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/raid1/www/Hosts/bankrupt/TCR_Public/090629.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, June 29, 2009, Vol. 13, No. 178 Headlines ACCURIDE CORP: Bank Debt Trades at 23% Off in Secondary Market ADVANCED MICRO: To Solicit Stock Options Exchange from Employees ALSET OWNERS: Wants Schedules Filing Extended Until July 31 AMCORE FINANCIAL: Consent Order Cues Default Under JPMorgan Loan AMERICAN COMMERCIAL: S&P Assigns 'B' Corporate Credit Rating AMERICAN INT'L: Obama Considered Bankruptcy Among Options AMR CORP: American Bank Debt Trades at 8% Off in Secondary Market AMR CORP: Citi, JPMorgan Waive EBITDAR Covenant for Q2 ANGIOTECH PHARMACEUTICALS: S&P Puts 'CC' Rating on Positive Watch APPLIED SOLAR: Bankruptcy Still Likely; Quercus Note Due June 30 ASARCO LLC: Court Approves $1,675,000 Idaho Settlement ASARCO LLC: Parent Appeals Order on Environmental Settlement ASARCO LLC: Taps URS Corp. to Clean Up Helena Smelter Site ASARCO LLC: $5MM JPMorgan L/C Facility Extended to June 2010 ASARCO LLC: Seeks to Expand Barclays Role in Assets Sale AVIZA TECHNOLOGY: Hires Omni Management as Claims Agent AVIZA TECHNOLOGY: Taps Murray & Murray as Bankruptcy Counsel AVIS BUDGET: Debt Trades at 22% Off in Secondary Market AVIS BUDGET: Files Annual Reports for 5 Employee Plans BAKERS FOOTWEAR: Posts $2.8 Million Net Loss for 2009 Q1 BEAZER HOMES: Files 2008 Annual Report for 401(k) Plan BERNARD MADOFF: Wife Cedes $80MM Claim to Assets, Keeps $2.5MM BLUFFS LLC: Case Summary & Seven Largest Unsecured Creditors BONANZA OIL: In Default Under Secured Promissory Notes BOSTON SCIENTIFIC: Jim Tobin Resigns as President & CEO BRITTANY PLACE: Voluntary Chapter 11 Case Summary BRUNO'S SUPERMARKETS: Files Liquidating Plan; June 19 Hearing Set BUILDING MATERIALS: July 1 Final Hearing on $80 Million DIP Loan BUILDING MATERIALS: Taps Garden City Group as Notice Agent BURLINGTON COAT: Fitch Affirms Issuer Default Rating at 'B-' BUTLER SERVICES: Taps RAS Management Chief Restructuring Advisor BUTLER SERVICES: U.S. Trustee Appoints 3-Member Creditors Panel BUTLER SERVICES: Wants Venturi & Company as Investment Banker CARAUSTAR INDUSTRIES: Gets Final Approval to $75MM DIP Financing CARAUSTAR INDUSTRIES: Schedules Filing Extended Until August 14 CARAUSTAR INDUSTRIES: Taps Administar Services as Claims Agent CASELLA WASTE: S&P Affirms Corporate Credit Rating at 'B+' CENTERSTONE DIAMONDS: Wants Schedules Filing Extended Until July 6 CHEMTURA CORP: Biolab Sues to Compel OxyChem to Perform CHEMTURA CORP: Wants to Enjoin Diacetyl-Related Suits CHEMTURA CORP: Withdrew Proposal for Inesa Guaranty Pact CHRYSLER LLC: Sec. 341 Meeting Continued to September 21 CIRCUIT CITY: Wants Removal Deadline Extended Until October 9 CIRCUIT CITY: Seeks to Sell Baltimore Property for $4.6-Mil. CIRCUIT CITY: Gets Court Nod to Sell San Mateo Leases to Merchant CIRCUIT CITY: Seeks Approval of Agreement with Creative Realty CIRCUIT CITY: Shores' $8.2MM is Winning Bidder for Ardmore Land CITADEL BROADCASTING: Moody's Cuts Corp. Family Rating to 'Caa3' CLAIRE'S STORES: Bank Debt Trades at 43% Off in Secondary Market CLEAR CHANNEL: Bank Debt Trades at 40% Off in Secondary Market CLEAR CHANNEL: Jon Zellner Leaves Sirius XM to Take Same Role CLEAR CHANNEL: Will Have Trouble Paying Debts, Analysts Say CLOVERLEAF ENTERPRISES: Proposes Meyers Rodbell as Special Counsel CLOVERLEAF ENTERPRISES: Seeks Zuckerman Spaeder as Attorney COACHMEN INDUSTRIES: Discloses $6MM in Cash; Admits to Tough Times COAST TO COAST METAL: Voluntary Chapter 11 Case Summary COLETO CREEK: S&P Downgrades Ratings on $735 Mil. Senior Loan COMMERCIAL BARGE: Moody's Assigns 'B1' Corporate Family Rating COMMUNITY BANK: FDIC Named Receiver; Has No Buyer CONSOLIDATED RESORTS: Closing Fifteen Time-Share Resorts CONSPIRACY ENTERTAINMENT: Files Amendment to 2007 Annual Report COYOTES HOCKEY: Reinsdorf Bids $148MM for Team to Stay in Glendale CURRENT RIVER CAPITAL: Case Summary & 16 Largest Unsec. Creditors DAVID WEBB: Files for Ch 11 Bankr.; Lists $6.9MM in Debts DELTA AIR: Fitch Downgrades Issuer Default Rating to 'B-' DETROIT PROPERTIES: Case Summary & Two Largest Unsecured Creditors DIAL-A-MATTRESS: Court Okays Firm's $25 Million Sale to Sleepy's DXTECH LLC: Case Summary & 20 Largest Unsecured Creditors E*TRADE FINANCIAL: Files Prospectus Supplement to Senior Notes EDDIE BAUER: U.S. Trustee Forms Seven-Member Creditors Committee EDDIE BAUER: Hires Latham & Watkins as Bankruptcy Counsel EDDIE BAUER: Seeks to Employ Young Conaway as Delaware Counsel EPIXTAR CORP: Can Employ Hinshaw Culbertson as Bankruptcy Counsel ESSAR STEEL: S&P Downgrades Corporate Credit Rating to 'B-' FAIRPOINT COMMUNICATIONS: Fitch Junks Issuer Default Rating FAIRPOINT COMMUNICATIONS: S&P Cuts Corporate Credit Rating to 'CC' FIRST WORTH OSTEOPATHIC: Bk. Ct. Abstains from Probate Matter FLYING J: Plan Filing Period Extended to August 31 FLYING J: To Consider Proposed Longhorn Sale Process on July 6 FONIX CORP: Posts $781,000 Net Loss for March 31, 2009 Quarter FONTAINEBLEAU LAS VEGAS: To Employ Moelis as Financial Advisors FONTAINEBLEAU LAS VEGAS: Taps Citadel as Financial Advisors FONTAINEBLEAU LAS VEGAS: To Hire Kasowitz as Special Counsel FONTAINEBLEAU LAS VEGAS: Obtains Nod to Hire KCC as Claims Agent FORT WAYNE: Taps Barrett & McNagny as Attorney FORT WAYNE: Taps Schafer and Weiner as Special Counsel FRONTIER AIRLINES: Terms of Republic Airways-Backed Ch. 11 Plan FRONTIER AIRLINES: Disclosure Statement Hearing on July 22 FRONTIER AIRLINES: Seeks Approval of Republic Investment Agreement FRONTIER AIRLINES: Hires D. Shurz as VP for Strategy & Planning GENARO MENDOZA: Taps Kalish & Gordon as Special Counsel GENERAL MOTORS: Unions Seek Equity for Former Workers GENERAL MOTORS: S&P Withdraws 'D' Senior Secured Ratings GENMAR HOLDINGS: Taps Fredrikson & Byron as Bankruptcy Counsel GLOBAL CASH: Share Repurchases Won't Affect S&P's 'BB-' Rating GRAHAM PACKAGING: General Partner OKs Option Grant to CEO Burgess HARTMARX CORP: Emerisque and SKNL Buyout to Close by July 7 HAWAII SUPERFERRY: U.S. Trustee Creates 3-Member Creditors Panel HAWAII SUPERFERRY: Court Approves Donlin Recano as Claims Agent HAWKER BEECHCRAFT: Bank Debt Trades at 32% Discount HAYES LEMMERZ: Court Establishes July 27 General Bar Date HC INNOVATIONS: Management Expects to Meet Capital Needs HIGGSCORP A CORPORATION: Case Summary & 2 Largest Unsec. Creditors HOLLYWOOD THEATERS: S&P Raises Corporate Credit Rating to 'B-' HORIZON BANK: Closed; Stearns Bank Assumes All of the Deposits HUNTGAIN LLC: Wants to Hire Gordon Feinblatt as Counsel IKARIA ACQUISITION: Moody's Assigns 'B1' Corporate Family Rating IPAYMENT INC: Moody's Affirms 'B1' Corporate Family Ratings JOURNAL REGISTER: Court to Rule on Reorganization Plan by July 7 KABUTO ARIZONA: Gets Nod to Tap Engelman Berger as Counsel LA BONITA OLE: Launches Campaign to Avoid SunTrust Foreclosure LAKEWEST GROUP: To Liquidate Business Under Chapter 7 LAS VEGAS SANDS: Bank Debt Trades at 28% Off in Secondary Market LEAR CORP: Bank Debt Trades at 30% Off in Secondary Market LEAR CORP: Working on Prepackaged Bankruptcy LENNAR CORP: Posts $125.2 Million in Second Quarter 2009 MAHALO ENERGY: Seeks to Use Cash, Borrow $2 Million MAP FINANCIAL: Recurring Losses Cues Going Concern Doubt MARVIN-WAXHAW: Court Approves Mitchell & Culp as Attorney MASSEY ENERGY: S&P Changes Outlook to Negative; Keeps 'BB-' Rating MBIA INC: Moody's Downgrades Senior Debt Rating to 'Ba3' MCCLATCHY CO: Unveils Results of Private Exchange Offer MCKINNEY AVENUE: Files List of 20 Largest Unsecured Creditors MCKINNEY AVENUE: Taps Quilling Selander as General Counsel METALDYNE CORP: Seeks to Employ Foley as Special Counsel METROPACIFIC BANK: FDIC Named Receiver; Sunwest Assumes Deposits MGM MIRAGE: Annual Stockholders' Meeting Scheduled for August 4 MICHAELS STORES: Bank Debt Trades at 8% Off in Secondary Market MIRAE BANK: Closed; Wilshire State Bank Assumes Deposits NAVISTAR INT'L: Board Elects DuPont's Gulyas as Class II Director NAVISTAR INT'L: Files 2008 Annual Report for Four Employee Plans NEIGHBORHOOD COMMUNITY: Closed; CharterBank Assumes Deposits NEIMAN MARCUS: Bank Debt Trades at 25% Off in Secondary Market NEW ORLEANS: Fitch Affirms 'B' Rating on Sewerage's Revenue Bonds NORTH AMERICAN TECH: Dec. 28 Balance Sheet Upside-Down by $8.48MM NORTHEASTERN REAL: Voluntary Chapter 11 Case Summary NOVEMBER 2005: Case Summary & Amended List of Creditors NOVEMBER 2005: Taps Goold Patterson in Development Declarations NOVEMBER 2005: Taps Latham & Watkins on Real Estate & Tax Matters OCULUS INNOVATIVE: Marcum LLP Raises Going Concern Doubt OFFICE DEPOT: BC Partners Deal Won't Affect S&P's 'B' Rating OHH ACQUISITION: Fin'l Restatement Won't Move Moody's 'B3' Rating ONE COMMUNICATIONS: Moody's Assigns 'B2' Rating on $275 Mil. Notes PATCH ENERGY: Files for Bankruptcy Under Canada's Insolvency Act PATRICIA MENDEZ: Voluntary Chapter 11 Case Summary PENN-MAR CONSULTANTS: Case Summary & 1 Largest Unsecured Creditor PENTHOUSE MEDIA: Dist. Ct. Revives Legal Malpractice Suit PETCO ANIMAL: Moody's Affirms 'B2' Corporate Family Ratings PHICO INSURANCE: Commonwealth Court Sets July 30 Claims Bar Date PINGHO ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors PMI GROUP: Moody's Confirms Senior Debt Rating at 'B3' PRINCETON OFFICE: Court Sets July 23 Disclosure Statement Hearing PROPEX INC: Committee Drops Complaint Against BNP Paribas PROPEX INC: Houlihan Lokey Bills $2.25-Mil. for Ch. 11 Work PROPEX INC: King & Spalding Charges $1.4-Mil. For Feb.-May Work PROPEX INC: Resolves AIU Objection to Contracts' Assumption PROSPECT MEDICAL: S&P Puts 'B-' Rating on CreditWatch Developing QIMONDA AG: U.S. Court to Hear Chapter 15 Petition July 22 QUEBECOR WORLD: U.S. Government, et al., Object to Plan QUEBECOR WORLD: Expands Operations in Virginia; to Invest $35.2MM QUEBECOR WORLD: Proposes to Vest Severance Benefits to Employees QUEBECOR WORLD: Signs Deal with Louisiana on Sales Taxes RAPID LINK: April 30 Balance Sheet Upside-Down by $5,188,555 RASHAD MUNIR: Case Summary & 2 Largest Unsecured Creditors REVLON INC: Files 2008 Annual Report for Employee Plan RICHARD STEWART: Case Summary & 20 Largest Unsecured Creditors RONALD HUSTON: Case Summary & 20 Largest Unsecured Creditors RSC EQUIPMENT: Moody's Downgrades Corporate Family Rating to 'B3' RSC EQUIPMENT: S&P Retains 'B+' Corporate Credit Rating SHABBIR SHAIKH: Case Summary & 16 Largest Unsecured Creditors SIRIUS XM: Jon Zellner Leaves Post to Join Clear Channel SK FOODS: Olam West Coast Buys Firm, Sale Gets Court Okay SMITHFIELD FOODS: Moody's Downgrades Corp. Family Rating to 'B2' SMITHFIELD FOODS: S&P Assigns 'BB-' Senior Secured Debt Rating SOURCE INTERLINK: Declares Confirmed Plan Effective as of June 19 SOUTH SOUND: Gets Temporary Access to Cascade Bank Cash Collateral SPECTRUM BRANDS: Terms of Confirmed Chapter 11 Plan SPECTRUM BRANDS: Seeks Ratification of GE Capital Exit Facility SPECTRUM BRANDS: To Employ L&W as Co-Counsel on Baker Transfer SPECTRUM BRANDS: Seeks to Pay Workers Assisting Plants Shutdown STEPHEN RUSSELL: Case Summary & 17 Largest Unsecured Creditors SYNCORA GUARANTEE: BCP Exchange Offer for RMBS Moved to July 10 TAMPA ESUITES: Case Summary & 3 Largest Unsecured Creditors TERRA-GEN FINANCE: Moody's Assigns 'Ba3' Rating on $275 Mil. Loan THORNBURG MORTGAGE: Court Sets August 3 General Claims Bar Date TOYS R US: Moody's Assigns 'B3' Rating on $950 Mil. Sr. Notes TOYS R US: S&P Affirms Corporate Credit Rating at 'B' TRIBUNE CO: Alvarez & Marsal Bills $1-Mil. for April Work TRIBUNE CO: Committee Seeks to Probe Tesop Corp Merger in 2007 TRIBUNE CO: Court Okays Assumption of Nielsen Ratings Agreements TRIBUNE CO: Deutsche Bank Files More Than $1.2 Billion in Claims TRIBUNE CO: Names J. Marenhegi as EVP/Sales and Distribution TRICOM SA: Plan Solicitation Period Extended Until August 31 TRILOGY DEVELOPMENT: U.S. Trustee Unable to Appoint Committee TROPICANA ENTERTAINMENT: Transfer of Atlantic City Assets Okayed TROPICANA ENTERTAINMENT: Delaware Debtors to Sign AC Resort Deal TROPICANA ENTERTAINMENT: Yemenidjian to Run Las Vegas Casino TRW AUTOMOTIVE: Obtains Covenant Relief Under Credit Facility UAL CORP: Nazir May Pursue California Suit if Reversed on Appeal UAL CORP: District Court Denies P. Carr Motion for Leave UNIVERSAL HOSPITAL: Moody's Affirms 'B2' Corporate Family Rating VERMILLION INC: Secures Court OK for Incentive Bonus Plan YOUNG BROADCASTING: Selling Assets to unXis Inc. for $5,250,000 WALKER HOMES: Case Summary & 2 Largest Unsecured Creditors WOLVERINE TUBE: KPMG LLP Raises Going Concern Doubt XERIUM TECHNOLOGIES: Discloses Terms of CFO Maffucci's Employment XERIUM TECHNOLOGIES: Stockholders OK Changes to Incentive Plan XM SATELLITE: Raise in Offering Won't Affect Moody's 'Caa1' Rating YRC WORLDWIDE: To Begin Talks with Teamsters; Seeks CBA Changes * Focus Awarded for CRO Role in Archway Bankruptcy * Five Banks Shuttered; Failed Banks Rise to 45 in 2009 * GASB Issues 2 EDs on OPEB Measurements, Chapter 9 Bankruptcies * Towers Perrin and Watson Wyatt Combine to Form Towers Watson * BOND PRICING -- For the Week From June 22 to 26, 2009 ********* ACCURIDE CORP: Bank Debt Trades at 23% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Accuride Corp. is a borrower traded in the secondary market at 77.10 cents-on-the- dollar during the week ended June 26, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.60 percentage points from the previous week, the Journal relates. The loan matures January 6, 2012. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's. The bank debt carries S&P's CC rating. 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. ADVANCED MICRO: To Solicit Stock Options Exchange from Employees ---------------------------------------------------------------- Advanced Micro Devices, Inc., reports that on May 7, 2009, the Company's stockholders approved a one-time option exchange program pursuant to which Company employees, excluding executive officers and directors, who hold certain options to purchase shares of the Company's common stock will be given the opportunity to exchange the eligible options for replacement options. Written communication was disseminated by the Company on June 15, 2009, in connection with the proposed Option Exchange Program. Even though the requisite stockholder approval has been obtained, the Compensation Committee of the Board of Directors of the Company has the discretion to determine if and when to implement the Option Exchange Program. The Option Exchange Program has not yet commenced. The Company will file a Tender Offer Statement on Schedule TO with the Securities and Exchange Commission, upon the commencement of the Option Exchange Program. Persons who are eligible to participate in the Option Exchange Program should read the Tender Offer Statement on Schedule TO and other related materials when those materials become available because they will contain important information about the Option Exchange Program. The Company's stockholders and option holders will be able to obtain the written materials and other documents filed by the Company with the SEC free of charge from the SEC's Web site at http://www.sec.gov/ In addition, stockholders and option holders may obtain free copies of the documents filed by the Company with the SEC by directing a written request to: Advanced Micro Devices, Inc. One AMD Place Sunnyvale, California 94088 Attn: Investor Relations About Advanced Micro Headquartered in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides innovative processing solutions in the computing, graphics and consumer electronics markets. As reported by the Troubled Company Reporter on May 26, 2009, Fitch revised the senior unsecured debt rating on Advanced Micro Devices to 'CC/RR6' from 'CCC/RR6'. Fitch affirmed AMD's Issuer Default Rating at 'B-'. The Rating Outlook is Negative. As of March 28, 2009, AMD's total consolidated debt was approximately $5.6 billion. The senior unsecured debt includes these rated notes -- $1.5 billion of 5.75% senior notes due 2012; approximately $2.0 billion of 6% senior notes due 2015; and $390 million of 7.75% senior notes due 2012. The TCR said on April 24, 2009, that Standard & Poor's Ratings Services removed its ratings on Advanced Micro Devices from CreditWatch and lowered its corporate credit and senior secured ratings on the company to 'CCC+' from 'B'. S&P also revised the recovery rating on the senior unsecured notes '4' from '3'. The '4' recovery rating reflects average (30%-50%) recovery in the event of a payment default. The ratings were placed on CreditWatch on April 8, 2009. The outlook is negative. "The rating action reflects our view of the risk that current liquidity, at both AMD as a stand-alone entity and the consolidated group, may be insufficient to adequately fund expected near-term operating losses and debt amortization requirements," said Standard & Poor's credit analyst Lucy Patricola, "even giving consideration for future capital investments by Advanced Technology Investment Corp." The financial support provided by the company's new partner, ATIC (owned by the government of Abu Dhabi) only partly offsets this factor. ALSET OWNERS: Wants Schedules Filing Extended Until July 31 ----------------------------------------------------------- Alset Owners LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend until July 31, 2009, the time to file their schedules of assets and liabilities and statements of financial affairs. Alset Owners LLC is a franchisee of Rally's and Checkers' Restaurants. The Company and its affiliates filed for Chapter 11 on June 5, 2009 (Bankr. D. Del. Lead Case No. 09-11960). The Company, in its petition, listed assets of $19.7 million and debt of $17.4 million. Bonnie Glantz Fatell, Esq., at Blank Rome LLP, represents the Debtor. AMCORE FINANCIAL: Consent Order Cues Default Under JPMorgan Loan ---------------------------------------------------------------- AMCORE Financial, Inc., holding company of AMCORE Bank, have entered into agreements with regulators designed to strengthen and improve the Bank's financial condition and operations. Specifically, the holding company has entered into a Written Agreement with the Federal Reserve Bank of Chicago and the Bank has agreed to the issuance of a Consent Order with the Office of the Comptroller of the Currency. The agreement and order are the result of ongoing discussions between regulators and AMCORE's management team. In general, the agreement and order contain requirements to develop plans to raise capital and to revise and maintain a liquidity risk management program. As a result of the agreement and order, AMCORE Financial, Inc., the parent company, is in default under its credit agreement with JPMorgan Chase Bank, N.A., related to a $20 million credit facility. JPMorgan has advised the Company that it does not expect to pursue any remedies at this time. Both parties are working cooperatively. "The AMCORE management team is taking appropriate actions that address today's economic challenges," said William R. McManaman, Chairman and CEO of AMCORE. "Over the last several quarters, we have taken steps to reduce operating expenses, rebuild the credit management practices, strengthen the lending function and reduce our concentration in construction and development loans. The regulatory agreement and order announced today support the continued execution of our strategy and establish a framework against which we will work to make further improvements. From an operational perspective, we believe growth of non-performing loans this quarter has decreased from recent quarters and we expect a significantly lower provision for loan loss reserves in the second quarter." AMCORE's ability to serve its customers will not be impacted by these actions and customer deposits remain fully insured to the highest limits set by the FDIC. Management will continue to coordinate with their primary regulator and work to achieve the designated capital ratios and maintain a comprehensive liquidity risk management program. Mr. McManaman said, "We believe the regulators have seen the considerable progress that management has achieved in addressing the problems it faces and remain supportive of our continued efforts. We are committed to delivering the highest quality service to our customers and leveraging our expertise across our organization. We have been steadfastly doing so since 1910." AMCORE Financial, Inc. -- http://www.AMCORE.com/-- is headquartered in Northern Illinois and has banking assets of $5.3 billion with 74 locations in Illinois and Wisconsin. AMCORE provides a full range of consumer and commercial banking services, a variety of mortgage lending products and wealth management services including trust, brokerage, private banking, financial planning, investment management, insurance and comprehensive retirement plan services. AMCORE common stock is listed on The NASDAQ Stock Market under the symbol "AMFI." AMERICAN COMMERCIAL: S&P Assigns 'B' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said it has assigned its 'B' corporate credit rating to American Commercial Lines Inc. The outlook is negative. At the same time, S&P assigned a 'B+' rating to Commercial Barge Line Co.'s proposed $200 million senior secured second-lien notes, one notch above the corporate credit rating on American Commercial Lines (guarantor), and a '2' recovery rating, indicating S&P's expectation that lenders will receive substantial (70% to 90%) recovery in the event of a payment default. As of March 31, 2009, ACL had about $576 million of lease-adjusted debt. "The ratings on Jeffersonville, Ind.-based ACL reflect its highly leveraged financial risk profile and participation in the highly competitive and capital-intensive barge shipping industry," said Standard & Poor's credit analyst Funmi Afonja. The ratings also reflect ACL's exposure to various demand swings caused by economic changes, seasonally fluctuating export volumes, and vulnerability to weather-related disruptions to operations. Positive credit factors include the company's substantial market position in the U.S. domestic inland barge dry cargo industry, with some diversification from its liquid barge transportation and manufacturing segments, and competitive barriers to entry under the Jones Act. The Jones Act requires that shipments between U.S. ports be carried on U.S.-built vessels that are registered in the U.S. and crewed by U.S. citizens. These requirements prevent direct competition from foreign-flagged vessels. ACL operates a fleet of Jones Act-qualified vessels. ACL provides barge transportation primarily for dry cargo (including steel, grain, cement, fertilizer, coal, and various bulk commodity products) and liquid cargo on the U.S. inland waterways. Dry cargo accounts for about 71% of barge transportation revenues, and liquid cargo accounts for the remaining 29%. ACL is the second-largest independent dry barge company and the second-largest liquid barge company in the U.S., and it operates 12.5% and 13.1% of the total U.S. inland dry and liquid tank barges, respectively. The company also provides repair and terminal services and manufactures barges through its Jeffboat subsidiary, which accounts for about 21% of total company revenues. ACL operates a fleet of 2,586 barges, the majority of which the company owns, as well as 149 towboats, most of which it also owns. ACL emerged from bankruptcy on Jan. 11, 2005. The company had entered Chapter 11 in January 2003 because of weak operating performance during a period of slow economic growth, high debt, and severely constrained liquidity. In 2007, ACL adopted a more aggressive financial policy, characterized by share repurchases and several modest acquisitions, despite reduced earnings. That year, the company repurchased $300 million of its shares, about 20% of the previously outstanding shares, and made three small acquisitions for $42 million. In 2008, ACL acquired the remaining 70% ownership stake in one of its investments for approximately $8.5 million. The financing of ACL's share repurchases and acquisitions contributed to increased debt leverage and weakened credit measures. The company has about $50 million remaining under its current share-repurchase program. High fuel prices (despite a fuel surcharge program) have affected the transportation segment's operating performance. The manufacturing segment's (Jeffboat) results have been constrained by low-margin legacy contracts, although recent contracts have been more lucrative, with built-in labor and steel cost pass- throughs. The legacy contracts expire over the next year, and S&P expects this segment to show some improvement in the long term. S&P believes earnings could come under increasing pressure in the next year and that adjusted debt levels will fluctuate over time, depending on the timing of investments in the fleet. Liquidity is adequate. Pro forma for the proposed refinancing, ACL will have about $3.0 million in cash and $96.9 million available under its $350 million revolving facility, after taking into consideration about $3.4 million in outstanding letters of credit. The new revolving facility has a $100 million accordion feature and expires in 2013. Pro forma for the proposed refinancing, ACL will have no debt maturities for the next few years. The company has significant upcoming capital-spending needs to replace its aging fleet. S&P expects operating cash flow (about $136 million in fiscal 2008) and availability under bank borrowing facilities to be sufficient to meet operating, capital expenditure, and debt-service requirements for the next year. The negative outlook reflects S&P's expectation that earnings and cash flow could come under increasing pressure because of a prolonged U.S. recession and weak global economic outlook. S&P would likely lower the ratings if economic pressures were to cause liquidity constraints or cause debt to EBITDA to move above 4.5x on a sustained basis. S&P could revise the outlook to stable if economic recovery later this year and in early 2010 permit materially improved earnings and cash flow generation. AMERICAN INT'L: Obama Considered Bankruptcy Among Options --------------------------------------------------------- Christopher Anstey at Bloomberg News reports that the Obama administration considered a range of options, which included a bankruptcy filing, for American International Group Inc. after taking office, before opting to maintain the current rescue plan. According to the report, citing an e-mail between employees at the Treasury and the Federal Reserve Bank of New York, officials scheduled a Jan. 30 discussion on the idea of an AIG bankruptcy filing. "Earlier this year, as a matter of prudent planning, all contingencies and their potential outcomes, including those on the downside, were analyzed," Andrew Williams, a Treasury spokesman in Washington, said in an e-mailed statement to Bloomberg. "That was the responsible course of action." Based in New York, American International Group, Inc., 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. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets. At March 31, 2009, AIG had $819.75 billion in total assets and $765.53 billion in total liabilities. At September 30, 2008, AIG had $1.022 trillion in total assets and $950.9 billion in total debts. 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. AMR CORP: American Bank Debt Trades at 8% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which AMR Corporation's American Airlines' unit is a borrower traded in the secondary market at 92.05 cents-on-the-dollar during the week ended June 26, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.00 percentage point from the previous week, the Journal relates. The loan matures December 17, 2010. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B2 rating and S&P's B+ rating. About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. At March 31, 2009, AMR had $24,518,000,000 in total assets; $8,908,000,000 in current liabilities, $8,314,000,000 in long-term debt, less current maturities, $528,000,000 in obligations under capital leases, less current obligations, $6,739,000,000 in pension and postretirement benefits, and $3,138,000,000 in other liabilities, deferred gains and deferred credits; resulting in $3,109,000,000 in stockholders' deficit. AMR CORP: Citi, JPMorgan Waive EBITDAR Covenant for Q2 ------------------------------------------------------ American Airlines, Inc., as the borrower, and AMR Corporation as guarantor, entered into an amendment dated June 26, 2009, to the Amended and Restated Credit Agreement, dated March 27, 2006, with Citicorp USA, Inc., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, and a syndicate of lenders arranged by Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint book-running managers. Pursuant to the Amendment, the lenders irrevocably waived AMR's compliance with the EBITDAR Covenant for the period ending on June 30, 2009, and agreed to changes to the EBITDAR Covenant. The remaining loan facility under the Credit Agreement consists of a fully drawn $433 million secured bank term loan facility with a final maturity on December 17, 2010. The Credit Agreement contains a covenant requiring AMR to maintain, for specified periods, a minimum ratio of cash flow -- defined as consolidated net income, before dividends, interest expense (less capitalized interest), income taxes, depreciation and amortization and rentals, adjusted for certain gains or losses and non-cash items -- to fixed charges -- comprising interest expense (less capitalized interest) and rentals. Prior to the amendment of the Credit Agreement, the minimum ratios for the periods ending as of specified dates were: Period Minimum Ratio ------------------------------ ------------- Quarter ending June 30, 2009 0.90:1.00 Two quarters ending September 30, 2009 0.95:1.00 Three quarters ending December 31, 2009 1.00:1.00 Four quarters ending March 31, 2010 1.05:1.00 Four quarters ending June 30, 2010 1.10:1.00 Four quarters ending September 30, 2010 1.15:1.00 Pursuant to the Amendment, the EBITDAR Covenant was amended to provide that thereafter, AMR will be required to maintain, for each period, a ratio of cash flow to fixed charges of not less than the amount specified for that period: Period Minimum Ratio ------------------------------ ------------- Quarter ending September 30, 2009 0.95:1.00 Two quarters ending December 31, 2009 0.95:1.00 Three quarters ending March 31, 2010 0.95:1.00 Four quarters ending June 30, 2010 1.00:1.00 Four quarters ending September 30, 2010 1.05:1.00 Prior to the Amendment, advances under the Credit Agreement bore interest at 2.00% per annum over LIBOR, in the case of "Eurodollar Rate Advances" and 1.00% over the "Base Rate", in the case of "Base Rate Advances". Pursuant to the Amendment, these margins were increased to 4.00% per annum in the case of LIBOR Advances, and 3.00% in the case of Base Rate Advances. In addition, the Amendment provides that the minimum rate of LIBOR for purposes of determining the interest rate on Eurodollar Rate Advances will be 2.50% per annum and that the minimum Base Rate for purposes of determining the interest rate on Base Rate Advances will be 3.50% per annum (the Credit Agreement did not previously provide for fixed minimums of such interest rates). American will pay certain fees to the lenders who consented to the Amendment, and certain fees and expenses of the administrative agent and the joint lead arrangers, as provided in Section 3(v) of the Amendment. American and AMR have a number of other commercial relationships with the lenders and other parties to the Credit Agreement. From time to time, several of the lenders and parties or their affiliates perform investment banking and advisory services for, and furnish general financing and banking services to, American, AMR and their affiliates. A full-text copy of Amendment No. 3 Dated as of June 26, 2009 to Amended and Restated Credit Agreement Dated March 27, 2006, is available at no charge at http://ResearchArchives.com/t/s?3e39 About AMR Corporation Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. At March 31, 2009, AMR had $24,518,000,000 in total assets; $8,908,000,000 in current liabilities, $8,314,000,000 in long-term debt, less current maturities, $528,000,000 in obligations under capital leases, less current obligations, $6,739,000,000 in pension and postretirement benefits, and $3,138,000,000 in other liabilities, deferred gains and deferred credits; resulting in $3,109,000,000 in stockholders' deficit. ANGIOTECH PHARMACEUTICALS: S&P Puts 'CC' Rating on Positive Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'CC' long-term corporate credit rating, on Vancouver-based Angiotech Pharmaceuticals Inc. on CreditWatch with positive implications. The bank loan recovery ratings on the company's senior unsecured and subordinated debt are unchanged. "The CreditWatch placement reflects S&P's view that Angiotech's liquidity position has improved sufficiently to enable the company to continue operations in the near term," said Standard & Poor's credit analyst Lori Harris. Angtiotech obtained new credit facilities in March in the amount of $32.5 million due 2013. In addition, the company received $25 million in March as consideration for the Amended and Restated Distribution and License Agreement with Baxter International Inc. (A+/Positive/A-1). As a result, Angiotech had $66 million in cash/short-term investments and no drawings under the revolving credit facility at March 31, 2009. Still, despite management's efforts to cut costs, the company remained cash flow negative for the 12 months ended March 31. Standard & Poor's will likely keep the ratings on Angiotech on CreditWatch until S&P meet with management and obtain better clarity regarding the company's expectations for operating performance and financial flexibility in 2009. APPLIED SOLAR: Bankruptcy Still Likely; Quercus Note Due June 30 ---------------------------------------------------------------- Applied Solar, Inc., says its previously-disclosed intention to file for reorganization and protection from creditors pursuant to Chapter 11 of the U.S. Bankruptcy Code has not changed. On June 11, 2009, Applied Solar entered into an amendment to a definitive loan and security agreement with The Quercus Trust dated May 18, 2009, pursuant to which Applied Solar increased the total principal amount of the loan provided by the Loan Agreement in the amount of $85,000, and delivered an additional secured promissory note in the principal amount of $85,000. The Company received additional cash loan proceeds of $75,000 (net of a $10,000 amendment fee). The Amendment also extended the maturity date on the notes issued pursuant to the Loan Agreement to June 30, 2009. In connection with the Amendment, the Company entered into a Forbearance Agreement dated as of June 11, 2009, with The Quercus Trust pursuant to which Quercus agreed to forbear from exercising its rights and remedies against the Company in respect of specified defaults identified in the parties' Loan and Security Agreement dated May 18, 2009; the Loan and Security Agreement dated April 29, 2008; and the Series B Convertible Note dated September 19, 2007. The forbearance period extends through July 1, 2009, after which period, Quercus's rights under the Specified Loan Agreements would be reinstated and, unless additional forbearance was received, Quercus would have the right to exercise all of its rights in respect of the specified defaults under the Specified Loan Agreements. The Forbearance Agreement provides for the payment to Quercus of an amendment fee of $10,000, which is intended to compensate it for the costs and expenses incurred in the preparation of the Forbearance Agreement. As reported by the Troubled Company Reporter, Applied Solar on May 18, 2009, entered into a definitive loan and security agreement with Quercus pursuant to which the Company delivered a secured promissory note in the original principal amount of $698,000 and received loan proceeds of $698,000. The Note bears interest at a rate equal to 10% per annum. Payment of the principal was due June 15, 2009. As a condition of the financing, the Loan Agreement required that the Company file for bankruptcy by June 17, 2009. The Company also engaged in discussions with potential financing sources, including The Quercus Trust, concerning the extension of debtor-in-possession or "DIP" financing to support the Company's operations during its reorganization. Applied Solar to Restate Financial Reports In a separate filing, Applied Solar said based on its review of accounting treatment for certain restricted stock and stock option modification transactions recorded during the quarter ended November 30, 2008, the Company determined that the transactions were incorrectly accounted for under SFAS 123R "Share-Base Payment." Under the treatment prescribed in SFAS 123R, the Company understated its non-cash stock compensation recorded in Selling, General and Administrative by $10.7 million in its 2nd quarter of fiscal year 2009 financial statements filed in the Form 10-Q for the three and six months ended November 30, 2008. Until the errors in the consolidated financial statements for the three and six months ended November 30, 2008, are corrected through an amended filing, such financial statements should not be relied upon. Authorized officers of the Company discussed the matters with the Company's independent accountant. About Applied Solar Applied Solar, Inc., a Nevada Corporation, is a "next-generation" solar energy company. The Company develops, commercializes and licenses clean energy solutions, innovative solar products and energy management applications. Effective January 16, 2009, Open Energy Corporation changed its name to Applied Solar. Shares of the Company's common stock currently trade on the OTC Bulletin Board under the symbol "APSO.OB". As of February 28, 2009, Applied Solar had $17.5 million in total assets and $18.9 million in total liabilities, resulting in $1.4 million in stockholders' deficit. The Company posted a net loss of $4.3 million for the three months ended February 28, 2009. ASARCO LLC: Court Approves $1,675,000 Idaho Settlement ------------------------------------------------------ Judge Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas has approved ASARCO LLC's compromise and settlements with the state of Idaho, including the Idaho Department of Lands and the Idaho Department of Environmental Quality, and the United States of America regarding the Triumph Mine Tailings Piles Site located in and around the town of Triumph, in Blaine County, Idaho. He also authorized ASARCO to enter into and implement the settlement agreements. Federal Mining and Smelting Company, which merged with ASARCO Incorporated in 1953, owned and worked the mines at the Site from 1917 until 1923. ASARCO no longer operates any properties in the Site area. IDL and the United States own portions of the Site. ASARCO, the State, and the IDL entered into a Consent Order for Remedial Design/Remedial Action at the Triumph Mine Tailings Piles Site, effective August 12, 1999, which required ASARCO and IDL to finance and perform clean-up actions and pay governmental oversight costs regarding the Site. ASARCO and the IDL entered into the PRP Agreement for the Triumph Site on June 24, 1999, which required ASARCO and IDL to work together to respond efficiently to any demands and claims that may be asserted by the United States or the State in connection with the Site. The State on behalf of itself, the IDL and IDEQ have filed Claim Nos. 10847 and 11053 in the Debtors' bankruptcy cases, setting forth claims against ASARCO based on the Consent Order. ASARCO, the State, and the IDL brought an action in 2001 in the U.S. District Court for the District of Idaho against the United States and the U.S. Department of the Interior, in which the Plaintiffs sought remedies under the Comprehensive Environmental Response, Compensation, and Liability Act. ASARCO and the State, including the IDL and the IDEQ, and the United States participated in extensive negotiations. As a result, the Parties were able to reach an agreement resolving their disputes as provided in two settlement agreements. ASARCO, the State, including the IDL and the IDEQ, and the United States are parties to the Settlement Agreement, resolving the State's claims in the ASARCO Bankruptcy Case. ASARCO, the State, including the IDL, and the United States are also parties to another Settlement Agreement, resolving the Plaintiffs' claims against the United States and the Department of the Interior in the Idaho District Court Action. The key terms of the Bankruptcy Settlement Agreement are: (a) In settlement and full satisfaction of all the claims and causes of action of the State against ASARCO in connection with the Site: * the State on behalf of IDEQ will have an allowed general unsecured claim for $1,675,000; and * ASARCO will convey by quit claim deed to the IDEQ the ASARCO-owned tract of land situated in Blaine County, Idaho and described as "TOWNSHIP 4 NORTH, RANGE 18 EAST, BOISE MERIDIAN, BLAINE COUNTY, IDAHO. Section 25: Lot 6"; (b) The United States, on behalf of the Environmental Protection Agency, agrees that upon confirmation of a plan of reorganization in the ASARCO Bankruptcy Case, all obligations or liabilities under Sections 106 or 107 of CERCLA, or Section 7003 of the Resource Conservation and Recovery Act, related to the Site will be discharged and the United States, on behalf of EPA, agrees not to assert a claim in the ASARCO Bankruptcy Case for those obligations or liabilities, except as provided in the Bankruptcy Settlement Agreement; and (c) ASARCO agrees to approve the Idaho District Court Settlement Agreement, and further agrees that the IDL will retain all proceeds from the Idaho Court Settlement Agreement. The key terms of the Idaho District Court Settlement Agreement are: (a) In settlement and final resolution of all claims asserted in connection with the Site, the United States will pay $1,000,000 to the IDL; and (b) Upon the approval and entry of the Settlement Agreements by the District Court and the Bankruptcy Court and the approval of the Bankruptcy Settlement Agreement by the Bankruptcy Court, the Settlement Agreement will constitute a final judgment among the Parties. 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: Parent Appeals Order on Environmental Settlement ------------------------------------------------------------ Asarco Incorporated notified the U.S. Bankruptcy Court for the Southern District of Texas that it would take an appeal of Judge Richard Schmidt's order entered on June 5, 2009, approving the settlement agreement and compromise of certain environmental claims filed against the Debtors' bankruptcy estates. The June 5 global settlement order disposed of the Debtors' single motion, which sought approval of all of the Debtors' proposed settlements of environmental claims. As referenced in the Global Order, the Bankruptcy Court issued a single Findings of Fact and Conclusions of Law for all of the proposed settlements. The Parent notes that the Findings and Conclusions are within the scope of their appeal. In addition to the Global Order, the Bankruptcy Court also issued five separate orders approving environmental settlements on an individual basis. The Subsidiary Orders fall within the scope of the Global Order because the Global Order grants the Debtors' single motion seeking approval of all settlements and incorporates the Findings and Conclusions relevant to approval of each of the settlement agreements. Hence, the Parent's Notice of Appeal from the Global Order satisfies the requirements of Rule 8001 of the Federal Rules of Bankruptcy Procedure as to the substance of its Notice of Appeal and permits the Parent to challenge any and all of the Subsidiary Orders as part of the appeal, relates Gregory Evans, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California. Because so many different states and governmental entities are affected by the Global Order, the Parent seeks to clarify, rather than upon briefing, precisely what aspects of the Global Order and related Subsidiary Orders will be part of its appeal. Accordingly, the Parent sought and obtained from the Bankruptcy Court order (i) and order extending the notice time and (ii) permission to file a supplemental notice of appeal, which specifies that the Parent is appealing four of the Subsidiary Orders already encompassed within the Global Order. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). ASARCO LLC filed a plan of reorganization on July 31, 2008, premised on the sale of the Debtors' assets to Sterlite USA for $2.6 billion. By October 2008, ASARCO LLC informed the Court that Sterlite refused to close the proposed sale and thus, the Original Plan could not be confirmed. The parties has since renewed their purchase and sale agreement and ASARCO LLC has obtained Court approval of a settlement and release contained in the new PSA for the sale of the ASARCO assets for $1.1 billion in cash and a $600 million note. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted its own plan which allows it to keep its equity interest in ASARCO LLC by offering full payment to ASARCO's creditors. AMC offered provide up to $2.7 billion in cash and a $440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Taps URS Corp. to Clean Up Helena Smelter Site ---------------------------------------------------------- ASARCO LLC sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Texas to enter into a contract with URS Corporation/Cleveland Wrecking Co. for the 2009 Cleaning and Demolition Project of ASARCO's lead smelter plant in East Helena, Montana. ASARCO has operated the plant since 1888, and continues to own it. Prior to its bankruptcy filing, ASARCO entered into a Consent Decree with the United States Environmental Protection Agency and an Order on Consent with the Montana Department of Environmental Quality, which govern, among other things, the process by which materials are to be removed, stored, and properly disposed or recycled from certain process units located at the plant. Over the last five years, ASARCO has achieved substantial success in accomplishing those goals, but not all of the tasks are complete. The Cleaning and Demolition Project will take place at the East Helena Plant pursuant to a certain order on consent workplan approved by MDEQ. ASARCO, however, lacks the manpower and other resources to undertake the project itself and thus has concluded that the only viable method for completing the project was to hire a contractor, relates Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas. ASARCO has determined that URS is the best choice among the bidders for the project, Mr. Kinzie tells the Court. He adds that the EPA and MDEQ do not object to ASARCO's selection of URS as contractor. To get the work underway as quickly as possible, ASARCO therefore seeks the Court's authority to enter into a contract with URS for the performance of the Project, pursuant to which contract URS will perform the work for $1,858,580. ASARCO also seeks authority to order extra work or initiate changes in the contemplated work by altering, adding to, or deducting from the work, in accordance with the workplan approved by MDEQ and as set forth in the Montana Custodial Trust Settlement Agreement, without the need of additional Court order. Pursuant to the Debtors' proposed plan of reorganization, the East Helena property is scheduled to be transferred to the Montana Custodial Trust. Consequently, the parties' agreement permits assignment of the contract to the Custodial Trustee. Moreover, amounts paid by ASARCO to URS will be credited as provided in the Montana Custodial Trust Settlement Agreement towards ASARCO's obligations to the Montana Custodial Trust. 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: $5MM JPMorgan L/C Facility Extended to June 2010 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas authorized ASARCO LLC to amend and extend its $5 million letter of credit facility with JPMorgan Chase Bank, N.A., and to pay JPMorgan Chase a $5,000 up-front deposit for reasonable fees and expenses for due diligence and documentation. The outstanding balance under the existing Credit Facility is $920,493, as of June 15, 2009. ASARCO and JPMorgan Chase negotiated the terms of an amendment to the Credit Facility. The amendment provides that: -- The maturity date of the Credit Facility will be extended to June 25, 2010; -- Each letter of credit issued under the Amended Credit Facility and all associated fees and expenses, and all interests on any unreimbursed draws will be secured by cash collateral, to be provided in advance of the issuance of an LOC, in the amount of 110% of the face amount of the LOC; -- A commitment fee will be paid equal to 0.25% per annum on the Commitment, payable at closing to Chase; and -- A $5,000 deposit will be used to cover JPMorgan Chase's reasonable, documented out-of-pocket expenses, including reasonable fees, time charges and expenses of its attorneys, due diligence expenses, syndication expenses, consultants' fees and expenses, and travel expenses. The material terms of the Amended Credit Facility are described in a commitment letter and term sheet, a copy of which is available for free at: http://bankrupt.com/misc/ASARCO_Chase_LOC_061509.pdf Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, tells the Court that after extensive negotiations with JPMorgan Chase, ASARCO was able to obtain the Amended Credit Facility on terms more favorable than the original Credit Facility. He elaborates that JPMorgan Chase has reduced by 0.25% its Commitment Fee and reduced its Letter of Credit fees from 1.5% to 1.125% per annum. Accordingly, ASARCO asks Judge Schmidt to grants its request and allow it to enter into the Amended Credit Facility and incur postpetition secured indebtedness from JPMorgan Chase pursuant to the Commitment Letter and Term Sheet. ASARCO also asks the Court to allow it to execute appropriate documentation memorializing the Amended Credit Facility, including letter of credit agreements, security documents and any other legal documents. 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: Seeks to Expand Barclays Role in Assets Sale -------------------------------------------------------- ASARCO LLC seeks permission from the U.S. Bankruptcy Court for the Southern District of Texas to expand, effective as of June 1, 2009, Barclays Capital Inc.'s role as its financial advisor and investment banker in connection with the auction and potential sale of all or a portion of the assets granted to the Debtors in connection with the final judgment in the adversary complaint commenced by ASARCO against Americas Mining Corporation on a transfer dispute of certain stocks of Southern Peru Copper Company, now known as Southern Copper Corporation, to AMC, entered on April 14, 2009, by the U.S. District Court for the Southern District of Texas, Brownsville Division. In a separate filing, the Debtors inform the Court that they may call on these individuals as witnesses during the hearing of the application: -- George M. Mack, managing director at Barclays Capital -- Joseph F. Lapinsky, chief executive officer and president of ASARCO LLC -- Any witness called or designated by any other party -- Any witness necessary to rebut the testimony of any witness called or designated by any other party, or any evidence presented or designated by any other party For several weeks, ASARCO and its advisors have discussed and evaluated various options for monetizing the SCC Judgment, Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, tells the Court. He notes that most of the Debtors' creditors, many of whom have not been paid on account of their claims for more than six years, desire more cash and more certainty of cash payments on the effective date of a plan of reorganization. Pursuant to the parties' engagement letter, Barclays Capital has recommended a two-step, stalking-horse auction process. The auction process is intended to meet the Debtors' objectives by potentially monetizing some or all of the SCC Judgment prior to the Plan Effective Date, and spreading, or eliminating if the SCC Judgment is sold as a whole, the inherent delay and appellate risk among creditors and third-party strategic or financial investors, Mr. Kinzie says. The auction of the SCC Judgment will also facilitate a successful reorganization of ASARCO and benefit the bankruptcy estates to the extent that the outcome of the auction process may assist the Court in the valuation of the judgment for confirmation purposes. If sold as a whole, the SCC Judgment will be assigned to the purchasers and the proceeds of the sale will be distributed to creditors in accordance with the Debtors' Plan. In connection with the SCC Sale Process, Barclays Capital will: (a) assist ASARCO in analyzing and evaluating various strategic and financial alternatives available with regard to the SCC Judgment; (b) assist ASARCO in connection with a potential sale of the SCC Judgment; (c) assist in coordinating potential investors' or purchasers' due diligence efforts, including creating and maintaining a data room; (d) assist in evaluating proposals received from potential purchasers of the SCC Judgment; (e) assist ASARCO in negotiations with and related strategy concerning potential purchasers of the SCC Judgment; (f) assist ASARCO in developing bidding procedures for the sale of the SCC Judgment, and assist ASARCO in obtaining the Court's approval of the procedures; (g) conduct any auction, as needed, as part of the SCC Sale Process; (h) participate in hearings before the Court with respect to the matters concerning the SCC Sale Process upon which Barclays Capital has provided advice; and (i) provide expert witness testimony concerning the SCC Sale Process. Barclays Capital's Mark Shapiro, Gil Sanborn, Gary Matt and George Mack will be leading the team of professionals working on the contemplated services. As set forth in the Engagement Letter, Barclays Capital will be paid: -- an initial retainer fee of $1,000,000 payable in cash as soon as possible following the Court's approval of the application. A monthly retainer fee of $150,000 will be payable on the first business day of each calendar month thereafter beginning July 1, 2009; -- if, during the term of the engagement or for a period of 12 months following the effective date of the firm's termination by ASARCO, other than for cause, a definitive agreement to effect a sale of the SCC Judgment is entered into by ASARCO and the sale is consummated, Barclays Capital would be paid a successful sale fee equal to the lesser of: (i) $6 million; and (ii) a successful bid fee that would have been payable pursuant to the Engagement Letter; -- if, during the term of the engagement, one or more bona fide offers are submitted to ASARCO prior to the effective date of a Chapter 11 plan, but ASARCO does not enter into a definitive sale agreement with respect to any of the Bona Fide Offers, Barclays Capital will be paid a successful bid fee equal to 2% of the aggregate amount of cash consideration proposed in each of the Bona Fide Offers. In no event will the Successful Bid Fee exceed $6,000,000; -- in no event will both the Successful Sale Fee and the Successful Bid Fee be paid simultaneously; and -- ASARCO will reimburse Barclays Capital for its reasonable and duly documented out-of-pocket expenses incurred in connection with the services Barclays Capital performs under the Engagement Letter, regardless of whether a sale of the SCC Judgment is consummated. George M. Mack, a managing director at Barclays Capital, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. In a supplemental affidavit submitted to the Court in connection with the application, Mr. Mack reveals that: -- Barclays Capital has recently been engaged by the Pension Benefit Guaranty Corporation to provide investment banking advisory services regarding matters unrelated to the Debtors' bankruptcy cases. The PBGC is a member of ASARCO's Official Committee of Unsecured Creditors; -- In the summer of 2008, Oscar Pate, son of Judge Robert C. Pate, the Future Claims Representative appointed in the cases, was hired by Lehman Brothers, Inc., as an analyst in its Investment Banking Division. In September 2008, as part of Barclays Capital's acquisition of Lehman Brothers, Inc., Oscar became an employee of Barclays Capital. Oscar works in Barclays Capital's Houston office within the Natural Resources group, and has no involvement in Barclays Capital's activities in the Debtors' cases; and -- Barclays Capital acted as Coordinating Bookrunner for a $7.5 billion credit facility for Glencore International AG, the parent company of Glencore Ltd., a bidder in the 2008 auction which most recently submitted a non-binding indicative offer for ASARCO's assets on April 21, 2009. The Barclays Capital team members who worked on the transaction are based out of the firm's European offices and have no involvement in Barclays Capital's activities in the cases. AMC Objects Americas Mining Corporation contends that the request to expand the services of Barclays Capital does not meet the stringent requirements of Section 328(a) of the Bankruptcy Code to allow Barclays Capital's compensation to be different from what previously approved by the Court. The application thinly veils Barclays Capital's desire to renegotiate the economic terms of its engagement with ASARCO, AMC alleges. Section 328 only permits an economic modification, like the one proposed by the application, at the conclusion of the engagement and only if the original compensation is shown to be improvident in light of developments not capable of being anticipated at the time its terms were approved, Charles A. Beckham, Jr., Esq., at Haynes and Boone, LLP, in Houston, Texas, points out. The application should be denied because, in both purpose and execution, it is rife with problems, Mr. Beckham argues. He adds that the proposed terms and conditions of the application are excessive and unreasonable in light of the services offered and those already being provided by Barclays Capital. 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) AVIZA TECHNOLOGY: Hires Omni Management as Claims Agent ------------------------------------------------------- Aviza Technology, Inc., and its affiliates seek permission from the U.S. Bankruptcy Court for the Northern District of California, San Jose Division, to hire Omni Management Group, LLC, as noticing and claims agent. There are 7,000 creditors and parties-in-interest in the Debtors' cases. Given the large number of creditors, the Debtors identified that the Court requires a notice and claims' agent. Brian Osborne, a member at Omni, assures the Court that Omni is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and holds no interest adverse to the Debtors and their estate for the matters for which Omni is to be employed. Headquartered in Scotts Valley, California, Aviza Technology Inc. (NASDAQ GM:AVZA) -- http://www.aviza.com/-- designs, manufactures, sells and supports semiconductor capital equipment and process technologies for the global semiconductor industry and related markets. The Company's systems are used in a variety of segments of the semiconductor market for advanced silicon for memory devices, 3-D packaging and power integrated circuits for communications. The Company's manufacturing, R&D, sales and customer support facilities are located in the United Kingdom, Germany, France, Taiwan, China, Japan, Korea, Singapore and Malaysia. The Company and two of its subsidiaries, Aviza Inc. and Trikon Technologies Inc., filed for Chapter 11 bankruptcy protection on June 9, 2009 (Bankr. N.D. Calif. Case No. 09-54511). Judge Roger L. Efremsky presides over the Chapter 11 case. Attorneys at the law offices of Murray and Murray represent the Debtors. At the time of the filing, Aviza Technology reported assets and debts ranging from $10 million to $50 million. AVIZA TECHNOLOGY: Taps Murray & Murray as Bankruptcy Counsel ------------------------------------------------------------ Aviza Technology, Inc., and its affiliates seek the consent of the U.S. Bankruptcy Court for the Northern District of California, San Jose Division, to hire Murray & Murray as general bankruptcy counsel. Murray & Murray will provide Aviza assistance in the administration of the Chapter 11 case; advise the Debtors concerning their rights and responsibilities under the Bankruptcy Code as debtors and debtors in possession; provide the Debtors with continued representation in all negotiations and proceedings involving creditors and other parties; advise the Debtors regarding sales of the Debtors' assets and procedures relating thereto; assist the Debtors in the formulation of a Chapter 11 plan of reorganization and disclosure statement, and the approval thereof; and represent the Debtors in all other legal aspects of the jointly administered Chapter 11 cases in accordance with the powers and duties established by the Bankruptcy Code. The current hourly rates of the attorneys at Murray & Murray are: Name Rate Per Hour ---- ------------- John Walshe Murray $590.00 Janice M. Murray 540.00 Craig M. Prim 510.00 Stephen T. O'Neill 470.00 Robert A. Franklin 460.00 Doris A. Kaelin 440.00 Jenny Lynn Fountain 350.00 Rachel P. Ragni 330.00 Thomas T. Hwang 310.00 Laurent Chen 280.00 Ivan C. Jen 225.00 Law Clerks/Paralegals 150.00 The Debtors have also agreed that Murray & Murray will be reimbursed for its expenses incurred in connection with the case. John Walshe Murray, Esq., a partner at the firm, says Murray & Murray is disinterested as contemplated in Section 101(14) of the Bankruptcy Code. Murray & Murray may be reached at: John Walshe Murray, Esq. Robert A. Franklin, Esq. Doris A. Kaelin, Esq. MURRAY & MURRAY, A Professional Corporation 19400 Stevens Creek Blvd., Suite 200 Cupertino, CA 95014-2548 Tel: (650) 852-9000; (408) 907-9200 Fax: (650) 852-9244 Email: jwmurray@murraylaw.com Email: rfranklin@murraylaw.com Email: dkaelin@murraylaw.com Headquartered in Scotts Valley, California, Aviza Technology Inc. (NASDAQ GM:AVZA) -- http://www.aviza.com/-- designs, manufactures, sells and supports semiconductor capital equipment and process technologies for the global semiconductor industry and related markets. The Company's systems are used in a variety of segments of the semiconductor market for advanced silicon for memory devices, 3-D packaging and power integrated circuits for communications. The Company's manufacturing, R&D, sales and customer support facilities are located in the United Kingdom, Germany, France, Taiwan, China, Japan, Korea, Singapore and Malaysia. The Company and two of its subsidiaries, Aviza Inc. and Trikon Technologies Inc., filed for Chapter 11 bankruptcy protection on June 9, 2009 (Bankr. N.D. Calif. Case No. 09-54511). Judge Roger L. Efremsky presides over the Chapter 11 case. Attorneys at the law offices of Murray and Murray represent the Debtors. At the time of the filing, Aviza Technology reported assets and debts ranging from $10 million to $50 million. AVIS BUDGET: Debt Trades at 22% Off in Secondary Market ------------------------------------------------------- Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 77.64 cents-on-the-dollar during the week ended June 26, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.23 percentage points from the previous week, the Journal relates. The loan matures April 1, 2012. The Company pays 125 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and S&P's CCC+ rating. About Avis Budget Based in Parsippany, New Jersey, Avis Budget Group, Inc., provides car and truck rentals and ancillary services to businesses and consumers in the United States and internationally. * * * As reported by the Troubled Company Reporter on April 30, 2009, Standard & Poor's Ratings Services assigned a '6' recovery rating to Avis Budget Car Rental LLC's (CCC+/Developing/--) unsecured notes, indicating expectations of negligible (0%-10%) recovery of principal in the event of a payment default. Avis Budget Car Rental LLC is a subsidiary of Avis Budget Group Inc. (CCC+/Developing/--). AVIS BUDGET: Files Annual Reports for 5 Employee Plans ------------------------------------------------------ Avis Budget Group Inc. filed with the Securities and Exchange Commission annual reports on Form 11-K for the year ended December 28, 2008, on five employee plans: 1. Avis Budget Group, Inc. Employee Savings Plan 2. Avis Voluntary Investment Savings Plan 3. AB Car Rental Services, Inc. Retirement Savings Plan For Bargaining Hourly Employees 4. Avis Voluntary Investment Savings Plan For Bargaining Hourly Employees 5. AB Car Rental Services, Inc. Retirement Savings Plan Net Assets Available For Benefits ------------ Avis Budget Group, Inc. $347,798,240 Employee Savings Plan See http://ResearchArchives.com/t/s?3e34 Avis Voluntary Investment $52,979,903 Savings Plan See http://ResearchArchives.com/t/s?3e35 AB Car Rental Services, Inc. $2,380,779 Retirement Savings Plan For Bargaining Hourly Employees http://ResearchArchives.com/t/s?3e36 Avis Voluntary Investment Savings Plan $19,293,932 For Bargaining Hourly Employees See http://ResearchArchives.com/t/s?3e37 AB Car Rental Services, Inc. $68,682,357 Retirement Savings Plan http://ResearchArchives.com/t/s?3e38 About Avis Budget Based in Parsippany, New Jersey, Avis Budget Group, Inc., provides car and truck rentals and ancillary services to businesses and consumers in the United States and internationally. * * * As reported by the Troubled Company Reporter on April 30, 2009, Standard & Poor's Ratings Services assigned a '6' recovery rating to Avis Budget Car Rental LLC's (CCC+/Developing/--) unsecured notes, indicating expectations of negligible (0%-10%) recovery of principal in the event of a payment default. Avis Budget Car Rental LLC is a subsidiary of Avis Budget Group Inc. (CCC+/Developing/--). BAKERS FOOTWEAR: Posts $2.8 Million Net Loss for 2009 Q1 -------------------------------------------------------- Bakers Footwear Group, Inc., reduced its net loss in the first quarter ended May 2, 2009, by $2.1 million to $2.8 million down from $4.9 million in the first quarter of fiscal year 2008. During the first quarter of 2009, the Company's net sales increased 3.3% compared to the first quarter of 2008, and its comparable store sales increased 4.8% The Company incurred net losses of $15.0 million and $17.7 in fiscal years 2008 and 2007, but continues to make significant progress in focusing its inventory lines and maintaining cost control. Since June 2008, the Company has achieved positive comparable store sales each month through May 2009. Its losses in the first quarter of fiscal year 2009 and in fiscal years 2008 and 2007 have had a significant negative impact on its financial position and liquidity. As of May 2, 2009, the Company had $58.9 million in total assets, $41.2 million in total current liabilities and $9.6 million in accrued rent liabilities, resulting in $8.0 million in stockholders' equity. As of May 2, 2009, the Company had negative working capital of $15.5 million and accumulated deficit of $30.8 million. In fiscal year 2008, the Company obtained net proceeds of $6.7 million from the entry into a $7.5 million three-year subordinated secured term loan and the issuance of 350,000 shares of common stock. On May 9, 2008, the Company amended the subordinated secured term loan to reduce the financial covenant for minimum adjusted EBITDA for the first quarter of fiscal year 2008 to maintain compliance as of May 2, 2008, and to defer principal payments until September 1, 2008. As consideration for the amendment, the Company issued an additional 50,000 shares of common stock. On April 9, 2009, the Company again amended the subordinated secured term loan to reduce the financial covenant for minimum adjusted EBITDA for the fourth quarter of fiscal year 2008 to maintain compliance at January 31, 2009. As consideration for the amendment, the Company paid a fee of $250,000 and issued an additional 250,000 shares of common stock. The amendment also tightened the minimum adjusted EBITDA covenants and tangible net worth covenants and reduced the capital expenditure covenants for fiscal years 2009 and 2010. On April 9, the Company also amended its revolving credit agreement, extending the expiration date to January 2011 from August 2010 and obtaining the senior lender's consent to the amendment of the subordinated secured term loan. The amendment also increased the interest rate from the bank's prime rate to prime plus 2.5%, increased the unused line fee from 0.25% to 0.5%, reduced the overall facility from $40 million to $30 million, eliminated the grace period for failing to maintain minimum availability levels, and reduced the advance rate during the fourth quarter. In connection with the amendment, the Company paid $125,000 in fees. As of June 3, 2009, the balance on the revolving line of credit was $9.5 million and the unused borrowing capacity was $900,000. The Company's business plan for the remainder of fiscal year 2009 is based on a continuation of the mid-single digit increases in comparable store sales, which began in the second quarter of fiscal year 2008 and working with vendors and landlords to arrange payment terms that are more reflective of the seasonal cash flow patterns in order to manage availability. The Company's business plan also reflects continued focus on inventory management and on timely promotional activity. The Company believes this focus on inventory should improve the overall gross margin performance compared to fiscal year 2008. The Company said it continues to face considerable liquidity constraints. Although it believes its business plan is achievable, should it not achieve the sales or gross margin levels it anticipates, not obtain payment terms from vendors and landlords more reflective of seasonal cash flow patterns, or incur significant unplanned cash outlays, it would become necessary for the Company to obtain additional sources of liquidity or make further cost cuts to fund operations. "However, there is no assurance that we would be able to obtain such financing on favorable terms, if at all, or to successfully further reduce costs in such a way that would continue to allow us to operate our business," the Company cautioned. A full-text copy of the Company's quarterly report on Form 10-Q for the period ended May 2, 2009, is available at no charge at: http://ResearchArchives.com/t/s?3e44 About Bakers Footwear Group Bakers Footwear Group, Inc., is a national, mall-based, specialty retailer of distinctive footwear and accessories targeting young women who demand quality fashion products. The Company features private label and national brand dress, casual and sport shoes, boots, sandals and accessories. As of January 31, 2009, the Company operated 239 stores, including the 21 store Wild Pair chain that targets men and women between the ages of 17 and 29 who desire edgier, fashion forward footwear. As of April 11, 2009, it operated 240 stores, including 21 Wild Pair stores. Ernst & Young LLP in St. Louis, Missouri, has expressed substantial doubt on the ability of Bakers Footwear Group to continue as a going concern. The Company's independent registered public accounting firm cited the Company's substantial losses from operations in 2008 and 2007. In addition, the Company is dependent on its various debt agreements to fund its working capital needs. E&Y said the debt agreements contain certain financial covenants with which the Company must comply, and compliance cannot be assured. BEAZER HOMES: Files 2008 Annual Report for 401(k) Plan ------------------------------------------------------ Beazer Homes USA, Inc., filed with the Securities and Exchange Commission an annual report on Form 11-K for the year ended December 31, 2008, on its Beazer Homes USA, Inc. 401(k) Plan. The Company reports that the Plan has $64,446,785 in net assets available for benefits at December 31, 2008. The Plan is a defined contribution plan established to encourage and assist employees in saving and investing payroll withholdings for the purpose of receiving retirement benefits. The Plan is a savings and investment plan covering eligible employees. The Plan is administered by a committee appointed by the Company's Board of Directors and is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. All employees who have attained 21 years of age are eligible to participate in the Plan on the first day of the month following the completion of 30 days of service. A full-text copy of the Annual Report on Form 11-K is available at no charge at http://ResearchArchives.com/t/s?3e3a Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." As reported by the Troubled Company Reporter on June 18, 2009, 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. BERNARD MADOFF: Wife Cedes $80MM Claim to Assets, Keeps $2.5MM -------------------------------------------------------------- Amir Efrati and Robert Frank at The Wall Street Journal report that Ruth Madoff, who has been under a voluntary asset freeze since December, agreed to give up her claim to more than $80 million worth of assets. According to Jane J. Kim at WSJ, Ms. Madoff will give up: -- tens of millions in cash and securities; -- her $7.5 million interest in a New York City apartment; -- a $7 million Montauk, New York, property; -- jewelry insured at more than $2.6 million; -- two fur coats valued at $48,500; -- $18,000 in linens and bedding; and -- $8,500 in silverware. Court documents say that Mrs. Madoff consented to the sale of her properties in Palm Beach, Fla., Montauk and Manhattan, as well as boats and vehicles to preserve value for the Bernard L. Madoff Investment Securities LLC fraud victims. Bernard Madoff had asked prosecutors to let his wife keep $70 million in assets held in her name, claiming that they weren't connected to the fraud, but in an agreement reached with the U.S. attorney's office last week, Ms. Madoff will keep $2.5 million in cash, WSJ states. WSJ relates that U.S. District Court Judge Denny Chin, who will sentence Mr. Madoff on June 29, has approved the agreement. According to WSJ, the settlement was finalized alongside a court order of forfeiture against Mr. Madoff in the amount of $170 billion, which represents the amount of money that prosecutors say flowed into his investment firm. WSJ reports that the settlement doesn't prevent the U.S. Securities and Exchange Commission or the Irving Picard from pursuing Mrs. Madoff's funds in the future. WSJ says that eligible victims may get payments of up to $500,000 from the Securities Investor Protection Corp., which was set up to compensate investors for theft or proven unauthorized trading in brokerage accounts. WSJ relates that of the $188.4 million that already has been approved for payout to eligible claimants, SIPC has distributed about $142 million in checks. WSJ notes that the rest of the victims' losses will be partially recouped from the assets Mr. Picard manages to gather in the liquidation process. WSJ relates that Mr. Picard already sold Mr. Madoff's market-making operation for $25.5 million, and has sued to recover more than $10 billion from investors who withdrew sums from their Madoff accounts in recent years, the biggest targets include trust funds and partnerships run by investors Jeffry Picower and Stanley Chais, who collectively withdrew $6.1 billion over and above their principal investment with the Madoff firm. WSJ reports that many former Madoff customers want more, suing Mr. Picard over the matter. WSJ relates that some of those former clients demand that their claims be based on what was shown on their November 2008 account statements, which reflected balances of almost $65 billion. About Bernard L. Madoff Investment Securities Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on December 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Madoff's fraud were allegedly at least $50 billion. Also on December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Mr. Madoff, if found guilty of all counts, would be imprisoned for 150 years, but legal experts expect the actual sentence to be much lower and would still be an effective life sentence for the 70- year-old defendant, WSJ notes. Mr. Madoff, WSJ relates, would also face millions of dollars in possible criminal fines. The report says that Mr. Madoff has been free on bail since his arrest on December 11, 2008. There was no plea agreement with Mr. Madoff in which leniency in sentencing might be recommended, the report states, citing prosecutors. BLUFFS LLC: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------ Debtor: The Bluffs, LLC 9400 Reeds Rd., Suite 100 Overland Park, KS 66207 Bankruptcy Case No.: 09-11978 Type of Business: The Debtor owns an apartment complex. Chapter 11 Petition Date: June 25, 2009 Court: District of Kansas (Wichita) Debtor's Counsel: Bruce J. Woner, Esq. Woner Glenn Reeder Girard & Riordan PA 5611 S.W. Barrington Court P.O. Box 67689 Topeka, KS 66667-0689 Tel: (785) 235-5330 bwoner@wonerglenn.com Total Assets: $60,000,000 Total Debts: $54,784,928 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dovetail Builders 2 LLC $9,400,000 301 Iowa Avenue, Suite 400 Muscantine, IA 52761 First Management Inc. $1,192,464 601 N. Iowa Lawrence, KS 66044 Alexander W. Glenn $0 David J. Christie $0 JC Investment LLC $0 John R. Pratt $0 Alan E. Meyer $0 The petition was signed by David J. Christie. BONANZA OIL: In Default Under Secured Promissory Notes ------------------------------------------------------ Bonanza Oil and Gas, Inc., reports that it has incurred significant losses and had negative cash flow from operations since its inception on August 17, 2007, and has an accumulated deficit of $7,655,060 at March 31, 2009. As of March 31, 2009, the Company had $8,949,548 in total assets and $4,483,484 in total liabilities. It posted a net loss of $592,408 for the three months ended March 31, 2009, compared to a net loss of $279,187 for the same period last year. The Company said substantial portions of its losses are attributable to non-cash writedowns of oil and gas properties, with the balance attributable to primarily personnel costs, legal and professional fees, and financing costs. The Company's operating plans require additional funds that may take the form of debt or equity financings. There can be no assurance that any additional funds will be available. According to the Company, its ability to continue as a going concern is in substantial doubt and is dependent upon achieving a profitable level of operations and obtaining additional financing. The Company has undertaken steps as part of a plan to improve operations with the goal of sustaining operations for the next 12 months and beyond. These steps include (a) raising additional capital or obtaining financing, if available, (b) increasing current production (c) continuing development drilling on proved and undeveloped properties and (d) controlling overhead and expenses. "There can be no assurance that we will successfully accomplish these steps and it is uncertain we will achieve a profitable level of operations and/or obtain additional financing. There can be no assurance that any additional financings will be available to us on satisfactory terms and conditions, if at all. In the event we are unable to continue as a going concern, we may elect or be required to seek protection from our creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence," the Company said. Default Under December 2007 Secured Promissory Note In December 2007, the Company entered into a 14% Senior Asset Backed Secured Promissory Note and Security Agreement, and a Securities Purchase Agreement, with Phoenix Capital Opportunity Fund, L.P., in principal amount of $250,000 and the issuance of 74,999 shares (on a post-split adjusted basis) of Common Stock of the Company. At March 31, 2009, the Company was in default with respect to the repayment obligation upon maturity on December 17, 2008, with respect to its December 2007 Secured Promissory Note. Pursuant to the terms of the December 2007 Secured Promissory Note, the interest rate on all amounts outstanding increased to 24% per annum, effective December 17, 2008. On February 6, 2009, the Company made a partial payment of $125,000 toward satisfaction of this obligation. As of June 10, 2009, the Company has not remitted the balance of amount due; however the lender has not, as of June 10, 2009, taken any further action with respect to the default. Although the Company is actively seeking additional financing to remedy this default, and is in constant communication with the lender, there can be no assurances that the lender will continue to delay the enforcement of its remedies under the December 2007 Secured Promissory Note. Default Under January 2008 Secured Promissory Note In January 2008, the Company entered into three 14% Senior Secured Promissory Note and Security Agreements, and Securities Purchase Agreements, with accredited investors for an aggregate principal amount of $800,000 and the issuance of 160,000 shares of the Company's Common Stock. At March 31, 2009, the Company was in default with respect to the repayment obligation upon maturity on January 31, 2009, with respect to its January 2008 Secured Promissory Notes. Pursuant to the terms of the January 2008 Secured Promissory Notes, the interest rate on all amounts outstanding increased to 24% per annum, effective January 31, 2009. In addition, if the January 2008 Secured Promissory Notes are not repaid prior to July 31, 2009, the Company is obligated to issue an additional 150,000 shares of its Common Stock as an additional interest payment. As of June 10, 2009, the Company has not cured its default; however the lenders have not, as of June 10, 2009, taken any further action with respect to the default. Although the Company is actively seeking additional financing to remedy this default, and is in constant communication with the lenders, there can be no assurances that the lenders will continue to delay the enforcement of their remedies under the January 2008 Secured Promissory Notes. Missed Payment Under May 2008 Convertible Note In May 2008, the Company entered into a Securities Purchase Agreement with an accredited investor providing for the sale by the Company of an 8% convertible note in the principal amount of $750,000 and the issuance of 375,000 shares of Common Stock of the Company, a Series A Common Stock Purchase Warrant to purchase 750,000 shares of the Company's Common Stock and a Series B Common Stock Purchase Warrant to purchase 750,000 shares of the Company's Common Stock. As of June 10, 2009, the Company had not made quarterly interest payment due on March 31, 2009, with respect to its May 2008 Convertible Note. Pursuant to the terms of the May 2008 Convertible Note, the interest rate on the past due quarterly interest payment increased to 15% per annum, effective March 31, 2009. The Company has 90 days to make the scheduled quarterly interest payment before an Event of Default should occur. Although the Company is actively seeking additional financing to remedy this default, and is in constant communication with the lender, there can be no assurances that the Company will make the scheduled quarterly interest payment within 90 days of March 31, 2009, and if not, that the lender will delay the enforcement of its remedies under the May 2008 Convertible Note. As of June 10, 2009, the Company had not repaid any of the amounts due under the August 2008 Unsecured Promissory Notes or the October 2008 Unsecured Promissory Note. Pursuant to the terms of the August 2008 Unsecured Promissory Notes and the October 2008 Unsecured Promissory Note agreements, the Company is required to issue to the holders of the August 2008 Unsecured Promissory Notes and the October 2008 Unsecured Promissory Note, a total of 137,500 warrants to purchase shares of the Company's Common Stock every 30 days that amounts remain outstanding under the August 2008 Unsecured Promissory Notes and the October 2008 Unsecured Promissory Note. Capital Expenditures and 2009 Outlook The Company presently does not have any available credit, bank financing or other external sources of liquidity. Due to its brief history and historical operating losses, its operations have not been a source of liquidity. To obtain capital, the Company said it may need to sell additional shares of common stock or borrow funds from private lenders. Bonanza Oil & Gas, Inc., is an independent energy company engaged primarily in the acquisition, development, production and the sale of crude oil, natural gas and natural gas liquids. The Company's production activities are located in the United States of America. The principal executive offices of the Company are located in Houston, Texas. BOSTON SCIENTIFIC: Jim Tobin Resigns as President & CEO ------------------------------------------------------- Boston Scientific Corporation President and Chief Executive Officer Jim Tobin will retire from the Company, and that its board of directors has appointed Ray Elliott the new President and CEO, effective July 13. "Ten years ago this month, I began my tenure as CEO of Boston Scientific, and two months from now, I will turn 65," said Mr. Tobin. "Over the course of the past decade, we have built a stronger, more diversified company that is well positioned for the future. We have achieved this due largely to the support of our employees, customers and investors, and I would like to take this opportunity to thank them. Now is an appropriate time for me to turn over the leadership of the Company to Ray Elliott, our new CEO. Ray is an outstanding choice, and he has my full and enthusiastic support. We will have a smooth transition, which will culminate with Ray taking over next month." "The board accepts Jim's decision to retire with understanding and enormous gratitude," said Pete Nicholas, Chairman of the Board of Boston Scientific. "Jim led Boston Scientific through a period of tremendous growth and diversification that transformed the Company. Thanks to his leadership and the efforts of thousands of Boston Scientific employees, our Company has strengthened its position as a worldwide leader in less-invasive medicine. More important, while Jim has been CEO, Boston Scientific has helped improve the lives of millions of patients. On behalf of the board, I would like to recognize and thank Jim for these and so many other accomplishments." Mr. Elliott, 59, has more than 35 years of experience leading health care and consumer products companies. He led the orthopedics company Zimmer Holdings Inc. for 10 years, joining the company as President and rising to become Chairman, President and CEO. Prior to joining Zimmer, he served as President and CEO of Cybex International Inc., a medical rehabilitation and cardiovascular products company. He has also served as President and Chairman of various divisions of Southam Inc., a communications group, and as Group President of the food and beverage company John Labatt Ltd. He began his career in the health care industry with American Hospital Supply Corp. -- now Baxter International Inc. -- where he served for 15 years in sales, marketing, operations, business development and general management positions, leading to his appointment as President of all the Far East divisions, based in Tokyo. He has also served on a number of boards, including AdvaMed, where he was chair of its orthopedics sector. He was a member of the Boston Scientific board of directors from 2007 until earlier this year. In addition to serving as President and CEO of Boston Scientific, he will rejoin the board. He holds a bachelor's degree from the University of Western Ontario, Canada. During Mr. Elliott's leadership of Zimmer, sales and market capitalization quadrupled. Sales increased from approximately $1 billion in 1997 to approximately $4 billion in 2007. Mr. Elliott oversaw taking Zimmer public in 2001, with an initial market capitalization of approximately $5 billion. At the time of his departure in 2007, the company's market capitalization was more than $20 billion. In 2005 he was named "Best CEO in America" for Health Care (Medical Supplies and Devices), by Institutional Investor magazine. "We are delighted that Ray will be joining us as only the third CEO of Boston Scientific," said Mr. Nicholas. "His long and proven track record in leadership positions has prepared him well for this role. Ray is an extremely capable leader with extensive experience running global health care companies. We have gotten to know Ray well as a leader and colleague in the industry, as well as from his service on our board. We are confident he offers the right combination of experience, results and talents for Boston Scientific going forward." "As chair of the search committee, I had the opportunity to review a number of strong candidates, and Ray stood out convincingly as our top choice," said Ernest Mario, Ph.D., a member of the Company's board of directors. "His experience and success leading large, complex, international companies -- coupled with his specific expertise in medical devices -- made him the clear selection to be Boston Scientific's new CEO. We are very pleased that Ray will be assuming the leadership of the Company." "It's an honor to follow Pete and Jim as the CEO of Boston Scientific, a company with great products and technologies, a rich pipeline creating substantial future growth potential, and of course, outstanding people," said Mr. Elliott. "I look forward to leading the Boston Scientific team and building on the impressive tradition of delivering innovative medical solutions to patients and physicians. I am committed, as always, to creating value for them, our employees and our shareholders." About Boston Scientific Boston Scientific -- http://www.bostonscientific.com/-- is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a broad range of interventional medical specialties. As reported by the Troubled Company Reporter on May 21, 2009, Fitch Ratings affirmed the 'BB+' issuer default rating on Boston Scientific Corp. Fitch also affirmed Boston Scientific's 'BB+' ratings on senior unsecured notes and unsecured bank credit facility. Fitch also revised the Rating Outlook to Positive from Stable. According to the TCR on March 27, 2009, Standard & Poor's Ratings Services said that it affirmed its 'BB+' ratings on Natick, Massachussetts-based Boston Scientific Corp., and revised the outlook to positive from negative. These actions reflect the Company's ongoing debt paydown over the past several years, maintenance of its leading market share in the drug eluting stent market in the face of increasing competition, and prospects for (at minimum) modest growth in cardiac rhythm management devices, given recent new product launches. The TCR reported on March 12, 2009, that Moody's revised Boston Scientific Corporation's rating outlook to stable from negative and changed its Speculative Grade Liquidity Rating to SGL-2 from SGL-3. At the same time, the Company's Corporate Family Rating was affirmed at Ba1. In addition, its senior unsecured note and senior shelf ratings were upgraded to Ba1 from Ba2 in accordance with Moody's Loss Given Default methodology because of changes to the Company's capital structure. BRITTANY PLACE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: The Brittany Place Apartments, LLC 708 N. Country Club Drive Mesa, AZ 85201 Bankruptcy Case No.: 09-14380 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Debtor's Counsel: David WM Engelman, Esq. Engelman Berger, P.C. 3636 N. Central Ave., #700 Phoenix, AZ 85012 Tel: (602) 271-9090 Fax: (602) 222-4999 Email: dwe@engelmanberger.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Michael A. Baine, manager of the Company. BRUNO'S SUPERMARKETS: Files Liquidating Plan; June 19 Hearing Set ----------------------------------------------------------------- Bruno's Supermarkets, LLC, has filed with the U.S. Bankruptcy Court for the Northern District of Alabama a disclosure statement with respect to its plan of liquidation dated June 19, 2009. The hearing to consider the "adequacy" of the disclosure statement for Debtor's plan of liquidation dated June 19, 2009, pursuant to Section 1125 of the Bankruptcy Code, is set for August 6, at 1:30 p.m. Plan Terms The Plan is a liquidating plan. Upon the Plan's effective date, substantially all of the Debtor's assets would have been sold to Southern Family Markets, LLC. The Plan provides for the liquidation of the Debtor's remaining assets and the distribution of the net proceeds by a Liquidating Trustee to the Debtor's creditors. The Plan further provides for the termination of all interests in the Debtors and the dissolution and wind up of the affairs of the Debtor. The Liquidating Trustee will distribute the net proceeds as follows: (a) first to pay the reasonable costs and expenses of the Liquidating Trustee and his professionals; and (b) second Pro Rata to the holders of allowed claims on the terms and conditions, and in the priority, set forth in the Plan. Classification of Claims The Plan places the various claims against and interests in the Debtor into 4 separate classes and provides for the treatment of each class. Class 1 -- Secured Claims Class 2 -- Convenience Class of Unsecured Claims Against Debtor Class 3 -- General Unsecured Claims Against Debtor Class 4 -- Interests Under the Plan, each holder of an allowed secured claim under Class 1, unless said holder agrees to other treatment, will receive the collateral securing their liens on, or as soon as reasonably practicable after, the Plan's Effective Date. Claims in Class 1 are unimpaired under the Plan. Each holder of a convenience claim under Class 2 will receive 25% of its allowed claim amount from available funds, to the extent funds are available, within 30 days after all allowed administrative expense claims, allowed priority tax claims, allowed PACA claims, allowed PASA claims, allowed priority non-tax claims and allowed Class 1 claims have been paid in full. Claims in Class 2 are impaired under the Plan. Each holder of an allowed general unsecured claim under Class 3 will be paid pro rata from available funds, to the extent funds are available and until said claims are paid in full, after all administrative expense claims, allowed priority tax claims, allowed PACA claims, allowed PASA claims, allowed priority non-tax claims, allowed Class 1 claims, and allowed Class 2 claims have been paid in full. Claims in Class 3 are impaired under the Plan. Interests in Debtor under Class 4 will be cancelled. Holders of Interests in Class 4 are deemed to have rejected the Plan and are not entitled to vote to accept or reject the Plan. Who are Entitled to Vote Secured claims under Class 1, being unimpaired, are conclusively presumed to have accepted the Plan. Consequently, their votes will not be solicited. The Debtor will be soliciting acceptance of the Plan only from holders of claims in Classes 2 and 3 which are "impaired" under the Plan and are entitled to accept or reject the Plan. Because holders of Interests in Class 4 will not receive any distribution or other property on account of said Interests, they are deemed to have rejected the Plan and are not entitled to vote to accept or 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' plan of liquidation dated June 19, 2009, is available at: http://bankrupt.com/misc/bruno'sDS.pdf Bruno's Supermarkets, LLC, is a privately held company headquartered in Birmingham, Alabama. Bruno's is the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. Bruno's filed for Chapter 11 relief on February 5, 2009 (Bankr. N.D. Ala. Case No. 09-00634). Burr & Forman LLP is the Debtor's lead counsel. Najjar Denaburg, P.C., is the Debtor's conflicts counsel. Greenberg Traurig, LLP, is the official committee of unsecured creditors' counsel. Alvarez & Marsal is the Debtor's restructuring advisor. When Bruno's filed for Chapter 11 protection from its creditors, it listed between $100 million and $500 million each in assets and debts. BUILDING MATERIALS: July 1 Final Hearing on $80 Million DIP Loan ---------------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing on July 1, 2009, to consider approval of Building Materials Holding Corp. and its affiliates' request to obtain $80 million in debtor-in-possession financing from Wells Fargo Bank, National Association. As reported by the Troubled Company Reporter on June 18, 2009, 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. The Debtors' secured debt consist of (i) a secured revolver with a balance of $20,000,000 plus obligations of $112.5 million under issued and outstanding letters of credit issued by WFB, (ii) secured term loan with an outstanding balance of $268.8 million provided by WFB as agent, (iii) secured swap obligations of $6.0 million of exposure, (iv) accrued and unpaid interest on the swap obligations, (e) prepetition payment-in-kind of $6.3 million on the secured term loan, (f) other obligations for fees and expenses under prepetition credit agreement, and (g) other secured indebtedness of $1.1 million. The Debtors say that a series of unforeseen events -- including a downturn in the housing market, and unsuccessful attempts to implement an out-of-court restructuring -- placed significant strain on their ability to continue servicing their secured indebtedness and ultimately led to the filing of their Chapter 11 cases. The Debtors say they need financing to be able to maintain operations postpetition. After soliciting financing proposals from banks, the Debtors selected an offer of lenders holding a significant portion of their prepetition secured debt. The DIP Facility will be underwritten by WFB. The DIP financing consists of an $80 million senior secured, superpriority debtor-in-possession financing revolving credit facility, including a financing provided pursuant to a $20 million letter of credit facility. The DIP facility will mature January 2, 2010. The DIP loans will bear interest at Base rate plus 4.50%. The Debtors will use proceeds of the DIP facility to repay $4 million of the amount owing under the prepetition revolving credit facility. Claims arising from the DIP facility will be entitled to superpriority administrative expense claim status in the Chapter 11 cases. The DIP Lenders will grant the Debtors access to $40 million of the financing upon interim approval of the DIP facility. The Debtors also seek permission to use their prepetition lenders' cash collateral. The Debtors will provide replacement liens, administrative priority claims, and payment of professional fees and expenses to the extent of diminution in value of the collateral. Peter J. Solomon was retained by the Debtors in evaluating financing alternatives. About Building Materials 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. BUILDING MATERIALS: Taps Garden City Group as Notice Agent ---------------------------------------------------------- Building Materials Holding Corp. and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Garden City Group as claims, noticing, solicitation, balloting and tabulation agent. Prepetition, the Debtors engaged in negotiations with significant holders of their secured indebtedness to develop a way to de-lever their business. These negotiations culminated the Debtors' filing of a proposed Chapter 11 plan. GCG will assist with, among other things, the solicitation, balloting and tabulation of votes and the distribution as required in furtherance of confirmation of the Debtors' plan of reorganization. GCG received a $25,000 retainer from the Debtors prepetition. 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. BURLINGTON COAT: Fitch Affirms Issuer Default Rating at 'B-' ------------------------------------------------------------ Fitch Ratings has affirmed these ratings on Burlington Coat Factory Warehouse Corp.: -- Issuer Default Rating at 'B-'; -- $800 million asset-based revolver at 'B+/RR1'; -- $900 million term loan at 'B/RR3'. In addition, Fitch has revised its ratings on these to reflect the new issue rating definitions as of March 2009: -- $305 million senior unsecured notes revised to 'CC/RR6' from 'CCC/RR6'; -- $99 million senior discount notes revised to 'C/RR6' from 'CCC-/RR6'. The company had approximately $1.3 billion of debt outstanding as of Feb. 28, 2009. The Rating Outlook has been revised to Stable from Negative. The Outlook revision reflects BCF's improving operating performance, positive free cash flow generation and adequate liquidity. The ratings continue to reflect BCF's solid brand recognition as a discounter of apparel and home products with significant geographic reach as well as the company's negative comparable store sales, high leverage and intense competition in the discounted apparel and home furnishings segments. BCF is nationally recognized with 433 stores in 44 states and Puerto Rico and $3.5 billion in revenues in fiscal 2009 that ended May 30, 2009. The company's business is highly seasonal with approximately 50% of revenues occurring from September to January. BCF's comparable store sales improved to -2.5% in fiscal 2009 from -5.2% in fiscal 2008 due to the company's value offering, which is resonating well with customers in the current environment, supported by ongoing initiatives to improve product assortments, deliver values that fit within a good, better and best pricing strategy and create a positive shopping experience. However, the continued negative comparable store sales reflect the ongoing challenging operating environment. Competition in the discounted apparel and home furnishings segments remains fierce and highly fragmented. BCF's operating performance in the last 12 months ended Feb. 28, 2009 strengthened as a result of improvements in initial markups, fewer markdowns and cost cutting efforts. LTM operating EBIT margin increased 40 basis points to 2.2% compared to 1.8% in fiscal 2008. This combined with debt paydown caused LTM leverage, defined as total adjusted debt/EBITDAR, to decrease to 6.3 times (x) from 6.9x in fiscal 2008. LTM interest coverage, defined as EBITDAR/interest expense plus rent, improved slightly to 1.6x from 1.4x over the same period. Fitch anticipates comparable store sales will remain in the negative low single-digit range in the current operating environment. This will lead to fiscal 2010 credit metrics to be at similar levels as fiscal 2009. Fitch expects BCF will have adequate liquidity to meet its near- term capital and debt service requirements. The company's $800 million credit facility, which is used for working capital purposes, expires in May 2011 and Fitch expects the company will remain within its covenants. There is no significant debt maturity until 2013. In addition, there are no mandatory redemption or sinking fund payments on the notes issued by the company. However, the company is required to make a payment on the term loan based on 50% of the available free cash flow generated at the end of each fiscal year. BCF generated positive free cash flow of $72 million and had $27 million of cash and cash equivalents as well as approximately $428 million of availability under the revolver as of Feb. 28, 2009. The Recovery Ratings reflect Fitch's recovery expectations in a distressed scenario. Fitch's recovery analysis assumes an enterprise value of approximately $1 billion in a distressed scenario. Applying this value across the capital structure results in outstanding recovery prospects (91%-100%) for the asset-based revolver, which resulted in a rating of 'B+/RR1'. The asset-based revolver is secured by a pledge of inventory and accounts receivable. The term loan is rated 'B/RR3', reflecting good recovery prospects (51%-70%), and is secured by property. The unsecured senior notes at the operating company level are guaranteed by the holding company and its current and future restricted subsidiaries. These notes are revised to 'CC/RR6' from 'CCC/RR6', reflecting poor recovery prospects (0%-10%). The unsecured senior discount notes are structurally subordinated at the holding company level. They are revised to 'C/RR6' from 'CCC-/RR6', reflecting poor recovery prospects (0%-10%) in a distressed case and are one notch below the senior notes. BUTLER SERVICES: Taps RAS Management Chief Restructuring Advisor ---------------------------------------------------------------- Butler Services International, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authorization to employ RAS Management Advisors LLC as chief restructuring advisor. RAS Management will, among other things: a) assist the Debtor and their management with their cash management and in monitoring expenses, and make suggestions as to opportunities for reducing or eliminating expenditures that are not necessary; b) work with the investment banker selected by the Debtors and assist the Debtors in the development of a business plan, which plan may be shares by the Debtors, their lenders, creditors, partners, investors, and other parties-in- interest, in discussions concerning a potential sale of all or part of the Debtors' assets or restructuring some or all of the Debtors' indebtedness, obligations or liabilities; and c) advise management regarding the Chapter 11 filing and related issues. The hourly rates and daily rates of RAS Management's personnel are: Professional Hourly Rate Daily Rate ------------ ----------- ---------- Richard Sebastiao $500 $5,000 Timothy Boates $450 $4,500 Robert Tetreault $300 $3,000 Clerical $30 -- Pre-bankruptcy, RAS Management received $232,650 as compensation for services and $13,446 as reimbursement for expenses incurred. As of Butler Services' petition date, RAS Management held an advanced retainer of $150,000. To the best of the Debtors' knowledge, RAS Management is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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 filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Del. Case No. 09-11914). Charlene D. Davis, Esq., at Bayard, P.A., assists the Company in its restructuring efforts. At the time of its filing, the Company said its assets and debts range $50,000,001 to $100,000,000. BUTLER SERVICES: U.S. Trustee Appoints 3-Member Creditors Panel --------------------------------------------------------------- Roberta A. DeAngelis, acting U.S. Trustee for Region 3, appointed three creditors to serve on the official committee of unsecured creditors in Butler Services International, Inc., and its debtor- affiliates' Chapter 11 cases: The Committee members are: 1. Jerry Pittman & Associates Attn: Jerry Pittman P.O. Box 5367 Vancleave, MS 39565 Tel: (228) 826-9255 Fax: (228) 826-9258 2. Cades Digitech Pvt. Ltd. Attn: Dr. Sanjay Mahajan 39555 Orchard Hill Place, Ste 600 Novi, MI 48375 Tel: (248) 374-5016 Fax: (248) 374-5018 3. Mid-Atlantic Technical Engineering LLC Attn: Keith Pauley, president 3200 Kanawha Turnpike P.O. Box 8396 South Charleston, WV 25303 Tel: (800) 611-2296, Ext. 889 Fax: (304) 720-6794 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About 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 filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Del. Case No. 09-11914). Charlene D. Davis, Esq., at Bayard, P.A., assists the Company in its restructuring efforts. At the time of its filing, the Company said its assets and debts range $50,000,001 to $100,000,000. BUTLER SERVICES: Wants Venturi & Company as Investment Banker ------------------------------------------------------------- Butler Services International, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authorization to employ Venturi & Company LLC as investment banker. Venturi will, among other things: a) provide updated materials regarding the Debtors' assets, operations and financial condition to prospective additional bidders; b) maintain the data room; and c) assist in contacting identified and additional prospective bidders and in marketing the Debtors' business to maximize the likelihood that additional bidders will participate in the auction. The fee structure of Venturi consists of: a) a $25,000 monthly advisory fee; b) a success fee equal to $525,000 Pre-bankruptcy, Venturi received its $25,000 monthly advisory fee plus reimbursable expenses. To the best of the Debtors' knowledge, Venturi is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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 filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Del. Case No. 09-11914). Charlene D. Davis, Esq., at Bayard, P.A., assists the Company in its restructuring efforts. At the time of its filing, the Company said its assets and debts range $50,000,001 to $100,000,000. CARAUSTAR INDUSTRIES: Gets Final Approval to $75MM DIP Financing ---------------------------------------------------------------- The Bankruptcy Court for the Northern District of Georgia granted Caraustar Industries, Inc., final authorization to borrow all amounts available under its $75 million debtor-in-possession credit facility from General Electric Capital Corporation, pursuant to the terms and conditions of the DIP Facility Agreement, and to use the amounts borrowed under the DIP Facility to fund working capital and other general corporate needs. The Court had previously authorized the immediate use of up to $25 million of the $75 million senior secured DIP Facility, the use of the company's existing cash management systems and substantially all of its existing bank accounts, and the payment of pre- and post-petition invoices to trade creditors (general unsecured claims) in the ordinary course of business. The DIP facility --- a $75,000,000 senior secured revolving credit facility -- will mature nine months following closing or upon confirmation of a Chapter 11 plan. The DIP Lenders will receive superpriority claims pursuant to Section 364(c)(1) of the Bankruptcy Code. "The Court approval gives Caraustar and its stakeholders additional financial flexibility to continue to do what we do best, run safe manufacturing operations and service customers. The approval of the DIP Facility also supports our efforts to emerge as a financially stronger company. We are committed to the long- term profitability of the company and remain steadfast in providing our customers with innovative products and excellent service," stated Michael J. Keough, president and chief executive officer of Caraustar. GE Capital is represented by: Jesse H. Austin, III, Esq. Susan M. Brake, Esq. Paul, Hastings, Janofsky & Walker LLP 600 Peachtree Street, N.E., Suite 2400 Atlanta, Georgia 30308 About Caraustar Industries Headquartered in Austell, Georgia, Caraustar Industries, Inc. -- http://www.caraustar.com/-- is one of North America's largest integrated manufacturers of 100% recycled paperboard and converted paperboard products. Caraustar serves the four principal recycled boxboard product end-use markets: tubes and cores; folding cartons; gypsum facing paper and specialty paperboard products. Caraustar reached an agreement with holders of roughly 83% of its 7-3/8% Senior Notes maturing June 1, 2009 and 91% of its 7-1/4% Senior Notes maturing May 1, 2010, on the terms of a cooperative financial restructuring that would reduce the company's debt obligations by roughly $135 million. The company and its domestic subsidiaries filed voluntary Chapter 11 petitions along with a pre-negotiated Plan of Reorganization in the United States Bankruptcy Court for the Northern District of Georgia on May 31, 2009 (Bankr. N.D. Ga. Lead Case No. 09-73830). James A. Pardo, Jr., Esq., and Mark M. Maloney, Esq., at King & Spalding represent the Debtors on their restructuring efforts. The Debtors listed $50 million to $100 million in assets and $100 million to $500 million in debts. The U.S. Trustee for Region 21 will convene a meeting of creditors in Caraustar's cases on June 29, 2009, at 2:00 p.m. The meeting will be held at Russell Federal Building - Plaza P78A, 75 Spring Street, SW, Atlanta, Georgia. CARAUSTAR INDUSTRIES: Schedules Filing Extended Until August 14 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia extended until August 14, 2009, Caraustar Industries Inc. and its debtor-affiliates' time to file their schedules and statements of financial affairs. Headquartered in Austell, Georgia, Caraustar Industries, Inc. -- http://www.caraustar.com/-- is one of North America's largest integrated manufacturers of 100% recycled paperboard and converted paperboard products. It serves four principal recycled boxboard product end-use markets: tubes and cores; folding cartons; gypsum facing paper and specialty paperboard products. The Company and its affiliates filed for Chapter 11 on May 31, 2009 (Bankr. N.D. Ga. Lead Case No. 09-73830). James A. Pardo, Jr., Esq., and Mark M. Maloney, Esq., at King & Spalding represent the Debtors on their restructuring efforts. The Debtors listed $50 million to $100 million in assets and $100 million to $500 million in debts. CARAUSTAR INDUSTRIES: Taps Administar Services as Claims Agent -------------------------------------------------------------- Caraustar Industries Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Georgia for permission to employ Administar Services Group LLC as claims, noticing, and balloting agent. Administar will: a) serve as the Debtors' noticing agent to mail certain notices to certain of the estates' creditors and other parties in interest; b) provide computerized claims, objection, schedule, preparation, and balloting database services; and c) provide expertise and consultation and assistance in claim and ballot processing and with the dissemination of other administrative information related to the Debtors' Chapter 11 cases. Jeffrey L. Pirrung, Administar's vice president for consulting, tells the Court that the hourly rates of the firm's personnel are: President/Senior Vice President $215 to $225 Vice President/Executive Consultant $135 to $225 Bankruptcy Consultant/Senior Bankruptcy Consultant $95 to $135 Bankruptcy Analyst/Senior Bankruptcy Analyst $75 to $95 Administrative/Operations/ Call Center Attendant $35 to $55 Mr. Pirrung adds that prior to the petition date, Administar received a deposit of $25,000. Mr. Pirrung assures the Court that Administar is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Caraustar Industries, Inc. Headquartered in Austell, Georgia, Caraustar Industries, Inc. -- http://www.caraustar.com/-- is one of North America's largest integrated manufacturers of 100% recycled paperboard and converted paperboard products. It serves four principal recycled boxboard product end-use markets: tubes and cores; folding cartons; gypsum facing paper and specialty paperboard products. The Company and its affiliates filed for Chapter 11 on May 31, 2009 (Bankr. N.D. Ga. Lead Case No. 09-73830). James A. Pardo, Jr., Esq., and Mark M. Maloney, Esq., at King & Spalding represent the Debtors on their restructuring efforts. The Debtors listed $50 million to $100 million in assets and $100 million to $500 million in debts. CASELLA WASTE: S&P Affirms Corporate Credit Rating at 'B+' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B+' corporate credit rating on Casella Waste Systems Inc. and removed all ratings from CreditWatch with negative implications, where they were placed on May 15, 2009. The outlook is negative. At the same time, S&P assigned issue-level ratings and recovery ratings to the proposed $180 million first-lien revolving credit facility due December 2012, $100 million first-lien term loan B due March 2014, and $205 million second-lien notes due July 2014. The issue rating on the proposed first-lien facilities is 'BB' (two notches above the corporate credit rating) with a recovery rating of '1', indicating the expectation of very high recovery (90%-100%) in the event of a payment default. The issue rating on the proposed second-lien notes is 'B+' (same as the corporate credit rating) with a recovery rating of '4', indicating the expectation of average (30%-50%) recovery in the event of a payment default. The ratings on the first-lien and second-lien debt are based on preliminary terms and conditions. The issue-level rating on the company's existing 9.75% senior subordinated notes due February 2013 remains 'B-' and the recovery rating remains '6', indicating negligible recovery (0%-10%) in the even of a default. In the event the subordinated notes are not refinanced on or prior to October 2012, all amounts outstanding on the proposed term loan B will accelerate and become due in December 2012. "The removal of the CreditWatch listing follows Casella's recent announcement that it is in the process of refinancing its existing credit facilities. The newly issued debt will extend near-term maturities and feature a new set of financial covenants, thereby alleviating S&P's previous concerns around maturing debt and potential covenant violations," said Standard & Poor's credit analyst Ket Gondha. The negative outlook reflects S&P's concerns that a weakness in earnings or a delay in operational improvements could pressure the highly leveraged financial profile and diminish the modest cushions under the newly-proposed financial covenants. CENTERSTONE DIAMONDS: Wants Schedules Filing Extended Until July 6 ------------------------------------------------------------------ Centerstone Diamonds, Inc., and Michael Beaudry, Inc., ask the U.S. Bankruptcy Court for the Central District of California to extend until July 6, 2009, their time to filed their schedules of assets and liabilities and statements of financial affairs. Headquartered in Los Angeles, California, Centerstone Diamonds, Inc., sells jewelry, watches, precious stones, and precious metals. The Company and Michael Beaudry, Inc. filed for Chapter 11 on June 4, 2009 (Bankr. C. D. Calif. Case No. 09-23944 and 09- 23945). Michael S. Kogan, Esq., at Ervin Cohen & Jessup LLP, represents the Debtors in their restructuring efforts. Centerstone said at the time of the filing it has assets and debts both ranging from $10 million to $50 million. CHEMTURA CORP: Biolab Sues to Compel OxyChem to Perform ------------------------------------------------------- Debtor Bio-Lab, Inc., initiated an adversary proceeding against Occidental Chemical Corporation on June 6, 2009, seeking a declaratory judgment that OxyChem is in violation of the automatic stay by attempting to refuse performance of a contract postpetition. In July 2000, Bio-Lab and OxyChem entered into a contract for the purchase of sodium dichloroisocyanurate 60 for Biolab's use in its pool and spa chemical blends. Demand for Chemtura's pool and spa care products increases on a seasonal basis, with the busiest seasons during the spring and summer months. Currently, Chemtura is heading into the season during which its pool and spa care products generate the most revenue. Accordingly, it is crucial that Chemtura obtain sufficient amount of OxyChem's Dichlor 60 in order to manufacture its pool and spa care products and to provide those products to its customers for sale on a timely basis. Pursuant to the parties' Contract, OxyChem agreed to supply Bio- Lab with 100% of Bio-Lab's North American requirements. The term of the Contract is from January 1, 2000, through January 31, 2014, continuing thereafter as a rolling one-year evergreen contract unless terminated by either party effective December 31, 2014, or any December 31 thereafter, upon at least 36 months prior written notice. David J. Zott, P.C., at Kirkland & Ellis, in New York, relates that on or about June 4, 2009, OxyChem informed Bio-Lab that it would not meet the confirmed deliveries of Dichlor 60, although it had the ability to do so. OxyChem said it was electing to fill other customers' orders for Dichlor 56 prior to filling any of Bio-Lab's Dichlor 60 orders. He says OxyChem confirmed to the Debtors that it could attempt to meet its customers' needs for Dichlor 56 by purchasing it from other suppliers, but that it would reduce its overall profits on those contracts. OxyChem decided instead to breach its firm order commitments to the Debtors, knowing it would cause incalculable harm to the Debtors' business, Mr. Zott tells the Court. In order to fill other orders first, OxyChem shut down production of Dichlor 60. Initially, OxyChem stated that it would not resume production of Dichlor 60 until June 19, 2009. OxyChem later stated that it might be able to begin production on June 8 or 9, 2009. As of June 5, 2009, OxyChem is behind on delivery of 336,600 pounds of Dichlor 60 to Bio-Lab, according to Mr. Zott. TRO Sought In a separate filing, Biolab also seeks a temporary restraining order and preliminary and permanent injunction to enjoin OxyChem from refusing to perform under the Contract. Biolab also seeks award for damages on account of OxyChem's breach and for specific performance of the Contract. About Chemtura Corp Based in Middlebury, Connecticut, Chemtura Corporation -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D. N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Wants to Enjoin Diacetyl-Related Suits ----------------------------------------------------- In an adversary complaint dated June 17, 2009, Chemtura Corporation sought to enjoin various individuals from prosecuting pending diacetyl-related actions and commencing new actions or proceedings asserting any diacetyl-related claims against non- debtor affiliate Chemtura Canada Corporation and third party Citrus & Allied Essences, Ltd: - Karen Smith, - William Smith, - Phoebe Williams, - Louis Watson, - Doris Stubbs, - Don Stephens, - Doris Pate, - Gerardo Solis, - Norma Batteese, - Lola Couser, - Dennis Patton, - Debra Robinson, - Robert Riley, - Bernard Couser, - Dawn Riley, - Charles Campbell, - Natoma Campbell, - Emmett D. Cooper, - Paul Dunbar, - Josephine Dunbar, - Elizabeth Fults, - Nancy Dudley, - Jill Roth, - Karen Geile, - Georgia Hawthorne, - Carolyn Kiefer, - Sara Lane, - Reschane Thitakom, - Marjorie Turnbough, - Mary Whiteside, - Francisco Herrera, - Mark L. Millar, - Donna F. Millar, - Donald Powell, - Kelly Powell, - Irma Rose Ortiz, - Victor Mancilla, - Oscar Zettina Pech, - Maria Zettina, - Ricardo Corona, - Richard Smead, - Kathy Smead, - Pamela Wibbenmeyer, - Lauren Elder, - Citrus & Allied Essences, Ltd., - Ungerer & Co., and - John Does 1-1000. Citrus, a flavoring distributor and manufacturer, requested Chemtura Canada to manufacture diacetyl, a butter flavoring ingredient widely used in the food industry between 1982 and 2005. From 1982 to 1998, Chemtura Canada sold diacetyl directly to Citrus. By 1998, Chemtura Corp. purchased from Chemtura Canada and sold to Citrus, but never took possession or control of the, diacetyl. Chemtura Corp.'s involvement was primarily for invoicing purposes. David J. Zott, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, relates that the Defendants have brought diacetyl- related liability actions, alleging that they sustained personal injury, including respiratory illnesses, from their exposure to diacetyl during the course of their employment at food manufacturing facilities which used diacetyl. About 14 diacetyl-related cases are pending against Chemtura Corp. and Chemtura Canada. They either are (i) "direct claims" against Chemtura Corp. or Chemtura Canada, as well as other companies involved in the manufacture, distribution, sale or use of diacetyl, for injury arising from exposure to diacetyl; or (ii) "indirect claims" against Chemtura Corp. or Chemtura Canada brought by Citrus seeking indemnification or contribution. A chart summarizing the pending cases is available for free at: http://bankrupt.com/misc/Complaints_v_ChemturaEtAl.pdf The Diacetyl-Related Direct Claims turn on identical legal theories, factual allegations, and defenses, including (i) whether diacetyl was the proximate cause of the alleged injury; (ii) whether the diacetyl was defective as manufactured; (iii) whether Chemtura Corp., Chemtura Canada and Citrus had a duty to test diacetyl before selling it; (iii) whether the Diacetyl Claimants' experts on product defect, causation, and damages are qualified or basing their opinions on relevant and reliable methods and data; and (iv) whether the Diacetyl Claimants were sophisticated buyers or users of diacetyl, thus relieving Citrus, Chemtura, and Chemtura Canada of any liability. The Diacetyl-Related Indirect Claims refer to indemnification or contribution claims brought by Citrus, alleging that Chemtura Corp. and Chemtura Canada share in Citrus' liability to the Diacetyl Claimant's harm caused by exposure to diacetyl. The Diacetyl Claims "could be among the largest unsecured claims asserted against Chemtura's estate and thus, may substantially impede Chemtura's estate and reorganization," Mr. Zott contends. Mr. Zott notes that with respect to the Diacetyl Litigation, only the lawsuits of Campbell, Solis and Miller have trial dates while the rest in the early stages of discovery. Counsel for Chemtura anticipates that discovery to be extensive and would necessarily implicate the time and resources of Chemtura. He adds that the prosecution of the Diacetyl Litigation: (i) will divide the attention of Chemtura's leaders and managers, thus compromising their availability to the Debtors and impeding the Debtors' reorganization efforts; (ii) threatens to deplete assets of the estate; (iii) will entail discovery that will require significant time and resources; (iv) includes the resolution of diacetyl-related claims against Chemtura Canada and Citrus that poses the threat of collateral estoppel, stare decisis and evidentiary prejudice against Chemtura Corp.; and (v) may result to Chemtura Corp. being estopped from denying any liability finding against Citrus or Chemtura Canada in later litigation. Against this backdrop, Chemtura Corp. asks Judge Robert Gerber to rule that until the effective date of a plan of reorganization in the Debtors' cases: (a) the automatic stay is extended to the commencement or continuation of Diacetyl Litigation against Chemtura Canada and Citrus; (b) the commencement or continuation of Diacetyl Litigation against Chemtura Canada and Citrus is barred and enjoined; (c) Chemtura Corp.'s efforts to remove and transfer the Diacetyl Litigation to the Bankruptcy Court are not subject to the automatic stay; (d) the Diacetyl Claimants are enjoined from seeking discovery from the Debtors or Chemtura Canada in the Diacetyl Litigation. TRO Sought In a separate filing, Chemtura Corp. asked the Court for a temporary restraining order and a preliminary injunction or, in the alternative, to stay the continued prosecution of the Diacetyl Litigation and any future diacetyl actions against Chemtura Canada and Citrus during the pendency of the Debtors' Chapter 11 cases. The Debtor subsequently filed a memorandum of law in support of its TRO request. The Debtor asserts that absent an immediate extension of the stay, it will be forced to respond to discovery requests and participate in the defense of both Citrus and Chemtura Canada at trials beginning this summer to protect itself from the risk of depleted insurance policies and indemnification obligations. Under its memorandum of law, Chemtura Corp. noted the risk of the possible high dollar value of diacetyl judgments and settlements and the risk of depleting Chemtura Corp.'s shared insurance. Chemtura Corp. shares insurance with Chemtura Canada and thus, any recovery against Chemtura Canada, through judgment or settlement, will deplete the insurance property of the Debtor' estate. In a declaration filed with the Court, Alyssa A. Qualls, Esq., at Kirkland & Ellis LLP, tells the Court that Chemtura Corp. is attempting to negotiate a voluntary stay of all proceedings related to the Debtor. However, if an agreement is not reached, the Debtor will need a TRO to prevent imminent irreparable harm, she maintains. About Chemtura Corp Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D. N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Withdrew Proposal for Inesa Guaranty Pact -------------------------------------------------------- Chemtura Corp. and its affiliates withdrew a request seeking authority to enter into a guarantee agreement with Intesa Mediofactoring SpA in connection with the obligation of the Debtors' non-debtor affiliates. Chemtura Corporation Chief Financial Officer Stephen Forsyth relates that certain of the Debtors' European subsidiaries participate in a program to sell certain of their eligible accounts receivable, otherwise referred to as the European Accounts Receivable Facility. The European Subsidiaries sell their accounts receivables to Intesa Mediofactoring SpA in exchange for an amount equal to the face value of the receivables. This arrangement permits the European Subsidiaries to receive advance payment on account of the sold receivables that have not been collected. However, the decline in the Debtors' financial performance constrained their ability to access liquidity under the European AR Facility. Intesa Mediofactoring imposed restrictions in the European Subsidiaries' ability to sell accounts under the European AR Facility, according to Mr. Forsyth. In that light, the Debtors sought approval to enter into an agreement with Intesa pursuant to which Chemtura Corp. will guarantee the obligations of the European Subsidiaries under the AR Facility on a postpetition basis. The salient terms of the Postpetition AR Guarantee Agreement were: (a) Chemtura Corp. will not dispose of its direct or indirect part of all of its ownership interest in the European Subsidiaries without having first advised Intesa in writing; (b) Chemtura Corp. will continue to provide financing and managerial support to the European Subsidiaries to allow them to meet obligations under the European AR Agreement; and (c) Chemtura Corp. will unconditionally reimburse Intesa, up to a total of EUR70 million on written demand, any and all amounts owed for any reason to Intesa by the European Subsidiaries pursuant to the terms of the European AR Agreement. About Chemtura Corp Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D. N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Sec. 341 Meeting Continued to September 21 -------------------------------------------------------- Corinne Ball, Esq., at Jones Day, in New York, disclosed that the meeting of creditors of Old Carco LLC, f/k/a Chrysler LLC, and its debtor-affiliates pursuant to Section 341 of the Bankruptcy Code commenced as scheduled on June 22, 2009, at 1:00 p.m., New York Time, at the New York Helmsley Hotel. According to Ms. Ball, the Section 341 Meeting was continued to, and will be concluded on September 21, 2009, at 1:30 p.m., New York Time, at the Office of the United States Trustee for Region 2, at 80 Broad Street, 4th Floor, New York, NY 10004. 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) CIRCUIT CITY: Wants Removal Deadline Extended Until October 9 ------------------------------------------------------------- Circuit City Stores, Inc., and its debtor-subsidiaries sought and obtained an order from the U.S. Bankruptcy Court for the Eastern District of Virginia extending the period within which they may remove actions through the later of: (a) October 6, 2009; or (b) 30 days after entry of an order terminating the automatic stay with respect to any particular action sought to be removed. Section 1452 of the Judiciary and Judicial Procedures Code provides that a party may remove any claim or cause of action in a civil action to the district court where that civil action is pending, if that district court has jurisdiction of that claim or cause of action. The Debtors are parties to numerous judicial and administrative proceedings currently pending in various courts and administrative agencies. These Actions involve a variety of claims, including discrimination, workers' compensation, and product liability claims. Because of the number of Actions involved and the variety of claims, the Debtors require additional time to determine which, if any, of the Actions should be removed and, if appropriate, transferred to this district, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, told Judge Gonzalez. In addition, since the Debtors announced their liquidation on January 16, 2009, they have been focused on, among other things, executing on a wind-down plan with the dual goal of winding down as expeditiously as possible and maximizing value for the benefit of their estates. These efforts included closing and vacating approximately 600 retail stores, distribution, service and call centers, and corporate headquarters, marketing and selling or otherwise realizing value from their various assets, and reconciling and objecting to administrative, priority and unsecured claims, according to Mr. Foley. Mr. Foley assures the Court that the Debtors' adversaries will not be prejudiced by an extension because they may not prosecute the Actions absent relief from the automatic stay. Moreover, nothing in the Motion will prejudice any party to a proceeding that the Debtors seek to remove from pursuing remand pursuant to Section 1452(b) of the Judiciary and Judicial Procedures Code. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Seeks to Sell Baltimore Property for $4.6-Mil. ------------------------------------------------------------ Pursuant to Sections 105, 363, 365 and 503 of the Bankruptcy Code and Rules 2002, 6044 and 6006 of the Federal Rules of Bankruptcy Procedure, Circuit City Stores, Inc., and its debtor-subsidiaries ask the U.S. Bankruptcy Court for the Eastern District of Virginia to (i) authorize Circuit City Stores, Inc., as seller, to enter into an agreement with VEI Circuit LLC, as purchaser, for the sale of certain of the Seller's property located at 8823 Pulaski Highway, in Baltimore County, Maryland, subject to higher or better proposals; (ii) approve a proposed termination fee; (iii) approve the sale free and clear of all liens; and (iv) approve the assumption, assignment and sale of certain leases associated with the Property free and clear of all Liens. In addition to operating a retail store on the Property, Circuit City leases certain portions of the Property to two different tenants. Circuit City is party to (1) a lease dated March 23, 1995, with NTW Inc., and (2) lease dated July 13, 1999, with Boat America Corporation. The Sale of the Property would be subject to the Leases, which would be assigned to any purchaser of the Property, according to Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia. In light of the failure to obtain any feasible going concern bids and the decision to liquidate the Debtors' inventory through going-out-of-business sales, Circuit City has been left with various assets, including the Property, for which it has no remaining use. Circuit City believes that the Sale of the Property and the Assignment of the Leases represent its best opportunity under the circumstances to maximize the value of the Property and the Leases, and are in the best interests of its estate and stakeholders. As a result of marketing efforts, Circuit City received various proposals to purchase the Property. Circuit City has determined that the proposal submitted by VEI was considerably higher or otherwise better than the alternate proposals received. On February 19, 2009, Circuit City entered into an initial contract with VEI for the Sale of the Property. VEI initially exercised its option to terminate the Initial Contract before the expiration of its due diligence period. Subsequently, Circuit City and VEI have agreed to reinstate the Initial Contract with certain amendments and modifications ?- Agreement -- including an extension of the due diligence period, provision for the Debtor to obtain an updated environmental assessment of the Property with the costs to be deducted from any break up fee payable to the Purchaser, and an adjustment in the purchase price, Mr. Foley relates. According to Mr. Foley, the significant terms of the Agreement include: (a) VEI would acquire the Property, consisting solely of Circuit City's right, title and interest in and to the Property comprising approximately 7.389 acres, together with (1) all rights and appurtenances pertaining to the land, (2) all buildings, structures and other improvements on the land, and (3) electrical, mechanical, air conditioning and other fixtures attached. The Property will not include any lifts or racking located in any of the buildings or any personal property, inventory, equipment or trade fixtures of the Tenants of the Leases. Circuit City would assign each of the Leases to VEI. (b) The Property would be sold free and clear of all liens, charges, pledges, security interests, conditional sale agreements or other title retention agreements, leases, mortgages, security interests, options, or other encumbrances except for certain permitted encumbrances. (c) The Sale would be subject to Court approval and competitive bidding pursuant to proposed bidding procedures. (d) The purchase price to be paid by VEI for the Property would be $4,650,000. (e) In accordance with the Agreement, VEI has previously delivered irrevocable letters of credit payable to Circuit City in the amount of $500,000 to an escrow agent. If the Agreement is terminated before the closing of the Sale and Assignment because of VEI's breach of the Agreement, Circuit City would be entitled to draw upon the Letters of Credit as its sole recourse. (f) The Agreement could be terminated before closing in these circumstances: (1) by Purchaser, if an action is initiated to take any material portion of the Property by eminent domain proceedings, (2) by Purchaser, in the event of damage to the Property exceeding $200,000 occurring during the period after the date of the Agreement and before Closing, if Seller does not repair the damage, (3) by Purchaser, in the event that Seller will fail to consummate the transactions contemplated in the Agreement, (4) by Seller, in the event that Purchaser will fail to comply with the Agreement, and (5) by Seller, in order to permit it to accept a higher or better offer for the Property pursuant to the Bidding Procedures. Circuit City has agreed to pay VEI a break-up fee of $20,000, less costs incurred by the Seller to obtain the environmental site assessment if, and only if, VEI is not in breach of or in default under the Agreement, and Circuit City consummates the Sale of the Property with a higher or otherwise better bidder following an auction and approval by the Court. VEI is unwilling to keep open its offer to purchase the Property under the terms of the Agreement unless the Court authorizes payment of the Termination Fee, Mr. Foley notes. He assures the Court that payment of the Termination Fee will not diminish the Seller's estate. If Circuit City receives any qualified bids, an auction will be conducted. Circuit City, in consultation with its advisors, would determine the highest or otherwise best bid at the conclusion of any Auction. To be a qualified bidder, any person or entity submitting the bid would be required to submit an offer that includes: (a) an executed copy of the Agreement marked to show the amendments and modifications to the Agreement that the Qualified Bidder proposes. The purchase price must be at least $4,700,000; (b) a statement that the bid will not be conditioned on the outcome of unperformed due diligence by the bidder or any financing contingency; and (c) a good faith deposit equal to at least $500,000 in cash or in the form of a letter of credit. If no Qualified Bids other than VEI's bid are received, Circuit City would proceed with the Sale to VEI after the entry of a sale order. If Circuit City receives additional Qualified Bids, then at the Sale Hearing, it would seek approval of the Successful Bid, as well as the second highest or best Qualified Bid. A bid would not be deemed accepted by the Seller unless and until approved by the Court. After approval of the Sale to the Successful Bidder, if the Successful Bidder fails to consummate the sale for specified reasons, then the Alternate Bid would be deemed to be the Successful Bid, and Circuit City would be permitted to effectuate a sale to the Alternate Bidder without further Court order. A full-text copy of the Agreement is available at no charge at: http://bankrupt.com/misc/CC_CC&VEIbaltimoreSaleAgrmnt.pdf West Marine Objects The July 13, 1999 Lease relates to a portion of the Property. Pursuant to an Assignment and Assumption of Lease dated February 26, 2003, by and between Boat America Corporation and West Marine Products, Inc., Boat America, the original tenant under the Lease, assigned to West Marine all of its right, title and interest as tenant under the Lease, Mark J. Friedman, Esq., at DLA Piper LLP, in Baltimore, Maryland, relates. Also on February 26, 2003, Circuit City signed a Landlord Consent, in which it consented to the 2003 Assignment. According to Mr. Friedman, West Marine's limited objection to the Baltimore Sale Motion relates to two issues -- (1) cure of Circuit City's defaults under the Lease, as required by Section 365(b)(1) of the Bankruptcy Code and (2) provision of adequate assurance of future performance under the Lease by the Purchaser or Alternate Bidder, as required by Section 365(f)(2) of the Bankruptcy Code. Pursuant to the July 13, 1999 Lease, West Marine is obligated to pay certain amounts in addition to the base rent. If the total amount paid by West Marine for any year is less than the actual amount due from it for that year, West Marine must pay the difference to Circuit City. Conversely, if the total amount paid by West Marine for any year is more than the actual amount due from it for that year, West Marine is entitled to a refund by credit or payment, Mr. Friedman informs the Court. To determine whether West Marine is entitled to a Refund, Circuit City must furnish West Marine with a written statement of the actual amount of the tenant's proportionate share of taxes and common area costs. However, Circuit City has not done so for 2008, Mr. Friedman says. Because it is required before Circuit City may assume the July 13, 1999 Lease, the Baltimore Sale Motion should be granted and the Seller authorized to assume the Lease only if it fulfills its obligations under the Lease with respect to calculating the amount of the Refund and pays any amount owing to West Marine, Mr. Friedman tells the Court.8 About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Gets Court Nod to Sell San Mateo Leases to Merchant ----------------------------------------------------------------- Circuit City Stores West Coast, Inc., as successor to Edbro California Realty Company, is party to a ground lease dated April 30, 1970, with Concar Enterprises, Inc., for the premises located at 1880 South Grant Street in San Mateo, California. The Debtor subleases the Premises to TJ Maxx of CA, LLC, pursuant to a sublease dated July 31, 1987. Circuit City Stores, Inc., and its debtor-subsidiaries seek an order from the U.S. Bankruptcy Court for the Eastern District of Virginia (i) authorizing them to enter into an agreement in connection with the sale of the San Mateo Leases, subject to higher or otherwise better proposals, (ii) approving the proposed termination fee, and (iii) approving the sale of the Leases free and clear of all interests. In light of the failure to obtain any feasible going concern bids and the decision to liquidate the Debtors' inventory through going-out-of-business sales, the Debtors have been left with various assets, including the San Mateo Leases, for which they have no remaining use. The San Mateo Leases are among the Debtors' most valuable real property leases because they generate a net positive cash flow annually. The sale of the assets would result in significant proceeds for the Debtors' estate and creditors, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, says. The Debtors and their real estate advisor, DJM Realty, LLC, have been marketing the San Mateo Leases, and have received various proposals to purchase the Leases. The Debtors determined that the proposal submitted by Merchant Equity NY, Inc., was the highest or otherwise best proposal received. The Agreement provides that Merchant Equity will pay $235,000 to the Debtors, $35,250 of which has been deposited in escrow and the balance to be paid upon closing of the Sale. As adequate assurance of future performance, Merchant Equity has provided federal tax returns, which have been forwarded to the Landlord, Concar Enterprises. The Debtors have agreed to pay Merchant Equity a break-up fee of $20,000, if and only if (i) the Purchaser is not in breach of or in default under the Agreement, (ii) the Agreement is not conditioned on conducting any further, or completing, due diligence, and (iii) the Debtors consummate the Sale of the San Mateo Leases with a higher or otherwise better bidder at the auction. The Debtors have agreed to pay the Termination Fee in recognition of Merchant Equity's expenditure of time, energy, and resources in pursuing the Sale. Merchant Equity is unwilling to keep open its offer to purchase the San Mateo Leases under the terms of the Agreement unless the Court authorizes payment of the Termination Fee, according to Mr. Foley. He assures the Court that payment of the Termination Fee will not diminish the Debtors' estates. Upon receipt of any alternate proposal that the Debtors deem to be a qualified bid, the Debtors will provide the Landlord with adequate assurance information from the party who submits a Qualified Bid. If no Qualified Bids other than Merchant Equity's bid are received, the Debtors would proceed with the Sale to the Purchaser after entry of Sale order. A bid would not be deemed accepted by the Debtors unless and until approved by the Court. The Debtors believe that they are current on their obligations under the Ground Lease, except with respect to $40,514, which is the Proposed Cure Amount. Objections to Sale of San Mateo Leases Concar Enterprises, the Landlord, finds the Debtors' Proposed Cure Amount "grossly insufficient." Concar Enterprises relates that the actual cure amount exceeds the stalking horse bid of $235,000 by more than $200,000. The cure amount due under the San Mateo Leases, according to Concar Enterprises' books and records, is $445,446, comprising $7,113 for November 2008 rent, $7,113 for May 2009 rent, $33,400 for real estate taxes for the period July through November 2008, $369,586 for parking lot repairs required by the Leases, and $3,500 for deferred landscaping maintenance and adjustments, according to Michael D. Mueller, Esq., at Christian & Barton, LLP, in Richmond, Virginia. In conjunction with the obligation of the Debtors to cure defaults upon assumption of the San Mateo Leases, the Debtors must also compensate Concar Enterprises for any actual pecuniary loss, including attorneys' fees, resulting from a lease default. Accordingly, Concar Enterprises is entitled to attorneys' fees amounting to $24,732, together with any additional attorneys' fees it incurs subsequent to the filing of its Objection. A single year's tax return is insufficient to satisfy the Debtors' burden of adequate assurance of further performance, Mr. Mueller tells the Court. He says that the Debtors must provide the Landlord with information sufficient to assess any proposed assignee's operating experience and financial capability under the San Mateo Leases in order to comply with the requirements of Sections 365(b)(3) and (f)(2) of the Bankruptcy Code. The Debtors must ensure that all accrued, but unbilled charges, including year-end adjustments and reconciliations, if any, are paid in accordance with the terms of the San Mateo Leases, and that any assignee of the Leases expressly assume all obligations upon any assignment of the Leases, Mr. Mueller adds. In a separate filing, T.J. Maxx of CA, LLC, filed its response to the Sale. Pursuant to a sublease dated July 31, 2987, TJM subleases from the Debtors approximately 24,077 square feet of retail space -- the San Mateo Property -- on the Premises. The TJM Sublease, which expires on October 31, 2015, was assigned to TJM by The TJX Companies, Inc., pursuant to an assignment and assumption agreement dated January 30, 1998. TJM currently operates a retail store adjacent to the San Mateo Circuit City Store. Neither the Overlease nor the Sublease have been assumed or rejected, Lisa Taylor Hudson, Esq., at Sands, Anderson, Marks & Miller, P.C., in Richmond, Virginia, notes. Although the San Mateo Leases Sale Motion contemplates the prospective buyer would acquire both the Overlease and the TJM Sublease on an "as is" basis, the Sale Motion also states that the sale would be "free and clear" of other claims, interests, liens, and encumbrances. It is unclear and ambiguous as to what this means, Ms. Hudson points out. TJM objects to the Sale Motion to the extent the Debtors intend to sell the Overlease "free and clear" of the TJM Sublease or TJM's interest as subtenant of the San Mateo Property. TJM also repeats its demand for adequate protection pursuant to Section 363(e) of the Bankruptcy Code, insofar as the Debtors impair or purport to impair TJM's possessory interest in the San Mateo Property. TJM expressly reserves the right to elect to remain in possession of the San Mateo Property, as permitted under Section 365(h) of the Bankruptcy Code, insofar as the Debtors reject or purport to reject the TJM Sublease or Overlease. * * * The Court granted the Debtors' San Mateo Leases Sale Motion. All objections that have not been withdrawn, waived, or settled, are overruled on the merits. The Debtors are authorized to assume the San Mateo Leases and to assign these to the Assignee, Concar Enterprises. The Debtors are also authorized to sell the San Mateo Leases to the Assignee. The Debtors are further authorized to execute the Sale, Assumption and Assignment Agreement. Upon payment of the Purchase Price, the Assignee will succeed to the entirety of the Debtors' rights and obligations in the San Mateo Leases due, accruing, arising or attributable to the time period occurring on or after the effective date of May 13, 2009, and will have the rights of the tenant. The Assignee will pay to the Debtors $445,446, less a $145,446 cure amount, and $15,630 Sublease rent received by the Debtor from the Sublessee attributable to the period subsequent to May 13, 2009, plus rent credit of $573. The total purchase price amounts to $284,943. Among other things, all defaults of the Debtors under the San Mateo Leases through the Effective Date will be deemed cured. No other amounts will be owed by the Debtors or their estates with respect to the San Mateo Leases. Any and all persons or entities will be forever barred and estopped from asserting a claim against the Debtors or their estates that any additional amounts are due or defaults exist under the Leases. Any and all persons or entities will be forever barred and estopped from asserting a claim against the Debtors, their estates, and, except as provided in the order, the Assignee, that any additional amounts are due or defaults exist under the San Mateo Leases that arose or accrued, relate to or are attributable to the period before the Effective Date. The Assignee takes the San Mateo Leases "as is" except the Leases will be free and clear of any interests. Upon occurrence of the Effective Date and payment of the Purchase Price, the Assignee will be entitled to the protections of Section 363(m) of the Bankruptcy Code. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Seeks Approval of Agreement with Creative Realty -------------------------------------------------------------- Pursuant to Sections 105, 363, and 365 of the Bankruptcy Code and Rules 2002, 6004, and 6006 of the Federal Rules of Bankruptcy Procedure, Circuit City Stores, Inc., and its debtor-subsidiaries sought and obtained authority from the U.S. Bankruptcy Court for the Eastern District of Virginia to (1) enter into an agreement with Creative Realty Management LLC for the sale of certain of the Debtors' leases, subject to higher or otherwise better proposals, (2) approve the proposed termination fee, and (3) approve the Sale and assignment of the Leases free and clear of all interests. Circuit City Stores, Inc., as successor to Service Merchandise Company, Inc., is party to a ground lease dated September 19, 1986, with Simon Property Group (Illinois) LP, the landlord, as successor to C.Y.A., Inc., for premises located at 340 West Army Trail Road, in Bloomingdale, Minnesota. Circuit City subleases the Premises to Dollar Tree Stores, Inc., pursuant to a sublease dated January 2004. In light of the failure to obtain any feasible going concern bids and the decision to liquidate the Debtors' inventory through going-out-of-business sales, the Debtors have been left with various assets, including the Leases, for which they have no remaining use. The Debtors believe that the assumption, assignment, and sale represents their best opportunity under the circumstances to maximize the value of the Leases. The Sale is in the best interests of the Debtors' estates and stakeholders, according to Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia. The Debtors received various proposals to purchase the Leases, and have determined that the proposal submitted by Creative Realty was the highest or otherwise best proposal of those received. According to Mr. Foley, the Agreement provides, among other things, that: (a) Creative Realty will pay $175,000 to the Debtors, $26,250 of which has been deposited in escrow, and the balance to be paid upon closing of the Sale. (b) As adequate assurance of future performance, Creative Realty has provided federal tax returns for the years 2007 and 2008, which have been forwarded to the Landlord. (c) The Debtors have agreed to pay Creative Realty a break-up fee of $40,000 if, and only if, (1) the Purchaser is not in breach of or default under the Agreement, (2) the Agreement is not conditioned on conducting any further, or completing, due diligence, and (3) the Debtors consummate the Sale of the Leases with a higher or otherwise better bidder at the auction. The Purchaser is unwilling to keep open its offer to purchase the Leases under the terms of the Agreement unless the Court authorizes payment of the Termination Fee. Simon Property Group, Inc., and its related entities as Landlord, filed an objection asserting that $170,047 is the amount required to cure the Leases. Simon also objected to the omission within the Agreement of any language obligating the prevailing bidder to take the Leases subject to charges accrued as of June 2, 2009, but not yet billed. Simon said it does not object to the Leases being assumed and assigned to Creative Realty, but disagrees with the proposed cure amount. Pursuant to the Court's order, the consummation of the transactions with respect to the Leases and the Agreement will be effective as of June 9, 2009. Upon the occurrence of the Effective Date, subject to the provisions of the Order, Creative Realty will succeed to the entirety of the Debtors' rights and obligations in the Leases due, accruing, arising, or attributable to the time period occurring on or after the Effective Date and will have the rights of the tenant. The Debtors will pay to the Landlord the $147,969 "Undisputed Cure Amount" for the Leases. The Debtors will deposit into an escrow account with a third party agent an amount for the "Disputed Cure Amount," which will be held in escrow until the earlier of (i) the date the Debtors and the Landlord agree in writing or (ii) a final non-appealable order is entered by the Court. For the avoidance of doubt, if the Disputed Cure Amount is $0, the Debtors will have no obligation to establish an escrow. The Debtors and the Landlord will undertake good faith negotiations to resolve disagreements regarding the Disputed Cure Amount. Upon entry of the Order, (i) all defaults under the Leases through the Effective Date will be deemed cured, (ii) no other amounts will be owed by the Debtors or their estates with respect to the Leases, provided that this is without prejudice to the Landlord filing a timely administrative expense request for accrued but unbilled 2009 real property taxes or common area maintenance charges that may be due under the Leases, pro rated through the period before the Effective Date, and (iii) no amounts will be owed by Creative Realty with respect to the Leases for obligations relating or attributable to the period before the Effective date. Except as specifically noted in the Order, any and all persons or entities will be forever barred and estopped from asserting a claim against the Debtors or their estates that any additional amounts are due or defaults exist under the Leases. Creative Realty takes the Leases "as is." All objections with regard to the Motion as it pertains to the Leases that have not been withdrawn, waived, or settled, are overruled on the merits. A full-text copy of the Order, including the Agreement and other exhibits, is available at no charge at: http://bankrupt.com/misc/CC_OrdSaleLease_CreativeRealty061009.pdf Debtors' Urge Court to Hold Creative Realty in Contempt and to Stay June 10, 2009 Order Pursuant to Section 105 of the Bankruptcy Code and Rules 9020 and 9024 of the Federal Rules of Bankruptcy Procedure, the Debtors seek a Court order (i) finding Creative Realty in civil contempt and (ii) compelling Creative Realty to comply with the Court's decision. Under the Court's June 10, 2009 Assignment Order, Creative Realty was obligated to pay the Debtors $175,000 in immediately available funds. In turn, the Debtors were obligated to remit payment of the Cure Amount. Notwithstanding the Debtors' repeated communications concerning closing, Creative Realty alleged that the Debtors had breached the Agreement, stated it would not close, and refused to wire $175,000 to the Debtors, Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, in Wilmington, Delaware, relates. The Debtors have attempted in good faith to work with Creative Realty and the Landlord to resolve any issues, but have been unsuccessful. Creative Realty's continued refusal to comply with the Order constitutes a "blatant disregard of this Court's order," Mr. Fredericks asserts. To cease this unlawful act, to deter future violations, and to compensate the Debtors for the harm caused, the Debtors request the Court to compel Creative Realty to comply with the Order, holding it in civil contempt, and impose appropriate sanctions. In the event the Court is not inclined to compel Creative Realty to comply with the Order, the Debtors request that the Court vacate the Order, which will have the effect of deeming the Leases rejected as of June 8, 2009. In a separate filing, pursuant to Section 105(a) of the Bankruptcy Code, Rules 7062 and 9014 of the Federal Rules of Bankruptcy Procedure, and Rule 62(b) of the Federal Rules of Civil Procedure, the Debtors ask the Court to stay the Assignment Order effective as of June 11, 2009 -- the date on which Creative Realty first advised the Debtors that it would not comply with the Order -- pending disposition of the Contempt Motion and to avoid immediate potential irreparable harm to the Debtors and their estates. The Debtors also sought and obtained a Court order to expedite the hearing on their Contempt Motion and the Stay Motion. Creative Realty filed an objection to the expedition of the hearing on the Contempt Motion, stating that "there is no emergency which necessitates an expedited hearing. . ." The Debtors' sole bases for the emergency nature of the Contempt Motion is alleged diversion of time and resources of their professionals and the requirement that the Debtors pay a cure amount under a previous order. Neither assertion is sufficient to create a true need for an emergency hearing, which deprives Creative Realty of sufficient time to prepare its response and permit its witnesses to attend the hearing, Christopher L. Perkins, Esq., at LeClairRyan, A Professional Corporation, in Richmond, Virginia, says. If the Stay Motion is granted -- and Creative Realty supports it -- there will be no need for an emergency hearing on the Contempt Motion as it will alleviate the Debtors from the requirement to provide the cure amount, Mr. Perkins notes. To the extent the Court permits the Debtors to proceed with the Contempt Motion on an emergency basis, Creative Realty objects on the grounds that the Assignment Order is not a valid order and the Debtors are not entitled to the relief requested regarding contempt and related sanctions. Indeed, the Contempt Motion is another effort by the Debtors to "saddle" Creative Realty with an agreement and order that were hastily prepared and do not reflect a consensual accord between the parties, Mr. Perkins contends. Creative Realty submits that vacating the Assignment Order is the proper result and wholeheartedly supports the Debtors' request in that regard, Mr. Perkins says. Creative Realty did not have an opportunity to review, much less agree, to the terms of the Assignment Order, as entered by the Court. Specifically, Creative Realty insisted on specific landlord estoppel provisions as a term of the assignment. The Debtors continually promised but failed to deliver that language, Mr. Perkins informs the Court. Creative Realty twice recommended that the Debtors not go forward with the sale hearing on June 9, 2009. Even after the June 9, 2009 hearing, the Debtors sent Creative Realty a revised agreement that did not reflect the Purchaser's intent. "The Debtors ignored Creative Realty's repeated requests, choosing instead to push forward with an order that does not accurately reflect an agreement between the parties," Mr. Perkins relates. In a separate filing, Dollar Tree asks the Court to deny the aspect of the Debtors' Motion seeking relief under Rule 9024 of the Federal Rule of Bankruptcy Procedure and Rule 60(b) of the Federal Rules of Civil Procedure from the Assignment Order. Dollar Tree relates that it informed the Debtors that it had no objection to the sale and assignment, but that it required certain changes to the form of the sublessee estoppel and the form of the order. Dollar Tree and the Debtors consensually resolved their differences with minor modification to the Sublessee Estoppel and the form of the order, none of which adversely affected Creative Realty or Simon. Dollar Tree remains in possession of the Premises and, upon information and belief, the Debtors continue to enjoy the benefits of Dollar Tree's subtenancy. Pursuant to the Sublessee Estoppel and the Assignment Order, Dollar Tree was assured that it was not in default under the Sublease and that the Sublease was in full force and effect. Dollar Tree has relied on the Debtors' affirmations and the Court's findings in the Assignment Order. On June 11, 2009, Dollar Tree was informed that Creative Realty was unwilling to comply with the Assignment Order. Subsequently, Dollar Tree and the Debtors remained in contact regarding the status of the negotiations between the Debtors and Creative Realty. The Debtors' request to vacate the Assignment Order should not be granted because there is no basis to do so, says W. Alexander Burnett, Esq., at Williams Mullen, in Richmond, Virginia. The Debtors' analysis under Rule 60(b) is entirely lacking of the factual elements necessary to grant the relief requested, he said. The Debtors argue that since Creative Realty has not paid the Purchase Price, there will be no harm to undoing the Sale. However, the Debtors ignore that they assumed the Leases, that the sale and assignment became effective June 9, 2009, that Creative Realty and Dollar Tree are now in privity, and that if the Assignment Order is vacated, Dollar Tree's tenancy will be harmed, Mr. Burnett points out. In addition, any breach of the Assignment Order by Creative Realty may be a breach of the privity. Dollar Tree has upwards of 50 years of lease control at issue here, he says. If the breach continues and the Closing does not happen, Dollar Tree will have a significant claim for damages to its leasehold rights -- a claim, which it is prepared to fully prosecute if necessary, Mr. Burnett tells the Court. He adds that if the Court vacates the Assignment Order, not only will Dollar Tree not have a postpetition claim against the Debtors, it may not have a claim against Creative Realty as well. Dollar Tree asks the Court to honor the integrity of the sale process and the sanctity of the Assignment Order. If the Debtors cannot perform as expected because of the actions of Creative Realty, then they have remedies that they can seek against Creative Realty. However, these remedies do not include vacating the Assignment Order, Mr. Burnett asserts. Even if the Debtors are able to get past the strict limitation on review of sale orders approved pursuant to Section 363 of the Bankruptcy Code, they would not be able to meet the stringent requirements of Rule 60(b), Mr. Burnett notes. The Debtors ignore the prejudice to Dollar Tree. Moreover, there are no "exceptional circumstances" that justify relief under Rule 60(b), Mr. Burnett maintains. If Creative Realty has in fact breached, then the Debtors have a damages claim equal to at least as much as the Purchaser was required to pay pursuant to the Assignment Order. Therefore, any harm to the Debtors or the estate warranting extraordinary relief under Rule 60(b)(6) is speculative at this stage of the proceedings, according to Mr. Burnett. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: Shores' $8.2MM is Winning Bidder for Ardmore Land --------------------------------------------------------------- Circuit City Stores Inc. advised the U.S. Bankruptcy Court for the Eastern District of Virginia that, after an auction held on May 11, and after consultation with the Official Committee of Unsecured Creditors, they have determined in the exercise of their business judgment that Shores Oilfield Equipment Company, Inc., submitted the highest and best offer at $8,200,000, for real property located at 1901 Cooper Drive, in Ardmore, Oklahoma. General Mills Operations, LLC, submitted the second highest and best bid for the Property at $8,100,000. Circuit City contemplated on selling the Property to Shores for $6,000,000 subject to higher or otherwise better proposals at an auction. The Court approved the Shores Oilfield Agreement and its terms and conditions. A copy of the Ardmore Sale Order, including the Successful Bidder's Agreement and other exhibits, is available at no charge at http://bankrupt.com/misc/CC_OrdSaleArdmoreOklahomaProp&Ex.pdf Any and all objections to the Motion not waived, withdrawn, settled, adjourned or otherwise resolved are overruled on the merits and denied with prejudice. The Successful Bidder's Agreement and any related agreements, documents, or other instruments may be modified, amended, or supplemented by the parties without further Court order, provided that any modification, amendment, or supplement is disclosed to the Creditors Committee and does not have a material adverse effect on the Seller's estate, in the good faith business judgment of the Seller. Upon consummation of the Successful Bidder's Agreement, the Seller's right, title and interest in the Property will be transferred to Shores Oilfield free and clear of all Liens except the Permitted Encumbrances, with all Liens to attach to the cash proceeds of the Sale in the order of their priority, with the same validity, force, and effect, which they had as against the Property immediately before the transfer, subject to any claims and defenses the Seller may possess. If Shores Oilfield fails to close on the purchase of the Property in accordance with the terms of its Agreement due to no fault of, and Seller is not in default of its obligations under the Agreement, then Seller's counsel will file with the Court and serve upon the Successful Bidder, the Alternate Bidder and their counsel, a notice of the default, which will include a copy of the Alternate Bidder's agreement upon which the Seller will then close. In which case, the (i) Seller will be deemed authorized to close on the sale of the Property with the Alternate Bidder on 10 days' advance written notice to the Alternate Bidder, and (ii) Alternate Bidder will be afforded all of the protections originally afforded to the Successful Bidder under the Ardmore Sale Order and the Court's findings as to adequacy and fairness of consideration paid and good faith will be deemed to apply to the Alternate Bidder, its Alternate Bid, and its purchase and sale agreement with the Seller, without the necessity of further Court order. All deposits submitted to the Seller for the Property will be returned to the bidder that submitted it after the closing of the sale with the Successful Bidder, or Alternate Bidder, as applicable, except in the case of a bidder who closed on the sale of the Property or who was required to close in accordance with the terms of the Ardmore Sale Order, but failed to do so in breach of its contractual obligations through no fault of the Seller. About Circuit City Stores Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Circuit City Stores Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITADEL BROADCASTING: Moody's Cuts Corp. Family Rating to 'Caa3' ---------------------------------------------------------------- Moody's Investors Service downgraded Citadel Broadcasting Corporation's Corporate Family Rating to Caa3 from Caa2 and Probability of Default Rating o Ca from Caa3. In addition, Moody's downgraded Citadel's senior secured credit facility to Caa3 from Caa2. The rating outlook is stable. The downgrades of Citadel's ratings, and in particular its PDR, incorporate the elevated risk of default following the company's recent announcement that it engaged Lazard Freres & Co. LLC to provide financial and advisory services in evaluating financial options, including a possible restructuring of its capital structure. Citadel's Caa3 CFR as compared to its lower Ca PDR, reflects Moody's expectation of an above average recovery for the debt. The rating outlook is stable as all ratings now reflect Moody's estimate of ultimate recovery levels for creditors upon emergence from an anticipated near-term restructuring, with the exception of the PDR which would revert to a "D" rating in the event of a bankruptcy filing or some other form of wholesale default on the company's obligations due to a restructuring. On March 26, 2009, Citadel entered into the fourth amendment and waiver of its credit agreement dated June 12, 2007. Among its provisions, Citadel's total leverage covenant was waived for the remainder of 2009 and a cumulative minimum monthly EBITDA test was introduced. Assuming the company does not refinance or restructure its debt and given the current economic environment and Moody's expectations for continuing weak broadcast advertising through 2009, Moody's believes Citadel will need to seek an additional amendment and/or waiver in the first quarter of 2010 as the company will be extremely challenged to meet either the new stipulation that requires it to have at least $150 million of available cash on January 15, 2010 or its original total leverage covenant which returns for the quarter ending March 31, 2010. Moody's anticipates that Citadel's bank group will continue to provide amendments and/or waivers as long as the company is able to generate free cash flow, which Moody's believes is likely in 2009 and 2010, although a pre-emptive restructuring on a larger scale may occur given ongoing weakness in the capital markets and bank debt amortization requirements beginning next year which could be greater than free cash flow generation if ad revenues do not rebound in time. In addition, the debt load is increasing due to the higher interest cost following the latest amendment which is being added to the debt outstanding at maturity (PIK). Citadel's debt is almost completely comprised of bank loans and there is minimal junior capital to absorb any losses in a bankruptcy or restructuring. The amendment also requires Citadel to modify the maturity date of its unrated convertible subordinated notes ($48 million as of March 31, 2009) to no earlier than September 30, 2014 (after the bank facility matures) from February 15, 2011. If the company is successful with this note exchange, it would likely be deemed as a limited default distressed exchange. Moody's has taken these ratings actions: Issuer: Citadel Broadcasting Corporation * Corporate Family Rating -- Downgraded to Caa3 from Caa2 * Probability of Default rating -- Downgraded to Ca from Caa3 * Senior Secured Credit Facility -- Downgraded to Caa3 (LGD 3, 32%) from Caa2 (LGD 3, 31%) * Speculative Grade Liquidity Rating -- Remains at SGL-4 * Outlook -- Changed to Stable from Negative Moody's last commented on Citadel on April 14, 2009 when it said that the company's fourth amendment and waiver of its credit agreement did not impact the company's ratings or outlook. The last rating action on Citadel was on February 13, 2009 when Moody's downgraded the company's CFR to Caa2 from B3 and PDR to Caa3 from Caa1. Citadel Broadcasting Corporation, headquartered in Las Vegas, Nevada, is a radio broadcaster comprised of 165 FM and 58 AM stations in more than 50 markets. For the LTM period ended March 31, 2009, Citadel generated revenues of $816 million. CLAIRE'S STORES: Bank Debt Trades at 43% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Claire's Stores is a borrower traded in the secondary market at 56.38 cents-on-the- dollar during the week ended June 26, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.97 percentage points from the previous week, the Journal relates. The loan matures May 29, 2014. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa2 rating and S&P's B- rating. 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. At May 2, 2009, Claire's Stores 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). CLEAR CHANNEL: Bank Debt Trades at 40% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications is a borrower traded in the secondary market at 59.58 cents-on-the-dollar during the week ended June 26, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.74 percentage points from the previous week, the Journal relates. The loan matures January 30, 2016. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa2 rating and S&P's CCC rating. Clear Channel Communications is the operating subsidiary of San Antonio, Texas-based CC Media Holdings Inc. Clear Channel Communications, Inc.'s balance sheet at March 31, 2009, showed total assets of $22.0 billion and total liabilities of $25.4 billion, resulting in a members' deficit of $3.3 billion. * * * As reported by the Troubled Company Reporter on June 10, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating and issue-level ratings on CC Media Holdings Inc. and its operating subsidiary, Clear Channel Communications Inc., by two notches. The corporate credit rating was lowered to 'CCC' from 'B-'. The ratings were removed from CreditWatch, where they were placed with negative implications on May 4, 2009. "The ratings downgrade is due to uncertainty around Clear Channel's ability to meet financial covenants in the second half of 2009 without completing a debt exchange with senior lenders," explained Standard & Poor's credit analyst Michael Altberg. In March 2009, Moody's Investors Service downgraded Clear Channel Communications' Corporate Family Rating and Probability-of-Default Rating to Caa3 from B2. Moody's also downgraded the Company's senior secured credit facilities to Caa2 from B1 and all senior unsecured notes to Ca from Caa1. In addition, Moody's downgraded Clear Channel's speculative grade liquidity rating to SGL-4 from SGL-2. The ratings downgrade reflects Moody's belief that there is a high probability that the company will violate its secured 9.5x leverage covenant this year, and that when this occurs, a debt restructuring will be likely. The outlook has been revised to negative. This rating action concludes the review initiated on February 6, 2009. CLEAR CHANNEL: Jon Zellner Leaves Sirius XM to Take Same Role ------------------------------------------------------------- Sarah McBride at The Wall Street Journal reports that Jon Zellner has left Sirius XM Radio Inc. as its senior vice president of music programming to take up the same role at rival Clear Channel Communications Inc. in July. WSJ notes that Sirius XM is having trouble holding on to paying subscribers amid the recession. According to WSJ, Sirius XM's subscribers declined to 18.6 million subscribers in the first quarter 2009, compared to 19 million at the end of 2008. W. Scott Bailey at San Antonio Business Journal relates that Mr. Zellner will work with Clear Channel program directors in major and mid-sized U.S. markets, and will report to Mark Kopelman, executive vice president of the Company's operations. Business Journal states that at Sirius XM, Mr. Zellner has supervised programming for more than 75 channels, and previously served as XM's executive vice president of programming. Clear Channel Communications is the operating subsidiary of San Antonio, Texas-based CC Media Holdings Inc. Clear Channel Communications, Inc.'s balance sheet at March 31, 2009, showed total assets of $22.0 billion and total liabilities of $25.4 billion, resulting in a members' deficit of $3.3 billion. * * * As reported by the Troubled Company Reporter on June 10, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating and issue-level ratings on CC Media Holdings Inc. and its operating subsidiary, Clear Channel Communications Inc., by two notches. The corporate credit rating was lowered to 'CCC' from 'B-'. The ratings were removed from CreditWatch, where they were placed with negative implications on May 4, 2009. "The ratings downgrade is due to uncertainty around Clear Channel's ability to meet financial covenants in the second half of 2009 without completing a debt exchange with senior lenders," explained Standard & Poor's credit analyst Michael Altberg. In March 2009, Moody's Investors Service downgraded Clear Channel Communications' Corporate Family Rating and Probability-of-Default Rating to Caa3 from B2. Moody's also downgraded the Company's senior secured credit facilities to Caa2 from B1 and all senior unsecured notes to Ca from Caa1. In addition, Moody's downgraded Clear Channel's speculative grade liquidity rating to SGL-4 from SGL-2. The ratings downgrade reflects Moody's belief that there is a high probability that the company will violate its secured 9.5x leverage covenant this year, and that when this occurs, a debt restructuring will be likely. The outlook has been revised to negative. This rating action concludes the review initiated on February 6, 2009. CLEAR CHANNEL: Will Have Trouble Paying Debts, Analysts Say ----------------------------------------------------------- David Hendricks at Mysanantonio.com reports that analysts believe that Clear Channel Communications will find it hard making scheduled payments later this year. According to Mysanantonio.com, Clear Channel has $22 billion in total debts, and is faced with slumping advertising revenues, a $428 million first quarter loss, and little prospect for refinancing its debt. Mysanantonio.com relates that Clear Channel will have to start selling stations or go into bankruptcy, where lenders will put stations up for sale. Clear Channel's lenders evidently want the Company to file for bankruptcy so that they can pick up the assets cheap and sell them, Mysanantonio.com states. Citing author and radio industry forecaster Alec Foege, Mysanantonio.com states that several radio companies like CBS Radio, Citadel Broadcasting Inc., and Emmis Communications would bid on Clear Channel radio stations, especially those in large cities. Mysanantonio.com quoted Mr. Foege as saying, "The financial moves by Clear Channel were aimed at enriching the executive team at the expense of the shareholders. There's still financial acumen at the Company, but it doesn't extend to solving its financial problems in terms of marketing its core product." Clear Channel Communications is the operating subsidiary of San Antonio, Texas-based CC Media Holdings Inc. Clear Channel Communications, Inc.'s balance sheet at March 31, 2009, showed total assets of $22.0 billion and total liabilities of $25.4 billion, resulting in a members' deficit of $3.3 billion. * * * As reported by the Troubled Company Reporter on June 10, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating and issue-level ratings on CC Media Holdings Inc. and its operating subsidiary, Clear Channel Communications Inc., by two notches. The corporate credit rating was lowered to 'CCC' from 'B-'. The ratings were removed from CreditWatch, where they were placed with negative implications on May 4, 2009. "The ratings downgrade is due to uncertainty around Clear Channel's ability to meet financial covenants in the second half of 2009 without completing a debt exchange with senior lenders," explained Standard & Poor's credit analyst Michael Altberg. In March 2009, Moody's Investors Service downgraded Clear Channel Communications' Corporate Family Rating and Probability-of-Default Rating to Caa3 from B2. Moody's also downgraded the Company's senior secured credit facilities to Caa2 from B1 and all senior unsecured notes to Ca from Caa1. In addition, Moody's downgraded Clear Channel's speculative grade liquidity rating to SGL-4 from SGL-2. The ratings downgrade reflects Moody's belief that there is a high probability that the company will violate its secured 9.5x leverage covenant this year, and that when this occurs, a debt restructuring will be likely. The outlook has been revised to negative. This rating action concludes the review initiated on February 6, 2009. CLOVERLEAF ENTERPRISES: Proposes Meyers Rodbell as Special Counsel ------------------------------------------------------------------ Cloverleaf Enterprises Inc. asks the U.S. Bankruptcy Court for the District of Maryland for permission to employ Meyers, Rodbell & Rosenbaum P.A. as special counsel. The firm will represent the Debtor in certain litigation and administrative proceedings and provide general business advice. The firm's customary hourly rates range from $150 to $375 per hour. To the best of the Debtor's knowledge, the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Fort Washington, Maryland-based Cloverleaf Enterprises Inc. -- http://www.rosecroft.com/-- owns the Rosecroft Raceway, a harness track. The Company filed for Chapter 11 bankruptcy protection on June 3, 2009 (Bankr. D. Md. Case No. 09-20056). The Company listed $10 million to $50 million in assets and $1 million to $10 million in debts. CLOVERLEAF ENTERPRISES: Seeks Zuckerman Spaeder as Attorney ----------------------------------------------------------- Cloverleaf Enterprises Inc. asks the U.S. Bankruptcy Court for the District of Maryland for permission to employ Zuckerman Spaeder LLP as is attorneys. The firm will: a) advise the Debtor with respect to its powers and duties as a debtor and debtor-in-possession in the continued management and operation of its business and affairs; b) attend meetings and negotiate with representatives of creditors and other parties in interest and advise and consult on the conduct of the case, including all of the legal and administrative requirements of operating in Chapter 11; c) take all necessary action to protect and preserve the Debtor's estate, including, with the assistance of Special Counsel, the prosecution of actions on its behalf, the defense of any actions commenced against the estate, negotiations concerning all litigation in which the Debtor may be involved and objections to claims filed against the estate; d) prepare on behalf of the Debtor all motions, applications, answers, orders, reports and papers necessary to the administration of the estate; e) negotiate and prepare on the Debtor's behalf one or more plans of reorganization, a disclosure statement and all related agreements and/or documents and take any necessary action on behalf of the Debtor to obtain confirmation of such plans; f) advise the Debtor in connection with any sale of assets; g) appear before this Court, any appellate courts, and the U.S. Trustee, and protect the interests of the Debtor's estate before such courts and the U.S. Trustee; and h) perform all other necessary legal services and provide all other necessary legal advice to the Debtor in connection with its Chapter 11 case. The firm's customary hourly rates range from $325.00 to $1,000. To the best of the Debtor's knowledge, the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Fort Washington, Maryland-based Cloverleaf Enterprises Inc. -- http://www.rosecroft.com/-- owns the Rosecroft Raceway, a harness track. The Company filed for Chapter 11 bankruptcy protection on June 3, 2009 (Bankr. D. Md. Case No. 09-20056). The Company listed $10 million to $50 million in assets and $1 million to $10 million in debts. COACHMEN INDUSTRIES: Discloses $6MM in Cash; Admits to Tough Times ------------------------------------------------------------------ Richard M. Lavers, President and Chief Executive Officer of Coachmen Industries, Inc., said the Company situation has roughly $5 million to $6 million in unrestricted cash. "Much of our cash is still tied up in escrow accounts and as collateral for letters of credit. With one remaining payment, we have received the settlement funds from the Crane/Kemlite lawsuit. We have used these funds in part to repay a temporary loan of $2.3 million from one of our directors, and some of the rest to resolve our bonding issues for the second phase of the Ft. Bliss military construction project," he said in a shareholder update filed June 19, 2009, with the Securities and Exchange Commission. "However, as I said on the April 28 conference call, more capital is required to fulfill our strategic vision of opening more home stores, increasing major projects, expanding our footprint, and developing additional specialty vehicles, as well as for bonding other military construction projects," Mr. Lavers continued. Mr. Lavers said their bonding company is still requiring 100% cash collateral to post bonds. In that regard, he said Coachmen has recently been notified that its proposal team has been awarded an additional large military construction project that should begin production this year. "We intend to bond that project. Naturally we are in discussions with our bonding company about the balance sheet metrics they would expect in order to reduce or eliminate the need for collateral for these bonded projects. This may require raising additional capital, which in itself could also resolve this issue. As you are certainly aware, the shareholders narrowly voted down the preferred stock authority that we sought at the May shareholders meeting, so we are considering other alternatives for securing that capital," he said. Mr. Lavers said the first five months of 2009 have been challenging for the Company. "We saw a slight improvement in housing sales in May over April, but without a major project to buoy us up, business has remained very difficult. Rightly or wrongly, we chose not to bid on money losing projects just to 'keep the doors open.' Surveying the current landscape littered with bankrupt companies, we think we made the correct choice. We also continued to curtail costs, and our monthly run rate has been reduced from the first quarter," he said. Mr. Lavers said the National Association of Home Builders/Wells Fargo index of builder confidence fell in May, as builders continue to report losses as foreclosures mount, worsening the glut of unsold properties and driving down prices at the same time that borrowing costs are rising. "It appears we may be bucking that trend, however modestly. I am by no means predicting a runaway second quarter, but our housing sales marginally improved May over April -- and after months of precipitous drops, that is saying a lot. Our Ft. Bliss modules began shipping in May, and we also will begin production on several smaller commercial projects this month. We did ship over $900,000 in buses in May, which approximately equaled the entire amount shipped in the prior four months! We expect that number will increase in June, and we have just finished fabricating, installing and testing new chassis jigs to allow us to open a second bus production line at our plant in Middlebury." Mr. Lavers also clarified that General Motors' bankruptcy has not much effect on Coachmen's ARBOC Mobility bus business. "Over a month ago, GM did announce the temporary suspension of the cutaway chassis that we modify for this bus. The chassis is slated to be available again in mid-August. In the meantime, we have enough chassis in inventory and scheduled for delivery to feed planned production through mid-August. This has caused us to delay our planned ramp-up in production slightly, and is causing some juggling of chassis among pending orders, but assuming chassis are available in August as promised by GM, this will prove to be mostly a temporary inconvenience. "On the other hand, the recently announced permanent discontinuance of the medium duty chassis has actually helped us. This is not the chassis we use, but it is the chassis used by some of our competitors for their buses. As a result, we have seen some orders switch to us, and we expect to see demand for our ARBOC Mobility product to increase." Mr. Lavers also clarified the status of the potential contingent liabilities relating to potential obligations to repurchase RVs. The RV Group was sold in December. On June 9, Coachmen completed the sale of its primary Fitzgerald, Georgia RV complex to Ben Hill County (GA) Schools. Prior to Coachmen's exit from the RV business in December 2008, this complex had been the home of operations for Coachmen's subsidiary, Coachmen Motor Works of Georgia, LLC, formerly known as Coachmen Recreational Vehicle Company of Georgia, LLC. The closing consideration paid was approximately $650,000. The Company has retained a separate facility in Fitzgerald. According to Mr. Lavers, management believes that the overall perception of the contingent liabilities is much worse than their reality. "The number many have seized upon is the maximum potential amount of 'dealer buybacks' under floor-planning arrangements that we were required to report by accounting rules. I do not quarrel with accounting rules, but I must again point out that the maximum gross potential of these claims is not, never has been, and will prove not to be close to the actual net liability," he said. This is for many reasons, he said: (1) Under the floor-planning arrangements, dealers are not free to simply tender back inventory: the floor planner must cease doing all business with the dealership, which in most cases has meant the dealership must go out of business; (2) Coachmen RV's dealer body tended to have a higher concentration of low fixed overhead, smaller "Mom and Pop" dealerships that are better able to withstand reduced revenues than larger, higher overhead operations; fewer dealer failures means fewer inventory buybacks; (3) The buyback obligations have a fixed contractual life, in the largest part 12 months from the date of sale to the dealer, some extending to 15 months; and (4) Rentals being further limited by maximum mileage; as a result, every month that goes by, in fact every day that goes by, the maximum total potential obligation shrinks significantly; (5) The Company retained only the buyback obligations for the product which the Company sold prior to the sale of the RV Group, not for any of the inventory that was sold to Forest River, and subsequently resold under floor-planning arrangements in which the Company did not participate; those sales do not add to the Company's exposure; (6) There are many other factors why the maximum possible is never achieved, for example, damaged units, and units sold out of trust (by dealers in trouble). Further, the Company cut back production and sales were reduced many months before the group was sold, which means the monthly reduction in exposure was "front end loaded;" and, (7) The maximum is a gross figure, with no allowance for any residual value upon resale of the RVs. Mr. Lavers cited these facts: -- The estimated maximum exposure (if all dealers go out of business today, all their floor-planned inventory is eligible and none of it can be resold for anything) at the end of June is just over $29 million; however, management believes that it is reasonable to assume that most dealers who survived the slow winter months will stay in business for the spring/summer selling season. Assuming that occurs, by the end of September, the maximum exposure is estimated to drop to well under $8 million. -- The RV industry is starting to show signs of revival. The RVIA announced just this past week at the RV Industry Association annual meeting in Washington, D.C. that experts from the University of Michigan expect a 24% increase in shipments in 2010. Some manufacturers are already increasing production and shipments, particularly of travel trailers. As retail sales increase, dealers will be stronger, and the decline of repurchase obligations will accelerate. -- Actual floor-planning repossession demands made between closing of the transaction and May 29, 2009 totaled only $1.5 million. -- The total of units the Company actually repurchased as a result of floor-plan contracts in 2009 through May 29, 2009, was $300,000. About Coachmen Industries Coachmen Industries, Inc., is one of America's premier systems- built construction companies under the ALL AMERICAN HOMES(R) and MOD-U-KRAF(R) brands, as well as a manufacturer of specialty vehicles. Coachmen Industries, Inc. is a publicly held company with stock listed on the New York Stock Exchange (NYSE) under the ticker COA. * * * In March 2009, Coachmen's independent public accounting firm, Ernst & Young LLP, said that despite the Company's sale of the assets related to its RV Segment, its recurring net losses and lack of current liquidity raise substantial doubt about its ability to continue as a going concern. Coachmen said its ability to continue as a going concern is highly dependent on its ability to obtain financing or other sources of capital. Coachmen temporarily closed a plant in Rutherfordton, North Carolina early in March. The Company plans to reopen the facility when the market recovers and demand is sufficient. "[T]iming depends on market conditions," the Company said. COAST TO COAST METAL: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Coast to Coast Metal Finishing Corp, A Calif. Corp 401 S Raymond Ave Alhambra, CA 91803 Bankruptcy Case No.: 09-26209 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Dennis Sanchez, Esq. The Law Office of Dennis Sanchez 5307 E Beverly Blvd Los Angeles, CA 90022 Tel: (323) 725-7714 Fax: (323) 725-6313 Total Assets: $1,950,000 Total Debts: $1,036,297 The Company says it does not have unsecured creditors who are non- insiders when it filed its petition. The petition was signed by Gilardo Bernal, president of the Company. COLETO CREEK: S&P Downgrades Ratings on $735 Mil. Senior Loan ------------------------------------------------------------- Standard & Poor's Rating Services said it has lowered its issue rating on Coleto Creek Power L.P.'s $735 million senior secured first-lien term loan due 2013, its $170 million synthetic letter of credit facility maturing 2013, and its $60 million working capital revolving facility maturing 2011 to 'B+' from 'BB-'. S&P also revised the recovery rating to '2' from '1', indicating S&P's expectation that lenders would receive substantial (70% to 90%) recovery of principal in the event of a payment default. (Coleto Creek has a $200 million senior secured second-lien term loan due 2013 that S&P does not rate.) "The rating action follows the project's weak financial performance over the past couple of years caused by weakened market conditions, construction delays with its pollution-control equipment, and other forced outages," said Standard & Poor's credit analyst Swami Venkataraman. "Furthermore, given current merchant market conditions, S&P expects financial performance to be weaker than S&P originally expected for the next couple of years as well, which also leads to greater refinancing risk and lower recovery prospects," he continued. At the time S&P assigned the original rating in 2006, S&P expected Coleto's debt burden at Dec. 31, 2008, to be $1,410 per kilowatt (kW). That number now stands at $1,458/kW. In addition, S&P expected leverage at Dec. 31, 2010, to be $1,171/kW under the sponsor's case. S&P now expect that number to be $1,329/kW, or perhaps $1,425/kW under S&P's merchant price deck. These ratios support only a 'B+' rating, including the benefit of recovery expectations. Coleto Creek is an indirect, wholly owned partnership subsidiary of International Power PLC (IP; BB-/Stable/--) and owns the 632 megawatt coal-fired Coleto Creek plant in the Electric Reliability Council of Texas (ERCOT) region. Debt-service coverage ratio for 2008 was 0.93x, chiefly because of the need to contribute $24 million for capital expenditures and the major maintenance reserve for the 2010 turbine rewind. Coverage in 2009 will improve because there is no maintenance contribution, and interest rates are lower. Exposure to merchant heat rates and gas prices will increase in 2010, and financial performance will vary accordingly. The stable outlook reflects S&P's expectation that the plant will be able to maintain its historically strong operating profile. Downside risk still exists if merchant markets continue to deteriorate or if the project's availability is poorer than expected or if a stringent carbon legislation is passed. Upside potential is currently limited, given the high leverage at the project and will largely be driven by a merchant market recovery. COMMERCIAL BARGE: Moody's Assigns 'B1' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned ratings to Commercial Barge Line Company; probability of default of B2, corporate family rating of B1, and speculative grade liquidity rating of SGL-2. Moody's also assigned a rating of B2 to the planned issuance of $200 million of Second Lien Notes due 2017. The outlook is stable. These are first time ratings being assigned to Commercial Barge. Commercial Barge is the sole first tier holding company subsidiary of American Commercial Lines Inc. The proceeds of the Notes and a significant drawing on a contemporaneously arranged new first slien, asset-based revolving credit due 2013 ("Revolver" not rated) will fund the refinancing of Commercial Barge's existing first lien revolving credit facility that matures on March 31, 2011. The Notes will be guaranteed by ACL and other of its operating company subsidiaries. The B2 probability of default rating reflects ACL's favorable position as the second largest independent inland barge transportation company and the second largest manufacturer of Jones Act qualified barges. The ratings also reflect that demand for the company's transportation services can be highly cyclical, which can stress credit metrics during periods of weak demand, as in the current trough. Over the near-term, Moody's expects ACL's metrics to remain in the single B range. The broad mix of commodities transported; expectations of increasing manufacturing margins over time; and expected sizeable free cash flow in upcoming periods should help sustain ACL's ability to adequately service its debt obligations. "Moody's expects ACL's management to continue to execute its two-pronged strategy focused on streamlining and making its barge operations more efficient and improving the profitability of its shipyard," said Moody's Analyst Jonathan Root. "Moody's believes ACL's strategy could potentially strengthen its credit profile beyond the intermediate term. However, the B2 probability of default rating reflects Moody's anticipation that the current weak demand pattern and execution risks could negatively affect the pace and extent to which ACL achieves its projected financial performance," continued Root. The B2 PDR also reflects the expectation of an improving liquidity profile because of the application of free cash flow to reduction of the Revolver balance. Moody's used a fundamental approach when estimating family level loss-given default, rather than the mean family level loss-given default estimate of 50%. Moody's believes the important link of ACL's freight services in the supply and distribution chains of its customers, its large fleet and its barge manufacturing capacity should maintain ACL's relevance in the sector. This should support an enterprise value in excess of the aggregate of the obligations modeled in the LGD waterfall. Based on this approach, Moody's increased its estimate of the expected family level recovery rate to 65% from 50%. This higher estimate of recovery results in the corporate family rating being notched up by one notch from the B2 probability of default rating, to B1. The SGL-2 rating indicates that Moody's expects ACL to maintain good liquidity. Moody's expects ACL to generate a meaningful level of free cash flow, which it will apply to reduction of the revolver balance. Moody's also expects availability on the new $350 million asset-based revolving credit (not rated) to remain above $70 million. The stable outlook anticipates that cash flow from core barge operations will remain steady over the near term, notwithstanding the current, challenging U.S. economic conditions. The outlook could be changed to positive if ACL is able to meaningfully replace cyclical earnings from the grain trade with less cyclical, higher margin cargoes, such that it sustains a more predictable, higher level of funds from operations from its barge business. EBIT to Interest that is sustained above 2.5 times or Retained cash flow to Net Debt that approaches 20% could lead to a change in the outlook to positive. The outlook could be changed to negative or the ratings downgraded if Funds from operations + interest to interest approached 2.2 times or Debt to EBITDA was sustained above 5.2 times. Although not expected over the near term, the ratings could also be pressured by a large, primarily debt-financed acquisition. Assignments: Issuer: Commercial Barge Line Company -- Probability of Default Rating, Assigned B2 -- Corporate Family Rating, Assigned B1 -- Senior Secured Regular Bond/Debenture, Assigned B2, 53 - LGD4 -- Speculative Grade Liquidity Rating, Assigned SGL-2 Commercial Barge Line Company, headquartered in Jeffersonville, Indiana, is the sole first tier subsidiary holding company of American Commercial Lines, Inc., also headquartered in Jeffersonville, Indiana. ACL is one of the largest integrated marine transportation and services companies in the United States, providing barge transportation and related services, and barge, towboat and other vessel construction. COMMUNITY BANK: FDIC Named Receiver; Has No Buyer ------------------------------------------------- Community Bank of West Georgia, Villa Rica, Georgia, was closed June 26 by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver. To protect the depositors, the Federal Deposit Insurance Corporation will mail checks to insured depositors for their insured funds on Monday morning, June 29. Direct deposits from the federal government, such as Social Security and Veterans' payments, will be transferred to United Community Bank, Blairsville, Georgia. Customers will need to claim their incoming government ACH direct deposits in person at United Bank's Villa Rica branch. Customers of Community Bank of West Georgia with brokered deposits should contact their brokers about the status of their accounts. The FDIC will provide payment for insured brokered deposits once brokers provide the FDIC with the necessary documents to identify customers and permit a determination of their insured deposit. As of May 15, 2009, Community Bank of West Georgia had total assets of $199.4 million and total deposits of $182.5 million. At the time of closing, the bank had approximately $1.1 million in deposits that exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers. Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-866-954-9530 to set up an appointment to discuss their deposits. Interested parties can visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/communityga.html Beginning today, depositors of Community Bank of West Georgia with more than $250,000 at the bank may visit the FDIC's Web page "Is My Account Fully Insured?" at: https://www2.fdic.gov/drrip/afi/index.asp. The FDIC estimates the cost of the failure to its Deposit Insurance Fund to be approximately $85 million. Community Bank of West Georgia is the 41st FDIC-insured institution to fail in the nation this year, and the eighth in Georgia. The last FDIC- insured institution to be closed in the state was Southern Community Bank, Fayetteville, on June 19, 2009. CONSOLIDATED RESORTS: Closing Fifteen Time-Share Resorts -------------------------------------------------------- Star-Bulletin reports that Consolidated Resorts Inc. is closing 15 time-share resorts. According to Star-Bulletin, nine resorts will be closed in Hawaii, three in Las Vegas, and two in Orlando. Consolidated Resorts is a vacation ownership company that operates 14 resorts in Hawaii, Las Vegas and Orlando. Its Hawaii resorts include the Imperial Hawaii in Waikiki and the Kona Islander on the Big Island and seven Maui resorts: Sands of Kahana Vacation Club, Kahana Beach Resort, Hono Koa, The Gardens at West Maui, Kahana Villa Resort, Maui Beach Vacation Club and Maui Banyan Vacation Club. Consolidated Resorts filed for bankruptcy on Tuesday, after Goldman Sachs Group's Whitehall real-estate fund abandoned its $372 million investment. CONSPIRACY ENTERTAINMENT: Files Amendment to 2007 Annual Report --------------------------------------------------------------- Conspiracy Entertainment Holdings, Inc., filed with the Securities and Exchange Commission Amendment No. 2 on Form 10-K/A to amend the Company's Annual Report on Form 10-KSB for the year ended December 31, 2007. The Annual Report was originally filed on April 15, 2008, and subsequently amended on January 16, 2009. The Company filed Amendment No. 2 to revise certain disclosures in Item 9A(T) regarding the Company's controls and procedures. A full-text copy of the revised Annual Report is available at no charge at http://ResearchArchives.com/t/s?3e49 At March 31, 2009, the Company had $3,248,657 in total assets and $9,789,181 in total liabilities, resulting in $6,540,524 in stockholders' deficit. As of March 31, 2009, the Company had an accumulated deficit of roughly $9,382,108, significant negative working capital, and is in default on its debt. These factors raise substantial doubt about the Company's ability to continue as a going concern, the Company has said. As of March 31, 2009, the Company's cash balance was $67,147, compared to $424,529 at December 31, 2008. Total current assets at March 31, 2009, were $401,967, compared to $681,349 at December 31, 2008. In its quarterly report for the first quarter ended March 31, 2009, the Company indicated it currently plans to use the cash balance and cash generated from operations for increasing working capital reserves and, along with additional debt financing, for new product development, securing new licenses, building up inventory, hiring more sales staff and funding advertising and marketing. Management believes that the current cash on hand and additional cash expected from operations in fiscal 2009 will be sufficient to cover working capital requirements for fiscal 2009. The Company reached this conclusion by assuming that a major portion -- $2,217,400 -- of its debt is attributed to convertible notes payable. The Company said it expects the debt will be eventually be converted into shares although there is no assurance that this debt will actually be converted into. The Company said it was negotiating with several other parties to waive portions of its debt, or to pay the debt with the issuance of company stock. In addition, based on the schedule of development for the remainder of this year, the Company said it anticipates an increase in sales, profitability and cash receipts in 2009 which will allow the Company to continue to pay down working capital requirements and help avoid the additional need for working capital. On May 21, 2009, the Company entered into a subscription agreement with certain parties. The Company issued and sold secured convertible notes in the aggregate principal amount of $150,000 to the Subscribers: Note Principal & Subscriber Purchase Price ---------- ---------------- Alpha Capital Anstalt $75,000 Whalehaven Capital Fund Limited $75,000 Immediately following the closing, there were 51,189,605 outstanding shares of the Company's common stock. The Notes mature one year from the date of issuance and will accrue interest at the rate of 15%. Upon a default in the payment of any amounts due under the Notes, the interest rate will be increased to 18%. Upon the occurrence of an Event of Default, all principal and interest then remaining unpaid shall be immediately due and payable. Events of Default include but are not limited to (i) the Company's failure to make payments when due, (ii) breaches by the Company of its representations, warranties and covenants, and (iii) delisting of the Company's common stock from the OTC Bulletin Board. Pursuant to the terms of the Notes, the Subscribers have the right, so long as the Notes are not fully repaid, to convert the Notes into shares of the Company's common stock at a conversion price of $0.01 per share, as may be adjusted. The Notes contain anti-dilution provisions, including but not limited to if the Company issues shares of its common stock at less than the then existing conversion price, the conversion price of the Notes will automatically be reduced to such lower price. The Notes contain limitations on conversion, including the limitation that the holder may not convert its Note to the extent that upon conversion the holder, together with its affiliates, would own in excess of 4.99% of the Company's outstanding shares of common stock (subject to an increase upon at least 61-days' notice by the Subscriber to the Company, of up to 9.99%). The Notes are secured by a security interest in certain assets of the Company. About Conspiracy Entertainment Holdings Based in Santa Monica, California, Conspiracy Entertainment Holdings, Inc., develops, publishes and markets interactive entertainment software. The Company currently publishes titles for many popular interactive entertainment hardware platforms, such as Sony's PlayStation, Nintendo 64 and Nintendo's Game Boy Color and Game Boy Advance as well as the next generation hardware platforms such as Sony's PlayStation 2, Sony's PSP, Nintendo GameCube, Nintendo's DS, Microsoft's Xbox, and also for the PC. COYOTES HOCKEY: Reinsdorf Bids $148MM for Team to Stay in Glendale ------------------------------------------------------------------ Joe Schneider at Bloomberg News reports that Jerry Reinsdorf, owner of Major League Baseball's Chicago White Sox and National Basketball Association's Chicago Bulls, offered to buy the bankrupt Phoenix Coyotes of the National Hockey League for $148 million. Mr. Reinsdorf's bid would challenge one from Jim Balsillie, co- chief executive officer of Blackberry-maker Research In Motion Ltd., who has offered $212.5 million on the condition he's allowed to move the team to Canada. Mr. Reinsdorf's offer was submitted June 26, the deadline set by Judge Redfield T. Baum of the U.S. Bankruptcy Court for the District of Arizona for bidders willing to keep the team, partly owned by Wayne Gretzky, at its current location in the Phoenix suburb of Glendale. No other competing offers were submitted. Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. As widely reported, Jim Balsillie, Research in Motion Ltd.'s co- chief executive officer, offered to buy the Phoenix Coyotes for $212 million and move the NHL team to Hamilton, Ontario, and the League balked at the relocation proposal. Mr. Balsillie was unsuccessful in 2007 when he attempted to buy and relocate the Nashville Predators, and lost a similar bid in 2006 to buy and relocate the Pittsburgh Penguins. CURRENT RIVER CAPITAL: Case Summary & 16 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Current River Capital LLC 123 Shorecrest Circle Hendersonville, TN 37075 Bankruptcy Case No.: 09-07051 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. ------ -------- Tekeni Partners LLC 09-07052 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: George C. Paine II Debtor's Counsel: Glen C, Watson III, Esq. Law Office of Roy Desha, Jr. 1106 18th Ave S Nashville, TN 37212 Tel: (615) 369-9600 Fax: (615) 369-9613 Email: bknotice@deshalaw.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 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/tnmb09-07051.pdf The petition was signed by William Pfaffmann, managing partner of the Company. DAVID WEBB: Files for Ch 11 Bankr.; Lists $6.9MM in Debts --------------------------------------------------------- David Webb Inc. has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. Rob Bates at JCK Online reports that David Webb listed $10.3 million in assets and $6.9 million in liabilites. According to JCK Online, David Webb's top creditors include: -- Frank Mastoloni and Sons, owed about $333,000; -- Dov Schwarrz, owed about $165,000; -- J Birnbach, owed about $30,000; and -- PH Gems, owed about $19,000. David Webb said in a statement, "the Corporation has encountered serious financial difficulties in connection with its operations and is unable to make payment of the necessary debts and expenses being incurred by it in such operations, and in the opinion of the directors and officers, it is in the best interest of the Corporation and its creditors that the corporation reorganize pursuant to Chapter 11 of the United States Bankruptcy Code." New York-based David Webb Inc. is a 61-year-old Madison Avenue- based jeweler owned by the Silberstein Family Partnership. DELTA AIR: Fitch Downgrades Issuer Default Rating to 'B-' --------------------------------------------------------- Fitch Ratings has downgraded the debt ratings of Delta Air Lines, Inc., and its wholly owned subsidiary Northwest Airlines, Inc.: DAL -- Issuer Default Rating to 'B-' from 'B'; -- First-lien senior secured credit facilities to 'BB-/RR1' from 'BB/RR1'; -- Second-lien secured credit facility to 'B-/RR4' from 'B/RR4'. NWA -- IDR to 'B-' from 'B'; -- Secured bank credit facility to 'BB-/RR1' from 'BB/RR1'. The ratings apply to $2.4 billion of funded secured debt at DAL and $904 million of outstanding credit facility borrowings at NWA. The Rating Outlook is Negative. The downgrade of DAL's ratings reflects the continued erosion of the airline's near-term cash flow generation potential that has resulted from extremely weak business travel demand and large year-over-year declines in passenger revenue per available seat mile. Despite large 2009 cost savings driven by the sharp decline in jet fuel prices from last summer's peak, Fitch expects DAL to report another year of substantially negative free cash flow in 2009 as the airline struggles to adjust capacity to a diminished level of demand. While total unrestricted liquidity of more than $5 billion provides DAL with a bigger margin of safety than most of its legacy carrier competitors, the steady erosion of cash balances since last fall threatens DAL's ability to comfortably meet heavy fixed obligations without improved access to capital. With scheduled debt maturities of over $5 billion between now and the end of 2011, DAL's ability to maintain liquidity near current levels depends upon improved credit market openness and a stabilization of the industry operating environment in 2010. The 'B-' IDR reflects DAL's weak near-term margin and cash flow outlook, the anticipated erosion of cash balances driven by weak operating results in the second half of 2009, and the carrier's extremely heavy lease-adjusted debt burden. Risk of default over the next year is mitigated by DAL's liquidity and cost advantages over its more vulnerable rivals -- UAL, AMR and US Airways (all with IDRs of 'CCC' by Fitch). Fitch believes that a bankruptcy filing by any of those carriers, which could occur as early as the winter if operating trends fail to stabilize, would quickly result in further capacity rationalization and a stabilization of RASM trends for better-positioned carriers like DAL. Steady progress toward complete integration of NWA into DAL has been made since the merger closed last October. Most of the key labor representation and seniority issues have been resolved, and DAL appears on track to meet its goal of receiving a single airline operating certificate from the FAA by early 2010. Cross- fleeting of DAL and NWA aircraft is now underway, and consolidation of airport facilities is nearing completion. Unfortunately, many of the projected revenue synergies offered by the creation of a truly global route network are being offset by the collapse of premium business travel demand and intense fare competition across the entire industry. This has forced DAL, as recently as early June, to announce more planned cuts in international capacity to minimize losses on under-performing routes. While the combined DAL-NWA network is probably best positioned to deliver a RASM premium to the industry once global economic recovery occurs, a continuation of substantial unit revenue declines could, in Fitch's view, drive full year 2009 negative free cash flow in excess of $400 million. The revenue outlook has shown no signs of real improvement over the last few weeks, even as hopes for a slow economic recovery moving into 2010 have increased. For DAL, May monthly revenue trends appeared to weaken versus April, particularly in hard-hit international markets that had been at the center of DAL's network growth strategy since 2007. DAL noted that H1N1-related booking softness was apparent even outside of Mexican markets last month. Asian point of sale bookings in particular were affected, and DAL indicated that the H1N1 revenue impact could approach $250 million for the full year. This has eroded international RASM further and contributed to DAL's decision to pull more seats out of its international system this fall. The carrier now expects total system ASMs to be down about 10% in fourth quarter 2009 (4Q09). In light of the continued revenue softness, Fitch believes that full-year passenger RASM declines in the range of 10%-15% are now far more likely for DAL and the other legacy carriers with significant international and premium passenger exposure. The big driver of negative RASM comparisons in the second quarter remains weak business bookings on high-fare trans-Atlantic and trans-Pacific routes. In order to offset the impact of poor front cabin loads, U.S. legacy carriers and foreign flag carriers have been engaged in aggressive fare discounting. Fitch expects this fare and unit revenue pressure to continue through the summer, dampening hopes of a free cash flow turnaround in the second half of the year. Recognizing the risk of widening losses in international markets after August, DAL's most recent capacity cut will seek to trim schedules in some of the underperforming international routes. On the cargo side, extreme revenue pressure linked to the global trade collapse led DAL to shut down the dedicated freighter operation inherited from NWA. DAL's relative liquidity strength within the U.S. legacy carrier group has been pressured over the past year as a result of poor operating trends and the outflow of cash driven by the need to post fuel hedge margin collateral with hedging counterparties. While that liquidity effect is winding down as the out-of-the- money hedges roll off this year, DAL's total unrestricted liquidity position has worsened to the point where unrestricted cash, investments and revolver availability total less than 20% of annual revenues. On June 11, management indicated that Q2-ending liquidity will total $5.3 billion (including the undrawn $500 million NWA revolving credit facility). Given the carrier's heavy maturities over the next three years and the significant refinancing risk it faces in the still-constrained credit markets, Fitch regards a cash position of over $4.0 billion as critical for DAL as it faces negative free cash flow in the second half of the year and heavy scheduled debt maturities of over $2.9 billion in 2010. Absent strong free cash flow, extensive capital markets activity will be required to refinance maturing obligations. One positive is the fact that all near-term aircraft orders have committed financing in place, and aircraft capital commitments in 2010 are relatively light. In addition, Continental's launch of a public enhanced equipment trust certificate deal in early June bodes well for a revival of credit market access -- at least for better- positioned airlines like DAL. With regard to 2010 maturities, the freeing-up of collateral backing the NWA bank credit facility and the 2001-1 EETC issue (both maturing next year) puts DAL in a relatively good position to successfully refinance those obligations. Since DAL and NWA were the last major carriers to restructure in Chapter 11 this decade, they exited with a unit cost advantage over the other U.S. legacy carriers. This puts the merged carrier in a position to report somewhat better margins than UAL, AMR and US Airways -- even as DAL struggles with a network strategy that is not delivering big revenue premiums to the rest of the industry. Merger-related savings are being realized this year as facilities are streamlined, capacity and headcount are reduced and aircraft are parked. For the full year, DAL expects non-fuel unit costs to rise by 4%-6%. Fitch expects unit cost inflation to moderate somewhat in 2010 and 2011 if capacity cuts abate in line with a modestly better operating environment. Fuel costs will be the biggest single contributor to cash flow this year, with fuel- related cash savings of over $5 billion expected based on the forward curve. Like the other large U.S. airlines, DAL paid a steep price for aggressive fuel hedging undertaken in 2008 as energy prices soared before pulling back sharply. By 4Q08, after crude oil and jet fuel prices had dropped from their July highs, DAL began to unwind some of its remaining fuel hedge exposure. Even after the early termination of many fuel swaps, DAL was required under GAAP hedge accounting rules to recognize large losses in 4Q08 and 1Q09. This will continue over the next two quarters, and the company has indicated that it will likely book $500 million in hedge-related losses in the current quarter. From a cash standpoint, the key trend will be the working down of the fuel hedge collateral account to less than $100 million by the end of the June quarter. After the late 2008 fuel price collapse, DAL began layering on more protection for 2009. In order to reduce downside liquidity risk, the airline has used call options more extensively to hedge. DAL has approximately 52% of Q3 fuel consumption hedged. For Q4, hedges cover approximately 36% of projected consumption. Based on the forward curve, DAL's projected fuel price is $2.04 per gallon for Q2, $2.17 per gallon for Q3, and $2.05 per gallon for Q4. The narrowing jet fuel crack spread in the first half of this year has kept jet fuel prices from rising as much as gasoline and other refined products, limiting some of the damage of rising energy prices over the past several weeks. Recovery expectations for the DAL first-lien revolver and term loan are superior to those of the second lien term loan. Recovery prospects for first-lien lenders are strong, reflecting the value of a collateral pool consisting of aircraft, engines, spare parts and other assets, as well as a tight covenant package protecting lenders via fixed charge coverage, minimum liquidity and collateral coverage tests. Similar covenants are included in NWA's secured bank credit facility, which is secured by NWA's Pacific route authorities. Taking into account the credit facilities, aircraft-backed EETC obligations and private mortgage agreements, DAL has few unencumbered assets remaining to support additional borrowing if liquidity needs grow. With regard to covenant compliance, the most restrictive requirement is the quarterly EBITDAR fixed charge coverage test in DAL's bank credit facilities. As defined in the bank agreement, DAL must maintain a ratio of EBITDAR to fixed charges in excess of 1.2 times (x) on a twelve-month trailing basis. A similar covenant exists in the NWA credit facility. Compliance with a fixed charge ratio requirement of 1.0x for the preceding quarter only begins in the current quarter following a suspension of the test for four quarters after NWA's negotiation of a waiver in 2008. In subsequent quarters, the EBITDAR coverage test will be extended to a two-quarter period ending Sept. 30 and a three- quarter period ending Dec. 31. A further downgrade of the IDR to 'CCC' could follow later this year or in 2010 if no signs of stabilization in the airline revenue environment appear, increasing the risk that DAL's total liquidity position could slip below $4.0 billion with forecasts of continuing negative free cash flow next year. Fitch believes that in such a scenario other more vulnerable carriers will file for bankruptcy before DAL would face imminent default risk. In the process, capacity rationalization would have the effect of stabilizing unit revenue, putting DAL in a better position to ride out the period of industry restructuring. A revision of the Outlook to Stable would likely occur if a stabilization in RASM and fuel trends, accompanied by modest global economic growth, occurs in 2010. A significant re-opening of aircraft-backed credit markets would also be regarded as a necessary condition for a return to a Stable Outlook. DETROIT PROPERTIES: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Detroit Properties, LLC 26 Corporate Plaza Drive, Suite 260 Newport Beach, CA 92660 Bankruptcy Case No.: 09-16272 Debtor-affiliate filing separate Chapter 11 petition on April 23, 2009: Entity Case No. ------ -------- MKA Real Estate Opportunity Fund I 09-13613 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: June 24, 2009 Court: Central District Of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Nancy S. Goldenberg, Esq. nancy.goldenberg@usdoj.gov Law Offices of Nancy S. Goldenberg 411 W. Fourth St., Ste. 9041 Santa Ana, CA 92701-8000 Tel: (714) 338-3416 Fax: (714) 338-3421 Estimated Assets: $10 million to $50 million Estimated Debts: $50 million to $100 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Allied Nationwide Security business debt $13,845 Attn: A.J. Nomair 18570 Shermay Way, Ste. C-1 Reseda, CA 91335 Tel: (800) 955-8417 Al Rentals $75 24000 Crenshaw Blvd. Torrance, CA 90505 The petition was signed by George C. Baker. DIAL-A-MATTRESS: Court Okays Firm's $25 Million Sale to Sleepy's ---------------------------------------------------------------- The Hon. Dennis Milton of the U.S. Bankruptcy Court for the Eastern District of New York has approved the sale of 1800mattress.com to Sleepy's LLC, Furniture Today reports. As reported by the Troubled Company Reporter on May 28, 2009, Dial-a-Mattress Operating Corp. said that Sleepy's won the Company's auction with a $25 million bid. Moritt Hock Hamroff Horowitz lawyer Marc Hamroff said that the deal includes the assumption of certain obligations like offering jobs to "substantially all employees" of Dial-A-Mattress. Sleepy's bid would allow unsecured creditors to be paid 85% of what they were owed when 1800mattress.com filed bankruptcy in March, Furniture Today says, citing Judge Milton. According to Furniture Today, Judge Milton also let Sleepy's reject 1800mattress.com's two franchise agreements. The report quoted Judge Milton as saying, "The Court's independent review confirms that rejection of the franchise agreements benefits the estate and that the decision to conduct an auction sale is a proper business judgment." Furniture Today relates that the Court had earlier approved an $11.4 million damage claim for the franchisees if their agreements were ultimately rejected. The claim will be added to the other claims from unsecured creditors, says the report. Founded in 1976, 1800mattress.com -- http://www.1800mattress.com/ -- is the leading national multi-channel (internet, chat, call center and showrooms) retailer of mattresses, box springs and bedding products. It features products by all major brands, including custom sizes, sofa beds, Murphy beds, futons, and adjustable and organic beds. As reported by Troubled Company Reporter on March 23, 2009, creditors filed a Chapter 7 petition for Dial-A-Mattress Operating Corp. et al. (Bankr. E.D.N.Y. Case No. 09- 41966). 1-800-Mattress Corp. and Dial-A-Mattress countered by filing voluntary Chapter 11 petitions. Marc L. Hamroff, Esq., Leslie A. Berkoff, Esq., and Theresa A. Driscoll, Esq., at Moritt Hock Hamroff & Horowitz LLP, serve as the Debtors' counsel. DXTECH LLC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: DxTech, LLC Heron Cove Office Park 10 Al Paul Lane, Suite 200 Merrimack, NH 03054 Bankruptcy Case No.: 09-12176 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Kevin Gross Debtor's Counsel: Christopher A. Ward, Esq. Polsinelli Shughart PC 222 Delaware Avenue, Suite 1101 Wilmington, DE 19801 Tel: (302) 252-0920 Fax: (302) 252-0921 Email: cward@polsinelli.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/deb09-12176.pdf The petition was signed by Steve Lufkin, president and chief executive officer of the Company. E*TRADE FINANCIAL: Files Prospectus Supplement to Senior Notes -------------------------------------------------------------- E*TRADE Financial Corporation filed with the Securities and Exchange Commission a prospectus supplement dated June 25, 2009, relating to its: -- $258,607,000 principal amount of 7.375% Senior Notes due 2013; and -- $126,600,000 principal amount of 7.875% Senior Notes due 2015, which may be sold from time to time by selling securityholders. The Notes are general senior obligations of E*TRADE and are not and will not be secured by any property or assets and are not and will not be guaranteed by any of the Company's subsidiaries through which the Company currently conducts substantially all of its operations. E*TRADE says the selling securityholder may offer and sell the Notes offered directly to purchasers or through underwriters, brokers, dealers or agents, who may receive compensation in the form of discounts, concessions or commissions. The Notes may be sold in one or more transactions at fixed or negotiated prices or at prices based on prevailing market prices at the time of sale. If underwriters, brokers, dealers or agents are used to sell these Notes, E*TRADE will name them and describe their compensation in a supplement to the prospectus supplement. E*TRADE will not receive any of the proceeds from the sale of the Notes pursuant to the prospectus supplement. E*TRADE, however, is responsible for expenses incident to the registration under the Securities Act of 1933 of the offer and sale of the Notes. The Notes will not be listed on any securities exchange. A full-text copy of the prospectus supplement is available at no charge at http://ResearchArchives.com/t/s?3e3b 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 June 23, 2009, Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on E*TRADE Financial Corp., as well as the senior debt ratings on the 8.0% notes due 2011 and the 12.5% springing lien notes due 2017, to 'CC' from 'CCC-'. At the same time, S&P affirmed the 'CCC-' senior debt rating on the 7.375% notes due 2013 and the 7.875% notes due 2015. S&P also affirmed the 'CCC+' counterparty credit and certificate of deposit ratings on E*TRADE Bank. S&P remove the ratings from CreditWatch- Negative, where they were placed May 21, 2009. The outlook is negative. 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." EDDIE BAUER: U.S. Trustee Forms Seven-Member Creditors Committee ---------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors of Eddie Bauer Holdings Inc. and its debtor- affiliates. The members of the Committee are: 1) The Bank of New York Mellon as Indenture Trustee Attn: Robert H. Major 6525 West Campus Oval New Albany, OH 43054 Phone: 614-775-5278, Fax: 614-775-5636 2) Tara Hill c/o Marc Primo, Esq. Initiative Legal Group LLP 1800 Century Park East, Suite 200 Los Angeles, CA 90067 Phone: 310-556-5637 Fax: 310-861-9051 3) RR Donnelley & Sons Company Attn: Dan Pevonka 3075 Highland Pkwy. Downers Grove, IL 60515 Phone: 630-322-6931 Fax: 630-322-6052 4) Simon Property Group Attn: Ronald M. Tucker 225 W.Washington St. Indianapolis, IN 46204 Phone: 317-263-2346 Fax: 317-263-7901 5) GGP Limited Partnership c/o Julie Minnick Bowden 110 N. Wacker Drive Chicago, IL 60606 Phone: 312-960-2707 Fax: 312-442-6374 6) AQR Capital Attn: Todd Pulvino 2 Greenwich Plaza, 1st Floor Greenwich, CT 06830 Phone: 203-742-3002 Fax: 203-742-3072 7) Highbridge Capital Management, LLC Attn: Eric Colandrea 9 West 57th Street, 27th Floor New York, NY 10019 Phone: 212-287-4735 Fax: 212-751-0755 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Eddie Bauer Established in 1920 in Seattle, Washington, 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, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer Inc. emerged from Spiegel's 2003 chapter 11 case as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Eddie Bauer Holdings, Inc., and eight affiliates filed for bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No. 09-12099). Judge Mary F. Walrath presides over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as local counsel. The Debtors' restructuring advisors are Alvarez and Marsal North America LLC. Their financial advisors are Peter J. Solomon Company. Kurtzman Carson Consultants LLC acts as claims and notice agent. As of April 4, 2009, Eddie Bauer had $525,224,000 in total assets and $448,907,000 in total liabilities. EDDIE BAUER: Hires Latham & Watkins as Bankruptcy Counsel --------------------------------------------------------- Eddie Bauer Holdings, Inc., and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Latham & Watkins LLP as attorneys in their bankruptcy cases, nunc pro tunc to June 17, 2009. Latham & Watkins will, among other things, advise the Debtors with respect to their powers and duties as debtors-in-possession, attend meetings and negotiate with parties-in-interest, take all necessary action to protect and preserve the Debtors' estates, and prepare and submit pleadings necessary to the administration of the Debtors' estates. L&W's hourly rates for matters related to the Chapter 11 cases range as: Hourly Rate ----------- Partners $750 to $1,050 Counsel $695 to $975 Associates $370 to $740 Paraprofessionals $115 to $415 L&W says it is a "disinterested person" as that term is defined in 11 U.S.C. Sec. 101(14). L&W may be reached at: Heather L. Fowler, Esq. Latham & Watkins LLP 355 South Grand Avenue Los Angeles, California 90071-1560 Tel: (213) 4866-1234 Fax: (213) 891-8763 About Eddie Bauer Established in 1920 in Seattle, Washington, 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, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer Inc. emerged from Spiegel's 2003 chapter 11 case as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Eddie Bauer Holdings, Inc., and eight affiliates filed for bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No. 09-12099). Judge Mary F. Walrath presides over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as local counsel. The Debtors' restructuring advisors are Alvarez and Marsal North America LLC. Their financial advisors are Peter J. Solomon Company. Kurtzman Carson Consultants LLC acts as claims and notice agent. As of April 4, 2009, Eddie Bauer had $525,224,000 in total assets and $448,907,000 in total liabilities. EDDIE BAUER: Seeks to Employ Young Conaway as Delaware Counsel -------------------------------------------------------------- Eddie Bauer Holdings, Inc., and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Young Conaway Stargatt & Taylor, LLP, as their Delaware bankruptcy counsel, nunc pro tunc to June 17, 2009. The firm's principal attorneys and paralegals designated to represent the Debtors are: Hourly Rate ----------- Michael R. Nestor, Partner $560 Kara Hammond Coyle, Associate $330 Pilar G. Kraman, Associate $240 Troy Bollman, Paralegal $125 Young Conaway receive a $150,000 retainer. Young Conaway disclosed that it previously represented creditors and lienholders of the Debtors, including Bank of New York, Hyperion, Wells Fargo Bank, and Epsilon. Other than that disclosure, the firm has no connection with the Debtors, their creditors or any other parties-in-interest. Young Conaway is a "disinterested person" as that term is defined in 11 U.S.C. Sec. 101(14) of the Bankruptcy Code, says Michael R. Nestor, a partner at the firm. The firm may be reached at: Michael R. Nestor, Esq. Kara Hammond Coyle, Esq. Pilar G. Kraman 1000 West Street, 17th Floor Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 About Eddie Bauer Established in 1920 in Seattle, Washington, 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, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer Inc. emerged from Spiegel's 2003 chapter 11 case as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Eddie Bauer Holdings, Inc., and eight affiliates filed for bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No. 09-12099). Judge Mary F. Walrath presides over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as local counsel. The Debtors' restructuring advisors are Alvarez and Marsal North America LLC. Their financial advisors are Peter J. Solomon Company. Kurtzman Carson Consultants LLC acts as claims and notice agent. As of April 4, 2009, Eddie Bauer had $525,224,000 in total assets and $448,907,000 in total liabilities. EPIXTAR CORP: Can Employ Hinshaw Culbertson as Bankruptcy Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida has granted Epixtar Corp., et al., permission to employ Michael D. Seese, Esq., and the firm Hinshaw & Culbertson, LLP, as their bankruptcy, general corporate and litigation counsel, nunc pro tunc to May 18, 2009. H&C is authorized to receive payment in the amount of $25,000 as a retainer, against which H&C is authorized to draw fees and costs awarded by the Court. As the Debtors' counsel, H&C will, among others, advise the Debtors generally regarding matters of bankruptcy law in connection with these cases; negotiate with creditors, prepare and seek confirmation of a plan and related documents, and assist the Debtors with implementation of any plan; and assist the Debtors in the analysis, negotiation and disposition of estate assets for the benefit of the estate and its creditors. Michael D. Seese, Esq., a partner at H&C, assured the Court that the firm does not have any interest materially adverse to the Debtors or their estates, and that the firm is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. H&C's professionals bill at these hourly rates: Members $350 to $600 Associates and Of Counsel $190 to $400 Paralegals $115 to $180 The hourly rate of Mr. Seese is $450. About Epixtar Corp. Based in Miami, Florida, Epixtar Corp. fdba Global Assets Holding Inc. -- http://www.epixtar.com/-- acquires or establishes companies specialized in mass-market communication products. Epixtar operates through its subsidiaries, National Online Services Inc. and One World Public. The Company and its debtor-affiliates filed for Chapter 11 protection on October 6, 2005 (Bank. S.D. Fla. Case No. 05-42040). Michael D. Seese, Esq., at Hinshaw & Culbertson, LLP,, represents the Debtors in their restructuring efforts. Carlos E. Sardi, Esq., Glenn D. Moses, Esq., and Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., represent the official committee of unsecured creditors as counsel. When the Debtors filed for protection from their creditors, they listed total assets of $30,376,521 and total debts of $39,158,724. ESSAR STEEL: S&P Downgrades Corporate Credit Rating to 'B-' ----------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Sault Ste. Marie, Ontario-based Essar Steel Algoma Inc. (ESA; formerly Algoma Steel Inc.) to 'B-' from 'B'. The outlook is negative. At the same time, S&P lowered the issue-level rating on ESA's first-lien bank facility to 'B+' (two notches above the corporate credit rating) from 'BB-', while the recovery rating remains unchanged at '1', indicating an expectation of a very high (90%- 100%) recovery in the event of default. In addition, S&P lowered the issue-level rating on ESA's senior unsecured notes to 'CCC+' (one notch below the corporate credit rating) from 'B-'. The '5' recovery rating is unchanged, indicating an expectation of a modest (10%-30%) recovery in the event of default. "The downgrade reflects S&P's expectation that ESA's fiscal year 2010 results will be weak amid ongoing difficult conditions in the North American steel industry, contributing to extremely high leverage for the rating and a likely breach of covenants later in calendar 2009," said Standard & Poor's credit analyst Donald Marleau. S&P believes that revenues for fiscal year 2010 (ESA's fiscal year end is March 31) could decline by as much as 50%, as benchmark prices for ESA's primary product, hot rolled coil steel, have dropped to about US$400 per ton, compared with ESA's average of US$875 per ton for fiscal 2009, while reducing output to match sharply lower demand. Considering the high fixed costs in the steel industry, S&P believes that ESA's EBITDA could drop 70% for fiscal 2010, pushing debt leverage up to 8x. The ratings on ESA reflect its limited operating diversity, large debt burden, and the volatility of its end markets. In Standard & Poor's opinion, these risks are counterbalanced by the company's good cost profile and integration of key inputs. In June 2007, ESA was 100% acquired by Essar Steel Holdings Ltd. (not rated) for US$1.6 billion, financed in part with US$1.1 billion of new debt at ESA. The rated debt is nonrecourse to Essar and, hence, the ratings reflect only ESA's stand-alone credit quality. Essar's ownership of ESA is not a significant rating factor in S&P's view, but it might become increasingly important if Essar uses ESA as an aggressive growth vehicle to execute its North American strategy. The negative outlook reflects Standard & Poor's view that weak steel industry conditions will pressure ESA's profitability making it likely that the company will breach the financial covenants in its term loan in the second half of 2009. S&P could lower the ratings or place them on CreditWatch with negative implications if ESA is unable to successfully amend the covenants by early September 2009, as S&P expects the company will be in breach after its fiscal second quarter ended Sept. 30, 2009. That said, S&P could revise the outlook to stable if ESA is able to successfully negotiate covenant relief, along with improving steel market conditions and profitability resulting in debt to EBITDA improving to less than 5.5x. In S&P's view, the rating on ESA is constrained to the 'B' category because of its limited operating diversity. FAIRPOINT COMMUNICATIONS: Fitch Junks Issuer Default Rating ----------------------------------------------------------- Fitch Ratings has downgraded these ratings assigned to FairPoint Communications, Inc.: -- Issuer Default Rating (IDR) to 'C' from 'B-'; -- $531 million 13.125% senior unsecured notes due 2018 to 'C/RR4' from 'B-/RR4'; -- $170 million senior secured revolving credit facility to 'B- /RR1' from 'BB-/RR1'; -- $497 million senior secured term loan due 2014 to 'B-/RR1' from 'BB-/RR1'; -- $1.13 billion senior secured term loan due 2015 to 'B-/RR1' from 'BB-/RR1'; -- $200 million senior secured delayed draw term loan due 2015 to 'B-/RR1' from 'BB-/RR1'. Fitch removed the company from Rating Watch Negative. Fitch's downgrade reflects the company's June 24, 2009 announcement of a private exchange offer for all of its 13.125% senior notes due 2018, of which there is approximately $531.1 million outstanding, and a consent solicitation. FairPoint states the exchange offer will reduce cash interest in the second and third quarter of 2009, and help maintain its compliance with the interest coverage ratio maintenance covenant (2.5 times [x]) in its senior secured bank facility. Fitch believes the company is unlikely to pursue a waiver to the covenant, as the company states that preliminary discussions with its administrative agent regarding a waiver would lead to a significant fee payment and additional restrictions and revisions to its credit facility. The consent solicitation, if successful, will lead to amendments that weaken covenant protection for holders of the old notes. In Fitch's view, the exchange and consent solicitation are being undertaken in an attempt to avoid a bankruptcy filing and to preserve the company's liquidity and thus the exchange has elements of a coercive debt exchange under Fitch's policy. Terms of the exchange call for noteholders participating in the exchange offer to receive new notes equal to 100% of the principal amount of the old notes tendered plus accrued and unpaid interest, with payment (at FairPoint's option) in either additional new notes or a combination of new notes and cash. A minimum of 95% of the aggregate principal amount of old notes must be tendered to consummate the exchange offer. The new notes will be identical to the old notes in all material aspects except that: 1) FairPoint will have the option to pay a portion or all of its Oct. 1, 2009 interest payment by capitalizing the payment and adding it to the principal of the notes; and 2) the new notes will mature one day after the old notes on April 2, 2018. FairPoint had previously disclosed with the release of its first quarter 2009 earnings in May 2009 that the weak economy, difficulties related to its systems cutover, and incremental costs to operate the business following cutover may jeopardize its ability to execute on its business plan, and that it may be at risk of violating its interest coverage covenant in its bank facility as early as June 30, 2009. The company had also stated it was exploring changes to its capital structure, which had led to Fitch's previous downgrade of its IDR to 'B-' from 'B+' on May 7, 2009. On March 31, 2009, FairPoint's cash balance amounted to approximately $92.5 million and its restricted cash balance was $55.2 million. The cash balance includes proceeds drawn on FairPoint's $170 million credit facility to preserve capital availability; $4.7 million remains available. FairPoint has no major maturities in 2009, although Fitch estimates approximately $33 million will be due under the amortization of its credit facility during the remainder of the year. The revolving credit facility and term loan A mature in March 2014. FAIRPOINT COMMUNICATIONS: S&P Cuts Corporate Credit Rating to 'CC' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered the corporate credit and bank loan ratings on Charlotte, North Carolina-based telecommunications carrier FairPoint Communications Inc. to 'CC' from 'CCC+'. S&P also lowered the company's senior unsecured debt rating to 'C' from 'CCC-' and revised the CreditWatch implications on all these ratings to negative from developing. These actions follow the company's announcement that it is commencing a private exchange offer for the $531 million of remaining outstanding senior notes due 2018 for new notes at 100% of par value that Standard & Poor's views as a distressed exchange offer. The new notes are identical in all material respects, except that they permit the interest payable on Oct. 1, 2009, in cash, by capitalizing the interest and adding it to principal or some combination and it also extends the maturity by one day. This offer also includes a consent solicitation to eliminate or amend substantially all restrictive covenants and modify a number of the events of default in the indenture. "Due to these various modifications," said Standard & Poor's credit analyst Catherine Cosentino, "we view this as a distressed exchange offer under S&P's ratings criteria, especially since the company has indicated that it may be unable or unwilling to make the Oct. 1, 2009, interest payment on the notes and that the exchange offer is critical to its continued viability while it works to explore options for a more permanent restructuring of its capital structure." The exchange offer is designed to reduce cash interest expense for the second and third quarters of 2009 and to help maintain compliance with the interest coverage covenant in the credit facility. FairPoint currently expects it is likely to fail this test in June 30 period and that a successful exchange offer may not be sufficient to meet the test in the Sept. 30 period. The company has begun discussions regarding a waiver of the potential covenant breach and views the exchange as a first step to a more comprehensive restructuring of the capital structure. The exchange offer requires a minimum of 95% of the principal amount to be tendered and the offer expires on July 22, 2009. "If it is successful, S&P will lower the corporate credit rating further to 'SD' and the rating on the notes further to 'D'," added Ms. Cosentino. S&P will then reassign the corporate credit rating, and are likely to be raise it to 'CC', given the very limited liquidity being experienced by the company since the cutover from the Verizon systems due to operational issues, the uncertain payment of interest due on Oct. 1, and uncertain ability to meet existing covenants in the credit facility over the coming quarters. FIRST WORTH OSTEOPATHIC: Bk. Ct. Abstains from Probate Matter ------------------------------------------------------------- WestLaw reports that even assuming that it could exercise "related to" jurisdiction over a removed state court action brought by a probate estate that had previously obtained a judgment against the debtor-hospital for its medical malpractice in connection with the testator's death, to recover from a third party that administered a trust created by the debtor-hospital in lieu of purchasing liability insurance based on the third party's role in the depletion of trust assets, the bankruptcy court would exercise its discretion to permissively abstain from hearing the proceeding. The proceeding was in the nature of a state law dispute between non-debtor parties that was only tangentially related to the bankruptcy case, and the probate estate had requested a jury trial. In re Fort Worth Osteopathic Hosp., Inc., --- B.R. ----, 2009 WL 1037587, http://is.gd/1fSXZ(Bankr. N.D. Tex.). Fort Worth Osteopathic Hospital, Inc., filed a voluntary chapter 7 petition (Bankr. W.D. Tex. Case No. 05-41513) on February 11, 2005. Thereafter Shawn K. Brown was appointed as the chapter 7 trustee to liquidate the healthcare concern. FLYING J: Plan Filing Period Extended to August 31 -------------------------------------------------- The U.S. Bankruptcy Code for the District of Delaware has extended Flying J, Inc., and its debtor-affiliates' exclusive period to period to file a plan until August 31, 2009, and their exclusive period to solicit acceptances of that plan until October 20, 2009. This is the second extension of the Debtor's exclusive periods. In their motion, the Debtors related that an extension of the exclusive periods will provide them adequate time to assess and pursue all alternative options with respect to their Chapter 11 cases. Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is engaged in the exploration and refining of petroleum products. It also operates about 200 travel plazas in 41 states and six Canadian provinces. The Company and six of its affiliates filed for Chapter 11 protection on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FLYING J: To Consider Proposed Longhorn Sale Process on July 6 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on July 6, 2009, at 11:30 a.m. (EST) to consider the motion of Flying J, Inc., et at., for an order approving bidding and notice procedures and break-up fee in connection with the sale of (i) substantially all of the assets of Flying J unit Longhorn Partners Pipeline, L.P. and (ii) petroleum products belonging to certain of the Debtors. The deadline to file objections, solely with respect to the bidding procedures order, if any, is on or before July 2, 2009, at 4:00 p.m. (EST). The sale objection deadline is on or before July 20, 2009, at 4:00 p.m. (EST). The sale hearing will be held on July 27, 2009, at 10:30 a.m. (EST). As reported in the Troubled Company Reporter on June 23, 2009, Magellan Midstream Partners, L.P., was selected as the "stalking horse" bidder for substantially all of the assets of Longhorn Partners Pipeline, L.P. The 700-mile common carrier pipeline system transports refined petroleum products from Houston to El Paso, Texas. A terminal in El Paso, comprised of a 5-bay truck loading rack and over 900,000 barrels of storage, is included in the purchase. This terminal serves local petroleum products demand and distributes product to connecting third-party pipelines for ultimate delivery to markets in Arizona, New Mexico and in the future to Northern Mexico. Magellan currently serves as the operator of the pipeline system. The purchase price for the pipeline system is $250 million plus the fair market value of line fill, which is currently estimated at approximately $90 million. Management intends to finance the acquisition with debt. Break-Up Fee The Stalking Horse Purchase Agreement with Magellan dated June 19, 2009, provides for a break-up fee of $3,750,000 (1.5% of the Purchase Price) in the event that a party other than Magellan is the successful bidder for the acquired assets at the auction. If, however, another party is the successful bidder, and on or prior to the last day of the acution, the applicable period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (known commonly as the "HSR Act") applicable to the transactions comtemplated by the APA has expired or terminated, then the break- up fee will be $7,500,000. Under the proposed bid procedures, the bid deadline is no later than 4:00 p.m. (EST) on July 17, 2009. If necessary, the Debtors will conduct an auction with respect to the acquired assets starting at 9:00 a.m. (EST) on July 24, 2009, at Kirkland & Ellis, LLP, 601 Lexington Avenue, New York, N.Y. 10022, or at such other plae, date and time as may be designated in writing by the Debtors. A full-text copy of Flying J's proposed bidding procedures is available at: http://bankrupt.com/misc/flyingj.proposedbiddingprocedures.pdf Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is engaged in the exploration and refining of petroleum products. It also operates about 200 travel plazas in 41 states and six Canadian provinces. The Company and six of its affiliates filed for Chapter 11 protection on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FONIX CORP: Posts $781,000 Net Loss for March 31, 2009 Quarter -------------------------------------------------------------- Fonix Corporation reports that for the quarters ended March 31, 2009 and 2008, the company generated revenues of $141,000 and $286,000, respectively, and incurred net losses of $781,000 and $1,046,000, respectively; and had negative cash flows from operating activities of $51,000 and $82,000, respectively. As of March 31, 2009, the Company had $4,157,000 in total assets, $49,971,000 in total liabilities, all current; resulting in $45,814,000 in stockholders' deficit. As of March 31, 2009, the Company also had an accumulated deficit of $287,895,000; negative working capital of $46,549,000; derivative liabilities of $38,310,000 related to the issuance of Series P Preferred Stock, Series L Preferred Stock, Series M Preferred stock, Series N Preferred Stock, Series O Preferred Stock, Series E Convertible Debentures and Series B Preferred Stock of a subsidiary; accrued liabilities of $7,316,000; accounts payable of $2,204,000; deferred revenues of $445,000. The Company expects to continue to incur significant losses and negative cash flows from operating activities at least through December 31, 2009, primarily due to expenditure requirements associated with continued marketing and development of its speech- enabling technologies. The Company said cash resources, limited to collections from customers, sales of equity and debt securities and loans, have not been sufficient to cover operating expenses. As a result, some payments to vendors have been delayed. On March 15, 2007, the New York State trial court entered judgment against the Company and in favor of the Breckenridge Fund in the amount of $1,602,000. In February 2008, the Company entered into an amended settlement agreement with Breckenridge under which the Company agreed to pay Breckenridge $540,000. The Company has paid Breckenridge the full amount. No further obligations are required by the Company to Breckenridge. These factors, according to the Company, raise substantial doubt about its ability to continue as a going concern. The Company said management plans to fund further operations from cash flows from future license and royalty arrangements and with proceeds from additional issuance of debt and equity securities. There can be no assurance that management's plans will be successful. Based in Lindon, Utah, Fonix Corporation's operations are managed through its two wholly owned subsidiaries, Fonix Speech, Inc., and Fonix GS Acquisition Co., Inc. Fonix Speech provides value-added speech-enabling technologies, speech interface development tools, and speech solutions and applications, including automated speech recognition and text-to- speech that empower consumers to interact conversationally with information systems and devices. Fonix GS was formed on June 27, 2008, to facilitate the acquisition of Shanghai Gaozhi Software Systems Limited, a Chinese software developer and solutions provider in second-generation and third-generation telecommunication operation support systems in China and throughout the Asian Pacific region. Gaozhisoft is a qualified competitor for telecommunication operation supports systems. GaozhiSoft's products are designed to increase data transferring speed, reduce telecommunications data loss and provide network management, billing accuracy and improved implementation techniques to telecom carriers. FONTAINEBLEAU LAS VEGAS: To Employ Moelis as Financial Advisors --------------------------------------------------------------- Fontainebleau Las Vegas Holdings, LLC, and its affiliates obtained authority, on an interim basis, from the U.S. Bankruptcy Court for the Southern District of Florida to employ Moelis & Company LLC as their financial advisor and investment banker. The Court will hold a final hearing on the request on June 30, 2009. Moelis is expected to: (a) undertake, in consultation with members of management of the Debtors, a comprehensive business and financial analysis of the Debtors; (b) review and analyze the Debtors' assets and their operating and financial strategies; (c) review and analyze the business plans and financial projections prepared by the Debtors, including testing assumptions and comparing those assumptions to historical and industry trends of the Debtors; (d) evaluate the Debtors' debt capacity and assist in the determination of an appropriate capital structure for the Debtors; (e) identify, initiate, review, negotiate, and evaluate any restructuring transaction, sale transaction or capital transaction, or any combination, and develop and evaluate alternative proposals for a restructuring transaction, sale transaction or capital transaction, or their combination; (f) solicit and evaluate indications of interest and proposals regarding any Restructuring Transaction, Sale Transaction or Capital Transaction from current or potential lenders, equity investors, acquirors or strategic partners; (g) assist the Debtors in developing strategies to effectuate any Restructuring Transaction, Sale Transaction or Capital Transaction, including financing alternatives; (h) advise and assist the Debtors in the course of their negotiation of any Restructuring Transaction, Sale Transaction or Capital Transaction and participate in those negotiations, as requested; (i) determine and evaluate the risks and benefits of considering, initiating and consummating any Restructuring Transaction, Sale Transaction or Capital Transaction; (j) determine values or ranges of values for the Debtors and any securities that the Debtors offer or propose to offer in connection with a Capital Transaction; (k) in coordination with the Debtors, prepare and implement a marketing plan and prepare one or more memoranda, called selling memos, which describe assets, properties or businesses to be sold in any Sale Transaction; (l) working with the Debtors' management in preparing one or more memoranda, called information memeo, describing the Debtors and their businesses for use in any potential Capital Transaction; (m) contact potential acquirors or investors that Moelis and the Debtors have agreed may be appropriate, and in rendering the services, Moelis may meet with representatives of those acquirors or investors and provide the representatives with the selling memo or information memo and additional information about the Debtors' assets, properties or businesses as may be appropriate and acceptable to the Debtors, subject to customary business confidentiality agreements in form and substance approved by the Debtors; (n) assist the Debtors in the development, preparation and distribution of selected information, documents and other materials to create interest in and to consummate any Restructuring Transaction, Sale Transaction or Capital Transaction; (o) assist the Debtors in valuing their assets or business, provided that any real estate or fixed asset appraisals will be undertaken by outside appraisers, separately retained and compensated by the Debtors; (p) be available at the Debtors' request to meet with Debtors' management, board of directors or board of managers, creditor groups, equity holders, any official committees appointed in these Chapter 11 cases, or other parties, to discuss any Restructuring Transaction, Sale Transaction or Capital Transaction; (q) if requested by the Debtors, participate in hearings before the Bankruptcy Court and provide relevant testimony; and (r) provide other financial advisory and investment banking services as may be agreed upon by Moelis and the Debtors. The Debtors relate that Moelis will provide services concurrently with the Citadel Derivatives Group LLC. The Debtors believe that it is in the best interests of their estates to retain both Moelis and CDRG as financial advisors and investment bankers, and have determined that each possess complementary, but distinct, expertise necessary to assist them in effectuating a Restructuring Transaction, Capital Transaction or Sales Transaction. The Debtors propose to pay Moelis based on this fee structure: (A) Monthly Fee of $150,000 whether or not a Restructuring Transaction, Sale Transaction or Capital Transaction has taken place or will take place, from the Petition Date until the end of the term of the Engagement Letter. All Monthly Fees paid by the Debtors to Moelis will be credited against any Restructuring Fee, Capital Transaction Fee or Sale Transaction Fee payable under the Engagement Letter, provided, however, that credit will not apply to the extent that, and in the amount that, any Restructuring Fee, Capital Transaction Fee or Sale Transaction Fee is not entirely approved by the Bankruptcy Court. (B) Restructuring Fee of $9,000,000 in cash, if a Restructuring Transaction is consummated, to be paid immediately upon any closing of a Restructuring Transaction. A separate Restructuring Fee will be payable in respect of each Restructuring Transaction in the event more than one Restructuring Transaction will occur. (C) Capital Transaction Fee, in cash, equal to: (1) 0.60% of the aggregate amount of new debt raised in a Capital Transaction in the form of secured, first lien, non-convertible debt, (2) 1.05% of the aggregate amount of new debt raised in a Capital Transaction in the form of senior unsecured, non- convertible debt, (3) 1.35% of the aggregate amount of new debt raised in a Capital Transaction in the form of subordinated and/or junior lien, non-convertible debt, (4) 1.50% of the aggregate amount of new debt raised in a Capital Transaction in the form of convertible debt, (5) 2.25% of the aggregate amount or face value of new capital raised in a Capital Transaction in the form of non-convertible preferred equity, including preferred equity in the form of stock or partnership, membership or limited liability company interests, equity-linked securities, options, warrants or other rights to acquire preferred equity interests in the Debtors, and (6) 2.40% of the aggregate amount or face value of new capital raised in a Capital Transaction in the form of common equity, including common equity in the form of stock or partnership, membership or limited liability company interests, equity-linked securities, options, warrants or other rights to acquire common equity interests in the Debtors, or in the form of convertible preferred equity, including convertible preferred equity in the form of stock or partnership, membership or limited liability company interests; Each percentage, however, will be reduced: (a) with respect to clauses (5) or (6), by 50% with respect solely to new preferred equity or common equity raised in a Capital Transaction from: * any person or entity that is an existing investor or holder of debt of the Debtors, other than from Jeffrey Soffer or any entity that Jeffrey Soffer controls, or * indemnified persons specified in the Engagement Letter, or (b) to 0% with respect solely to new debt or new capital raised in a Capital Transaction from Jeffrey Soffer or any entity that Jeffrey Soffer controls. The Capital Transaction Fee will be paid in cash immediately upon any closing of a Capital Transaction. A separate Capital Transaction Fee will be payable in respect of each Capital Transaction in the event that more than one Capital Transaction will occur. (D) Sale Transaction Fee, in cash and in an amount equal to 0.75% of the Transaction Value. In the event, however, that the Sale Transaction consists of (i) a liquidation in a bankruptcy case under chapter 7, or (ii) a credit bid by any secured lender where the credit bid consists solely of secured debt, the cash fee will be an amount equal to 0.60% of the Transaction Value, provided, further, that, any Sale Transaction Fee will not exceed $9,000,000. The Sale Transaction Fee will be paid in cash immediately upon any closing of a Sale Transaction. A separate Sale Transaction Fee will be payable in respect of each Sale Transaction if more than one Sale Transaction occurs. Pursuant to the Engagement Letter, if any single transaction constitutes both a Restructuring Transaction and a Sale Transaction, Moelis will receive only one transaction fee in respect of the single transaction, which will be equal to the greater of the Restructuring Transaction Fee and the Sale Transaction Fee. If a Restructuring Transaction and a Capital Transaction occur simultaneously or at different times, whether or not they are connected with or related to one another, the Debtors will pay Moelis both the Restructuring Transaction Fee and the Capital Transaction Fee. Notwithstanding anything to the contrary contained in the Engagement Letter, the maximum fees payable by the Debtors to Moelis under the Engagement Letter, whether in respect of the Monthly Fee, the Restructuring Fee, the Sale Transaction Fee or the Capital Transaction Fee, or any of this combination, after giving effect to any crediting, will not exceed $15,000,000 in the aggregate. Furthermore, if, at any time prior to the expiration of 12 months after the expiration or termination of Moelis' engagement, a Restructuring Transaction, Sale Transaction or Capital Transaction, or any combination, is consummated, or if the Debtors enter into an agreement regarding a Restructuring Transaction, Sale Transaction or Capital Transaction, which is subsequently consummated, then the Debtors will pay Moelis the appropriate fee pursuant to the specified fee structure immediately on the closing of the transaction. The fee -- called the tail fee -- will not be paid to Moelis if (a) the Debtors terminate Moelis' engagement due to acts or failures to act by Moelis that are finally determined by a court of competent jurisdiction to constitute bad faith, willful misconduct or gross negligence, or (b) Moelis terminates its engagement pursuant to the Engagement Letter without cause. The Debtors will reimburse Moelis for all reasonable expenses incurred while providing the contemplated services, whether or not any Restructuring Transaction, Sale Transaction or Capital Transaction is consummated. The Debtors will also indemnify and hold harmless Moelis and its professionals against any losses, claims, damages or liabilities in connection with the services it provides to the Debtors related to the Chapter 11 Cases, except liabilities that have resulted primarily from fraud, gross negligence or willful misconduct by Moelis or its professionals. Before the Petition Date, Moelis received $250,000 as retainer fee and $150,000 of monthly fees from October 2008 until June 2009. Moelis also has received $$174,543 as expense reimbursement for the same period. Thane W. Carlston, a managing director at Moelis & Company LLC, in New York, says Moelis and its professionals are "disinterested persons" within the meaning of sections 327(a) and 101(14) of the Bankruptcy Code, but is unable to state with certainty that it has disclosed every client relationship or other connection. In the event that additional disclosure becomes necessary, Moelis will file a supplemental verified statement, Mr. Carlston tells the Court. The Debtors believe that the retention of Moelis is necessary and will be critical to the overall success of the reorganization efforts. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU LAS VEGAS: Taps Citadel as Financial Advisors ----------------------------------------------------------- Fontainebleau Las Vegas Holdings, LLC, and its affiliates obtained authority, on an interim basis, from the U.S. Bankruptcy Court for the Southern District of Florida to employ Citadel Derivatives Group LLC as their financial advisor and investment banker, to assist them in the restructuring of outstanding obligations, raising of additional capital or consummating a sale transaction to facilitate their reorganization and emergence from Chapter 11. The Court authorized the Debtors to pay monthly fees and reimburse Citadel for expenses incurred, pursuant to the Engagement Letter. The Court, however, reserves its ruling on all other fees pending final hearing on the request on June 30, 2009. As the Debtors' financial advisor and investment banker, Citadel is expected, among others, to: (a) undertake a comprehensive business and financial analysis of the Debtors; (b) review and analyze the business plans and financial projections prepared by the Debtors, including testing assumptions and comparing those assumptions to historical and industry trends of the Debtors; (c) identify, initiate, review, negotiate, and evaluate any restructuring transaction, sale transaction or capital transaction, or any combination, and develop and evaluate alternative proposals for a restructuring transaction, sale transaction or capital transaction, or their combination; (d) solicit and evaluate indications of interest and proposals regarding any Restructuring Transaction, Sale Transaction or Capital Transaction from current or potential lenders, equity investors, acquirors or strategic partners; (e) advise and assist the Debtors in the course of their negotiation of any Restructuring Transaction, Sale Transaction or Capital Transaction and participate in those negotiations, as requested; (f) contact potential acquirors or investors that Citadel and the Debtors have agreed may be appropriate, and in rendering the services, Moelis may meet with representatives of those acquirors or investors and provide the representatives with the selling memo or information memo and additional information about the Debtors' assets, properties or businesses as may be appropriate and acceptable to the Debtors, subject to customary business confidentiality agreements in form and substance approved by the Debtors; (g) provide other financial advisory and investment banking services as may be agreed upon by Moelis and the Debtors. For the contemplated services, the Debtors will pay Citadel: (A) A monthly fee of $25,000 (B) Restructuring fee of $6,000,000 in cash if a restructuring transaction is consummated, to be paid immediately upon any closing of a restructuring transaction. A separate Restructuring Fee will be payable in respect of each Restructuring Transaction in the event more than one Restructuring Transaction occurs. (C) If a capital transaction is consummated, a Capital Transaction Fee will be paid in cash equal to: (1) 0.40% of the aggregate amount of new debt raised in a Capital Transaction in the form of secured, first lien, non-convertible debt, (2) 0.70% of the aggregate amount of new debt raised in a Capital Transaction in the form of senior unsecured, non-convertible debt, (3) 0.90% of the aggregate amount of new debt raised in a Capital Transaction in the form of subordinated and/or junior lien, non-convertible debt, (4) 1.00% of the aggregate amount of new debt raised in a Capital Transaction in the form of convertible debt, (5) 1.50% of the aggregate amount or face value of new capital raised in a Capital Transaction in the form of non-convertible preferred equity, including preferred equity in the form of stock or partnership, membership or limited liability company interests, equity-linked securities, options, warrants or other rights to acquire preferred equity interests in the Debtors, and (6) 1.60% of the aggregate amount or face value of new capital raised in a Capital Transaction in the form of common equity, including common equity in the form of stock or partnership, membership or limited liability company interests, equity-linked securities, options, warrants or other rights to acquire common equity interests in the Debtors, or in the form of convertible preferred equity, including convertible preferred equity in the form of stock or partnership, membership or limited liability company interests; Each percentage, however, will be reduced: (a) with respect to clauses (5) or (6), by 50% with respect solely to new preferred equity or common equity raised in a Capital Transaction from: * any person or entity that is an existing investor or holder of debt of the Debtors, other than from Jeffrey Soffer or any entity that Jeffrey Soffer controls, or * any indemnified persons, pursuant to the Engagement Letter, or (b) to 0% with respect solely to new debt or new capital raised in a Capital Transaction from Jeffrey Soffer or any entity that Jeffrey Soffer controls. The Capital Transaction Fee will be paid in cash immediately upon any closing of a Capital Transaction. A separate Capital Transaction Fee will be payable in respect of each Capital Transaction in the event that more than one Capital Transaction will occur. (D) Sale Transaction Fee, in cash and in an amount equal to 0.75% of the transaction value if a sale transaction is consummated. In the event, however, that the Sale Transaction consists of (i) a liquidation in a bankruptcy case under chapter 7, or (ii) a credit bid by any secured lender where the credit bid consists solely of secured debt, the cash fee will be an amount equal to 0.40% of the Transaction Value, provided, further, that, any Sale Transaction Fee will not exceed $6,000,000. The Sale Transaction Fee will be paid in cash immediately upon any closing of a Sale Transaction. A separate Sale Transaction Fee will be payable in respect of each Sale Transaction if more than one Sale Transaction occurs. Payment by the Debtors under the Engagement Letter, for Monthly Fees, Restructuring Fees, Sale Transaction Fees or Capital Transaction Fees, or any of this combination, after giving effect to any crediting, will not exceed $10,000,000 in the aggregate, notwithstanding anything to the contrary in the Engagement Letter. Moreover, the Debtors will indemnify and hold harmless Citadel and its professionals, agents and affiliates, against any losses they will incur in connection with the engagement, except for liabilities that have resulted primarily to their fraud, gross negligence or willful misconduct. Citadel will provide services to the Debtors concurrently with the services of Moelis & Company LLC. The Debtors recognize that Citadel and Moelis possess unique industry knowledge and relationships that would be highly beneficial to the Debtors. Citadel will coordinate any services performed with Moelis, the Debtors' counsel and other professionals in these cases to ensure that resources are not expended on duplicative efforts. Before the Petition Date, the Debtors paid Citadel $25,000 for monthly fees and $30,000 for reimbursement of expenses incurred from April to June 2009. The Debtors do not owe the firm for services rendered as of the Petition Date. Todd Kaplan, head of investment banking of Citadel Derivatives Group LLC, in Chicago, Illinois, says Citadel and its professionals are "disinterested persons" within the meaning of Sections 327(a) and 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU LAS VEGAS: To Hire Kasowitz as Special Counsel ------------------------------------------------------------ Fontainebleau Las Vegas Holdings, LLC, and its affiliates obtained, on an interim basis, permission from the U.S. Bankruptcy Court for the Southern District of Florida to employ Kasowitz, Benson, Torres & Friedman LLP as their special litigation counsel, to represent the Debtors in potential legal issues that may arise in the Chapter 11 cases, including the prosecution of the credit agreement litigation against Bank of America, N.A., by one of the Debtors, Fontainebleau Las Vegas LLC, or Resort. Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, in Miami, Florida, the Debtors' counsel, relates that Kasowitz Benson currently represents Resort in the credit agreement litigation that was commenced in April and which in May 2009 was removed to federal court by the defendants. In the complaint, Resort alleged that the banks, led by BofA, were in breach of their contractual promise to finance the construction of a multi-billion dollar casino-resort development project in Las Vegas. Contemporaneously with the filing of these Chapter 11 cases, the complaint was withdrawn without prejudice and a substantially similar complaint was filed as an adversary proceeding in the U.S. Bankruptcy Court for the Southern District of Florida. Additionally, Kasowitz Benson will commence and conduct any litigation necessary to assert the Debtors' rights, including any litigation within the bankruptcy cases in adversary proceedings or contested matters in connection with the Debtors' prepetition credit agreement or any DIP financing agreement or contested cash collateral usage, as well as litigation to protect the assets of the Debtors' estates, confirm a plan of reorganization, or otherwise further the goal of completing the Debtors' successful reorganization. Kasowitz Benson will also advise the Debtors with respect to any possible settlement of potential claims by or against the Debtors' estates. The Debtors will pay Kasowitz Benson based on these fees: Professional Hourly Rate ------------ ----------- Partner $550 to $1,000 Special Counsel $525 to $750 Associates $275 to $675 Staff Attorneys $225 to $390 Paralegals $150 to $225 The Debtors will also reimburse Kasowitz Benson for all actual and necessary expenses incurred by the firm. David M. Friedman, Esq., a member of Kasowitz, Benson, Torres & Friedman LLP, in New York, discloses that his firm represents Jeffrey and Jacquelyn Soffer, Turnberry Ltd., and their affiliates, among others, in matters unrelated to the Debtors' Chapter 11 cases. Mr. Friedman assures the Court that Kasowitz Benson does not represent or hold any interest adverse to the Debtors in these cases with respect to matters for which it will be engaged. Final hearing on the application is set for June 30, 2009. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU LAS VEGAS: Obtains Nod to Hire KCC as Claims Agent ---------------------------------------------------------------- Fontainebleau Las Vegas Holdings, LLC, and its affiliates obtained, on an interim basis, permission from the U.S. Bankruptcy Court for the Southern District of Florida to employ Kurtzman Carson Consultants LLC as their notice, claims and balloting agent, effective as of the Petition Date, pursuant to Section 156(c) of the Judiciary and Judicial Procedure. Section 156(c) provides that any court may use facilities or services, either on or off the Court's premises, which pertain to the provision of notices, dockets, calendars, and other administrative information to parties in cases filed under Chapter 11. Scott, L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, in Miami, Florida, relates that although the clerk for the U.S. Bankruptcy Court for the Southern District of Florida ordinarily would serve notice on the Debtors' creditors and other parties-in-interest, the clerk's office may not have the resources to undertake its tasks, in light of the number of the Debtors' potential creditors, estimated to reach 1,600 in the aggregate. As the Debtors' notice, claims and balloting agent, KCC will: (a) prepare and serve various notices in the Debtors' cases; (b) timely prepare for filing with the Clerk's office a certificate of affidavit of service; (c) maintain copies of all proofs of claim and proofs of interest filed in these cases; (d) maintain official claims registers in these cases; (e) implement security measures to ensure completeness and integrity of the claims registers; (f) assist the Debtors in preparing their Schedules of Assets and Liabilities and Statements of Financial Affairs; (g) assist the Debtors in preparing and maintaining a creditor matrix to be filed with the Court; (h) maintain an up-to-date mailing list of all parties-in- interest in these cases; (i) provide access to the public for examination of copies of proofs of claim or proofs of interest, without charge during regular business hours; (j) maintain a Web site that provides free public access to a copy of the Bankruptcy Court's docket of all documents filed with the Bankruptcy Court; (k) record all transfers of claims and provide notice of those transfers, if directed by the Court; (l) provide temporary employees to process claims, as necessary; (m) work with restructuring counsel to coordinate the design, printing, and mailing of plan booklets and all necessary ballots; (n) scan all ballots received into a computer database so that permitted users can view, via the Internet, PDF images of received ballots; (o) review each ballot and input relevant information into a computer database to enable users to search and sort information pertaining to received ballots and to generate ballot reports; (p) prepare a ballot tabulation report of the reorganization plan; (q) provide other claims processing, noticing, balloting, and administrative services as may be requested from time to time by the Debtors. The Debtors will pay KCC based on these rates: Professional Hourly Rate ------------ ------------ Clerical $45 to $65 Project Specialist $80 to $140 Technology/ Programming Consultant $145 to $195 Consultant $165 to $245 Senior Consultant $255 to $275 Senior Management Consultant $295 to $325 The Debtors will also reimburse KCC for reasonable expenses in connection with the engagement. Before the Petition Date, the Debtors paid KCC a refundable retainer of $50,000, will be applied to any outstanding invoices at the end of these cases, with any net balance returned to the Debtors. Michael J. Frishberg, vice president of corporate restructuring services of Kurtzman Carson Consultants LLC, in El Segundo, California, says KCC does not hold or represent any interest materially adverse to the Debtors' estates. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FORT WAYNE: Taps Barrett & McNagny as Attorney ---------------------------------------------- Fort Wayne Foundry Corporation and and Cole Pattern and Engineering Co. Inc. asks the U.S. Bankruptcy Court for the Northern District of Indiana for permission to employ Barrett & McNagny LLP as its attorney. The firm will: a) give legal advice with respect to the Debtors' powers and duties as debtor-in-possession and management of its property interest; b) prepare petitions, schedules, answers, orders, reports and other legal papers; c) take necessary action to avoid attachment of any lien against the Debtors' property; and d) perform all other legal services for the Debtor. Papers filed with the Court did not show the firm's compensation rates. To the best of the Debtors' knowledge, the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Based in Fort Wayne, Indiana, Fort Wayne Foundry Corporation -- http://www.fortwaynefoundry.com/-- makes aluminum sand castings for transportation and automotive powertrain applications. The Company and Cole Pattern and Engineering Co., Inc., its affiliate filed for Chapter 11 on June 3, 2009 (Bankr. N.D. Ind. Lead Case No. 09-12423). Thomas P. Yoder, Esq., represents the Debtors in their restructuring efforts. The Debtors listed $10 million to $50 million in assets and $1 million to $10 million in debts. FORT WAYNE: Taps Schafer and Weiner as Special Counsel ------------------------------------------------------ Fort Wayne Foundry Corporation and and Cole Pattern and Engineering Co. Inc. asks the U.S. Bankruptcy Court for the Northern District of Indiana for permission to employ Schafer and Weiner PLLC as its special counsel. The firm will: a) give legal advice with respect to the Debtors' powers and duties as debtor-in-possession and management of its property interest; b) prepare petitions, schedules, answers, orders, reports and other legal papers; c) take necessary action to avoid attachment of any lien against the Debtors' property; and d) perform all other legal services for the Debtor. To the best of the Debtors' knowledge, the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The Debtor assures the Court that there is no duplication in the work with Barret & McNagnyh LLP. Based in Fort Wayne, Indiana, Fort Wayne Foundry Corporation -- http://www.fortwaynefoundry.com/-- makes aluminum sand castings for transportation and automotive powertrain applications. The Company and Cole Pattern and Engineering Co., Inc., its affiliate filed for Chapter 11 on June 3, 2009 (Bankr. N. D. Ind. Lead Case No. 09-12423). Thomas P. Yoder, Esq., represents the Debtors in their restructuring efforts. The Debtors listed $10 million to $50 million in assets and $1 million to $10 million in debts. FRONTIER AIRLINES: Terms of Republic Airways-Backed Ch. 11 Plan --------------------------------------------------------------- As reported by the Troubled Company Reporter on June 23, Frontier Airlines Holdings, Inc. and its debtor-affiliates delivered their Joint Plan of Reorganization and Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York. The Plan incorporates an investment agreement between Frontier Airlines and Republic Airways Holdings, Inc., by which Republic will serve as equity sponsor for Frontier's Plan and purchase 100% of the equity in the reorganized company for $108.75 million. The plan sponsorship agreement is subject to bankruptcy court approval and various conditions. If the Plan of Reorganization is approved and implemented as proposed, upon its emergence from Chapter 11, Frontier Airlines Holdings would become a wholly owned subsidiary of Indiana-based Republic, an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The airlines currently employ approximately 4,400 aviation professionals and operate 235 regional jets. Frontier Airlines and Lynx Aviation would maintain their current names and continue to operate as usual. Frontier has filed a motion to approve the investment agreement with Republic, subject to higher and better proposals under a court-supervised auction. Frontier will seek court approval of the investment agreement and proposed auction procedures at a hearing scheduled for July 13, 2009. Frontier currently expects to conclude the auction process and emerge from Chapter 11 by autumn 2009. The proposed plan of reorganization provides for general unsecured creditors to receive $28.75 million in cash. An additional $40 million of the sale proceeds would be applied as repayment of the outstanding DIP loan. If the plan is implemented as proposed, the company's current equity would be extinguished and holders of that equity would not receive any recovery. The Court will convene a hearing on July 22, 2009, to consider approval of the Disclosure Statement. Parties have until July 17 to file objections. Frontier has asked the Court to set September 10, 2009, as the confirmation hearing date, and August 28 as the deadline for filing confirmation objections. Investment Agreement According to Edward M. Christie, III, Frontier's senior vice president and chief financial officer, contemporaneously with the filing of their Disclosure Statement and Joint Reorganization Plan, the Debtors have sought approval of the Investment Agreement from Judge Robert D. Drain, subject to higher or better bids at an auction. At the conclusion of the auction period, if the Debtors identify an entity other than Republic as the proposed Plan Sponsor, they will file with the Court a Plan Supplement identifying the Entity. At the Court's approval of an investment agreement with the Entity, the Debtors will modify the Plan accordingly. Thereafter, the Debtors will effectuate the Plan with the non- Republic Plan Sponsor and pay Republic a termination fee of $3.5 million and reimburse certain of Republic's expenses of up to $350,000. However, if the Debtors do not receive any higher or otherwise better bids, Reorganized Frontier -- following the Court's approval of the Investment Agreement with Republic -- will issue, sell and deliver to Republic the Frontier New Common Stock. As set forth in the Investment Agreement, Republic has agreed to purchase the New Common Stock free and clear of all Liens, for the Purchase Price that may be offset by any Allowed Debtor-in- Possession Facility Claims held by Republic. A portion of the Share Purchase Price equal to the Class 3 Allocation will be allocated, upon the terms and conditions of the Plan, to satisfy the Allowed General Unsecured Claims. Classification and Treatment of Claims and Interest Under the Joint Plan of Reorganization, all claims against the Debtors, other than Administrative Claims and Priority Tax Claims, are classified into four classes: Treatment of Projected Class Designation Allowed Claims Recovery ----- ----------- -------------- --------- 1 Other Priority Payment in full 100% in cash or other treatment that will render the Claim Unimpaired 2 Secured Claims Payment in full in 100% cash; reinstatement of the legal, equitable and contractual rights of the Claimholder; payment of the proceeds of the sale or disposition of the collateral securing the Claim; return of the Collateral; other treatment that will render the Claim Unimpaired 3 General Unsecured Pro rata share of the 8.2% Class 3 Allocation to 9.6% 4a Interests in No distribution 0% Frontier Holdings 4b Interests in Reinstatement of 100% Frontier and Lynx Interests 4c Securities Litigation No distribution 0% Claim Classes 1, 2 and 4b are unimpaired. Classes 3, 4a and 4c are impaired. Classes 1, 2 and 4b are deemed to accept the Plan, while Classes 4a and 4c are deemed to reject it. Accordingly, only holders of Class 3 Claims are entitled to vote to accept or reject the Plan. The Debtors' project that the Classes' recoveries are based on certain assumptions, including their estimates of the Claims that will eventually be Allowed in various Classes. The projected recovery for General Unsecured Claims is based on (i) a Class 3 Allocation equal to $28,750,000 and (ii) estimated total Allowed General Unsecured Claims of $300 million to $350 million against the Debtors. The Projected Recoveries, as set forth in the Plan, include: Class/Designation Total Allowed Claims ----------------- -------------------- Other Administrative Claims $9.6 - $11.2 million Priority Tax Claims $12 - $13.6 million 1 - Other Priority Claims $0 2 - Secured Claims $379.8 million 3 - Unsecured Claims $300 - $350 million All claims arising under the debtor-in-possession facility will be Allowed on or prior to the Effective Date of the Plan, and paid in full in cash, provided that at the election of the Plan Sponsor and on the terms and conditions set forth in the Investment Agreement, any Allowed DIP Facility Claims held by the Plan Sponsor may be offset against the Share Purchase Price. The Plan also contemplates the payment in full in cash of Professional Fee Claims against any of the Debtors. According to the Debtors, the Plan provides the best recoveries possible for their Creditors. Any alternative to confirmation of the Plan, including liquidation, partial sale of assets or any attempt by another party-in-interest to file a plan, would result in lower recoveries for stakeholders, as well as significant delays, litigation and costs. Plan Consolidation For purposes of voting and distributions under, and confirmation of, the Plan, all assets and liabilities of the Debtors will be treated as though they were merged. All guarantees of the Debtors of the obligations of any other Debtor will be eliminated so that any Claim against any Debtor, any guarantee thereof executed by any other Debtor and any joint or several liabilities of any of the Debtors will be one obligation of the Debtors. In addition, each and every Claim filed or to be filed in the Chapter 11 cases will be deemed filed against the Debtors collectively and will be one Claim against, and one obligation of, the Debtors. Mr. Christie notes that the Plan Consolidation will not affect (i) the legal or organizational structure of the Debtors, (ii) pre- or postpetition liens or security interests, (iii) pre- or postpetition guarantees to be maintained in connection with executory contracts or unexpired leases that have been or will be assumed or pursuant to the Plan, (iv) defenses to any cause of action or (v) distributions out of any insurance policies or their proceeds. Restructuring Transactions On or after the Effective Date, the Reorganized Debtors may engage in or take actions as may be necessary or appropriate to effect corporate restructurings of their businesses, including actions necessary to simplify, reorganize and rationalize the overall reorganized corporate structure of the Reorganized Debtors. These Transactions may include (i) dissolving companies, (ii) filing appropriate certificates or articles of merger, consolidation or dissolution pursuant to applicable state law and (iii) any other action reasonably necessary or appropriate in connection with the corporate restructurings. In each case in which the surviving, resulting or acquiring Entity in any of the Transactions is a successor to a Reorganized Debtor, the surviving, resulting or acquiring Entity will perform the obligations of the Reorganized Debtor pursuant to the Plan, including paying or otherwise satisfying the Allowed Claims to be paid by the Reorganized Debtor. Implementation of any restructuring transactions will not affect any distributions, discharges, exculpations, releases or injunctions set forth in the Plan. Issuance of New Common Stock and Cancellation of Old Stock As of the Effective Date of the Plan, and upon the terms and conditions set forth in the Investment Agreement, the Reorganized Debtors will issue 1,000 shares of New Common Stock, representing 100% of the issued and outstanding stock of Reorganized Frontier Holdings for distribution to the Plan Sponsor. All notes, instruments, certificates and other documents evidencing the Company's Old Notes and Old Stock will be cancelled, and the obligations of the Debtors to the Notes and the Stock will be fully satisfied, released and discharged. The Cancellation, however, will not itself alter the obligations or rights of any non-Debtor third parties vis-a-vis one another with respect to the Old Notes and Old Stock. On the Effective Date, any indenture or similar agreement will be deemed to be cancelled, as permitted by Section 1123(a)(5)(F) of the Bankruptcy Code, and discharged with respect to (i) all obligations owed by any Debtor under any the agreement and (ii) to the rights and obligations of the Indenture Trustee under the Indenture against the holders of Old Notes Claims. After the Effective Date, U.S. Bank National Association, in its capacity as indenture trustee, pursuant to the Indenture dated as of December 7, 2005, with Frontier will retain its rights (i) as trustee, paying agent and registrar; (ii) relating to distributions to Old Noteholders; (iii) relating to representation of Old Noteholders' interests; and (iv) relating to participation by the Indenture trustee in proceedings and appeals related to the Plan. Provisions Governing Distributions The Reorganized Debtors, or any person or entity they designate or retain without the need for Court approval, will serve as disbursing agent will make all distributions required under the Plan, except with respect to a creditor whose distribution is to be deposited with, and administered by a Servicer, for distribution. U.S. Bank and Wells Fargo Bank Northwest, National Association, as administrative agent under the Amended and Restated Secured SuperPriority Debtor in Possession Credit Agreement, dated as of April 1, 2009, with the Debtors as borrowers and a host of lenders, will be considered Servicers for all DIP Facility Claims and all Claims that arise from or relate to the Old Notes or the Indenture. The Reorganized Debtors will be authorized without further Court approval, but not directed to, reimburse any Servicer for its reasonable out-of-pocket expenses incurred in providing postpetition services related to distributions pursuant to the Plan. Distributions on account of General Unsecured Claims Allowed will be made on or as soon as reasonably practicable after the initial distribution date, or the day reasonably practicable after, but not later than 60 days after, the Effective Date of the Plan. Because of the size and complexities of the Chapter 11 cases, however, the Debtors cannot accurately predict the timing of the Final Distribution Date. The Reorganized Debtors, the Disbursing Agent or any Servicer will not have any obligation to make a particular distribution to a specific holder of an Allowed Claim on an Initial Distribution Date or an Interim Distribution Date under the Plan: (1) if the Allowed Claim has an economic value less than $250 and its claimholder is also the holder of a Disputed Claim; (2) with a value of less than $25, unless a written request is received by the Reorganized Debtors; and (3) unless the sum of all distributions authorized to be made to all holders of Allowed Claims on the Interim Distribution Date exceeds $2,000,000. As of the Effective Date, any General Unsecured Claim asserted in a currency other than U.S. dollars will be automatically deemed converted to the equivalent U.S. dollar value using the exchange rate on the Petition Date, as quoted at 4:00 p.m., mid-range spot rate of exchange for the applicable currency as published in The Wall Street Journal, Eastern Edition, on the day after the Petition Date. The portion of the Class 3 Allocation that is not distributed on the Initial Distribution Date pursuant to the Plan will be held in reserve to be distributed on the Interim and Final Dates. At the option of the Debtors, any Cash payments to be made may be made by check, wire transfer or any other customary payment method. Final Fee Applications All final requests for payment of professional fee claims must be filed with the Court within 25 days after the Effective Date of the Plan. Upon the Effective Date, any requirement that Professionals comply with Sections 327 through 331 of the Bankruptcy Code in seeking retention or compensation for services rendered after the Date will terminate. Hence, the Debtors and the Reorganized Debtors may employ and pay all Professionals in the ordinary course of business without any further notice to, action by or order or approval of the Court or any other party. Unexpired Leases and Executory Contracts Pursuant to sections 365 and 1123 of the Bankruptcy Code, each executory contract and unexpired lease to which the Debtor are parties will be deemed automatically rejected by the Debtors as of the Effective Date, except for any Contract or Lease that: -- has previously been assumed or rejected pursuant to a Court order; -- is the subject of the Debtors' request to assume or reject pending on the Confirmation Date; -- is assumed, rejected or otherwise treated pursuant to the Plan; -- is listed in the Debtors' schedules for treatment in accordance with the Plan; or -- has been the subject of a timely filed treatment objection. Company Programs, CBAs Deemed Assumed Effective Pursuant to the Joint Reorganization Plan, each Customer Program, Foreign Agreement, Insurance Plan, Intercompany Contract, Interline Agreement, Letter of Credit, Surety Bond and Workers' Compensation Plan will be deemed assumed effective as of the Effective Date. All Proofs of Claim on account of, or with respect to, any agreement covered by the Programs will be deemed withdrawn automatically and without any further notice to or action by the Court. Similarly, each collective bargaining agreement, as amended, will be deemed assumed effective as of the Effective Date but will not be deemed to effect an assumption of any employee benefit plan that previously was rejected, discontinued or terminated. Upon assumption of the Collective Bargaining Agreements, all claims filed by (i) the Debtors' workers' unions and (ii) Union- represented employees pertaining to rights collectively bargained for or disposed of under the CBAs -- on account of grievances, reinstatement and pension obligations -- will be deemed withdrawn, disallowed and forever barred from assertion automatically and without any further notice to or action, order or approval of the Court. Corporate Governance On the Effective Date, the term of the members of the Board will expire and the Board members will be replaced by the New Board. The members of the boards of directors of Frontier and Lynx prior to the Effective Date will continue to serve in their current capacities after the Effective Date, except as specified by the Debtors. The New Certificate of Incorporation and the New Bylaws will be amended or deemed amended as may be required to be consistent with the provisions of the Plan, the Investment Agreement and the Bankruptcy Code and will be satisfactory to the Plan Sponsor. Liquidation Analysis According to Mr. Christie, under the liquidation analysis prepared by the Debtors' management with the assistance of its advisors, the amount that holders of Claims and Interests in different Impaired Classes would receive in a hypothetical Chapter 7 liquidation of the Debtors will change based on further refinements of Allowed Claims, as the Debtors' claim objection and reconciliation process continues. The Debtors cite estimates and assumptions that, although developed and considered reasonable by the Debtors' management and other advisors, are inherently subject to significant business, economic and competitive uncertainties and contingencies beyond the control of the Debtors and their management. The values reflected in the Liquidation Analysis might not be realized if the Debtors were to undergo a Chapter 7 liquidation, he says. A full-text copy of Frontier's Liquidation Analysis is available for free at http://bankrupt.com/misc/FAH_LiquidationAnalysis.pdf Financial Projections The Debtors also prepared financial projections on the assumption that the Effective Date of the Plan is September 30, 2009, Mr. Christie continues. The Consolidated Financial Projections are based on, and assume, among other things, the successful reorganization of the Debtors, the equity investment by the Plan Sponsor and implementation of the Reorganized Debtors' emergence business plan. The Financial Projections are based on numerous assumptions, including, without limitation, (i) the timing, Confirmation and consummation of the Plan, (ii) the anticipated future performance of the Reorganized Debtors, (iii) airline industry performance and (iv) general business and economic conditions. If the Effective Date is delayed, he says, the Debtors will continue to incur reorganization costs, which may be significant. Similarly, the Debtors contend that if they do not achieve projected revenue or cash flow levels, the Reorganized Debtors may lack sufficient liquidity to continue operating their businesses consistent with the Financial Projections after the Effective Date and actual financial results may differ. A full-text copy of Frontier's Financial Projections, covering the six fiscal-year periods from March 31, 2010 to 2014, is available for free at: http://bankrupt.com/misc/FAH_FinancialProjections.pdf Plan Supplements The Debtors will file with the Court no later than 10 calendar days prior to the voting deadline that is yet to be determined, documents relating to: * Compensation Programs, if any, to be implemented as of or after the Effective Date; * Unexpired Leases and Executory Contracts; and * Terms relating to the capacities of the Frontier's current and new Board. A full-text copy of Frontier's Plan of Reorganization is available for free at: http://bankrupt.com/misc/FAH_Ch11ReorgPlan.pdf A full-text copy of Frontier's Disclosure Statement is available for free at: http://bankrupt.com/misc/FAH_DisclosureStatement.pdf About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Disclosure Statement Hearing on July 22 ---------------------------------------------------------- Frontier Airlines Inc. and its affiliates maintain that the Disclosure Statement accompanying their Joint Plan of Reorganization dated June 22, 2009, provides holders of impaired claims and interests entitled to vote on the Plan with sufficient information allowing them to make informed judgments to vote on the Plan. The Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to find that their Disclosure Statement contains "adequate information" pursuant to Section 1125(a)(1) of the Bankruptcy Code. A hearing to consider approval of the Disclosure Statement will be held on July 22, 2009, at 10:00 a.m. Objections, if any, must be filed on July 17. The Debtors also ask the Court to approve uniform solicitation and tabulation procedures to facilitate an efficient and expeditious solicitation process in connection with their Chapter 11 Plan of Reorganization. The Debtors will mail "Solicitation Packages" to all known holders of claims and interests in the Voting Classes. The Package consists of: (a) a cover letter; (b) a CD-ROM containing the Disclosure Statement and the Approval Order; (c) the Notice of Hearing on the confirmation of the Plan; (d) the ballot or beneficial ballot; and (e) a letter from the Official Committee of Unsecured Creditors regarding acceptance of the Plan. The Debtors expect that they will be able to commence distribution of the Solicitation Packages to Voting Classes no later than three days after the Court approves the Disclosure Statement and the Solicitation Procedures. The Debtors maintain that they are not required to distribute Solicitation Packages, Ballots, copies of the Disclosure Statement or the Plan or any other notices to holders in Class 4a Interest Claims against Frontier Holdings or Class 4c Securities Litigation Claims. The Debtors also propose to send Non-Voting Notices to these Classes. Voting Record Date Rule 3017 of the Federal Rules of Bankruptcy Procedure provides that the Record Date is typically the date that the Court approves the Disclosure Statement. The record holders of the Debtors' securities, however, generally require advance notice to enable them to assemble ownership lists of their Securities to compile an accurate list of holders. Accordingly, the Debtors seeks the Court's permission to establish July 22, 2009, as the record date for purposes of determining which creditors are entitled to vote on the Plan. The Disclosure Statement Hearing is also scheduled for July 22, 2009. Form of Ballots The ballots, which substantially conform to Official Form No. 14 but modified to address the terms of the Plan and the Classes of Claims, will be distributed to holders of claims in Class 3. The Debtors propose to deliver Solicitation Packages, including beneficial ballots to Voting Nominees -- the record holders of the Securities as of the Voting Record Date -- including, without limitation, brokers, banks, dealers or other agents and nominees. Master ballots would thereafter be delivered to the Voting Nominees. The Debtors propose that Voting Nominees be directed to, within five days of their receipt of the Solicitation Packages: (1) forward a Solicitation Package -- including a Beneficial Ballot -- to be returned to the Voting Nominees and summarized on the appropriate Master Ballot; (2) distribute "pre-validated" Beneficial Ballots, which pre- validation occurs when a Voting Nominee completes and executes the Beneficial Ballot through indicating (i) the name and DTC Participant Number of the Voting Nominee, (ii) the amount of securities held by the Voting Nominee for the Beneficial Holder, and (iii) the account numbers in which the securities are held by the Voting Nominee. The Debtors propose that all Voting Nominees be required to keep the original Beneficial Ballots they received from Beneficial Holders for a period of at least one year after the Voting Deadline. The Debtors further propose to reimburse each Voting Nominee for its reasonable out-of-pocket expenses. The Debtors ask Judge Robert Drain to establish August 28, 2009, as the Voting Deadline. Tabulation Procedures Regarding general ballots, the Debtors propose, among other things, that: (1) If a claim is deemed Allowed pursuant to an agreement with the Debtors, the claim should be allowed for voting purposes in the Allowed amount set forth in the Court's order. (2) If a claim is wholly contingent or unliquidated, not the subject of objection and not temporarily allowed for voting purposes in an amount greater than $1.00, the claim should be temporarily allowed for voting purposes only, and not for purposes of allowance or distribution, at $1.00. (c) Claims that are subject to objection should be disallowed for voting purposes only and not for purposes of allowance. (d) If a claim has been disallowed by agreement between the Debtors and the claimholder or by Court order, the claim should be disallowed for voting purposes. (e) If a claim has been estimated or otherwise allowed by the Court for voting purposes, the claim should be temporarily allowed for voting purposes only. (f) If a claim is listed in the Schedules as contingent, unliquidated or disputed and a proof of claim was not (i) filed by the Claims Bar Date or (ii) deemed timely filed, the claim be disallowed for voting purposes and for purposes of allowance and distribution pursuant to Rule 3003(c) of the Federal Rules of Bankruptcy Procedure. (g) A claim that is partially liquidated and partially unliquidated should be allowed for voting purposes only in the liquidated amount. (h) If the obligation underlying a claim against one of the Debtors is the subject of a guarantee by another of the Debtors or a claim was otherwise filed against more than one Debtor on account of the same obligation, only one claim will be allowed for voting purposes. (i) If the obligation underlying an Unimpaired Claim claim against a Debtor is the subject of a guarantee of another Debtor, the claim will disallowed for voting purposes. (j) Any creditor who has filed or purchased (i) duplicate Class 3 Claims or (ii) claims against multiple Debtors arising from the same transaction will be provided with only one Solicitation Package and one ballot and be permitted to vote only a single claim. Whenever a creditor casts more than one Ballot voting the same claims prior to the Voting Deadline, the last dated Ballot received prior to the Voting Deadline will be deemed to reflect the voter's intent and, thus, supersedes any prior Ballots. Creditors with multiple Class 3 claims must vote all of their claims either to accept or reject the Plan and may not split their votes. Ballots will not be counted or considered for any purpose in determining whether the Plan has been accepted or rejected if they are: * improperly completed and executed; * received after the Voting Deadline; * illegible or contains insufficient information to permit the identification of the claimant; * does not hold a Class 3 claim; * cast for a claim scheduled as unliquidated, contingent or disputed for which no proof of claim was timely filed; * unsigned or non-originally signed; * sent directly to any party other than the Solicitation Agent; * cast for a claim that has been disallowed; and * transmitted to Epiq Bankruptcy Solutions, LLC, as the solicitation agent, by facsimile or other electronic means. With respect to the tabulation of Master Ballots and Beneficial Ballots cast by Voting Nominees and Beneficial Holders, the Debtors propose that the amount that will be used to tabulate acceptance or rejection of the Plan will be the principal amount held as of the Voting Record Date. In addition, the Solicitation Agent may adjust any principal amount voted to reflect the corresponding claim amount, including prepetition interest. Confirmation Hearing Notice The Debtors ask the Court to set August 28, 2009, at 4:00 a.m., prevailing Eastern Time, as the deadline for filing of objections to confirmation to the Plan. The Debtors maintain that the Confirmation Objection Deadline will afford the Court, the Debtors and other parties-in-interest sufficient time to consider any objections or proposed modifications to the Plan prior to September 10, 2009 proposed Confirmation Hearing Date. Besides providing all creditors and equity security holders a copy of the Confirmation Hearing Notice, the Debtors will publish the Notice in the national edition of the Wall Street Journal not less than 25 days before the Plan Objection Deadline. The Debtors will publish the Confirmation Hearing Notice at http://www.frontier-restructuring.com About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Seeks Approval of Republic Investment Agreement ------------------------------------------------------------------ Frontier Airlines Inc. and its affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's authority to enter into an investment agreement with Republic Airways Holdings, Inc., through which the Debtors may negotiate a transaction with an investor that is prepared to make the highest and best proposal for an equity investment, in order to maximize the value realized for the benefit of the Debtors' estates, their creditors and other parties-in-interest. The Investment Agreement provides that Frontier Holdings will issue to Republic shares of common stock representing 100% of their total equity on a fully diluted basis, in exchange for the investment amount of $108,750,000, of which $28,750,000 in cash will be allocated for payment to holders of allowed general unsecured claims against the Debtors. Republic may credit all or any portion of the then-current balance of the monetary obligations owed to it under the Amended and Restated Debtor-in- possession Credit Facility against the Investment Amount. To recall, Frontier received in March 2009, a firm commitment for $40 million in postpetition debtor-in-possession financing from Republic Airways Holdings to support Frontier's additional working capital needs and refinance its expiring DIP loan, increasing the available financing and preserving Frontier's financial stability. As a condition to the loan, Frontier agreed to allow Republic's damage claim for $150 million arising out of Frontier's rejection of its airline services agreement with Republic. Damian S. Schaible, Esq., at Davis Polk & Wardwell, in New York, relates that the Investment Agreement also provides for these principal terms: (1) Customary pre-closing and additional covenants, including, without limitation, (i) the Debtors' business operations, (ii) the filing of necessary documents with the Court, (iii) notification of certain events, (iv) non- solicitation of alternative transactions after the termination of the auction date, (v) cooperation and access, (vi) provision of financial information relating to the Chapter 11 cases, (vii) receipt of governmental and third-party approvals, (viii) maintenance of accounting policies, litigation settlement, tax elections and other tax-related matters, (ix) aircraft maintenance programs, and (x) ERISA-related issues. (2) Closing under the Investment Agreement is subject, among other things, to approval of the Investment Agreement by the Court and confirmation of the Debtors' Chapter 11 Plan of Reorganization. (3) To compensate Republic for serving as a "stalking horse," the Investment Agreement provides for payment by Frontier Holdings to Republic of: (i) a termination fee of $3,500,000 or 3.2% of the value of the Proposed Investment, which will be deemed an administrative claim under Sections 503(b) and 507(a) of the Bankruptcy Code; and (ii) expense reimbursements up to a maximum of $350,000 for all of Republic's reasonable out-of-pocket fees and expenses. (4) Republic would be able to terminate the Investment Agreement if, among other things, an entity other than Republic or an affiliate of Republic, is approved by the Court as the Successful Investor or the Debtors to otherwise proceed with an alternative Transaction; and (ii) the closing of the Transaction will not have occurred on or before December 1, 2009. (5) The Debtors may, upon written notice sent to and received by Republic, engage in negotiations with any Person that has made after the Auction Termination Date a bona fide, unsolicited written proposal with respect to an Alternative Transaction that the Board of Directors of Frontier believes will likely to lead to a Superior Proposal. Proposal Process The Debtors ask Judge Robert Drain to approve a Proposal Process with respect to the Investment Agreement, which provides that any person or entity other than Republic may participate in the Proposal Process by expressing interest in making the Investment through an initial submission of confidentiality agreements no later than August 3, 2009, to: Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 Marshall S. Huebner; and Seabury Group LLC 1350 Avenue of the Americas 25th Floor New York, New York A "Qualified Investor" is a Potential Investor that has timely delivered the Initial Submission and that the Debtors determine, in their sole discretion after consultation with the Official Committee of Unsecured Creditors, has the financial capability to consummate the Investment, Mr. Schaible notes. The Debtors will notify the Potential Investor, the Creditors' Committee and Republic whether or not that Potential Investor has been determined to be a Qualified Investor. A Qualified Investor must make and submit a binding, written proposal to Davis Polk and Seabury Group, on August 10, 2009. The Binding Proposal must provide value to the Debtors of no less than $109.75 million plus, for Qualified Investors other than Republic, amounts sufficient to pay the Termination Fee and the Expense Reimbursement. If the Debtors receive no Qualified Proposal by the Proposal Deadline, or if no Qualified Investor had submitted a Qualified Proposal, no Auction will be conducted. However, if the Debtors receive a Qualified Proposal other than the Investment Agreement, the Debtors will conduct an auction that will commence on August 11, 2009. Prior to the conclusion of the Auction, the Debtors and the Creditors Committee will review the proposals and identify the highest and otherwise best proposal. Upon the Court's approval of the Proposal Process, the Notice of Auction will be (i) published in the national edition of The Wall Street Journal, (ii) made available on the Debtors' Web site at http://www.frontier-restructuring.comand (iii) served upon the notice parties including counsel to Republic; the Internal Revenue Service; the U.S. Attorney's Office for the Southern District of New York; the Department of Transportation; the Federal Aviation Administration; and the Securities and Exchange Commission. Mr. Schaible contends that the Proposed Investment Agreement will offer a substantial equity investment and benefit the Debtors by providing the funding necessary to successfully implement the Debtors' Plan. Similarly, he adds, bidding incentives consisting of the Termination Fee and the Expense Reimbursement -- will encourage potential investors to negotiate with the Debtors regarding to the Investment, despite the inherent risks and uncertainties of the Chapter 11 process. A full-text copy of the Proposal Process is available for free at: http://bankrupt.com/misc/FAH_ProposalProcess.pdf About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Hires D. Shurz as VP for Strategy & Planning --------------------------------------------------------------- Frontier Airlines named Daniel M. Shurz to the position of Vice President of Strategy and Planning. Mr. Shurz will oversee management of Frontier's route planning and aircraft scheduling. He also will have responsibility for forging and managing the Company's strategic alliances and joint venture efforts. Mr. Shurz joins Frontier from Air Canada, Inc., where he was most recently Vice President, Network Planning and Alliances. In that position, he directed network design and scheduling of the company's 350 aircraft, including 150 belonging to the carrier's regional partners. Mr. Shurz also has held a number of other senior-level positions in the transportation and airline industries, including with the Chicago Transit Authority and United Airlines. "I have known Daniel for several years; he will be a tremendous asset to our executive team," said Frontier President and CEO Sean Menke. "We are operating in an extremely competitive market and in an economy that has seen revenue declines across our industry. We will count on Daniel's experience and deep knowledge of the airline industry to develop the strategic and innovative revenue initiatives and alliances that will position Frontier for the significant growth that lies ahead." Mr. Shurz received a BA degree from Queens' College, University of Cambridge in Cambridge, England, and an MBA in Strategy, Economics and International Business from the University of Chicago Booth School of Business. About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENARO MENDOZA: Taps Kalish & Gordon as Special Counsel ------------------------------------------------------- Genaro Mendoza asks the U.S. Bankruptcy Court for the Northern District of California for permission to employ Kalish & Gordon LLP as its special counsel. The firm will advise the Debtor regarding matters of real estate, general business, and other areas of non-bankruptcy law, among other things. The firm will charge $290 per hour for this engagement. The Debtor assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Petaluma, California-based Genaro Mendoza, aka George Mendoza and Mendoza Investment, filed for Chapter 11 on June 3, 2009 (Bankr. N.D. Calif. Case No. 09-11678). John H. MacConaghy, Esq., at MacConaghy and Barnier represents the Debtor in its restructuring efforts. The Debtor listed $100 million to $500 million in assets and 50 million to $100 million in debts. GENERAL MOTORS: Unions Seek Equity for Former Workers ----------------------------------------------------- A letter transmitted by 13 Ohio congressional members and U.S. Sen. Sherrod Brown (D-OH) to U.S. Secretary of Treasury Timothy F. Geithner was made public June 26, urging 'simple justice' with equity in financial support for the future medical and life insurance benefits of GM retirees represented by the United Steelworkers and two other unions. Nearly 50,000 former employees of GM or Delphi and their dependents stand to lose most or all of their medical coverage in the GM bankruptcy proceedings. The USW represents 6,200 retirees and surviving spouses, saying the present value of the lost benefits is at least $424 million. According to the Communications Workers of America, the lost benefits of 41,000 GM Delphi retirees and surviving spouses they represent are valued at $2.87 billion. Other Delphi retirees are represented by the International Union of Operating Engineers. USW President Leo W. Gerard released the congressional letter, saying, "Along with the CWA and IUOE, we have filed objections before the U.S. Bankruptcy Court on behalf of the retirees and hope that our federal government will come to its senses on fairness for the former GM workers who contributed nothing less than the auto workers to the fortunes of the company." The Ohio congressional delegation's letter emphatically stated to the treasury secretary: "In short, it is your representatives who have decided that these retirees will not have an opportunity for a decent retirement." Criticizing the treasury department, the bi-partisan congressional letter said the impact goes far beyond the retirees and their families. "Crucially, the great majority of these affected persons live in Dayton and Warren, Oh., two cities already suffering due to the closing of GM and Delphi plants and whose recovery will be crippled by the loss of health insurance by tens of thousands of their residents." The letter urged the U.S. Treasury Secretary to "do the right thing, which is to treat these retirees exactly as it treated the UAW represented retirees by either placing them in the UAW VEBA, with proportionately increased funding so the UAW retirees suffer no diminution of benefits, or by creating a separate non-UAW VEBA with funding sufficient to provide identical benefits." The congressional members declared: "Simple justice requires that your Department afford them access to the same medical and life insurance benefits." According to the unions, the treasury department has agreed to protect a significant amount of medical and life insurance benefits of the UAW-represented GM retirees by establishing a VEBA trust with funding of $10 billion in cash, a $2.5 billion note and 17 percent of stock shares in a newly-structured GM. When GM met with the USW and CWA earlier this month to negotiate for the former Delphi retirees, GM proposed to eliminate all medical insurance for Medicare-eligible retirees and offered an unaffordable, catastrophic medical plan for other retirees available only until they turned 65. The 13 Ohio congressional members who were signatories of the letter are: Rep. Betty Sutton (D-13); Charlie Wilson (D-06); Rep. Marcia Fudge (D-11); Rep. Tim Ryan (D-17); Rep. Steven LaTourette (R-14); Rep. Patrick Tiberi (R-12); Rep. Michael Turner (R-03); Rep. Mary Jo Kilroy (D-15); Rep. Steve Driehaus (D-01); Rep. Dennis J. Kucinich (D-10); Rep. John A. Boccieri (D-16); Rep. Marcy Kaptur (D-09); Rep. Zach Space (D-18). GENERAL MOTORS: S&P Withdraws 'D' Senior Secured Ratings -------------------------------------------------------- Standard & Poor's Ratings Services said it has withdrawn its issue-level and recovery ratings on General Motors Corp.'s $4.5 billion senior secured (pre-petition) revolving credit facility and $1.5 senior secured (pre-petition) term loan, reflecting S&P's expectation that these loans will be repaid in full. In accordance with the pending repayment, S&P revised its recovery rating on the revolving credit facility to '1' from '2', indicating S&P's expectation that lenders will receive very high (90% to 100%) recovery. S&P subsequently withdrew that rating also. The corporate credit rating on GM remains 'D'. "The revised recovery rating and subsequent withdrawals follow the bankruptcy court's approval of GM's $33.3 billion debtor-in- possession credit facility, allowing for the full repayment of the prepetition revolving credit facility and term loan," said Standard & Poor's credit analyst Robert Schulz. Ratings List Recovery Ratings Revised General Motors Corp. To From -- ---- Senior Secured D D Recovery Rating 1 2 General Motors of Canada Ltd. To From -- ---- Senior Secured D D Recovery Rating 1 2 Ratings Withdrawn General Motors Corp. To From -- ---- Senior Secured NR D Recovery Rating NR 1 General Motors of Canada Ltd. To From -- ---- Senior Secured NR D Recovery Rating NR 1 GENMAR HOLDINGS: Taps Fredrikson & Byron as Bankruptcy Counsel -------------------------------------------------------------- Genmar Holdings, Inc., and its debtor-affiliates ask the Bankruptcy Court District of Minnesota for authorization to employ Fredrikson & Byron, P.A as counsel. Fredrikson & Byron will, among other things: a) analyze the Debtors' financial situation and render advice and assistance in determining how to proceed, which has included advice, negotiation and preparation of documents for a Chapter 11 filing; b) assist with preparation of filing of the petition, exhibits, attachments, schedules, statements, and lists, for stay motions, and other documents required by the Bankruptcy Code, the Bankruptcy Rules, the Local Rules or the Court in the course of these bankruptcy cases; and c) represent the Debtors at the meeting of creditors. James L. Baillie, a shareholder at Fredrikson & Byron, tells the Court that the firm received a $200,00 retainer of which $94,250 was applied on May 29, for prepetition fees, leaving a balance of $105,749. The Debtors also advanced $22,858 for payment of the filing fees. To the extent there are any unpaid fees and costs for the few days prior to the filing date, those fees and costs will be included and fully disclosed in Fredrikson & Byron's first interim fee application. Mr. Baillie assures the Court that Fredrikson & Byron is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Baillie can be reached at: Fredrikson & Byron, P.A 200 South Sixth Street Minneapolis, MN 55402-1425 Tel: (612) 492-7310 About Carver Italia, LLC Pulaski, Wisconsin-based Carver Italia, LLC, and its affiliates, including Genmar Holdings, Inc. -- http://www.genmar.com/-- manufacture recreational boats. The Debtors filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Minn. Case No. 09-33773, and 09-43537). James L. Baillie, Esq., and Ryan Murphy, Esq., at Fredrikson & Byron, PA, assist the Debtors in their restructuring efforts. The Debtors listed $10 million to $50 million in assets and $100 million to $500 million in debts. GLOBAL CASH: Share Repurchases Won't Affect S&P's 'BB-' Rating -------------------------------------------------------------- Standard & Poor's Rating Services said that its ratings on Las Vegas-based Global Cash Access Inc. (GCA; BB-/Stable/--) are not affected by the company's recent announcement that it had repurchased approximately 5.8 million common shares from company founder Robert Cucinotta and sent a notice of its intent to redeem about 6.7 million of shares held by founder Karim Maskatiya on or before Sept. 22, 2009. GCA initiated these actions in an attempt to avoid the loss of regulatory approval to provide products and services at Native American gaming establishments in Arizona. In Standard & Poor's opinion, GCA's cash balance, which totaled about $71 million at March 31, 2009, combined with solid free cash flow characteristics, provides sufficient cushion to absorb potential cash outflows associated with these share repurchases, which are likely to be funded through a combination of cash and debt. S&P also note that GCA may not need to purchase all of the shares held by Mr. Maskatiya if he chooses to sell all or part of them in the open market prior to the redemption date. However, depending on the amount of shares repurchased by the company, near-term financial flexibility could be somewhat limited due to financial maintenance covenants contained in the company's senior secured credit facility. Additionally, if the elimination of these shareholders' ownership interests in GCA does not alleviate the concerns of the Arizona Department of Gaming, S&P could reassess S&P's view of the rating. GRAHAM PACKAGING: General Partner OKs Option Grant to CEO Burgess ----------------------------------------------------------------- BCP/Graham Holdings L.L.C., the General Partner of Graham Packaging Holdings Company, approved on June 17, 2009, the grant of an option to purchase a total of 50 limited partnership units of the Company to Mark S. Burgess, the Company's Chief Executive Officer. The Option, which was issued under the Company's 2008 Management Option Plan, has an exercise price of $25,122 per limited partnership unit. Provided that Mr. Burgess remains continuously employed by the Company through the date on which Blackstone Capital Partners III Merchant Banking Fund L.P., Blackstone Offshore Capital Partners III L.P. and their affiliates -- other than the Company and its subsidiaries -- sell their entire interest in the Company and Graham Packaging Company, L.P. -- a "Liquidity Event -- the Option will become exercisable in accordance with the following schedule based upon the multiple of invested capital achieved in connection with the Liquidity Event. Multiple of Percent of Option that Invested Capital becomes Exercisable ---------------- ---------------------- 2.50x 100% 2.25x 75% 2.00x 50% 1.75x 25% 1.50x 0% Values between those listed in the schedule will be interpolated. The Option, which will expire after 10 years, also provides that if Mr. Burgess' employment is terminated by the Company without cause or by Mr. Burgess for good reason and a Liquidity Event occurs within one year of his termination of employment, then the Option will become immediately exercisable upon the Liquidity Event. In the event of the termination of Mr. Burgess' employment for any reason other than cause, the Option will expire upon the earlier of the end of the 90-day period following his termination or the end of the 10-year option term. If Mr. Burgess' employment is terminated for cause, he will immediately forfeit all outstanding options. Until the later of the fifth anniversary of the date of grant of the Option or 100 days following a public offering of the Company's equity securities, any units issued upon the exercise of the Option will be subject to the Company's right to call the units at fair market value for a period of 90 days from Mr. Burgess' termination of employment. If, however, Mr. Burgess' employment is terminated for cause, the Company will have the right to purchase such shares at the lesser of cost or fair market value. About Graham Packaging Headquartered in York, Pennsylvania, Graham Packaging Holdings company, -- http://www.grahampackaging.com/-- the parent company of Graham Packaging Company, L.P., is engaged in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, automotive lubricants and personal care/specialty product categories. As of the end of June 2008, the company operated 83 manufacturing facilities throughout North America, Europe and South America. The Blackstone Group, an investment firm, is the majority owner of Graham Packaging Holdings company. As reported by the Troubled Company Reporter on May 25, 2009, Moody's Investors Service assigned a B1 rating to the new revolving credit facility and term loan C of Graham Packaging, L.P. Moody's also affirmed the B2 Corporate Family Rating and stable outlook. The rating is in response to the company's announcement that it had amended the terms and maturity of its term loan and revolver. The amendment extended the maturity of a $1,200 million of Graham's existing term loans from October 2011 to April 2014 and extended the maturity of $125 million of Graham's existing $250 million revolving credit facility from October 2010 to October 2013. The interest rate on the new facilities is 425 basis points above LIBOR. HARTMARX CORP: Emerisque and SKNL Buyout to Close by July 7 ----------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Illinois approved the sale of substantially all of the assets of Hartmarx Corporation to Emerisque Brands UK and SKNL North America, B.V., for a total transaction value of roughly $119 million. Emerisque Brands and SKNL expect the transaction to close July 7, 2009. "We are pleased that the Court, with the unanimous support of the Company and its lenders, agreed that our going concern bid is in the best interest of the estate and all of Hartmarx's stakeholders," Emerisque Brands and SKNL said in a statement. "Once the transfer of assets is complete, SKNL and Emerisque look forward to revitalizing the iconic American brands that constitute the Hartmarx portfolio. "We are confident about returning Hartmarx to profitability and to fulfill its potential in the U.S. and in the global marketplace with the continued support of all constituencies involved." About Hartmarx Corporation Based in Chicago, Illinois, Hartmarx Corporation -- http://www.hartmarx.com/-- produces and markets business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey-Freeman, Palm Beach, Coppley, Monarchy, Manchester Escapes, Society Brand, Racquet Club, Naturalife, Pusser's of the West Indies, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace, Eye, Christopher Blue, Worn, One Girl Who . . . and b.chyll. In addition, the company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Burberry men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Lyle & Scott, Golden Bear, Jag and Dr. Martens. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. Hartmarx and certain affiliates filed for bankruptcy protection on January 23, 2009 (Bankr. N.D. Ill. Lead Case No. 09-02046). George N. Panagakis, Esq., Felicia Gerber Perlman, Esq., and Eric J. Howe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed $483,108,000 in total assets and $261,220,000 in total debts as of August 31, 2008. HAWAII SUPERFERRY: U.S. Trustee Creates 3-Member Creditors Panel ---------------------------------------------------------------- Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, named three creditors to the Official Committee of Unsecured Creditors in the bankruptcy cases of HSF Holding, Inc. and Hawaii Superferry. The Committee members are MTU Detroit Diesel, Inc.; Entrix, Inc.; and Laird Christianson Advertising. Wilmington, Delaware-based HSF Holding Inc. operates as the parent company of Hawaii Superferry, Inc., a Hawaiian inter-island ferry service expected to commence operations in early 2007. The Company is planning to use the latest generation of large, high-speed roll-on/roll-off catamaran ferries. The ferries will be used to transport travellers from island to island as well as transport agricultural and bulk goods. The Company and its affiliate filed for Chapter 11 on May 30, 2009 (Bankr. D. Del. Case Nos. 09-11901 and 09-11902). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton LLP represent the Debtors in their restructuring efforts. When the Debtors sought protection from their creditors, they listed both assets and debts between $100 million and $500 million. The U.S. Trustee for Region 3 will convene a meeting of creditors under Section 341 of the Bankruptcy Code on July 1, 2009. HAWAII SUPERFERRY: Court Approves Donlin Recano as Claims Agent --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Hawaii Superferry Inc. and HSF Holding Inc. to employ Donlin Recano & Company LLC as their claims agent. The firm is expected to, among other things: a) serve as the Court's noticing agent to mail notices to the estate's creditors and parties in interest; b) provide computerized claims, objection and balloting database services; c) provide expertise, consultation and assistance in claim and ballot processing and other administrative information; and d) provide disbursement services with respect to the Debtor's bankruptcy case, if requested. The Debtors assured the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Wilmington, Delaware-based HSF Holding Inc. operates as the parent company of Hawaii Superferry, Inc., a Hawaiian inter-island ferry service expected to commence operations in early 2007. The Company is planning to use the latest generation of large, high- speed roll-on/roll-off catamaran ferries. The ferries will be used to transport travellers from island to island as well as transport agricultural and bulk goods. The Company and its affiliate filed for Chapter 11 on May 30, 2009 (Bankr. D. Del. Case Nos. 09-11901 and 09-11902). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton LLP represent the Debtors in their restructuring efforts. When the Debtors sought protection from their creditors, they listed both assets and debts between $100 million and $500 million HAWKER BEECHCRAFT: Bank Debt Trades at 32% Discount --------------------------------------------------- Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 67.81 cents-on- the-dollar during the week ended June 26, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.69 percentage points from the previous week, the Journal relates. The loan matures March 26, 2014. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B- rating. Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, is a leading manufacturer of business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. As reported by the Troubled Company Reporter on June 19, 2009, Moody's Investors Service adjusted ratings on certain debt instruments of Hawker Beechcraft Acquisition Company LLC's to reflect the company's capital structure following its recent tender transaction; senior secured bank facilities were affirmed at B3; senior unsecured cash-pay and PIK-election notes were upgraded to Caa3 from Ca; and subordinated notes were affirmed at Ca. The company's outlook (stable) and liquidity rating (SGL-3) are unaffected by these actions. The TCR said on June 16 that Moody's affirmed Hawker Beechcraft's Corporate Family Rating of Caa2 and revised the company's Probability of Default rating to Caa2/LD from Ca. At the same time, the rating on company's cash-pay senior unsecured notes was lowered to Ca from Caa3. The rating outlook was revised to stable from developing and the Speculative Grade Liquidity rating was left unchanged at SGL-3. The actions follow conclusion of the company's tender offer for portions of its junior debt capital, a transaction Moody's deemed to be a distressed exchange leading to a declaration of a limited default. HAYES LEMMERZ: Court Establishes July 27 General Bar Date --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has set July 27, 2009, at 5:00 p.m. (prevailing Eastern Time) as the general bar date for the filing of proofs of claim, including Section 503(b)(9) claims, in Hayes Lemmerz International, Inc., and its debtor-affiliates' bankruptcy cases. The governmental bar date is November 9, 2009, at 5:00 p.m. (prevailing Eastern Time). Proofs of claim must be delivered so as to be received on or before the applicable bar date, at: a) If by First-Class Mail: The Garden City Group, In. Attn: Hayes Lemmerz International, Inc. P.O. Box 9000, #6531 Merrick, NY 11566-9000 b) If by Hand Delivery or Overnight Courier: The Garden City Group, Inc. Attn: Hayes Lemmerz International, Inc. 105 Maxess Road Melville, NY 11747 About Hayes Lemmerz Originally founded in 1908, Hayes Lemmerz International, Inc. (NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. The Company is also a supplier of automotive powertrain components. The Company has global operations with 23 facilities, including business, sales offices and manufacturing facilities, located in 12 countries around the world. The Company sells products to every major North American, Asian and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world. The Company and certain affiliates filed for bankruptcy on May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching agreements with lenders holding a majority of the Company's secured debt. The Company's principal bankruptcy attorneys are Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co., LLC, serves as the Company's financial advisors. AlixPartners, LLP, serves as the Company's restructuring advisors. The Garden City Group, Inc., serves as the Debtors' claims and notice agent. As of January 31, 2009, the Debtors had total assets of $1,336,600,000 and total debts of $1,405,200,000. This is the Company's second trip to the bankruptcy court, dubbed a Chapter 22, which was precipitated by an unprecedented slowdown in industry demand and a tightening of credit markets. The Company plans to reduce its debt and restructure its balance sheet. Hayes Lemmerz and its direct and indirect domestic subsidiaries and one subsidiary in Mexico first filed for bankruptcy in December 2001 before the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 filings were precipitated by declining market conditions and the Company's excessive debt burdens, according to Mr. Clawson, who also served as chairman and chief executive officer at that time. The Court confirmed the Company's reorganization plan in May 2003, allowing the Company to exit bankruptcy in June 2003. In accordance with the 2003 Plan, approximately $2.1 billion in pre-petition debt and other liabilities were discharged. The Plan provided for holders of prepetition secured claims to receive $478.5 million in cash and 53.1% of the reorganized company common stock. Holders of senior note claims were to receive $13 million in cash and 44.9% of the New Common Stock, and holders of general unsecured claims were to receive 2% of the New Common Stock. Hayes Lemmerz' prior common stock and securities were cancelled as of June 3, 2003. HC INNOVATIONS: Management Expects to Meet Capital Needs -------------------------------------------------------- Management of HC Innovations, Inc., believes that the Company will be successful in its efforts to adequately meet its capital needs and continue to grow its businesses, despite an adverse opinion by its independent auditors raising substantial doubt about the Company's ability to continue as a going concern. CCR LLP in Glastonbury, Connecticut, in its audit report in March 2009, raised substantial doubt about the ability of HC Innovations, Inc., to continue as a going concern. The auditor noted that the Company has a working capital deficiency of roughly $9.6 million as of December 31, 2008, has had net losses of roughly $14.5 million and $10.7 million for the years ended December 31, 2008 and 2007, respectively, has an accumulated deficit of approximately $30.4 million as of December 31, 2008. The Company explained in a recent regulatory filing with the Securities and Exchange Commission that the cumulative losses to date are largely a result of business development and start up costs associated with expanding the Company's operations, largely driven by new contracts as well as significant investment in building the corporate infrastructure to support the Company's expansion. According to the Company, during 2008, it was successful in expanding relations with existing customers. At March 31, 2009, the Company had $4,813,449 in total assets and $22,286,630 in total liabilities, resulting in $17,473,181 in stockholders' deficit. The Company posted a net loss of $6,522,186 for the three months ended March 31, 2009, compared to a net loss of $3,607,052 for the same period last year. HC Innovations filed with the SEC Amendment No. 1 on Form 10-K/A to amend the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008. The original report was filed on March 27, 2009. The Amendment relates to "Item 10: Directors, Executive Officers and Corporate Governance," "Item 11: Executive Compensation, Item 13: Certain Relationships and Related Transactions, and Item 15: Exhibits. In addition, new Certifications are filed as exhibits to the Amendment. The Amendment is filed in response to comment letter the Company received from the staff of the Commission on the Original Filing. A full-text copy of the Amended Annual Report is available at no charge at http://ResearchArchives.com/t/s?3e4b The Company also filed Amendment No. 1 on Form 10-Q/A to amend its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009. The original report was filed on May 15, 2009. The Amendment relates to "Part I, Item 2: Management's Discussion and and Analysis of Financial Condition and Results of Operations" and Part I, Item 4: Controls and Procedures. In addition, new Certifications are filed as exhibits to the Amendment. The Amendment is filed in response to comment letter the Company received from the staff of the Commission on the Original Filing. A full-text copy of the Amended Quarterly Report is available at no charge at http://ResearchArchives.com/t/s?3e4c About HC Innovations HC Innovations, Inc., is a specialty care management company comprised of separate divisions each with a specific focus and intervention. The Company identifies subgroups of people with high costs and disability, and create and implement programs and interventions that improve their health, intended to result in dramatic reductions in the cost of their care. The Company also develops and implements medical management systems for the long term care industry. Enhanced Care Initiatives, Inc., a wholly owned subsidiary of HCI was founded in 2002 and is the management company for all HCI entities. ECI has five wholly owned subsidiaries operating in Tennessee, Texas, Massachusetts, Alabama, and New York. ECI markets its proprietary specialty care management programs for the medically frail and other costly sub-populations to Health Maintenance Organizations and other managed care organizations as well as state Medicaid departments. NP Care, LLCs, are nursing home medical management systems. The LLCs care program provides onsite medical care by Physicians and Advanced Practice Registered Nurse under the oversight of the patients' individual physician to residents in nursing homes and assisted living facilities. The LLCs operate in the states of Illinois and Tennessee and are managed exclusively by ECI. HIGGSCORP A CORPORATION: Case Summary & 2 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Higgscorp a Corporation PO Box 72 Artesia, CA 90702 Bankruptcy Case No.: 09-24166 Chapter 11 Petition Date: June 24, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Sheri Bluebond Debtor's Counsel: Andrew S. Bisom, Esq. Law Offices of Andrew S. Bisom 695 Town Center Dr., Ste 700 Costa Mesa, CA 92626 Tel: (714) 245-8800 Email: abisom@bisomlaw.com Total Assets: $2,483,000 Total Debts: $1,871,689 A full-text copy of the Debtor's petition, including a list of its 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-24166.pdf The petition was signed by Steve Higgs, president of the Company. HOLLYWOOD THEATERS: S&P Raises Corporate Credit Rating to 'B-' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and issue-level ratings on U.S. movie exhibitor Hollywood Theaters Inc. by two notches. The corporate credit rating was raised to 'B-' from 'CCC'. These ratings were removed from CreditWatch, where they were placed with developing implications June 2, 2009. The rating outlook is stable. S&P also raised the corporate credit rating on holding company parent Wallace Theater Holdings Inc. to 'B-' from 'CCC' and removed it from CreditWatch. In addition, S&P affirmed its 'B-' issue-level rating on Wallace's senior secured floating-rate notes (this rating was not previously on CreditWatch). "The ratings upgrade reflects S&P's reassessment of the company's creditworthiness following its completion of its issuance of $157 million of senior secured notes," explained Standard & Poor's credit analyst Jeanne Mathewson. Wallace plans to use proceeds of the notes to refinance the existing $137.8 million of indebtedness at Hollywood. Other factors affecting the rating include the mature and highly competitive nature of the industry and the company's exposure to the fluctuating popularity of movies. The rating also reflects S&P's concern that proliferation of competing entertainment alternatives and shorter periods in theatrical release prior to home video and video-on-demand release could pressure U.S. movie exhibitors' attendance trends over the long run. In the first quarter of 2009, the company's revenue and EBITDA increased 11% and 18%, respectively, from the prior year. Lease- adjusted leverage was high, at roughly 6.9x for the 12 months ended March 31, 2009, but higher still, at about 9x, when including debt-like preferred stock. EBITDA coverage of interest was 2.2x for the same period. Pro forma for the proposed notes, EBITDA coverage of interest falls to roughly 1.3x due to a higher interest rate on the new notes. Discretionary cash flow was negative for the 12 months ended March 31, 2009, due to high capital spending. S&P expects capital spending to moderate. Even so, under an increased interest expense burden, discretionary cash flow could range from modestly positive to modestly negative, based on box office performance. HORIZON BANK: Closed; Stearns Bank Assumes All of the Deposits -------------------------------------------------------------- Horizon Bank, Pine City, Minnesota, was closed June 26 by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Stearns Bank, National Association, St. Cloud, Minnesota, to assume all of the deposits of Horizon Bank. As of March 31, 2009, Horizon Bank had total assets of $87.6 million and total deposits of approximately $69.4 million. Stearns Bank, N.A. paid a premium of 0.75 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, Stearns Bank, N.A. agreed to purchase approximately $84.4 million of assets. The FDIC will retain the remaining assets for later disposition. The FDIC and Stearns Bank, N.A. entered into a loss-share transaction on approximately $65.1 million of Horizon's assets. Stearns Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. Customers who have questions about the transaction can call the FDIC toll-free at 1-866-954-9531. Interested parties can also visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/horizon.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $33.5 million. Stearns Bank's, N.A. acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Horizon Bank is the 43rd FDIC-insured institution to fail in the nation this year, and the first in Minnesota. The last FDIC-insured institution to be closed in the state was First Integrity Bank, N.A., Staples, on May 30, 2008. HUNTGAIN LLC: Wants to Hire Gordon Feinblatt as Counsel ------------------------------------------------------- Huntgain LLC asks the U.S. Bankruptcy Court for the District of Maryland for permission to employ Gordon, Feinblatt, Rothman, Hoffberger and Hollander LLC as counsel. The firm will advise management of the Debtor with respect to the powers and duties of a debtor-in-possession in the continued operation of its business and management of its property, among other things. The firm received a $76,039 retainer, $9,073 of which has been applied to the payment of fees and expenses for prepetition services on behalf of the Debtor. The balance of the retainer will be applied to compensation allowed by the Court for services to the Debtor during the Chapter 11 case. To the Best of the Debtor's knowledge, the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Timonium, Maryland-based Huntgain, LLC, filed for Chapter 11 on June 4, 2009 (Bankr. D. Md. Case No. 09-20152). The Debtor has assets and debts both ranging from $10 million to $50 million. IKARIA ACQUISITION: Moody's Assigns 'B1' Corporate Family Rating ---------------------------------------------------------------- Moody's assigned a B1 Corporate Family Rating to Ikaria Acquisition Inc., the borrower and direct subsidiary of Ikaria Holdings, Inc. Moody's also assigned a B2 Probability of Default Rating and a B1, LGD3, 33% to the $275 million (face value) credit facility. The rating outlook is stable. This is the first time Moody's has assigned public ratings to Ikaria. The B1 Corporate Family Rating reflects the small size of the company and single product concentration risk. These factors are offset by the modest leverage, strong cash flow generation and very good liquidity. The rating is also supported by Ikaria's strong competitive positioning within its market niche treating critically ill patients, which often have few treatment alternatives. Moody's believes this market has relatively high barriers to entry and is subject to modest pricing/reimbursement risk. Other risks considered include a very high level of off- label usage (the company can not legally market for off-label indications), and the expiration of several key patents in 2013. Moody's also anticipate that Ikaria's business development activities will accelerate, however Moody's believe the company is more likely to pursue licensing and technology transactions than very large, debt funded acquisitions. Ratings Assigned: * Corporate Family Rating, B1 * Probability of Default Rating, B2 * $40 million senior secured revolver due 2012, B1, LGD3, 33% * $235 million (face value) senior secured term loan due 2013, B1, LGD3, 33% The outlook is stable. Ikaria, headquartered in Clinton, New Jersey, develops and manufactures products aimed at the critical care market. The company's current product, INOtherapy(R), delivers nitric oxide for inhalation through a proprietary delivery system. INOtherapy is currently FDA approved for the treatment of hypoxic respiratory failure in term and near-term infants. The product is also used in hospitals for the treatment of other respiratory conditions in critically ill patients. Ikaria is currently the only company to offer this drug in the US. For the twelve months ended March 31, 2009, Ikaria generated revenues of approximated $241 million. IPAYMENT INC: Moody's Affirms 'B1' Corporate Family Ratings ----------------------------------------------------------- Moody's lowered iPayment Inc.'s speculative grade liquidity rating to SGL-3 from SGL-2 and revised its ratings outlook to negative from stable due to very limited headroom under its bank financial covenants, which constrains the company's liquidity profile as well as weaker than expected financial results. iPayment's B2 corporate family rating, B1 ratings on its senior secured credit facilities, and Caa1 rating on its senior subordinated notes were affirmed. The negative ratings outlook reflects iPayment's reduced liquidity profile as a result of very limited headroom under its credit agreement's financial maintenance covenants and weaker than expected financial performance over recent quarters. Moody's believes that further tightening of the financial covenant levels later this year could result in further contraction in covenant cushions or a possible covenant breach to the extent iPayment is not able to repay debt as planned. The B2 corporate family rating reflects iPayment's: i) high degree of financial leverage; ii) very limited headroom for its financial covenants under its bank credit agreement (which is expected to decline even further given pending covenant step-downs); and iii) small scale in the highly competitive merchant transaction processing landscape relative to a number of large-scale transaction processors. Additionally, iPayment's B2 CFR is constrained by its sole focus on the small merchant market, which is more susceptible to failures in an economic downturn than larger-scale merchants, which could lead to increased merchant attrition rates and the potential for increased chargebacks liabilities. Conversely, iPayment's B2 CFR is supported by the company's high degree of recurring transaction-based revenue stream from clients under multi-year contracts, credit metrics which are appropriate for its rating category, its good cash flow generation capabilities, and its diverse customer base with minimal customer concentration by size or sector These ratings were lowered: * Speculative grade liquidity rating to SGL-3 from SGL-2 This rating was affirmed: * Corporate Family Rating at B2 * $60 million senior secured revolving credit facility due 2012 at B1 (LGD3, 36%) * $475 million senior secured term loan due 2013 at B1 (LGD3, 36%) * $195 million senior subordinated notes due 2014 at Caa1 (LGD5, 89%) The ratings outlook is negative. The last rating action on iPayment was on September 22, 2006, when Moody's assigned a Probability of Default rating of B2, as well as upgraded the rating on revolving credit facility and senior secured term loan to B1 from B2. Headquartered in Nashville, Tennessee, iPayment, Inc., is a merchant acquirer / processor that provides credit and debit card- based payment processing services to small business merchants located across the United States. The company provides services such as card authorization, data capture, settlement, risk management, fraud detection and chargeback services. The company generated net-revenues (net of interchanges fees) of $340 million for the last-twelve-month period ended March 31, 2009. JOURNAL REGISTER: Court to Rule on Reorganization Plan by July 7 ---------------------------------------------------------------- The Associated Press reports that the U.S. Bankruptcy Court for the Southern District of New York will rule on Journal Register Company's Chapter 11 plan by July 7, after several creditors objected the Plan. The AP relates that while majority of creditors voted to approve terms that Journal Register submitted, plans to pay executive bonuses after the Company's emergence from bankruptcy protection as well as a provision that would arrange a $6.6 million gift from secured lenders to key suppliers have drawn criticism. Yardley, Pennsylvania-based Journal Register Company (PINKSHEETS: JRCO) -- http://www.JournalRegister.com/-- owns 20 daily newspapers, more than 180 non-daily publications and operates over 200 individual Web sites that are affiliated with the Company's daily newspapers, non-daily publications and its network of employment Web sites. All of the Company's operations are strategically clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The Company also owns JobsInTheUS, a network of 20 employment Web sites. The Company, along with its affiliates, filed for Chapter 11 bankruptcy protection on February 21, 2009 (Bankr. S.D.N.Y. Case No. 09-10769). Marc Abrams, Esq., Rachel C. Strickland, Esq., Shaunna D. Jones, Esq., and Jennifer J. Hardy, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors as counsel. William M. Silverman, Esq., Scott L. Hazan, Esq., and Jeanette A. Barrow- Bosshart, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represent the Official Committee of Unsecured Creditors as counsel. Conway, Del Genio, Gries & Co., LLC, provides restructuring management services to the Debtors. Robert P. Conway is the company's chief restructuring officer. The Company estimated $100 million to $500 million in total assets and $500 million to $1 billion in total debts at the time of the filing. KABUTO ARIZONA: Gets Nod to Tap Engelman Berger as Counsel ---------------------------------------------------------- Kabuto Arizona Properties, LLC, obtained permission from the U.S. Bankruptcy Court for the District of Arizona to employ Engelman Berger, P.C., as general counsel. EB will be employed to work alongside McNutt Law Group, LLP, co counsel, in rendering legal services for the Debtor. Those services include, (a) advising the Debtor with respect to its powers and duties as debtor-in-possession; (b) representing the Debtor in court hearings and meetings of creditors, (c) attending meetings and negotiating with representatives of creditors, and (iv) assisting the Debtor with the presentation of its schedules and statements. EB will be paid at these rates: Hourly Rates ------------ Shareholders $350-$425 Associates $250 Paralegals $150 All out-of-pocket costs and expenses will be reimbursed by the Debtor. EB may be reached at: David Wm. Engelman Scott B. Cohen Bradley D. Pack 3636 North Central Avenue, Suite 700 Phoenix, Arizona 85012 McNutt Law Group may be reached at Scott H. McNutt 188 The Embarcadero, Suite 800 San Francisco, California 94105 Kabuto Arizona Properties, LLC, owns a hotel and resort known as Wigwam Golf Resort and Spa located in Litchfield Park, Arizona It filed for Chapter 11 on May 22, 2009 (Bankr. D. Ariz. Case No. 09-11282). David W.M. Engelman, Esq., at Engelman Berger, P.C., represents the Debtor in its restructuring efforts. The Debtor has tapped McNutt Law Group, LLP, as co-counsel. The Debtor, at the time of its filing, says it has assets and debts both ranging from $50 million to $100 million. LA BONITA OLE: Launches Campaign to Avoid SunTrust Foreclosure -------------------------------------------------------------- After 17 years of providing a growing line of tortillas to the eastern United States, La Bonita Ole may be facing a permanent shift in owner/management. In this regard, La Bonita Ole President and CEO Tammy Young has launched a national campaign to "Save The Tortillas" to save her company. La Bonita Ole filed a voluntary Chapter 11 bankruptcy petition on July 16, 2008, that allowed the company to restructure its debt obligations under the auspices of SunTrust Bank. Because of the current credit crisis and a one-year growing pain impact, La Bonita Ole, like many other solid, growing companies, was left with insufficient funds to address its operating costs, after seventeen years of consecutive expansion. Filing for Chapter 11 enabled La Bonita Ole to continue to function, pay its bills and creditors, and become profitable and solvent again. The risk, however, was that control of the company could be shifted out of the hands of current management by SunTrust Bank whose current plan is to sell the company. If this happens, Ms. Young would be divested of her interests. "We do believe, had we been in a normal banking environment, our company probably wouldn't be in the situation we are now," said Ms. Young. "We had growing pains that prompted us to borrow money for capital. Thankfully, SunTrust provided that need through an unsecured $1.0M loan. When the world financial crisis hit, SunTrust and all other banks evaluated their loan portfolios. SunTrust determined they needed La Bonita Ole, Inc. to find funding to remove their unsecured exposure. The company has made and continues to make every agreed upon payment since the first day of all of its loans with SunTrust." Ms. Young hopes that the "Save The Tortillas" campaign can generate an overwhelming show of public support for the company and her cause before the date of final judgment in court which is August 19, 2009. Ideally, this public support would influence SunTrust Bank and the courts to allow the existing loans to remain in the SunTrust portfolio. The goal of the campaign is to make SunTrust Bank a hero in the banking industry for allowing La Bonita Ole to continue to thrive in their current state with Young at the helm and with its current employees. The campaign is using social media channels -- YouTube, Twitter, Facebook, Digg, Flickr and Brand Tampa -- to spark and ignite a movement to "Save The Tortillas" by sharing the company story, raising awareness of the situation and inviting fans to show their support and spread the word to save the tortillas. The campaign also has its own Web site -- http://www.savethetortillas.com/-- which includes a complete timeline of the company's history, past and current financials, a petition as well as a list of ways the public can support La Bonita Ole. On the Net: http://www.savethetortillas.com http://www.youtube.com/savethetortillas http://www.twitter.com/savethetortilla http://www.facebook.com/pages/Save-The- Tortillas/106550617936?ref=s http://www.brandtampa.com About La Bonita Ole Founded in 1992, Tampa-based La Bonita Ole makes tortillas. La Bonita Ole supplies over 20 major food retailers in 28 states, does over $12 million in sales, and employs more than 40 people. LAKEWEST GROUP: To Liquidate Business Under Chapter 7 ----------------------------------------------------- LakeWest Group LLC filed a petition to liquidate under Chapter 7 of the Bankruptcy Code before the U.S. Bankruptcy Court for the District of Delaware (Case No. 09-12190) on June 26, 2009. LakeWest, based in Cleveland, Ohio, is an independent management consulting firm to retailers. In its petition, LakeWest reported assets ranging from $100,000 to $500,000 and debt ranging from $1 million to $10 million. According to Reuters, LakeWest's clients include Macy's and Coldwater Creek Inc. The case is In re: LakeWest Group LLC, U.S Bankruptcy Court, District of Delaware, No. 09-12190. (Reporting by Santosh Nadgir in Bangalore, Additional reporting by Caroline Humer in New York)) LAS VEGAS SANDS: Bank Debt Trades at 28% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Las Vegas Sands is a borrower traded in the secondary market at 71.18 cents-on-the- dollar during the week ended June 26, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.51 percentage points from the previous week, the Journal relates. The loan matures May 1, 2014. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B- rating. Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo and convention center. The company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China. On March 10, 2009, Moody's Investors Service lowered the Company's Corporate Family Rating to B3 from B2 and assigned a negative rating outlook. LEAR CORP: Bank Debt Trades at 30% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which Lear Corp. is a borrower traded in the secondary market at 69.72 cents-on-the- dollar during the week ended June 26, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 4.43 percentage points from the previous week, the Journal relates. The loan matures March 29, 2012. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt is not rated by both Moody's and S&P's. About Lear Corporation Based in Southfield, Michigan, Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear is traded on the New York Stock Exchange under the symbol [LEA]. * * * Lear had approximately $1.2 billion in cash and cash equivalents as of April 4, 2009, as compared to approximately $1.6 billion as of December 31, 2008. The decline reflects negative free cash flow in the first quarter, as well as the termination of an accounts receivable factoring facility in Europe. Lear had total assets of $6.4 billion, current liabilities of $4.4 billion and long-term liabilities of $2.0 billion, resulting in $41.4 million in stockholders' deficit at April 4, 2009. LEAR CORP: Working on Prepackaged Bankruptcy -------------------------------------------- Lear Corp. is working on a prepackaged bankruptcy, sources told Dow Jones Newswires. Lear is facing a $38 million interest payment on two bonds Tuesday. Lear may file for a traditional-style bankruptcy if a prepackaged bankruptcy deal isn't reached, Dow Jones said. Craig Trudell and Lauren Coleman at Bloomberg News report, citing a person familiar with the matter, said Lear may file for bankruptcy protection as early as June 29 and no later than July 1. Current lenders JPMorgan Chase & Co. reportedly will provide debtor-in-possession financing. The Troubled Company Reporter on June 26, 2009, said Stroock & Stroock & Lavan LLP will represent the bondholders; and Simpson Tchacher & Bartlett LLP will represent creditors. Investment bank Miller Buckfire & Co. is giving Lear Corp. advice. As reported by the TCR on June 3, 2009, Lear did not make the $38 million semi-annual interest payments due on June 1, 2009, with respect to its 8.50% senior notes due 2013, and 8.75% senior notes due 2016. The Company utilized the 30-day grace period applicable to the interest payments, while it continues discussions of a possible capital restructuring with its lenders and certain other parties, according to Matthew J. Simoncini, senior vice president and chief financial officer of the company. Under the applicable indentures relating to the senior notes, the use of the 30-day grace period does not constitute a default that permits acceleration of the senior notes or any other indebtedness, Mr. Simoncini said. On May 13, 2009, the Company entered into an amendment and waiver under its primary credit facility, wherein the waiver of covenant defaults under the primary credit facility would terminate if the Company were to make any payments with respect to the senior notes. A full-text copy of the second amendment and waiver is available for free at http://ResearchArchives.com/t/s?3a6e About Lear Corporation Based in Southfield, Michigan, Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear is traded on the New York Stock Exchange under the symbol [LEA]. * * * Lear had approximately $1.2 billion in cash and cash equivalents as of April 4, 2009, as compared to approximately $1.6 billion as of December 31, 2008. The decline reflects negative free cash flow in the first quarter, as well as the termination of an accounts receivable factoring facility in Europe. Lear had total assets of $6.4 billion, current liabilities of $4.4 billion and long-term liabilities of $2.0 billion, resulting in $41.4 million in stockholders' deficit at April 4, 2009. LENNAR CORP: Posts $125.2 Million in Second Quarter 2009 -------------------------------------------------------- Lennar Corporation reported results for its second quarter ended May 31, 2009. Second quarter net loss in 2009 was $125.2 million, or $0.76 per diluted share, compared with a second quarter net loss of $120.9 million, or $0.76 per diluted share, in 2008. Stuart Miller, President and Chief Executive Officer of Lennar Corporation, said, "During the second quarter, the housing market experienced an uptick in sales of new homes, compared to the first quarter, as more confident homebuyers took advantage of increased affordability. Declining home prices, historically low interest rates and government stimulus programs, such as the $8,000 federal tax credit and the $10,000 California state tax credit, created unique purchasing opportunities and made it more compelling for homebuyers to enter the market. While we are sensing pent-up demand in the market, rising unemployment, increased foreclosures and tighter credit standards continue to present challenges for the industry to generate sales at a more robust pace and at stabilized pricing. This combined with a recent spike in mortgage rates has made it difficult to predict when the market will ultimately turn the corner." Mr. Miller continued, "During the second quarter, we strategically focused on further enhancing our liquidity position as we ended the quarter with $1.4 billion in cash and a responsible homebuilding debt-to-total capital ratio, net of homebuilding cash, of 32.9%. We generated liquidity by reducing our completed, unsold inventory by 53% to 626 homes from 1,321 homes at February 28, 2009. We also issued $400 million of senior notes, retired $281 million of senior notes and generated proceeds of $126 million from the issuance of common stock under an equity draw-down program." "We continue to focus on returning to profitability. We have made significant progress on right-sizing our business and have aggressively reduced our overhead structure. This was evident by a 510 basis point improvement in S,G&A expenses as a percentage of home sales, compared to the first quarter of 2009. In addition, we have made great strides in lowering our construction costs and repositioning our product offering to target first-time and value- focused homebuyers. More efficient, smaller plans have been very well received by our customers and continue to represent an increased percentage of our deliveries." Mr. Miller concluded, "As we continue our intense focus on rebuilding homebuilding profitability and on cash generation, we are well positioned with a strong balance sheet to navigate the current market and to take advantage of opportunities as they present themselves." Results of Operations Three Months Ended May 31, 2009 Compared to Three Months Ended May 31, 2008 Homebuilding Revenues from home sales decreased 23% in the second quarter of 2009 to $788.6 million from $1,018.9 million in 2008. Revenues were lower primarily due to a 16% decrease in the number of home deliveries, excluding unconsolidated entities, and an 8% decrease in the average sales price of homes delivered in 2009. New home deliveries, excluding unconsolidated entities, decreased to 3,138 homes in the second quarter of 2009 from 3,729 homes last year. In the second quarter of 2009, new home deliveries were lower in each of the Company's homebuilding segments and Homebuilding Other, compared to 2008. The average sales price of homes delivered decreased to $251,000 in the second quarter of 2009 from $274,000 in the same period last year, primarily due to reduced pricing. Sales incentives offered to homebuyers were $52,600 per home delivered in the second quarter of 2009, compared to $48,700 per home delivered in the same period last year. Gross margins on home sales were $76.1 million, or 9.6%, in the second quarter of 2009, which included $34.6 million of SFAS 144 valuation adjustments, compared to gross margins on home sales of $88.4 million, or 8.7%, in the second quarter of 2008, which included $73.6 million of SFAS 144 valuation adjustments. Gross margins on home sales excluding SFAS 144 valuation adjustments were $110.7 million, or 14.0%, in the second quarter of 2009, compared to $162.0 million, or 15.9%, in 2008. Gross margin percentage on home sales, excluding SFAS 144 valuation adjustments, decreased compared to last year primarily due to higher sales incentives offered to homebuyers as a percentage of revenues from home sales as the Company focused on reducing its completed, unsold inventory. Selling, general and administrative expenses were reduced by $44.4 million, or 28%, in the second quarter of 2009, compared to the same period last year, primarily due to reductions in associate headcount, variable selling expenses and fixed costs. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 14.3% in the second quarter of 2009, from 15.4% in 2008. Gross profits on land sales totaled $2.4 million in the second quarter of 2009, net of $5.6 million of SFAS 144 valuation adjustments and $1.8 million of write-offs of deposits and pre- acquisition costs related to homesites under option that the Company does not intend to purchase. In the second quarter of 2008, losses on land sales totaled $5.4 million, which included $2.1 million of SFAS 144 valuation adjustments and $6.6 million of write-offs of deposits and pre-acquisition costs related to homesites that were under option. Equity in loss from unconsolidated entities was $59.9 million in the second quarter of 2009, which included $50.1 million of SFAS 144 valuation adjustments related to assets of unconsolidated entities in which the Company has investments, compared to equity in loss from unconsolidated entities of $18.9 million in the second quarter of 2008, which included $8.0 million of SFAS 144 valuation adjustments related to assets of unconsolidated entities in which the Company has investments. Other income (expense), net, totaled ($22.5) million in the second quarter of 2009, which included $7.0 million of APB 18 valuation adjustments to the Company's investments in unconsolidated entities, compared to other income (expense), net, of ($47.9) million in the second quarter of 2008, which included $46.9 million of APB 18 valuation adjustments to the Company's investments in unconsolidated entities. Minority interest income, net was $6.5 million and $0.2 million, respectively, in the second quarter of 2009 and 2008. Sales of land, equity in loss from unconsolidated entities, other income (expense), net and minority interest income, net may vary significantly from period to period depending on the timing of land sales and other transactions entered into by the Company and unconsolidated entities in which it has investments. Financial Services Operating earnings for the Financial Services segment was $16.5 million in the second quarter of 2009, compared to an operating loss of $3.0 million in the same period last year. Improved consumer confidence and lower interest rates resulted in increased volume and a higher profit per transaction in the segment. The segment was also able to leverage lower fixed costs as a result of its successful cost reduction initiatives implemented throughout the downturn. Corporate General and Administrative Expenses Corporate general and administrative expenses as a percentage of total revenues increased to 3.4% in the second quarter of 2009, from 2.6% in 2008, primarily due to lower revenues. Deferred Tax Asset Valuation Allowance SFAS 109 requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on available evidence, it is more likely than not that such assets will not be realized. As a result of its net loss during the three months ended May 31, 2009, the Company generated deferred tax assets of $44.4 million and recorded a non-cash valuation allowance in accordance with SFAS 109 against the entire amount of deferred tax assets generated. Debt Repurchase/Debt Issuance In March 2009, the Company retired its $281 million 7 5/8% senior notes due March 2009 for 100% of the outstanding principal amount, plus accrued interest as of the maturity date. In April 2009, the Company issued $400 million of 12.25% senior notes due 2017 in a private placement under SEC Rule 144A. Equity Draw-down Program As of May 31, 2009, the Company issued a total of 12.8 million common shares of its Class A common stock under an equity offering for gross proceeds of $126.3 million, or $9.86 per share. The Company is authorized to sell shares for up to $275 million under the equity offering. The Company will use the proceeds from the equity offering for general corporate purposes. Six Months Ended May 31, 2009 Compared to Six Months Ended May 31, 2008 Homebuilding Revenues from home sales decreased 33% in the six months ended May 31, 2009 to $1.3 billion from $2.0 billion in 2008. Revenues were lower primarily due to a 26% decrease in the number of home deliveries, excluding unconsolidated entities, and a 10% decrease in the average sales price of homes delivered in 2009. New home deliveries, excluding unconsolidated entities, decreased to 5,274 homes in the six months ended May 31, 2009 from 7,166 homes last year. In the six months ended May 31, 2009, new home deliveries were lower in each of the Company's homebuilding segments and Homebuilding Other, compared to 2008. The average sales price of homes delivered decreased to $248,000 in the six months ended May 31, 2009, from $276,000 in 2008, primarily due to reduced pricing. Sales incentives offered to homebuyers were $51,800 per home delivered in 2009, compared to $48,400 per home delivered in 2008. Gross margins on home sales were $110.3 million, or 8.4%, in the six months ended May 31, 2009, which included $75.3 million of SFAS 144 valuation adjustments, compared to gross margins on home sales of $225.1 million, or 11.4%, in the six months ended May 31, 2008, which included $99.8 million of SFAS 144 valuation adjustments. Gross margins on home sales excluding SFAS 144 valuation adjustments were $185.6 million, or 14.2%, in the six months ended May 31, 2009, compared to $324.9 million, or 16.5%, in 2008. Gross margin percentage on home sales, excluding SFAS 144 valuation adjustments, decreased compared to last year, primarily due to higher sales incentives offered to homebuyers as a percentage of revenues from home sales as the Company focused on reducing its completed, unsold inventory. Selling, general and administrative expenses were reduced by $118.3 million, or 36%, in the six months ended May 31, 2009, compared to the same period last year, primarily due to reductions in associate headcount, variable selling expenses and fixed costs. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 16.3% in the six months ended May 31, 2009, from 16.8% in 2008. Losses on land sales totaled $8.1 million in the six months ended May 31, 2009, which included $5.8 million of SFAS 144 valuation adjustments and $12.1 million of write-offs of deposits and pre- acquisition costs related to homesites under option that the Company does not intend to purchase. In the six months ended May 31, 2008, losses on land sales totaled $31.9 million, which included $17.6 million of SFAS 144 valuation adjustments and $23.4 million of write-offs of deposits and pre-acquisition costs related to homesites that were under option. Equity in loss from unconsolidated entities was $62.8 million in the six months ended May 31, 2009, which included $50.1 million of SFAS 144 valuation adjustments related to assets of unconsolidated entities in which the Company has investments, compared to equity in loss from unconsolidated entities of $41.9 million in the six months ended May 31, 2008, which included $26.9 million of SFAS 144 valuation adjustments related to assets of unconsolidated entities in which the Company has investments. Other income (expense), net, totaled ($70.4) million in the six months ended May 31, 2009, which included $44.2 million of APB 18 valuation adjustments to the Company's investments in unconsolidated entities, compared to other income (expense), net, of ($69.7) million in the six months ended May 31, 2008, which included $76.5 million of APB 18 valuation adjustments to the Company's investments in unconsolidated entities. Minority interest income (expense), net totaled $8.3 million and ($16) thousand, respectively, in the six months ended May 31, 2009, and 2008. Sales of land, equity in loss from unconsolidated entities, other income (expense), net and minority interest income (expense), net may vary significantly from period to period depending on the timing of land sales and other transactions entered into by the Company and unconsolidated entities in which it has investments. Financial Services Operating earnings for the Financial Services segment were $17.0 million in the six months ended May 31, 2009, compared to an operating loss of $12.7 million in the same period last year. Improved consumer confidence and lower interest rates resulted in increased volume and a higher profit per transaction in the segment. The segment was also able to leverage lower fixed costs as a result of its successful cost reduction initiatives implemented throughout the downturn. Corporate General and Administrative Expenses Corporate general and administrative expenses were reduced by $6.1 million, or 10%, for the six months ended May 31, 2009, compared to the same period last year. As a percentage of total revenues, corporate general and administrative expenses increased to 3.9% in the six months ended May 31, 2009, from 2.9% in the same period last year, due to lower revenues. Deferred Tax Asset Valuation Allowance SFAS 109 requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on available evidence, it is more likely than not that such assets will not be realized. As a result of its net loss during the six months ended May 31, 2009, the Company generated deferred tax assets of $102.2 million and recorded a non-cash valuation allowance in accordance with SFAS 109 against the entire amount of deferred tax assets generated. The Company's financial statements are available at: http://ResearchArchives.com/t/s?3e31 About Lennar Corp. Based in Miami, Fla., Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/-- builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance and closing services for both buyers of the company's homes and others. * * * As reported by the Troubled Company Reporter on April 28, 2009, Moody's Investors Service assigned a B3 rating to the new $400 million senior unsecured note offering of Lennar Corporation. At the same time, Moody's affirmed the company's existing ratings, including its corporate family rating at B2, the ratings on its various issues of senior unsecured notes at B3, and its speculative grade liquidity rating at SGL-2. The ratings outlook is changed to stable from negative. According to the TCR, Fitch Ratings assigned a 'BB+' rating to Lennar Corp.'s $400 million, 12.25% senior notes due June 1, 2017. The Rating Outlook is Negative. The TCR reported that Standard & Poor's Ratings Services also assigned its 'BB-' rating to Lennar Corp.'s $400 million 12.25% senior unsecured note issue, due 2017. Concurrently, Standard & Poor's determined that the debt offering and other recently disclosed events would not immediately affect its corporate credit rating on Lennar. MAHALO ENERGY: Seeks to Use Cash, Borrow $2 Million --------------------------------------------------- Mahalo Energy (USA) Inc. seeks permission from the U.S. Bankruptcy Court for the Eastern District of Oklahoma to obtain postpetition financing and use cash collateral. Mahalo Energy seeks to obtain a $2,000,000 secured term loan from Ableco Finance LLC, as lender and agent for the lenders. The DIP financing will be secured by liens on and security interests in all of the Debtor's assets and will be guaranteed by Mahalo Energy, Ltd., parent of the Debtor. At the option of the Debtor, the DIP loan will bear interest rate (i) at a base rate plus 11.55, with a base rate floor set at 5% or (ii) LIBOR plus 12.50% with a LIBOR floor set at 3.5%. The DIP loan will mature in about three months or upon the sale of substantially all of the assets of the Debtor. Mahalo seeks to use its lenders' cash collateral for working capital and general corporate needs over the next three month. The Debtor will provide Ableco, as agent to prepetition lenders owed not less than $73,019,220, adequate protection for any diminution in value of their collateral. The adequate protection will be in the form of replacement liens and allowed superpriority administrative claim. The Debtor will also provide Wells Fargo Bank, N.A., as hedge counterparty under a certain ISDA master agreement, adequate protection. The Debtor is required as part of the DIP financing to meet milestones for an 11 U.S.C. Sec. 363 sale, including closing of a sale within two months of the Debtor's bankruptcy filing. Ableco is permitted to be the stalking horse bidder at the auction for the Debtor's assets. While the Debtor said in its cash collateral motion that the prepetition lenders have consented to the cash collateral use, it filed an amendment motion to clarify that the lenders have not. The Debtor's proposed budget provides that as of June 12, 2009, the Debtor will have $1,930,400 in cash collateral. Of this amount, the Debtor proposes to pay $818,770 for "US Royalties". Williams Production Mid-Continent Company, which operates natural gas wells in which the Debtor has a working interest and which claims to be a lien creditor, said it opposes to the use of $818,770 to pay royalty and working interest owner. Mid-Continent also objected to the proposal to grant replacement liens to secured creditors to the extent it trumps the liens of the existing lien holders. The Court has issued interim orders authorizing the Debtor to use cash collateral pending a final hearing on the Motion. About Mahalo Energy (USA) Inc. Mahalo Energy (USA) Inc. has 300 producing wells in Oklahoma and 60,000 acres of gas-bearing shale formations. Tulsa, Oklahoma- based Mahalo Energy filed for Chapter 11 on May 21, 2009 (Bankr. E.D. Okla. Case No. 09-80795). The Debtor filed for Chapter 11 following a default in its secured debt, resulting from increasing commodity prices and failure to meet targets to overall production levels. Stephen W. Elliott, Esq., at Kline, Kline, Elliot & Bryant, PC, represents the Debtor in its restructuring efforts. The Debtor listed $10 million to $50 million in assets and $100 million to $500 million in debts. MAP FINANCIAL: Recurring Losses Cues Going Concern Doubt -------------------------------------------------------- Map Financial Group, Inc., reported a net loss of $121,880 on revenues of $415,756 for the three months ended March 31, 2009. It reported $2,047,825 in total assets and $2,388,597 in total liabilities, all current, resulting in $340,772 in stockholders' deficit. Map Financial notes it has incurred recurring losses from operations, and as of March 31, 2009, an accumulated deficit of $373,502, the Company's current liabilities exceeded its current assets by $608,830 and its total assets by $340,772. According to the Company, these factors raise substantial doubt about the Company's ability to continue as a going concern. "Over the past year the Company's growth has been funded mainly by our revolving credit agreement. The Company expects that it will need to raise substantial additional capital investment to accomplish its business plan over the next several years. In addition, the Company may wish to selectively pursue possible acquisitions of businesses, technologies or products complementary to those of the Company in the future in order to expand its presence in the marketplace and achieve operating efficiencies. However there can be no assurance that these objectives will be achieved," Map Financial explains. The Company's subsidiaries entered into a master loan agreement with MapCash Management, Ltd. in the amount of $10,000,000. Advances and any unpaid accrued interest under the terms of the agreement are due and payable on demand. Interest is charged at a rate of 15% per annum which is due and payable on the first day of each January, April, July, and October. The proceeds of the loan shall be used solely for its working capital needs. On March 5, 2009 the agreement was amended to include a provision indicating the note will be due on July 10, 2010. Map Financial Group, Inc. was incorporated under the laws of the State of Nevada on June 27, 2008, to act as a holding company for five indirect, wholly owned operating subsidiaries that provide micro-lending services in the Caribbean. Through the Operating Subsidiaries, the Company offers short term micro-loans to the employees of various governmental agencies and private companies in the Commonwealth of Dominica, Antigua and Barbuda, St. Lucia, St. Vincent and the Grenadines and Grenada. Map Financial Group's wholly owned subsidiary is FastCash International Limited, and its wholly owned subsidiaries are FastCash International Limited: Financial Services Inc. located in the Commonwealth of Dominica; FastCash (St. Lucia) Ltd.; FastCash (Antigua) Ltd; FastCash Ltd (Grenada); Cash Express Ltd (St. Vincent). MARVIN-WAXHAW: Court Approves Mitchell & Culp as Attorney --------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of North Carolina authorized Marvin-Waxhaw Associates LLC to employ Mitchell & Culp PLLC as its attorney. The firm will provide legal advice with respect to its powers and duties as debtor-in-possession in the continued operation of its business and management of its property; to represent debtor in lawsuits now pending against debtor; and to perform all other legal services for debtor as debtor-in-possession which may be necessary herein. Papers filed with the Court did not disclose the firm's compensation rates. To the best of Debtor's knowledge, the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Weddington, North Carolina-based Marvin-Waxhaw Associates, LLC, filed for Chapter 11 on June 5, 2009 (Bankr. W. D. N.C. Case No. 09-31455). The Debtor has assets and debts both ranging from $10 million to $50 million. MASSEY ENERGY: S&P Changes Outlook to Negative; Keeps 'BB-' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it revised its outlook on Richmond, Virginia-based Massey Energy Co. to negative from stable. At the same time, S&P affirmed its ratings on the company, including the 'BB-' corporate credit rating. The outlook revision reflects S&P's assessment that the company's leverage ratio (debt to EBITDA) will likely exceed 4x in the next few quarters, which is above S&P's comfort level for the rating. This assessment is due to S&P's expectation that Massey will produce around 39 million tons of coal this year and around the same level in 2010, about 2 million tons less than in 2008. "Because of the high fixed cost nature of the business, S&P don't expect the cost of coal sales to decline significantly enough to prevent EBITDA from declining below the level necessary to maintain leverage below 4x," said Standard & Poor's credit analyst Sherwin Brandford. The rating on Massey reflects the company's limited geographic diversity, difficult mining conditions in Central Appalachia, high cost position, and somewhat aggressive financial policy. Still, the company is the largest producer of high-quality, low-sulfur coal in Central Appalachia, and possesses an extensive reserve base. S&P considers Massey's business position weak and its financial profile aggressive. The negative outlook reflects S&P's expectation that coal demand and spot pricing during 2009 will be lower than S&P previously expected because of the economic downturn, resulting in leverage increasing to around 5x over the next few quarters. A downgrade could occur if coal industry fundamentals weaken more than expected or remain weak for a prolonged period, resulting in leverage remaining above 4x for a sustained period of time. S&P could revise the outlook back to stable if the company's operating results exceed S&P's expectation over the next few quarters resulting in leverage being maintained below 4x, or if the company repays enough debt to keep leverage below that level despite weaker results. S&P would also revise the outlook to stable if better than expected performance in 2010 results in leverage declining to a level below 4x during that period. MBIA INC: Moody's Downgrades Senior Debt Rating to 'Ba3' -------------------------------------------------------- Moody's Investors Service has downgraded to Ba3, from Ba1, the senior debt rating of MBIA, Inc.; the outlook is negative. Additionally, the rating agency confirmed the Baa1 rating of National Public Finance Guarantee Corporation (National) with a developing outlook, concluding a review for possible upgrade initiated on February 18, 2009, and changed the rating outlook of MBIA Insurance Corporation and supported insurance subsidiaries to negative. These rating actions reflect further expected insured portfolio deterioration at MBIA Insurance Corporation and the uncertainty stemming from ongoing litigation challenging MBIA's recent restructuring. The rating actions have implications for the various transactions wrapped and reinsured by National Public Finance Guaranty Corporation as discussed later in this press release. Rationale For Rating Actions Moody's said that the confirmation of National's rating with a developing outlook, despite its strong capital profile and operational infrastructure, reflects the uncertainty caused by ongoing litigation challenging the recent restructuring of the group, and the extended timeframe over which such uncertainty may persist. Creditors and counterparties have sued MBIA, requesting that the February 17, 2009 restructuring of the group that led to National's capitalization with some of MBIA Insurance Corp's resources be reversed. Moody's noted that National's ability to write new business may be substantially constrained while the litigation remains outstanding, given the uncertainty as to its outcome. A resolution of the litigation that provides clarity on the separation of National from MBIA Corp., without reducing the current level of financial resources at National, could lead to an upgrade of National's rating in the future. On the other hand, a resolution that jeopardizes the separation and/or diminishes the financial integrity of National could lead to a downgrade; this potential for divergent outcomes is reflected in Moody's developing rating outlook for National. The downgrade of MBIA Inc.'s senior debt rating to Ba3, and downgrade of MBIA Insurance Corporation's surplus notes and preferred stocks ratings reflects the continued severe stress faced by MBIA Insurance Corp as a result of its exposure to ABS CDOs and RMBS securities. Taking account of recent performance experience, Moody's updated estimates of losses for ABS CDOs show substantial increases from prior estimates. Estimated losses on direct RMBS exposures have also increased, though not as significantly. Moody's expected losses for ABS CDOs and RMBS now approximate 19% and 14.5%, respectively, of the associated par outstanding, with losses under a stress scenario materially above those levels. Absent better loss development than currently anticipated by the rating agency, Moody's believes that MBIA will likely pursue a negotiated settlement of some of these exposures under terms similar to a distressed exchange. There is, however, meaningful uncertainty about the actual losses that MBIA will incur due in part to the lack of consensus about the direction of the economy and its effect on portfolio credit performance. The rating agency noted that MBIA's loss reserves are substantially lower than Moody's expected loss on ABS CDOs and RMBS transactions. MBIA is suing some mortgage lenders for breach of representations and warranties and Merrill Lynch for fraudulent conduct in arranging ABS CDO transactions, both actions could potentially materially reduce losses to MBIA. The downgrade of MBIA Inc.'s senior debt rating to Ba3 also reflects the risks stemming from the ongoing litigations on the group's restructuring, said Moody's. A resolution of such litigations in favor of the plaintiffs could potentially limit MBIA Inc's access to National's resources or further link MBIA Inc. to the fortunes of MBIA Insurance Corporation. Treatment Of Wrapped Transactions Moody's ratings on securities that are guaranteed or "wrapped" by a financial guarantor are generally maintained at a level equal to the higher of these: a) the rating of the guarantor (if rated at the investment grade level); or b) the published underlying rating (and for structured securities, the published or unpublished underlying rating). Moody's approach to rating wrapped transactions is outlined in Moody's special comment entitled "Assignment of Wrapped Ratings When Financial Guarantor Falls Below Investment Grade" (May, 2008); and Moody's November 10, 2008 announcement entitled "Moody's Modifies Approach to Rating Structured Finance Securities Wrapped by Financial Guarantors". In light of the confirmation of National Public Finance Guarantee Corporation's Baa1 rating, Moody's will also confirm the rating of securities wrapped by National and reinsured municipal securities of MBIA Insurance Corporation, unless they have higher published underlying ratings. The FGIC policies reinsured by National Public Finance Guaranty Corporation are unaffected by the rating action as the reinsurance agreement does not qualify for credit substitution under Moody's methodology because it allows FGIC to terminate the reinsurance agreement without a final payment being made by MBIA. List Of Rating Actions These ratings have been downgraded, with a negative outlook: * MBIA Inc. -- senior unsecured debt at Ba3, from Ba1, provisional senior debt at (P) Ba3, from (P) Ba1, provisional subordinated debt at (P) B1, from (P) Ba2, and provisional preferred stock at (P) B2, from (P) Ba3; * MBIA Insurance Corporation -- surplus notes to Caa3, from Caa2; and preferred stock to Ca, from Caa3; This rating has been confirmed with a developing outlook: * National Public Finance Guarantee Corporation (previously, MBIA Insurance Corporation of Illinois) -- Baa1 insurance financial strength, previously under review for possible upgrade. The outlook on these firms was changed to negative: * MBIA Insurance Corporation -- insurance financial strength at B3; * Capital Markets Assurance Corporation -- insurance financial strength at B3; * MBIA UK Insurance Limited -- insurance financial strength at B3; * MBIA Mexico S.A. de C.V. -- insurance financial strength at B3; and national scale insurance financial strength at B1.mx; The last rating action was on February 18, 2009, when Moody's adjusted MBIA's ratings as a result of the firm's restructuring. MBIA Inc. provides financial guarantees to issuers in the municipal and structured finance markets in the United States, as well as internationally. MBIA also offers various complementary services, such as investment management and municipal investment contracts. MCCLATCHY CO: Unveils Results of Private Exchange Offer ------------------------------------------------------- The McClatchy Company announced the expiration and results of its private exchange offer for its 7.125% Notes due 2011 (CUSIP No. 499040AM5), its 4.625% Notes due 2014 (CUSIP No. 499040AN3), its 5.750% Notes due 2017 (CUSIP No. 499040AP8), its 7.150% Debentures due 2027 (CUSIP No. 499040AH6) and its 6.875% Debentures due 2029 (CUSIP No. 499040AL7). The expiration for the Exchange Offer occurred at 5:00 p.m., New York City time, on June 25, 2009. McClatchy said the settlement date of the Exchange Offer was Friday. As of the Expiration Date, according to Global Bondholder Services Corporation, the depositary for the Exchange Offer, the Company received valid tenders from holders of roughly: -- $3.8 million aggregate principal amount of 2011 Notes, -- $11.1 million aggregate principal amount of 2014 Notes, -- $53.4 million aggregate principal amount of 2017 Notes, -- roughly $10.8 million aggregate principal amount of 2027 Debentures, and -- roughly $23.8 million aggregate principal amount of 2029 Debentures. The Company has waived the Exchange Offer's minimum note amount condition. This minimum note amount condition required that the Company issue at least an aggregate principal amount of $50 million of its 15.75% Senior Notes due 2014 in exchange for the Old Notes pursuant to the Exchange Offer. As a result, the Company will accept -- without proration -- for payment all Old Notes that were validly tendered in the Exchange Offer. The Old Notes validly tendered and accepted will be exchanged into roughly $3.4 million in cash, in the case of the 2011 and 2014 Notes, and roughly $24.2 million in aggregate principal amount of the Company's New Notes. About The McClatchy Company Headquartered in Sacramento, California, The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, with 30 daily newspapers, approximately 50 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, the Charlotte Observer, and The (Raleigh) News & Observer. McClatchy also owns a portfolio of premium digital assets, including 14.4% of CareerBuilder, an online job site, and 25.6% of Classified Ventures, a newspaper industry partnership that offers the auto website, cars.com, and the rental site, apartments.com. * * * As reported in the Troubled Company Reporter on May 25, 2009, Moody's Investors Service downgraded The McClatchy Company's Probability of Default rating to Caa3 from Caa1 following the company's announcement that it has commenced a private offer to exchange up to $1.15 billion of outstanding senior unsecured and unguaranteed notes and debentures for up to $60 million in cash and up to $175 million of new 15.75% senior unsecured guaranteed notes due 2014. Moody's also downgraded the existing senior unsecured note ratings to Ca (2011 notes) and C (2014, 2017, 2027 and 2029 notes), reflecting the expected loss from the exchange offer and the high near term probability of default. MCKINNEY AVENUE: Files List of 20 Largest Unsecured Creditors ------------------------------------------------------------- Mckinney Avenue Properties No. 2 LTD. filed with the U.S. Bankruptcy Court for the Northern District of Texas a list of 20 largest unsecured creditors. The Debtor's largest unsecured creditors are: Entity Nature of Claim Claim Amount ------ --------------- ------------ Heath S. Kasnetz Services $5,436,819 2711 Hibernia Street Dallas, TX 75204-2555 Andrew Kasnetz Services $152,243 2702 McKinney Ave., Ste. 200 Dallas, TX 75204 Dallas County Tax Assessor Taxes $48,185 PO Box 139066 Dallas, TX 75313 Meadows, Collier, Reed et al. Services $12,497 Frank Carabetta, Tribecca, Tenant $10,951 Tera K, LLC Jessica Cha and Randy Kim Tenant $9,995 BK Ventures, LLC Tenant $7,200 Spin 4 Life Tenant $6,698 Chipotle Mexican Grill Tenant $5,416 The Godsey Law Firm Tenant $5,000 Black's Guide Services $4,300 Yaser Khalaf & Rafeek Khayal Tenant $4,000 Barbara Yevchak Tenant $4,000 Jason T. Jones Tenant $3,650 Frank Carabetta Tenant $3,650 Switch Creative Tenant $3,280 Christian Fretheim Tenant $2,925 Sleep Trends Tenant $2,895 Jay Gonzales Tenant $2,895 Patti L. Granoff Tenant $2,695 Dallas, Texas-based McKinney Avenue Properties No. 2, LTD, and West End Parking Co. Ltd filed for Chapter 11 on May 30, 2009 (Bankr. N. D. Tex. Case No. 09-33348 and 09-33219). The Debtors have assets and debts both ranging from $10 million to $50 million. MCKINNEY AVENUE: Taps Quilling Selander as General Counsel ---------------------------------------------------------- Mckinney Avenue Properties No. 2 LTD. asks the U.S. Bankruptcy Court for the Northern District of Texas for permission to employ Quilling, Selander, Cummiskey & Lownds, P.C., as general counsel. The firm will: a) furnish legal advice to the Debtor with regard to its powers, duties and responsibilities as a debtor-in- possession and the continued management of its affairs and assets under chapter 11; b) prepare, for and on behalf of the Debtor, all necessary applications, motions, answers, orders, reports and other legal papers; c) prepare a disclosure statement and plan of reorganization and other services incident thereto; d) investigate and prosecute preference and fraudulent transfers actions arising under the avoidance powers of the Bankruptcy Code; and e) perform all other legal services for the Debtor which may be necessary herein. The firm hourly rates are: Designation Hourly Rate ----------- ----------- shareholder $275-$350 associates $150-$250 paralegals $50-$105 To the best of the Debtor's knowledge, the firm is "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Dallas, Texas-based McKinney Avenue Properties No. 2, LTD, and West End Parking Co. Ltd filed for Chapter 11 on May 30, 2009 (Bankr. N. D. Tex. Case No. 09-33348 and 09-33219). The Debtors have assets and debts both ranging from $10 million to $50 million. METALDYNE CORP: Seeks to Employ Foley as Special Counsel -------------------------------------------------------- Metaldyne Corp. and its affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Foley and Lardner LLP as conflicts and special counsel. Foley is already familiar with the Debtors' business. Foley has represented the Debtors in numerous legal matters over the last several years in nearly all aspects of their businesses. In the Chapter 11 cases, Foley will handle matters which are not appropriately handled by general bankruptcy counsel because of a potential conflict of interest or, alternatively, which can be more efficiently handled by Foley as the Debtors or general bankruptcy counsel may request. The Debtors may seek to utilize Foley's services as special counsel with respect to any customer-related issues that may arise in the Chapter 11 cases. Because Foley has substantial experience with certain of the Debtors' customers, and particularly the North American original equipment manufacturers, which will fund the debtor-in-possession financing facility, Foley's services, if utilized, will be critical to the Debtors' reorganization and any issues that arise with respect to that facility. Foley's professionals who will provide work in the Chapter 11 cases are: Hourly Rate ----------- Judy A. O'Neill, partner $675 Victor A. Vilaplana, partner $600 Joanne Lee, bankruptcy counsel $410 Robert Nederhood, corporate $305 Olya Petukhova, bankruptcy counsel $420 Gary Steinbauer, litigation $265 Gregory M. Yatooma, corporate $320 Judy A. O'Neill says the firm is a "disinterested person" as that term is defined in 11 U.S.C. Sec. 101(14). About Metaldyne Corporation Headquartered in Plymouth, Michigan, Metaldyne Corporation -- http://www.metaldyne.com/-- is a wholly owned subsidiary of Asahi Tec, a Shizuoka, Japan-based chassis and powertrain component supplier in the passenger car/light truck and medium/heavy truck segments. Asahi Tec is listed on the Tokyo Stock Exchange. Metaldyne is a global designer and supplier of metal based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel end, and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry. On January 11, 2007, in connection with a plan of merger, Asahi Tee Corporation in Japan acquired the shares of Metaldyne. On the same date, Asahi Tee contributed those shares to Metaldyne Holdings, and Asahi Tee thereby became the indirect parent of Metaldyne and its other units. RHJ International S.A. of Belgium now holds approximately 60.1% of the outstanding capital stock of Asahi Tec. The Company own 23 different properties, including 14 domestic manufacturing facilities in six states, and more than 10 manufacturing facilities North America, Europe, South America and Asia. Metaldyne Corporation aka MascoTech, Inc., aka MascoTech Harbor, Inc., Riverside Acquisition Corporation and Metaldyne Subsidiary Inc. and its affiliates filed for Chapter 11 on May 27, 2009 (Bankr. S. D. NY Lead Case No. 09-13412). The filing did not include the company's non-U.S. entities or operations. Richard H. Engman, Esq., at Jones Day represents the Debtors in their restructuring efforts. Judy A. O'Neill, Esq., at Foley & Lardner LLP serves as conflicts counsel; Lazard Freres & Co. LLC and AlixPartners LLP as financial advisors; and BMC Group Inc. as claims agent. For the fiscal year ended March 29, 2009, the company recorded annual revenues of approximately US$1.32 billion. As of March 29, 2009, utilizing book values, the company had assets of approximately US$977 million and liabilities of US$927 million. METROPACIFIC BANK: FDIC Named Receiver; Sunwest Assumes Deposits ---------------------------------------------------------------- MetroPacific Bank, Irvine, California, was closed June 26 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 Sunwest Bank, Tustin, California, to assume all of the deposits of MetroPacific Bank, excluding those from brokers. MetroPacific Bank's sole office will reopen today, as a branch of Sunwest Bank. Depositors of MetroPacific Bank will automatically become depositors of Sunwest Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until Sunwest Bank can fully integrate the deposit records of MetroPacific Bank. As of June 8, 2009, MetroPacific Bank had total assets of $80 million and total deposits of approximately $73 million. Sunwest Bank agreed to purchase virtually all of the failed bank's assets. The FDIC will retain any remaining assets for later disposition. Sunwest Bank will purchase all deposits, except about $6 million in brokered deposits, held by MetroPacific Bank. The FDIC will pay the brokers directly for the amount of their funds. Customers who placed money with brokers should contact them directly for more information about the status of their deposits. Customers who have questions about the transaction can call the FDIC toll-free at 1-800-523-8275. The phone number will be operational this evening until 9:00 p.m., Pacific Daylight Time (PDT); on Saturday from 9:00 a.m. to 6:00 p.m., PDT; on Sunday from noon to 6:00 p.m., PDT; and thereafter from 8:00 a.m. to 8:00 p.m., PDT. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/metropacific.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $29 million. Sunwest Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. MetroPacific is the 44th FDIC-insured institution to fail in the nation this year, and the fifth in California. The last FDIC-insured institution to be closed in the state was First Bank of Beverly Hills, Calabasas, on April 24, 2009. MGM MIRAGE: Annual Stockholders' Meeting Scheduled for August 4 --------------------------------------------------------------- The Annual Meeting of Stockholders of MGM MIRAGE will be held at The Mirage in the Terry Fator Theatre, located at 3400 Las Vegas Boulevard South, Las Vegas, Nevada 89109, on August 4, 2009, at 10:00 a.m., Pacific Time. At the Annual Meeting, stockholders will be asked to: (1) elect a Board of Directors; (2) ratify the selection of the independent registered public accounting firm for the year ending December 31, 2009; (3) consider a stockholder proposal if presented at the Annual Meeting; and (4) transact other business as may properly come before the meeting or any adjournments thereof. One of the purposes of the annual meeting is to elect 13 directors, each of whom will serve until the next annual meeting. The nominees are: * Robert H. Baldwin; * Willie D. Davis; * Kenny C. Guinn; * Alexander M. Haig, Jr.; * Alexis M. Herman; * Roland Hernandez; * Gary N. Jacobs; * Kirk Kerkorian; * Anthony Mandekic; * Rose McKinney-James; * James J. Murren; * Daniel J. Taylor; and * Melvin B. Wolzinger The Audit Committee of the Board of Directors of the Company is scheduled to meet prior to the Annual Meeting to select, subject to ratification by the stockholders, the independent registered public accounting firm to audit the consolidated financial statements of the Company during the year ended December 31, 2009. It is anticipated that the Audit Committee will select the firm of Deloitte & Touche LLP, an independent registered public accounting firm. A representative of Deloitte & Touche LLP will be present at the stockholders' meeting with the opportunity to make a statement if he or she desires to do so and to respond to appropriate questions. The Office of the Comptroller of New York City -- custodian and trustee of the New York City Employees' Retirement System, the New York City Teachers' Retirement System, the New York City Police Pension Fund and the New York City Fire Department Pension Fund, and custodian of the New York City Board of Education Retirement System -- wants the Board of Directors to issue a report to shareholders, by June 30, 2010, at reasonable cost and omitting proprietary information, on the Company's sustainability policies and performance, including multiple, objective statistical indicators. Mr. Kerkorian's Tracinda Corporation holds 163,123,044 shares, or 37%, of the Company's common stock. On May 19, 2009, Tracinda purchased 14,285,714 shares of MGM MIRAGE Common Stock in an underwritten public offering of 143,000,000 shares of Common Stock for a per share price of $7.00. In a regulatory filing with the Securities and Exchange Commission, Tracinda disclosed that on June 26, 2009, it pledged, as collateral under a Pledge Agreement, the 14,285,714 shares it acquired pursuant to the May 2009 underwritten public offering of 164,450,000 shares of Common Stock (including shares issued on exercise of an over-allotment option). A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?3e3c Stockholders of record at the close of business on June 12, 2009, are entitled to notice of and to vote at the annual meeting. As reported by the Troubled Company Reporter on June 24, 2009, MGM MIRAGE has concluded that there is no longer substantial doubt about its ability to continue as a going concern as a result of a series of transactions it executed in May 2009 to improve its financial condition. On May 19, 2009, as reported by the TCR, MGM MIRAGE completed a public offering of 164.5 million shares of its common stock at $7 per share, with proceeds of roughly $1.1 billion. In addition, the Company launched a private placement of senior secured notes; $650 million of 10.375% senior secured notes due May 2014 and $850 million of 11.125% senior secured notes due November 2017. In conjunction with the transactions, the company entered into Amendment No. 6 and waiver to its senior credit facility, which required the Company to: 1) permanently repay $826 million of the credit facility, and 2) treat the $400 million in aggregate repayment of the credit facility borrowings made as a condition to Amendment No. 2 and Amendment No. 5 as a permanent prepayment of the credit facility borrowings. On June 15, 2009, MGM MIRAGE and U.S Bank National Association, as trustee, entered into a Supplemental Indenture to the Indenture, dated November 14, 2008, governing the Company's 13% Senior Secured Notes due 2013. Pursuant to a covenant under the Indenture pertaining to sales of non-collateral assets of the Company or any restricted subsidiary, the Company and its restricted subsidiaries are restricted in their ability to, among others, (i) sell assets not securing the Notes (including the corresponding subsidiary guarantees) unless at least 75% of the consideration received is in cash, cash equivalent or "deemed cash" and (ii) use the net proceeds from such sale. As a result of the Supplemental Indenture, the Covenant was amended to provide that (i) the Covenant does not apply to the sale of the Treasure Island Hotel & Casino consummated on March 20, 2009, (ii) any indebtedness of the Company or any restricted subsidiary of the Company (to the extent reflected in the Company's or such restricted subsidiary's then most recent consolidated balance sheet and excluding any indebtedness subordinated in right of payment to the Notes or indebtedness owed to the Company or any affiliate of the Company) validly released in writing in exchange for the assets of the Company or such restricted subsidiary will be "deemed cash" for purposes of the 75% cash consideration requirement under the Covenant, and (iii) permitted uses of the net proceeds of non-collateral asset sales would include payment (at a price not to exceed 100% of the principal amount thereof and accrued but unpaid interest thereon) of indebtedness that ranks equally with the Notes or any of the corresponding subsidiary guaranty (including the Company's senior revolving indebtedness to the extent the corresponding commitment under the revolving facility is permanently reduced by a corresponding amount). In connection with the amendments to the Covenant set forth in the Supplemental Indenture, the Company received the consent for the adoption of such amendments from holders of a majority of the outstanding Notes. About MGM MIRAGE Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. The report of Deloitte & Touche, LLP, MGM MIRAGE's independent registered public accounting firm on the Company's consolidated financial statements for the year ended December 31, 2008, contains an explanatory paragraph with respect to the Company's ability to continue as a going concern. * * * As reported by the Troubled Company Reporter on May 20, 2009, Standard & Poor's Ratings Services raised its corporate credit ratings on MGM MIRAGE and its subsidiaries to 'CCC+' from 'CCC', reflecting the substantial boost to MGM MIRAGE's intermediate-term liquidity profile provided by the recent $2.5 billion capital raise (prior to any over-allotments on the equity offering). S&P also removed all ratings from CreditWatch, where they were placed with positive implications on May 13, 2009, following MGM MIRAGE's announced plans to raise at least $2.5 billion of capital. The rating outlook is developing. The TCR said May 15 that Moody's Investors Service affirmed MGM MIRAGE's Caa2 Corporate Family Rating and Caa3 Probability of Default Rating following the company's announcement it intends to issue $1.0 of new common equity and $1.5 billion of new senior secured notes. A B1 rating was assigned to the proposed $1.5 billion senior secured guaranteed notes. MGM has an SGL-4 Speculative Grade Liquidity rating and a negative rating outlook. MICHAELS STORES: Bank Debt Trades at 8% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which Michaels Stores Inc. is a borrower traded in the secondary market at 79.21 cents- on-the-dollar during the week ended June 26, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.54 percentage points from the previous week, the Journal relates. The loan matures October 31, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's B rating. About Michaels Stores Headquartered in Irving, Texas, Michaels Stores, Inc., is the largest arts and crafts specialty retailer in North America. As of March 9, 2009, the company operated 1,105 "Michaels" retail stores in the United States and Canada and 161 Aaron Brothers Stores. As of January 31, 2009, Michaels Stores had $1.62 billion in total assets and $4.51 billion in total liabilities resulting in $2.88 billion in stockholders' deficit. For fiscal year 2008 -- ended January 31, 2009 -- the Company posted a $5 million net loss on $3.81 billion in net sales. MIRAE BANK: Closed; Wilshire State Bank Assumes Deposits -------------------------------------------------------- Mirae Bank, Los Angeles, was closed June 26 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 Wilshire State Bank, Los Angeles, California, to assume all of the deposits of Mirae Bank. The five offices of Mirae Bank will reopen today as branches of Wilshire State Bank. Depositors of Mirae Bank will automatically become depositors of Wilshire State Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until Wilshire State Bank can fully integrate the deposit records of Mirae Bank. As of May 29, 2009, Mirae Bank had total assets of $456 million and total deposits of approximately $362 million. In addition to assuming all of the deposits of the failed bank, Wilshire State Bank agreed to purchase approximately $449 million of assets. The FDIC will retain the remaining assets for later disposition. The FDIC and Wilshire State Bank entered into a loss-share transaction on approximately $341 million of Mirae's assets. Wilshire State Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. Customers who have questions about the transaction can call the FDIC toll-free at 1-800-930-1848. The phone number will be operational this evening until 9:00 p.m., Pacific Daylight Time (PDT); on Saturday from 9:00 a.m. to 6:00 p.m., PDT; on Sunday from noon to 6:00 p.m., PDT; and thereafter from 8:00 a.m. to 8:00 p.m., PDT. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/mirae.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $50 million. Wilshire State Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Mirae Bank is the 45th FDIC-insured institution to fail in the nation this year, and the sixth in California. The last FDIC-insured institution to be closed in the state was MetroPacific Bank, Irvine, earlier June 26. NAVISTAR INT'L: Board Elects DuPont's Gulyas as Class II Director ----------------------------------------------------------------- Diane H. Gulyas was elected to the Board of Directors of Navistar International Corporation as a Class II director, effective June 16, 2009. Ms. Gulyas also was appointed a member of the Board's Finance Committee. Ms. Gulyas is a group vice president at E.I. DuPont de Nemours & Company, responsible for DuPont's performance materials, which contains four business units -- engineering polymers, packaging, elastomers and films. With annual revenues of approximately $7 billon, the performance materials group is the largest of DuPont's five business segments. A graduate of the University of Notre Dame, Ms. Gulyas joined DuPont in 1978 and spent her first 10 years in a variety of sales, marketing, technical and systems development positions, primarily in the company's polymers business. She later served as vice president and general manager for DuPont advanced fiber business and then group vice president of the $3 billion electronic and communication technologies platform. In April 2004, she was named chief marketing and sales officer, where she was responsible for corporate branding and marketing communications, market research, e-business and marketing/sales capability worldwide. She was named to her current position in April 2006. "I am extremely delighted that Diane Gulyas is able to bring her knowledge of manufacturing, electronics and marketing as well as her experience in international operations to Navistar," said Daniel C. Ustian, Navistar chairman, president and chief executive officer. The selection of Ms. Gulyas increases the number of Navistar board members to 10. In connection with Ms. Gulyas' election, the Board's Audit Committee approved a related person transaction pursuant to the provisions of the Company's Policy and Procedures with Respect to Related Person Transactions pertaining to Ms. Gulyas' service as fundraising chair of the United Way, Delaware. During each of the prior three fiscal years, the Company contributed in excess of $120,000 to the United Way in support of its fundraising campaign and expects to do so again this year. None of the contributions have gone to the United Way, Delaware. Ms. Gulyas did not influence in any manner the Company's contributions to the United Way nor did she receive any direct or indirect material benefit from that relationship. Under the Policy, the Audit Committee determined this relationship is not inconsistent with the best interests of the Company and approved the transaction. As a director of the Company, Ms. Gulyas will receive compensation as a non-employee director in accordance with the Company's non- employee director compensation practices. This compensation generally consists of an annual retainer in the amount of $60,000 -- 1/4 of which is to be paid in the form of restricted stock -- meeting attendance fees of $1,500 for each Board or Committee meeting and an annual stock option grant of 4,000 shares. The initial cash and stock award to be received by Ms. Gulyas will be pro-rated accordingly. Separately, on June 16, Y. Marc Belton, a Class I director of the Company, notified the Company that after 10 years of service he intends to retire from the Board effective upon the conclusion of the next scheduled meeting of the Board to be held on August 25, 2009. His decision to retire was not as a result of any disagreement with the Company or its management. NAVISTAR INT'L: Files 2008 Annual Report for Four Employee Plans ---------------------------------------------------------------- Navistar International Corporation filed with the Securities and Exchange Commission annual reports on Form 11-K for the year ended December 31, 2008, on four employee plans: Net Assets Available For Benefits ------------ Navistar, Inc. 401(K) Plan for $143,658,475 Represented Employees See http://ResearchArchives.com/t/s?3e3d IC Bus, LLC 401(k) Plan $17,053,724 See http://ResearchArchives.com/t/s?3e3e Navistar, Inc. Retirement Accumulation Plan $188,556,699 See http://ResearchArchives.com/t/s?3e3f Navistar, Inc. 401(k) Retirement Savings Plan $175,528,476 See http://ResearchArchives.com/t/s?3e41 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. NEIGHBORHOOD COMMUNITY: Closed; CharterBank Assumes Deposits ------------------------------------------------------------ Neighborhood Community Bank, Newnan, Georgia, was closed June 26 by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with CharterBank, West Point, Georgia, to assume all of the deposits of Neighborhood Community Bank. The four offices of Neighborhood Community Bank will reopen as branches of CharterBank. All of the offices will maintain normal business hours. Depositors of Neighborhood Community Bank will automatically become depositors of CharterBank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until CharterBank can fully integrate the deposit records of Neighborhood Community Bank. Depositors of Neighborhood Community Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of March 31, 2009, Neighborhood Community Bank had total assets of $221.6 million and total deposits of approximately $191.3 million. In addition to assuming all of the deposits of the failed bank, CharterBank agreed to purchase approximately $209.6 million of assets. The FDIC will retain the remaining assets for later disposition. The FDIC and CharterBank entered into a loss-share transaction on approximately $178.5 million of Neighborhood Community Bank's assets. CharterBank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $66.7 million. CharterBank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Neighborhood Community Bank is the 42nd FDIC-insured institution to fail in the nation this year, and the ninth in Georgia. The last FDIC-insured institution to be closed in the state was Community Bank of West Georgia, Villa Rica, earlier June 26. NEIMAN MARCUS: Bank Debt Trades at 25% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Neiman Marcus Group Inc. is a borrower traded in the secondary market at 74.56 cents-on-the-dollar during the week ended June 26, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.41 percentage points from the previous week, the Journal relates. The loan matures April 6, 2013. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and S&P's BB- rating. Headquartered in Dallas, Texas, Neiman Marcus Inc.'s -- http://www.neimanmarcusgroup.com/-- operations include the Specialty Retail Stores segment and the Direct Marketing segment. The Specialty Retail Stores segment consists primarily of Neiman Marcus and Bergdorf Goodman stores. The Direct Marketing segment conducts both online and print catalog operations under the Neiman Marcus, Horchow and Bergdorf Goodman brand names. * * * As reported by the Troubled Company Reporter on March 19, 2009, Moody's Investors Service downgraded Neiman Marcus Group Inc.'s long term ratings including its Probability of Default Rating to Caa1 from B1, its Corporate Family Rating to Caa1 from B1, and its Speculative Grade Liquidity Rating to SGL-3 from SGL-2. The rating outlook is negative. On March 5, 2009, Fitch Ratings affirmed the Issuer Default Rating on Neiman Marcus, Inc., and its subsidiary, The Neiman Marcus Group, Inc., at 'B' and revised the Rating Outlook to Negative from Stable. NMG had $3 billion of debt outstanding as of January 31, 2009. The TCR said February 9, 2009, that Standard & Poor's Ratings Services placed its ratings on six department store companies, including Neiman Marcus ("B+"), on CreditWatch with negative implications. NEW ORLEANS: Fitch Affirms 'B' Rating on Sewerage's Revenue Bonds ----------------------------------------------------------------- Fitch Ratings has assigned a 'BBB-' rating to the New Orleans Sewerage and Water Board, Louisiana's (the board) $24.5 million sewerage service refunding bonds, series 2009. In addition, Fitch affirms the 'BBB-' rating on the board's $160.7 million in outstanding sewer revenue bonds. Fitch also takes this rating action on the New Orleans Sewerage and Water Board: -- Water system revenue bonds affirmed at 'B' ($38.8 million outstanding); -- Drainage system bonds affirmed at 'BBB' ($22.7 million outstanding). The Rating Outlook for the sewer system revenue bonds and water system revenue bonds is revised to Stable from Positive, while the Outlook on the drainage system bonds remains Positive. The series 2009 bonds are secured by a gross pledge of sewer system revenues and are on parity with the outstanding sewer system revenue bonds. Proceeds will be used to refund the board's $24 million sewerage service refunding bond anticipation notes, series 2006 outstanding, and pay issuance costs. The bonds are scheduled for a negotiated sale on or about July 6. The 'BBB-' rating on the sewer revenue bonds reflects improvement in the financial position of the sewer fund, including a marked increase in liquidity. This improvement has been the result largely of a series of sewer rate hikes, beginning in 2003, which have aided cash flow as the board has struggled to recover from the effects of Hurricane Katrina in fall 2005. The revision in the Outlook to Stable from Positive for the water and sewer systems reflects weaker than expected 2008 results for both systems, as well as the ongoing financial support that the sewer system is making to the water system, which has yet to establish a sound financial footing. The Outlook remains Positive for the drainage system bonds due to the property tax revenue support for both debt service and operations, the recovery in the city's tax base since 2005 and the prospect for continued gains, and improvement in property tax collections over the same period. The rebound in sewer revenues since 2005 has enabled the system to meet its obligations and increase liquidity over this period. Available revenues (after operating expenses) generated debt service coverage of 1.1 times (x) in 2008, and cash and investments totaled $22.1 million or the equivalent of 189 days of expenditures. Fitch has cited liquidity as a credit concern for both the water and sewer systems historically; as recently as 2004 sewer system cash and investments totaled only $5.3 million at year-end. The sewer rate increases consisted of 15% hikes in both 2003 and 2004, and 14% increases in 2005 and 2006. Despite the improved financial position, Fitch notes that the sewer system -- along with the water and drainage systems -- are not generating surplus revenues sufficient to make a significant contribution toward the sizable capital needs of each system. As capital needs are deferred, the potential for service interruptions and increased costs in the future climbs. The drainage system bond rating reflects continued stabilization of property tax revenue collections and continued, albeit slower, tax base growth. The board's drainage system bonds and operations are supported by three property tax millages. Since 2005 the tax collection rate has steadily improved as the city's population count has climbed. Current collections for 2008 were roughly 85%, which is not markedly different from historical collections. Meanwhile, the water fund continues to struggle as recurring revenues fall short of meeting both operational and debt service requirements. While Fitch notes that the water system historically has posted annual net losses (including deprecation expenses), the losses climbed steeply in 2005 and have remained elevated, exceeding $35 million in both 2007 and 2008. While water system working capital remains negative, liquidity turned positive in 2008, with cash and investments totaling $5.1 million. The board and New Orleans City Council approved a series of water rate increases in March, 2007, which by 2011 will boost water charges by more than 50% cumulatively. Fitch believes that the combination of these rate hikes and a steady increase in customer count eventually will stabilize the water system operations; until then, however the water system will continue to rely on other resources to provide financial support. Operations in all three systems following Hurricane Katrina were aided by federal community disaster loan proceeds, which totaled $62 million. Likewise, debt service payments through June 2008 were supported by tax credit bond proceeds totaling $77.5 million. All systems have very large future capital needs, which result from a combination of storm damage and aging infrastructure. Estimated capital costs for all three systems through 2013 total roughly $2.2 billion, with anticipated funding projected to cover slightly less than one-half of the costs. Of the $1.04 billion in projected available funds, $764 million is a contribution from the U.S. Corps of Engineers for drainage work. Cumulative short-term and long-term capital needs, as estimated by the board's consulting engineer, total $5.7 billion. The current customer base of more than 117,000 has shown steady growth since June 2008 when a program to aggressively pursue and close inactive accounts peaked, and the customer count now exceeds 80% of the pre-Katrina total of more than 140,000. The U. S. Census Bureau recently revised upwards by 20% its July 2007 city population estimate to about 288,000. The most recent estimates put the city's population at between 300,000-325,000, or nearly 70% of the pre-storm total. While employment levels in the metropolitan area have shown a gain of more than 8% since 2006, they remain about 15% below pre-storm totals. The latest city unemployment rate of 7.5% (April 2009) was up sharply from last year, but still was less than the national average for the month (8.6%). The federal Road Home Program is largest of the numerous federal and state financial assistance efforts and targets the most pressing need in post-Katrina New Orleans -housing. Over the past 12 months the number of closings has accelerated; the most recent program totals cite roughly 124,000 closings, or nearly 90% of the total number of applications. The program to date has disbursed $7.9 billion for residential rebuilding efforts in coastal areas of Louisiana. The city's economy continues to recover, although the pace appears to have slowed due to the recession. The city reports that tourism traffic has picked up for major events, as evidenced by the estimated 1 million visitors for the 2009 Mardis Gras celebration (up 25% from 2008). The number of hotel rooms in the metropolitan area now exceeds 85% of the more than 38,000 rooms that existed before the storm. Convention Center bookings have leveled off and attendance totals have declined in recent months due to the recession; economic weakness across the U.S. also has affected hotel occupancy levels, which began showing weakness during the final quarter of 2008. Taxable values have rebounded, climbing more than 10% in 2007 and jumping nearly 38% in 2008 thanks to citywide reappraisals. The increase for 2009 was more modest at slightly more than 2%. Property tax collections also have improved; for 2008 current collections totaled more than 85% of the levy amount, which is approaching historical averages. Improvements to infrastructure and service delivery systems have occurred, although much work remains to be done. The city reports that the number of police officers is approaching pre-Katrina totals, and a renovated municipal courts facility recently opened. Also, it is estimated that only 50% of pre-storm hospital beds currently are available in the area. Long-term health care improvement is evident in the U.S. Department of Veterans Affairs' and Louisiana State University partnering to construct a $2 billion medical center in downtown New Orleans; construction is expected to begin later this year when acquisition of all property is completed, and completion is expected in 2-3 years. While more than 80 charter and non-charter schools are currently open in the city, nearly 50 schools remain closed. The state took over the majority of public schools in the city from the long-troubled Orleans Parish School Board after Katrina. NORTH AMERICAN TECH: Dec. 28 Balance Sheet Upside-Down by $8.48MM ----------------------------------------------------------------- North American Technologies Group Inc. filed one week apart with the Securities and Exchange Commission its annual report for the year ended September 28, 2008 (filed June 12) and its quarterly report on Form 10-Q for the period ended December 28, 2008. As of December 28, 2008, the Company had a cash balance of $926,826 and a negative working capital balance of $2,750,893. For the three months ended December 28, 2008 and the year ended September 28, 2008, the Company incurred net losses of $1,473,436 and $2,924,340, respectively. The Company's operating activities provided cash of $436,127 for the three months ended December 28, 2008, and used cash of $2,454,089 for the year ended September 28, 2008. The Company could incur losses for the foreseeable future. At December 28, 2008, the Company had $17,078,208 in total assets and $25,565,043, resulting in $8,486,835 in stockholders' deficit. The Company said it has significant cash needs. Beginning October 1, 2008, the Company was required to pay quarterly interest in cash on the construction loan with Opus 5949 LLC. On October 31, 2009, the Company will be required to repay the $2,000,000 bridge loan, together with interest. The Company also has a commitment to pay in 2009 approximately $740,000 for the remaining purchase price of equipment on order with a supplier. Additionally, the Company will have to fund its working capital needs, potential operating losses, and capital expenditures. The Company's viability and ability to pay or refinance its debt obligations, particularly to pay cash interest quarterly on the Construction Loan and repay the Bridge Loan, together with interest thereon, and to maintain adequate liquidity, depend on a number of factors. According to the Company, the factors include the ability to maintain adequate production volumes, the reduction of equipment failures that disrupt production, the willingness of customers to continue to purchase ties and pay prices that yield positive gross margins, the willingness of customers to agree upon an orderly schedule for the replacement of ties that the Company has agreed to replace, the procurement of raw materials at reasonable prices, and the continued collection of accounts receivable in a timely manner. The Company's inability to achieve any of the factors could, and most likely would, have a material and adverse effect on its liquidity. There can be no assurances that the Company's activities will be successful or that the Company will ultimately achieve sustained profitability. Accordingly, the Company may have to continue funding future cash needs through financing activities. To date, the Company has no financing arrangements and no commitments to obtain any financing arrangements. There can be no assurance that the Company will be able to secure financing and that financing, if secured, will contain terms which are favorable to the Company and be sufficient to enable the Company to fund operations and pay debts. If the Company raises capital by issuing new common stock or securities convertible into common stock, the percentage ownership of its current stockholders would be reduced, unless the existing stockholders participate in providing such additional capital. Also, any new securities may have rights, preferences or privileges senior to those of the current common stockholders. The uncertainty of achieving profitability or obtaining additional financing raises substantial doubt about the Company's ability to continue as a going concern. In its audit report dated June 12, 2009, KBA Group LLP in Dallas, Texas, the company's independent auditor, raised substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?3e33 A full-text copy of the Company's Form 10-K report is available at no charge at http://ResearchArchives.com/t/s?3e32 About North American Technologies North American Technologies Group Inc. (OTC BB: NATK) -- http://www.natk.com/-- is principally engaged in the manufacturing and marketing of engineered composite railroad crossties through its 100% owned subsidiary TieTek LLC. The company's composite railroad crosstie is a direct substitute for wood crossties, but with a longer expected life and with several environmental advantages. NORTHEASTERN REAL: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Northeastern Real Properties, Ltd. 2814 Edison Street, NW Uniontown, OH 44685 Bankruptcy Case No.: 09-62467 Debtor-affiliates filing Chapter 11 petitions: Entity Case No. ------ -------- Sequatchie Mountain, LLC 09-62470 Wilder Mountain, LLC 09-62471 J.J. Detweiler Enterprises, Inc. 09-62472 Southeast Real Properties, Ltd. 09-62473 Southwest Real Properties, Ltd. 09-62474 Type of Business: The Debtors operate a land development company that purchases tracts of undeveloped land to subdivide and sell in individual parcesl. Chapter 11 Petition Date: June 18, 2009 Court: Northern District of Ohio (Canton) Judge: Russ Kendig Debtor's Counsel: Marc Merklin, Esq. mmerklin@brouse.com Brouse McDowell, LPA 388 S. Main Street, Suite 500 Akron, OH 44311 Tel: (330) 535-5711 Fax: (330) 253-8601 Estimated Assets: Less than $50 million Estimated Debts: Less than $50 million In their joint administration motion, the Debtors said they have $23 million in secured debt under a certain loan agreement entered by J.J. Detweiler and various lenders, which are each secured by specific parcels of real estate. The Debtors' did not file a list of 20 largest unsecured creditors. The petition was signed by Cheryl S. McDonald. NOVEMBER 2005: Case Summary & Amended List of Creditors ------------------------------------------------------- Debtor: November 2005 Land Investors, L.L.C. 11411 Southern Highlands Parkway, Suite 300 Las Vegas, NV 89141 Bankruptcy Case No.: 09-17474 Chapter 11 Petition Date: May 8, 2009 Court: District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Richard F. Holley, Esq. rholley@nevadafirm.com 400 S. Fourth St., 3rd Floor Las Vegas, NV 89101 Tel: (702) 791-0308 Fax: (702) 791-1912 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor's Amended List of Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Western States Contracting services $1,161,103 4129 West Cheyenne, Ste. B North Las Vegas, NV 89032 City of North Las Vegas Reimbursement $221,074 2200 Civil Center Drive of personnel North Las Vegas, NV 89030 salaries and Wages G.C. Wallace Inc. Development $61,309 6655 South Cimarron Rd. Services Las Vegas, NV 89113-2132 Credit Suisse admin. fee $51,250 Agency Loan Op for first lien 7033 Louis Stephens Drive and revolver PO Box 110047 Durham, NC 27709 Credit Suisse admin. fee $51,250 for second lien Standard & Poors Rating services $40,000 Moody's Investor Service services $35,000 Carter & Burgess Inc. services $30,000 Rafael Construction Inc. services $16,099 Panacea Services LLp services $11,957 Jacobs Engineering Group Inc. services $3,600 Lewis and Roca LLp services $2,500 Wright Engineers services $1,600 Martz Agency services $50 Insurance Company of the West agreement unknown Larry Sip services unknown NUVIS services unknown Owens Geotechnical Inc. services unknown The petition was signed by Douglas W. Hensley, chief financial officer. NOVEMBER 2005: Taps Goold Patterson in Development Declarations --------------------------------------------------------------- November 2005 Land Investors, L.L.C., asks the U.S. Bankruptcy Court for the District of Nevada for authorization to employ Goold Patterson, Ales & Day as special counsel. Goold Patterson is familiar with master planned community, Park Highlands, and is involved with development declarations with each separate owner of property within and the master CC&R's recorded against the property. With reference to the master planned community, Park Highlands, for which the Debtor is the declarant, Goold Patterson will revise development declarations with each separate owner of the property withing Park Highlands and amend and restate the master CC&R's recorder against the property to reflect the necessary changes in the documents and the project since the documents were originally drafted. Goold Patterson provides Nevada Registered agent services for the Debtor and for NLV Holdings, LLC, the Debtor's sole member. Goold Patterson charges $250 annually per entity for the registered agent services. The hourly rates of Goold Patterson's personnel are: Shareholders $250 - $450 Associates $160 - $280 Paralegals $185 Prior to November 2005 petition date, Goold Patterson received $23,646 in payment for services rendered. Goold Patterson did not receive a retainer from the Debtor. To the best of the Debtor's knowledge, Goold Patterson is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Goold Patterson, Ales & Day 4496 South Pecos Road Las Vegas, NV 89121 Tel: (702) 436-2600 1-866-642-2600 Fax: (702) 436-2650 About November 2005 November 2005 Land Investors, L.L.C., based in Las Vegas, filed for Chapter 11 protection on May 8, 2009 (Bankr. D. Nev. Case No. 09-17474). Mike K. Nakagawa handles the case. Richard F. Holley, Esq., serves as bankruptcy counsel. The Debtor disclosed estimated assets and debts of $100 million to $500 million. NOVEMBER 2005: Taps Latham & Watkins on Real Estate & Tax Matters ----------------------------------------------------------------- November 2005 Land Investors, L.L.C., asks the U.S. Bankruptcy Court for the District of Nevada for authorization to employ Latham & Watkins LLP as special counsel. LW will provide counseling and representation on the finance, real estate and tax matters. LW represented the Debtor during prepetition negotiations with the major creditors in an effort to restructure its first lien term loans and revolving loans and its second lien term loans. LW was finance counsel to the Debtor during the origination of the first lien loans and second lien loans made in 2006, and has represented the Debtor in each of the subsequent amendments of the credit facilities over the last three years. LW also provided counseling and representation with respect to the real estate and tax matters involved in the proposed restructuring. Christopher R. Plaut, lawyer at L&W, tells the Court that the hourly rates of the firm's personnel are: Paralegals $165 - $310 Associates $335 - $655 Counsel $625 - $810 Partners $675 - $925 Mr. Plaut assures the Court that LW is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Plaut can be reached at: Latham & Watkins LLP 885 Third Avenue, Suite 1000 New York, NY 10022-4834 About November 2005 November 2005 Land Investors, L.L.C., based in Las Vegas, filed for Chapter 11 protection on May 8, 2009 (Bankr. D. Nev. Case No. 09-17474). Mike K. Nakagawa handles the case. Richard F. Holley, Esq., serves as bankruptcy counsel. The Debtor disclosed estimated assets and debts of $100 million to $500 million. OCULUS INNOVATIVE: Marcum LLP Raises Going Concern Doubt -------------------------------------------------------- Marcum LLP in New York, in its audit report dated June 10, 2009, said there is substantial doubt about the ability of Oculus Innovative Sciences, Inc., to continue as a going concern. The Company incurred net losses of $17,656,000 for the year ended March 31, 2009. At March 31, 2009, the Company had $5,447,000 in total assets, $3,178,000 in total liabilities, and $108,482,000 in accumulated deficit. The Company had working capital of $1,263,000 as of March 31, 2009. The Company needs to raise additional capital from external sources to sustain its operations while continuing the longer term efforts contemplated under its business plan. The Company expects to continue incurring losses for the foreseeable future and must raise additional capital to pursue its product development initiatives, penetrate markets for the sale of its products and continue as a going concern. The Company cannot provide any assurance that it will raise additional capital. Management believes that the Company has access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means; however, the Company has not secured any commitment for new financing at this time nor can it provide any assurance that new financing will be available on commercially acceptable terms, if at all. If the economic climate in the U.S. does not improve or continues to deteriorate, the Company's ability to raise additional capital could be negatively impacted. If the Company is unable to secure additional capital, it may be required to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet it obligations. These measures could cause significant delays in the Company's efforts to commercialize its products in the United States, which is critical to the realization of its business plan and the future operations of the Company. On April 1, 2008, the Company conducted a closing of 18,095 shares of its common stock at a purchase price of $5.25 per share, and warrants to purchase an aggregate of 9,047 shares of common stock at an exercise price of $6.85 per share for gross proceeds of $95,000 (net proceeds of $36,000 after deducting the placement agent's commission and other offering expenses). On February 6, 2009, the Company entered into Purchase Agreements with a group of accredited investors whereby it raised $1,752,803 in gross proceeds (net proceeds of $1,514,000 after deducting the placement agent's commission and other offering expenses) through a private placement of 1,499,411 shares. On February 24, 2009, the Company entered into a Purchase Agreement with Robert Burlingame, a director of the Company, and an accredited investor. Pursuant to the terms of the Purchase Agreement, the investors agreed to make a $3,000,000 investment in the Company. The investors paid $1,000,000 (net proceeds of $948,000 after deducting offering expenses) for 854,701 shares of common stock on February 24, 2009 and agreed to purchase 1,709,402 shares of common stock for $2,000,000 no later than August 1, 2009. On June 1, 2009, the Company issued the remaining securities related to the February 24, 2009 private placement. The issuance comprised of an aggregate of 1,709,402 shares of common stock, Series A Warrants to purchase an aggregate of 1,000,000 shares of common stock and Series B Warrants to purchase an aggregate of 1,333,333 shares of common stock to the Investors pro rata to the investment amount of each Investor. The Company received $2,000,000 in connection with this transaction. The Company has used, or intends to use, the proceeds from the offerings principally for general corporate purposes, including working capital. A full-text copy of the Company's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?3e4a About Oculus Innovative Sciences Oculus Innovative Sciences, Inc. -- http://www.oculusis.com/-- develops, manufactures and markets a family of products intended to significantly reduce the need for antibiotics as it prevents and treats infections in chronic and acute wounds while simultaneously enhancing wound healing through modes of action unrelated to the treatment of infection. Oculus Innovative Sciences has two principal subsidiaries -- Oculus Technologies of Mexico, S.A. de C.V., organized in Mexico, and Oculus Innovative Sciences Netherlands, B.V., organized in the Netherlands. On January 20, 2009, the Company dissolved its subsidiary, Oculus Innovative Sciences Japan, KK, organized under Japanese law. OFFICE DEPOT: BC Partners Deal Won't Affect S&P's 'B' Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that its ratings and outlook on Boca Raton, Florida-based Office Depot Inc. (B/Negative/--) are not immediately affected by the company's recent announcement that it sold $350 million of perpetual convertible preferred stock to BC Partners Inc., including $275 million of redeemable Series A convertible preferred stock and $75 million of Series B redeemable conditional convertible preferred stock, which is convertible to common stock upon shareholder approval. Dividends of the preferred will initially be paid-in-kind at 10% per year, and cannot be paid in cash unless certain conditions under its existing credit agreement are met. The transaction provides BC Partners with an initial ownership interest in the company of approximately 20%, and allows the new investor to add three members to Office Depot's board, which will be expanded to 14 members. Proceeds are expected to be used for general corporate purposes, which includes repayment of its ABL revolving credit facility borrowings. Net proceeds from this investment provide Office Depot with an additional source of liquidity as it continues to manage through a very challenging operating environment. Although S&P will treat the preferred stock as having minimal equity content in accordance with S&P's existing rating methodology (thus treatment of these securities will be classified as debt within the calculation of S&P's credit measures), S&P has also considered the equity-like characteristics of the investment. S&P still believe Office Depot's business in 2009 will remain materially affected by lower consumer and small business spending, and weak global macroeconomic conditions. Although S&P believes that credit metrics are likely to weaken further, the current rating incorporates S&P's expectation that the company will maintain sufficient liquidity to fund its operations, and will continue to proactively take additional actions (if needed) aimed at raising cash and preserving capital under adverse conditions. Pro forma for the transaction, S&P estimates total debt to EBITDA to be above 7x, based on financials for the 12 months ended March 28, 2009. S&P estimates that if sales were to decline in the double digits in fiscal 2009, coupled with further operating margin declines from current levels, this could cause leverage to approach the 9x area or beyond on a fully adjusted basis by the end of the fiscal year. S&P will continue to monitor the company's performance closely during the year and would consider a lower rating if operating performance falls below S&P's current expectations, and/or weaker cash flow generation causes liquidity to tighten such that borrowing availability on the company's revolving credit facility falls below $500 million, absent other potential liquidity sources. OHH ACQUISITION: Fin'l Restatement Won't Move Moody's 'B3' Rating ----------------------------------------------------------------- Moody's Investors Service said that the 2007 financial restatement and revised quarterly 2008 results of OHH Acquisition Corporation, parent of Ozburn-Hessey Holding Company, LLC, have no ratings impact -- corporate family rating of B3, outlook stable. Extending or replacing the company's revolver will be important to maintaining ratings stability. The last rating action on Ozburn-Hessey occurred March 12, 2008 when the B3 corporate family rating was affirmed. Ozburn-Hessey's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Ozburn-Hessey's core industry and Ozburn-Hessey's ratings are believed to be comparable to those of other issuers of similar credit risk. Ozburn-Hessey Holding Company, LLC, headquartered in Nashville, TN, is a provider of third-party logistics and related services, including warehouse management, truck brokerage, customs brokerage, freight forwarding, and dedicated contract carriage. Ozburn-Hessey is a wholly-owned subsidiary of OHH Acquisition Corporation, which is controlled by private equity group Welsh, Carson Anderson & Stowe. Ozburn-Hessey had FY2008 gross revenue of approximately $800 million. ONE COMMUNICATIONS: Moody's Assigns 'B2' Rating on $275 Mil. Notes ------------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to One Communications Corp.'s proposed $275 million (gross proceeds) senior secured note issuance. The company will use the net proceeds from the note issuance primarily to repay the outstandings under its existing senior secured term loans, at par. As part of the rating action, Moody's has affirmed all other ratings. The rating outlook remains stable. Assignments: Issuer: One Communications Corp. -- US$275M Senior Secured Regular Bond/Debenture, Assigned B2 LGD4 - 51% One Communications' B2 corporate family rating and the stable outlook reflects the Company' moderate financial risk, and its still-strong free cash flow generation for a CLEC. On the other hand, the ratings are tempered by the challenges that the management team faces in re-energizing revenue growth. Although the Company has bulked up its operating scale through consolidation, its operations in the northeastern USA serve the most competitive telecommunications market in the country, while the Company's Midwest operations continue to be impacted by the regional macroeconomic forces. Moody's believes One Communications has good liquidity, which would be aided by an amendment from its lenders which will loosen financial covenants over the duration of its term loan facility. Moody's most recent rating action on One Communications was on November 20, 2007, when the rating agency downgraded the Company's corporate family rating to B2 from B1 due to lower than expected revenue and EBITDA generation. One Communications is a CLEC headquartered in Burlington, MA. The Company generated over $785 million in revenues in 2008. PATCH ENERGY: Files for Bankruptcy Under Canada's Insolvency Act ---------------------------------------------------------------- Patch International Inc., said its wholly owned subsidiary Patch Energy Inc., filed a notice of intention to make a proposal to its creditors under the Bankruptcy and Insolvency Act (Canada). Patch International said the filing was made after a review of available options with professional advisors. As a result of the filing, all actions by creditors and certain classes of counterparties against Patch Energy Inc. are stayed for an initial period of 30 days. The NOI filing allows Patch Energy to maintain the integrity of its assets while evaluating its strategic alternatives and developing a restructuring proposal for creditors. Patch Energy Inc. is required to file its proposal within 30 days unless an extension is granted by the courts. RSM Richter Inc. has consented to act as proposal trustee of Patch Energy Inc. in accordance with the provisions of the BIA. Patch International also said that, effective June 26, 2009, it terminated the contracts of employment between the Corporation and Jason Dagenais, Chief Operating Officer, and Terry Buchanan, Vice President of Exploration. Mr. Dagenais and Mr. Buchanan have agreed to provide services to the Corporation on an as-needed, contract basis during the Corporation and Patch Energy Inc.'s restructuring efforts. About Patch International Inc. Patch International Inc. is an emerging oil sands company dedicated through its subsidiary Patch Energy Inc. to the exploitation and production of its resources in the Athabasca oil sands area in Alberta, Canada. Patch International's strategy has been to engage top quality staff and consultants to exploit and produce its high quality oil sands assets. PATRICIA MENDEZ: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Patricia E. Mendez 5353 Jennifer Drive Fairfax, VA 22032 Bankruptcy Case No.: 09-15103 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Debtor's Counsel: Michael R. Strong, Esq. The Strong Law Firm, P.C. 7202 Arlington Blvd., Suite 202 Falls Church, VA 22042 Tel: (703) 204-2040 Fax: (703) 204-1979 Email: stronglawfirm@msn.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 Ms. Mendez. PENN-MAR CONSULTANTS: Case Summary & 1 Largest Unsecured Creditor ----------------------------------------------------------------- Debtor: Penn-Mar Consultants, Inc. 4551 Wentz Rd. Manchester, MD 21102 Bankruptcy Case No.: 09-21503 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: James F. Schneider Debtor's Counsel: Edward M. Miller, Esq. Miller and Miller, LLP 129 E. Main St., Suite 205 Westminster, MD 21157 Tel: (410) 751-5444 Fax: (410) 751-6633 Email: mmllplawyers@verizon.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor identified BPR, Inc. with a trade debt claim for $11,443 as its largest unsecured creditor. A copy of the Company's largest unsecured creditor is available for free at: http://bankrupt.com/misc/mdb09-21503.pdf The petition was signed by Marlin W. Utz, president of the Company. PENTHOUSE MEDIA: Dist. Ct. Revives Legal Malpractice Suit --------------------------------------------------------- WestLaw reports that genuine issues of material fact as to whether a Chapter 11 debtor, despite its bankruptcy counsel's repeated assurances that notice of the rejection bar date was properly served on the counterparties to the debtor's executory contracts, should have known that this was not the case based solely on a claim asserted by one such counterparty shortly prior to the hearing on the counsel's final fee application, and as to whether the debtor had a full and fair opportunity to raise counsel's deficient performance in failing to serve the notice at this fee hearing, precluded entry of summary judgment for counsel on the debtor's subsequent legal malpractice claims. The court could not determine as a matter of law whether the claims were barred by the res judicata effect of the bankruptcy court order approving counsel's fee. Penthouse Media Group, Inc. v. Pachulski Stang Ziehl & Jones LLP, --- B.R. ----, 2009 WL 1542556 (S.D.N.Y. Case No. 09 Civ. 85). Attorney malpractice lawyer Andrew Lavoot Bluestone, Esq., explains at http://blog.bluestonelawfirm.com/legal-malpractice- news-res-judicata-and-bankruptcy-fee-hearings.html that Judge Scheindlin, sitting in appeal of a U.S. Bankruptcy decision by Judge Bernstein, finds that Penthouse didn't have a full and fair opportunity to be heard, and that res judicata does not control the issue of legal malpractice, and shares these paragraphs from Judge Scheindlin's opinion: "Although Pachulski's fee application was approved by the bankruptcy court in the prior proceeding, I cannot conclude as a matter of law that PMG had a full and fair opportunity to litigate allegations of Pachulski's malpractice during that hearing. Many of the factors used to consider whether a party had a full and fair opportunity to litigate an issue favor PMG, particularly given PMG's continued retention of Pachulski as its counsel. For instance, one of the factors courts have considered is 'the importance of the claim in the prior litigation.' PMG had just undergone a reorganization with the help of Pachulski as its counsel. The possibility that Pachulski may have committed malpractice while representing PMG during that reorganization may not have been at the forefront of PMG's concerns. In addition, PMG had no 'incentive [or] initiative to litigate' the malpractice issue, considering that it expected Pachulski to continue to advise PMG in the winding down of its bankruptcy proceeding. "Of particular importance to this Court is the bankruptcy court's reliance on D.A. Elia Construction Corp. Judge Bernstein concluded that D.A. Elia was directly on point, but D.A. Elia is perhaps even more clearly distinguishable from the instant case than other cases cited by Pachulski, as in that case the malpractice claim was actually litigated during the fee application proceeding. D.A. Elia emphasized that many of the same allegations made by Elia in its [malpractice] complaint were previously made by Elia in its objections to Damon & Morey's final fee application. Specifically, Elia argued to the bankruptcy court that the firm had labored under a conflict of interest, had committed legal malpractice and had failed to turn over money owed to the estate. The bankruptcy court provided Elia with ample opportunity [to] raise those claims, but ultimately rejected them as meritless." The district court concluded that "it cannot be said that Elia was denied the opportunity to raise these [malpractice] claims in the prior action." In the instant case, PMG raised no such objections at the fee hearing." General Media, a subsidiary of Penthouse International, Inc., filed for Chapter 11 protection on August 12, 2003 (Bankr. S.D.N.Y. Case No. 03-15078). Robert Joel Feinstein, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., represented the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, it listed $50 million to $100 million in total assets and more than $50 million in total debts. The Debtor confirmed a chapter 11 plan and emerged from bankruptcy in October 2004 under a plan that swapped approximately 89% of the Senior Notes of General Media, Inc., for equity and passed ownership of the reorganized company to PET Capital Partners, LLC, an affiliate of Marc Bell Capital Partners, LLC. PETCO ANIMAL: Moody's Affirms 'B2' Corporate Family Ratings ----------------------------------------------------------- Moody's Investors Service affirmed ratings of PETCO Animal Supplies Stores Inc., including the B2 Corporate Family Rating and Probability of Default Rating, and changed the outlook to stable from negative. The stable outlook reflects expectations that PETCO's operating metrics have stabilized, and that the company can generate sufficient cash to finance its operating and capital needs. The ratings and outlook also reflect Moody's expectation that the company will maintain high leverage and weak fixed charge coverage for the next 12 to 24 months. PETCO's B2 Corporate Family Rating is supported by its strong market position, broad geographic diversification, and good liquidity. However, the ratings are constrained by intense competition and the company's high leverage and weak interest coverage. For the last twelve months ending May 2, 2009 debt to EBITDA was at 6.1 times and EBITA / interest expense was at 1.4 times. These ratings are affirmed and LGD rates adjusted: * Corporate Family Rating at B2; * Probability of Default Rating at B2; * $686 million senior secured term loan due 2013 at B1 (LGD 3, 33%). Moody's does not rate PETCO's $200 million asset-based revolving credit facility or $450 million senior subordinated notes. The last rating action for PETCO occurred on May 21, 2008 when its outlook was changed to negative from stable and its term loan rating was downgraded to B1 from Ba3. PETCO Animal Supplies Inc., headquartered in San Diego, California, is a specialty retailer of premium supplies, food and services for household pets. The company operates about 1,000 stores in all 50 U.S. states. Revenues were about $2.6 billion for the last twelve months ending May 2, 2009. PHICO INSURANCE: Commonwealth Court Sets July 30 Claims Bar Date ---------------------------------------------------------------- On June 15, 2009, the Commonwealth Court of Pennsylvania established a July 30, 2009 bar date for the filing of proofs of claim against PHICO Insurance Company (In Liquidation). A free copy of the Proof of Claim form may be obtained by writing to PHICO Insurance Company (In Liquidation), 100 Sterling Parkway, Suite 109, P.O. Box 85, Mechanicsburg, PA 1705-0085, or by calling PHICO at (800) 382-1378. PHICO provided medical malpractice, general liability and workers compensation insurance for hospitals, physician groups and individual physicians. The Commonwealth Court of Pennsylvania placed PHICO into liquidation effective February 1, 2002, due to insolvency. The liquidation order appointed the Insurance Commissoner of the Commonwealth of Pennsylvania as statutory liquidator of PHICO and vested him with title to all property, assets, contracts and rights of action of PHICO. PINGHO ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Pingho Associates Corporation dba Quintegra Corporation dba I Quest Solutions, Inc. dba IQuest dba PAC, Inc. dba PAC 1660 International Drive, Suite 400 Mc Lean, VA 22102 Bankruptcy Case No.: 09-15093 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Debtor's Counsel: Robert M. Marino, Esq. Redmon Peyton & Braswell, LLP 510 King Street, Suite 301 Alexandria, VA 22314-3143 Tel: (703) 684-2000 Fax: (703) 684-5109 Email: rmmarino@rpb-law.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/vaeb09-15093.pdf The petition was signed by Ramana Bhamidipati, senior finance manager of the Company. PMI GROUP: Moody's Confirms Senior Debt Rating at 'B3' ------------------------------------------------------ Moody's Investors Service has confirmed the B3 senior debt rating of The PMI Group, Inc. This rating action concludes the review of the holding company's ratings for possible downgrade that was initiated on February 13, 2009. The ratings outlook for PMI and its operating subsidiaries, led by PMI Mortgage Insurance Co (MIC -- affirmed at Ba3 insurance financial strength) is developing. At the same time Moody's assigned ratings to PMI's shelf registration. Moody's said that the confirmation of PMI's senior debt rating reflects the reduction in near term default risk as a result of the amended terms of the bank credit facility. The amendments to the facility include the elimination of rating triggers and certain financial covenants and the modification of a net worth trigger in exchange for a pledge in the security interest of a contingent note from QBE Insurance Group for the sale of PMI Australia (the proceeds of which will be dependent on the future performance of the Australian mortgage insurance portfolio as of June 30, 2008) and a reduction in the size of the facility to $125 million from $200 million. The contingent note comes due on September 30, 2011 and the proceeds are expected to be partially used to repay the credit facility which matures on October 24, 2011. Moody's expects that The PMI Group will be able to operate within the revised bank credit facility covenants. Moody's said that the B3 rating for PMI continues to reflect constrained financial flexibility, and meaningful liquidity and refinancing risks that the company may face if the deterioration in mortgage finance market conditions is protracted. Moody's believes PMI has sufficient liquidity to meet debt service obligations over the next 18 months, but is likely to be dependent on the proceeds from the QBE note to repay the amounts outstanding on the credit facility at maturity and to continue to meet holding company fixed charge obligations if the dividend capacity of PMI's US operations continues to be constrained. Moody's stated that the developing outlook reflects both the potential for further deterioration in the insured portfolio of PMI, as well as positive developments that could occur over the near to medium term, including the possibility of a greater than expected level of claims rescissions, the potential for various initiatives being pursued at the US Federal level to mitigate the rising trend of mortgage loan defaults, and the possibility that mortgage insurers gain access to government capital via a program similar to the U.S. Treasury's Capital Assistance Program. Moody's will continue to evaluate PMI's ratings in the context of the future performance of the company's insured portfolio relative to expectations and resulting capital adequacy levels, as well as changes, if any, to the company's strategic and capital management plans. List Of Rating Actions These ratings were confirmed with a developing outlook: * The PMI Group, Inc. -- senior unsecured debt at B3, and junior subordinated debt at Caa1. These ratings were assigned with a developing outlook: * The PMI Group, Inc -- provisional rating on senior unsecured debt at (P)B3, provisional rating on subordinated debt at (P)Caa1, and provisional rating on preferred stock at (P) Caa2. The last rating action related to PMI occurred on February 13, 2009, when Moody's downgraded to Ba3 from A3 the insurance financial strength rating of MIC, and downgraded PMI's European mortgage insurance operations to B1 from A3. At that time Moody's downgraded the senior unsecured debt ratings of The PMI Group, Inc., to B3 from Baa3 and placed the ratings under review for further downgrade. The PMI Group, Inc., headquartered in Walnut Creek, CA, is the holding company for PMI Mortgage Insurance Co., including its wholly owned subsidiaries and affiliated companies in Europe and Canada. The PMI Group, Inc. also owns a 50% interest in CMG Mortgage Insurance Co., a 42% interest in FGIC Corporation, and a 23.7% interest in RAM Reinsurance Company Ltd. The PMI Group, Inc., through its wholly owned subsidiaries, offers residential mortgage insurance and credit enhancement products. PRINCETON OFFICE: Court Sets July 23 Disclosure Statement Hearing ----------------------------------------------------------------- The U.S. Bankruptcy Court will convene a hearing on June 23, 2009, to consider whether Princeton Office Park, L.P.'s disclosure statement contains adequate information necessary for creditors to make an informed judgement of its proposed plan of reorganization. Objections are due by July 13, 2009. The Debtor is the owner of approximately 170,000 square feet of building on 37 acres of property located at 410 Quakerbridge Road, Township of Lawrence, in Mercer County, New Jersey. Currently, the property is vacant. Pursuant to the reorganization plan, Plymouth Park, which filed a secured claim of $1,775,791 on various tax certificates relating to the property sold to it by the Township of Lawrence, will be paid quarterly principal and interest payments with a balloon payment on the 20th quarter, based on a 25-year amortization schedule. Petillo Enterprises, LLC, which holds a secured claim of $5,000,000, will have a second lien in the property to the extent of its allowed claim. General unsecured claims, with an aggregate scheduled claim of approximately $1,487,162 of which $235,863 are claims by insiders, along with Petillo's secured claim, will receive the same treatment as that provided for Plymouth Park's first lien claim under the Plan. All existing Equity Interests under Class 6 will be retained by the Equity Interest Holders. This class is not impaired. The funding for the implementation of the Plan will be provided through secured loans from United States Land Resources, L.P., a New Jersey limited partnership and general partner of Princeton Office Park GP, L.L.C. (which holds a 50% equity interest in the Debtor), in an amount sufficient to pay all Plan obligations as well as on-going expenses. USLR will execute a formal guaranty of the Notes. If and when the Plan is confirmed, the Debtor will continue to own the property. Whether the building will be leased or the property sold, the Debtor states, will depend on the estimated length of the downturn in the residential real estate market. In the interim, USLR will provide all necessary funding to the Debtor to enable the Debtor to make all Plan payments and satisfy all property and operating expenses. The secured claim of the Township of Lawrence under Class 1, the secured claim of Plymouth Park under Class 2, the secured claim of Petillo under Class 3, allowed 507(a) priority claims under Class 4, and general unsecured claims under Class 5, are all impaired under the Plan and entitled to vote to accept or reject the Plan. "Cramdown" Provisions Pursuant to the "cramdown" provisions of the Bankruptcy Code, the Debtor 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 Debtor's Plan of Reorganization is available at: http://bankrupt.com/misc/princetonoffice.DS.pdf About Princeton Office Park Headquartered in Morristown, New Jersey, Princeton Office Park, LP, is a real estate development company. The assets of the Company consist of approximately 170,000 square feet of building on 37 acres located at 4100 Quakerbridge Road, Township of Lawrence, Mercer County, New Jersey. The property has been re- zoned for multi-family residental use at 10 units per acre or 370 units. Princeton Office Park GP, L.P. holds a 50% equity interest in the Debtor. Princeton GP's general partner is United States Land Resources, L.P., a New Jersey limited partnership, whose general partner is United States Realty Resources, Inc., a New Jersey corporation. Lawrence S. Berger is the president of USRR. The Debtor's limited partners is Success Truehand GmbH, which holds a 31.67% equity interest in the Debtor. The Company filed for Chapter 11 protection on September 9, 2008 (Bankr. D. N.J. Case No. 08-27149). Melissa A. Pena, Esq., at Norris, McLauglin & Marcus, in New York, and Morris S. Bauer, Esq., at Norris McLaughlin & Marcus PA, in Bridgewater, New Jersey, represent the Debtor as counsel. In its schedules, the Debtor listed total assets of $25,000,000 and total debts of $2,517,370. PROPEX INC: Committee Drops Complaint Against BNP Paribas --------------------------------------------------------- At the behest of the official committee of unsecured creditors in Propex Inc.'s case, the U.S. Bankruptcy Court for the Eastern District of Tennessee dismissed the adversary proceeding commenced by the Committee against BNP Paribas Securities Corp. and certain of the Debtors' prepetition lenders. The Committee sought the dismissal in light of the Court-approved stipulation it entered into with the Debtors, BNP Paribas and Houlihan Lokey & Zukin Inc. for the resolution of the Debtors' prepetition secured indebtedness to BNP Paribas and the Prepetition Lenders. The Committee sued BNP Paribas and the Prepetition Lenders on September 23, 2008, challenging the validity of certain liens the Lenders held under the Prepetition Credit Agreement. A recently approved stipulation of the parties contemplate the dismissal of the Committee Complaint versus BNP Paribas, the allowance of a claim to the Prepetition Lenders equal to the aggregate prepetition loan of the Debtors of about $230 million, and the consent of the Prepetition Lenders to the allocation of the certain funds and net cash proceeds in the possession of the Debtors' estates. Under the stipulation, the Prepetition Lenders also waive any claim arising from adequate protection liens and claims. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on January 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of US$562,700,000, and total debts of US$551,700,000. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Houlihan Lokey Bills $2.25-Mil. for Ch. 11 Work ----------------------------------------------------------- Houlihan Lokey Howard & Zukin Capital, Inc. submitted to the U.S. Bankruptcy Court for the Eastern District of Tennessee a final fee application, seeking allowance of $2,250,000 in fees for services rendered for the period from January 18, 2008, through April 24, 2009, and reimbursement of $145,987 in necessary expenses incurred during the same fee period. Houlihan Lokey serves as financial advisor to the Debtors. Among others, Houlihan Lokey has: (a) coordinated, maintained and facilitated the delivery of due diligence information for third parties, including holders of Prepetition Senior Debt and their legal and financial advisors, the Official Committee of Unsecured Creditors and its legal and financial advisors, and other third-party potential acquirers of the Debtors' assets; (b) analyzed Section 363 process for the sale of substantially all of the Debtors' assets; (c) analyzed financial statements and financial and operational performance of the Debtors and non-Debtors in order to evaluate and value the Debtors' business; (d) discussed with Propex's Board of Directors and other various parties-in-interest; (e) negotiated and formulated the terms of the Debtors' Disclosure Statement, Plan of Reorganization and financing documents filed in October 2008; and (f) administered the Debtors' Chapter 11 cases. The firm also seeks entitlement to a $500,000 Success Fee following the sale of substantially all of the Debtors' assets. throughout the Chapter 11 process. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on January 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of US$562,700,000, and total debts of US$551,700,000. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: King & Spalding Charges $1.4-Mil. For Feb.-May Work --------------------------------------------------------------- In separate filings, three bankruptcy professionals employed in the Chapter 11 cases of Propex Inc. seek payment of their legal fees and reimbursement of necessary expenses for the period from February to May 2009: Professional Period Fees Expenses ------------ ----------- ---------- -------- King & Spalding LLP 02/01/09 to 05/31/09 $1,462,711 $43,120 Miller Martin PLLC 02/01/09 to 05/31/09 69,452 5,940 Akin Gump Strauss 02/01/09 to Hauer & Feld LLP 05/31/09 322,456 27,477 King & Spalding is the Debtors' counsel. Miller Martin is the Debtors' local counsel. Akin Gump is the counsel to the Official Committee of Unsecured Creditors. Akin Gump also seeks payment of fees incurred in connection with the Adversary Proceeding initiated by the Creditors Committee against BNP Paribas and certain of the Debtors' lenders for $132,714 and reimbursement of The Garden City Group Inc.'s expenses incurred in connection with rendering professional services as the Committee's communications agent for $6,565. Pursuant to a Court Order dated June 12, 2008, Akin Gump was directed to include The Garden City's fees and expenses in its interim applications. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on January 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of US$562,700,000, and total debts of US$551,700,000. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Resolves AIU Objection to Contracts' Assumption ----------------------------------------------------------- American International Group, American International Specialty Lines Insurance Company, National Union Fire Insurance Company, New Hampshire Insurance Company, American International South Insurance Company, Insurance Company of the State of Pennsylvania, AISLIC (AIG Environmental) and Commerce and Industry Insurance Company, providers of insurance coverage to the Debtors, asserted they had inadequate information in deciding whether to consent or to object to Propex Inc.'s assumption of their policies. They further argued the Debtors have the burden of proving any cure amount, and that the Debtors have not made a showing of adequate assurance. In connection with the intention to sell substantially all of their assets to the highest and best bidder, the Debtors also seek to assume, assign, and sell certain of their unexpired leases, license agreements, and executory contracts, free and clear of all liens, claims, encumbrances, and interests. The Debtors delivered to the Court on March 9, 2009, a list of the Contracts they want to assume, assign and sell and the corresponding cure costs, a copy of which is available for free at http://bankrupt.com/misc/Propex_ContractsLeases.pdf The list includes the Debtors' insurance policies, corporate policies and more than 170 contracts to be assumed. To resolve the parties' objections, the AIU Companies, the Debtors, and Xerxes Operating Company LLC and Xerxes Foreign Holdings Corp., have agreed to the assumption and assignment of the AIU Companies' policies and contracts and that to extent any defaults under the Policies are subsequently discovered, Xerxes will cure those defaults in the ordinary course of business. Moreover, the parties agreed that the Court retains jurisdiction to hear any disputes that arise with regard to asserted defaults under the Policies and their associated cure amounts. The U.S. Bankruptcy Court for the Eastern District of Tennessee has approved the settlement. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on January 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of US$562,700,000, and total debts of US$551,700,000. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PROSPECT MEDICAL: S&P Puts 'B-' Rating on CreditWatch Developing ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised the CreditWatch implications for its ratings on Prospect Medical Holdings Inc., including the 'B-' counterparty credit rating, to developing from negative. "The CreditWatch action reflects the greater potential for fundamental improvement in Prospect Medical's balance sheet in the near term," said Standard & Poor's credit analyst Joseph Marinucci. "The developing implications also continue to reflect the downside risk of the company's existing capital structure." S&P originally placed the ratings on Prospect Medical on CreditWatch with negative implications in April 2009 following the company's receipt of notices of nonmonetary default from its administrative agent and certain lenders for the nondivestiture of certain assets by a specified date (as agreed to by contract). The company has strongly disputed the administrative agent's characterization of the matter and all parties are engaged in ongoing discussions seeking a resolution. In connection with that event, which resulted in the reclassifying of Prospect Medical's debt to its current due-on-demand status (along with a higher interest rate burden), S&P believes the risk of payment default had increased. S&P could raise or lower the rating on Prospect Medical in connection with the company's efforts to address key balance sheet weaknesses associated with its existing debt facilities. A near- term successful refinancing of its existing debt (with improved terms) could result in a one notch upgrade to 'B'. Conversely, if S&P expects the existing capital structure to remain in place beyond the near term, then S&P could lower its rating on Prospect Medical by one or more notches into the 'CCC' category. QIMONDA AG: U.S. Court to Hear Chapter 15 Petition July 22 ---------------------------------------------------------- The United States Bankruptcy Court for the Eastern District of Virginia will convene a hearing on July 22, 2009, at 11:00 a.m. to consider a Chapter 15 petition for Qimonda AG, and a related request for a permanent injunction against creditor actions in the U.S. On June 15, 2009, Dr. Michael Jaffe, in his capacity as the foreign representative of Qimonda AG, filed a petition with the Bankruptcy Court seeking recognition of its insolvency proceedings in Germany as the "foreign main proceeding." Chapter 15 allows a company to seek protection from creditors in the United States while its primary foreign proceeding is pending in another country. If the U.S. court grants the Chapter 15 petition, the assets in the U.S. can be liquidated or reorganized through the foreign proceeding. Responses or objections to the petition and motion or the relief requested by the petitioner must be filed so as to be received no later than July 15, 2009, at 5:00 p.m. (Eastern Daylight Savings Time). Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading global memory supplier with a diversified DRAM product portfolio. The company generated net sales of EUR1.79 billion in financial year 2008 and had -- prior to its announcement of a repositioning of its business -- approximately 12,200 employees worldwide, of which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond (Virginia, USA). The company provides DRAM products with a focus on infrastructure and graphics applications, using its power saving technologies and designs. Qimonda is an active innovator and brings high performance, low power consumption and small chip sizes to the market based on its breakthrough Buried Wordline technology. Qimonda AG filed for Chapter 15 on June 15, 2009 (Bankr. E.D. Va. Case No. 09-14766). Jeff A. Showalter, Esq., at Morrison & Foerster, LLP, represents petitioner Dr. Michael Jaffe as counsel. In its petition, Qimonda AG listed more than $1 billion each in assets and debts. QUEBECOR WORLD: U.S. Government, et al., Object to Plan ------------------------------------------------------- Eight parties-in-interest objected to Quebecor World (USA) Inc. and its affiliates' Third Amended Joint Plan of Reorganization and its accompanying exhibits: (a) U.S. Government The United States of America objects to the confirmation Plan as it proposes to discharge a panoply of non-debtors from a broad swath of potential liability, including more than $150 million in Clean Air Act penalties and more than $10 million in taxes owed to U.S. tax agencies. In addition to granting releases to all directors, employees, affiliates, representatives, accountants, attorneys, investment bankers, agents, consultants, and professional advisors of the Debtors, the Plan would also release the Official Committee of Unsecured Creditors, the Syndicate Committee, the Syndicate Released Parties, the Ad Hoc Group of Noteholders, and the DIP Lenders. According to the Government, because these proposed third-party releases are not essential to the reorganization of the Debtors, and because the proposed releases would discharge a wide array of potential liabilities and as to some of which there exist express statutory bars, the Court should not grant the non-debtor releases in the Plan. Releases granted to non-debtors are barred by Section 524(e) of the Bankruptcy Code, the Government asserts. The Government further asserts that the Plan should be denied because it purports to divest district courts of their concurrent jurisdiction to adjudicate environmental claims. The Government notes that the bankruptcy court cannot, post-confirmation, divest all other district courts of their concurrent jurisdiction to determine whether a discharge bars a subsequent civil action. The Government argues that proceedings raising the issue of whether a cause of action is barred by a discharge are actions arising under title 11, over which the district courts have original, but not exclusive, jurisdiction. Moreover, the grant of jurisdiction to the bankruptcy courts pursuant to Section 1334 is "sharply reduced" post-confirmation. (b) Cisco Systems Capital Corporation Cisco Systems object to the Debtors' intent to assume and assign certain executory contracts and unexpired leases and the Debtors' fixing of cure amounts associated with those contracts and leases. Cisco Capital complains that Debtors fail to provide it with adequate or sufficient information concerning the lease schedules, which Debtors intend to assume and assign. Cisco Capital asks the Court to deny the Debtors' request to assume and assign any contracts other than the Cisco Capital Contracts to which Cisco Capital is a counter-party without prejudice until the Debtors have provided adequate information to enable Cisco Capital to identify the lease schedules to be assumed and determine what appropriate measures are necessary to cure defaults and provide adequate assurance of performance. (c) Hewlett-Packard Financial Services Company Hewlett-Packard objects to the Debtors' proposal to assume these contracts with HPFS: * Master Lease Agreement, Operating Leases and Support Agreements between HPFS and Quebecor World (USA), Inc., * Equipment Lease and Rental between HPFS and Debtor QW New York Corp., and * Equipment Lease between HPFS and Debtor Quebecor World Lease GP. HPFS complains that the information provided by the Debtors does not permit HPFS to identify the Leases. HPFS also objects to the proposed cure amounts. (d) GATX Corporation GATX Corporation complains that the Debtors failed to list a Master Lease Agreement on the Schedule of Assumed Contracts and Leases or the Schedule of Rejected Contracts and Leases that was filed and served as an Exhibit to the Plan on June 9, 2009, in accordance with the provisions of the Disclosure Statement Order. GATX asserts that it has a right to know whether or not its Lease will be assumed or rejected prior to the Effective Date of the Plan so that it may exercise its rights under Section 365(p)(1) of the Bankruptcy Code. (e) National City Commercial Capital Company, LLC National City asserts that the $40,546 cure amount alleged by the Debtors to Lease Numbers 476670003 and 104319000 is incorrect. As evidenced by its breakdown, National City asserts that the amount to cure the postpetition arrears through the Effective Date is $83,381. (f)Sharp Electronics Corporation Sharp Electronics welcomes the Debtors' assumption of its contracts but complains that it does not identify its contracts with the Debtors by the contract IDs on the accompanying exhibits of the Plan and therefore cannot determine whether or not all of the Sharp contracts are to be assumed or not. Sharp Electronics asserts that the Debtors should pay it $104,642 instead of the proposed $73,002 cure amount. (g) GE Capital Information Technology Solutions, Inc. GE Capital complains that the Debtors' proposed cure amounts for its leases are incorrect. GE Capital asserts that the cure amounts should be $77,570. 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: Expands Operations in Virginia; to Invest $35.2MM ----------------------------------------------------------------- Governor Timothy M. Kaine said Quebecor World Inc. will invest $35.2 million to expand in Frederick County. As the recipient of two new printing presses that will increase production capability, the Frederick County operation will retain 150 existing jobs and create 30 new positions. Virginia successfully competed with Pennsylvania and Tennessee for the project. Governor Kaine met with Quebecor World senior management during a 2006 marketing mission to Montreal. "Quebecor World has thrived in Frederick County for two decades," Governor Kaine said. "It speaks volumes that the company's Virginia operations were chosen for this expansion and increase in production. I am confident that Quebecor World will enjoy continued success in the Commonwealth." Quebecor World Inc. provides marketing and advertising solutions to retailers, catalogers, branded-goods companies, and other businesses. The company also offers full-service print solutions for publishers and is a market leader in most of its major product categories, including advertising inserts and circulars, catalogs, direct mail products, magazines, books, directories, digital premedia, logistics, and mail list technologies. With approximately 20,000 employees worldwide, Quebecor World operates nearly 90 printing and related facilities in the United States, Canada, Argentina, Brazil, Chile, Colombia, Mexico, and Peru. "This investment is another clear demonstration of our commitment to provide our customers with the most flexible and efficient platform available in the retail market today," said Jacques Mallette, President and CEO of Quebecor World. "We are very pleased to be able to partner with the state of Virginia in this endeavor. This new equipment is strategically located to serve our customers and ensure they receive the highest return on their marketing investment." The Virginia Economic Development Partnership worked with Frederick County to secure the project for Virginia. Governor Kaine approved a $300,000 performance-based grant from the Virginia Investment Partnership program, an incentive available to existing Virginia companies. The Virginia Department of Business Assistance will provide training assistance through the Virginia Jobs Investment Program. "This is another example to show that Frederick County remains a highly attractive place for businesses to locate," said Richard Shickle, Chairman of the Frederick County Board of Supervisors. "What motivates a company like Quebecor World to come and stay here is Frederick County's diverse business community, proven commitment to long term business growth and strong quality of life." 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 to Vest Severance Benefits to Employees ---------------------------------------------------------------- At the start of their bankruptcy cases, Quebecor World (USA) Inc., and its affiliates obtained the U.S. Bankruptcy Court for the Southern District of New York's authority to maintain their existing severance program during the pendency of the Chapter 11 cases. The Debtors' severance program sets forth guidelines delineating the severance benefits available to eligible employees under the program, which generally provide that for each six months of completed service an eligible employee may accrue one week of severance pay, with a maximum benefit available under the Guidelines of 26 weeks of severance pay. Throughout the pendency of the Cases, the Debtors have been making severance payments to terminated employees pursuant to the Guidelines. The Debtors wish to modify the Guidelines so as to vest all accrued severance benefits previously earned by eligible employees, and to provide that all severance benefits will be vested as earned under the Guidelines, with the benefits to be otherwise payable pursuant to the terms of the Guidelines. In addition to those employees who receive benefits pursuant to the Guidelines, a few individual employees of the Debtors are entitled to severance benefits under separate agreements rather than generally under the Guidelines. Michael J. Canning, Esq., at Arnold & Porter LLP, in New York, asserts that modifying the Guidelines and the Severance Agreements to vest in the Debtors' employees severance benefits as earned are necessary to maintain morale among employees at the critical juncture in the Chapter 11 cases and to ensure the ultimate success of the Debtors' reorganization and emergence from bankruptcy. 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: Signs Deal with Louisiana on Sales Taxes -------------------------------------------------------- Quebecor World (USA) Inc. and the State of Louisiana Department of Revenue reached a stipulation in connection with the Debtors' compliance with their postpetition sales tax obligations. As agreed, on or before June 30, 2009, the Debtors will remit to Louisiana a payment in the amount of $264,219, on account of all postpetition sales tax owed to Louisiana by the VDA Debtors for the period January 21, 2008, through and including the month of April 2009. Louisiana's acceptance of the Postpetition Payment will be without prejudice to Louisiana's ability to seek payment of additional sums on account of the VDA Debtors' postpetition sales tax obligations for the Postpetition Sales Tax Periods, and to the extent that the amount of postpetition sales tax due during the postpetition sales tax period, together with applicable penalties and interest, is determined to exceed the amount of the Postpetition Payment. The VDA Debtors will file all requisite sales tax returns and remit any sales tax payable in respect to Louisiana for the month of May 2009 by June 20, 2009, and in the ordinary course of business for the remainder of the Chapter 11 Cases. Louisiana's objection to the Debtors' Voluntary Tax Disclosure Procedures as it relates to the Debtors' postpetition sales tax compliance obligations for the Postpetition Sales Tax Periods and is resolved and withdrawn. Upon confirmation of a plan of reorganization by the Debtors only those surviving entities will be subject to continued sales tax return filing requirements. The Debtors ask the Court to approve the Stipulation. 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) RAPID LINK: April 30 Balance Sheet Upside-Down by $5,188,555 ------------------------------------------------------------ Rapid Link, Inc., reported $11,339,032 in total assets and $16,527,587 in total liabilities, resulting in $5,188,555 in stockholders' deficit as of April 30, 2009. For the second fiscal quarter ended April 30, 2009, the Company posted a $1,153,354 net loss compared to a $442,164 net income for the same period last year. The Company posted a $1,813,861 net loss for the six months ended April 30, 2009, compared to a $189,376 net income for the same period last year. The Company has an accumulated deficit of $55,126,284 as of April 30, 2009 as well as a significant working capital deficit. The Company said funding of working capital deficit, current and future operating losses, and expansion will require continuing capital investment, which may not be available to it. Although to date the Company has been able to arrange debt facilities and equity financing, there can be no assurance that sufficient debt or equity financing will continue to be available in the future or that it will be available on terms acceptable to the Company. KBA Group LLP in Dallas, Texas, the Company's independent auditors have included a going concern paragraph in their audit opinion on the Company's consolidated financial statements for the fiscal year ended October 31, 2008, which states, "The Company has suffered recurring losses from continuing operations during each of the last two fiscal years. Additionally, at October 31, 2008, the Company's current liabilities exceeded its current assets by $2.1 million and the Company had a shareholders' deficit totaling $2.9 million. These conditions raise substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the Company's Quarterly Report is available at no charge at http://ResearchArchives.com/t/s?3e4e Rapid Link, Incorporated, and its subsidiaries have served as facilities-based, communication companies providing various forms of voice and data services to customers around the world. Rapid Link provides a multitude of communication services targeted to small and medium sized businesses, as well as individual consumers. These services include the transmission of voice and data traffic over public and private networks. The Company also sells foreign and domestic termination of voice traffic into the wholesale market. RASHAD MUNIR: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Rashad S. Munir 60 Oakside Avenue, Unit 2 Brockton, MA 02301 Bankruptcy Case No.: 09-15860 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Henry J. Boroff Debtor's Counsel: Michael Van Dam, Esq. Van Dam & Traini, LLP 60 William Street, Suite 300 Wellesley, MA 02481 Tel: (617) 969-2900 Fax: (617) 964-4631 Email: mvandam@trainilaw.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 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mab09-15860.pdf The petition was signed by Rashad S. Munir. REVLON INC: Files 2008 Annual Report for Employee Plan ------------------------------------------------------ Revlon Inc. filed with the Securities and Exchange Commission an annual report on Form 11-K for the year ended December 31, 2008, on the Revlon Employees' Savings, Investment and Profit Sharing Plan. The Plan reported net assets available for benefits of $94,914,000 at December 31, 2008. The Plan is a qualified defined contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. The Plan is sponsored by Revlon Consumer Products Corporation. The Plan Administrator is Products Corporation. In 2008 and 2007, the Plan's investment manager and record-keeper for the Plan's assets was Fidelity Investments Institutional Operations Company, Inc., and the Plan's trustee was Fidelity Management Trust Company. A full-text copy of the Annual Report on Form 11-K is available at no charge at http://ResearchArchives.com/t/s?3e42 Separately, Revlon disclosed that Kenneth L. Wolfe, 70, resigned as a director of the Company, effective June 16, 2009. Mr. Wolfe, who has been a member of the Company's Board of Directors since 2004, advised the Company that he desired to spend more time devoted to his family and personal matters and commitments. "The Company appreciates and is grateful for Mr. Wolfe's service during his 5 years on the Board," Revlon said in a regulatory filing. About Revlon Inc. Headquartered in New York City, Revlon Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and personal care products company. The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), Mitchum(R), Charlie(R), Gatineau(R), and Ultima II(R). At March 31, 2009, Revlon Inc. had $784,700,000 in total assets; $300,900,000 in total current liabilities, $1,183,600,000 in long- term liabilities, $107,000,000 in long-term debt of affiliates, $222,900,000 in Long-term pension and other post-retirement plan liabilities, and $65,400,000 in other long-term liabilities; resulting in $1,095,100,000 in stockholders' deficit. * * * Revlon Inc., the parent company of Revlon Consumer Products Corp. (B-/Stable/--) has received a proposal from MacAndrews & Forbes Holdings Inc. to convert Revlon Inc.'s Class A common stock, currently not held by M&F, to voting preferred stock. According to the Troubled Company Reporter on April 23, 2009, Standard & Poor's Ratings Services said the proposal, which was sent to the independent members of Revlon Inc.'s Board of Directors, will not immediately affect the RCPC ratings or outlook. M&F effectively controls about 75% of Revlon Inc.'s voting rights. The preferred stock would pay an annual dividend of 12.5% and would be redeemed four years from the date of issuance at the liquidation preference, which is about $75 million. Along with this transaction, M&F proposed to contribute $75 million of its $107 million subordinated loan to Revlon Inc. (payable by RCPC), extend the loan maturity to 2013, and increase the interest rate on this loan to 12.5%. As a result of the M&F loan maturity extension, RCPC would not have any scheduled debt maturities until 2011. S&P expects that if Revlon Inc.'s board accepts the M&F proposal, there would be no significant effect on the company's cash flow or credit metrics. RICHARD STEWART: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Richard Michael Stewart dba K.C. Concrete & Construction P.O. Box 1732 Noblesville, IN 46061 Bankruptcy Case No.: 09-09097 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz III Debtor's Counsel: Eric C. Redman, Esq. Bator Redman Bruner Shive & Ludwig 151 N Delaware St Ste 1106 Indianapolis, IN 46204 Tel: (317) 685-2426 Email: ksmith@batorredman.com Total Assets: $1,555,750 Total Debts: $2,867,026 A full-text copy of Mr. Stewart's petition, including a list of his 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/insb09-09097.pdf The petition was signed by Mr. Stewart. RONALD HUSTON: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Joint Debtors: Ronald George Huston aw Mountain Safari, Inc. aw Huston Properties, Inc. dba Oak Tree Village Linda Marie Huston aw Mountain Safari, Inc. aw Huston Properties, Inc. dba Oak Tree Village 37375 Ironwood Drive Yucaipa, CA 92399 Bankruptcy Case No.: 09-24196 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Thomas B. Donovan Debtors' Counsel: Winfield S. Payne, III, Esq. Winfield Payne and Associates 4308 Lime St. Riverside, CA 92501 Tel: (951) 276-9300 Email: Wpaynelaw@aol.com Total Assets: $7,325,189 Total Debts: $4,336,569 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/cacb09-24196.pdf The petition was signed by the Joint Debtors. RSC EQUIPMENT: Moody's Downgrades Corporate Family Rating to 'B3' ----------------------------------------------------------------- Moody's Investors Service downgraded the debt ratings of RSC Equipment Rental, Inc. -- Corporate Family Rating and Probability of Default Rating to B3 from B2. Moody's also rated the company's proposed new senior secured notes B1. The speculative grade liquidity rating was downgraded to SGL-3. The ratings outlook is stable. The ratings downgrade reflects reduced rental demand and pricing pressure due to the slowdown in non-residential construction, an important source of the company's revenues, as well as softer equipment rental demand from the industrial market. The reduced demand has resulted in significant margin erosion and lower realized value on equipment sales, which are driving lower return on invested capital and weaker credit metrics for the company. Because demand for rental equipment will likely remain soft through 2010 due to the severity of the economic downturn within the U.S., Moody's anticipates that the company's EBITDA to interest metric will fall to approximately 2.3 times for 2009 from 3.8 times in 2008, and that the company's overall financial profile will be more consistent with a B3 Corporate Family Rating. The assignment of a B1 rating to RSC's new senior secured notes reflects their priority of claim in the capital structure as per Moody's Loss Given Default rating methodology. The notes are pari passu in right of payment with all existing and future Senior Indebtedness. The proposed notes are first lien senior secured notes junior in priority to the liens securing the Senior ABL Facility. Proceeds are anticipated to be used to pay down the company's ABL term loan, currently maturing in 2011. Moody's notes that the note's ratings and the ratings/LGD assessments of all other rated instruments in RSC's capital structure may change if the size, terms, or conditions are substantially different than those anticipated by Moody's in its rating action. The ratings downgrade considers the benefits from the proposed transactions impact on the company's refunding risk. The ABL holders are being offered various incentives including a coupon premium in exchange for extending the company's debt maturity, currently November 30, 2011. RSC's B3 Corporate Family Rating considers the company's leading competitive position in the North American equipment rental industry, which should partially insulate the company from the severe contraction in the non-residential construction market. Industrial companies, which provide about 50% of RSC's rental revenues and partially offset the declining construction end markets, are also suffering from the significant downturn in the U.S. economy and their cost reduction initiatives will likely result in less requirements for rental equipment. The downgrade in the Speculative Grade Liquidity rating to SGL-3 from SGL-2 reflects the view that the value of the company's equipment supporting the borrowing base is declining in value due to market conditions, ongoing depreciation, and lighter reinvestment in new equipment. The stable outlook reflects the expectation that the proposed transaction will be executed as contemplated. Failure to refinance or extend the ABL's maturity could result in a negative outlook. These ratings were assigned: * Proposed senior secured revolving bank credit facility rated Ba3 (LGD2, 20%); * $300 million senior secured notes rated B1 (LGD3, 30%). These ratings were downgraded and assessments changed: * Corporate Family Rating downgraded to B3 from B2; * Probability of Default Rating downgraded to B3 from B2; * $1.45 billion senior secured revolving bank credit facility downgraded to Ba3 (LGD2, 20%) from Ba2 (LGD2, 19%), to be withdrawn post the refinancing; * $244 million senior secured term loan bank credit facility downgraded to Ba3 (LGD2, 20%) from Ba2 (LGD2, 19%), to be withdrawn post the refinancing; * $899.3 million 2nd lien term loan due 2013 downgraded to Caa1 (LGD4, 63%) from B3, (LGD4, 62%); * $620.0 million senior unsecured notes due 2014 downgraded to Caa2 (LGD5, 89%) from Caa1 (LGD5, 89%); and, * Speculative Grade Liquidity rating downgraded to SGL-3 from SGL- 2. The ratings outlook is stable. The last rating action was on April 22, 2009 at which time Moody's changed RSC's rating outlook to negative. RSC Equipment Rental, Inc., is one of the largest equipment rental companies in North America operating 464 locations throughout the United States and Canada. The company maintains over 1,000 categories of equipment having an original equipment cost of $2.7 billion. Revenues for 2008 were approximately $1.8 billion. RSC EQUIPMENT: S&P Retains 'B+' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services said that the ratings on RSC Equipment Rental, including the 'B+' corporate credit rating, remain unchanged. The outlook is stable. S&P also assigned an issue-level rating of 'BB' to the proposed offering of $300 million first-lien notes due 2017 (based on preliminary terms; S&P is basing the rating on the assumption of $300 million of notes and S&P's estimate of the borrowing base availability on the ABL credit facility). The recovery rating is '1', indicating high expectation (90%-100%) of recovery in the event of a default. S&P expects the company will use the proceeds to reduce term-loan debt and thereby increase availability on the company's revolving credit facility. The ratings on RSC reflect its aggressive financial profile, which more than offsets its position as one of the largest providers of construction equipment rentals. Although RSC operates in the cyclical, highly competitive, and fragmented equipment rental sector, it has good geographic, product, customer diversity, and a well-maintained and relatively young fleet. "The ratings and outlook incorporate S&P's expectations of declining industry conditions in the intermediate term, following several years of relatively healthy industry fundamentals," said Standard & Poor's credit analyst John R. Sico. S&P expects that RSC will see deterioration in its operating performance as it operates in the declining phase of the cycle. "However, if nonresidential construction markets decline by more than S&P expects in 2009, which S&P currently believes will be 20%, S&P could revise the outlook to negative or lower the ratings, in light of a severe downturn and significant deterioration in operating margins because of much weaker pricing conditions," he continued. Standard & Poor's expects RSC to maintain financial and acquisition discipline. S&P's ratings and outlook do not factor in dividends or other shareholder-friendly initiatives, or a debt-financed acquisition, all of which could result in a possible downward rating action. Ratings upside is unlikely at this point in the cycle. SHABBIR SHAIKH: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------- Joint Debtors: Shabbir M. Shaikh aka Shaikh W. Shabbir Rubina Shabbir aka Rubina Shaikh 10011 Park Royal Drive Great Falls, VA 22066 Bankruptcy Case No.: 09-15091 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Debtors' Counsel: Bennett A. Brown, Esq. The Law Office of Bennett A. Brown 3905 Railroad Avenue, Suite 200N Fairfax, VA 22030 Tel: (703) 591-3500 Fax: (703) 591-2185 Email: bennett@pcgalaxy.com Total Assets: $4,704,000 Total Debts: $3,143,104 A full-text copy of the Debtors' petition, including a list of their 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/vaeb09-15091.pdf The petition was signed by the Joint Debtors. SIRIUS XM: Jon Zellner Leaves Post to Join Clear Channel -------------------------------------------------------- Sarah McBride at The Wall Street Journal reports that Jon Zellner has left Sirius XM Radio Inc. as its senior vice president of music programming to take up the same role at rival Clear Channel Communications Inc. in July. W. Scott Bailey at San Antonio Business Journal relates that Mr. Zellner will work with Clear Channel program directors in major and mid-sized U.S. markets, and will report to Mark Kopelman, executive vice president of the Company's operations. Business Journal states that at Sirius XM, Mr. Zellner has supervised programming for more than 75 channels, and previously served as XM's executive vice president of programming. Jeffrey Zients Leaves Board Radio Ink Magazine relates that Jeffrey Zients, after being confirmed by the Senate as the Deputy Director of the U.S. Office of Management and Budget, has resigned from Sirius XM's board of directors. According to a filing with the U.S. Securities and Exchange Commission, Sirius XM notified Nasdaq that, now having seven independent directors, it is no longer in compliance with Nasdaq listing rules. Sirius XM said that it will, as the rules require, be back in compliance with the independent-director requirement before its next annual stockholders' meeting or June 22, 2010, Radio Ink reports. Unit Prices Offering of Senior Secured Notes due 2013 XM Satellite Radio Inc., a wholly owned indirect subsidiary of SIRIUS XM Radio, priced an offering of $525,750,000 of Senior Secured Notes due 2013. The offering size was increased from $350,000,000 in response to strong investor demand. The notes, which were offered pursuant to Rule 144A and Regulation S under the Securities Act of 1933, will bear interest at an annual rate of 11.25%. The price to investors will be 95.093% of the principal amount of the notes. The company will receive gross proceeds of $499,951,448 from the sale of the notes before deducting the initial purchaser's commissions and estimated offering expenses. The notes will be guaranteed by XM Satellite Radio Holdings Inc. and certain subsidiaries. XM will use the net proceeds from the offering to repay all amounts outstanding under its amended and restated credit agreement; to replace the $150 million second-lien credit agreement with Liberty Media Corporation, which will be terminated upon the closing of the offering; and to refinance or repay other debt of XM and XM Holdings. The balance of the net proceeds, if any, will be used for general corporate purposes. The notes have not been registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration, except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. About Sirius XM Radio Headquartered in New York, Sirius XM Radio Inc. (SIRI) -- http://www.sirius.com/-- formerly Sirius Satellite Radio Inc., is a satellite radio provider. The Company offers over 130 channels to its subscribers, 69 channels of 100% commercial-free music and 65 channels of sports, news, talk, entertainment, traffic, weather, and data content. Its primary source of revenue is subscription fees, with most of its customers subscribing to SIRIUS on either an annual, semi-annual, quarterly or monthly basis. The Company derives revenue from activation fees, the sale of advertising on its non-music channels, and the direct sale of SIRIUS radios and accessories. Various brands of SIRIUS radios are Best Buy, Circuit City, Costco, Crutchfield, Sam's Club, Target, and Wal-Mart. * * * As reported by the Troubled Company Reporter on April 17, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Sirius XM Radio Inc. and XM Satellite Radio Holdings Inc. (which S&P analyzes on a consolidated basis) to 'CCC+' from 'CCC'. In accordance with this rating change, S&P also raised its issue-level ratings on the companies' debt by one notch (with the exception of Sirius XM's senior unsecured notes, which were affirmed at 'CCC-'). All of these ratings were removed from CreditWatch, where S&P placed them with positive implications on February 17, 2009. The corporate credit rating outlook is stable. SK FOODS: Olam West Coast Buys Firm, Sale Gets Court Okay --------------------------------------------------------- Tim Sheehan at The Fresno Bee reports that Olam West Coast acquired SK Foods LP out of bankruptcy for $39 million on Thursday. Bradley Sharp, the bankruptcy trustee for SK Foods said that Olam West was the sole qualified bidder to participate in the auction for SK Foods' "physical assets" -- its property, plants, and equipment -- on Wednesday, The Fresno Bee states. Olam West's vice president of strategic investment, Stephen B. Smith, said in court documents that his company had been interested in acquiring SK Foods since February "in order to expand into the tomato- processing business in California." According to The Fresno Bee, the sale includes SK's tomato processing plant in Lemoore and another plant in Williams. The sale doesn't include SK Foods' accounts receivable or its existing inventory of product, the report states, citing Mr. Sharp. Mr. Sharp said that the U.S. Bankruptcy Court for the Eastern District of California has approved the sale, The Fresno Bee relates. SK Foods LP runs a tomato processing facility in Lemoore. It filed for Chapter 11 bankruptcy protection after being dropped by its lending group. As reported by the Troubled Company Reporter on May 12, 2009, creditors filed an involuntary Chapter 11 petition SK Foods LP and affiliate RHM Supply/ Specialty Foods Inc. before the U.S. Bankruptcy Court for the Eastern District of California. SK Foods had said that it was preparing to file a voluntary Chapter 11 petition. SMITHFIELD FOODS: Moody's Downgrades Corp. Family Rating to 'B2' ---------------------------------------------------------------- Moody's Investors Service lowered Smithfield Foods, Inc.'s existing long-term ratings, including its corporate family and probability of default ratings to B2 from B1. This rating action was based on Moody's concern that soft hog prices, following the news of the A (H1N1) virus outbreak and exacerbated by the global recession, will preclude sufficient near term earnings improvement in Smithfield's hog production segment. Moody's also rated at Ba3 Smithfield's new $500 million senior secured notes to be issued under Rule 144A, subject to review of final documentation. Moody's affirmed the company's speculative grade liquidity rating of SGL-4. The rating outlook was changed to stable from negative. Ratings lowered, and certain LGD assessments revised: * Corporate family rating to B2 from B1 * Probability of default rating to B2 from B1 * Senior unsecured debt ratings to Caa1 (LGD5, 83%) from B3 (LGD5, 81%) Rating affirmed: * Speculative grade liquidity rating at SGL-4 Rating assigned: * New $500 million senior secured notes due 2014 at Ba3 (LGD2,23%) Smithfield's prior B1 corporate family rating had incorporated the expectation that industry capacity reductions would bring higher hog market prices in the company's fiscal year ending in April 2010, and that the significant moderation of feed grain prices would also help to boost profitability. However, the outbreak in late April of influenza A(H1N1) -- incorrectly known as swine flu -- impacted U.S. fresh pork demand initially, and hence market prices. While the domestic pork market seems to have returned to more normal levels, some international markets such as China continue to place restrictions on pork imports, hurting major US hog producers. In mid-April 2009, before the H1N1 outbreak, the US$A had projected hog prices of $46 to $48 per hundredweight in calendar 2009; its mid-June report, after the outbreak, had lowered that projection to $43 to $45 per hundredweight. At this point, though, the lingering and severe global recession is the most significant factor in soft pork demand and prices. This external event occurred at a challenging time for Smithfield. Despite record profits in its packaged meats and export businesses, Smithfield reported a consolidated operating loss for the fiscal year ended May 3, 2009, of $135.7 million, pro forma for restructuring charges of $88.2 million but without the earnings of the beef business that was classified as a discontinued operation. Operating profit in pork products was insufficient to offset the hog production segment's reported operating loss of $521.2 million. Reported EBITDA, without beef earnings but pro-forma for restructuring charges, was only about $199 million, slightly less than interest expense. Market prices of U.S. live hogs in the most recent fiscal quarter were $43 per hundredweight, well below domestic raising costs of $63 per hundredweight. Through the fiscal year end, Smithfield's corn costs were locked in at about $6 per bushel, well above market levels. The change in rating outlook to stable from negative reflects the expectation that profitability in fiscal year April 2010 will gradually and modestly improve in hog production, given lower feed grain costs and the capacity reductions that the company has made and will make. Smithfield has already cut the size of its U.S. sow herd by 10% and has initiated another 3% reduction. Smithfield's restructuring initiatives should also boost profitability, with approximately $55 million of annual cost savings targeted in fiscal 2010 and $125 million in fiscal 2011. The new $500 million senior bond to be issued under Rule 144A will be guaranteed by material domestic subsidiaries and will benefit from security. The notes will have a first lien on tangible and intangible personal property of the borrower and guarantors, certain fixed assets, and 65% of stock in foreign subsidiaries. The notes will have a 2nd lien on the collateral pledged to a new $1 billion domestic asset based revolving credit facility. This security will be shared with Smithfield's $200 million term loan. The rating assigned to the new notes reflects their structural advantages over Smithfield's senior unsecured debt. The company's SGL-4 rating reflects Moody's anticipation that Smithfield will rely on its external sources of cash in order to cover capital expenditures, working capital requirements, and scheduled debt maturities until profit margins and internal cash flow generation strengthen. The SGL-4 incorporates the company's current capital structure and financial covenants, some of which have modest cushion. External available liquidity at May 3, 2009 was robust, at $1.1 billion. Senior debt due in October 2009, aggregating $241 million, can thus be repaid from operating cash flow or by drawings under Smithfield's revolving credit agreement or by proceeds from the new senior notes issue. Smithfield is in the process of significantly improving its capital structure. Its $1.3 billion domestic revolving credit facility expiring in August 2010 is expected to be replaced by a new $1 billion ABL that will expire the earlier of 3 years from closing or 90 days prior to the maturity of certain other debt instruments. The ABL's only financial covenant will be a fixed charge coverage ratio that will be tested only when usage exceeds a high threshold that is unlikely to be met often. The unrated ABL will have a first lien primarily on receivables and inventory and a second lien on the assets that secure the new senior secured notes. Smithfield is evaluating alternatives for its Euro revolving credit facility, which expires for the most part in August 2010. Moody's anticipates that Smithfield will address financial covenants in the process. Moody's further expects that the company's $200 million term loan will be extended for an additional two years from its original August 2011 maturity and that maintenance financial covenants will be eliminated. In effect, Smithfield is unlikely to be subject to ongoing maintenance financial ratio covenants. At the conclusion of these efforts as contemplated, Moody's could raise Smithfield's speculative grade liquidity rating to SGL-3. Moody's most recent rating action for Smithfield on October 28, 2008 confirmed the company's prior ratings and maintained its negative outlook. On April 27, 2009, Moody's commented in a press release that the outbreak of the H1N1 virus had not impacted Smithfield's ratings at that time. Smithfield Foods, Inc., headquartered in Smithfield, Virginia, is the world's largest pork producer and processor. Sales for the fiscal year ended May 3, 2009, excluding the revenues of the discontinued beef business, were approximately $12.5 billion. SMITHFIELD FOODS: S&P Assigns 'BB-' Senior Secured Debt Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB-' senior secured debt and '1' recovery rating to Smithfield Foods Inc.'s planned $500 million senior secured note offering due 2014. The '1' recovery rating indicates S&P's expectation of substantial recovery (90%-100%) of principal in the event of a default. In addition, S&P affirmed all of the existing ratings on Smithfield Foods, including its 'B' corporate credit rating. The outlook is negative. The note offering will be issued pursuant to Rule 144A but will not have registration rights. Proceeds from this offering as well as the company's planned $1 billion asset backed revolving credit facility (unrated) and the planned $200 million term loan maturing in 2013 (unrated) will replace Smithfield's existing U.S. credit facility, will help refinance near-term debt maturities, and be used for general corporate purposes. Approximately $3 billion of debt was outstanding as of May 3, 2009. "The ratings on Smithfield Foods Inc. reflect the continued weak operating performance in the company's hog production segment, volatility of feed costs, cyclicality of the swine industry, and very high debt leverage," explained Standard & Poor's credit analyst Patrick Jeffrey. The swine industry is highly competitive, commodity-based, and cyclical. Although the company benefits from its position as the leading producer, processor, and marketer of fresh and processed pork in the U.S., Smithfield faced a very challenging operating environment in fiscal 2009 as an oversupply of hogs, high feed costs, and the A(H1N1) virus resulted in a significant earnings decline. "Although the company has reduced its hog production capacity, S&P believes pricing trends for pork remain uncertain in the near term as demand continues to be affected by the weak economy and the A(H1N1) virus" added Mr. Jeffrey. S&P also believes that other pork producers in the industry will also need to reduce livestock numbers to stabilize hog prices. In fiscal 2009, the company hedged feed costs in anticipation of continued increases but then incurred significant losses as feed costs dropped well below Smithfield's hedged positions. However, S&P believes Smithfield's feed costs should materially decline in fiscal 2010 as its higher cost hedge positions roll off in the first quarter. In addition, Smithfield has implemented a restructuring of its pork operations that is expected to result in cost savings of about $55 million in fiscal 2010 and $125 million in fiscal 2011 (does not include depreciation). The outlook is negative. As a result of very weak operations in fiscal 2009, total debt to EBITDA was very weak for the rating at 15.7x. Although S&P expects the first quarter of fiscal 2010 to remain somewhat soft, S&P expects lower feed costs and operating initiatives implemented by the company to result in significant improvement in credit measures through the remainder of fiscal 2010. S&P also believes Smithfield's planned credit facilities and senior secured debt issuance will provide enhanced near term liquidity as the company continues to focus on eliminating all of its quarterly financial covenants. S&P could lower the rating over the near term if leverage increases materially and if the company does not demonstrate improved quarter-over-quarter improvement in EBITDA by the second quarter of fiscal 2010 and continuing though the remainder of fiscal 2010. S&P could also lower the rating if Smithfield faces further liquidity pressure. S&P would consider a stable outlook if the company is able to reduce debt leverage approaching the mid-6x area, maintain adequate liquidity and demonstrate sustained improvement in its hog production operations. SOURCE INTERLINK: Declares Confirmed Plan Effective as of June 19 ----------------------------------------------------------------- Source Interlink Companies, Inc., filed on June 19, 2009, a Notice of Effective Date with the United States Bankruptcy Court for the District of Delaware. The Bankruptcy Court had entered an order on May 28, 2009, confirming the Debtors' Prepackaged Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code, with technical amendments. The order became final on June 8, 2009 The Company has emerged from Chapter 11 as a privately-held company concurrently with the funding of its exit financing and other commitments contemplated under the Plan. As of the Effective Date, the Company has, among other things: -- Reorganized the Company and its affiliated Debtors and subsidiaries such that its subsidiary, Source Home Entertainment, Inc., has become the parent of the Company -- Holdco -- and all of the Company's other subsidiaries and holds 100% of the Company's issued and outstanding capital stock; -- Entered into a $300 million revolving credit agreement by and among the Company as borrower, the guarantors, the lenders, Wells Fargo Foothill, LLC as administrative agent and as collateral agent, Citicorp North America, Inc., as syndication agent and JPMorgan Chase Bank, N.A., as documentation agent; -- Entered into a $485 million revolving credit agreement comprising an $85 million Term Loan A and a $400 million Term Loan B, by and among the Company as borrower, the guarantors, the lenders, Citicorp North America, Inc. as administrative agent and as Term Loan A collateral agent and Term Loan B collateral agent, and JPMorgan Chase Bank, N.A., as syndication agent; -- Exchanged with the holders of Class 4 Term Loan Claims an aggregate principal amount equal to $400 million (plus applicable interest and fees) of Class 4 Term Loan Claims for $400 million aggregate principal amount of Term Loan B as provided for by the Plan; -- Exchanged with the holders of Class 4 Term Loan Claims the remaining amount of Class 4 Term Loan Claims for a pro rata share of 100% of the newly issued common stock of Holdco and the Holdco Loan; and -- Extinguished an intercompany loan in the approximate principal amount of $1.9 million between Holdco and Source Interlink Distribution, LLC. Also as of the Effective Date, Holdco entered into a $200 million unsecured term loan agreement by and among Holdco as borrower, the lenders, Citicorp North America, Inc., as administrative agent and JPMorgan Chase Bank, N.A. as syndication agent -- Holdco Loan. The Company is neither an obligor nor a guarantor under the Holdco Loan, nor does the Company otherwise have any obligations to repay the Holdco Loan. Pursuant to the Plan, the Company's existing common stock and other equity interests were cancelled on the Effective Date without any distribution on account of such equity interests. Accordingly, the Company plans to terminate its registration under the Securities Exchange Act of 1934, as amended. A Form 25 was filed with the Securities and Exchange Commission on May 29, 2009, by NASDAQ to delist the Company's common stock from the NASDAQ Stock Market LLC and to remove the Company's common stock from registration under section 12(b) of the Securities Exchange Act of 1934, as amended. Pursuant to the Plan, holders of the Senior Notes Claims did not receive any distribution on account of such claims, and Senior Notes Claims were discharged, cancelled, released, and extinguished as of the Effective Date. Pursuant to the Plan, holders of Section 510(b) Claims did not receive any distribution on account of such claims, and Section 510(b) Claims were discharged, cancelled, released, and extinguished as of the Effective Date. Other claims under the Plan were unimpaired. On the Effective Date, 100% of Holdco's common stock was issued to the holders of the Class 4 Term Loan Claims as set forth in the Plan, and it had no other capital stock outstanding. A full-text copy of the Plan, as amended and supplemented dated May 26, 2009, is available at no charge at: http://ResearchArchives.com/t/s?3e43 Bonita Springs, Florida-based Source Interlink Companies, Inc., -- http://www.sourceinterlink.com/-- is a U.S. distributor of home entertainment products and services and one of the largest publishers of magazines and online content for enthusiast audiences. Source Interlink Media, LLC, publishes more than 75 magazines and 90 related Web sites. Source Interlink and 17 affiliates filed for bankruptcy on April 27, 2009 (Bankr. D. Del. Case No. 09-11424). Judge Kevin Gross presides over the case. David Eaton, Esq., and David Agay, Esq., at Kirkland & Ellis LLP; and Laura Davis Jones, Esq., Mark M. Billion, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl Young Jones in Wilmington, Delaware, serve as bankruptcy counsel. Meolis & Company LLC serves as the Debtors' financial advisors, while Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. As of April 24, 2009, the Debtors had $2,436,005,000 in total assets and $1,995,504,000 in total debts. SOUTH SOUND: Gets Temporary Access to Cascade Bank Cash Collateral ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Washington authorized, on an interim basis, South Sound Property Development, L.L.C., to: -- access the cash securing repayment of loan from Cascade Bank; and -- grant adequate protection. A final hearing to the Debtor's continued use of case collateral will be held on July 6, 2009, at 11:59 a.m. The Debtor and Cascade Bank are parties to various loan agreements, security agreements, financing statements, and a deed of trust pursuant to which Bank asserts it holds security interest and liens in various items and parcels of real and personal property of the Debtor. On May 21, 2009, Debtor owed Bank $12,735,000, including principal, interest, fees, and costs, but excluding attorney's fees to which Bank is entitled under the Loan Documents and applicable law. Additional interest, fees, costs, and attorneys' fees have accrued between May 21, 2009, and the petition date. The Debtor will grant Bank liens and security interests upon all property of the estate. Secured creditor, Cascade Bank objected to the Debtor's motion to access the cash collateral. The bank related that the Debtor lacked the necessary funds to make ongoing interest payments on the Debtor's secured loan with the Bank. The bank related that: -- the motion failed to provide the bank with adequate protection; -- under the proposed budget, there will be insufficient net revenue to service monthly accruing interest for the loan until December 2009; -- the bank must be provided with necessary financial information; -- maintenance and repair cost budget of $2,000 per month was unrealistic; -- the Debtor's employment of prepetition accountant troubled the bank; and -- a carveout for professional fees of $200,000 was too high. The Court directed the Debtor to allow Bank access to the prepetition collateral and adequate protection collateral for the purpose of enabling the bank to inspect and audit the collateral and the books and records of the Debtor. About South Sound Property Lacey, Washington-based South Sound Property Development, L.L.C., is engaged in the real estate business. The Company filed for Chapter 11 on May 21, 2009 (Bankr. W. D. Wash. Case No. 09-43633). Benjamin J. Riley, Esq., at Brian L Budsberg PLLC, represents the Debtor in its restructuring efforts. The Debtor has assets and debts both ranging from $10 million to $50 million. SPECTRUM BRANDS: Terms of Confirmed Chapter 11 Plan --------------------------------------------------- As reported by the Troubled Company Reporter on June 26, Judge Ronald King of the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, approved on June 25 Spectrum Brands Inc.'s Plan of Reorganization and will enter a confirmation order upon submission. Following entry of the confirmation order, the plan will become effective -- and the company will exit bankruptcy protection -- as soon as all closing conditions to the Plan, including the closing of the company's exit financing, have been met. Spectrum Brands expects to emerge from Chapter 11 in August. Prior to the series of Confirmation Hearings held from June 15 to June 24, 2009, the Debtors' voting and solicitation agent, Financial Balloting Group, LLC, filed a report with the Court showing that the Debtors received overwhelming support from holders of Class 7 Noteholder Claims. More than 99% of ballots submitted by holders of Class 7 Claims were cast in favor of the Plan. Tabulation of Class 7 Ballots: Amount Amount Number Number Accepting Rejecting Accepting Rejecting (%) (%) (%) (%) ------------ ----------- --------- --------- $951,401,797 $38,998,110 1,664 6 (96.06%) (3.94%) (99.64%) (0.36%) FBG also reported that 76 ballots were excluded from tabulation, a list of which and the reasons for their exclusion is available for free at http://bankrupt.com/misc/Spectrum_ExcludedBallots.pdf The Court has ordered that each holder of Claims in Class 2 are entitled to cast a provisional vote on the Plan to be counted only if the Court determines at the Confirmation Hearing that holders of Class 2 Term Facility Claims are impaired. Tabulation of Class 2 Ballots: Amount Amount Number Number Accepting Rejecting Accepting Rejecting (%) (%) (%) (%) ------------ ------------ --------- --------- $331,888,417 $865,330,190 4 131 (27.72%) (72.28%) (2.96%) (97.04%) Based on this tabulation of results, Class 2 has not accepted the Plan, says Kathleen M. Logan, president of Logan & Company. According to Ms. Logan, they have invalidated 1 ballot having a claim amount $5,269,695.21, for having already voted against the Confirmation of the Plan. Further, Ms. Logan informed the Court, that the amounts used in the class 2 solicitation included a tranche denoted in Euros, not in Dollars. Logan converted the amounts to dollars using the conversion rate of 1.3232 in effect on the Class 2 Voting Record Date. The calculation increased the claims voted by $74,497,373. Of this amount, $21,641,718 voted to accept the plan and $52,855,654 voted against it, Ms. Logan notes. On the voting results, Mr. Hussey said, "Today marks a significant milestone in our pre-negotiated debt restructuring process. We are pleased to have the strong support of our noteholders and appreciate the continued loyalty of our business partners, suppliers, customers and employees as we move through this process, from which we expect to emerge with a stronger balance sheet and better positioned to pursue revenue and profit growth opportunities." Spectrum Brands Settles Senior Lenders' Plan Objection As reported by the TCR, Spectrum Brands reached agreement with the agent acting for the senior term lenders as to the terms of a settlement that would revise the terms of its senior term credit facility and resolve the senior term lenders' objection to Spectrum Brands' Plan. The Senior Secured Lenders are Silver Point Capital, Caspian Select Credit Master, Sandell/Castlerigg Master Investments, Scoggin Capital Management and Goggenheim Partners. The key terms of the amendment to the senior term credit facility include: * a floor on LIBOR rate of 150 basis points; * an increase of 250 basis points in the applicable rate to apply to each tranche of the facility; * increased required senior leverage ratios to allow a maximum senior leverage ratio of 5.75 through October 2010, 5.50 from October 2010 through October 2011; and 5.00 thereafter; and * a change in the maturity of the senior term loans from March 2013 to June 2012. "We are very pleased to have reached this mutually agreeable settlement with our senior term lenders which we believe represents a major step forward in our efforts to implement our proposed Plan of Reorganization and ultimately emerge from Chapter 11 protection later this summer. We believe the Plan of Reorganization, including the proposed amendment to the senior term credit facility, will significantly improve the financial profile of the company," said Kent Hussey, CEO of Spectrum Brands. The Administrative Agent and the Senior Secured Lenders objected to the confirmation of the Plan complaining that: (i) The main purpose for this plan is to deliver the Debtors' equity to the Subordinated Noteholders, which is a blatant violation of the Credit Agreement's prohibition against making distributions to Subordinated Noteholders before the Senior Secured Lenders are repaid in full. These distributions would cause an immediate Event of Default upon consummation of the Plan. (ii) The moment the Plan is confirmed, and the new equity becomes available to the Subordinated Noteholders, there will be a Change of Control to the Noteholder Group, Mr. Terry adds. This Change of Control Event of Default also is no mere technicality, for it is a common provision of credit agreements that ensures senior lenders a seat at the table when critical changes in control of the borrower's equity are taking place. But under the Plan, the Noteholder Group is seeking nothing less than to deprive the Senior Secured Lenders of exactly that seat at the table; (iii) although capable of reorganizing successfully, the Debtors have proposed a Plan that cannot meet the feasibility requirements of Section 1129(a)(11) of the Bankruptcy Code. As the evidence will show, and as the Debtors' proposed cramdown "amendment" confirms, the Debtors need covenant relief in order to avoid a swift descent back into chapter 11 early next year. The Debtors have repeatedly changed their theories and manipulated their numbers to try to avoid a default under the Senior Secured Leverage Ratio covenant, but in the end there is no legitimate solution to the problem; (iv) the Debtors will be required to demonstrate that the Plan can be crammed down over the Senior Secured Lenders' rejection of the Plan. Similarly, this endeavor will fail, because the Noteholder Group that extracted an interest rate in excess of 17.5% in a secured DIP facility they lent into just a few months ago are now compelling the Debtors to ask the Court to impose a cramdown rate of just 6.7% on the Senior Secured Lenders. The Senior Secured Lenders further complained that the Noteholders have been intent on inflating the value of the new equity they are to receive by attempting to keep the below-market Credit Agreement in place notwithstanding the multiple defaults that would occur upon confirmation of the Plan. Debtors Modify Plan The Debtors, on June 8, 2009, modified, and filed supplements to, their Plan, including, among others: (1) "Amendment No. 1," which is the amendment to the Credit Agreement dated March 30, 2007, among, Spectrum as the Borrower, the Subsidiary Debtors as Guarantors, Bank of New York Mellon as the Administrative Agent, Collateral Agent and Syndication Agent, Wachovia Bank, National Association as the Deposit Agent, Bank of America N.A. as an LC Issuer, and the Lenders, which amendment implements the cramdown provisions of Section 3.2(b)(ii) of the Plan. A full-text copy of Amendment No. 1 is available for free at http://ResearchArchives.com/t/s?3e25 (2) The treatment of the Class 2 Term Facility Claims. The Term Facility Terms will either be reinstated or will receive the treatment required by Section 1129(b)(2)(A) of the Bankruptcy Code in accordance with the terms of Amendment No. 1, including an interest rate to be determined by the Bankruptcy Court at the Confirmation Hearing. (3) The New Spectrum Governing Documents articulates the Reorganized Debtors' Certificate of Incorporation and By Laws. A full-text of the Spectrum Governing Documents is available for free at: http://bankrupt.com/misc/Spectrum_gov_docs.pdf (4) The Registration Rights Agreement for New Common Stock is an agreement among Spectrum Brands, and its Investors Avenue International Master, L.P. and its subsidiaries, D.E. Shaw Laminar Portfolios, L.L.C. and Harbinger Capital Partners Master Fund I, Ltd. and its affiliates, whereby the Company wishes to grant certain registration rights with respect to the company's Common Stock held by the Investors. A full-text copy of the Registration Rights Agreement for New Common Stock is available for free at: http://bankrupt.com/misc/Spectrum_regrights_agrmtcs.pdf (5) The New Indenture defines the agreement between Spectrum Brands, Inc., its affiliate Debtors as Guarantors, and U.S. Bank National Association as trustee, whereby the parties agree that Spectrum Brands issues a 12% Senior Subordinated Toggle Notes, which may be delivered under this Indenture in the aggregate amount of $218,076,405 plus any Additional Notes. A full-text copy of the New Indenture is available for free at: http://bankrupt.com/misc/Spectrum_new_indenture.pdf (6) The Registration Rights Agreement for New Notes is an agreement among Spectrum Brands, and its Investors Avenue International Master, L.P. and its subsidiaries, D.E. Shaw Laminar Portfolios, L.L.C. and Harbinger Capital Partners Master Fund I, Ltd. and its affiliates, whereby the Company wishes to grant certain registration rights with respect to the company's Common Stock held by the Investors. A full-text copy of the Registration Rights Agreement for New Notes is available for free at: http://bankrupt.com/misc/Spectrum_regrights_agrmntnn.pdf (7) The New Equity Incentive Plan aims to support the Company's ongoing efforts to attract and retain leaders of exceptional talent and to provide the Company with the ability to provide incentives directly linked to the profitability of the Company's businesses and to increases in shareholder value. A full-text copy of the New Equity Incentive Plan is available for free at: http://bankrupt.com/misc/Spectrum_new_eqtyincntv_plan.pdf (8) Spectrum's current board of directors has approved the nomination, the election and the appointment of new persons to serve as initial board of directors of Reorganized Spectrum. The names and biographies of the new members of the board are listed in the Plan Supplement. A list of the names of the members of the New Board is available for free at: http://bankrupt.com/misc/Spectrum_new_bod.pdf (9) The Term Sheet Exit Facility discusses the Debtors' Asset- Based Exit Facility and Indicative Terms and Conditions. A full-text copy of the Term Sheet Exit Facility is available for free at: http://bankrupt.com/misc/Spectrum_termsht_exitfclty.pdf The Debtors had assured the Court that the modification will not cause the Plan to fail to meet the requirements of Sections 1122 and 1123. The Debtors asserted that the modifications either (a) are not material and not will not adversely impact the rights of any parties in interest or (b) satisfy all applicable requirements of the Bankruptcy Code by providing the cramdown treatment provided under Section 1129(b) with respect to a Class of Claims that has rejected the Plan. The Debtors added that they have consulted with the Negotiating Noteholders concerning the modifications and got the Noteholders' consent, as required by the Plan. Debtors Addressed Plan Confirmation Objections Maintaining that their Plan is feasible, the Debtors submitted with the Court an itemized response to the various objections that certain parties had raised. The Debtors told the Court that they have modified the Plan to address the concerns raised by iStar CTL. Addressing the concerns of Cascade Investment, L.L.C., which complained that the Plan is non-compliant or unconfirmable, the Debtors averred that the overwhelming votes of holders of claims in Class 7 to accept the Plan had rendered many arguments of the Cascade Objection moot. Taking on the U.S. Trustee's disagreement with respect to the breadth of certain release, injunction and exculpation provisions contained in the Plan as providing overly broad relief, the Debtors contended that the releases are limited in scope. The Debtors do not believe that there are any Valid Debtor Claims against any of the released parties. Moreover, any action brought to enforce a potential Debtor Claim would involve significant costs to the Debtors and the distraction of the Debtors' key personnel from the demands of the Debtors' ongoing businesses, the Debtors asserted. For the avoidance of doubt, the Debtors said they have added in their Plan Modification that the plan is not intended to operate as a discharge of obligations owed to any Person by any non- Debtor subsidiary but is intended to protect any non-Debtor subsidiary from the assertion of Claims against the Debtors for which the non-Debtor subsidiary has no liability. The Debtors submitted to the Court a confidential and sealed response to the Official Committee of Equity Shareholders' objections to the Plan confirmation. Believing to have resolved its Plan Confirmation Objection, Cascade Investment withdrew its Objection. About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. The U.S. Trustee was unable to appoint an Official Committee of Unsecured Creditors as too few creditors expressed an interest in being appointed to the Committee. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPECTRUM BRANDS: Seeks Ratification of GE Capital Exit Facility --------------------------------------------------------------- To ensure that Spectrum Brands Inc. and its affiliates have access to most of the cost-effective financing arrangement upon exit from Chapter 11, the Debtors and their financial advisor, Perella Weinberg Partners LP, over the past several months, solicited proposals from prospective lenders for exit financing facilities. As a result, the Debtors received proposals from five financial institutions, and devoted considerable time to negotiating with the proponents about the various proposed lending terms. After carefully evaluating the proposals, the Debtors, with the assistance of Perella Weinberg and their other advisors, determined that the financing proposal submitted by General Electric Capital Corporation was the least expensive of the proposals received and provided the Debtors with the most liquidity. GE Capital's proposal, according to the Debtors' counsel, Mark A. McDermott, Esq., at Skadden, Arps, slate, Meagher & Flom LLP in New York, also provided the Debtors with the best financing terms available, consistent with the Debtors' anticipated working capital needs as they emerge from Chapter 11. In light of this, the Debtors sought and obtained authority from the U.S. Bankruptcy Court for the Western District of Texas to ratify a commitment letter dated June 15, 2009, by and among Spectrum Brands, Inc., and General Electric Capital Corporation. The Commitment Letter sets forth the terms and conditions upon which GE Capital will provide, arrange and syndicate, a senior secured exit financing facility in the amount of $242,000,000 upon consummation of a plan of reorganization for the Debtors. The Court also approved a fee letter accompanying the Exit Financing Facility, which sets forth the fees and terms with respect to the financing commitment and the Debtors' use of estate funds to pay related fees and expenses. Pursuant to the Commitment Letter, the Fee Letter will be disclosed only to the Supplemental Loan Participants. GE Capital has committed to provide the Exit Facility in the aggregate amount of up to $242,000,000 consisting of: (a) $197,000,000 of revolving loans, including a $60 million letter of credit subfacility and a $30 million swingline loan subfacility;, and (b) a $45,000,000 "first-in, last-out" supplemental loan, in respect of which GE Capital will act as fronting lender. A full-text copy of the Exit Facility Letter is available for free at http://bankrupt.com/misc/spectrum_gecap_commitletter.pdf Bondholders D.E. Shaw & Co., Avenue Capital Management and Harbinger Management or their affiliates -- the Supplemental Loan Participants -- will fund the entire Supplemental Loan portion of the Exit Facility through their participations. The Exit Facility also provides for the potential of additional revolving loan facilities in an aggregate amount up to $103,000,000 as may be made available subject to the terms and conditions of the Exit Facility. GE Capital has committed to provide up to $15,000,000 of the Incremental Facilities. The Commitment Letter contains customary provisions for exit financings. The Letter requires the Debtors to reimburse GE Capital for reasonable costs and expenses incurred by GE Capital in connection with matters pertaining to the Commitment Letter and the Exit Facility. The Commitment Letter further provides that the arrangements with GE Capital will be on an exclusive basis and the Debtors will not engage, solicit or otherwise consult with other financial institutions regarding any other debt facilities or preferred equity securities. Once effective, GE Capital's commitment to provide financing in accordance with the terms of the Commitment Letter will cease if the Transaction does not close, or the Financing is not funded for any reason, on or before September 30, 2009. Accordingly, under the Commitment Letter, Spectrum will indemnify GE Capital and its affiliates, and representatives against all losses or claims, which may be asserted against GE Capital's affiliates and representatives in connection with the Commitment Letter and the Exit Facility. About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. The U.S. Trustee was unable to appoint an Official Committee of Unsecured Creditors as too few creditors expressed an interest in being appointed to the Committee. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPECTRUM BRANDS: To Employ L&W as Co-Counsel on Baker Transfer -------------------------------------------------------------- Spectrum Brands Inc. and its affiliates seek the U.S. Bankruptcy Court for the Western District of Texas' authority to employ Latham & Watkins LLP under a general retainer as their bankruptcy co-counsel nunc pro tunc May 26, 2009. The Debtors intend to employ L&W to serve as their co-counsel because D.J. Baker, Esq., and Rosalie Gray, Esq., who -- while at Skadden, Arps, Slate & Meager & Flom LLP, in New York, served as the Debtors' counsel and have been instrumental to the Debtors' Chapter 11 cases -- have joined L&W. The Debtors believe that L&W is both well-qualified and uniquely able to represent them during the remaining pendency of the Debtors' Chapter 11 cases in an efficient and timely manner. The Debtors intend that both Mr. Baker and Ms. Gray continue to serve in the same roles and to perform the same services, working from their offices at L&W. Skadden Arps also agreed not to let any senior attorneys to assume Mr. Baker's and Ms. Gray's responsibilities. Through Mr. Baker and Ms. Gray, L&W will: (a) advise the Debtors with respect to their powers and duties as debtors and debtors in possession in the continued management and operation of their business and properties; (b) advise the Debtors with respect to debtor-in-possession financing and exit financing; (c) attend meetings and negotiating with representatives of creditors and other parties-in-interest and advising on the conduct of the cases, including all of the legal and administrative requirements of operating in Chapter 11; (d) take all necessary action to protect and preserve the Debtors' estates including the prosecution of actions on their behalf, the defense of any actions commenced against those estates, negotiations concerning litigation in which the Debtors may be involved, and objections to claims filed against the estates; (e) prepare, on behalf of the Debtors, motions, applications, answers, orders, reports, and papers necessary to the administration of the estates; (f) prepare and negotiate on the Debtors' behalf a plan of reorganization, disclosure statement, and all related or similar agreements or documents, and taking any necessary action on behalf of the Debtors to obtain confirmation of a plan; (g) advise the Debtors in connection with any sale of assets; (h) perform other necessary legal services and providing other necessary legal advice to the Debtors in connection with these Chapter 11 cases; and (i) appear before the Court, any appellate courts and the United States Trustee, and protecting the interests of the Debtors' estates before these courts and the U.S. Trustee. For its services, the Debtors propose to pay L&W at these hourly rates plus the reimbursement of reasonable, necessary out-of- pocket expenses in connection with the Debtors' cases: Professional Rate per hour ------------ ------------- Attorneys $295 to $1,120 paralegals 105 to 620 D.J. Baker, Esq., at Latham & Watkins LLP, in New York, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) and as modified by Section 1107(b) of the Bankruptcy Code and does not hold or represent any interest adverse to the estates. About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. The U.S. Trustee was unable to appoint an Official Committee of Unsecured Creditors as too few creditors expressed an interest in being appointed to the Committee. Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spectrum Brands Inc. and its various subsidiaries. (http://bankrupt.com/newsstand/or 215/945-7000) SPECTRUM BRANDS: Seeks to Pay Workers Assisting Plants Shutdown --------------------------------------------------------------- Spectrum Brands Inc. seek Judge Ronald King's authority to make payments to certain employees involved in the shutdown of the Debtors' Bridgeton, Missouri distribution center, the Pendergras, Georgia distribution center, the San Bernardino, California distribution facility, the Orville, Ohio facilities, and the partial shutdown of the Edwardsville, Illinois distribution center. Specifically, the Debtors ask the Court to allow them to implement a program providing for payments to be made to certain necessary, non-insider employees in exchange for these employees remaining employed and assisting the Debtors with an orderly exit from the entirety of the "shutdown Payment Program." The amount the Debtors propose to pay these employees is $136,500. The Debtors formerly used the Bridgeton, Pendergrass, and San Bernardino Facilities, and a portion of the Edwardsville Facility as distribution centers in connection with the "Controls" portion of their Home & Garden Business. To streamline their product distribution system and better control their distribution costs for the H&G Business, the Debtors have determined to shut down all or a portion of these distribution centers. The Debtors formerly utilized the Orrville Facilities primarily in connection with their fertilizer and growing media business, though a small portion of one of the Orrville Facilities was, and is currently used in connection with the "Controls" portion of the H&G Business. As part of the Debtors' prepetition determination to shut down the FGM Business, the Debtors concluded that the Orrville Facilities are no longer necessary for the Debtors' operations. The Debtors contemporaneously filed motions seeking authorization to, among other things, reject the real property leases related to the Bridgeton, Pendergrass and San Bernardino Facilities. The Debtors do not intend to file a motion to reject the lease for the Edwardsville Facility, but anticipate exiting the portion of that facility that relates to the H&G Business on or about January 15, 2010. According to Mark A. McDermott, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, the Debtors designated certain Employees who they believed were essential to an efficient shutdown of each the Facility. The rationale behind the Shutdown Payment Program is that the Debtors' cost savings attributable to the efficient shutdown of all or a portion of the Facilities will inure directly to the Debtors' benefit and the program will assist the Debtors in maintaining a stable workforce and achieving an orderly exit from the Facilities. Pursuant to the Shutdown Payment Program, the Debtors propose to make Payments to 107 Employees ranging from $750 to $5,000 per Employee. Of the 107 Employees eligible to participate in the program, only approximately 25 Employees are entitled to receive Payments in excess of $750. None of the Employees are insiders. The Debtors propose to distribute this amount to: No. of Proposed Proposed Facility Employees Amount Payment date -------- --------- -------- ------------ Bridgeton 33 $36,500 Jan. 15, 2010 Pendergrass 30 35,500 Nov. 30, 2009 San Bernardino 16 26,750 Oct. 31, 2009 Orrville 11 14,250 Aug. 15, 2009 Edwardsville 17 24,000 Jan. 31, 2010 A schedule of the proposed Payments to be made under the Shutdown Payment Program will be provided to the United States Trustee. If the Debtors were unable to retain the Employees participating in the Shutdown Payment Program through the agreed date, the Debtors would be left to suffer the disarray and lost efficiencies resulting from unplanned departures or would be forced to hire new employees to assist in the winding down of all or a portion of the Facilities, Mr. McDermott stresses. Because any new employees would not have the same knowledge and expertise with respect to the Debtors' operations at the respective Facilities as do the current Employees, the efficient shutdown of the Facilities would be compromised, increasing the Debtors' costs associated therewith. The Debtors believe that the Shutdown Payment Program is ordinary course and could be implemented during the pendency of these cases. Nevertheless, the Debtors seek the Court's approval, with respect to the first-day order governing payments to employees, which require the Debtors to seek court approval prior to making payments under these programs, Mr. McDermott says. About Spectrum Brands Based in Cibolo, Texas, Spectrum Brands, Inc. -- http://www.spectrumbrands.com/-- supplies consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products, and portable lighting. Spectrum Brands' business is operated in three reportable segments: (a) Global Batteries and Personal Car; (b) Global Pet Supplies; and (c) Home and Garden. Spectrum Brands has roughly 5,960 employees worldwide, with about 2,700 of those employees working within the United States. In addition, Spectrum Brands holds a 50% interest in a domestic entity; minority interests (less than 25% each) in a domestic entity and a foreign entity; a limited partnership interest in a foreign entity; and a 100% interest in a foreign trust. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. The U.S. Trustee was unable to appoint an Official Committee of Unsecured Creditors as too few creditors expressed an interest in being appointed to the Committee. 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) STEPHEN RUSSELL: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Joint Debtors: Stephen Guy Russell Dena Marie Russell 23150 Roland Place Bend, OR 97701 Bankruptcy Case No.: 09-34933 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court District of Oregon Judge: Trish M. Brown Debtors' Counsel: Ted A. Troutman, Esq. 16100 Nw Cornell Rd #200 Beaverton, OR 97006 Tel: (503) 292-6788 Email: tedtroutman@sbcglobal.net 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 17 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/orb09-34933.pdf The petition was signed by the Joint Debtors. SYNCORA GUARANTEE: BCP Exchange Offer for RMBS Moved to July 10 --------------------------------------------------------------- The BCP Voyager Master Funds SPC, Ltd., acting on behalf of and for the account of, the Distressed Opportunities Master Segregated Portfolio, has extended the expiration date of the Fund's offer for 55 classes of residential mortgage backed securities insured by Syncora Guarantee Inc. to 11:59 p.m., New York City time, on Friday, July 10, 2009. The offer will expire at that time, unless extended. Certain Consent Prices Revised The Fund has revised certain consent prices offered for each class of RMBS from those previously disclosed, subject to the conditions described in the offer. All Eligible RMBS Securities validly tendered as of 11:59 p.m. on June 26, 2009 will be accepted into the offer prior to any RMBS tendered on or after that time, subject to the conditions described in the offer. If there are only sufficient funds to accept a portion of the tendered RMBS of a given priority of acceptance, then tenders for that given priority of acceptance will be accepted pro rata. Results of Offer as of June 26 and Status of Discussions with Holders of RMBS The Fund also announced the results of the offer and the status of certain discussions with holders of RMBS as of June 26, 2009. As of June 26, tenders have been received in the offer and binding, non-binding and other agreements have been reached by the Fund and/or Syncora Guarantee and holders of RMBS to remediate RMBS exposures totaling 54.7 remediation points. RMBS representing 38.4 remediation points have been tendered into the offer, binding agreements have been reached by the Fund or Syncora Guarantee and RMBS holders to remediate RMBS exposures totaling 10.7 remediation points, subject to certain conditions, and non-binding agreements have been reached by the Fund or Syncora Guarantee and RMBS holders to remediate RMBS exposures totaling 5.5 remediation points. An agreement has been reached by the Fund and Syncora Guarantee and one RMBS holder to remediate RMBS exposures totaling 1.7 remediation points, in the event certain conditions are met. The Fund and Syncora Guarantee are in continuing discussions with numerous other holders of RMBS as the offer continues. The aggregate principal amounts of RMBS securities that have been tendered into the offer are: Aggregate Principal Balance in US$ Tendered CUSIP No. Security Description As of 06/26/09 --------- -------------------- -------------- 39539BAA1 GreenPoint Mortgage Funding Trust 2006-HE1 86,452,326 126685DT0 Countrywide Home Equity Loan Trust 2006D 137,928,505 39539JAA4 GreenPoint Mortgage Funding Trust 2007-HE1 55,690,854 45664UAA3 Indymac Home Equity Mortgage Loan Asset Backed Trust Series 2006-H3 75,460,819 126685DS2 Countrywide Home Equity Loan Trust 2006D 226,354,373 41161MAB6 Harborview Mortgage Pass-Through Certificates Series 2006-5 74,098,902 126685AT3 CWABS, Home Equity Revolving Loan Trust 2005-K 110,046,593 1248MKAA3 C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-SL1 66,977,590 75114GAB5 RALI 2006-QO4 Trust 51,404,290 41161PE41 Harborview Mortgage Pass-Through Certificates 2006-CB1 39,701,573 456612AB6 Indymac Indx Mortgage Loan Trust 2006-AR6 84,772,320 41161PG64 Harborview Mortgage Loan Trust 2006-BU1 34,339,366 68402SAA7 Option One Mortgage Loan Trust 2007-HL1 205,830,564 12668VAB5 Countrywide Home Equity Loan Trust 2006-S7 23,900,595 86801CAA1 STICS 2007-1 83,781,970 65538BAA7 Nomura NAAC 2007-S2 - 41161PL35 Harborview Mortgage Pass-Through Certificates 2006-4 93,977,192 41161PP72 Harborview Mortgage Pass-Through Certificates 2006-4 - 41161PQ22 Harborview Mortgage Pass-Through Certificates 2006-4 41,768,612 12668VAC3 Countrywide Home Equity Loan Trust 2006-S7 38,551,660 1248MKAB1 C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-SL1 62,150,773 785778QA2 SACO I Trust 2006-1 10,941,134 41161PXG3 Harborview Mortgage Loan Trust 2005-15 14,575,372 41161PUJ0 Harborview Mortgage Pass-Through Certificates 2005-11 12,686,329 12587PEM8 BSSP 2007-R5 (Bear Stearns) - 12668VAD1 Countrywide Home Equity Loan Trust 2006-S7 - 12668VAA7 Countrywide Home Equity Loan Trust 2006-S7 13,523,180 23332UGP3 Downey Savings and Loan Mortgage Trust Series 2006-AR1 - 23332UGL2 Downey Savings and Loan Mortgage Trust Series 2006-AR1 426,155 12668VAF6 Countrywide Home Equity Loan Trust 2006-S7 - 52524PBT8 Lehman XS Trust, Series 2007-6 3,097,240 12668VAE9 Countrywide Home Equity Loan Trust 2006-S7 12,025,983 126685AU0 CWABS, Home Equity Revolving Loan Trust 2005-K 10,542,964 456612AE0 Indymac Indx Mortgage Loan Trust 2006-AR6 42,044,903 07401UAB9 Bear Stearns Second Lien Trust 2007-SV1 162,192,000 126673QB1 Countrywide Home Equity Loan Trust 2004R 38,060,530 52524TAS3 Lehman XS Trust, Series 2007-8H - 41161PL68 Harborview Mortgage Pass-Through Certificates 2006-4 - 30248EAA6 First Franklin Mortgage Loan Trust Series 2007-FFB-SS 89,928,498 525248BL3 Lehman XS Trust, Series 2007-5H 25,219,400 75114GAE9 RALI 2006-QO4 Trust 40,478,820 126685AX4 CWABS, Home Equity Revolving Loan Trust 2005-K 39,787,632 525248BK5 Lehman XS Trust, Series 2007-5H 28,593,744 126673QA3 Countrywide Home Equity Loan Trust 2004R - 126673MY5 Countrywide Home Equity Loan Trust 2004Q 49,857,273 126685AW6 CWABS, Home Equity Revolving Loan Trust 2005-K 12,978,770 07401UAU7 Bear Stearns Second Lien Trust 2007-SV1 25,529,277 86363GBS2 Structured Adjustable Rate Mortgage Loan Trust, Series 2007-3 28,745,884 126673MX7 Countrywide Home Equity Loan Trust 2004Q - 41161PUM3 Harborview Mortgage Pass-Through Certificates 2005-11 - 525245CP9 Lehman XS Trust, Series 2007-3 17,241,072 41161PG98 Harborview Mortgage Loan Trust 2006-BU1 14,911,945 68402SAD1 Option One Mortgage Loan Trust 2007-HL1 - 68402SAC3 Option One Mortgage Loan Trust 2007-HL1 22,220,000 68402SAB5 Option One Mortgage Loan Trust 2007-HL1 22,161,593 The offer and related financing are also conditioned on the consummation of an agreement entered into between Syncora Guarantee and certain counterparties to Syncora Guarantee's credit default swap transactions and financial guarantee insurance policies, the tender of a minimum amount of RMBS, approval of the New York Department of Insurance and certain other conditions. Holders of RMBS that have tendered or will tender their RMBS into the offer are no longer able to withdraw their tendered RMBS. The offer by the Fund and any transactions with Syncora Guarantee are being conducted only with qualified institutional buyers and are exempt from registration under Section 4(2) of the Securities Act of 1933, as amended. Any securities that may be issued pursuant to such transactions have not been and, at the time of the closing of the transaction, will not be registered under the Securities Act or any state securities laws. The securities may not be offered or sold in the United States absent registration under, or an applicable exemption from, the registration requirements of the Securities Act and applicable state securities laws. About Syncora Guarantee Inc. Syncora Guarantee Inc. -- http://www.syncora.com/-- is a wholly owned subsidiary of Syncora Holdings Ltd. Syncora Holdings Ltd. is a Bermuda-domiciled holding company. In April 2009, Standard & Poor's Ratings Services revised its financial strength and financial enhancement ratings on Syncora Guarantee Inc. to 'R' from 'CC'. Standard & Poor's also revised its counterparty credit rating on Syncora to 'D' from 'CC'. An insurer rated 'R' is under regulatory supervision because of its financial condition. The 'CC' counterparty credit, financial strength, and financial enhancement ratings on Syncora Guarantee U.K. Ltd. are unchanged because at this time, that company is not subject to any regulatory orders that mandate the suspension of claims payments. TAMPA ESUITES: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Tampa eSuites, LLC 6308 Benjamin Road, Suite 710 Tampa, FL 33634 Bankruptcy Case No.: 09-05274 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: A. Thomas Small Debtor's Counsel: Trawick H. Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P.O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Email: efile@stubbsperdue.com Total Assets: $3,000,000 Total Debts: $25,544,507 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/nceb09-05274.pdf The petition was signed by Gerald D. Ellenburg. TERRA-GEN FINANCE: Moody's Assigns 'Ba3' Rating on $275 Mil. Loan ----------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 rating to Terra-Gen Finance Company, LLC's proposed $275 million of senior secured credit facilities. The facilities are made up of a $250 million senior secured term loan and a $25 million senior secured working capital facility, both due 2014. The rating outlook is stable. Terra-Gen is a special purpose entity formed by affiliates of ArcLight Capital Partners, which owns or leases a portfolio of 831 MWs of renewable generating capacity. The portfolio is made up of 387 MWs of geothermal, 80 MWs of solar and 364 MWs of wind generation located in the western US. Approximately 73% of the capacity is sold to Southern California Edison (SCE, sr. unsec. A3) under long term contracts maturing from 2014 to 2030 and revenue under these contracts represents about ninety percent of Terra-Gen's consolidated cash flows over the next five years. Terra-Gen's significant ownership interests include Coso Geothermal Power Holdings LLC (Baa3 sr. secured; under review for possible downgrade) which represents more than 50% of the Terra- Gen's consolidated cash flow over the medium term. The term loan will be used solely to refinance an existing bridge facility and to pay fees and expenses related to the transaction. The working capital facility will be used to provide working capital from time to time and for other general corporate purposes. It will primarily be used to support the issuance of letters of credit to replace existing project-level letters of credit. The Ba3 rating considers the benefits of portfolio diversification across 21 power plants and three renewable technologies (solar, wind and geothermal). The rating also reflects the mostly contracted cash flows generated under long-term power purchase agreements with primarily investment grade counterparties; generally strong operating performance across the portfolio; a capable operator with a long operating history; and strong political and regulatory support for renewable energy. In addition, Terra-Gen benefits from the involvement of a financially supportive sponsor in ArcLight, which has invested over $700 million of cash equity into Terra-Gen to date. ArcLight has also contributed approximately $34 million into an accelerated capital expenditure program at Coso Power and will provide a guarantee to provide an additional $35 million. Terra-Gen is undergoing a significant capital expenditure program for Coso Power. The total cost for the drilling program will be approximately $108 million between 2009 and 2011, and it will be funded in part by equity infusions from ArcLight. Of this $108 million, $24.8 million has been funded to date by ArcLight. The program includes geothermal resource augmentation by water injection, which is a program intended to increase the level of production and decrease or stop the future decline by preventing fluid loss. The program also includes a new enhanced drilling plan to further develop the field in anticipation of the water augmentation program, which will generate substantial economic benefit to Coso Power by restoring steamfield capacity and increasing production. Terra-Gen is also in the final stages of permitting for its Hay Ranch project to transport the Hay Ranch water to Coso Power for injection into the steamfield. Terra-Gen has received the conditional use permit from Inyo County, although this permit is being appealed, which Moody's has been told is an administrative appeal to a court that generally upholds decisions of the Board of Supervisors. Terra-Gen expects to receive the remaining permit from the Bureau of Land Management within a few weeks. Once this happens, Terra-Gen intends to commence construction of the pipeline and to begin pumping water in late Q4 2009. The Hay Ranch Project will cost approximately $13 million to complete, of which Terra-Gen has already spent approximately $4 million. The rating factors in the possibility that Coso Power may be downgraded from its current Baa3 senior secured rating. Several factors concerning the development of the Hay Ranch project as well as the actions by ArcLight limit the prospects for a multi- notch rating change at Coso Power. As such, to the extent that the rating on Coso Power was downgraded by one notch, Moody's would not anticipate that this rating change would affect the Ba3 rating assigned to Terra-Gen. The rating also considers the execution risk associated with a refinancing at Dixie Valley, completion of a wind repowering at the wind assets, the effects of the Hay Ranch delays at Coso, exposure to SRAC price risk starting in May 2012 (on approximately 40% of the generation), and a major capital expenditure program though 2011. The Ba3 rating for Terra-Gen considers these credit strengths: * Terra-Gen benefits from contracted project revenues, which are generated through resource diverse projects in its portfolio. Contracted cash flows representing 90% of annual revenue through April 2012 and 60% through 2019 and then 90% through 2030. * All of the projects have long operating histories with the most recent project entering operation in 2000 (excluding the recent Alite acquisition, which commenced operation in 2008). * Terra-Gen's portfolio is comprised of 21 projects spread over three different renewable technologies, thus diversifying operational and technology risk. * The collateral is similar to other holding company financings and consists of security in Terra-Gen equity, collateral in all the accounts and the existence of a restricted payments test. Importantly, liquidity at the Terra Gen level is initially bolstered by a 15 month debt service reserve composed of an (initial) 3-month cash funded debt service reserve plus another 12 month DSR LOC provided by ArcLight and non-recourse to Terra- Gen. This increased liquidity level will exist during the early part of the Terra-Gen financing, a period when the greatest execution and construction risk exists and when distributions from Coso Power are not expected to occur. While the amount of the debt service reserve can step down to 12 months and then to 6 months, such step downs can only occur upon the project meeting certain performance conditions. * The project sponsor, ArcLight, is a strategic investor focused exclusively on the power and energy sectors. ArcLight has also put in approximately $34MM into Coso Power to date to support capex and is committing to put in another $35MM into Coso Power's capital expenditure program. In addition, Terra-Gen is ArcLight's single largest investment with over $700 million in cash equity invested in the borrower to date. The rating also reflects these areas of credit concern: * The potential for geothermal reserve decline represents a key risk for Terra-Gen, since the largest source of cash flows (approximately 60-70%) comes from the three geothermal plants (Coso Power, Dixie Valley, Beowawe). * The execution of the Dixie Valley refinancing introduces execution risk to Terra-Gen, which could delay the funding for the major capital expenditure program and could impact the degree of refinancing risk at Terra-Gen. * Coso Power expects to engage in a water augmentation program to reverse the geothermal reserve decline; however, permitting problems have caused delays and slowed the program's implementation. Moody's notes that Coso Power project did receive a conditional use permit for Hay Ranch and is waiting for the BLM permit (expected in a few weeks). * From 2012 to 2019, Terra-Gen will rely on merchant or floating SRAC for about 40% of consolidated cash flows (depending upon the year). * Coso Power is engaged in a major capital program through 2011, which could result in possible cost overruns and reduced cash flow. * A degree of concentration risk exists since more than 90% of the revenue is derived from SCE and 75% of Terra-Gen's assets are located in California. In addition, Terra-Gen relies heavily on Coso Power for cash flow since Coso Power represents more than 50% of the consolidated cash flows. Terra-Gen's stable outlook reflects the expectation of stable consolidated cash flow generation under long term contracts through 2012 and the successful implementation of capital programs at several operating companies, including Coso Power. The outlook also incorporates projected strong operating performance across the portfolio and moderate de-leveraging on a consolidated basis over the medium term. Limited prospects exist for a rating upgrade in the near future. Over the longer term, positive trends that could lead to an upgrade include the execution of the Dixie Valley refinancing such that there is a repaid deleveraging of Terra-Gen debt and higher sustained generation output at Coso Power above the base case forecast. Terra-Gen's ratings could be lowered if it does not receive the final Hay Ranch permit, does not achieve successful implementation of the accelerated capital program such that generation output at Coso Power is significantly below the base case forecast, there is a failure to complete the Dixie Valley refinancing or there is a very substantial deterioration in the credit quality at SCE. The ratings are predicated upon final documentation in accordance with Moody's current understanding of the transaction and final debt sizing consistent with initially projected credit metrics. Terra-Gen Finance Company, LLC is a wholly owned subsidiary of Terra-Gen Power, LLC. Terra-Gen Power is a holding company that was formed to acquire and own an 831 MW portfolio of renewable generation assets primarily located in California. The majority of the portfolio's capacity is sold to SCE under long term contracts maturing from 2014 to 2030. Terra-Gen is privately owned by affiliates of ArcLight Capital Partners. THORNBURG MORTGAGE: Court Sets August 3 General Claims Bar Date --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland has established August 3, 2009, at 5:00 p.m. (prevailing Eastern Time) as the general bar date for the filing of proofs of claim in Thornburg Mortgage, Inc., et al.'s bankruptcy cases. Governmental units have until October 28, 2009, at 5:00 p.m. (prevailing Eastern time) to file proofs of claim against any of the Debtors. Proofs of claim must be delivered so as to be received on or before the applicable bar dates, at: a) For claims sent via the United States Postal Service: Thornburg Mortgage Claims Processing c/o Epiq Bankruptcy Solutions, LLC FDR Station, P.O. Box 5011 New York, NY 10150-5011 b) For claims sent by overnight courier or hand delivery: EPIQ Bankruptcy Solutions, LLC Attn: Thornburg Claims Processing 757 Third Avenue, 3rd Floor New York, NY 10017 Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage, Inc. and its four affiliates filed for Chapter 11 on May 1 (Bankr. D. Md. Lead Case No. 09-17787). Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, has been tapped as counsel. Orrick, Herrington & Sutcliffe LLP is employed as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., have been tapped as investment banker and financial advisor. Protiviti Inc. has also been engaged for financial advisory services. KPMG LLP is the tax consultant. Epiq Systems, Inc. is claims and noticing agent. In its bankruptcy petition, Thornburg listed total assets of $24,400,000,000 and total debts of $24,700,000,000, as of January 31, 2009. TOYS R US: Moody's Assigns 'B3' Rating on $950 Mil. Sr. Notes ------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the new $950 million senior unsecured notes for Toys "R" Us Property Company I, LLC. Moody's also upgraded to B1 from B2 a senior secured term loan for Toys "R" Us Delaware, Inc. At the same time, Moody's affirmed the B2 Corporate Family and Probability of Default ratings, and SGL-3 Speculative Grade Liquidity rating for Toys "R" Us, Inc. The rating outlook is stable. Ratings on the new senior unsecured notes for Toys Propco are subject to Moody's review of final documentation. The new $950 million senior unsecured notes will refinance and replace a $1.3 billion senior unsecured credit facility at Toys Propco, with $1.27 billion presently outstanding. Additional sources of repayment for the existing Toys Propco loan come from $125 million in proceeds from the sale by Toys Propco of 25 locations, as well as excess cash. While the new notes are unsecured, there is a negative pledge on 359 properties as well as the assignment of the master lease between Toys Propco (as lessor) and Toys "R" Us Deleware (as Lesee). Moody's also recognizes that the new notes are guaranteed by Toys Propco's four subsidiaries with ownership of the pool properties. The affirmation of the B2 Corporate Family and Probability of Default ratings reflects Toys' solid operating performance during this downturn, with credit metrics that have improved, with debt/EBITDA reducing to 5.9 times at the LTM May 2009. "Toys has done a credible job navigating this difficult macroeconomic environment, with its improved operating discipline the major reason," stated Moody's Senior Analyst Charlie O'Shea. "In addition, it has prudently refinanced the lions' share of its near term maturities, with the $800 million in CMBS debt maturing in August 2010 the remaining hurdle". New Rating assigned: Toys "R" Us Property Company I, LLC -- Senior unsecured notes at B3 (LGD5, 70%). Ratings affirmed and LGD point estimate adjusted include: Toys "R" Us, Inc. -- Corporate Family Rating at B2; -- Probability of Default Rating at B2; -- Senior unsecured notes rating at Caa1 (LGD6, 92%) from Caa1 (LGD6, 93%), and -- Speculative grade liquidity rating SGL-3. Toys "R" Us Delaware. Inc. -- 8.75% debentures due 2012 at B3 (LGD5, 70%) from B3 (LGD4, 68%) Rating upgraded: Toys "R" Us Delaware. Inc. -- Senior secured term loan due 2012 to B1 (LGD3, 37%) from B2 (LGD3, 48%) The affirmation of the SGL-3 speculative grade liquidity rating considers Toys' improved internal cash flow, as well as the liquidity provided by its recently-renewed unrated secured asset- based revolving credit facility. The new facility retains approximately $2 billion in availability until July 2010, and then reverts to a $1.525 billion facility expiring in May 2012. A significant concern, however, is the need to refinance $800 million in CMBS debt coming due in August 2010, which could impair liquidity. The upgrade of the Toys "R" Us Delaware, Inc. 2012 term loan results from the elimination of the prior deficiency claim as more assets are available due to the reduction in the ABL and Propco facilities. The last rating action for Toys "R" Us was the August 24, 2007, confirmation of the B2 corporate family and probability of default ratings, and the affirmation of the SGL-3 speculative grade liquidity rating. The outlook was changed to stable from negative, and the Toys "R" Us Delaware, Inc. term loans were downgraded to B2 (LGD3, 48%). Toys "R" Us, headquartered in Wayne, New Jersey, is the largest specialty retailer of toys, with annual revenues of around $14 billion. It operates stores both in the U.S. and internationally, as well as the Babies "R" Us format. TOYS R US: S&P Affirms Corporate Credit Rating at 'B' ----------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its ratings on Toys "R" Us Inc., including its 'B' corporate credit rating. The outlook remains negative. S&P also assigned a 'B+' issue-level rating (one notch higher than the corporate credit rating) and '2' recovery rating to US Propco's proposed $950 million unsecured notes. The '2' recovery rating indicates S&P's expectation of substantial recovery (70%- 90%) in the event of a payment default. The notes will be issued by US Propco (to be renamed Toys R Us Property Co. I LLC), a bankruptcy remote special purpose entity, with ownership of 359 properties. These properties are leased to Toys "R" Us-Delaware Inc. (US Opco) through a 20-year triple net master lease agreement. The notes will benefit from a negative pledge on the properties held by US Propco. Proceeds of the proposed debt issue, along with proceeds from the sale of real estate assets to US Opco, cash contribution from Toys "R" Us Inc. (Holdco), and cash on hand will be used to repay borrowings under the $1.3 billion unsecured US Propco loan due 2010. The ratings on Wayne, N.J.-based Toys "R" Us Inc. reflect participation in the intensely competitive toy retailing sector, especially from mass merchants and discounters such as Wal-Mart Stores Inc. and Target Corp., extreme seasonality and dependence on "hot" products and video games, as well as high debt leverage and thin cash flow protection measures. S&P expects weak economic conditions to hurt retail sales in 2009. S&P believes a steep cutback in consumer spending, intense competition, and aggressive promotions could be problematic for sales and earnings over the near-to-intermediate term. Comparable-store sales declined 3.5% in the fourth quarter and declined 0.1% in fiscal 2008. Sales trends remain negative with comparable store sales declining 5.4% in the first quarter ended May 2, 2009, reflecting weaker consumer spending as well as a cyclical dip in the video game business. Still, though Toys "R" Us Inc. faced significant challenges during the fourth quarter of 2008 and into 2009, strong execution, merchandising initiatives, cost control and the positive impact from the store conversion program have helped mitigate the effects of negative sales and protect profitability. As a result, operating margins remained fairly table at 10.9% for the 12 months ended May 2, 2009, compared with 11.1% a year ago. The company has been undergoing a restructuring effort over the past few years, with the goal of improving competitiveness, store productivity, and operating efficiency. It has successfully executed a growing number of side-by-side conversions that have provided a meaningful lift in sales. Enhanced customer service and exclusive product offerings have helped store productivity and stem margin erosion The negative outlook anticipates that a difficult economic environment and intense competition could lead to lower operating performance. In addition, Toys "R" Us faces refinancing of about $800 million in 2010. If this debt is successfully refinanced, S&P would consider an outlook revision to stable. S&P would also consider a stable outlook if Toys can improve its cash flow amid declining sales and earnings, resulting in debt leverage improving to the mid-6.0x. This could occur if a sales decline is held to 1% and margins improve 100 bps in 2009, while debt remains constant. If management turnaround initiatives lose traction resulting in weaker than anticipated operating results, S&P could lower the ratings if leverage exceeds 8x or liquidity contracts. This could occur if sales fall 5% and margins contract over 50 basis points. S&P might also lower the ratings occur if Toys "R" Us is unable to refinance maturing debt. TRIBUNE CO: Alvarez & Marsal Bills $1-Mil. for April Work --------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, these professionals hired in Tribune Co.'s bankruptcy cases filed interim applications seeking court approval of fees and expenses in connection with the services they rendered: A. Debtors' Professionals Professional Period Fees Expenses ------------ ------ ---- -------- Alvarez & Marsal North 04/01/09 - America, LLC 04/30/09 $1,068,295 $10,099 Jenner & Block LLP 04/01/09 - 04/30/09 175,231 2,709 Reed Smith LLP 04/01/09 - 04/30/09 6,966 853 Daniel J. Edelman, Inc. 04/01/09 - 04/30/09 1,750 22 PricewaterhouseCoopers 03/01/09 - LLP 03/31/09 $64,407 $2,116 B. Official Committee of Unsecured Creditors' Professionals Professional Period Fees Expenses ------------ ------ ---- -------- Moelis & Company LLC 04/01/09 - 04/30/09 $200,000 $7,676 The Debtors said they received no objections as to these professionals' monthly fee applications: Professional Period ------------ ------ Paul, Hastings, Janofsky & Walker 03/01/09-03/31/09 Daniel J. Edelman, Inc. 12/08/09-03/31/09 PricewaterhouseCoopers LLP 02/01/09-02/28/09 PricewaterhouseCoopers LLP 12/08/09-01/31/09 Lazard Freres & Co. LLC 03/01/09-03/31/09 Cole, Schotz, Meisel, Forman & Leonard, P.A. 03/01/09-03/31/09 Lazard Freres & Co., LLC 12/08/09-02/28/09 Sidley Austin LLP 03/01/09-03/31/09 The Creditors' Committee said it received no objections to the fee applications submitted by these professionals, thus these professionals will be paid: Professional Period ------------ ------ AlixPartners, LLP 04/01/09-04/30/09 Chadbourne & Parke LLP 04/01/09-04/30/09 Landis Rath & Cobb LLP 04/01/09-04/30/09 The Committee said that due to a clerical error, Landis & Rath's Fourth Application overstated by $38 the amount of expenses sought to be reimbursed. McDermott Resolves U.S. Trustee's Concern The Debtors tell the Court that subsequent to the filing of the certificate of no objection to the fee application of McDermott Will & Emery LLP, the U.S. Trustee expressed concern regarding the firm's quarterly application. According to the Debtors, the U.S. Trustee and McDermott have resolved the U.S. Trustee's concern with the firm agreeing not to seek payment of disputed fees for $110,867. McDermott, however, may seek the right to payment of the Disputed Fees at a later time with the understanding that both Parties reserve all rights. Accordingly, McDermott may now be paid 100% of the undisputed fees totaling $419,637 and $6,808 representing 100% of expenses. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Committee Seeks to Probe Tesop Corp Merger in 2007 -------------------------------------------------------------- As part of its statutory duties, the Official Committee of Unsecured Creditors in Tribune Co. and its affiliates' Chapter 11 cases has been investigating the acts, liabilities and financial condition of the Debtors, including without limitation, the series of transactions that took place in April 2007, which culminated with the consummation of the merger of Tribune Company and Tesop Corporation in December 2007. In connection with its investigation, the Committee has spoken to various parties involved and sent requests for information surrounding the Leveraged ESOP Transactions and the Merger to, among others, the Debtors and Samuel Zell. In addition, the Committee sent the Foundations detailed requests for information. Pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, the Committee asks the Court for authority to conduct examination of duly appointed representatives of the Robert R. McCormick Foundation and the Cantigny Foundation, both of which were major stockholders of Tribune Company prior to the merger. The Committee further asks the Court for an order requiring that the Rule 2004 examination be done at the offices of Landis Rath & Cobb LLP, at 919 Market Street, Suite 600, in Wilmington, Delaware, at a mutually convenient time for the Foundations and the Committee. In connection with the examination, the Committee also asks that the Court direct the Foundations to respond fully and completely to the requests for information. "These documents are material and relevant to the Leveraged ESOP Transactions and the Merger," Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, counsel to the Committee, asserts. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Court Okays Assumption of Nielsen Ratings Agreements ---------------------------------------------------------------- Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware authorized Tribune Co. and its affiliates to assume their prepetition agreements with Nielsen and enter into the Global Amendment effective April 1, 2009. Judge Carey further authorized the Debtors and Nielsen to file unredacted versions of the amended Nielsen Agreements and the Global Amendment, under seal. Subsequently, the Debtors filed under seal unredacted versions of the Amended Ratings Services Agreements, Ancillary Agreements and Global Amendment. The Debtors notified the Court that no objection were filed as to the joint motion of for authority to file under seal unredacted versions of certain ratings services agreements, ancillary agreements, and a global amendment of those agreements between the Debtors and The Nielsen Company (US), LLC. The Official Committee of Unsecured Creditors, however, proposed certain revisions to clarify the Settlement and Release Agreement. The revisions provide, among other things, that both the Tribune Parties and Nielsen, on behalf of themselves and their predecessors, waive, abandon and forever release each other from all claims, causes of actions and rights that they may have arising under the Agreements. A full-text copy of the revised Settlement Agreement is available for free at: http://bankrupt.com/misc/Tribune_RevNielsenSettlement.pdf Tribune's broadcasting and entertainment division, including the Broadcast Subsidiaries, own and operate 23 network-affiliated television stations, "superstation" WGN America, and Chicago cable news station CLTV, which together reach more than 80% of television households in the United States. Nielsen is a prominent marketing and media information company, best known for its television ratings services that are an industry norm in broadcasting. Nielsen generates its ratings data primarily through electronic television "set meters," which capture audience behavior data from approximately 25,000 participating households daily. Set meters allow Nielsen to track a program's audience, measuring how long viewers spend with a program and how often they return. Tribune Broadcasting, WGN, and CLTV are each parties to certain prepetition rating services agreements and certain prepetition and postpetition ancillary agreements with Nielsen, which, among other things, enable each of the Tribune Stations to access Nielsen ratings and to analyze audience share rankings. The Nielsen Agreements are comprised of: (i) a Nielsen Station Index Service Agreement and a group of ancillary software license agreements entered by Tribune Broadcasting on behalf of itself and certain of the Tribune Stations; (ii) a National Homevideo Index National Service Agreement and ancillary software license agreements entered into by Tribune Broadcasting and WGN on behalf of themselves and superstation WGN America; and (iii) an NHI Local Service Agreement and ancillary software license agreements entered into by Chicago cable station CLTV. Six of the ancillary agreements, which are included in the Nielsen Agreements, constitute unexpired, prepetition agreements. Kate J. Stickles, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, relates that over the past several months, Tribune Broadcasting, WGN, CLTV, and Nielsen have engaged in discussions regarding their ongoing business relationships, including the bankruptcy proceedings and the impact of declines in advertising revenues and data sampling concerns in certain designated market area markets. As a result of these discussions, the parties have agreed to adjust the rates Nielsen charges for its ratings services for all of the Tribune Stations as part of a global amendment to Nielsen Agreements. Moreover, the Global Amendment includes a provision pertaining to a possible increase in sample sizes in certain local DMA markets. In addition, the Global Amendment extends the terms of all Nielsen Agreements until December 31, 2011, and will be retroactively effective as of April 1, 2009. To effectuate the terms and secure the enhanced economic benefits of the amended Nielsen Agreements for their estates, Tribune Broadcasting, WGN, and CLTV have determined both to amend their Postpetition Ancillary Agreements in the ordinary course of business and to assume the Prepetition Nielsen Agreements, in each case as amended by the Global Amendment. The Tribune Parties and Nielsen have also agreed to a compromise and waiver of certain claims, pursuant to Rule 9019. Specifically, Nielsen has agreed to release: (i) all claims against Tribune Parties arising under the Nielsen Agreements or the Expired Prepetition Ancillary Agreements prior to the Petition Date or on or after the Petition Date but prior to April 1, 2009, but excluding any payments owing to Nielsen for postpetition services; and (ii) all claims whether arising prepetition or postpetition against the Tribune Parties in connection with Tribune Entertainment's agreements with Nielsen -- the TEC Agreements, including any claims in connection with the prepetition or postpetition termination of the TEC Agreements. The Tribune Parties, on behalf of themselves and the Tribune Stations, have agreed to release all claims against Nielsen arising under the Nielsen Agreements or the Expired Prepetition Ancillary Agreements prior to the Petition Date or on or after the Petition Date but prior to April 1, 2009, and specifically including all claims under the avoidance powers codified in Chapter 5 of the Bankruptcy Code for payments made to Nielsen under the Nielsen Agreements, the Expired Prepetition Ancillary Agreements or TEC Agreements, but excluding any credits owing to Tribune Parties arising postpetition for guaranteed sample characteristics and tolerance, as specified in the Nielsen Agreements. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Deutsche Bank Files More Than $1.2 Billion in Claims ---------------------------------------------------------------- Deutsche Bank Trust Company Americas, solely in its capacity as the successor Indenture Trustee, filed proofs of claim totaling more than $1.2 billion on behalf of the holders of the: Indenture Claim Amount ------ ------------ 4.875% Debentures due August 15, 2010 $456,946,875 5.25% Debentures due August 15, 2015 335,486,250 7.25% Debentures due November 15, 2096 148,715,333 7.50% Debentures due July 1, 2023 102,000,520 6.61% Debentures due September 15, 2027 86,270,366 7.25% Debentures due August 1, 2013 83,702,999 5.67% Debentures due December 8, 2008 69,812,899 6.25% Medium Term Notes due November 20, 2026 120,500 Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Names J. Marenhegi as EVP/Sales and Distribution ------------------------------------------------------------ Tribune Company appointed Julio Marenghi as executive vice president/sales and distribution for WGN America. Mr. Marenghi, an industry veteran with more than 30 years of sales experience, will be responsible for leading all top line sales efforts, growing distribution and managing the national cable channel's day-to-day operations. "Julio is a proven leader who understands every facet of the business," said Ed Wilson, president of Tribune Broadcasting. "He's innovative and talented and the strong relationships he's forged across the television advertising industry will serve WGN America well. He's the right guy for this position and his consistently successful record speaks for itself." Prior to joining WGN America, Mr. Marenghi held significant leadership roles at CBS Television Stations. Most recently as president/advertising sales, he was responsible for the strategic management, operation and top line sales of 27 stations. His leadership of local, national and digital sales operations and marketing efforts enabled the station group to increase market share by 10% and improve the revenue rank in all of CBS' top 7 markets. He was also responsible for building the company's first business development and marketing division. "WGN America is a great brand with tremendous potential for growth -- I want to expand our reach and take this operation to the next level," Mr. Marenghi said. "To do that, we must boldly define our brand and give advertisers the kind of customized solutions that best meet their needs in a highly competitive marketplace." Mr. Marenghi's experience also includes serving as president and general manager of CBS' New England triopoly of stations and numerous sales positions at television stations on the east and west coasts. Mr. Marenghi is a Boston native and a die-hard Red Sox fan who says he has recently developed a strong interest in the Chicago Cubs. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRICOM SA: Plan Solicitation Period Extended Until August 31 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has extended Tricom S.A., et al.'s exclusive period to solicit and obtain acceptances of their first amended prepackaged joint plan of reorganization, as amended, until August 31, 2009. A full-text copy of the disclosure statement relating to the Debtor's second amended prepackaged joint plan of reorganization is available at http://bankrupt.com/misc/Tricom.2ndamendedDS.pdf As reported in the Troubled Company Reporter on June 10, 2009, two banks filed objections to the approval of Tricom SA's disclosure statement with respect to its first amended plan, saying that the disclosure statement fails to satisfy the "adequate information" requirement of Section 1125 of the Bankruptcy Code. Banco Multiple Leon, S.A., with asserted claims of not less than $166,019,348, said that the amended plan and disclosure statement do not accurately set forth all of the terms and conditions of the Banco Leon Settlement being discussed between the parties. On the other hand, Richard E. L. Fogerty and G. James Cleaver, the joint official liquidators and recognized foreign representatives of Bancredit Cayman Limited (in official liquidation), the debtor in a Chapter 15 case in the U.S. Bankruptcy Court for the Southern District of New York, said that the Debtors' first amended plan retains many fatal flaws of the original pre-packaged plan and that the disclosure statement is inadequate in terms of describing said flaws. The plan, Bancredit said, still favors the Debtors' existing insiders GFN Parties, former chairman and CEO Manuel Arturo Pellerano Pena, and other affiliated creditors. Yet, Bancredit added, the disclosure statement fails to disclose information on the relationships among these insiders. Even more importantly, Bancredit related that Mr. Pellerano has filed indemnification claims against each Debtor, which, if not otherwise provided for, would present a seemingly insurmountable impediment to the plan's feasibility. About Tricom S.A. Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on February 29, 2008 (Bankr. S.D.N.Y. Case No. 08-10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of $327,600,000 and total debts of $764,600,000. TRILOGY DEVELOPMENT: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- The United States Trustee for the Western District of Missouri informed the U.S. Bankruptcy Court for the Western District of Missouri that it was unable to appoint an official committee of unsecured creditors in the bankruptcy case of Trilogy Development Company, LLC. The U.S. Trustee told the Court it had contacted unsecured creditors, but too few creditors expressed an interest in being appointed to the Committee. Kansas City, Missouri-based Trilogy Development Company, LLC, was founded by advertising magnate Bob Bernstein to build his west edge project. The Company filed for Chapter 11 on May 15, 2009 (Bankr. W.D. Mo. Case No. 09-42219). Jonathan A. Margolies, Esq., and R. Pete Smith, Esq., at McDowell, Rice, Smith & Buchanan represent the Debtor in its restructuring efforts. In its petition, the Debtor disclosed assets and debts ranging from $100 million to $500 million. TROPICANA ENTERTAINMENT: Transfer of Atlantic City Assets Okayed ---------------------------------------------------------------- Judge Judith Wizmur of the U.S. Bankruptcy Court for the District of New Jersey approved the transfer of substantially all of the assets of Debtors Adamar of New Jersey, Inc., and Manchester Mall, Inc., to an assignee of Credit Suisse, as administrative agent for the lenders under the OpCo Credit Agreement, free and clear of all claims, encumbrances and liens. The buyer will be the person or entity designated by Credit Suisse at the closing of the sale upon the direction of certain required lenders and on behalf of secured parties to receive the Tropicana Atlantic City Resort business of the New Jersey Debtors. The Asset Purchase Agreement dated April 29, 2009, among the New Jersey Debtors, the Honorable Gary S. Stein, in his role as conservator of the Adamar Assets, Atlantic-Deauville, Inc., Adamar Garage Corporation, Ramada New Jersey, Inc., and Credit Suisse and all other ancillary documents are approved in all respects. An Auction for the Adamar Assets was set for June 5, 2009. However, no competing Qualified Bids were submitted by the May 29, 2009 bid deadline and thus, the Auction was cancelled. Accordingly, Credit Suisse was determined by the New Jersey Debtors as the successful bidder. The credit bid by Credit Suisse in the amount of $200 million at the direction of the Required Lenders is deemed valid, effective and enforceable pursuant to Section 363 of the Bankruptcy Code. At the Closing of the sale, Credit Suisse, on behalf of the Secured Parties, will surrender a portion of the obligations secured by the OpCo Credit Agreement in the aggregate principal amount of $200,000,000, in exchange for the right to receive the Adamar Assets. The buyers of the Tropicana AC Resort consist of a group of lenders headed by billionaire financier Carl C. Icahn, pressofAtlanticCity.com points out. The other large creditors in the group that won the bid for Tropicana AC Resort are Black Diamond Capital Management of Greenwich, Conn., and Schultze Asset Management LLC of Purchase NY, the Associated Press noted in a separate report. Sale Objections Before the Court entered the sale approval order, the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America; the Casino Reinvestment Development Authority; and the Atlantic City Municipal Utilities Authority presented to the Court their opposition to the sale of the Adamar Assets. The UAW opposed the proposed sale to the extent that it sought to eliminate the purchaser's obligation to bargain collectively with the UAW as the Union is the duly authorized representative for Tropicana Casino and Resort Atlantic City's dealers and slot technicians. The UAW avers that it represents over 700 full and part-time dealers and 23 slot technicians. The Atlantic City Municipal Utilities Authority noted that it provides water and related services to Adamar., and asserted that it is owed $339,641 on account of the water utility accounts of Tropicana AC Resort as of May 4, 2009. The ACMUA is concerned that the New Jersey Debtors have not given it any security on account of postpetition utility usage and have not made any payments on account of postpetition utility usage to date. The ACMUA thus asked the Court to require parties to the Asset Purchase Agreement of the Adamar Assets to fully protect its interest so that it may be paid in full as an allowed secured creditor. For its part, the Casino Reinvestment Development Authority said it cannot confirm if all of its contracts with the New Jersey Debtors are to be assumed and assigned as there is a lack of identifying information with respect to the Contracts. The CRDA objected to the Sale Motion and the proposed contract assumption and assignment to the extent that not all the CRDA Contracts are identified. The CRDA reserved its right to dispute proposed cure amounts. Judge Wizmur ruled that all objections to the Sale Motion that have not been waived, withdrawn or settled are overruled. Contract Assumption & Assignment; Cure Amount Schedules Judge Wizmur further authorized the New Jersey Debtors to assume and assign certain contracts to the Buyer in relation to the sale of the Adamar Assets. At the Closing of the sale, the Buyer will assume full responsibility and liability for all Contracts to be acquired and all Collective Bargaining Agreements. Before the entry of the Sale Order, the New Jersey Debtors filed on May 26, 2009, a schedule of contracts to be acquired in relation to the sale of the Adamar Assets and the related cure amounts due and owing as of the NJ Debtors' Petition Date, a copy of which is available for free at: http://bankrupt.com/misc/TropiA_CureSked052609.pdf Certain creditors have been paid after the Petition Date pursuant to the first day motion orders and thus, certain amounts due and owing under the May 26 Cure Schedule may have been reduced. Certain of the Contracts may also expire in the near term or may have continued on a month-to-month basis since their expiration date and thus, the New Jersey Debtors clarify that the inclusion of any of those Contracts in the Cure Schedule should not be deemed or construed to obligate them to make any cure payments unless mutually agreed by the contract parties. The New Jersey Debtors added that with respect to intercompany commercial real property leases, real estate taxes have been paid to the applicable taxing authorities and will continue to be paid in the ordinary course of business. The New Jersey Debtors also told Judge Wizmur that they are in the process of discussing amendments to leases with California Avenue Ventures, LLC, Luxouri, LLC, et al., BDJM Associates LLC, et al., BW Associates, LP, et al., and Resort SAI Motel, LLC. The Leases may be assumed and assigned in the event the parties mutually agree to new terms. Moreover, the New Jersey Debtors continue to review agreements with Casino Reinvestment Development Authority to discern whether performance with respect to those Agreements have been completed. The New Jersey Debtors reserve the right to remove any agreement, which they determine no longer require further performance, and any lease in the event new terms are not agreed upon. Certain parties objected to the cure amounts listed in the May 26 Cure Schedule, and asserted that the correct cure amounts are: Scheduled Asserted Party Amount Amount ----- ------------ ------------ Alpha Message Center, Inc. $243 $17,636 Bally Gaming, Inc., et al. 524,404 536,505 Chico's FAS, Inc. 9,388 69,383 Konami Gaming, Inc. 492,876 493,571 Otis Elevator Company 28,953 172,652 Swarovski Retail Ventures, Ltd. 15,441 26,674 White House Black Market, Inc. 7,644 17,030 International Game Technology also objected to the incorrect cure amount listed on the Cure Schedule. Representatives of the New Jersey Debtors and IGT are working together to resolve the issue. The Debtors subsequently filed an amended Cure Schedule to reflect agreements reached regarding certain cure objections, clarification of descriptions of certain highlighted agreements, and the removal of duplicate entries or contracts inadvertently included in the May 26 Cure Schedule. The Amended Cure Scheduled is available at no charge at: http://bankrupt.com/misc/TropiA_AmCureSked061109.pdf All changes to the May 26, 2009 Cure Schedule are highlighted. The Cure Schedule does not contain any agreements that the New Jersey Debtors have entered into since the Petition date in the ordinary course of business. Accordingly, Judge Wizmur ruled that after the closing of the Adamar Assets Sale or as soon as practicable, sums required to satisfy all cure amounts with respect to the Contracts to be acquired and CBAs to which any New Jersey Debtor is a counterparty and to which the Buyer has designated for assumption and assignment under the Tropicana Atlantic City APA, and as to which no objections to Cure Amounts set forth in a certain Notice of Intent to Assume have been filed, or to which the New Jersey Debtors and applicable non-Debtor contract or lease party have agreed as to the allowed Cure Amount, will be paid by the New Jersey Debtors from cash on hand. Payment of disputed Cure Amounts, if any, will be subject to further hearing and Court order, Judge Wizmur opined. Upon payment of the Cure Amounts, the New Jersey Debtors will have no further responsibility under any Acquired Contracts or CBAs for any monetary or non-monetary defaults, breaches or other associated damages. Notwithstanding anything to the contrary in the Sale Order, no executory contract or unexpired lease will be assumed and assigned unless and until approved by the New Jersey Court and the occurrence of the Closing. A full-text copy of the Tropicana AC Resort Sale Order is available at no charge at: http://bankrupt.com/misc/TropiA_NJSaleOrder061209.pdf About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENTERTAINMENT: Delaware Debtors to Sign AC Resort Deal ---------------------------------------------------------------- Tropicana Entertainment, LLC, and its debtor affiliates that filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware ask permission from Judge Kevin Carey to: (i) enter into an asset purchase agreement for the sale of the Tropicana Casino and Resort - Atlantic City and related assets, including certain assets of the Delaware Debtors, free and clear of all liens, claims, encumbrances, and interests; (ii) consummate the transactions contemplated in the APA, including the sale of certain of the Delaware Debtors' estate property and resources. The Delaware Debtors also seek authority from the Delaware Court to grant a limited intellectual property license to the purchaser of the Tropicana AC Resort. The Delaware Court confirmed on May 5, 2009, separate Chapter 11 plans proposed by the OpCo Debtors and the LandCo Debtors, both of which comprise the Delaware Debtors. The OpCo Plan specifically contemplates the sale of the Tropicana AC Resort by the OpCo Debtors and the reorganization of the OpCo Debtors' business portfolio without the Tropicana AC Resort as part of their casino operations. Under the OpCo Plan, proceeds from that sale of the Tropicana AC Resort or the amount of a successful credit bid for the Tropicana AC Resort will reduce the principal amount of the OpCo Credit Facility, which is secured by a first lien on substantially all the OpCo Debtors' assets and the Tropicana AC Resort. "Thus, the sale of the Tropicana Atlantic City [Resort] is an important element of the OpCo Debtors' restructuring efforts and is in furtherance of the OpCo Plan," Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, says. Mr. Kaufman relates that the OpCo Debtors acquired their interest in the Tropicana AC Resort in a series of transactions that were initiated in May 2006. On May 16, 2006, non-Debtor affiliate Tropicana Casinos and Resorts, Inc., formerly Wimar Tahoe Corporation, entered into an agreement to purchase Aztar Corporation, a holding company owning five casino properties, including the Tropicana AC Resort. TCR Inc. acquired all of the stock of Aztar Corp. on January 3, 2007. Aztar Corp. was then merged into one of TCR Inc.'s subsidiaries so that it is now a direct subsidiary of Debtor Tropicana Entertainment, LLC, formerly Wimar OpCo LLC. Before the Aztar Acquisition, the Delaware Debtors were granted temporary authority to operate the Tropicana AC Resort through Adamar of New Jersey, Inc., and Manchester Mall, Inc. To obtain interim authorization from the New Jersey Casino Control Commission to continue operations, New Jersey law required the Delaware Debtors to place the stock of Adamar in an interim casino authorization trust. Retired Justice Gary S. Stein was appointed trustee of the ICA Trust. The NJ Commission, however, denied the Delaware Debtors' applications to renew the Adamar license and for plenary qualification, and for TCR Inc.'s application for plenary qualification on December 12, 2007. The NJ Commission's decision was based, in large part, on findings concerning the inability of TCR Inc. and the Delaware Debtors' former officers and directors to operate the Tropicana AC Resort. Simultaneous with the New Jersey License Denial, the NJ Commission instituted a conservatorship and appointed former Justice Stein as conservator of Adamar, in addition to his role as ICA Trustee. Once the ICA Trust became operative, Justice Stein assumed all rights incident to the ownership of the property subject to the ICA Trust and was obligated to exercise all rights of ownership of the Adamar stock, to manage the operations of the Tropicana AC Resort, and to sell or otherwise dispose of all the equity or assets of Adamar. Since then, Justice Stein, in his capacity as trustee and conservator, has been actively overseeing efforts to dispose of the Adamar Assets. By April 29, 2009, Adamar of New Jersey and Manchester Mall filed voluntary bankruptcy petitions in the U.S. Bankruptcy Court for the District of New Jersey. They recently sought and obtained approval from the New Jersey Court for the sale of the Tropicana AC Resort. The Sale includes certain of non-conservatorship sellers' assets connected with the Tropicana AC Resort, including certain real property interests and rights, executory contracts and unexpired leases, and intellectual property rights as they related to the Tropicana AC Resort. Declarations in Support of Request Mark Giannantonio, president, chief operating officer, secretary, and treasurer of Adamar of New Jersey, Inc., and Manchester Mall, Inc., filed a declaration to the Delaware Court supporting the Delaware Debtors' Motion. He relates that at an April 29, 2009 hearing, the NJ Commission issued Resolution No. 09-04-29-14, which (i) approved the final form of the Asset Purchase Agreement of the Adamar Assets, (ii) granted Justice Stein authority to sign the APA and to commence Chapter 11 cases in the New Jersey Bankruptcy Court on behalf of the New Jersey Debtors, and (iii) extended the deadline for Justice Stein to sell the Tropicana Atlantic City through December 31, 2009. Resolution No. 09-04-29-14 also required the parties to file a petition for "Commission Ownership Qualification Ruling" with the NJ Commission in sufficient time for the Commission to have a reasonable opportunity to rule on that petition before the consummation of the OpCo Plan. The OpCo Lenders filed on June 10, 2009, a Qualification Petition with the NJ Commission, setting forth the relevant details regarding two potential ownership structures for the Buyer, according to Mr. Giannantonio. He notes that in one structure, the OpCo Lenders would have the Buyer be a newly formed subsidiary of the Reorganized OpCo Debtors. In the other ownership structure, the OpCo Lenders would acquire and operate Tropicana Atlantic City on a stand-alone basis utilizing a newly formed entity owned by the OpCo Secured Parties, as the holding company of an acquisition subsidiary that would act as the Buyer. The OpCo Lenders also advised the NJ Commission pursuant to the Qualification Petition that they prefer the Buyer to be a newly formed subsidiary of the Reorganized OpCo Debtors. The Qualification Petition is scheduled to be heard by the NJ Commission on July 15, 2009. Scott C. Butera, president, chief executive officer and a member of the board of managers of Tropicana Entertainment LLC and Tropicana Entertainment Holdings LLC also presented to the Delaware Court a declaration in support of the Delaware Debtors' Motion, noting that the Delaware Debtors believe that the best way for them to maximize value for the estates is to ask the Delaware Court, respectfully, to defer to the New Jersey Court's judgment regarding approval of the Adamar Asset Sale and the Asset Purchase Agreement. This would permit the Delaware Debtors to reap the benefits of the process already underway in the New Jersey Court and avoid the costs attendant to having the Delaware Court oversee a separate marketing process, which the Delaware Debtors believe would not be efficient, in light of the marketing efforts the New Jersey Debtors have already undertaken, Mr. Butera says. * * * Judge Carey grants the Delaware Debtors' request. The Delaware Debtors are authorized to consummate the transactions contemplated under the Asset Purchase Agreement for the Adamar Assets, including the granting of the Intellectual Property Licenses to the Buyer. A full-text copy of the Delaware Court's Order on the Adamar Assets Sale is available for free at: http://ResearchArchives.com/t/s?3e4f About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENTERTAINMENT: Yemenidjian to Run Las Vegas Casino ------------------------------------------------------------ The Nevada Gaming Commission has consented to the appointment of Alex Yemenidjian to run the operations of Tropicana Las Vegas Resort & Casino until the Casino's new owners get their licenses, Globest.com reports. Mr. Yemenidjian works for Canadian private equity firm Onex Corp., who is set to take over Tropicana Las Vegas in late 2009. Mr. Yemenidjian is a former MGM Grand executive. Tropicana Entertainment LLC sought bankruptcy protection in May 2008 and sometime after that, Onex created a special purpose entity to acquire more than $200 million of the principal amount of Tropicana's $440 million term loan secured by the Las Vegas Casino unit, Brian K. Miller of Globest.com relates. A Chapter 11 plan for the Las Vegas Casino has been confirmed in May 2009, which provides that secured creditors, including Onex and certain other holders of the $440 million term loan, will receive 100% equity in the Las Vegas Casino property, Mr. Miller states. Mr. Yemenidjian told the Nevada Gaming Control Board in early June 2009 that the new owners intend to invest about $100 million or more for the renovation of the Casino property, according to Globest.com. "We're going to embark on a journey to transform the Tropicana to pre-eminence," the new source quoted Mr. Yemenidjian as saying. not conduct an auction. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRW AUTOMOTIVE: Obtains Covenant Relief Under Credit Facility ------------------------------------------------------------- TRW Automotive Holdings Corp. has finalized an agreement with its lenders of its senior secured credit agreement. The amended $2.5 billion credit agreement is effective June 24, 2009, and includes revised financial covenant ratios beginning with the second quarter of 2009 and continuing through the third quarter of 2011. The Company sought the amendment in response to the current industry conditions including the unprecedented decline in global vehicle production. With 2008 sales of $15.0 billion, TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, operates in 26 countries and employs approximately 61,000 people worldwide. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services. UAL CORP: Nazir May Pursue California Suit if Reversed on Appeal ---------------------------------------------------------------- UAL Corp. and Iftikhar Nazir submitted a form of order to the U.S. Bankruptcy Court for the Northern District of Illinois resolving the matters raised in the Debtors' Motion to Hold in Contempt Mr. Nazir and his Counsel and the Reconsideration Motion, consistent with Judge John W. Darrah of the United States District Court for the Northern District of Illinois's opinion dated October 29, 2008. The parties agreed that Mr. Nazir may not seek or obtain any recovery in the lawsuit he filed in the Superior Court for the State of California based on the conduct of United or its employees before December 9, 2002. However, if the California Lawsuit is reversed on appeal and remanded for trial, he may present evidence regarding his Prepetition Claims to the extent the trial judge in the California Lawsuit deems it relevant to pursue determination of his Postpetition Claims. To the extent that Mr. Nazir's claims are based on conduct by United or its employees that occurred on or after December 9, 2002, he: (i) may continue to prosecute the California Lawsuit in the California state appellate courts until its conclusion; and (ii) may, if the dismissal of the California Lawsuit is reversed on appeal or the California Lawsuit is allowed to proceed in the California trial court, prosecute the California Lawsuit in the California courts to the extent it is based on the Postpetition Claims. If Mr. Nazir should ultimately obtain a final judgment against the Debtors based on his Postpetition Claims, then he will be entitled to recover from the Debtors on the judgment and the judgment will be entitled to treatment as an administrative claim against the Debtors without the need to file any further pleadings or claims in the Bankruptcy Court, notwithstanding Section 1141 of the Bankruptcy Code or United's Confirmed First Amended Plan of Reorganization. Hearings on the Motion to Hold in Contempt and the Reconsideration Motion scheduled in the Debtors' bankruptcy cases June 9, 2009 were also stricken. Judge Wedoff signed the order on June 8, 2009. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 12, 2009, Fitch Ratings has downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp. and its principal operating subsidiary United Airlines, Inc. The downgrade reflects Fitch's view that the airline's credit profile is likely to weaken further, as extreme pressure in the revenue environment continues to undermine the positive cash flow impact of lower jet fuel prices in 2009. UAL CORP: District Court Denies P. Carr Motion for Leave -------------------------------------------------------- Judge John W. Darrah of the U.S. District Court for the Northern District of Illinois affirmed on June 18, 2009, the U.S. Bankruptcy Court for the Northern District of Illinois' decision denying the motion of Phyllis A. Carr for leave to file an untimely appeal. Ms. Carr filed on January 5, 2009, a notice of motion for leave to file late notice of appeal and appeal, and subsequently took an appeal in the United States Court of Appeals for the Seventh Circuit from the dismissal order issued by the District Court on December 30, 2008. Judge Darrah explained that a bankruptcy judge's decision rejecting excusable neglect will be overturned only in extreme cases, when the bankruptcy court has abused its discretion. Judge Darrah stated that while Ms. Carr argued that she was not aware of the full nature of her attorney's illness and trusted that her attorney would assist her with an appeal, Judge Wedoff of the U.S. Bankruptcy Court found the argument unpersuasive and inconsistent with her May 22, 2008 declaration. Even assuming that Ms. Carr was not aware of the full nature of her counsel's illness in May 2008, her declaration clearly shows that she knew at that time her counsel was ill enough to have others handle her cases, Judge Darrah noted. This is sufficient to support Judge Wedoff's decision rejecting excusable neglect, Judge Darrah pointed out. Judge Darrah continued that Judge Wedoff also found that Ms. Carr had sufficient information, before the Bankruptcy Court's July 16, 2008 decision denying her motion to vacate the settlement agreement, to know that she should get another lawyer or proceed pro se with an appeal. In sum, Judge Darrah said, the Bankruptcy Court did not abuse its discretion in rejecting Ms. Carr's assertion of excusable neglect. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 12, 2009, Fitch Ratings has downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp. and its principal operating subsidiary United Airlines, Inc. The downgrade reflects Fitch's view that the airline's credit profile is likely to weaken further, as extreme pressure in the revenue environment continues to undermine the positive cash flow impact of lower jet fuel prices in 2009. UNIVERSAL HOSPITAL: Moody's Affirms 'B2' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Universal Hospital Services, Inc., including the B2 Corporate Family Rating and the B2 Probability of Default Rating. Moody's also affirmed the Speculative Grade Liquidity Rating of SGL-2 and the B3 rating on both the $230 million second lien floating rate notes and the $230 million second lien PIK Toggle notes. The rating outlook remains stable. The B2 Corporate Family Rating reflects UHS' small absolute and relative size, high leverage position, and weak interest coverage. The rating benefits from UHS' leading market position in the medical outsourcing service business, its national footprint, and diverse customer and supplier base. The rating is also supported by UHS' good liquidity position. While UHS has historically generated negative free cash flow, the ratings incorporate Moody's belief that a substantial amount of capital expenditures are discretionary and could be reduced in order to improve cash generation. These ratings were affirmed: -- $230 million second lien floating rate notes due 2015, rated B3 (LGD4, 58%) -- $230 million second lien toggle notes due 2015, rated B3 (LGD4, 58%) -- Corporate Family Rating, B2 -- Probability of Default Rating, B2 -- Speculative Grade Liquidity Rating, SGL-2 The ratings outlook is stable The last rating action was May 14, 2007, when Moody's assigned ratings to UHS. UHS is a leading nationwide provider of medical outsourcing and lifecycle services to the United States health care industry. For the twelve months ended March 31, 2009, the company reported revenues of approximately $288 million. VERMILLION INC: Secures Court OK for Incentive Bonus Plan --------------------------------------------------------- GenomeWeb reports that the U.S. Bankruptcy Court for the District of Delaware has approved an incentive bonus plan, which could result in significantly lower payments to Vermillion, Inc.'s three directors. Court documents say that under the terms of the plan, Vermillion's directors, Gail Page, James Burns, and John Hamilton would be awarded: -- nothing for the first $3 million of any sale of assets or distribution of cash, debt, or equity; -- 6 percent of the total value of the sale of assets or distribution of cash, debt, or equity greater than $3 million but less than or equal to $10 million; and -- 8 percent of the total value of the sale of assets or distribution of cash, debt, or equity greater than $10 million. GenomeWeb relates that Mr. Page would be paid 50% of the total incentive bonus, while Burns and Hamilton would receive 25% each of the bonus, unless the three agree to other conditions. According to GenomeWeb, the terms cover: -- gross proceeds from the sale of any assets; and -- any distribution of cash, debt, or equity if and when Vermillion's reorganization plan is approved. Headquartered in Fremont, California, Vermillion, Inc. -- http://www.vermillion.com/-- engages in the development and commercialization of diagnostic tests to aid physicians diagnose and treat results for patients. The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del. Case No. 09-11091). Francis A. Monaco Jr., Esq., and Mark L. Desgrosseilliers, Esq., at Womble Carlyle Sandridge & Rie, PLLC, represent the Debtor as counsel. At September 30, 2008, the Debtor had $7,150,000 in total assets and $32,015,000 in total liabilities. YOUNG BROADCASTING: Selling Assets to unXis Inc. for $5,250,000 --------------------------------------------------------------- The SCO Group, Inc., disclosed in a filing with the Securities and Exchange Commission that it executed a definitive agreement for the sale of a substantial portion, of its assets and the assignment of certain of its liabilities, to unXis, Inc. The aggregate purchase price is $5,250,000, plus the assumption of certain assumed liabilities. The Company entered into the Agreement with SCO Operations, Inc., and SCO Global, Inc., each a subsidiary of the Company, and unXis, Inc. The agreement is subject to the approval of the U.S. Bankruptcy Court for the Southern District of New York. Pursuant to the Agreement, the sellers agree to sell, at closing under the Agreement, all rights it will require to operate the UNIX business in the future. In addition, the sale will include the Company's equity interests in certain foreign subsidiaries, or alternatively, selected assets of the foreign subsidiaries. Under the Agreement, the Company will retain the UNIX related rights and claims the Company requires to continue pursuing its pending litigation and related claims. The purchase price is payable at closing in the form of a $250,000 cash deposit presently held in escrow by the Company's counsel, a letter of credit for $2,150,000, and a second letter of credit for $2,850,000 required to be posted by the Purchaser as a source of funds to pay, if necessary, Novell's Nov. 20, 2008, judgment against the Company that is under appeal. At closing, the cash deposit is required to be paid to the sellers and the Letter of Credit-Balance may be drawn upon by the sellers. The Letter of Credit-Sun is required to be posted in escrow concurrently with the closing and to be held pending adjudication of the Appeal. If and when monies are determined by final adjudication to be due to Novell on account of the Novell Judgment, the Letter of Credit-Sun is to be drawn upon and applied to the extent necessary to pay Novell the amount determined to be due to Novell on account of the claims underlying the Novell Judgment. If no decision is rendered in connection with the Appeal by August 31, 2009, or if for any reason the Letter of Credit-Sun is not drawn upon December 31, 2009, then, the Letter of Credit-Sun will terminate as of the date, and the Purchaser will have no obligation to pay the portion of the purchase price represented by the Letter of Credit-Sun. If the Appeal is reversed or remanded in whole or in part by no later than August 31, 2009, the Letter of Credit-Sun may not be drawn upon until a final non-appealable judgment is entered on the claims that are the subject of the Novell Judgment; and in the event the Purchaser is granted certain rights with respect to further appellate efforts. Certain assets are excluded from the sale, and retained by the sellers. The excluded or retained assets include, without limitation, the purchase price, the Company's Java Patent and Me Inc. products and business, cash and cash equivalents, accounts receivable, equity interests in subsidiaries other than the particular foreign subsidiaries to be acquired by the Purchaser, contracts other than designated assumed contracts, and certain copyrights, contract rights and litigation rights pertaining to the Company's pending litigation against Novell, IBM, Red Hat, Inc. and AutoZone, Inc. The Retained SCO Rights include rights to assert claims against certain third parties, other than most material customers of unXis, based on allegations that the Linux operating system or use of Linux-based products infringes the Retained SCO Rights. The Retained SCO Rights are subject to releases and covenants not to sue, and to various qualifications and conditions, including transfer rights in favor of the Purchaser upon circumstances stated in the Agreement. The Agreement is subject to various closing conditions, including without limitation, approval by the Bankruptcy Court, and approval of the United States government's Committee on Foreign Investment in the United States. Upon closing, the employment of various employees will be terminated and certain identified employees will be offered employment with the Purchaser. The sellers will be subject to certain non-compete and non-solicitation covenants after closing, and the Company's chief executive officer will be subject to a non-compete agreement. A full-text copy of the PURCHASE AND SALE AGREEMENT is available for free at http://ResearchArchives.com/t/s?3e2b About Young Broadcasting, Inc. Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV - Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV - Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO-TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV- Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Company and its affiliates filed for Chapter 11 protection on February 13, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-10645). Jo Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP, represents the Debtors in their restructuring efforts. Andrew N. Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP, represents the official committtee of unsecured creditors as counsel. The Debtors selected UBS Securities LLC as consultant; Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker chief restructuring officer. The Debtors listed total assets of $575,600,070 and total debts of $980,425,190. WALKER HOMES: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Walker Homes, Inc. 11459 E Troon Vista Drive Scottsdale, AZ 85255 Bankruptcy Case No.: 09-14398 Chapter 11 Petition Date: June 25, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Debtor's Counsel: James Portman Webster, Esq. James Portman Webster, PLLC 935 E Main St, Suite 101 Mesa, AZ 85203 Tel: (480) 964-0141 Fax: (888) 214-8293 Email: jim@jpwlegal.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-14398.pdf The petition was signed by Paul Walker, president of the Company. WOLVERINE TUBE: KPMG LLP Raises Going Concern Doubt --------------------------------------------------- Wolverine Tube, Inc., does not currently have additional borrowing capacity, and future funding requirements with respect to its liquidity requirements could vary materially from the Company's current estimates. "Those matters raise substantial doubt about the Company's ability to continue as a going concern," KPMG, LLP, in Birmingham, Alabama, its independent auditors, said in a report dated June 11, 2009. On April 28, 2009 the Company successfully completed an exchange offer which refinanced approximately $121.6 million 10.5% Senior Notes and 10.5% Senior Exchange Notes with 15% Senior Exchange Notes. The Senior Secured Notes mature in a lump sum on March 31, 2012. After completing this refinancing, the Company had domestic cash balances of approximately $15.0 million on April 28, 2009. The Company believes that its available cash and cash anticipated to be generated through operations is expected to be adequate to fund the Company's liquidity requirements, although there can be no assurances that the Company will be able to generate such cash. Additionally, the Company does not currently have in effect a revolving credit agreement or other capital commitments to supplement its existing cash and anticipated cash resources, if necessary, to meet its liquidity requirements materially in excess of the Company's current expectations. The Company expects to continue to actively manage and optimize its cash balances and liquidity, working capital, operating expenses and product profitability, although there can be no assurances the Company will be able to do so. During 2009, the Company's sources of liquidity are cash and cash equivalents -- approximately $15.0 million of domestic cash as of the closing of the exchange offer -- cash provided by operations and amounts available from foreign subsidiaries. On June 11, 2009, the Company reported its annual results. Net sales for 2008 were $815.8 million versus $1.01 billion in 2007. This 19.3% decrease versus 2007 is primarily the result of the discontinuance of manufacturing certain products at the Company's Decatur, Alabama and Booneville, Mississippi facilities in December 2007 and January 2008, respectively, offset partially by an increase in sales of externally sourced products. The Company posted a net loss of $48.4 million in 2008 compared to $98.2 million in 2007. The net loss applicable to common stockholders in 2008 was $60.3 million compared to a loss of $116.1 million in 2007. The Company had total assets of $237.1 million and $261.2 million in total liabilities, resulting $47.7 million in stockholders' deficit at December 31, 2008. A full-text copy of the Company's report is available at no charge at http://ResearchArchives.com/t/s?3e4d Wolverine Tube, Inc., is a global manufacturer and distributor of copper and copper alloy tube, fabricated products, and metal joining products. XERIUM TECHNOLOGIES: Discloses Terms of CFO Maffucci's Employment ----------------------------------------------------------------- As reported by the Troubled Company Reporter on June 3, 2009, the Board of Directors of Xerium Technologies Inc. appointed on May 27 Mr. Maffucci to the position of Executive Vice President and Chief Financial Officer, effective June 8, 2009, upon the recommendation of Stephen R. Light, President, Chief Executive Officer and Chairman, at which time the Company and Mr. Maffucci agreed to a summary of principal terms of his employment. Under the terms of his employment agreement, Mr. Maffucci will receive a base salary of $415,000, which may be increased for subsequent years at the discretion of the Board of Directors of the Company. Mr. Maffucci is eligible to participate in the in the Company's Performance Award Program for 2009 at a minimum target participation level of 60% of his base salary at the rate in effect on December 31, 2009, prorated from the date of hire of June 8, 2009. The total bonus compensation earned for 2009 shall not be less than 50% of this prorated amount. If, after six months of employment, Mr. Maffucci terminates his employment other than for "good reason", he is entitled to his unpaid salary and benefits through his date of termination. If his employment terminates because of his death or disability, then he is entitled to his earned and unpaid salary through his date of termination and any payout he would have earned under the Company's annual bonus plans for the fiscal year in which the termination occurs, prorated to reflect the number of days that he worked in the fiscal year. In addition, if his employment terminates because of disability, he is entitled to participate in medical/dental benefit plans for 18 months (or such longer period as may be provided in the Company's benefit plans). If the Company terminates his employment for any other reason, or if he terminates his employment for "good reason," then he is entitled to receive his base salary for one year and to participate in medical/dental benefit plans for one year (or such longer period as may be provided in the Company's benefit plans. If any termination occurs within three months prior to or two years following certain specified change of control transactions, then the period of base salary and medical/dental benefit continuation shall be 18 months instead of one year. If the Company terminates his employment for "cause," he is entitled only to payment of his earned and unpaid base salary for the period prior to termination. The employment agreement also imposes non-competition and employee non-solicitation obligations on Mr. Maffucci. If it is determined that any payment or benefit provided to Mr. Maffucci by the Company or any of the Company's subsidiaries will be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, pursuant to the employment agreement the Company will make an additional lump-sum payment to Mr. Maffucci sufficient, after giving effect to all federal, state and other taxes and charges with respect to such payment, to make Mr. Maffucci whole for all taxes imposed under or as a result of Section 4999. On June 8, 2009, the Company granted Mr. Maffucci 112,500 time based restricted stock units under the Company's 2005 Equity Incentive Plan. The Company will issue one share of common stock for each fully vested time based restricted stock unit. With respect to 75,000 of the time-based restricted stock units, the awards will vest in nearly equal installments on the first, second, and third anniversaries of the date of grant. With respect to 37,500 of the time-based restricted stock units, 12,500 will vest on January 3, 2010 and the remaining 25,000 will vest on January 3, 2011. Mr. Maffucci's time-based restricted stock unit awards will vest as long as he continues to be employed by the Company on the applicable vesting dates, and is subject to earlier vesting in certain circumstances. In particular, in the event Mr. Maffucci's employment terminates as a result of a "Change of Control", the entire unvested portion of the award will become vested on the date of termination. If Mr. Maffucci ceases to be employed by the Company prior to a vesting date as a result of resignation, dismissal or any other reason, then the unvested portion of the award will be forfeited automatically. In the event of termination of Mr. Maffucci's employment by the Company other than for "Cause" or termination for "Good Reason", a pro rata percentage of the unvested portion of the award will become vested on the date of termination. On June 8, 2009, the Company also granted Mr. Maffucci 37,500 performance based restricted stock units under the Plan. On each of January 3, 2010 and 2011, 12,500 and 25,000 of the performance based restricted stock units, respectively, will be earned if the Adjusted Fair Market Value of the Company's common stock equals or exceeds the price target established by the Compensation Committee of the Company's Board of Directors prior to the grant date. In the event that the price target is not satisfied on January 3, 2010, but the price target is satisfied on January 3, 2011, the previously unearned portion of the award will become earned. On January 3, 2011, any performance based restricted stock units that have not been earned will be forfeited. Generally, Mr. Maffucci must continue to be employed by the Company through January 3, 2011 in order for any of the earned performance based restricted stock units to vest completely. The Company also issued 60,000 shares of the Company's common stock to Mr. Maffucci on June 8, 2009 in connection with his appointment as the Company's Executive Vice President and Chief Financial Officer. About Xerium Technologies Based on Youngsville, North Carolina, Xerium Technologies Inc. (NYSE: XRM) -- http://www.xerium.com/-- manufactures and supplies two types of consumable products used in the production of paper: clothing and roll covers. With 35 manufacturing facilities in 15 countries around the world, Xerium has approximately 3,700 employees. * * * As related in the Troubled Company Reporter on June 5, 2008, Standard & Poor's Ratings Services affirmed its ratings on Xerium Technologies Inc., including the 'CCC+' corporate credit rating, and removed them from CreditWatch, where they were originally placed with negative implications on March 19, 2008. At the same time, S&P assigned a positive outlook. The TCR on June 9, 2008, reported that Moody's Investors Service revised Xerium Technologies, Inc.'s outlook to positive from negative, upgraded its speculative grade liquidity rating to SGL-3 from SGL-4, and upgraded its probability of default rating to Caa1 from Caa2. At March 31, 2009, Xerium had $760,967,000 in total assets; total current liabilities of $164,079,000, long-term debt, net of current maturities, of $557,596,000, deferred and long-term taxes of $10,900,000, pension, other postretirement and postemployment obligations of $63,621,000, and other long-term liabilities of $4,885,000; resulting in stockholders' deficit of $40,114,000. XERIUM TECHNOLOGIES: Stockholders OK Changes to Incentive Plan -------------------------------------------------------------- Xerium Technologies Inc. reports that on June 9, 2009, at the 2009 Annual Meeting of Stockholders, the Company's stockholders approved Amendment No. 3 to the Company's 2005 Equity Incentive Plan. The Amendment increased the limit on the number of shares of common stock that may be granted as stock awards in 2009 to the Company's Chief Executive Officer to 2,302,178 shares. Amendment No. 3 was approved by the Company's Board of Directors on March 10, 2009. The stockholders also approved: (1) The election of seven directors, all of whom were current directors of the Company prior to the Annual Meeting. The elected directors will serve until the 2010 Annual Meeting of Stockholders, and until their successors are duly elected and qualified, or until their earlier death, resignation or removal: -- Stephen R. Light; -- Jay J. Gurandiano; -- Nico Hansen; -- David G. Maffucci; -- Edward Paquette; -- Michael Phillips; and -- John G. Raos; and (2) The ratification of Ernst & Young LLP as the Company's independent registered public accounting firm for 2009. Ernst & Young LLP served as the Company's independent registered public accounting firm for 2008. About Xerium Technologies Based on Youngsville, North Carolina, Xerium Technologies Inc. (NYSE: XRM) -- http://www.xerium.com/-- manufactures and supplies two types of consumable products used in the production of paper: clothing and roll covers. With 35 manufacturing facilities in 15 countries around the world, Xerium has approximately 3,700 employees. * * * As related in the Troubled Company Reporter on June 5, 2008, Standard & Poor's Ratings Services affirmed its ratings on Xerium Technologies Inc., including the 'CCC+' corporate credit rating, and removed them from CreditWatch, where they were originally placed with negative implications on March 19, 2008. At the same time, S&P assigned a positive outlook. The TCR on June 9, 2008, reported that Moody's Investors Service revised Xerium Technologies, Inc.'s outlook to positive from negative, upgraded its speculative grade liquidity rating to SGL-3 from SGL-4, and upgraded its probability of default rating to Caa1 from Caa2. At March 31, 2009, Xerium had $760,967,000 in total assets; total current liabilities of $164,079,000, long-term debt, net of current maturities, of $557,596,000, deferred and long-term taxes of $10,900,000, pension, other postretirement and postemployment obligations of $63,621,000, and other long-term liabilities of $4,885,000; resulting in stockholders' deficit of $40,114,000. XM SATELLITE: Raise in Offering Won't Affect Moody's 'Caa1' Rating ------------------------------------------------------------------ Moody's Investors Service said that the Caa1 rating on XM Satellite Radio Inc.'s proposed senior secured notes is not affected by the increase in the size of the offering to $526 million from $350 million. XM Radio will utilize the incremental proceeds to replace the $150 million second lien term loan commitment (currently undrawn) with Liberty Media Corporation. The increase in the note offering eliminates uncertainty that the borrowing conditions on the second lien term loan would be met including the minimum cash and EBITDA covenants. XM Radio will no longer have any maintenance financial covenants upon completion of the offering and the repayment/termination of its existing credit facilities/second lien term loan commitment. The second term loan was originally put in place to fund a portion of XM Satellite Radio Holdings Inc.'s 10% convertible notes due December 2009 that the company now plans to partially fund with the incremental proceeds from the upsize in the note offering. LGD Updates: Issuer: XM Satellite Radio Inc. -- $526 Million Senior Secured Bonds (upsized from $350 Million), Changed to LGD2 - 26% from LGD2 - 23% (no change to Caa1 rating) Issuer: Sirius XM Radio Inc. -- $250 Million Senior Secured Bank Credit Facility, Changed to LGD2 - 26% from LGD2 - 23% (no change to Caa1 rating) Moody's has revised the loss given default point estimate to LGD2 - 26% from LGD2 - 23% on XM Radio's new $526 million senior secured notes due 2013 and Sirius XM Radio Inc.'s $250 million senior secured term loan to reflect the increase in the size of the first lien secured debt in the consolidated waterfall. Sirius XM's Ca Corporate Family Rating, Caa3 Probability of Default Rating, and SGL-3 speculative-grade liquidity rating and the senior unsecured note ratings and loss given default assessments for Sirius XM and XM Holdings are not affected. The last rating action was on June 23, 2009, when Moody's assigned a Caa1 rating to XM Radio's new notes and upgraded Sirius XM's speculative-grade liquidity rating to SGL-3 from SGL-4. Sirius XM's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (iii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Sirius XM's core industry and believes Sirius XM's ratings are comparable to those of other issuers with similar credit risk. Sirius XM Radio Inc., headquartered in New York, NY, is a provider of subscription-based satellite radio services. Annual revenue is approximately $2.4 billion. YRC WORLDWIDE: To Begin Talks with Teamsters; Seeks CBA Changes --------------------------------------------------------------- YRC Worldwide Inc. said last week it will begin discussions with the International Brotherhood of Teamsters to seek to modify the terms of the current labor agreement for its employees covered by the National Master Freight Agreement. The discussions will address alternatives to help to reduce the company's cost structure and preserve operating capital going forward. Bill Zollars, Chairman, President and CEO of YRC Worldwide, said, "Entering into discussions with the Teamsters is another important step in our overall plan to strengthen our financial position during this difficult economic climate. We have made progress with various stakeholders, including our pension plan trustees and our bank lending group, to modify agreements, and we are grateful to the Teamsters for their willingness to consider further adjustments to our contracts to help reduce our cost structure and enable us to be competitive with others in our industry." As reported by the Troubled Company Reporter on June 26, 2009, YRC Worldwide subsidiaries YRC Inc., USF Holland Inc., USF Reddaway Inc., and New Penn Motor Express, Inc., have entered into a Contribution Deferral Agreement with the Central States, Southeast and Southwest Areas Pension Fund and Wilmington Trust Company, as agent. The Central States Pension Fund is the largest of the Company's International Brotherhood of Teamsters multiemployer defined benefit pension funds, representing roughly 58% of the company's pension funding obligations. Other IBT pension funds may execute a joinder agreement to become a party to the Contribution Deferral Agreement. The Central States Pension Fund agreed that the Primary Obligors could defer the payment to it of roughly $83 million of contributions (that were originally due on or before June 15, 2009. The Company also said it is working to finalize discussions with other Funds to defer roughly $50 million of contributions owed to such Funds and have such Funds agree to the terms of the Contribution Deferral Agreement. As other Funds become a party to the Contribution Deferral Agreement, the amount of Deferred Pension Payments would increase by the second quarter 2009 contributions due to those Funds. The Funds also agreed that the deferral of Obligations would not be used in any determination that any Obligor or any ERISA affiliate has incurred complete or partial withdrawal from any such Funds or is otherwise subject to withdrawal liability. The company also obtained an amendment to its bank agreement, which provides for the immediate release of escrow funds generated from the company's prior real estate transactions to pay down the revolving credit facility without reducing the company's borrowing availability under the facility. About YRC Worldwide Overland Park, Kansas-based YRC Worldwide Inc. (NASDAQ: YRCW) is a holding company that through wholly owned operating subsidiaries offers its customers a wide range of transportation services. The services include global, national and regional transportation as well as logistics. Its operating subsidiaries include YRC National Transportation; YRC Regional Transportation; YRC Logistics; and YRC Truckload. At March 31, 2009, about 70% of the Company's labor force is subject to collective bargaining agreements, which predominantly expire in 2013. At March 31, 2009, the Company had $3,674,725,000 in total assets and $3,467,190,000 in total liabilities. As reported by the Troubled Company Reporter on May 20, 2009, Standard & Poor's Ratings Services maintained its 'CCC' long-term corporate credit rating on YRC Worldwide Inc. on CreditWatch with negative implications. S&P had revised the CreditWatch implications to negative from positive on April 24, 2009, reflecting concerns that the company may not be able to meet its amended bank covenants. * Focus Awarded for CRO Role in Archway Bankruptcy -------------------------------------------------- Focus Management Group has been awarded the Food & Beverage Sector Deal of the Year by the M&A Global Network, for its role as Chief Restructuring Officer in the Chapter 11 bankruptcy filing of Archway & Mother's Cookie Company. Archway, a leading cookie manufacturer, and its subsidiaries were led through a successful Chapter 11 filing and subsequent sale by Managing Director Jeff Granger, a restructuring specialist with extensive leadership experience in Chapter 11 reorganizations. "We are honored that we were recognized for our accomplishments in this transaction," said President J. Tim Pruban. "The success of the Archway engagement clearly demonstrated the expertise of our firm's professionals in bankruptcy management." The M&A Global Network announced the winners of the Turnaround Atlas Awards at a gala dinner on June 22, 2009 in Chicago, Illinois. About Focus Management Group Focus Management Group provides nationwide professional services in turnaround management, insolvency proceedings, business restructuring and operational improvement with a senior-level team of 120 professionals. Headquartered in Tampa, Florida, with offices in Atlanta, Chicago, Cleveland, Greenwich, Los Angeles and Nashville, the firm provides a full portfolio of services to distressed companies and their stakeholders, including secured lenders and equity sponsors. * Five Banks Shuttered; Failed Banks Rise to 45 in 2009 ------------------------------------------------------- Bank closures have reached 45 after five banks -- Mirae Bank, Los Angeles; MetroPacific Bank, Irvine, California; Horizon Bank, Pine City, Minnesota; Neighborhood Community Bank, Newnan, Georgia; and Community Bank of West Georgia, Villa Rica, Georgia, -- were closed June 26. In accordance with Federal law, allowed claims against failed financial institutions will be paid, after administrative expenses, in this order of priority: 1. Depositors 2. General Unsecured Creditors 3. Subordinated Debt 4. Stockholders According to Bloomberg News, regulators have seized the most U.S. banks this year since 1993. The Summer 2009 issue of Supervisory Insights released by the FDIC on June 16, 2008, said the U.S. financial services industry experience a crisis in 2008, with these challenges continuing during the first half of 2009. In 2008, U.S. financial regulatory agencies extended $6.8 trillion in temporary loans, liability guarantees and asset guarantees in support of financial services. By the end of the first quarter of 2009, the maximum capacity of new government financial support programs in place, or announced, exceeded $13 trillion. Bear Stearns was the first large investment bank to be acquired by a bank holding company during 2008. Of the other four largest investment banks in the United States, one would fail and the others would be acquired by, or become, bank holding companies. In 2008, 25 banks with total assets of $372 billion failed. IndyMac Bank, FSB, was closed by the Office of Thrift Supervision on July 11, and the FDIC was named conservator. At the time it was closed, IndyMac's assets of $32 billion made it the second largest bank failure in FDIC history. By the end of the first quarter of 2009, the maximum capacity of new government financial support programs in place, or announced, exceeded $13 trillion. A copy of the Supervisory Insights is available for free at: http://bankrupt.com/misc/FDIC_SI_Summer2009.pdf Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks: Buyer's FDIC Cost Assumed to Insurance Deposits Fund Closed Bank Buyer (millions) (millions) ----------- ---- -------- ----- Mirae Bank Wilshire State Bank $362.0 $50.0 Metro Pacific Bank Sunwest Bank, Tustin $67.0 $29.0 Horizon Bank Stearns Bank, N.A. $69.4 $33.5 Neighborhood Comm CharterBank, West Point $191.3 $66.7 Community Bank -- None -- - - First National Bank Bank of Kansas $142.5 $32.2 Cooperative Bank First Bank, Troy, N.C. $717.0 $217.0 Southern Community United Community $307.0 $114.0 Bank of Lincolnwood Republic Bank, Chicago $202.0 $83.0 Citizens National Morton Community $200.0 $106.0 Strategic Capital Midland States Bank $471.0 $173.0 BankUnited FSB WL Ross-Led Investors $8,300.0 $4,900.0 Westsound Bank Kitsap Bank $295.1 $108.0 America West Cache Valley Bank $284.1 $119.4 Citizens Community N.J. Community Bank $43.7 $18.1 Silverton Bank -- No Buyer -- - $1,300.0 First Bank of Id US Bank, Minneapolis $261.2 $191.2 First Bank of BH -- No Buyer -- - $394.0 Heritage Bank Level One Bank $101.7 $71.3 American Southern Bank of North Georgia $55.6 $41.9 Great Basin Bank Nevada State Bank $221.4 $42.0 American Sterling Metcalf Bank, Lee Summit $171.9 $42.0 New Frontier Bank -- No Buyer -- - $670.0 Cape Fear Bank First Federal, Charleston $403.0 $131.0 Omni National -- No Buyer -- - $290.0 TeamBank, N.A. Great Southern Bank $474.0 $98.0 Colorado National Herring Bank, Amarillo, TX $82.7 $9.0 FirstCity Bank -- No Buyer -- - $100.0 Freedom Bank Nat'l Georgia Bank, Lavonia $161.0 $36.2 Security Savings Bank of Nevada, L.V. $175.2 $59.1 Heritage Community MB Financial Bank, N.A. $218.6 $41.6 Silver Falls Citizens Bank $116.3 $50.0 Pinnacle Bank Washington Trust Bank $64.0 $12.1 Corn Belt Bank Carlinville Nat'l Bank $142.4 $100.0 Riverside Bank TIB Bank $281.4 $201.5 Sherman County Heritage Bank $85.1 $28.0 County Bank Westamerica Bank $1,300.0 $135.0 Alliance Bank California Bank & Trust $951.0 $206.0 FirstBank Regions Bank $279.0 $111.0 Ocala National CenterState Bank $205.2 $99.6 Suburban Federal Bank of Essex $302.0 $126.0 MagnetBank -- No Buyer -- - $119.4 1st Centennial First California Bank $302.1 $227.0 Bank of Clark Umpqua Bank $523.6 $120-145 Nat'l Commerce Republic Bank of Chicago $402.1 $97.1 A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html 305 Banks in Problem List No advance notice is given to the public when a financial institution is closed. The FDIC has a "problem list" of banks, although the list is not divulged to the public. The FDIC said on May 27 that the number of banks and savings institutions in its "Problem List" increased to 305 from 252 at the end of 2008. The 305 banks and thrifts have combined assets of $220 billion, according to the FDIC's quarterly banking profile. The 252 insured institutions with combined assets of $159 billion on the FDIC's "Problem List" as of year-end was already the largest since the middle of 2005. The Problem List had 171 institutions with $116 billion in assets at the end of the third quarter, and 76 institutions with $22 billion in assets at the end of 2007. "Problem" institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. They are rated by the FDIC or Office of the Thrift Supervision as either a "4" or "5", based on a scale of 1 to 5 in ascending order of supervisory concern. The Problem List is not divulged to the public. No advance notice is given to the public when a financial institution is closed. Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ Q1'09 305 $220,047 21 $9,498 2008 252 159,405 25 371,945 2007 76 22,189 3 2,615 2006 50 8,265 0 0 2005 52 6,607 0 0 2004 80 28,250 4 170 A copy of the FDIC's Quarterly Banking Profile for the first quarter of 2009 is available for free at: http://bankrupt.com/misc/FDIC_Mar3109_QBP.pdf * GASB Issues 2 EDs on OPEB Measurements, Chapter 9 Bankruptcies ---------------------------------------------------------------- The Governmental Accounting Standards Board issued two Exposure Drafts of proposed Statements, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans, and Accounting and Financial Reporting for Chapter 9 Bankruptcies. The EDs contain proposals intended to improve consistency in the financial reporting and the measurement of retiree health insurance and other postemployment benefits and the effects of Chapter 9 bankruptcy. Users and preparers of state and local governmental financial reports are encouraged to review and provide comment on the proposed Statements. The proposed Statement on OPEB measurements addresses issues related to measurement of OPEB obligations by employers participating in agent multiple-employer OPEB plans, and would amend Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. (In agent multiple-employer plans, separate liabilities are calculated and separate asset accounts are kept for each participating government, rather than being administered and accounted for as a single plan as is done in a cost-sharing plan.) Specifically, it addresses the circumstances in which certain agent employers are eligible to use the alternative measurement method; the requirement that a defined benefit OPEB plan obtain an actuarial valuation; and requirements in Statements 43 and 45 regarding the frequency and timing of determining OPEB measures by agent multiple-employer plans and participating employers. The proposed Statement on Chapter 9 bankruptcies would provide guidance for state and local governments that have petitioned for protection from creditors by filing for bankruptcy under Chapter 9 of the United States Bankruptcy Code. It would establish requirements for recognizing and measuring the effects of the bankruptcy process on assets and liabilities, and for classifying changes in those items and related costs. "With the current economic environment putting stress on state and local government resources, it became necessary for the GASB to address the financial reporting issues associated with local governments filing for bankruptcy protection under Chapter 9," said Robert Attmore, chairman of the GASB. "By issuing these EDs, the GASB is directly addressing issues raised by practitioners and users of governmental financial statements," stated Mr. Attmore. "We encourage constituents of the GASB to review the proposals and provide their feedback." The EDs can be downloaded free of charge at http://www.gasb.org/exp The deadline for written comments on both documents is August 28, 2009. About the Governmental Accounting Standards Board The Governmental Accounting Standards Board -- http://www.gasb.org/-- is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board's diverse constituency, including preparers and auditors of government financial statements, users of those statements, and members of the academic community. * Towers Perrin and Watson Wyatt Combine to Form Towers Watson -------------------------------------------------------------- Towers, Perrin, Forster & Crosby, Inc. and Watson Wyatt Worldwide, Inc. (NYSE, NASDAQ: WW) said their respective Boards of Directors have unanimously approved a definitive agreement under which Towers Perrin and Watson Wyatt will combine in a merger of equals to form a new, publicly listed company called Towers Watson & Co. Based on the closing price of Watson Wyatt common stock on June 26, 2009, the implied equity value of the transaction is approximately $3.5 billion. Watson Wyatt Chief Executive Officer John Haley will serve the combined company as Chief Executive Officer; Towers Perrin Chief Executive Officer Mark Mactas will serve as President. "The combination of Towers Perrin and Watson Wyatt into Towers Watson will create one of the world's leading professional services firms, well positioned for sustained growth and profitability across all geographies and business segments," said Mr. Haley. "The combination will further strengthen our core service lines while offering our clients an enhanced portfolio of proven offerings across a range of financial, risk and people management areas. Towers Watson will have tremendous global reach and service breadth to meet the growing needs of the world's largest multinational corporations. As we provide more value for our clients, we in turn create value for our people and our shareholders." Mark Mactas, Chief Executive Officer of Towers Perrin, said, "This is an important transaction for our respective organizations that positions us well for a future of accelerated growth and higher levels of profitability. The fit between our firms is excellent, starting with a deep commitment to client service and shared values of integrity, professionalism and respect. Our service lines and geographic strengths are also highly complementary, which creates great opportunities for growth. We couldn't be more excited about this combination, which will change the landscape of our industry." Towers Watson, which is expected to have annual revenues in excess of $3 billion, will benefit from the scale of the combined companies and anticipates approximately $80 million in pretax annual synergies. While significant savings are expected during the first two years following completion of the transaction, it is anticipated that full realization of synergies will take three years and cost approximately $80 million. Towers Watson will also have significant non-cash expenses during the first two years following completion of the transaction. The transaction is expected to be accretive to diluted earnings per share within three years following the consummation of the transaction. Strategic & Financial Benefits of the Transaction * Strengthened Organizational Capabilities: Towers Watson will be stronger than the sum of its parts, positioned for industry leadership long into the future and a more effective competitor that can provide additional services to our existing and prospective clients. * Expanded Global Presence with Geographically Diverse Revenue Base: The combination will expand global footprint to optimize service, global reach, and seamless delivery for clients. Towers Watson will operate within four geographic regions: North America, EMEA (Europe, Middle East and Africa), Asia-Pacific, and Latin America. * Enhanced Products and Services: Towers Watson will focus its operations on three segments: Benefits, Talent and Rewards, and Risk and Financial Services. These will build on existing thought leadership and research, and will be supported by a more comprehensive set of services, from strategic advice to solutions and implementation. Towers Watson believes that these benefits will lead to: * Increased Growth and Revenue: For shareholders, the firm expects to deliver economies of scale, diversification of current businesses, and increased growth and investment potential. * Greater Depth of Talent for Clients: the firm expects to provide broader solutions and a deeper talent pool across a wider geographic footprint. * Greater Opportunities for its People: For the firm's people, there will be an expanded set of career opportunities, a stronger brand, greater access to resources, and a broader network of colleagues. * Increased Profitability through Operating Synergies: Towers Watson expects to have an annual earnings before interest, taxes, depreciation and amortization margin of 17%+ post- integration. The firm expects $80 million potential cost synergies on a year three run rate, with $80 million in expected one-time costs Transaction Terms Under the terms of the agreement, Watson Wyatt shareholders will be entitled to receive 50% of the combined company's shares on a fully diluted basis. Towers Watson shares issued to Watson Wyatt shareholders in the merger will be freely tradable. Towers Perrin shareholders, who are all active employees of Towers Perrin, plus a group of Towers Perrin employees to be designated to receive certain equity incentive awards, will be entitled to receive fifty percent of the combined company's shares on a fully diluted basis. Towers Watson shares issued to Towers Perrin shareholders will be restricted shares that become freely tradable over a period of one to four years. Conference Call Webcast & Conference Call Today The companies will host a live webcast and conference call on Monday, June 29, 2009 beginning at 8:30 a.m. Eastern Time to discuss the transaction. The webcast can be accessed via the Internet by going to the Investor Relations section of http://www.watsonwyatt.com/ A replay will be available after the live call and may be accessed via either company's Web site at http://www.towersperrin.com/or http://www.watsonwyatt.com/ Approvals and Time to Close The transaction is subject to approval by each company's shareholders and the satisfaction of customary closing conditions and regulatory review and approvals, including competition reviews in the U.S. and other countries. Subject to satisfaction of these conditions, the companies anticipate a shareholder vote in the fourth quarter of 2009 and a closing date as soon as possible thereafter. Advisors Goldman, Sachs & Co. is acting as financial advisor and Milbank, Tweed, Hadley & McCloy LLP is acting as legal advisor to Towers Perrin. Banc of America Merrill Lynch Securities is acting as financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal advisor to Watson Wyatt. About Towers Perrin Towers Perrin is a global professional services firm that helps organizations improve performance through effective people, risk and financial management. Towers Perrin has 6,300 employees located in 26 countries. About Watson Wyatt Watson Wyatt's (NYSE, NASDAQ: WW) global services include managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 7,700 associates in 34 countries. * BOND PRICING -- For the Week From June 22 to 26, 2009 ------------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- ACCURIDE CORP 8.50% 2/1/2015 35.00 ADVANTA CAP TR 8.99% 12/17/2026 19.40 AHERN RENTALS 9.25% 8/15/2013 40.50 ALERIS INTL INC 9.00% 12/15/2014 1.00 ALERIS INTL INC 10.00% 12/15/2016 3.50 ALLIED CAP CORP 6.63% 7/15/2011 53.25 AMBASSADORS INTL 3.75% 4/15/2027 31.45 AMBASSADORS INTL 3.75% 4/15/2027 30.00 AMER AXLE & MFG 5.25% 2/11/2014 29.50 AMER GENL FIN 3.05% 6/15/2010 60.50 AMER GENL FIN 3.10% 7/15/2009 95.00 AMER GENL FIN 4.00% 8/15/2009 91.75 AMER GENL FIN 4.10% 5/15/2010 70.68 AMER GENL FIN 4.20% 8/15/2009 95.00 AMER GENL FIN 4.20% 10/15/2010 45.00 AMER GENL FIN 4.25% 10/15/2010 59.00 AMER GENL FIN 4.30% 9/15/2009 89.50 AMER GENL FIN 4.40% 4/15/2012 38.00 AMER GENL FIN 4.50% 7/15/2009 96.60 AMER GENL FIN 4.50% 9/15/2009 93.22 AMER GENL FIN 4.50% 3/15/2010 60.00 AMER GENL FIN 4.50% 11/15/2010 55.96 AMER GENL FIN 4.55% 10/15/2009 80.00 AMER GENL FIN 4.60% 10/15/2010 45.00 AMER GENL FIN 4.63% 3/15/2012 43.62 AMER GENL FIN 4.95% 11/15/2010 62.00 AMER GENL FIN 5.00% 6/15/2010 60.50 AMER GENL FIN 5.00% 9/15/2010 70.16 AMER GENL FIN 5.00% 10/15/2010 62.36 AMER GENL FIN 5.00% 11/15/2010 54.50 AMER GENL FIN 5.00% 12/15/2010 63.00 AMER GENL FIN 5.00% 12/15/2010 65.31 AMER GENL FIN 5.00% 6/15/2011 55.00 AMER GENL FIN 5.00% 10/15/2011 40.00 AMER GENL FIN 5.20% 6/15/2010 70.15 AMER GENL FIN 5.20% 9/15/2010 45.00 AMER GENL FIN 5.25% 7/15/2010 55.00 AMER GENL FIN 5.25% 12/15/2012 25.00 AMER GENL FIN 5.40% 6/15/2011 53.79 AMER GENL FIN 5.40% 5/15/2013 30.00 AMER GENL FIN 5.45% 9/15/2009 92.00 AMER GENL FIN 5.50% 12/15/2010 63.51 AMER GENL FIN 5.85% 9/15/2012 40.00 AMER GENL FIN 6.25% 7/15/2011 57.51 AMER GENL FIN 6.50% 6/15/2015 15.00 AMER GENL FIN 7.75% 9/15/2010 47.89 AMER GENL FIN 8.00% 8/15/2010 72.00 AMER GENL FIN 8.15% 8/15/2011 52.78 AMER MEDIA OPER 8.88% 1/15/2011 60.38 AMR CORP 9.20% 1/30/2012 48.00 ANTHRACITE CAP 11.75% 9/1/2027 16.50 ANTHRACITE CAP 11.75% 9/1/2027 18.01 ANTIGENICS 5.25% 2/1/2025 25.50 APPLETON PAPERS 9.75% 6/15/2014 35.50 ARCO CHEMICAL CO 10.25% 11/1/2010 32.00 BALLY TOTAL FITN 13.00% 7/15/2011 2.00 BANK NEW ENGLAND 8.75% 4/1/1999 10.13 BANK NEW ENGLAND 9.88% 9/15/1999 10.75 BANKUNITED FINL 3.13% 3/1/2034 6.38 BARRINGTON BROAD 10.50% 8/15/2014 33.50 BELL MICROPRODUC 3.75% 3/5/2024 24.50 BLOCKBUSTER INC 9.00% 9/1/2012 49.00 BORDEN INC 8.38% 4/15/2016 18.00 BORDEN INC 9.20% 3/15/2021 24.75 BOWATER INC 6.50% 6/15/2013 12.00 BOWATER INC 9.38% 12/15/2021 17.00 BOWATER INC 9.50% 10/15/2012 14.00 BRODER BROS CO 11.25% 10/15/2010 30.13 BROOKSTONE CO 12.00% 10/15/2012 44.33 CALLON PETROLEUM 9.75% 12/8/2010 49.00 CAPMARK FINL GRP 7.88% 5/10/2012 26.38 CAPMARK FINL GRP 8.30% 5/10/2017 26.00 CARAUSTAR INDS 7.25% 5/1/2010 56.88 CCH I LLC 9.92% 4/1/2014 0.75 CCH I LLC 10.00% 5/15/2014 0.75 CCH I LLC 11.13% 1/15/2014 0.75 CCH I LLC 11.75% 5/15/2014 0.50 CCH I LLC 12.13% 1/15/2015 1.06 CCH I LLC 13.50% 1/15/2014 1.75 CCH I/CCH I CP 11.00% 10/1/2015 12.00 CCH I/CCH I CP 11.00% 10/1/2015 12.00 CHAMPION ENTERPR 2.75% 11/1/2037 12.00 CHARTER COMM HLD 10.00% 5/15/2011 1.00 CHARTER COMM INC 6.50% 10/1/2027 22.50 CHENIERE ENERGY 2.25% 8/1/2012 32.00 CIT GROUP INC 4.50% 7/15/2009 91.00 CIT GROUP INC 4.85% 12/15/2011 40.00 CIT GROUP INC 6.00% 7/15/2009 96.48 CIT GROUP INC 6.88% 11/1/2009 96.70 CITADEL BROADCAS 4.00% 2/15/2011 7.00 CLEAR CHANNEL 4.40% 5/15/2011 40.00 CLEAR CHANNEL 4.50% 1/15/2010 60.50 CLEAR CHANNEL 5.00% 3/15/2012 32.50 CLEAR CHANNEL 5.50% 9/15/2014 21.06 CLEAR CHANNEL 5.75% 1/15/2013 20.55 CLEAR CHANNEL 6.25% 3/15/2011 40.00 CLEAR CHANNEL 7.65% 9/15/2010 55.50 CLEAR CHANNEL 10.75% 8/1/2016 30.00 CLEAR CHANNEL 10.75% 8/1/2016 30.25 COMPREHENS CARE 7.50% 4/15/2010 75.25 COMPUCREDIT 3.63% 5/30/2025 34.15 CONEXANT SYSTEMS 4.00% 3/1/2026 41.00 CONSTAR INTL 11.00% 12/1/2012 8.00 COOPER-STANDARD 7.00% 12/15/2012 10.00 COOPER-STANDARD 8.38% 12/15/2014 11.00 CREDENCE SYSTEM 3.50% 5/15/2010 31.25 CXW-CALL07/09 7.50% 5/1/2011 100.00 DAYTON SUPERIOR 10.00% 9/30/2029 17.00 DAYTON SUPERIOR 13.00% 6/15/2009 20.62 DECODE GENETICS 3.50% 4/15/2011 5.00 DECODE GENETICS 3.50% 4/15/2011 6.50 DELPHI CORP 8.25% 10/15/2033 0.13 DEX MEDIA INC 8.00% 11/15/2013 11.63 DEX MEDIA INC 9.00% 11/15/2013 8.00 DEX MEDIA INC 9.00% 11/15/2013 12.00 DEX MEDIA WEST 8.50% 8/15/2010 67.00 DEX MEDIA WEST 9.88% 8/15/2013 13.25 DOWNEY FINANCIAL 6.50% 7/1/2014 7.50 DUNE ENERGY INC 10.50% 6/1/2012 57.00 EDDIE BAUER HLDG 5.25% 4/1/2014 10.00 ENERGY PARTNERS 8.75% 8/1/2010 35.00 EPIX MEDICAL INC 3.00% 6/15/2024 19.13 FAIRPOINT COMMUN 13.13% 4/1/2018 20.00 FIBERTOWER CORP 9.00% 11/15/2012 41.50 FINLAY FINE JWLY 8.38% 6/1/2012 2.00 FIRST DATA CORP 5.63% 11/1/2011 45.75 FLEETWOOD ENTERP 14.00% 12/15/2011 29.00 FORD MOTOR CRED 5.20% 7/20/2009 96.00 FRANKLIN BANK 4.00% 5/1/2027 1.25 FRONTIER AIRLINE 5.00% 12/15/2025 8.00 GENCORP INC 4.00% 1/16/2024 83.38 GENERAL MOTORS 7.13% 7/15/2013 11.25 GENERAL MOTORS 7.40% 9/1/2025 11.25 GENERAL MOTORS 7.70% 4/15/2016 12.50 GENERAL MOTORS 8.10% 6/15/2024 10.90 GENERAL MOTORS 8.25% 7/15/2023 11.75 GENERAL MOTORS 8.38% 7/15/2033 13.20 GENERAL MOTORS 8.80% 3/1/2021 11.25 GENERAL MOTORS 9.40% 7/15/2021 11.25 GENERAL MOTORS 9.45% 11/1/2011 10.00 GEORGIA GULF CRP 7.13% 12/15/2013 26.00 GGP LP 3.98% 4/15/2027 37.25 GMAC LLC 5.10% 7/15/2009 98.00 GMAC LLC 5.25% 7/15/2009 98.50 GMAC LLC 5.25% 8/15/2009 96.00 GMAC LLC 6.30% 7/15/2009 84.50 GMAC LLC 6.60% 7/15/2009 97.50 GMAC LLC 6.65% 7/15/2009 92.76 GMAC LLC 6.70% 7/15/2009 98.27 GMAC LLC 6.80% 12/15/2009 86.00 GMAC LLC 7.13% 8/15/2009 96.00 GOLDMAN SACHS 1.50% 7/22/2009 96.67 HAIGHTS CROSS OP 11.75% 8/15/2011 35.00 HARRY & DAVID OP 9.00% 3/1/2013 39.25 HAWAIIAN TELCOM 9.75% 5/1/2013 3.00 HEADWATERS INC 2.88% 6/1/2016 54.25 HERTZ CORP 9.00% 11/1/2009 89.13 HINES NURSERIES 10.25% 10/1/2011 14.00 IDEARC INC 8.00% 11/15/2016 2.50 INN OF THE MOUNT 12.00% 11/15/2010 37.63 INTCOMEX INC 11.75% 1/15/2011 40.38 INTERDENT SVC 10.75% 12/15/2011 52.40 INTL LEASE FIN 3.25% 2/15/2010 65.00 INTL LEASE FIN 4.70% 8/15/2009 96.00 INTL LEASE FIN 4.85% 8/15/2009 94.01 INTL LEASE FIN 4.85% 9/15/2010 67.00 INTL LEASE FIN 5.00% 6/15/2012 43.25 INTL LEASE FIN 7.25% 2/15/2010 78.00 ISTAR FINANCIAL 5.13% 4/1/2011 59.99 ISTAR FINANCIAL 5.13% 4/1/2011 57.88 ISTAR FINANCIAL 5.80% 3/15/2011 60.50 JAZZ TECHNOLOGIE 8.00% 12/31/2011 35.00 JEFFERSON SMURFI 7.50% 6/1/2013 32.50 JEFFERSON SMURFI 8.25% 10/1/2012 36.00 KAISER ALUM&CHEM 12.75% 2/1/2003 7.00 KELLWOOD CO 7.63% 10/15/2017 19.00 KELLWOOD CO 7.88% 7/15/2009 96.50 KEMET CORP 2.25% 11/15/2026 40.25 KEMET CORP 2.25% 11/15/2026 39.88 KEYSTONE AUTO OP 9.75% 11/1/2013 31.50 KNIGHT RIDDER 4.63% 11/1/2014 21.50 KNIGHT RIDDER 6.88% 3/15/2029 17.75 KNIGHT RIDDER 7.13% 6/1/2011 29.85 KNIGHT RIDDER 7.15% 11/1/2027 10.00 LAZYDAYS RV 11.75% 5/15/2012 3.03 LEAR CORP 5.75% 8/1/2014 24.50 LEAR CORP 8.50% 12/1/2013 25.25 LEAR CORP 8.75% 12/1/2016 22.50 LEHMAN BROS HLDG 1.50% 3/23/2012 12.50 LEHMAN BROS HLDG 2.00% 10/31/2012 11.46 LEHMAN BROS HLDG 4.25% 1/27/2010 13.50 LEHMAN BROS HLDG 4.38% 11/30/2010 14.13 LEHMAN BROS HLDG 4.50% 7/26/2010 14.25 LEHMAN BROS HLDG 4.50% 8/3/2011 12.84 LEHMAN BROS HLDG 4.80% 2/27/2013 7.00 LEHMAN BROS HLDG 4.80% 3/13/2014 15.00 LEHMAN BROS HLDG 4.80% 6/24/2023 9.13 LEHMAN BROS HLDG 5.00% 1/14/2011 13.75 LEHMAN BROS HLDG 5.00% 2/11/2013 9.63 LEHMAN BROS HLDG 5.00% 3/27/2013 7.75 LEHMAN BROS HLDG 5.00% 8/3/2014 9.00 LEHMAN BROS HLDG 5.00% 5/28/2023 10.00 LEHMAN BROS HLDG 5.00% 5/30/2023 8.54 LEHMAN BROS HLDG 5.00% 6/10/2023 9.63 LEHMAN BROS HLDG 5.00% 6/17/2023 7.75 LEHMAN BROS HLDG 5.10% 1/28/2013 5.50 LEHMAN BROS HLDG 5.10% 2/15/2020 6.93 LEHMAN BROS HLDG 5.15% 2/4/2015 9.50 LEHMAN BROS HLDG 5.20% 5/13/2020 7.75 LEHMAN BROS HLDG 5.25% 2/6/2012 14.75 LEHMAN BROS HLDG 5.25% 1/30/2014 8.75 LEHMAN BROS HLDG 5.25% 2/11/2015 9.55 LEHMAN BROS HLDG 5.25% 3/5/2018 7.00 LEHMAN BROS HLDG 5.25% 9/14/2019 9.00 LEHMAN BROS HLDG 5.25% 3/8/2020 10.00 LEHMAN BROS HLDG 5.25% 5/20/2023 7.38 LEHMAN BROS HLDG 5.35% 2/25/2018 9.00 LEHMAN BROS HLDG 5.35% 3/13/2020 11.00 LEHMAN BROS HLDG 5.35% 6/14/2030 7.70 LEHMAN BROS HLDG 5.38% 5/6/2023 7.75 LEHMAN BROS HLDG 5.40% 3/6/2020 7.00 LEHMAN BROS HLDG 5.40% 3/20/2020 9.25 LEHMAN BROS HLDG 5.40% 3/30/2029 7.25 LEHMAN BROS HLDG 5.40% 6/21/2030 7.50 LEHMAN BROS HLDG 5.45% 3/15/2025 7.56 LEHMAN BROS HLDG 5.45% 4/6/2029 7.42 LEHMAN BROS HLDG 5.45% 2/22/2030 6.50 LEHMAN BROS HLDG 5.45% 7/19/2030 8.26 LEHMAN BROS HLDG 5.45% 9/20/2030 7.75 LEHMAN BROS HLDG 5.50% 4/4/2016 12.00 LEHMAN BROS HLDG 5.50% 2/4/2018 7.75 LEHMAN BROS HLDG 5.50% 2/19/2018 8.30 LEHMAN BROS HLDG 5.50% 11/4/2018 9.00 LEHMAN BROS HLDG 5.50% 2/27/2020 7.75 LEHMAN BROS HLDG 5.50% 8/19/2020 7.25 LEHMAN BROS HLDG 5.50% 3/14/2023 7.75 LEHMAN BROS HLDG 5.50% 4/8/2023 8.50 LEHMAN BROS HLDG 5.50% 4/15/2023 7.67 LEHMAN BROS HLDG 5.50% 4/23/2023 9.63 LEHMAN BROS HLDG 5.50% 10/7/2023 7.92 LEHMAN BROS HLDG 5.50% 1/27/2029 9.00 LEHMAN BROS HLDG 5.50% 2/3/2029 7.50 LEHMAN BROS HLDG 5.55% 2/11/2018 7.50 LEHMAN BROS HLDG 5.55% 3/9/2029 8.26 LEHMAN BROS HLDG 5.55% 1/25/2030 8.50 LEHMAN BROS HLDG 5.55% 9/27/2030 11.00 LEHMAN BROS HLDG 5.55% 12/31/2034 11.01 LEHMAN BROS HLDG 5.60% 1/22/2018 6.93 LEHMAN BROS HLDG 5.60% 2/17/2029 7.75 LEHMAN BROS HLDG 5.60% 2/24/2029 11.00 LEHMAN BROS HLDG 5.60% 3/2/2029 7.75 LEHMAN BROS HLDG 5.60% 2/25/2030 9.00 LEHMAN BROS HLDG 5.60% 5/3/2030 8.50 LEHMAN BROS HLDG 5.63% 1/24/2013 14.88 LEHMAN BROS HLDG 5.63% 3/15/2030 7.75 LEHMAN BROS HLDG 5.65% 11/23/2029 7.75 LEHMAN BROS HLDG 5.65% 8/16/2030 8.25 LEHMAN BROS HLDG 5.65% 12/31/2034 11.01 LEHMAN BROS HLDG 5.70% 1/28/2018 9.00 LEHMAN BROS HLDG 5.70% 2/10/2029 7.75 LEHMAN BROS HLDG 5.70% 4/13/2029 8.50 LEHMAN BROS HLDG 5.70% 9/7/2029 8.50 LEHMAN BROS HLDG 5.70% 12/14/2029 7.69 LEHMAN BROS HLDG 5.75% 4/25/2011 14.00 LEHMAN BROS HLDG 5.75% 7/18/2011 14.00 LEHMAN BROS HLDG 5.75% 5/17/2013 14.00 LEHMAN BROS HLDG 5.75% 3/27/2023 9.10 LEHMAN BROS HLDG 5.75% 10/15/2023 8.25 LEHMAN BROS HLDG 5.75% 10/21/2023 8.00 LEHMAN BROS HLDG 5.75% 11/12/2023 8.00 LEHMAN BROS HLDG 5.75% 11/25/2023 8.50 LEHMAN BROS HLDG 5.75% 12/16/2028 7.00 LEHMAN BROS HLDG 5.75% 12/23/2028 11.01 LEHMAN BROS HLDG 5.75% 8/24/2029 10.00 LEHMAN BROS HLDG 5.75% 9/14/2029 7.75 LEHMAN BROS HLDG 5.75% 10/12/2029 9.25 LEHMAN BROS HLDG 5.75% 3/29/2030 9.63 LEHMAN BROS HLDG 5.80% 9/3/2020 8.50 LEHMAN BROS HLDG 5.80% 10/25/2030 7.75 LEHMAN BROS HLDG 5.85% 11/8/2030 9.00 LEHMAN BROS HLDG 5.88% 11/15/2017 12.50 LEHMAN BROS HLDG 5.90% 5/4/2029 8.50 LEHMAN BROS HLDG 5.90% 2/7/2031 8.50 LEHMAN BROS HLDG 5.95% 12/20/2030 7.50 LEHMAN BROS HLDG 6.00% 7/19/2012 14.38 LEHMAN BROS HLDG 6.00% 12/18/2015 7.80 LEHMAN BROS HLDG 6.00% 1/22/2020 6.81 LEHMAN BROS HLDG 6.00% 2/12/2020 7.00 LEHMAN BROS HLDG 6.00% 1/29/2021 8.00 LEHMAN BROS HLDG 6.00% 10/23/2028 8.25 LEHMAN BROS HLDG 6.00% 11/18/2028 7.75 LEHMAN BROS HLDG 6.00% 5/11/2029 9.75 LEHMAN BROS HLDG 6.00% 7/20/2029 8.25 LEHMAN BROS HLDG 6.00% 3/21/2031 6.25 LEHMAN BROS HLDG 6.00% 4/30/2034 8.00 LEHMAN BROS HLDG 6.00% 7/30/2034 7.75 LEHMAN BROS HLDG 6.00% 2/21/2036 6.50 LEHMAN BROS HLDG 6.00% 2/24/2036 7.50 LEHMAN BROS HLDG 6.00% 2/12/2037 7.75 LEHMAN BROS HLDG 6.05% 6/29/2029 9.63 LEHMAN BROS HLDG 6.10% 8/12/2023 8.25 LEHMAN BROS HLDG 6.15% 4/11/2031 7.00 LEHMAN BROS HLDG 6.20% 9/26/2014 15.50 LEHMAN BROS HLDG 6.20% 6/15/2027 7.75 LEHMAN BROS HLDG 6.20% 5/25/2029 7.50 LEHMAN BROS HLDG 6.25% 2/5/2021 9.75 LEHMAN BROS HLDG 6.25% 2/22/2023 8.25 LEHMAN BROS HLDG 6.40% 10/11/2022 7.03 LEHMAN BROS HLDG 6.40% 12/19/2036 12.50 LEHMAN BROS HLDG 6.50% 2/28/2023 11.01 LEHMAN BROS HLDG 6.50% 3/6/2023 9.75 LEHMAN BROS HLDG 6.50% 10/18/2027 8.75 LEHMAN BROS HLDG 6.50% 10/25/2027 7.00 LEHMAN BROS HLDG 6.50% 11/15/2032 7.35 LEHMAN BROS HLDG 6.50% 1/17/2033 9.00 LEHMAN BROS HLDG 6.50% 12/22/2036 9.75 LEHMAN BROS HLDG 6.50% 6/21/2037 7.75 LEHMAN BROS HLDG 6.50% 7/13/2037 9.63 LEHMAN BROS HLDG 6.60% 10/3/2022 6.11 LEHMAN BROS HLDG 6.63% 1/18/2012 14.15 LEHMAN BROS HLDG 6.63% 7/27/2027 9.00 LEHMAN BROS HLDG 6.75% 7/1/2022 8.50 LEHMAN BROS HLDG 6.75% 3/11/2033 10.50 LEHMAN BROS HLDG 6.75% 10/26/2037 11.50 LEHMAN BROS HLDG 6.80% 9/7/2032 9.90 LEHMAN BROS HLDG 6.85% 8/16/2032 7.75 LEHMAN BROS HLDG 6.88% 5/2/2018 16.06 LEHMAN BROS HLDG 6.88% 7/17/2037 0.02 LEHMAN BROS HLDG 6.90% 9/1/2032 9.63 LEHMAN BROS HLDG 7.00% 4/16/2019 8.38 LEHMAN BROS HLDG 7.00% 5/12/2023 7.09 LEHMAN BROS HLDG 7.00% 9/27/2027 15.63 LEHMAN BROS HLDG 7.00% 10/4/2032 7.75 LEHMAN BROS HLDG 7.00% 7/27/2037 11.50 LEHMAN BROS HLDG 7.00% 9/28/2037 8.00 LEHMAN BROS HLDG 7.00% 11/16/2037 9.63 LEHMAN BROS HLDG 7.00% 12/28/2037 7.00 LEHMAN BROS HLDG 7.00% 1/31/2038 9.00 LEHMAN BROS HLDG 7.00% 2/1/2038 8.00 LEHMAN BROS HLDG 7.00% 2/7/2038 9.00 LEHMAN BROS HLDG 7.00% 2/8/2038 6.02 LEHMAN BROS HLDG 7.05% 2/27/2038 8.18 LEHMAN BROS HLDG 7.10% 3/25/2038 9.00 LEHMAN BROS HLDG 7.25% 4/29/2038 9.00 LEHMAN BROS HLDG 7.35% 5/6/2038 9.75 LEHMAN BROS HLDG 7.88% 8/15/2010 14.25 LEHMAN BROS HLDG 8.00% 3/5/2022 7.75 LEHMAN BROS HLDG 8.50% 8/1/2015 14.50 LEHMAN BROS HLDG 8.80% 3/1/2015 13.00 LEHMAN BROS HLDG 8.92% 2/16/2017 10.50 LEHMAN BROS HLDG 9.50% 12/28/2022 8.52 LEHMAN BROS HLDG 9.50% 1/30/2023 4.46 LEHMAN BROS HLDG 9.50% 2/27/2023 6.27 LEHMAN BROS HLDG 10.00% 3/13/2023 12.25 LEHMAN BROS HLDG 10.38% 5/24/2024 7.50 LEHMAN BROS HLDG 11.00% 10/25/2017 10.75 LEHMAN BROS HLDG 11.00% 6/22/2022 7.50 LEHMAN BROS HLDG 11.00% 7/18/2022 10.50 LOCAL INSIGHT 11.00% 12/1/2017 27.00 LTX-CREDENCE 3.50% 5/15/2011 37.55 MAJESTIC STAR 9.50% 10/15/2010 60.25 MAJESTIC STAR 9.75% 1/15/2011 9.00 MERCER INTL INC 9.25% 2/15/2013 33.50 MERISANT CO 9.50% 7/15/2013 5.00 MERRILL LYNCH 0.00% 3/9/2011 89.00 MILLENNIUM AMER 7.63% 11/15/2026 5.54 MOMENTIVE PERFOR 11.50% 12/1/2016 28.00 MOMENTIVE PERFOR 11.50% 12/1/2016 28.25 NCI BLDG SYSTEMS 2.13% 11/15/2024 64.00 NEENAH FOUNDRY 9.50% 1/1/2017 21.50 NEFF CORP 10.00% 6/1/2015 14.50 NETWORK COMMUNIC 10.75% 12/1/2013 20.50 NEW PLAN EXCEL 7.40% 9/15/2009 85.50 NEW PLAN EXCEL 7.50% 7/30/2029 17.10 NEW PLAN REALTY 7.65% 11/2/2026 18.25 NEW PLAN REALTY 7.97% 8/14/2026 13.35 NEWARK GROUP INC 9.75% 3/15/2014 2.00 NEWPAGE CORP 10.00% 5/1/2012 47.00 NEWPAGE CORP 12.00% 5/1/2013 29.00 NORTEK INC 8.50% 9/1/2014 28.25 NORTH ATL TRADNG 9.25% 3/1/2012 35.50 NTK HOLDINGS INC 0.00% 3/1/2014 8.50 OUTBOARD MARINE 9.13% 4/15/2017 3.50 PALM HARBOR 3.25% 5/15/2024 33.25 PENHALL INTL 12.00% 8/1/2014 36.25 PLY GEM INDS 9.00% 2/15/2012 20.25 POPE & TALBOT 8.38% 6/1/2013 1.00 PRIMUS TELECOM 8.00% 1/15/2014 11.63 PRIMUS TELECOMM 14.25% 5/20/2011 63.00 QUALITY DISTRIBU 9.00% 11/15/2010 45.00 RADIO ONE INC 6.38% 2/15/2013 18.00 RADIO ONE INC 8.88% 7/1/2011 35.00 RAFAELLA APPAREL 11.25% 6/15/2011 19.00 RAIT FINANCIAL 6.88% 4/15/2027 28.87 RATHGIBSON INC 11.25% 2/15/2014 35.25 READER'S DIGEST 9.00% 2/15/2017 14.75 REALOGY CORP 10.50% 4/15/2014 42.00 REALOGY CORP 12.38% 4/15/2015 27.13 REALOGY CORP 12.38% 4/15/2015 27.50 REEBOK INTL LTD 2.00% 5/1/2024 84.13 RENTECH INC 4.00% 4/15/2013 35.50 RESIDENTIAL CAP 8.00% 2/22/2011 60.00 RESIDENTIAL CAP 8.38% 6/30/2010 73.00 RH DONNELLEY 6.88% 1/15/2013 4.50 RH DONNELLEY 6.88% 1/15/2013 4.00 RH DONNELLEY 6.88% 1/15/2013 4.25 RH DONNELLEY 8.88% 1/15/2016 5.00 RH DONNELLEY 8.88% 10/15/2017 4.25 RJ TOWER CORP 12.00% 6/1/2013 1.38 ROTECH HEALTHCA 9.50% 4/1/2012 19.00 SALEM COMM HLDG 7.75% 12/15/2010 50.10 SHERIDAN GROUP 10.25% 8/15/2011 60.00 SILVERLEAF RES 8.00% 4/1/2010 73.50 SINCLAIR BROAD 6.00% 9/15/2012 40.60 SIX FLAGS INC 4.50% 5/15/2015 13.63 SIX FLAGS INC 8.88% 2/1/2010 13.00 SIX FLAGS INC 9.63% 6/1/2014 13.00 SIX FLAGS INC 9.75% 4/15/2013 13.00 SPACEHAB INC 5.50% 10/15/2010 45.00 SPANSION LLC 2.25% 6/15/2016 1.44 SPHERIS INC 11.00% 12/15/2012 41.00 STALLION OILFIEL 9.75% 2/1/2015 32.63 STANLEY-MARTIN 9.75% 8/15/2015 25.75 STATION CASINOS 6.00% 4/1/2012 34.75 STATION CASINOS 6.50% 2/1/2014 3.50 STATION CASINOS 6.63% 3/15/2018 2.00 STONE CONTAINER 8.38% 7/1/2012 37.00 TEKNI-PLEX INC 12.75% 6/15/2010 58.15 THORNBURG MTG 8.00% 5/15/2013 0.50 TIMES MIRROR CO 6.61% 9/15/2027 3.50 TIMES MIRROR CO 7.25% 3/1/2013 4.55 TIMES MIRROR CO 7.25% 11/15/2096 4.25 TIMES MIRROR CO 7.50% 7/1/2023 4.00 TOUSA INC 9.00% 7/1/2010 6.25 TOUSA INC 10.38% 7/1/2012 0.01 TRANS-LUX CORP 8.25% 3/1/2012 45.00 TRANSMERIDIAN EX 12.00% 12/15/2010 6.75 TRIBUNE CO 4.88% 8/15/2010 6.40 TRIBUNE CO 5.25% 8/15/2015 4.75 TRIBUNE CO 5.67% 12/8/2008 4.40 TRONOX WORLDWIDE 9.50% 12/1/2012 16.25 TRUE TEMPER 8.38% 9/15/2011 1.25 TRUMP ENTERTNMNT 8.50% 6/1/2015 11.25 UAL CORP 4.50% 6/30/2021 36.00 UAL CORP 5.00% 2/1/2021 43.96 USFREIGHTWAYS 8.50% 4/15/2010 36.75 VERASUN ENERGY 9.38% 6/1/2017 11.88 VERENIUM CORP 5.50% 4/1/2027 22.50 VERSO PAPER 11.38% 8/1/2016 28.00 VICORP RESTAURNT 10.50% 4/15/2011 0.13 VION PHARM INC 7.75% 2/15/2012 34.50 VISTEON CORP 7.00% 3/10/2014 3.00 VITESSE SEMICOND 1.50% 10/1/2024 59.00 WASH MUT BANK NV 5.50% 1/15/2013 0.10 WASH MUT BANK NV 5.55% 6/16/2010 22.00 WASH MUTUAL INC 8.25% 4/1/2010 67.50 WCI COMMUNITIES 4.00% 8/5/2023 1.56 WCI COMMUNITIES 7.88% 10/1/2013 1.88 WCI COMMUNITIES 9.13% 5/1/2012 1.06 WII COMPONENTS 10.00% 2/15/2012 46.00 WILLIAM LYON 7.63% 12/15/2012 34.00 WILLIAM LYONS 7.50% 2/15/2014 31.00 WILLIAM LYONS 7.63% 12/15/2012 35.00 WILLIAM LYONS 10.75% 4/1/2013 38.00 WISE METALS GRP 10.25% 5/15/2012 42.00 ********* 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 **