the United States, Canada, and Puerto Rico. Simmons Bedding also serves as a key supplier of beds to many of the world's leading hotel groups and resort properties. Simmons Bedding is committed to developing superior mattresses and promoting a higher quality sleep for consumers around the world. * * * As reported by the Troubled Company Reporter on March 2, 2009, Moody's Investors Service assigned a limited default rating to Simmons following the expiration of the 30 day grace period of a missed interest payment on its $200 million subordinated notes. The limited default rating is assigned to Simmons' Ca probability of default rating. All other ratings are affirmed. The outlook is developing. SIMMONS COMPANY: Likely to Restructure Debt in Bankruptcy --------------------------------------------------------- Simmons Bedding Company said that an acceleration of payments under the senior credit facility or the subordinated notes could result in either a voluntary filing or an involuntary petition for bankruptcy against the company of any of its affiliates. The company is seeking a negotiated restructuring including a restructuring of its debt obligations and sale of its assets that could occur pursuant to a pre-packaged, pre-arranged or voluntary bankruptcy filing. As of December 27, 2008, Simmons Bedding was not in compliance with certain covenants of its $540 million senior credit facility and was operating under a forbearance agreement with its senior lenders. On January 15, 2009, the company did not make a scheduled payment of interest due on its subordinated notes resulting in a default under the indenture governing the subordinated notes. As a result, the company entered into a forbearance agreement with more than a majority of the outstanding subordinated notes holders where in they agreed to refrain from enforcing their respective rights and remedies under the Subordinated Notes and the related indenture. Both forbearance agreements, as amended, with the company's senior lenders and the noteholders provide a forbearance period through June 30, 2009 and, upon meeting certain conditions, a further extension to July 31, 2009. The company said it incurred fees and expenses in connection with the forbearance agreements and related amendments. As a condition to the forbearance agreement with the senior lenders, the company initiated a financing restructuring process in December 2008. A special committee of independent directors was formed by its board of directors on January 23, 2009, to evaluate and oversee proposals for restructuring its debt obligations, including seeking additional debt or equity capital and evaluating various strategic alternatives of the company. About Simmons Company Atlanta-based Simmons Company -- http://www.simmons.com/-- through its indirect subsidiary Simmons Bedding Company, is one of the world's largest mattress manufacturers, manufacturing and marketing a broad range of products including Beautyrest, Beautyrest Black, Beautyrest Studio, ComforPedic by Simmons, Natural Care, Beautyrest Beginnings and Deep Sleep. Simmons Bedding operates 19 conventional bedding manufacturing facilities and two juvenile bedding manufacturing facilities across the United States, Canada, and Puerto Rico. Simmons Bedding also serves as a key supplier of beds to many of the world's leading hotel groups and resort properties. Simmons Bedding is committed to developing superior mattresses and promoting a higher quality sleep for consumers around the world. * * * As reported by the Troubled Company Reporter on March 2, 2009, Moody's Investors Service assigned a limited default rating to Simmons following the expiration of the 30 day grace period of a missed interest payment on its $200 million subordinated notes. The limited default rating is assigned to Simmons' Ca probability of default rating. All other ratings are affirmed. The outlook is developing. SIX FLAGS: Files for Chapter 11 Bankruptcy in Delaware ------------------------------------------------------ Six Flags, Inc., and certain of its subsidiaries on Saturday began reorganization proceedings under Chapter 11 of the United States Bankruptcy Code in the District of Delaware. In connection with the filing, Six Flags is seeking expedited approval from the Bankruptcy Court of its pre-negotiated plan of reorganization. The plan has unanimous support of the lenders' Steering Committee and the Administrative Agent for the Company's $1.1 billion senior secured credit facility. This support is evidenced by executed lock-up agreements. April 2009 Restructuring On April 17, 2009, Six Flags commenced an exchange offer to exchange its 8-7/8% Senior Notes due 2010, 9-3/4% Senior Notes due 2013 and 9-5/8% Senior Notes due 2014 for common stock. The Senior Notes Exchange Offer was to expire June 25, 2009. Six Flags also conducted a separate offer to exchange its 4.50% Convertible Senior Notes due 2015 for common stock and a consent solicitation from the holders of its Preferred Income Equity Redeemable Shares to convert to common stock. The consummation of the Senior Notes Exchange Offer and the Convertible Notes Exchange Offer were conditioned on, among other things, the valid participation of at least 95% of the aggregate principal amount of each of the Senior Notes and Convertible Notes. Under the April 2009 restructuring, holders of the Senior Notes would receive 58.3% of the Company's outstanding common stock, holders of the Convertible Notes would receive 26.7% of the outstanding common stock, holders of PIERS would receive 10.0% of the outstanding common stock and existing stockholders would retain 5.0% of the outstanding common stock, in each case prior to taking into account a new equity incentive plan to be implemented in connection with the restructuring plan for up to 12.0% of the outstanding common stock. On June 1, 2009, Six Flags said it has chosen to take advantage of the applicable 30-day grace period for making the semi-annual interest payment of roughly $15 million due on its 9-5/8% Senior Notes due 2014. By virtue of the bankruptcy filing and the failure to meet the minimum tender condition, Six Flags' exchange offers have terminated. Balance Sheet Deleveraging Six Flags' plan would result in a deleveraging of the Company's balance sheet by roughly $1.8 billion, as well as the elimination of more than $300 million in mandatorily redeemable preferred stock obligations. The bankruptcy filing marks the final step in Six Flags' ongoing efforts to restructure its debt obligations and position the Company for long-term success, according to Six Flags. "The current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in these challenging financial markets," said Mark Shapiro, President and CEO of Six Flags. "As a result, we are cleaning up the past and positioning the Company for future growth." "No one should be confused about what a bankruptcy process means for Six Flags. Following a record year of performance in 2008, which completed the three-year turnaround of our system-wide park operation, this action to clean up the balance sheet paves the way for a full revival of the company. We will emerge from this process stronger and more competitive than ever. " Mr. Shapiro emphasized that the Chapter 11 filing will have no impact on day-to-day park operations. "Our brand and our operations are on solid ground. This process is strictly a financial restructuring of our debt. We are fully committed to ensuring that the experience of our guests this summer is totally unaffected by this restructuring process. During this period we will work even more closely with our vendors, suppliers and employees to deliver the same friendly, clean, fast, safe service our guests have come to expect from the new Six Flags. I remain thankful for the steadfast support of our employees and other stakeholders throughout this entire process, and I am confident in our ability to expand and pursue new opportunities for the Six Flags brand once our balance sheet is healthy. More than ever, consumers are gravitating toward experiences they know and trust. Six Flags has been a favorite family destination for almost a half century. Our financial reorganization will best position our parks to entertain millions of guests for another 50 years." About Six Flags Six Flags, Inc. is a publicly traded corporation headquartered in New York City and is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets, including $189,043,000 in total current assets; and $3,431,647,000 in total liabilities, including $603,617,000 in current liabilities, $1,912,477,000 in long-term liabilities, $414,394,000 in redeemable noncontrolling interests and $307,875,000 in mandatorily redeemable preferred stock; resulting $524,312,000 in stockholders' deficit. SIX FLAGS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Six Flags Inc. 1540 Broadway, 15th Floor New York, NY 10036 Bankruptcy Case No.: 09-12019 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Astroworld GP LLC 09-12047 Astroworld LP 09-12051 Astroworld LP LLC 09-12050 Fiesta Texas Inc. 09-12044 Funtime, Inc. 09-12045 Funtime Parks, Inc. 09-12048 Great America LLC 09-12043 Great Escape Holding Inc. 09-12040 Great Escape Rides L.P. 09-12038 Great Escape Theme Park L.P. 09-12036 Hurricane Harbor GP LLC 09-12035 Hurricane Harbor LP 09-12032 Hurricane Harbor LP LLC 09-12030 KKI, LLC 09-12027 Magic Mountain LLC 09-12025 Park Management Corp. 09-12023 PP Data Services Inc. 09-12053 Premier International Holdings Inc. 09-12019 Premier Parks of Colorado Inc. 09-12021 Premier Parks Holdings Inc. 09-12024 Premier Waterworld Sacramento Inc. 09-12028 Riverside Park Enterprises, Inc. 09-12031 SF HWP Management LLC 09-12034 SFJ Management Inc. 09-12039 SFRCC Corp. 09-12042 Six Flags, Inc. 09-12037 Six Flags America LP 09-12046 Six Flags America Property Corporation 09-12049 Six Flags Great Adventure LLC 09-12052 Six Flags Great Escape L.P. 09-12041 Six Flags Operations Inc. 09-12022 Six Flags Services, Inc. 09-12026 Six Flags Services of Illinois, Inc. 09-12029 Six Flags St. Louis LLC 09-12033 Six Flags Theme Parks Inc. 09-12054 South Street Holdings LLC 09-12055 Stuart Amusement Company 09-12020 Related Information: Six Flags is the largest regional theme park operator in the world. From its headquarters in New York City, Six Flags indirectly owns or operates twenty parks located in geographically diverse markets across North America, including eighteen domestic parks, one park in Mexico, and one park in Canada. Eighteen of the twenty parks are branded as "Six Flags" parks. Six Flags intends to expand its operations beyond North America with destinations in Dubai and Qatar. Chapter 11 Petition Date: June 13, 2009 Court: District of Delaware Debtors' Counsel: Paul E Harner, Esq. Steven T Catlett, Esq. Christian M Auty, Esq. Paul, Hastings, Janofsky & Walker LLP 191 North Wacker Drive, Thirtieth Floor Chicago, Il 60606 Tel: (312) 499-6000 Fax: (312) 499-6100 http://www.paulhastings.com/ Debtors' Co-Counsel: Daniel J. DeFranceschi, Esq. L. Katherine Good, Esq. Richards, Layton & Finger, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 http://www.rlf.com/ Debtors' Special Counsel: Cadwalader Wickersham & Taft LLP One World Financial Center New York, NY 10281 Tel: (212) 504-6000 Fax: (212) 504 6666 http://www.cadwalader.com/ Debtors' Financial Advisor: Houlihan Lokey Howard & Zukin Capital Inc. 245 Park Avenue New York, NY 10167-0001 Tel: (212) 497-4100 Fax: (212) 661-3070 http://www.hlhz.com/ Debtors' Accountant: KPMG LLC 3 Chestnut Ridge Road Montvale, NJ 07645-0435 Tel.: (201) 307-8498 http://www.kpmg.com/ Debtors' Claims Agent: Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 Tel: (866) 967-1783 http://www.kccllc.net/ The Debtors' financial condition as of March 31, 2009: Total Assets: $2,907,335,000 Total Liabilities: $3,431,647,000 Debt securities held by more than 500 holders: -- 8 1/4% senior notes due 2010 $131,077,000 -- 9 3/4% senior notes due 2013 $142,441,000 -- 9 5/8% senior notes due 3014 $314,757,000 -- 4 1/2% convertible senior notes due 2015 $280,000,000 -- 12 1/4% senior notes due 2016 $400,000,000 The Debtors have 1,115,000 preferred stock and 97,775,488 common stock. Entities that own and control 5% or more of the voting securities of the Debtors: Beneficial Owner Percentage Ownership ---------------- -------------------- Cascade Investment LLC 11.1% Citigroup Inc. 9.1% Barclays PLC 6.65% Daniel M. Snyder 5.92% Renaissance Technologies LLC 5.52% Dwight C. Schar 5.17% The Debtors' Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ HSBC Bank USA, National bond debt $400,000,000 Association as Trustee (12.25% Notes 452 Fifth Avenue due 2016) New York, New York 10018 Bank of New York Mellon as bond debt $314,787,000 Trustee (9.625% Notes 101 Barclay St - 8W due 2014) New York NY 10286 Bank of New York Mellon as bond debt $280,000,000 Trustee (4.5% Notes 101 Barclay St - 8W due 2015) New York NY 10286 Bank of New York Mellon as bond debt $142,441,000 Trustee (9.75% Notes 101 Barclay St - 8W due 2013) New York NY 10286 Bank of New York Mellon as bond debt $131,077,000 Trustee (8.875% Notes 101 Barclay St - 8W due 2010) New York NY 10286 Lake County, Illinois trade debt $180,440 Convention and Visitor's Bureau 5465 W, Grand Ave, Suite 100 Gurnee, IL 60031 NSB Retail Solutions L.P, trade debt $102,633 2800 Autoroute Transcanaadienn Point-Claire, QC H9RIBI County of Los Angeles - trade debt $100,126 Sheriff P,O, Box 512816 Los An eles, CA 90051-0816 Philadelphia Coca-Cola USA trade debt $85,910 P,O, Box 8500 2735 Philadel hia, PA 19718-2735 CJ Contractors NJ, Inc. trade debt $85,309 115 North County Line Road Jackson, NJ 08527 Alex In Wonderland trade debt $75,050 3224 N, San Fernando Blvd. Burbank, CA 91504 Roto Graphic Printing Inc. trade debt $70,777 575 Fond Du Lac Ave. Fond Du Lac, WI 54936-1495 Tri-City Fence Company, Inc. trade debt $66,631 1175 Benicia Road Vallejo, CA 94591 Mindshare USA LLC trade debt $58,724 P.O. Box 60 I689 Charlotte, NC 28260-1689 Green Order trade debt $55,000 205 Lexington Ave. 15th Floor New York, NY 10016 Coca Cola Bottling Co. of New trade debt $42,599 York P.O. Box 4 I08 Boston, MA 02231-410 R&M Grading, Inc. trade debt $40,705 2200 Big Ranch Road Napa, CA 94558 Bunzl New Jersey Inc. trade debt $35,359 12769 Collection Center Drive Chicago, IL 60693 Boller Construction Co Inc. trade debt $34,904 3045 W. Washington St. Waukegan, IL 60085 Cirignano Contracting Inc. trade debt $32,656 750 California Ave. Absecon, NJ The petition was signed by Jeffrey R. Speed, chief financial officer of Six Flags Inc. SIX FLAGS: Bank Debt Trades at 22% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which Six Flags Theme Parks, Inc., is a borrower traded in the secondary market at 78.00 cents-on-the-dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.07 percentage points from the previous week, the Journal relates. The loan matures May 15, 2015. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating and S&P's CCC+ rating. Six Flags, Inc. is a publicly traded corporation headquartered in New York City and is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets, including $189,043,000 in total current assets; and $3,431,647,000 in total liabilities, including $603,617,000 in current liabilities, $1,912,477,000 in long-term liabilities, $414,394,000 in redeemable noncontrolling interests and $307,875,000 in mandatorily redeemable preferred stock; resulting $524,312,000 in stockholders' deficit. SMURFIT-STONE: Court Approves Evergreen & Travelers Surety Bonds ---------------------------------------------------------------- Smurfit-Stone Container Corp. and its debtor-affiliates use surety bonds to secure a variety of obligations incurred in the ordinary course of their businesses. According to James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, in certain instances, state agencies require surety bonds, including performance bonds to secure various environmental obligations. In other instances, contract counterparties, like utility providers, construction companies, and others require bonds to secure the Debtors' contractual obligations. Consequently, the Debtors must have access to surety bonds in order to properly operate their business, Mr. Conlan says. Before their bankruptcy filing, the Debtors maintained agreements with several surety bond providers, including Evergreen National Indemnity Company and Travelers Casualty and Surety Company of America. Mr. Conlan notes that Evergreen was the Debtors' sole provider of environmental surety bonds prior to the Petition Date. Evergreen issued the bonds to state environmental agencies on behalf of the Debtors to secure certain environmental obligations in connection with their operation of landfills and a barrier recovery well system. He discloses that as of the Petition Date, the Debtors had eight outstanding environmental performance surety bonds that were issued by Evergreen. The Debtors choose to own and operate their own landfills to ensure that their wastes are properly managed. This also allows the Debtors to better control their waste disposal costs and avoid the significant costs associated with using commercial landfills, incinerators or other disposal facilities, Mr. Conlan tells the U.S. Bankruptcy Court for the District of Delaware. Travelers issued surety bonds on the Debtors' behalf to state agencies, customs authorities and utility providers, among others. Travelers issued the surety bonds pursuant to a certain general contract of indemnity entered into by Smurfit-Stone Container Corporation and Smurfit-Stone Container Enterprises, Inc. as indemnitors and certain other general agreements of indemnity. Pursuant to the Prepetition Agreements, the Debtors indemnified Travelers and agreed to reimburse Travelers in the event that the bond beneficiaries obtained payment from Travelers on account of the bonds. Mr. Conlan says that the Debtors provided Travelers with an irrevocable letter of credit to secure the Debtors' indemnity and reimbursement obligations under the Prepetition Agreements. As of the Petition Date, the Debtors had 25 outstanding surety bonds that were issued by Travelers aggregating $7,000,000, and approximately $6,200,000 of the amount relates to Prepetition Travelers Bonds issued to state agencies to secure workers' compensation obligations. As of the Petition Date, the letter of credit provided by the Debtors to secure their indemnity obligations in respect of the Prepetition Travelers Bonds was $7,000,000. Mr. Conlan notes that Travelers is entitled to draw down on the letter of credit in the event Travelers is required to pay any of the beneficiaries of the Prepetition Travelers Bonds. In order to continue operating their businesses effectively as debtors-in-possession, Mr. Conlan submits that the Debtors need to maintain many of their existing bonds and will likely be required to post new bonds. He explains that although the Debtors continue to pay their workers' compensation obligations in the ordinary course, the Debtors are required to maintain bonds with a number of state regulatory agencies in order to maintain their self- insured status in those states. Travelers and Evergreen have notified the Debtors that they will not issue any new surety bonds or renew existing bonds unless the Debtors agree to enter into new agreements. In separate requests, the Debtors ask the Court for authority to enter into new agreements with Evergreen and Travelers. The key terms of the new agreements between the Parties are: A. Evergreen (a) The terms of Evergreen's Postpetition Agreement with the Debtors will supersede any conflicting terms in the Prepetition Agreement. (b) The Prepetition Evergreen Bonds will remain in place. Evergreen will provide the Debtors with new bonds and increases or renewals of existing bonds according to Evergreen's normal underwriting practices. (c) Evergreen agrees to issue certain new bonds to replace bonds previously issued by a different surety provider on behalf of the Debtors. (d) The Debtors will continue to pay timely premiums on all bonds as the premiums become due. (e) The Debtors agree to treat their obligations under the Evergreen Prepetition Agreement as valid and binding postpetition obligations. (f) To the extent that any of the Replaced Bonds were previously canceled by the prior surety bond provider, the corresponding New Bonds will have an effective date retroactive to the cancellation date. The Replaced Bonds that are currently in place will remain in place and will be replaced by Evergreen on the renewal date of the bond, or if the bond is canceled prior to the renewal date, on the earliest practicable date after the cancellation of the bond. (g) The irrevocable letter of credit issued as collateral for the Prepetition Evergreen Bonds will be maintained as security for the Prepetition Evergreen Bonds and the New Bonds. (h) If any of the default provisions in the Prepetition Agreement is triggered, the Debtors will be provided notice of the default and a minimum of 90 days to cure the default prior to Evergreen exercising any of the default remedies defined under the Evergreen Postpetition Agreement. B. Travelers (a) Travelers may issue bonds up to an aggregate capacity of $25,000,000 for all outstanding bonds, including the Prepetition Travelers Bonds. (b) Travelers will provide the Debtors with new bonds and increases or renewals of existing bonds according to Travelers' normal underwriting practices. (c) The applicable premiums to be charged to the Debtors are set in a side letter agreement, which the Debtors will provide to the Official Committee of Unsecured Creditors and the U.S. Trustee for the District of Delaware on a confidential basis. The Debtors will continue to pay timely premiums on all bonds as the premiums become due. (d) The Debtors will provide security in the form of one or more irrevocable letters of credit for all bonds maintained, issued, renewed or reinstated postpetition. (e) The Debtors reaffirm their obligations under the Travelers Prepetition Agreements and agree to treat them as their valid and binding postpetition obligations. (f) Travelers will be entitled to superpriority administrative expense status for any claim it may have under the Travelers Postpetition Agreement or the Prepetition Agreements that is in excess of the amount of collateral held by Travelers, provided that the superpriority administrative expense claim will be junior and subordinate to the superpriority administrative claims granted to the DIP Lenders, the Prepetition Secured Parties, and the Calpine Lenders. (g) Travelers is granted relief from the automatic stay, as may be necessary, to effectuate the cancellation of any bond in accordance with the terms of the Travelers Postpetition Agreement and to draw upon any letters of credit issued to Travelers. * * * The Court granted the Debtors' requests. Prior to Court approval, Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, certified that there were no objections to the Debtors' requests. About Smurfit-Stone Container Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Court Approves Zurich Insurance Agreement -------------------------------------------------------- As reported by the Troubled Company Reporter on May 14, 2009, Smurfit-Stone Container Corp. and its debtor-affiliates asked permission from the U.S. Bankruptcy Court for the District of Delaware to enter into new insurance agreements with Zurich American Insurance Company. The Court granted the Debtors' request. The Parties negotiated and agreed to the terms of new general liability, workers compensation and automobile liability insurance policies with policy periods from May 1, 2009, to April 1, 2010. A full-text copy of the New Policies Agreement is available for free at http://bankrupt.com/misc/SmurfNewPolicy.pdf The key terms of the New Policies Agreement between the Debtors and Zurich include: (a) General Liability Coverage in U.S. -- The deductible is $2,500,000, so Zurich insures the Debtors for claims up to the policy limits of $2,500,000 for each occurrence and $2,500,000 in the aggregate, but the Debtors reimburse Zurich for all the claims. The applicable premium is $3,017. (b) General Liability Coverage in Canada -- The self-insured retention/deductible is $2,500,000, so the Debtors pay directly up to $2,000,000 for every claim before Zurich responds to the loss. Zurich insures the Debtors for $500,000 in excess of the $2,000,000, but the Debtors reimburse Zurich for all claims within the limit. The applicable premium is $1,500. (c) Workers' Compensation. * Excess coverage for states where self-insured: a. Generally, there is a $1,500,000 self-insured retention and the Debtors are obligated to pay directly up to $1,500,000 for every workers' compensation claim before Zurich responds to the loss. b. $500,000 self-insured retention for employers' liability claims and the Debtors are obligated to pay up to $500,000 for every claim before Zurich responds to the loss. The employers' liability limit is $500,000 in excess of the self-insured retention. c. $393,455 premium. * Coverage for states where not self-insured: a. All workers' compensation claims are covered, but the Debtors reimburse Zurich for the first $1,500,000 of every claim. b. Employers' liability claims are covered up to $1,000,000, but the Debtors reimburse Zurich for up to $1,000,000. c. $350,415 premium. * Retrospective rating program: a. All workers' compensation claims are covered, but the Debtors reimburse Zurich for the first $1,500,000 of every claim. b. Employers' liability claims are covered up to $1,000,000, but the Debtors reimburse Zurich for up to $1,000,000. c. $10,607 premium. * Premium Adjustment -- The workers' compensation premium amounts are adjusted at the end of the term of the New Policies Agreement based on actual payroll amounts during the term. (d) Automobile Liability Coverage in U.S. -- The deductible is $2,000,000. Zurich insures the Debtors for claims up to $3,000,000, but the Debtors reimburse Zurich for the first $2,000,000 of each claim. The estimated premium is $44,779. (e) Automobile Liability Coverage in Canada -- The deductible is $2,000,000. Zurich insures the Debtors for claims up to $3,000,000, but the Debtors reimburse Zurich for the first $2,000,000 of each claim. The estimated premium is $13,440. (f) Collateral Obligations -- The $21,500,000 of collateral currently held by Zurich will be increased per the terms of the New Policies Agreement to $25,416,000. Of the amount, $7,045,000 relates to the Debtors' reimbursement obligations to Zurich for the 5/1/09 - 4/1/10 policy term. The portion of the collateral may be adjusted from time to time, but no earlier than September 30, 2010 (g) Failure to Meet Deductible Obligations -- If the Debtors fail to meet deductible obligations, Zurich can cancel the policies without obtaining relief from the automatic stay. (h) Affirmation of Obligations Under 2002-09 Policies -- The Debtors are affirming their remaining obligations under the 2002-09 Policies, which are comprised almost entirely of the collateral and deductible-related obligations. About Smurfit-Stone Container Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Court Approves Settlement Pact With Southeast Fuels ------------------------------------------------------------------ As reported by the Troubled Company Reporter on May 8, 2009, Smurfit-Stone Container Corp. and its debtor-affiliates asked the U.S. Bankruptcy Court for the District of Delaware to approve their settlement agreement with Southeast Fuels, Inc., pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP, disclosed that as of May 15, 2009, there were no objections to the Debtors' request. Accordingly, the Court granted the Debtors' request. The terms of the Parties' Agreement are: -- SSCC will pay nothing to Southeast Fuels and Southeast Fuels will pay $200,000 to SSCC to settle all of the claims asserted in a lawsuit SSCC filed against Southeast Fuels in the United States District Court for the Eastern District of Virginia; -- Southeast Fuels will place an initial cash payment of $150,000 in escrow; -- Southeast Fuels will make a second cash payment amounting to $50,000, on or before July 2, 2009 which will be secured by a promissory note from Southeast Fuels; -- SSCC and Southeast Fuels mutually release each other of all claims effective immediately upon the Court's approval of the Settlement Agreement; -- upon the Court's approval of the Settlement Agreement, SSCC and Southeast Fuels will cause the District Court Action, including the Complaint and the Counterclaim, to be dismissed with prejudice, with each Party paying its own costs and attorneys' fees. About Smurfit-Stone Container Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Georgia-Pacific & GNN Seek $1 Million in Damages --------------------------------------------------------------- Georgia-Pacific Corrugated I LLC and GNN Investor LLC tell the U.S. Bankruptcy Court for the District of Delaware that Debtor Smurfit Stone Container Enterprises breached a certain agreement whereby SSCE agreed to purchase and Georgia agreed to sell a certain parcel of real property located at 210 Grove Street, Franklin, in Norfolk County, Massachusetts, and certain personal property. In connection with the Agreement, the Georgia and GNN deposited $1,000,000 with LandAmerica Title Insurance Company, an escrow agent, to be used as earnest money to be applied as part payment of the $15,000,000 purchase price, or as liquidated damages if SSCE breached the Agreement, Duane D. Werb, Esq., at Werb & Sullivan, in Wilmington, Delaware, relates. Before closing the transaction, SSCE advised Georgia and GNN by letter that it would not close within 10 business days following the expiration of SSCE's review period and purported to terminate the Agreement because there was a "Material Adverse Effect" in respect of the Property, Mr. Werb says. Specifically, SSCE stated that it had conducted soil and groundwater sampling, which revealed contamination necessitating remediation. Subsequently, Georgia and GNN advised SSCE that no "Material Adverse Effect" had occurred and that they expect SSCE to close the sales transaction. However, SSCE failed to close the transaction. Under the Agreement, the Parties agreed that Georgia'a and GNN's damages, in the event of a breach of the Agreement by SSCE, would be difficult or impossible to determine. Therefore, the Parties agreed that liquidated damages amounting $1,000,000 were the Parties' best and most accurate estimate of the damages the Plaintiffs would suffer if the transaction provided for in the Agreement failed to close, Mr. Werb contends. Under certain terms, Mr. Werb says, the Escrow Agent was to disburse the funds in accordance with the written instructions of the Parties. However, the Escrow Agent did not receive any instruction. On January 15, 2009, the Georgia and GNN filed a complaint for breach of contract in the Superior Court of Fulton County, Georgia, against SSCE, which was stayed when the Debtors filed for Chapter 11 protection. Accordingly, Georgia and GNN ask the Court to: (i) find that Georgia and GNN are entitled to liquidated damages of $1,000,000 and all interest accrued arising out of SSCE's breach of the Agreement; (ii) declare that the Escrow Funds are not property of SSCE's bankruptcy estate; and (iii) authorize and direct the Escrow Agent to turn over and immediately surrender the Escrow Funds to Georgia and GNN. About Smurfit-Stone Container Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Sidley Austin Bills $2.7MM for 1st Quarter Services ------------------------------------------------------------------ Ten professionals retained in Smurfit-Stone Container Corp. and its debtor-affiliates' Chapter 11 cases filed applications for allowance of fees and reimbursement of expenses for the first quarter of 2009: A. Debtors' Professionals Professional Fees Expenses ------------ ---------- -------- Young Conaway Stargatt & Taylor LLP $155,686 $29,449 Sidley Austin LLP 2,757,173 75,132 Lazard Freres & Co. LLC 548,387 6,303 PricewaterhouseCoopers LLP 1,607,831 83,484 Ernst & Young LLP 601,221 359 Armstrong Teasdale LLP 274,620 21,423 B. Committee's Professionals FTI Consulting, Inc. $471,429 $6,953 Kramer Levin Naftalis & Frankel LLP 851,501 22,313 Houlihan Lokey Howard & Zukin LLP 342,857 13,559 Bennett Jones LLP 86,487 592 Seven professionals, in separate filings, filed monthly applications for allowance of fees and reimbursement of expenses: Professional Period Fees Expenses ------------ ------ ---------- -------- Sidley Austin LLP Mar. 2009 $1,141,768 $35,479 Kramer Levin Naftalis & Mar. 2009 476,497 16,131 Frankel LLP FTI Consulting, Inc. Feb. 9 to 471,429 6,953 Mar. 2009 Apr. 2009 275,000 10,543 Armstrong Teasdale LLP Jan. 26 to 201,519 6,314 Feb. 2009 Mar. 2009 73,100 8,794 Lazard Freres & Co. LLC Mar. 2009 250,000 4,467 Houlihan Lokey Howard Feb. 9 to 274,285 13,559 and Zukin Capital, Inc. Mar. 2009 Apr. 2009 160,000 6,202 Bennett Jones LLP Apr. 2009 81,198 28,801 Ernst & Young LLP Mar. 2009 174,954 3,244 Kramer Levin, Bennet Jones, and FTI Consulting certify that there are no objections to their February and March 2009 monthly fee applications. Ernst & Young and PricewaterhouseCoopers LLP, certify that there are no objections to their January 26, 2009, to February 28, 2009, monthly fee applications. Young Conaway Stargatt & Taylor LLP and Armstrong Teasedale LLP also certify that there are no objections to their monthly fee applications from January 26 through March 31, 2009. Sidley Austin and Lazard Freres certify that there are no objections to their March 2009 fee applications. About Smurfit-Stone Container Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: 4 Creditors Transfer Claims Aggregating $356,410 --------------------------------------------------------------- Four creditors have transferred their claims in Smurfit-Stone Container Corp. and its debtor-affiliates' Chapter 11 cases to: Transferor Transferee Amount ---------- ---------- ------ Dolphin Cartage, Inc. United States $295,252 Recovery II LLC Discount Ramps.Com LLC Sierra Liquidity 9,045 Fund LLC David Industrial Sales, Inc. Sierra Liquidity 2,113 Fund LLC St. Louis Art Museum Liquidity Solutions, Inc. $50,000 Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs approximately 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported approximately $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SOUTHERN PINES: Creditors Meeting on July 2 ------------------------------------------- A meeting of creditors in Hernando Beach Inc.'s case will held on July 2. Hernando Beach owes more than $409,000 to its 20 largest unsecured creditors, although almost $275,000 of that debt is disputed. Prebankruptcy Hernando Beach offered 224 units in the first phase of its Southern Pines project just off Cortez and Clinton boulevards in Brooksville. Hernando Beach, court documents say, has a pair of construction loans on the property that it still owes $3 million, although one loan where $1.7 million is owed to Center State Bank in Zephyrhills, is disputed. Business Journal states that two other loans from Cortez Community Bank in Brooksville where $1.3 million is still owed. According to Business Journal, much of the unsecured claims range from $8,000 to $39,000 and are from subcontractors. Brooksville, Florida-based Hernando Beach, Inc., dba Southern Pines Condominium is the developer of Southern Pines Condominium. The Company filed for Chapter 11 bankruptcy protection on June 8, 2009 (Bankr. M.D. Fla. Case No. 09-12037). Sheila D. Norman, Esq., at Norman and Bullington, P.A., assists the Company in its restructuring efforts. The Company listed $6,772,442 in assets and $3,575,531 in debts. SPARKS REGIONAL: Moody's Does Not Take Action on 'Caa1' Rating -------------------------------------------------------------- Moody's Investors Service will not take immediate rating action on the Caa1 rating assigned to Sparks Regional Medical Center's (Sparks) Series 2001 fixed rate bonds ($53.1 million outstanding) following the recent announcement that Sparks and for-profit Jackson Healthcare (headquartered in Alpharetta, Georgia) have discontinued negotiations for Jackson to acquire Sparks. The two parties signed a non-binding Letter of Intent in March 2009. At this time, it is unclear what Sparks' course of action will be. Moody's note that through April 30 (ten months of FY 2009), consolidated operations demonstrate modest improvement compared to the first two quarters of FY 2009. Operating cash flow is slightly positive for the first ten months of the year (0.1% operating cash flow margin) compared to -$4.3 million through six months of FY 2009 (-3.5% margin). Unrestricted cash (including $2 million that may be borrowed from the foundation) increased to $11.4 million at April 30, 2009, translating into approximately 16 days cash on hand (liquidity measures $9.4 million and 13 days cash on hand when excluding the foundation money). These compare to $7.5 million of cash and 11 days cash on hand through six months FY 2009 (December 31, 2008). Sparks continues to make its regularly scheduled principal and interest payments and the debt service reserve fund remains fully funded. Rated Debt (debt outstanding as of April 30, 2009) -- Series 2001 Fixed Rate Revenue Bonds ($53.1 million outstanding), rated Caa1 The last rating action was on January 28, 2009, when the rating of Sparks Regional Medical Center was downgraded to Caa1 from B2 and removed from Watchlist. SUN-TIMES MEDIA: Settlement With Shareholders Gets Court Approval ----------------------------------------------------------------- Lorene Yue at Chain's Chicago Business reports that a federal judge has approved Sun-Times Media Group, Inc.'s settlement with shareholders who filed a class-action lawsuit against the Company for securities fraud allegedly committed when Conrad Black led the Company. Bloomberg News quoted John Kairis, lawyer for the plaintiffs, as saying, "It's an excellent result for the class, given the fact that three of the corporate defendants declared bankruptcy. There was a serious risk of no recovery at all." According to Crain's, the settlement dismisses claims that Mr. Black and other members of management misled investors about their compensation. The settlement, Crain's says, applies to shareholders who purchased stock between August 13, 1999, and March 31, 2003. Mr. Black was convicted in 2007 of misappropriating company funds and obstruction of justice. The Supreme Court denied on Thursday his request for bail while he appeals his case, Crain's says. Sun-Times Media Group, Inc. -- http://www.thesuntimesgroup.com/-- (Pink Sheets:SUTM) owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. The Company and its affiliates conduct business as a single operating segment which is concentrated in the publishing, printing, and distribution of newspapers in greater Chicago, Illinois, metropolitan area and the operation of various related Web sites. The Company also has affiliates in Canada, the United Kingdom, and Burma. Sun-Times Media's balance sheet at September 30, 2008, showed total assets of $479.9 million, total liabilities of $801.7 million, resulting in a stockholders' deficit of roughly $321.8 million. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009 (Bankr. D. Delaware Case No. 09- 11092). James H.M. Sprayregan, P.C., James A. Stempel, Esq., David A. Agay, Esq., and Sarah H. Seewer, Esq., at Kirkland & Ellis LLP assist the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. As of November 7, 2008, the Debtors listed $479,000,000 in assets and $801,000,000 in debts. THE LOEB-NORTON RANCH: Case Summary & 3 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: The Loeb-Norton Ranch Corporation 5 Corporate Park, Suite 170 Irvine, Ca 92606 Bankruptcy Case No.: 09-15689 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Michael N. Sofris, Esq. 468 N Camden Dr, Ste 200 Beverly Hills, CA 90210 Tel: (310) 229-4505 Fax: (310) 388-0535 Email: michael@sofris.com Total Assets: 4,026,550 Total Debts: $2,706,995 A full-text copy of the Debtor's petition, including a list of its 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-15689.pdf The petition was signed by Richard James Chamberlin, chief financial officer and secretary of the Company. THEATER XTREME: JC Int'l Acquires Trademark and IP Assets --------------------------------------------------------- JC International has purchased TheaterXtreme's intellectual property, trademarks, logos, operational procedures, and rights to its enterprise resource planning platform. The purchase, which was approved by a U.S. Bankruptcy Court judge on May 28, 2009, effectively completed the liquidation of the former corporation which originally filed for Chapter 7 bankruptcy in late 2008. "I've worked closely with the Company's team for many years," said incoming CEO Robert Cribbs. "During the bankruptcy proceedings we did substantial due diligence and found the Company's failure was not due to the business model, which is sound, but a lack of funding to help it reach its full potential. Its investment capital tightened significantly in the final months of operation. This fact was compounded by the structure of its financial relationship with Circuit City that has since gone out of business, and the high cost of being publicly traded," Mr. Cribbs added. He believes that since these problems have been eliminated through the bankruptcy proceedings that TXEG can and will be viable. Mr. Cribbs, who is CEO of JC International, will continue development of the increasingly popular RowOne(R) furniture line, while reaching out to AV advisors to discuss expanding the line of products, made possible by the closure of so many stores in the industry. According to Cribbs, the newly reformed TheaterXtreme needs to move quickly in order to take advantage of low-cost leases on first-tier locations, a flood of highly qualified talent currently on the market, and vendors eager to expand their sales bases as they fight declining sales. "The time is right to re-launch a truly visionary retail concept," he added. Robert Cribbs -- http://www.jaspercabinet.com/-- owns and operates JC International and Jasper Cabinet, a well established furniture company started in 1904. Jasper Cabinet has been expanding into entertainment based furniture, as an addition to its current custom accent line. The purchase of the TheaterXtreme intellectual property is part of its plans to expand into retail, creating a venue for the sale of new furniture products, while continuing the goal of making TheaterXtreme a national model. JC international did not purchase the corporation or franchise operations of TheaterXtreme. Theater Xtreme Entertainment Group, Inc. is a specialty retailer of real movie theaters for the home. Theater Xtreme operates one company-owned store and has 10 franchises in 12 states. The Debtor is represented by Tobey M. Daluz, Esq., at Ballard Spahr Andrews & Ingersoll. As of September 30, 2008, the company's balance sheet showed $1.9 million in total assets, $6.1 million in total liabilities, resulting in $4.2 million in stockholders' deficit. TIMOTHY BOWMAN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Joint Debtors: Timothy J. Bowman Leanne C. Bowman P.O. Box 26401 Prescott Valley, AZ 86314 Bankruptcy Case No.: 09-12983 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Chief Judge Redfield T. Baum PCT Sr. Debtors' Counsel: Christopher Ryan Chicoine, Esq. Aiken Schenk Hawkins & Ricciardi 4742 N. 24th Street, Suite 100 Phoenix, AZ 85016 Tel: (602) 248-8203 Fax: (602) 248-8840 Email: crc@ashrlaw.com D. Lamar Hawkins, Esq. Aiken Schenk Hawkins & Ricciardi PC 4742 North 24th Street, Suite 100 Phoenix, AZ 85016 Tel: (602) 602-248-8203 Fax: (602) 248-8840 Email: dlh@ashrlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtors did not file a list of their 20 largest unsecured creditors when they filed their petition. The petition was signed by the Joint Debtors. TOM'S FOODS: PBGC Seeks $3MM Recovery on Behalf of Pension Plan --------------------------------------------------------------- The Pension Benefit Guaranty Corporation has filed a motion to intervene in a suit by participants in the pension plan formerly sponsored by Tom's Foods Inc., the defunct Columbus, Georgia-based snack food maker. The suit in U.S. District Court in Columbus seeks to recover about $3 million in plan assets lost due to unlawful investments by the plan's fiduciaries. The action in which the PBGC is seeking to intervene names as defendants Rolland Divin, formerly chief executive officer of Tom's Foods and chairman of the pension plan's investment committee, Michael E. Heisley, the company's former chairman, and Andrew G. C. Sage, II, a former member of the company's board of directors. The PBGC intends to add other defendants. The Tom's Foods Pension Plan terminated in 2007, resulting in a claim of $45 million against the federal pension insurance program for unfunded guaranteed benefits earned by the plan's 2,600 covered workers. The PBGC's filing alleges that the plan's fiduciaries, members of the Tom's Foods board of directors and the pension plan's investment committee, violated their duties of loyalty and prudence to plan participants by directing the plan to invest $3.9 million of its assets in junk bonds issued by Tom's Foods Inc. The board had made several previous attempts to cause the plan to invest in securities of Tom's Foods, which were rebuffed by the plan's investment committee. Following a change in the composition of the committee, the plan purchased the bonds in June and October of 2003. The complaint alleges further that the fiduciaries knew or should have known in 2003 that the company was insolvent and very likely to default on the bonds when they were to come due on November 1, 2004. Tom's Foods defaulted on the bonds on that date, entered chapter 11 bankruptcy on April 6, 2005, and sold all of its operating assets on October 21, 2005 to an affiliate of Lance Inc. From the bankrupt estate, bondholders -- including the pension plan -- recovered roughly 22 cents on the dollar. The pension plan's share of the total distribution was $873,653. The PBGC seeks a judgment against the fiduciaries to pay the plan for losses resulting from investment of its assets in violation of federal pension law, plus income the plan would have realized if those assets had been prudently invested, and to pay the PBGC for costs of litigation. The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. TOWN CENTER PLAZA: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Town Center Plaza, L.L.C. 1343 E. Kingsley, Ste. G Springfield, MO 65804 Bankruptcy Case No.: 09-61290 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court Western District of Missouri (Springfield) Debtor's Counsel: Bruce E. Strauss, Esq. Merrick, Baker & Strauss, P.C. 1044 Main St, 4th Flr. Kansas City, MO 64105 Tel: (816) 221-8855 Fax: (816) 221-7886 Email: bestrauss@mbslaw.psemail.com Total Assets: $6,750,000 Total Debts: $5,131,012 A full-text copy of the Debtor's petition, including a list of its 18 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mowb09-61290.pdf The petition was signed by William R. Jester. TRANSMERIDIAN EXPLORATION: Wants June 24 Hearing to Consider Sale ----------------------------------------------------------------- Transmeridian Exploration Inc. has requested the U.S. Bankruptcy Court for the Southern District of Texas to schedule a June 24 hearing to consider approval of a disclosure statement explaining the reorganization plan in which the principal asset will be sold for $35 million in two-year notes, Bloomberg's Bill Rochelle reports. Unless a higher bid appears at auction for the interest in the field in Kazakhstan, the buyer is to be a Kazakhstan company affiliated with an individual named Erlan Sagadiev, who was retained to provide consulting and management services for the operations in Kazakhstan, according to the report. The company originally intended to sell the operations in Kazakhstan before confirmation of a reorganization plan but the Bankruptcy Court ruled that the sale could only occur as part of a plan. To meet the Court's requirements, the Company filed a plan and explanatory disclosure statement at the end of May. In exchange for their $300 million in secured claims, the noteholders are to receive the $35 million in notes from the sale, less the $700,000 in financing that Mr. Sagadiev provided for the reorganization effort. The noteholders also will receive 80% of cash left in the company after the sale. Unsecured creditors, whose claims may total as much as $12.7 million, are to have the other 20% of available cash. As reported in the Troubled Company Reporter on June 3, 2009, the Debtors submitted to the Court a consolidated plan of liquidation, dated as of May 29, 2009, and a joint disclosure statement with respect to said plan. A full-text copy of the disclosure statement explaining the Debtors' consolidated plan of liquidation is available at: http://bankrupt.com/misc/transmeridan.DS.pdf Headquartered in Houston, Texas, Transmeridian Exploration Incorporated is an independent energy company engaged in the business of acquiring, developing and producing oil and natural gas. Its activities are primarily focused on the Caspian Sea region of the former Soviet Union. The License and oil and gas production in Kazakhstan is handled through the Debtors' wholly owned subsidiary, JSC Caspi Neft TME, a joint stock company organized under the laws of Kazakhstan. The Company and two affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. S.D. Tex. Lead Case No. 09-31859). Judge Marvin Isgur presides over the case. John Wesley Wauson, Esq., and Matthew Brian Probus, Esq., at Wauson & Probus, serve as the Debtors' bankruptcy counsel. As of September 30, 2008, the Debtor has total assets of $377,902,000 and total debts of $451,678,000. TRIBUNE CO: Bank Debt Trades at 65% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 34.44 cents-on-the- dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.94 percentage points from the previous week, the Journal relates. The loan matures May 17, 2014. The Company pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt. S&P has assigned a default rating. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENTERTAINMENT: Court OKs Casino & Resort Sale to Lenders ------------------------------------------------------------------ Retired Justice Gary S. Stein, the state-appointed trustee and conservator of the Tropicana Atlantic City Casino and Resort, said that the United States Bankruptcy Court in Camden, N.J. has approved the sale of the casino and resort to the Tropicana's pre- petition lenders in exchange for the cancellation of $200 million of their secured claims. The Secured Parties have made a filing with the New Jersey Casino Control Commission that is one of several filings the Secured Parties need to make in order to obtain the different Commission approvals that will allow the Secured Parties to complete the transaction. Among the issues this filing requests is a decision from the Commission as to whether the Secured Parties can own the Tropicana as part of the larger Tropicana Entertainment, Inc. ownership structure, which they will own as a result of the conversion of part of their pre-petition debt into equity in Tropicana Entertainment LLC upon its emergence from separate Chapter 11 proceedings, or whether the Tropicana will be owned by the Secured Parties in a stand-alone ownership structure. It is expected that the regulatory filings and subsequent rulings will take five or six months to complete. Closing of the sale of the Tropicana will occur after interim casino authorization is granted by the Commission. The transaction is expected to close before year-end. Justice Stein said, "The court's approval for the sale of the Tropicana to its Secured Parties is a major step toward the successful completion of this transaction. The court's decision has added a level of certainty to the Tropicana's future and we are grateful for that." Mark Giannantonio, President and Chief Operating Officer of the Tropicana, said, "All of us at the Tropicana look forward to working with our new owners and we are optimistic that the Casino Control Commission will approve their filings as soon as possible. While we await transition to new ownership we fully expect to continue to operate in a smooth and uninterrupted manner and Tropicana customers will continue to receive the highest-quality hotel, entertainment and casino experience." On April 29, Tropicana announced that it had filed motions seeking bankruptcy court authorization to conduct a sale of the casino and resort under a "stalking horse" asset purchase agreement that provided for the Secured Parties, through a newly formed entity, to purchase the Tropicana in exchange for the cancellation of $200 million of their secured claims. The sale was being conducted pursuant to Section 363 of the United States Bankruptcy Code with the objective of selling the Tropicana's assets free and clear of any liens and claims other than certain assumed liabilities. Ordinarily, under the Section 363 sale process, the sale of the Tropicana would have been subject to an auction. Because no additional qualified bids were received, however, Tropicana did not conduct an auction. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UNIVISION COMMUNICATIONS: Tender Offer Won't Move Moody's Rating ---------------------------------------------------------------- Moody's Investors Service said that Univision Communications Inc.'s ratings (including the B3 Corporate Family Rating) and SGL- 3 speculative-grade liquidity rating are not affected by the company's announced tender offer to repurchase all of its 7.85% $500 million senior secured notes due 7/15/2011 and its proposed credit facility amendments, although Moody's believes the actions improve Univision's liquidity position. The tender offer is contingent upon the sale of new senior secured notes to fund the repurchase. Moody's expects to assign a rating to the proposed notes in the near future. For additional information, please see www.moodys.com. The last rating action was on December 10, 2008 when Moody's downgraded Univision's CFR and Probability of Default Rating to B3 from B2, the senior secured debt to B2 from B1, and the senior unsecured notes to Caa2 from Caa1, with a negative rating outlook. Univision, headquartered in New York, is the leading Spanish- language media company in the United States. Annual revenue is approximately $2 billion. US FOODSERVICE: Bank Debt Trades at 28% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which US Foodservice is a borrower traded in the secondary market at 71.46 cents-on-the- dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.96 percentage points from the previous week, the Journal relates. The loan matures July 3, 2014. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating. S&P does not rate the bank loan. US Foodservice, headquartered in Rosemont, Illinois, is the United States' second largest distributor of food and related products to more than 250,000 customers, including restaurants, healthcare facilities, hotels, schools and governmental facilities. The Company employs more than 26,000 associates and operates more than 60 distribution centers, offering more than 300,000 fresh, frozen, dry and nonfood products from every major national brand and a robust offering of its own exclusive brands. US MORTGAGE: Former President Pleads Guilty to $139MM Fraud Scheme ------------------------------------------------------------------ Michael J. McGrath, Jr., 46, the former president and director of U.S. Mortgage, pleaded guilty Thursday to mail and wire fraud and money laundering charges in connection with a $139 million fraud scheme that bankrupted Pine Brook-based U.S. Mortgage Corp. and its subsidiary, CU National Mortgage, LLC, Acting U.S. Attorney Ralph J. Marra, Jr. announced. Mr. McGrath pleaded guilty before U.S. District Judge Katharine S. Hayden to one count of mail and wire fraud conspiracy, which carries a statutory maximum prison sentence of 20 years, and one count of money laundering conspiracy, which carries a statutory maximum prison sentence of 10 years. Under his plea agreement, Mr. McGrath faces an actual sentencing range of between 150 and 240 months in federal prison. He also will have to pay restitution to the victims and has agreed to forfeit to the United States the contents of several bank and brokerage accounts and his interest in a Hoboken property. The plea agreement does not bind Judge Hayden, who must consult the advisory sentencing guidelines, but has discretion in imposing a sentence within, above or below the determined guidelines range. Judge Hayden scheduled sentencing for Oct. 1. Judge Hayden allowed Mr. McGrath to be released on a $1 million secured bond and ordered home confinement with electronic monitoring until sentencing. Mr. McGrath admitted that during January 2004 through Jan. 28, 2009, he conspired with several others to fraudulently sell loans belonging to various credit unions and use the proceeds to fund U.S. Mortgage's operations and his personal investments and investments he made on U.S. Mortgage's behalf. Mr. McGrath further admitted that the scheme started with the diversion of funds that should have been paid to various credit unions for mortgage loans they had made and authorized CU National to sell to Fannie Mae. Mr. McGrath explained that he began withholding these funds to help U.S. Mortgage address cash flow problems caused by losing investments in mortgage-backed securities he had made on the company's behalf. Mr. McGrath further admitted that when U.S. Mortgage's financial condition continued deteriorating, he sold hundreds of mortgage loans to Fannie Mae without the knowledge and consent of the credit unions that owned the loans. "This was truly a massive fraud, a giant shell game by McGrath," said Mr. Marra. "Mr. McGrath deftly and fraudulently moved these mortgage assets around and sold them while the institutional owners had no idea they no longer held the assets. The goal was to prop up his own company, which instead sunk deeper into trouble as his scheme grew larger and ultimately collapsed." To accomplish the fraudulent loan sales, he executed documents assigning the loans from the credit unions to U.S. Mortgage in which he pretended to be an officer of the credit unions in question. He also caused subordinates at U.S. Mortgage to execute documents purporting to assign the loans from U.S. Mortgage to Fannie Mae. And he sold some of these loans a second time, to an institution based in New Jersey. All told, the scheme netted approximately $139 million. In addition, Mr. McGrath admitted that he took numerous steps to conceal the scheme. Those steps included: directing U.S. Mortgage's servicing manager to generate reports for the credit unions falsely stating that loans that had been sold to Fannie Mae were still in their portfolios; directing the servicing manager to modify data in U.S. Mortgage's servicing system; directing U.S. Mortgage's chief financial officer to pay off or make monthly payments to the credit unions for the fraudulently-sold loans; and causing the chief financial officer and another subordinate to falsify documents. Mr. McGrath further admitted that he transferred some of the proceeds of the scheme to bank and brokerage accounts controlled by or benefitting him. Mr. McGrath stated that he used the transferred proceeds to invest in, among other things: 1 million shares of Fannie Mae common stock; millions of shares of common and preferred stock of a New Orleans-based company; and a Hoboken property. Mr. McGrath conceded that approximately $13 million in funds that the government has frozen or seized to date were involved in, derived from or traceable to his offenses. Mr. McGrath's guilty plea is the latest step in an investigation by the U.S. Postal Inspection Service, the IRS Criminal Investigations, the FBI and the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG) that became public on Jan. 27, 2009, when dozens of law enforcement agents executed a search warrant at U.S. Mortgage's and CU National's Pine Brook headquarters. Shortly afer the search, Mr. McGrath indicated that he would take responsibility for the scheme. In the following weeks, U.S. Mortgage and CU National commenced bankruptcy proceedings. Mr. Marra credited Postal Inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge David L. Collins; Special Agents of the IRS Criminal Investigation Division, under the direction of Special Agent in Charge William P. Offord; Special Agents of the FBI, under the direction of Special Agent in Charge Weysan Dun; and Special Agents of the HUD- OIGl, under the direction of Special Agent in Charge Rene Febles, for their vigorous investigation leading to this guilty plea. Mr. Marra also thanked the United States Postal Service Office of Inspector General for assisting the investigation. The government is represented by Assistant U.S. Attorney Mark E. Coyne of the U.S. Attorney's Commercial Crimes Unit. Based in Pine Brook, New Jersey, U.S. Mortgage Corp. -- http://2usmortgage.com/-- provides mortgage-related services. The Debtor filed for bankruptcy February 23, 2009 (Bankr. D. N.J. Case No. 09-14301). Bruce D. Buechler, Esq., and Kenneth Rosen, Esq., at Lowenstein Sandler PC, serve as bankruptcy counsel. The Debtor listed $10 million to $50 million in estimated assets and $100 million to $500 million in estimated debts. VICTORIA CANEN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Victoria L. Canen 5207 E. Anderson Drive Scottsdale, AZ 85254 Bankruptcy Case No.: 09-13010 Chapter 11 Petition Date: June 11, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Debtor's Counsel: Bill King, Esq. 7150 E Camelback Rd #444 Scottsdale, AZ 85251 Tel: (480) 949-7121 Fax: (480) 890 0820 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Ms. Canen's petition, including a list of her 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-13010.pdf The petition was signed by Ms. Canen. VISTEON CORP: Bank Debt Trades at 61% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Visteon Corp. is a borrower traded in the secondary market at 38.69 cents-on-the- dollar during the week ended June 12, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.90 percentage points from the previous week, the Journal relates. The loan matures on May 30, 2013. The Company pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt. S&P has assigned a default rating. Meanwhile, participations in a syndicated loan under which Dana Corp. is a borrower traded in the secondary market at 55.20 cents- on-the-dollar during the week ended June 12, 2009, an increase of 4.70 percentage points from the previous week. The loan matures January 31, 2015. The Company pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating and S&P's B rating. Participations in a syndicated loan under which Lear Corporation is a borrower traded in the secondary market at 72.00 cents-on- the-dollar during the week ended June 12, 2009, an increase of 6.82 percentage points from the previous week. The loan matures March 29, 2012. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated by both Moody's and S&P. Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 80.06 cents-on-the-dollar during the week ended June 12, 2009, an increase of 2.10 percentage points from the previous week. The loan matures April 1, 2012. The Company pays 125 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and S&P's CCC+ rating. 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: Tex Instruments Says It Has No Contract With Debtor ----------------------------------------------------------------- Texas Instruments Inc. filed a limited objection with the U.S. Bankruptcy Court for the District of Delaware to Visteon Corp.'s motion to pay prepetition claims of critical suppliers, saying that it provides computer chips on a consignment basis which the Debtors may purchase and that it is not a party to a contract with the Debtors. As it has no contract with the Debtors, TI says it should not be designated as a Contract Counterparty of the Debtors and cannot be compelled by the Court to provide products to Visteon if the motion is approved. TI relates that it is confused by a statement made by a representative of the Debtors that TI could not alter its business terms with the Debtors since this would be a violation of the law and prohibited by the Bankruptcy Code. TI says it has not been notified of its status as a critical supplier or whether the Debtors believe that they have a contract with TI. As reported in the Troubled Company Reporter on June 4, 2009, the Debtors identified three separate categories of critical suppliers who are crucial to their business and who have prepetition claims: 1. Critical Free Agents. Suppliers without contracts, who likely would not continue their business with the Debtors postpetition or who would attempt to extract onerous terms absent payment of their prepetition claims. 2. Distressed Suppliers. Suppliers whose financial condition is so distressed that payments are necessary to avoid severe disruption of the Debtors' supply chain. 3. Contract Counterparties. Suppliers who, although covered by an executory contract, have refused to ship their parts or materials postpetition if their prepetition balances are not paid. The Court has approved the payment of $15,000,000 to critical suppliers' prepetition claims, on an interim basis. The final hearing on the Debtors' motion for payment of up to $33,900,000 in critical suppliers' prepetition claims is set for June 19. 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) WR GRACE: Court Resets Phase I Pretrial Conference to June 18 ------------------------------------------------------------- Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware rescheduled the pretrial conference concerning Phase I confirmation issues to June 18, 2009, at 1:00 p.m., Eastern Time. The pretrial conference will be held in Courtroom A, 54th Floor, US Steel Tower, 600 Grant Street, in Pittsburgh, Pennsylvania. The Phase I pretrial conference was previously scheduled for June 1 but Judge Fitzgerald cancelled the June 1 hearing. All matters for hearing on June 1, excluding the Phase I pretrial conference, will be heard on June 29. Judge Fitzgerald also denied, without prejudice, the Libby Claimants' motion to amend the case management order and the Libby Claimants' request to postpone Phase II of the confirmation hearing. Creditors' Committee & Bank Lenders Seek to Amend CMO In separate motions, the Official Committee of Unsecured Creditors and the group of bank lenders, led by their agent JPMorgan Chase Bank, ask the Court to further amend the third amended Plan-related case management order to defer adjudication of impairment objections in certain claims against the Debtors. The Creditors' Committee and the Lenders also seek to amend the CMO in light of the appeals they raised to the U.S. District Court for the District of Delaware from Judge Fitzgerald's order holding that the Bank Lenders are not entitled to postpetition interest at the default rate on the loans the Bank Lenders provided the Debtors before the Petition Date. On behalf of the Creditors' Committee, Michael R. Lastowski, Esq., at Duane Morris LLP, in Wilmington, Delaware, complains that the existing schedule established by the CMO would preclude the impairment issue during Phase I as a result of other pending Plan objections. He notes that pursuant to the CMO, objections about the propriety of classifying claims as Class 9 will not be heard until Phase II confirmation hearings. Since each claim classified in Class 9 must be unimpaired for the entire class to be found to be unimpaired, classification objections must first be addressed before the impairment issues, he asserts. Accordingly, the Court will first need to determine which claims are properly in Class 9 before determining whether Class 9 is impaired, he asserts. According to the Bank Lenders' counsel, Richard Cobb, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, any decision rendered by the Bankruptcy Court on the impairment confirmation issues or any other issue on appeal before it is revested with authority to consider those issues, would be void ab initio and thus a waste of judicial and estate resources particularly if the Interest Payment Order is reversed on appeal. The CMO, accordingly, should be amended to defer consideration of impairment confirmation issues until the issues on appeal are resolved, he asserts. The Court, at the behest of the Bank Lenders, shortened the notice period on the motion so that the motion will be heard during the Phase I pre-trial hearing on June 18, 2009. Objections must be filed on or before June 11. The Creditors' Committee also asked the Court to expedite the hearing on its motion during the Phase I pre-trial hearing. The Bank Lender Group submitted to the Court exhibits related to Phase I of the Plan confirmation hearing in the Debtors' cases, as precaution in the event an order is entered later determining that the Bankruptcy Court has jurisdiction to consider at this time the issues that have been appealed. Plan Proponents Talk Back In a brief filed with the Court, the Plan Proponents contend that the Bank Lenders are not impaired by the Plan's failure to pay default interest on their claims. The Plan Proponents emphasized that in the absence of a stay pending the appeal, the Bankruptcy Court can enforce the claims objection opinion and apply the findings to matters before it in the confirmation proceedings in any event. The Plan Proponents argue that the Court has jurisdiction to adjudicate Class 9 impairment issues as part of Phase I of the confirmation hearing. "Although an appeal divests a court's control over those aspects involved in the specific appeal, a bankruptcy court clearly does not lose jurisdiction over every other aspect of the case," the Plan Proponents assert. The Creditors' Committee and the Bank Lenders should have sought a stay pending appeal if they did not want the Court's ruling to be enforced, the Plan Proponents assert. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Court scheduled a two-phase confirmation hearing: -- Hearings on June 22 to 25 to deal with objections by insurance companies; and -- Hearings on September 8 to 11 for objections related to claims from the facility in Libby, Montana. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WR GRACE: Fails to Get Requisite 2/3 Votes From Unsec. Creditors ---------------------------------------------------------------- W.R. Grace & Co. failed to obtain acceptances from creditors holding 2/3 of the dollar amount of claims voted in Class 9 for its proposed Chapter 11 plan. Kevin A. Martin, a senior manager of BMC Group, Inc., in El Segundo, California, voting agent for W.R. Grace & Co., discloses in a declaration with the U.S. Bankruptcy Court for the District of Delaware that more than one-half in number of claimants holding Class 9 General Unsecured Claims voted to accept the Plan but the provisional vote did not obtain the requisite two-thirds dollar amount for acceptance. Class 9 is unimpaired but their provisional vote was solicited pursuant to the Plan. Mr. Martin also relates that holders of more than one-half in number of holders of claims that are impaired under the Debtors' Joint Plan of Reorganization and at least two-thirds in amount of those impaired claims voted to accept the Plan. Impaired classes who voted to accept or reject the Plan include Class 6 Asbestos Personal Injury Claims, Class 7B US Zonolite Attic Insulation Property Damage Claims, Class 8 Canadian ZAI PD Claims, and Class 10 Equity Interest in the Parent. Holders of Class 7A Asbestos PD Claims are unimpaired but their votes were solicited for purposes of Section 524(g) of the Bankruptcy Code. Mr. Martin says the result constitutes at least 75% in number for classes voting for purposes pursuant to Section 524(g). Class 1 Priority Claims, Class 2 Secured Claims, Class 3 Employee Benefit Claims, Class 4 Workers' Compensation Claims, Class 5 Intercompany Claims, and Class 11 Equity Interest in Debtors other than the Parent are unimpaired under the Plan. Holders of the unimpaired classes of claims were deemed to have accepted the Plan and were not entitled to vote, and their votes were not solicited. Mr. Martin disclosed the results of the tabulation of properly executed and timely received ballots for these Classes: ---------------------------------------------------------------- | | | | | | Accepting | Rejecting | | Class |__________________________|________________________| | | No. of | Amount | No. of | Amount | | | Holders | Held | Holders | Held | |___________|_________|________________|_________|______________| | | | | | | | Class 6 | 275,366 | $4,098,207,537 | 1,349 | $21,159,029 | | Claim | | | | | | Holders |(99.51%) | (99.49%) | (0.49%) | (0.51%) | |___________|_________|________________|_________|______________| | | | | | | | Class 7A | 396 | - | 63 | - | | Claim | | | | | | Holders |(86.27%) | - |(13.73%) | - | |___________|_________|________________|_________|______________| | | | | | | | Class 7B | 1,833 | $1,820 | 240 | $234 | | Claim | | | | | | Holders |(88.42%) | (88.61%) |(11.58%) | (11.39%) | |___________|_________|________________|_________|______________| | | | | | | | Class 8 | 1 | $6,500,000 | 0 | $0 | | Claim | | | | | | Holders | (100%) | (100%) | (0%) | (0%) | |___________|_________|________________|_________|______________| | | | | | | | Class 9 | 608 | $66,466,717 | 49 | $325,226,655 | | Claim | | | | | | Holders |(92.54%) | (16.97%) | (7.46%) | (83.09%) | |___________|_________|________________|_________|______________| | | | | | | | Class 10 | 33-mil. | - | 3.7-mil.| - | | Claim | | | | | | Holders |(89.90%) | - |(10.10%) | - | |___________|_________|________________|_________|______________| A full-text copy of Mr. Martin's declaration is available for free at http://bankrupt.com/misc/BMCMartinAffdvt.pdf A summary of the Voting and Tabulation Results is available for free at http://bankrupt.com/misc/grace_tabulation.pdf About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Court scheduled a two-phase confirmation hearing: -- Hearings on June 22 to 25 to deal with objections by insurance companies; and -- Hearings on September 8 to 11 for objections related to claims from the facility in Libby, Montana. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WR GRACE: Insurers Insist Plan Is Unconfirmable ----------------------------------------------- Ten insurers filed with the U.S. Bankruptcy Court for the District of Delaware separate briefs relating to Phase I of the confirmation hearing for the First Amended Plan of Reorganization for W.R. Grace & Co. and its debtor-affiliates: * Arrowood Indemnity Company, * Continental Casualty Company, Transportation Insurance Company and their American insurance affiliates, * Fireman's Fund Insurance Company, * Allianz S.p.A., formerly Riunione Adriatica Di Sicurta, and Allianz SE, formerly Allianz Aktiengesellschaft, * Federal Insurance Company, * Zurich Insurance Company and Zurich International (Bermuda) Ltd., * Government Employees Insurance Co., Republic Insurance Company, now known as Starr Indemnity & Liability Company, and Seaton Insurance Company; * General Insurance Company of America, * AXA Belgium, as successor to Royale Belge SA, and * The AIU Insurers consisting of American Home Assurance Company, AIU Insurance Company, Birmingham Fire Insurance Company, Granite State Insurance Company, Illinois National Insurance Company, Insurance Company of the State of Pennsylvania, Lexington Insurance Company and New Hampshire Insurance Company. The Insurers generally complain that the Plan of Reorganization: (a) impairs their rights and interest and is not "insurance neutral;" (b) is unconfirmable to the extent it treats their claims differently than other similarly situated claims; (c) is unconfirmable to the extent that it purports to upgrade W.R. Grace & Co.'s bargained-for exchange in its 1995 Settlement Agreement with the Insurers; (d) is unconfirmable to the extent that it purports to assign rights that Grace does not have; (e) is unconfirmable to the extent that it seeks to fund the trust by breaching the Settlement Agreement; (f) is unconfirmable to the extent that the broad exculpation sought in the Plan violates applicable law; (g) does not meet the confirmation requirements of Section 1129(a) of the Bankruptcy Code; (h) is unconfirmable to the extent that it was not proposed in good faith, and is not fundamentally fair, as well as financially infeasible; (i) is unconfirmable to the extent that Class 9 general unsecured claims are incorrectly designated as unimpaired; and (j) is unconfirmable to the extent that it violates the absolute priority rule and the "fair and equitable" requirement of Section 1129(b). Arrowood complains about "exceptionally broad exculpation and release provisions" in the Plan, saying that the provisions purport to bar Arrowood and other insurers from asserting their claims against exculpated and released third-party non-Debtors. Continental Casualty, Transportation Insurance, and their American insurance affiliates complain that the Bankruptcy Code contains no timing restriction on granting a Section 524(g) channeling injunction to insurers. Fireman's Fund, Allianz, and Zurich join in Continental's arguments. CNA Companies, AXA Belgium, and Fireman's Fund, filed exhibits to their briefs, consisting of, among others, excerpts to the depositions of the Debtors' representatives. Maryland Casualty Company also filed a statement, in lieu of a brief, to support its Plan objection. In their objection to the confirmation of the Plan, The St. Paul Companies, Inc., and its affiliates, collectively known as Travelers, contend that the Plan purports to treat Travelers' claims as unimpaired. Travelers seeks assurance that the Plan will provide that, as an indirect PD Trust claimant, Travelers will not suffer any loss on the proof of claim it filed against the Debtors on account of the appeal bond it issued on the Debtors' behalf, as well as on the proof of claim arising from general contracts of indemnity the Debtors executed pertaining to the appeal bond. Travelers also seeks to be repaid for all amounts paid to third parties in connection with the appeal bond and the GCIs. Summary of Libby Claimants' Plan Objection The Court authorized the Libby Claimants to file a brief supporting its objection to the Debtors' First Amended Plan of Reorganization that will exceed the page limit rule. The Court, however, directed the Libby Claimants to file a summary of the objection in not more than five pages. Moreover, the Court ruled that any replies of the Libby Claimants must not exceed the applicable page limit rule, and if not established by separate order, not to exceed 20 pages. Heading the Court's directive, the Libby Claimants submitted to the Court a summary of their objections to the Plan outlining that: (a) the Plan is not confirmable because the treatment of Libby Claimants violates the policy of equal distribution under the Bankruptcy Code; (b) the Plan impermissibly disenfranchises the Libby Claimants through impermissible classification and treatment of their claims; (c) the Plan is unconfirmable because it denies the Libby Claimants their rights to trial by jury; (d) the Plan is unconfirmable as a matter of law because it violates the Libby Claimants' statutory right to have their clams allowed in accordance with applicable non- bankruptcy law; (e) the Plan is unconfirmable because it provides for injunctions and exculpations that are impermissibly broad; (f) the Plan is unconfirmable because it improperly usurps the Court's function to modify or dissolve preliminary injunctions; and (g) the Plan violates Section 1129(a)(7) of the Bankruptcy Code because it provides less to the Libby Claimants than they would receive or retain in a Chapter 7 liquidation of the Debtors. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Court scheduled a two-phase confirmation hearing: -- Hearings on June 22 to 25 to deal with objections by insurance companies; and -- Hearings on September 8 to 11 for objections related to claims from the facility in Libby, Montana. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WR GRACE: Says Remaining Objections Unfounded --------------------------------------------- Notwithstanding the overwhelming acceptance of the First Amended Joint Plan of Reorganization for W.R. Grace & Co. and its debtor- affiliates from the constituencies who have a legitimate and equitable right to be heard, the proponents to the Plan tell the U.S. Bankruptcy Court for the District of Delaware that Plan confirmation is being obstructed by certain constituencies who ultimately either (1) have no economic interests in the allocation of the Debtors' assets, or (2) are seeking to arrogate to themselves more than their legal share. The Plan Proponents are the Debtors, the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos PI Future Claimants' Representative. In the brief the Plan Proponents filed for Phase I of the Plan Confirmation Hearing, they argue that those objections do not upset the fundamental integrity of the Plan, rather, the objectors ultimately seek to force the Plan Proponents to amend the Plan in favor of the objectors' self-interests over the interest of all of the Debtors' other constituencies, based on various erroneous technical and extremely tenuous arguments. The Debtors' counsel, David M. Bernick, P.C., at Kirkland & Ellis LLP, in New York, argues that all objections to the Plan are at best unfounded, and that the Court should proceed to confirmation of the Plan. The Plan Proponents complain that: (1) Numerous insurers have decided to interpose objections to confirmation not only with respect to the issue of insurance neutrality, but also with respect to fundamental and ubiquitous provisions of the Joint Plan relating to (i) the way in which the Asbestos PI Trust will function post-confirmation, irrespective of the plain language of the Plan that fully preserves their rights in that respect; (ii) the injunctions contemplated by the Joint Plan; and (iii) the Joint Plan's release and exculpation provisions. In mounting the attack, particularly as to the Plan's release and exculpation provisions, the objecting Insurers fail to demonstrate how they have any legal or economic interest that would be affected by these provisions so as to afford them standing. (2) The Lenders have utterly failed to address their purported rights in connection with the Debtors' motion to disallow the Lenders' claims for default interest, by either (i) demonstrating a legally cognizable default by the Debtors, or (ii) that the Debtors are solvent. Indeed, the Lenders have also entirely failed to pursue their opportunity for discovery during the confirmation process established by the Court's Third Amended Plan-related Case Management Order. Nevertheless, the Lenders are now attempting to derail the entire confirmation agenda on the premise that because, as a matter of law, which they concede, the Court must conclude from its order and opinion disallowing the default interest claim that the Lenders are not impaired for the purposes of confirmation, their appeal from the default interest order divests the Court's jurisdiction to rule on the impairment issue in the confirmation proceedings. (3) The Official Committee of Unsecured Creditors, rather than applauding the Plan because it contemplates that all of the allowed claims of their constituency will be paid in full in cash, have decided to bow to the wishes of an economically powerful group of creditors -- the Lenders -- and support the untenable argument that confirmation cannot proceed because of the Lenders' appeal from the disallowance of the Lenders' claims for default interest. (4) The Libby Claimants, in an attempt to extract more money for themselves from the Asbestos PI Trust's pool of assets at the expense of other asbestos claimants and demand holders, continue to oppose confirmation on the ground that their claims are somehow discriminated against based on unsupported scientific theories and on incorrect and untenable theories of law. (5) Anderson Memorial Hospital continues to complain that it is being discriminated against, not because the Plan will fail to pay its ultimately allowed claim in full, but rather because the forum, which will preside over the allowance of that claim will be this Court. "[T]he Insurers must demonstrate the 'irreducible constitutional minimum' of injury, causation and redressability with respect to each of the issues they seek to raise," Mr. Bernick argues. With respect to the objections raised by the Creditors' Committee, Morgan Stanley Senior Funding, Inc., Longacre Master Fund, Ltd., and Longacre Capital Partners (QP), L.P., in regard to Class 9 non-lender claims, the Plan Proponents maintain that the Class 9 claimants are not impaired by the Plan. "The Plan equivocally provides for postpetition interest," Mr. Bernick argues, in response to the Committee's complaint about the Plan being ambiguous with respect to payment of postpetition interest to non-lender claims. As for Morgan Stanley's objection about different rates proposed for different non-lender Class 9 claimants, the Plan Proponents assert that the fact that different non-lender claimants may be entitled to different rates of postpetition interest under applicable non-bankruptcy law is not a basis to separately classify the claims. All of the non-lender claimants are being paid in full the allowed amount of their claims, the Plan Proponents explain. Longacre does not want the amount provided for under the Plan because it thinks it deserves more, but that Longacre may want what the Plan provides if the Court rules that it actually is entitled to less under the terms of the agreements between Longacre and the Debtors, the Plan Proponents contend. The class is not impaired by failing to provide a windfall position for claimants like Longacre who choose to reject the postpetition interest rate as settlement under the Plan, and want to instead submit a calculation of its interest claim to adjudication, the Plan Proponents say. A full-text copy of the Plan Proponents' Brief is available for free at http://bankrupt.com/misc/22021_briefplanproponents.pdf The Plan Proponents, prior to filing the brief, sought and obtained the Court's approval to submit a brief that exceeds the 40-page limit. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Court scheduled a two-phase confirmation hearing: -- Hearings on June 22 to 25 to deal with objections by insurance companies; and -- Hearings on September 8 to 11 for objections related to claims from the facility in Libby, Montana. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * 22 Mintz Levin Attorneys Named Leaders in Their Fields for 2009 ----------------------------------------------------------------- The 2009 Chambers USA: America's Leading Lawyers for Business guide said Friday it ranked 22 of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.'s attorneys as leaders in their fields, including two at the national level, one as a Senior Statesman, and one as a "Star Individual" in his field. The 2009 directory was compiled after conducting extensive in-depth interviews with attorneys and clients, and consists of tiered attorney and practice area rankings by location with corresponding client and peer commentary. The qualities on which rankings are assessed include technical legal ability, professional conduct, client service, commercial awareness/astuteness, diligence, commitment and other qualities most valued by the client. The Mintz Levin attorneys included in the 2009 listing are: * Life Sciences (National) Jeffrey Wiesen (Tier 1) Ivor Elrifi * Antitrust (California) Robert Taylor * Bankruptcy/Restructuring (Massachusetts) (Firm Tier 1) Daniel Bleck William Kannel Richard Mikels (Star Individual) Paul Ricotta Kevin Walsh * Corporate/M&A (Massachusetts) Jeffrey Wiesen (Tier 1) * Employee Benefits and Executive Compensation (Massachusetts) Alden Bianchi (Tier 1) * Environment (Massachusetts) Ralph Child (Tier 1) Jeffrey Porter (Tier 1) * Healthcare (District of Columbia) Hope Foster * Healthcare (Massachusetts) Thomas Crane Deborah Daccord Ellen Janos Stephen Weiner * Healthcare (New York) Andrew Roth * Labor and Employment (Massachusetts) Bret Cohen Robert Gault * Litigation (Massachusetts) R. Robert Popeo (Senior Statesman) * Real Estate (Massachusetts) Frederick Pittaro * Telecom, Broadcast & Satellite: Regulatory (District of Columbia) Howard Symons Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. -- http://www.mintz.com/-- is an AmLaw 100 law firm with offices in the U.S. and the U.K. Since 1933, the firm's lawyers have represented entrepreneurs, emerging growth companies, Fortune 500 companies, government agencies, not-for-profit organizations and leaders in primary industries that include Life Sciences/Biotechnology; Technology & Communications; Energy & Clean Technology; Financial Services & Insurance; Healthcare; Real Estate, Hospitality & Construction; and Retail & Consumer Products. * Chadbourne Three International Partners in Moscow Office ---------------------------------------------------------- The international law firm of Chadbourne & Parke LLP said Dmitry Gubarev, Olga Koniuhova and Julia Romanova have been named international partners in connection with the firm's practice in the Russian Federation. "These moves, increasing our Moscow resident partners to five, reflect the depth of Chadbourne's senior level capability in Russia in the areas of corporate, project finance, litigation and restructuring," said Chadbourne's Managing Partner Charles K. O'Neill. "Dmitry, Olga and Julia have in-depth understanding of clients' needs throughout Russia and they have the skills and insights needed to successfully navigate the challenges of today's turbulent economy." Chadbourne's Moscow office was established in 1990 and has been recognized as one of the leading law offices in Russia, most recently by Acquisition Finance Magazine and International Law Office. Despite the current economic environment, the Firm will continue building upon 19 years of servicing Russian and international clients from its offices in Moscow and, since 2005, in St. Petersburg. Details on the new partners in Chadbourne & Parke International, LLP are: (A) Dmitry Gubarev, Corporate and Project Finance Practices Mr. Gubarev specializes in issues relating to finance and banking law and capital markets transactions, including structured finance, project finance and derivatives. His work with Chadbourne has included advising multilateral lenders, as well as Russian and western banks and companies on various securitizations, syndicated loans, project finance transactions, credit linked notes issues and other financings in Russia and other CIS countries. Mr. Gubarev received a law degree with honors from Lomonosov Moscow State University, Faculty of Law in 1998 and a Doctor of Laws in 2002 from the Diplomatic Academy of the Ministry of Foreign Affairs of the Russian Federation. (B) Olga Koniuhova, Corporate, Private Funds and Financial Restructuring Practices Ms. Koniuhova specializes in cross-border transactions with an emphasis on mergers and acquisitions, private equity, shareholder and joint venture arrangements, corporate restructuring and reorganization, preparation of companies for listing or the raising of debt on Russian and international capital markets. She has also provided legal counsel to a broad range of multinational and other companies on matters such as corporate governance, local regulatory regimes and labor issues. Previously a director (legal practice) at PricewaterhouseCoopers in Moscow, Ms. Koniuhova holds a law degree from Kyrgyz State University, and received a Ph.D from Frunze Polytechnic Institute, where she majored in Engineering & Geology. (C) Julia Romanova, Litigation, Arbitration and Bankruptcy Practices Ms. Romanova focuses her practice on litigation, international and domestic arbitration and bankruptcy/restructuring matters. She advises clients with regard to all aspects of dispute resolution involving Russian elements. Ms. Romanova has worked with international multilateral lending institutions on recovery and restructuring matters and rendered advice in connection with numerous international arbitration proceedings for such institutions and major Russian clients. She received a law degree, with honors, in 1996 from Lomonosov Moscow State University, Faculty of Law. "We are delighted that Dmitry, Olga and Julia have become international partners. They are each dynamic and excellent professionals, well-known in their respective fields, who will add to the depth and breadth of Chadbourne's experience in Russia," said Moscow Managing Partner Jennifer Handz. "Dmitry has extensive experience advising multilateral lenders, as well as Russian and western banks and companies on securitizations, syndicated loans, project finance transactions, credit linked notes issues and other financings in Russia and the CIS," Ms. Handz noted. "Olga has the key corporate experience to help Chadbourne and its clients in the market and Julia's focus on restructuring, litigation, arbitration and bankruptcy is particularly valuable in the current economic environment." About Chadbourne & Parke LLP Chadbourne & Parke LLP -- http://www.chadbourne.com/-- an international law firm headquartered in New York City, provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, energy, communications and technology, commercial and products liability litigation, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Central and Eastern Europe, Russia and the CIS, the Middle East and Latin America. The Firm has offices in New York, Washington, DC, Los Angeles, London (a multinational partnership), Moscow, St. Petersburg, Warsaw (a Polish partnership), Kyiv, Almaty, Dubai and Beijing. * NADA Welcomes Congressional Oversight of Dealership Closures -------------------------------------------------------------- Following his testimony before the U.S. House Energy and Commerce Subcommittee on Oversight and Investigations, John McEleney, Chairman of the National Automobile Dealers Association and a multi-franchise dealer from Iowa, on Friday issued this statement: "NADA welcomes the engagement of this subcommittee which has a long history of aggressive congressional oversight. Oversight is exactly what is needed due to the lack of transparency and the harsh treatment of dealers during the government-sponsored restructuring of both Chrysler and General Motors. "GM is closing 1,350 dealerships. Chrysler, through the bankruptcy courts, just shuttered 789 franchises. Between them, these closings put more than 100,000 jobs at risk, in communities throughout the country. With unemployment at its highest rate in more than 25 years, eliminating jobs and closing community businesses is not the way to help a struggling economy. "Everyone agrees that both Chrysler and GM need to decrease costs and increase revenue to survive, but eliminating dealerships does neither. Dealers cost an automaker almost nothing. They are independent entrepreneurs who risk millions of dollars to buy the land, build the buildings and purchase the vehicles and parts from the automaker. Terminating dealerships only cuts into an automakers' revenue, jeopardizes market share without making either company any stronger. "We learned recently that it was the federal government that required these closures. Ron Bloom of the Automotive Task Force acknowledged to the Senate this week that the Task Force required both Chrysler and GM to be "more aggressive" regarding dealers. "We do not see how cutting dealerships and jobs makes economic sense -- not for Chrysler, not for General Motors, not for local communities and certainly not for the struggling U.S. economy. "I would also like to comment on the status of the GM agreements, both the Participation Agreements for those dealers going forward and the "Wind-Down" Agreements for closing franchises. During the Senate Commerce Committee hearing [held the first week of June], NADA voiced serious concerns about the extremely one-sided Participation Agreements delivered to the 4,000 dealers of the new GM. General Motors executives responded to these concerns promptly and, after a very frank discussion, made significant improvements to the Participation Agreement. Additionally, the company has committed to clarify some of the terms of the Wind- Down Agreements for the terminated dealerships. Furthermore, we appreciate GM's willingness to continue to work with NADA on these crucial matters. "We remain concerned, however, because these government-negotiated bankruptcies continue to threaten dealer rights under state motor vehicle franchise laws. These laws inject balance in the inherently unbalanced economic relationship between a dealer and the manufacturer. To fix this problem, Congress should insist that the franchise laws of the 50 states apply with full force and effect by passing H.R. 2743, the Automobile Dealer Economic Rights Restoration Act of 2009." A full-text copy of Mr. McEleney's full oral testimony is available at no charge at: http://researcharchives.com/t/s?3de3 * Perkins Coie Named Among Top Firms in Chambers USA ---------------------------------------------------- Perkins Coie has been ranked by Chambers & Partners, publishers of Chambers USA: America's Leading Lawyers for Business, as a top law firm in the United States. Perkins Coie was recognized in the annual directory as a leader, having obtained Band 1 placement in 14 practice areas with top rankings in eight key markets across the country, including Alaska, Arizona, California, Colorado, Idaho, Illinois, Oregon, and Washington. The rankings are the results of extensive surveys and interviews of in-house counsel and leading law firm partners. Last year the firm was ranked in 41 areas with #1 placement in 15 of those practice areas, compared to this year's rankings in 29 areas with #1 placement in 14 areas. In addition, last year, 78 attorneys were highly ranked with 24 attorneys being recognized as leaders in their practice areas. This year, 86 attorneys received Chambers recognition, with 25 attorneys again earning the "Band 1", or top rank, within their practice areas. In addition, Oregon, Partner Roy Tucker was recognized as a "Star," which is considered above a Band 1 ranking and five attorneys were ranked as "Senior Statesman." "It is an honor to be recognized for excellence in so many practice areas," said Robert E. Giles, managing partner. "Our clients drive our success and we thank them for bringing us challenging and interesting work. This recognition is a reflection of the great companies we counsel." In Washington, where the firm is headquartered, Perkins Coie received the #1 ranking for its Corporate/Commercial, Environment, Intellectual Property, Litigation and Real Estate practices. In Alaska, the firm ranked #1 in its Environment & Natural Resources and Labor & Employment practices. In Oregon, it ranked #1 in its Corporate/Mergers & Acquisitions, Litigation, and Environment practices. In Arizona, the firm ranked #1 in its Litigation: White-Collar Crime & Government Investigations practice. In Idaho, the firm ranked #1 in its Labor & Employment practice. The firm also ranked #1 nationally for its Political Law, Retail and Transportation/Aviation practices. Additionally, the firm's Leisure & Hospitality and Privacy & Data Security practices also ranked nationally. Chambers & Partners, based in London, publishes directories that assess and rank the world's leading lawyers. Chambers USA was first introduced in 2003. About Perkins Coie With more than 700 lawyers in 15 offices across the United States and in China, Perkins Coie serves great companies ranging in size from start-ups to FORTUNE 100. * BOND PRICING -- For the Week From June 8 to 12, 2009 ------------------------------------------------------ Company Coupon Maturity Bid Price ------- ------ -------- --------- ACCURIDE CORP 8.5 % 2/1/2015 35 ADVANTA CAP TR 8.99 % 12/17/2026 19.4 AHERN RENTALS 9.25 % 8/15/2013 40 ALERIS INTL INC 9 % 12/15/2014 1.77 ALERIS INTL INC 10 % 12/15/2016 1.408 AMBASSADORS INTL 3.75 % 4/15/2027 31.45 AMBASSADORS INTL 3.75 % 4/15/2027 30 AMER GENL FIN 3 % 7/15/2009 79 AMER GENL FIN 3.05 % 6/15/2010 60.5 AMER GENL FIN 3.3 % 11/15/2009 84.02 AMER GENL FIN 3.3 % 6/15/2010 67 AMER GENL FIN 3.875 % 11/15/2009 81.6 AMER GENL FIN 4.05 % 5/15/2010 71.5 AMER GENL FIN 4.1 % 5/15/2010 55.481 AMER GENL FIN 4.2 % 10/15/2010 45 AMER GENL FIN 4.25 % 10/15/2010 39.85 AMER GENL FIN 4.3 % 9/15/2009 80 AMER GENL FIN 4.35 % 3/15/2010 45 AMER GENL FIN 4.4 % 4/15/2012 38 AMER GENL FIN 4.5 % 3/15/2010 60 AMER GENL FIN 4.5 % 8/15/2010 66.9 AMER GENL FIN 4.5 % 11/15/2010 55.96 AMER GENL FIN 4.75 % 11/15/2012 30 AMER GENL FIN 4.8 % 9/15/2011 44.29 AMER GENL FIN 4.875 % 6/15/2010 72 AMER GENL FIN 4.95 % 11/15/2010 62 AMER GENL FIN 5 % 9/15/2009 91 AMER GENL FIN 5 % 6/15/2010 60.5 AMER GENL FIN 5 % 10/15/2010 62.36 AMER GENL FIN 5 % 11/15/2010 50.438 AMER GENL FIN 5 % 12/15/2010 63 AMER GENL FIN 5 % 1/15/2011 62.714 AMER GENL FIN 5 % 1/15/2011 62.5 AMER GENL FIN 5 % 3/15/2011 59 AMER GENL FIN 5 % 8/15/2013 29 AMER GENL FIN 5.1 % 9/15/2009 90 AMER GENL FIN 5.2 % 6/15/2010 70.146 AMER GENL FIN 5.25 % 6/15/2009 95 AMER GENL FIN 5.25 % 7/15/2010 55 AMER GENL FIN 5.25 % 12/15/2012 25 AMER GENL FIN 5.35 % 6/15/2010 48.63 AMER GENL FIN 5.35 % 7/15/2010 50 AMER GENL FIN 5.4 % 6/15/2011 53.793 AMER GENL FIN 5.5 % 4/15/2011 55.16 AMER GENL FIN 5.5 % 6/15/2012 31 AMER GENL FIN 5.75 % 6/15/2013 30.75 AMER GENL FIN 5.75 % 9/15/2014 27 AMER GENL FIN 5.85 % 9/15/2012 40 AMER GENL FIN 6.5 % 6/15/2015 15 AMER GENL FIN 7.75 % 9/15/2010 47.885 AMER GENL FIN 7.85 % 8/15/2010 50 AMER GENL FIN 8 % 8/15/2010 72 AMER GENL FIN 8.15 % 8/15/2011 52.78 AMER MEDIA OPER 8.875 % 1/15/2011 41 AMR CORP 9.2 % 1/30/2012 48 AMR CORP 10.4 % 3/15/2011 46 ANTHRACITE CAP 11.75 % 9/1/2027 20.5 ANTIGENICS 5.25 % 2/1/2025 25.5 APPLETON PAPERS 9.75 % 6/15/2014 35.5 ARCO CHEMICAL CO 10.25 % 11/1/2010 35 ARVINMERITOR 8.75 % 3/1/2012 71 AVENTINE RENEW 10 % 4/1/2017 22 BALLY TOTAL FITN 14 % 10/1/2013 1 BANK NEW ENGLAND 8.75 % 4/1/1999 10.75 BANK NEW ENGLAND 9.875 % 9/15/1999 10.75 BANKUNITED FINL 3.125 % 3/1/2034 6.375 BARRINGTON BROAD 10.5 % 8/15/2014 20 BELL MICROPRODUC 3.75 % 3/5/2024 23 BORDEN INC 8.375 % 4/15/2016 28.11 BORDEN INC 9.2 % 3/15/2021 22.3 BOWATER INC 6.5 % 6/15/2013 19.75 BOWATER INC 9.375 % 12/15/2021 19.5 BOWATER INC 9.5 % 10/15/2012 19.5 BRODER BROS CO 11.25 % 10/15/2010 30.125 BROOKSTONE CO 12 % 10/15/2012 47 C&D TECHNOLOGIES 5.5 % 11/15/2026 44.655 CALLON PETROLEUM 9.75 % 12/8/2010 46 CAPMARK FINL GRP 7.875 % 5/10/2012 26.75 CARAUSTAR INDS 7.25 % 5/1/2010 56.875 CCH I LLC 9.92 % 4/1/2014 1.25 CCH I LLC 10 % 5/15/2014 0.75 CCH I LLC 11.75 % 5/15/2014 0.75 CCH I LLC 12.125 % 1/15/2015 1.063 CCH I LLC 13.5 % 1/15/2014 1.25 CCH I/CCH I CP 11 % 10/1/2015 12 CCH I/CCH I CP 11 % 10/1/2015 12.25 CHAMPION ENTERPR 2.75 % 11/1/2037 12 CHARTER COMM HLD 9.92 % 4/1/2011 0.56 CHARTER COMM HLD 10 % 5/15/2011 1 CHARTER COMM HLD 11.75 % 5/15/2011 1.5 CHARTER COMM HLD 12.125 % 1/15/2012 1.5 CHARTER COMM INC 6.5 % 10/1/2027 22.125 CIT GROUP INC 4.05 % 2/15/2010 81.55 CIT GROUP INC 4.5 % 7/15/2009 91 CIT GROUP INC 4.85 % 12/15/2011 40 CIT GROUP INC 4.875 % 6/15/2013 34 CIT GROUP INC 5.25 % 6/15/2009 99 CIT GROUP INC 6 % 7/15/2009 96.476 CIT GROUP INC 6.125 % 6/15/2009 97.45 CIT GROUP INC 6.25 % 2/15/2010 88.51 CLEAR CHANNEL 4.4 % 5/15/2011 46 CLEAR CHANNEL 4.5 % 1/15/2010 76 CLEAR CHANNEL 5 % 3/15/2012 37.375 CLEAR CHANNEL 5.5 % 9/15/2014 26 CLEAR CHANNEL 5.75 % 1/15/2013 29.5 CLEAR CHANNEL 6.25 % 3/15/2011 52.375 CLEAR CHANNEL 7.65 % 9/15/2010 65 COMPREHENS CARE 7.5 % 4/15/2010 75.125 COMPUCREDIT 3.625 % 5/30/2025 35.5 CONEXANT SYSTEMS 4 % 3/1/2026 47.05 CONSTAR INTL 11 % 12/1/2012 8 COOPER-STANDARD 7 % 12/15/2012 22 COOPER-STANDARD 8.375 % 12/15/2014 12 CREDENCE SYSTEM 3.5 % 5/15/2010 34 DAYTON SUPERIOR 10 % 9/30/2029 17 DECODE GENETICS 3.5 % 4/15/2011 5.25 DECODE GENETICS 3.5 % 4/15/2011 5 DELPHI CORP 6.5 % 8/15/2013 1.875 DELPHI CORP 8.25 % 10/15/2033 1 DEX MEDIA INC 8 % 11/15/2013 12.5 DEX MEDIA INC 9 % 11/15/2013 16.75 DEX MEDIA INC 9 % 11/15/2013 11.5 DEX MEDIA WEST 9.875 % 8/15/2013 15 DOWNEY FINANCIAL 6.5 % 7/1/2014 5.1 EDDIE BAUER HLDG 5.25 % 4/1/2014 19.5 ENCOMPASS SERVIC 10.5 % 5/1/2009 5 ENERGY PARTNERS 8.75 % 8/1/2010 35 EPIX MEDICAL INC 3 % 6/15/2024 19.125 FAIRPOINT COMMUN 13.125 % 4/1/2018 36.5 FIBERTOWER CORP 9 % 11/15/2012 43.125 FINISAR CORP 2.5 % 10/15/2010 73 FINLAY FINE JWLY 8.375 % 6/1/2012 7 FIRST DATA CORP 5.625 % 11/1/2011 41.5 FIRST IND LP 5.25 % 6/15/2009 99.5 FLEETWOOD ENTERP 14 % 12/15/2011 29 FLOTEK INDS 5.25 % 2/15/2028 27.1 FORD MOTOR CRED 5 % 7/20/2009 99.63 FORD MOTOR CRED 5 % 8/20/2009 94 FORD MOTOR CRED 5.1 % 7/20/2009 96 FORD MOTOR CRED 5.15 % 11/20/2009 86.495 FORD MOTOR CRED 5.2 % 7/20/2009 96 FORD MOTOR CRED 5.4 % 6/22/2009 98.25 FORD MOTOR CRED 5.5 % 6/22/2009 95 FRANKLIN BANK 4 % 5/1/2027 0.01 FRONTIER AIRLINE 5 % 12/15/2025 8 GENCORP INC 4 % 1/16/2024 80 GENERAL MOTORS 7.125 % 7/15/2013 12.25 GENERAL MOTORS 7.4 % 9/1/2025 11.85 GENERAL MOTORS 7.7 % 4/15/2016 12 GENERAL MOTORS 8.1 % 6/15/2024 12 GENERAL MOTORS 8.25 % 7/15/2023 12 GENERAL MOTORS 8.375 % 7/15/2033 14 GENERAL MOTORS 8.8 % 3/1/2021 13 GENERAL MOTORS 9.4 % 7/15/2021 12 GENERAL MOTORS 9.45 % 11/1/2011 10.25 GENWORTH GLOBAL 6.1 % 4/15/2033 15.25 GEORGIA GULF CRP 7.125 % 12/15/2013 26 GGP LP 3.98 % 4/15/2027 41.125 GMAC LLC 5 % 8/15/2009 94.665 GMAC LLC 5.35 % 6/15/2009 99 GMAC LLC 5.4 % 6/15/2009 99.505 GMAC LLC 5.5 % 6/15/2009 99.25 GMAC LLC 6.25 % 6/15/2009 98 GMAC LLC 6.25 % 6/15/2009 99 GMAC LLC 6.25 % 7/15/2013 31 GMAC LLC 6.3 % 6/15/2009 98.1 GMAC LLC 6.3 % 7/15/2009 84.5 GMAC LLC 6.5 % 6/15/2009 99.5 GMAC LLC 6.5 % 10/15/2009 99 GMAC LLC 6.6 % 7/15/2009 97.5 GMAC LLC 6.65 % 7/15/2009 92.76 GMAC LLC 6.7 % 6/15/2009 99.088 GMAC LLC 6.8 % 7/15/2009 97 GMAC LLC 6.8 % 12/15/2009 86 GMAC LLC 6.85 % 7/15/2009 97.5 GREAT LAKES CHEM 7 % 7/15/2009 57.25 HAIGHTS CROSS OP 11.75 % 8/15/2011 41.75 HANNA (MA) CO 6.52 % 2/23/2010 70.063 HARRY & DAVID OP 9 % 3/1/2013 34 HAWAIIAN TELCOM 9.75 % 5/1/2013 3 HEADWATERS INC 2.875 % 6/1/2016 51 HERTZ CORP 9 % 11/1/2009 89.125 HINES NURSERIES 10.25 % 10/1/2011 14 IDEARC INC 8 % 11/15/2016 3.2 INN OF THE MOUNT 12 % 11/15/2010 23.3 INTCOMEX INC 11.75 % 1/15/2011 38 INTERDENT SVC 10.75 % 12/15/2011 52.4 INTL LEASE FIN 3.25 % 2/15/2010 65 INTL LEASE FIN 4.85 % 8/15/2009 94.005 INTL LEASE FIN 4.85 % 9/15/2010 67 INTL LEASE FIN 5 % 6/15/2012 43.25 INTL LEASE FIN 7.25 % 2/15/2010 78 ISTAR FINANCIAL 5.5 % 6/15/2012 52 ISTAR FINANCIAL 5.8 % 3/15/2011 65.75 ITRI-CALL07/09 7.75 % 5/15/2012 95 JAZZ TECHNOLOGIE 8 % 12/31/2011 31 JEFFERSON SMURFI 7.5 % 6/1/2013 36 JEFFERSON SMURFI 8.25 % 10/1/2012 36.5 JOHN HANCOCK LIF 4.15 % 6/15/2009 99 K HOVNANIAN ENTR 8.875 % 4/1/2012 59.5 KAISER ALUM&CHEM 12.75 % 2/1/2003 4 KELLWOOD CO 7.625 % 10/15/2017 20 KELLWOOD CO 7.875 % 7/15/2009 93.5 KEMET CORP 2.25 % 11/15/2026 40.25 KEMET CORP 2.25 % 11/15/2026 39.875 KEYSTONE AUTO OP 9.75 % 11/1/2013 31.5 KNIGHT RIDDER 4.625 % 11/1/2014 24.25 KNIGHT RIDDER 7.125 % 6/1/2011 37.1 KNIGHT RIDDER 7.15 % 11/1/2027 10.02 LEAR CORP 5.75 % 8/1/2014 32 LEAR CORP 8.5 % 12/1/2013 29.5 LEHMAN BROS HLDG 1.5 % 3/23/2012 12.5 LEHMAN BROS HLDG 2 % 10/31/2012 11.46 LEHMAN BROS HLDG 4.25 % 1/27/2010 15.5 LEHMAN BROS HLDG 4.375 % 11/30/2010 14.3 LEHMAN BROS HLDG 4.5 % 7/26/2010 13 LEHMAN BROS HLDG 4.5 % 8/3/2011 8.5 LEHMAN BROS HLDG 4.8 % 2/27/2013 7 LEHMAN BROS HLDG 4.8 % 3/13/2014 14 LEHMAN BROS HLDG 4.8 % 6/24/2023 7.25 LEHMAN BROS HLDG 5 % 1/14/2011 13 LEHMAN BROS HLDG 5 % 2/11/2013 9.625 LEHMAN BROS HLDG 5 % 3/27/2013 7 LEHMAN BROS HLDG 5 % 8/3/2014 7.25 LEHMAN BROS HLDG 5 % 12/18/2015 9.625 LEHMAN BROS HLDG 5 % 5/28/2023 7.75 LEHMAN BROS HLDG 5 % 5/30/2023 9.625 LEHMAN BROS HLDG 5 % 6/10/2023 9.625 LEHMAN BROS HLDG 5 % 6/17/2023 8.5 LEHMAN BROS HLDG 5.1 % 1/28/2013 5.5 LEHMAN BROS HLDG 5.15 % 2/4/2015 9.5 LEHMAN BROS HLDG 5.2 % 5/13/2020 8.01 LEHMAN BROS HLDG 5.25 % 2/6/2012 14.1 LEHMAN BROS HLDG 5.25 % 1/30/2014 8.75 LEHMAN BROS HLDG 5.25 % 2/11/2015 9.552 LEHMAN BROS HLDG 5.25 % 3/5/2018 9.625 LEHMAN BROS HLDG 5.25 % 3/8/2020 10 LEHMAN BROS HLDG 5.25 % 5/20/2023 7.75 LEHMAN BROS HLDG 5.35 % 2/25/2018 9 LEHMAN BROS HLDG 5.35 % 3/13/2020 7.5 LEHMAN BROS HLDG 5.35 % 6/14/2030 7.7 LEHMAN BROS HLDG 5.375 % 5/6/2023 7.25 LEHMAN BROS HLDG 5.4 % 3/6/2020 8.17 LEHMAN BROS HLDG 5.4 % 3/20/2020 8.25 LEHMAN BROS HLDG 5.4 % 3/30/2029 7.25 LEHMAN BROS HLDG 5.4 % 6/21/2030 8.26 LEHMAN BROS HLDG 5.45 % 3/15/2025 5.875 LEHMAN BROS HLDG 5.45 % 4/6/2029 7 LEHMAN BROS HLDG 5.45 % 2/22/2030 7.5 LEHMAN BROS HLDG 5.45 % 7/19/2030 8.26 LEHMAN BROS HLDG 5.45 % 9/20/2030 9.625 LEHMAN BROS HLDG 5.5 % 4/4/2016 12.1 LEHMAN BROS HLDG 5.5 % 2/4/2018 9.25 LEHMAN BROS HLDG 5.5 % 2/19/2018 9.5 LEHMAN BROS HLDG 5.5 % 11/4/2018 9 LEHMAN BROS HLDG 5.5 % 2/27/2020 7.75 LEHMAN BROS HLDG 5.5 % 8/19/2020 7.25 LEHMAN BROS HLDG 5.5 % 3/14/2023 8.5 LEHMAN BROS HLDG 5.5 % 4/8/2023 7 LEHMAN BROS HLDG 5.5 % 4/15/2023 8.5 LEHMAN BROS HLDG 5.5 % 4/23/2023 9.625 LEHMAN BROS HLDG 5.5 % 10/7/2023 9.625 LEHMAN BROS HLDG 5.5 % 1/27/2029 9 LEHMAN BROS HLDG 5.5 % 2/3/2029 7 LEHMAN BROS HLDG 5.55 % 2/11/2018 3.95 LEHMAN BROS HLDG 5.55 % 3/9/2029 8.26 LEHMAN BROS HLDG 5.55 % 1/25/2030 8.5 LEHMAN BROS HLDG 5.55 % 9/27/2030 9.625 LEHMAN BROS HLDG 5.55 % 12/31/2034 8.01 LEHMAN BROS HLDG 5.6 % 1/22/2018 9.5 LEHMAN BROS HLDG 5.6 % 2/17/2029 7.55 LEHMAN BROS HLDG 5.6 % 2/24/2029 9.625 LEHMAN BROS HLDG 5.6 % 3/2/2029 9.875 LEHMAN BROS HLDG 5.6 % 2/25/2030 8.25 LEHMAN BROS HLDG 5.6 % 5/3/2030 7.608 LEHMAN BROS HLDG 5.625 % 1/24/2013 16.125 LEHMAN BROS HLDG 5.625 % 3/15/2030 8.5 LEHMAN BROS HLDG 5.65 % 11/23/2029 8 LEHMAN BROS HLDG 5.65 % 8/16/2030 7 LEHMAN BROS HLDG 5.65 % 12/31/2034 8 LEHMAN BROS HLDG 5.7 % 1/28/2018 6.5 LEHMAN BROS HLDG 5.7 % 2/10/2029 8.5 LEHMAN BROS HLDG 5.7 % 4/13/2029 8.5 LEHMAN BROS HLDG 5.7 % 9/7/2029 8.5 LEHMAN BROS HLDG 5.7 % 12/14/2029 8.5 LEHMAN BROS HLDG 5.75 % 4/25/2011 14.07 LEHMAN BROS HLDG 5.75 % 7/18/2011 15.875 LEHMAN BROS HLDG 5.75 % 5/17/2013 14.1 LEHMAN BROS HLDG 5.75 % 1/3/2017 0.03 LEHMAN BROS HLDG 5.75 % 3/27/2023 7 LEHMAN BROS HLDG 5.75 % 10/15/2023 9.625 LEHMAN BROS HLDG 5.75 % 10/21/2023 8 LEHMAN BROS HLDG 5.75 % 11/12/2023 9.625 LEHMAN BROS HLDG 5.75 % 11/25/2023 7.75 LEHMAN BROS HLDG 5.75 % 12/16/2028 7 LEHMAN BROS HLDG 5.75 % 12/23/2028 7.5 LEHMAN BROS HLDG 5.75 % 8/24/2029 8.26 LEHMAN BROS HLDG 5.75 % 9/14/2029 8.25 LEHMAN BROS HLDG 5.75 % 10/12/2029 9.625 LEHMAN BROS HLDG 5.75 % 3/29/2030 9.625 LEHMAN BROS HLDG 5.8 % 9/3/2020 8.5 LEHMAN BROS HLDG 5.8 % 10/25/2030 7.75 LEHMAN BROS HLDG 5.85 % 11/8/2030 9 LEHMAN BROS HLDG 5.875 % 11/15/2017 12.75 LEHMAN BROS HLDG 5.9 % 5/4/2029 9.625 LEHMAN BROS HLDG 5.9 % 2/7/2031 7 LEHMAN BROS HLDG 5.95 % 12/20/2030 7.5 LEHMAN BROS HLDG 6 % 7/19/2012 14.3 LEHMAN BROS HLDG 6 % 1/22/2020 9 LEHMAN BROS HLDG 6 % 2/12/2020 8 LEHMAN BROS HLDG 6 % 1/29/2021 8.01 LEHMAN BROS HLDG 6 % 10/23/2028 8.25 LEHMAN BROS HLDG 6 % 11/18/2028 6.25 LEHMAN BROS HLDG 6 % 5/11/2029 8.25 LEHMAN BROS HLDG 6 % 7/20/2029 8.25 LEHMAN BROS HLDG 6 % 3/21/2031 6.25 LEHMAN BROS HLDG 6 % 4/30/2034 8.25 LEHMAN BROS HLDG 6 % 7/30/2034 8.859 LEHMAN BROS HLDG 6 % 2/21/2036 8.25 LEHMAN BROS HLDG 6 % 2/24/2036 10.25 LEHMAN BROS HLDG 6 % 2/12/2037 8.26 LEHMAN BROS HLDG 6.05 % 6/29/2029 9.625 LEHMAN BROS HLDG 6.1 % 8/12/2023 8 LEHMAN BROS HLDG 6.15 % 4/11/2031 8.25 LEHMAN BROS HLDG 6.2 % 9/26/2014 15.5 LEHMAN BROS HLDG 6.2 % 6/15/2027 8.13 LEHMAN BROS HLDG 6.2 % 5/25/2029 8 LEHMAN BROS HLDG 6.25 % 2/5/2021 9.625 LEHMAN BROS HLDG 6.25 % 2/22/2023 9.25 LEHMAN BROS HLDG 6.4 % 10/11/2022 7.033 LEHMAN BROS HLDG 6.4 % 12/19/2036 12.5 LEHMAN BROS HLDG 6.5 % 7/19/2017 0.01 LEHMAN BROS HLDG 6.5 % 2/28/2023 9.625 LEHMAN BROS HLDG 6.5 % 3/6/2023 7.35 LEHMAN BROS HLDG 6.5 % 10/18/2027 5.925 LEHMAN BROS HLDG 6.5 % 10/25/2027 8 LEHMAN BROS HLDG 6.5 % 11/15/2032 7.35 LEHMAN BROS HLDG 6.5 % 1/17/2033 6.435 LEHMAN BROS HLDG 6.5 % 12/22/2036 9.75 LEHMAN BROS HLDG 6.5 % 6/21/2037 8.25 LEHMAN BROS HLDG 6.5 % 7/13/2037 9.625 LEHMAN BROS HLDG 6.6 % 10/3/2022 6.11 LEHMAN BROS HLDG 6.625 % 1/18/2012 14.563 LEHMAN BROS HLDG 6.625 % 7/27/2027 4 LEHMAN BROS HLDG 6.75 % 7/1/2022 5.5 LEHMAN BROS HLDG 6.75 % 10/26/2037 5.022 LEHMAN BROS HLDG 6.8 % 9/7/2032 7 LEHMAN BROS HLDG 6.85 % 8/16/2032 9.5 LEHMAN BROS HLDG 6.875 % 5/2/2018 16.75 LEHMAN BROS HLDG 6.875 % 7/17/2037 0.01 LEHMAN BROS HLDG 6.9 % 9/1/2032 9.625 LEHMAN BROS HLDG 7 % 4/16/2019 7.75 LEHMAN BROS HLDG 7 % 5/12/2023 7.085 LEHMAN BROS HLDG 7 % 9/27/2027 15.625 LEHMAN BROS HLDG 7 % 10/4/2032 8.02 LEHMAN BROS HLDG 7 % 7/27/2037 8.26 LEHMAN BROS HLDG 7 % 9/28/2037 7.5 LEHMAN BROS HLDG 7 % 11/16/2037 9.625 LEHMAN BROS HLDG 7 % 12/28/2037 9.5 LEHMAN BROS HLDG 7 % 1/31/2038 8.511 LEHMAN BROS HLDG 7 % 2/1/2038 9 LEHMAN BROS HLDG 7 % 2/7/2038 9 LEHMAN BROS HLDG 7 % 2/8/2038 9.625 LEHMAN BROS HLDG 7.1 % 3/25/2038 7.25 LEHMAN BROS HLDG 7.25 % 4/29/2038 9 LEHMAN BROS HLDG 7.35 % 5/6/2038 9.75 LEHMAN BROS HLDG 7.73 % 10/15/2023 5.83 LEHMAN BROS HLDG 7.875 % 8/15/2010 15.5 LEHMAN BROS HLDG 8 % 3/5/2022 7.75 LEHMAN BROS HLDG 8.05 % 1/15/2019 5.063 LEHMAN BROS HLDG 8.5 % 8/1/2015 13.5 LEHMAN BROS HLDG 8.8 % 3/1/2015 13.5 LEHMAN BROS HLDG 8.92 % 2/16/2017 11.5 LEHMAN BROS HLDG 9.5 % 12/28/2022 6.088 LEHMAN BROS HLDG 9.5 % 2/27/2023 5.26 LEHMAN BROS HLDG 10 % 3/13/2023 12.25 LEHMAN BROS HLDG 10.375 % 5/24/2024 7.5 LEHMAN BROS HLDG 11 % 10/25/2017 9.625 LEHMAN BROS HLDG 11 % 6/22/2022 7.5 LEHMAN CAP VII 5.857 % #N/A N Ap 0.3 LOCAL INSIGHT 11 % 12/1/2017 25 LTX-CREDENCE 3.5 % 5/15/2011 32 MAJESTIC STAR 9.5 % 10/15/2010 60 MAJESTIC STAR 9.75 % 1/15/2011 9 MERCER INTL INC 9.25 % 2/15/2013 41 MERISANT CO 9.5 % 7/15/2013 10.875 MERRILL LYNCH 0 % 3/9/2011 90.5 METALDYNE CORP 11 % 6/15/2012 10 MILLENNIUM AMER 7.625 % 11/15/2026 7 MOMENTIVE PERFOR 11.5 % 12/1/2016 31.5 MORRIS PUBLISH 7 % 8/1/2013 5 NCI BLDG SYSTEMS 2.125 % 11/15/2024 68.5 NEENAH FOUNDRY 9.5 % 1/1/2017 21.5 NEFF CORP 10 % 6/1/2015 22 NELNET INC 5.125 % 6/1/2010 70.625 NETWORK COMMUNIC 10.75 % 12/1/2013 20.5 NEW PLAN EXCEL 4.5 % 2/1/2011 59.875 NEW PLAN EXCEL 7.4 % 9/15/2009 85.5 NEW PLAN EXCEL 7.5 % 7/30/2029 13.1 NEW PLAN REALTY 6.9 % 2/15/2028 16.26 NEW PLAN REALTY 6.9 % 2/15/2028 18.161 NEW PLAN REALTY 7.65 % 11/2/2026 15.125 NEW PLAN REALTY 7.97 % 8/14/2026 13.35 NEWPAGE CORP 12 % 5/1/2013 32 NEXSTAR BROADC 7 % 1/15/2014 44 NORTEK INC 8.5 % 9/1/2014 32.5 NORTH ATL TRADNG 9.25 % 3/1/2012 26 NTK HOLDINGS INC 0 % 3/1/2014 11.25 OUTBOARD MARINE 9.125 % 4/15/2017 3.5 PACKAGING DYNAMI 10 % 5/1/2016 33.25 PALM HARBOR 3.25 % 5/15/2024 33.25 PANOLAM INDUSTRI 10.75 % 10/1/2013 5 PARK PLACE ENT 7.5 % 9/1/2009 71.305 PINNACLE AIRLINE 3.25 % 2/15/2025 85.25 PLY GEM INDS 9 % 2/15/2012 24.5 PRIMUS TELECOM 8 % 1/15/2014 12.25 PRIMUS TELECOMM 14.25 % 5/20/2011 61 QUALITY DISTRIBU 9 % 11/15/2010 45 RADIO ONE INC 6.375 % 2/15/2013 18 RADIO ONE INC 8.875 % 7/1/2011 38 RAFAELLA APPAREL 11.25 % 6/15/2011 19 RAIT FINANCIAL 6.875 % 4/15/2027 28.8672695 RATHGIBSON INC 11.25 % 2/15/2014 42 READER'S DIGEST 9 % 2/15/2017 14.1 REAL MEX RESTAUR 10 % 4/1/2010 78 REALOGY CORP 12.375 % 4/15/2015 31.5 REALOGY CORP 12.375 % 4/15/2015 32.5 REEBOK INTL LTD 2 % 5/1/2024 84.125 RENTECH INC 4 % 4/15/2013 35.5 RH DONNELLEY 6.875 % 1/15/2013 3 RH DONNELLEY 6.875 % 1/15/2013 5 RH DONNELLEY 6.875 % 1/15/2013 4.875 RH DONNELLEY 8.875 % 1/15/2016 4.875 RH DONNELLEY 8.875 % 10/15/2017 4.875 RITE AID CORP 8.125 % 5/1/2010 74 RJ TOWER CORP 12 % 6/1/2013 1.375 ROTECH HEALTHCA 9.5 % 4/1/2012 19 SALEM COMM HLDG 7.75 % 12/15/2010 31.5 SILVERLEAF RES 8 % 4/1/2010 73.5 SINCLAIR BROAD 6 % 9/15/2012 41 SIX FLAGS INC 4.5 % 5/15/2015 10.875 SIX FLAGS INC 9.625 % 6/1/2014 12.5 SIX FLAGS INC 9.75 % 4/15/2013 12.75 SPACEHAB INC 5.5 % 10/15/2010 45 SPHERIS INC 11 % 12/15/2012 38 STALLION OILFIEL 9.75 % 2/1/2015 32.625 STANDARD MTR 6.75 % 7/15/2009 92 STATION CASINOS 6 % 4/1/2012 36.5 STATION CASINOS 6.5 % 2/1/2014 6 STATION CASINOS 6.625 % 3/15/2018 3 STATION CASINOS 6.875 % 3/1/2016 2.25 STONE CONTAINER 8.375 % 7/1/2012 36 TEKNI-PLEX INC 12.75 % 6/15/2010 75 TEXAS UTILITIES 7.46 % 1/1/2015 31.017 THORNBURG MTG 8 % 5/15/2013 5 TIMES MIRROR CO 6.61 % 9/15/2027 2.875 TIMES MIRROR CO 7.25 % 3/1/2013 5 TIMES MIRROR CO 7.25 % 11/15/2096 4.25 TIMES MIRROR CO 7.5 % 7/1/2023 4.25 TOYOTA-CALL06/09 4.4 % 12/22/2014 99.625 TOYOTA-CALL06/09 5.1 % 12/20/2018 97.04 TOYOTA-CALL06/09 5.25 % 6/20/2017 99 TOYOTA-CALL06/09 5.5 % 6/20/2017 98.75 TRANS-LUX CORP 8.25 % 3/1/2012 30 TRIBUNE CO 4.875 % 8/15/2010 6.4 TRIBUNE CO 5.25 % 8/15/2015 5 TRIBUNE CO 5.67 % 12/8/2008 4.4 TRICO MARINE 3 % 1/15/2027 27.737 TRICO MARINE SER 6.5 % 5/15/2028 30.75 TRONOX WORLDWIDE 9.5 % 12/1/2012 16.5 TRUMP ENTERTNMNT 8.5 % 6/1/2015 12 UAL CORP 4.5 % 6/30/2021 41.125 UAL CORP 5 % 2/1/2021 48.98 USFREIGHTWAYS 8.5 % 4/15/2010 44.778 VERASUN ENERGY 9.375 % 6/1/2017 11 VERENIUM CORP 5.5 % 4/1/2027 22.5 VERSO PAPER 11.375 % 8/1/2016 34 VION PHARM INC 7.75 % 2/15/2012 34.5 VISTEON CORP 7 % 3/10/2014 7.45 VITESSE SEMICOND 1.5 % 10/1/2024 59 WASH MUT BANK FA 6.875 % 6/15/2011 0.5 WASH MUT BANK NV 5.5 % 1/15/2013 0.01 WASH MUT BANK NV 5.55 % 6/16/2010 17.5 WASH MUTUAL INC 8.25 % 4/1/2010 61.5 WCI COMMUNITIES 4 % 8/5/2023 1.25 WCI COMMUNITIES 7.875 % 10/1/2013 1 WCI COMMUNITIES 9.125 % 5/1/2012 1.063 WII COMPONENTS 10 % 2/15/2012 40.25 WILLIAM LYON 7.625 % 12/15/2012 34 WILLIAM LYONS 7.5 % 2/15/2014 29.775 WILLIAM LYONS 7.625 % 12/15/2012 35 WILLIAM LYONS 10.75 % 4/1/2013 36 ********* 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 ***