/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090618.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, June 18, 2009, Vol. 13, No. 167 Headlines ABITIBIBOWATER INC: Enters into Amended Securitization Facility ABITIBIBOWATER INC: Seeks to Pay Augusta Newsprint's $9.5MM Claim ABITIBIBOWATER INC: Seeks Canada Court OK to Pay Employees ABITIBIBOWATER INC: Settlement With Alabama Power Gets Court Nod ABITIBIBOWATER INC: Court Denies CEP's Request to Lift CCAA Stay ACCESS WAREHOUSES: Case Summary & 4 Largest Unsecured Creditors ACCURIDE CORP: Erie Unit Closes $2.5MM Improvement Financing ADVANTA CORP: Fitch Downgrades Issuer Default Rating to 'RD' AGT CRUNCH: U.S. Trustee Says Dechert Has Conflict of Interest ALLEGHANY CORP: S&P Withdraws 'BB+' Preferred Stock Rating AMALGAMATED ARMADILLO: Case Summary & 3 Largest Unsec. Creditors AMERICAN HOUSING: To Pursue Late CEO's $24MM Life Insurance AMERICAN INT'L: Says Maurice Greenberg Improperly Seized Shares AMH HOLDINGS: Exchange Agreement Won't Affect S&P's 'CCC+' Rating ANCHOR BLUE: DIP Financing From Wachovia Bank Has Interim Approval ANCHOR BLUE: To Close Additional 14 Stores APPALACHIAN OIL: NRC to Hold Sealed Bid Sale; July 9 Deadline Set ASARCO LLC: Brattle Group's Testimony Contributes to Settlement ASARCO LLC: Two Parties Object to Sale of Perth Amboy Property ASSOCIATED MATERIALS: Exchange Pact Won't Affect S&P's CCC+ Rating ASYST TECHNOLOGIES: Bid Protocol Approved; July 17 Hearing Set ASYST TECHNOLOGIES: Can Use Lenders' Cash Collateral 'til June 30 AUDIO VISUAL: Moody's Cuts Corp. Family Rating to B2; Outlook Neg. AVIS BUDGET: Moody's Takes Rating Actions on Four Series of Notes BANK OF AMERICA: Court Can Retry Former Merrill Executives' Case BANKUNITED FINANCIAL: Court Approves Interim Trading Procedures BANKUNITED FINANCIAL: Court Limits Equity Trades to Protect NOLs BALLY TOTAL: Committee Counsel Retained by Party in AGT Case BALLY TOTAL: Opposes Admiral Insurance Bid to Lift Stay BALLY TOTAL: Opposes H&S Journal Demand for $290,107 Rent BEAZER HOMES: S&P Downgrades Corporate Credit Rating to 'CCC' BLB MANAGEMENT: Moody's Withdraws 'Ca' Corporate Family Rating BRSP LLC: Moody's Assigns 'B1' Rating on $275 Mil. Facility BUILDING MATERIALS: Chapter 11 Filing Cues Moody's 'D' Rating BUILDING MATERIALS: Gets Interim Approval For $80MM DIP Facility BULLSEYE COLLISION: Case Summary & 20 Largest Unsecured Creditors BUTLER INT'L: To Sell Assets to Meet Buyer's Month-End Deadline CANTILLON CAPITAL: Will Close Hedge Funds CANWEST MEDIA: Lenders Extend Forbearance to June 30; Talks Go On CAPITAL CORP: Wilmington Trust Appointed to Creditors' Panel CELL THERAPEUTICS: Defers Payment of 25% Executives Cash Bonuses CHENIERE ENERGY: Board OKs $160,000 Compensation to Directors CHRYSLER LLC: To Resume Production at 7 Assembly Plants CLAIRE'S STORES: Balance Sheet Upside-Down by $79MM as of May 2 CONTINENTAL AIRLINES: S&P Puts 'CCC+' Rating on Subordinated Debt COOPER BROTHERS: Case Summary & 20 Largest Unsecured Creditors COOPER-STANDARD AUTOMOTIVE: S&P Cuts Corp. Credit Rating to 'D' COREL CORP: Denies Knowledge on Surge in Trading Volume, Price COYOTES HOCKEY: Owner to Work on Open, Transparent Sales Process COYOTES HOCKEY: Buyers Need $20MM in City Aid, Jim Balsillie Says CRITICAL ACCESS HEALTH: Case Summary & 20 Largest Unsec. Creditors DBSI INC: Creditors Committee Seeks to File Competing Plan DELPHI CORP: Panel Wants Discovery on Platinum Equity Deal DESERT AMERICAN: Voluntary Chapter 11 Case Summary EDDIE BAUER: Case Summary & 30 Largest Unsecured Creditors EDRA BLIXSETH: Court Rejects Plea Not to Liquidate Assets EDDIE BAUER: Files for Chapter 11; To Sell to CCMP for $202MM EMPIRE RESORTS: Hires KPMGCF to Raise $75 Million in Capital E*TRADE FIN'L: Unveils $1.2BB Plan to Strengthen Capital Structure E*TRADE FIN'L: Updates on May 2009 Activity, Loan Delinquencies ETHAN ALLEN: S&P Downgrades Corporate Credit Rating to 'BB' FARMLAND INDUSTRIES: Legal Fees Gives Bankr. Court Jurisdiction FELCOR LODGING: S&P Retains Negative CreditWatch on 'B-' Rating FIRST INDUSTRIAL: Moody's Cuts Senior Unsecured Rating to 'Ba3' FOAMEX INTERNATIONAL: Wayzata Drops Appeal From Sale Order FORD MOTOR: Navistar Hikes Equity Stake in Joint Ventures FORTUNOFF FINE: PBGC Assumes Underfunded Pension Plan GEORGIA GULF: Fitch Downgrades Issuer Default Rating to 'RD' GETRAG TRANSMISSION: Has Liquidating Plan in Detroit Court GLOBE RESTAURANT: Files for Chapter 7 Bankruptcy Protection GOODMAN GLOBAL: Moody's Affirms 'B1' Corporate Family Rating GREG MOSS: Files for Chapter 7; Talks with Trustcash Fall GREAT SMOKEY: Voluntary Chapter 11 Case Summary HARMAN INTERNATIONAL: Equity Offering Won't Move S&P's BB+ Rating HARRAH'S ENTERTAINMENT: HOC Assumes $1.3BB in Note Obligations HARTFORD FINANCIAL: Fitch Puts 'BB+' Ratings on Negative Watch HAWAIIAN TELCOM: Terms of Proposed Reorganization Plan HAWAIIAN TELCOM: Projects Up to 3% Recovery for Senior Noteholders HAWAIIAN TELCOM: Disclosure Statement Hearing on August 11 HAWAIIAN TELCOM: Proposes FBG as Securities Voting Agent HAWAIIAN TELCOM: Seeks September 30 Extension of Plan Period HERBST GAMING: Sr. Sub Notes, Equity Get Nothing Under Plan HEXION SPECIALTY: FTC Sets Aside Ruling on Failed Huntsman Merger HUNTSMAN CORP: FTC Sets Aside Ruling on Failed Huntsman Merger IMPERIAL CAPITAL: Case Summary & 20 Largest Unsecured Creditors INDYMAC BANCORP: Trustee Sues FDIC to Recover $736MM Transfer ISCHUS HIGH: S&P Downgrades Ratings on Class A-1S & A-1J Notes JJJ ENTERPRISES: Voluntary Chapter 11 Case Summary JUANA ORTEGA: Case Summary & 6 Largest Unsecured Creditors KIWA BIO-TECH: In Talks with Investors to Resolve Event of Default LEAR CORP: S&P Changes Recovery Ratings on $1 Bil. Loan to '3' LIBBEY GLASS: Weak Performance Cues Moody's to Junk Ratings LIMITED BRANDS: Fitch Assigns 'BB' Rating on $500 Mil. Notes LINCOLN NAT'L: Fitch Keeps Low-B Ratings on Three Notes LINENS 'N THINGS: Court Confirms Modified Third Amended Plan LUMINENT MORTGAGE: Court Sets June 18 Plan Confirmation Hearing MAGNA ENTERTAINMENT: Updated Case Summary & 50 Unsecured Creditors MAGNACHIP SEMICONDUCTOR: Has Prenegotiated Chapter 11 Plan MAGNACHIP SEMICONDUCTOR: May Use Cash Collateral Until July 8 MARK IV INDUSTRIES: Files Schedules of Assets and Liabilities MARK IV INDUSTRIES: Secured Lenders to Own 92% of Newco Under Plan MARY LUDENA: Case Summary & 14 Largest Unsecured Creditors MGM MIRAGE: Gets Requisite Consents for $750MM Secured Notes MICHAEL CALDARON: Case Summary & 20 Largest Unsecured Creditors MOMENTIVE PERFORMANCE: Issues $200MM of 12-1/2% Notes Due 2014 MORTON INDUSTRIAL: Wins Court OK to Sell Biz for $33MM NANOGEN INC: Court Approves Auction of Assets on June 23 NAVISTAR INT'L: Hikes Equity Stake in Joint Ventures With Ford NORTH SHORE MUSIC: May File for Bankruptcy Protection NORTHSHORE ASSET: Receiver to Hold Auction of Assets on July 10 NTK HOLDINGS: Taps Blackstone and Weil Gotshal as Advisors OMNI LINGUAL SERVICES: Voluntary Chapter 11 Case Summary OPUS SOUTH: Wachovia Bank Agrees to Pay For Firm's Bills OSI RESTAURANT: Chief Operating Office Resigns, CEO Assumes Role PACIFIC ENERGY: Seeks Nov. 4 Plan Deadline; Eyes Asset Sales PAETEC HOLDING: Moody's Assigns 'B1' Rating on $350 Mil. Notes PAETEC HOLDING: S&P Assigns 'B' Rating on $350 Mil. Debt PALM INC: Cuts Board Seats to Eight, Names Rubinstein CEO & Prez PENHALL HOLDING: Moody's Cuts Corporate Family Rating to 'Caa2' PHILADELPHIA NEWSPAPERS: Gets 60-Day Extension for Plan Filing PHILADELPHIA NEWSPAPERS: May Have Special Lawyer for Taping Issue PPLACE TWO: Case Summary & 46 Largest Unsecured Creditors QPC LASERS: Unit's Assets Sale Completion Cues Directors to Resign QUANTUM CORP: Completes Offering of 4.375% Conv. Sub. Notes QUANTUM CORP: Delays Filing of March 31 Form 10-Q Quarterly Report QUANTUM CORP: Will Cease Issuing EMC Corp. Warrant to Buy Shares QUANTUM CORP: Tender Offer Won't Affect S&P's 'CC' Rating QUEBECOR WORLD: S&P Downgrades Ratings on Loan to 'B+' From 'BB-' QUEBECOR WORLD: Committee to Retain Experts for Adversary Cases QUEBECOR WORLD: Proposes Settlement With Vertis, et al. REAL MEX: Mulls Offering of $110 Million Senior Secured Notes REGIONS FINANCIAL: Fitch Cuts Long-Term Issuer Default Rating RESORTS MEZZANINE: Collateral to be Sold at July 7 Public Auction RESERVE MANAGEMENT: To Make Second Payout From Int'l Liquidity RIVIERA HOLDINGS: Files Form 25 With SEC to Delist Common Stock SABRE HOLDINGS: S&P Downgrades Corporate Credit Rating to 'SD' SALEM COMMUNICATIONS: S&P Puts 'B-' Rating on CreditWatch Negative SARAHE ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors SCO GROUP: Inks Deal to Sell Unix Business to Gulf Capital SEA CONTAINERS: Post-Confirmation Report for November 2008 Period SEA CONTAINERS: Post-Confirmation Report for December 2008 Period SEA CONTAINERS: Post-Confirmation Report for March 2009 Period SENDTC INC: Seeks Court Approval on Sale to PHIDS Inc. SHOPPES AT SILVER: Files for Chapter 11 Bankruptcy Protection SIMTROL INC: Files Amendment to Specification of Shares Issued SINCLAIR BROADCAST: Moody's Cuts Corporate Family Rating to 'B3' SMITTY'S BUILDING: Court Confirms Chapter 11 Plan SOUTHWEST ACADIA: Case Summary & 5 Largest Unsecured Creditors SPECTRUM BRANDS: U.S. Trustee Fails to Name Creditors' Committee STAR TRIBUNE: Reaches Tentative Pact With Teamsters Union SWOLEN LLC: Case Summary & 7 Largest Unsecured Creditors TARRAGON CORP: Court Approves KEIP for 8 Dallas Employees TLC VISION: Former CEO to Receive $1-Mil. in Severance Payments TRANS READ: Case Summary & 3 Largest Unsecured Creditors TRUMP ENTERTAINMENT: Donald Trump Submits Offer to Acquire Firm VINEYARD CHRISTIAN: Court Okays Bid Protocol; June 19 Auction Set VINTAGE AT THE MESA: Case Summary & 19 Largest Unsecured Creditors VRAD INVESTMENTS: Voluntary Chapter 11 Case Summary WASHINGTON COUNTY: Will File for Chapter 11 Bankruptcy Protection WATERFORD CUSTOM: Case Summary & 20 Largest Unsecured Creditors WCI COMMUNITIES: Plan Filing Period Extended to June 30 WILLIAM LYON: S&P Raises Corporate Credit Rating to 'CCC-' WR BERKLEY: Moody's Assigns 'Ba1' Initial Preferred Stock Rating ZILA INC: Posts $1.4 Million Net Loss in Quarter ended April 30 * Factory Production and Wholesale Prices Make Record Lows * Gov't Turns Down Auto Suppliers' Plea for Up to $10BB in Aid * Household Wealth Drops $1.3 Trillion in First Quarter * ICSC Retail Bankruptcy Program in Atlantic City on July 10 * Standard & Poor's Says 2009 Defaults Already Higher Than 2008 * Chapter 11 Cases With Assets and Liabilities Below $1,000,000 ********* ABITIBIBOWATER INC: Enters into Amended Securitization Facility --------------------------------------------------------------- AbitibiBowater Inc. has completed an amendment and restating of its existing accounts receivable securitization program for the Company's Abitibi-Consolidated subsidiary. The amended US$270 million program, which Citibank, N.A. and Barclays Capital Inc. led as joint lead arrangers, provides the Company with the liquidity necessary to conduct ongoing business operations during AbitibiBowater's restructuring and allows the previously court- authorized sale of receivables and related rights to continue. "Completing the amendment to this securitization program is an important milestone as we work through the stabilization period of the Company's restructuring process," stated David J. Paterson, President and Chief Executive Officer. "We appreciate the confidence shown by our financial partners as AbitibiBowater strives to emerge, as rapidly as possible, from the creditor protection filings a stronger, more sustainable organization." The Company had obtained an interim court order in the U.S. as well as a Canadian court order authorizing Abitibi-Consolidated to enter into an amended and restated securitization program. 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). ABITIBIBOWATER INC: Seeks to Pay Augusta Newsprint's $9.5MM Claim ----------------------------------------------------------------- AbitibiBowater Inc. and its affiliates seek the U.S. Bankruptcy Court for the District of Delaware's authority to pay the prepetition claims of Augusta Newsprint not to exceed $9.5 million for goods the creditor sold for the period from April 1 through April 15, 2009. The Court notified parties-in-interest that it would convene a hearing on June 4, 2009, to consider Augusta's request. The matter, however, has been adjourned to June 17, as per agreement of the Debtors and Augusta. 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). ABITIBIBOWATER INC: Seeks Canada Court OK to Pay Employees ---------------------------------------------------------- AbitibiBowater Inc. and its Canadian affiliates seek the Quebec Superior Court Commercial Division's authority to: (1) pay unused vacation entitlements or other similar contractual entitlements that had accrued prior to April 17, 2009 to employees who have resigned, have retired or were laid-off, or will resign, retire or be laid-off, before or during the course of their CCAA Proceedings; (2) permit unused Employee Entitlements that had accrued prior to April 17, 2009, to be taken as paid time-off by employees of the CCAA Applicants, or to be paid as lump sum payments under collective bargaining agreements or existing policies; and (3) reimburse expenses or other reimbursable amounts incurred prior to April 17, 2009, by employees or former employees of the CCAA Applicants in the context of their employment, consistent with existing compensation policies and arrangements. Pursuant to the Canadian Court's initial order granting the CCAA Applicants protection from creditors under the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended., the CCAA Applicants are entitled to pay certain amounts that were due or accruing due prior to April 17, 2009. An exception is made for de minimis payments of $2,000 per employee and $50,000 in the aggregate, for which the approval of the Court-appointed Monitor is sufficient. The CCAA Applicants assert that allowing the Entitlements to all their current and former employees, without any pre- or post- filing distinctions, adopts a practical, viable and fair solution which treats all employees equitably, with due regard to the Applicants' financial position. Moreover, the request would be consistent with the position adopted in the context of the Chapter 11 cases, where the Debtors were authorized to pay prepetition wages, salaries, payroll taxes, employee benefits and related expenses in accordance with their existing policies in the ordinary course of their business, the CCAA Applicants contend. 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). ABITIBIBOWATER INC: Settlement With Alabama Power Gets Court Nod ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved a stipulation reached by AbitibiBowater Inc. with Alabama Power Company, with respect to the dismissal of the action commenced by Alabama Power in the Circuit Court of Talladega County, Alabama, seeking damages for past energy overcharges. The Settlement also provides for Alabama Power's concomitant withdrawal of its letter to terminate a contract regarding its provision of electric power for use in the Debtors' newsprint and pulp mill located at Coosa Pines, in Talladega County, Alabama. The parties have noted that the resolution of the Talladega Action represents a savings for the creditors by obviating further litigation, thereby saving the expenses. Judge Kevin Carey allowed the Parties to file a redacted version of the Settlement Agreement to maintain and safeguard its confidentiality. The Court ruled that the Unredacted Version, including exhibits, will remain under seal and not be made available to anyone except to the United States Trustee, the Official Committee of Unsecured Creditors, and any other party as the Court may order. The Parties reasoned out that disclosing the unredacted Settlement Agreement will compromise Alabama Power's negotiating position with other customers. Overcharging Allegations Pursuant to a power supply contract in February 1999, Alabama Power Company agreed to provide electric power to a predecessor- in-interest to Debtor Bowater Alabama LLC, formerly known as Bowater Alabama, Inc., for use in Bowater's newsprint and pulp mill located in Coosa Pines, Talladega County, Alabama. Under the Contract, Alabama Power can only make certain annual increases in energy charges. Bowater Alabama alleged that Alabama Power overcharged them by increasing rates by more than what the Contract allowed. Despite discussions regarding the rate increases, the parties were unable to resolve their disagreement. Alabama Power then sent Bowater Alabama a letter on April 23, 2008, purportedly exercising its rights to terminate the Contract effective May 1, 2009. By April 30, 2008, Bowater Alabama filed a lawsuit against Alabama Power in the Circuit Court of Talladega County, Alabama, seeking: -- damages for past energy overcharges; -- a declaratory judgment ruling that Alabama Power may not overcharge Bowater in violation of the Contract; and -- a declaratory judgment ruling that Alabama Power may not terminate the Contract through the Termination Letter. After engaging in several months of negotiations, the Parties agreed to resolve their dispute by entering into a settlement, which: (a) directs the dismissal of the Talladega Action by Bowater Alabama, without prejudice to Bowater Alabama's rights with respect to all claims, rights and reservations; (b) provides for the concomitant withdrawal of (i) the Termination Letter by Alabama Power, and (ii) Bowater Alabama's declaratory judgment request with respect to Alabama Power's rights to terminate the Contract; (c) acknowledges that the compromise of disputed claims is not an admission of liability or an admission as to any alleged facts; and (d) prohibits the disclosure, publication, or revelation of the Settlement terms to any person or entity other than to the parties' attorneys, accountants, tax advisers, or insurers, or to any court or other government entity which might compel disclosure, or as may be necessary or appropriate to enforce the Settlement terms. The Parties contend that success in the Talladega Action is not guaranteed and further litigation with Alabama Power would likely be costly. Hence, the resolution of the Talladega Action represents a savings for the creditors by obviating further litigation, thereby saving the expenses. 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). ABITIBIBOWATER INC: Court Denies CEP's Request to Lift CCAA Stay ---------------------------------------------------------------- The Honorable Mr. Justice Gascon dismissed a request by The Communications, Energy and Paperworkers Union of Canada, along with George Randell, Wilson Pike, Everett Lambert, Leo Atwood, Robert Taylor, Willis Blake, William Butt, Gerald Pearce, Leonard Higgins, Lloyd Pinsent, Harris Rowsell and Sandy Loveless or the CEP-represented workers, to lift the stay in the restructuring proceedings of AbitibiBowater, Inc., and its Canadian affiliates pursuant to the Companies' Creditors Arrangement Act, to: (1) allow the CCAA Applicants to fulfill their obligations under the Early Retirement Incentive Program; and (2) permit them to file grievances in the case of a violation of the terms and conditions of the ERIP. In an 11-page opinion, the Honorable Judge Gascon held that the Canadian Court should "try to keep at its minimum the maneuvers for positioning" among creditors during the restructuring process and to preserve a delicate status quo while moving along the process swiftly towards a successful compromise or arrangement. The ERIP was established by Abitibi-Consolidated Inc. to help diminish the impact during the reorganization of the workforce through the advancement of mechanization of harvesting on the Employer's operations, as well as the automation and technological changes that will continue to impact the employees. Eligible employees represented by CEP Local 161 who reach age 58 and above receive $1,600 per month until the age of 60, and $1,400 per month until the age of 65. At CEP Local 60-N, eligible employees who reach age 58 and above and that meet the criteria of eligibility, receive $1,400 per month until the age of 60 and $1,200 per month until the age of 65, or until the death of the retiree, whichever occurs first. ERIP-eligible employees in Local 161 are also covered by benefits of life insurance and prescription drugs, which are paid 100% by the employer. Local 60-N employees are also covered by the Benefits, which are paid 65% by the employer and 35% by the employee. The CEP Locals represent a total of 122 employees. Representing CEP, Trudel Nadeau Avocats, SENCRL, in Montreal, Canada, contends that lifting the CCAA Stay will neither impair the CCAA Applicants' ability to continue in business nor obtain an advantage to the detriment of others. In fact, CEP members who are eligible under the ERIP show necessity for payment of their benefits, given that they are months away from retirement and do not have insufficient income, Trudel Nadeau asserts. The Canadian Court held that if the sole criteria of undue hardship and necessity for payment would suffice to lift the CCAA Stay, parties in CCAA proceedings will likely end up devoting time and energy assessing the levels of prejudice caused to one or the other, instead of focusing upon the end result, which is to gather consensus around a fair and reasonable compromise for all. The Canadian Court noted that at the current stage of the Applicants' CCAA Proceedings, the stakeholders are better served by an equal treatment of their positions than by the granting of an undue advantage or preference to some. "The sympathy a Court may feel towards the sad situation of many should not and could not distract it from its supervisory role, and particularly, from its key objective of maintaining, during this restructuring process, a fair but delicate balance between the positions of everyone, no matter how painful it could sometimes be," the Honorable Mr. Justice Gascon said. 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). ACCESS WAREHOUSES: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Access Warehouses, LLC 6100 S. 58th St., Ste. E Lincoln, NE 68516 Bankruptcy Case No.: 09-41673 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court District of Nebraska (Lincoln Office) Debtor's Counsel: John C. Hahn, Esq. Jeffrey, Hahn, Hemmerling & Zimmerman 4701 Van Dorn, Suite 1 Lincoln, NE 68506 Tel: (402) 483-7711 Fax: (402) 483-6133 Email: bankruptcy@jhhz.net Total Assets: $1,131,812 Total Debts: $2,092,754 A full-text copy of the Debtor's petition, including a list of its 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/neb09-41673.pdf The petition was signed by David Miller, member of the Company. ACCURIDE CORP: Erie Unit Closes $2.5MM Improvement Financing ------------------------------------------------------------ Accuride Erie, L.P., a wholly owned subsidiary of Accuride Corporation, completed on June 9, 2009, a so-called Improvement Financing related to Accuride Erie's existing Erie, Pennsylvania, facility, removing all conditions on the effectiveness of, and finalizing, an Amended and Restated Plant Parcel Lease Agreement, between Accuride Erie and Greater Erie Industrial Development Corporation. The Lease replaces a prior lease agreement between Accuride Erie and GEIDC for the same property. The Improvement Financing of roughly $2.5 million is to be used to fund certain building renovations, repairs and improvements. Pursuant to the Lease, Accuride Erie will pay $27,250 each month for a total of 114 months, together with all Additional Rent set forth in the Lease, and thereafter will pay rent of $1.00 per year. Accuride Erie made a $595,000 cash security deposit as of the closing of the financing, a portion of which will be returned to Accuride Erie each year an specified in the Lease. The term of the Lease is 15 years and is subject to certain tenant options to (i) take title to the buildings and convert the Lease to a ground lease for $1.00 per year and extend the Lease for an additional 50 years and (ii) purchase the leased premises for $10.00 plus closing costs and transfer taxes. Accuride Corporation, headquartered in Evansville, Indiana, is a diversified North American manufacturer and supplier of commercial vehicle components. Principal products include wheels, wheel-end components and assemblies, truck body and chassis parts, and seating assemblies. Accuride reported $700.8 million in total assets and $805.0 million in total liabilities as of March 31, 2009, resulting in $104.2 million in stockholders' deficit. * * * As reported by the Troubled Company Reporter on May 20, 2009, Moody's Investors Service lowered Accuride's Corporate Family and Probability of Default Rating to Caa3 from Caa1. In a related action the ratings of the company's first out bank credit facility were lowered to Caa1 from B2, the rating for the senior subordinated bonds was lowered to Ca from Caa2, and a rating of Caa3 was assigned to the company's last-out bank credit facility. The outlook is negative. The TCR said May 15 that Standard & Poor's Ratings Services lowered its corporate credit rating on Accuride to 'CCC' from 'B-'. S&P also lowered its issue-level ratings on the company's senior secured and subordinated debt. The outlook is negative. ADVANTA CORP: Fitch Downgrades Issuer Default Rating to 'RD' ------------------------------------------------------------ Fitch Ratings has downgraded the long-term Issuer Default Rating of Advanta Corp. to 'Restricted Default' due to the initiation of a tender offer for all $100 million of its 8.99% trust preferred securities at 20% of face value. Fitch considers the transaction to be a coercive debt exchange according to its 'Coercive Debt Exchange Criteria' (March 3, 2009). In April 2009, Advanta elected to defer its semi-annual interest payments on the trust preferred securities and Fitch believes that investors who do not participate in the tender offer could face even worse recovery prospects in the event of liquidation. Fitch has downgraded this: Advanta Corp. -- Long-term IDR to 'RD' from 'C'. Fitch also removed the rating from Rating Watch Negative. The rating no longer carries a Rating Outlook or Watch. AGT CRUNCH: U.S. Trustee Says Dechert Has Conflict of Interest -------------------------------------------------------------- A U.S. trustee overseeing the restructuring of AGT Crunch Acquisition LLC claims Dechert LLP is far too caught up in the Debtor's dealings to serve as counsel in the Chapter 11 proceeding, according to Law360. New York-based AGT Crunch Acquisition LLC and its affiliates filed for Chapter 11 on May 6, 2009 (Bankr. S. D. N.Y. Lead Case No. 09-12889). Davin J. Hall, Esq., at Dechert LLP represents the Debtors in their restructuring efforts. Diana G. Adams, the U.S. Trustee for Region 2, appointed seven creditors to serve on the official committee of unsecured creditors in the Debtors' Chapter 11 cases. The Debtors have assets and debts both ranging from $100 million to $500 million. ALLEGHANY CORP: S&P Withdraws 'BB+' Preferred Stock Rating ---------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BBB' unsolicited counterparty credit rating on Alleghany Corp. Standard & Poor's subsequently withdrew this rating and the 'BB+' preferred stock rating. Alleghany's 5.75% mandatory convertible preferred stock had $215 million outstanding as of March 31, 2009. This preferred stock automatically converted into Alleghany common stock on June 15, 2009. 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. AMALGAMATED ARMADILLO: Case Summary & 3 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Amalgamated Armadillo Holdings, LLC 100 Church Street Kissimmee, FL 34741 Bankruptcy Case No.: 09-08454 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: David R. McFarlin, Esq. Wolff, Hill, McFarlin & Herron, P.A 1851 West Colonial Drive Orlando, FL 32804 Tel: (407) 648-0058 Fax: (407) 648-0681 Email: dmcfarlin@whmh.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-08454.pdf The petition was signed by Walter L. Medlin, managing member of the Company. AMERICAN HOUSING: To Pursue Late CEO's $24MM Life Insurance ----------------------------------------------------------- According to Bloomberg's Bill Rochelle, American Housing Foundation aims to undo former Chief Executive Steve Wright Sterquell's decision to switch beneficiaries on $24 million in insurance policies on his life. AHF, the report relates, said that the April 1 death of Mr. Sterquell in an auto accident was "determined to be suicide." AHF was previously the beneficiary of Mr. Wright's insurance policies. However, in the weeks before his death, Mr. Sterquell changed the beneficiaries to "various trusts controlled by or for the benefit of" Mr. Sterquell or his family. AHF has filed a suit to recover the $24 million, citing that it was a fraudulent transfer. AHF said it had discovered after Sterquell's death that the organization had $26.3 million in debt owing to certain creditors. About American Housing Founded as a Texas 501(c)(3) non-profit corporation in 1989, American Housing Foundation 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. AHF filed for Chapter 11 on June 11, 2009 (Bankr. N.D. Tex. Case No. 09-20373) Judge Robert L. Jones handles the case. Robert Yaquinto, Jr., Esq., at Sherman & Yaquinto, LLP, represents the Debtor. At the time of the filing, AHF estimated it had assets and debts of $100 million to $500 million. Nine creditors filed an involuntary petition to send AHF to Chapter 11 in April. Robert L. Templeton, who asserts a $5.1 million claim on account of an investment, has the largest claim among the petitioners, which are being represented by David R. Langston, Esq., at Mullin, Hoard & Brown, in Lubbock, Texas. AMERICAN INT'L: Says Maurice Greenberg Improperly Seized Shares --------------------------------------------------------------- Chad Bray at The Wall Street Journal reports that American International Group's lawyer, Theodore Wells said that Maurice R. Greenberg improperly seized in 2005 control of millions of shares of the Company's stock held by sister company Starr International Co. According to WSJ, Mr. Wells said that Mr. Greenberg was angry and vindictive after being forced out as AIG's CEO. Mr. Greenberg, through Starr International, breached a trust agreement in which the shares would be used to fund a deferred-compensation plan for select AIG executives, WSJ states, citing Mr. Wells. Mr. Wells said that Starr International used the stock for 35 years to fund a deferred-compensation plan in which participating AIG executives received compensation from the plan when they retired from the Company, but that changed after Mr. Greenberg was forced out, WSJ relates. WSJ, citing Mr. Wells, says that Mr. Greenberg threw eight AIG executives off Starr International's board and took control of the shares. Starr International's lawyers, David Boies, contended that AIG wasn't a beneficiary of the trust and has no right to the shares at issue, WSJ states. Citing Mr. Boies, the report says that the block of shares was placed with Starr International to protect AIG from a takeover bid, to go to charity if Starr were liquidated and to fund other projects, like compensation for select AIG executives. Based in New York, American International Group, Inc. (AIG), is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on September 8, 2008, to $4.76 on September 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These factors and other events severely limited AIG's access to debt and equity markets. On September 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At September 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since September 30, 2008, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. Certain of AIG's domestic life insurance subsidiaries subsequently entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On November 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG more time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At September 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMH HOLDINGS: Exchange Agreement Won't Affect S&P's 'CCC+' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'CCC+' corporate credit ratings and negative outlook on AMH Holdings Inc. and its operating subsidiary, Cuyahoga Falls, Ohio-based Associated Materials Inc., are unchanged following the company's announcement that it has entered into an exchange agreement. AMH Holdings II Inc., an indirect parent company of AMI, is exchanging its outstanding 13.625% senior notes due 2014 for $20 million of cash and $13.066 million of new 20% senior notes due 2014. AMH Holdings II is an unrated entity and its senior notes due 2014 are not rated by Standard & Poor's. The ratings and outlook on AMH Holdings and AMI incorporate a highly leveraged financial profile and a significant increase in cash interest expense starting September 2009. Following the completion of the proposed exchange, there will be $20 million of new senior subordinated notes due 2012 issued by AMI in a private placement, partially offset by a reduction of debt obligations at AMH II. ANCHOR BLUE: DIP Financing From Wachovia Bank Has Interim Approval ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized, on an interim basis, Anchor Blue Retail Group Inc. and its debtor- affiliates to: a) obtain postpetition loans, advances and other financial accommodations from Wachovia Bank, national Association, as agent and the other revolving loan lenders; b) use cash collateral; and c) grant adequate protection. The Bankruptcy Court has yet to grant final approval of the DIP financing. As of Anchor Blue's petition date, the amount of all revolving loans, letters of credit accommodations and other prepetition obligations owed was $20,193,970, plus interest accrued and accruing. The amount of all term loans and other prepetition obligations owed to Ableco Finance LLC, as agent and the revolving loan lenders was $76,327,692, plus interest accrued and accruing thereon. The prepetition revolving loan obligations were fully secured, and the prepetition term loan obligations secured by valid, perfecter and enforceable and non-avoidable first priority security interests and liens. The Debtors obtained commitments from administrative agents and revolving loan lenders to extend certain loans, advances and other financial accommodations. The Debtors were unable to procure financing in a form of unsecured credit, without the grant of liens on assets. Terms of the PostPetition Financing Agreements Cross Collateralization: Pursuant to the interim order, all postpetition revolving loan obligations of the Debtors are secured by all of the prepetition and postpetition collateral. The Debtors believe that this provision does not impair the rights of other creditors. Maturity Date: The term will end on the earlier of (i) 100 days after the petition date; (ii) the confirmation of a Plan of Reorganization or liquidation of any Debtor in the cases; (iii) payment in full of the revolving loan obligations unless the T/L revolving loan effective date has occurred or (iv) the last termination date, unless the final order has been entered prior to the date, and in the event, then the last termination date set forth in the final order. Security: The administrative agent, the revolving loan lenders, the bank product providers and the T/L revolving loan lenders, is granted continuing security interest in and liens upon, and rights of setoff against, all of the postpetition collateral. Fees: (i) DIP facility fee: $350,000 paid to the adminsitrative agent; and (ii) the letter of credit fee: rate equal to 4% per annum on the daily outstanding balance of the letter of credit accommodations for the immediately preceding month except that the rate may be increased by the administrative agent, upon written direction of the required revolving loan lenders to a rate equal to 6% per annum on the daily outstanding balance for: (1) the period from and after the date of termination until the administrative agent and the revolving loan lenders have received payment in full of all the revolving loan obligations; and (2) upon the direction of the required loan lenders, the period from and after the date of the occurrence of an event of default for so long as the event of default is continuing as determined by the agent in good faith. Interest Rate: The interest rate will be the prime rate plus 2.5% provided that the interest will increase by 2% at the administrative agent's option, without notice. Superpriority Claim: For all postpetition revolving loan obligations, the administrative agent and revolving loan lenders are granted an allowed superpriority administrative claim, having priority in right of payment over any and all other obligations. Cash Collateral: In exchange for adequate protection for the diminution in value of their interests in the prepetition collateral, the Debtors will be authorized to use, until the expiration of the administrative agent's and revolving loan lenders' commitment to lend under the loan agreement and other financing agreements, the cash collateral, subject to the prepetition liens and security interests granted for the benefit of revolving loan lenders. Sale of Assets: The Debtors are require to file separate motions seeking approval of bidding procedures with respect to (i) the sale of all or substantially all of the Most Purchasing Corp.'s assets; and (ii) the sale of all or substantially all of Anchor Blue assets. 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. ANCHOR BLUE: To Close Additional 14 Stores ------------------------------------------ Anchor Blue Retail Group, Inc. and its affiliates ask Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware for authority to close 14 additional retail stores: * Burbank, CA/Media City Center * Norwalk, CA/Norwalk Town Square (AB Outlet) * Westminster, CO/Westminster Mall * Lakewood, CO/Colorado Mills * Chino, CA/Chino Spectrum TC * Fairfield, CA/Westfield Solano * San Bruno, CA/Shops at Tranforan * Simi Valley, CA/Simi Valley TC * Laredo, TX/Mall del Norte * Roswell, NM/Roswell Mall (AB Outlet) * Reno, NV/Meadowwood Mall * Sante Fe, NM/Sante Fe Place * Henderson, NV/Galleria @ Sunset * Layton, UT/Layton Hills Mall As part of the bankruptcy filing, Anchor Blue reached a stalking horse agreement with Levi Strauss & Co. regarding the purchase of the Levi's & Dockers Outlet by MOST stores. The Company said this will enable the ongoing operation of the business and provide the best possible outcome for employees and vendors. In addition, the Company negotiated a stalking horse agreement with nationally recognized financial institutions to purchase its Anchor Blue Division in collaboration with the current senior management team. Judge Walsh approved bidding procedures and set June 26 as auction date to determine whether anyone will beat the offer from Levi Strauss to buy 73 of the 74 Levi's & Dockers Outlet by MOST stores for $72 million. Competing bids are due June 24. The hearing to approve the MOST sale will take place June 30. The deal to sell some 127 Anchor Blue stores to current management and Ableco Finance LLC, the agent for the term loan lenders, will be tested at a July 27 auction to see if there's another bid and will be followed by a sale approval hearing on July 30. Ableco will pay for the stores largely in exchange for secured debt, including debt provided for the Chapter 11 case. The remaining 50 stores will be closed in going-out-of-business sales. Gordon Brothers Retail Partners LLC has the stalking horse bid for the GOB sales. The Debtors now seek to add 14 more stores to that list. Under the Debtors' agreement with its stalking horse bidder for the liquidation sales, the Debtors were to receive 114% of the "aggregate Cost Value of the Merchandise" sold at the GOB sales, but only if the aggregate Cost Value is between $6.5 million and $7.5 million. If the aggregate Cost Value is outside of that range (either higher or lower), Anchor Blue's guaranteed percentage is lower. The Debtors decided to add 14 stores to the GOB store list after determining there is a significant possibility that the $6.5 million Merchandise Threshold will not be reached if Store Closing Sales are conducted only at those stores listed on the original Closing Stores List. About Anchor Blue Anchor Blue Retail Group Inc. is a 251-store casual wear retailer. 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 and debts between $100 million to $500 million. APPALACHIAN OIL: NRC to Hold Sealed Bid Sale; July 9 Deadline Set ----------------------------------------------------------------- NRC Realty Advisors, LLC, the court designated agent for the sealed bid sale of 47 fully equipped operating convenience stores & gasoline service stations of Appalachian Oil Company, says that it will be accepting final bids for the assets no later than July 9, 2009. Twenty-four of the stores/gasoline service stations are located in Tennessee, 14 in Virginia and 9 in Kentucky. For more information, please call NRC Realty at (800) 747-3342, ext. 906 or visit http://www.NRC.com/906 About Appalachian Oil Bountville, Tennessee-based Appalachian Oil Co. is a fuel distributor and operator of 60 convenience stores. It has 22.5 million-gallon terminal serving customers in six states. Titan Global Holdings purchased Appco in September 2007. Appco operates 55 stores in Northeast Tennessee, Southwest Virginia, and Southeast Kentucky. Appalachian Oil sought Chapter 11 protection before the U.S. Bankruptcy Court for the Eastern District of Tennessee on February 9, 2009 (Case No. 09-50259). Mark S. Dessauer, Esq., at Hunter, Smith & Davis, in Kingsport, Tennessee, represents the Debtor as counsel. In its petition, the Debtor listed assets between $10 million and $50 million and the same range of debt. The Company's creditors with the biggest unsecured claims are BP Plc's Amoco/BP, owed $2.41 million, and fuel distributor Crescent Oil Co., owed $1.6 million. ASARCO LLC: Brattle Group's Testimony Contributes to Settlement --------------------------------------------------------------- Testimony provided by The Brattle Group contributed to the recent approval of ASARCO LLC's motion to settle environmental claims at 53 sites nationwide for $1.1 billion. The settlement was one part of ASARCO LLC's bankruptcy proceeding in the Southern District of Texas/Corpus Christi Division. Previously settled environmental claims had a value of $530 million, bringing the overall environmental settlements to approximately $1.6 billion. Gayle Koch and Greg Brusseau, principals of The Brattle Group and environmental and product liability cost estimation experts, worked on behalf of the U.S. Department of Justice and the State of Washington. They supported several claims brought against ASARCO LLC by 48 federal and state agencies. The large number of environmental claims resulting from both historical and current operations makes this the largest environmental bankruptcy in U.S. history. As part of the environmental claim estimation process in the case, U.S. Bankruptcy Court Judge Richard Schmidt conducted an evidentiary hearing on May 18 and 19, 2009, to address objections to the remaining settlements. Prior to this evidentiary hearing and after years of negotiations, ASARCO LLC and the various government organizations developed a comprehensive settlement comprised of five separate settlement agreements that resolved approximately $3.5 billion of environmental claims against the bankruptcy estate. Total demands, including previously settled claims, approached approximately $6.5 billion. On June 5, 2009, the Court ruled in favor of ASARCO LLC, to the satisfaction of both the debtor and the governmental creditors, and cited the estimates of Ms. Koch and Dr. Brusseau at several points in the findings of fact and conclusions of law. The ruling culminated a three-year process to estimate the liability at the sites, and is a critical step for ASARCO LLC to exit bankruptcy. The Brattle Group had participated in these estimation proceedings since 2007. Ms. Koch, head of The Brattle Group's Environmental/Mass Tort Practice, said, "The decision shows the importance of evaluating information from all parties and taking into account the full range of risk when estimating environmental liabilities, whether for litigation or disclosure purposes." The Brattle Group -- http://www.brattle.com/-- provides consulting services and expert testimony in economics and finance to corporations, law firms, and public agencies worldwide. Areas of expertise include valuation and damages, litigation risk assessment, and regulation and strategy in a variety of industries. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). ASARCO LLC filed a plan of reorganization on July 31, 2008, premised on the sale of the Debtors' assets to Sterlite USA for $2.6 billion. By October 2008, ASARCO LLC informed the Court that Sterlite refused to close the proposed sale and thus, the Original Plan could not be confirmed. The parties has since renewed their purchase and sale agreement and ASARCO LLC has obtained Court approval of a settlement and release contained in the new PSA for the sale of the ASARCO assets for $1.1 billion in cash and a $600 million note. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted its own plan which allows it to keep its equity interest in ASARCO LLC by offering full payment to ASARCO's creditors. AMC offered provide up to $2.7 billion in cash and a $440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Two Parties Object to Sale of Perth Amboy Property -------------------------------------------------------------- PA-PDC Perth Amboy Urban Renewal, LLC, asks the U.S. Bankruptcy Court for the Southern District of Texas to deny Asarco LLC's request to sell property in Perth Amboy, New Jersey, to RLF Perth Amboy Properties, LLC, and TRC Companies, Inc., because ASARCO LLC's interest under Section 541 of the Bankruptcy Code in the Property was already defined by applicable non-bankruptcy law, like the New Jersey redevelopment law, as of the Petition Date. ASARCO's at-filing interest in the Property is not subject to a private sale conditional on higher and better offers, as proposed by the Debtors, argues David S. Gragg, Esq., Langley & Banack, Inc., in San Antonio, Texas. Pursuant to the United States Supreme Court's ruling in Butner v. U.S., 440 U.S. 48 (1979), the bidding process and overbid/break up fees are objectionable because they are inconsistent with the procedures for acquisition of property for a redevelopment project, as the property entered bankruptcy already subject to a different process for establishment of fair market value pursuant to applicable non-bankruptcy law, Mr. Gragg contends. He insists that the process proposed is inherently unfair in that it does not provide prospective purchasers of the Property with sufficient time or access to conduct meaningful due diligence. For its part, Morris Realty Associates, LLC, argues that the proposed sale is the result of a flawed and unfair process, which has been obstructed by the proposed purchaser and which will not result in the best and highest offer for the sale being achieved. Morris Realty asserts that the proposed sale does not qualify for a finding of good faith pursuant to Section 363(m) of the Bankruptcy Code. "Indeed, notwithstanding the fact that the proposed Sale purports to have been subject to higher and better offers, it is in fact a private sale," William S. Katchen, Esq., at Duane Morris LLP, in Newark, New Jersey, tells the Court. "Potential purchasers of the ASARCO property -- such as Morris Realty -- have not been given any, let alone sufficient, time or access to the property and the relevant records to conduct meaningful due diligence and submit additional bids, he alleges. Because of the manner in which the proposed sale was handled and interfered with by the proposed purchaser, it was not subjected to competitive bidding, and should not be approved, Morris Realty insists. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). ASARCO LLC filed a plan of reorganization on July 31, 2008, premised on the sale of the Debtors' assets to Sterlite USA for $2.6 billion. By October 2008, ASARCO LLC informed the Court that Sterlite refused to close the proposed sale and thus, the Original Plan could not be confirmed. The parties has since renewed their purchase and sale agreement and ASARCO LLC has obtained Court approval of a settlement and release contained in the new PSA for the sale of the ASARCO assets for $1.1 billion in cash and a $600 million note. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted its own plan which allows it to keep its equity interest in ASARCO LLC by offering full payment to ASARCO's creditors. AMC offered provide up to $2.7 billion in cash and a $440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASSOCIATED MATERIALS: Exchange Pact Won't Affect S&P's CCC+ Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its 'CCC+' corporate credit ratings and negative outlook on AMH Holdings Inc. and its operating subsidiary, Cuyahoga Falls, Ohio-based Associated Materials Inc., are unchanged following the company's announcement that it has entered into an exchange agreement. AMH Holdings II Inc., an indirect parent company of AMI, is exchanging its outstanding 13.625% senior notes due 2014 for $20 million of cash and $13.066 million of new 20% senior notes due 2014. AMH Holdings II is an unrated entity and its senior notes due 2014 are not rated by Standard & Poor's. The ratings and outlook on AMH Holdings and AMI incorporate a highly leveraged financial profile and a significant increase in cash interest expense starting September 2009. Following the completion of the proposed exchange, there will be $20 million of new senior subordinated notes due 2012 issued by AMI in a private placement, partially offset by a reduction of debt obligations at AMH II. ASYST TECHNOLOGIES: Bid Protocol Approved; July 17 Hearing Set -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California has approved bid proredures for the sale of substantially all of the assets of Asyst Technologies, Inc., through an auction process. The hearing on the sale motion will be held on July 17, 2009, at 10:00 a.m. A copy of the approved bid procedures is available at: http://bankrupt.com/misc/Asyst.bIdprocedures.pdf 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., Janet D. Gertz, Esq., and Rayla Dawn Boyd, Esq., at the Law Offices of Baker and McKenzie, represent the Debtor as counsel. Andrew I. Silfen, Esq., Mette H. Kurth, Esq., Michael S. Cryan, Esq., and Schuyler G. Carroll, Esq., at Arent Fox LLP, represent the official committee of unsecured creditors as counsel. 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. Kosei Watanabe was appointed as Trustee of Asyst Japan Holdings and ATJ. ASYST TECHNOLOGIES: Can Use Lenders' Cash Collateral 'til June 30 ----------------------------------------------------------------- The U.S. Bankruptcy Court or the Northern District of California has granted Asyst Technologies, Inc., permission, on a final basis, to use cash collateral of KeyBank National Association, as agent for itself and the prepetition lenders, from the petition date through June 30, 2009, in accordance with a budget. In its motion, the Debtor told the Court that the use of cash collateral is necessary to maintain its operations and preserve and maximize the value of the assets of its estate, thus increasing the possibility of the sale of the Debtor as a going concern. As of the petition date, the Debtor was indebted to prepetition lenders in the principal amount of not less than $77 million plus accrued prepetition interests, cost and fees and other obligations. The Debtor's use of cash collateral will immediately and automatically terminate, except as KeyBank may otherwise agree in writing in its sole discretion, upon the earliest to occur of certain termination events. These termination events include the dismissal or conversion to Chapter 7 of the Debtor's case, the appointment of any trustee or any examiner with powers beyond those prescribed by sections 1106(a)(3) and (4) of the Bankruptcy Code, the effective date of any plan of reorganization in the Debtor's casese, and failure by the Debtor to file a motion to sell substantially all of its assets on or before June 3, 2009, unless extended by written agreement between the Agent and the Debtor on or prior to the occurrence of said date. As adequate protection for, and to the extent of any collateral diminution, the Agent and the lenders are granted, in addition to all existing security interests in the prepetition collateral, postpetition interests in, and replacement liens on, all real property and assets of the Debtor, whether now owned or hereafter acquired by the Debtor, and all proceeds thereof. Lenders are also granted a "superpriority claim" allowed under section 507(b) of the Bankrutpcy Code, subordinate only to the Carve-Out for the fees of professionals retained by the Debtor and unpaid fees payable to the Clerk of the Court or the U.S. Trustee. 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., Janet D. Gertz, Esq., and Rayla Dawn Boyd, Esq., at the Law Offices of Baker and McKenzie, represent the Debtor as counsel. Andrew I. Silfen, Esq., Mette H. Kurth, Esq., Michael S. Cryan, Esq., and Schuyler G. Carroll, Esq., at Arent Fox LLP, represent the official committee of unsecured creditors as counsel. 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. Kosei Watanabe was appointed as Trustee of Asyst Japan Holdings and ATJ. AUDIO VISUAL: Moody's Cuts Corp. Family Rating to B2; Outlook Neg. ------------------------------------------------------------------ Moody's Investors service downgraded all the credit ratings of Audio Visual Services Group, Inc., and changed the outlook to negative. The Corporate Family Rating and Probability of Default Rating were lowered to B2 from B1, the first lien senior secured credit facility rating was lowered to B1 from Ba3 and the second lien senior secured term loan rating was lowered to Caa1 from B3. The B2 Corporate Family Rating and negative outlook reflect Moody's expectations that AVSG's medium-term revenues and operating results will be materially lower than previous projections as a result of the macroeconomic decline that has reduced demand for business travel and corporate meetings. Subsequent to the actions, AVSG's ratings will be withdrawn because Moody's believes it lacks adequate information to maintain a rating. Refer to Moody's Withdrawal Policy on moodys.com. These ratings were downgraded: -- $30 million first lien revolving credit facility due 2013, to B1 (LGD3, 37%) from Ba3 (LGD3, 37%) -- $223 million first lien term loan due 2014, to B1 (LGD3, 37%) from Ba3 (LGD3, 37%) -- $60 million second lien term loan due 2014, to Caa1 (LGD5, 88%) from B3 (LGD5, 88%) -- Corporate family rating, to B2 from B1 -- Probability of default rating, to B2 from B1 The previous rating action on AVSG occurred on February 9, 2007, when Moody's assigned an initial CFR of B1. AVSG provides audiovisual and event technology support to hotels, event production companies, trade associations, convention centers and corporations in North America and Europe. AVIS BUDGET: Moody's Takes Rating Actions on Four Series of Notes ----------------------------------------------------------------- Moody's has taken rating actions with respect to four series of rental car asset backed notes issued by Avis Budget Rental Car Funding, LLC, a subsidiary of Avis Budget Rental Car LLC, owner/ operator of Avis Rent A Car and Budget Rent A Car. This results in changes to three ratings actions announced March 3, 2009, and one rating action taken on April 13, 2009. The rating actions reflect in part Moody's determination that the prior actions had relied on an inappropriate model assumption relating to the cost of interest, and additionally reflect updated collateral mix and OEM default assumptions. The current ratings on the notes are consistent with Moody's practice of rating insured securities at the higher of the guarantor's insurance financial strength rating and the underlying rating, based on Moody's modified approach to rating structured finance securities wrapped by financial guarantors. The underlying ratings reflect the intrinsic credit quality of the notes in the absence of the guarantee. Complete Rating Actions: Issuer: Avis Budget Rental Car Funding LLC -- Series 2003-4, Rental Car Asset-Backed Notes, Class A-4, currently Ba3, previously on March 3, 2009, downgraded to B2. -- Financial Guarantor: Syncora Guaranty Inc., Ca, developing outlook. -- Series 2005-1, Rental Car Asset-Backed Notes, Class A-3, currently Ba3, previously on March 3, 2009, downgraded to B1. -- Financial Guarantor: MBIA Insurance Corp., B3, developing outlook. -- Series 2006-1, Rental Car Asset-Backed Notes, currently Ba1, previously on March 3, 2009 downgraded to Ba3. -- Financial Guarantor: MBIA Insurance Corp., B3, developing outlook. -- Series 2007-2, Rental Car Asset-Backed Notes, currently Ba1, previously on April 13, 2009 downgraded to Ba3. -- Financial Guarantor: Ambac Assurance Corp., Ba3, developing outlook. Principal Rating Methodology The primary asset backing the downgraded transactions is an interest in a loan indirectly secured by vehicles comprising the bulk of the Avis and Budget daily rental car fleets, including both 'program' vehicles (acquired vehicles subject to repurchase by the related auto manufacturer at pre-set prices) and non- program vehicles (acquired vehicles that do not benefit from such repurchase agreements). The key factors in Moody's rating analysis include the probability of default of ABCR, the likelihood of bankruptcy default of the auto manufacturers providing vehicles to the rental car fleet owned by RCF, and the recovery rate on the rental car fleet in case ABCR defaults. Monte Carlo simulation modeling was used to assess the impact on bondholders of these variables. The default probability of ABCR was simulated based on its current corporate family rating and Moody's idealized default rates. Like all rental car companies, ABCR's fleet (the majority of which is owned by RCF) includes both program cars and non-program or 'risk' cars. Under the terms of the simulation, in cases where ABCR does not default then it is assumed that bondholders are repaid in full and no liquidation of the RCF rental car fleet is necessary. In cases where ABCR does default, the RCF fleet must be liquidated in order to repay bondholders. In those cases, defaults of the related auto manufacturers must also be simulated. Due to the Detroit Three's current highly uncertain credit status, their defaults were simulated based on estimates for probability of default provided by Moody's corporate analysts which incorporated estimates for the likelihood of both Chapter 7 and Chapter 11 bankruptcies as well as the potential, in a Chapter 11 scenario, for an auto manufacturer to honor its repurchase obligation. In simulating liquidation of the rental car fleet following an ABCR default, it is assumed the non-program fleet will be sold at the end of a six-month delay period with certain haircuts to the estimated market value of the vehicles at time of liquidation. The delay is incorporated to reflect potential legal challenges to obtaining control of the fleet and the potential difficulties of marshaling and selling such a large quantity of vehicles. If at the same time an auto manufacturer also defaults, additional haircuts are assumed for its portion of the fleet. Moody's assume more stressful haircuts for a Chapter 7 filing by the manufacturer than for a Chapter 11 reorganization. For program vehicles, it is assumed that when ABCR defaults, the program vehicles will be disposed of based on the default status of each related manufacturer. If a manufacturer does not default, then, at the end of the six-month delay period, that manufacturer's program vehicles will be turned back to the manufacturer based on the terms of the buyback agreement. If the manufacturer is assumed to be in Chapter 11, Moody's assume that there is a certain probability that the buyback obligation nevertheless will be honored. If the buyback agreement is honored, the program vehicles will be put back to the manufacturers based on the buyback agreement. If the buyback agreement is rejected, then it is assumed that the defaulting manufacturer's program vehicles will be sold as risk vehicles in the auction market, with the haircut for risk vehicles in Chapter 11 applied. If a manufacturer is assumed to be in Chapter 7, then Moody's assume that the buyback agreement is never honored and the manufacturer's program vehicles will be liquidated as risk vehicles in the auction market, with the haircut for risk vehicles in Chapter 7 applied. In all cases, the market value of a vehicle at time of liquidation is estimated using market depreciation data from the National Automobile Dealers Association for each manufacturer in the collateral pool. Recovery rate is calculated as disposal proceeds divided by book value (value under the terms of the securitization) at the time of disposal. BANK OF AMERICA: Court Can Retry Former Merrill Executives' Case ---------------------------------------------------------------- The Associated Press reports that the 5th U.S. Circuit Court of Appeals has upheld a Houston federal judge's 2008 ruling that the three former Merrill Lynch & Co. executives connected to an Enron Corp. deal can be retried. The Appeals Court said that the retrial of Daniel Bayly, James A. Brown, and Robert S. Furst wouldn't breach their constitutional protections against double jeopardy, WSJ states. WSJ relates that Messrs. Bayly, Brown, and Furst are accused of helping push through Enron's sham sale of three power barges moored off the coast of Nigeria to the brokerage in 1999, inflating earnings in Enron's energy division. According to WSJ, Messrs. Bayly, Brown, and Furst were convicted in 2004 of conspiracy and wire fraud, but the 5th Circuit in New Orleans threw out their convictions in 2006 after finding fault with the government's legal theory in the case. 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. BANKUNITED FINANCIAL: Court Approves Interim Trading Procedures --------------------------------------------------------------- On June 9, 2009, the U.S. Bankruptcy Court for the Southern District of Florida, upon the motion of BankUnited Financial Corporation, et al., entered an interim order approving trading procedures and restrictions on certain transfers of interests in the Debtor, to preserve the Debtors' valuable net operating loss carryforwards and certain other tax attributes. Any acquisition, disposition or other transfer in violation of the restrictions will be null and void ab initio as an act in violation of the automatic stay under sections 105(a) and 362 of the Bankruptcy Code. Notice of Substantial BUFC Equity Securities Ownership Any person or entity that beneficially owns, at any time, on or after the Motion Date, BUFC Equity Securities in an amount sufficient to qualify such person or entity as a Substantial Equityholder will file with the Court, and serve upon the Debtors, their counsel, and counsel for the Creditors' Committee, a Notice of Substantial Stock Ownership on or before the date that is the later of: (a) ten (10) days after the entry of the Interim Order or (b) ten (10) days after that person or entity qualifies as a Substantial Equityholder. Acquisition of BUFC Equity Securities or Options At least twenty (20) calendar days before the proposed date of any transfer of equity securities (including Options to acquire such securities) that would result in an increase in the amount of BUFC Equity Securities beneficially owned by any person or entity that currently is or becomes a Substantial Equityholder or that would result in a person or entity becoming a Substantial Equityholder, such person, entity or Substantial Equityholder will file with the Court, and serve upon the Debtors, their counsel, and counsel for the Creditors' Committee, a Notice of Intent to Purchase, Acquire, or Otherwise Accumulate BUFC Equity Securities specifically and in detail describing the proposed transaction in which BUFC Equity Securities would be acquired. Disposition of BUFC Equity Securities or Options At least twenty (20) calendar days before the proposed date of any transfer of equity securities (including Options to acquire such securities) that would result in a decrease in the amount of BUFC Equity Securities beneficially owned by a Substantial Equityholder or that would result in a person or entity ceasing to be a Substantial Equityholder, such person, entity or Substantial Equityholder will file with the Court, and serve upon the Debtors, their counsel, and counsel for the Creditors' Committee, a Notice of Intent to Sell, Trade or Otherwise Transfer BUFC Equity Securities specifically and in detail describing the proposed transaction in which BUFC Equity Securities would be transferred. A "Substantial Equityholder" is any person that beneficially owns at least: (i) 4.75% of all issued and outstanding shares of BUFC's Class A Common Stock; (ii) 4.75% of all issued and outstanding shares of BUFC's Class B Common Stock; (iii) 4.75% of all issued and outstanding shares of BUFC's Noncumulative Convertible Preferred Stock, Series B; (iv) 4.75% of all issued and outstanding notes of BUFC's Senior Convertible Notes; (v) 4.75% of all issued and outstanding units of BUFC's HiMEDS Units; or (vi) any combination of the foregoing BUFC Equity Securities identified in (i) through (v) above that, upon purchase, sale, or conversion, would in the aggregate constitute, 4.75% of the issued and outstanding shares of either BUFC's Class A Common Stock, Class B Common Stock, or both. A final hearing to determine whether the procedures will be approved on a inal basis will be held on June 30, 2009. BankUnited Financial Corporation -- http://www.bankunited.com/-- was the holding company for BankUnited FSB, the largest banking institution headquartered in Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed by regulators and the Federal Deposit Insurance Corporation facilitated a sale of the bank to a management team headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank, and a group of investors led by W.L. Ross & Co. BankUnited, FSB, had assets of $12.8 billion and deposits of $8.6 billion as of May 2, 2009. The Company and its affiliates filed for Chapter 11 on May 22, 2009, (Bankr. S.D. Fla. Lead Case No.: 09-19940) Stephen P. Drobny, Esq. and Peter Levitt, Esq. at Shutts & Bowen LLP represents the Debtors in their restructuring efforts. The Debtors' financial condition as of March 31, 2009, showed total assets of $37,729,520 and total debts of $559,740,185. The Debtors have $237,261,000 trust preferred securities, $120,000,000 convertible subordinated senior notes, $12,500,000 junior subordinated debentures, and $184,000,000 convertible subordinated senior HiMEDS. The Debtors listed 1,226,853 noncumulative convertible preferred stock, Series B; and $35,507,988 Class A and 719,947 Class B shares of common stock. BANKUNITED FINANCIAL: Court Limits Equity Trades to Protect NOLs ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida has entered an interim order establishing procedures and restrictions on certain transfers of interests in debtors BankUnited Financial Corporation, BankUnited Financial Services, Incorporated, and CRE America Corporation, and their non-debtor affiliates. The Court held that (i) the Debtors' interests in BankUnited's consolidated net operating loss carryforwards and certain other tax attributes are property of the Debtors' estates and are protected by Section 362(a) of the Bankruptcy Code; and (ii) trading in BUFC Equity Securities could severely limit the Debtors' ability to use the Tax Attributes for purposes of title 26 of the United States Code. Any person or entity that beneficially owns BUFC Equity Securities in an amount sufficient to qualify such person or entity as a Substantial Equityholder must file with the Court, and serve upon the Debtors, their counsel, and counsel for the Creditors' Committee, a Notice of Substantial Stock Ownership specifically and in detail describing the BUFC Equity Securities ownership on or before the later of: (a) 10 days after the entry of the Interim Order; or (b) 10 days after that person or entity qualifies as a Substantial Equityholder. "BUFC Equity Securities" mean (i) Class A Common Stock; (ii) Class B Common Stock; (iii) Noncumulative Convertible Preferred Stock, Series B; (iv) $125 million 3.125% Convertible Senior Notes due 2034; and (v) $184 million 6.75% HiMEDS Units issued 2007. A "Substantial Equityholder" is any person or entity that beneficially owns at least: (i) 4.75% of all issued and outstanding shares of BUFC's Class A Common Stock; (ii) 4.75% of all issued and outstanding shares of BUFC's Class B Common Stock; (iii) 4.75% of all issued and outstanding shares of BUFC's Noncumulative Convertible Preferred Stock, Series B; (iv) 4.75% of all issued and outstanding notes of BUFC's Senior Convertible Notes; (v) 4.75% of all issued and outstanding units of BUFC's HiMEDS Units; or (vi) any combination of the BUFC Equity Securities that, upon purchase, sale, or conversion, would in the aggregate constitute 4.75% of the issued and outstanding shares of either BUFC's Class A Common Stock, Class B Common Stock, or both. At least 20 calendar days before the proposed date of any transfer of equity securities that would result in an increase in the amount of BUFC Equity Securities beneficially owned by any person or entity that currently is or becomes a Substantial Equityholder or that would result in a person or entity becoming a Substantial Equityholder, the entity must file with the Court and serve a Notice of Intent to Purchase, Acquire or Otherwise Accumulate BUFC Equity Securities specifically and in detail describing the proposed transaction in which BUFC Equity Securities would be acquired. At least 20 calendar days prior to the proposed date of any transfer of equity securities that would result in a decrease in the amount of BUFC Equity Securities beneficially owned by a Substantial Equityholder or that would result in a person or entity ceasing to be a Substantial Equityholder, the entity must file with the Court, and serve a Notice of Intent to Sell, Trade or Otherwise Transfer BUFC Equity Securities specifically and in detail describing the proposed transaction in which BUFC Equity Securities would be transferred. The Debtors and the Creditors' Committee may object to any proposed transfer of BUFC Equity Securities on the grounds that such transfer may adversely affect the Debtors' ability to utilize the Tax Attributes as a result of an ownership change under Section 382 or Section 383 of the Tax Code. If an objection is filed, the Proposed Equity Acquisition Transaction or Proposed Equity Disposition Transaction will not be effective unless approved by a final and nonappealable Court order. If the Debtors or the Creditors' Committee do not file a timely Equity Objection, or if the Debtors and the Creditors' Committee provide written authorization to the Proposed Equity Transferor approving the Proposed Equity Acquisition Transaction or the Proposed Equity Disposition Transaction, then the Proposed Equity Acquisition Transaction or the Proposed Equity Disposition Transaction, may proceed. Any acquisition, disposition or other transfer of BUFC Equity Securities in violation of the procedures will be null and void ab initio as an act in violation of the automatic stay. Objections to entry of a final order must be filed and served so as to be received no later than Thursday, June 25, 2009, at 4:30 p.m. A final hearing to determine whether the procedures will be approved on a final basis will be held June 30. BankUnited Financial Corporation -- http://www.bankunited.com/-- was the holding company for BankUnited FSB, the largest banking institution headquartered in Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed by regulators and the Federal Deposit Insurance Corporation facilitated a sale of the bank to a management team headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank, and a group of investors led by W.L. Ross & Co. BankUnited, FSB, had assets of $12.80 billion and deposits of $8.6 billion as of May 2, 2009. BankUnited is the largest among 36 banks so far closed this year. The Company and its affiliates filed for Chapter 11 on May 22, 2009, (Bankr. S. D. Fla. Lead Case No.: 09-19940) Stephen P. Drobny, Esq. and Peter Levitt, Esq. at Shutts & Bowen LLP represents the Debtors in their restructuring efforts. The Debtors' financial condition as of March 31, 2009, showed total assets of $37,729,520 and total debts of $559,740,185. The Debtors have $237,261,000 trust preferred securities, $120,000,000 convertible subordinated senior notes, $12,500,000 junior subordinated debentures, and $184,000,000 convertible subordinated senior HiMEDS. The Debtors listed 1,226,853 noncumulative convertible prefereed stock, Series B; and $35,507,988 Class A and 719,947 Class B shares of common stock. BALLY TOTAL: Committee Counsel Retained by Party in AGT Case ------------------------------------------------------------ David H. Botter, Esq., a member of Akin Gump Strauss Hauer & Feld LLP, in New York, noted in a supplemental affidavit filed with the Court, that his firm has been retained by CH Fitness Investors, LLC, in connection with the Chapter 11 cases of AGT Crunch Acquisition, LLC. Akin Gump is counsel to the official committee of unsecured creditors in Bally's Chapter 11 case. Mr. Botter related that in 2006, Crunch purchased certain assets from Bally. Thereafter, Crunch commenced litigation against the Debtors arising from the Transaction, which is pending in New York State Court. Akin Gump has not participated, nor will it participate, in the Litigation, Mr. Botter said. To the extent it is necessary for the Debtors' unsecured creditors to participate in the Litigation, the Official Committee of Unsecured Creditors will seek to use its conflicts counsel, Butler Rubin Saltarelli & Boyd LLP, to represent the unsecured creditors' interests, Mr. Botter informed Judge Lifland. About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China, and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports Clubs of Canada (R) brands. Bally Total and its affiliates filed for Chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre- packaged Chapter 11 plan. Joseph Furst, III, Esq., at Latham & Watkins, L.L.P., represents the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had US$408,546,205 in total assets and US$1,825,941,54627 in total liabilities. The Debtors filed their Joint Prepackaged Plan & Disclosure Statement on July 31, 2007. The Court confirmed the Plan in September 2007. The Plan was declared effective October 1, 2007. Bally Total Fitness Holding Corp. and its debtor-affiliates and subsidiaries again filed voluntary petitions under Chapter 11 on December 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818). Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York. As of September 30, 2008, the Company (including non-debtor affiliates) had consolidated assets totaling approximately $1.376 billion and recorded consolidated liabilities totaling approximately $1.538 billion. Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings of Bally Total Fitness Holding Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000) BALLY TOTAL: Opposes Admiral Insurance Bid to Lift Stay ------------------------------------------------------- Admiral Insurance Company asked the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay imposed by Section 362(d)(1) of the Bankruptcy Code, to allow it to commence a declaratory judgment action against the Bally Total Fitness Holdings Inc. and its affiliates in the U.S. District Court for the Southern District of New York. Admiral specifically sought a declaration of the Debtors' obligations to pay defense costs and claims within the limits of self-insured retentions for $250,000, under four insurance policies issued by Admiral to the Debtors. Admiral also noted that no obligation to defend the claims made commercial general liability coverage, or provide coverage for any claims until the Debtors have satisfied their obligations under the Policies. To avoid having to bear the increased cost of defense of the underlying tort actions, Admiral seeks to lift the stay to seek a declaratory judgment that the Debtors' failure to comply with the SIR relieves it of its coverage obligations under the Policies, P. Bradley O'Neill, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, said. Mr. O'Neill added that Admiral's "claims of hardship" cannot support relief from the Stay because, among other things, the Debtors have never consented to the Relief for any personal injury or tort claimant. In addition, Admiral "is not suffering any injury" as a result of the Stay, he said. The tort and personal injury actions for which it has provided coverage have been stayed, so Admiral is not presently incurring defense costs that otherwise would fall within a SIR. Moreover, the Stay does not prevent Admiral from obtaining a judicial interpretation of the Policies in the Court, Mr. O'Neill pointed out. Given that Admiral has already litigated -- and lost -- in another Court the same issues it would raise in its proposed declaratory judgment action, any "harm" flowing from a delay in pursuing the Action is minimal at best. Thus, construing Admiral's arguments does not weigh in favor of lifting the Stay, Mr. O'Neill added. According to Mr. O'Neill, the Official Committee of Unsecured Creditors agrees with the Debtors' statements and legal arguments and, accordingly, joins in the Debtors' Objection. Against this backdrop, the Debtors ask the Judge Lifland to deny Admiral's Motion in its entirety and declare that Admiral must continue to provide coverage and indemnity to the Debtors pursuant to the non-executory Policies. Admiral Replies Admiral argues that they contracted with the Debtors in accordance with a bankruptcy clause in the SIR endorsement, which provides that the Debtors' failure to pay the SIR because of their bankruptcy or insolvency does not excuse them from paying the retained limit under the Policies. Hence, Admiral sought a declaration from the Court stating that the Debtors must act as their own primary insurer, for both defense and indemnity, up to the $250,000 SIR. Admiral has no duty to participate in the Debtors' defense or indemnification of claims until the $250,000 SIR is paid, Andrew J. Mihalick, Esq., at Kral, Clerkin, Redmond, Ryan, Perry & Girvan, LLP, in New York, contends. The Declaratory Judgment Action will clarify and settle the rights and obligations pursuant to the Policies between the Debtors and Admiral and terminate the uncertainty and controversy surrounding the Action, he asserts. In addition, the Action to determine the parties' contractual rights under the Policy "is entirely independent of the bankruptcy proceedings," as it involves ordinary state-law claims on a third- party insurance contract and does not otherwise implicate the Debtors' rights, Mr. Mihalick contends, citing In re United States Brass Corp., 110 F.3d 1261, 1268 (7th Cir.). Any recovery under the Admiral policies would serve only to augment the assets of the Debtors' estates for general distribution, he adds. According to Mr. Mihalick, the resolution of the contractual dispute pertaining to the Policies will have little to no bearing on the administration of the estate. The scope of the Policies is to indemnify the insureds for covered losses, and the Debtors have not shown how or why Admiral's contract claims will directly affect the bankruptcy court's core administrative function, he says. About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China, and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports Clubs of Canada (R) brands. Bally Total and its affiliates filed for Chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre- packaged Chapter 11 plan. Joseph Furst, III, Esq., at Latham & Watkins, L.L.P., represents the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had US$408,546,205 in total assets and US$1,825,941,54627 in total liabilities. The Debtors filed their Joint Prepackaged Plan & Disclosure Statement on July 31, 2007. The Court confirmed the Plan in September 2007. The Plan was declared effective October 1, 2007. Bally Total Fitness Holding Corp. and its debtor-affiliates and subsidiaries again filed voluntary petitions under Chapter 11 on December 3, 2008 (Bankr. S.D.N.Y., Lead Case No. 08-14818). Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York. As of September 30, 2008, the Company (including non-debtor affiliates) had consolidated assets totaling approximately $1.376 billion and recorded consolidated liabilities totaling approximately $1.538 billion. Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings of Bally Total Fitness Holding Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000) BALLY TOTAL: Opposes H&S Journal Demand for $290,107 Rent --------------------------------------------------------- H&S Journal Square Associates LLC asked the U.S. Bankruptcy Court for the Southern District of New York to compel the Debtors to pay $290,107 under a lease agreement involving a property located at 912-920 Bergen Avenue in Jersey City, New Jersey. H&S maintained that the Rent constitutes all fixed and additional rent from the Petition Date through April 30, 2009. In opposition, the Debtors maintained that pursuant to the Lease, the opening of the Premises on February 2, 2009, is the correct date on which the Debtors were required to begin paying rent. However, due to various abatements and credits under the Lease, the Debtors do not owe rent to H&S until September 2009. H&S's calculation of the date on which Bally is to begin paying rent under the Lease "is incorrectly premised" on the assertion that Bally obtained "all Permits necessary in connection with performing "tenant's work," as defined under the Lease, on April 12, 2007, Bradley O'Neill, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, averred. Accordingly, H&S's motion to compel the Debtors to pay their asserted postpetition rent obligations should be denied because no payments are due. "Taking into account Bally's rent credits to H&S and various abatements provided for under the Lease, Bally's first rent payment to H&S will be due in September 2009," Mr. O'Neill noted. About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China, and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports Clubs of Canada (R) brands. Bally Total and its affiliates filed for Chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre- packaged Chapter 11 plan. Joseph Furst, III, Esq., at Latham & Watkins, L.L.P., represents the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had US$408,546,205 in total assets and US$1,825,941,54627 in total liabilities. The Debtors filed their Joint Prepackaged Plan & Disclosure Statement on July 31, 2007. The Court confirmed the Plan in September 2007. The Plan was declared effective October 1, 2007. Bally Total Fitness Holding Corp. and its debtor-affiliates and subsidiaries again filed voluntary petitions under Chapter 11 on December 3, 2008 (Bankr. S. D. N. Y., Lead Case No. 08-14818). Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York. As of September 30, 2008, the Company (including non-debtor affiliates) had consolidated assets totaling approximately $1.376 billion and recorded consolidated liabilities totaling approximately $1.538 billion. Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings of Bally Total Fitness Holding Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000) BEAZER HOMES: S&P Downgrades Corporate Credit Rating to 'CCC' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Beazer Homes USA Inc. to 'CCC' from 'CCC+' due to a large second-quarter net loss that further eroded shareholder equity, raised the company's already-high leverage ratios, and increased covenant pressures. The outlook is negative. S&P also lowered its ratings on the company's senior unsecured notes to 'CCC-' from 'CCC'. S&P's '5' recovery rating, indicating S&P's expectation for a modest (10%-30%) recovery in the event of default, is unchanged. "Our rating actions follow a larger-than-anticipated net loss during Beazer's second fiscal quarter, ended March 31, 2009," said Standard & Poor's credit analyst James Fielding. Standard & poor's acknowledges that the GAAP loss included a significant number of noncash and nonrecurring items that did not impair the company's liquidity position. Furthermore, S&P acknowledge that Beazer has made good progress toward resolving several outstanding legal issues. However, a sharp reduction in shareholders' equity and tangible net worth outweighed these positive factors. "As a consequence of its lower tangible net worth, Beazer tripped one covenant governing its secured revolving credit facility during the quarter and, in our view, appears more likely to breach other financial covenants barring some form of recapitalization," Mr. Fielding noted. "We believe that this condition raises the likelihood that the company may pursue various opportunities to reduce leverage, which could include a below-par debt exchange." The negative outlook reflects S&P's expectation that Beazer's earnings will remain weak over the intermediate term because of the very challenging conditions in its core housing markets, particularly in California, Florida, Arizona, and Nevada. S&P would lower S&P's ratings further under these conditions: cash balances are sharply reduced as a consequence of larger-than- expected operating cash flow deficits; the company does not resolve its existing and potential covenant issues; and/or it undertakes a distressed debt exchange or similar restructuring. Barring a substantial equity infusion, S&P is unlikely to revise the outlook to stable in the near term. BLB MANAGEMENT: Moody's Withdraws 'Ca' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service has withdrawn BLB Management Services, Inc.'s Ca Corporate Family Rating, Ca/LD Probability of Default Rating, Caa3 senior secured revolver and term loan ratings and C second lien senior secured term loan rating. The ratings have been withdrawn because Moody's believes it lacks adequate information to maintain a rating. Please refer to Moody's Withdrawal Policy on moodys.com. Moody's previous rating action on BLB occurred on March 16, 2009 when Moody's downgraded the company's Corporate Family Rating to Ca from Caa3, its first lien bank facilities to Caa3 from Caa2 and the second lien term loan to C from Ca. BLB Management Services, Inc. is a joint venture holding company owned by Kerzner International Limited, Starwood Capital Group, and Waterford Group LLC. BLB's restricted operating subsidiary, UTGR, Inc., owns and operates the Twin River racino located near Providence, Rhode Island. BLB recently completed a significant renovation of Twin River which included expanded gaming space, and improved non-gaming amenities. BRSP LLC: Moody's Assigns 'B1' Rating on $275 Mil. Facility ----------------------------------------------------------- Moody's Investors Service has assigned a B1 rating to BRSP LLC's $275 million term loan facility. Proceeds of the debt will be used to refinance BRSP's existing term loan, which was obtained to finance the acquisition of certain lessor notes. BRSP is a special purpose entity indirectly owned by CIT Group, Inc., that exists solely to act as borrower under the term loan and to hold the lessor notes, which were issued as part of a leverage sale- leaseback financing of two power generation projects in South Carolina and Arizona with Calpine Corporation. The debt is secured by the lessor notes as well as pledges of the equity interests in BRSP and the owner lessors (also indirectly owned by CIT Group) that are issuers of the lessor notes. In addition, the owner participants that are the direct owners of the owner lessors have pledged their rights to any dividends to the lenders. Through the lessor notes and the lease agreements, the term loan is ultimately but indirectly secured by lease payments unconditionally guaranteed by Calpine Corporation related to two natural gas fired power plants, as well as a lien on the two generating facilities themselves, an assignment of the tolling agreements with a creditworthy offtaker for one of the facilities. The debt also benefits from a six months' cash funded debt service reserve fund. The rating reflects the credit quality of Calpine's guarantee, which is the ultimate source of payment for the loans, and the comparatively low degree of leverage relative to the expected value of the collateral, including the favorable terms of the tolls. BRSP's probability of default under the term loan is directly linked to Calpine's probability of default under its guarantee, which is reflected in Calpine's B2 P(D) rating. With just under $200/kw of debt at closing, however, the B1 rating on the loan also incorporates Moody's expectation of a relatively high recovery, notwithstanding the plants' somewhat checkered operating histories and the current relatively weak state of the merchant power market in which the asset without a toll is located. BRSP's rating was assigned by evaluating factors believed to be relevant to the credit profile of the issuer. These attributes were compared against other issuers both within and outside of BRSP's core peer group and BRSP's rating is believed to be comparable to ratings assigned to other issuers of similar credit risk. BRSP is a special purpose entity indirectly owned by CIT Group, Inc., that was created solely to finance the acquisition of certain lessor notes that secure its debt. BUILDING MATERIALS: Chapter 11 Filing Cues Moody's 'D' Rating ------------------------------------------------------------- Moody's Investors Service has lowered the probability of default rating of Building Materials Holding Corporation to D from Caa3 following its filing for protection under Chapter 11 of the US Bankruptcy Code. Subsequent to these rating actions, Moody's will withdraw all of the ratings because the issuer has entered bankruptcy. These ratings for BMHC were downgraded: -- Corporate Family Rating, downgraded to Ca from Caa3; -- Probability of default, downgraded to D from Caa3; and -- Senior Secured Bank Credit Facility, downgraded to Ca, LGD4, 50% from Caa3, LGD3, 49%. The previous rating action on BMHC was the April 16, 2009, downgrade of the corporate family rating to Caa3 from Caa1. BMHC, headquartered in Boise, Idaho, is one of the largest providers of residential building products and construction services in the United States, with a focus in the western and southern states. Sales for the twelve months ending March 31, 2009, were $1.1 billion. BUILDING MATERIALS: Gets Interim Approval For $80MM DIP Facility ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware in Wilmington granted initial approval for Building Materials Holding Corporation to access a new $80 million in debtor-in-possession financing facility from Wells Fargo Bank and certain of its other existing lenders. At a hearing yesterday, the Court authorized $40 million to be immediately available to the Company on an interim basis, with the full $80 million accessible upon final Court approval. The Company expects the new financing to provide ample liquidity to meet its ongoing obligations to employees, customers and suppliers during the reorganization process. Building Materials also received interim authorization to, among other things, continue to meet its obligations to customers, including the fulfillment of contracts and the honoring of all warranties on normal terms in the ordinary course of business. The Company also has received Court approval to continue to meet its obligations to suppliers, employees and subcontractors. "We are very pleased that the Bankruptcy Court in Delaware has approved our First Day Motions and our DIP financing, which allow us to continue business as usual and to meet our obligations to our customers, suppliers and employees," said Robert E. Mellor, Chairman and Chief Executive Officer. "All of our operations are open, and we are continuing to serve our customers with the same focus and dedication as always. We appreciate the support we have seen from both our customers and suppliers as we move forward with this process to make BMHC financially stronger for the long term." BMHC reached agreement with members of its secured lender group on a plan to restructure the Company's balance sheet and provide greater financial flexibility to support its long-term business plan. Under the proposed restructuring plan, BMHC will significantly reduce its outstanding funded debt, establish a new revolving credit facility, and substantially lower annual interest expense upon consummation of the plan. In order to implement this "pre-negotiated" restructuring plan in an efficient and timely manner, on June 16, 2009, the Company and all of its subsidiaries voluntarily initiated reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code in Delaware and have filed a plan of reorganization to implement the restructuring. BMHC will maintain normal operations and continue to pay employee wages, salaries and benefits in the usual manner. The Company intends to make payment for goods received and services provided to it on or after the filing date in the normal course of business and in accordance with the terms of existing supplier agreements. In addition, under its proposed Plan of Reorganization, the Company expects to pay in full suppliers of goods provided in the 20 days prior to filing and those with claims of under $5,000. The company's "First Day Motions" were approved on either a final or interim basis at yesterday's hearing. A hearing at which the Company will seek final U.S. Court approval for the interim financing order has been scheduled for July 1. Building Materials Holding Corporation -- http://www.bmhc.com/-- is one of the largest providers of building materials and residential construction services in the United States. BMHC serves the homebuilding industry through two recognized brands: as BMC West, it distributes building materials and manufacture building components for professional builders and contractors in the western and southern states; as SelectBuild, it provides construction services to high-volume production homebuilders in key markets across the country. BMHC and 11 affiliates filed for bankruptcy on June 16, 2009 (Bankr. D. Del. Lead Case No. 09-12074). Judge Kevin J. Carey handles the case. Michael A. Rosenthal, Esq., and Matthew K. Kelsey, Esq., at Gibson, Dunn & Crutcher LLP; and Sean M. Beach, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as bankruptcy counsel. Paul Croci at Peter J. Solomon Company serves as financial advisor. Joseph Spano at Alvarez & Marsal North America, LLC serves as restructuring advisor. The Debtors' tax consultant is KPMG LLP; tax advisor is PricewaterhouseCoopers LLP; and claims and notice agent is The Garden City Group, Inc. As of March 31, 2009, the Debtors had total assets of $480,148,000 and total debts of $481,314,000. BULLSEYE COLLISION: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Bullseye Collision Center & Sales Inc 6750 S Broadway Haysville, KS 67060 Bankruptcy Case No.: 09-11864 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court District of Kansas (Wichita) Judge: Chief Judge Robert E. Nugent Debtor's Counsel: Todd Allison, Esq. 301 N Main, Ste 1600 Wichita, KS 67202 Tel: (316) 267-0331 Email: nfair@kmazlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $100,001 to $500,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ksb09-11864.pdf The petition was signed by Shellie K. Voelzke, president of the Company. BUTLER INT'L: To Sell Assets to Meet Buyer's Month-End Deadline --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved the proposed sale process for Butler International Inc. Butler America, LLC, which is already under contract to buy the assets, has demanded an auction this month for the assets, according to Bloomberg's Bill Rochelle. Bloomberg relates that the Bankruptcy Court has set a June 26 deadline for competing bids, an auction a day later, and a sale hearing on June 29. As reported by the TCR on June 12, Butler International, Inc., has entered into a "stalking horse" asset purchase agreement with Butler America, LLC, an affiliate of D. Stephen Sorensen, Chairman and Chief Executive Officer of Select Staffing, to sell substantially all of the assets of Butler International, Inc., and certain of its subsidiaries to Butler America. Under the terms of the agreement, Butler America has agreed, subject to Court approval and other closing conditions, to acquire substantially all of the non-publishing assets of Butler International for approximately $27,000,000 in cash, subject to certain adjustments. Butler America has also agreed to assume certain liabilities of Butler International. The auction on June 28 will determine whether there are higher and better offers for the Debtor's assets. The Debtor will seek approval of the sale to the highest bidder at the hearing on June 29. About Butler International Headquartered in Ft. Lauderdale, Florida, Butler International, Inc. -- http://www.butler.com/-- provides Engineering and Technical Outsourcing Services, helping customers worldwide increase performance and savings. Butler International's global services model provides clients with onsite, offsite, or offshore service delivery options customized appropriately to their unique objectives. During its 62-year history of providing services, Butler International has served many prestigious companies through its industry groups, which include clients in the aircraft/aerospace, federal/defense, communications, consumer and manufacturing and commercial sectors. At September 30, 2007, the Company had $118,755,000 in total assets, $100,224,000 in total liabilities, and $18,531,000 in total stockholders' equity. For the nine month period then ended, the Company reported a net loss of $4,221,000 on net sales of $236,361,000. The Company has not filed its annual reports for 2007 and 2008 with the Securities and Exchange Commission. The Company and its affiliates, including Butler Services International Inc., filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Delaware Case No. 09-11914). Charlene D. Davis, Esq., at Bayard, P.A., assists the Company in its restructuring efforts. The Company listed $50,000,001 to $100,000,000 in assets and $50,000,001 to $100,000,000 in debts CANTILLON CAPITAL: Will Close Hedge Funds ----------------------------------------- Jenny Strasburg at The Wall Street Journal reports that Cantillon Capital Management investors said that the Company it is closing its hedge funds, after a second money-losing year. WSJ relates that Cantillon Capital's hedge funds dropped about 10%, compared with about 19% for the industry in 2008. WSJ notes that the strength in stocks for the last several months has hurt hedge funds like Cantillon Capital. According to WSJ, many hedge funds place so-called short bets, or wagers that stock prices will drop, that can leave managers exposed to runaway losses if stocks rise. The report says that powerful stock-market rallies have dealt harsh blows to some big hedge-fund winners of the past. Citing Hedge Fund Research Inc., the report states that hedge funds this year are solidly profitable, posting average gains through May of about 9.8%. According to the report, Cantillon Capital was down 7% to 8% through May. WSJ states that Cantillon Capital, unlike many money-losing managers in 2008, didn't limit investor redemptions. According to WSJ, Cantillon Capital manager William von Mueffling will continue to manage about $1 billion in "long-only investments", or bets that securities will rise in price. WSJ notes that long-only funds charge relatively modest but also steady fees. Citing a person familiar with the matter, WSJ states that Mr. von Mueffling will halve his staff of more than 40 people housed in New York and London, with hopes of rebuilding the Company as long-only focused and that he is expecting interest from pension funds and other investors. Cantillon Capital Management is a multibillion-dollar hedge-fund player run by William von Mueffling, who started the Company in 2003. CANWEST MEDIA: Lenders Extend Forbearance to June 30; Talks Go On ----------------------------------------------------------------- Canwest Global Communications Corp. said its subsidiary, Canwest Media Inc., is continuing discussions with the members of an ad hoc committee of 8% noteholders of CMI regarding a recapitalization transaction. The holders of the new 12% senior secured notes of CMI and Canwest Television Limited Partnership as well as CIT Business Credit Canada Inc., the provider of a senior secured revolving asset- based loan facility to CMI, have agreed to extend to June 30, 2009, the date by which CMI must reach an agreement in principle with members of the Ad Hoc Committee in respect of a recapitalization transaction, as well as certain other milestones that were to be achieved by June 15, 2009. CMI and the members of the Ad Hoc Committee have also entered into a further extension agreement and forbearance to June 30, 2009. As reported by the Troubled Company Reporter on May 26, 2009, Canwest Media and Canwest Television and certain parties entered into an agreement, pursuant to which the parties will purchase the U.S. dollar equivalent of C$105 million principal amount of 12% senior secured notes of CMI and CTLP for an aggregate purchase price of the U.S. dollar equivalent of C$100 million. CIT agreed to provide a senior secured revolving ABL facility for C$75 million to CMI. Both transactions were expected to close May 21, 2009. Canwest has kept the identity of the Purchasers confidential. Moreover, the Note Purchase Agreement provides that in the event Canwest Media or Canwest Television seeks creditor protection under the Companies' Creditors Arrangement Act or comparable legislation, the Notes will be converted into a debtor-in- possession financing arrangement. The Purchasers also suggested FTI Consulting to be appointed as monitor in the event of a CCAA filing. Canwest also said in May that the senior lenders under the CMI existing credit facility extended their waiver agreement until June 2, 2009, and also agreed to defer certain payments aggregating approximately $10 million until June 2, which would allow completion of the new facilities. Additionally, Canwest also said CMI and the members of the Ad Hoc Committee entered into a further agreement and forbearance until June 15, subject, among other things, to closing of the issuance of the Senior Secured Notes. Under the terms of the new financing arrangements, CMI originally agreed to satisfy certain milestones within certain time frames: * On or before June 15, 2009, reaching an agreement in principle with members of the Ad Hoc Committee in respect of a recapitalization transaction. * On or before July 15, 2009, entering into a definitive agreement with members of the Ad Hoc Committee with respect to the recapitalization transaction. CMI used proceeds from the issue and sale of the Senior Secured Notes and from CIT's ABL facility to, among other things, repay the current lenders all amounts owing under CMI's existing senior credit facility and settle related obligations. About Canwest Global Communications Corp. Canwest Global Communications Corp. -- http://www.canwest.com/-- (TSX: CGS and CGS.A,) an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and/or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey,Indonesia, Singapore, the United Kingdom and the United States. * * * As reported in the Troubled Company Reporter on June 9, 2009, Moody's Investors Service downgraded Canwest Limited Partnership's probability of default rating to Ca/LD and its corporate family to Caa3 on news the company decided to not make payments totaling $10 million due under its senior secured credit facility on May 29, 2009, the end of the company's fiscal quarter. This suggests that CLP has chosen to force the issue with its bank lenders, and is also likely an indication that ongoing negotiations with the bank lenders were not going well, according to Moody's. Given the recent experience of CLP's parent company, Canwest Media Inc., this step was likely unavoidable. Since the payment includes a principal component and there is no cure period, the bank credit facility is now in default. The lenders have not accelerated repayment. The TCR on June 2, 2009, said Standard & Poor's Ratings Services lowered its ratings on Canwest LP, including the corporate credit and senior secured ratings to 'D' (default) from 'CCC' and the rating on the C$75 million senior subordinated credit facility due 2015 to 'D' from 'CC'. S&P also lowered the rating on the company's US$400 million senior subordinated notes due 2015 to 'C' from 'CC'. The recovery ratings on the debt obligations are unchanged. CAPITAL CORP: Wilmington Trust Appointed to Creditors' Panel ------------------------------------------------------------ Wilmington Trust Corporation has been appointed by the United States Trustee to the unsecured creditors' committee in the bankruptcy of Capital Corporation of the West, which filed for Chapter 11 protection on May 11, 2009 in the United States Bankruptcy Court, Eastern District of California. Previously Wilmington Trust was appointed indenture trustee on behalf of creditors who hold approximately $25.7 million of debt issued by CCOW. Wilmington Trust is not a direct holder of CCOW debt and has no direct credit exposure to the company or its affiliates. Wilmington Trust is paid a fee for providing trust services such as those related to the CCOW case. Wilmington Trust's CCS business offers institutional trustee, agency, asset management, retirement plan, and administrative services for clients worldwide who use capital market financing structures, as well as those who seek to establish or maintain nexus, or legal residency, for special purpose entities. Because Wilmington Trust does not underwrite securities offerings or provide investment banking services, it is able to deliver corporate trust services that are conflict-free. About Wilmington Trust Wilmington Trust Corporation provides Regional Banking services throughout the mid-Atlantic region, Wealth Advisory Services for high-net-worth clients in 36 countries, and Corporate Client Services for institutional clients in 88 countries. Its wholly owned bank subsidiary, Wilmington Trust Company, which was founded in 1903, is one of the largest personal trust providers in the United States and the leading retail and commercial bank in Delaware. Wilmington Trust Corporation and its affiliates have offices in Arizona, California, Connecticut, Delaware, Florida, Georgia, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania, South Carolina, Vermont, the Cayman Islands, the Channel Islands, London, Dublin, Frankfurt, Luxembourg, and Amsterdam. About Capital Corp of the West Capital Corporation of the West is a bank holding company, whose primary asset and source of income is County Bank of Merced. The Bank is a community bank with operations located mainly in the San Joaquin Valley of Central California with additional business banking operations in the San Francisco Bay Area. The corporate headquarters of the Company and the Bank's main branch facility are located at 550 West Main Street, Merced, California. County Bank was closed February 6, 2009, by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Westamerica Bank, based in San Rafael, California, to assume all of the deposits of County Bank. As of February 2, 2009, County Bank had total assets of approximately $1.7 billion and total deposits of $1.3 billion. In addition to assuming all of the failed bank's deposits, including those from brokers, Westamerica Bank agreed to purchase all of County Bank's assets. Capital Corp of the West filed for bankruptcy on May 11, 2009 (Bankr. E.D. Calif. Case No. 09-14298). Judge W. Richard Lee presides over the case. Paul J. Pascuzzi, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi, serves as the Debtor's bankruptcy counsel. As of September 30, 2008, Capital Corp. of the West had $1.87 billion in total assets, $1.79 billion in total liabilities and shareholders' equity of $73.9 million. In its Chapter 11 petition, the Company disclosed $6,789,058 in total assets and $68,096,190 in total debts. CELL THERAPEUTICS: Defers Payment of 25% Executives Cash Bonuses ---------------------------------------------------------------- Cell Therapeutics Inc. disclosed in a filing with the Securities and Exchange Commission that the payment of 25% of the fiscal year 2008 cash bonuses awarded to the Company's management team was deferred. The board of directors has determined that the Company was sufficiently liquid to pay the remaining amount. The Company considered cancelling these bonus opportunities. However, on June 4, 2009, the board reconsidered the Company's cash position and the Compensation Committee of the board determined that it would be appropriate to pay the deferred portion of the fiscal 2008 bonuses. Accordingly, payments will be made to the Company's named executive officers in these amounts: Name and Principal Position Deferred Payment of Fiscal 2008 Bonus James A. Bianco, M.D., chief executive officer $121,875 Craig W. Philips, president $16,750 Louis A. Bianco executive vice president, finance and administration $41,250 Jack W. Singer, M.D., executive vice president, chief medical officer $38,250 Daniel Eramian, executive vice president, corporate communications $35,448 About Cell Therapeutics Headquartered in Seattle, Cell Therapeutics Inc. -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. At March 31, 2009, the Company's balance sheet showed total assets of $42.9 million and total liabilities of $$158.9 million, resulting in a stockholders' deficit of about $116.0 million Going Concern Doubt Stonefield Josephson Inc. in Los Angeles, California, expressed substantial doubt about Cell Therapeutics' ability to continue as a going concern after auditing company's financial statements for the years ended December 31, 2008 and 2007. The auditing firm reported that the Company has substantial monetary liabilities in excess of monetary assets as of December 31, 2007, including approximately $19.8 million of convertible subordinated notes and senior subordinated notes which mature in June 2008. the Company has sustained loss from operations over the audit periods, incurred an accumulated deficit, and has substantial monetary liabilities in excess of monetary assets as of December 31, 2008. Given the above factors and the Company's inability to demonstrate its ability to satisfy the monetary liabilities raises substantial doubt about the Company's ability to continue as a going concern. CHENIERE ENERGY: Board OKs $160,000 Compensation to Directors ------------------------------------------------------------- The Board of Directors of Cheniere Energy, Inc., on June 12, 2009, approved the recommendation of the Governance and Nominating Committee to compensate each non-employee director by $160,000 for services for the period from the current year's Annual Meeting of Stockholders (June 12, 2009) until the next year's Annual Meeting of Stockholders. Additional compensation of $20,000 for the Annual Period was approved for each of the chairman of the Audit Committee, the chairman of the Compensation Committee and the Lead Director. Additional compensation of $10,000 for the Annual Period was approved for the chairman of the Governance and Nominating Committee. Compensation will be paid, at the election of the director, either 100% in shares of restricted stock of the Company or 50% in cash and 50% in shares of restricted stock of the Company. If a director elects to receive 50% of his or her compensation in cash, such cash payments will be made quarterly as of the 15th day of August, November, February and May, beginning on August 15, 2009. Payment in the form of restricted stock will be made June 15, 2009, and the number of shares granted will be determined by the closing price of the Company's common stock as reported on the NYSE Amex on the Date of Grant. Vesting of the restricted stock will occur in full on the first anniversary of the Date of Grant. Amendment No. 4 to the 2003 Stock Incentive Plan Moreover, the Company's Board unanimously adopted, subject to stockholder approval, Amendment No. 4 to the 2003 Stock Incentive Plan. Amendment No. 4: -- increases the number of shares of common stock available for issuance under the 2003 Plan from 11,000,000 shares to 21,000,000 shares (subject to adjustment for stock dividends, stock splits and certain other changes in capitalization, pursuant to the terms of the 2003 Plan), -- increases the maximum number of shares that can be granted to any one individual during a calendar year from 1,000,000 to 3,000,000 shares of common stock, -- increases the aggregate cash awards that may be payable to an individual during any calendar year from $10 million to $25 million, and -- adds an additional business criterion relating to contracted LNG quantity to the list of permissible business criteria pursuant to which performance awards may be granted under the 2003 Plan. The Board presented Amendment No. 4 to the stockholders and recommended that the stockholders approve Amendment No. 4 at the Annual Meeting of Stockholders. Amendment No. 4 received an affirmative vote of the majority of the shares entitled to vote on such matter and present at the Annual Meeting and was approved by the stockholders effective as of June 12, 2009. Based in Houston, Texas, Cheniere Energy Inc. (AMEX: LNG) -- http://www.cheniere.com/-- is developing a network of three LNG receiving terminals and related natural gas pipelines along the Gulf Coast of the United States. Cheniere is pursuing related business opportunities both upstream and downstream of the terminals. Cheniere is also the founder and holds a 30.0% limited partner interest in a fourth LNG receiving terminal. As of March 31, 2009, Cheniere had $2.89 billion in total assets, $3.33 billion in total liabilities and $238.9 million in non- controlling interests, resulting in $683.9 million in stockholder's deficit and $444.9 million in total deficit. CHRYSLER LLC: To Resume Production at 7 Assembly Plants ------------------------------------------------------- Chrysler Group LLC, the new company formed by Italy-based automaker Fiat S.p.A. under its deal with Chrysler LLC, is set to restart the operations of its seven assembly plants at the end of June. Chrysler Group confirmed in its June 17 statement that plants in Sterling Heights and Warren, Michigan; St. Louis; Toledo, Ohio; Brampton and Windsor, Ontario; and Toluca, Mexico, will return to production on June 29. The plants have been idle since Chrysler LLC filed for bankruptcy protection on April 30. Toledo Supplier Park makes the Jeep Wrangler, while Brampton, Ontario makes the Chrysler 300, Dodge Charger and Challenger. Chrysler and Dodge minivans are built in Windsor, and Toluca makes the Dodge Journey crossover and Chrysler PT Cruiser, Reuters reported. Moreover, the Chrysler Sebring and Dodge Avenger are made in Sterling Heights while the Dodge Ram and Dodge Dakota are made in Warren. The St. Louis Plant assembles the Dodge Ram. Chrysler Group's powertrain and stamping factories that supply the assembly plants will also resume operations on June 29. Chrysler Group's Conner Avenue assembly plant, which produces the Dodge Viper brand, returned to production last June 15. Last year, Chrysler LLC had announced that it intended to sell off the Viper brand but it had not received any bids that met its requirements. The Viper was introduced in the 1992 model year, and only 25,000 have been sold since then, according to a CNNMoney.com report. The eight assembly plants that are restarting employ about 15,000 workers. The company statement said all Chrysler Group plants will be closed during a previously announced two-week Summer Break the weeks of July 13 and 20. Re-start of production at other Chrysler Group assembly plants will be announced at a later date. When the factories come back on line, their work will be done under a different manufacturing system, one used in Europe by Fiat Group SpA called "World Class Manufacturing," The Associated Press reported. According to union officials, training in the new manufacturing methods got under way in early June, with workers learning a more detail-oriented, data-driven process that is similar to but less bureaucratic than Chrysler's system, the report said. Five Chrysler assembly plants that will stay dark include the Jefferson North plant in Detroit that makes the Jeep Grand Cherokee and Commander sport utility vehicles, and the Belvidere, Illinois, factory that makes Chrysler's smallest offerings, the Dodge Caliber and Jeep Compass and Patriot, AP reported. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. 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). Chrysler 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 has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. 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. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. 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) CLAIRE'S STORES: Balance Sheet Upside-Down by $79MM as of May 2 --------------------------------------------------------------- Claire's Stores Inc. and subsidiaries posted a net loss of $29.0 million on net sales of $293.0 million for the three months ended May 2, 2009. This is compared to a net loss of $35.5 million on net sales of $327.0 million for the three months ended May 3, 2008. Claire's Stores reports, at May 2, 2009, that it has $2,877,264,000 in assets, $212,884,000 in current liabilities and $2,743,540,000 in long-term liabilities (for $2,956,424,000 in total liabilities). As of May 2, 2009, Claire's Stores had cash and cash equivalents of $206.7 million, and substantially all of the cash equivalents consisted of U.S. Treasury Securities. Claire's Stores noted in a regulatory filing that the current distress in the financial markets has resulted in extreme volatility in security prices and has had a negative impact on credit availability, and there can be no assurance that its liquidity will not be affected by changes in the financial markets and the global economy or that its capital resources will at all times be sufficient to satisfy liquidity needs. "Although we believe that our existing cash will provide us with sufficient liquidity through the current credit crisis, tightening of the credit markets could make it more difficult for us to access funds, refinance our existing indebtedness and enter into agreements for new indebtedness," Claire's Stores said. "We have significant amounts of cash and cash equivalents at financial institutions that are in excess of federally insured limits. With the current financial environment and the instability of financial institutions, we cannot be assured that we will not experience losses on our deposits. "We anticipate that cash generated from operations will be sufficient to meet our future working capital requirements, new store expenditures, and debt service requirements as they become due. However, our ability to fund future operating expenses and capital expenditures and our ability to make scheduled payments of interest on, to pay principal on, or refinance indebtedness and to satisfy any other present or future debt obligations will depend on future operating performance." About Claire's Stores Based in Pembroke Pines, Florida, Claire's Stores, Inc., is a specialty retailer of value-priced jewelry and accessories for girls and young women through its two store concepts: Claire's(R) and Icing(R). Icing operates only in North America; Claire's operates worldwide. As of January 31, 2009, Claire's Stores, Inc. operated 2,969 stores in North America and Europe. Claire's Stores, Inc., also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. CONTINENTAL AIRLINES: S&P Puts 'CCC+' Rating on Subordinated Debt ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its preliminary 'A-' rating to Continental Airlines Inc.'s series 2009-1 Class A pass-through certificates, with an expected maturity of July 8, 2016. The final legal maturity will be 18 months after the expected maturity. The issues are a drawdown under a Rule 415 shelf registration. Standard & Poor's will decide on ratings to assign on conclusion of a legal review of the documentation. S&P is also assigning preliminary ratings to the Rule 415 shelf registration filed April 24, 2009, including 'B-' to the senior unsecured debt, 'CCC+' to the subordinated debt, and 'A-' to equipment trust certificates. "The preliminary 'A-' rating is based on Continental's credit quality, substantial collateral coverage by desirable aircraft, and on legal and structural protections available to the pass- through certificates," said Standard & Poor's credit analyst Betsy R. Synder. "The company will use the proceeds of the offering to acquire five B737-900ER aircraft being delivered this year, and refinance three B777-200ER, four B737-700, three B737-800, and two 757-200 aircraft, which Continental already owns," she continued. Each aircraft's secured notes are cross-collateralized and cross- defaulted, a provision that S&P believes increases the likelihood that Continental would affirm the notes (and thus continue to pay on the certificates) in a bankruptcy. Standard & Poor's 'B' corporate credit rating on Continental reflects its participation in the high-risk airline industry and a heavy debt and lease burden, but also better-than-average operating performance among its peer large U.S. hub-and-spoke airlines. The outlook is negative. Although Continental currently has adequate liquidity, worse-than-expected economic conditions and revenue weakness could erode the company's financial profile. S&P may lower S&P's rating if unrestricted cash and short-term investments fall below $2 billion. If Continental can weather the downturn and industry conditions improve, S&P could revise the outlook to stable. COOPER BROTHERS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Cooper Brothers, LLC P.O. Box 149 West Poland, Me 04291 Bankruptcy Case No.: 09-20896 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Cooper Packing, Inc. 09-20897 K.W. Cooper & Sons, LLC 09-20898 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court Maine (Portland) Debtor's Counsel: Richard P. Olson, Esq. Perkins Olson, PA 30 Milk St. P.O. Box 449 Portland, ME 04112 Tel: (207) 871-7159 Email: rolson@perkinsolson.com Total Assets: $673,000 Total Debts: $4,021,091 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/meb09-20896.pdf The petition was signed by Peter J. Bolduc, Jr., manager of the Company. COOPER-STANDARD AUTOMOTIVE: S&P Cuts Corp. Credit Rating to 'D' --------------------------------------------------------------- Standard & Poor's Ratings Services said it has lowered its corporate credit rating on Cooper-Standard Automotive Inc. to 'D' (default) from 'CC' and lowered the issue-level rating on the company's senior unsecured and subordinated debt to 'D' from 'C'. S&P also lowered the rating on the company's senior secured debt to 'CC' from 'CCC-'. Cooper-Standard Holdings Inc., the unrated parent company of Cooper-Standard Automotive, announced on June 15, 2009, that it would not make interest payments due that day on its 7% senior notes due in 2012 and 8.375% senior subordinated notes due in 2014. Under the indentures governing the senior notes, Cooper- Standard has a 30-day grace period to make interest payments on these notes before there is an event of default. "We are not confident that Cooper-Standard will make the payments within the grace period," said Standard & Poor's credit analyst Nancy Messer. "Among other outcomes, the company might pursue a distressed exchange or file for bankruptcy under Chapter 11," she continued. COREL CORP: Denies Knowledge on Surge in Trading Volume, Price -------------------------------------------------------------- Corel Corp. on Friday confirmed that it is not aware of any undisclosed material changes relating to the Company or its business. Corel issued the statement in response to inquiries related to a recent increase in its trading volume and trading prices. On June 11, StreetInsider.com in a report entitled "Unusual 11 Mid-Day Movers 6/11" noted that Corel shares were trading 36.1% higher. StreetInsider.com said, "not hearing any news or rumors related to the stock, but the price action could suggest traders are speculating that a takeover bid could be coming. Back in early 2008, the company's largest shareholder, Vector Capital, offered to buy the remaining shares for $11, but by the end of summer, the firm had withdrawn its bid." About Corel Corp. Corel Corp. (NASDAQ:CREL) (TSX:CRE) -- http://www.corel.com/-- is one of the world's top software companies with more than 100 million active users in over 75 countries. The company provides high quality, affordable and easy-to-use Graphics and Productivity and Digital Media software. The company's products are sold through a scalable distribution platform comprised of Original Equipment Manufacturers (OEMs), the company's global e- Stores, and the company's international network of resellers and retail vendors. The company's product portfolio includes CorelDRAW(R) Graphics Suite, Corel(R) Paint Shop Pro(R) Photo, Corel(R) Painter(TM), VideoStudio(R), WinDVD(R), Corel(R) WordPerfect(R) Office and WinZip(R). The company's global headquarters are in Ottawa, Canada, with major offices in the United States, United Kingdom, Germany, China, Taiwan and Japan. As of February 28, 2009, Corel had $245.8 million in total assets and $255.2 million in total liabilities, resulting in $9.4 million in stockholders' deficit. * * * The Troubled Company Reporter reported on November 6, 2008, that Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit and senior secured debt ratings, on Ottawa-based packaged software provider Corel Corp. At the same time, S&P removed the ratings from CreditWatch with negative implications, where they were placed March 31, 2008. The outlook is stable. At August 31, Corel had US$159 million of debt outstanding. COYOTES HOCKEY: Owner to Work on Open, Transparent Sales Process ---------------------------------------------------------------- Jerry Moyes, the principal owner of the Phoenix Coyotes, and his legal team gave reaction to a June 15, 2009 ruling by Bankruptcy Judge Redfield T. Baum. As reported by the Troubled Company Reporter on June 17, 2009, The Hon. Redfield Baum of the U.S. Bankruptcy Court for the District of Arizona has rejected Jim Balsillie's offer to acquire Phoenix Coyotes and move it to Canada. Judge Baum concluded that the June 29 deadline that Mr. Balsillie imposed for his offer to be accepted didn't give enough time for legal issues in the case to be resolved. According to Mr. Moyes, Judge Baum denied the Coyotes' motion to relocate without prejudice, which means the decision is subject to further consideration by the court if resubmitted. Mr. Moyes noted that the Judge's order leaves open the possibility that the relocation issue will be addressed again at a later date. "Now the most important thing for us to do is work towards an open and transparent sales process that will result in obtaining the most money for the team's creditors," said Mr. Moyes. Mr. Moyes went on to say, "The case depends upon whether the NHL denies relocation under any circumstances and thus violates anti- trust laws, or specifies a relocation fee that is reasonable in this case." The Judge cited with approval cases involving relocation of other professional franchises, including the NFL Raiders from Oakland to Los Angeles, California. The Judge also soundly rejected the positions of the NHL, NBA, MLB and NFL that allowing such sales in a bankruptcy proceeding would "wreak havoc" in professional sports, citing numerous examples of teams that have moved locations or filed bankruptcy proceedings such as the Baltimore Colts, San Diego Clippers and Seattle Pilots. The judge also stressed that "maximizing recovery for all of the creditors is the paramount concern of the court." According to the Coyotes' attorney, Thomas J. Salerno, Esq., at Squire Sanders Dempsey, "The most significant part of the Judge's decision may be that the rule of law will decide, as it has in anti-trust cases, if league rules are unequivocally enforceable or whether rights and powers under the Bankruptcy Code render some of those rules unenforceable." Separately, referring to a recent statement by Deputy Commissioner Bill Daly, Mr. Moyes stated, "I am dismayed at Deputy Commissioner Daly's implication that owners of NHL franchises who spend tens of millions of dollars supporting their teams and communities are not legitimate creditors of those teams." Dewey Ranch, together with affiliates Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC, filed for Chapter 11 bankruptcy protection on May 5, 2009 (Bankr. D. Ariz. Case No. 09-09488), to implement a court-approved sale of Phoenix Coyotes under the Bankruptcy Code. The filing included a proposed sale of the franchise to PSE Sports & Entertainment, LP, which would move the franchise to southern Ontario, Canada. Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, assists the Debtors in their restructuring efforts. Dewey Ranch listed $100 million to $500 million in assets and $100 million to $500 million in debts. COYOTES HOCKEY: Buyers Need $20MM in City Aid, Jim Balsillie Says ----------------------------------------------------------------- Buyers who want to keep Phoenix Coyotes in Glendale would likely require a $20 million financial backing from the city, Mike Sunnucks at Phoenix Business Journal reports, citing Jim Balsillie. As reported by the Troubled Company Reporter on June 17, 2009, the Hon. Redfield Baum of the U.S. Bankruptcy Court for the District of Arizona rejected Mr. Balsillie's $213 million offer to acquire Phoenix Coyotes and move it to Canada. Judge Baum concluded that the June 29 deadline that Mr. Balsillie imposed for his offer to be accepted didn't give enough time for legal issues in the case to be resolved. According to Business Journal, Mr. Balsillie's representatives said that the $20 million estimate stems from bankruptcy court filings outlining potential help for the team Glendale might offer Phoenix Coyotes. Incentives could run into financial and legal issues as Phoenix-area governments budget troubles and the Arizona Supreme Court is looking at the legality of economic development and other subsidies, the report says, citing the representatives. Mr. Balsillie's representatives said that he is considering reworking the bid with a different timetable, Business Journal relates. About Coyotes Hockey Glendale, Arizona-based Dewey Ranch Hockey LLC and its affiliates, including Coyotes Hockey LLC, own the Phoenix Coyotes team and franchise in the National Hockey League. Dewey Ranch, together with affiliates Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC, filed for Chapter 11 bankruptcy protection on May 5, 2009 (Bankr. D. Ariz. Case No. 09-09488), to implement a court-approved sale of Phoenix Coyotes under the Bankruptcy Code. The filing included a proposed sale of the franchise to PSE Sports & Entertainment, LP, which would move the franchise to southern Ontario, Canada. Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, assists the Debtors in their restructuring efforts. Dewey Ranch listed $100 million to $500 million in assets and $100 million to $500 million in debts. CRITICAL ACCESS HEALTH: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Critical Access Health Services Corp. dba Washington County Memorial Hospital 911 N. Shelby Salem, IN 47167 Bankruptcy Case No.: 09-92085 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court Southern District of Indiana (New Albany) Judge: Basil H. Lorch III Debtor's Counsel: Christine K. Jacobson, Esq. Katz & Korin, PC 334 N. Senate Avenue Indianapolis, IN 46204-1708 Tel: (317) 464-1100 Fax: (317) 464-1111 Email: cjacobson@katzkorin.com Michael W. Hile, Esq. Katz & Korin PC 334 N. Senate Ave. Indianapolis, IN 46204-1708 Tel: (317) 464-1100 Email: mhile@katzkorin.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/insb09-92085.pdf The petition was signed by Aaron M. Lee. DBSI INC: Creditors Committee Seeks to File Competing Plan ---------------------------------------------------------- The official committee of unsecured creditors in the Chapter 11 cases of DBSI, Inc. and its affiliated debtors asks the U.S. Bankruptcy Court for the District of Delaware for an order: (l)(a) pursuant to 11 U.S.C. Sec. 1121(d) terminating the Debtors' exclusive rights under 11 U.S.C. Sec. 1121 solely to allow the Committee to file and solicit acceptances of a chapter 11 plan, or, in the alternative, (b) pursuant to 11 U.S.C. Sec. 1104(a) directing the appointment of a trustee to be in possession, and to manage the affairs and operations, of the Debtors' estates in replace of the Debtors; and (2) further continuing the hearing on the Debtors' disclosure statement. As reported by the TCR on May 13, 2009, DBSI Inc. and its debtor- affiliates delivered to the Court a joint Chapter 11 plan of liquidation, which creates a liquidating trust on the plan's effective date. Under the plan, among other things, holders of unsecured claims against the Debtors will receive a pro rata share. However, the Debtors' plan did not indicate the estimated recovery that unsecured creditors would receive. A full-text copy of the Debtors' Joint Chapter 11 Plan of Liquidation is available for free at http://ResearchArchives.com/t/s?3cbd Dennis A. Meloro, Esq., at Greenberg Traurig LLP, in Wilmington, Delaware, asserts that DBSI's "beleaguered and conflicted" insider management to should now cede control over the plan process. "These chapter 11 cases began under the cloud of fraud allegations and distrust, darkened by a class action securities fraud suit and further darkened by the Debtors' misguided attempts to obtain insider releases and other concessions via a self-inflicted threat to immediately reject their entire TIC master-lease portfolio." Non-Filed Entities The Creditors Committee notes that 181 DBSI affiliates have sought chapter 11 relief in the jointly administered cases, but there are many more Non-Filed Entities that remain outside of chapter 11 protection. Collectively, the Debtors and the Non-Filed Entities comprise a vast byzantine network of interconnected interests in numerous commercial real estate and non-real estate projects and businesses. According to Mr. Meloro, after a careful review by the Committee (and the examiner appointed in the Chapter 11 cases) of the Debtors' schedules of assets and liabilities and the disclosure statement to their proposed Plan, these fundamental truths have emerged: -- An entire universe of DBSI entities (the "Non-Filed Entities") with untold assets have been obscured and excluded from the Chapter 11 proceedings, despite a vast web of intercompany claims that binds them to the Debtors under the purview of the Court; and -- The pervasively overlapping insider ownership of these Non- Filed Entities creates significant conflicts of interest that have rendered DBSI management incapable of honoring their fiduciary duties to proceed with a chapter 11 plan designed to further the best interests of the estates. The Committee relates the Non-Filed Entities include Kastera, LLC and subsidiaries DBSI Investments Limited Partnership, Stellar Technologies LLC and several subsidiary technology companies, DBSI Redemption Reserve, numerous limited partnerships in which DBSI'Inc., DBSI Investments Limited Partnership and DCI, Inc. are general partners, numerous special purpose entities (generally limited liability companies), dissolved partnerships and other miscellaneous entities. Mr. Meloro asserts that the overlap among the DBSI Debtors and the Non-Filed Entities and the sweeping entanglement among their financial affairs are demonstrated by these intercompany claims and transfers: -- A $192 million claim by DBSI Inc. against DBSI Redemption Reserve. -- A $124 million claim by DBSI Redemption Reserve against Stellar Technologies LLC. Stellar is a holding company for various technology companies, which appear to have been the ultimate recipients of substantial investments that were down-streamed from DBSI Redemption Reserve. -- A $99.8 million claim by DBSI Redemption Reserve against DBSI Investments Limited Partnership. The Committee and the examiner continue to investigate the extent to which DBSI Investments Limited Partnership distributed these funds to its insider general partners and/or its controlled limited partnership subsidiaries or otherwise. -- A $28.5 million claim by DBSI 2008 Notes Corporation against Stellar. This claim may be secured by Stellar's ownership interest in technology companies. -- A $13 million claim by DBSI Guaranteed Capital Corporation against Stellar. This claim may be secured by Stellar's ownership interest in technology companies. -- A $9 million claim by DBSI Real Estate Funding Corporation against DBSI Investments Limited Partnership. -- An $8.8 million claim by DBSI 2008 Notes Corporation against DBSI Western Technologies LLC, which is the holding company for Non-Filed Entity DBSI Western Electronics LLC. -- A $7.8 million claim by DBSI Redemption Reserve against Western Technologies. -- A $7 million claim by DBSI Inc. against Kastera LLC. -- A $7 million claim by DBSI 2006 Secured Notes Corporation against Kastera Homes LLC. Kastera Homes LLC borrowed from DBSI 2006 Notes Corporation to fund its development of certain residential real estate projects. The Kastera Homes LLC borrowings are secured by mortgages and deeds of trust in favor of DBSI 2006 Notes Corporation in the underlying real estate. -- A $6.5 million claim by REF against DBSI Redemption Reserve. -- A $3.7 million claim by DBSI Guaranteed Capital Corporation against Western Technologies, which may be secured by Western Technologies' ownership interest in DBSI Western Electronics LLC. -- A $2.1 million claim by REF against Kastera Homes LLC. REF also lent funds to Kastera Homes LLC for the development of residential real estate projects, which loans are secured by mortgages and deeds of trust in favor of REF in the underlying real estate. According to the Committee, aside from the intercompany claims, the Debtors directly or indirectly own majority interests in the Non-Filed Debtors. During plan negotiations, the Committee inquired of the Debtors how they intended to resolve these significant Non-Filed Entity issues. After months of asking, the Committee received the answer that the Debtors will not proceed with a plan that makes any attempt to incorporate the Non-Filed Entities in any way. Fiduciary Duties "Whether the Debtors are motivated by pie-in-the-sky visions of retaining value or simply setting up a new scheme to leverage releases, the Debtors are not honoring their fiduciary duties to maximize value for the benefit of the estates and their constituencies," Mr. Meloro contends. "Instead, the Debtors are plainly acting to further the conflicted self-interests of others." After reviewing its options, the Committee believes that terminating exclusivity solely to allow the Committee to files its own plan and disclosure statement will best serve the interest of the Debtors' estates. The Debtors, Mr. Meloro points out do not have the resources and liquidity to endure a protracted stay in chapter 11. He says confirmation of DBSI's plan, which fails to incorporate the Non- Filed Entities, will only expose a liquidating trustee to future litigation and continued attempts to assert control by the DBSI insiders. The Committee states is preparing and will be prepared to file a plan and disclosure statement that will actively engage the Non- Filed Entity issues and leave a post-confirmation liquidating trustee in control of the assets from which distributions to creditor beneficiaries will be generated. Other than addressing the crucial issue of how to incorporate the Non-Filed Entities, the Committee's plan does not require substantial modification to the Debtors' plan. Thus, the double-track confirmation process can proceed apace (and benefit from at least the preliminary results of the examiner's investigation), Mr. Meloro contends. "A competing plan process will prevent the Debtors from forcing creditors to choose between an incomplete plan that omits the Non- Filed Entities and no plan at all," Mr. Meloro points out. If the Court is not inclined to terminate exclusivity to allow competing chapter 11 plans, the Committee proposes that the Court appoint a chapter 11 trustee. Mr. Meloro asserts that absent the ability for the Committee to propose a plan, a neutral third party not only to investigate the Debtors' affairs (as is being done by the examiner), but also to have and exercise the authority to manage those affairs through the chapter 11 plan process, is necessary. Committee's Plan The Committee intends to file a competing plan that largely mirrors the Debtors' plan with the addition of several key provisions to address the Non-Filed Entities, including: -- The Committee's plan will address the intercompany claims among Debtors and Non-Filed Entities -- particularly those involving DBSI Redemption Reserve Fund and DBSI Investments Limited Partnership; -- The Committee's plan will include a mechanism for the direct transfer of the Kastera Collateral and the resolution of claims among the Debtors and the Kastera affiliates; -- The Committee's plan will include a mechanism to vest the liquidating trust with the technology company claims and ownership interests held by Stellar and Western; -- The Committee's plan will specifically delineate the transfer of other Non-Filed Entities and assets, and the resolution of other claims among Debtors and Non-Filed Entities. According to Mr. Meloro, in contrast to the Debtors' plan, the Committee's plan will (i) be accompanied by full and complete disclosure regarding the Debtors and the Non-Filed Entities, (ii) maximize value for the benefit of the Debtors' estates and constituents, (iii) ensure that a post-confirmation liquidating trust will not be handcuffed by third-party disputes, and (iv) provide the closure and certainty that parties in interest need to move on from these very difficult chapter 11 cases. Accordingly, the Committee proposes this plan schedule in the event that the Court terminates exclusivity for the Committee to files its plan: * June 29, 2009 - Committee files its plan and disclosure statement (the Debtor should file revised plan and disclosure statement prior to this date). * July 28, 2009 - Examiner files preliminary report. * July 31, 2009 - Committee and Debtors file amended plans/disclosure statement(s) with any revisions prompted by examiner report. * Aug. 4, 2009 - Continued hearing on Committee/Debtor plans and disclosure statement(s). * Aug. 25, 2009 - Confirmation objection deadline for Committee-Debtor plans. * Aug. 31, 2009 - Confirmation hearing for Committee/Debtor plans. About DBSI Inc. Headquartered in Meridian, Idaho, DBSI Inc. and its affiliates were engaged in numerous commercial real estate and non-real estate projects and businesses. On November 10, 2008, and other subsequent dates, DBSI and 180 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-12687). Lawyers at Young Conaway Stargatt & Taylor LLP represent the Debtors as counsel. The Official Committee of Unsecured Creditors tapped Greenberg Traurig, LLP, as its bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' notice claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets and debts both between $100 million and $500 million. Joshua Hochberg, a former head of the Justice Department fraud unit, has been named examiner to investigate allegations of fraud by the Debtors and their management. DELPHI CORP: Panel Wants Discovery on Platinum Equity Deal ---------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy cases of Delphi Corp. and its affiliates tells the U.S. Bankruptcy Court for the Southern District of New York that it intends to propound discovery requests on the Debtors with respect to the proposed modifications to their Plan of Reorganization and the proposed sale to General Motors and Platinum Equity. The Committee notes that the Debtors have indicated the panel may not conduct discovery with respect to the plan modifications or the proposed alternative section 363 sale until a contested matter exists. The Committee has objected to the terms of the proposed sale, which would leave unsecured creditors with a small recovery, at best. Delphi Corp. and its affiliates are seeking approval of certain modifications to their Confirmed Chapter 11 Plan. The proposed modifications were submitted to the Court June 1, 2009. The Modified Plan provides that in the event the Debtors are not able to implement certain transactions contemplated in the Plan, the Debtors will seek approval on July 23, 2009, of a sale of substantially all their operating businesses to Parnassus Holdings II, LLC, an affiliate of Platinum Equity Capital Partners II, L.P., and of certain North American operations and the global steering business to GM Components Holdings LLC, an affiliate of General Motors Corporation, under a Master Disposition Agreement. The Committee reserves the right to supplement its objection at a later date. Platinum Equity Comments on Court Ruling Meanwhile, Platinum Equity issued a statement on a ruling by Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York, instructing Delphi to ensure that other potential bidders are considered as Delphi proceeds with the sale of its assets. According to Platinum Equity, although it has an executed agreement in place, it fully supports maintaining "what has always been an open and competitive process." "As that process reaches culmination, we are confident that our offer will be validated as the highest and best before the court," Platinum Equity said in a news statement. As reported by yesterday's Troubled Company Reporter, during the June 10 preliminary hearing on Delphi Corp.'s proposal to amend its Chapter 11 plan, Judge Drain directed the Debtors to establish bidding procedures for an auction of their assets. Billionaire Carl Icahn has been reported to be considering a bid on Delphi's assets pursuant to an auction. A source privy to the matter told The New York Post said Mr. Icahn, owner of Federal- Mogul Corporation, and certain other entities were previously engaged in talks with Delphi on possible sale of the company's assets while the Auto Task Force was striking a deal with Platinum Equity. The article, citing an unnamed source from Delphi, said Mr. Icahn's offer could have been a better deal for Delphi's creditors. Platinum Equity said it has spent nearly three years working with Delphi and its stakeholders, under the supervision of the court, to devise a solution that best ensures the long-term health of the business after its emergence from Chapter 11. "We have never been the only prospective bidder in the process, nor even necessarily the favored bidder. But we have persevered with only one objective: Putting the strongest and most comprehensive solution on the table and delivering value for all of Delphi's stakeholders. "We have spent thousands of hours analyzing all aspects of Delphi's business from a global, divisional, business unit and product-line perspective. "We have studied, in detail, Delphi's revenue and capital plans, its programs, commodity exposure, foreign currency exposure, manufacturing footprint, IT systems, allocation methodology, engineering resources and SG&A resources. "We have held hundreds of meetings to discuss all aspects of Delphi's business with management and employees at the headquarters and divisional level; with General Motors and other major OEM customers; and with the United Auto Workers union. "Based on all of those meetings and a comprehensive analysis of what it will take to operate the business successfully, we have developed a comprehensive strategic operating plan for Delphi going forward." Platinum Equity said it is the only bidder that has: -- provided a full and final global resolution to Delphi's Bankruptcy case; -- provided a substantial investment of new financial capital in the deal; -- provided a substantial investment of intellectual capital and operational resources that will ensure the future vitality of the business; -- provided a team and comprehensive business plan that will result in a healthy and well-capitalized Delphi that will survive as a long-term, extremely stable supplier to customers; -- provided stakeholder General Motors with the right to acquire key sites and operations while protecting GM's supply of parts through an orderly and collaborative transition; -- provided certainty of closing within the timeline outlined by the U.S. Bankruptcy Court, which envisions a final hearing date of July 23, 2009. "Numerous other parties have had full and complete access to Delphi and its stakeholders, and the opportunity to make a competing bid for this business over the past 31/2 years. In just the past few weeks, we were informed that another prospective bidder conducted substantive diligence but chose not to finalize a bid prior to the June 1, 2009 deadline," Platinum Equity said. As the sale process now approaches culmination, Platinum Equity said it fully supports Judge Drain's decision to maintain an open and competitive process that allows any other party an opportunity to meet all of the conditions necessary to complete the transaction within the timeline approved by the court to successfully resolve the Delphi bankruptcy case. About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on December 20, 2007. The Court confirmed the Debtors' First Amended Plan on January 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DESERT AMERICAN: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Desert American Builders Corp. 1360 N Houghton Road Tucson, AZ 85749 Bankruptcy Case No.: 09-13398 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Eric Slocum Sparks, Esq. 110 S Church Ave #2270 Tucson, AZ 85701 Tel: (520) 623-8330 Fax: (520) 623-9157 Email: eric@ericslocumsparkspc.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 Robert David Seal, president of the Company. EDDIE BAUER: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Eddie Bauer Holdings, Inc. 10401 N.E. 8th Street, Suite 500 Bellevue, WA 98004 Bankruptcy Case No.: 09-12099 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Eddie Bauer, Inc. 09-12100 Eddie Bauer Fulfillment Services, Inc. 09-12101 Eddie Bauer Diversified Sales, LLC 09-12103 Eddie Bauer Services, LLC 09-12104 Eddie Bauer International Development, LLC 09-12105 Eddie Bauer Information Technology, LLC 09-12106 Financial Services Acceptance Corporation 09-12107 Spiegel Acceptance Corporation 09-12108 Type of Business: Established in 1920 in Seattle, Eddie Bauer is a specialty retailer that sells outerwear, apparel and accessories for the active outdoor lifestyle. The Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style and customer service. Eddie Bauer products are available at 371 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebauer.com/ Eddie Bauer participates in a joint venture in Japan and has licensing agreements across a variety of product categories. Chapter 11 Petition Date: June 17, 2009 Court: District of Delaware Judge: Mary F. Walrath The Debtors' Counsel: David S. Heller, Esq. Josef S. Athanas, Esq. Heather L. Fowler, Esq. Latham & Watkins LLP Sears Tower, Suite 5800 233 South Wacker Drive Chicago, IL 60606 Tel: (312) 876-7700 Fax: (312) 993-9767 http://www.lw.com/ Co-Counsel: Kara Hammond Coyle, Esq. Michael R. Nestor, Esq. Young Conaway Stargatt & Taylor LLP The Brandywine Bldg. 1000 West Street, 17th Floor P.O. Box 391 Wilmington, DE 19899 Tel: (302) 571-6600 Fax: (302) 571-1253 http://www.ycst.com/ Restructuring Advisor: Alvarez and Marsal North America LLC 600 Lexington Avenue, 6th Floor New York, NY 10022 Tel: (212) 759-4433 Fax: (212) 759-5532 http://www.alvarezandmarsal.com/ Claims Agent: Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 Tel: (866) 967-1781 http://www.kccllc.net/ Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtors' Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Bank of New York Bond Indenture $75,000,000 Attn: Mary Lagumina Trustee Corporate Trust Administration 101 Barclay Street Floor 8W New York, NY 10286 Tel: (212) 815-4812 Fax: (212) 815-5704 U.S. Customs Service Trade Claim $2,500,000 Attn: Mike Hagge ACH Debit Applications Revenue Division 6650 Telecom Drive, Suite 100 Indianapolis, IN 46278 Tel: (317) 298-1200 ext. 1098 Fax: (317) 298-1259 Kristal D. Scherer Litigation $1,600,000 Sheldon A. Ostroff Law Offices of Sheldon A. Ostroff 1441 State St. San Diego, CA 92101 Tel: (619) 544-0881 Fax: (619) 544-0892 RR Donnelley Trade Claim $855,526 Receivables Inc. Attn: Tom Van Westrienen 5050 1st Ave S, Ste 101 Seattle, WA 98134 Tel: (425) 450-1292 Fax: (425) 417-5732 Expeditor's International Trade Claim $700,000 Attn: Jannelle Farina 21318 64th Ave. S. Kent, WA 98032 Tel: (206) 407-2935 Fax: (206) 835-7013 Boom! Trade Claim $464,976 Spiegel Creditors Bank Accounts $450,000 Midland Paper Co. Trade Claim $299,469 Vipdesk Connect Inc. Trade Claim $250,000 Fry Inc. Trade Claim $225,000 Stageplan Inc. Trade Claim $217,807 Newgistics Trade Claim $200,000 Scheiner Commercial Trade Claim $178,571 Epsilon Trade Claim $150,000 Vulcan Mgmt/Smart Services Trade Claim $150,000 UPromise Trade Claim $136,480 FedEx Trade Claim $131,024 Meisel C. Laminack Trade Claim $130,000 Performics Trade Claim $124,827 Russell Reynolds Trade Claim $123,747 National Print Trade Claim $111,665 Colorgraphics Trade Claim $106,000 Tranzact Trade Claim $100,000 Vanney Associates Trade Claim $99,042 Kiva Designs Trade Claim $92,044 South Central Power Trade Claim $84,243 AT&T Trade Claim $81,888 Voda Studios Trade Claim $72,835 Danny Hernandez Litigation Unknown The petition was signed by Marvin Edward Toland, senior vice president and chief financial officer. EDRA BLIXSETH: Court Rejects Plea Not to Liquidate Assets --------------------------------------------------------- Matthew Brown at The Associated Press reports that the Hon. Ralph B. Kirscher of the U.S. Bankruptcy Court for the District of Montana has rejected Edra Blixseth's appeal to reorganize her finances. As reported by the Troubled Company Reporter on June 9, 2009, the Hon. Ralph B. Kirscher of the Court converted Ms. Blixseth's Chapter 11 reorganization case to a Chapter 7 liquidation proceeding. Acting U.S. Trustee Robert D. Miller Jr. said that Ms. Blixseth ignored "repeated requests" to show that her assets, allegedly worth millions of dollars, were insured. According to The AP, Ms. Blixseth had appealed for time to craft a business plan in hopes of emerging from personal bankruptcy with her sizable fortune intact. The AP states that Ms. Blixseth said that her Porcupine Creek estate in California and other assets would be worth more if she had time to properly market them, while creditors argued that a prompt liquidation would yield maximum value for her assets. The AP relates that lawyers for creditors raised questions about Ms. Blixseth's luxurious lifestyle. According to the report, Ms. Blixseth claimed that she has scaled back spending, sold off jewelry, and stopped using a private jet to travel, but continues to live on a 240-acre California estate recently valued at $137 million. While Ms. Blixseth listed $157 million in debts in court documents, she admitted in court that she owed up to $357 million, The AP states. "Standards had not been met" that would have allowed Ms. Blixseth to retain her assets while crafting a business reorganization plan, The AP reports, citing Judge Kirscher. Ms. Blixseth, according to The AP, said that she would cooperate with a court-appointed trustee charged with liquidating her assets under Chapter 7 and that she is "going to try to regroup and figure out the best way to maximize the value of the assets." Ms. Blixseth said that she would continue fighting against some creditors that she claimed submitted false claims against her, the report states. 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. EDDIE BAUER: Files for Chapter 11; To Sell to CCMP for $202MM ------------------------------------------------------------- Eddie Bauer Holdings, Inc. (Nasdaq: EBHI) said June 17 that it has voluntarily initiated proceedings under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Delaware and under the Companies' Creditors Arrangement Act (CCAA) in Canada in the Ontario Superior Court of Justice (Commercial List), and is pursuing a sale process under Section 363 of the Bankruptcy Code and under the CCAA. The Company has entered into an asset purchase agreement with an affiliate of CCMP Capital Advisors, LLC ("CCMP Capital") to buy the Company's assets through a bankruptcy process, subject to an auction and Bankruptcy Court approval, for $202 million in cash, with working capital and similar adjustments. CCMP Capital, a global private equity firm with significant experience in the retail and consumer sectors, intends to operate the business as a going concern with little or no long-term debt. CCMP Capital has agreed to: -- Keep the majority of the stores open and retain the majority of the employees; -- Support Company motions to maintain critical vendor relationships and payments; and -- Support Company motions to honor gift cards and the Company's loyalty reward program. The sale process is expected to enable a sale of the business to CCMP Capital or any higher and better bidder approved by the Court on an accelerated basis, thereby transforming the business into a financially stronger entity with substantially less debt and a better position for the future. The Company currently anticipates completing the sale process in 60 days or less. All of the Company's operations, including its 371 stores, catalog operations and its online sites (www.eddiebauer.com and www.firstascent.com) are open and serving customers. The Company plans to conduct business as usual through the process and has asked for court approval to continue paying product vendors and employees as usual. The Company intends to honor customer gift cards, returns and loyalty program points. Neil Fiske, President and Chief Executive Officer of Eddie Bauer, said, "Eddie Bauer is a good company with a great brand and a bad balance sheet. This process will allow the business to emerge with far less debt, positioned for growth as the economy recovers and as our new products gain traction. We expect this process to be completed very quickly, protecting our employees and critical vendor partners every step of the way. "We have made good progress on our turnaround strategy of returning Eddie Bauer to its heritage as an active outdoor brand and have exciting new product launches on the way to market, including First Ascent, our return to expedition-grade outerwear and gear. Unfortunately, a crushing debt burden placed on the Company from the Spiegel reorganization in 2005, combined with the severe, prolonged recession, have left us with no choice but to use this process to reduce the debt load on the business." For additional background, a statement from Mr. Fiske is attached. The Company has secured a commitment from its existing revolving credit lenders, Bank of America, N.A., GE Capital Corporation and CIT Group/Business Credit, Inc. for so-called Debtor-in-Possession (DIP) financing of $90 million on an interim basis and $100 million based on final court order, which it believes will provide ample liquidity to meet its ongoing obligations during the sale process. In April 2009, the Company negotiated an amendment with its senior term loan lenders that provided short-term relief on its loan covenants. The Company explored various paths for restructuring its balance sheet, but was ultimately unable to reach an agreement. The Company has filed customary "First Day" motions seeking Bankruptcy Court approval of various types of relief designed to support its employees, customers and suppliers during the sale process, including motions to allow the Company to continue to pay suppliers under normal terms for goods and services; to pay its employees in the usual manner and to continue without disruption their primary benefits; and to continue the Company's customer programs including its gift card, merchandise return, Friends and other programs. The Company's legal advisor is Latham & Watkins LLP; its financial advisor is Peter J. Solomon Company; and its restructuring advisor is Alvarez & Marsal. CCMP Capital's legal advisor is Weil, Gotshal & Manges LLP. Additional information on the restructuring is available on the Company's Web site at http://investors.eddiebauer.com. About Eddie Bauer Established in 1920 in Seattle, Eddie Bauer is a specialty retailer that sells outerwear, apparel and accessories for the active outdoor lifestyle. The Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style and customer service. Eddie Bauer products are available at 371 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebauer.com/ Eddie Bauer participates in a joint venture in Japan and has licensing agreements across a variety of product categories. Eddie Bauer Holdings, Inc., was a spin-out of a solvent subsidiary debtor from insolvent Spiegel Inc.'s chapter 11 proceeding. Eddie Bauer, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer filed a chapter 11 petition (Bankr. S.D.N.Y. Case No. 03-11547) on March 17, 2003, right behind it's parent company. On a standalone basis, Eddie Bauer, Inc., reported $394 million in assets and $42 million in liabilities in its Schedules of Assets and Liabilities. Spiegel, Eddie Bauer and other debtor-affiliates filed a chapter 11 plan dated February 18, 2005, and amended on March 28, 2005; Judge Lifland confirmed that plan on May 25, 2005; and Eddie Bauer, Inc., emerged from chapter 11 under the terms of that amended plan on June 21, 2005, as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Spiegel, under the terms of that same chapter 11 plan, liquidated after selling its assets. Under the chapter 11 plan, Eddie Bauer distributed new common stock in new, deleveraged Eddie Bauer Holdings., Inc. -- not Spiegel -- to old Eddie Bauer creditors. On December 15, 2005, Eddie Bauer registered those new shares with the SEC. About CCMP Capital CCMP Capital Advisors, LLC is a leading global private equity firm specializing in buyouts and growth equity investments in companies ranging from $500 million to more than $3 billion in size. CCMP Capital focuses on four primary industries: Consumer, Retail and Services; Energy; Healthcare Infrastructure; and Industrial. Selected consumer and retail investments have included: Cabela's, Guitar Center, 1-800-flowers.com, Quiznos, Pinnacle Foods and Crosstown Traders. CCMP Capital's founders have invested over $12 billion since 1984. CCMP Capital's latest fund, CCMP Capital Investors II, L.P., closed in September 2007 with commitments of $3.4 billion. CCMP Capital has offices in New York, Houston and London. Through active management, its global resources and its powerful value creation model, CCMP Capital has established a reputation as a world-class investment partner. For more information, please visit www.ccmpcapital.com. CCMP Capital is a registered investment adviser with the Securities and Exchange Commission. EMPIRE RESORTS: Hires KPMGCF to Raise $75 Million in Capital ------------------------------------------------------------ Empire Resorts, Inc., and Monticello Raceway Management, Inc., a subsidiary of the Company, entered into a letter agreement with KPMG Corporate Finance LLC to retain its services as exclusive financial advisor. KPMGCF will raise for the Company up to $75 million in newly sourced capital to address pending maturity and contractual issues relating to the Company's $65 million Convertible Senior notes due July 31, 2014, which the holders have the right to require the Company to repurchase on July 31, 2009, and the transaction costs related thereto. The Transaction may include, with respect to new funds sourced by KPMGCF pursuant to the Agreement: i) a private placement of equity securities or debt obligations of the Company and any affiliate or subsidiary thereof, in one or more related transactions, to one or more accredited Investors and sources of financing, in the form of debt obligations, including term and revolving debt and credit support facilities as letters of credit, common stock, convertible preferred stock, convertible debt securities, preferred stock, equity-linked securities, warrants, equity or equity-linked joint ventures or other equity or equity- linked arrangements and/or (ii) the direct repurchase or retirement of all or a portion of the existing debt obligations of the Company. The Agreement became effective as of June 3, 2009, and will continue until Sept. 30, 2009. The Agreement may be extended thereafter upon the mutual written agreement of both parties or terminated after the expiration of 14 days after either party gives written notice of termination to the other party, except for certain provisions that survive termination of the Agreement. Pursuant to the terms of the Agreement, the Company will pay to KPMGCF (i) a retainer of $75,000; (ii) a monthly fee of $60,000; and (iii) upon consummation of a Transaction, a percentage-based fee calculated with regard to the size of such transaction, subject to a minimum fee of $500,000. A full-text copy of the Engagement of KPMG Corporate Finance is available for free at http://ResearchArchives.com/t/s?3df0 About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. -- http://www.empireresorts.com/-- operates the Monticello Gaming & Raceway and is involved in the development of another gaming resort project in the Catskills. At March 31, 2009, the Company's balance sheet showed total assets of $45.4 million and total liabilities of $79.5 million, resulting in a stockholders' deficit of about $34.1 million. Going Concern Doubt In its 2008 annual report filed in March 2009, the Company said its ability to continue as a going concern is dependent upon its ability to negotiate a renewal or extension of the maturity dates or to arrange financing to repay its credit facility with the Bank of Scotland when it matures on May 29, 2009, and the holders of the Senior Convertible Notes if they demand repayment of the notes on July 31, 2009. The Company said there is no assurance that it will be successful in obtaining a result that will avoid a default on its obligations under its credit facility or the terms of the Senior Convertible Notes. Friedman LLP in New York, the Company's independent registered public accounting firm, included an explanatory paragraph in its report dated March 13, 2009, regarding its concerns about the Company's ability to continue as a going concern. The Company entered into a credit facility with Bank of Scotland on January 11, 2005. The credit facility provides for a $10 million senior secured revolving loan. In addition, the Company issued on July 26, 2004, about $65 million of 5.5% senior convertible notes presently convertible into approximately 5.2 million shares of common stock, subject to adjustment upon the occurrence or non-occurrence of certain events. The notes were issued with a maturity date of July 31, 2014, and the holders have the right to demand that we repurchase the notes at par plus accrued interest on July 31, 2009. Interest is payable semi- annually on January 31 and July 31. E*TRADE FIN'L: Unveils $1.2BB Plan to Strengthen Capital Structure ------------------------------------------------------------------ E*TRADE FINANCIAL Corporation launched a registered public offering of $400 million of its common stock. The Company also said that, upon pricing of the Common Stock Offering, it will launch significant debt exchange transactions for certain of its outstanding notes. The consummation of the Exchange Transactions will be subject to certain conditions, including the closing of the Common Stock Offering and shareholder approval. Affiliates of Citadel Investment Group L.L.C., the Company's largest stock and bond holder, have agreed to participate in both the Common Stock Offering and the Exchange Transactions. The proceeds from the Common Stock Offering will provide additional equity capital, primarily for E*TRADE Bank and secondarily for other corporate purposes. Citadel has committed to place an order with the underwriters to purchase either $50 million or $100 million of stock in the Common Stock Offering, depending on the public offering price. The Company had previously suspended its open market purchase program that commenced on May 8, 2009. The Company has raised net proceeds of approximately $63 million through the issuance of approximately 41 million shares of common stock under that program to date. The Company will offer to exchange more than $1 billion of newly- issued zero coupon convertible debt for all of its 8% Senior Notes due 2011 and a portion of its 12.5% Springing Lien Notes due 2017. This will significantly reduce the Company's debt service burden by eliminating interest costs relating to those debt securities that are exchanged and lengthening the weighted-average maturity of its debt securities. The convertible debt will have a maturity of 10 years and will be convertible into shares of common stock based on the public offering price in the Common Stock Offering (net of underwriting discounts), provided that the conversion price will be no less than $1.00 per share and no more than $1.20 per share. Citadel has agreed to participate in the Exchange Transactions for an aggregate principal amount of at least $800 million face value of the Company's long-term debt, including $200 million face value of the 2011 Notes and at least $600 million face value of the 2017 Notes, subject to reduction under certain circumstances. The Company will offer to exchange all of its 2011 Notes and up to $310 million face value of its 2017 Notes not held by Citadel on the same terms. The Exchange Transactions are expected to be commenced immediately following the pricing of the Common Stock Offering. Complete details of the Exchange Transactions will be announced at that time. The Company's ability to execute the Exchange Transactions requires, among other things, shareholder approval under NASDAQ Marketplace Rules. Accordingly, E*TRADE will file a preliminary proxy statement with the Securities and Exchange Commission calling for a special meeting of its shareholders to authorize the Exchange Transactions, the issuance of up to 365 million shares of common stock in additional debt exchange transactions, and an increase in the number of authorized shares of the Company. In addition to approval by shareholders, the extent of Citadel's participation in the Exchange Transactions is subject to approval from E*TRADE's primary federal banking regulator, the Office of Thrift Supervision. J.P. Morgan Securities Inc. and Sandler O'Neill & Partners, L.P. are joint book-running managers and E*TRADE Securities LLC is co-manager of the Common Stock Offering. J.P. Morgan Securities Inc. has also been retained as the Company's exclusive financial advisor in connection with the Exchange Transactions. The Company is paying customary fees for these services and has agreed to indemnify it for certain liabilities. J.P. Morgan Securities Inc.'s compensation for its advisory services with respect to the Exchange Transactions is in no way contingent on the results or the success of the exchange offer or consent solicitation relating to any outstanding notes, and J.P. Morgan Securities Inc. has not been retained to, and will not, solicit acceptances of the Exchange Transactions or consents to any outstanding notes or make any recommendations with respect thereto. 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 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." E*TRADE FIN'L: Updates on May 2009 Activity, Loan Delinquencies --------------------------------------------------------------- E*TRADE FINANCIAL Corporation has released its Monthly Activity Report for May and provided an intra-quarter update on its loan portfolio delinquencies and certain key financial and balance sheet metrics. The Company ended May with record total accounts of more than 4.5 million, which included record brokerage accounts of more than 2.7 million. This included gross new brokerage accounts of 43,000 and net new brokerage accounts of 23,000. Total Daily Average Revenue Trades for May were 239,439 -- an increase of 4 percent from April and 34 percent from the year ago period. The Company reported approximately 220,000 DARTs for June month to date (as of June 12), with second-quarter DARTs on track to be approximately 15 percent higher than the prior quarter. Asset flows continued to be positive, as the Company realized $500 million in net new customer assets during May, marking the eighth consecutive month of positive inflows. Total customer cash and deposits (including brokerage-related cash) decreased slightly during the month, while total customer assets increased 5.8 percent. Customers were net buyers of more than $450 million in securities during the month. The Company also provided an update concerning delinquencies in its loan portfolio. Special mention delinquencies (30 to 89 days delinquent) for its home equity portfolio, which represents the Company's greatest exposure to loan losses, declined 10 percent from March 31 to May 31. Home equity "at risk" delinquencies (30 to 179 days delinquent) declined 14 percent from March 31 to May 31. Total special mention delinquencies for the Company's loan portfolio, which includes one- to four-family, home equity and consumer and other loans, declined by 7 percent quarter to date as of May 31, 2009. The Company also provided an update to certain key financial and balance sheet metrics through the first two months of the second quarter of 2009, as well as certain forecasts for the second quarter 2009 results. The Company cautions that this data is preliminary as of June 12, 2009 and subject to change. April and May Quarter-to-Date Results -- Total Net Revenue of $448 million -- Commission, Fees and Other Revenue of $165 million -- Operating Expense of $192 million May Bank Capital Metrics (as of May 31, 2009) -- Bank Tier-1 and risk-based capital ratios of 6.07% and 12.75%, respectively -- Bank excess risk-based capital (excess to the regulatory well-capitalized threshold) of $644 million -- Bank Tier-1 capital to risk-weighted assets ratio of 11.46% Net revenue totaled $448 million for April and May, inclusive of gains on the sale of agency mortgage-backed securities of $54 million. Commission, fees and other revenue totaled just over $165 million, and operating expenses totaled just over $192 million for April and May. The Company also forecasted a range for loan loss provision and expected net charge-offs for the full second quarter: -- Estimated provision for loan losses of $375 million to $450 million -- Estimated net charge-offs of $375 million to $400 million 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 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." ETHAN ALLEN: S&P Downgrades Corporate Credit Rating to 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit and senior unsecured debt ratings on Danbury, Connecticut-based Ethan Allen Interiors Inc. to 'BB' from 'BBB-' and removed all of the ratings from CreditWatch with negative implications, where they were placed on Feb. 9, 2009. The outlook is negative. At the same time, Standard & Poor's lowered its rating on the $200 million senior unsecured notes due 2015 of the company's wholly owned subsidiary, Ethan Allen Global Inc., to 'BB' from 'BBB-', and assigned a '3' recovery rating, indicating the expectation of meaningful (50% to 70%) recovery in the event of a payment default. "The rating actions reflect the company's very weak operating results in recent quarters, which have resulted in credit protection measures that are well below S&P's expectations for the previous rating," said Standard & Poor's credit analyst Rick Joy. Although the company has taken actions to reduce operating expenses and strengthen its competitive position, S&P believes near-term operating performance may decline further, given the current weak economy and S&P's expectation for continued challenges in the North American residential furnishings industry. As of March 31, 2009, the company had about $203 million of total funded debt, excluding operating lease obligations. The ratings on Ethan Allen reflect the company's vulnerability to reduced discretionary spending in an economic downturn and its exposure to the highly competitive residential furnishings industry. Ethan Allen benefits from its brand strength and dedicated retail distribution network. Continued declines in the housing market and their effects on the furniture industry remain a significant rating concern. Ethan Allen is one of the largest manufacturers and retailers of home furnishings and accessories in the U.S. As a vertically integrated company, Ethan Allen designs, manufactures, sources, distributes, and sells a full range of home furnishings under the well-recognized Ethan Allen brand. The company's products are sold through a dedicated international network of 290 retail stores, which S&P believes provides a competitive advantage. Although the company maintains a leading market position with a strong brand in the highly fragmented residential furnishings industry, S&P believes housing market weakness and reduced consumer spending on furniture have pushed down sales in the past two years. Sales declined 23% for the last 12 months ended March 31, 2009, with declines accelerating beginning in the fourth quarter of fiscal 2008 (ended June 30). The outlook is negative. The company's credit measures have deteriorated significantly because of the challenging operating environment, given the weak U.S. housing market and economy. In light of S&P's expectation for continued weakness, S&P believes credit measures could deteriorate further in the near term. S&P would consider a lower rating if the company's operating environment and credit measures substantially weaken further, and/or if the company's liquidity is materially pressured. Although less likely over the near term, S&P could revise the outlook to stable if Ethan Allen can stabilize operating results and materially improve credit measures from current levels. FARMLAND INDUSTRIES: Legal Fees Gives Bankr. Court Jurisdiction --------------------------------------------------------------- According to Bill Rochelle at Bloomberg News, the U.S. Court of Appeals for the Eighth Circuit in St. Louis, ruled in the case GAF Holdings LLC v. Rinaldi (In re Farmland Industries Inc.), Case No. 07-3840, that a bankruptcy court has jurisdiction over a lawsuit if the bankrupt estate is obligated to pay for the defense of one of the parties. On March 2, 2007, GAF filed its complaint alleging misconduct on the part of Philip Rinaldi; Stanley Riemann; Robert Terry; and Pegasus Partners II, L.P. and affiliates in connection with the 2004 sale of a refinery and fertilizer complex in Coffeyville, Kansas to Coffeyville Resources, LLC. At the time of the sale, the Coffeyville complex was part of the Chapter 11 bankruptcy estate of Farmland Industries. Messrs. Riemann and Terry were officers of Farmland or one of its subsidiaries. The Purchaser was a subsidiary of one of the Pegasus entities formed for the purpose of acquiring the Coffeyville complex. Mr. Rinaldi was an executive with Pegasus and an officer and director of the Purchaser. The sale was conducted according to procedures approved by the bankruptcy court. GAF failed to qualify as a bidder under the sale procedures. The bankruptcy court approved the sale to the Purchaser by order dated November 14, 2003. On December 19, 2003, the bankruptcy court entered its order confirming Farmland's plan. On February 2, 2004, GAF filed a motion pursuant to Federal Rule of Civil Procedure 60(b) and Federal Rule of Bankruptcy Procedure 9024 to set aside the sale order as the product of collusion between Mr. Riemann, Mr. Terry, and the Purchaser. After discovery and a hearing, the bankruptcy court denied the motion. Three years later, GAF filed the complaint with the bankruptcy court again alleging misconduct in connection with the sale of the Coffeyville complex. In the complaint, GAF sought damages against Mr. Rinaldi, Mr. Riemann, Mr. Terry and Pegasus for intentional interference with business expectancy and conspiracy. GAF also sought to force the liquidating trustee appointed in Farmland's plan to set forth any interest the Liquidating Trust might have in any proceeds of the litigation. The Bankruptcy Court dismissed the complaint with prejudice as an impermissible collateral attack on the prior orders approving the sale and for failing to state a claim upon which relief can be granted. On appeal from dismissal, the United States Bankruptcy Appellate Panel for the 8th Circuit dismissed the case, ruling that GAF's complaint is beyond the subject matter jurisdiction of the bankruptcy court. According to the Appellate Panel, the bankruptcy court lacks subject matter jurisdiction over GAF's state law based tort claims against non-debtor third parties. According to Bill Rochelle, the appeal was then brought to the Eighth Circuit Court in St. Louis, which has held that there was jurisdiction in the bankruptcy court because the suit was "related to" the bankruptcy. The Court, according to Bloomberg, said there was more than the required "conceivable effect" on the bankruptcy because the bankrupt estate was already paying for the defense of former company officers under an indemnification agreement. About Farmland Industries Farmland Industries, Inc., was one of the largest agricultural cooperatives in North America with about 600,000 members. The firm operates in three principal business segments: fertilizer production; pork processing, packing and marketing; and beef processing, packing and marketing. The company, along with its affiliates, filed for chapter 11 protection (Bankr. W.D. Mo. Case No. 02-50557) on May 31, 2002 before the Honorable Jerry W. Venters. The Debtors' Counsel is Laurence M. Frazen, Esq. of Bryan Cave LLP. When the Debtors filed for chapter 11 protection, they listed total assets of $2.7 billion and total debts of $1.9 billion. During its Chapter 11 case, the Company sold its businesses, including its pork production and processing business to Smithfield, Virginia-based Smithfield Foods for cash of $367.4 million and other considerations. Pursuant to the Second Amended Joint Plan of Reorganization filed by Farmland Industries, Inc. and its debtor-affiliates, the court declared May 1, 2004, as the Effective Date of the Plan. Pursuant to the plan, Farmland transferred certain assets to a liquidating trust to liquidate and distribute proceeds to certain creditors of and interest holders in Farmland. J.P. Morgan Trust Company, National Association is the trustee of that trust. FELCOR LODGING: S&P Retains Negative CreditWatch on 'B-' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B-' corporate credit rating for Irving, Texas-based FelCor Lodging Trust Inc., along with all related issue-level ratings, remain on CreditWatch with negative implications, where it was placed on March 27, 2009. Yesterday, FelCor announced that it had closed a $200 million term loan due 2013 (assuming the company exercises its rights to extend the maturity) and will use the proceeds for general corporate purposes, including repaying $128 million of outstanding amounts and terminating its $250 million line of credit. In S&P's recovery analysis on the company's $300 million 8.5% senior secured notes and $215 million floating-rate senior secured notes due 2011, S&P applies a discrete asset valuation and assume that unencumbered properties will be available to support the notes. The new term loan is secured by nine hotels and, therefore, the unencumbered portfolio has changed. S&P will evaluate whether S&P's recovery rating on the notes will change and whether this will result in a lower issue-level rating on the notes. "In resolving the CreditWatch listing, S&P will review the collateral package on the new term loan and its impact on the security relating to FelCor's two senior notes issuances," said Standard & Poor's credit analyst Liz Fairbanks. "In addition, S&P continue to monitor the difficult operating environment and its impact on the company's portfolio." FIRST INDUSTRIAL: Moody's Cuts Senior Unsecured Rating to 'Ba3' --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of First Industrial Realty Trust and First Industrial L.P. (senior unsecured debt to Ba3, from Ba1) and revised the rating outlook to negative. This concludes Moody's review. This rating action reflects Moody's expectation that the REIT's operating performance will be declining throughout 2009 as a result of the global economic slowdown, thus, causing its debt protection measures such as fixed charge coverage and leverage measured as debt/EBITDA to deteriorate further. In addition, Moody's view First Industrial's liquidity as limited due to its largely drawn line of credit and reliance primarily on cash on balance sheet and results of operations. Positively, the REIT has successfully refinanced its June 2009 bond maturity on a secured basis, as previously outlined, and its commitments for the remainder of 2009 and through the mid-2010 are minimal. Still, First Industrial must comply with both bank and bond covenants which are likely to come under pressure as earnings deteriorate. Counterbalancing these challenges, First Industrial benefits from a geographically diverse and virtually unencumbered portfolio. Its largely unsecured balance sheet will allow the REIT to add secured leverage to access liquidity. For the rating outlook to return to stable, First Industrial's earnings would need to stabilize as evidenced by maintaining a fixed charge coverage of approximately 1.8X over several quarters while limiting leverage to 65% debt+preferred/gross assets or below 8X debt/EBITDA and secured debt below 20% of gross assets. Moody's does not expect this to occur in the near-term. Also, maintaining covenant compliance and adequate liquidity would be key for a stable outlook. Negative rating pressure would occur from further earnings deterioration leading to a decline in fixed charge below 1.5X, leverage increasing to above 70% debt/gross assets or 10X debt/EBITDA, secured debt rising above 25% of gross assets, or any liquidity challenges or covenant violations. The latter could result in a multiple-notch downgrade. These ratings were downgraded with a negative outlook: * First Industrial L.P. -- Senior debt to Ba3 from Ba1; senior debt shelf to (P)Ba3 from (P)Ba1 * First Industrial Realty Trust, Inc. -- Preferred stock at to B2 from Ba2; preferred stock shelf to (P)B2 from (P)Ba2 Moody's last rating action with respect to First Industrial was on April 23, 2009, when Moody's downgraded the ratings of First Industrial L.P. to Ba1 from Baa3 (senior unsecured) and First Industrial Realty Trust, Inc. to Ba2 from Ba1 (preferred stock) and maintained the ratings on review for possible downgrade. First Industrial Realty Trust, Inc. is an industrial real estate investment trust that controls over 70 million square feet of warehouse, manufacturing and light industrial assets, in addition to over 680 acres of developable land in more than 30 markets in the United States and Canada. At March 31, 2009, First Industrial had $3.2 billion in assets and $976 million in book equity. FOAMEX INTERNATIONAL: Wayzata Drops Appeal From Sale Order ---------------------------------------------------------- According to Bloomberg's Bill Rochelle, Wayzata Capital Investment Partners LLC has dropped its appeal from the order approving the sale of Foamex International Inc. to MatlinPatterson Global Advisers LLC and Black Diamond Capital Management LLC. Wayzata Capital Investment Partners LLC said in its appeal that its cash bid provides a higher return for creditors. As reported in the Troubled Company Reporter on May 29, 2009, MaitlinPatterson and Black Diamond won the bidding for Foamex with a $155 million offer, along with the assumption of some liabilities. Wayzata won the first auction for the assets. However, the auction was reopened, and MatlinPatterson and Black Diamond emerged the winning bidder. Foamex is asking an August 18 extension of its exclusive period to propose a Chapter 11 plan. The Court will consider approval of the Debtors' first request for an extension on July 16. Foamex International Inc. (FMXL) -- http://www.foamex.com/-- headquartered in Media, PA, produces polyurethane foam-based solutions and specialty comfort products. The Company services the bedding, furniture, carpet cushion and automotive markets and also manufactures high-performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. Foamex and eight affiliates first filed for Chapter 11 protection on September 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). On February 2, 2007, the U.S. Bankruptcy Court for the District of Delaware confirmed the Debtors' reorganization plan. The Plan became effective and the Company emerged from Chapter 11 bankruptcy on February 12, 2007. Foamex missed $7.3 million in interest payments due at the end of the January 21 grace periods on the Company's $325 million first- lien term loan and the $47 million second-lien term loan. On February 18, 2009, Foamex International Inc. and seven affiliates filed separate voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 09-10560). The Hon. Kevin J. Carey presides over the cases. Ira S. Dizengoff, Esq., Phillip M. Abelson, Esq., and Brian D. Geldert, Esq., at Akin Gump Strauss Hauer, in New York, represent the Debtors as counsel. Mark E. Felger, Esq., and Jeffrey R. Waxman, Esq., at Cozen O'Connor, in Wilmington, Delaware, represent the Debtors as Delaware counsel. Investment banker is Houlihan Lokey; accountant is McGladrey & Pullen LLP; and claims and noticing agent is Epiq Bankruptcy Solutions LLC. Sharon L. Levine, Esq., at Lowenstein Sandler, is counsel to the Official Committee of Unsecured Creditors. David M. Fournier, Esq., Evelyn J. Meltze, Esq., and Leigh-Anne M. Raport, Esq., at Pepper Hamilton LLP, is the Committee's Delaware counsel. As of September 28, 2008, the Debtors had $363,821,000 in assets, and $379,710,000 in debts. FORD MOTOR: Navistar Hikes Equity Stake in Joint Ventures --------------------------------------------------------- Navistar International Corporation and Ford Motor Company in January 2009 reached an agreement to restructure their ongoing business relationship and settle all existing litigation between the companies. As part of the settlement agreement, both companies agreed to terminate their respective lawsuits and release each other from various actual and potential claims, including those brought in the lawsuits. Navistar also received a cash payment from Ford and will increase its equity interest in its Blue Diamond Truck and Blue Diamond Parts joint ventures with Ford to 75%. Finally, Navistar and Ford will end their current diesel engine supply agreement effective December 31, 2009. On June 9, 2009, pursuant to the provisions of the settlement agreement, Navistar entered into a Fifth Amendment to the Blue Diamond Joint Venture Agreement with Ford. Navistar increased its equity interest in BDP from 49% to 75% as well as increased its equity interest in BDT from 51% to 75%. The receipt of additional equity interest from Ford was among the various components of the settlement agreement, and no additional consideration was paid to Ford in connection with the increase in equity interest in BDT or BDP. 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 $9.65 billion in total assets and $11.09 billion in total liabilities as of April 30, 2009, resulting in $1.44 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. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FORTUNOFF FINE: PBGC Assumes Underfunded Pension Plan ----------------------------------------------------- The Pension Benefit Guaranty Corporation assumed responsibility for the pension plan covering nearly 3,000 workers and retirees of the Fortunoff Fine Jewelry & Silverware LLC and M. Fortunoff of Westbury LLC units of Source Financing Corp., a retail holding company based in Uniondale, N.Y. The PBGC stepped in because the underfunded pension plan faced abandonment after Source Financing, in chapter 11 bankruptcy, sold substantially all of its assets in a transaction that did not include the pension plan. The company's Fortunoff subsidiaries were specialty retailers of jewelry, house wares, small appliances, gifts and luggage, with stores in New York, New Jersey, Connecticut and Pennsylvania. According to PBGC estimates, the Fortunoff, The Source, Cash Balance Plan is 54 percent funded, with assets of $45 million and benefit liabilities of $82 million. The agency expects to cover the entire $37 million shortfall. The plan has been frozen since October 29, 2006. The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended as of March 6, 2008. Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other participants will receive their pensions when they are eligible to retire. Within the next several weeks, the PBGC will send notification letters to all participants in the Fortunoff 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 date of the plan sponsor's bankruptcy. Therefore participants in these pension plans are subject to the limits in effect on February 4, 2008, which set a maximum guaranteed amount of $51,750 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 Fortunoff Fine Jewelry & Silverware and M. Fortunoff of Westbury 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 approximately $13 million as the claim was previously included at a lower estimated amount in the agency's fiscal year 2008 financial statements, in accordance with generally accepted accounting principles. 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. About Fortunoff Fine Jewelry and Silverware LLC New York-based Fortunoff Fine Jewelry and Silverware LLC -- http://www.fortunoff.com/-- started out as a family-owned business founded by Max and Clara Fortunoff in 1922, until it merged with M. Fortunoff of Westbury, L.L.C. and Source Financing Corporation in 2004. Fortunoff offers customers fine jewelry and watches, antique jewelry and silver, everything for the table, fine gifts, home furnishings including bedroom and bath, fireplace furnishings, housewares, and seasonal shops including outdoor furniture shop in summer and enchanting Christmas Store in the winter. Fortunoff and its two affiliates filed for chapter 11 petition on Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) to effectuate a sale to NRDC Equity Partners LLC -- http://www.nrdcequity.com/-- a private equity firm that bought Lord & Taylor from Federated Department Stores. In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total assets and $136,626,948 total liabilities; Source Financing Corp. listed $154,680,100 total assets and $176,961,631 total liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955 total assets and $119,985,788 total liabilities. Fortunoff sold substantially all of their assets, including their "Fortunoff" and "The Source" trademarks, on March 7, 2008, to NRDC Equity Partners LLC's H Acquisition LLC, now known as Fortunoff Holdings LLC. One year later, Fortunoff Holdings and its affiliate, Fortunoff Card Company LLC, filed for Chapter 11 protection on February 5, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10497). Lee Stein Attanasio, Esq., at Sidley Austin LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Zolfo Cooper LLC as their special financial advisor and The Garden City Group Inc. as their claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. GEORGIA GULF: Fitch Downgrades Issuer Default Rating to 'RD' ------------------------------------------------------------ Fitch Ratings has downgraded Georgia Gulf Corp.'s Issuer Default Rating to 'RD' from 'C' following its announcement of an extension of its exchange offer until July 1, 2009. Georgia Gulf simultaneously announced that it has obtained extended forbearance agreements to ensure that indebtedness under its notes may not be accelerated prior to July 15, 2009 due to failure to make the $34.5 million of interest payments due April 15, 2009. Earlier Georgia Gulf obtained an amendment under its senior secured credit agreement that allows the company to continue to withhold the interest payments without constituting a default under the credit agreement until the earlier of July 15, 2009 or the first day note holders may accelerate the indebtedness under such notes. Georgia Gulf also announced that it has withheld interest payments on the 2013 notes in the amount of $3.6 million due June 15 and subject to a 30-day grace period. The downgrade reflects Fitch's view that Georgia Gulf has experienced an uncured payment default on a bond, loan or other material financial obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased business due to the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations. Fitch has also affirmed Georgia Gulf's debt ratings: -- Senior secured credit facility at 'B-/RR1'; -- Senior unsecured notes at 'C/RR6'; -- Senior subordinated notes at 'C/RR6'. Should the exchange prevail in full, interest expense would be reduced by about $38 million annually and debt net of cash would be reduced by $530 million. The exchange incorporates payment of accrued interest on the notes in cash. At March 31, 2009, Georgia Gulf had cash on hand of roughly $65 million and $35.9 million available under its revolver. At that time, $172.5 million was drawn under the revolver, $349.5 million was outstanding under the term loan B due 2013, the face amount of the senior notes was $600 million, and the face amount of the senior subordinated notes was $200 million. Based in Atlanta, Georgia Gulf is a commodity chemicals producer. Its product portfolio includes VCM, PVC resin, vinyl compounds, cumene, acetone, phenol, window and door profiles and moldings as well as outdoor building products. Georgia Gulf earned approximately $174 million of EBITDA from continuing operations on sales of $2.9 billion in 2008. GETRAG TRANSMISSION: Has Liquidating Plan in Detroit Court ---------------------------------------------------------- According to Bloomberg's Bill Rochelle, the U.S. Bankruptcy Court for the Eastern District of Michigan will convene a hearing on August 4 to consider confirmation of the liquidating Chapter 11 plan and approval for the explanatory disclosure statement filed by Getrag Transmission Manufacturing LLC. According to the report, the disclosure statement explaining the Liquidating Plan says unsecured creditors don't stand to see anything aside from recovery from lawsuits. Getrag listed unsecured creditors with claims totaling $483 million. Getrag Transmission asserts claims against Chrysler, but any recovery from the automaker is doubtful, Bill Rochelle says. Getrag sued Chrysler LLC in a dispute over a dual clutch transmission plant the two companies were building in Tipton, Indiana. Prepetition, Getrag Transmission and Chrysler agreed to the construction of a $530 million dual clutch transmission plant in Tipton County, Indiana. According to Bloomberg, Chrysler agreed to reimburse Getrag $305 million and agreed that the plant would be sole source for the product until 2020. Chrysler, however, later sued Getrag Transmission in the state court of Michigan, claiming that the Company couldn't secure the needed financing, and the Company abandoned the project before it filed for bankruptcy. Getrag, in response, filed for Chapter 11 and sued Chrysler in bankruptcy court. The bankruptcy court has been automatically stayed by Chrysler's own Chapter 11 filing. Getrag Transmission has a pending agreement to sell its real property to secured lenders in exchange for a $13 million reduction in debt. About GETRAG Transmission Headquartered in Sterling Heights, Michigan, GETRAG Transmission Manufacturing LLC -- http://www.getrag.de/-- designs and makes dual clutch transmission its facility in Tipton, Indiana. The company filed for Chapter 11 relief on November 17, 2008 (Bankr. E.D. Mich. Case No. 08-68112). Jayson Ruff, Esq., Jeffrey S. Grasl, Esq., and Stephen M. Gross, Esq., at McDonald Hopkins, represent the Debtor as counsel. In its schedules, the Debtor listed total assets of $690,071,505 and total debts of $582,208,616. Getrag Transmission is a unit of Germany's Getrag Group. Based in Untergruppenbach, Germany, GETRAG Corporate Group is an independent automotive transmission manufacturer with 12,400 employees at 23 locations worldwide. GLOBE RESTAURANT: Files for Chapter 7 Bankruptcy Protection ----------------------------------------------------------- Karen O'Shea at SILive.com reports that Globe Restaurant Group has filed for Chapter 7 bankruptcy protection in the U.S. District Court for the Eastern District of New York. Court documents say that Globe Restaurants has up to $50,000 in assets, $100,000 to $500,000 in liabilities, and up to 49 creditors. According to SILive.com, Globe Restaurant founder Scot Cosentino said that the Island's Goodfella's pizza restaurants are independent and won't be affected by the Company's bankruptcy filing. Luigi Violante, owner of a Goodfella's franchise in Woodrow Plaza, said that Globe Restaurant collapsed due to extra fees and the poor economy. Globe Restaurant Group is the franchisor for Goodfella's Old World Brick Oven Pizza. GOODMAN GLOBAL: Moody's Affirms 'B1' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Goodman Global Inc.'s Corporate Family Rating and Probability of Default Rating at B1 and the senior secured term loan at Ba3. The outlook is negative. Goodman's B1 Corporate Family Rating reflects the company's competitive market position, established distribution and dealer network for HVAC systems, and sound operating margins. EBITA margins were 12.2% for latest twelve months through March 31, 2009. Goodman is continuing with its cost reduction initiatives and working capital improvements, which should assist the company in managing through the current difficult business environment. The company should also benefit from lower commodity costs for steel and other materials used in its production processes. Nevertheless, even with the benefits stemming from consumer demand shifting to the higher priced, higher seasonal energy efficiency ratio cooling products, the company is unlikely to fully offset the adverse effects of volume declines. Sales volumes in 1Q09 was 15.3% lower than the same period in the previous year, primarily from the ongoing decline in residential new construction and the overall downturn in the U.S. economy. Further, Goodman remains highly leveraged even though it has reduced balance sheet debt by about $76 million through secondary purchases of its senior subordinated notes. On a pro forma basis debt/EBITDA would be about 5.4x (actual leverage was 5.6x) at 1Q09 while EBITA/interest expense would be about 1.1x (actual interest coverage was 1.0x) for LTM March 31, 2009 (all ratios adjusted per Moody's methodology). These pro forma metrics support a slightly weaker credit profile that was previously identified by the rating agency as a threshold that would put negative pressure on the ratings. The negative outlook incorporates Moody's view that Goodman's leveraged capital structure could hinder the company's financial flexibility as it contends with the ongoing contraction in the U.S. housing market and the potential for further contraction in Goodman's end markets to result in a protracted period of weaker financial metrics. These ratings/assessments were affected by this action: -- Corporate Family Rating affirmed at B1; -- Probability of Default affirmed at B1; and, -- $772 million senior secured term loan due 2014 affirmed at Ba3, but its loss give default assessment is changed to (LGD3, 40%) from (LGD3, 39%) The last rating action was on January 14, 2008 at which time Moody's confirmed Goodman's B1 Corporate Family Rating. Goodman Global Inc., based in Houston, Texas, is the second largest domestic manufacturer of heating, ventilation and air conditioning products for residential and light commercial use based on unit sales. Revenues for the last twelve months through March 31, 2009, totaled approximately $1.8 billion. GREG MOSS: Files for Chapter 7; Talks with Trustcash Fall --------------------------------------------------------- Trustcash Holdings, Inc., said Greg H. Moss, former president of Trustcash, filed a Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court and settlement discussions between Trustcash and Ayuda Funding Corp. conducted in an effort to resolve pending litigation, have ended unsuccessfully. Complaint Against Moss and Ayuda Trustcash's complaint, filed on October 27, 2008 in the United States District Court for the District of New Jersey, alleges that Mr. Moss and Ayuda knowingly engaged in the illegal and fraudulent distribution of restricted shares of Trustcash's common stock into the over-the-counter public market. Trustcash claims the market impact of this unlawful distribution severely depressed the market value for Trustcash stock, thereby depriving shareholders of the value of their holdings. The defendants' actions also operated as a major obstacle to the fund raising operations that Trustcash was undertaking. Trustcash claims that Mr. Moss' former positions with the company and his beneficial ownership of more than 10% of the outstanding shares of the common stock at the time of the distribution made him an "affiliate" of the company, restricting his ability to sell shares in the open market. Trustcash has alleged in its complaint that Moss' consecutive transfers of shares to Ayuda on February 19th, 2008, and March 18th, 2008 of 1,750,000 and 7,000,000 shares of Trustcash common stock were contrary to the restrictions imposed by current securities regulations. Mr. Moss resigned as CEO, CFO, principal accounting officer and director of Trustcash on March 27, 2008. Kent Carasquero, Trustcash's current CEO comments: "We are disappointed that Ayuda has filed a motion to dismiss our claims rather than settle them amicably. We now wait for the courts to authenticate our claims by rejecting Ayuda's motion to dismiss. As for Mr. Moss, his filing in the US Bankruptcy Court has not dissuaded us from attempting to proceed with our claims against him, as claims for the illegal and fraudulent distribution of securities are not dischargeable in bankruptcy court." Gregory Bartko, Esq., of the Law Office of Gregory Bartko, LLC, the law firm handling the securities claims on behalf of Trustcash, commented: "We are optimistic that the Trustcash claims pending in Federal court in New Jersey will move forward shortly. The briefs have been filed with the court now for over 60 days, so a ruling could be received at anytime." About Trustcash Based in Atlanta, Georgia, Trustcash Holdings, Inc. (PINKSHEETS: TCHH) -- http://www.trustcash.com/-- is a pioneer of anonymous payment systems for the Internet. Trustcash developed a business based on the sale of a virtual stored value card that can be used by consumers to make secure and anonymous purchases on the Internet. The company markets its Trustcash(TM) payment card, which is sold in denominations ranging from $10 to $200 online. The Trustcash(TM) card is the only "stored value card" produced where no personal data is stored by or available to a vendor or merchant, providing a unique level of both security and privacy to the purchaser. GREAT SMOKEY: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Great Smokey Mountain Enterprises Inc. P.O. Box 2100 Sylva, NC 28779 Bankruptcy Case No.: 09-20122 Chapter 11 Petition Date: June 15, 2009 Court: Western District of North Carolina (Bryson City) Judge: George R. Hodges Debtor's Counsel: R. Kelly Calloway, Jr., Esq. rkelly@callowaylawfirm.com Calloway & Associates Law Firm 318 N. Main Street, Ste. 9 Hendersonville, NC 28792 Tel: (828) 696-8660 Fax: (828) 696-8683 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. The petition was signed by Bipinchandra B. Patel, secretary and treasurer. HARMAN INTERNATIONAL: Equity Offering Won't Move S&P's BB+ Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that Harman International Industries Inc.'s announcement of a common equity offering will have no effect on S&P's ratings on Harman (BB+/Watch Neg/--). S&P estimates that the offering, which Harman has stated is underwritten, could result in about $200 million of proceeds to the company. Harman has disclosed that 20% of the proceeds will be used to reduce debt and permanently reduce commitments under its $270 million revolving credit facility that terminates Dec. 31, 2011. S&P views the proposed equity raise as a positive, but a significant portion of the proceeds could be used for acquisitions, rather than for additions to liquidity. S&P placed Harman's ratings on CreditWatch on April 30, 2009, following Chrysler LLC's filing for Chapter 11 bankruptcy protection in the United States, along with several other auto suppliers. S&P expects to resolve the CreditWatch listing within the next 30 days. S&P's review will include the effect of low production by many of Harman's automaker customers, a prospective assessment of the company's liquidity, and an understanding of Harman's acquisition strategies. HARRAH'S ENTERTAINMENT: HOC Assumes $1.3BB in Note Obligations -------------------------------------------------------------- Harrah's Operating Company, Inc., a wholly owned subsidiary of Harrah's Entertainment, Inc., on June 10, 2009, assumed $1,375,000,000 aggregate principal amount of 11.25% senior secured notes due 2017, which mature on June 1, 2017, pursuant to a supplemental indenture, dated as of June 10, 2009, among Harrah's Operating and U.S. Bank National Association, as trustee, to an indenture, dated as of June 10, 2009, among Harrah's Operating Escrow LLC and Harrah's Escrow Corporation, wholly owned subsidiaries of Harrah's Operating; Harrah's Entertainment as parent guarantor; and U.S. Bank National Association, as trustee. The Indenture provides that the notes are guaranteed by the parent guarantor and are secured by substantially all of the assets of Harrah's Operating and the assets of the subsidiaries of Harrah's Operating that have pledged their assets to secure Harrah's Operating's obligations under its senior secured credit facilities. Harrah's Operating will pay interest on the notes at 11.25% per annum, semiannually to holders of record at the close of business on May 15 or November 15 immediately preceding the interest payment date on June 1 and December 1 of each year, commencing on December 1, 2009. Harrah's Operating may redeem the notes, in whole or part, at any time prior to June 1, 2013, at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest to the redemption date and a "make-whole premium." The Company may redeem the notes, in whole or in part, on or after June 1, 2013, at the redemption prices set forth in the Indenture. At any time (which may be more than once) before June 1, 2012, the Company may choose to redeem up to 35% of the principal amount of the notes at a redemption price equal to 111.250% of the face amount thereof with the net proceeds of one or more equity offerings so long as at least 50% of the aggregate principal amount of the notes at maturity issued of the applicable series remains outstanding afterwards. The Indenture contains covenants that limit the Company's (and most of its subsidiaries') ability to, among other things: (i) incur additional debt or issue certain preferred shares; (ii) pay dividends on or make other distributions in respect of its capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) create or permit to exist dividend and/or payment restrictions affecting its restricted subsidiaries; (vi) create liens on certain assets to secure debt; (vii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; (viii) enter into certain transactions with its affiliates; and (ix) designate its subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important limitations and exceptions. The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding notes to be due and payable immediately. Banc of America Securities Registration Rights Deal Also on June 10, in connection with the issuance and assumption of the notes, Harrah's Operating, the Escrow Issuers and the Parent Guarantor entered into a registration rights agreement with Banc of America Securities LLC, as representative of the initial purchasers, relating to, among other things, the exchange offer for the notes and the related guarantee. Subject to the terms of the Registration Rights Agreement, Harrah's Operatingand the Parent Guarantor will use their commercially reasonable efforts to register with the Securities and Exchange Commission notes having substantially identical terms as the notes as part of offers to exchange freely tradable exchange notes for notes within 365 days after the issue date of the notes. The Company and the Parent Guarantor will use their commercially reasonable efforts to cause each exchange offer to be completed within 30 business days after the effectiveness target date. If the Company and the Parent Guarantor fail to meet the targets, the annual interest rate on the notes will increase by 0.25%. The annual interest rate on the notes will increase by an additional 0.25% for each subsequent 90-day period during which the registration default continues, up to a maximum additional interest rate of 1.0% per year over the applicable interest rate, which is 11.25%. If the registration default is corrected, the applicable interest rate will revert to the original level. First Lien Intercreditor Agreement Bank of America, N.A., as collateral agent for the first lien secured parties and as authorized representative for the credit agreement secured parties, U.S. Bank National Association, as authorized representative for the initial other first lien secured parties, and each additional authorized representative from time to time party to the First Lien Intercreditor Agreement, entered into an intercreditor agreement on June 10. The First Lien Intercreditor Agreement governs the relative rights of the secured parties in respect of security interests in the Company's and certain subsidiaries' assets securing the notes, and the borrowings under the senior secured credit facilities and future indebtedness which may be secured by such assets on a pari passu basis and certain other matters relating to the administration of security interests. Joinder to Intercreditor Agreement U.S. Bank National Association, as trustee under the Indenture entered into a joinder to the intercreditor agreement, dated as of December 24, 2008, among Bank of America, N.A., as credit agreement agent, U.S. Bank National Association, as trustee, U.S. Bank National Association, as second priority agent and each collateral agent for any future second lien indebtedness from time to time party thereto. Pursuant to the Joinder to the Second Lien Intercreditor Agreement, U.S. Bank as the New Trustee became a party to and agreed to be bound by the terms of the Second Lien Intercreditor Agreement as another first priority lien obligations agent, as if it had originally been party to the Second Lien Intercreditor Agreement as a first priority agent. The Second Lien Intercreditor Agreement governs the relative priorities of the respective security interests in the Company's and certain subsidiaries' assets securing (i) the notes, (ii) the 10.0% second-priority senior secured notes due 2018 issued pursuant to the indenture, dated as of April 15, 2008, among the Company, Parent Guarantor and U.S. Bank National Association, as trustee (iii) the 10.0% second-priority senior secured notes due 2015 and the 10.0% second-priority senior secured notes due 2018 issued pursuant to the indenture, dated as of December 24, 2008, among the Company, Parent Guarantor and U.S. Bank National Association, as trustee and (iv) borrowings under the senior secured credit facilities and certain other matters relating to the administration of security interests. Amended and Restated Collateral Agreement Harrah's Operating, certain Subsidiary Parties and Bank of America, N.A. as collateral agent on June 10, 2009, entered into an Amended and Restated Collateral Agreement. Pursuant to the Collateral Agreement, the notes will be secured by substantially all of the assets of the Company and the assets of certain subsidiaries on a pari passu basis with the senior secured credit facilities, and the Agent is authorized to act as the Authorized Representative for the secured parties. Amended and Restated Guaranty and Pledge Agreement Harrah's Entertainment as Parent Guarantor on June 10, 2009, entered into an Amended and Restated Guaranty and Pledge Agreement, in favor of Bank of America, N.A., as administrative agent and collateral agent for the lenders party to the senior secured credit facilities. Pursuant to the Guaranty and Pledge Agreement, the Parent Guarantor guarantees payment on the senior secured credit facilities and grants to the Agent for the benefit of the secured parties a security interest in all of its rights and title in the Collateral as collateral security for prompt payment on the notes and the senior secured credit facilities. About Harrah's Entertainment Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com/-- operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. At March 31, 2009, the Company's consolidated condensed balance sheets showed total assets of $31.9 billion, total liabilities of $31.1 billion and preferred stock of $2.3 million, resulting to stockholders' deficit of $1.5 million. * * * The Troubled Company Reporter said June 15, 2009, that Standard & Poor's Ratings Services raised its corporate credit ratings on Harrah's Entertainment and Harrah's Operating 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. HARTFORD FINANCIAL: Fitch Puts 'BB+' Ratings on Negative Watch -------------------------------------------------------------- Overall, Fitch Ratings views as positive Hartford Financial Services Group, Inc.'s announcement that it will participate in the U.S. Treasury's Capital Purchase Program and that it also intends to raise equity capital. Fitch believes that CPP eligibility enhances near-term financial flexibility in a period of challenging capital markets access, and could ultimately help stabilize ratings. One exception, however, is Fitch's belief that the receipt of government support and the accompanying tighter debt service requirements could increase risk of deferral for hybrid securities, particularly given the sizable amount of CPP funds relative to the existing capital structure. Accordingly, Fitch has placed these HFSG hybrid security ratings on Rating Watch Negative: -- $500 million 8.125% junior subordinated debentures due 2068 'BB+'; -- $1.75 billion 10% junior subordinated debentures due 2068 'BB+'. Fitch expects to resolve the Negative Watch following finalization of the terms and conditions and receipt of the CPP funds, which will most likely result in a one notch downgrade of the hybrid securities. Fitch has also affirmed the Issuer Default Rating and senior debt ratings of HFSG and the Insurer Financial Strength ratings of HFSG's primary life and property/casualty insurance subsidiaries. The affirmation reflects Fitch's more positive view on receipt of CPP funds to the overall organization, as well as the company's announced discretionary equity issuance plan to issue up to $750 million of common stock from time to time. A full list of rating actions follows at the end of this release. Fitch's Negative Outlook for the ratings that were affirmed continues to reflect HFSG's exposure to the volatile credit and investment market conditions, particularly in its variable annuity business and asset portfolio. Also, the added debt service on the CPP funds increases HFSG's cash needs and reduces holding company interest coverage margins, although the company has also substantially reduced its quarterly common share dividend by 90% to conserve cash. If the company suffers additional significant losses, the ratings could be lowered. However, if the company is able to improve its earnings and generate internal capital growth, the Outlook could return to Stable. The Negative Outlook also reflects Fitch's concerns about the potential impact to HFSG's business position, franchise value and management team as a result of recent financial stress and its need to participate in CPP, particularly given the federal government restrictions imposed on companies. Fitch anticipates that the company will focus in the near-term on mitigating any such disruptions so as to preserve the long-term success of the business. Any actual impact of these changes will be monitored closely in Fitch's rating analysis going forward. HFSG also maintains financial flexibility with approximately $1 billion available in holding company cash following the company's repayment of $375 million borrowed under the Federal Reserve's Commercial Paper Funding Facility. The source of this remaining cash is primarily the $1 billion from Allianz SE that was not contributed to the life insurance operations following Allianz's $2.5 billion investment in Hartford in the fourth quarter of 2008. Additional financial flexibility is provided through a $1.9 billion revolving credit facility and a $500 million contingent capital facility. Fitch has placed these ratings on Negative Watch: Hartford Financial Services Group, Inc. -- $500 million 8.125% junior subordinated debentures due 2068 'BB+'; -- $1.75 billion 10% junior subordinated debentures due 2068 'BB+'. Fitch has affirmed these ratings with a Negative Rating Outlook: Hartford Financial Services Group, Inc. -- Long-Term IDR at 'BBB'; -- $275 million 7.9% notes due 2010 at 'BBB-'; -- $400 million 5.25% notes due 2011 at 'BBB-'; -- $319 million 4.625% notes due 2013 at 'BBB-'; -- $199 million 4.75% notes due 2014 at 'BBB-'; -- $200 million 7.3% notes due 2015 at 'BBB-'; -- $300 million 5.5% notes due 2016 at 'BBB-'; -- $499 million 5.375% notes due 2017 at 'BBB-'; -- $500 million 6.3% notes due 2018 at 'BBB-'; -- $499 million 6% notes due 2019 at 'BBB-'; -- $298 million 5.95% notes due 2036 at 'BBB-'; -- $323 million 6.1% notes due 2041 at 'BBB-'; -- Short-term IDR at 'F2'; -- Commercial paper at 'F2'. Hartford Life, Inc. -- Long-term IDR at 'BBB'; -- $147 million 7.65% notes due 2027 at 'BBB-'; -- $92 million 7.375% notes due 2031 at 'BBB-'; -- Short-term IDR at 'F2'. Hartford Life Global Funding -- Secured notes program at 'A-'. Hartford Life Institutional Funding -- Secured notes program at 'A-'. Hartford Life and Accident Insurance Company -- IFS at 'A-'. Hartford Life Insurance Company -- IFS at 'A-'; -- Medium-term note program at 'BBB+'. Hartford Life and Annuity Insurance Company -- IFS at 'A-'. Members of the Hartford Fire Insurance Intercompany Pool: Hartford Fire Insurance Company Nutmeg Insurance Company Hartford Accident & Indemnity Company Hartford Casualty Insurance Company Twin City Fire Insurance Company Pacific Insurance Company, Limited Property and Casualty Insurance Company of Hartford Sentinel Insurance Company, Ltd. Hartford Insurance Company of Illinois Hartford Insurance Company of the Midwest Hartford Underwriters Insurance Company Hartford Insurance Company of the Southeast Hartford Lloyd's Insurance Company Trumbull Insurance Company -- IFS at 'A+'. HAWAIIAN TELCOM: Terms of Proposed Reorganization Plan ------------------------------------------------------ Hawaiian Telcom Communications, Inc., and its seven debtor- affiliates presented to the U.S. Bankruptcy Court for the District of Hawaii a Joint Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on June 3, 2009. The Plan contemplates that the Debtors will emerge with a minimum of $45 million in cash and that the senior secured lenders under that certain Credit Agreement will own the vast majority of Reorganized Hawaiian Telcom Holdco. Holders of the Senior Notes will obtain minority ownership in Reorganized Hawaiian Telcom Holdco through new warrants and a rights offering. Unsecured creditors will also receive cash in an amount equal to their pro rata share of the Unsecured Claims Fund. Equity interests in Hawaiian Telcom Holdco, Inc., will be extinguished. "The Plan provides for a significantly deleveraged capital structure, will maximize the value of the Debtors' estates for all stakeholders, and will position the Debtors to meet the ever evolving telecommunications needs of the State of Hawaii in a highly-competitive market," according to Nicholas C. Dreher, Esq., at Cades Schutte LLP, in Honolulu, Hawaii. The Plan will be implemented through these means: (1) The provisions of the Plan will constitute a good-faith compromise and settlement of all claims and equity interests and controversies resolved pursuant to the Plan. All distributions made to holders of Allowed Claims in any Class are intended to be, and will, be final. (2) On the Effective Date, the Debtors or Reorganized Debtors will enter into transactions to effectuate a corporate restructuring of their businesses, including intercompany mergers, consolidations, amalgamations, arrangements, continuances, restructurings, conversions, dissolutions, transfers, liquidations, or other corporate transactions, as applicable. (3) On the Effective Date, the New Hawaiian Telcom Holdco Board will be established. Reorganized Hawaiian Telcom Holdco will adopt a Management Equity Incentive Program and other agreements contemplated by the Plan as necessary to consummate the Plan. The Management Equity Incentive Program will become effective without any further action by the Debtors or the Reorganized Debtors. (4) The sources of consideration for the Plan distributions are: -- The Debtors will fund cash distributions under the Plan with cash on hand, including cash from operations; -- On the Effective Date, the Reorganized Debtors will enter into a New Term Loan. Confirmation will be deemed approval of the New Term Loan, and authorization for the Reorganized Debtors to enter into and execute the New Term Loan documents and to grant liens on all of the Reorganized Debtors' assets, subject to modifications as necessary; -- The Debtors and the Reorganized Debtors will be entitled to transfer funds between and among themselves to enable the Reorganized Debtors to satisfy their obligations under the Plan. However, any changes in intercompany account balances resulting from the transfers will be accounted for and settled in accordance with the Debtors' historical intercompany account settlement practices and will not violate the Plan. -- The Certificate of Incorporation of Reorganized Hawaiian Telcom Holdco will be amended to authorize the issuance of 40,000,000 common shares. On the Effective Date, Reorganized Hawaiian Telcom Holdco will issue and distribute 100% of the initial number of shares of New Common Stock to the Distribution Agent for the benefit of holders of Allowed Claims in Class 3, subject to dilution on account of New Warrants, Rights Offering and Management Equity Incentive Program. -- On the Effective Date, the Distribution Agent will issue the New Warrants to the holders of Allowed Senior Notes Claims in Class 5, pursuant to a New Warrant Agreement. All New Warrants issued pursuant to the Plan will be duly authorized, validly issued, fully paid and non-assessable. (5) Each Debtor will continue to exist after the Effective Date as a separate corporate entity or limited liability company, with all the applicable powers pursuant to the applicable law in the jurisdiction in which each applicable Debtor is incorporated and pursuant to the certificate of incorporation and by-laws in effect prior to the Effective Date. To the extent the certificates of incorporation and by-laws are amended, they are deemed amended pursuant to the Plan and require no further action or approval. (6) On the Effective Date, all property in each estate of the Debtors, all causes of action, and any property acquired by any of the Debtors pursuant to the Plan will vest in each Reorganized Debtor, free and clear of all liens and encumbrances. Each Reorganized Debtor may operate its business and may use, acquire or dispose of property and compromise or settle any Claims, Equity Interests or Causes of Action without approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. (7) The obligations of the Debtors under the Credit Agreement, the Senior Notes Indenture, the Subordinated Notes Indenture and any other debt instrument that may give rise to any Claim or Equity Interest will be cancelled solely as to the Debtors and their affiliates, and the Reorganized Debtors will not have any continuing obligations. Moreover, the obligations of the Debtors and their Affiliates pursuant to any agreements, indentures, certificates of designation, by-laws or certificate or articles of incorporation or similar documents governing the shares, certificates, notes, bonds, indentures, purchase rights, options, New Warrants or other debt instruments will be released and discharged; provided, however, that any indenture or agreement that governs the rights of the holder of a Claim will continue in effect solely to allow holders to receive distributions under the Plan. Rights Offering The Plan provides for a rights offering wherein each Eligible Senior Notes Claim Holder will receive Subscription Rights, entitling the holder to purchase its pro rata share as of the Rights Offering Record Date of 3,125,000 shares of New Common Stock, which will be issued on the Effective Date or as soon as practicable. The Rights Offering will commence on the date the Plan ballots are mailed to Eligible Senior Notes Claim Holders, which is contemplated to be seven days after the entry of the Disclosure Statement Order. Each Eligible Senior Notes Claim Holder intending to participate in the Rights Offering must affirmatively elect to exercise its Subscription Rights and pay the Subscription Purchase Price. After the Subscription Expiration Date, any exercise of Subscription Rights will be null and void and the Debtors will not be obligated to honor any exercise received by the Rights Offering Agent after the Subscription Expiration Date, regardless of when the documents relating to the exercise were sent. Any net proceeds of the Rights Offering resulting in pro forma cash in excess of $75 million will be delivered to the Senior Secured Parties and the outstanding amount of the New Term Loan will be reduced proportionately. Additional Disclosures The Debtors relate that they have prepared financial projections based on their operating budget for year 2009. The financial projections for years 2010 through 2013 incorporate management's assumptions and initiatives, including the impact of new products and services as contemplated in the new business plan. The operating assumptions assume that the Effective Date will be December 31, 2009. Moreover, the Debtors believe that the value of any distributions if their Chapter 11 cases were converted to cases under Chapter 7 of the Bankruptcy Code would be less than the value of distributions under the Plan. The fees and expenses of a Chapter 7 trustee would also reduce cash available for distribution to holders of allowed claims. The Debtors aver that holders of Class 5 Senior Notes Claims, Class 7 Hawaiian Te1com Communications Inc. General Unsecured Claims, Class 8 Hawaiian Te1com Holdco Inc. General Unsecured Claims, Class 9 Hawaiian Te1com Inc. General Unsecured Claims, Class 10 Hawaiian Te1com Services Company Inc. General Unsecured Claims, Class 11 Hawaiian Te1com IP Service Delivery Investment LLC General Unsecured Claims, Class 12 Hawaiian Te1com IP Service Delivery Research LLC General Unsecured Claims, Class 13 Hawaiian Te1com IP Video Investment LLC General Unsecured Claims and Class 14 Hawaiian Te1com IP Video Research LLC General Unsecured Claims will recover more value as a result of confirmation of the proposed Plan than through a hypothetical Chapter 7 liquidation. The Debtors are yet to file their financial projections, liquidation analysis and plan supplements on September 11, 2009, or ten days before the confirmation hearing. The Debtors are confident that the proposed Plan satisfies the regulatory requirements and is in the best interests of the State of Hawaii. Furthermore, the Debtors believe that acceptance of the Plan is a key step in enabling them to achieve their long-term goal of becoming the preferred one-stop provider of communications services and productions for business and residential customers throughout Hawaii. A full-text copy of the Hawaiian Telcom Plan is available for free at http://bankrupt.com/misc/HawTel_June3DiscStat.pdf A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/HawTel_June3ReorgPlan.pdf About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: Projects Up to 3% Recovery for Senior Noteholders ------------------------------------------------------------------ The Joint Plan of Reorganization proposed by Hawaiian Telcom Communications, Inc., and its affiliates groups claims against and interest in the Debtors in 18 classes: Class/Designation Treatment Est. Recovery/Claim Amt ----------------- --------- ----------------------- 1 Priority Non-Tax Paid in full, Est. Recovery: 100% Claims in cash. 2 Secured Tax Claims Paid in full, Est. Recovery: 100% in cash. 3 Senior Secured Pro rata share of Est. Recovery: 75-80% Claims (i) New Term Loan Est. Amt.: $592,544,328 and (ii) 100% of New Common Stock. 4 Other Secured Either (a) Est. Recovery: 100% Claims reinstatement of allowed Other Secured Claim, (b) payment in full in Cash, or (c) release of the collateral. 5 Senior Notes Pro rata share of Est. Recovery: 2-3% Claims (a) New Warrants Est. Amt.: $368,976,750 and (b) Subscription Rights 6 Subordinated Will not receive Est. Recovery: -- Notes Claims any property under Est. Amt.: $160,937,500 the Plan 7 Hawaiian Telcom Payment in cash -- Communications, equal to pro rata Inc. General share of the Unsecured Claims Unsecured Claims Fund 8 Hawaiian Telcom Payment in cash -- Holdco, Inc. equal to pro rata General Unsecured share of the Claims Unsecured Claims Fund 9 Hawaiian Telcom Payment in cash Est. Recovery: 1-2% Inc. General equal to pro Est. Amt.: $25-$35 mil. Unsecured Claims rata share of the Unsecured Claims Fund. 10 Hawaiian Telcom Payment in cash Est. Recovery: 1-2% Services Company, equal to pro Inc. General rata share of the Unsecured Claims Unsecured Claims Fund 11 Hawaiian Telcom Payment in cash -- IP Service equal to pro Delivery rata share of the Investment, LLC Unsecured Claims General Unsecured Fund Claims 12 Hawaiian Telcom Payment in cash -- IP Service equal to pro rata Delivery share of the Research, LLC Unsecured Claims General Unsecured Fund Claims 13 Hawaiian Telcom Payment of cash -- IP Video equal to pro rata Investment, LLC share of the General Unsecured Unsecured Claims Claims Fund 14 Hawaiian Telcom, Payment of cash -- IP Video equal to pro rata Research, LLC share of the General Unsecured Unsecured Claims Claims Fund 15 Intercompany May be -- Claims reinstated or cancelled 16 Intercompany Will be -- Interests reinstated 17 Hawaiian Telcom Holders will l -- Holdco Equity not receive any Interests distribution 18 Section 510(b) Holders will -- Claims not receive any distribution Claims in Classes 1, 2, 4, 15, 16 have unimpaired status. The rest of the Classes of Claims have impaired status. A full-text copy of the Claims Classification under the Hawaiian Telcom Plan is accessible for free at: http://ResearchArchives.com/t/s?3db0 About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: Disclosure Statement Hearing on August 11 ---------------------------------------------------------- Hawaiian Telcom Communications, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Hawaii to approve the Disclosure Statement accompanying the Joint Plan of Reorganization they filed with the Court as containing "adequate information" pursuant to Section 1125 of the Bankruptcy Code. Nicholas C. Dreher, Esq., at Cades Schutte LLP, in Honolulu, Hawaii, asserts that the Debtors' Disclosure Statement contains the pertinent information necessary for holders of eligible claims to make an informed decision about whether to vote or accept or reject the Plan. Among others, he notes, the Disclosure Statement provides information on: (1) claims asserted against the Debtors' estates and the procedures for the resolution of disputed, contingent and unliquidated claims or equity interests; (2) certain risk factors to consider that may affect the Plan; (3) the reorganization contemplated by the Plan and the Reorganized Debtors' financial projections and valuation; (4) the provisions governing distributions under the Plan; (5) the means for implementation of the Plan; (6) procedures for soliciting votes to accept or reject the Plan, confirmation procedures, statutory requirements for confirmation of the Plan and consummation of the Plan; and (7) the Debtors' recommendation that holders of claims entitled to vote on the Plan vote to accept the Plan. The Debtors also ask the Court to approve a notice of the hearing to consider the Disclosure Statement to be provided to creditors and other parties-in-interest. The Disclosure Statement Hearing Notice identifies (i) the date, time, and place of the Disclosure Statement Hearing, (ii) the manner in which parties can obtain a copy of the Disclosure Statement, and (c) the deadline for filing objections to the approval of the Disclosure Statement. Voting Record Date The Debtors propose to establish July 29, 2009, or 13 days before hearing on the Disclosure Statement, as the record date for determining: (a) the holders of claims entitled to vote to receive a solicitation package; (b) the holders of claims entitled to vote to accept or reject the Plan; and (c) whether claims have been properly transferred to an assignee pursuant to Rule 3001(e) of Federal Rules of Bankruptcy Procedure so that the assignee can vote as the holder of the claim. Voting Deadline The Debtors propose to establish September 11, 2009, at 1 p.m. Hawaii Standard Time, as the deadline for the submission of votes on the Plan. For votes to be counted, all claim holders entitled to vote on the Plan must properly complete, execute and return their Ballots, prevalidated Beneficial Holder Ballots and Master Ballots by first class mail, overnight courier, or personal delivery so that they are actually received by the Debtors' Claims and Solicitation Agent or Securities Voting Agent by the Voting Deadline Date. Form of Ballots Pursuant to Rule 3017(d) of the Federal Rules of Bankruptcy Procedure, the Debtors prepared ballots based on Official Form No. 14, but modified to (i) address the particular circumstances under their Chapter 11 cases, and (ii) include certain additional information that is relevant and appropriate for claims within any of the classes entitled to vote on the Plan, including detailed instructions regarding how to vote on the Plan. The Debtors intend to distribute the Ballots to classes entitled to vote on the Plan, which includes under Classes 3, 5, 7, 8, 9, 10, 11, 12, 13 and 14. All other classes are not entitled to vote to accept or reject the Plan because they are either unimpaired and thus, presumed to accept the Plan; or are not entitled to receive or retain any property under the Plan and thus, are deemed to reject the Plan. Solicitation Package The Debtors intend to distribute the plan-related materials or the "Solicitation Package" to creditors entitled to vote two days after entry of the Disclosure Statement Order. The Solicitation Package will consist of: (1) the Disclosure Statement and accompanying exhibits; (2) the Disclosure Statement Order; (3) the appropriate Ballot, Beneficial Holder Ballot and Master Ballot and voting instructions; (4) a pre-addressed, postage prepaid return envelope; (5) an appropriate letter explaining the solicitation process and urging the holders of claims to vote to accept the Plan; (6) the Confirmation Hearing Notice; and (7) other materials as the Court may direct. The Plan, Disclosure Statement and the Disclosure Statement Order will be distributed in CD-ROM format, while the Ballots as well as the cover letter explaining the solicitation process and the Confirmation Hearing Notice will be provided in paper format. The Debtors also propose to deliver Solicitation Packages to each identified entity as holding senior fixed rate notes or senior floating rate notes on behalf of Beneficial Holders as of the Voting Record Date. The Debtors ask the Court to require the Nominees upon receipt of the Solicitation Packages, to promptly distribute within five business days the Solicitation Packages to Beneficial Holders so that Beneficial Holders will receive and have ample opportunity to review the materials and timely vote. Upon receipt of a completed Beneficial Holder Ballot from Beneficial Holders, the Nominee must compile the votes cast on the Beneficial Holder Ballots onto the appropriate Master Ballot. Non-Voting Class Notice Claims and equity interests in Classes 1, 2, 4, 15 and 16 are unimpaired and thus, presumed to accept the Plan. Claims and equity interests in Classes 6, 17 and 18 will not receive or retain any interest or property under the Plan and therefore, are deemed to reject the Plan. To avoid reduce expenses, in lieu of a Solicitation Package, the Debtors propose to send holders of claims and equity interests not entitled to vote on the Plan (1) a Confirmation Hearing Notice, and (2) a notice of non-voting status. Each Notice of Non-Voting Status will describe, among others, (i) instructions as to how to view or obtain copies of the Disclosure Statement, the Disclosure Statement Order and all other materials in the Solicitation Package from the Claims and Solicitation Agent and the Court's website via PACER; (ii) a disclosure regarding the settlement, release, exculpation and injunction language pursuant to the Plan; (iii) notice of the Plan Objection Deadline; and (iv) the Confirmation Hearing Notice. The Debtors believe that the mailing of a Confirmation Hearing Notice and Notices of Non-Voting Status in lieu of Solicitation Packages satisfies the requirements of Bankruptcy Rule 3017(d). Voting Procedures Ballots will not be considered if they are, among others, (i) received after the Voting Deadline, (ii) illegible or contains insufficient information to permit the identification of the holder of the claim, (iii) does not hold a claim in a class that is entitled to vote on the Plan, (iv) unsigned, or (v) not marked to accept or reject the Plan or marked both to accept and reject the Plan. Holders must vote all of their claims within a particular class either and may not split any votes. Rights Offering In accordance with the Plan and pursuant to rights offering procedures, each holder of an allowed Senior Notes claim on the Voting Record Date who is an Accredited Investor and who has timely delivered an Investor Certificate certifying to that effect will receive the right, but not the obligation, to purchase its pro rata share of $50,000,000 worth of common stock based on the plan equity value. Each Eligible Senior Notes Claim Holder intending to participate in the Rights Offering must affirmatively elect to exercise its Subscription Rights on or prior to September 11, 2009. To exercise Subscription Rights, each Eligible Senior Notes Claim Holder must (a) complete the Subscription Form, and (b) pay to the subscription agent for the Rights Offering, on or before the Subscription Expiration Date, the subscription purchase price multiplied by the number of shares of New Common Stock it seeks to purchase by wire transfer or by bank check. Confirmation Hearing The Debtors ask the Court to set September 21, 2009, or 10 days after the Voting Deadline, as the hearing date to consider confirmation of the Plan. The Debtors also seek that parties-in- interest be given until September 11 to file formal objections to the Plan. Any objection asserted with respect to the confirmation of the Plan must be in writing; must conform to Bankruptcy Rules; must set forth the name of the objector, the nature and amount of claims or equity interests held or asserted by the objector against the Debtors; must assert the basis of the objection; and must be filed with the Court, together with proof of service; and must be served so as to be received no later than 1:00 p.m. Hawaii Standard Time, on September 11, 2009. The Court will convene a hearing on August 11, 2009, to consider the Debtors' request for approval of the Disclosure Statement and the plan solicitation procedures. Objections to the Disclosure Statement are due August 4. The Disclosure Statement hearing was previously set on July 23, 2009. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: Proposes FBG as Securities Voting Agent -------------------------------------------------------- Hawaiian Telcom Communications, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Hawaii to employ Financial Balloting Group LLC as their securities voting agent in connection with the Plan confirmation process. As the Debtors' Voting Agent, FBG will: (a) advise the Debtors regarding all aspects of the Plan voting, including timing issues; voting, tabulation and subscription procedures; and documents needed for the plan vote and the Rights Offering; (b) review the voting portions of the relevant documents, particularly as they may relate to Beneficial Holders of securities held in "Street" name. Documents may include the solicitation procedures motion and order, disclosure statement and plan, ballots, subscription forms and other documents; (c) work with the Debtors to seek appropriate information from The Depository Trust Company and the indenture trustee; (d) establish an interest bearing account for the Debtors in connection with its role as Subscription Agent. FBG would act as administrator for the account, but Hawaiian Telcom would need to approve any wires out of the account initiated by FBG; (e) if the Rights Offering is conducted through DTC, work with DTC to establish the Rights Offering on its ASOP system; coordinate the delivery and payments by DTC; and act as ASOP agent with DTC in connection with the Rights Offering; (f) if appropriate, coordinate the distribution of questionnaires to street name holders of notes by forwarding the appropriate document to the proxy departments of the banks and brokerage firms holding the securities, who in turn will forward it to Beneficial Holders; (g) mail voting documents to any registered holders of bonds; (h) coordinate the distribution of voting documents to street name holders of bonds by forwarding the appropriate documents to the banks and brokerage firms holding the securities, who in turn will forward it to Beneficial Holders for voting; (i) distribute copies of the Master Ballots to the appropriate Nominees after the initial mailing, so that firms may cast votes on behalf of Beneficial Holders; (j) prepare a certificate of service for filing with the Court; (k) handle requests for documents from parties in interest, including brokerage firm and bank back-offices and institutional holders; (l) respond to telephone inquiries from noteholders and Nominees regarding the Disclosure Statement and the voting and subscription procedures; (m) make telephone calls to non-objecting Beneficial Holders and registered holders of securities to confirm receipt of Plan documents and respond to questions about voting and subscription procedures; (n) receive and examine any Subscription Forms submitted by holders of the Debtors' senior notes, if applicable, and deposit any checks in the special subscription account established by FBG for that purpose; (o) receive and examine all Ballots and Master Ballots cast by holders of bonds; (p) tabulate all Ballots and Master Ballots received prior to the Voting Deadline in accordance with established procedures, and prepare a voting certification for filing with the Court; and (q) undertake other duties as may be agreed upon by Hawaiian Telcom and FBG. The Debtors propose to pay FBG on these terms: a. For the distribution of materials to noteholders in "Street" name, FBG will be entitled to a project fee of $13,000. This covers the coordination with all brokerage firms, banks, institutions and other interested parties, including the distribution of voting materials. This assumes one distribution of voting materials, which will be directed to the firms' proxy departments, a Rights Offering, which will likely be made directly to any eligible holders, a single plan of reorganization, and no extensions of the Voting Deadline. b. For the mailing to registered record holders, FBG will be entitled to estimated labor charges of $1.75 to $2.25 per voting package, depending on the complexity of the mailing, with a $500 minimum for each file. The charge indicated assumes the package includes the Disclosure Statement, a Ballot, a return envelope and one other document. It also assumes that a window envelope will be used for the mailing, and will thus not require a matched mailing. c. FBG will be entitled to a minimum charge of $2,000 to take up to 250 telephone calls from holders within a 30-day solicitation period. If more than 250 calls are received within the period, those additional calls will be charged at $8.00 per call. Any call to holders will be charged at $8.00 per call. d. FBG will be entitled to a charge of $125 per hour for the tabulation of Ballots and Master Ballots, plus set up charges of $1,000 for each tabulation element. Standard hourly rates will apply for any time spent by senior executives reviewing and certifying the tabulation and dealing with special issues that may develop. A surcharge of $2,500 will apply for a voting deadline later than 8:00 P.M., Eastern time. Specifically, the Debtors will pay FBG's professionals according to their customary hourly consulting rates: Title Rate per Hour ----- ------------- Executive Director $410 Vice President $360 Senior Case Manager $300 Case Manager $240 Case Analyst $190 Programmer II $195 Programmer I $165 Clerical $65 The Debtors will also reimburse FBG for expenses the firm incurred or incurs in connection with the contemplated services. The Debtors also seek approval to employ FBG as their subscription agent in connection with the Rights Offering under the Plan. Jane Sullivan, executive director of FBG, informs the Court that her firm does not represent or hold an interest adverse to the Debtors with respect to the matters on which FBG will be employed. She maintains that FBG is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. To the extent any new relevant facts bearing on the matters during the period of FBG's retention are discovered, she assures the Court that FBG will promptly file a supplemental declaration as required by Rule 2014(a) of the Federal Rules of Bankruptcy Procedure. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: Seeks September 30 Extension of Plan Period ------------------------------------------------------------ Hawaiian Telcom Communications, Inc., and its debtor-affiliates are seeking from the U.S. Bankruptcy Court for the District of Hawaii a second extension to their exclusivity periods. The Debtors filed with the Court a Joint Plan of Reorganization and accompanying Disclosure Statement on June 3, 2009. The Plan will accomplish the Debtors' primary goals in their Chapter 11 cases -- to deleverage its capital structure and ensure sufficient liquidity for the Debtors to remain the leading provider of telecommunications in Hawaii, Nicholas C. Dreher, Esq., at Cades Schutte LLP, in Honolulu, Hawaii, tells the Court. Aside from the Debtors' filing of the Plan, which evidences the Debtors' efforts to move their reorganization along, Mr. Dreher states that the Debtors have made progress toward a successful conclusion of these Chapter 11 cases through these accomplishments: (1) The Debtors have continued to engage their key stakeholders in restructuring discussions and to market the business to numerous potential strategic and financial investors. After reviewing various restructuring and sale alternatives, the Debtors determined that it is in the best interests of their estates to pursue a restructuring supported by the Secured Lenders. (2) The Debtors commenced an extensive independent analysis of the lien dispute, which is subject to an adversary proceeding commenced by the Secured Lenders against the Official Committee of Unsecured Creditors. The Debtors undertook this analysis so that it can assist the Court and parties-in-interest and expedite the Loan Dispute. (3) The Debtors acted prudently to conserve their limited cash resources. Indeed, in February 2009, the Debtors filed a request seeking authority to continue to use cash collateral beyond the February 28, 2009 expiration of the consensual "first day" cash collateral order, but to eliminate adequate protection payments to the Secured Lenders in an amount equal to postpetition interest at the non-default rate. After extensive negotiations, the Debtors and the Secured Lenders agreed to reduce the adequate protection payments by $11.4 million for 2009. (4) The Debtors' management team has maintained an open dialogue with the State of Hawaii to keep the Hawaii Public Utilities Commission informed about their restructuring. Although the Debtors believe that the Plan is confirmable, it could take six to nine months to receive the applicable regulatory approvals, Mr. Dreher tells the Court. The outcome of the Lien Dispute is also uncertain. The Debtors say they cannot bring their cases to conclusion until the Lien Dispute is resolved and the applicable regulatory agencies approve the Plan. Against this backdrop, the Debtors assert that their exclusivity period must be preserved in the event the Plan is unconfirmed. Accordingly, the Debtors ask the Court to extend their: (i) exclusive plan filing period through and including September 30, 2009; and (ii) exclusive plan solicitation period through and including November 30, 2009. Mr. Dreher emphasizes that the proposed extension is warranted because the Debtors have more than $1.1 billion in outstanding prepetition debt and complex issues remain outstanding. He adds that despite the Lien Dispute, the Debtors have filed the Plan that reflects the Debtors' independent analysis of the outcome of the Lien Dispute and contemplates a post-emergence capital structure that the Debtors are confident will attain regulatory approval. He also maintains that the Debtors have continued to pay their debts as they become due. The Debtors add that they have reduced the adequate protection payments to the Secured Lenders so that they can continue to pay debts as the debts become due. Since the Secured Lenders will be the key economic stakeholders in Reorganized Hawaiian Telcom, the Debtors also continue to engage in an open dialogue with the Committee and the HPUC on all matters. Mr. Dreher clarifies that the Debtors are not seeking an extension of exclusivity to apply pressure to any creditor to agree to the proposed Plan. On the contrary, the Debtors are moving expeditiously toward confirmation and only seek the proposed extension in the event they must reformulate the Plan at a later date, he emphasizes. "Allowing the exclusive periods to expire could derail the Debtors' efforts to bring these Chapter 11 cases to a successful conclusion as quickly as possible and would likely result in increased administrative costs," he asserts. The Court will consider the Debtors' request on July 1, 2009. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telecom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HERBST GAMING: Sr. Sub Notes, Equity Get Nothing Under Plan ----------------------------------------------------------- Herbst Gaming and its affiliates delivered to the U.S. Bankruptcy Court for the District of Nevada their Plan of Reorganization and accompanying Disclosure Statement. NetDockets reports that pursuant to the Plan documents, the enterprise value of Herbst's assets, which are primarily a casino business and a slot route business, has been determined to be between $469 million and $557 million. As of the Petition Date, Herbst's obligations under its senior secured credit facility totaled $876.5 million. Under the proposed Plan of Reorganization, Herbst's senior secured creditors would receive 100% of the equity in the reorganized Herbst Gaming and the senior secured credit facility would be restructured with the reorganized company being obligated for $350 million in debt. According to NetDockets, because Herbst's senior secured creditors (the lenders under the credit facility) will not be recovering the full value of their claims (according to the debtors), holders of Herbst's senior subordinated notes (whose claims are contractually subordinated to the credit facility claims) will not receive any recovery on account of their claims. Existing equity holders would also have their interests expunged without receiving any recovery. However, holders of allowed general unsecured claims would be paid in full under the proposed Plan and all contracts relating to Herbst's slot route business would be assumed (thereby requiring cure of pre-bankruptcy payment defaults). Headquartered in Reno, Nevada, Herbst Gaming Inc. -- http://www.herbstgaming.com/-- is an established casino and slot route operator that operates casinos located in Nevada, Missouri and Iowa. The Debtors own and operate approximately 6,800 slot machines in its slot route business and is a slot machine operator in Nevada. The Company and 17 of its affiliates filed for Chapter 11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09-50752). Thomas H. Fell, Esq., at Gordon Silver, represents the Debtors in their restructuring efforts. Herbst Gaming had $919.1 million in total assets; and $33.5 million in total liabilities not subject to compromise and $1.24 billion in liabilities subject to compromise, resulting in $361.0 million in stockholders' deficiency as of March 31, 2009. HEXION SPECIALTY: FTC Sets Aside Ruling on Failed Huntsman Merger ----------------------------------------------------------------- Hexion Specialty Chemicals Inc. reports that on June 4, 2009, the Federal Trade Commission reopened and set aside or modified orders issued by the FTC on October 2, 2008 and November 13, 2008 in the matter of Hexion's acquisition of Huntsman Corporation, thereby removing obligations relating to the divesture of assets to which Hexion agreed in order to complete the transaction, which was subsequently terminated and settled on December 14, 2008. The modification of the FTC's earlier orders sets aside requirements intended to remedy the anti-competitive effects of the proposed transaction, but imposes on Hexion a three-year requirement to seek the FTC's approval prior to the acquisition of any stock or certain assets of Huntsman, or any merger or other combination with Huntsman. In October 2008, Hexion sued Credit Suisse Group and Deutsche Bank AG after the bank lenders refused to fund the company's $6.5 billion purchase of Huntsman. The merger was ultimately cancelled and in December 2008, Huntsman settled with Hexion and with Apollo Management, L.P., in connection with Huntsman's $325 million break-up fee claim and other claims related to the merger. Payments to be made to Huntsman under the settlement agreement totaled $1 billion. About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://www.hexionchem.com/-- is a producer of thermosetting resins, or thermosets. Thermosets are a critical ingredient in virtually all paints, coatings, glues and other adhesives produced for consumer or industrial uses. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management L.P. As of March 31, 2009, Hexion had $2.8 billion in total assets on $5.0 billion in total liabilities, resulting in $2.1 billion in stockholders' deficit. * * * As reported by the Troubled Company Reporter on June 16, 2009, Moody's Investors Service lowered the Probability of Default Rating of Hexion to Ca/LD from B3 as Moody's deemed the recently concluded tender offer, combined with open market repurchases of debt in the first quarter, to be a distressed exchange. Moody's noted that since the beginning of 2009 Hexion has bought back roughly $217 million of debt (face amount) for roughly $32 million. Moody's affirmed Hexion's Corporate Family Rating at B3, its senior secured first lien credit facilities at B1 and its Speculative Grade Liquidity Rating at SGL-3. The rating outlook is negative. The negative outlook reflects the level of uncertainty over the timing of the recovery in demand and profit improvement at Hexion, according to Moody's. Additionally, the outlook reflects Moody's expectations for a very slow recovery in housing and construction markets in 2010. Despite unusually weak credit metrics, Hexion has more than adequate liquidity at the current time due to the "covenant-lite" terms in its credit facility and the availability of $200 million of additional capital from its financial sponsor. The combination of these items would make a potential breech of the financial covenant over the next 12 months unlikely. HUNTSMAN CORP: FTC Sets Aside Ruling on Failed Huntsman Merger -------------------------------------------------------------- Hexion Specialty Chemicals Inc. reports that on June 4, 2009, the Federal Trade Commission reopened and set aside or modified orders issued by the FTC on October 2, 2008 and November 13, 2008 in the matter of Hexion's acquisition of Huntsman Corporation, thereby removing obligations relating to the divesture of assets to which Hexion agreed in order to complete the transaction, which was subsequently terminated and settled on December 14, 2008. The modification of the FTC's earlier orders sets aside requirements intended to remedy the anti-competitive effects of the proposed transaction, but imposes on Hexion a three-year requirement to seek the FTC's approval prior to the acquisition of any stock or certain assets of Huntsman, or any merger or other combination with Huntsman. In October 2008, Hexion sued Credit Suisse Group and Deutsche Bank AG after the bank lenders refused to fund the company's $6.5 billion purchase of Huntsman. The merger was ultimately cancelled and in December 2008, Huntsman settled with Hexion and with Apollo Management, L.P., in connection with Huntsman's $325 million break-up fee claim and other claims related to the merger. Payments to be made to Huntsman under the settlement agreement totaled $1 billion. About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://www.hexionchem.com/-- is a producer of thermosetting resins, or thermosets. Thermosets are a critical ingredient in virtually all paints, coatings, glues and other adhesives produced for consumer or industrial uses. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management L.P. As of March 31, 2009, Hexion had $2.8 billion in total assets on $5.0 billion in total liabilities, resulting in $2.1 billion in stockholders' deficit. * * * As reported by the Troubled Company Reporter on June 16, 2009, Moody's Investors Service lowered the Probability of Default Rating of Hexion to Ca/LD from B3 as Moody's deemed the recently concluded tender offer, combined with open market repurchases of debt in the first quarter, to be a distressed exchange. Moody's noted that since the beginning of 2009 Hexion has bought back roughly $217 million of debt (face amount) for roughly $32 million. Moody's affirmed Hexion's Corporate Family Rating at B3, its senior secured first lien credit facilities at B1 and its Speculative Grade Liquidity Rating at SGL-3. The rating outlook is negative. The negative outlook reflects the level of uncertainty over the timing of the recovery in demand and profit improvement at Hexion, according to Moody's. Additionally, the outlook reflects Moody's expectations for a very slow recovery in housing and construction markets in 2010. Despite unusually weak credit metrics, Hexion has more than adequate liquidity at the current time due to the "covenant-lite" terms in its credit facility and the availability of $200 million of additional capital from its financial sponsor. The combination of these items would make a potential breech of the financial covenant over the next 12 months unlikely. IMPERIAL CAPITAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Imperial Capital Resource Group, Inc. dba The Peak City Grill & Bar 126 North Salem Street, Suite 200 Apex, NC 27502 Bankruptcy Case No.: 09-04946 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Steven Mark Adams and Julie Marcellino Adams 09-04945 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Randy D. Doub Debtor's Counsel: Travis Sasser, Esq. 875 Walnut Street, Suite 342 Cary, NC 27511 Tel: (919) 319-7400 Fax: (919) 657-7400 Email: tsasser@carybankruptcy.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nceb09-04946.pdf The petition was signed by Steven Adams, president of the Company. INDYMAC BANCORP: Trustee Sues FDIC to Recover $736MM Transfer ------------------------------------------------------------- Bloomberg News reports that the Chapter 7 trustee for IndyMac Bancorp Inc. sued the Federal Deposit Insurance Corp. the U.S. District Court for the District of Columbia (Case No. 09-01088), seeking to recover $736 million transferred by the holding company to its banking unit. The trustee contends that the transfers made by the Debtor to Indymac Bank between 2006 and 2008 were fraudulent transfers and can be recovered by the estate. According to Bill Rochelle at Bloomberg, the trustee filed a claim with the FDIC in the receivership of the bank. When the FDIC denied the claim, the trustee decided he had no alternative but to sue the FDIC to validate the claim. The Chapter 7 trustee, the report adds, contends the holding company didn't receive value for the money it invested in the bank while trying to keep it afloat. Because the transfers made the holding company insolvent, the trustee contends he's entitled to have a valid claim in the bank's receivership. As reported by the TCR on Feb 26, 2009, the Chapter 7 trustee for IndyMac Bancorp Inc. sued the Federal Deposit Insurance Corp. before the U.S. Bankruptcy Court for the Central District of California, seeking a ruling that some of the assets seized by the FDIC belong to the bankrupt estate of the holding company and not to the bank under the regulator's control. About IndyMac Bancorp Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank, FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. Through its hybrid thrift- mortgage bank business model, IndyMac designed, manufactured, and distributing cost-efficient financing for the acquisition, development, and improvement of single-family homes. IndyMac also provided financing secured by single-family homes to facilitate consumers' personal financial goals and strategically invests in single-family mortgage-related assets. All of Indymac's business is conducted, and assets are held, within IndyMac Bank, F.S.B. On July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank and appointed FDIC as the bank's receiver. Thacher Proffitt & Wood LLP was engaged as counsel to the FDIC. Two weeks following FDIC's takeover of its banking operations, Indymac Bancorp filed for Chapter 7 bankruptcy protection on July 31, 2008 (Bankr. C.D. Calif., Case No. 08-21752). Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C. Weitnauer, Esq. Bloomberg noted that Indymac had $32.01 billion in assets as of July 11, 2008. In court documents, IndyMac disclosed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. ISCHUS HIGH: S&P Downgrades Ratings on Class A-1S & A-1J Notes -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class A-1S and A-1J notes issued by Ischus High Grade Funding I Ltd., a cash flow high-grade structured finance collateralized debt obligation transaction. The downgrades follow S&P's receipt of notice from the trustee on the deal stating that a majority of the controlling class has directed the trustee to proceed with the liquidation of the collateral backing the rated notes. The liquidation notice follows previous notice declaring an event of default for the transaction, dated Nov. 13, 2008. The deal experienced the EOD due to the failure of an overcollateralization-based EOD trigger specified in section 5.01 (i) of the transaction's indenture. The downgrades reflect S&P's opinion that substantial losses to the noteholders are highly likely based on the current market value of the collateral and S&P's view that market prices may not recover during the liquidation period. Ratings Lowered Ischus High Grade Funding I Ltd. Rating ------ Class To From ----- -- ---- A-1S CC B+/Watch Neg A-1J CC CCC- Other Outstanding Ratings Ischus High Grade Funding I Ltd. Class Rating ----- ------ A-2 CC A-3 CC B CC C CC JJJ ENTERPRISES: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: JJJ Enterprises, LLC 20020 Veterans Blvd., Suite 7 - 9 Port Charlotte, FL 33954 Bankruptcy Case No.: 09-12625 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- 1775, LLC 09-3560 Florida Investments, Inc. 09-3556 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court Middle District of Florida (Ft. Myers) Judge: Alexander L. Paskay Debtor's Counsel: Stephen R. Leslie, Esq. Stichter, Riedel, Blain & Prosser 110 East Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: (813) 229-0144 Email: sleslie.ecf@srbp.com Estimated Assets: $0 to $50,000 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 Jeff R. Weiler, managing member of the Company. JUANA ORTEGA: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Juana Ortega 1643 N Ironstone Montebello, CA 90640 Bankruptcy Case No.: 09-25170 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Richard M. Neiter Debtor's Counsel: Thomas L. Reed, Esq. 29006 Brookings Ln Highland, CA 92346 Tel: (909) 649-2120 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Ms. Ortega's petition, including a list of her 6 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-25170.pdf The petition was signed by Ms. Ortega. KIWA BIO-TECH: In Talks with Investors to Resolve Event of Default ------------------------------------------------------------------ Kiwa Bio-Tech Products Group Corporation received a Notice of Default from its investors: AJW Partners, LLC, AJW Partners II, LLC, AJW Offshore, Ltd., AJW Offshore II, Ltd., AJW Qualified Partners, LLC, AJW Qualified Partners II, LLC, AJW Master Fund, Ltd., AJW Master Fund II, Ltd., New Millennium Capital Partners III, LLC. The investors claim that the Company was purportedly in default for failure to timely file registration or effect registration as required under the Company's notes issued to the investors. The Company has engaged in discussion with the Investors to resolve the matter. Headquartered in Claremont, California, Kiwa Bio-Tech Products Group Corporation (OTC BB: KWBT.OB) -- http://www.kiwabiotech.com/ -- develops, manufactures, distributes and markets bio- technological products for agricultural and natural resources and environmental conservation. The Company has established two subsidiaries in China: (1) Kiwa Shandong in 2002, a wholly owned subsidiary, and (2) Kiwa Tianjin in July 2006, of which the company holds 80% equity. Going Concern Doubt On March 6, 2009, Mao & Company, CPAs, Inc., in New York City expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial results for periods ended December 31, 2008, and 2007. The auditors pointed that the Company has suffered recurring losses from operations, has debts maturing in 2009 and has a working capital deficit and a net capital deficiency as of December 31, 2008. LEAR CORP: S&P Changes Recovery Ratings on $1 Bil. Loan to '3' -------------------------------------------------------------- Standard & Poor's Ratings Services said it has revised its recovery ratings on Lear Corp.'s (D/--/--) $1 billion senior secured term facility to '3' from '1', indicating S&P's expectation that lenders will receive meaningful (50% to 70%) recovery in the event of a default. At the same time, S&P revised its recovery rating on Lear's senior unsecured notes to '6' from '5', indicating S&P's expectation that lenders will receive negligible (0 to 10%) recovery in the event of a payment default. "The recovery rating changes were made in conjunction with S&P's review of Lear's collateral value and the decision to use a discrete asset methodology to determine recovery values in the event of a default, given the recent substantial decline in EBITDA," said Standard & Poor's credit analyst Lawrence Orlowski. The issue-level rating on Lear's senior secured term facility remains at 'CC'. The issue-level ratings on the company's 5.75% notes due 2014 and zero-coupon notes due 2022 remain at 'C', while the issue-level ratings on the 8.5% notes due 2013 and 8.75% notes due 2016 remain at 'D'. The 'D' corporate credit and issue-level ratings reflect Lear's decision not to pay interest due June 1, 2009, on those notes. Ratings List Lear Corp. Corporate credit rating D/--/-- Recovery Ratings Revised Senior Unsecured To From -- ---- US$300 mil. 8.5% sr. nts ser due 12/01/2013 Recovery Rating 6 5 US$600 mil. 8.75% sr. nts ser due 12/01/2016 Recovery Rating 6 5 Ratings Affirmed Lear Corp. Senior Secured CC Recovery Rating 3 Senior Unsecured C Recovery Rating 6 LIBBEY GLASS: Weak Performance Cues Moody's to Junk Ratings ----------------------------------------------------------- Moody's Investors Service downgraded Libbey Glass Inc.'s ratings, including its corporate family and probability of default ratings to Caa1 from B3, and the rating on its second lien senior secured notes to Caa1 from B3. Libbey's SGL-3 speculative grade liquidity rating was unchanged. The ratings outlook is negative. These actions conclude the review for possible downgrade that was initiated on February 13, 2009. The downgrade reflects Libbey Glass' weak operating performance and credit metrics stemming from the difficult macroeconomic environment and the company's sizeable debt load and interest burden. The company's debt service capacity has diminished significantly due to the increased pressure on EBITDA. While acknowledging some improvement in first quarter cash flow and debt levels, Moody's expects economic challenges to persist through 2009, resulting in only modest improvement in performance and metrics during the year. For the latest twelve months ended March 31, 2009, the company's Debt/EBITDA exceeded 8.0x while interest coverage remained well below 1.0x. Near term liquidity appears adequate, as reflected in the SGL-3 speculative grade liquidity rating, supported by the expectation that planned cash flow improvement, moderate cash balances, and availability under its asset-based revolver should be sufficient to cover cash flow needs over the next twelve months. However, longer term concern exists, especially if earnings and cash flow do not materially improve. Interest on the company's pay-in-kind notes turns cash pay in June 2009 (with the first cash payment due in December 2009), and its ABL revolving credit facility matures in December 2010. The negative ratings outlook reflects Moody's concern that should Libbey Glass' operating performance or liquidity not improve over the next twelve to eighteen months, the risk of restructuring its capital structure in some form could increase. Thus, the company's ratings could face downward pressure from further erosion in its financial condition or liquidity, leading to weaker debt holder protections, or rising default probability. These ratings were downgraded: -- Corporate family rating to Caa1 from B3; -- Probability of default rating to Caa1 from B3: -- Second lien senior secured notes due 2012 to Caa1 (LGD4, 58%) from B3 (LGD4, 55%). This rating was unchanged: -- Speculative Grade Liquidity Rating at SGL-3 Moody's previous rating action on Libbey Glass was on February 13, 2009, when the company's corporate family rating was downgraded to B3 and placed on review for possible further downgrade. Headquartered in Toledo, Ohio, Libbey Glass Inc. is the largest manufacturer of glass tableware in the Western Hemisphere, and one of the largest manufacturers of glass tableware in the world. Revenue for the twelve months ending March 31, 2009, exceeded $780 million. The Company serves foodservice, retail, industrial, and business-to-business customers in over 100 countries. It is the operating subsidiary of Libbey Inc. LIMITED BRANDS: Fitch Assigns 'BB' Rating on $500 Mil. Notes ------------------------------------------------------------ Fitch Ratings has assigned a 'BB' rating to Limited Brands, Inc.'s (Limited) $500 million senior unsecured guaranteed notes due 2019. The notes will be guaranteed on an unsecured basis by each of the subsidiaries that guarantee the senior credit facility and term loan. The proceeds of the offering will be used to repay existing debt and for general corporate purposes. The company's decision to pay down either the secured $750 million term loan due 2012 or unsecured debt with the use of proceeds could have an impact on future ratings. Fitch has also affirmed Limited's existing ratings: -- Long-term Issuer Default Rating (IDR) at 'BB+'; -- Bank credit facility at 'BB+'; -- Term loan at 'BB+'; -- Senior unsecured notes at 'BB'; -- Short-term IDR at 'B'; -- Commercial Paper at 'B'. The Rating Outlook is Negative. The ratings reflect Limited's strong market positions in intimate apparel and personal care and beauty products, solid cash flow generation and strong liquidity. This is balanced by Limited's weaker operating performance and credit metrics given the current challenging operating environment, increasingly competitive landscape and track record of shareholder-friendly activities. The Negative Outlook reflects the potential for prolonged weakness in same store sales that would negatively impact operating margins and weaken credit metrics as well as management's discipline with regards to share repurchases. Limited is a leading intimate apparel retailer under the brands Victoria's Secret and La Senza with 1,358 stores as of May 2, 2009. In addition, Victoria's Secret Beauty and Bath & Body Works, with 1,638 stores, represent the fifth largest beauty and personal care company in North America in terms of sales. The company's focus on better working capital management has helped generate positive free cash flow of $360 million in the last twelve months ending May 2, 2009. The company's strong liquidity position is supported by $936 million of cash as of May 2, 2009 and full availability under its $1 billion credit facility, which will provide financial flexibility to the company. Nonetheless, Limited's credit metrics have weakened given the current challenging operating environment, which has pressured revenues and operating EBIT. For the LTM period, Limited's leverage ratio (adjusted debt/EBITDAR) increased to 4.5 times (x) from 4.1x in 2007 while EBITDAR coverage of interest and rent expense decreased to 2.2x from 2.5x over the same period. Fitch expects 2009 leverage and coverage ratios to weaken further as operating profit is expected to decline given lower revenues and pressure on operating margins. In addition, the competitive landscape is intense as Limited competes with many different types of retailers including individual and chain specialty stores, department stores, discount retailers as well as e-commerce and catalogue businesses. Limited has a track record of shareholder-friendly activities as excess cash flow has been directed to share repurchases historically. Currently, share repurchases have been halted as a result of the limitation on restricted payments in the credit facility covenants. However, Fitch expects this trend will resume once profitability improves. LINCOLN NAT'L: Fitch Keeps Low-B Ratings on Three Notes ------------------------------------------------------- Following the company's announcement of an asset sale and several capital raising initiatives over the next several weeks, Fitch Ratings has affirmed the ratings of Lincoln National Corp. and its operating subsidiaries. Fitch also has assigned a 'BBB' rating to the company's proposed issuance of up to $500 million in new senior unsecured notes. The Rating Outlook remains Negative. The capital raising initiatives include the issuance of $600 million in new common equity, up to $500 million in new senior unsecured debt, and approximately $950 million in new preferred stock issued under the U.S. Treasury's Capital Purchase Program. While LNC continues to face considerable challenges, primarily related to the impact capital market turmoil has had on the company's capital position and operating performance, Fitch takes a positive view on initiatives management has taken thus far to bolster capital and adjust to the current uncertain operating environment. In addition, LNC announced yesterday that it has signed a definitive agreement to sell its Gloucester, England-based life insurance and retirement product operations (Lincoln UK) to SLF of Canada UK Limited, a subsidiary of Sun Life Assurance Company of Canada, for expected net proceeds of between $280 million and $300 million. Assuming regulatory approval, the transaction is expected to close near Sept. 30, 2009. Currently, LNC does not carry any goodwill associated with its UK operations on its balance sheet. However, the company is expected to record a GAAP loss on the transaction of between $170 million and $190 million. Fitch believes that CPP eligibility enhances near-term financial flexibility in a period of challenging capital markets access, and could ultimately help stabilize ratings. While Fitch believes that LNC will buttress capital through its use of CPP and other recently announced initiatives, Fitch expects the effect of the ongoing recession and capital market turmoil to continue to pressure LNC and its peers, and the company's ratings are being affirmed at their current levels to reflect these ongoing risks. Fitch downgraded LNC's deferrable capital securities to 'BB+' on April 16, 2009, reflecting an increasing likelihood that LNC would trigger the alternative coupon satisfaction mechanism associated with these securities due in part to a goodwill write-down the company was expected to record in the first quarter of 2009. Assuming LNC is successful in its recently announced capital raising initiatives, the potential for triggering the ACSM will become significantly more remote. However, Fitch believes the receipt of deferrable government capital increases the risk of deferral for all deferrable securities in LNC's capital structure. Therefore, Fitch is maintaining the additional notching between LNC's senior unsecured debt and hybrid securities to reflect this risk. The Negative Outlook on the LNC's ratings reflects Fitch's view that near-term adverse financial market and recessionary economic conditions will likely continue for an extended period. As a result, Fitch believes LNC could experience higher-than-expected volatility in financial results and capital. Fitch's ratings on LNC are supported by the company's longstanding strong competitive position in the life insurance and annuity market, strong and diverse distribution network, strong management team and historically solid operating performance. These positives are tempered somewhat by the current weak economic and capital market conditions, as well as challenges LNC faces with respect to strong competition in the life insurance and asset accumulation sectors, particularly in the affluent market segment that LNC has targeted, and the degree to which the company's earnings continue to be leveraged to the equity markets. Lincoln National Corp., headquartered in Radnor, Pennsylvania, markets a broad range of insurance and asset accumulation products and financial advisory services primarily to the affluent market segment. On March 31, 2009, the company reported consolidated assets of $157.4 billion and common equity of $7.3 billion. Fitch assigns a rating of 'BBB' to this issuance with a Negative Outlook: -- up to $500 million in senior unsecured notes. Fitch affirms these ratings: Lincoln National Corporation -- Issuer Default Rating at 'BBB+'; -- Short-term IDR at 'F-2'; -- Commercial paper at 'F-2'; -- Floating-rate senior notes due April 20, 2010 at 'BBB'; -- 6.2% senior notes due Dec. 15, 2011 at 'BBB'; -- 5.65% senior notes due Aug. 27, 2012 at 'BBB'; -- 4.75% senior notes due Jan. 27, 2014, at 'BBB'; -- 4.75% senior notes due Feb. 15, 2014 at 'BBB'; -- 7% senior notes due March 15, 2018 at 'BBB'; -- 6.15% senior notes due April 7, 2036 at 'BBB'; -- 6.3% senior notes due Oct. 9, 2037 at 'BBB'; -- 6.75% junior subordinated debentures due April 20, 2066 at 'BB+'; -- 7% junior subordinated debentures due May 17, 2066 at 'BB+'; -- 6.05% junior subordinated debentures due April 20, 2067 at 'BB+'. Lincoln National Capital VI -- Trust preferred securities at 'BB+'. Lincoln National Life Insurance Company -- Insurer Financial Strength at 'A+'. Lincoln Life & Annuity Company of New York -- IFS at 'A+'. First Penn-Pacific Life Insurance Company -- IFS at 'A+'. The Outlook for all the ratings is Negative. LINENS 'N THINGS: Court Confirms Modified Third Amended Plan ------------------------------------------------------------ The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware has confirmed Linens 'n Things Inc.'s modified third amended plan of reorganization, which was filed with the Court on June 12, 2009. Pursuant to the third amended plan, holders of Class 2 Senior Note Claims, with allowed claims of approximately $699 million, will receive their pro rata share of the proceeds from the sale of their collateral. Holders of Allowed General Unsecured Claims, with allowed claims of approximately $900 million, will receive their Pro Rata share of: (a) 50% of all all proceeds of Liquidating Trust Assets, net of Litigation Trust Shared Expenses, in excess of the Initial Litigation Recovery Amount, (b) net of Liquidating Trust Unshared Expenses. Equity Interests will neither receive nor retain any property under the Plan. On and after the Plan's Effective Date, the Reorganized Debtors will continue to liquidate the Remaining Senior Noteholders' Collateral and distribute the net proceeds thereof to the holders of Allowed Senior Notes Claims in accordance with the terms of the Plan. Linens 'N Things' Third Amended Joint Plan provides for the creation of a liquidating trust and the rejection of any remaining executory contracts and unexpired leases. The confirmation order vests the trustee of the liquidating trust to settle trust claims and avoidance actions of less than $1 million without further court approval. The settlement of causes of action of more than $1 million, however, will continue to require court approval. Pursuant to the confirmation order, the Third Amended Joint Plan is required to become effective by August 30, 2009. The Debtors may seek an extension of that date if the Creditors Committee and the Senior Noteholders' Committee consent to the request. Summary Classification and Treatment of Claims and Interests The Plan segregates the various claims against and interests in the Debtors into five classes: Class Claim Status Voting Rights ----- ------------------------ ---------- ---------------- 1 Other Secured Claims Unimpaired Deemed to Accept 2 Senior Notes Claims Impaired Entitled to Vote 3 General Unsecured Claims Impaired Entitled to Vote 4 Equity Interests Impaired Deemed to Reject 5 Intercompany Claims Impaired Deemed to Accept A copy of the modified 3rd Amended Plan of Reorganization is available at http://bankrupt.com/misc/Linens.3rdAmendedPlan.pdf Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. -- http://www.lnt.com/-- was the second largest specialty retailer of home textiles, housewares and home accessories in North America. As of Sept. 30, 2008, Linens 'n Things operated 411 stores in 47 states and seven provinces across the United States and Canada. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed Chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08- 10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., are Linens 'n Things' bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. LUMINENT MORTGAGE: Court Sets June 18 Plan Confirmation Hearing --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland has scheduled a confirmation hearing for June 18, 2009, at 10:30 a.m. to consider approval of the disclosure statement with respect to Lumninent Mortgage Capital, Inc.'s 2nd Amended Joint Plan of Reorganization, dated as of May 14, 2009. As reported in the Troubled Company Reporter on June 2, 2009, the Plan provides for: -- The consummation of the transactions contemplated by the ACC Settlement on the Effective Date of the Plan, the proceeds of which will be used to make a number of the payments contemplated by the Plan; -- The conversion of Debtor Luminent Mortgage Capital, Inc., from a publicly traded real estate investment trust into a private asset management company and the issuance of the Reorganized Equity Units and the Reorganized Preferred Equity Units to certain classes of Creditors; -- The payment in full of all Allowed Other Secured Claims; -- The payment in full of all Allowed Priority Non-Tax Claims; -- The payment in full of all Allowed Unclassified Claims; -- The distribution of the Reorganized Equity Units, the Convenience Class Fund, the Unsecured Distribution Fund, the Unsecured Distribution Fund, and the Subsequent Unsecured Distribution Amount; and -- The cancellation of all outstanding Interests in the Debtors. Pursuant to the Plan, the Secured Claims of ACC Parties under Class 2 will receive 46% of the Reorganized Equity Units and other consideration as is provided under the terms of the ACC Settlement and the Plan. General Unsecured Claims under Class 4(a) will receive their ratable portion of (i) the Unsecured Distribution Fund, (ii) their ratable portion of the Subsequent Distribution Amount and (iii) 29% of the Reorganized Equity Units. Subordinated TRUPS claims will receive their ratable portion of (A)(i) the Unsecured Distribution Fund, (ii) their ratable portionof the Subsequent Distribution Amount and (iii) 29% of the Reorganized Equity Units, and (B) 5% of the Reorganized Equity Units. Interests will not receive any property under the Plan and are deemed to have voted to reject the Plan. Allowed Interests will be cancelled on the Plan's Effective Date. Estimated Estimated Class Allowed Claims Recovery Treatment ----- -------------- --------- --------- 1 Priority Non-Tax Claims $0 100% Unimpaired 2 Secured Claims of ACC Parties $28,883,346 0% Impaired 3 Other Secured Claims $0 100% Unimpaired 4(a) General Unsecured Claims $93,000,000 3.23% Impaired 4(b) General Unsecured Opt-Out Claims $0* 0%* Impaired 5(a) Convenience Class Claims $2,300,000 4.34% Impaired 5(b) Convenience Opt-Out Claims $0** 0%** Impaired 6(a) Subordinated TRUPS Claims $92,788,000 0% Impaired 6(b) Subordinated TRUPS Opt-Out Claims $0*** 0%*** Impaired 7 Interests N/A 0% Impaired * Assumes all Creditors in Class 4 will not make the Creditor Opt-Out Election and therefore participate in distributions of the Unsecured Distribution Fund under Class 4(a) of the Plan. ** Assumes all Creditors in Class 5 will not make the Creditor Opt-Out Election and therefore participate in distributions of the Convenience Class Fund under Class 5(a) of the Plan. *** Assumes all Creditors in Class 6 will not make the Creditor Opt-Out Election and therefore participate in distributions of the 5% of the Reorganized Equity Units allocable under Class 6(a) of the Plan. Only holders of claims in Classes 2, 4(a), 5(a) and 6(a) are eligible to vote. Allowed Class 7 Interests will not receive any property under the Plan and are deemed to have voted to reject the Plan. Cramdown Pursuant to the "cramdown" provisions of the Bankruptcy Code, the Debtors may seek confirmation of the Plan, despite the non-acceptance of one or more impaired Classes of Claims and or Interests, as set forth in Sec. 1129(b) of the Bankruptcy Code. A full-text copy of the disclosure statement explaining the Debtors' Second Amended Plan is available at: http://bankrupt.com/misc/luminent.2ndAmendedDS.pdf A full-text copy of Debtors' Second Amended Joint Plan of Reorganization is available at: http://bankrupt.com/misc/luminent.2ndAmendedPlan.pdf About Luminent Mortgage Luminent Mortgage Capital, Inc. (OTCBB: LUMCE), is a real estate investment trust, or REIT, which, together with its subsidiaries, has historically invested in two core mortgage investment strategies. Under its Residential Mortgage Credit strategy, the company invests in mortgage loans purchased from selected high- quality providers within certain established criteria as well as subordinated mortgage-backed securities and other asset-backed securities that have credit ratings below AAA. Under its Spread strategy, the company invests primarily in U.S. agency and other highly-rated single-family, adjustable-rate and hybrid adjustable- rate mortgage-backed securities. Luminent and nine subsidiaries filed on September 5, 2008, for relief under Chapter 11 of the U.S Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland, Baltimore Division (Lead Case No. 08-21389). Immediately prior to the filing, the Debtor executed a Plan Support and Forbearance Agreement with secured creditor Arco Capital Corp., Ltd., WAMU Capital Corp. and convertible noteholders representing 100% of the outstanding principal amount of its convertible notes. Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, represents the Debtors as counsel. The U.S. Trustee for Region 4 appointed creditors to serve on an Official Committee of Unsecured Creditors. Jeffrey Neil Rothleder, Esq., at Arent Fox LLP, represents the Creditors Committee as counsel. In its operating report for the month of September 2008, Luminent Mortgage Capital, Inc., reported $1,960,516 in total assets and $374,868,632 in total liabilities, resulting in a $372,908,116 stockholders' deficit. MAGNA ENTERTAINMENT: Updated Case Summary & 50 Unsecured Creditors ------------------------------------------------------------------ Debtor: Magna Entertainment Corp. 1209 Orange Street Wilmington, DE 19801 Bankruptcy Case No.: 09-10720 Debtor-affiliate filing separate Chapter 11 petition on June 16, 2009: Entity Case No. ------ -------- MEC Pennsylvania Racing Services, Inc. 09-12091 Debtor-affiliates filing separate Chapter 11 petitions on March 5, 2009: Entity Case No. ------ -------- The Santa Anita Companies, Inc. 09-10724 Southern Maryland Agricultural Association 09-10725 Los Angeles Turf Club, Incorporated 09-10726 MEC Land Holdings (California) Inc. 09-10727 Pacific Racing Association 09-10728 MEC Maryland Investments, Inc. 09-10729 Gulfstream Park Racing Association Inc. 09-10730 MEC Dixon, Inc. 09-10731 30000 Maryland Investments LLC 09-10732 Laurel Racing Assoc., Inc. 09-10733 GRPA Commercial Enterprises Inc. 09-10734 GPRA Thoroughbred Training Center, Inc. 09-10735 Pimlico Racing Association, Inc. 09-10736 MEC Holdings (USA) Inc. 09-10737 Remington Park, Inc. 09-10738 Prince George's Racing, Inc. 09-10739 Sunshine Meadows Racing, Inc. 09-10740 Thistledown, Inc. 09-10741 Southern Maryland Racing, Inc. 09-10742 The Maryland Jockey Club of Baltimore City, Inc. 09-10743 Maryland Jockey Club, Inc. 09-10744 AmTote International, Inc. 09-10745 Laurel Racing Association Limited Partnership 09-10746 Lambertson Truex, LLC 09-10747 Type of Business: Magna Entertainment is North America's largest owner and operator of horse racetracks, based on revenue. The Debtors develop, own and operate horse racetracks and related pari- mutuel wagering operations, including off-track betting facilities. The Debtors also develop, own and operate casinos in conjunction with their racetracks where permitted by law. The Debtors own and operate AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a fifty percent interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. See: http://www.magnaent.com/ Court: District of Delaware (Delaware) Judge: Mary F. Walrath Debtors' Counsel: Marcia L. Goldstein, Esq. Brian S. Rosen, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Fax: (212) 310-8007 http://www.weil.com Debtors' Local Counsel: L. Katherine Good, Esq. good@rlf.com Mark D. Collins, Esq. collins@RLF.com Richards, Layton & Finger, P.A. 920 North King Street Wilmington, DE 19801 Fax: (302) 651-7701 Debtors' Financial Advisor: Miller Buckfire & Co. LLC 153 East 53rd Street, 22nd Floor New York, NY 10022 Fax: (212) 895-1853 http://www.millerbuckfire.com/ Debtors' Claims Agent: Kurtzman Carson Consultants LLC 1230 Avenue of the Americas, 7th Floor New York, NY 10020 http://www.kccllc.com/ The Debtors' financial condition as of December 31, 2008: Total Assets: $1,049,387,000 Total Debts: $958,591,000 The Debtors' Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Bank of New York, as 8.55% Notes $127,345,313 Trustee 101 Barclay Street - 21st Floor Attn: Global Finance Unit New York, NY 10286 The Bank of New York, as 7.25% Notes $76,193,229 Trustee 101 Barclay Street - 21st Attn: Global Finance Unit New York, NY 10286 Maryland Thoroughbred Trade $3,820,500 Horsemen's Wayne Wright Association Inc 6314 Windsor Mill Road Baltimore, MD 21207 Tel: (41... Aon Reed Stenhouse Inc. Insurance $3,682,756 20 Bay Street Toronto, ON M5J 2N9 Tel: (416) 8685500 Florida Thoroughbred Breeders Horsemen $2,157,327 Owners Association 801 SW 60th Avenue Ocala, FL 34474 Tel: (305) 6339779 Zurich North America Letter of $1,937,472 8734 Paysphere Circle credit Chicago, IL 60674 RGS/St. Kitts Settlement $1,763,952 Rob Terry c/o Red Rock Administrative Services, Settlement Agent 9275 West Flamingo Road Suite 120 Las Vegas, NV 89147 Tel: (70... Northern California Off PRA Trade $1,662,231 Track Wagering Inc. payable Patrice Van Dussen 7950 Dublin Blvd, Suite 214 Dublin, CA 94568 Tel: (92... Treasurer. Stateof California Settlement $1,374,051 Horse Racing Board Statutory 1010 Hurley Way, Ste #300 Sacramento, CA 95825 Southern California Off-Track Settlement $1,194,623 Wagering Inc Craig Crampton 4961 Katella Avenue Los Alamitos, CA 90720-2799 Tel: (71... Magna International Inc. Transactions $845,892 337 Magna Drive Aurora, ON L4G 7Kl New York Racing Association, Settlement $830,175 Inc. Roberto Molina 108th & Rockaway Blvd. PO Box 169 Ozone Park, NY 11417 Tel: (718) 659-2219 McCasey Group Transactions $756,217 455 Magna Drive Aurora, ON L4G 7A9 Elite Turf Club 2 Settlement $695,411 James Mikowski c/o Las Vegas Dissemination Settlement Agent 3555 W. Reno Avenue, Suite 3555 Las Vegas, NV 89118 Tel: (702) 739-8781 Oklahoma Tax Commission Gamin Tax $669,114 PO Box 26930 Oklahoma City, OK 73126-0930 Tel: (405) 521-3160 The Leffler Agency Trade $637,487 2607 North Charles Street Baltimore, MD 21218 Tel: (301) 235-5661 RedRock Administrative Trade $617,561 Services, LLC 9275 W. Flamingo Road Suite #120 Las Vegas, NY 89147 Tel: (954) 920-6010 Royal River Racing Settlement $605,791 c/o Lewiston Raceway, Settlement Agent 4 Mollison Way Lewiston, ME 04240 Tel: (207) 783-4910 x616 Aristocrat Technologies, Inc. Slot Machine $551,153 Dept. 9540 Purchases Los Angeles, CA 90084-9540 Tel: (702) 270-1299 Jerry Holledorfer or Horsemen $550,252 George Todaro 1432 Sandpiper Spit Point Richmond, CA 94801 Tel: (510) 526-4104 L0s Angeles County Tax Settlement $442,281 Collector Las Vegas Dissemination Settlement $430,036 Juddmonte Farms Horsemen $424,961 Southern Service Corporation Trade $377,728 Aladema County Tax Property Tax $367,691 Ranger Construction-South Trade $364,289 California Thoroughbred Settlement $336,275 Leonard Powel Horsemen $329,411 Jerry Hollendorfer Horsemen $307,846 Gulf Greyhound Settlement $290,675 New York Racing Assn, Inc. Settlement $288,285 Harrah's Louisiana Downs Settlement $274,900 Oklahoma County Treasurer Property Tax $273,574 Aware Digital, Inc. Trade $270,000 Maryland Horse Breeders Trade $269,800 Association, Inc. Max International Trade $250,416 OK Breeding Development Horsemen $246,969 Fairgrounds Race Course Settlement $220,591 Bob Baffert Horsemen $204,617 Cecil N, Peacock Horsemen $200,547 CRCono, LLC Horsemen $197,723 Churchill Downs, Inc. Settlement $195,098 Maryland Racing Commission Taxes $193,914 Roberts Communications Phone utility $188,005 Las Vegas Dissemination Settlement $185,260 Tampa Bay Downs Inc. Settlement $185,081 B. Wayne Hughes Horsemen $184,882 Richard J. O'Neill Trust Horsemen $170,516 Florida Power & Light Co. Electric $168,000 Lathrop G. Hoffman Horsemen $166,788 The petition was signed by William G. Ford, general counsel and secretary. MAGNACHIP SEMICONDUCTOR: Has Prenegotiated Chapter 11 Plan ---------------------------------------------------------- MagnaChip Semiconductor LLC and its affiliates filed together with its bankruptcy petition a reorganization plan designed to sell the business for $80 million to a Korean limited partnership named KTB 207 Private Equity Fund, Bill Rochelle at Bloomberg reports. The report relates that the first lien-lenders have agreed to the sale as part of a Chapter 11 plan in which they will receive the net proceeds while second-lien and unsecured creditors would split up $1 million in cash, if they vote in favor of the plan. The distribution that would otherwise go to subordinated debt holders will be earmarked for the second-lien creditors. MagnaChip's debt, Mr. Rochelle notes, includes $95 million on first-lien debt, $500 million owed to second-lien creditors, $250 million on subordinated notes and some $4 million to trade suppliers and other unsecured creditors. The plan is to be filed not later than June 29. According to the report, Citigroup Venture Capital Equity Partners LP was part of the investor group that acquired MagnaChip in 2004 from Hynix Semiconductor Inc. MagnaChip Chief Financial Officer Margaret Sakai said in a court filing that the fall into bankruptcy was precipitated by a loss of research talent after the acquisition and "steep declines" in revenue during 2008 as a result of "contracting customer demand." MagnaChip Semiconductor -- http://www.magnachip.com/-- designs, develops, and manufactures mixed-signal and digital multimedia semiconductors addressing the convergence of consumer electronics and communications devices. MagnaChip also provides wafer foundry services utilizing CMOS high voltage, embedded memory, and analog and power process technologies for the manufacture of IC's for customer-owned designs. As of Dec. 31, 2009, MagnaChip had assets of $425 million against debts of $1.04 billion as of Dec. 31, 2008. MagnaChip Semiconductor LLC and its affiliates filed for Chapter 11 on June 12, 2009 (Bankr. D. Del. Case NO. 09-12009). Judge Peter J. Walsh handles the case. James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are bankruptcy counsel to the Debtors. Omni Management Group LLC is the Debtors' claims agent. MAGNACHIP SEMICONDUCTOR: May Use Cash Collateral Until July 8 ------------------------------------------------------------- MagnaChip Semiconductor LLC and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware to use cash collateral until a final hearing July 8. MagnaChip owes $95 million to first-lien lenders, $500 million to second-lien creditors, and $250 million to holders of subordinated notes. MagnaChip Semiconductor -- http://www.magnachip.com/-- designs, develops, and manufactures mixed-signal and digital multimedia semiconductors addressing the convergence of consumer electronics and communications devices. MagnaChip also provides wafer foundry services utilizing CMOS high voltage, embedded memory, and analog and power process technologies for the manufacture of IC's for customer-owned designs. As of Dec. 31, 2009, MagnaChip had assets of $425 million against debts of $1.04 billion as of Dec. 31, 2008. MagnaChip Semiconductor LLC and its affiliates filed for Chapter 11 on June 12, 2009 (Bankr. D. Del. Case NO. 09-12009). Judge: Peter J. Walsh handles the case. James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are bankruptcy counsel to the Debtors. Omni Management Group LLC is the Debtors' claims agent. MARK IV INDUSTRIES: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Mark IV Industries, Inc. and its debtor-affiliates filed with the the U.S. Bankruptcy Court for the Southern District of New York its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property B. Personal Property C. Property Claimed as Exempt D. Creditors Holding Secured Claims $986,228,732 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority Claims ----------- ----------- TOTAL $986,228,732 A full-text copy of Lucky Chase's schedules of assets and debts is available at http://bankrupt.com/misc/Markiv_sal.pdf About Mark IV Industries Headquartered in Amherst, New York, Mark IV Industries, Inc., -- http://www.mark-iv.com/-- is a privately held leading global diversified manufacturer of highly engineered systems and components for vehicles, transportation infrastructure and equipment. The company's systems and components are designed to promote a cleaner and safer environment and include power transmission, air admission and cooling, advanced radio frequency, and information display, technologies. The company has a geographically diverse innovation, marketing and manufacturing footprint. Mark IV filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York on April 30. Mark IV's International and IVHS operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. The Company has also established a Restructuring Information Line, which is 888-248-4460. Outside the U.S., callers can dial +1 716- 213-6855. Additional information about the Company's Chapter 11 restructuring can also be found at http://www.MARKIVRESTRUCTURING.com/ MARK IV INDUSTRIES: Secured Lenders to Own 92% of Newco Under Plan ------------------------------------------------------------------ Mark IV Industries Inc. and its affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York a proposed Plan of Reorganization and accompanying Disclosure Statement on June 17, 2009. Mark IV seeks to emerge from chapter 11 as a privately held company. Pursuant to the Plan, the lenders under Mark IV's prepetition $865 million first lien credit facility would receive 92% of the equity in the reorganized Mark IV. General unsecured creditors would get the remaining 8% of the new common stock. The Plan classifies all claims of Mark IV's second lien lenders as general unsecured claims. Holders of equity interests in Mark IV are out of the money. According to the Plan, the new common stock issued to the lenders and the unsecured creditors would be subject to dilution from the exercise of options and grants of restricted stock to employees pursuant to a new Management Equity Incentive Plan. The Plan documents do not indicate the percentage of equity that may be issued pursuant to the proposed incentive plan. A full-text copy of Mark IV's plan of reorganization filed June 17, 2009, is available at no charge at: http://bankrupt.com/misc/MarIVPlan.PDF A full-text copy of Mark IV's disclosure statement filed June 17, 2009, is available at no charge at: http://bankrupt.com/misc/MarIVDS.PDF About Mark IV Industries Headquartered in Amherst, New York, Mark IV Industries, Inc. -- http://www.mark-iv.com/-- is a privately held leading global diversified manufacturer of highly engineered systems and components for vehicles, transportation infrastructure and equipment. The company's systems and components are designed to promote a cleaner and safer environment and include power transmission, air admission and cooling, advanced radio frequency, and information display, technologies. The company has a geographically diverse innovation, marketing and manufacturing footprint. Mark IV Industries, Inc. and 17 affiliates filed for chapter 11 on April 30, 209 (Bankr. S.D.N.Y. Lead Case No. 09-12795). Judge Stuart M. Bernstein presides over the case. Jay M. Goffman, Esq., J. Eric Ivester, Esq., and Matthew M. Murphy, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as the Debtors' counsel. David Orlofsky, Managing Director; Tadd Crane, Director; Jose Alvarez; and Jeffrey Genova at Zolfo Cooper serve as Restructuring Advisors. David Hilty and Saul Burian, Managing Directors at Houlihan Lokey, serve as Investment Bankers and Financial Advisors. Sitrick and Company acts as Public Relations Advisor. Steven M. Fuhrman, Esq., at Simpson Thacher & Bartlett LLP represents JPMorgan Chase Bank, N.A., the First Lien Agent and the DIP Agent. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Creditors' Committee. The Debtors disclosed $100 million to $500 million in estimated assets and more than $1 billion in debts when they filed for bankruptcy. MARY LUDENA: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Mary Ludena 19801 Meadow Ridge Dr. #47 Trabuco Canyon, CA 92679 Bankruptcy Case No.: 09-15877 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: Michael R. Totaro, Esq. Totaro & Shanahan POB 789 Pacific Palisades, CA 90272 Tel: (310) 573-0276 Fax: (310) 496-1260 Email: mtotaro@aol.com Total Assets: $1,197,220 Total Debts: $2,258,530 A full-text copy of Ms. Ludena's petition, including a list of her 14 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-15877.pdf The petition was signed by Ms. Ludena. MGM MIRAGE: Gets Requisite Consents for $750MM Secured Notes ------------------------------------------------------------ MGM MIRAGE disclosed on Tuesday the expiration of, and receipt of requisite consents in, its consent solicitation with respect to an amendment to the indenture governing its 13% Senior Secured Notes due 2013 ($750 million aggregate principal amount; CUSIP Nos. 552953 BD2 and U5928T AH4). The amendment provides that the non- collateral asset sale covenant does not apply to the previously announced sale of Treasure Island. In addition, the amendment conforms the non-collateral asset sale covenant with the corresponding covenant in the indenture dated May 19, 2009, which governs the Company's 10.375% Senior Secured Notes due 2014 and 11.125% Senior Secured Notes due 2017. On June 15, 2009, following the expiration of the consent solicitation and the receipt of the requisite consents for the adoption of the amendment, the Company, its subsidiary guarantors, and the trustee for the Notes executed and delivered the supplemental indenture, dated June 15, 2009, giving effect to the amendment. The Company will settle today the consent payment with respect to Notes for which consents have been delivered and accepted in the consent solicitation. Persons with questions regarding the consent solicitation should contact the solicitation agent, Banc of America Securities LLC, at (888) 292-0070, or the information and tabulation agent, Global Bondholder Services Corporation, at (866) 470-4200 or (212) 430- 3774. 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 CALDARON: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Joint Debtors: Michael Robert Caldaron Judith Henderson Caldaron 82 Sunlight Drive Carbondale, CO 81623 Bankruptcy Case No.: 09-21686 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Howard R. Tallman Debtors' Counsel: Phillip Jones, Esq. 200 N. 6th St. PO Box 338 Grand Junction, CO 81502 Tel: (970) 242-6262 Email: pjones@wth-law.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 Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cob09-21686.pdf The petition was signed by the Joint Debtors. MOMENTIVE PERFORMANCE: Issues $200MM of 12-1/2% Notes Due 2014 -------------------------------------------------------------- Momentive Performance Materials Inc. on June 15, 2009, issued $200,000,000 aggregate principal amount of 12-1/2% Second-Lien Senior Secured Notes due 2014, which mature on June 15, 2014, pursuant to an indenture, dated as of June 15, 2009, among the Company, the guarantors, and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral trustee. The notes were issued in transactions exempt from registration under the Securities Act of 1933. The Company will pay interest on the notes at a rate of 12-1/2% per annum, payable semiannually on June 15 and December 15 of each year, commencing on December 15, 2009, to holders of record at the close of business on June 1 and December 1 of each year. The Company may redeem the notes, in whole or in part, prior to December 15, 2011 at 100% of their principal amount, together with any accrued and unpaid interest, plus a "make-whole" premium. The Company may redeem the notes, in whole or part, at any time on or after December 15, 2011, at the redemption prices set forth in the Indenture. At any time and from time to time on or prior to December 15, 2011, the Company may redeem in the aggregate up to 35% of the notes using the net cash proceeds of certain equity offerings, at a redemption price equal to 112.5% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, provided that, among other things, at least 65% in aggregate principal amount of the notes remain outstanding. In addition, upon the occurrence of certain change of control transactions with respect to the Company, each holder will have the right to require the Company to repurchase all or any part of such holder's notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest. The Indenture contains covenants that limit the Company's (and its restricted subsidiaries') ability to, among other things: (i) incur or guarantee additional indebtedness or issue preferred stock; (ii) pay dividends or make distributions to our stockholders; (iii) repurchase or redeem capital stock or subordinated indebtedness; (iv) make investments or acquisitions; (v) incur restrictions on the ability of certain of our subsidiaries to pay dividends or to make other payments to us; (vi) enter into transactions with our affiliates; (vii) grant liens on assets; (viii) merge or consolidate with other companies or transfer all or substantially all of our assets; and (ix) transfer or sell assets. These covenants are subject to a number of important limitations and exceptions. The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding notes to be due and payable immediately. The indebtedness evidenced by the notes and the guarantees is senior secured indebtedness of the Company and Guarantors, respectively. Pursuant to the Collateral Agreement, dated as of June 15, 2009, among the Company, the Guarantors and the Collateral Trustee and certain other mortgages and security documents, the notes and the guarantees thereof are secured by substantially all of the assets of the Company and the Guarantors which secure the Company's and the Guarantors' obligations under the Company's senior secured credit facilities. Pursuant to the Intercreditor Agreement, dated as of June 15, 2009, among JPMorgan Chase Bank, N.A., as first priority representative, the Collateral Trustee, as second priority representative, the Company and the Guarantors, the liens securing the notes and the guarantees thereof are junior and subordinated to the liens securing the Company's senior secured credit facilities with respect to all Collateral. JPMorgan Registration Rights Agreement In connection with the issuance of the notes, the Company and the Guarantors entered into a registration rights agreement on June 15 with J.P. Morgan Securities Inc., J.P. Morgan Securities Ltd., UBS Securities LLC and UBS Limited, as dealer managers, relating to, among other things, an exchange offer for the notes and the related guarantees. Subject to the terms of the Registration Rights Agreement, the Company and the Guarantors will use their commercially reasonable efforts to register with the SEC notes having substantially identical terms as the notes as part of an offer to exchange freely tradable exchange notes for the notes not later than 366 days after the date of the initial issuance of the notes. However, the Company and the Guarantors will not be required to consummate any exchange offer or file or make effective such registration if, prior to the exchange date, the notes -- other than those held by or on behalf of affiliates of the Company -- have become freely tradeable and the restrictive legends on the notes have been removed. If the Company fails to satisfy its registration obligations under the Registration Rights Agreement, including, if required, its obligation to have an effective shelf registration statement for the notes, the annual interest rate on the notes will increase by 0.25%. The annual interest rate on the notes will increase by 0.25% for each subsequent 90-day period during which the registration default continues, up to a maximum additional interest rate of 1.0% per year over the applicable interest rate. If the registration default is corrected, the applicable interest rate of the notes will revert to the original level. 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. As of March 29, 2009, Momentive had $3.42 billion in total assets on $4.08 billion in total liabilities, resulting in $662.8 billion in stockholders' deficit. * * * The Troubled Company Reporter said on June 17, 2009, that Standard & Poor's Ratings Services lowered its corporate credit rating on Momentive Performance Materials to 'SD' (selective default) from 'CC' and its senior unsecured and subordinated debt ratings on the company to 'D' from 'C' following the completion of what S&P considers to be a distressed exchange offer. In addition S&P has removed the ratings from CreditWatch, where they were placed with negative implications on March 17, 2009. All S&P's other ratings on Momentive and its subsidiaries remain unchanged. Moody's Investors Service also deemed the recently concluded notes exchange offer which included issuance of secured second lien notes to be a distressed exchange, and lowered the Probability of Default Rating of Momentive Performance Materials to Ca/LD from Caa3. Moody's also changed some of Momenitve's other ratings to reflect the occurrence of a distressed exchange. The ratings on Momentive's senior unsecured notes and senior subordinated notes were changed to Ca from Caa2 and Caa3, respectively, reflecting the low applicable clearing price resulting from the exchange offer. Moody's affirmed Momentive's Corporate Family Rating at Caa1, its senior secured first lien debt (revolver and term loan) at B1 and its Speculative Grade Liquidity Rating at SGL-3. The rating outlook is negative. MORTON INDUSTRIAL: Wins Court OK to Sell Biz for $33MM ------------------------------------------------------ According to Bill Rochelle at Bloomberg, the U.S. Bankruptcy Court for the district of Delaware has granted Morton Industrial Group Inc. approval to sell its business for $33 million. MIG Acquisition Corp, the stalking-horse bidder, was under contract to purchase the assets for $33 million, absent higher and better bids. No competing bids were submitted at auction. Morton Industrial has five plants that generated $208 million in sales during 2008. Headquartered in Morton, Illinois, Morton Industrial Group Inc. -- http://www.mortongroup.com/-- and its affiliates are contract metal fabricators serving an array of Original Equipment Manufacturers. The Debtors operate five manufacturing facilities located in the Midwestern and Southeastern United States. The Debtors' customers are Caterpillar Inc., Deere & Co., JLG Industries, Inc., Hallmark Cards, Kubota Manufacturing of America and Winnebago Industries, Inc. Morton Industrial and its affiliates, including MMC Precision Holdings Corp., filed for Chapter 11 protection on March 22, 2009, (Bankr. D. Del. Lead Case No.: 09-10998) Paul, Hastings, Janofsky & Walker LLP represents the Debtors in their restructuring efforts. The Debtors propose to hire Paul N. Heath, Esq., at Richards, Layton & Finger PA as co-counsel, AlixPartners, LLP as restructuring advisors, Kurtzman Carson Consultants LLC as claims, noticing and balloting agent. Roberta A. DeAngelis, United States Trustee for Region 3, appointed three members to serve on the Official Committee of Unsecured Creditors of Morton Industrial Group Inc. and its debtor-affiliates. The Debtors listed estimated assets of $50 million to $100 million and estimated debts of $100 million to $500 million. NANOGEN INC: Court Approves Auction of Assets on June 23 -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware for authorized Nanogen, Inc., and its debtor-affiliates to auction assets on June 23, 2009, at 10:00 a.m. at the offices of Morgan, Lewis, & Bockius LLP, 101 Park Avenue, New York City. A hearing to approve the proposed sale of the assets will be conducted on June 24, 2009, at 4:00 p.m.(Eastern Time) Objections, if any are due today, June 19, 2009, at 4:00 p.m. The Court also approved the bid procedures for the sale of: (i) Molecular Diagnostics Business; (ii) Point of Care Business; and (iii) Additional IP Assets. The Debtors entered into a purchase agreement with Financiere Elitech SAS, pursuant to which Elitech agreed to acquire the assets for $25.6 million. In order to make a single bid on the Debtors' assets, Elitech entered into an agreement with The Bay City Capital Fund V, L.P. to finance a portion of the purchase and to receive immediately subsequent to the sale title to and license to use certain of the Purchased assets well as assignment of certain contracts. The Court overruled the objections to the Debtors' motion to sell assets including those filed by Pharmacogenetics Diagnostic Laboratory, LLC, Dr. Roland Valdes, Dr. Mark Linder, MetCyte Business Lab LLC and Roberta De Angelis, the acting U.S. Trustee for Region 3. A full-text copy of the purchase agreement is available for free at http://bankrupt.com/misc/nanogen_purchaseagreement.pdf For more information on the auction, contact: Ashby & Geddes, P.A. 500 Delaware Avenue, 8th Floor P.O. Box 1150 Wilmington, DE 19899 Tel: (302) 654-1888 Fax: (302) 654-2067 About Nanogen, Inc. Headquartered in San Diego, California, Nanogen, Inc. is a manufacturer of advanced human diagnostic products. The Company and its affiliates filed for Chapter 11 on May 13, 2009 (Bankr. D. Del. Lead Case No. 09-11696). Karen B. Skomorucha, Esq., Ricardo Palacio, Esq., and William Pierce Bowden, Esq., at Ashby & Geddes, P.A., represent the Debtors in their restructuring efforts. The Debtors have assets and debts both ranging from $10 million to $50 million. NAVISTAR INT'L: Hikes Equity Stake in Joint Ventures With Ford -------------------------------------------------------------- Navistar International Corporation and Ford Motor Company in January 2009 reached an agreement to restructure their ongoing business relationship and settle all existing litigation between the companies. As part of the settlement agreement, both companies agreed to terminate their respective lawsuits and release each other from various actual and potential claims, including those brought in the lawsuits. Navistar also received a cash payment from Ford and will increase its equity interest in its Blue Diamond Truck and Blue Diamond Parts joint ventures with Ford to 75%. Finally, Navistar and Ford will end their current diesel engine supply agreement effective December 31, 2009. On June 9, 2009, pursuant to the provisions of the settlement agreement, Navistar entered into a Fifth Amendment to the Blue Diamond Joint Venture Agreement with Ford. Navistar increased its equity interest in BDP from 49% to 75% as well as increased its equity interest in BDT from 51% to 75%. The receipt of additional equity interest from Ford was among the various components of the settlement agreement, and no additional consideration was paid to Ford in connection with the increase in equity interest in BDT or BDP. 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 $9.65 billion in total assets and $11.09 billion in total liabilities as of April 30, 2009, resulting in $1.44 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. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. NORTH SHORE MUSIC: May File for Bankruptcy Protection ----------------------------------------------------- Mary Moore at Boston Business Journal reports that North Shore Music Theatre may file for bankruptcy protection. "The thing we know is that we're not putting on a 2009 season. I think the very likely consequence of that is that we will very quickly go out of business. Whether it's Chapter 11 or Chapter 7 -- it's completely up in the air at the moment," Business Journal quoted David Fellows, chairman of the North Shore Music Theatre board, as saying. Business Journal says that North Shore Music will cancel its 2009 season, slated to start in July, despite an aggressive campaign to raise enough funds to keep operating. North Shore Music has failed to raise $2 million in philanthropic commitments to fund a new business model and launch a 2009 season. Although more than $500,000 in pledges have been made since the theater announced a turn-around strategy in April, officials of the theater say that time has run out to raise the balance and move forward with its plans. "In the last two months we have been able to make progress toward our fundraising goal, but sadly, this is not enough to fund a 2009 season and keep the theater open. Without a season this year, we are unable to address the substantial debts of our creditors and restore the theater's economic health," Mr. Fellows said. North Shore Music's debts include large mortgages on its property and buildings and debts to vendors, the State of Massachusetts, and subscribers who paid in advance for the 2009 Season. Business Journal relates that North Shore Music has $10 million in liabilities, including large mortgages on its property and buildings and debts to vendors, the State of Massachusetts, and subscribers who paid in advance for the 2009 season. Theater officials are in discussions with its senior creditor and are reviewing the options available for liquidating and maximizing the value of the theater's assets for its stakeholders, as well as identifying potential buyers of the property who might consider a lease back of the theater. Mr. Fellows, according to Business Journal, said that most of North Shore Music's 4,400 subscribers are unlikely to get their money returned. North Shore Music Theatre -- http://www.nsmt.org/index.php-- is based in Beverly, Massachusetts. NORTHSHORE ASSET: Receiver to Hold Auction of Assets on July 10 --------------------------------------------------------------- Arthur Steinberg, the court-appointed receiver for Northshore Asset Management LLC, et al., will conduct a public auction to sell certain assets of the Receivership Estate. The auction will be conducted on July 10, 2009, at 10:00 a.m. (eastern) at Kaye Scholer LLP, 425 Park Avenue, New York, NY 10022. The Case is Securities and Exchange Commission v. Nortshore Asset Management, LLC, et al., (Civil Action No. 05-CV-2192(WHP). A detailed list of the assets is attached as Exhibit B to the Sale Application [Docket No. 576], which was filed with the U.S. District Court for the Southern District of New York. A copy of the Sale Application, the Bidding Procedures and the Court's order may be obtained from the docket or by written request made to counsel to the Receiver addressed at: Kaye Scholer LLP Attn: Marilee Dahlman, Esq. 425 Park Avenue New York, NY 10022 Tel: (212) 836-8000 Fax: (212) 836-6373 Headquartered in Chicago, Illinois, Northshore Asset Management LLC provides investment management services to private equity and hedge funds and sophisticated investors. On Feb. 15, 2005, Northshore, NSCT LLC and Saldutti Capital Management, LP, filed for Chapter 11 protection (Bankr. N.D. Ill. Case Nos. 05-04950, 05-04958 and 05-04959). On February 16, 2005, the U.S. District Court for the Southern District of New York appointed Arthur Steinberg as receiver. On March 29, 2005, the Honorable Pamela S. Hollis in Chicago ordered the transfer of the Debtors' Chapter 11 cases to the U.S. Bankruptcy Court for the Southern District of New York (Bankr. Case Nos. 05-12797 through 05-12799), and the U.S. District Court for the Southern District of New York withdrew the reference of those cases from the Bankruptcy Court to consolidate all proceedings in one forum. Jon C. Vigano, Esq., and Patricia J. Fokuo, Esq., at Schiff Hardin LLP; and William J. Kohn, Esq., at Benesch Friedlander Coplan & Aronoff LLP, represented the Debtors in the Chapter 11 case. When the Debtors filed for protection from their creditors, they estimated assets and debts ranging from $10 million to $50 million. Arthur Steinberg, Esq., at Kaye Scholer LLP, serves as the Receiver. Additional information about this proceeding is available on-line at http://www.northshoreupdate.com/ NTK HOLDINGS: Taps Blackstone and Weil Gotshal as Advisors ---------------------------------------------------------- NTK Holdings, Inc., and Nortek, Inc., are analyzing their capital structures in light of current economic conditions and, to assist in that process, the Blackstone Group and Weil, Gotshal & Manges have been retained as advisors. The advisors will be contacting bondholders and debt holders as appropriate. Richard L. Bready, Chairman and Chief Executive Officer, said, "In consideration of the current economic environment, our businesses are performing well and we remain focused on operating as efficiently as possible and executing our strategic business plans." Based in Providence, Rhode Islands, NTK Holdings Inc., the parent company of Nortek Holdings and Nortek, is a diversified global manufacturer of innovative, branded residential and commercial ventilation, HVAC and home technology convenience and security products. NTK Holdings and Nortek offer a broad array of products including: range hoods, bath fans, indoor air quality systems, medicine cabinets and central vacuums, heating and air conditioning systems, and home technology offerings, including audio, video, access control, security and other products. OMNI LINGUAL SERVICES: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Omni Lingual Services aka NetworkOmni Multilingual Communications 4353 Park Terrace Drive Westlake Village, CA 91361 Bankruptcy Case No.: 09-17341 Chapter 11 Petition Date: June 15, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Debtor's Counsel: Tshombe Sampson, Esq. 1014 6th St., Ste H Santa Monica, CA 90403 Tel: (310) 394-1788 Fax: (310) 394-1788 Email: starren@excite.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Laura Raville, president of the Company. OPUS SOUTH: Wachovia Bank Agrees to Pay For Firm's Bills -------------------------------------------------------- Rachel Feintzeig posted on The Wall Street Journal blog Bankruptcy Beat that Wachovia Bank has agreed to make the payments for Opus South Corporation's bills. According to Bankruptcy Beat, Opus South is having trouble paying "critical expenses," including its water and sewer bills for the 51-unit complex on Perdido Key near Pensacola, Florida. Opus South, Bankruptcy Beat relates, said that its only option is to borrow $68,000 from Wachovia Bank, "unless Wachovia is authorized to immediately make protective advance payments for the critical expenses. The health, safety and welfare of the residents living at the La Serena Project will be jeopardized." Bankruptcy Beat relates that Opus South said that it was unable to order necessary supplies for the pool at the Waters Edge development in May. The report says that Opus South was also expecting cable TV service and water for the development to be cut off. Opus South said that had no money to pay the only two workers capable of repairing the development's heating and cooling system, according to the report. Wachovia stepped in, to pay for the bills and also promised to pay up to $65,000 to cover "delinquent expenses" for another Opus South development in St. Petersburg, Florida, Bankruptcy Beat states. Headquartered in Atlanta, Georgia, Opus South Corporation -- http://www.opuscorp.com/-- provides an array of real estate related services across the United States including real estate development, architecture & engineering, construction and project management, property management and financial services. The Company and its affiliates filed for Chapter 11 on April 22, 2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial Corporation as real estate broker, Delaware Claims Agency LLC as claims agent. The Debtors have assets and debts both ranging from $50 million to $100 million. OSI RESTAURANT: Chief Operating Office Resigns, CEO Assumes Role ---------------------------------------------------------------- Paul Avery, chief operating officer of OSI Restaurant Partners Inc., retired after 20 years with OSI. Mr. Avery assumed his current role as chief operating officer in 2005 with direct responsibility for the Outback Steakhouse, Carrabba's Italian Grill and Bonefish Grill brands. Prior to his promotion to chief operating officer, Mr. Avery served as president of the Outback Steakhouse brand. He began his career with Outback Steakhouse as the managing partner of the Palm Harbor location in 1990, with promotions to regional director and vice president of operations. "This is one of the toughest decisions I have ever faced," stated Mr. Avery. "I have been contemplating retirement for some time, but did not feel it appropriate to retire when the company was challenged by this difficult economy. Although the economy remains challenging, OSI is now on a firm footing and I can devote my full time to my family," Mr. Avery added. "It is impossible to overstate the contributions [Mr. Avery] has made to OSI or what he means to the people of OSI," Bill Allen, CEO of OSI, stated. "It is a testament to his character that he delayed his retirement in order to continue to provide leadership through a tough economy. [Mr. Avery] has been a mentor to many people at OSI and he will always be part of the OSI family." added Mr. Allen. "OSI simply would not have become the company it is without [Mr. Avery]," Chris Sullivan and Bob Basham, founders of OSI, stated. "He is a natural leader and has been a leader not only for OSI but for the entire restaurant industry. We have the utmost gratitude for all Paul has done for OSI and its people," related Messrs. Sullivan and Basham. OSI brands previously reporting to Mr. Avery will now report to Mr. Allen as the company evaluates its leadership structure. About OSI Restaurant OSI Restaurant Partners Inc. is the No. 3 operator of casual- dining spots (behind Darden Restaurants and Brinker International), with more than 1,400 locations in the US and 20 other countries. Its flagship Outback Steakhouse chain boasts more than 950 locations that serve steak, chicken, and seafood in Australian-themed surroundings. OSI also operates the Carrabba's Italian Grill chain, with about 240 locations. Other concepts include Bonefish Grill, Fleming's Prime Steakhouse, and Cheeseburger In Paradise. Most of the restaurants are company owned. A group led by chairman Chris Sullivan took the company private in 2007. * * * As reported by the Troubled Company Reporter on February 24, 2009, Moody's Investors Service downgraded OSI Restaurant's Probability of Default rating to Ca from Caa1 and lowered the rating on its $550 million 10% senior unsecured notes to C from Caa3. Moody's also placed OSI's Corporate Family and senior secured ratings on review for possible downgrade. The review was prompted by the recent announcement that OSI continues to experience a substantial decline in earnings and store traffic to levels worse than Moody's previously expected. The company also announced that it will likely need to take an impairment charge of between $480 and $540 million for goodwill due to a reduction in its projected results for future periods as a result of poor overall economic conditions. PACIFIC ENERGY: Seeks Nov. 4 Plan Deadline; Eyes Asset Sales ------------------------------------------------------------ Bill Rochelle at Bloomberg News reports that Pacific Energy Resources Ltd. is seeking a November 4 extension of its exclusive period to file a Chapter 11 plan. The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on July 1 to consider the proposed extension. Pacific Energy said in a Court filing that it will be proposing a process to auction off properties in waters off California and Alaska. If there are no acceptable bids for the Alaska properties, the company will be seeking authorization to abandon the assets. Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com/-- engages in the acquisition and development of oil and gas properties, primarily in the United States. The Company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09-10785). Attorneys at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. The Debtors proposed Rutan & Tucker LLP as special corporation and litigation counsel; Schully, Roberts, Slattery & Marino, PLC, as special oil and gas and transactional counsel; Devlin Jensen as special Canadian counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; and Albrecht & Associates, Inc., as agent for the Debtors in the sale of their oil and gas properties. Omni Management Group, LLC, is the claims, balloting, notice and administrative agent for the Debtors. When the Debtors filed for protection from their creditors, they listed assets and debts of between $100 million and $500 million each. PAETEC HOLDING: Moody's Assigns 'B1' Rating on $350 Mil. Notes -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to PAETEC Holding Corp.'s proposed $350 million (gross proceeds) senior secured note issuance. The company will use the net proceeds from the note issuance primarily to repay outstandings under its existing senior secured term loans, at par. As part of the rating action, Moody's has affirmed all other ratings, including the SGL-1 liquidity rating. The rating outlook remains stable. Assignments: Issuer: PAETEC Holding Corp. -- Senior Secured Regular Bond/Debenture, Assigned a range of 33 - LGD3 to B1 -- Senior Secured Regular Bond/Debenture, Assigned a range of 33 - LGD3 to B1 PAETEC's B2 corporate family rating and stable rating outlook broadly reflect the Company's high leverage for its rating category and modest free cash flow. In addition, the rating reflects Moody's view that the operating environment for CLECs will continue to be difficult, and that PAETEC will be challenged to generate revenue growth in a tough economic environment. Specifically, Moody's expects that the economic downturn and relative softness in the acquired McLeodUSA Incorporated properties will stress the Company's revenues through the next 12- 18 months. The ratings are supported by PAETEC's operating scale as one of the largest CLECs operating in the US, and the potential for the Company to drive its cost structure lower and provide a platform for greater product diversity by utilizing the long-haul and metro fiber assets that it obtained in the McLeod acquisition. PAETEC's SGL-1 rating continues to reflect Moody's view that it should maintain very good liquidity over the coming 12 months; however, Moody's believes that macroeconomic weakness will continue to impact the Company's growth prospects, which may stress its liquidity position over time and be further compounded by completion of the announced $30 million stock buyback by 3Q 2009 (about $16 million remaining under the authorization). Moody's most recent rating action for Paetec was on November 18, 2008, when the Company's ratings were affirmed, including the B2 CFR and SGL-1 rating. PAETEC is a CLEC headquartered in Fairport, New York. The Company generated nearly $1.6 billion of revenue in 2008. PAETEC HOLDING: S&P Assigns 'B' Rating on $350 Mil. Debt -------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its issue- level and recovery ratings to Fairport, New York-based competitive local exchange carrier PAETEC Holding Corp.'s proposed senior secured notes due 2017 of $350 million to be issued under rule 144A with registration rights. S&P assigned the debt an issue- level rating of 'B' (the same as the corporate credit rating) with a recovery rating of '3', indicating expectations for meaningful (50%-70%) recovery in the event of payment default. The new notes will be pari passu with the existing senior secured term loan and revolver and proceeds will be used to repay a portion of the company's debt, including the term loan, as well as for general corporate purposes. At the same time, S&P affirmed all other ratings on PAETEC, including the 'B' corporate credit rating. The outlook is stable. Total debt outstanding as of March 31, 2009, was $930 million. "The new notes will add a degree of financial flexibility by extending maturities, although business trends remain somewhat weak because of market conditions," said Standard & Poor's credit analyst Allyn Arden. Additionally, PAETEC's operating lease- adjusted leverage is elevated at about 4.9x and is unlikely to meaningfully improve over the next couple of years. PALM INC: Cuts Board Seats to Eight, Names Rubinstein CEO & Prez ---------------------------------------------------------------- Palm Inc. amended and restated its bylaws effective as of June 12, 2009, to decrease the authorized number of directors on its board of directors from nine to eight. On June 9, Palm's board of directors approved a transition in the role of Palm's President and Chief Executive Officer from Edward T. Colligan to Jonathan J. Rubinstein. The transition was announced on June 10 and was effective as of June 12. In connection with the transition, Mr. Colligan resigned as a member of Palm's board, effective June 12. Rubinstein Engagement Deal On June 10, Palm entered into an offer letter with Mr. Rubinstein to be Palm's President and CEO as well as Chairman of Palm's board. Under the Offer Letter, Mr. Rubinstein is entitled to receive an annual base salary of $850,000 and will be eligible to participate in the Company's discretionary cash bonus plan with a target annual performance bonus of 100% of base salary. Mr. Rubinstein will also receive: a stock option grant of 430,000 shares of Palm common stock which will vest on a monthly basis over four years; 215,000 Palm performance shares (also known as restricted stock units), at a purchase price of $0.001 per share, which will vest in equal annual increments over four years; and restricted stock purchase rights to acquire 215,000 shares of Palm common stock, at a purchase price of $0.001 per share, which will vest in equal annual increments over four years. Colligan Separation Agreement On June 10, Palm entered into a separation agreement with Mr. Colligan, who agreed to remain an employee of the Company and an officer and director of certain of its subsidiaries until July 12, 2009. Mr. Colligan is entitled to receive: a lump sum payment of $800,000, payable in 12 equal monthly installments commencing August 12, 2009; an additional lump sum payment of $400,000, payable on July 12, 2010; and reimbursement of premiums under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended for up to 18 months. In addition, portions of Mr. Colligan's unvested Palm stock options, shares of Palm restricted stock and Palm performance shares will have their vesting accelerate, which to some extent will be conditioned on Mr. Colligan's compliance with certain obligations. So long as Mr. Colligan complies with the obligations, any options to acquire Palm common stock in which Mr. Colligan will vest on or prior to July 12, 2009, together with any options that vest pursuant to the Separation Agreement, will remain outstanding and exercisable until January 12, 2011. As part of the Separation Agreement, Mr. Colligan has agreed to non- competition, non-solicitation and other standard post-separation obligations. Palm anticipates that, based on its closing stock price as of June 10, 2009, the Separation Agreement will result in a non-cash charge to earnings of roughly $5 million in the Company's fiscal quarter ending August 28, 2009, and non-cash charges totaling roughly $2 million recognized over the 12 months ending July 12, 2010, subject to mark-to-market adjustments. About Palm Inc. Headquartered in Sunnyvale, California, Palm Inc. (Nasdaq:PALM) -- http://www.palm.com/-- provides mobile computing solutions worldwide. The company offers Palm Treo smartphones, Palm LifeDrive mobile managers, and Palm handheld computers, as well as software, services, and accessories. As of February 28, 2009, Palm reported $656.4 million in total assets; $342.4 million in current liabilities, $391.0 million in long-term debt, $7.09 millon in non-current tax liabilities, and $180,000 in other non-current liabilities; $262.9 million in Series B redeemable convertible preferred stock and $78.4 million in Series C redeemable convertible preferred stock; resulting in $425.6 million in stockholders' deficit. PENHALL HOLDING: Moody's Cuts Corporate Family Rating to 'Caa2' --------------------------------------------------------------- Moody's Investors Service has downgraded the corporate family and probability of default ratings of Penhall Holding Company to Caa2 from Caa1. The rating outlook is negative. The corporate family rating downgrade reflects Penhall's highly leveraged capital structure and an expectation that declining U.S. non-residential construction activity through 2010 will drive net losses. The downgrade follows a decline in revolver availability that occurred over the seasonally weak Q1-2009 and an updated view that as construction and credit markets remain soft Penhall may need to further borrow on its revolving credit line to fund internal deficits and scheduled debt amortizations in 2009. Equipment price declines could also diminish availability under the company's asset-based revolving credit facility in 2010, when the next independent appraisal is applied to the borrowing base formula. In Moody's view, should the revolver's covenant tests activate near-term, compliance would be unlikely. The Caa2 rating also acknowledges that Penhall's strong market position as a highway rehabilitation subcontractor and equipment rental operator could benefit revenues later in 2009 as U.S. fiscal stimulus spending spurs greater highway improvement work. A key concern for Penhall will be how much gross profit such work may generate to help cover fixed costs, as price competition should be stiff. Greater demand for time-based commercial service work, beyond lower-margin, fixed price job contracts, would help improve fixed cost coverage and free cash flow capability. Near- term prospects for non-stimulus related road projects in California, a key Penhall market, have diminished with California's budget issues. Additional ratings changes: Penhall International Corp. -- $175 million 12% second lien notes due 2014 to Caa2 LGD 3, 43% from Caa1 LGD 3, 47% Penhall Holding Company -- $60 million unsecured term loan due 2012 to Ca LGD 5, 89% from Caa3 LGD 6, 90% Moody's last rating action occurred on February 13, 2009 when the corporate family rating was downgraded to Caa1 from B3. Penhall Holding Company is the largest provider of concrete cutting, breaking and highway grinding services in North America. Penhall provides a broad range of services including equipment rental with experienced operators who can operate equipment, and project managers for more complex requirements. The company operates 41 locations in 19 States and Canada and maintains over 800 pieces of equipment. PHILADELPHIA NEWSPAPERS: Gets 60-Day Extension for Plan Filing -------------------------------------------------------------- Steve Tawa at KYW reports that Hon. Jean Fitzsimon of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania has given Philadelphia Newspapers LLC another 60 days, or until August 31 to file a Chapter 11 reorganization plan. KYW relates that creditors had complained to the Court that Philadelphia Newspapers didn't engage in any meaningful talks on a restructuring plan. Philadelphia Newspapers CEO Brian Tierney has been lining up investors to infuse new cash into the operation, KYW states, citing Richard Thayer, the Company's vice president of finance. KYW quoted Philadelphia Newspapers's counsel, Lawrence McMichael, as saying, "We're very close to finalizing a very substantial amount of new capital. The target goal is $50 million." According to KYW, Philadelphia Newspapers also indicated that it won't negotiate with 14 unions, which have contracts due in August 31, until a reorganization plan is in place. Philadelphia Newspapers, LLC -- http://www.philly.com/-- owns and operates numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its certain affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Debtors listed assets and debts of $100 million to $500 million. The United States Trustee has appointed a three-member Official Committee of Unsecured Creditors, which is represented by Ben Logan, Esq., and other lawyers at O'Melveny & Myers LLP. PHILADELPHIA NEWSPAPERS: May Have Special Lawyer for Taping Issue ----------------------------------------------------------------- According to Bill Rochelle at Bloomberg, the U.S. District Court for the Eastern District Pennsylvania in Philadelphia overturned a ruling in April by Bankruptcy Judge Jean K. FitzSimon that denied a request by Philadelphia Newspapers LLC to hire special counsel for advice on the allegedly illegal taping of a pre-bankruptcy meeting with bank lenders. Philly Newspapers CEO Brian Tierney said that in a key meeting with lenders in November, he discovered that a bank officer was making a recording, which was a violation of Pennsylvania state law. Lenders were reviewing confidential, proprietary financial information at that time. After bankruptcy, Philly Newspapers sought bankruptcy court authorization to hire the same firm it has hired prepetition to investigate and bring suit. The bankruptcy judge denied the application to retain special counsel, although he allowed the official committee of unsecured creditors appointed in the Chapter 11 case to investigate. The bankruptcy judge wanted to keep the incident from becoming one of the "sideshows." According to Bill Rochelle, U.S. District Judge Eduardo C. Robreno partially reversed in a 33-page opinion on June 10. Judge Robreno allowed Philadelphia Newspapers to hire the firm for advice, although he upheld the bankruptcy judge by precluding the firm from investigating or filing suit. In substance, the firm can advise its client based on the pre-bankruptcy investigation and the fruits of the investigation conducted by the Creditors Committee. Judge Robreno said it was in the best interests of the Company to receive advice from its own lawyer and therefore was an abuse of discretion by the bankruptcy judge to preclude engagement of the special counsel. Philadelphia Newspapers, LLC -- http://www.philly.com/-- owns and operate numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa., Lead Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Debtors listed assets and debts of $100 million to $500 million. PPLACE TWO: Case Summary & 46 Largest Unsecured Creditors --------------------------------------------------------- Debtor: PPlace Two, LLC 1286 Kifer Rd. #103 Sunnyvale, CA 94086 Bankruptcy Case No.: 09-54697 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- PPlace One, LLC 09-54698 Chapter 11 Petition Date: June 15, 2009 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Riordan J. Zavala, Esq. Law Offices of Riordan J. Zavala P.O. Box 1061 Placentia, CA 92871 Tel: (714) 996-5168 Email: rjzlaw@adelphia.net Total Assets: $2,002,025 Total Debts: $1,050,441 A full-text copy of the Debtor's petition, including a list of its 46 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/canb09-54697.pdf QPC LASERS: Unit's Assets Sale Completion Cues Directors to Resign ------------------------------------------------------------------ QPC Lasers, Inc., disclosed in a filing with the Securities and Exchange commission that Merrill McPeak, Israel Ury, Robert Adams, and George Lintz resigned from the board of directors as a result of the completion of the disposition of the assets of the Company's subsidiary, Quintessence Photonics Corporation. As of the date of the disposition, the Company and its subsidiary have no further operations. None of the resigning directors identified as the cause of his resignation any disagreement with the Company regarding the company's operations, policies or practices. The Company anticipates that it will in the near future file for protection under Chapter 7 of the federal bankruptcy laws and that its common stock will have no value after liquidation of the Company is completed. QPC Lasers, Inc., designs and manufactures laser diodes through its wholly-owned subsidiary, Quintessence Photonics Corporation. Quintessence was incorporated in November 2000 by Jeffrey Ungar, Ph.D. and George Lintz, MBA. The Founders began as entrepreneurs in residence with DynaFund Ventures in Torrance, California and wrote the original business plan during their tenure at DynaFund Ventures from November 2000 to January 2001. The business plan drew on Dr. Ungar's 17 years of experience in designing and manufacturing semiconductor lasers and Mr. Lintz's 15 years of experience in finance and business; the primary objective was to build a state of the art wafer fabrication facility and hire a team of experts in the field of semiconductor laser design. QUANTUM CORP: Completes Offering of 4.375% Conv. Sub. Notes ----------------------------------------------------------- Quantum Corp. disclosed in a filing with the Securities and Exchange Commission the expiration and final results of the tender offer for its 4.375% Convertible Subordinated Notes due 2010 (CUSIP Nos. 747906 AD 7 and 747906 AE 5). The tender offer expired at 5:00 p.m., New York City time, on June 3, 2009. As of the Expiration Date, $87,181,000 in aggregate principal amount of the Notes, representing approximately 54.5% of the aggregate principal amount of the outstanding Notes, had been validly tendered in the tender offer. All Notes validly tendered and not validly withdrawn in the tender offer have been accepted for payment by Quantum. Requests for the Offer to Purchase and other documents relating to the tender offer may be directed to Global Bondholder Services Corporation, the information agent, which can be contacted at (212) 430-3774 (for banks and brokers only) or (866) 488-1500 (for all others toll-free). A full-text copy of the SENIOR SUBORDINATED TERM LOAN AGREEMENT is available for free at http://ResearchArchives.com/t/s?3dee About Quantum Corp Headquartered in San Jose, California, Quantum Corporation -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive solutions. The Company provides an integrated range of disk, tape and software solutions. Quantum's solutions are all designed to provide information technology (IT) departments in a variety of organizations with tools for protecting, retaining and accessing their digital assets. The Company sells its products via its branded channels and through original equipment manufacturers (OEMs), such as Dell, Inc., Hewlett-Packard Company, International Business Machines Corporation and Sun Microsystems, Inc., Quantum divides its products into three categories: tape automation systems; disk- based backup systems and data management software, and devices and media. The devices and media category includes removable disk drives, standalone tape drives and media products. The Company works with a network of value-added resellers, OEMs and other suppliers to meet customers' data protection need. As reported in the Troubled Company Reporter on May 4, 2009, Quantum Corporation had $551.5 million in total assets; and $215.7 million in total current liabilities and $453.5 million in total long-term liabilities, resulting in $117.7 million in stockholders' deficit as of March 31, 2009. * * * TCR reported on May 20, 2009, that Standard & Poor's Ratings Services said that its CreditWatch placement for its 'CC' corporate credit rating on Quantum Corp. has been revised to developing from negative. QUANTUM CORP: Delays Filing of March 31 Form 10-Q Quarterly Report ------------------------------------------------------------------ Quantum Corporation says it won't be able to file its quarterly report for the period ended March 31, 2009, on time. Quantum explains that on March 31, 2009, it received a comment letter from the Securities and Exchange Commission regarding its Form 10-K for the fiscal year ended March 31, 2008 and Form 10-Q for the fiscal quarter ended December 31, 2008 which included inquiries about its accounting policy and associated method of accounting for service parts for maintenance among other topics. Quantum provided written responses to the SEC on April 14, 2009. On May 12, 2009, Quantum received a subsequent comment letter from the SEC with additional inquiries regarding its accounting for service parts for maintenance. Subsequent to the receipt of that letter, Quantum had several telephone discussions with the SEC Staff regarding this topic, and provided a written response to the SEC on June 15, 2009. Based on discussions with the SEC Staff, a change to Quantum's method of accounting for service parts for maintenance is appropriate. Quantum's most recent accounting method was to classify service parts as long-lived assets and to amortize the parts over their estimated useful life of eight years. The method of accounting under evaluation is to classify service parts for maintenance as a current asset and apply an inventory method to account for the service parts at the lower of cost or market. Until the SEC has reviewed Quantum's response, including its materiality assessment, and closed on the matter, Quantum is unable to conclude its Consolidated Financial Statements for the year ended March 31, 2009. "We believe applying this change in accounting principle to prior periods is immaterial; however, the SEC Staff has not yet had an opportunity to review our assessment and provide their opinion on our conclusion. We intend to file our Form 10-K as soon as reasonably practicable, but in any event no later than the fifteenth calendar day following the prescribed due date," Quantum said. According to Quantum, revenue decreased 17%, or $166.7 million, in fiscal 2009 to $809.0 million compared to $975.7 million in fiscal 2008. Operating expenses increased $307.3 million, or 94%, to $634.2 million in fiscal 2009 primarily due to a $339.0 million goodwill impairment charge recorded in the third quarter of fiscal 2009. This compares to operating expenses of $327.2 million in fiscal 2008. Due to changing its method of accounting for service parts, Quantum is unable to conclude its fiscal 2009 cost of revenue, gross margin or net loss at this time. As reported by the Troubled Company Reporter on May 4, 2009, Quantum had $551.5 million in total assets; and $215.7 million in total current liabilities and $453.5 million in total long-term liabilities, resulting in $117.7 million in stockholders' deficit as of March 31, 2009. The Company said revenue for its fiscal fourth quarter ended March 31, 2009, was $168 million and that revenue for the full fiscal year 2009 was $809 million. About Quantum Corp San Jose, California, Quantum Corporation -- http://www.quantum.com/-- is a global storage company specializing in backup, recovery and archive solutions. The Company provides an integrated range of disk, tape and software solutions. Quantum's solutions are all designed to provide information technology (IT) departments in a variety of organizations with tools for protecting, retaining and accessing their digital assets. The Company sells its products via its branded channels and through original equipment manufacturers (OEMs), such as Dell, Inc., Hewlett-Packard Company, International Business Machines Corporation and Sun Microsystems, Inc., Quantum divides its products into three categories: tape automation systems; disk- based backup systems and data management software, and devices and media. The devices and media category includes removable disk drives, standalone tape drives and media products. The Company works with a network of value-added resellers, OEMs and other suppliers to meet customers' data protection need * * * As reported by the TCR on June 8, 2009, Moody's Investors Service revised the probability of default rating for Quantum to Ca/LD, reflecting the limited default which has occurred following completion of the previously announced tender offer for its 4.375% Convertible Subordinated Notes due 2010. The PDR will revert back to Ca (still under review) and the /LD designation will be removed in approximately 3 business days, consistent with Moody's practice for such deemed distressed exchange transactions. In addition, Moody's notes that it is continuing its review of all ratings, with direction uncertain, pending the outcome of additional actions required to eliminate the potential accelerated maturity of the remaining $208 million senior secured term loan in February 2010. QUANTUM CORP: Will Cease Issuing EMC Corp. Warrant to Buy Shares ---------------------------------------------------------------- Quantum Corporation disclosed in a filing with the Securities and Exchange Commission that it entered into a Warrant Purchase Agreement with EMC Corporation, as contemplated by the Third Amended and Restated Embedded Software License and Distribution Agreement, effective as of April 1, 2009, between the Company and EMC Corporation. The Warrant Agreement provides that, within 30 days after August 31 of this year and the years 2010 and 2011, the Company will grant a warrant to EMC to purchase a number of shares of the Company's common stock calculated in accordance with the terms of the License Agreement; provided, that in no event will any warrant be granted or exercisable to the extent that issuance or exercise thereof would result in EMC holding, or being deemed to hold, more than 15% of the issued and outstanding capital stock of the Company. The exercise price per share of the Company's common stock will be $0.38. Each warrant issued pursuant to the Warrant Agreement will vest and be exercisable in the event of a change of control of the Company, including a sale of all or substantially all of the Company's business or of certain assets, any person or group acquiring beneficial ownership of more than 50% of the Company's common stock, and a merger, consolidation, reorganization or similar business combination with respect to the Company. The warrants may not be exercised other than in connection with a change of control. Each warrant will expire on the earlier of (i) seven years from the date of issuance and (ii) three years from the occurrence of a change of control. A full-text copy of the WARRANT PURCHASE AGREEMENT is available for free at http://ResearchArchives.com/t/s?3ded About Quantum Corp Headquartered in San Jose, California, Quantum Corporation -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive solutions. The Company provides an integrated range of disk, tape and software solutions. Quantum's solutions are all designed to provide information technology (IT) departments in a variety of organizations with tools for protecting, retaining and accessing their digital assets. The Company sells its products via its branded channels and through original equipment manufacturers (OEMs), such as Dell, Inc., Hewlett-Packard Company, International Business Machines Corporation and Sun Microsystems, Inc., Quantum divides its products into three categories: tape automation systems; disk- based backup systems and data management software, and devices and media. The devices and media category includes removable disk drives, standalone tape drives and media products. The Company works with a network of value-added resellers, OEMs and other suppliers to meet customers' data protection need. As reported in the Troubled Company Reporter on May 4, 2009, Quantum Corporation had $551.5 million in total assets; and $215.7 million in total current liabilities and $453.5 million in total long-term liabilities, resulting in $117.7 million in stockholders' deficit as of March 31, 2009. * * * TCR reported on May 20, 2009, that Standard & Poor's Ratings Services said that its CreditWatch placement for its 'CC' corporate credit rating on Quantum Corp. has been revised to developing from negative. QUANTUM CORP: Tender Offer Won't Affect S&P's 'CC' Rating --------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on San Jose, California-based Quantum Corp. (CC/Watch Dev/--) are not affected by recent announcements regarding the completion of its tender offer or the delayed filing of its financial statements. The completion of the tender offer, with $87 million of convertible notes accepting the company's offer, leaves an approximate balance of $48 million that will require refinancing before Feb. 1, 2010, to avoid an acceleration of bank debt. S&P expects the delayed filing of the company's 10-K financial statement, related to the accounting of service parts, to be immaterial to historic statements and is likely to be resolved shortly. S&P will continue to monitor Quantum's progress closely in its effort to refinance the required debt. The company's filings must be current before Standard & Poor's would consider an upgrade of the rating following a successful refinancing announcement. QUEBECOR WORLD: S&P Downgrades Ratings on Loan to 'B+' From 'BB-' ----------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its issue-level and recovery ratings on Montreal-based Quebecor World Inc.'s proposed senior secured term loan due 2012 following the increase in the facilities to US$450 million from US$325 million. S&P has lowered the issue-level ratings on the term loan to 'B+' (the same as the corporate credit rating on Quebecor World) from 'BB-', and revised the recovery ratings to '3' from '2'. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery in the event of default. The ratings are based on preliminary information and are subject to satisfactory review of final documentation. (For the complete corporate credit rating rationale, see the research report to be published on RatingsDirect immediately following this media release.) At the same time, S&P affirmed all other ratings, including the 'B+' long-term corporate credit rating on the company. The outlook is negative. "The rating action follows the increase in the size of the proposed term loan by US$125 million. Additional cash proceeds from the term loan will be used to reduce the company's preferred shares outstanding and to provide additional liquidity to the company," said Standard & Poor's credit analyst Madhav Hari. "The term loan is part of the company's exit financing from bankruptcy protection," Mr. Hari added. Under the revised terms of the credit facilities, the company will be able to pay cash dividends on the preferred shares or unsecured notes (of up to US$12.5 million per year) under certain conditions including the maintenance of a minimum US$175 million in liquidity, only after 50% of the term loan has been repaid, and provided the company is in compliance will all financial covenants. The ratings on Quebecor World reflect S&P's assessment of the company's vulnerable business risk profile as reflected in its weakness in revenues and earnings, as well as its participation in the challenging printing industry, which is characterized by overcapacity, declining volumes, electronic substitution, pricing pressures, and intense competition. Partially offsetting these factors in S&P's opinion are Quebecor World's market position and solid credit protection measures for the ratings. Despite declining revenue and weaker performance than its global peers in the past several years, Quebecor World remains the second-largest North American printer, with leading market positions in most of its major product groups, including magazines, retail inserts, catalogues, books, direct mail, and directories. It has significant operations in North America and Latin America. The negative outlook reflects Standard & Poor's ongoing concerns regarding the challenges Quebecor World faces given its weak operating performance and difficult industry fundamentals. Downward pressure on the ratings could result from the continued deterioration in the company's operations or weakness in credit protection measures. S&P could revise the outlook to stable if Quebecor World demonstrates consistent improvement in operating performance. QUEBECOR WORLD: Committee to Retain Experts for Adversary Cases --------------------------------------------------------------- The official committee of unsecured creditors in Quebecor World Inc.'s Chapter 11 cases obtained permission from Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to retain experts in pending adversary proceedings. The Creditors' Committee filed: (a) a complaint on September 19, 2008, commencing an adversary proceeding against American United Life Insurance Company, et al., which seeks to recover approximately $376 million of payments to certain of the Debtors' private noteholders during the 90-day preference period set forth in Section 547 of the Bankruptcy Code; and an amended complaint on February 10, 2008; and (b) two other adversary proceedings seeking to recover alleged fraudulent conveyances to Royal Bank of Canada and Compushare Trust Company of Canada and alleged fraudulent conveyances to Societe Generale (Canada) and Compushare Trust Company of Canada. The Committee anticipates that it will require the assistance of various experts in the Private Noteholder Action and the Fraudulent Conveyance Actions. Experts may act solely in a consulting capacity, or they may serve as testifying experts for purposes of particular litigated issues, John K. Sherwood, Esq., at Lowenstein Sandler, PC, in Roseland, New Jersey, contends. The Committee will not be obligated to disclose the identity of their Experts except in accordance with applicable Federal Rules of Civil Procedure and the December 3, 2008 Stipulation and Consent Order Concerning Discovery Schedule. The Committee contends that the Experts are not "professionals" whose retention would require Court approval under Section 327 of Bankruptcy Code. Accordingly, the Committee asks the Court to authorize it to retain Experts in its discretion without requiring the submission of separate retention applications for each Expert. In addition, the Committee asks that the Experts not be required to file fee applications for approval of fees and expenses. Rather, the Debtors' estates will be directly liable for fees and expenses incurred by the Experts, and these charges, including any retainers requested by the Experts, should be passed through to the estates as disbursements on Committee counsels' fee applications. Mr. Sherwood relates that like the consultants and experts of the Debtors, the Experts to be retained by the Committee are not in a position to control the strategy affecting the management or administration of the Chapter 11 cases or the negotiation of a plan of reorganization. While the Experts' advice maybe helpful to the pending adversary proceedings, the advice is tangential to the administration of the estate. He asserts that the Experts are not "professionals" under the central role test. While testifying Experts may render independent opinions, Mr. Sherwood asserts that those opinions do not empower the experts with discretion or autonomy over the administration of the Debtors' estates, the purchase and sale of assets or the strategy to be used to reorganize, manage, and liquidate estate assets. Accordingly, he contends, the Experts do not meet the "degree of autonomy" test. According to Mr. Sherwood, the need for the Experts arises from the significant adversary proceedings commenced by the Committee within the Debtors' Cases. The Committee has legitimate interest in drawing on the services of Experts without disclosing the Experts' work unless and until required to do so by the rules governing discovery, he argues. Mr. Sherwood relates that the Committee does not propose to alter the basis on which any of the advisers and consultants render services in the Cases. Each of those advisers and consultants will continue to file fee applications. * * * The Court in its order approving the application said that the Debtors' estates will be directly liable for all fees and expenses incurred by the Experts, the Committee or its counsel will not have personal liability for Experts' fees or expenses. The Committee and its counsel will review the billing statements submitted by the Expert and determine the reasonableness of the billing statements. In the billing statements, counsel for the Committee will include fees and expenses for its Experts, including any retainer requested by any Expert, as disbursements on counsel's monthly fee. The counsel will not be required to submit a detailed statement or invoices with respect to services rendered or expenses sought by any Expert. The Experts will have specialized knowledge and expertise reasonably related to the subject matters of pending or anticipated adversary proceedings. Experts may act solely in a consulting capacity, or may serve as testifying experts for purposes of particular litigated matters. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Proposes Settlement With Vertis, et al. ------------------------------------------------------- Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure and Sections 105(a), 363 and 502 of the United States Bankruptcy Code, Quebecor World (USA) Inc. and its affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement among Quebecor World (USA) Inc., Quebecor World Inc., Vertis, Inc. and Charles Miotke. Charles Miotke, a former employee of the Debtors, had entered in to an employment agreement with the Debtors, which agreement restricts Mr. Miotke from working for any of the Debtors competitors following the termination of his employment. Following the termination of Mr. Miotke's employment with the Debtors, Vertis hired him to work in the Direct Marketing segment of Vertis' commercial printing business. The Debtors and Vertis are, to some extent, competitors in the Direct Marketing segment of the commercial printing business. Mr. Miotke asserts that the Debtors are obligated to him for certain payments related to his employment compensation, vacation, expenses and employee benefits. The Debtors contend that Mr. Miotke owes them certain obligations related to his relocation during the time he was employed by the Debtors. The Debtors, Mr. Miotke and Vertis entered into settlement discussions to reach a consensual resolution of their claims regarding the Employment Agreement, and the hiring of Mr. Miotke and his compensation and relocation expenses. Following the discussions, the parties agreed on these terms of a settlement: (a) Mr. Miotke agrees to release the Debtors and any of their related entities or other representative from any claims, damages, causes of action, or disputes of any kind or nature, whether presently known or unknown, anticipated or unanticipated, choate or inchoate, contingent or otherwise; (b) Mr. Miotke agrees that to the extent that he has trade secrets or confidential or proprietary information of the Debtors, he will not use any of the information in any manner in conjunction with his new employment with Vertis or with any other employer he may become employed by at any time in the future, and will not disclose any information to any third party, including current or future employees; (c) Mr. Miotke further agrees that, from May 8, 2008, to May 9, 2009, he will not directly or indirectly solicit for employment any current employee of Quebecor or any former employee of the Debtors who is subject to a restrictive non-compete covenant; (c) the Debtors agree to pay or, in the case of retirement or investment plans, make available for distribution to Miotke in accordance with the terms of the Plan of Reorganization, an aggregate amount of $766,834; (d) the Debtors agree to release Mr. Miotke and Vertis and any of their related entities or other representatives, from any claims, damages, causes of action, or disputes of any kind or nature, whether presently known or unknown, anticipated or unanticipated, choate or inchoate, contingent or otherwise; (e) the Debtors will release Mr. Miotke from any obligations that he may have under the terms of the Employment Agreement; (f) the Debtors will reaffirm its indemnity obligation and other commitments set forth in that certain July 2, 2005 letter from the Debtors to Mr. Miotke; (g) Vertis agrees to release the Released Quebecor Parties, jointly and severally, from any claims, damages, causes of action, or disputes of any kind or nature, whether presently known or unknown, anticipated or unanticipated, choate or inchoate, contingent or otherwise; and (h) Vertis agrees to make a single, one-time payment totaling $164,144 to QWI five business days after the expiration of the revocation period applicable to Mr. Miotke to compensate the Debtors for the Relocation Expenses. Due to the confidential nature of certain portions of the Settlement Agreement, a copy of the Settlement Agreement will be delivered to each of the Official Committee of Unsecured Creditors, the Ad-Hoc Group of Noteholders, and the Administrative Agent for the Debtors' prepetition lenders, and will also be provided to the Court in camera. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) REAL MEX: Mulls Offering of $110 Million Senior Secured Notes ------------------------------------------------------------- Real Mex Restaurants, Inc., plans to privately place $110 million of senior secured notes due 2012. The Company intends to use the net proceeds from the issuance of the Notes (i) to repay its senior secured notes due April 1, 2010, (ii) to pay certain related fees and expenses and (iii) to use the balance, if any, for general corporate purposes. Any Notes will be sold to institutional accredited investors and qualified institutional buyers pursuant to the exemptions from registration provided by Section 4(2) of the Securities Act of 1933, as amended and Rule 506 of Regulation D promulgated thereunder. Headquartered in Cypress, California, Real Mex Restaurants, Inc. - - http://www.realmexrestaurants.com/-- is a full-service Mexican casual dining restaurant chain operator in the United States. As of December 28, 2008, the Company had 190 restaurants, located in California. Its four primary restaurant concepts, El Torito, El Torito Grill, Chevys Fresh Mex and Acapulco Mexican Restaurant, offer a variety of Mexican dishes and a selection of alcoholic beverages, seven days a week for lunch and dinner, as well as Sunday brunch. The Company's three major subsidiaries are El Torito Restaurants, Inc., Acapulco Restaurants, Inc., Chevys Restaurants LLC, and a purchasing, distribution, and manufacturing subsidiary, Real Mex Foods, Inc. At March 29, 2009, the company's balance sheet showed total assets of $287.3 million, total liabilities of $272.9 million and stockholders' equity of about $14.4 million. * * * As reported in the Troubled Company Reporter on November 26, 2008, Moody's Investors Service raised Real Mex Restaurants, Inc.'s probability of default rating and corporate family rating to Caa2 from Caa3, while affirming its $105 million senior secured notes at B2. The rating outlook is negative. Concurrently, its Speculative Grade Liquidity rating was affirmed at SGL-4, indicating expected weak liquidity in the next twelve months. REGIONS FINANCIAL: Fitch Cuts Long-Term Issuer Default Rating ------------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Rating of Regions Financial and its subsidiary, and removed them from Rating Watch Negative. The Rating Outlook is Negative. RF's ratings were placed on Rating Watch Negative on May 15, 2009, as part of Fitch's U.S. bank review, which was announced on May 7, 2009. Fitch has since completed its review of RF, and while Fitch believes the recent capital raise provides considerable support to RF's balance sheet, the agency believes the company continues to face elevated risk due to its exposure to problematic markets, including multiple types of real estate exposure in Florida. Further, Fitch anticipates that RF will be unable to return to profitability in 2009 given elevated credit costs. In resolving the Negative Outlook, Fitch will assess the company's asset quality, financial performance, capital position, and liquidity profile over the intermediate-term to gauge any impact to its credit profile. RF reported considerable asset quality deterioration in the first quarter of 2009 (1Q'09), both in terms of problem assets and delinquent loans. Fitch believes RF has been aggressive in dealing with its stressed portfolios, which include loans for homebuilders, condominiums, and home equity lines of credit; however, the continued rise in nonperforming loans during 1Q'09 raise further concerns that asset quality deterioration continues to occur and will likely remain a considerable drag on earnings and capital formation for the foreseeable future. Concurrent with the downgrade of RF's long-term IDR, Fitch has affirmed the company's Individual and short-term ratings given its recently augmented capital base and its solid liquidity profile. As part of the Federal Reserve's recent Supervisory Capital Assessment Program, RF's capital buffer was determined to be short by $2.5 billion, of which $400 million needed to be new Tier 1 capital. RF has since successfully met that requirement mainly through the issuance of $1.84 billion in common stock and $287.5 million of mandatorily convertible preferred stock. These issuances have helped fortify the outstanding liquidity positions of both the bank and the holding company. Both entities continue to maintain a significant amount of borrowing capacity, and a large level of liquid assets. The current ratings of RF and its subsidiaries continue to incorporate their solid market position in the southeastern U.S. RF is a $146 billion financial holding company headquartered in Birmingham, Alabama. RF operates almost 2,000 branches in 16 states across the South, Midwest and Texas. RF provides traditional commercial, retail and mortgage banking services, as well as investment banking, asset management, trust, mutual funds, and securities brokerage services through its wholly-owned subsidiary, Morgan Keegan. Fitch has downgraded these ratings and assigned a Negative Rating Outlook: Regions Financial Corporation -- Long-term IDR to 'A-' from 'A'; -- Senior debt to 'A-' from 'A'; -- Subordinated debt to 'BBB+' from 'A-'; -- Preferred stock to 'BBB' from 'BBB+'. Regions Bank -- Long-term IDR to 'A-' from 'A'; -- Long-term deposits to 'A' from 'A+'; -- Senior debt to 'A-' from 'A'; -- Subordinated debt to 'BBB+' from 'A-'. AmSouth Bank -- Subordinated debt to 'BBB+' from 'A-'. Regions Financing Trust II, III -- Preferred stock to 'BBB' from 'BBB+'. Union Planters Corporation -- Senior debt to 'A-' from 'A'; -- Subordinated debt to 'BBB+' from 'A-'. AmSouth Bancorporation -- Subordinated debt to 'BBB+' from 'A-'. Fitch has affirmed these ratings: Regions Financial Corporation -- Individual at 'B/C'; removed from Rating Watch Negative; -- Short-term IDR at 'F1'; removed from Rating Watch Negative; -- Support at '5'; -- Support floor at No Floor. Regions Bank -- Short-term IDR at 'F1'; removed from Rating Watch Negative; -- Long-term debt guaranteed by TLGP at 'AAA'; -- Short-term debt guaranteed by TLGP at 'F1+'; -- Short-term deposits at 'F1'; removed from Rating Watch Negative; -- Individual at 'B/C'; removed from Rating Watch Negative; -- Support at '4'; -- Support floor at 'B'. RESORTS MEZZANINE: Collateral to be Sold at July 7 Public Auction ----------------------------------------------------------------- Accelerated Exchange Group, Inc will offer for sale (i) 100% of the membership interests in CPH Monarch Hotel, LLC, and CPH Monarch Golf, LLC, each a Delaware limited liability company and (ii) 100% of the sponsor membership interests in the Monarch Bay Club, a California non-profit mutual benefit corporation, on July 7, 2009, at 1:00 p.m. at the offices of First American Title, 5 First American Way, Santa Ana, CA 92707. The principal assets of CPH Monarch Hotel, LLC and CPH Monarch Golf, LLC are a hotel and golf course commonly known as the St. Regis Monarch Beach Resort and the Monarch Beach Golf Links, located at One Monarch Beach Resort, Dana Point, CA, 92629. The holder of the sponsor membership interests in the Monarch Bay Club is entitled to be the sponsor member thereof. The sale is to enforce the rights of the secured parties under those certain pledge agreements executed by (i) Resorts Mezzanie LLC, as debtor, dated July 30, 2007, and (ii) Makallon Resorts I, LLC, as debtor, dated July 30, 2007. Interested parties who would like additional information regarding the collateral, the requirements to be a "qualified bidder" or the terms of sale should visit the Web site http://www.eastdilsecured.com/notices/MonarchBeach.pdfor contact Patrick Deming of Eastdil Secured, 100 Wilshire Boulevard, Suite 1500, Santa Monica, CA 90401, (310) 526-9219. RESERVE MANAGEMENT: To Make Second Payout From Int'l Liquidity -------------------------------------------------------------- Reserve Management Co. said in a statement that it will make a second payout as much as $400 million from its offshore fund, International Liquidity Fund, starting June 19. Daisy Maxey at The Wall Street Journal relates that International Liquidity "broke the buck" in September 2008. Reserve Management President Bruce Bent said in a statement, "We are focused on liquidating the fund's holdings at amortized cost as quickly as possible." "Our money should have been returned to us a long time ago," WSJ quoted Mark Ressler of Kasowitz, Benson, Torres & Friedman LLP -- a lawyer for two offshore hedge funds Caxton International Ltd. and Caxton Equity Growth Holdings LP that had invested about $170 million in the International Liquidity Fund -- as saying. WSJ states International Liquidity Fund had about $2.87 billion in assets on September 15, 2008. * * * As reported in the Troubled Company Reporter on September 25, 2008, Moody's Investors Service downgraded and left on review for further downgrade 10 money market and bond funds managed by Reserve Management Company, Inc., including The Reserve Primary Fund's 'Caa' rating. RIVIERA HOLDINGS: Files Form 25 With SEC to Delist Common Stock --------------------------------------------------------------- Riviera Holdings Corporation filed a Form 25 with the Securities and Exchange Commission to voluntarily delist its common stock from NYSE Amex LLC. The Company received a deficiency letter from the Exchange indicating that the Company was not in compliance with certain of the Exchange's continued listing standards. The Company is seeking to have its common stock quoted on the Over-The-Counter Bulletin Board, according to the Troubled Company Reporter on June 11, 2009. The deficiency letter, received June 1, 2009, indicated that the Company did not meet certain of the Exchange's continued listing standards set forth in Section 1003(a)(iv) of the NYSE Amex Company Guide, in that it sustained losses which were so substantial in relation to its overall operations or its existing financial resources, or its financial condition become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the Company will be able to continue operations and meet its obligations as they mature. The Exchange requested that the Company submit a plan of compliance by July 1, 2009, advising the Exchange of action it has taken or will take in order to bring it into compliance with the applicable continued listing standards by November 27, 2009. The Company does not believe that it can take the steps necessary to satisfy the continued listing criteria of the Exchange within the prescribed time frame. Consequently, the Company has informed the Exchange that it does not intend to submit a plan to regain compliance. The Company intends to voluntarily delist its common stock from the Exchange and file a Form 25 with the Securities and Exchange Commission to remove the listing of the common stock from NYSE Amex. The delisting from the Exchange is expected to be effective 10 calendar days after filing the Form 25. The Company expects that the last day of trading for its common stock on the NYSE Amex Exchange will be on or about June 25, 2009. The Company will seek to have its common stock quoted on the OTC Bulletin Board shortly after the date of delisting from the Exchange, though it cannot provide any assurances in this regard. About Riviera Holdings Riviera Holdings Corp. is a holding company that, through its wholly owned subsidiary, Riviera Operating Corporation, owns and operates the Riviera Hotel & Casino (Riviera Las Vegas) located on the Las Vegas Boulevard in Las Vegas, Nevada. The Company, through its wholly owned subsidiary, Riviera Black Hawk, Inc., owns and operates the Riviera Black Hawk Casino (Riviera Black Hawk), a limited-stakes casino in Black Hawk, Colorado. Riviera Las Vegas comprises approximately 1.8 million square feet, including 110,000 square feet of casino space, a 160,000-square- foot convention, meeting and banquet facility; 2,075 hotel rooms (including 177 luxury suites) in five towers; three restaurants; a buffet; four showrooms; a lounge, and approximately 2,300 parking spaces. Riviera Black Hawk has 32,000 square feet of gaming space, parking for approximately 520 vehicles, a 252-seat buffet, two bars and an entertainment center with seating for approximately 400 people. As reported by the Troubled Company Reporter on May 12, 2009, the Company received a notice of default on February 26, 2009, from Wachovia with respect to the Credit Facility in connection with the Company's failure to provide a Deposit Account Control Agreement, or DACA, from each of the Company's depository banks per a request made by Wachovia to the Company on October 14, 2008. The DACA that Wachovia requested the Company to execute was in a form that the Company ultimately determined to contain unreasonable terms and conditions as it would enable Wachovia to access all of the Company's operating cash and order it to be transferred to a bank account specified by Wachovia. The Notice further provided that as a result of the default, the Company would no longer have the option to request the LIBOR Rate loans. Consequently, the Term Loan was converted to an ABR Loan effective March 31, 2009. On March 25, 2009, the Company engaged XRoads Solution Group LLC as our financial advisor. Based on an extensive analysis of the Company's current and projected liquidity, and with its financial advisor's input, the Company determined it was in the best interests of the Company to not pay the accrued interest of approximately $4 million on its $245 million Credit Facility, which was due March 30, 2009. Consequently, the Company elected to not make the payment. The Company's failure to pay interest due on any loan within its Credit Facility within a three-day grace period from the due date was an event of default under our Credit Facility. As a result of this event of default, the Company's lenders have the right to seek to charge additional default interest on the Company's outstanding principal and interest under the Credit Agreement, and automatically charge additional default interest on any overdue amounts under the Swap Agreement. These defaults rates are in addition to the interest rates that would otherwise be applicable under the Credit Agreement and Swap Agreement. The Company received an additional notice of default on April 1, 2009, from Wachovia. The Additional Default Notice alleges that subsequent to the Company's receipt of the February Notice, additional defaults and events of default had occurred and were continuing under the terms of the Credit Agreement including, but not limited to: (i) the Company's failure to deliver to Wachovia audited financial statement without a "going concern" qualification; (ii) the Company's failure to deliver Wachovia a certificate of an independent certified public accountant in conjunction with the Company's financial statement; and (iii) the occurrence of a default or breach under a secured hedging agreement. The Additional Default Notice also states that in addition to the foregoing events of default that there were additional potential events of default as a result of, among other things, the Company's failure to pay: (i) accrued interest on the Company's LIBOR rate loan on March 30, 2009, (ii) the commitment fee on March 31, 2009, and (iii) accrued interest on the Company's ABR Loans on March 31, 2009. The Company has not paid the March 31 Payments and the applicable grace period to make these payments has expired. The Additional Default Notice states that as a result of these events of defaults, (a) all amounts owing under the Credit Agreement thereafter would bear interest, payable on demand, at a rate equal to: (i) in the case of principal, 2% above the otherwise applicable rate; and (ii) in the case of interest, fees and other amounts, the ABR Default Rate, which as of April 1, 2009, was 6.25%; and (b) neither Swingline Loans nor Additional Revolving Loans are available to the Company at this time. As a result of the February Notice and the Additional Default Notice, effective March 31, 2009, the Term Loan interest rate is now approximately 10.5% per annum and effective April 1, 2009, the Revolver interest rate is approximately 6.25% per annum. On April 1, 2009, the Company also received Notice of Event of Default and Reservation of Rights in connection with an alleged event of default under the Company's Swap Agreement. The Swap Default Notice alleges that (a) an event of default exists due to the occurrence of an event of default under the Credit Agreement and (b) that the Company failed to make payments totaling $2.1 million to Wachovia with respect to one or more transactions under the Swap Agreement. The Company has not paid this overdue amount and the applicable grace period to make this payment has expired. As previously announced by the Company, any default under the Swap Agreement automatically results in an additional default interest of 1% on any overdue amounts under the Swap Agreement. This default rate is in addition to the interest rate that would otherwise be applicable under the Swap Agreement. As of March 31, 2009, the mark to market amount outstanding under the Swap Agreement was $28.0 million, excluding any credit risk adjustment. With the aid of the Company's financial advisors and outside counsel, the Company is continuing to negotiate with its various creditor constituencies to refinance or restructure its debt. The Company cannot assure that it will be successful in completing a refinancing or consensual out-of-court restructuring, if necessary. If the Company is unable to do so, it would likely be compelled to seek protection under Chapter 11 of the U. S. Bankruptcy Code. SABRE HOLDINGS: S&P Downgrades Corporate Credit Rating to 'SD' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on travel distributor Sabre Holdings Corp., specifically the long-term corporate credit rating to 'SD' (selective default) from 'B', and the issue-level rating on the company's senior notes due 2011 to 'D' from 'CCC+'. "The rating actions reflect the company's open market purchases of $76 million of its senior notes due 2011 at a cost of $44 million in April 2009," said Standard & Poor's credit analyst Betsy R. Snyder. The debt repurchase met S&P's criteria for a distressed debt redemption. "We expect to review the effect of the debt repurchase on the company's financial profile in the next few days, and to subsequently raise the corporate credit rating on Sabre Holdings back to 'B' and the issue-level rating on the senior notes due 2011 back to 'CCC+' on conclusion of our review," she continued. SALEM COMMUNICATIONS: S&P Puts 'B-' Rating on CreditWatch Negative ------------------------------------------------------------------ Standard & Poor's Rating Services placed its 'B-' corporate credit rating for Camarillo, California-based radio broadcasting company Salem Communications Corp., as well as the 'CCC' issue-level rating on the holding company subordinated notes, on CreditWatch with negative implications. "The CreditWatch listing reflects our concerns regarding the company's need for comprehensive intermediate-term refinancing by mid 2010," said Standard & Poor's credit analyst Michael Altberg. The company's senior secured credit facilities (not rated by Standard & Poor's) consist of a $75 million term loan B ($71.6 million outstanding as of March 31, 2009) maturing March 10, 2010 and a $165 million term loan C ($160.8 million outstanding) maturing June 30, 2012 (or six months prior to the maturity of any subordinated debt). Salem's $90.6 million 7.75% senior subordinated holding company notes mature on Dec. 15, 2010, and, as a result, the term loan C will be due on June 15, 2010. For this reason, S&P expects that the company will need to refinance its entire capital structure at the end of this year or early next year. An alternative option would be for Salem to refinance or repay its term loan B and look to extend the maturity on its senior subordinated notes. Doing so would effectively push out the maturity on the term loan C. EBITDA coverage of interest expense, at 2.2x for the 12 months ended March 31, 2009, and moderate discretionary cash flow, with nearly 59% conversion of EBITDA to discretionary cash flow, provide a modest degree of flexibility to absorb higher interest rates that would most likely accompany a refinancing. In resolving the CreditWatch listing, S&P will meet with management to discuss its strategy to address the 2010 maturities. SARAHE ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Sarahe Associates, Inc. 40 Millhurst Road Manalapan, NJ 07726 Bankruptcy Case No.: 09-25565 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Arthur Abramowitz, Esq. Cozen O'Connor Libertyview Building, Suite 300 457 Haddonfield Road Cherry Hill, NJ 08002 Tel: (856) 910-5000 Email: aabramowitz@cozen.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-25565.pdf The petition was signed by Peter J. Saker, president of the Company. SCO GROUP: Inks Deal to Sell Unix Business to Gulf Capital ---------------------------------------------------------- The SCO Group Inc. has signed a deal to sell its Unix business to Gulf Capital Partners LLC, a group formed by Stephen Norris of Stephen Norris & Co. Capital Partners and other investors, Tom Harvey at The Salt Lake Tribune states. Mr. Norris, Salt Lake Tribune says, had previously sought to acquire SCO along with an unnamed Middle Eastern investor. Salt Lake Tribune quoted SCO CEO Darl McBride, "We signed that deal just minutes before the court hearing [on Monday on the possible conversion of the Company's Chapter 11 reorganization case to Chapter 7 liquidation], and walked in and handed it to them." According to Salt Lake Tribune, SCO will keep its licensing claims that are part of high-profile lawsuits involving IBM, Novell, and other companies. The report states that SCO will also retain its mobile application business. Mr. McBride, Salt Lake Tribune relates, said that under the agreement, he will remain as CEO, while President Jeff Hunsaker would move to direct the new company, along with a majority of SCO's 62 employees, and that SCO would continue to pursue the lawsuits. Salt Lake Tribune states that the Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware didn't hear arguments on motions to sell off SCO's assets, but it set a hearing for either July 16 or July 27 to consider SCO's sale plan. Headquartered in Lindon, Utah, The SCO Group Inc. (Nasdaq:SCOX) fka Caldera International Inc. -- http://www.sco.com/-- provides software technology for distributed, embedded and network-based systems, offering SCO OpenServer for small to medium business and UnixWare for enterprise applications and digital network services. The company has office locations in Australia, Austria, Argentina, Brazil, China, Japan, Poland, Russia, the United Kingdom, among others. The Company and its affiliate, SCO Operations Inc., filed for Chapter 11 protection on September 14, 2007, (Bankr. D. Del. Lead Case No. 07-11337). Paul Steven Singerman, Esq., and Arthur Spector, Esq., at Berger Singerman P.A., represent the Debtors in their restructuring efforts. James O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the Debtors' Delaware and conflicts counsels. Epiq Bankruptcy Solutions LLC, acts as the Debtors' claims and noticing agent. The United States Trustee failed to form an Official Committee of Unsecured Creditors in the Debtors' cases due to insufficient response from creditors. As of January 31, 2009, the Company had $8.78 million in total assets and $13.2 million in total liabilities, resulting in $4.51 million in stockholders' deficit. SEA CONTAINERS: Post-Confirmation Report for November 2008 Period ----------------------------------------------------------------- Sea Containers Ltd. filed with the U.S. Bankruptcy Court for the District of Delaware its Post Confirmation Summary Report for the period ended November 24, 2008: Sea Containers, Ltd. Post Confirmation Summary Report Ending November 24, 2008 Beginning Cash Balance $24,819,914 All receipts received by the Debtor Cash Sales - Interest income 7,851 SC Group cash repatriation 17,633,382 Foreign exchange 26,212 Inter company banking sweep (52,635) ------------ Total of cash received 17,614,810 ------------ Total of cash available 42,434,724 Less all disbursements or payments - made by the Debtor Disbursements made under the DIP exit 250,000 plan, claims of bankruptcy professionals Disbursements made pursuant to the - admin. claims of bankruptcy professionals All other disbursements made in the 2,823,195 ordinary course ------------ Total Disbursements 3,073,195 ------------ Ending Cash Balance $39,361,529 ============ Sea Containers Services, Ltd. Post Confirmation Summary Report Ending November 24, 2008 Beginning Cash Balance $43,732 All receipts received by the Debtors: Collection of accounts receivable 59,616 Tax refunds 570,282 SC Group cash repatriation 20,368 Foreign exchange (3,779) Inter company banking sweep 52,635 ------------ Total of cash received 699,122 ------------ Total of cash available 742,853 Less all disbursements or payments made by the Debtor: Disbursements made under the plan, excluding - the admin. claims of bankruptcy professionals Disbursements made pursuant to the - admin. claims of bankruptcy professionals All other disbursements made in the 757,998 ordinary course ------------ Total Disbursements 757,998 ------------ Ending Cash Balance ($15,145) ============ About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provided passenger and freight transport and marine container leasing. Registered in Bermuda, the company had regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. Through its GNER subsidiary, Sea Containers Passenger Transport operated Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. were represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors was represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083 as of its bankruptcy filing. Sea Containers Ltd., Sea Containers Services Ltd., and Sea Containers Caribbean, Inc., notified the Court and parties-in- interest on February 11, 2009, that their Fourth Amended Joint Plan of Reorganization became effective. (Sea Containers Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Post-Confirmation Report for December 2008 Period ----------------------------------------------------------------- Sea Containers Ltd. filed with the U.S. Bankruptcy Court for the District of Delaware its Post Confirmation Summary Report for the period ended December 31, 2008: Sea Containers, Ltd. Post Confirmation Summary Report Ending December 31, 2008 Beginning Cash Balance $39,361,529 All receipts received by the Debtor Cash Sales - Interest income 37,238 SC Group cash repatriation 13,299,817 Foreign exchange (2,716,881) Inter company banking sweep 2,077,983 ------------ Total of cash received 12,698,157 ------------ Total of cash available 52,059,686 Less all disbursements or payments made by the Debtor: Disbursements made under the plan, excluding - the admin claims of bankruptcy professionals Disbursements made pursuant to the - admin. claims of bankruptcy professionals All other disbursements made in the 8,596,146 ordinary course ------------ Total Disbursements 8,596,146 ------------ Ending Cash Balance $43,463,540 ============ Sea Containers Services, Ltd. Post Confirmation Summary Report Ending December 31, 2008 Beginning Cash Balance ($15,145) All receipts received by the Debtors: Collection of accounts receivable - Tax refunds - SC Group cash repatriation 3,759,189 Foreign exchange 10,531 Inter company banking sweep (2,077,983) ------------ Total of cash received 1,691,737 ------------ Total of cash available 1,676,592 Less all disbursements or payments made by the Debtor: Disbursements made under the plan, excluding - the admin. claims of bankruptcy professionals Disbursements made pursuant to the - admin. claims of bankruptcy professionals All other disbursements made in the 1,603,376 ordinary course ------------ Total Disbursements 1,603,376 ------------ Ending Cash Balance $73,216 ============ About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provided passenger and freight transport and marine container leasing. Registered in Bermuda, the company had regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. Through its GNER subsidiary, Sea Containers Passenger Transport operated Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. were represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors was represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083 as of its bankruptcy filing. Sea Containers Ltd., Sea Containers Services Ltd., and Sea Containers Caribbean, Inc., notified the Court and parties-in- interest on February 11, 2009, that their Fourth Amended Joint Plan of Reorganization became effective. (Sea Containers Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Post-Confirmation Report for March 2009 Period -------------------------------------------------------------- Sea Containers Ltd. filed with the U.S. Bankruptcy Court for the District of Delaware its Post Confirmation Summary Report for the period ended March 31, 2009: Sea Containers, Ltd. Post Confirmation Summary Report Ending March 31, 2009 Beginning Cash Balance $43,463,540 All receipts received by the Debtor Repayment of loan note to Seaco Ltd. (17,306,000) Net reimbursement of costs - Seaco Ltd. 1,239,851 Settlement of GE SeaCo balances 274,800 Interest income 16,167 Sale of Debtors assets 572,554 SC Group cash repatriation 41,621,552 Foreign exchange (466,926) Inter company banking sweep (2,143,843) ------------ Total of cash received 23,808,155 Total of cash available 67,271,695 Less all disbursements or payments made by the Debtor: Disbursements made under the plan, excluding 6,285,191 the admin claims of bankruptcy professionals Disbursements made pursuant to the 13,213,000 admin. claims of bankruptcy professionals Debtor in possession loan repayment 24,828,483 All other disbursements made in the 4,498,990 ordinary course ------------ Total Disbursements 48,825,664 ------------ Ending Cash Balance $18,446,031 ============ Sea Containers Services, Ltd. Post Confirmation Summary Report Ending March 31, 2009 Beginning Cash Balance $73,216 All receipts received by the Debtors: SCSL cash repatriation to SCL (4,496,365) SC Group cash repatriation to SCSL 4,496,365 Tax refunds 274,574 Pension Schemes Equalization payments (921,283) Foreign exchange (459) Inter company banking sweep 2,143,843 ------------ Total of cash received 1,496,675 Total of cash available 1,569,891 Less all disbursements or payments made by the Debtor: Disbursements made under the plan, excluding - the admin. claims of bankruptcy professionals Disbursements made pursuant to the - admin. claims of bankruptcy professionals All other disbursements made in the 1,477,584 ordinary course ------------ Total Disbursements 1,477,584 ------------ Ending Cash Balance $92,307 ============ About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provided passenger and freight transport and marine container leasing. Registered in Bermuda, the company had regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. Through its GNER subsidiary, Sea Containers Passenger Transport operated Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. were represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors was represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083 as of its bankruptcy filing. Sea Containers Ltd., Sea Containers Services Ltd., and Sea Containers Caribbean, Inc., notified the Court and parties-in- interest on February 11, 2009, that their Fourth Amended Joint Plan of Reorganization became effective. (Sea Containers Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SENDTC INC: Seeks Court Approval on Sale to PHIDS Inc. ------------------------------------------------------ Michael Hinman at Tampa Bay Business Journal reports that SendTec Inc. has asked the U.S. Bankruptcy Court for the Middle District of Florida to approve the Company's sale to PHIDS Inc. According to Business Journal, PHIDS was formed on June 10, 2009, specifically to acquire SendTec. Court documents say that PHIDS would acquire SendTec's assets for $900,000 in cash, the best offer SendTec said it has. According to court documents, SendTec could face liquidation under Chapter 7 without the sale. Business Journal relates that under the purchase agreement with PHIDS, SendTec will change its name, even in bankruptcy papers, so that PHIDS could continue the Company under that brand if it chooses. The sale to PHIDS could be terminated if it isn't closed within the next month, Business Journal states. SendTec, according to Business Journal, said that one of its clients, Oasis Legal, cancelled its contract with the Company when it heard about the bankruptcy filing. The report quoted SendTec as saying, "The result may be a cascading event where other clients leave believing SendTec will not survive. A quick sale is necessary to maintain value for creditors." Based in St. Petersburg, Florida, SendTec, Inc., is a customer acquisition ad agency with expertise in multi-channel integrated direct marketing. The Company filed for Chapter 11 bankruptcy protection on June 15, 2009 (Bankr. M.D. Fla. Case No. 09-12519). John D. Goldsmith, Esq., at Trenam, Kemker, Scharf, et al, assists the Company in its restructuring efforts. The Company listed $3,708,396 in assets and $17,363,732 in debts. SHOPPES AT SILVER: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------- Dan Miller at The Patriot-News reports that the Shoppes at Silver Spring, LP, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Middle District of Pennsylvania. According to The Patriot-News, Shoppes at Silver Spring faces a July 1 forced sale in Cumberland County Court to satisfy a $4.47 million debt owed to M&T Bank. The bankruptcy filing shouldn't have any impact on Shoppes at Silver Spring's two remaining tenants, The Patriot-News states, citing Robert Chernicoff, who assists Shoppes at Silver Spring in its restructuring efforts. Shoppes at Silver Spring, LP, is a shopping center in Carlisle, Pennsylvania. SIMTROL INC: Files Amendment to Specification of Shares Issued -------------------------------------------------------------- Simtrol, Inc. filed with the Securities and Exchange Commission an amendment to provide additional specification regarding the shares issued. On May 29, 2009, the Company completed the sale of $562,250 of Participation Interests in a secured master promissory note and 5-year warrants to purchase 3,000,000 shares of common stock at an exercise price of $0.375 per share to accredited private investors. The net proceeds of this offering will be used for working capital and general corporate purposes. Important terms of the Master Note include: -- The Master Note bears interest at the rate of 22% per annum, is payable 6 months from the issue date and can be pre-paid at any time. Accrued interest is payable in cash on the Maturity Date. -- The Maturity Date of the Master Note may be extended by the Company for two 30-day periods. If the Company elects to extend the Maturity Date, the Company will pay a 5% Extension Fee at the conclusion of each 30-day Extension Period, payable at the option of the Company in cash or the Company's common stock. By way of example, if the outstanding balance of the Master Note is $22,500, the Company would pay an Extension Fee of $1,125. If the Extension fee is paid in common stock, the common stock will be deemed to have a value per share equal to the greater of $0.375 or the 10-day simple average of closing prices on the Over The Counter Bulletin Board for the 10 trading days preceding the date the payment is due. -- The Master Note is secured by all of the Company's cash and cash equivalents, accounts receivable, prepaid assets, and equipment. The Master Note and Participation Interests will be convertible into equity securities on these terms: -- If the Company closes a Qualifying Next Equity Financing before the Maturity Date, the then-outstanding balance of principal and accrued interest on the Master Note will automatically convert into shares of the Next Equity Financing Securities the Company issues. Next Equity Financing Securities means the type and class of equity securities that the Company sells in a Qualifying Next Equity Financing or a Non-Qualifying Next Equity Financing. If the Company sells a unit comprising a combination of equity securities, then the Next Equity Financing Securities shall be deemed to constitute that unit. Upon conversion, the Company would issue that number of shares of Next Equity Financing Securities equal the quotient obtained by dividing the then- outstanding balance of principal and accrued interest on the Master Note by the price per share of the Next Equity Financing Securities. -- If the Company closes a Non-Qualifying Next Equity Financing before the Maturity Date, the then-outstanding balance of principal and accrued interest represented by a Participation Interest can be converted, at the option and election of the investor, into shares of the Next Equity Financing Securities the Company issues. -- A Qualifying Next Equity Financing means the first bona fide equity financing or series of related equity financing transactions, occurring subsequent to the date of issue of the Master Note in which the Company sells and issues any securities for total consideration totaling not less than $2.0 million in the aggregate, including the principal balance and accrued but unpaid interest to be converted on all its outstanding Participation Interests in the Master Note, at a price per share for equivalent shares of common stock that is not greater than $0.375 per share. -- A Non-Qualifying Next Equity Financing means that the Company completes a bona fide equity financing but fails to raise total consideration of at least $2.0 million, or the price per share for equivalent shares of common stock is greater than $0.375 per share. -- At any time prior to payment in full of this Note, an Investor may convert all, but not less than all, of the Investors interest in this Note into that number of Series C Preferred Stock Units equal to (A) the principal balance plus accrued but unpaid interest hereunder due and payable to the investor in accordance with such Investor's Participation Interest, divided by (B) $750.0. Each Series C Preferred Stock Unit comprises one share of its Series C Convertible Preferred Stock and detachable five-year warrants to acquire 2,000 shares of its common stock at an exercise price of $0.375 per share. The Investor Warrants have a term ending on the earlier to occur of (i) the fifth anniversary of the Investor Warrant issue date; or (ii) the closing of a change of control event. The Investor Warrants will have a cashless exercise feature and anti-dilution provisions that adjust both the exercise price and quantity if subsequent equity offerings are completed where Simtrol issues common stock at a lower effective price per share than the exercise price. About Simtrol Inc. Headquartered in Norcross, Georgia, Simtrol Inc. (OTC BB: SMRL) -- http://www.simtrol.com/-- is a developer of software that manages controllable devices such as display monitors, video cameras, and medical equipment for diverse markets such as digital signage, security and surveillance, and healthcare. Going Concern Doubt On March 27, 2009, Marcum & Kliegman LLP in New York City raised substantial doubt about Simtrol Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended December 31, 2008, and 2007. As of March 31, 2009, the Company had cash and cash equivalents totaling $389,003 and working capital of $258,961. Since inception, the Company has not achieved a sufficient level of revenue to support its business and incurred a net loss of $882,733 and used net cash of $595,501 in operating activities during the three months ended March 31, 2009. The Company will require additional funding to fund its development and operating activities during the second quarter of 2009. If no source of additional cash is available to the Company, then the Company would be forced to significantly reduce the scope of its operations or possibly seek court protection from creditors or cease business operations altogether. SINCLAIR BROADCAST: Moody's Cuts Corporate Family Rating to 'B3' ---------------------------------------------------------------- Moody's Investors Service downgraded Sinclair Broadcast Group, Inc.'s Corporate Family Rating to B3 from B1, the Probability of Default Rating to Caa1 from B1, and the speculative grade liquidity rating to SGL-4 from SGL-3. Associated debt ratings were lowered as detailed below and LGD assessments were updated to reflect the current debt mix and the above average family recovery rate as currently forecast and implied by the one notch differential between the CFR and PDR. The rating outlook is negative. Moody's has taken these rating actions: Downgrades: Issuer: Sinclair Broadcast Group, Inc. -- Corporate Family Rating, Downgraded to B3 from B1 -- Probability of Default Rating, Downgraded to Caa1 from B1 -- Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 -- 4.875% Senior Convertible Notes, Downgraded to Caa2, LGD4 - 59% from B3, LGD5 - 78% Issuer: Sinclair Television Group, Inc -- Senior Secured Bank Credit Facility, Downgraded to Ba3, LGD1 - 5% from Ba1, LGD2 - 12% -- 8% Senior Subordinated Notes, Downgraded to B3, LGD3 - 31% from B1, LGD4 - 52% The downgrades and SGL-4 speculative-grade liquidity rating reflect the refinancing risk associated with Sinclair's remaining $294 million 3.0% convertible senior notes due 2027 and $144 million 4.875% convertible senior notes due 2018 that are putable to the company in May 2010 and January 2011, respectively. In Moody's opinion, there is a high likelihood that note holders will exercise their put rights given that Sinclair's current stock price (approximately $2 per share) is well below the notes' per share conversion price (both exceeding $20). Moody's believes that Sinclair's internal cash resources and external sources of committed capital are not sufficient to meet the put obligations, creating reliance on new external financing or modifications to the terms of the putable notes. Moody's expects that Sinclair would seek to repurchase the convertible notes at a discount to par if new external financing is obtained. Sinclair's internal cash sources consist of a modest cash balance (approximately $11 million as of 3/31/09) and free cash flow, whi ch Moody's projects will be approximately $60-65 million in 2009. Sinclair's external sources of committed capital consist of limited availability under Sinclair Television Group, Inc.'s $175 million revolving credit facility (approximately $48 million of unused capacity as of 3/31/09). Sinclair indicated in its first quarter earnings conference call that it is working with the convertible note holders to reach a solution. However, Moody's is concerned that the current weak credit and advertising environment and Moody's projection that the company's debt-to-EBITDA leverage will be elevated in FY 2009 (exceeding 8x incorporating Moody's standard adjustments) will make it challenging to refinance or, if successful, result in a significant increase in cash interest costs and a need to amend loan covenants if new debt is issued at STG. In Moody's view, such additional interest costs would weaken free cash flow generation and make it more difficult for Sinclair to meet the continued step-ups in required term loan amortization in 2010 and 2011 and to address the maturity of the rest of its capital structure by the end of 2012. The one notch differential between Sinclair's CFR and PDR reflects the heightened risk of a default or a transaction that could be deemed a distressed exchange. The negative rating outlook reflects the elevated refinancing risk related to the put obligations and term loan amortization over the next several years, and the potential that a refinancing would materially increase cash interest costs. The last rating action was on January 29, 2009 when Moody's downgraded Sinclair's CFR and PDR each to B1 from Ba3, its speculative grade liquidity rating to SGL-3 from SGL-1, and its senior convertible notes to B3 from B1, and lowered STG's credit facility rating to Ba1 from Baa3 and its senior subordinated notes to B1 from Ba3. Sinclair, headquartered in Baltimore, Maryland, is a television broadcaster, operating 58 television stations in 35 markets. Sinclair generated revenue of approximately $723 million for the trailing twelve months ended March 31, 2009. SMITTY'S BUILDING: Court Confirms Chapter 11 Plan ------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria has signed an order confirming Smitty's Building Supply Inc.'s Chapter 11 plan, Bloomberg's Bill Rochelle reports. Smitty's, according to the report, has exit financing from Bank of America N.A. consisting of a $9.5 million term loan and a $5 million revolving credit that refinances pre-bankruptcy debt and loans to finance the reorganization. To pay off claims, the Company is selling real property in Alexandria. Mr. Rochelle relates that the first $7.5 million goes to the bank and the next $300,000 to a trust for unsecured creditors, with everything over $7.8 million earmarked for the bank. The Smith family retains ownership by giving the trust $125,000 cash and a $250,000 note. Unsecured creditors, with claims totaling $4.2 million, will be paid with money from the trust. Headquartered in Alexandria, Virginia, Smitty's Building Supply Inc. supplies building materials in Washington, D.C. The Company and three of its affiliates filed for Chapter 11 protection on Jan. 5, 2009 (Bankr. D. Del. Lead Case No. 09-10040). Andrew J. Currie, Esq., Lawrence A. Katz, Esq., Kristen Burgers, Esq., and Abby W. Clifton, Esq., at Venable LLP, represent the Debtors in their restructuring efforts. Epiq Bankruptcy Solutions LLC serves as the Debtors' claims agent. The U.S. Trustee has appointed an official committee of unsecured creditors in the case. LeClairRyan represents the Creditors Committee as counsel. When the company filed for protection from their creditors, they listed assets and debts between $10 million and $50 million each. SOUTHWEST ACADIA: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Southwest Acadia Water Corporation P.O. Box 719 Morse, LA 70559 Bankruptcy Case No.: 09-50798 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court Western District of Louisiana (Lafayette/Opelousas) Debtor's Counsel: H. Kent Aguillard, Esq. P.O. Drawer 391 Eunice, LA 70535 Tel: (337) 457-9331 Email: kaguillard@yhalaw.com Total Assets: $3,024,745 Total Debts: $2,963,370 A full-text copy of the Debtor's petition, including a list of its 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/lawb09-50798.pdf The petition was signed by Sheila Godeaux, president of the Company. SPECTRUM BRANDS: U.S. Trustee Fails to Name Creditors' Committee ---------------------------------------------------------------- The United States Trustee for the Western District of Texas informed the Bankruptcy Court that it was unable to appoint an Official Committee of Unsecured Creditors in the Spectrum Brands, Inc. Chapter 11 cases. The U.S. Trustee said it contacted unsecured creditors, but too few creditors expressed an interest in being appointed to the Creditors' Committee. An Official Committee of Equity Security Holders has been appointed in the cases in March 2009. Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) STAR TRIBUNE: Reaches Tentative Pact With Teamsters Union --------------------------------------------------------- Jackie Crosby at StarTribune.com reports that The Minneapolis Star Tribune has reached a tentative agreement with the Teamsters union that represents the Company's drivers. As reported by the Troubled Company Reporter on June 10, 2009, Star Tribune and the drivers' union put off, for a second time, the hearing to terminate what the newspaper called a "critically underfunded" multi-employer pension plan. The new hearing date for the pension fund is June 22. The Teamsters union had threatened to strike if Star Tribune Holdings Corp. is permitted to reject its collective bargaining agreement with unionized drivers. Star Tribune, according to StarTribune.com, said that its lenders -- owed about $400 million --wouldn't agree to exchange their debt for equity if the Company faced pension liabilities. StarTribune.com relates that Local 638 -- which represents almost 158 full-time equivalent workers -- is also scheduled to vote on the proposal on June 17. Headquartered in Minneapolis, Minnesota, The Star Tribune Company -- http://www.startribune.com/-- operates the largest newspaper in the U.S. state of Minnesota and published seven days each week in an edition for the Minneapolis-Saint Paul metropolitan area. The Company and its affiliate, Star Tribune Holdings Corporation, filed for Chapter 11 protection on January 15, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-10245). Marshall Scott Huebner, Esq., James I. McClammy, Esq., and Lynn Poss, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Blackstone Advisory Services L.P. is the Debtors' financial advisor. Diana G. Adams, the U.S. Trustee for Region 2, selected seven members to the official committee of unsecured creditors in the Debtors' Chapter 11 cases. Scott Cargill, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC, represents the Committee as counsel. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. * * * The Court has extended the Debtors' exclusive periods to file a plan of reorganization until August 13, 2009. SWOLEN LLC: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Swolen, LLC 1900 Ridge Crest Road Prescott, AZ 86305 Bankruptcy Case No.: 09-13387 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Debtor's Counsel: Pernell W. Mcguire, Esq. Mcguire Gardner, PLLC 320 N. Leroux, Suite A Flagstaff, AZ 86001 Tel: (928) 779-1173 Fax: (928) 779-1175 Email: pmcguire@mcguiregardner.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 7 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-13387.pdf The petition was signed by Tom Tillery. TARRAGON CORP: Court Approves KEIP for 8 Dallas Employees --------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey has authorized Tarragon Corp., et al., to pay incentible bonuses to eligible employees in the amount of 15% of the eligible employees' respective annual gross salaries on the earlier of the (i) cessation of the Debtor's operations in Dallas, Texas or (ii) 30 days following confirmation of the Debtors' Chapter Plan, subject to the eligible employees' continued employment with the Debtors through that date. As reported in the Troubled Company Reporter on June 1, 2009, Tarragon Corporation sought the Bankruptcy Court's approval to implement a key employee incentive program for eight specific employees stationed in the Dallas, Texas office. The aggregate amount of the incentive bonuses is approximately $100,000. About Tarragon Corporation Based in New York City, Tarragon Corporation (NasdaqGS:TARR) -- http://www.tarragoncorp.com/-- is a leading developer of multifamily housing for rent and for sale. Tarragon's operations are concentrated in the Northeast, Florida, Texas, and Tennessee. Tarragon and its affiliates filed for Chapter 11 protection on January 12, 2009 (Bankr. D. N.J. Case No. 09-10555). The Hon. Donald H. Steckroth presides over the case. Michael D. Sirota, Esq., Warren A. Usatine, Esq., and Felice R. Yudkin, Esq., at Cole Schotz Meisel Forman & Leonard, P.A., represent the Debtor as bankruptcy counsel. Kurztman Carson Consultants LLC serves as notice and claims agent. Daniel A. Lowenthal, Esq., at Patterson Belknap Webb & Tyler, LLP, in New York, represents the official committee of unsecured creditors appointed in the case. Tarragon has said equity holders are out of the money with regard to its bankruptcy case. As of September 30, 2008, the Debtors had $840,688,000 in total assets and $1,035,582,000 in total debts. TLC VISION: Former CEO to Receive $1-Mil. in Severance Payments --------------------------------------------------------------- TLC Vision Corporation and James C. Wachtman, the former chief executive officer of the Company, entered into a Separation and Release Agreement. The Agreement sets forth the terms and conditions of Mr. Wachtman's resignation from the Company and the Company's board of directors which occurred on April 23, 2009. The Agreement provides that in consideration for Mr. Wachtman's agreement to release any claims he may have against the Company and other related parties and his agreeing to be bound by certain covenants, including without limitation, covenants not to compete with the Company or to solicit the Company's employees, key advisors, consultants, independent contractors, clients and customers for a period of 2 years after the Resignation Date, and subject to Mr. Wachtman's not exercising his right to revoke the Agreement: -- Mr. Wachtman is entitled to receive severance payments in an amount equal to the sum of (a) $913,000 in accordance with the Employment Agreement between the Company and Mr. Wachtman, dated May 15, 2002, and (b) an additional severance amount of $100,000; -- In accordance with the Employment Agreement, on the Resignation Date all of Mr. Wachtman's outstanding stock options to purchase shares of the Company's common stock became fully vested and are exercisable by Mr. Wachtman for their entire term. In addition, any stock options that would have expired during a blackout period imposed by the Company on Mr Wachtman's ability to exercise his stock options will be exercisable during the 10 day period after the date the Company lifts the blackout period; -- in accordance with the Employment Agreement and subject to his timely election of COBRA continuation under the Employer's group health and dental plans, for a period ending on the earlier of 24 months after the Resignation Date or his becoming eligible for medical and dental benefits from a subsequent employer, the Employer will pay to Mr. Wachtman monthly payments in an amount equal to 100% of the premium for the COBRA coverage for the applicable month; and -- the Company, on behalf of itself and other related parties, agreed, subject to certain exceptions, to release any causes of action it had relating to Mr. Wachtman's employment with, and termination from, the Company. A full-text copy of the SEPARATION AND RELEASE AGREEMENT is available for free at http://ResearchArchives.com/t/s?3def About TLC Vision Based in St. Louis, Missouri, TLC Vision Corporation (NASDAQ:TLCV; TSX:TLC) -- http://www.tlcv.com/and http://www.tlcvision.com/-- is North America's premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality patient care. TLCVision maintains leading positions in Refractive, Cataract and Eye Care markets. At March 31, 2009, the Company's balance sheet showed total assets of $149.9 million and total liabilities of $170.2 million, resulting in a stockholders' deficit of $20.3 million. TRANS READ: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Trans Read Warehouse, Inc. 7035 West 65th Street Bedford Park, IL 60638 Bankruptcy Case No.: 09-21854 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Debtor's Counsel: Adam B. Goodman, Esq. Goodman Law Offices 105 West Madison Street, Suite 400 Chicago, IL 60602 Tel: (312) 238-9592 Fax: (312) 264-2535 Email: adam@thegoodmanlawoffices.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilnb09-21854.pdf The petition was signed by Dennis Pizak, president of the Company. TRUMP ENTERTAINMENT: Donald Trump Submits Offer to Acquire Firm --------------------------------------------------------------- Beth Jinks at Bloomberg News reports that Donald Trump has submitted a plan to acquire Trump Entertainment Resort, Inc. Trump Entertainment said in a statement that Mr. Trump proposed a debt restructuring that would return him as the Company's owner. According to Bloomberg, Trump Entertainment has until August 3 to submit a restructuring plan to the U.S. Bankruptcy Court for the District of New Jersey. Bloomberg relates that Mr. Trump left the Trump Entertainment board in February 2009 when he disagreed with bondholders' decisions, including their rejection of a buyout offer he made. He said at that time that he was cutting ties with Trump Entertainment, according to the report. Days after Mr. Trump's departure, Trump Entertainment filed for bankruptcy, the report states. Court documents say that the Court extended Trump Entertainment's exclusivity period through August 3, barring anyone else from submitting a plan of reorganization for the Company until then. Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the company and, as its non- executive Chairman, is not involved in the daily operations of the company. The company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. VINEYARD CHRISTIAN: Court Okays Bid Protocol; June 19 Auction Set ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved on June 9, 2009, the motion of Jeffey I. Golden, the Chapter 11 trustee for the bankruptcy estate of Vineyard Christian Fellowship of Malibu, for the entry of an order (1) approving bid procedures for the sale of the real property and personal property located at 23825 Stuart Ranch Road, Malibu, Califonia, and (2) approving the payment of a break-up fee to the City of Malibu. Pursuant to the Court's order, the City of Malibu will be entitled to a break-up fee of $300,000 to be paid from the proceeds of the sale of the Property, in the event that the City is not the successful bidder at the auction. The auction and the hearing to consider approval of the sale of the Property to the successful bidder at the auction will be held on June 19, 2009, at 10:00 a.m. A copy of the approved bid procedures is available at: http://bankrupt.com/misc/vineyard.approvedbidproedures.pdf As reported in the Troubled Company Reporter on May 29, 2009, the City of Malibu submitted a $15 million bid for Vineyard Christian Fellowship of Malibu's Malibu Performing Arts Center. According to the Malibu Times, Malibu is considering making MPAC as its permanent city hall. Malibu Times related that a January 2008 appraisal values MPAC at $27.6 million. Citing Malibu Mayor Andy Stern, Malibu Times reported that the City believes that $15 million "is a very fair price for the purchase of a building that will become Malibu's city hall. If the City is the successful bidder at the auction, the City will issue certificates of participation to fund the purchase." Malibu, California-based Vineyard Christian Fellowship of Malibu owns real property in Malibu, California, on which it operates a multi-purpose office building and recording studio. The company filed for Chapter 11 protection on September 12, 2008 (Bankr. C.D. Calif. Case No. 08-16951). James Stang, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtor as counsel. Reem J. Bello, Esq., at Weiland, Golden, Smiley, Wang Ekval & Strok, LLP, represents the Chapter 11 trustee as counsel. In its schedules, the Debtor listed total assets of $34,344,046 and total debts of $18,670,082. VINTAGE AT THE MESA: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Vintage At The Mesa, Inc. 18401 Von Karman Avenue Irvine, CA 92612 Bankruptcy Case No.: 09-15845 Chapter 11 Petition Date: June 15, 2009 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Gabriel I. Glazer, Esq. Jeffrey C. Krause, Esq. 1901 Avenue of the Stars, Ste 1200 Los Angeles, CA 90067 Tel: (310) 228-5600 Fax: (310) 228-5788 Email: gglazer@stutman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 19 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-15845.pdf The petition was signed by Matthew K. Osgood, chief executive officer and sole director of the Company. VRAD INVESTMENTS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: VRAD Investments, LLC, Debtor 5110 N. Central Avenue, Suite 200 Phoenix, AZ 85012 Bankruptcy Case No.: 09-13433 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Debtor's Counsel: Robert J. Berens, Esq. Mann, Berens & Wisner, Llp 3300 N. Central Ave., #2400 Phoenix, AZ 85012 Tel: (602) 258-6200 Fax: (602) 258-6212 Email: rberens@mbwlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Armando Delgadillo, manager and member of the Company. WASHINGTON COUNTY: Will File for Chapter 11 Bankruptcy Protection ----------------------------------------------------------------- Business First of Louisville reports that Washington County Memorial Hospital will file for Chapter 11 bankruptcy protection. Joe Roche, interim president of Washington County Memorial Hospital and administrator of St. Vincent Jennings Hospital, said in a statement, "The filing of bankruptcy protection sustains the viability of the hospital. This move ensures continued service, and no disruption of care to Washington County patients, families and surrounding communities." According to Business First, Washington County Memorial is trying to reorganize its finances and negotiate an operating agreement with a new partner. Washington County Memorial said in a statement that Critical Access Health Services Corp. has signed an agreement with St. Vincent Health to provide management services during the reorganization process. Business First relates that Washington County Memorial was negotiating with St. Vincent Health in November 2008 about becoming a St. Vincent affiliate hospital. Washington County Memorial said in a statement that it is also exploring a long-term management deal with St. Vincent Health or another health care entity. Washington County Memorial Hospital is based in Salem, Indiana. WATERFORD CUSTOM: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Waterford Custom Homes, Inc. 11390 Amber Hills Ct. Fairfax, VA 22033 Bankruptcy Case No.: 09-14807 Chapter 11 Petition Date: June 16, 2009 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Debtor's Counsel: John Paul Forest II, Esq. 11350 Random Hill Rd., Suite 700 Fairfax, VA 22030 Tel: (703) 691-4940 Email: j.forest@stahlzelloe.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/vaeb09-14807.pdf The petition was signed by Michael I. Iacovacci II, president of the Company. WCI COMMUNITIES: Plan Filing Period Extended to June 30 ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended WCI Communities Inc., et al.'s exclusive period to propose a plan until June 30, 2009, and their exclusive period to solicit acceptances thereof to August 31, 2009. On June 8, 2009, WCI Communities, Inc. filed a Plan of Reorganization and related Disclosure Statement for the Company and approximately 130 of its wholly owned subsidiaries with the Bankruptcy Court. As reported in the Troubled Company Reporter on June 10, 2009, under the Plan, the Company's senior secured lenders will receive new first lien debt in the aggregate amount of $450 million, which includes a $150 million payment-in-kind (PIK) component and an initial 95% equity stake in the reorganized company. The remaining 5% would be shared by the Company's unsecured creditors. The unsecured creditors' share would begin to increase when the new debt is fully retired and would reach a maximum of 35% after the secured lenders have received payments that are equivalent to the amount currently owed to them (approximately $770 million). The court will consider the adequacy of the information contained in the Disclosure Statement on July 17, 2009. As reported in the Troubled Company Reporter on April 22, 2009, the Debtors' counsel, Jeffrey M. Schlerf, Esq., at Fox Rothschild, in Wilmington, Delaware, related that the critical issues have now been framed and are in the process of being plumbed. He added that this process is ongoing and in the Debtors' view, if permitted to continue with a modest extension of exclusivity, will maximize the likelihood of a largely consensual plan. About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. (Pink Sheets:WCIMQ) -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company. It has operations in Florida, New York, New Jersey, Connecticut, Massachusetts, Virginia and Maryland. The company directly employs roughly 1,800 people, as well as roughly 1,800 sales representatives as independent contract employees. The Company and 126 of its affiliates filed for Chapter 11 protection on August 4, 2008 (Bankr. D. Del. Lead Case No. 08- 11643 through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., and Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida, represents the Debtors as counsel. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, represent the Debtors as Delaware counsel. Lazard Freres & Co. LLC is the Debtors' financial advisor. Epiq Bankruptcy Solutions LLC is the claims and notice agent for the Debtors. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP; and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. WILLIAM LYON: S&P Raises Corporate Credit Rating to 'CCC-' ---------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on William Lyon Homes to 'CCC-' from 'SD' (selective default). The outlook is negative. At the same time, S&P raised S&P's ratings on the company's senior unsecured notes to 'CC' from 'D'. The recovery rating on these securities remains '5', indicating S&P's expectation for a modest (10%-30%) recovery in the event of default. "The upgrades follow our review of William Lyon's capital structure with adjustments for the recent tender for some of its notes," said Standard & Poor's credit analyst James Fielding. "We viewed the below-par exchange as tantamount to default given the distressed financial condition of the company. S&P's 'CCC-' corporate credit rating on the company reflects S&P's view that the company remains highly leveraged on a pro forma basis, as well as our expectations that covenant pressures will heighten if operating losses continue to mount." The negative outlook acknowledges S&P's expectation for very weak profitability in the intermediate term due to continued weak demand and lower home prices. These conditions preclude consideration of a stable outlook at this time. S&P would lower its corporate credit rating to 'CC' if William Lyon's tangible net worth covenant cushion erodes materially as a consequence of operating losses and/or inventory impairments. S&P would also lower its rating if the company undertakes additional distressed debt redemptions. WR BERKLEY: Moody's Assigns 'Ba1' Initial Preferred Stock Rating ---------------------------------------------------------------- Moody's Investors Service has assigned provisional ratings (provisional senior unsecured debt at (P)Baa2), to W.R. Berkley Corporation's multi-seniority shelf registration statement filed by the company on November 26, 2008. This new shelf registration statement replaces W.R. Berkley's previous shelf registration statement filed on September 23, 2005. The company maintains its shelf registration statement for general corporate purposes, which may include reduction of short-term borrowings, stock repurchases, expansion of its net underwriting capacity and acquisitions. The outlook for the ratings is stable. The registration statement includes various classes of debt and preferred stock issuable by W.R. Berkley and W.R. Berkley Capital Trust III (as well as common stock and warrants by W.R. Berkley). Any issuance from W.R. Berkley Capital Trust III would be fully and unconditionally guaranteed by W.R. Berkley. Moody's has assigned provisional debt ratings to securities that may be issued under W.R. Berkley's shelf registration statement: -- W.R. Berkley Corporation: provisional senior unsecured debt at (P)Baa2; provisional subordinated and junior subordinated debt at (P)Baa3; provisional preferred stock at (P)Ba1; -- W.R. Berkley Capital Trust III: provisional preferred securities at (P)Baa3. Moody's will withdraw the provisional ratings previously assigned to W.R. Berkley's shelf registration that has been replaced by the new shelf. Based in Greenwich, CT, W. R. Berkley Corporation is an insurance holding company that conducts business in many segments of the property & casualty insurance market through its operating subsidiaries. For the full year 2008, W. R. Berkley reported net premiums written of $4.0 billion and net income of $281 million. For the first quarter of 2009, the company reported net premiums written of $1.0 billion and a net loss of $20 million. As of March 31, 2009, shareholders' equity was approximately $3.1 billion. Moody's last rating action on W.R. Berkley occurred on September 9, 2008, when Moody's affirmed the group's debt and insurance financial strength ratings. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations. ZILA INC: Posts $1.4 Million Net Loss in Quarter ended April 30 --------------------------------------------------------------- Zila Inc. disclosed in a filing with the Securities and Exchange Commission its financial results for quarter ended April 30, 2009. Zila Inc.'s balance sheet at April 30, 2009, showed total assets of $21,302,884, total liabilities of $16,932,897 and shareholders' equity of $4,369,987. For three months ended April 30, 2009, the Company incurred net loss of $1,485,124 compared with net loss of $4,444,993 for the same period in the previous year. For the nine months ended April 30, 2009, the Company posted net loss of $29,540,151 compared with net loss of $14,036,063 for the same period in the previous year. Liquidity and Capital Resources Historically, the Company sustained recurring losses and negative cash flows from operations as it changed its strategic direction to focus on the growth and development of ViziLite(R) Plus and its periodontal product lines. The Company's liquidity needs have arisen from the funding of its research and development program and the launch of its new products, as ViziLite(R) Plus, working capital and debt service requirements, and strategic initiatives. As of April 30, 2009, the Company's primary sources of liquidity included cash and cash equivalents of $3.1 million compared to $4.5 million as of July 31, 2008. The Company's working capital was negative $5.3 million as of April 30, 2009, compared to $6.6 million as of July 31, 2008. The decrease in working capital relates to its decreased cash and receivable balances and the reclassification of its senior secured convertible notes to current liabilities, offset by a decline in accounts payable and other accrued expenses. The Company is in compliance with the terms of the senior secured convertible notes, except for the quarterly interest payments due April 30, 2009, and Jan. 31, 2009, which have not been made as of the date of this filing. The failures to make these payments are events of default under its senior secured convertible notes. Upon an event of default, the senior secured convertible notes bear interest at a default rate of 15.0% per annum. Although the Company has not received a notice of default or acceleration from the note holders as of the date of this filing, which is required prior to any of the principal amount becoming due and payable as a result of the default, the Company has reclassified the senior secured convertible notes to current liabilities. Pursuant to the Note Purchase Agreement, the holders of the Senior Secured Convertible Notes have agreed not to exercise their remedies under the notes unless and until the note purchase agreement is terminated. However, there can be no assurance that the current or future note holders will not accelerate amounts due under the senior secured convertible Notes and proceed against their collateral. In the event of acceleration, the Company would likely be forced to file for protection under Chapter 11 of the Federal Bankruptcy Code or liquidate the Company under Chapter 7 of the Federal Bankruptcy Code, which would likely result in its common stock becoming worthless. The Company anticipates it will need to refinance its senior secured convertible notes by their due date of July 31, 2010. As of April 30, 2009, there were $1.1 million of unamortized debt issue costs and $2.2 million of debt discounts relative to the senior secured convertible notes. A full-text copy of the 10Q filing is available for free at http://ResearchArchives.com/t/s?3df1 About Zila Inc. Based in Scottsdale, Arizona, Zila Inc. is a diagnostic company dedicated to the prevention, detection and treatment of oral cancer and periodontal disease. Zila manufactures and market ViziLite(R) Plus with TBlue(R), its flagship product for the early detection of oral abnormalities that could lead to cancer. * Factory Production and Wholesale Prices Make Record Lows ---------------------------------------------------------- According to Bill Rochelle at Bloomberg, factory output was down 1.1 percent in May, bringing plant utilization to 68.3 percent, the lowest since records were first kept in 1967. Factory production was down 15 percent from May 2008, the largest drop since 1946. Wholesale prices fell 5 percent for the 12 months ended in May, the biggest decline in 50 years. Housing starts in May increased to an annual rate of 532,000 units. * Gov't Turns Down Auto Suppliers' Plea for Up to $10BB in Aid -------------------------------------------------------------- Josh Mitchell at The Wall Street Journal reports that the government has denied auto-part suppliers for up to $10 billion in new aid. According to WSJ, the government said that it shouldn't further interfere in the industry's contraction. WSJ quoted Neil De Koker, president and chief executive of the Original Equipment Suppliers Association, as saying, "They [the government] felt that unless we see chaos or a disorderly situation arising where have assembly-line shutdown due to lack of ability to get parts or stuff like that, then we would relook at this situation, but that at the present time we believe everything is working." WSJ relates that auto suppliers had asked for the government to guarantee $8 billion to $10 billion in loans, in addition to a $5 billion support program that the administration put in place earlier this year, so that banks will lend to the suppliers. Citing trade groups, WSJ states that hundreds of suppliers could collapse without further government aid as the bankruptcy filings of General Motors Corp. and Chrysler LLP deepen the suppliers' troubles. WSJ says that parts suppliers are now turning their lobbying efforts toward Congress. WSJ relates that Sen. Sherrod Brown is planning to propose a legislation that would "provide a new funding source to help auto suppliers and other manufacturers retool for the clean energy industry." According to the report, the plan has the support of business, environmental, and labor leaders. * Household Wealth Drops $1.3 Trillion in First Quarter ------------------------------------------------------- Bloomberg's Bill Rochelle, citing a report by the Federal Reserve, said that household wealth in the U.S. fell to $50.4 trillion in the first quarter from $51.7 trillion in the fourth quarter. The $1.3 trillion decline was largely attributable to the drop in stock and home prices. According to Brian Blackstone at The Wall Street Journal, citing the Fed's survey of consumer finances, released Thursday, average net worth is estimated to have fallen 22.7% from 2007 until October 2008. The median, or midpoint, fell a more modest 17.8%, suggesting declines were centered among wealthier families. Mr. Blackstone notes the Fed survey itself actually only covered 2007. However, Fed economists made projections through October of last year based on changes in the Wilshire 5000 stock index and home prices. * ICSC Retail Bankruptcy Program in Atlantic City on July 10 ------------------------------------------------------------ The International Council of Shopping Centers, Inc.'s Philadelphia Next Generation Program, "Retail Bankruptcy: What you need to Know", will be held on July 10, 2009, at 2:30 p.m. at the Tropicana Casino & Resort, Atlantic City, New Jersey. The program presents a panel of commercial real estate experts discussing the principals of bankruptcy and how it affects landlords, retailers, lenders, and others in the business. Press registration is complimentary. Those interested to participate must contact Jesse Tron in ICSC's media relations department to obtain press credentials. He can be reached at 646- 728-3814 or jtron@icsc.org All registrations, including fax registrations, must be received at ICSC by 12:00 noon ET three business days before the meeting. No refunds or cancellations will be given at any time. As economies around the world have faltered over the last year, thousands of retailers have been pushed to the brink of existence. Weakened balance sheets burdened by tremendous amounts of debt, coupled with a sharp decrease in consumer spending, has left many iconic brands and businesses contemplating whether they have the capital to continue operating. Bankruptcy has become an increasingly realistic option for many of these troubled companies. Astute industry professionals are realizing that in order to stay competitive they need to know far more about this legal concept than they once thought. A panel of commercial real estate experts will be discussing the principles of bankruptcy and how it affects landlords, retailers, lenders and others in the business. These groups will also discuss how they successfully adapt to changes in bankruptcy laws to realize a better result. The ICSC educational, networking and mentoring program is specifically designed for real estate professionals who are seeking to develop their careers and build relationships in the shopping center industry. The Next Generation program offers retail real estate professionals the unique opportunity to meet and interact with their peers, share experiences, exchange ideas and advice in an interactive yet relaxed environment. Next Generation is also open to seasoned professionals who wish to give back to the industry. * Standard & Poor's Says 2009 Defaults Already Higher Than 2008 --------------------------------------------------------------- The number of global weakest links decreased marginally to 290 as of June 11, 2009, from 293 in May and a record high of 300 in April 2009, said an article published June 16. The article, which is titled "Global Bond Markets' Weakest Links And Monthly Default Rates (Premium)," says that the decline was largely attributable to the sharp rise in defaults, many of which were weakest links. This is a trend that likely will continue for some time. Eroding credit quality leads to lower ratings and more entities with negative outlooks or with ratings on CreditWatch with negative implications as well as increased vulnerability to default. The 290 weakest links have combined rated debt worth $369.95 billion. "By sector, media and entertainment, forest products and building materials, and retail and restaurants were the most vulnerable, with the highest concentrations of weakest links," noted Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. Corporate defaults continue to rise rapidly in 2009, already surpassing the number in all of 2008. Through June 11, 2009, 152 issuers defaulted, affecting debt worth $387.31 billion. By comparison, 126 defaults were recorded in all of 2008, affecting debt worth $433 billion. Of the 152 defaults in 2009, 108 are from the U.S., 29 are from emerging markets, seven are from Europe, six are from Canada, and one each is from Australia and Japan. The U.S. also leads in the number of weakest links, with 209 of the 290 entities, or 72%. Weakest links are defined as issuers rated 'B-' or lower with either a negative outlook or with ratings on CreditWatch with negative implications, and they are at greater risk of default. Global Fixed Income Research: Diane Vazza New York (1) 212-438-2760 diane_vazza@standardandpoors.com Media Contact: Mimi Barker New York (1) 212-438-5054 mimi_barker@standardandpoors.com A June 12 report by S&P said that so far this year, 153 companies defaulted on their debt or filed bankruptcy, compared with 126 for all of 2008. During the same period in 2008, defaulting companies totaled 35. * Chapter 11 Cases With Assets and Liabilities Below $1,000,000 --------------------------------------------------------------- In Re Alberto Villarreal Maria Julia Higueros Bankr. C.D. Calif. Case No. 09-24455 Chapter 11 Petition filed June 9, 2009 See http://bankrupt.com/misc/cacb09-24455.pdf In Re Gregory Thomas Greaves dba Huntsville Generator Deborah Kay Greaves Bankr. N.D. Ala. Case No. 09-82354 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/alnb09-82354.pdf In Re El Reventon LLC Bankr. D. Ariz. Case No. 09-12809 Chapter 11 Petition filed June 10, 2009 Filed as Pro Se In Re Kerri L. Beck aka KERRI L BECK DVM DACVR LLC AND COMPANION ANIMAL Bankr. D. Ariz. Case No. 09-12918 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/azb09-12918.pdf In Re Timothy D. Finn Catherine E. DeMonte Bankr. C.D. Calif. Case No. 09-17077 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/cacb09-17077.pdf In Re American Energy Savers, Inc. Bankr. D. Conn. Case No. 09-31536 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/ctb09-31536.pdf In Re Aaron William Stachowiak Bankr. M.D. Fla. Case No. 09-12175 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/flmb09-12175.pdf In Re Global One Financial Group, Inc. Bankr. M.D. Fla. Case No. 09-12176 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/flmb09-12176.pdf In Re James D. Perkins Lana J. Perkins Bankr. M.D. Fla. Case No. 09-12178 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/flmb09-12178.pdf In Re Maison Grande Condominium Association, Inc. Bankr. S.D. Fla. Case No. 09-21589 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/flsb09-21589.pdf In Re Obie Blanton Taylor Colett Janel Taylor Bankr. E.D. Ky. Case No. 09-51847 Chapter 11 Petition filed June 10, 2009 Filed as Pro Se In Re The Penny Pincher Pawn Shop, Inc. Bankr. M.D. La. Case No. 09-10833 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/lamb09-10833.pdf In Re 950 N. River Street Building, LLC fka Garrett Nursery and Garden Center, LLC Bankr. E.D. Mich. Case No. 09-58350 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/mieb09-58350p.pdf See http://bankrupt.com/misc/mieb09-58350c.pdf In Re JB Restaurants, LLC dba Indigo Joe's Indigo Joe's Sports Pub & Restaurant Bankr. W.D. Mo. Case No. 09-61270 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/mowb09-61270.pdf In Re aj Moss, Inc. Bankr. D. N.H. Case No. 09-12153 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/nhb09-12153.pdf In Re Luther M. Johnson, Jr. Tanya C. Johnson Bankr. D. N.J. Case No. 09-25071 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/njb09-25071.pdf In Re Sherrie A. Ace aka Aces Unlimited LLC aka 141968067-EIN Bankr. D. Ore. Case No. 09-63027 Chapter 11 Petition filed June 10, 2009 Filed as Pro Se In Re Philadelphia Media Holdings, LLC Bankr. E.D. Pa. Case No. 09-14315 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/paeb09-14315.pdf In Re Todd Alan Fennell Bankr. W.D. Pa. Case No. 09-24342 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/pawb09-24342p.pdf See http://bankrupt.com/misc/pawb09-24342c.pdf In Re Pilot Realty, LLC Bankr. D. R.I. Case No. 09-12287 Chapter 11 Petition filed June 10, 2009 Filed as Pro Se In Re CabFixco, Inc. dba Metro Store Fixtures Bankr. N.D. Tex. Case No. 09-33682 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/txnb09-33682.pdf In Re Real Comet, Inc. Bankr. W.D. Wash. Case No. 09-15659 Chapter 11 Petition filed June 10, 2009 See http://bankrupt.com/misc/wawb09-15659.pdf In Re AND Sportswear, Inc. Bankr. C.D. Calif. Case No. 09-24592 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/cacb09-24592.pdf In Re Wei Dong Yingzi Yan Bankr. C.D. Calif. Case No. 09-24627 Chapter 11 Petition filed June 11, 2009 Filed as Pro Se In Re Wei Xu Le Du Bankr. C.D. Calif. Case No. 09-24637 Chapter 11 Petition filed June 11, 2009 Filed as Pro Se In Re Legacy Park Master Homeowners' Association, Inc. Bankr. M.D. Fla. Case No. 09-12287 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/flmb09-12287.pdf In Re Dream New Orleans Operating Company, Inc. Bankr. E.D. La. Case No. 09-11751 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/laeb09-11751.pdf In Re Melvin's Truck Repair Center, LLC Bankr. D. Md. Case No. 09-20581 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/mdb09-20581p.pdf See http://bankrupt.com/misc/mdb09-20581c.pdf In Re Cerro Benito, LLC Bankr. D. Nev. Case No. 09-19946 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/nvb09-19946.pdf In Re Raymond Grant Riley Bankr. D. N.M. Case No. 09-12522 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/nmb09-12522.pdf In Re Franchise Kings of Midtown, Inc. Bankr. S.D. N.Y. Case No. 09-13726 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/nysb09-13726.pdf In Re The Cincinnati Cremation Company Bankr. S.D. Ohio Case No. 09-13699 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/ohsb09-13699.pdf In Re DIXIE LEE BRASWELL aka DLB CONSTRUCTION, LLC aka ACI BULIDING GROUP, LLC LYNNE RENEE BRASWELL Bankr. M.D. Tenn. Case No. 09-06521 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/tnmb09-06521.pdf In Re Timmy Wade Miller aka TIM W MILLER Bankr. M.D. Tenn. Case No. 09-06550 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/tnmb09-06550.pdf In Re Great White Bait, LLC Bankr. W.D. Wash. Case No. 09-44152 Chapter 11 Petition filed June 11, 2009 See http://bankrupt.com/misc/wawb09-44152.pdf In Re Stephen Pk Ho Bankr. S.D. Ala. Case No. 09-12689 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/alsb09-12689.pdf In Re MARIO O. JIMENEZ LILIA JIMENEZ Bankr. D. Ariz. Case No. 09-13092 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/azb09-13092.pdf In Re MATRIX FOREST PRODUCTS, INC. Bankr. D. Ariz. Case No. 09-13165 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/azb09-13165.pdf In Re SouthArk EMS Bankr. W.D. Ark. Case No. 09-72917 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/arwb09-72917.pdf In Re Tong Il Pak Bankr. C.D. Calif. Case No. 09-24760 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/cacb09-24760.pdf In Re Radigonde Torres Peredo aka Radigonde Peredo Licudine Bankr. N.D. Calif. Case No. 09-31631 Chapter 11 Petition filed June 12, 2009 Filed as Pro Se In Re Vall A. Youngberg Bankr. N.D. Ill. Case No. 09-21408 Chapter 11 Petition filed June 12, 2009 Filed as Pro Se In Re Coastal Bay Properties, LLC Bankr. D. Maine Case No. 09-20874 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/meb09-20874.pdf In Re Igor Prokopiw Bankr. D. Maine Case No. 09-20877 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/meb09-20877p.pdf See http://bankrupt.com/misc/meb09-20877c.pdf In Re CRYSTAL DIANE SMITH ERIK CHARLES SMITH Bankr. D. Nev. Case No. 09-20096 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/nvb09-20096.pdf In Re AM Operating Group LLC dba Merkato 55 Bankr. S.D. N.Y. Case No. 09-13755 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/nysb09-13755.pdf In Re Beltway Pizza, Inc. Bankr. E.D. Va. Case No. 09-14702 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/vaeb09-14702.pdf In Re Empire Metal Recycling, Inc. Bankr. S.D. W.Va. Case No. 09-30461 Chapter 11 Petition filed June 12, 2009 See http://bankrupt.com/misc/wvsb09-30461.pdf In Re Noemi Valdez Pinedo Margarito Alonso Pinedo Bankr. N.D. Calif. Case No. 09-54650 Chapter 11 Petition filed June 13, 2009 See http://bankrupt.com/misc/canb09-54650.pdf In Re Paramjit S. Chawla Kitty Chawla Bankr. E.D. Calif. Case No. 09-32147 Chapter 11 Petition filed June 14, 2009 See http://bankrupt.com/misc/caeb09-32147.pdf In Re David Shoes, Inc. Bankr. E.D. N.Y. Case No. 09-44985 Chapter 11 Petition filed June 14, 2009 See http://bankrupt.com/misc/nyeb09-44985.pdf In Re Kessler Trucking, LLC Bankr. N.D. Ala. Case No. 09-41732 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/alnb09-41732.pdf In Re Trinity Ministry of Helps, Inc. Bankr. E.D. Ark. Case No. 09-14193 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/areb09-14193.pdf In Re Alfonso Medrano Bankr. C.D. Calif. Case No. 09-17284 Chapter 11 Petition filed June 15, 2009 Filed as Pro Se In Re Gerald Lamont Myles aka GLM Enterprises Bankr. C.D. Calif. Case No. 09-24926 Chapter 11 Petition filed June 15, 2009 Filed as Pro Se In Re Kullamandiri M. Shukla Bankr. C.D. Calif. Case No. 09-24942 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/cacb09-24942.pdf In Re Presidential Limousine, LLC Bankr. S.D. Calif. Case No. 09-08409 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/casb09-08409.pdf In Re Lawrence C. Potter aka Lawrence Charles Potter Bankr. D. Colo. Case No. 09-21590 Chapter 11 Petition filed June 15, 2009 Filed as Pro Se In Re Diamond Gym LLC Bankr. N.D. Ill. Case No. 09-21581 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/ilnb09-21581.pdf In Re One Source Recycling, Inc. Bankr. N.D. Ill. Case No. 09-72443 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/ilnb09-72443.pdf In Re Hilltop Properties, LLC Bankr. D. Maine Case No. 09-20884 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/meb09-20884.pdf In Re Jean J. Gilles Bankr. D. Mass. Case No. 09-15532 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/mab09-15532.pdf In Re William McNeir Richmond Bankr. D. Mass. Case No. 09-15527 Chapter 11 Petition filed June 15, 2009 Filed as Pro Se In Re Premier Sales, Inc. Bankr. E.D. Mich. Case No. 09-58793 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/mieb09-58793.pdf In Re 244 Flatbush Avenue, LLC Bankr. E.D. N.Y. Case No. 09-44989 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/nyeb09-44989.pdf In Re 1700 Church Avenue Corp. Bankr. E.D. N.Y. Case No. 09-44991 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/nyeb09-44991.pdf In Re DION DOLCE INC. Bankr. S.D. N.Y. Case No. 09-13839 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/nysb09-13839.pdf In Re Kyle P. Harrington Bankr. S.D. N.Y. Case No. 09-13845 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/nysb09-13845.pdf In Re New York Gifts & Gallery Discount Framing, Inc. Bankr. S.D. N.Y. Case No. 09-13835 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/nysb09-13835.pdf In Re Emerson Street, LLC Bankr. D. Ore. Case No. 09-34627 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/orb09-34627.pdf In Re GAMALIER GONZALEZ RIVERA SYBET MEDINA MARTINEZ Bankr. D. P.R. Case No. 09-04868 Chapter 11 Petition filed June 15, 2009 See http://bankrupt.com/misc/prb09-04868.pdf In Re IVAN B. WEINSTEIN BRENDA S. WEINSTEIN Bankr. D. Ariz. Case No. 09-13430 Chapter 11 Petition filed June 16, 2009 See http://bankrupt.com/misc/azb09-13430.pdf In Re KAREN M. RICHARD Bankr. D. Ariz. Case No. 09-13417 Chapter 11 Petition filed June 16, 2009 See http://bankrupt.com/misc/azb09-13417.pdf In Re RITA REYNA PEDROZA Bankr. D. Ariz. Case No. 09-13332 Chapter 11 Petition filed June 16, 2009 Filed as Pro Se In Re Fermin Pinpin Nazareno Criselda Soriano Nazareno Bankr. N.D. Calif. Case No. 09-31657 Chapter 11 Petition filed June 16, 2009 Filed as Pro Se In Re Joan Wenters Bankr. N.D. Calif. Case No. 09-45296 Chapter 11 Petition filed June 16, 2009 See http://bankrupt.com/misc/canb09-45296.pdf In Re Michael R. Berube dba Harvest Equities Bankr. N.D. Calif. Case No. 09-54715 Chapter 11 Petition filed June 16, 2009 Filed as Pro Se In Re James Daniel Brown dba Economy Fence Company Debra Louise Brown Bankr. S.D. Ind. Case No. 09-08630 Chapter 11 Petition filed June 16, 2009 See http://bankrupt.com/misc/insb09-08630.pdf In Re DC Framing, LLC Bankr. D. Mass. Case No. 09-15557 Chapter 11 Petition filed June 16, 2009 See http://bankrupt.com/misc/mab09-15557.pdf In Re Petroleum Equipment Services, Inc. Bankr. W.D. Pa. Case No. 09-24474 Chapter 11 Petition filed June 16, 2009 See http://bankrupt.com/misc/pawb09-24474p.pdf See http://bankrupt.com/misc/pawb09-24474c.pdf In Re Clarkson Enterprises, LLC Bankr. N.D. W.Va. Case No. 09-01344 Chapter 11 Petition filed June 16, 2009 See http://bankrupt.com/misc/wvmb09-01344.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Ma. Theresa Amor J. Tan Singco, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***