/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090707.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, July 7, 2009, Vol. 13, No. 186 Headlines 2008 ASSET HOLDING: To Liquidate Assets in Chapter 11 87-10 51ST AVENUE: Case Summary & 16 Largest Unsecured Creditors AGT CRUNCH: Taps Omni Management as Claims and Noticing Agent AMERICAN INT'L: Files Form 424B3s Related to Exchange Offers ANCHOR BLUE: Macerich, et al., Protest Wachovia Bank DIP Facility ASARCO LLC: Aviva Settlement Agreement Approved ASARCO LLC: Asbestos Panel Ch. 5 Actions Deadline Moved Post-Plan ASARCO LLC: Parent Appeals Environmental Settlement Order ASHWORTH BROTHERS: Case Summary & 20 Largest Unsecured Creditors BEAZER HOMES: SEC Charges Ex-Chief Accounting Officer for Fraud BERNARD MADOFF: SIPC Spending $231 Million on Claim Payments CALPINE CORP: Nissequogue Cogen Settles Suit Against SUNY CARAUSTAR INDUSTRIES: Sends Plan to Creditors for Voting CHARTER COMM: Former Employee Says Allen Misled Investors CHARTER COMM: Court Grants Open Ended Extension to Removal Period CHARTER COMM: Agrees to Reinstate Goodell Class Claim CHRYSLER LLC: NewCo Completes 9-Member Board of Directors CHRYSLER LLC: Proposes Protocol for Assumption of Lemon Law Claim CHRYSLER LLC: Mohr's Motion to Lift Stay to Liquidate PI Claim CLEAR CHANNEL: Fails to Attract Interest in Debt CRABTREE & EVELYN: Parent to Provide $40 Million Financing CRUSADER ENERGY: Court Establishes July 28 Claims Bar Date E*TRADE FINANCIAL: To Hold Special Shareholders Meeting in August E*TRADE FINANCIAL: Supplements Prospectus on Certain Securities EDDIE BAUER: Lists 38,000 Potential Creditors ENERGY PARTNERS: Court Approves Parkman Whaling Financial Advisors ENERGY PARTNERS: Court Approves Schully Roberts as Special Counsel ENERGY PARTNERS: Court OKs Vinson & Elkins as Bankruptcy Counsel ENERGY PARTNERS: Gets Court Approval of Alan D. Bell as CRO EVIDENT TECHNOLOGIES: Legal Costs on IP Suit Forces Bankruptcy FLEETWOOD ENTERPRISES: Has $1.75MM Offer for Garrett Facility FLEETWOOD ENTERPRISES: Plan Filing Period Extended to October 6 FLUID ROUTING: Plan Filing Deadline Moved to September 3 FONTAINEBLEAU: Unsec. Creditors Tap Fox Rothschild as Co-Counsel FONTAINEBLEAU: Court Approves Kurtzman As Claims Agent FONTAINEBLEAU: Court Approves Bilzin Sumberg As Lead Counsel FONTAINEBLEAU: Court Approves Kasowitz As Special Counsel FORBES ENTERPRISES: Case Summary & 5 Largest Unsecured Creditors FORD MOTOR: Suspends Production at Russian Plant on Weak Demand FOUNDERS BANK: Head Raising Capital to Save Remaining Banks FOUR BUCKS: Assigned Rents Not Estate Property, Judge Rules GATEWAY ETHANOL: Court Approves Additional Financing of $718,000 GENERAL MOTORS: Court OKs Sale to U.S. Treasury-Backed Entity GENERAL MOTORS: Will Have $950 Million for Wind-Down GENERAL MOTORS: Consumer Privacy Ombudsman Files Status Report GENERAL MOTORS: Creditors Panel Taps Butzel Long as Supplier Attys GENERAL MOTORS: Friedman Wants Stay Lifted to Pursue Appeal GENERAL MOTORS: WTC is Successor to Citibank as Indenture Trustee GENERAL MOTORS: Pulls Out of 25-Year Nummi Venture With Toyota GENERAL MOTORS: June Retail Sales Up 10% From May Levels GENERAL MOTORS: Hitachi to Supply Hybrid Cars With Li-Ion Battery GENERAL MOTORS: Beijing Auto Makes $924-Mil. Bid for Opel Unit GENERAL MOTORS: Halts Production at Russian Plant on Weak Demand GENX CORP: Trading Suspended Amid Questions on Promo Materials GLOBAL SAFETY: Expects Restructuring Agreement With Lenders HAWAII SUPERFERRY: Court Denies Change-of-Venue Request HELLER EHRMAN: U.S. Trustee Adds 2 Members to Creditors Committee HIGHLANDS INSURANCE: Files Motion for Permanent Injunction IDEARC INC: Lenders Agree Committee Can Sue Over Loan INLET RETAIL: Inlet Square Mall May Have New Owner by August 17 INTERLAKE MATERIAL: Liquidating Plan Goes to Creditors for Vote JEFFERSON COUNTY: Senator Appeals to Alabama Governor for Aid JH2 INVESTMENTS: Case Summary & 6 Largest Unsecured Creditors LEAR CORP: Seeking Additional Support for Chapter 11 Plan LEAR CORP: ISDA Determinations Committee Affirms "Credit Event" LEAR CORP: CBAs & Customer Pacts Won't Be Issues in Ch. 11 Plan LEHMAN BROTHERS: Wants Plan Filing Deadline Moved to March 2010 LEHMAN BROTHERS: Court Sets September 22 Claims Bar Date LEHMAN BROTHERS: Committee Wants Examiner to Limit Barclays Probe LEHMAN BROTHERS: LBI Trustee Asks for Approval of FSA Settlement LEHMAN BROTHERS: LBI Trustee Starts Review of Customer Claims LEVEL 3: Closes Debt Exchange With Unnamed Investor LIVENT INC: Prosecutors Want 10 Years for Drabinsky & Gottlieb LOG HOME: Files for Chapter 11 After Owner Sued for Theft LUMINENT MORTGAGE: Court Confirms Second Amended Joint Plan MAGNACHIP SEMICONDUCTOR: Plan Offers 71% for First-Lien Creditors METALDYNE CORP: Committee Taps Reed Smith as Counsel METALDYNE CORP: Proposes Donnelly Penman as Investment Banker MGM MIRAGE: Clients Demand Significant Price Cuts for Condos MIDWAY GAMES: Court OKs Sale of Assets to Time Warner MIDWAY GAMES: Court OKs Thomas Settlement, Aug. 10 Plan Deadline MONACO COACH: Court Converts Case to Chapter 7 Liquidation MXENERGY HOLDINGS: Commences Discounted Offer; Bankruptcy Warning NEW CENTURY: Allowed Appeal on Confirmation Reversal NORTEL NETWORKS: Ex-Federal Judge Leads Class Action Suit NORTEL NETWORKS: Selected by Telecom Liechtenstein for UC Network NORTEL NETWORKS: Wins Court Nod to Sell French Unit NORTEL NETWORKS: Selected by Ziggo for IP Telephony in Netherlands NORWOOD PROMOTIONAL: Files Schedules of Assets and Liabilities OCEANAIRE TEXAS: Case Summary & 40 Largest Unsecured Creditors PACIFIC ENERGY: Court Approves Key Employee Incentive Plan PACIFIC ENERGY: Plan Filing Period Extended to November 4 PILGRIM'S PRIDE: Assumes 58 Real Property Leases PILGRIM'S PRIDE: Retains Integrity Mgt. as Operational Consultant PILGRIM'S PRIDE: Texas Comptrollers Wants to Effectuate Setoff POMARE LTD: Files Amended Plan; Court to Hear Plan Outline July 15 PRIMUS TELECOM: Consummates Confirmed Reorganization Plan PROVIDENT ROYALTIES: Can Use Sinclair Cash Collateral on Interim QSGI INC: Case Summary & 20 Largest Unsecured Creditors RH DONNELLEY: Wins Final Approval to Use Cash Collateral RH DONNELLEY: Committee Establishes Info Access Protocol RH DONNELLEY: Committee Proposes to Retain Ropes & Gray As Counsel ROBETEX INC: Case Summary & 17 Largest Unsecured Creditors ST GERMAIN: Involuntary Chapter 11 Case Summary STANFORD GROUP: Antigua Liquidators Win Fight Over Assets STANFORD GROUP: Owner's Passport Found; Lawyer to Re-appeal Bail STEVEN MALFO: Case Summary & 3 Largest Unsecured Creditors TEUFEL NURSERY: Can Use $1.5MM Textron Cash Collateral on Interim THUNDERBIRD HOLDINGS: Case Summary & 4 Largest Unsecured Creditors TOUSA INC: Disclosure Statement Hearing Adjourned Sine Die TOUSA INC: Creditors Committee Sues Directors & Officers TOUSA INC: Applies for Approval to Management Incentive Plan TROPICANA ENT: Lenders Group Objects to Columbia Sussex's Claims TROPICANA ENT: Lenders Group Objects to Wimar Tahoe Admin. Claim TWIN CITIES: Files Chapter 11 in St. Paul, Minnesota USG CORP: Court Formally Closes Chapter 11 Case USG CORP: Garlock Settles Dispute with Asbestos PI Trust USG CORP: Asbestos PI Trust's 2008 Annual Report VISTEON CORP: $5.1MM for Pre-Bankr. Debt to Foreign Vendors Okayed VISTEON CORP: Committee Retains KCC as Web Site Administrator VISTEON CORP: Applies to Hire Crowell As Antitrust Counsel * Earnings Drop Worldwide as Unemployment Discourage Consumers * Hotels May Lead Commercial Real Estate in Defaults * No Jury Trial on Turnover Action, First Circuit Holds * Prime Mortgage Delinquencies Rise Sharply in 2009 * Unemployment Rate Climbed to 9.5% in June * David J. Bell Joins Capstone Advisory Group * Wachtell Lipton Doubles Merger Work Despite Fall in Deals Volume * Large Companies With Insolvent Balance Sheets ********* 2008 ASSET HOLDING: To Liquidate Assets in Chapter 11 ----------------------------------------------------- According to Bill Rochelle at Bloomberg News, 2008 Asset Holding Corp., formerly known as GSC Capital Corp., intends to file a Chapter 11 liquidating plan it hopes will be supported by the noteholders. The Debtor owes $97.9 million on 7.25% senior convertible notes. GSC Capital Corp., a real estate investment trust, was formed to invest in mortgage-backed securities, residential mortgages, mortgage loans, and a variety of real estate-related derivatives. Some of the assets are worthless and will be abandoned, Bloomberg said, citing a court filing. 2008 Asset Holding, together with two subsidiaries, filed for Chapter 11 on June 30, 2009 (Bankr. S.D.N.Y. Case No.: 09-14264). Shannon Lowry Nagle, Esq., at O'Melveny & Myers, LLP, in New York serves as counsel. The petition says assets range from $1,000,001 to $10,000,000 while debts are between $100,000,001 and 500,000,000. 87-10 51ST AVENUE: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: 87-10 51st Avenue Owners Corp. c/o Owners Coporation P.O. Box 790105 MIddle Village, NY 11379-0105 Bankruptcy Case No.: 09-45657 Chapter 11 Petition Date: July 5, 2009 Court: Eastern District of New York (Brooklyn) Judge: Elizabeth S. Stong Debtor's Counsel: Douglas T. Tabachnik, Esq. dtabachnik@dttlaw.com Law Offices of Douglas T. Tabachnik, P.C Woodhull House 63 West Main Street, Suite C Freehold, NJ 07728 Tel: (732) 780-2760 Fax: (732) 780-2761 The Debtor's financial condition as of July 4, 2009: Total Assets: $19,555,000 Total Debts: $6,730,088 The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ NYC Water Board $294,618 P.O. Box 410 Church Street Station New York, NY 10008-0410 Castle Oil Corporation $246,161 c/o Michael M. Meadvin 440 Mamaroneck Ave., Suite 402 Harrison, N.Y. 10528 Scher Martin H. $114,917 1 Old Country Rd Ste 385 Carle Place, NY 11514-185 Approved Oil $56,388 Consolidated Edison Co. of N.Y. $4,746 NY State Tax Commission $5,542 Philadelphia Insurance $1,985 Imperial Elevator Corp $1,801 NYS Dept. of Taxation $772 National Grid $754 Tower Glass Products $561 Scher Martin H. $440 Paychex, Inc. $259 Verizon $348 NYC Department of Finance $140 Dependable Sewer & Drain, Inc. $92 The petition was signed by Nicholas Dovas, president. AGT CRUNCH: Taps Omni Management as Claims and Noticing Agent ------------------------------------------------------------- Hon Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York authorized AGT Crunch Acquisition LLC and its debtor-affiliates to employ Omni Management Group, LLC, as claims and noticing agent. Omni Management is expected to, among other things: a) assist the Debtors and their professionals with the preparation of a creditor matrix, service lists, and other documents and exhibits pertaining to first day motions and applications; b) develop a case-specific Web site to communicate pertinent information and pleadings; and c) transfer data to maintain the creditor matrix for notice and other purposes and continually revise and update the creditor matrix as necessary. Robert Berger, a consultant of Omni Management, told the Court that the firm received a $25,000 retainer. The hourly rates of Omni Management's personnel are: Senior Consultants $195 - $295 Consultants/ project Specialists $75 - $125 Programming $130 - $200 Clerical Support $35 - $95 Mr. Berger assured the Court that Omni Management is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About AGT Crunch Acquisition Co. AGT Crunch Acquisition Co. and its affiliates own Crunch Fitness, chain of 19 high-end fitness clubs. The clubs, with 73,000 members, are located in New York, Chicago, Los Angeles and Rock Creek, Maryland. New York-based AGT Crunch Acquisition LLC and its affiliates filed for Chapter 11 on May 6, 2009 (Bankr. S.D.N.Y. Lead Case No. 09- 12889). Davin J. Hall, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Diana G. Adams, the U.S. Trustee for Region 2, appointed seven creditors to serve on the official committee of unsecured creditors in the Debtors' Chapter 11 cases. The Debtors have assets and debts both ranging from $100 million to $500 million. AMERICAN INT'L: Files Form 424B3s Related to Exchange Offers ------------------------------------------------------------ American International Group, Inc., filed with the Securities and Exchange Commission prospectuses under Form 424B3 related to its offer to exchange: -- $4,000,000,000 8.175% Series A-6 Junior Subordinated Debentures for any and all outstanding 8.175% Series A-6 Junior Subordinated Debentures See http://ResearchArchives.com/t/s?3eb1 The terms of the new junior subordinated debentures are substantially identical to the terms of the old junior subordinated debentures, except that the new junior subordinated debentures are registered under the Securities Act of 1933, and the transfer restrictions, registration rights and additional interest provisions currently applicable to the old junior subordinated debentures do not apply to the new junior subordinated debentures. -- $3,250,000,000 8.250% Notes Due 2018 for any and all Outstanding 8.250% Notes Due 2018 See http://ResearchArchives.com/t/s?3eb2 The terms of the new 8.250% Notes due 2018 are substantially identical to the terms of the old 8.250% Notes due 2018, except that the New Notes are registered under the Securities Act of 1933, and the transfer restrictions, registration rights and additional interest provisions currently applicable to the Old Notes do not apply to the New Notes. The Exchange Offer was to expire at 5:00 p.m., New York City time, on July 2, 2009, unless extended by AIG. On March 2, 2009, AIG and the Board of Governors of the Federal Reserve System announced their intent to enter into transactions pursuant to which AIG would transfer to the Federal Reserve Bank of New York preferred equity interests in newly-formed Delaware limited liability companies. Each LLC would hold (directly or indirectly) 100% of the common stock of an AIG operating subsidiary (American International Assurance Company, Limited in one case and American Life Insurance Company in the other). On June 25, 2009, AIG and the FRBNY entered into definitive agreements with respect to these transactions. In exchange for the preferred interests received by the FRBNY, there will be a $25 billion reduction in the outstanding balance and maximum amount available to be borrowed on the lending commitment under the Credit Agreement, dated as of September 22, 2008, as amended, between AIG and the FRBNY (provided the maximum amount available under the FRBNY Facility will not be less than $25 billion as a result of such reduction). As part of the purchase agreement, AIRCO will transfer 100% of the common stock of AIA to a newly-formed Delaware limited liability company; AIRCO and AIG will retain 100% of the common interests of AIA LLC; and the FRBNY will receive 100% of the preferred interests of AIA LLC. As consideration for the preferred interests in AIA LLC to be received by the FRBNY, there will be a reduction of $16 billion in the outstanding balance of the FRBNY Facility and the maximum amount available to be borrowed thereunder (provided the maximum amount available under the FRBNY Facility shall not be less than $25 billion as a result of such reduction). The common interests will entitle AIG to 100% of the voting power of AIA LLC, including the right to appoint the entire board of directors of AIA LLC. The preferred interests will entitle the FRBNY to veto rights over certain significant actions by AIA LLC and its subsidiaries and the right, subject to certain restrictions, to compel AIA LLC to take certain actions, including an initial public offering of the company and a sale of the company. The preferred interests received by the FRBNY will have a liquidation preference of $16 billion and will accrue a return of 5% per annum until September 22, 2013 and thereafter 9% per annum. The transactions contemplated by the AIA Purchase Agreement are subject to certain conditions, including regulatory approvals, the closing of the transactions contemplated by the ALICO Purchase Agreement and certain other conditions. In a separate purchase agreement, AIG will transfer 100% of the common stock of ALICO to a newly-formed Delaware limited liability company; AIG will retain 100% of the common interests of ALICO LLC; and the FRBNY will receive 100% of the preferred interests of ALICO LLC. As consideration for the preferred interests in ALICO LLC to be received by the FRBNY, there will be a reduction of $9 billion in the outstanding balance of the FRBNY Facility and the maximum amount available to be borrowed thereunder (provided the maximum amount available under the FRBNY Facility shall not be less than $25 billion as a result of such reduction). The common interests will entitle AIG to 100% of the voting power of ALICO LLC, including the right to appoint the entire board of directors of ALICO LLC. The preferred interests will entitle the FRBNY to veto rights over certain significant actions by ALICO LLC and its subsidiaries and the right, subject to certain restrictions, to compel ALICO LLC to take certain actions, including an initial public offering of the company and a sale of the company. The preferred interests received by the FRBNY will have a liquidation preference of $9 billion and will accrue a return of 5% per annum until September 22, 2013, and thereafter 9% per annum. The transactions contemplated by the ALICO Purchase Agreement are subject to certain conditions, including regulatory approvals, the closing of the transactions contemplated by the AIA Purchase Agreement and certain other conditions. About American International Group 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. 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. ANCHOR BLUE: Macerich, et al., Protest Wachovia Bank DIP Facility ----------------------------------------------------------------- The Macerich Company, Passco Real Estate Enterprises, Texas Comptroller of Public Accounts and CBL Associates Management Inc. object to the request of Anchor Blue Retail Group Inc. and its debtor-affiliates to access postpetition financing from Wachovia Bank National Association. The Debtors leased retail space from Macerich Company where they continue to operate retail stories as tenants pursuant to unexpired leases of nonresidential real property at certain shopping locations. In its objection, Macerich argues that the Debtors have no authority to disregard the terms of their leases and the protections granted it under the U.S. Bankruptcy Code. Macerich Company contends that it did not create the Debtors' financial maladies and should not bear the consequences of this bankruptcy through loss of their contractual rights. Ballard Spahr Andrews & Ingersoll LLP and Katten Muchin Rosenman LLP represent Macerich Company. A hearing is set for July 17, 2009, at 2:00 p.m., to consider approval of the DIP financing. As reported in Troubled Company Reporter on June 18, 2009, the Court authorized, on an interim basis, the Debtors' to obtain postpetition loans, advances and other financial accommodations from Wachovia Bank. As of the Debtors' petition date, the amount of all revolving loans, letters of credit accommodations and other prepetition obligations owed was $20,193,970, plus interest accrued and accruing. The amount of all term loans and other prepetition obligations owed to Ableco Finance LLC, as agent and the revolving loan lenders was $76,327,692, plus interest accrued and accruing thereon. About Anchor Blue Retail Group Anchor Blue Retail Group is the holding company for two subsidiaries -- Anchor Blue Division and Levi's(R) & Dockers(R) Outlet by MOST Division. Anchor Blue is a specialty retailer of casual apparel and accessories for the teenage and young adult markets. Founded in 1972, the Company has 177 stores in 12 states. Anchor Blue offers a great assortment of well-priced fashion basics with West Coast style in a fun environment. MOST is an outlet store retailer that holds the exclusive U.S. license for Levi's(R) Outlet & Dockers(R) Outlet Stores. Known for its denim apparel and reasonable prices, MOST operates 74 stores across the U.S. Anchor Blue Retail Group Inc. and four of its affiliates filed for Chapter 11 protection on May 27, 2009 (Bankr. D. Del. Lead Case No. 09-11770). Chun I. Jang, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger P.A., represent the Debtors' in their restructuring efforts. In its petition, Anchor Blue listed between $100 million to $500 million each in assets and debts. ASARCO LLC: Aviva Settlement Agreement Approved ----------------------------------------------- At a June 30, 2009 hearing, Judge Schmidt overruled objections filed against the approval of ASARCO LLC's settlement agreement with Aviva Canada Incorporated. The terms of the order approving the settlement were stated on the record by the Court. Pursuant to the settlement, Aviva will buy back its insurance rights for $1,150,000, which funds have been paid and deposited by ASARCO into an interest bearing segregated account. Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). ASARCO LLC filed a plan of reorganization on July 31, 2008, premised on the sale of the Debtors' assets to Sterlite USA for $2.6 billion. By October 2008, ASARCO LLC informed the Court that Sterlite refused to close the proposed sale and thus, the Original Plan could not be confirmed. The parties has since renewed their purchase and sale agreement and ASARCO LLC has obtained Court approval of a settlement and release contained in the new PSA for the sale of the ASARCO assets for $1.1 billion in cash and a $600 million note. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted its own plan which allows it to keep its equity interest in ASARCO LLC by offering full payment to ASARCO's creditors. AMC offered provide up to $2.7 billion in cash and a $440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Asbestos Panel Ch. 5 Actions Deadline Moved Post-Plan ----------------------------------------------------------------- ASARCO LLC and the Official Committee of Unsecured Creditors for the Asbestos Subsidiary Debtors agree to further toll and extend the time by which the Asbestos Committee may commence actions under Chapter 5 of the Bankruptcy Code to 90 days after the effective date of a confirmed plan of reorganization in the bankruptcy cases, unless ASARCO, the Subsidiary Debtors, and the Subsidiary Committee agree otherwise in writing. Nothing in the Agreement will revive, extend, or reinstate any limitations period that expired prior to April 10, 2007. The Court previously approved the parties' agreement to toll and to extend until July 1, 2009, the time by which the Asbestos Committee may commence actions. 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 Environmental Settlement Order --------------------------------------------------------- Asarco Incorporated previously notified the U.S. Bankruptcy Court for the Southern District of Texas that it would take an appeal of Judge Schmidt's order entered on June 5, 2009, approving the settlement agreement and compromise of certain environmental claims filed against the Debtors' bankruptcy estates, including the specific orders included in the Global Order. Through its appeal, the Parent want the District Court to review whether Judge Schmidt erred, as a matter of law, in: (1) approving the Amended Settlement Agreement and Consent Decree Regarding Residual Environmental Claims for the Coeur d'Alene, Idaho, Omaha, Nebraska, and Tacoma, Washington Environmental Sites among the United States, the States of Washington and Nebraska, and ASARCO, as that settlement pertains to the Omaha, Nebraska Lead Site, insofar as the Bankruptcy Court restricted the procedural fairness inquiry required under United States v. Cannons Engineering Corp., 899 F.2d 79, 90 (1st Cir. 1990) to the actual settlement negotiations between the Debtors and the Environmental Protection Agency, rather than also considering evidence of the EPA's misconduct and errors of procedures designed by EPA to create an unfair bargaining environment during those negotiations; (2) making findings of fact pertaining to procedural fairness as set forth in the Court's findings and conclusions, specifically, whether the Bankruptcy Court erred in failing to find that: -- the EPA's delays of required Omaha Lead Site studies resulted in procedural unfairness with respect to the Omaha settlement; -- the tactical decision of the Agency for Toxic Substances and Disease Registry, in coordination with the EPA, not to perform a public health study resulted in procedural unfairness with respect to the Omaha settlement; and -- it was procedurally unfair for the EPA to intentionally withhold exculpatory public information, despite the existence of this information, EPA's obligation to produce it, and outstanding requests for it, during the time the EPA negotiated the Omaha settlement with Debtors; (3) approving the Residual Environmental Settlement, as that settlement pertains to the OLS, insofar as the Bankruptcy Court failed to assess whether the settlement fairly apportions liability based on ASARCO's comparative fault, as required under the substantive fairness prong set forth in Cannons Engineering; (4) making findings of fact pertaining to substantive fairness as set forth in the Findings and Conclusions, specifically whether the Bankruptcy Court erred in failing to find that: -- ASARCO is not responsible for lead in residential soils; -- lead-based paint is the predominant source of lead contamination at the OLS; -- CERCLA does not permit EPA to pursue a cost recovery action against a potentially responsible party when it involves the clean up of lead-based paint, which is noted as the primary and overwhelming cause of contamination at the OLS; and -- evidence from park studies and a cemetery study confirms that lead-based paint is the primary and overwhelming cause of contamination at the OLS; (5) approving the Residual Environmental Settlement, as that settlement pertains to the OLS, insofar as the Bankruptcy Court failed to preclude a cost recovery settlement under CERCLA where the entire body of evidence establishes that the remedy has failed and will continue to fail, rendering the settlement unreasonable under the standard for approval of CERCLA settlements set forth in Cannons Engineering; (6) making findings of fact pertaining to reasonableness as set forth in the Findings and Conclusions in failing to find that: -- the Omaha Settlement provides for an ineffective remedy at the OLS that improperly emphasizes soil removal while failing to remove lead-based paint, the primary cause of lead contamination at the site; and -- the evidence clearly demonstrates that any remedy short of lead-based paint abatement at the OLS will fail to remediate the lead contamination at that site; and (7) approving these consent decrees and settlement agreements: -- The Amended Consent Decree and Settlement Agreement Establishing a Custodial Trust for Certain Owned Sites in Alabama, Arizona, Arkansas, Colorado, Illinois, Indiana, New Mexico, Ohio, Oklahoma, Utah and Washington among the United States, ASARCO, ASARCO Master, Inc., Arkansas, Colorado, Illinois, Indiana, New Mexico, Ohio, Oklahoma, Utah and Washington, LePetomane XXV, and St. Paul Travelers; -- The Consent Decree and Settlement Agreement Regarding the Montana Sites among the United States, the State of Montana, ASARCO, ASARCO Consulting, Inc., American Smelting and Refining Company, ASARCO Master Inc., and the Montana Environmental Trust Group, LLC; and -- The Consent Decree and Settlement Agreement Establishing a Custodial Trust for the Owned Smelter Site in El Paso, Texas and the Owned Zinc Smelter Site in Amarillo, among the United States, the State of Texas, ASARCO and American Smelting and Refining Company because those Custodial Trust Settlements constitute an improper sub rosa plan. 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) ASHWORTH BROTHERS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Ashworth Brothers, Inc. 3220 S. 2050 W. West Haven, UT 84401 Bankruptcy Case No.: 09-26973 Chapter 11 Petition Date: July 3, 2009 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Judge: William T. Thurman Debtor's Counsel: Knute Rife, Esq. Wrona Law Offices 11650 S. State, Suite 103 Draper, UT 84020 Tel: (801) 676-5252 Email: karife@rifelegal.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/utb09-26973.pdf The petition was signed by Kellie Kendrick, financial manager of the Company. BEAZER HOMES: SEC Charges Ex-Chief Accounting Officer for Fraud --------------------------------------------------------------- The Securities and Exchange Commission has charged the former chief accounting officer of Atlanta-based home builder Beazer Homes, USA, Inc., for conducting a multi-year fraudulent earnings management scheme and misleading Beazer's outside auditors and internal Beazer accountants in order to conceal his wrongdoing. The SEC alleges that Michael T. Rand of Sandy Springs, Ga., fraudulently decreased Beazer's reported net income by recording improper accounting reserves during certain periods between 2000 and 2005 in order to meet or exceed analysts' expectations for Beazer's diluted earnings per share (EPS) and maximize yearly officer and senior employee bonuses. Mr. Rand began reversing these improper reserves beginning in the first quarter of fiscal year 2006 in order to offset Beazer's declining financial performance. "Michael Rand orchestrated an old-fashioned 'cookie jar' earnings management scheme where he hid from view over $60 million in so- called reserves," said Robert Khuzami, Director of the SEC's Division of Enforcement. "Then when Beazer's business declined, he fraudulently reversed those secret reserves and appeased financial analysts, enticed new investors, and most importantly earned himself an undeserved lucrative bonus." The SEC also alleges that in fiscal year 2006 and the first two quarters of fiscal year 2007, Mr. Rand improperly recognized revenue from the sale and leaseback of certain model homes on Beazer's financial statements and used secret side agreements in order to hide his misconduct from Beazer's outside auditors. Cumulatively, Mr. Rand's actions caused Beazer to understate its income in SEC filings by approximately $63 million during fiscal years 2000 to 2005, representing approximately 7 percent of Beazer's cumulative actual restated net income of $955 million for the period. Mr. Rand's fraudulent actions caused Beazer to overstate its income and understate its loss by a total of $47 million during fiscal 2006 and the first two quarters of fiscal 2007, representing 20 percent of Beazer's cumulative actual restated net income of $232 million for the period. The SEC's complaint, filed in U.S. District Court for the Northern District of Georgia, charges Mr. Rand with violations of the antifraud, reporting, books and records and internal control provisions of the federal securities laws, and seeks a permanent injunction, disgorgement of Mr. Rand's ill-gotten gains plus prejudgment interest, and a financial penalty. The SEC also seeks a court order barring Rand from acting as an officer or director of any public issuer. The Commission acknowledges the assistance of the U.S. Attorney's Office of the Western District of North Carolina. The SEC's investigation is continuing. BERNARD MADOFF: SIPC Spending $231 Million on Claim Payments ------------------------------------------------------------ A total of $231 million in Securities Investor Protection Corporation funds has been committed in the determination of 543 claims submitted by Bernard L. Madoff Investment Securities LLC investors, according to Irving H. Picard, the court-appointed trustee for the liquidation of BLMIS under the Securities Investor Protection Act, and SIPC President Stephen Harbeck. The amount of SIPC funds committed in the Madoff liquidation exceeds the total amount paid in the previous 11 largest SIPA liquidations. The amount reflects major progress since May 14, 2009, when Messrs. Picard and Harbeck announced a total of $61.4 million in SIPC funds committed in determination letters sent to 125 BLMIS claimants. These 543 determined customer claims have been allowed in the total amount of $2.972 billion, including $2.741 billion in allowed customer claims that exceed the statutory limit of SIPA protection. Under SIPA, customers with allowed claims share on a pro-rata basis in customer property recovered by the Trustee. SIPC-funded protection is only used to supplement the distribution up to the statutory limit of $500,000 per customer on allowed claims. For that purpose, SIPC maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms. The only source of payment for the portion of these and other allowed claims in excess of the $500,000 from SIPC is the recovery of BLMIS property by the Trustee through the various actions he has and will undertake, including avoidance actions and other recoveries of BLMIS property. It is the Trustee's intent, pursuant to SIPA, to submit a motion at an appropriate time in the future for an order of the Bankruptcy Court to allocate to the fund of customer property the funds and other property he has recovered and will recover and to distribute customer property pro rata among BLMIS customers with allowed claims. Messrs. Picard and Harbeck once again sought to dispel incorrect information surrounding the BLMIS liquidation proceeding: They stressed that trustee expenses are not paid out of customer property. Mr. Harbeck said: "Contrary to what has been suggested by some entirely ill-informed parties, all of the expenses of this work have been paid for by SIPC. Customer funds are never used to pay for administrative expenses in a liquidation proceeding." About Bernard Madoff 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 Mr. 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. As reported by the TCR, Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors. CALPINE CORP: Nissequogue Cogen Settles Suit Against SUNY --------------------------------------------------------- Pursuant to Rule 41(a)(1)(A)(ii) of the Federal Rules of Civil Procedure and Rule 7041(a)(1)(A)(ii) of the Federal Rules of Bankruptcy Procedure, Nissequogue Cogen Partners dismisses its claims against the State University of New York and the State University of New York at Stony Brook. Both SUNY and SUSB dismiss their counterclaims against Nissequogue Cogen in the adversary proceeding. The parties have agreed that all of their claims and counterclaims will be dismissed in their entirety with prejudice, with each party to bear its own costs. Parties' Dispute Debtor Nissequogue Cogen Partners and the State University of New York are parties to a prepetition thermal energy and electric energy supply agreement, under which Nissequogue produces and delivers thermal energy in the form of steam equal to SUSB's total thermal requirements. James W. Draughn, Jr., P.C., Esq., at Kirkland & Ellis LLP, in New York, relates that a re-basing of the employment cost index by the U.S. Department of Labor in 2005 resulted in substantial increases in Nissequogue's compensation for steam under the contract. The Debtor informed SUNY that it will continue to use the 1989 ECI values to calculate SUNY's payments under the Supply Contract; however, Mr. Draughn says SUNY responded that it is preparing to file a claim in excess of $5,000,000 against the Debtor and insisted that Nissequogue use the December 2005 ECI for billing under the Supply Contract. Nissequogue anticipates that SUNY will continue to refuse payment of any amounts associated with the application of the calculated June 1989 ECI until the Court enters a judgment requiring that payments should be made. Furthermore, in 2004, SUNY installed a gas-fired energy production equipment in the State University of New York at Stony Brook, or SUSB, campus, which, according to Mr. Draughn would result to the displacement of the thermal energy that SUNY was required under the Supply Contract to purchase. By using the equipment, the Debtor asserts that SUNY violated the Supply Contract. Mr. Draughn says Nissequogue has spent more than $95,000,000 to design and construct a cogeneration facility at the SUSB Campus to produce the required steam and electricity based on SUNY's purchase commitment. The Debtor further relates that SUNY has also refused to pay for more than 400kwh of energy after claiming that its meters displayed electricity volumes down to the nearest tenth of a kilowatt hour, while Nissequogue's meters displayed volumes to the nearest 200 kilowatts. The Debtor alleges that SUNY has breached the Supply Contract by: (a) failing to make monthly steam payments reflecting proper escalation by an appropriate index; and (b) failing to purchase from Nissequogue certain of SUSB's steam requirements and by refusing to pay for electricity that Nissequogue has delivered based on alleged differences between Nissequogue's electric meters and meters maintained by SUNY. Accordingly, the Debtor asked the Court to award it damages, which, according to Mr. Draughn will exceed $4,000,000, for SUNY's breaches of contract, including pre-judgment interest. About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. On Dec. 19, 2007, the Court confirmed the Debtors' Plan. The Amended Plan was deemed effective as of Jan. 31, 2008. (Calpine Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). CARAUSTAR INDUSTRIES: Sends Plan to Creditors for Voting -------------------------------------------------------- According to Bill Rochelle at Bloomberg, the U.S. Bankruptcy Court for the Northern District of Georgia has approved the disclosure statement to Caraustar Industries Inc.'s pre-negotiated Chapter 11 plan, paving the way for the Plan to go to creditors for voting. The Court will convene a hearing to consider confirmation of the Plan on August 5. Pre-bankruptcy, Caraustar reached agreement with holders of approximately 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 Chapter 11 restructuring that would reduce the company's debt obligations by approximately $135 million. Under the Chapter 11 plan, the Company's common stock holders will receive their pro rata share of $2.9 million, or about 10 cents per share, subject to certain conditions, the company said. Further, the Company's existing Senior Notes will be exchanged for an aggregate of $85 million in new Senior Secured Notes and 100% of the common stock of the reorganized company. Unsecured creditors will receive full recovery. The reorganized company is expected to emerge as a private entity with Wayzata Investment Partners LLC becoming the company's controlling shareholder, Caraustar stated. 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. 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. CHARTER COMM: Former Employee Says Allen Misled Investors --------------------------------------------------------- In a letter addressed to the Honorable Stuart M. Bernstein, Chief Judge of the United States Bankruptcy Court for the Southern District of New York, Nicholas J. Hubbuch of Lake Saint Louis, Missouri, says that the prepackaged plan of reorganization of Charter Communications Inc. has many discrepancies, and that Judge James M. Peck lacks knowledge of those numerous inconsistencies. Mr. Hubbuch says he is a former director of Information Technology at Charter, serving from 1998 through 2002, and has some information regarding Charter's violation of the Sarbanes-Oxley Act of 2002 that has never been investigated. He contends that the violation specifically relates to Charter's data storage and recovery as mandated by the Sarbanes-Oxley Act, which put all investors at risk. "The specifics will take up much space so I'll wait to hear from you to provide them," he adds. The Sarbanes-Oxley Act creates a new, quasi-public agency, the Public Company Accounting Oversight Board, charged with overseeing, regulating, inspecting and disciplining accounting firms in their roles as auditors of public companies, and covers issues, including auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure. "Charter's Pre-Packaged Bankruptcy it is a total sham and one that has been allowed to proceed without any investigation by any governmental agencies," Mr. Hubbuch tells the Court. "There are entirely too many fraudulent activities that have been perpetrated by Charter, Paul Allen, and the Officers of the company," he continues. As a retiree and Vietnam veteran, Mr. Hubbuch declares that he is appalled that these miscarriages of justice are allowed to go unchallenged in the United States of America. Among others, he points out these specific allegations: -- Chairman and Microsoft co-founder Paul Allen along with the board of directors failed to exercise their fiduciary responsibilities to Charter's shareholders; -- Charter management over extended capital expenditures, or Capex, spending, and kept Charter in the perpetual state of losses to maintain the net operating losses or NOLs built up for Mr. Allen's personal use. Mr. Allen, since purchasing Charter, has taken its NOLs and used it to offset his taxes; -- Misleading statements made by Charter's chief financial officer on the second quarter of 2008 conference call regarding availability of funds to conduct business through all of 2010; -- Failure of Charter to fairly value their subscriber base in the planned bankruptcy filing to fraudulently wipe out the common shareholder equity. Recent estimates by industry experts (Kagan) estimate Charter subscribers on average provide $108 revenue each month; and -- Due to a provision in the economic stimulus legislation signed by President Barack Obama, since Mr. Allen's stake in Charter is around 50%, his partnership share of the debt forgiveness could be as much as $4 billion. He notes that Judge Peck has denied a motion to create an equity committee to represent shareholders in Charter's bankruptcy, saying it would be too costly and would threaten the cable company's restructuring. If an equity committee would be too costly, "then why is it that Charter has been spending money through this entire bankruptcy like it was water to enlarge their homes passed along with other campaigns that are extremely costly? This can easily be verified by looking at their expenses and asking how Judge Peck could make such an unscrupulous ruling," Mr. Hubbuch points out. A copy of Mr. Hubbuch's letter is available for free at: http://bankrupt.com/misc/CCI_Letter_Hubbuch_070109.pdf About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. On March 16, 2009, Charter Communications filed its annual report on Form 10-K, which contained a going concern modification to the audit opinion from its independent registered public accounting firm. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D. N.Y. Case No. 09-11435). Pacific Microwave filed for bankruptcy protection on April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: Court Grants Open Ended Extension to Removal Period ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended the period within which Charter Communications, Inc., and its debtor-affiliates may remove actions to the later of: (1) a plan of reorganization's confirmation date; (2) the date that is 30 days after the entry of an order terminating the automatic stay provided by Section 362 of the Bankruptcy Code with respect to the particular action sought to be removed; and (3) with respect to actions commenced after the Petition Date, the time periods set forth in Rule 9027(a)(3), which is the shorter of: * 30 days after receipt of a copy of the initial pleading setting forth the claim or cause of action sought to be removed, or * 30 days after receipt of the summons if the initial pleading has been filed with the court but not served with the summons. Judge Peck noted that the order will be without prejudice to any position the Debtors may take regarding whether Section 362 of the Bankruptcy Code applies to stay any action. About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. On March 16, 2009, Charter Communications filed its annual report on Form 10-K, which contained a going concern modification to the audit opinion from its independent registered public accounting firm. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D. N.Y. Case No. 09-11435). Pacific Microwave filed for bankruptcy protection on April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: Agrees to Reinstate Goodell Class Claim ----------------------------------------------------- Charter Communications Inc. and its affiliates filed an interim objection to the requests for (i) class certification and for class treatment of proof of claim, and (ii) estimation of that Class Claim filed by Marc Goodell, Philip Powers, Chad Werth, Ross Blakley and Dominic Tucker. Goodell, et al., filed a multi-state class action lawsuit in the U.S. District Court for the Western District of Wisconsin against Charter Communications, LLC, and Charter Communications, Inc., seeking payment of unpaid wages and overtime compensation on behalf of a class of plaintiffs, who assert claims under the wage and hour laws of California, Michigan, Minnesota, and Missouri. The Debtors told Judge Peck that the request for class certification should be denied because Goodell, et al., have failed to establish that certification of a class would advance the efficient administration of the bankruptcy estates, and further failed to establish the elements necessary for certification of a class pursuant to Rules 9014 and 7023 of the Federal Rules of Bankruptcy Procedure. The Debtors and Goodell, et al., eventually agreed on, and submitted to the Court a stipulation resolving and withdrawing the Goodell Requests. Pursuant to the Debtors' Plan, and notwithstanding any subsequent amendment to the terms of the Chapter 11 Plan that may alter the sections subject to the stipulation, the parties agree and stipulate that the contingent, unliquidated and disputed Class A-3 and Class J-6 claims alleged in the Goodell Action will be reinstated and rendered unimpaired in accordance with Section 1124 of the Bankruptcy Code upon confirmation of the Plan. For the avoidance of doubt, unless the Plan is subsequently and materially modified so that Class A-3 or Class J-6 claims, including those of the Goodell Plaintiffs, will not be reinstated and rendered unimpaired, Goodell, et al., will be permitted to pursue the claims asserted in the Goodell Action upon both confirmation of the Plan and after its effective date. Goodell, et al., will maintain the right to request class certification in the Goodell Action and the Debtors will maintain the right to oppose class certification, except on the basis of waiver, failure to expeditiously move for estimation or class certification, or prejudice resulting from any delay in the prosecution of the Requests. Goodell, et al., withdraw their Requests and their Class Proof of Claim, and will not refile any Requests or Proof of Claim, subject to certain exception. If a Chapter 11 plan for the Debtors providing for the reinstatement of the Class Claims is not confirmed by August 31, 2009, Goodell, et al., may refile a request to estimate or certify a class for submission of a class proof of claim, as well as resubmit their Class Proof of Claim. The Debtors may oppose that request on any ground other than on the basis of waiver, failure to expeditiously move for estimation or class certification, or prejudice resulting from any delay in the prosecution of the Requests. The Debtors agree that the discharge injunction and releases provided for under the Plan do not apply to the claims asserted by Goodell, et al., in the Goodell Action. The parties further agree and stipulate that, after both confirmation of the Plan and its effective date, they will file a request to lift that certain stay order entered by the District Court so that the parties may proceed with the litigation and the District Court may consider pending motions. Other than the agreements and limitations stated in the stipulation, the parties agree that the parties maintain and do not waive any rights regarding the prosecution or defense of the Goodell Claims, including all rights relating to the venue, service of process, jurisdiction, the right to a jury trial, or scheduling of the Goodell Action, and agree that the issues will be determined at a later date. Should the Debtors amend their Plan to provide that Class A-3 or Class J-6 claims, including those of the Goodell Plaintiffs, will not be reinstated and rendered unimpaired upon confirmation, the stipulation will be terminated. In that case, Goodell, et al., may refile the Requests and their Class Proof of Claim, and the Debtors will be estopped from asserting any defense thereto on the basis of waiver, failure to expeditiously move for estimation, or prejudice resulting from any delay in prosecution of the Goodell Requests. About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. On March 16, 2009, Charter Communications filed its annual report on Form 10-K, which contained a going concern modification to the audit opinion from its independent registered public accounting firm. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y. Case No. 09-11435). Pacific Microwave filed for bankruptcy protection on April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: NewCo Completes 9-Member Board of Directors --------------------------------------------------------- Chrysler Group LLC announced on July 5, 2009, the appointment of additional members to its Board of Directors, completing the nine- member Board that will provide oversight to the Chrysler Group. "The formal creation of our Board of Directors is another important step toward building a viable Chrysler Group for the long term," said C. Robert Kidder, acting Chairman of the Board, in an official statement. "Our board members bring a wealth of talent and experience in areas such as transportation, finance and investing, energy and government. We will work together as a Board of Directors to support Chrysler Group's success to the benefit of all stakeholders." The Board is expected to hold its first meeting on July 29. Mr. Kidder was previously announced to the Chrysler Group LLC Board of Directors on May 20. He currently serves on the boards of Morgan Stanley, where he is the lead director, Schering-Plough Corporation, and Microvi Biotech Inc. He previously served as Chairman and Chief Executive Officer of both Duracell International Inc. and Borden Chemical Inc. and as director of companies like Electronic Data Systems Corporation and General Signal Corporation. During his tenure with McKinsey and Co. Inc., he worked with a major OEM client in the automotive industry. He currently is Chairman and CEO of 3Stone Advisors LLC, an investment firm that focuses on clean-tech companies. Joining Mr. Kidder on the board are: (1) Alfredo Altavilla -- the Chief Executive Officer of Fiat Powertrain Technologies and Senior Vice President of Business Development of Fiat Group Automobiles. He joined Fiat Auto in 1990 as manager of product development, playing roles of increasing responsibility in the field of international ventures and strategic planning. (2) James J. Blanchard -- Partner and Co-Chairman, Regulatory and Government Affairs at DLA Piper, one of the world's largest law firms. He is former ambassador to Canada, served two terms as governor of Michigan and four terms as a member of the United States Congress. (3) George F.J. Gosbee -- Chairman, CEO and President of Tristone Capital Inc., a global energy advisory firm that provides fully integrated investment banking, property acquisitions & divestitures, and global equity capital markets services. Mr. Gosbee founded the firm in 2000, creating a unique model to assist oil and gas companies by combining technical expertise with financial professionals. (4) Sergio Marchionne -- CEO of Chrysler Group LLC since June 2009. Previously, he was appointed Chairman of CNH Case New Holland in April 2006 and CEO of Fiat Group Automobiles in February 2005. He was appointed CEO of Fiat S.p.A. in June 2004 and has been a Member of the Board since May 2003. He is Chairman of SGS Group of Geneva, and among other positions he was CEO of SGS Group of Geneva and was Chairman and CEO of Lonza Group Ltd. (5) Douglas Steenland -- former CEO of Northwest Airlines. He joined Northwest Airlines in 1991 as Vice President and Deputy General Counsel. After becoming CEO in 2004, he successfully reshaped Northwest Airlines into a financially viable airline. Mr. Steenland also worked as a Senior Partner at the Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson, and Hand and served in the Office of the General Counsel of the U.S. Department of Transportation. (6) Scott Stuart, a founding partner of Sageview Capital LLC, and former partner and member of the investment committee at Kohlberg Kravis Roberts & Company (KKR). He currently serves on the board of EverBank Financial Corp., Aveos Fleet Performance Inc. and previously served on such boards as Borden Chemical, Inc., Duracell International Inc., Nabisco, Inc. and Sealy Corporation. (7) Ronald L. Thompson, Chairman of the Board of Trustees for Teachers Insurance and Annuity Association (TIAA), a for- profit life insurance company that serves the retirement and financial needs of faculty and employees of colleges and universities, hospitals, cultural institutions and other non-profit organizations. He previously owned and operated Midwest Stamping Company of Maumee, Ohio, and rapidly grew the business into a first tier automotive supplier and one of the largest minority-owned companies in the U.S. (8) Stephen Wolf, Chairman of R.R. Donnelley & Sons Co. His career in the aviation industry began in 1966 with American Airlines. After positions at Pan American World Airways, Continental Airlines and Republic Airlines, he served as Chairman and Chief Executive Officer of UAL Corporation and United Air Lines, Inc. from 1987 to 1994. He became Managing Partner of Alpilles LLC in 2003. "While Chrysler Group LLC is a private company, the Board is focused on supplying the strong governance that would be expected of a public company," Mr. Kidder said. "We are looking forward to working as a single team to provide the oversight, guidance and expertise that will help make Chrysler Group successful." 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) CHRYSLER LLC: Proposes Protocol for Assumption of Lemon Law Claim ----------------------------------------------------------------- The court order approving the sale of Chrysler LLC's assets to Fiat S.p.A. provides for Chrysler Group LLC's assumption of claims under lemon laws. Lemon laws are state laws that require the manufacturer to provide remedy to buyers of vehicles when it is unable to conform to a warranty after a reasonable number of attempts to do so. The lemon laws of certain states provide for administrative proceedings for the assertion of claims against a manufacturer while in other states, claims are asserted in more traditional legal proceedings including litigation in state courts. As of April 30, 2009, the Debtors face around 1,350 state court litigations and arbitrary cases filed under the lemon laws. To establish a process to efficiently permit pending and future lemon law claims, the Debtors request that they be authorized to file notice of the terms of the sale order governing the assumption of lemon law claims in each of the lemon law actions, and other documents including the sale order, the proposed order approving the procedures, and other papers necessary to effectuate the assumption of the claims. The hearing to consider approval of the request is scheduled for July 16, 2009. Creditors and other concerned parties have until July 10, 2009, to file their objections. 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) CHRYSLER LLC: Mohr's Motion to Lift Stay to Liquidate PI Claim -------------------------------------------------------------- Gilbert Mohr's wife, Vickie Mohr and Ms. Mohr's mother, Maurine Heathscott were killed in an automobile accident while driving a Dodge Caravan. Mr. Mohr, as administrator of the decedents' estates, filed suit against DaimlerChrysler LLC, the manufacturer of the vehicle, in the Circuit Court of Shelby County, Tennessee, stating products liability claims for compensatory and punitive damages. The case went to trial three years later and because the plaintiffs' claims included claims for punitive damages, the case was tried in two phases: a liability and compensatory damage phase and a punitive damage phase. After the completion of the first phase of the trial, a jury returned a verdict against Chrysler for Ms. Mohr's death and awarded compensatory damages amounting to $7.5 million. In addition, the jury found Chrysler liable for Ms. Heathscott's death and awarded $2 million in compensatory damages. Leslie A. Berkoff, Esq., at Moritt Hock Hamroff & Horowitz LLP, in New York, explains that under Tennessee's law of comparative fault, the jury found Chrysler to be responsible for 46% of Ms. Mohr's damages and 50% of Ms. Heathscott's damages. In returning this verdict, the jury found the automobile was defectively designed and unreasonably dangerous based upon evidence that Chrysler deliberately chose to modify the design in a manner that compromised the safety of the passenger compartment. The design change allowed Chrysler to bring the automobile to market more quickly, which resulted in considerable cost savings to Chrysler. At the conclusion of the second phase of the trial, the jury returned a verdict against Chrysler for punitive damages for the wrongful death of Ms. Mohr amounting to $48,778,000. On September 13, 2005, the trial court entered findings of fact and conclusions of law affirming the punitive damage award, and on May 25, 2006, the trial court denied Chrysler's motion for a new trial. The trial court entered a final judgment against Chrysler on the jury verdicts, awarding $3,450,000 in compensatory damages for the death of Ms. Mohr and $1,100,000 in compensatory damages for the death of Ms. Heathscott. The Judgment also awarded $48,778,000 in punitive damages. Chrysler appealed the Judgment, as of right, to the Tennessee Court of Appeals, an intermediate appellate court. However, the Court of Appeals affirmed the $3,450,000 and $1,100,000 compensatory damage awards, but reduced the award of punitive damages to $13,800,000 and remanded the cause to the trial court to enforce the Judgment. On January 16, 2009, Chrysler applied to the Supreme Court for the State of Tennessee for permission to appeal the decision of the Court of Appeals. Ms. Berkoff says that Chrysler is, in effect, asking the Tennessee Supreme Court to revisit the Flax decision. Mr. Mohr, naturally, has filed an opposition to Chrysler's request for permission to appeal. In connection with the appeal, Chrysler posted a bond to supersede the Judgment. Safeco Insurance Company of America and DaimlerChrysler Insurance Company are sureties under the bond. Safeco is bound to Mr. Mohr for $51,597,130 while Chrysler Insurance is bound to Mr. Mohr for $14,877,000. By this motion, Mr. Mohr asks Judge Gonzalez to lift the automatic stay to complete the appeal and to proceed against the Supersedeas Bond. Ms. Berkoff contends that the prosecution of a state law tort claim in state court is not connected in any significant respect with the Debtors' bankruptcy cases. She adds that Mr. Mohr will clearly be prejudiced by any further delay because, regardless of the outcome of the Debtors' bankruptcy cases. 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) CLEAR CHANNEL: Fails to Attract Interest in Debt ------------------------------------------------ James Kraus at Bloomberg News reports that Clear Channel Outdoor Holdings Inc., the billboard advertising division of Clear Channel Communications Inc., failed to attract interest in a proposed $3 billion debt offering. The Bloomberg report cited the New York Post, which quoted an unidentified market participant as saying. According to NYP, calls with offers to sell the bonds from Goldman Sachs Group Inc. have stopped. Clear Channel Outdoor Holdings wanted to sell the debt in two tranches, one paying 10 percent and the other 14 percent, the Post reported. Clear Channel owns 89% of Clear Channel Outdoor. Clear Channel Communications, Inc. -- http://www.clearchannel.com/ -- is a diversified media company with three primary business segments: radio broadcasting, outdoor advertising and live entertainment. 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 CRABTREE & EVELYN: Parent to Provide $40 Million Financing ---------------------------------------------------------- Crabtree & Evelyn Ltd. will be able to fund its Chapter 11 cases through loans from its parent. According to Bloomberg's Bill Rochelle, Crabtree's ultimate parent, Kuala Lumpur Kepong Bhd from Malaysia, is offering to provide $40 million in secured debtor-in- possession financing. The financing doesn't charge any fees, the report relates. The Company filed in Chapter 11 after being unable to negotiate lease termination and concession agreements with landlords for its store leases. The Company said in a filing with the U.S. Bankruptcy Court for the Southern District of New York that sales declined "dramatically" in the past 10 months and are projected in the current fiscal year to fall 24% short of the previous fiscal year ended in September. Wholesale revenue is predicted to decline this year by 30%. Revenue in the last fiscal year was $107.5 million. The operating loss in fiscal 2008 was $8 million, following an operating loss of $3.2 million in fiscal 2007. The loss in the current fiscal year is forecast to be $13.3 million. About Crabtree & Evelyn The Woodstock, Connecticut-based Crabtree & Evelyn Ltd. is a retailer and wholesaler of personal care products, accessories, fragrances and foods. It has 126 stores in the U.S. and 130 stores abroad. Kuala Lumpur Kepong Bhd from Malaysia is its ultimate parent. Crabtree & Evelyn filed for Chapter 11 on July 1, 2009 (Bankr. S.D.N.Y. Case No. 09-14267). Judge Burton R. Lifland handles the Chapter 11 case. Attorneys at Cooley Godward Kronish LLP are bankruptcy counsel to the the Debtor. Clear Thinking Group LLC serves as financial advisor while KPMG Corporate Finance LLC serves as real estate consultant. Epiq Bankruptcy Solutions LLC has been selected as claims agent. In its petition, the Company listed assets of $46.2 million against debt totaling $47.8 million. CRUSADER ENERGY: Court Establishes July 28 Claims Bar Date ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has established July 28, 2009, at 5:00 p.m. as the deadline for the filing of proofs of claim in Crusader Energy Group Inc., et al.'s bankruptcy cases. Governmental units have until September 26, 2009, to file proofs of claim. Proofs of claim must be filed via mail, hand delivery, or courier service, so as to be actually received by the Debtors' claims and noticing agent, The BMC Group, Inc., by the applicable bar date at: If by U.S. First Class Mail: Crusader Energy Group Inc. c/o BMC Group P.O. Box 3020 Chanhassen, MN 55317-3020 If by Hand Delivery or Overnight Courier: Crusader Energy Group Inc. c/o BMC-Analytics Incorporated 18750 Lake Drive East Chanhassen, MN 55317-9384 Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explores, develops and acquires oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. Crusader Energy and its affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No. 09- 31797). The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, L.L.P., represent the Debtors as counsel. Holland N. Oneil, Esq., Michael S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne & Sewell, represent the official committee of unsecured creditors as counsel. E*TRADE FINANCIAL: To Hold Special Shareholders Meeting in August ----------------------------------------------------------------- E*TRADE FINANCIAL Corporation filed with the Securities and Exchange Commission a Schedule 14A to announce that it's going to hold a special meeting of stockholders to vote on a series of proposals. E*TRADE anticipates holding the Special Meeting of Stockholders sometime in August 2009. The meeting is expected to start at 9 a.m., local time, and will be held at Doral Arrowwood Conference Center, 975 Anderson Hill Road Rye Brook, in New York. E*TRADE is calling the Special Meeting to ask stockholders to vote upon a series of proposals which will permit the Company to: (1) complete a debt exchange for up to approximately $1.7 billion of its outstanding debt securities which is key to its plan to strengthen the Company's capital structure by increasing equity and reducing its debt burden, and (2) engage in additional transactions, as needed, to further strengthen the Company's capital structure in the future. E*TRADE believes that the transactions are not only in the best interest of all stockholders, and but also critical to the immediate future of the Company. The Company has adopted and is implementing a plan to strengthen its capital structure by raising cash equity primarily to support E*TRADE Bank and to reduce the Company's debt burden. E*TRADE completed the first step of the plan on June 24, 2009, when it closed a public offering of its common stock and raised nearly $600 million. If the proposals to complete the Debt Exchange are not approved and the proposed transactions are not completed, E*TRADE said it may be unable to strengthen the Company's capital structure and could face negative regulatory consequences, such as a public supervisory action by its primary regulator. These consequences could have a material negative effect on its business and financial condition and the value of its common stock. E*TRADE on June 22 commenced the Debt Exchange in which it is offering to exchange up to approximately $1.7 billion of its outstanding debt securities for an equivalent amount of newly- issued zero coupon convertible debentures due 2019. The Debt Exchange will significantly reduce its debt burden by materially reducing interest costs, lengthening the weighted-average maturities of its indebtedness and potentially reducing repayment obligations to the extent that holders of the Debentures convert rather than hold to maturity. Citadel Investment Group L.L.C, E*TRADE's largest stock and bond holder, has agreed to tender at least $800 million, and may tender up to approximately $1.2 billion aggregate principal amount of the notes owned by it in the Debt Exchange and to vote in favor of Proposals. On June 22, E*TRADE and Citadel Equity Fund Ltd. entered into Amendment No. 1 to the parties' Exchange Agreement, dated June 17, 2009. The Amendment, among other things, provides that if the Company has received the requisite consents with respect to a series of Notes, and the Exchange Offer has not been consummated on or prior to October 31, 2009, or the Exchange Agreement has been earlier terminated in accordance with its terms, the Company will nonetheless pay to each holder of validly tendered Notes in the Exchange Offer, including CEFL, a consent fee. The Amendment also provides that the Company will commence its Exchange Offer on June 22, 2009, that the Early Tender Period will expire at midnight, New York City time on July 1, 2009, and that the Company will announce preliminary results of the Early Tender Period at approximately 6:00 p.m. New York City time on July 1, 2009. As consent fee, the Company will pay to each holder of 2011 Notes or Springing Lien Notes who validly delivers and does not revoke a consent to the amendments prior to the expiration of the Early Tender Period, a cash payment equal to $5.00 for each $1,000 in principal amount of 2011 Notes or Springing Lien Notes in respect of which the consent has been validly delivered. At the Special Meeting, holders of the Company's common stock will be asked to consider and vote on proposals to: -- amend E*TRADE's Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 1,200,000,000 to 4,000,000,000; -- approve the issuance of Debentures in the Debt Exchange and the issuance of common stock issuable upon conversion of the Debentures under the applicable provisions of NASDAQ Marketplace Rule 5635; -- approve the potential issuance of common stock, or securities convertible into or exchangeable or exercisable for common stock, in connection with future debt exchange transactions in an amount up to 365 million shares; and -- grant management the authority to adjourn, postpone or continue the Special Meeting. The Board recommends approval of the Proposals. At the Special Meeting, holders of the Company's common stock also will be asked to consider and vote on a non-binding resolution concerning whether E*TRADE should retain or terminate its Stockholder Rights Plan until its scheduled expiration on July 9, 2011. The Board makes no recommendation regarding this proposal. 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." E*TRADE FINANCIAL: Supplements Prospectus on Certain Securities --------------------------------------------------------------- E*TRADE FINANCIAL Corporation filed with the Securities and Exchange Commission a prospectus supplement on Form 424B7 relating to: -- 180,095,920 shares of the Company's common stock, par value $0.01 per share; -- $230,245,000 principal amount of the Company's 8.0% Senior Notes due 2011; and -- $1,773,976,000 principal amount (plus capitalized interest, if any) of our 12.5% Springing Lien Notes due 2017, which may be sold from time to time by selling securityholders. The 2017 Notes include $1,604,641,000 principal amount of 12.5% Springing Lien Notes Due 2017 issued on November 29, 2007 and $169,335,000 principal amount of 12.5% Springing Lien Notes Due 2017 issued on January 18, 2008. 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. In the future, the Company said, it will be required to secure the 2017 Notes and certain of its subsidiaries will be required to guarantee the 2017 Notes. The security and guarantees may not provide the holders of the 2017 Notes with any further protection, the Company said. The prospectus supplement includes both Notes tendered by the selling securityholders in a Debt Exchange and Notes not tendered in the Debt Exchange. The Company explained the selling securityholders may offer and sell the common stock and Notes offered hereby directly to purchasers or through underwriters, brokers, dealers or agents, who may receive compensation in the form of discounts, concessions or commissions. The securities 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 the securities, we will name them and describe their compensation in a supplement to this prospectus supplement. The Company will not receive any of the proceeds from the sale of the securities pursuant to the prospectus supplement. The Company, however, is responsible for expenses incident to the registration under the Securities Act of 1933 of the offer and sale of the securities. The Notes will not be listed on any securities exchange. The Company's common stock is listed on the NASDAQ Global Select Market under the symbol "ETFC". The closing price of the common stock on July 1, 2009 was $1.35 per share. A full-text copy of the prospectus supplement is available at no charge at http://ResearchArchives.com/t/s?3eb6 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: Lists 38,000 Potential Creditors --------------------------------------------- Greg Lamm at Puget Sound Business Journal reports that Eddie Bauer Inc. may have 38,000 creditors worldwide. According Business Journal, Eddie Bauer's potential creditors include some 3,000 businesses, individuals and governments in Washington, ranging from a Seattle fashion-modeling agency to Microsoft and Amazon. Business Journal quoted Terri Morgan, one of the listed creditors, as saying, "We have just put the monies that are owed to us on hold, and hopefully we will be paid in a timely manner." Business Journal relates that private equity firm CCMP Capital said it wants to buy the assets of 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. ENERGY PARTNERS: Court Approves Parkman Whaling Financial Advisors ------------------------------------------------------------------ The Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas authorized Energy Partners, Ltd., and its debtor-affiliates to employ Parkman Whaling LLC as financial advisors. Parkman Whaling is expected to, among other things: a) evaluate the Debtors' strategic options based upon Parkman Whaling's initial review; b) advise the Debtors as to potential mergers or acquisitions, and the sale or other disposition of any of the Debtors' assets or business; and c) advise the Debtors with the development, negotiation and implementation of a restructuring Plan. Pre-bankruptcy, Parkman Whaling received $225,000 in fees and $34,469 in expense reimbursements. The Debtors do not owe Parkman Whaling any amounts with respect to prepetition services rendered. James E. Parkman, chairman of Parkman Whaling, told the Court that Parkman Whaling will be paid: a) a $75,000 monthly fee; b) a $2 million restructuring transaction fee; c) a M&A transaction fee; d) a financing transaction fee; and e) a break-up fee. Mr. Parkman assured the Court that Parkman Whaling is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Energy Partners Based in New Orleans, Louisiana, Energy Partners, Ltd., (Pink Sheets: ERPL.PK) is an independent oil and natural gas exploration and production company. The Company had interests in 24 producing fields, six fields under development and one property on which drilling operations were then being conducted, all of which are located in the Gulf of Mexico Region. Energy Partners, Ltd., and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. S.D. Tex. Lead Case No. 09-32957). Paul E. Heath, Esq., at Vinson & Elkins LLP, represents the Debtors in their restructuring efforts. The Debtors' financial condition as of December 31, 2008, showed total assets of $770,445,000 and total debts of $708,370,000. ENERGY PARTNERS: Court Approves Schully Roberts as Special Counsel ------------------------------------------------------------------ The Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas authorized Energy Partners, Ltd., and its debtor-affiliates to employ Schully, Roberts, Slattery & Marino as special counsel. Schully Roberts is expected to provide services upon the request of the Debtors and V&E in relation to: a) negotiations with the Minerals Management Service of the U.S. Department of the Interior; b) general advice on MMS policies, processes and procedures; c) review of any MMS orders and pleadings related to the Debtors' estates; d) advice on specific legal issues in relation to the Debtors' oil and gas operational matters; and e) any and all other necessary MMS and Louisiana legal advice related to these matters. Schully Roberts will work closely with the Debtors' general bankruptcy counsel to avoid duplication of efforts. Paul J. Goodwine, a shareholder of Schully Roberts, told the Court that the firm received a $100,000 retainer. The Debtors paid $14,539 to the firm out of this retainer to compensate for its prepetition services. The $85,460 balance will serve as postpetition retainer. The hourly rates of Schully Roberts personnel are: Mr. Goodwine $315 Herman Garner $315 Lynn Wolf $275 Kathleen Doody $240 Steve Domas $200 Paralegals and Legal Assistants $110 - $140 Mr. Goodwine assured the Court that Schully Roberts is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Court. Mr. Goodwine can be reached at: Schully, Roberts, Slattery & Marino 1100 Poydras Street, Suite 1800 New Orleans, Louisiana Tel: (504) 585-7800 Fax: (504) 585-7890 About Energy Partners Based in New Orleans, Louisiana, Energy Partners, Ltd., (Pink Sheets: ERPL.PK) is an independent oil and natural gas exploration and production company. The Company had interests in 24 producing fields, six fields under development and one property on which drilling operations were then being conducted, all of which are located in the Gulf of Mexico Region. Energy Partners, Ltd., and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. S.D. Tex. Lead Case No. 09-32957). Paul E. Heath, Esq., at Vinson & Elkins LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Parkman Whaling LLC as financial advisor. The Debtors' financial condition as of December 31, 2008, showed total assets of $770,445,000 and total debts of $708,370,000. ENERGY PARTNERS: Court OKs Vinson & Elkins as Bankruptcy Counsel ---------------------------------------------------------------- The Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas authorized Energy Partners, Ltd., and its debtor-affiliates to employ Vinson & Elkins LLP as counsel. V&E is expected to: a. serve as counsel of record for the Debtors in all aspects of the cases, to include any adversary proceedings commenced in connection with the cases, and to provide representation and legal advice to the Debtors throughout the cases; b. assist in the formulation and confirmation of a Chapter 11 Plan and disclosure statement for the Debtors; c. consult with the U.S. Trustee, any statutory committee and all other creditors and parties-in-interest concerning the administration of the cases; d. take all necessary steps to protect and preserve the Debtors' bankruptcy estates; and e. provide all other legal services required by the Debtors and assist the Debtors in discharging their duties as the debtors-in-possession in connection with these cases. Pre-bankruptcy, the Debtors paid V&E $1,285,308 in fees and expenses for services rendered, including, but not limited to, services in contemplation of, or in connection with, the Debtors' restructuring efforts, including substantial work performed negotiating, preparing and documenting the cases. The source of the compensation was the Debtors' property. Paul E. Heath, a partner at V&E, told the Court that V&E received a $200,000 retainer. As of the petition date, $126,423 remains in the retainer account as security for V&E's services. The hourly rates of V&E personnel are: Senior Partners $770 Junior Associates $220 Paraprofessionals $105 - $230 Mr. Heath assured the Court that V&E is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Heath can be reached at: Vinson & Elkins LLP Trammell Crow Center 2001 Ross Avenue, Suite 3700 Dallas, TX 75201 Tel: (214) 220-7700 Fax: (214) 999-7976 About Energy Partners Based in New Orleans, Louisiana, Energy Partners, Ltd., (Pink Sheets: ERPL.PK) is an independent oil and natural gas exploration and production company. The Company had interests in 24 producing fields, six fields under development and one property on which drilling operations were then being conducted, all of which are located in the Gulf of Mexico Region. Energy Partners, Ltd. and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. S.D. Tex. Lead Case No. 09-32957). The Debtors propose to employ Parkman Whaling LLC as financial advisor. The Debtors' financial condition as of December 31, 2008, showed total assets of $770,445,000 and total debts of $708,370,000. ENERGY PARTNERS: Gets Court Approval of Alan D. Bell as CRO ----------------------------------------------------------- Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas authorized Energy Partners, Ltd., and its debtor-affiliates to employ Alan D. Bell as chief restructuring officer. Mr. Bell is expected to: a. perform executive advisory services customarily performed by a CRO; b. perform duties as requested by EPL's board; c. review and assess the positions and interests of the current stakeholders; d. develop, propose, and where possible, implement, subject to board direction, plans to address issues now confronting the Debtors and its stakeholders; and e. provide executive leadership and problem solving for the full range of the Debtors' needs. Prior to Energy Partners' petition date, Mr. Bell received $75,000 as payment for fees and $7,603 for expenses incurred. Mr. Bell will receive a $50,000 monthly fee, plus any reasonable business fees and travel expenses. Mr. Bell holds a retainer of $25,000. Mr. Bell assured the Court that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Energy Partners Based in New Orleans, Louisiana, Energy Partners, Ltd., (Pink Sheets: ERPL.PK) is an independent oil and natural gas exploration and production company. The Company had interests in 24 producing fields, six fields under development and one property on which drilling operations were then being conducted, all of which are located in the Gulf of Mexico Region. Energy Partners, Ltd., and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. S.D. Tex. Lead Case No. 09-32957). Paul E. Heath, Esq., at Vinson & Elkins LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Parkman Whaling LLC as financial advisor. The Debtors' financial condition as of December 31, 2008, showed total assets of $770,445,000 and total debts of $708,370,000. EVIDENT TECHNOLOGIES: Legal Costs on IP Suit Forces Bankruptcy -------------------------------------------------------------- Evident Technologies commenced chapter 11 reorganization July 6, 2009, before the U.S. Bankruptcy Court in Albany, New York. The Company has asked the Bankruptcy Court to approve a debtor-in- financing package of $1.35 million. The filing was prompted by Evident's inability to continue paying the exorbitant costs associated with a patent infringement case brought on by a large California-based life science company. The promise of substantial debtor in possession financing triggered by a chapter 11 filing was another driving reason for the bankruptcy filing. During the Chapter 11, Evident will operate under current management and continue research in nanotechnology and pursuit of commercialization of its patented technology. "Defending a lawsuit in the Eastern District of Texas for patent infringement required us to spend at an unsustainable rate," stated Clinton Ballinger, CEO. "The restructuring plan associated with the chapter 11 allows us to protect our business and operate the company going forward. We have reached an agreement with our secured creditors already and our customers and employees should see minimal impact." Chapter 11 of the Bankruptcy Code allows companies to reorganize under the bankruptcy laws of the US if they are unable to service their debt. Evident has developed a plan with major creditors for operating the company going forward. About Evident Technologies Evident Technologies Inc. -- http://www.evidenttech.com/-- develops and commercializes technology based on semiconductor nanocrystals. Founded in 2000, Evident is one of the first companies to commercialize products based on semiconductor nanotechnology and has launched commercial products in LED and lighting, military and life science markets. FLEETWOOD ENTERPRISES: Has $1.75MM Offer for Garrett Facility ------------------------------------------------------------- Fleetwood Enterprises, Inc., et al., ask the U.S. Bankruptcy Court for the Central District of California to approve the sale of substantially all of the assets relating to their manufactured housing plant number 55-1 located in Garrett, Indiana to Adventure Homes, LLC, subject to higher and better bids at an auction. Adventure Homes, LLC, is principally owned by Mr. Walter Comer, who is currently employed by Fleetwood as the general manager of Plant 55, and certain partners of Mr. Comer. The Debtors are also requesting the Court's approval of the Break- Up Fee and Expense Reimbursement in a total amount not to exceed $52,500, payable only in the event that an overbidder, and not the purchaser is the successful bidder at the auction. The auction is to be conducted before the Court at the sale hearing which is currently set to take place on August 12, 2009, at 1:30 p.m. Pacific Time. The Debtors propose to sell the Plant 55-1 assets to Adventure Homes for the purchase price of $1,750,000 in cash. An asset purchase agreement is currently under negotiation. As soon as the APA becomes available, copies thereof may be obtained by contacting counsel for the Debtors, Gibson, Dunn & Crutcher LLP, attn: Eric Waters, Esq., via email at ewaters@gibsondunn.com The Debtors have proposed a bid deadline for 5:00 p.m. Pacific Daylight Time on Monday, August 10, 2009. Interested parties may request further information regarding the assets to be sold from the counsel to Fleetwood Homes of Indiana, Inc.: Rod Anavim, Esq. email: ranavim@gibsondunn.com Gibson, Dunn & Crutcher LLP Fax: (949) 475-4777 Founded in 1950, Fleetwood Enterprises, Inc., and its various subsidiaries produce, distribute, and service recreational vehicles and manufactured housing. Fleetwood continues to employ approximately 2,100 people in 14 plants located in 10 states. Fleetwood's products are primarily marketed through extensive dealer networks throughout the United States and Canada. The Company is headquartered in Riverside, Calif. The Company and 19 of its affiliates filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09- 14254). Craig Millet, Esq., at Gibson, Dunn & Crutcher LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. FLEETWOOD ENTERPRISES: Plan Filing Period Extended to October 6 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has extended Fleetwood Enterprises, Inc., and its affiliated debtors' exclusive period to file a plan until October 6, 2009, and their exclusive period to solicit acceptances thereof until December 7, 2009. In papers filed with the Court, the Debtors related that they have not yet completed the sales of their assets and that a bar date for filing of proofs of claim in their bankruptcy cases has not yet been set. Further, they said that they still have to develop a system or mechanism to resolve and liquidate pending litigation claims, to address the disposition of existing Dealer Agreements, to consider the treatment of warranty claims and to address the question of substantive consolidation as to 45 separate estates now involved in these bankruptcy cases. Founded in 1950, Fleetwood Enterprises, Inc., and its various subsidiaries produce, distribute, and service recreational vehicles and manufactured housing. Fleetwood continues to employ approximately 2,100 people in 14 plants located in 10 states. Fleetwood's products are primarily marketed through extensive dealer networks throughout the United States and Canada. The Company is headquartered in Riverside, Calif. The Company and 19 of its affiliates filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09- 14254). Craig Millet, Esq., at Gibson, Dunn & Crutcher LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. FLUID ROUTING: Plan Filing Deadline Moved to September 3 -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has extended until September 3, 2009, Fluid Routing Solutions Inc.'s exclusive period to file a liquidating Chapter 11 plan, Bill Rochelle at Bloomberg News reported. Fluid Routing has sold most of its assets since filing for Chapter 11 in February. Headquartered in Rochester Hills, Michigan, Fluid Routing Solutions Inc. now known as Carolina Fluid Handling, Inc. -- http://www.markivauto.com/-- makes automobile parts and accessories. The Company has manufacturing facilities located in Lexington, Tennessee; Big Rapids, Michigan; Oscala, Florida; and Easley, South Carolina. The Company's Detroit facility closed in 2008. The Company was formed in May 2007 when Sun Capital purchased the Dayco business from auto-parts manufacturer Mark IV Industries Inc. The company was the 10th of 15 investments by Sun Capital Partners Inc. to file in Chapter 11 since January 2006. Fluid Routing Solutions and three affiliates filed for Chapter 11 on February 6, 2009 (Bank. D. Del. Lead Case No. 09-10384). Judge Christopher Sonchi handles the case. Neil E. Herman, Esq., Kimberly A. Taylor, Esq., Oksana Lashko, Esq., Kizzy L. Rosenblatt, Esq., Alexis L. Allen, Esq., Rachel Jaffe Mauceri, Esq., and Luaren Hofmann, Esq., at Morgan Lewis & Bockuis LLP, represent the Debtors as counsel. Michael R. Nestor, Esq., and Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors as Delaware counsel. Mesirow Financial Interim Management, LLC, is the Debtors' restructuring advisor. In its bankruptcy petition, Fluid Routing listed assets of $10 million to $50 million and debts of $50 million to $100 million. The Debtors have sold, through a Court-sanctioned sale process, their hose extrusion and fuel assembly service business to FRS Holding Corp. for $11,000,000. Following the sale, Fluid Routing Solutions changed its corporate name to Carolina Fluid Handling, Inc. FONTAINEBLEAU: Unsec. Creditors Tap Fox Rothschild as Co-Counsel ---------------------------------------------------------------- Fox Rothschild LLP has been selected to represent the unsecured creditors committee in the Fontainebleau Las Vegas LLC Chapter 11 bankruptcy case filed in Miami, Florida on June 9, 2009. The firm will serve as co-counsel with Genovese, Joblove & Battista, P.A. The casino-resort developer Fontainebleau Las Vegas LLC and two of its affiliates -- Fontainebleau Las Vegas Holdings LLC and Fontainebleau Las Vegas Capital Corp. -- filed bankruptcy petitions on June 9 after litigation surrounding contractual disputes with lenders forced them to shut down construction of the Las Vegas project. The companies failed to get lenders, including Bank of America, JPMorgan Chase Bank and Deutsche Bank Trust Co. Americas, to provide about $800 million in construction funding to complete the $2.9 billion property. The Fox Rothschild team working on this case will include, Michael Viscount, a partner resident in the firm's Atlantic City office, Josephina Fernandez McEvoy, a partner in the Los Angeles office, and Joshua T. Klein, an associate in the Philadelphia office. Genovese, Joblove & Battista partners Paul Battista and Glenn Moses, resident in the Miami office, will work on the co-counsel's team. The Fontainebleau project is currently about 70% complete, and was scheduled to open in October 2009. Arguments by the banks were submitted on July 1, with the response by Fontainebleau scheduled to be submitted by July 7th. About Fox Rothschild LLP Fox Rothschild LLP -- http://www.foxrothschild.com-- is a full- service law firm built to serve business leaders. Over the past 100 years, the Company has grown to more than 450 lawyers in 15 offices coast to coast. 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. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. 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: Court Approves Kurtzman As Claims Agent ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Florida has authorized Fontainebleau Las Vegas Holdings, LLC, and its affiliates to employ Kurtzman Carson Consultants LLC as their notice, claims, and balloting agent, following the withdrawal of KCC's request for its retainer to be an "evergreen" retainer, as stated in open court. The Order modifies the Services Agreement to permit payment on a monthly basis only, after application of the prepetition retainer received by KCC to its postpetition fees. The terms of the Services Agreement are otherwise approved in their entirety. KCC is authorized to render noticing, claims processing, and balloting services. Without further court order, the Debtors are authorized to compensate KCC in accordance with the terms of the Services Agreement, provided that the Debtors will compensate KCC monthly; KCC will first apply its prepetition retainer to its postpetition fees; and the retainer will not be restored. The fees and expenses of KCC will be administrative expenses of the Debtors' estates. Notwithstanding anything to the contrary in the Services Agreement, the limitation of liability provisions will not apply in the case of gross negligence or willful misconduct by KCC, the Court said. 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. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. 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: Court Approves Bilzin Sumberg As Lead Counsel ------------------------------------------------------------ After it has been advised that Bilzin Sumberg Baena Price & Axelrod LLP amended its Employment Application to withdraw its request for approval of its retainer as an "evergreen" retainer -- without prejudice to reassert the request at a later time -- the U.S. Bankruptcy Court for the Southern District of Florida authorized the Debtors to employ the firm as their counsel, nunc pro tunc to the Petition Date, in accordance with the terms set forth in the Amended Application. The Debtors will pay Bilzin Sumberg for professional services rendered and reimbursement of expenses incurred in connection with the Debtors' Chapter 11 Cases in compliance with the applicable provisions of the Bankruptcy Code and other applicable laws. As the Debtors' lead counsel, Bilzin Sumberg will, among others: (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 property; (b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; (c) advise and counsel the Debtors in connection with any contemplated sales of assets or business combinations, including the negotiation of sales, stock purchase, merger or joint venture agreements, the formulation and implementation of bidding and auction procedures, the evaluation of competing offers, the drafting of appropriate corporate documents with respect to the proposed sales, and the closing of those sales; (d) advise and represent the Debtors in connection with obtaining postpetition financing and making cash collateral arrangements, provide advice and counsel with respect to prepetition financing arrangement, and provide advice to the Debtors in connection with emergence financing and capital structure, as well as negotiate and draft related documents; (e) analyze the Debtors' unexpired leases and executory contracts and the related assumption, rejection or assignment, as well as analyze the validity and priority of liens against the Debtors' assets; (f) advise the Debtors with respect to legal issues relating to their business operations, including attendance at senior management meetings, meetings with the Debtors' investment bankers and financial advisors, and meetings of the Debtors' board of managers; (g) negotiate and prepare on the Debtors' behalf a Chapter 11 plan of reorganization or liquidation, disclosure statement and all related agreements and documents, and take necessary actions on the Debtors' behalf to obtain confirmation of the plan; and (h) perform all other necessary legal services and provide all other necessary legal advice to the Debtors' in connection with their Chapter 11 cases. The Debtors will pay Bilzin Sumberg based on the firm's customary rates: Professional Hourly Rate ------------ ------------ Partners $370 to $700 OfCounsel $375 to $510 Associates $225 to $365 Paraprofessionals $190 to $205 The Debtors will also reimburse Bilzin Sumberg for necessary and reasonable out-of-pocket expenses incurred in connection with the engagement. 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. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. 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: Court Approves Kasowitz As Special Counsel --------------------------------------------------------- Kasowitz, Benson, Torres & Friedman LLP advised the U.S. Bankruptcy Court for the Southern District of Florida that it has amended its Employment Application to withdraw its request for approval of its retainer as a "evergreen" retainer, without prejudice to reassert the request at a later time. Accordingly, the Court ruled that the Debtors are authorized to employ Kasowitz Benson as their special litigation counsel, nunc pro tunc to the Petition Date, in accordance with the terms set forth in the Amended Application. The Debtors will pay Kasowitz Benson for professional services rendered and reimbursement of expenses incurred in connection with the Debtors' Chapter 11 cases subject to the allowance of professional fees and compensation as set forth in Section 330 of the Bankruptcy Code and other applicable laws. 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 the 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. 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. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. 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) FORBES ENTERPRISES: Case Summary & 5 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Forbes Enterprises At Saddle River, LLC 22 Pembroke Trail Upper Saddle River, NJ 07458 Bankruptcy Case No.: 09-27372 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- Scott Forbes and Ginette Forbes Winfield 09-27371 Chapter 11 Petition Date: July 3, 2009 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Rosemary Gambardella Debtor's Counsel: Gary N. Marks, Esq. Norris, McLaughlin & Marcus A Professional Corporation 721 Route 202-206, PO Box 1018 Somerville, NJ 08876 Tel: (908) 722-0700 Email: gnmarks@nmmlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-27372.pdf The petition was signed by Scott Forbes, managing member of the Company. FORD MOTOR: Suspends Production at Russian Plant on Weak Demand --------------------------------------------------------------- RIA Novosti reports that Ford Motor Co. suspended production at its auto factory in Russia Wednesday last week, citing weak demand for vehicles. According to RIA Novosti, a spokesman said the Ford factory in the town of Vsevolozhsk near Russia's second city of St. Petersburg, which produces Ford Focus and Mondeo cars, is halting production for six business days until July 9. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FOUNDERS BANK: Head Raising Capital to Save Remaining Banks ----------------------------------------------------------- According to Chicago Tribune, Lyle Campbell, head of the six Illinois Banks seized by regulators on July 2, is trying to raise capital to help three remaining lending institutions in their family owned banking business. The report relates that three banks that are still part of the Campbell family business are Peotone Bank & Trust Co., with $150.6 million in assets; First National Bank of Gilman, with $44 million in assets, and Scottsdale, Arizona-based Legacy Bank, which has $223.2 million in assets. The six banks closed by regulators, which named the Federal Deposit Insurance Company as receiver, include Founders Bank. Founders Bank was the largest among the six with $962.5 million in assets. FOUR BUCKS: Assigned Rents Not Estate Property, Judge Rules ----------------------------------------------------------- According to Bill Rochelle at Bloomberg, Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas in Fort Worth has written an opinion yesterday that could make reorganization impossible for some real-estate owners. In the case In re Four Bucks LLC (Bankr. N.D. Tex. Case No. 09- 42629), which involved an apartment project, Judge Lynn, the report relates, concluded that the mortgage created an "absolute assignment of rents for the benefit of the lender." Bloomberg relates that although Judge Lynn concluded that the mortgage gave the property owner a "revocable license" to collect the rents, he said that the "license was revoked prior to the petition date as a result of the debtor's default." Judge Lynn denied the property owner the use of incoming rent, saying it wasn't part of the bankruptcy estate. There wasn't a trial where the borrower could have attempted to show a course of dealing to counter the language in the mortgage. Judge Lynn included a footnote in his opinion saying other cases might involve "outside facts or circumstances" to overcome the words of the mortgage. Still, the opinion gives lenders an opening to attempt drafting mortgages tightly enough so bankruptcy reorganization could be impossible, Bill Rochelle said. GATEWAY ETHANOL: Court Approves Additional Financing of $718,000 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Kansas approved on June 25, 2009, amendments to its stipulated final order granting Gateway Ethanol, L.L.C., authority to obtain secured postpetition financing from Dougherty Funding LLC. The amendments include an increase in the maximum principal amount from $6,881,995 to $7,600,000, and postponement to August 31, 2009, of the deadline to close the asset sale. On April 27, the Bankruptcy Court increased the maximum principal amount available under the financing from $5,931,611 to $6,881,995, and postponement to June 30 of the deadline to close the asset sale. As reported by the Troubled Company Reporter on Nov 19, 2008, pursuant to the DIP Loan terms, the financing terminates if certain milestones are not achieved, including the completion of a sale at a specified date. Pratt, Kansas-based Gateway Ethanol, LLC, operates an ethanol plant that has a capacity of 55 million gallons a year, according to Orion Ethanol's Web site. The Company filed for bankruptcy protection on October 5, 2008 (Bankr. D. Ks., Case No. 08-22579). Laurence M. Frazen, Esq., Megan J. Redmond, Esq., and Tammee E. McVey, Esq., at Bryan Cave, LLP, represent the Debtor in its restructuring efforts. In its schedules, the Debtor listed total assets of $94,545,022, and total debts of $93,353,654. GENERAL MOTORS: Court OKs Sale to U.S. Treasury-Backed Entity ------------------------------------------------------------- Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York authorizes General Motors Corporation and its debtor affiliates to sell substantially all of their assets to an entity backed by the United States Department of the Treasury. "GM cannot survive with its continuing losses and associated loss of liquidity, and without the governmental funding that will expire in a matter of days. And there are no options to the sale -- especially any premised on the notion that the company could survive the process of negotiations and litigation that characterizes the plan confirmation process," Judge Gerber stated in a 95-page decision accompanying the sale order. Judge Gerber pointed out that the only alternative to an immediate sale is liquidation -- a disastrous result for GM's creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates. He also ruled that the sale is not a sub rosa plan pointing out that GM's assets simply are being sold with the consideration to GM to be hereafter distributed to stakeholders, consistent with their statutory priorities, under a subsequent plan. Judge Gerber's ruling is in consideration of the Government's statement that its intent to fund GM will terminate if an order approving the sale is not approved by July 10, 2009. Harry Wilson, senior member of the U.S. Presidential Task Force on the Auto Industry, told Judge Gerber during the sale hearings that the Government has the option to back out of the deal absent the completion of the Sale on August 15, 2009. The Sale Order will not be stayed for 10 days, but instead will be effective as of 12:00 noon, EDT, on July 9, 2009. Judge Gerber authorizes the Debtors and the Purchaser to close the 363 Transaction on or after 12:00 noon on July 9. GM and the Auto Task Force, Mr. Wilson told The Washington Post, are aiming to close the Sale as early as July 7, which spells GM's emergence from bankruptcy 37 days after its Petition Date, "or five days faster than Chrysler managed the same feat," the report noted, citing an unnamed source. Mr. Wilson also said New GM will hold an initial public offering of the company's stock in 2010. The IPO, he said, "would allow the Obama administration . . . to sell its GM stake," The Washington Post reported. Company advisers project that under the proposed Sale Transaction, the reorganized GM's equity value will be more than $38 billion, reported Bloomberg News. Judge Gerber overrules all objections to the sale to the extent not resolved or withdrawn. Harvey Miller, Esq., at Weil, Gotshal & Manges, LLP, in New York, told Judge Gerber during the hearings that GM and the U.S. Treasury struck deals with objectors to the Sale regarding, among other things, the Company's: -- assumption and payment of certain claims arising from accidents that occur after the Sale; -- granting of 10% stake in the Company to bondholders that hold $27 billion unsecured loans; and -- provision of an appeal system for dealerships that are to be shed. Except for the parties stated, no one has opposed to the fundamental merits of GM's restructuring plans and no party has come forward with another source of financing or proposed higher value for assets to be sold, the Court pointed out. Judge Gerber permits the Debtors to sell their assets to the Purchaser free and clear of all liens. Judge Gerber held that textual analysis is ultimately inconclusive as to the extent to which a 363 order can bar successor liability claims premised on the transfer of property, and cases on a nationwide basis are split. But principles of stare decisis, according to Judge Gerber, dictate that under the caselaw in the Second Circuit and District, the Court should, and indeed must, rule that property can be sold free and clear of successor liability claims. Judge Gerber ruled that injunction, applicable only to asbestos claims and demands, is enforceable "to the fullest extent constitutionally permissible." With respect to GM's environmental obligations, the Sale Order provides that the Order nor the MPA does not release, nullify, nor enjoin the enforcement of any liability to a governmental unit under environmental laws or regulations that any entity would be subject to as the owner, lessor, or operator of property after the date of the entry of the Sale Order. Judge Gerber noted that United Auto Workers retirees will get a better result than retirees from non-UAW unions, but held that that is not a reason of any violation of the Bankruptcy Code or applicable law. The Court will convene a hearing on August 3, 2009, at 9:00 a.m. to consider the cure amount and contract assumption objections. A full-text copy of the GM Sale Order is available for free at http://bankrupt.com/misc/gmsaleorder.pdf A full-text copy of the Sale Decision is available for free at http://bankrupt.com/misc/gmsaledecision.pdf Prior to the entry of the Sale Order, GM filed with the United States Securities and Exchange Commission the amended and restated master sale and purchase agreement, dated July 2, 2009, the automaker entered into with the Purchaser. The Amended MSPA included an equity subscription agreement entered into between the Purchaser and each of the 7176384 Canada Inc., a corporation organized under the Laws of Canada, and a wholly-owned subsidiary of Canada Development Investment Corporation; the U.S. Department of the Treasury; and the New Voluntary Employees Beneficiary Association Plan, pursuant to which the Purchaser has agreed to issue, on the Closing Date, the Canada Shares, the Sponsor Shares, the VEBA Shares, the VEBA Note and the VEBA Warrant. Pursuant to the equity subscription agreement between Purchaser and Canada, Canada has agreed to (i) contribute, on or before the Closing Date, an amount of Indebtedness owed to it by General Motors of Canada Limited, which results in not more than $1,288,135,593 of Indebtedness remaining an obligation of GMCL, to Canada immediately following the Closing and (ii) exchange immediately following the Closing the $3,887,000,000 loan to be made by Canada to Purchaser for additional shares of capital stock of Purchaser. The Purchaser's Assumed Liabilities under the Amended MSPA excludes: (i) all Liabilities arising out of, relating to, in respect of or in connection with any Indebtedness of Sellers; (ii) all Intercompany Obligations owed by Sellers to (A) another Seller, (B) any Excluded Subsidiary or (C) any joint venture or other entity in which a Seller or an Excluded Subsidiary has an Equity Interest; (iii) all Liabilities arising in connection with these Excluded Assets: -- cash or cash equivalents in an amount equal to $950,000,000; -- all Restricted Cash exclusively relating to the Excluded Assets or Retained Liabilities; -- all Receivables exclusively related to any Excluded Assets or Retained Liabilities; -- all of Sellers' Equity Interests in (A) Saturn, LLC, (B) Saturn Distribution, (C) Harlem, Inc. and (D) the Subsidiaries, joint ventures and the other entities in which any Seller has any Equity Interest; and -- all owned real property specified in the Amended Master Sale and Purchase Agreement and (B) all real property leased or subleased that is subject to a Contract designated as an "Excluded Contract." A full-text copy of the Amended MSPA is available for free at http://ResearchArchives.com/t/s?3ea1 In response to objections filed by retirees, the Debtors explain that the Purchaser has voluntarily negotiated the terms of the Retiree Settlement Agreement with the United Autoworkers as part of its need for members of the UAW to be the Purchaser's employees and perform services that will enable it to operate New GM. The Debtors assert that the UAW Retiree Settlement provides benefits to UAW-Represented Retirees that are fair and equitable under the circumstances. As part of the 363 Transaction, the Debtors assert that the UAW Retiree Settlement Agreement needs to be approved to enable continued retiree benefits for UAW-Represented Retirees that would otherwise be substantially diminished or lost if GM had to be liquidated. An amended chart illustrating the sale objections summary and the Debtors' reply to each of the objection is available for free at http://bankrupt.com/misc/gm_saleobjs2.pdf A schedule illustrating the status of the sale objections, whether withdrawn, resolved, or outstanding, is available for free at http://bankrupt.com/misc/gm_saleobjstatus.pdf Wells Fargo Bank Northwest, National Association, as indenture trustee, reserves its right to the Transition Services Agreement included in the Amended MSPA. Wells Fargo asserts that the MPSA, the TSA, and any order approving the sale of the Debtors' assets should be without prejudice to the rights of Wells Fargo as assignee to certain leases and properties and should be without prejudice to any right to assert an administrative expense claim against the Debtors or assert a claim against the Purchaser related to the Purchaser's use of the property. Toyota Clarifies Contract Assumption Issue Toyota Motor Corporation clarified that its contracts with the Debtors, consisting of joint venture agreements, limited liability corporation agreements, licensing agreements and other executory contracts with the Debtors, are not being sold, assumed or assigned as part of the Sale. A determination about whether the TMC Contracts will be sold or assumed and assigned will be made at a later date. If a mutually agreeable resolution cannot be reached between TMC and GM regarding the Contracts, the parties will ask the Court to resolve the dispute, Toyota said. Parties File Additional Witness Lists These parties-in-interest notified the Court that they may call on certain individuals as witnesses during the hearing on the Sale: * Matthew L. Schwartz on behalf of United States Of America * Ad Hoc Committee of Asbestos Personal Injury Claimants * Ad Hoc Committee of Consumer Victims of General Motors * White Marsh/Memphis Secured Lenders * Susan Jennik on behalf of IUE-CWA, AFL-CIO * Steve Jakubowski on behalf of Coleman Law Firm * Mark Buttita, on behalf of Salvatore Buttita These parties also submitted to the Court its deposition designations with respect to Fritz Henderson and Harry Wilson, among other individuals, on issues relating to the Sale: * The Official Committee of Unsecured Creditors * the U.S. Government * International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, AFL-CIO * Mark Buttita The Debtors filed with the Court designations of counter- depositions. In response to the exhibits, witness lists, and declarations filed in relation to the sale, the Debtors argue that none of the exhibits and declarations submitted prove or disprove any fact that is of consequence to the determination of the sale motion. In separate letters, 12 bondholders object to the exchange of stock in GM for the debt obligations that should be honored. Kenneth G. Wingeier, a retiree, asks the Court to transfer Delphi Corporation's salaried pension plans to GM. Finlay Industries, Inc., objects to the Debtors intent to assume and assign executory contracts arguing that it does not have any executory contracts, unexpired leases of personal property, or unexpired leases of nonresidential real property in effect with the Debtors. Rassini, S.A. de C.V., SANLUIS Rassini International, Inc., and Rassini Frenos, S.A., de C.V., object to the assumption and assignment of their leases because they do not receive the notice in a timely manner. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Attorneys Kramer Levin Naftalis & Frankel LLP, in New York, represent the official committee of unsecured creditors appointed in the case. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Will Have $950 Million for Wind-Down ---------------------------------------------------- General Motors Corporation and its debtor affiliates seek authority from Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York to enter into an amended DIP Facility with the U.S. Department of the Treasury and Export Development Canada. Judge Gerber earlier authorized, on a final basis, General Motors and its debtor affiliates to obtain up to $33.3 billion of debtor- in-possession loans from the United States Treasury and EDC. The DIP Lenders agreed to provide a facility up to $950 million in the form of an Amended DIP Facility to finance working capital needs and other general corporate purposes incurred in connection with the wind-down of the Debtors' estates, including the payment of expenses associated with the administration of the Debtors' cases. The Amended DIP Facility's primary terms are: Borrower: General Motors Corporation Lenders: U.S. Treasury and EDC Guarantors: Certain domestic subsidiaries of GM Collateral: The obligations under the Wind-Down Facility are to be secured by substantially all property and assets of the Borrower and the Guarantors other than (i) any stocks, warrants, options or other equity interests issued to or held by any Debtor pursuant to the Related Section 363 Transactions, and (ii) avoidance actions arising under Chapter 5 of the Bankruptcy Code and applicable state law against the Prepetition Senior Facilities Secured Parties. Proceeds of the Wind-Down constitute Collateral. Joint Liability: Subject to certain limitations, the Guarantors will guarantee the obligations under the Wind-Down Facility on a joint and several basis pursuant to an Amended and Restated Guaranty and Security Agreement. Limitation on Recourse: The obligations under the Wind-Down Facility will be non-recourse to the Borrower or the Guarantors, and recourse would be only to the Collateral. Borrowing Limits: Outstanding amounts of Tranche C Term Loans in an amount not less than $950 million. Interest Rate: The non-default rate for Eurodollar loans is the sum of the greater of (i) the LIBOR rate for the period of the applicable loan, adjusted for certain reserve requirements, and (ii) 2.00%, plus 3.00%. For the ABR loans is the sum of the greater of (i) the prime rate, (ii) the fed funds rate plus 0.5%, and (iii) the three month Eurodollar rate plus 1%, plus 2.00%. The default interest rate for outstanding loans is the otherwise applicable non-default rate, which, at the sole discretion of the U.S. Treasury may be the rate applicable to ABR loans, plus 5.00%. The default interest rate for all other outstanding obligations is the applicable non-default rate for ABR loans plus 5.00%. Interest accruing under the Wind-Down facility will be paid by adding that interest to the principal amount outstanding in the Amended DIP Facility. Wind-Down Budget: The Borrower and the Lenders are discussing an agreed upon wind-down budget. On a quarterly basis, the Borrower will amend the Wind-Down Budget by providing the Lenders reports of projected receipts and disbursements on a rolling 12-month basis that are certified by an officer of the Borrower. Maturity: Maturity Date will be the date on which all claims against the Debtors have been resolved so that there are no remaining disputed claims, all assets of the Debtors, other than remaining cash, have been liquidated, all distributions on account of allowed claims have been made, and all other actions that are required under the plan of liquidation, other than the dissolution of the last remaining Debtor, have been completed. On the Maturity Date, the plan administrator or other individual or entity charged with administering the liquidation plan will be entitled to retain a de minimis amount of funds to complete the dissolution of the last remaining Debtor. Voluntary Prepayments: The Wind Down Facility may be prepaid, in whole or in part, without premium or penalty, subject to minimum prepayment amounts in the case of partial prepayments. Mandatory Prepayment: The Borrower is required to prepay the loans in an amount equal to the net cash proceeds of certain asset sales, extraordinary receipts, casualty and condemnation events and from the incurrence of indebtedness not permitted to be incurred under the Wind Down Facility, in each case subject to certain exceptions. Events of Default: The Events of Default include: * any failure to pay the obligations under the Wind-Down Facility on the Maturity Date; * breach of non-payment obligations or covenants not covered by another Event of Default clause, and that default has not been remedied within the applicable grace period, or if no grace period, within 10 business days; * the appointment of a trustee, dismissal of the cases, and similar bankruptcy-related provisions; * an order granting relief from the automatic stay to certain secured parties; * a judgment for the payment of money in excess of $25 million will be entered and not stayed for 10 calendar days; * entry of any order modifying in any material respect of the DIP Orders, or the failure of the Debtors or certain non-debtor affiliates to comply with the DIP Orders; * certain ERISA-related events; * any change of control; and * certain insolvency triggers in respect of certain of the Debtors' affiliates. Remedies: The DIP Lenders are required to provide five business days' written notice prior to exercising any set off rights or enforcing any liens or certain other remedies. Lenders' recourse is solely to the Collateral and there will be no other recourse to the Borrower or the Guarantors. Initial Conditions: Funding of the DIP Facility is contingent on a number of conditions precedent, including, among others, (i) Lender satisfaction with the terms of the 363 sale transaction; (ii) the Final DIP Order not having Been reversed, modified, amended, Stayed or vacated without Lender consent; and (iii) delivery of the Wind-Down Budget. Indemnification: The Borrower indemnifies the Lenders for any loss resulting from early termination of LIBOR contracts due to payment of the applicable loan on a date other than the last day of the applicable interest period and other circumstances. The Borrower also provides certain tax indemnities to the Lenders. The Borrower also provides an indemnity in respect of certain expenses, liabilities and legal fees and breaches of environmental law. Harvey R. Miller, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that the Amended DIP Facility is the only source of immediate liquidity for the wind-down of the Debtors' estates. The terms and provisions of the Amended DIP Facility are fair and reasonable, both economically and from the perspective of how the funds may be used, he points out. Significantly, he notes, the DIP Lenders have agreed (i) not to take a security interest in the stock of the Purchaser that the Debtors are receiving as consideration for the 363 Transaction, and (ii) not to seek recourse against the Debtors for any unpaid portion of the DIP Facility if the proceeds of the collateral security therefore are insufficient. * * * After due consideration, Judge Gerber authorized the Debtors to enter into the Amended DIP Facility. The Court afforded the DIP Lenders these claims and liens: (1) Superpriority Administrative Expense Status to claims arising from the Amended DIP Facility, subject only to the Carve-Out. However, subsequent to the closing of the Section 363 Transactions, claims against the Debtors' estates relating to costs and expenses that are attendant to the formulation and confirmation of a liquidating Chapter 11 plan will have priority over the Obligations, up to the aggregate amount of $1,175,000,000. (2) The DIP Liens granted under the Final DIP Order will (i) continue under the Amended DIP Facility on the Property in the same force, effect and priority as set forth in the Final DIP Order to the extent the Property remains Property of the Debtors, (ii) be subject to the Carve-Out, and (iii) include the proceeds of the Amended DIP Facility. The DIP Liens will not include security interests in or liens on: -- avoidance actions arising under Chapter 5 of the Bankruptcy Code against the Prepetition Senior Facilities Secured Parties; or -- any stock, warrants, options or other equity interests in New CarCo, formerly known as NGMCO, Inc., as successor-in- interest to Vehicle Acquisition Holdings, LLC., issued to or held by the Debtors pursuant to the Section 363 Transactions including any dividends, payments or other distributions as New GM Equity Interests. Contemporaneously with the execution of the Amended DIP Facility, the amount of $1,175,000,000 in immediately available federal funds will be deposited into a segregated bank account at a nationally recognized financial institution acceptable to the DIP Lenders, the Court ruled. The Court held that the proceeds of the Amended DIP Facility will be used solely to finance the working capital needs and other general corporate purposes of the Debtors incurred in connection with the Wind-Down, including the payment of expenses associated with the postpetition administration of the their cases. Allowed Secured Claims against the Debtors' estates may be paid or otherwise satisfied from the proceeds of the Amended DIP Facility. Any unused proceeds, on the other hand, will be repaid to the Lender on the Maturity Date. All objections to the Amended DIP Facility that are not withdrawn on the merits in all respects are overruled, Judge Gerber ruled. A full-text copy of the July 5, 2009 Court Order is available for free at http://bankrupt.com/misc/GM_AmendedDIPOrder.pdf About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Attorneys Kramer Levin Naftalis & Frankel LLP, in New York, represent the official committee of unsecured creditors appointed in the case. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Consumer Privacy Ombudsman Files Status Report -------------------------------------------------------------- Alan Chapell, the court-appointed Consumer Privacy Ombudsman, submitted his first report on June 30, 2009, to apprise the U.S. Bankruptcy Court for the Southern District of New York regarding the sale of General Motors Corporation's assets to NGMCO, Inc., in relation to the facts, circumstances, and conditions of the Debtors' sale of their customers' Personally Identifiable Information. GM seeks to transfer information contained in these databases into the New GM, which contain PII: * Customer Relationship Management, * GM Rewards Cards Marketing, * Saab Warranty, * Chevrolet-Saturn of Harlem, Inc. Dealership, and * Deferred Termination Dealerships, consisting of GM's independent dealerships that were offered wind down or deferred termination agreements for their GM vehicle lines Where PII is collected pursuant to the GM Privacy Policy that allows the transfer of PII to affiliated parties, Mr. Chapell recommended that the Court allows the Transfer as contemplated by Debtors, under these conditions: (a) New GM and any independent dealership receiving the PII, agrees to abide by the Policy; (b) the Debtors and New GM agree to provide notice of the proposed transfer and about New GM and procedures for consumers to opt-out of being contacted by New GM for marketing purposes to those consumers whose PII they hold; (c) the Debtor and New GM agree to provide consumers with an opportunity to opt-out of being contacted by New GM for marketing purposes and an opportunity to opt-out of having information transferred to another dealer; and (d) New GM will notify the relevant dealerships of the requirement to have a privacy policy in place at the point of collection. As part of the Notification Process, GM and the New GM should agree to provide these consumers with an opportunity to exercise these "Choice Requirements": Consumers Choice Requirements --------- ------------------- with information contained Opt-out choice in the GM CRM, the GM Rewards and the Saab Warranty Databases, and information collected by the Harlem Dealership whose information was collected Opt-out choice for by Deferred Termination marketing by New GM Dealerships and opt-in for transferring by New GM to a dealer consumers whose information Opt-out choice was collected by the Deferred Termination Dealerships, where information could be sold or transferred The sale of PII should also (i) require New GM to file with the Court a statement under oath that it has fully complied with the conditions imposed to protect the PII, (ii) direct the Ombudsman to file a supplemental report confirming the compliance, or (iii) both, according to Mr. Chapell. A full-text copy of Mr. Chapell's report is available for free at http://bankrupt.com/misc/GM_ChapellJune30Report.pdf About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Attorneys Kramer Levin Naftalis & Frankel LLP, in New York, represent the official committee of unsecured creditors appointed in the case. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Creditors Panel Taps Butzel Long as Supplier Attys ------------------------------------------------------------------ The official committee of unsecured creditors in General Motors Corp. and its affiliates' Chapter 11 cases seeks the U.S. Bankruptcy Court for the Southern District of New York's authority to retain Butzel Long as its special counsel nunc pro tunc to June 10, 2009. As the Committee's special counsel, Butzel Long will: (a) represent the Committee as special supplier counsel to ensure that the procedures for the assumption and assignment of supplier contracts in the Debtors' sale of substantially all their assets under Section 363(b) of the Bankruptcy Code are fair and workable, including leading discussions and negotiations on that topic with the Debtors' special automotive counsel; (b) act as conflict counsel to represent the Committee in discrete matters during the pendency of the Debtors' Chapter 11 cases for which the Committee's counsel, Kramer Levin Naftalis & Frankel, LLP, has or may have a conflict of interest, or is unable to represent the Committee; and (c) represent the Committee with respect to other issues as the Committee decides would be in its best interests. Butzel Long bills its clients according to its professionals' customary hourly rates: Title Rate per Hour ----- ------------- Shareholders $300 to $750 Counsel $285 to $625 Senior Attorneys $275 to $590 Associates $205 to $400 Paralegals $120 to $245 Butzel Long's professionals who are expected to be involved in this engagement are: Name and Position Rate per Hour ----------------- ------------- Barry N. Seidel - Shareholder $725 Martin E. Karlinsky - Shareholder $675 Robert Sidorsky - Counsel $625 Philip J. Kessler - Shareholder $600 Thomas B. Radon - Shareholder $525 Eric B. Fisher - Shareholder $525 William J. Kohler - Counsel $460 W. Patrick Dreisig - Shareholder $435 Max J. Newman - Shareholder $425 Butzel Long will apply for payment of fees and expenses pursuant to Section 330(a) of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules of the Court, the United States Trustee's Guidelines for Fees and Disbursements and other applicable procedures. Barry N. Seidel, Esq., shareholder at Butzel Long, discloses that his firm has represented and represents automotive suppliers in connection with their contractual rights under their applicable agreements with the Debtors, which list is available for free at http://bankrupt.com/misc/GM_ButzelLongSupplierSched.pdf However, Mr. Seidel says that the interests of the Supplier Clients are consistent with, and not adverse to, the interests of the Committee. Moreover, he assures the Court that Butzel Long does not represent any entity having an adverse interest in the Debtors' Chapter 11 cases pursuant to Section 1103(b) of the Bankruptcy Code. He maintains that Butzel Long is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. Judge Gerber will consider the Committee's request on July 13, 2009. Objections are due July 8. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Attorneys Kramer Levin Naftalis & Frankel LLP, in New York, represent the official committee of unsecured creditors appointed in the case. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Friedman Wants Stay Lifted to Pursue Appeal ----------------------------------------------------------- Evgeny Friedman and a group of taxi companies and individual owners of handicap accessible taxicab medallions in New York City ask the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay for them to proceed with an appeal of the decision of the Honorable Shira A. Scheindlin of the U.S. District Court for the Southern District of New York. In March 2008, Mr. Friedman, on behalf of the group, sued General Motors Corporation for an alleged fraud and breach of warranty based on material misrepresentations regarding its promises to manufacture, retrofit, and sell to the Group certain Chevrolet Uplanders for use as wheelchair-accessible taxicabs in compliance with the specifications and requirements of the New York City Taxi & Limousine Commission. By Opinion and Order, dated May 29, 2009, Judge Scheindlin dismissed the Taxicab Group's Complaint. The Group has served and filed a Notice of Appeal of the Decision to the Second Circuit on June 29, 2009. The Taxicab Owners' Group avers that staying their appeal of the District Court's erroneous decision will deprive them of their ability to pursue their meritorious claims for breach of warranty and fraud against the Debtors. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Attorneys Kramer Levin Naftalis & Frankel LLP, in New York, represent the official committee of unsecured creditors appointed in the case. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: WTC is Successor to Citibank as Indenture Trustee ----------------------------------------------------------------- David A. Vanaskey Jr., Vice President of Wilmington Trust Company, in Wilmington, Delaware, discloses that it is successor-in- interest to Citibank, N.A., as Indenture Trustee under: (1) the Indenture dated November 15, 1990, between General Motors Corporation as issuer and Citibank as indenture trustee, for the holders of: a. $299,795,000 in original principal amount of 9.40% Debentures, issued on July 22, 1991 and due on July 15, 2021; b. $600,000,000 in original principal amount of 8.80% Notes, issued on March 12, 1991 and due on March 1, 2021; c. $500,000,000 in original principal amount of 7.40% Debentures, issued on September 11, 1995 and due on September 1, 2025; d. $15,000,000 in original principal amount of 9.40% Medium Term Notes, issued on July 22, 1991 and due on September 15, 2021; and e. $48,175,000 in original principal amount of 9.45% Medium Term Notes, issued on December 21, 1990 and due on November 1, 2011. (2) the Indenture dated December 7, 1995, between GM as issuer and Citibank as indenture trustee for the holders of: a. $377,377,000 in original principal amount of 7.75% Discount Debentures, issued on March 20, 1996 and due on March 15, 2036; b. $500,000,000 in original principal amount of 7.70% Debentures, issued on April 15, 1996 and due on April 15, 2016; c. $400,000,000 in original principal amount of 8.10% Debentures, issued on June 10, 1996 and due on June 15, 2024; d. $600,000,000 in original principal amount of 6 3/4% Debentures, issued on April 29, 1998 and due on May 1, 2028; e. $1,500,000,000 in original principal amount of 7.20% Notes, issued on January 11, 2001 and due on January 15, 2011; f. $575,000,000 in original principal amount of 7.25% Quarterly Interest Bonds, issued on April 30, 2001 and due on April 15, 2041; g. $718,750,000 in original principal amount of 7.25% Senior Notes, issued on July 9, 2001 and due on July 15, 2041; h. $690,000,000 in original principal amount of 7.375% Senior Notes, issued on October 3, 2001 and due on October 1, 2051; i. $875,000,000 in original principal amount of 7.25% Senior Notes, issued on February 14, 2002 and due on February 15, 2052; j. $1,150,000,000 in original principal amount of 4.50% Series A Convertible Senior Debentures, issued on March 6, 2002 and due on March 6, 2032; k. $2,600,000,000 in original principal amount of 5.25% Series B Convertible Senior Debentures, issued on March 6, 2002 and due on March 6, 2032; l. $1,115,000,000 in original principal amount of 7.375% Senior Notes, issued on May 19, 2003 and due on May 15, 2048; m. $425,000,000 in original principal amount of 7.375% Senior Notes, issued on May 23, 2003 and due on May 23, 2048; n. $3,000,000,000 in original principal amount of 8.375% Senior Debentures, issued on July 3, 2003 and due on July 15, 2033; o. $4,300,000,000 in original principal amount of 6.25% Series C Convertible Senior Debentures, issued on July 2, 2003 and due on July 15, 2033; p. $1,250,000,000 in original principal amount of 8.250% Senior Debentures, issued on July 3, 2003 and due on July 15, 2023; q. $1,000,000,000 in original principal amount of 7.125% Senior Notes, issued on July 3, 2003 and due on July 15, 2013; r. $720,000,000 in original principal amount of 7.50% Senior Notes, issued on June 30, 2004 and due on July 1, 2044; and s. $1,500,000,000 in original principal amount of 1.50% Series D Convertible Senior Debentures, issued on May 31, 2007 and due on June 1, 2009; The claims of the beneficial holders of the Notes and the Trustee under the Indentures consist of (i) all unpaid principal and unpaid interest on all outstanding Notes, plus other amounts due under the Indenture, and (ii) the Trustee's fees and expenses, reasonable disbursements and advances incurred or made by the Trustee. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Attorneys Kramer Levin Naftalis & Frankel LLP, in New York, represent the official committee of unsecured creditors appointed in the case. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Pulls Out of 25-Year Nummi Venture With Toyota -------------------------------------------------------------- General Motors Corporation confirmed on June 29, 2009, that it is terminating its joint venture with Toyota Motor Corp., at the New United Motor Manufacturing Inc., in Fremont, California, amid disagreements on the future product to be manufactured at the facility. NUMMI has been run by GM and Toyota since 1984, where Toyota manufactures the Corolla sedan and the Tacoma pickup and GM makes the Pontiac Vibe hatchback. GM has stated that that its stake in NUMMI will become part of the "Old GM" that will be sold off during its Chapter 11 proceedings. As part of its long-term viability plan, GM has decided that its ownership stake in the NUMMI joint venture with Toyota will not be a part of the "New GM," GM North America President Troy Clarke said in a press release. Mr. Clarke related that after extensive analysis, GM and Toyota could not reach an agreement on a future product plan that made sense for all parties. Accordingly, NUMMI will end production of vehicles for GM in August, and there are no future GM vehicles planned for the joint venture at this time, he said. Given that, GM believes it is in the best interest of the "New GM" and its stakeholders that we place our ownership interest in NUMMI in 'Old GM,' Mr. Clarke stated. "We have enjoyed a very positive and beneficial partnership with Toyota for the past 25 years, and we remain open to future opportunities of mutual interest," Mr. Clarke said. In an e-mail to Bloomberg News, Mike Goss, a U.S.-based spokesman for Toyota, said that the Toyota "[hoped] for the 50/50 joint venture to continue." "While we respect this decision by GM, the economic and business environment surrounding Toyota is also extremely severe, and so this decision by GM makes the situation even more difficult for Toyota," Mr. Goss told Bloomberg. NUMMI, for its part, said in a statement to The Los Angeles Times that "it may take some time before the future [of the facility] is determined." NUMMI is able to produce 420,000 cars and trucks annually. It employs 5,400 employees, majority of whom are United Auto Workers members, making it the only unionized facility among all Toyota's plants in the U.S. and Canada and "the most expensive plant to operate in North America," says The LA Times. Toyota, according to Bloomberg, may soon begin talks to buy out the NUMMI joint venture. Toyota is also negotiating with the United Auto Workers on personnel costs reduction at NUMMI, Bloomberg added. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Attorneys Kramer Levin Naftalis & Frankel LLP, in New York, represent the official committee of unsecured creditors appointed in the case. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: June Retail Sales Up 10% From May Levels -------------------------------------------------------- General Motors dealers in the United States delivered 176,571 total vehicles in June, down 33.6 percent compared with a year ago. However, when comparing GM's June retail sales with May, volume was up 10 percent, or more than 13,000 cars, crossovers and trucks resulting in the fourth consecutive month-over-month retail sales increase. "We're pleased with our retail performance for the month, and it shows consumers' strong attraction to our products -- such as the Camaro, Aveo, Traverse, LaCrosse, Lucerne, CTS, DTS and STS -- which all saw retail sales gains compared with May," said Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing. "Customers are cautiously coming back into the market, although the industry remains very weak at approximately a 10 million Seasonally Adjusted Annualized Rate. The reinvention of GM remains on track and we have compelling new offers in July, including 0 percent financing for up to 72 months available through GMAC and the Federal Car Allowance Rebate System 'Cash for Clunkers' plan that encourages consumers to trade in their old car or truck for a new fuel-efficient GM product." Although GM retail sales were up in June, fleet sales of 32,725 vehicles were down 49 percent compared to a year ago, contributing to an overall sales decline of 89,366 vehicles versus June 2008. This drop in fleet sales was a direct result of a strategic decision GM made to schedule down weeks at a number of its plants to tightly control inventories and better enable GM dealers to reduce their stock of vehicles. GM total truck sales in June, including crossovers, of 93,458 were down 40 percent, and car sales of 83,113 were off 24 percent compared with a year ago. When compared with May's retail performance, there were several product highlights in GM's core brands to note: * Chevrolet car retail sales were up 8 percent driven by Camaro and Aveo. Avalanche, Colorado, HHR, Equinox, Suburban and Traverse also saw retail sales increases with Chevrolet retail truck sales up 2 percent. Total Chevrolet vehicle retail sales increased 4 percent * Buick Enclave saw a retail sales increase, pushing its crossover sales up 5 percent. Buick retail car sales increased 17 percent with Lucerne up 21 percent and LaCrosse up 12 percent. Buick retail sales increased 11 percent * Cadillac car retail sales increased 16 percent with CTS, DTS and STS all pushing retail volume higher. Truck retail deliveries increased 3 percent as Escalade EXT and ESV both saw retail increases. Cadillac crossover retail sales increased 26 percent as SRX saw a retail sales increase too. Cadillac retail sales overall were up 14 percent * GMC crossover retail sales were up 2 percent, pushed by Acadia deliveries. Canyon retail sales were up 43 percent and Yukon XL retail sales increased 19 percent "Our outstanding products continue to compete strongly in the market," Mr. LaNeve said. "Camaro is the hottest product in America and probably led the sport segment with more than 9,300 vehicles delivered in June without any incentives. Additionally, we are offering the best selection of crossovers with Traverse, Acadia, Outlook and Enclave and we just announced very affordable pricing on the all-new GMC Terrain crossover. We invite consumers to visit dealer showrooms to shop and compare for themselves. We are confident they will be pleasantly surprised by the compelling designs, segment-leading fuel economy and outstanding value that our new cars, trucks and crossovers have to offer." A total of 1,454 GM hybrid vehicles were delivered in the month, illustrating the wide range of hybrid product offerings available. GM offers the Chevrolet Malibu, Tahoe and Silverado, GMC Yukon and Sierra, Cadillac Escalade, Saturn Aura and Vue hybrids. So far, in 2009, GM has delivered 8,349 hybrid vehicles. GM's four non-core brands saw total sales declines compared with a year ago as Saturn declined 60 percent; Saab was off 58 percent, HUMMER dropped 48 percent and Pontiac declined 16 percent. GM inventories dropped compared with a year ago, and are on track to approach the half-million mark as planned. At the end of June, about 582,000 vehicles were in stock, down about 206,000 vehicles (or 26 percent) compared with last year, and are down approximately 33 percent compared with January. There were about 250,000 cars and 332,000 trucks (including crossovers) in inventory at the end of June. Inventories were reduced about 93,000 vehicles compared with May. GM Certified Sales GM Certified Used Vehicles, Saturn Certified Pre-Owned Vehicles, Cadillac Certified Pre-Owned Vehicles, Saab Certified Pre-Owned Vehicles, and HUMMER Certified Pre-Owned Vehicles, combined sold 31,660 vehicles. GM Certified Used Vehicles, the industry's top-selling certified brand, posted June sales of 27,446 vehicles, down 25 percent from June 2008. Saturn Certified Pre-Owned Vehicles sold 990 vehicles, down 15 percent. Cadillac Certified Pre-Owned Vehicles sold 2,624 vehicles, down 20 percent. Saab Certified Pre-Owned Vehicles sold 396 vehicles, down 53 percent. HUMMER Certified Pre-Owned Vehicles posted a gain with 204 vehicles sold, up 53 percent. "GM's certified used/pre-owned programs provide tremendous value and added assurance to customers, and we remain positive about the market," said Mr. LaNeve. "Our Certified Used Vehicles offer the largest selection in the industry and strong factory-backed warranties, such as the 12-month/12,000 mile bumper-to-bumper warranty -- whichever comes first. It's important that consumers understand we will continue to honor our warranty commitment at our national network of dealers on current and future General Motors Certified Used/Pre-Owned vehicles. Our warranties offer the peace of mind in purchasing a durable and reliable vehicle. As we move forward in this new chapter of GM, we will work to meet the needs of our customers, whether they purchase new or Certified Used and Pre-Owned vehicles. See your dealer for more details regarding our warranties." GM North America reports preliminary June 2009 production; Q2 2009 production preliminary actuals at 394,000 vehicles In June, the region's preliminary actual production was 88,000 vehicles (52,000 cars and 36,000 trucks). This is down 253,000 vehicles or 74 percent compared with June 2008 when the region produced 341,000 vehicles (135,000 cars and 206,000 trucks). (Production totals include joint venture production of 12,000 vehicles in June 2009 and 16,000 vehicles in June 2008.) The region's 2009 second-quarter preliminary actual production was 394,000 vehicles (170,000 cars and 224,000 trucks), which is down about 53 percent compared with a year ago. GM North America built 834,000 vehicles (382,000 cars and 452,000 trucks) in the second- quarter of 2008. A full-text copy GM's June sales and production results is available for free at http://ResearchArchives.com/t/s?3ea2 About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Attorneys Kramer Levin Naftalis & Frankel LLP, in New York, represent the official committee of unsecured creditors appointed in the case. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Hitachi to Supply Hybrid Cars With Li-Ion Battery ----------------------------------------------------------------- Hitachi Ltd., Japan's biggest industrial electronics group, will supply General Motors Corporation with lithium-ion batteries in 2010, to power GM's 100,000 hybrid cars, according to BBC News. Seeking to boost orders from domestic and overseas automakers, Hitachi aims to increase capacity to meet the needs of 700,000 hybrids a year, the report said. In 2015, Hitachi is eyeing a 70- fold increase, with production costs that are expected to reach between JPY 20 billion and JPY 30 billion, according to Reuters. Hitachi will also mass produce two new types of lithium-ion batteries to be used in "next-generation hybrid vehicles," Reuters said. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Attorneys Kramer Levin Naftalis & Frankel LLP, in New York, represent the official committee of unsecured creditors appointed in the case. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Beijing Auto Makes $924-Mil. Bid for Opel Unit -------------------------------------------------------------- Beijing Automotive Industry Holding made a concrete offer, valued at $924 million, for General Motors Corp.'s Adam Opel GmbH unit. The Wall Street Journal, citing a person familiar with the situation, reported that BAIC delivered a nonbinding offer valued at EUR660 million, equivalent to approximately $924 million, for an equity stake in GM's Opel and Vauxhall businesses. Under the plan, BAIC would own 51% and GM would keep 49%, the person said. No plants would be closed in Germany, but jobs would be cut, including staff at Opel's headquarters, the Journal said. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Attorneys Kramer Levin Naftalis & Frankel LLP, in New York, represent the official committee of unsecured creditors appointed in the case. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Halts Production at Russian Plant on Weak Demand ---------------------------------------------------------------- RIA Novosti reports that General Motors Corp. suspendeded production at its car plant in Russia Wednesday last week, citing weak demand for vehicles. RIA Novosti relates GM's auto factory near St. Petersburg announced on Monday it would suspend production from July 1 to August 31 over declining demand on the Russian market. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D. N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENX CORP: Trading Suspended Amid Questions on Promo Materials -------------------------------------------------------------- The Securities and Exchange Commission has suspended trading in the securities of Fort Lauderdale-based music production company GenX Corporation amid questions about the accuracy and adequacy of publicly disseminated information appearing in stock promotional materials about the company and its purported relationships with music stars. GenX Corporation trades on the Pink Sheets (GNXO), and its stock is extensively promoted through brochures and other materials. One promotional brochure entitled "World of Investment" claims that the company has partnerships with several well-known recording artists and music producers, including Kanye West, T.I., and Pharrell Williams. This brochure was recently mailed to more than one million prospective investors. "When there are questions about the accuracy and adequacy of information pertaining to a public company, especially one that is new and thinly traded, there is a potential for market manipulation including pump-and-dump schemes," said John Reed Stark, Chief of the SEC's Office of Internet Enforcement. "A trading suspension allows all relevant market participants to stop and take a breath to minimize the potential of fraud and investor losses." The SEC's trading suspension will last for 10 business days, commencing today at 9:30 a.m. ET and terminating at 11:59 p.m. ET on July 16, 2009. The SEC's Online Complaint Center can be reached at enforcement@sec.gov. Information from the public may alert the SEC to an unfair practice or fraudulent misconduct in the securities industry. GLOBAL SAFETY: Expects Restructuring Agreement With Lenders ----------------------------------------------------------- According to Bill Rochelle at Bloomberg News, Global Safety Textiles Holdings LLC said it expects to have a restructuring agreement with its lenders "in the very near term." The report relates that promptly after filing for bankruptcy, the Company filed a lawsuit in bankruptcy court against some of the lenders, intending to stop them from enforcing guarantees against non-debtor foreign operating companies. The company wants an injunction against collection action initially for 21 days to afford time for negotiations on a workout and to avoid having the foreign companies file insolvency petitions in Germany and elsewhere. The Company generated $1.4 million of earnings before interest, taxes, depreciation and amortization in the first five months of 2009 as auto manufacturing declined. The chief restructuring officer said the company is worth as much as $82 million in a going-concern sale, compared with $34 million in liquidation. The Company's debt includes $26.2 million owing on revolving credits, $137 million on a first-lien term loan, and $34.1 million on a second-lien loan. The loans matured on June 30. Before maturity, there were covenant defaults, and interest hadn't been paid. About Global Safety Textiles Greensboro, North Carolina-based Global Safety Textiles Holdings LLC is a manufacturer of fabrics for auto air bags wholly owned by Wilbur Ross's International Textile Group Inc. The company has operations in three states in the U.S. and in five other countries. There are 217 employees in the U.S. and 3,000 abroad. Global Safety filed for Ch. 11 on June 30, 2009 (Bankr. D. Del. Case No.: 09-12234). Foreign based affiliates GST ASCI Holdings Mexico, Inc., GST ASCI Holdings Asia Pacific, GST ASCI Holdings Europe II LLC, Global Safety Textiles Acquisition GmbH, GST Widefabric International GmbH, and GST ASCI Holdings Europe, Inc., were included in the Chapter 11 filing. Michael C. Shepherd, Esq., at White & Case LLP, serves as the Debtors' bankruptcy counsel. Attorneys at Fox Rothschild LLP serves as co-counsel. EPIQ Bankruptcy Systems is claims agent. The petition says Global Safety's assets and debts are between $100 million to $500 million. HAWAII SUPERFERRY: Court Denies Change-of-Venue Request ------------------------------------------------------- The Hon. Peter Walsh of the U.S. Bankruptcy for the District of Delaware has ruled that Hawaii Superferry Inc. said that disputes with the state of Hawaii will be decided by the Bankruptcy Court in Honolulu. Judge Walsh, however, denied a motion by the state to transfer the cases to Hawaii. According to the report, Hawaii Superferry Inc. had support from creditors in opposing the transfer. The Company pointed out that more than half the unsecured creditors aren't in Hawaii. The largest secured creditor, Guggenheim Corporate Funding LLC, also wanted the case to remain in Delaware. The Maritime Administration of the U.S. Department of Transportation and the official committee of unsecured creditors also support having Delaware retained as the venue of the Chapter 11 cases. 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 assets and debts both between $100 million and $500 million. HELLER EHRMAN: U.S. Trustee Adds 2 Members to Creditors Committee ----------------------------------------------------------------- Sarah L. Kistler, the Acting United States Trustee for Region 17, has appointed two additional members to the official committee of unsecured creditors of Heller Ehrman LLP. The present members of the Committee are: Member's Representative ----------------------- 1. William R. Mackey Michael St. James wmackey732@aol.com michael@stjames-laws.com 21 Stanton Way St. James Law, P.C. Mill Valley, CA 94941 155 Montgomery Street, Suite 1004 Tel: (415) 381-7152 San Francisco, CA 94104 (Additional Member) Tel: (415) 391-7566 Fax: (415) 391-7568 2. Wondie Russell N/A wondie.russel@yahoo.com 465 Roosevelt Way San Francisco, CA 94114 Tel: (415) 626-3906 (Additional Member) 3. 333 Bush Associates Paul E. Paradis 101 California Street paulparadis@hines.com Suite 1000 101 California Street, Suite 1000 San Francisco, CA 94111 Tel: (415) 982-6200 Fax: (415) 398-1442 4. MEPT St. Matthews LLC Bennett Williams 1215 4th Avenue bennettw@kennedyusa.com Suite 2400 1215 4th Avenue, Suite 2400 Seattle, WA 98161 Seattle, WA 98161 Tel: (206) 236-2039 Fax: (206) 682-4769 5. Williams Lea, Inc. Deena Williamson 223 S. Wacker Drive deena.williamson@williamslea.com Chicago, IL 60606 100 K Street NW, Suite 800 Washington, DC 20005 Tel: (202) 729-2250 Fax: (202) 729-2240 About Heller Ehrman Headquartered in San Francisco, California, Heller Ehrman, LLP LP -- http://www.hewm.com/-- was an international law firm of more than 730 attorneys in 15 offices in the United States, Europe, and Asia. The firm filed a voluntary petition under Chapter 11 of the Bankruptcy Code on December 28, 2008 (Bankr. N.D. Calif. Case No. 08-32514). Members of the firm's dissolution committee led by Peter J. Benvenutti approved a plan dated September 26, 2008, to dissolve the firm. The Hon. Dennis Montali presides over the case. John D. Fiero, Esq., and Miriam Khatiblou, Esq., at Pachulski, Stang, Ziehl, Young and Jones, represent the Debtors as counsel. Thomas A. Willoughby, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP, represents the official committee of unsecured creditors of the Debtor. The firm listed between $50 million and $100 million each in assets and debts in its bankruptcy petition. HIGHLANDS INSURANCE: Files Motion for Permanent Injunction ---------------------------------------------------------- On July 1, 2009, Dan Yoram Schwarzmann and Mark Charles Batten, as the foreign representatives of Highlands Insurance Company (UK) Limited in its Chapter 15 case in the U.S. Bankruptcy Court for the Southern District of New York, have filed a motion for permanent injunction and related relief with the Court. The motion requests the Court to enter an order providing inter alia, that: -- The Scheme of Arrangement proposed in respect of the Company will be given full force and effect and be binding on and enforceable against all Scheme Creditors in the U.S.; -- All claims of Scheme Creditors will be administered and adjudicated exclusively pursuant to the terms of the Scheme of Arrangement and except as provided in the Scheme of Arrangement, all Scheme Creditors are permanently enjoined and restrained from taking any action in contravention of, or that are inconsistent with, the terms of the Scheme of Arrangement or its administration, implementation or enforcement; and -- Al Scheme Creditors asseting a claim under a Section 51 Direct Policy are required to make any and all claims in respect of their Section 51 Direct Policy and seek payment of said claims exclusively in accordance with the provisions of the Scheme and are precluded and enjoined from making any said claims except as specifically provided for under the Scheme of Arrangement; and -- All Section 51 Direct Policyholders/Claimants are prohibited and enjoined from asserting any and all claims in respect of their Section 51 Direct Policy or seeking payment of said claims (including asserting or effecting a set-off based on said claims) against Highlands Insurance Company (in Receivership). Objections or responses, if any, to this motion must be made in writing and filed with the Court so as to be received no later than August 12, 2009, at 5:00 p.m., New York time. A hearing to consider the motion and objections or responses thereto, if any, is schedules for August 18, 2009, at 2:00 p.m. New York time. Highlands Insurance Company (U.K.) Ltd. is a wholly-owned subsidiary of Highlands Holdings (U.K.) Ltd., which is in turn a wholly-owned subsidiary of Highlands Insurance Group Inc., a U.S. based Company. On October 25, 2007, the Debtor's directors presented an application to the High Court of Justice, Chancery Division, Companies Court to place the Debtors into administration under the U.K. Insolvency Act of 1986. On November 1, 2007, the High Court granted the application. Highlands Insurance Company (U.K.) Ltd. filed for Chapter 15 (Bankr. S.D.N.Y. Case No. 07-13970) on Dec. 18, 2007, through its duly authorized foreign representatives. When the company filed for Chapter 15, they listed assets between $50 million and $100 million and debts of more than $100 million. IDEARC INC: Lenders Agree Committee Can Sue Over Loan ----------------------------------------------------- Bill Rochelle at Bloomberg News reports that the secured lenders to Idearc Inc. agreed that the official committee of unsecured creditors formed in the Chapter 11 cases has the right to file suit if the panel believes there are defects in the lenders' pre- bankruptcy loan agreements. The U.S. Bankruptcy Court for the Northern District of Texas' order authorizing the Debtors to use cash collateral has set July 13 as the deadline to challenge the liens of the prepetition lenders. According to Mr. Rochelle, although the financing order prohibited the company itself from challenging the financing, it didn't give anyone else the right, known as standing, to file a suit. To avoid going to the bankruptcy judge, the lenders agreed that the committee can initiate a challenge to the pre-Chapter 11 financing. The Creditors Committee's deadline to file the suit remains at July 13. About Idearc, Inc. Headquartered in DFW Airport, Texas, Idearc, Inc. (NYSE: IAR) -- http://www.idearc.com/-- fka Verizon Directories Disposition Corporation, provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, their information directory for wireless subscribers. Idearc is the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. Idearc uses the Verizon brand on their print directories in their incumbent markets, well as in their expansion markets. Idearc and its affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31828). Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represents the Debtors in their restructuring efforts. The Debtors have tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on an official committee of unsecured creditors of Idearc, Inc., and its debtor-affiliates. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. The Debtors' financial condition as of December 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. INLET RETAIL: Inlet Square Mall May Have New Owner by August 17 --------------------------------------------------------------- Court documents say that that the biggest creditor of Inlet Retail Associates LLC has agreed to buy the Company's Inlet Square Mall by August 17, if no other buyer can be found. Mike Cherney at The (Myrtle Beach) Sun News reports that RAIT Partnership is owed $19 million from a loan to Inlet Retail. According to the report, RAIT agreed to pay $3.5 million on a credit bid. RAIT also agreed that if another entity emerges that will pay more than its offer, the property will go to that buyer, the report states. Court documents say that an auction will be held if two or more entities submit bids before August 17. The Sun News says that under Inlet Retail's reorganization plan filed on June 25, most of the contracts with the Company's current tenants will be honored after the sale. According to The Sun News, at least $120,000 from the sale will be set aside to pay off the other creditors. The amount will increase to $200,000 if the mall is sold for between $7 million and $10 million and will increase to $300,000 if it is sold for more than $10 million, The Sun News states. Inlet Retail has retained commercial real estate firm CB Richard Ellis to market the property and find a buyer, The Sun News reports. Headquartered in Irvine, California, Inlet Retail Associates, LLC, filed for Chapter 11 protection March 20, 2009, (Bankr. Case No.: 09-02083). Ivan N. Nossokoff, LLC, represents the Debtor in its restructuring efforts. The petition says that the Debtor has assets and debts of $10 million to $50 million. INTERLAKE MATERIAL: Liquidating Plan Goes to Creditors for Vote --------------------------------------------------------------- According to Bill Rochelle at Bloomberg News, Interlake Material Handling Inc. will present its liquidating plan at the confirmation hearing before the U.S. Bankruptcy Court for the District of Delaware on August 11. The Bankruptcy Court has approved the disclosure statement attached to the Plan, paving the way for Interlake to send the Plan to creditors for voting. The Plan calls for unsecured creditors with $60 million in claims to split up $350,000 cash and whatever is recovered from lawsuits in the future. Interlake Material has sold its business for $30 million to Mecalux SA, Spain's largest maker of warehouse equipment. About Interlake Material Headquatered in Naperville, Illinois, Interlake Material Handling, Inc. -- http://www.interlake.com/-- makes steel storage racks in the United States. The Company and three of its affiliates filed for protection on January 5, 2009 (Bankr. D. Del. Lead Case No. 09-10019). Winston & Strawn LLP represents the Debtors in their restructuring efforts. Young, Conaway, Stargatt & Taylor LLP is the Debtors' local counsel. Lake Pointe Partners, LLC, is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the claims agent for the Debtors. Lowenstein Sandler PC represents the official committee of unsecured creditors as counsel. Stevens & Lee, P.C., represents the Committee as Delaware counsel. When the Debtors filed for protection from their creditors, they listed assets between $50 million and $100 million, and debts between $100 million and $500 million. JEFFERSON COUNTY: Senator Appeals to Alabama Governor for Aid ------------------------------------------------------------- Rodger Smitherman, who represents beleaguered Jefferson County, in Alabama, said he would ask Governor Bob Riley for as much as $30 million to help the county pay its bills through the end of the fiscal year. Mr. Smitherman, a Democrat, said the aid would give lawmakers time to draft a bill to replace the county's occupational and license tax, Kathleen Edwards at Bloomberg News reports. The state Supreme Court in June rejected Jefferson County's proposal to spend occupational tax revenue as it appeals a lower- court ruling striking down the levy on constitutional grounds. The tax generates $75 million annually, or about 25% of the county's operating budget. According to Bloomberg, Jefferson County faces insolvency after borrowing costs on more than $3 billion of sewer bonds surged amid Wall Street's financial crisis. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. The Birmingham firm of Bradley Arant Rose & White, represents Jefferson County. Porter, White & Co. in Birmingham is the county's financial adviser. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion, set by Orange County, California in 1994. * * * As reported by the Troubled Company Reporter on April 30, 2009, Moody's Investors Service downgraded to Caa1 from B3 the rating on Jefferson County's (Alabama) $270 million in outstanding general obligation debt and to Caa2 from Caa1 the rating on $86.7 million in outstanding lease revenue warrants issued through the Jefferson County Public Building Authority; both ratings have been removed from Watchlist and the outlooks have been revised to negative. At this time, Moody's confirmed the Caa3 rating on the county's approximately $3.2 billion in outstanding sewer revenue debt, removed the rating from Watchlist and revised the outlook to negative. Moody's confirmed the B3 rating on the county's $996.8 million in limited obligation school warrants secured by sales tax revenues and the B3 rating on $40.86 million in debt issued by the Birmingham-Jefferson Civic Center Authority secured by special revenues including a beverage tax and lodging tax; both ratings have been removed from Watchlist and the outlooks revised to negative. According to the TCR on April 17, 2009, Standard & Poor's Ratings Services maintained its CreditWatch with negative implications on the rating on Jefferson County, Alabama's general obligation warrants outstanding, except for the rating on the series 2001B warrants, which was recently lowered to 'D'. Also remaining on CreditWatch negative is the rating on Jefferson County Public Building Authority's series 2006 lease-revenue warrants. Revenues available for payment of debt service on the general obligation warrants include ad valorem, sales, business license and occupational taxes; however, none of these legally available revenues is specifically pledged for payment of debt service. Also, in the event of a bankruptcy filing by the county, the entire balance of the 2001B warrants could become due immediately at the request of at least 25% of holders of the warrants, all of which are being held as bank warrants at this time. JH2 INVESTMENTS: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: JH2 Investments, LLC dba Hadden Associates 1553 Alexandria Drive, Suite 2B Lexington, KY 40504-2116 Bankruptcy Case No.: 09-52138 Chapter 11 Petition Date: July 5, 2009 Court: United States Bankruptcy Court Eastern District of Kentucky (Lexington) Debtor's Counsel: John E. Davis, Esq. 2343 Alexandria Dr, Suite 140 Lexington, KY 40504 Tel: (859) 219-3472 Fax: (859) 219-9432 Email: jay@davis-coffman.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 6 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/kyeb09-52138.pdf The petition was signed by Jerry Hadden, member of the Company. LEAR CORP: Seeking Additional Support for Chapter 11 Plan --------------------------------------------------------- Lear Corporation said in a regulatory filing on July 6 that it is seeking support for the proposed plan of reorganization from additional lenders and bondholders. If the requisite support is obtained, Lear expects to commence shortly the proposed restructuring under court supervision pursuant to a voluntary bankruptcy filing under Chapter 11 of the United States Bankruptcy Code by Lear and certain of its U.S. and Canadian subsidiaries. On July 1, Lear announced that it had reached an agreement in principle regarding a consensual debt restructuring with a majority of the members of a steering committee of Lear's secured lenders and a steering committee of bondholders acting on behalf of an ad hoc group of bondholders. Lear said that no assurance can be given as to the level of additional support for the Plan Lear ultimately will be able to obtain from its lenders and bondholders. Terms of Pre-Negotiated Plan Pursuant to the Agreement in Principle, Lear's Chapter 11 plan would provide for a restructuring of: (i) approximately $2.3 billion of indebtedness outstanding under the Amended and Restated Credit and Guarantee Agreement, dated as of April 25, 2006, among Lear, certain of its subsidiaries, the several lenders from time to time parties thereto, the several agents parties thereto and JPMorgan Chase Bank, N.A., as Agent for the Lenders, including termination claims under certain hedging arrangements held by certain Lenders, and (ii) approximately $1.3 billion of indebtedness outstanding under Lear's 8.50% senior notes due 2013, 5.75% senior notes due 2014, 8.75% senior notes due 2016, and Zero- coupon convertible senior notes due 2022. Debtor-in-Possession Financing / Exit Facility. Lear has received commitments from a syndicate of secured lenders, led by J.P. Morgan and Citigroup, for $500 million in debtor-in-possession financing, consisting of a term loan that matures on the first anniversary of the closing date thereof and may be extended, at Lear's option to the date that is 15 months after the Closing Date. Subject to certain conditions, the DIP Facility is convertible into an exit facility of up to $500 million, comprised of a term loan in an aggregate principal amount equal to the principal amount of the terms loans outstanding under the DIP Facility at the time of conversion. The DIP Facility is convertible into the Exit Facility upon the Debtors' emergence from chapter 11 of the Code, subject to the satisfaction of various conditions, including, without limitation, the approval by the applicable bankruptcy court of any plan of reorganization to the extent such plan is consistent in all material respects with the Plan and that the Debtors are not then in default under the terms of the DIP Facility. The Exit Facility's scheduled maturity date is three years after the effective date of a Qualified Plan. Restructuring of the Capital Structure. The Plan would provide for a restructuring of the Debtors' capital structure which, after the Effective Date, would consist of: -- up to a $500 million first lien term loan Exit Facility; -- a $600 million second lien term loan; -- $500 million of Series A Convertible Preferred Stock (which would not bear any mandatory dividends); and -- a single class of common stock, including sufficient shares to provide for: (i) management equity grants, (ii) the issuance to the lenders of warrants to purchase common stock with a value of up to $25 million, to the extent the Exit Facility fee to the lenders is not paid in cash and (iii) the issuance to the holders of Senior Notes and certain other general unsecured claims (including the deficiency claims of the Lenders under the Senior Credit Facility) of warrants to purchase 15% of the new common stock of Lear, on a fully-diluted basis (excluding the management equity grants) as of the Effective Date. The Plan would treat claims and interests in this manner: * Senior Credit Facility Claims. Each Lender would receive its pro rata share of: (i) $600 million of new second lien term loans, (ii) $500 million of Series A Convertible Preferred Stock of Lear, which is convertible into approximately 26% of the new common stock of Lear on a fully-diluted basis (excluding the management equity grants) as of the Effective Date, and (iii) approximately 26% of the new common stock of Lear, on a fully-diluted basis (excluding the management equity grants) as of the Effective Date. To the extent the Debtors have minimum liquidity on the Effective Date in excess of $1.0 billion, subject to certain adjustments, the amount of such excess would be utilized to prepay, first, the Series A Convertible Preferred Stock in an aggregate stated value of up to $50 million, then, the second lien term loan in an aggregate principal amount of up to $50 million, and thereafter, the Exit Facility. To the extent unsecured, the unsecured deficiency claims of the Lenders under the Senior Credit Facility would be treated as "Senior Notes and Other Unsecured Claims". * Unsecured Ongoing Operations Claims. General unsecured claims relating to the provision of goods or services to certain of the Debtors arising with, or held by, persons or entities with whom the Debtors conducted business as of the filing of the Chapter 11 Petitions, subject to certain exceptions, which are due and payable on or before the Effective Date, would be paid in full in cash. * Senior Notes and Other Unsecured Claims. Each holder of Senior Notes, the unsecured deficiency claims of the Lenders under the Senior Credit Facility and certain other general unsecured claims against the Debtors would receive its pro rata share of (i) approximately 46% of the new common stock of Lear, on a fully-diluted basis (excluding the management equity grants) as of the Effective Date and (ii) warrants to purchase 15% of the new common stock of Lear, on a fully-diluted basis (excluding the management equity grants) as of the Effective Date. * Existing Equity Claims. Existing equity holders of Lear, including holders of its common stock and options, would have no recovery under a Qualified Plan. Lear would continue to hold all equity interests in its subsidiaries that it held prior to the filing of the Chapter 11 Petitions. The parties assumed a distributable value of $3.054 billion. Management Equity Plan and Employee Matters. Lear would implement a key management incentive plan based on the achievement by Lear of certain financial targets during the Chapter 11 Cases and certain milestones with respect to the progress of the Chapter 11 cases. Under a Plan, Lear would implement a management equity plan for the benefit of certain continuing employees of Lear that would provide for the issuance up to 10% of the new common stock of Lear. The Plan also would provide for the adoption or assumption of employment agreements with Lear's executive officers and certain other employee benefit plans. In addition, Lear would assume or reinstate all U.S.-based employee and retiree health, welfare and pension plans. Board of Directors. Lear's board of directors following the Effective Date would consist of nine members, including Lear's Chairman and Chief Executive Officer. The Agent under Lear's senior credit facility, in consultation with the steering committee of the Lenders and with the assistance of a nationally recognized executive search firm, would appoint no fewer than five of the directors. The steering committee of bondholders acting on behalf of an ad hoc group of bondholders, in consultation with Lear's bondholders and the creditors' committee in the Chapter 11 cases, would appoint three of the directors. Registration. As soon as practicable following the Effective Date, Lear would be required to take such action as is necessary to register its new common stock under the Securities Exchange Act of 1934, as amended, and obtain a listing for such common stock on the New York Stock Exchange or Nasdaq. Loan Defaults Lear did not make required payments in an aggregate amount of approximately $7.15 million due and payable under the Senior Credit Facility on June 30, 2009. In addition, Lear did not make regularly scheduled interests payments in an aggregate amount of $38.4 million on the 8.50% Notes or the 8.75% Notes that were due and payable on June 1, 2009. Lear did not make approximately $4.5 million in aggregate, of payments that it was required to make on June 30, 2009 in respect of certain of hedging transactions. About Lear Corp. 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's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. As reported by the TCR on July 3, 2009, Standard & Poor's Ratings Services said that it has lowered its issue-level rating on Lear Corp.'s senior secured debt to 'D' from 'CC', and the rating on the remaining senior unsecured debt to 'D' from 'C', reflecting Lear's announcement that it intends to commence shortly a proposed debt restructuring through a bankruptcy filing. LEAR CORP: ISDA Determinations Committee Affirms "Credit Event" --------------------------------------------------------------- The 15 members determinations committee of the International Swaps and Derivative Association have unanimously agreed that a "failure to pay credit event" occurred with respect to Lear Corporation. A credit event triggers contracts protecting a default by Lear. UBS AG made the request before the committee on July 2. On June 1, Lear announced that it did not make $38 million of required interest payments on its 8.5% and 8.75% notes. The indenture provides for a 30-day grace period. On July 2, Lear announced plans to pursue a debt restructuring under Chapter 11. In the release, Lear states that it expects to be in default under the notes. A credit event would mean sellers guaranteeing roughly $2.2 billion of Lear's debt would have to pay buyers of the contracts face value, less the value of the debt, Bloomberg said, citing data from Depository Trust & Clearing Corp., which runs a central registry that captures most trading. According to Bloomberg News, banks, hedge funds, insurance companies and other asset managers had sold or bought credit swaps protecting a net $687 million of Lear debt as of June 26, Depository Trust data show. Bloomberg relates that about $1.56 billion in protection was bought through indexes that are linked to a group of companies including Lear. About Lear Corp. 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's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. As reported by the TCR on July 3, 2009, Standard & Poor's Ratings Services said that it has lowered its issue-level rating on Lear Corp.'s senior secured debt to 'D' from 'CC', and the rating on the remaining senior unsecured debt to 'D' from 'C', reflecting Lear's announcement that it intends to commence shortly a proposed debt restructuring through a bankruptcy filing. LEAR CORP: CBAs & Customer Pacts Won't Be Issues in Ch. 11 Plan --------------------------------------------------------------- David Barkholz at Automotive News reports that Lear Corp. CEO Robert Rossiter said that labor and customer contracts won't be issues in the Company's planned Chapter 11 bankruptcy filing. Lear has less than 5,000 UAW-represented workers, Automotive News relates, citing Mr. Rossiter. Lear spokesperson Mel Stephens said that the Company has about 70,000 workers worldwide, Automotive News states. According to Automotive News, Lear said it has reached an agreement on its restructuring plan with a majority of committee members representing secured lenders and bondholders. Mr. Rossister said in a statement that the agreements "will enable us to emerge expeditiously. We intend to complete the restructuring as quickly as possible." 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's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. As reported by the TCR on July 3, 2009, Standard & Poor's Ratings Services said that it has lowered its issue-level rating on Lear Corp.'s senior secured debt to 'D' from 'CC', and the rating on the remaining senior unsecured debt to 'D' from 'C', reflecting Lear's announcement that it intends to commence shortly a proposed debt restructuring through a bankruptcy filing. LEHMAN BROTHERS: Wants Plan Filing Deadline Moved to March 2010 --------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors ask Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to give them additional time to file their Chapter 11 plan of reorganization and solicit votes for that plan. The Debtors want the deadline for filing their Chapter 11 plan extended to March 15, 2010, and the deadline for soliciting votes from creditors stretched out to May 17, 2010. Attorney for the Debtors, Lori Fife, Esq., at Weil Gotshal Manges LLP, in New York, says they need more time to prepare the Debtors' Chapter 11 plan given the complexity of the Debtors' bankruptcy cases. "The Debtors have bank debt, bond debt, intercompany debt, derivative debt and guaranty issues that bear on the workings of any Chapter 11 plan. Before confirmable Chapter 11 plans can be proposed, the Debtors must intimately understand the scope and scale of the claims against their estates to negotiate practical and fair resolutions with their creditors," Ms. Fife says in court papers. Administering the cases, she adds, has been further complicated by the Debtors' limited resources. From an operating global enterprise with more than 25,000 employees, the Debtors' estates are now being administrated by around 700 individuals, including about 200 full-time professionals at Alvarez & Marsal North America LLC, many of whom were brought on after the bankruptcy filing. "Not only must these individuals learn Lehman's global prepetition business but they must also understand the thousands of counterparties with whom Lehman transacted to make informed business decisions," Ms. Fife points out. Ms. Fife further asserts that the extension of the deadline is also warranted given the major progress the Debtors have made in their cases including obtaining approval of major sales, which increased their cash balances from a mere $2 billion as of September 18, 2008, to more than $10 billion as of July 1, 2009. Shortly after their bankruptcy filing, the Debtors have conducted major sales including the sale of their North American capital markets business to U.K.-based Barclays Capital Inc. that generated more than $1.5 billion for the estates and preserved around 10,000 jobs. The Debtors also sold their investment management division in exchange for a preferred equity interest with an aggregate liquidation preference of $875 million and 49% of common stock in a newly formed company. They also sold their interest in Lehman Brothers Merchant Banking III L.P., Lehman Brothers Merchant Banking IV L.P. and Lehman Brothers Merchant Banking IV (Europe), L.P., as well as approximately 40 direct investments in various venture capital portfolio companies. Other major sales included the sale of the stake in R3 Capital Management LLC, which generated $500 million, and their interest in Eagle Energy Partners I L.P., which raked in $230 million. Ms. Fife assures the Court that the proposed extension is not an attempt to pressure creditors to accede to the Debtors' demands, pointing out that regular and open communication with their creditors has remained a fundamental goal of the Debtors. "The Debtors have made every effort to keep creditors apprised and informed of all developments, including constant communication with the Official Committee of Unsecured Creditors and its professionals on issues ranging from day-to-day administration to long term strategy," Ms. Fife says. A hearing to consider the request is scheduled for July 15, 2009. Creditors and other concerned parties have until July 10, 2009, to file their objections. The Debtors obtained a bridge order from the Court extending the exclusive periods deadline until the Court issues an order approving their request. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on September 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on September 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: Court Sets September 22 Claims Bar Date -------------------------------------------------------- Creditors holding pre-bankruptcy claims against Lehman Brothers Holdings Inc. and its affiliated debtors have until September 22, 2009, to prepare and file their claims, Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York ruled. Holders of a security that is not listed in the Debtors' master list of securities can ask that a security be added to the list by completing a form available on the Debtors' Web site, which form must be submitted to the Debtors on or before August 5, 2009. The master list will be final as of August 20, 2009. Each holder of a claim against the Debtors, which stemmed from a derivative contract, is required to complete the electronic derivative questionnaire found at the Debtors' Web site on or before October 22, 2009. Holders of claims against the Debtors based on amounts owed pursuant to a promise, representation and agreement to answer for the payment of some debt or the performance of some duty in case of the failure of another party that is liable; and creditors whose claims are based on a guarantee by the Debtors of the obligations of a non-debtor entity under a derivative contract have also until October 22, 2009, to complete the guarantee questionnaires. As for creditors that have claims on account of securities issued by the Debtors or any of their affiliates outside of the United States, which have been identified in the Debtors' Web site under the heading "Lehman Programs Securities" as of July 17, 2009, have until November 2, 2009, to file their proofs of claim. Court Approves Stipulations In separate orders, Judge Peck approved the stipulations that the Debtors inked with JPMorgan Chase Bank N.A., Pacific Investment Management Company LLC, and the Internal Revenue Service. Under the stipulations, the Debtors agreed to exempt JPMorgan and Pacific Investment from complying with certain requirements of the July 2 "bar date" order related to the derivative contracts. Meanwhile, IRS is allowed to file its proof of claim until June 30, 2010. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on September 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on September 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: Committee Wants Examiner to Limit Barclays Probe ----------------------------------------------------------------- The official committee of unsecured creditors in Lehman Brothers Holdings Inc.'s Chapter 11 cases asks the U.S. Bankruptcy Court for the Southern District of New York to issue a ruling directing Anton Valukas, the Court-appointed Chapter 11 examiner, to investigate only the potential claims against Barclays Capital Inc. related to assets of Lehman Brothers Holdings Inc.'s units. Attorney for the Creditors' Committee, Dennis Dunne, Esq., at Milbank Tweed Hadley & McCloy LLP, in New York, says that pursuant to the January 16, 2009 order approving the appointment of an examiner, Mr. Valukas was not tasked to investigate all aspects of the sale of LBHI's North American business to Barclays. "The examiner was charged with investigating the narrow issue of potential claims against Barclays relating to the assets of LBHI-related entities and affiliates, but not those of LBHI or [Lehman Brothers Inc.]," Mr. Dunne points out. The Creditors' Committee made the move out of concern that the Examiner would investigate aspects of the sale that have already been under the investigation of the panel, LBHI and LBI's trustee. "The examiner recently indicated that his investigation will take longer and cost more than originally anticipated," Mr. Dunne says, adding that it is the creditors who "will be paying for any inefficiency and overlap in the investigation process." "Maintaining a clear distinction between the simultaneous investigations is extremely important for many reasons including the need to proceed with these investigations as quickly and efficiently as possible, with minimal duplication of effort," he asserts. In an e-mail to Bloomberg News, Martin Bienenstock, Esq., at Dewey & LeBoeuf LLP, says "the last entity who should investigate and sue is Lehman." "Lehman is the entity that made the deal and insisted it must be closed before the ink was dry and the creditors could understand it," Mr. Bienenstock, counsel to some of LBHI's creditors, told Bloomberg. Mr. Bienenstock further told Bloomberg that Lehman's own investigation "would be handicapped by human nature not to challenge anything that might show that Lehman made a very bad deal riddled with mistakes." He added that LBI's trustee, meanwhile, can only bring actions beneficial to Lehman's affiliate and not to Lehman itself. The hearing to consider approval of the Creditors' Committee's request is scheduled for July 15, 2009. Creditors and other concerned parties have until July 10, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on September 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on September 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: LBI Trustee Asks for Approval of FSA Settlement ---------------------------------------------------------------- James Giddens, trustee for the liquidation of Lehman Brothers Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement with Financial Security Assurance Inc. Under the settlement, FSA will receive $1.1 million by wire transfer from the account maintained by JP Morgan Chase Bank N.A. FSA will only receive the payment, however, if the funds deposited in the account equal or exceed the $1,685,966, which was received on account of certain distributions of principal of and interest on LBI's collateral. The collateral consists of securities, which LBI pledged to FSA to secure its obligations under their guaranty and custody agreements dated February 1, 1992. Under the agreements, LBI was required to make timely payment to a fiscal agent who would forward the funds to a certain trustee to allow for the timely payment of principal and interest to the holders of certain bonds; and to reimburse FSA, the issuer of an insurance policy guarantying that payment. The settlement also provides for the transfer of the remaining balance of the funds deposited in JP Morgan's account to Mr. Giddens, free and clear of FSA's interest, following the payment of $1.1 million. The hearing to consider approval of the settlement is scheduled for July 15, 2009. Creditors and other concerned parties have until July 10, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on September 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on September 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEHMAN BROTHERS: LBI Trustee Starts Review of Customer Claims ------------------------------------------------------------- James Giddens, trustee for Lehman Brothers Inc., disclosed in court papers that he has entered the next phase of the company's liquidation proceeding under the Securities Investor Protection Act, in which he will be reviewing all customer claims to determine the customers' net equity claim. Mr. Giddens said the distributions to pay allowed customer claims on a pro rata basis will depend on the amount and value of property, securities and cash, allocated to the fund of customer property. "The trustee is continuing to take the steps mandated by SIPA, which are a precondition to determining the property to be made available to pay customers' net equity claims," he said. "Interim distributions on net equity claims will be made as soon as there is enough clarity for reasonable estimates to be made of both the amount of customer property available for distribution and the total of allowed net equity claims," Mr. Giddens stated in court papers. The trustee has received more than 12,000 customer claim forms representing over 80,000 accounts so far. He has also established teams of professionals who have been working to reconcile and resolve issues. These include teams working on the multibillion dollar claims submitted on an omnibus or group basis by Barclays Capital Inc., Lehman Brothers International (Europe) and other Lehman units; claims by prime brokerage account holders; and more than 7,000 timely filed individual customer claims after identification and elimination of duplicates. Mr. Giddens said he has already determined 3,350 of those claims, has issued about 1,500 deficiency letters, and reached out to customers to obtain required information with respect to claims that "lack meaningful information or are defective on their face." "The trustee is reviewing remaining claims and issuing letters of determination as rapidly as possible. Under SIPA and the procedures approved by the Court, when the trustee issues a determination denying a customer claim in whole or in part, the claimant has a right to object, and the dispute must be resolved or submitted for court determination," Mr. Giddens said. According to Mr. Giddens, some of those disputes will involve whether certain categories of transactions qualify for customer treatment under SIPA as well as valuation questions while others will involve substantial dollar amounts. "It may be a considerable time before some of these disputes can be finally resolved through the bankruptcy court and appeals process. The trustee will reserve for disputed claims until resolution becomes final," Mr. Giddens said. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on September 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on September 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). LEVEL 3: Closes Debt Exchange With Unnamed Investor --------------------------------------------------- Level 3 Communications, Inc., has consummated certain transactions contemplated by an Amended and Restated Exchange Agreement, dated as of June 26, 2009, between the Company and an institutional investor, amending an Exchange Agreement, dated as of June 21, 2009, between the parties. The Company did not identify the Investor. The Company agreed to exchange $142,079,000 aggregate principal amount of the Company's 6% Convertible Subordinated Notes due 2010 and $139,820,000 aggregate principal amount of the Company's 2.875% Convertible Senior Notes due 2010 held by the Investor for $200,000,000 aggregate principal amount of the Company's 7% Convertible Senior Notes due 2015 and $78,208,900.00 in cash, plus accrued and unpaid interest on the Existing Notes. On June 26, 2009, in exchange for certain of the Existing Notes, the Company issued the New Notes and paid $58,196,337.19 in cash to the Investor, plus accrued and unpaid interest on the Existing Notes that were exchanged. The remaining Existing Notes were subsequently exchanged for $20,012,562.81 in cash, plus accrued and unpaid interest on those Existing Notes. The Notes were issued pursuant to an Indenture, dated June 26, 2009, between the Company and The Bank of New York Mellon, as Trustee. The Notes are senior unsecured obligations of the Company, ranking equal in right of payment with all the Company's existing and future unsubordinated indebtedness. The Notes will mature on March 15, 2015 and pay 7% annual cash interest. Interest on the Notes will be payable on March 15 and September 15 of each year, commencing on September 15, 2009. The Notes are convertible by the Investor into shares of the Company's common stock, par value $0.01 per share, at an initial conversion price of $1.80 per share (which is equivalent to a conversion rate of 555.5556 shares of Common Stock per $1,000 principal amount of Notes), subject to adjustment upon certain events, at any time before the close of business on March 15, 2015. The Investor may require the Company to repurchase all or any part of the Notes upon the occurrence of a designated event (change of control or a termination of trading) at a price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the repurchase date, if any. In addition, if a holder elects to convert its Notes in connection with certain changes in control, the Company will pay, to the extent described in the Indenture, a make-whole premium by increasing the number of shares deliverable upon conversion of such Notes. On June 22, 2009, the Company said that during the second quarter 2009 it completed open market debt repurchases for an aggregate of approximately $223 million of cash, excluding accrued and unpaid interest. The Company repurchased approximately $117 million aggregate principal of debt due 2009, approximately $50 million aggregate principal of debt due 2010, approximately $61 million aggregate principal of debt due 2011 and approximately $20 million aggregate principal of debt due 2012. The Company has, after the close of the Investor transaction and excluding capital leases, roughly: $60 million of debt due in 2009, $181 million of debt due in 2010, $505 million of debt due in 2011, and $306 million of debt due in 2012. At March 31, 2009, the Company had unrestricted cash and cash equivalents of $672 million, or $634 million after giving effect to the approximately $274 million of net proceeds received from the senior secured Tranche B Term Loan completed in April and May 2009 and all of the transactions described. The Notes will not be registered under the Securities Act of 1933 or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. About Level 3 Communications Level 3 Communications, Inc. (NASDAQ: LVLT) -- http://www.Level3.com/-- is an international provider of fiber- based communications services. Enterprise, content, wholesale and government customers rely on Level 3 to deliver services with an industry-leading combination of scalability and value over an end- to-end fiber network. Level 3 offers a portfolio of metro and long-haul services, including transport, data, Internet, content delivery and voice. * * * As reported by the Troubled Company Reporter on June 30, 2009, Fitch Ratings has lowered the rating assigned to Level 3 Communications, Inc.'s convertible subordinated notes to 'CC/RR6' from 'CCC-/RR6'. The rating action brings the subordinated note ratings in line with Fitch's revised rating definition and mapping criteria. Approximately $484 million of convertible subordinates notes outstanding as of March 31, 2009, was effected by Fitch's action. As of March 31, 2009, LVLT had approximately $6.4 billion of debt outstanding. On June 25, the TCR said Fitch assigned a 'CCC/RR5' rating to Level 3's $200 million issuance of 7% convertible senior notes due March 2015. The notes will rank pari passu with LVLT's existing senior unsecured indebtedness. LVLT along with its wholly owned subsidiary Level 3 Financing, Inc., have a 'B-' Issuer Default Rating and a Positive Rating Outlook. The proceeds from the note offering along with approximately $78.2 million of cash (plus accrued interest) will be exchanged for a portion of LVLT's outstanding 6% convertible subordinated notes due 2010 and its 2.875% convertible senior notes due 2010 pursuant to an exchange agreement the company has entered into with certain institutional investors. From Fitch's perspective the debt exchange and the open market debt repurchases have a positive effect on LVLT's credit profile and alleviates concerns related to the company's liquidity position seeing that a significant portion of the exchange and repurchases were targeted at outstanding debt scheduled to mature between 2009 and 2010. After the close of the exchange, expected to occur before the end of the second quarter, and considering the open market debt repurchases, LVLT has a total of $241 million of debt maturing during the balance of 2009 and 2010. LIVENT INC: Prosecutors Want 10 Years for Drabinsky & Gottlieb -------------------------------------------------------------- By Joe Schneider at Bloomberg News reports that prosecutor Alex Hrybinsky said at the sentencing hearing of Garth Drabinsky and Myron Gottlieb that the two should spend 8 to 10 years in prison for defrauding investors of about C$500 million ($429 million). Messrs. Drabinsky and Gottlieb, 65, were charged in October 2002 with lying about finances at the theater producer Livent Inc. for nine years as they raised money to buy theaters in Toronto, Chicago and New York and paid for increasingly lavish productions, including "Fosse" and "Phantom of the Opera." The Ontario Superior Court Judge Mary Lou Benotto found Mr. Drabinsky, 59, and Mr. Gottlieb, 65, guilty of two counts of fraud and one count of forging a document on March 25, more than 10 years after police began probing what they called one of the biggest fraud cases in Canadian history. In 2005, the two were ordered by Manhattan Federal Judge Victor Marrero to pay $23,333,146 to investors who bought notes issued by Livent, Inc., a now- bankrupt entertainment company. Mr. Drabinsky was formerly Livent's chairman and chief executive, while Mr. Gottlieb was formerly Livent's president. Livent Inc. was a vertically integrated producer of live theatrical entertainment, as well as an operator of theaters in large North American markets. Livent and its debtor-affiliates filed for Chapter 11 relief on November 18, 1998. Matthew Allen Feldman, Esq., at Willkie Farr & Gallagher LLP represented the Debtors in their liquidating efforts. LOG HOME: Files for Chapter 11 After Owner Sued for Theft --------------------------------------------------------- Log Home Building Services LLC filed for Chapter 11 bankruptcy protection due to legal disputes involving its owner. The Flume relates that Log Home's owner, Jay Hamburg, was scheduled to appear in Park County Combined Court for a trial in a lawsuit filed by Pella Windows and Doors Inc. According to The Flume, Mr. Hamburg he was charged with theft of almost $60,000 from two men who hired who to build a log home near Alma. Mr. Hamburg allegedly took the money from the log home project to pay for previous projects, the report says. Mike Potter at The Flume reports that Log Home has $215,641.70 in liabilities, which includes $154,982 in credit card debt and $61,017 in "other current liabilities." The Flume states that businesses holding unsecured claims against Log Home include: -- Merrill Lynch Credit Card, in the amount of $48,750; -- Pine Junction-based Hutchison Lumber, a creditor for one debt of $38,872 and another for $13,978; -- AMA Electric, owed $9,833; and -- Fairplay-based attorney Chuck Pisano, which is owed $15,000. Mr. Hamburg has retained Jeffrey Brinen to represent him in the bankruptcy proceedings, The Flume states. Log Home Building Services LLC is based in Fairplay. The Company filed for Chapter 11 bankruptcy protection on June 23, 2009 (Bankr. D. Colo. Case No. 09-22282). The Company listed 100,000 to 500,000 in liabilities, but didn't disclose its assets. LUMINENT MORTGAGE: Court Confirms Second Amended Joint Plan ----------------------------------------------------------- The U.S. Bankruptcy Court confirmed Luminent Mortgage Capital Inc.'s Second Amended Joint Plan of Reorganization, according to BankruptcyData.com. The Plan, the report says, treats claims against, and interests in, the Debtor in this manner: i) holders of administrative claims, priority tax claims and priority non-tax claims will be paid in full in cash; ii) holders of Arco secured claims will receive 46% of the equity in the reorganized company; iii) holders of other secured claims will be paid in full; iv) holders of general unsecured claims will receive distributions from a general unsecured distribution fund, a share of a subsequent unsecured distribution amount and 29% of the equity in the reorganized company; v) holders of general unsecured opt-out claims, convenience opt-out claims, TRUPs opt-out claims and interests in the Company will receive no distribution; vi) holders of convenience claims will receive a share of a convenience class fund; and vii) holders of subordinated TRUPs claims will receive distributions from a general unsecured distribution fund, a share of a subsequent unsecured distribution amount and 29% of the equity in the reorganized company, provided, however, that the distributions to these creditors will be paid directly to the senior indenture trustee for further distribution to the holders of senior note claims to the extent necessary to comply with the contractual subordination provisions in the subordinated TRUPS indenture or senior notes indenture. In addition, a share of 5% of the reorganized equity units will be distributed directly to the subordinated TRUPs trustees for distribution to holders of the subordinated TRUPS and not subject to contractual subordination, the report relates. A full-text copy of the disclosure statement explaining the Debtors' Second Amended Plan is available at: http://bankrupt.com/misc/luminent.2ndAmendedDS.pdf A full-text copy of Debtors' Second Amended Joint Plan of Reorganization is available at: http://bankrupt.com/misc/luminent.2ndAmendedPlan.pdf About Luminent Mortgage Luminent Mortgage Capital, Inc. (OTCBB: LUMCE), is a real estate investment trust, or REIT, which, together with its subsidiaries, has historically invested in two core mortgage investment strategies. Under its Residential Mortgage Credit strategy, the company invests in mortgage loans purchased from selected high- quality providers within certain established criteria as well as subordinated mortgage-backed securities and other asset-backed securities that have credit ratings below AAA. Under its Spread strategy, the company invests primarily in U.S. agency and other highly-rated single-family, adjustable-rate and hybrid adjustable- rate mortgage-backed securities. Luminent and nine subsidiaries filed on September 5, 2008, for relief under Chapter 11 of the U.S Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland, Baltimore Division (Lead Case No. 08-21389). Immediately prior to the filing, the Debtor executed a Plan Support and Forbearance Agreement with secured creditor Arco Capital Corp., Ltd., WAMU Capital Corp. and convertible noteholders representing 100% of the outstanding principal amount of its convertible notes. Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, represents the Debtors as counsel. The U.S. Trustee for Region 4 appointed creditors to serve on an Official Committee of Unsecured Creditors. Jeffrey Neil Rothleder, Esq., at Arent Fox LLP, represents the Creditors Committee as counsel. In its operating report for the month of September 2008, Luminent Mortgage Capital, Inc., reported $1,960,516 in total assets and $374,868,632 in total liabilities, resulting in a $372,908,116 stockholders' deficit. MAGNACHIP SEMICONDUCTOR: Plan Offers 71% for First-Lien Creditors ----------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that MagnaChip Semiconductor B.V. and its affiliates filed a liquidating Chapter 11 plan that provides most of the proceeds from its assets sale to first-lien lenders owed $95 million. According to the disclosure statement explaining the Plan, second-lien noteholders owed $500 million will receive $1 million. The first-lien lenders will recover 70.6% while second lien noteholders would recover 0.2%. According to the report, subordinated debt holders with $250 million in claims will receive nothing because the money they otherwise would see from the $1 million will be directed to the second-lien creditors. MagnaChip prepared the Plan prior to its Chapter 11 filing. The sale to a Korean limited partnership named KTB 207 Private Equity Fund was also worked out in advance, Mr. Rochelle relates. About MagnaChip Semiconductor Inc. Headquartered in South Korea, MagnaChip Semiconductor LLC -- http://www.magnachip.com/-- is a leading, Asia-based designer and manufacturer of analog and mixed-signal semiconductor products for high volume consumer applications. The Company has a broad range of analog and mixed-signal semiconductor technology and intellectual property, supported by its 29-year operating history, large portfolio of registered and pending patents and extensive engineering and manufacturing process expertise. Citigroup Venture Capital Equity Partners LP was part of the investor group that acquired MagnaChip in 2004 from Hynix Semiconductor Inc. MagnaChip Semiconductor S.A. and five other entities filed for Chapter 11 on June 12, 2009, in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 cases are jointly administered under Case No. 09-12008, MagnaChip Semiconductor Finance Company. Judge Peter J. Walsh handles the case. James E. O'Neill, Esq., and Laura Davis Jones, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. Omni Management Group LLC is the Debtors' claims agent. In its petition, Magnachip Semiconductor Finance Company listed assets below $50,000 and debts of more than $1 billion. In their formal schedules, MagnaChip Semiconductor S.A. disclosed $951,917,782 in assets against $845,903,186 in debts while MagnaChip Semiconductor B.V. disclosed assets of $762,465,739 against debts of $1,800,612,084. METALDYNE CORP: Committee Taps Reed Smith as Counsel ---------------------------------------------------- The Official Committee of Unsecured Creditors of Metaldyne Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Reed Smith LLP as its counsel. The firm will: a) consult with the trustee or Debtors concerning the administration of these cases; b) investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses and the desirability or the continuance of such businesses, and any other matter relevant to the cases or to the formulation of one or more plans ; c) evaluate, with the Debtors, the purchase of the assets or businesses of the Debtors and participating in the sale process; d) if appropriate, request the appointment of one or more trustees or examiners under Section 1104 of the Bankruptcy Code; e) assert claims and causes of action on behalf of the Committee and the Debtors, if the Debtors fail to assert such claims; and f) perform other services as are in the interest of the Debtors' creditors. The regular rates for Reed Smith's paralegals, associates, and partners are as follows: $100 to $315 for paralegals; $275 to $545 for associates and for partners. Professional Designation Hourly Rate ------------ ----------- ----------- Mark D. Silverschotz, Esq. Partner $710 Kurt F. Gwynne, Esq. Partner $590 Mark W. Eckard, Esq. Associate $360 J. Cory Falgowski, Esq. Associate $360 Kathleen A. Murphy, Esq. Associate $305 John B. Lord paralegal $250 Lisa Lankford paralegal $145 Evan F. Jaffe Paralegal $105 Designation Hourly Rate ----------- ----------- Partners $375-$945 Associates $275-$545 Paralegals $100- $315 The Debtors assure the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. 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 owns 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.N.Y. 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. METALDYNE CORP: Proposes Donnelly Penman as Investment Banker ------------------------------------------------------------- Metaldyne Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Donnelly Penman & Partners as their investment banker for certain assets. The firm will: a) identify prospective purchasers of the Debtor's businesses; b) prepare information describing the businesses, their operations and financial performance; c) disseminate information regarding the businesses to the Prospects; d) conduct sell-side due diligence on the businesses; e) organize a data room(s) with information relevant to the prospective purchasers; f) coordinate due diligence with the prospective purchasers; g) negotiate a stalking horse bid with the prospective purchasers; h) negotiate the structure and terms of a potential transaction with the prospective purchasers; i) assist the Debtors and their counsel in conducting auctions of the Businesses under the auspices of the Court; j) assist the Debtors and their counsel with the preparation and negotiation of closing documentation relating to a transaction; k) assist the Debtors and their counsel in preparing necessary documentation and information in connection with obtaining approval by the Court of proposed Transactions; and 1) provide relevant testimony at hearings before the Court or other courts as the Debtors may request with respect to the foregoing. The firm will be paid $35,000 per month for this engagement. The Debtors assure the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. 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 owns 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.N.Y. 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. MGM MIRAGE: Clients Demand Significant Price Cuts for Condos ------------------------------------------------------------ Tamara Audi at The Wall Street Journal reports that some condo buyers who have signed contracts with MGM Mirage are demanding significant price reductions, while others want their deposits back. WSJ states that many of the contracts were signed in 2006 and 2007. According to WSJ, buyers have put down some $313 million in deposits on 1,500 units in the 2,440-unit complex. WSJ says that those who agreed to buy early fear that they will take possession of condos whose market values are far below what they agreed to pay. WSJ notes that home-sale prices are down more than 30% from 2008 in Las Vegas. WSJ relates that while some buyers have hired a law firm to negotiate with the Company, others are airing out their grievances through citycentercondodepositgroup.blogspot.com. WSJ quoted Mark Connot -- a partner with Hutchinson & Steffen, a Las Vegas law firm hired to represent some buyers demanding price reductions -- as saying, "It is simply not possible by any stretch of the imagination to close on the units at the contracted price. Our position is they need to adjust the price to market value. And until that's done I don't think they will find any buyers." According to WSJ, MGM Mirage said that it isn't offering discounts to current buyers, and that it is too early to know how the units are valued in the current market. A good portion of the buyers may no longer be able to secure financing and could just decide to walk away, leaving their units empty, WSJ says, citing real-estate analysts. WSJ notes that many of the first to sign contracts were MGM Mirage's biggest spending gamblers and its own executives. "You have 1,500 condo buyers right now who wish they'd never put this thing into contract and most of them have some kind of relationship with MGM Mirage," the report quoted a buyer as saying. 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. MIDWAY GAMES: Court OKs Sale of Assets to Time Warner ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has authorized Midway Games Inc. to sell its key assets to an affiliate of Time Warner Inc. for $33 million plus accounts receivable. As reported by the TCR on June 30, Warner Borthers Entertainment Inc. emerged as the sole bidder for Midway Games Inc. Ben Fritz and Alex Pham at the Los Angeles Times said Midway had hoped that the sale process, under which Warner's $33-million offer would be subject to competitive bidding, would spur interest and would raise the purchase price. Pursuant to the asset purchase agreement signed by the parties, Warner Bros. Entertainment would acquire substantially all of the Company's U.S. assets including its Mortal Kombat franchise and its development studios in Chicago and Seattle for a purchase price of $33,000,000, subject to adjustment as of the closing for changes in inventory, plus the agreed value of the Company's U.S. account receivables. The agreement does not include the Company's development studio in San Diego and the TNA franchise games, nor does it include the Company's development studio in Newcastle which had developed the Company's recently released Wheelman game. The salient terms of the APA reached by Midway and Warner Bros. are: -- Warner Bros. will pay $33 million cash at closing, subject to adjustments based on inventory valuation, and exclusive of Warner's payment of cure amounts and the accounts receivable amount. -- Assets to be sold include (i) all previously released titles, all video games based on the Mortal Kombat universe and This is Vegas universe, all Game Party video games, all Touchmaster video games, all Area 51 video games, all Spy unter video games, all Wheelman video games, and all of Midway's arcade and coin-operated games including, but not limited to, Gauntlet, Rampage, Joust, and Rampart, and all "back catalog" and "classic intellectual property" library video games (ii) all assigned contracts, including all leasehold interests in and to the real property located at the acquired studios in: (a) 3131 Elliot Avenue, Seattle, Washington, USA 98121; (b) 2633 W. Roscoe St., Chicago, Illinois, USA 60618; and (c) 2727 W. Roscoe St., Chicago, Illinois, USA 60618 (iii) any rights, claims or causes of action of Midway against Warner Bros. relating to the assets, properties, business or operations of Midway arising out of events occurring on or prior to the closing date, including, but not limited to, causes of action under Chapter 5 of the Bankruptcy Code. -- Excluded assets include: * all shares of capital stock, limited liability company membership interests and other equity interests, of Midway and all its subsidiaries; * assets of any foreign subsidiary, unless otherwise specified; * all cash and cash equivalents of Midway; * all causes of actions of Midway against third parties other than Warner Bros. relating to assets of Midway arising out of events occurring on or prior to the closing date, including causes of action in connection with the complaint brought by the Creditors Committee against National Amusements, Inc., et al. * all TNA Wrestling, NBA/NHL/MLB, Lord of the Rings, and Mechanic Master video games. * the Wheelman Distribution Agreement between Ubisoft Entertainment and Midway Home Entertainment Inc.; platform agreements; an agreement of Purchase and sale dated July 7, 2008, between Midway, as seller, and Lexington Homes LLC, as buyer, relating to property located at 2633 W. Roscoe St., Chicago, Illinois, USA 60618, and a related redevelopment agreement between the City of Chicago and Midway; and (i) any contracts that relate to properties located at: (i) the New Castle Studio, (ii) Heimaranstrasse 35, Munich, Germany 80339; (iii) 13 Rue Vivienne, Paris, France 75002; (iv) 43 Worship Street, London, EC21 2DX United Kingdom; and (v) any other property located outside the United States. -- Warner Bros. will hire certain of Midway's employees, including key designers and employees on design teams for certain of Midway's games that are included in the sale. -- The cure amounts for certain of Midway's games are: Game Cure Amount ---- ----------- Happy Feet $359,218 Ant Bully $166,126 Mortal Kombat vs. DC Universe $7,342,476 -- Closing conditions include: * With respect to the Unreal Engine 3 License Agreement dated January 14, 2005, between Midway Home Entertainment Inc. and Epic Games, inc., Warner Bros. will receive all Midway's rights and benefits under the Unreal Engine License. * Sony Computer Entertainment America Inc. and Sony Computer Entertainment Europe Ltd., (with respect to the PlayStation platforms) and Microsoft Licensing GP (with respect to the Xbox platforms) will each approve Warner Bros. as the "publisher of record" with respect to all the games included in the APA. -- Either party may terminate the agreement if closing has not occurred by July 15, 2009. Warner Bros. has claims against Midway pursuant to prepetition agreements pertaining to the games Mortal Kombat v. DC Universe, Happy Feet and Ant Bully. Midway owes Warner Bros. an aggregate of $7,867,820 on a prepetition basis in connection with these games. The claim will be waived Copies of the Asset Purchase Agreement and related exhibits are available at: http://bankrupt.com/misc/Midway_WarnerExhB.1.pdf http://bankrupt.com/misc/Midway_WarnerExhB.2.pdf http://bankrupt.com/misc/Midway_WarnerExhB.3.pdf About Midway Games Midway Games Inc. (OTC Pink Sheets: MWYGQ), headquartered in Chicago, Illinois, with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. More information about Midway and its products can be found at http://www.midway.com/ The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09- 10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. MIDWAY GAMES: Court OKs Thomas Settlement, Aug. 10 Plan Deadline ---------------------------------------------------------------- According to Bill Rochelle at Bloomberg News, the U.S. Bankruptcy Court for the District of Delaware has authorized the official committee of unsecured creditors formed in Midway Games Inc.'s Chapter 11 cases to settle with Mark Thomas, concluding a lawsuit the Committee filed in May against Thomas and his affiliated companies. The suit continues against former owner Sumner Redstone. Mr. Thomas, according to the Committee, paid Redstone $100,000 in November 2008 to buy Redstone's 87 percent ownership of Midway plus a secured claim for $30 million and a $40 million unsecured claim. The settlement has Mr. Thomas waiving the entire $40 million unsecured claim and reducing the secured claim to $5 million from $30 million. The Court also extended Midway's exclusive right to propose a Chapter 11 plan until Aug. 10. About Midway Games Midway Games Inc. (OTC Pink Sheets: MWYGQ), headquartered in Chicago, Illinois, with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. More information about Midway and its products can be found at http://www.midway.com/ The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09- 10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. MONACO COACH: Court Converts Case to Chapter 7 Liquidation ---------------------------------------------------------- At the behest of Monaco Coach Corporation, the U.S. Bankruptcy Court for the District of Delaware has converted Monaco's Chapter 11 bankruptcy cases to proceedings under Chapter 7 of the Bankruptcy Code. The Debtor explained that it lost access to the cash collateral securing its obligations to its lenders. The Debtor said it no longer has the ability to satisfy administrative expenses that will be incurred in continuing Chapter 11 cases. The Debtor said it wants the cases converted unless it can reach an agreement with its official committee of unsecured creditors and secured lenders that allows for the consensual use of the lenders' cash collateral necessary to continue under Chapter 11. Monaco Coach, now known as MCC, also said it closed sales of its luxury motorhome resort and core manufacturing assets on June 4, 2009. As reported by the Troubled Company Reporter on June 15, 2009, Navistar International Corporation, through its wholly owned subsidiary Workhorse International Holding Company, completed the acquisition of certain assets of Monaco Coach for $45 million. Navistar funded the purchase price with cash on hand. Under the terms of the asset purchase agreement, Navistar acquired five manufacturing facilities, intellectual property and trademarks and certain inventory. About Monaco Coach Monaco Coach Corporation, a national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. Headquartered in Coburg, Oregon, with manufacturing facilities in Oregon and Indiana, the Company offers a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, and R-Vision brand names. The Company operates motorhome-only resorts in California, Florida, Nevada and Michigan. Monaco Coach is listed on the Pink Sheets under the symbol "MCOAQ". As of September 27, 2008, the Company had $442.1 million in total assets and $208.8 million in total liabilities. Monaco Coach Corporation and its affiliates filed for Chapter 11 on March 5 (Bankr. D. Del., Lead Case No. 09-10750). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' counsel. Dennis A. Meloro, Esq., Diane E. Vuocolo, Esq., Donald J. Detweiler, Esq., Kevin Finger, Esq., Monica Loftin Townsend, Esq., and Sean Bezark, Esq., at Greenberg Traurig, LLP, represent the official committee of unsecured creditors. Omni Management Group LLC serves as the Debtors' claims, balloting, noticing and administrative agent. MXENERGY HOLDINGS: Commences Discounted Offer; Bankruptcy Warning ----------------------------------------------------------------- MXenergy Holdings Inc. has commenced a conditional private exchange offer with respect to its outstanding Floating Rate Senior Notes due 2011. For each $1,000 principal amount of Notes exchanged in the Exchange Offer, a registered holder of the outstanding Notes will receive: (i) a cash payment of $138.15, (ii) $393.33 principal amount of a new series of the Company's 13% Senior Secured Notes due 2014 and (iii) 188.91 shares of the Company's common stock. The consideration for Notes validly tendered and not validly withdrawn in the Exchange Offer will also include accrued and unpaid interest, if any, on such principal amount of Notes tendered from the most recent interest payment date preceding the settlement date to, but not including, the Settlement Date. In connection with the Exchange Offer, the Company is soliciting consents to effect certain proposed amendments to the indenture governing the Notes. The Exchange Offer and Consent Solicitation are being made pursuant to a Confidential Offering Memorandum and Consent Solicitation Statement, dated as of June 26, 2009, and a related Letter of Transmittal and Consent, dated as of June 26, 2009, which more fully set forth the terms and conditions of the Exchange Offer and Consent Solicitation. The Exchange Offer and Consent Solicitation will expire at 12:00 a.m. midnight, New York City time on July 28, 2009 unless extended or earlier terminated. The "Settlement Date" for the Exchange Offer and Consent Solicitation will be promptly after the Expiration Date, subject to the satisfaction or waiver of all the conditions precedent to the Exchange Offer and Consent Solicitation. MXenergy Holdings will also pay a consent payment to each Holder equal to $30 in cash per $1,000 aggregate principal amount of Notes only if the Holder has delivered and not revoked a valid Consent on or prior to the Early Consent Deadline. The Early Consent Deadline for the Consent Solicitation will be 5:00 p.m., New York City time, on July 13, 2009, unless extended, after which tenders of Notes and Consents to the Proposed Amendments may not be withdrawn. Tendered Notes may be withdrawn and Consents may be revoked at any time prior to 5:00 p.m., New York City time, on July 13, 2009, but not after the Withdrawal Deadline. As of the date of the Offering Memorandum and Consent Solicitation Statement, an aggregate of $165,200,000 principal amount of Notes are considered outstanding under the indenture governing the Notes for the purpose of determining properly delivered and unrevoked Consents to the Proposed Amendments from Holders representing at least a majority in aggregate principal amount of the Notes then outstanding under the Indenture, other than Holdings-Owned Notes, which excludes $24,800,000 principal amount of Notes owned by MXenergy Holdings. Holders holding $121,075,000 aggregate principal amount of the outstanding Notes have entered into agreements with MXenergy Holdings to tender their Notes in the Exchange Offer and consent to the Proposed Amendments. The agreements are sufficient to approve the Proposed Amendments, although the Exchange Offer and Consent Solicitation are subject to a number of conditions, including a Minimum Tender Condition. Holders who validly tender and do not validly withdraw their Notes in the Exchange Offer and Consent Solicitation will be deemed to have consented to the Proposed Amendments. The Company's obligations under the Exchange Offer and Consent Solicitation are conditioned upon, among other things, the satisfaction or waiver of these conditions: (i) its receipt of validly tendered Notes representing 90% in aggregate principal amount of the outstanding Notes, excluding Holdings-Owned Notes, on or prior to the Expiration Date, (ii) its entrance into facilities to refinance and replace its existing revolving credit facility and existing hedge facility, (iii) its entrance into an amendment to its current credit facility with Denham Commodity Partners LP, (iv) the conversion of the Company's Series A Convertible Preferred Stock into common stock, (v) the creation of a new management incentive plan, and (vi) the receipt of any required consents from government bodies or authorities which are required to consummate the Exchange Offer and Consent Solicitation. The Company has indicated in a regulatory filing with the Securities and Exchange Commission that if its restructuring efforts are not successful, it intends to explore all other alternatives, but would likely be required to commence a bankruptcy proceeding. About MXenergy MXenergy Holdings, Inc. -- http://www.mxenergy.com/-- is one of the fastest growing retail natural gas and electricity suppliers in North America, serving approximately 500,000 customers in 39 utility territories in the United States and Canada. The Company was founded in 1999 to provide natural gas and electricity to consumers in deregulated energy markets. MXenergy is a member of the Chicago Climate Exchange and an Energy Star Partner. NEW CENTURY: Allowed Appeal on Confirmation Reversal ---------------------------------------------------- New Century Financial Corp. can take an appeal to the U.S. Court of Appeals in Philadelphia before reworking the Chapter 11 plan that U.S. District Judge Sue L. Robinson in Delaware set aside when she reversed the confirmation order last month, Bill Rochelle at Bloomberg News reports. Judge Robinson last week granted a stay pending the Company's appeal to the Circuit Court. As reported by the Troubled Company Reporter on June 19, 2009, Judge Sue Robinson reversed the bankruptcy court's order confirming New Century Financial Corp. and its affiliates' Chapter 11 plan. Dow Jones states that a group of ex-New Century managers and employees had filed an appeal, complaining that New Century was paying its creditors with retirement money they had taken away from a special fund. Dow Jones reports that lawyers for the ex- employees tried to block confirmation at hearings in 2008, arguing that New Century couldn't use more than $40 million deducted from employee paychecks to pay its bills. New Century argued that that the funds being tapped were special tax shelters for highly paid executives who knew the risk they were taking, but former workers insisted that their retirement funds deserved special handling under the Plan, instead of being mingled with other assets to be handed out due to broad-ranging settlements, Dow Jones relates. New Century said its Chapter 11 plan was the only way to unwind the complex financial affairs of the Company. Judge Robinson, according to Dow Jones, found that New Century's Chapter 11 plan improperly treated New Century as three companies with three set of creditors instead of as many separate companies, each with its own set of creditors. The plan failed to deliver even-handed treatment to similarly situated creditors of the defunct lender, the report states, citing Judge Robinson. Dow Jones says that a federal appeals court in Philadelphia had warned that a Chapter 11 tactic dubbed "substantive consolidation" -- the ability to lump assets and liabilities into convenient piles -- should be used only sparingly as it can result in unfair treatment to some creditors. According to the report, New Century tried to get around the strictures by arguing its three-company distribution scheme preserved even-handed treatment for creditors. Judge Robinson said, "The many-into-three framework still presents the same potential for inequities for creditors as would be presented into the many-into-one framework. Namely, that creditors face increased competition for a consolidated pool of assets." Dow Jones notes that reversing the Plan's confirmation won't cause undue upset, as little money has been dished out under the plan that took effect in August 2008. Dow Jones relates that the trust has paid out $21 million in professional fees. According to Dow Jones, no creditors have been paid yet. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real state investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. New Century Financial and its affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07- 10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Court confirmed the Debtors' second amended joint Chapter 11 plan on July 15, 2008. NORTEL NETWORKS: Ex-Federal Judge Leads Class Action Suit --------------------------------------------------------- Kendall Law Group, led by former Federal Judge Joe Kendall, announced mid-June that a class action has been filed on behalf of stock purchasers of Nortel Networks Corporation. According to the complaint, certain officers of Nortel violated the Securities Exchange Act of 1934 for their failure to disclose material adverse facts about Nortel's true financial condition, business and prospects. On September 17, 2008, Nortel issued a press release announcing its "preliminary view on certain third quarter results." The Company also announced that it was engaging in a "comprehensive review" of Nortel's business and that "planning" was "underway for further restructuring and other cost reduction initiatives." In response to the Company's announcement, the price of Nortel stock declined from $5.30 per share to $2.68. The firm calls entities that purchased Nortel common stock between May 2, 2008, and September 17, 2008, to be "lead plaintiff" of the proposed class no later than July 20, 2009. A lead plaintiff is a class member who acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members. Although this case has been filed in the Southern District of New York, any investor who purchased stock during the above period may move for lead plaintiff. Please contact attorney Hamilton Lindley at 877-744-3728 or by email at hlindley@kendalllawgroup.com. Although Kendall Law Group has not yet filed a lawsuit against the defendants, the firm has tremendous experience in representing investors against companies that have committed securities fraud. For more information about this case, your rights, and Kendall Law Group, please visit: http://www.kendalllawgroup.com/or call us at 877-744-3728. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Selected by Telecom Liechtenstein for UC Network ----------------------------------------------------------------- Telecom Liechtenstein AG, a telecommunications service provider serving more than 5,000 enterprise customers in Liechtenstein, Austria and Switzerland, is modernising its internal communications infrastructure with a Unified Communications (UC) solution provided by the Innovative Communications Alliance between Microsoft and Nortel. Nortel is integrating Microsoft's Office Communications Server (OCS) environment with the company's existing Nortel voice communication infrastructure to enable unified communications applications that will simplify and speed up business operations, improve the way employees communicate and enhance customer service. The new system will enable the 130 employees of Telecom Liechtenstein in Vaduz to determine whether colleagues they wish to contact are available, and then instantly make phone calls, start conference calls and send e-mails and instant messages through a simple mouse 'click' on their desktop. The new unified communications network will also allow employees to securely access the Telecom Liechtenstein corporate network via mobile devices to retrieve information and respond more quickly to enquiries. In a second phase of this implementation, Telecom Liechtenstein plans to offer a hybrid network unified communications solution to enterprise customers in Liechtenstein, Austria and Switzerland. "With the support of our longstanding partner Nortel, we have been able to simply and inexpensively modernise our internal communication network within a tight project timeframe of only eight weeks," said Christoph Beck, NGN project manager, Telecom Liechtenstein. "The new OCS environment will enable our employees to not only communicate more efficiently, but also gain experience using new UC applications to better help us roll out UC solutions externally." "Telecom Liechtenstein will derive considerable future benefits from the unified communications solutions enabled by our Innovative Communications Alliance," said Rolf Weidmann, sales director, Service Providers, Nortel. "Unified communications bring speed and simplicity to business processes and improve operations. These new capabilities can also provide Telecom Liechtenstein with new and innovative business opportunities because many small and medium-sized enterprises could use Telecom Liechtenstein's hybrid service to leverage the productivity enhancements that unified communications offers themselves." Nortel also provided system integration services to support implementing Microsoft's Office Communications Server environment with the Telecom Liechtenstein network upgrade. Enterprise Innovative Communications Alliance solutions from Nortel and Microsoft span four key areas: Voice, Telephony and Unified Messaging; Unified Communications Integrated Branch ; Multimedia Conferencing; and Data Networking. The ICA is delivering new solutions that empower customers to realize the productivity potential of their organization by communications- enabling their business processes. The ICA has chalked up more than 1200 wins with more than 200 Nortel service deployments globally. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Wins Court Nod to Sell French Unit --------------------------------------------------- Nortel Networks Corporation obtained court approval to sell all or part of its French research and development unit, Bloomberg reported. Nortel requested the sale of the unit, one of its two French subsidiaries, as part of bankruptcy procedures filed in London in January 2009. A court in Versailles set an initial deadline of August 20, 2009, for a possible sale of the unit. Michel Clement, general manager for the two French units, said in a telephone interview with Bloomberg that the company will continue operations during the sales process. "There is no doubt in my mind that we should be able to find interested parties to take over these activities," Bloomberg quoted Mr. Clement as saying. He said that the sale could affect about 480 jobs. "The French company has been used by the rest of the group and then left to die," said Reinhard Dammann, Esq., at Clifford Chance Europe LLP, who represents the workers' committee at Nortel Networks SA, the French unit being liquidated. The committee opposed the sale, saying it was not properly consulted on the plan to sell the unit before the bankruptcy was filed, Bloomberg reported. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Selected by Ziggo for IP Telephony in Netherlands ------------------------------------------------------------------ Ziggo, the largest cable operator in the Netherlands, has selected an IP-Powered Business solution from Nortel to help them launch advanced business voice services for small and medium businesses (SMBs). Ziggo has enjoyed considerable success in the consumer telecommunications market in The Netherlands and now Nortel will assist them to expand into the SMB market with a pre-tested, end- to-end solution. The Nortel IP-Powered Business solution is specifically designed to help provide SMBs with all the standard telephony features that a business needs over a secure, reliable, and cost-effective IP-based system. IP-Powered Business can also be used to provide SMBs with advanced VoIP services such as "click-to-call," find me/follow me' capabilities and audio conferencing. "For small and medium sized businesses, communications enhancements can lead to improvements in productivity, customer service, and overall efficiency," said Arthur Ligthart, manager, Voice Management, Ziggo. "However, many SMBs just don't have the in-house resources or expertise to manage a complicated telephony system so we at Ziggo wanted to offer them a simple way to meet all of their voice communications needs without over-extending their budgets. Nortel's IP-Powered Business solution allows us to do that by providing advanced VoIP services in a package that is flexible and scalable to meet any customer's needs." "The industry is seeing more and more SMB's look to carrier- hosted solutions as their preferred scenario for VoIP services," said Samih Elhage, president, Carrier VoIP and Application Solutions, Nortel. "With Nortel's IP-Powered Business voice and multimedia solution, carriers like Ziggo can take advantage of this trend in SMB spending. In addition to offering VoIP capabilities, Nortel's solution can allow service providers to offer cost-effective multimedia applications and services such as fixed mobile convergence and unified communications to SMBs. Nortel's solution also includes a suite of marketing and sales tools that help carriers effectively reach this unique market." The Nortel solution for Ziggo makes use of the company's existing converged IP cable infrastructure. Using Nortel's Communication Server 2000 (CS 2000) and SIP technology, Ziggo can deliver advanced IP Telephony to companies using PBX technology by offering a carrier-hosted solution, or to companies that do not use PBX through a business trunking solution. Integrated with Patton VoIP gateway, Nortel's solution allows companies to retain their TDM PBX and migrate to SIP PBX at their own pace. This simplicity and flexibility allows SMBs to preserve their current equipment investments and upgrade in the most cost-effective way possible. "The CS2000 will be integrated into the existing Ziggo network to provide efficient call routing and it will also enable Ziggo to rapidly enter the SIP business trunking market and offer Hosted IP Telephony services depending on market demand," added Tijs Hulsbergen, senior account manager, Nortel Carrier Businesses, Nortel. Recently published reports from Dell'Oro Group and Infonetics Research ranked Nortel as the worldwide leader with the largest revenues in the carrier softswitch market for the first quarter of 2009. Nortel has shipped more than 110 million Carrier VoIP and Multimedia ports to over 340 wireline and wireless carriers globally. In addition, Nortel provides VoIP solutions to two thirds of IDC's worldwide listing of top 20 carriers (by revenue). NORWOOD PROMOTIONAL: Files Schedules of Assets and Liabilities -------------------------------------------------------------- Norwood Promotional Products Holdings, Inc., et al., filed with the U.S. Bankruptcy Court for the District of Delaware, their schedules of assets and liabilities, disclosing: Name of Debtor Assets Liabilities -------------- ------------ ------------ Norwood Promotional Holdings $0 $128,227,225 Norwood Promotional Inc. $98,654,525 $175,928,728 Renaissance Publishing Co. $6,926,915 $165,612,672 Norwood Operating Company $1,765,000 $165,013,661 The McCleery-Cumming Company $0 $164,658,983 Advertising Unimited, LLC $0 $164,658,983 Copies of Norwood Promotional Products Holdings, Inc. et al.'s SALs are available at: http://bankrupt.com/misc/norwoodpromotionalholdings.SAL.pdf http://bankrupt.com/misc/norwoodpromotionalproducts.SAL.pdf http://bankrupt.com/misc/renaissancepublishing.SAL.pdf http://bankrupt.com/misc/norwoodoperatingcompany.SAL.pdf http://bankrupt.com/misc/themccleery-cumming.SAL.pdf http://bankrupt.com/misc/advertisingunlimited.SAL.pdf About Norwood Promotional Norwood Promotional Products -- http://www.norwood.com/-- is an industry leading supplier of imprinted promotional products. The Company offers nearly 5,000 products and is a market leader in several of the industry's major product categories. Norwood also offers hundreds of products on 24-Hour service at no extra charge. Norwood Promotional Products Holdings, Inc., and five affiliates filed for Chapter 11 on May 5 (Bankr. D. Del. Case No. 09-11547). Judge Peter Walsh is handling the case. The Debtors hired Margaret Whiteman Greecher, Esq., and Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor, as counsel. Kirkland & Ellis LLP is general counsel and Mackinax Partners LLC is the restructuring consultant. Epiq Bankruptcy Solutions, LLC, has been hired as claims and noticing agent. The Company said its assets are $150 million while debt totals $295 million. OCEANAIRE TEXAS: Case Summary & 40 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: The Oceanaire Texas Restaurant Company, L.P. dba The Oceanaire Seafood Room 13340 Dallas Parkway, Suite 1369 Dallas, TX 75240 Bankruptcy Case No.: 09-34262 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- The Oceanaire Restaurant Company, Inc. 09-34263 The Oceanaire, Inc. 09-34264 The Oceanaire Investment Company, Inc. 09-34265 The Oceanaire Minneapolis Restaurant Company, LLC 09-34266 The Oceanaire Texas Beverage Company, Inc. 09-34267 Chapter 11 Petition Date: July 5, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Mark Joseph Elmore, Esq. Haynes & Boone, LLP 2323 Victory Avenue, Suite 700 Dallas, TX 75219-7673 Tel: (214)651-5265 Fax: (214)200-0905 Email: mark.elmore@haynesboone.com Robert Dew Albergotti, Esq. Haynes and Boone, LLP 2323 Victory Avenue, Suite 700 Dallas, TX 75219-7673 Tel: (214)651-5613 Fax: (214)200-0350 Email: robert.albergotti@haynesboone.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 40 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/txnb09-34262.pdf The petition was signed by Glenn C. Massey. PACIFIC ENERGY: Court Approves Key Employee Incentive Plan ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted Pacific Energy Resources Ltd., et al., authorization to implement a key employee incentive plan for a select list of 25 of its employees who are expected to have an integral role in maximizing value for the Debtors' Chapter 11 estates and their creditors. As reported in the Troubled Company Reporter on May 15, 2009, the total bonus to be paid under this plan will be between zero (if none of the minimum performance targets are reached) and approximately $1.4 million (if all are met). Bonuses to participating employees are payable only upon the closing of the sale of the Debtors' Alaska or California assets that meets or exceeds the target amount set forth under the various metrics of the incentive plan. The participating employee's bonus, if any, becomes unearned (i) at the time of voluntary separation by the participating employee from employment with the Debtors or (ii) upon termination of employment for cause. Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com/-- engages in the acquisition and development of oil and gas properties, primarily in the United States. The Company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09-10785). Attorneys at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. The Debtors proposed Rutan & Tucker LLP as special corporation and litigation counsel; Schully, Roberts, Slattery & Marino, PLC, as special oil and gas and transactional counsel; Devlin Jensen as special Canadian counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; and Albrecht & Associates, Inc., as agent for the Debtors in the sale of their oil and gas properties. Omni Management Group, LLC, is the claims, balloting, notice and administrative agent for the Debtors. When the Debtors filed for protection from their creditors, they listed between $100 million and $500 million each in assets and debts. PACIFIC ENERGY: Plan Filing Period Extended to November 4 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has extended Pacific Energy Resources Ltd., et al.'s exclusive periods to file a plan and solicit acceptances thereof to November 4, 2009, and January 4, 2010. This is the first extension of the Debtors' exclusive periods. In papers filed with the Court, the Debtors said that they will be devoting substantial time over the next three months to preparing and filing various bid procedure and sale motions regarding the sale of their Alaska and California assets, obtaining approval of the sales and closing any approved sales. As reported in the Troubled Company Reporter on July 1, 2009, the Debtors wants offers on the California offshore assets no later than July 24, with an auction on July 31 and a sale hearing on August 4. The Court already approved procedures for sale of the Alaska assets. Bids for the Alaska assets are due July 13, with an auction on July 20 and a sale hearing on July 27. Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com/-- engages in the acquisition and development of oil and gas properties, primarily in the United States. The Company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09-10785). Attorneys at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. The Debtors proposed Rutan & Tucker LLP as special corporation and litigation counsel; Schully, Roberts, Slattery & Marino, PLC, as special oil and gas and transactional counsel; Devlin Jensen as special Canadian counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; and Albrecht & Associates, Inc., as agent for the Debtors in the sale of their oil and gas properties. Omni Management Group, LLC, is the claims, balloting, notice and administrative agent for the Debtors. When the Debtors filed for protection from their creditors, they listed between $100 million and $500 million each in assets and debts. PILGRIM'S PRIDE: Assumes 58 Real Property Leases ------------------------------------------------ Pilgrim's Pride Corp. and its affiliates are parties to at least 58 unexpired non-residential real property leases and executory contracts. The Debtors' deadline to decide whether to reject or assume those leases and contracts expired on June 29, 2009. By this motion, the Debtors sought and obtained the Court's authority to assume all Real Property Leases that the Debtors have not already assumed, assumed and assigned, or rejected. A list of the Assumed Leases is available for free at: http://bankrupt.com/misc/PPC_assumedleaseslist.pdf Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP Dallas, Texas, pointed out that assuming the contracts and leases benefit the estate. Use of commercial spaces like those leased pursuant to the Assumed Leases is necessary to the continued operation of the Debtors' businesses, he stated. The Debtors determined that only immaterial rental savings could be achieved by rejecting any one of the Assumed Leases, acquiring new property or obtaining a new lease in its place, particularly in light of the expenses the Debtors would incur in moving their equipment and fixtures to a new location, and in light of the potential claims for damages arising from the rejection of any of their Assumed Leases. The Debtors said they have timely paid all postpetition rental payments when due under the Assumed Leases and expect to continue to be able to do so. The Debtors also said that no further showing of adequate assurance of future performance is necessary. About Pilgrim's Pride Corp. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the Company owns 34 processing plants in the United States and 3 processing plants in Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The Company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi, and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The Company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. PILGRIM'S PRIDE: Retains Integrity Mgt. as Operational Consultant ----------------------------------------------------------------- The official committee of unsecured creditors in Pilgrim's Pride Corp.'s Chapter 11 cases seeks the U.S. Bankruptcy Court for the Northern District of Texas' authority to retain Integrity Management Services, Inc., as its operational consultant effective as of June 3, 2009. The Creditors' Committee and IMS entered into an engagement letter, dated June 3, 2009. According to Jason S. Brookner, Esq., at Andrews Kurth LLP, in Dallas, Texas, the services of IMS are necessary and appropriate to enable the Creditors' Committee to continue to evaluate the industry operational issues that have and will continue to arise during the pendency of the Debtors' Chapter 11 cases and to assist the Committee in fulfilling its fiduciary and statutory duties to the Debtors' unsecured creditors. The Committee particularly selected IMS because its chief executive officer, Lindy "Buddy" Pilgrim, in an expert in the chicken industry and has knowledge of the Debtors' businesses. As Operational Consultant, IMS will: (a) provide industry expertise regarding the Debtors' operational matters and strategic decisions; (b) assist in analyzing potential impact of sales of various fixed assets of the Debtors; (c) assist in evaluating the operational and long term financial aspects of any restructuring proposals and any proposed plans of reorganization; (d) identify and recommend industry experts for specialized expert or fact witness testimony and consulting; (e) attend and participate in hearings, meetings, phone conferences, as needed; and (f) provide other advisory services as may be requested by the Committee. For its services, IMS will be paid $475 per hour and up to $600 monthly clerical support billed at $60 per hour, and be reimbursed of all reasonable necessary business expenses incurred by the firm as a direct result of its work conducted under the Engagement Letter. IMS' services will be rendered Lindy Pilgrim. The Creditors' Committee, Mr. Brookner says, also proposes to discuss in good faith with IMS whether the firm believes that a Success Fee is appropriate upon the successful reorganization of the Debtors. The Committee will recommend a Success Fee for the Court's approval if both parties agree that a Success Fee is fitting. Lindy Pilgrim tells the Court that he is not an immediate family of the Debtors' senior chairman, Lonnie "Bo" Pilgrim or to any member of his direct line. Lindy Pilgrim assures the Court that he is not a member, owner or beneficiary of any trust, family partnership or other entity that is owned or controlled by Lonnie Pilgrim or any of his direct family members or otherwise. About Pilgrim's Pride Corp. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the Company owns 34 processing plants in the United States and 3 processing plants in Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The Company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi, and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The Company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. PILGRIM'S PRIDE: Texas Comptrollers Wants to Effectuate Setoff -------------------------------------------------------------- The Texas Comptroller of Public Accounts asked the U.S. Bankruptcy Court for the Northern District of Texas to lift the stay to allow it to offset the Debtors' prepetition franchise tax refund claim of $433,863 against the Comptrollers' prepetition fuels tax claim. The Comptroller has asserted a $1,163,191 claim against the Debtors for Texas diesel fuel accounts payable. The Debtors have unpaid taxes totaling $1,004,423 and accrued prepetition interest of $158,768. Based on the agreement of the parties, the Bankruptcy Court issued an order leaving the stay in place with respect to the offset rights asserted by the Comptroller pending further order from the Court. Judge Lynn preserved the Comptrollers' offset rights, if any, to the same extent as of the filing date of the Comptrollers' Stay Motion. About Pilgrim's Pride Corp. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. In addition, the Company owns 34 processing plants in the United States and 3 processing plants in Mexico. The processing plants are supported by 42 hatcheries, 31 feed mills and 12 rendering plants in the United States and 7 hatcheries, 4 feed mills and 2 rendering plants in Mexico. Moreover, the company owns 12 prepared food production facilities in the United States. The Company employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico, and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi, and Utah. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. The Debtors have also tapped Baker & McKenzie LLP as special counsel. Lazard Freres & Co., LLC, is the company's investment bankers and William K. Snyder of CRG Partners Group LLC as chief restructuring officer. The Company's claims and noticing agent is Kurtzman Carson Consulting LLC. A nine-member committee of unsecured creditors has been appointed in the case. As of December 27, 2008, the Company had $3,215,103,000 in total assets, $612,682,000 in total current liabilities, $225,991,000 in total long-term debt and other liabilities, and $2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. POMARE LTD: Files Amended Plan; Court to Hear Plan Outline July 15 ------------------------------------------------------------------ Pomare Ltd. dba Hilo Hattie filed with the U.S. Bankruptcy Court for the District of Hawaii on June 26, 2009, a first amended disclosure statement in support of its first amended chapter 11 plan of reorganization. The Court set a hearing for July 15, 2009, at 10:30 a.m. to affirm the adequacy of the information in the disclosure statement. Pursuant to the Plan, holders of general unsecured claims will receive 5% of their allowed claims without interest in 5 equal annual installments, beginning on the first anniversary date of the Plan's Effective Date, and ending on the fifth anniversary date of the Effective Date. Equity Interests will not receive any distribution under the plan and will be deemed canceled and extinguished as of the Effective Date. The secured claim of North Tustin Partners, Inc. (now held by Donald B.S. Kang) in the original principal amount of $1 million will receive the New Common Stock of the Reorganized Debtor. Allowed administrative expenses will be satisfied in full on the Plan's Effective Date from a $1 million loan from Donald B.S. Kang, the owner of Royal Hawaiian Creations and the new owner of the Debtor. The Debtor will also receive an additional $2 million in working capital on the effective date of the Plan as a capital contribution from Mr. Kang. A full-text copy of the Disclosure Statement is available at http://bankrupt.com/misc/pomare.DS.pdf Classification and Treatment of Claims and Equity interests Class Description Treatment ----- ------------------------- ----------------------------- 1 Other Priority Claims Unimpaired. Deemed to Accept 2 Employee Priority Claims Unimpaired. Deemed to Accept 3 Secured Claim of NTP Impaired. Entitled to Vote 4 Secured Claims of CPB Unimpaired. Deemed to Accept 5 Secured Claims of Purchase Money Secured Creditors Unimpaired. Deemed to Accept 6 Maui Divers Secured Claim Unimpaired. Deemed to Accept 7 Additional Other Secured Claims Unimpaired. Deemed to Accept 8 Convenience Claims Impaired. Entitled to Vote 9 General Unsecured Claims Impaired. Entitled to Vote 10 Subordinated Allowed Claims Impaired. Deemed to Reject 11 Equity Interests Impaired. Deemed to Reject 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. About Pomare Ltd. Based in Honolulu, Hawaii, Pomare Ltd., dba Hilo Hattie, is a tourist-destination retailer with operations chiefly in Hawaii. It has seven stores in Hawaii and two in California. The Company filed for Chapter 11 relief on October 2, 2008 (Bankr. D. Hawaii Case No. 08-01448). Chuck C. Choi, Esq., and James A. Wagner, Esq., at Wagner Choi & Verbrugge, represent the Debtor as counsel. Alexis M. McGinness, Esq., and Ted N. Pettit, Esq., at Case Lombardi & Pettit, represent the official committee of unsecured creditors. In its schedules, the Debtor listed total assets of $15,825,657, and total debts of $13,767,047. PRIMUS TELECOM: Consummates Confirmed Reorganization Plan --------------------------------------------------------- According to Bill Rochelle at Bloomberg News, Primus Telecommunications Group Inc., has implemented its Chapter 11 reorganization plan. Primus' Chapter 11 plan was confirmed by the U.S. Bankruptcy Court for the District of Delaware on June 12, only 88 days after the Plan and related petitions were filed. The Plan reduces debts by $316 million, or roughly 50%, interest payments will be reduced by roughly 50% and certain debt maturities will be extended. An overwhelming amount and percentage of holders of claims and interests voted in favor of the Plan. As planned, none of PRIMUS' operating companies in the United States, Australia, Canada, India, Europe and Brazil were included in the bankruptcy filing. The operating units continued to manage and to operate their businesses normally during the brief financial reorganization of the Holding Companies. The significant elements of the consensual Plan include: -- Reinstatement and amendment of the $96 million in outstanding variable rate Term Loan debt due 2011; -- Modification of $173 million of outstanding 14-1/4% Senior Secured Notes due 2011 into $123 million of 14-1/4% Senior Subordinated Secured Notes of Primus Telecommunications IHC, Inc., including an extension of the maturity to 2013, and distribution to the former holders of 14-1/4% Senior Secured Notes due 2011 a pro rata share of common stock representing 48% of the equity of the reorganized company as of the effective date of the Plan, prior to exercise of warrants and options and any distributions on account of contingent value rights; -- Cancellation of $209 million outstanding principal amount of the 8% Senior Notes due 2014 and 5% Exchangeable Notes due 2010, and distribution to the former holders thereof of a pro rata share of: (1) common stock representing 48% of the equity of the reorganized company as of the effective date of the Plan, prior to exercise of warrants and options and any distributions on account of CVRs and (2) warrants exercisable for additional equity in the reorganized company at varying exercise prices based on predetermined equity values; -- Cancellation of the 12-3/4% Senior Notes due 2009, 3-3/4% Convertible Senior Notes due 2010 and 8% Step Up Convertible Subordinated Debentures due 2009, and distribution to the former holders thereof of a pro rata share of warrants exercisable for equity in the reorganized company at an exercise price based on a predetermined equity value; -- Cancellation of the existing common stock and other equity Interests of Primus Telecommunications Group, Incorporated and distribution to the former holders of common stock a pro rata share of CVRs representing the right to receive up to 15% of the fully-diluted equity of the reorganized company after the equity value reaches a certain threshold. In addition, the Plan provides that managers and employees of the reorganized company may be granted up to 10% of the equity of the reorganized company, prior to the dilution for exercise of warrants and any distribution on account of CVRs. Awards under the management compensation plan may include, but are not limited to, stock options and restricted stock units that vest upon achievement of certain performance benchmarks. About Primus Telecom PRIMUS Telecommunications Group, Incorporated (OTCBB: PRTL) -- http://www.primustel.com-- is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and Western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. The Company and four its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. D. Del. Lead Case No. 09-10867). George N. Panagakis, Esq., and T Kellan Grant, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, are the Debtors' proposed counsel. Davis L. Wright, Esq., Eric M. Davis, Esq., and Anthony Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, are the Debtors' proposed local counsel. The Debtor proposed CRT Investment Banking LLC as financial adviser and investment banker. When the Debtors filed for protection from their creditors, they listed assets between $100 million and $500 million, and debts between $500 million and $1 billion. The Debtors filed their proposed plan of reorganization together with their bankruptcy petitions on March 16, 2009. An amended reorganization plan was filed April 27, 2009 and the final plan was filed on June 12, 2009. PROVIDENT ROYALTIES: Can Use Sinclair Cash Collateral on Interim ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Provident Royalties LLC and its debtor-affiliates to use, on an interim basis, cash collateral from their prepetition lender, Sinclair Oil & Gas Company and Sinclair Finance Company. The Debtors told the Court that they have an urgent need to use cash collateral to continue operation of their business. Otherwise, they will not be able to make cash expenditures for necessary costs incurred during their reorganization including well costs, employee salaries and professional fees incurred, the Debtor said. Sinclair entities will be granted valid and automatically perfected first priority replacement liens and security interest in all of the Debtors' assets as adequate protection. The Debtors said that they defaulted under the loan agreement dated October 12, 2007, with the Sinclair entities. As of their bankruptcy filing, the Debtors have (i) at least $150,000,000 in unpaid principal; and (ii) $4,261,870 in accrued but unpaid interest, among other things. Provident Royalties LLC owns working interests in oil and gas properties primarily in Oklahoma. Provident and its affiliates filed for Chapter 11 on June 22, 2009 (Bankr. N.D. Tex. Case No. 09-33886). Judge Harlin DeWayne Hale presides over the case. Patton Boggs LLP represents the Debtors as their bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. The Company estimated assets and debts of $100 million to $500 million. QSGI INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: QSGI, Inc. 400 Royal Palm Way Palm Beach, FL 33480 Bankruptcy Case No.: 09-23658 Debtor-affiliates filing Chapter 11 petitions: Entity Case No. ------ -------- QSGI-CCSI, Inc. 09-23659 Qualtech Services Group, Inc. 09-23660 Type of Business: Chapter 11 Petition Date: July 2, 2009 Court: Southern District of Florida (West Palm Beach) Judge: Erik P. Kimball Debtor's Counsel: Bradley S. Shraiberg, Esq. bshraiberg@sfl-pa.com Shraiberg, Ferrara, Landau P.A. 2385 NW Executive Center Dr. #300 Boca Raton, FL 33431 Tel: (561) 443-0801 Fax: (561) 998-0047 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtors' Largest Unsecured Creditors: Entity Claim Amount ------ ------------ IBM Credit Corp. $647,499 North Castle Drive Armonk, NY 10504 Microsoft Licensing, GP $384,400 6100 Neil Road Reno, NV 89511-1132 John R. Riconda $354,736 200 Knickerbocker Avenue Bohemia, NY 11716-3158 Amex $283,240 American Express $252,378 Dell Marketing LP $246,540 McDonald Hopkins Co. LLC $149,512 Chicago Mercantile Exchange $141,000 Relay Health $130,000 Intuit Inc. $120,200 HCL (MASS) Inc. $111,520 The Hobart West Group $100,678 Morison Cogen LLP $82,320 Cambridge Corp. Services $77,600 Delaware Valley Packaging $72,434 International Technical Support $67,023 Pike Capital Partners (QP) LP $60,655 Nimsoft Inc. $58,108 Softential Inc. $58,512 Refrigeration Services $53,456 The petition was signed by Marc Sherman, chief executive officer. RH DONNELLEY: Wins Final Approval to Use Cash Collateral -------------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware gave R.H. Donnelley, Inc., and its debtor affiliates authority, on a final basis, to use the Cash Collateral securing their more than $3.6 billion prepetition indebtedness. The Debtors are borrowers under separate prepetition senior secured credit facilities: Borrower Admin. Agent Loan Amount -------- ------------ ----------- R.H. Donnelley Corporation Deutsche Bank $1.4 billion and R.D. Donnelley, Inc. Trust Company Americas Dex Media East LLC JPMorgan Chase 1.1 billion Bank, N.A. Dex Media West LLC JPMorgan Chase 1.1 billion Bank, N.A. The Cash Collateral will be used pursuant to separate 13-week budgets for each Operating Debtor through and including January 31, 2010. Copies of the 13-Week Budgets are available for free at: * R.H. Donnelley Budget at http://bankrupt.com/misc/RHDI13Wk.pdf * DME Budget at http://bankrupt.com/misc/DexMediaW13Wk.pdf * DMW Budget at http://bankrupt.com/misc/DexMediaE13Wk.pdf The Debtors are only allowed to use the Cash Collateral for (i) working capital, general corporate purposes and administrative costs and expenses of the Operating Debtors in the ordinary course of business and subject to the 13-Week Budgets, and (ii) adequate protection payments to the Administrative Agent and the Lenders. No later than 20 days prior to the expiration of the 13-Week Budgets, the Operating Debtors will submit for the Administrative Agent's review and approval a supplemental budget for the 13-week period commencing on the first Monday following the expiration of the current 13-Week Budgets. The Judge's Final Order does not permit the Debtors to use, sell, lease or otherwise dispose of any Prepetition Collateral outside the ordinary course of business or the Debtors' use of the Cash Collateral resulting therefrom without further order of the Court. Full-text copies of the Final Cash Collateral Orders are available for free at: * R.H. Donnelley Order at http://bankrupt.com/misc/RHDI.pdf * DME Order at http://bankrupt.com/misc/DME.pdf * DMW Order at http://bankrupt.com/misc/DMW.pdf About R.H. Donnelley Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC and Dex Media West LLC, filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) RH DONNELLEY: Committee Establishes Info Access Protocol -------------------------------------------------------- The official committee of unsecured creditors in R.H. Donnelley Corp.'s Chapter 11 cases asks the U.S. Bankruptcy Court for the District of Delaware's authority to enter an order clarifying that Section 1102(b)(3)(A) of the Bankruptcy Code does not authorize the Committee to provide access to confidential information. In addition, the Committee seeks the Court's authority to retain The Garden City Group, Inc., to create and maintain the Committee's Web site, which is linked to the Debtors' bankruptcy information Web site. Mark E. Felger, Esq., at Cozen O' Connor, in Wilmington, Delaware, relates that a debtor typically will share certain confidential information with a creditors' committee, subject to a confidentiality agreement, which enables the creditors' committee to assess, among other things, the debtor's capital structure, opportunities for restructuring of the debtor's business in Chapter 11, the results of any revised operations of the debtor in the bankruptcy case, and the debtor's overall prospects for reorganization under a Chapter 11 plan. Mr. Felger contends that without clarification from the Court, the Committee's efforts to participate fully in the Chapter 11 Cases could be impeded because the Debtors might be reluctant to share confidential information with the Committee if there is a risk the information may be shared with the public. He says that the Debtors' reluctance would undermine the Committee's ability to maximize creditor recoveries. "Similarly, the Committee would be reluctant to pursue an investigation of potential litigation on behalf of the Debtors' estates and to develop its own analyses if Privileged Information could be disseminated to other parties," Mr. Felger relates. To balance the need to maintain the confidentiality of the Confidential Information with creditors' need for information, the Committee proposes a protocol for the dissemination of information to any entity. The Proposed Protocol generally provides that the Committee will not produce confidential information without a Court order. A full-text copy of the provisions of the Proposed Protocol is available for free at http://bankrupt.com/misc/InfoProtocol.pdf About R.H. Donnelley Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC and Dex Media West LLC, filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) RH DONNELLEY: Committee Proposes to Retain Ropes & Gray As Counsel ------------------------------------------------------------------ The official committee of unsecured creditors in R.H. Donnelley Corp.'s Chapter 11 cases seeks the U.S. Bankruptcy Court for the District of Delaware's authority to retain Ropes & Gray LLP as counsel nunc pro tunc to June 10, 2009. The Committee submits that it is necessary for it to retain Ropes & Gray to: (a) advise the Committee with respect to its rights, duties and powers in the Chapter 11 cases; (b) assist and advise the Committee in its consultations with the Debtors relative to the administration of the Chapter 11 cases; (c) assist the Committee in analyzing the claims of the Debtors' creditors and capital structure and in negotiating with holders of claims and equity interests; (d) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' businesses; (e) assist the Committee in its analysis of, and negotiations with, the Debtors or any third parties concerning matters related to, among other things, the assumption or rejection of certain leases of nonresidential real property and executory contracts, asset dispositions, financing, or other transactions, and the terms of one or more plans of reorganization for the Debtors and accompanying disclosure statements and related plan documents; (f) assist and advise the Committee with its communications to the general creditor body regarding significant matters in the Chapter 11 cases; (g) represent the Committee at all hearings and other proceedings before the Court and other courts; (h) review and analyze applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety and, to the extent deemed appropriate by the Committee, support, join, or object thereto; (i) advise and assist the Committee with respect to any legislative, regulatory or governmental activities; (j) assist the Committee in its review and analysis of the Debtors' various commercial agreements; (k) prepare, on behalf of the Committee, any pleadings, including, without limitation, motions, memoranda, complaints, adversary complaints, objections or comments in connection with any of the foregoing and/or as may be necessary in furtherance of the Committee's interests and objectives; (1) investigate and analyze any claims against the Debtors' non-debtor affiliates; (m) investigate and analyze any claims against the Debtors' lenders; (n) advise the Committee with respect to any sales of the Debtors' assets; (0) advise the Committee with respect to the various plan and restructuring support agreements to which the Debtors are parties; and (p) perform other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code, Bankruptcy Rules, or other applicable law. Ropes & Gray has represented creditors, unofficial committees of creditors, official creditors' committees and members of unsecured creditors' committees in numerous Chapter 11 cases, and Ropes & Gray has a broad based practice, including expertise in areas of bankruptcy and restructuring, corporate and commercial law, tax, intellectual property, litigation, and labor and employment, as well as other areas that may be significant in these Chapter 11 cases. The Creditors' Committee asks that all fees and related costs and expenses incurred by the Committee on account of services rendered by Ropes & Gray in these cases be paid as administrative expenses of the Debtors' estates pursuant to Sections 328, 330(a), 331, 503(b) and 507(a) of the Bankruptcy Code. Ropes & Gray will charge for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date the services are rendered. The current hourly rates charged by Ropes & Gray for professionals and paraprofessionals employed in its offices are: Position Billing Rate -------- ------------ Partners $635 to $945 Special Counsel and Counsel 505 to 950 Associates 240 to 645 Paraprofessionals 115 to 280 The names, positions and current hourly rates of the Ropes & Gray attorneys currently expected to have primary responsibility for providing services to the Committee are: Professional Position Billing Rate ------------ -------- ------------ David S. Elkind Partner $815 Mark R. Somerstein Partner 780 Anne H. Pak Associate 605 Benjamin L. Schneider Associate 565 Dana Myers Associate 340 James Chang Associate 340 Raphael Rabin-Haft Associate 340 Mark R. Somerstein, Esq., a member of Ropes & Gray, discloses that: * Ropes & Gray previously represented Reuben H. Donnelley Corporation in patent and litigation matters between 1993 and 2003 and U.S. West Dex, Inc. was a member of a joint defense committee represented by Ropes & Gray in a patent infringement case between 1999 and 2003 prior to its acquisition by R.H. Donnelley Corporation. Both of the engagements terminated approximately six years prior to Ropes & Gray's retention by the Committee; * over three years ago, Ropes & Gray provided advice and analysis to two of its clients, Putnam Investment Management and Loomis Sayles & Company, with respect to certain of the Debtors' credit agreements. Those engagements terminated nearly two years prior to Ropes & Gray's retention by the Committee and did not involve any substantive aspect of any of the Debtors' credit facilities. Moreover, no Ropes & Gray attorney who assisted in those representations will represent the Committee in the Chapter 11 cases; and * an attorney with an offer to join Ropes & Gray as an associate in 2010 currently serves as a judicial law clerk to Judge Christopher S. Sontchi of the United States Bankruptcy Court for the District of Delaware. Despite the matters, Mr. Somerstein assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About R.H. Donnelley Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC and Dex Media West LLC, filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ROBETEX INC: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Robetex, Inc. PO Box 1225 Lumberton, NC 28359 Bankruptcy Case No.: 09-05574 Chapter 11 Petition Date: July 5, 2009 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Debtor's Counsel: Ocie F. Murray Jr., Esq. Murray Craven & Inman LLP PO Drawer 53007 Fayetteville, NC 28305-3007 Tel: (910) 483-4990 Fax: (910) 483-6822 Email: arhanover@mcilaw.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 17 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nceb09-05574.pdf The petition was signed by Kerry Talbot, president of the Company. ST GERMAIN: Involuntary Chapter 11 Case Summary ----------------------------------------------- Alleged Debtor: St. Germain Group, LLC 80 Baldwin Brook Road Canterbury, CT 06331 Case Number: 09-21867 Involuntary Petition Date: July 3, 2009 Court: District of Connecticut (Hartford) Judge: Albert S. Dabrowski Petitioners' Counsel: Brian C. Courtney, Esq. bcourtney@rms-law.com Rome, McGuigan PC One State Street, 13th Floor Hartford, CT 06103 Tel: (860) 549-1000 Fax: (860) 724-3921 Gary D. Lavigne, Esq. bankruptcy@lavigne-mark.com Lavigne & Mark, LLC 945 Main Street, Suite 208 Manchester, CT 06040 Tel: (860) 643-2501 Fax: (860) 645-0816 Timothy D. Miltenberger, Esq. tmiltenberger@coanlewendon.com Coan Lewendon Gulliver & Miltenberger 495 Orange Street New Haven, CT 06511 Tel: (203) 624-4756 Fax: (203) 243-4488 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Kingstown Post Enterprises unsecured $11,729 Inc. c/o DSM Realty, Inc. 150 Chestnut Street Providence, RI 02903 Lavigne & Mark, LLC unsecured $103,000 945 Main Street, Suite 208 Manchester, CT 06040 860 - 643-2501 Coan, Lewendon, Gulliver & unsecured $263,326 Miltenberger, LLC 495 Orange Street New Haven, CT 06511 STANFORD GROUP: Antigua Liquidators Win Fight Over Assets --------------------------------------------------------- On July 3, 2009, a trial court in the United Kingdom issued a decision that recognized the Antiguan Liquidators as "foreign representatives" in the U.K. for Stanford International Bank Limited, and recognized the Antiguan liquidation proceeding for SIBL as the "foreign main proceeding" for SIBL, at least so far as UK law goes. In the same decision, the court also recognized, as a matter of U.K. law, the Receiver as the receiver for the other defendants in the U.S. receivership. If the decision is not reversed on appeal, and ignoring any asset freezes, the decision would give the Antiguan Liquidators powers over assets of SIB that are located in the United Kingdom. However, all assets of SIBL located in the United Kingdom have been frozen under two separate orders issued by U.K. courts. As a result, the cash of SIB in the United Kingdom is required to remain in place unless and until a UK court lifts or modifies the freeze, or the requesting party agrees to a lifting or modification of the freeze. One of these was issued at the request of the SEC, and the other at the request of the U.K. Serious Fraud Office (which in turn acted at the request of the U.S. Department of Justice). The order issued at the request of the UK Serious Fraud Office was issued in April 2009, but was not publicly disclosed until after the criminal indictments of Robert Allen Stanford and others were returned in June 2009. To the extent the U.K. decision recognizes the Antiguan Liquidators and the Antiguan liquidation proceeding as superior to the Receiver and the U.S. receivership, the Receiver believes it is wrongly decided and should be reversed. The Receiver will appeal the decision so it can be reviewed by a higher court. About Stanford International Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The U.S. Securities and Exchange Commission, on Feb. 17, charged Mr. Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. STANFORD GROUP: Owner's Passport Found; Lawyer to Re-appeal Bail ---------------------------------------------------------------- Stanford International Bank Limited owner Robert Allen Stanford's expired Antiguan passport was found among possessions seized by Stanford Financial Group receiver, Ralph Janvey, three days after prosecutors told U.S. District Judge David Hittner they didn't know where it was, Andrew M. Harris and Laurel Brubaker Calkins of Bloomberg News report. According to the report, prosecutors argued that finding the missing passport doesn't justify letting Stanford out of jail on bail. "Before July 1, Mr. Stanford's counsel had not asked the receiver or his counsel about an expired Antiguan passport and they had no reason to think an expired Antiguan passport was of significance," Mr. Janvey's spokeswoman, Nancy Sims, said in an e- mailed statement obtained by the news agency. An attorney for Mr. Janvey told a Stanford lawyer on July 1 that the receiver's investigators had found the passport at Stanford's St Croix premises, Ms. Sims added. "I discovered [July 3] that the receiver/government has had the passport all along," Dick DeGuerin, Mr. Stanford's criminal- defense attorney, said in an e-mail obtained by the news agency. "It's pretty clear the prosecutors were less than forthcoming about it at the crucial time, during the hearings, especially when they made such an important point of 'the missing passport.'" Bloomberg notes Mr. DeGuerin said he plans to ask Judge Hittner to reopen the hearing on whether Mr. Stanford deserved bail based "on this and several other misrepresentations" made by prosecutors. As reported in the Troubled Company Reporter-Latin America on July 3, 2009, the Associated Press said Mr. Stanford will remain in jail while he awaits trial after Judge Hittner revoked a magistrate judge's decision that allowed him bail. A TCR-LA report on June 30, 2009, citing Bloomberg News, related that prosecutors urged Judge Hittner to revoke the US$500,000 bail given by U.S. Magistrate Judge Frances Stacy to Mr. Stanford. Prosecutors told Judge Hittner that Mr. Stanford is "an extreme flight risk" and might flee to avoid trial on charges against him. According to the report, prosecutors argued that Mr. Stanford's dual citizenship and lifestyle of "hop-scotching the globe," would make it easy for him to become a fugitive. Agence France-Presse News said Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Bloomberg related Mr. Stanford's lawyer, Dick DeGuerin, said his client should be released on bond because he has no intention of fleeing before a trial. According to Bloomberg, Mr. DeGuerin said Mr. Stanford voluntarily surrendered his passport two days after the U.S. Securities and Exchange Commission sued him of fraud. Assistant Attorney General Lanny Breuer, as cited by AFP, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. RadioJamaica related that Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on criminal charges. MailOnline News said Mr. Stanford was arrested in Fredricksburg, Virginia. About Stanford International Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The U.S. Securities and Exchange Commission, on Feb. 17, charged Mr. Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. STEVEN MALFO: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------- Joint Debtors: Steven Malfo Michele Malfo 5575 Stillwell Road Santa Maria, CA 93455 Bankruptcy Case No.: 09-12645 Chapter 11 Petition Date: July 3, 2009 Court: United States Bankruptcy Court Central District of California (Santa Barbara) Judge: Robin Riblet Debtors' Counsel: Vaughn C. Taus, Esq. 1042 Pacific St., Suite D San Luis Obispo, CA 93401 Email: tauslawyer@gmail.com Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-12645.pdf The petition was signed by the Joint Debtors. TEUFEL NURSERY: Can Use $1.5MM Textron Cash Collateral on Interim ----------------------------------------------------------------- The Hon. Trish M. Brown of the U.S. Bankruptcy Court for the District of Oregon authorized Teufel Nursery Inc. to use, on an interim basis, $1,505,650 of cash collateral until July 19, 2009, in accordance with the budget. Textron Financial Corporation, fka Systran Financial Services Corporation, asserts a $5,483,024 security interest/liens upon the cash collateral as of the Debtor's bankruptcy filing. Proceeds of the cash collateral will be used to pay the Debtor's operating expenses, including wages of its employees. The Debtor said that it wants to use as much as $7,477,010 of cash collateral. Judge Brown ruled that the Debtor's authority to use Cash Collateral is limited to the cumulative amounts and uses of cash collateral as set forth in the budget; provided, however, that apart from payroll and payroll taxes, the amounts set forth in the budget will be sufficient to make the payments set forth in the budget as well as any expenses incurred and not paid during the Cash Collateral Period, together with a 10% variance. As adequate protection, Textron Financial is granted a replacement lien upon all postpetition assets of the Debtor which are of the identical description to its prepetition collateral. If Textron Financial determines that it is not adequately protected, it can seek to terminate cash collateral usage. A final hearing is set for July 17, 2009, at 10:00 a.m., to consider final approval of the Debtor's request. A full-text copy of the Debtor's budget is available for free at http://ResearchArchives.com/t/s?3eb0 Headquartered in Portland, Oregon, Teufel Nursery, Inc. -- http://www.teufel.com/-- aka Teufel Landscape offers lawn and gardening services. The Company filed for Chapter 11 on June 24, 2009, (Bankr. D. Ore. Case No. 09-34880) Robert J. Vanden Bos, Esq., at Vanden Bos & Chapman represents the Debtor in its restructuring efforts. The Debtor has assets and debts both ranging from $10 million to $50 million. THUNDERBIRD HOLDINGS: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Thunderbird Holdings, LLC 2963 West Elliot Road, Suite 3 Handler, AZ 85224 Bankruptcy Case No.: 09-15391 Chapter 11 Petition Date: July 3, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Ian Kimball Douglas, Esq. Goff, Douglas And Eber, PC 21 E 6th, St #508 Tempe, AZ 85281 Tel: (602) 218-8458 Fax: (602) 916-0092 Email: ian@kgofflaw.com Kevin W. Goff, Esq. Goff, Douglas And Eber, PC 21 E 6th, St #508 Tempe, AZ 85281 Tel: (602) 476-1498 Fax: (602) 916-0092 Email: kevin@kgofflaw.com Total Assets: $1,077,893 Total Debts: $1,266,621 A full-text copy of the Debtor's petition, including a list of its 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-15391.pdf The petition was signed by Andrew Netupsky, manager of the Company. TOUSA INC: Disclosure Statement Hearing Adjourned Sine Die ---------------------------------------------------------- The U.S. Bankruptcy Code for the Southern District of Florida is yet to schedule another hearing date to consider the adequacy of the Disclosure Statement accompanying the First Amended Joint Chapter 11 Plan of TOUSA Inc. and its debtor affiliates. The Disclosure Statement hearing was previously scheduled for May 14, 2009. The Disclosure Statement hearing has been adjourned three times since the Debtors first filed their original Joint Plan of Reorganization in October 2008. Since October 2008, the Debtors' Plan and Disclosure Statement have been supplemented several times with more disclosures. In late March 2009, the Debtors have decided to revise their operational plan to focus on finishing up ongoing projects, sell remaining inventory, and cash in on land assets. The latest revision of the Debtors' Chapter 11 Plan and Disclosure Statement was presented to the Court on April 17, 2009, which embodies the Debtors' revised operational plan. April 17 Amended Plan The April 17 Amended Plan contemplates the orderly monetization of TOUSA's assets in 24 to 36 months. TOUSA filed its original Joint Plan of Reorganization on Oct. 14, 2008, which called for the conversion of more than $300 million of second lien debt into equity. The Plan was amended on Oct. 24, 2008, to disclose more information on company valuation, financial projections, liquidation analysis and terms of new notes to be issued under the Plan. The Plan was further amended on Nov. 12, 2008, to include more disclosures on the March 2006 First Lien Revolver Agreement, directors and officers indemnification obligations, intercompany claims, amendment on certain class claim designation and treatment, book value clarifications, and litigation trust interests, among others. Since then, the Company has decided to concentrate more on finishing up ongoing projects, selling remaining inventory and cashing in on land assets. The TOUSA revised business plan contemplates the suspension of the Company's efforts to generate new build-to-order sales and instead, provides for the diversion of primary focus on completing and closing homes currently under construction. In addition, TOUSA aims to sell its remaining inventory of "spec" homes, monetize land assets over time, and negotiate the sale of the financial services businesses operated by its non-Debtor indirect subsidiaries. The asset sale proceeds will be placed into escrow for distribution in accordance with the Plan, upon resolution of the action commenced by the Official Committee of Unsecured Creditors against certain of TOUSA's prepetition lenders. The Amended Plan also provides for these terms: * post-effective date status of TOUSA and its affiliates, * appointment of a Plan Administrator, * vesting of assets, * closing of TOUSA's Chapter 11 cases; * method of distribution under the Amended Plan; * monetization of assets; * creation of a Fee Funding Reserve; and * modification of certain claims treatment. TOUSA also amended the aggregate claim amount of these classes of claim designations under the Amended Plan: Claim Claim Amended Class Designation Aggregate Amount ----- ----------- ---------------- NA Administrative Claims $4,900,000 NA Priority Claims 4,900,000 NA US Trustee Fees 300,000 1A First Lien Revolver Claims 214,091,452 1B First Lien Term Loan Claims 135,977,236 2 Second Lien Claims 367,415,973 3 Other Secured Claims 42,285,506 4 Other Priority Claims 1,890,599 Full recovery is projected for Administrative Claims, Priority Claims, US Trustee Fees, Class 3 Other Secured Claims and Class 4 Other Priority Claims. In general, Class 1A First Lien Revolver Claims, Class 1B First Lien Term Loan Claims, and Class 2 Second Lien Claims will receive Net Proceeds derived from sale of all encumbered TOUSA assets available for distribution, up to full payment of the amount of allowed First Lien Revolver Claims. Moreover, Class 1A, Class 1B and Class 2 will be entitled to separate reserve accounts for reimbursement of reasonable actual out-of-pocket expenses for the defense of the Committee Action. The projected recovery for the First Lien Revolver Claims, First Lien Term Loan Claims, and Second Lien Claims will be dependent on the outcome of the Committee Action and the value of the encumbered Net Proceeds available for distribution by the Plan Administrator. Projected recovery for Class 5A Senior Note Claims, Class 5B General Unsecured Claims, and Class 5C Subordinated Note Claims will also be dependent on the outcome of the Committee Action. Classes 5A, 5B, 5C and 5D Claims will be paid their pro rata share of a series of Litigation Trust Interests for the applicable Debtor. Any distributions will be subject to the subordination provisions of the Subordinated Notes Indenture and the PIK Notes Indenture. Class 5C and 5D Claims will be allowed against the Debtors, except Beacon Hill at Mountain's Edge, LLC. TOUSA also appended exhibits to its Disclosure Statement pertaining to intercompany loans and claims summary, copies of which are available for free at: http://bankrupt.com/misc/Tousa_IntercompanyLoans.pdf http://bankrupt.com/misc/Tousa_ClaimsSummary.pdf A full-text copy of TOUSA's First Amended Joint Plan dated April 17, 2009, is available for free at: http://bankrupt.com/misc/TOUSA_FirstAmendedJointPlan.pdf A full-text copy of the TOUSA Disclosure Statement dated April 17, 2009, is available for free at: http://bankrupt.com/misc/Tousa_Apr17DiscStat.pdf About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TOUSA INC: Creditors Committee Sues Directors & Officers -------------------------------------------------------- The official committee of unsecured creditors appointed in Tousa Inc.'s Chapter 11 cases has commenced an adversary complaint in the U.S. Bankruptcy Court for the Southern District of Florida against these directors and officers of TOUSA Inc. and its debtor affiliates for breach of their fiduciary duties: * Konstantinos Stengos * Antonio Mon * Tommy McAden * Andreas Stengos * George Stengos * Larry Horner * William Hasler * Michael Poulus * Mariana Stengou * Susan Parks * J. Bryan Whitworth * Paul Berkowitz * Candace Corra * Russell Devendorf * Brian Konderik * Tom McAndrew * Dave Schoenborn * Gordon Stewart * Stephen Wagman The Creditors Committee specifically sought and obtained a Court order clarifying that it has standing to prosecute and settle certain causes of action against certain members of the board of directors of the direct and indirect wholly owned subsidiaries of TOUSA, Inc., and Technical Olympic, S.A., for breaches on behalf of the Debtors' estates. The Creditors Committee asserted that the TOUSA Directors served as directors and officers of the Debtor-Subsidiaries during a July 31, 2007 transaction, whereby the Directors caused the Debtor-Subsidiaries to incur more than $500 million in new secured debt obligations. Under the Complaint, the Creditors Committee also alleged that Technical Olympic, S.A., a construction company that owned 67% of TOUSA's stock and was the controlling shareholder of TOUSA, aided and abetted the TOUSA Directors and Officers in their breach of fiduciary duties to the Debtor-Subsidiaries. Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida, relates that on June 6, 2005, Debtor TOUSA Homes LP and its joint venture partner, Falcone/Ritchie LLC, formed TE/TOUSA LLC or the "Transeastern JV" to acquire substantially all of the homebuilding assets of Transeastern Properties, Inc. To fund the acquisition, TOUSA Homes and Falcone/Ritchie LLC created a series of special purpose subsidiaries, which entered into three credit agreements with a consortium of lenders to borrow up to $675 million. TOUSA Inc. and TOUSA Homes both executed three unsecured completion guaranties and three unsecured carve-out guaranties with respect to the Transeastern Credit Agreements, making them obligors of the $675 million Transeastern Debt. At the time of the Transeastern Acquisition, TOUSA Inc. and its debtor subsidiaries were already liable on $1.1 billion in Bonds, among others. In 2005, the book value of the Transeastern JV's assets was $862 million but by November 30, 2006, the assets declined to $475 million, against $811 million in debt and other liabilities of the Joint Venture. In early November 2006, TOUSA Inc. and TOUSA Homes received demand letters from DB Trust requiring payment under the TOUSA/TE Guaranties from alleged potential defaults and events of defaults that had occurred under the Transeastern Credit Agreements. Subsequently, on November 29, 2006, and March 26, 2007, the Transeastern Lenders filed lawsuits against the TOUSA/TE Borrowers, TOUSA Inc. and TOUSA Homes asserting alleged claims under the TOUSA/TE Guaranties and Transeastern Credit Agreements. As none of the other debtor subsidiaries became obligors or guarantors under the Transeastern Credit Agreements, they were not party to the Prepetition Transeastern Litigation. To resolve the litigation, the TOUSA Directors agreed to: -- pay $421,522,193 to The CIT Group/Business Credit for the benefit of the Transeastern Lenders on July 31, 2007; and -- provide a mixture of notes, stocks and warrants to the Transeastern Mezz lenders. To fund the settlement payments to the Transeastern Senior Lenders, TOUSA Inc. and TOUSA Homes borrowed $500 million in term loans or "New Debt" from a consortium of lenders led by Citicorp North America, Inc., as administrative agent. The Transeastern Settlement and New Debt transaction closed on July 31, 2007. The Committee argued that by entering into the New Debt Transaction, the Directors wrongfully cause the Debtor- Subsidiaries to become both co-borrowers and guarantors under the New Debt Transaction. Ms. Redmond contends that none of the Directors met to deliberate whether to approve the New Debt transaction or even evaluated whether they had different duties, different stakeholders, or different considerations in approving the Transaction and saddling the Debtor-Subsidiaries with the New Debt. Instead, each Director signed a "Unanimous Written Consent in Lieu of a Meeting of the Board" on July 31, 2007, which authorized each Debtor-Subsidiary to become a co-borrower and guarantor on the New Debt. TOUSA Entities recorded an impairment of more than $84 million for the quarter ended June 30, 2007. Given the Debtors' financial condition, the Directors were required, at that time, to factor into their deliberations that Debtor-Subsidiaries' existing creditors, consisting of $1.1 million in bonds and other debts, Ms. Redmond asserts. However, at best, she notes, the Directors failed to investigate, inform themselves, and deliberate properly as to the effect of the Transaction on creditors. Ms. Redmond further argues that the professional advice sought by the TOUSA Directors failed to address the interests of the Debtor-Subsidiaries or their creditors. For one, she notes, Lehman Brothers' advice, as sought by the TOUSA Directors, stated that the New Debt Transaction provides the best alternative for TOUSA under the circumstances to maximize its value for its stockholders, but the firm clearly disclosed that it had not been asked to consider the impact of the New Debt Transaction on the Debtor-Subsidiaries. Similarly, TOUSA sought a solvency opinion from Alix Partners LLP who opined that TOUSA would be solvent on a consolidated basis immediately after giving effect to the New Debt Transaction, but again the Alix Partners Opinion failed to address the joint and several liability of each co-borrowing party to the New Debt or determine the solvency of the Debtor- Subsidiaries on an unconsolidated basis. Notably, weeks after the New Debt Transaction, TOUSA could not provide the solvency certificate required to obtain funding under its revolving credit agreement. In light of the Directors' positions, fiduciary relationships existed between each Director and the Debtor-Subsidiary, Ms. Redmond asserts. The Directors, however, breached their fiduciary duties to the Debtor-Subsidiaries and their creditors and acted with gross negligence and recklessness, by approving the New Debt Transaction in spite of being conflicted to Technical Olympic, she argues. Accordingly, Ms. Redmond says, the Directors' breach of their fiduciary duties damaged the Debtor-Subsidiaries and their unsecured creditors by, among others, improperly: (i) harming and diminishing the value of the Debtor- Subsidiaries through the incurrence of the secured New Debt, for the sole purpose of satisfying the existing obligations of TOUSA Inc. and TOUSA Homes; and (ii) subordinating the interests of the Debtor-Subsidiaries' existing creditors in the Debtor-Subsidiaries' assets to the New Lenders, when existing creditors in the Debtor- Subsidiaries were force to become jointly and severally liable co-borrowers and guarantors of the secured New Debt. Moreover, the Committee alleged that Technical Olympic, through its agents, aided, abetted, induced, encouraged, substantially assisted, and participated in the breaches of fiduciary duty by the Directors. Ms. Redmond tells the Court that before entering into the New Debt Transaction, through October 2007, Directors Konstantinos Stengos, George Stengos, and Marianna Stengu were also on Technical Olympic's board of directors and had a financial interest in TOUSA's majority shareholder -- rendering them fiduciaries of both companies and deeply conflicted with respect to the New Debt Transaction. All of the TOUSA Directors acted solely in the interest of Technical Olympic and TOUSA's other shareholders when they approved the Transaction and Transeastern Settlement, Ms. Redmond maintains. She notes that by aiding and abetting in the breaches of duty committed by the Directors, Technical Olympic also damaged the Debtor-Subsidiaries and their unsecured creditors. Accordingly, under the Complaint, the Committee asked the Court to award it judgment: (1) with respect to the TOUSA Directors' breach of fiduciary duties and Technical Olympic's aiding of that breach of fiduciary duties, an amount to be determined at trial; and (2) with respect to attorneys' fees, costs and other expenses it incurred or will incur in light of its complaint. The Committee has also sought and obtained the Court's permission to file under seal its Complaint and to file a redacted version of the Complaint on the Court's public dockets. The Committee noted that its Complaint cites certain information from documents that were designated by certain producing parties as confidential or highly confidential pursuant to a Stipulated Protective Order dated August 12, 2008. Judge Olson directed the Committee to provide complete and unredacted versions of the documents to the U.S. Trustee for Region 21, counsel to the Debtors, and counsel to the agents for the Debtors' First and Second Lien Facilities. The redacted version of the Complaint dated June 9, 2009, is available for free at http://ResearchArchives.com/t/s?3e2c Moreover, at the behest of the Committee, Judge Olson suspended the deadlines related to the Committee Complaint to conform with the June 1, 2009 Court order granting the Committee standing to file complaints. In accordance with the Federal Rules of Bankruptcy Procedure and Local Rules of the U.S. Bankruptcy Court for the Southern District of Florida, the response deadline on the Complaint has been set for July 6, 2009, and a pretrial conference has been scheduled for November 18, 2009. The Standing Order provides that if the Committee files a complaint against the Debtors' directors prior to conclusion of the trial in the adversary proceeding commenced by the Committee against Citicorp North America, Inc. and certain of the Debtors' prepetition secured lenders, which is scheduled to begin on July 13, 2009, all deadlines under the "director complaint" are suspended until 30 days of (i) the conclusion of the trial of the Citicorp Action, or (ii) the entry of an order or series of orders approving a settlement of, or disposing of, the entirety of the Citicorp Action. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TOUSA INC: Applies for Approval to Management Incentive Plan ------------------------------------------------------------ Tousa Inc. and its affiliates believe that it is critically important to properly motivate certain members of their senior management through the course of their controlled asset monetization. The Debtors are essentially asking those senior management members to perform and work toward the maximization of the Debtors' assets in these difficult circumstances knowing with certainty that their jobs will eventually be eliminated, Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, relates. In this regard, he stresses, it is necessary to incentivize senior management to remain with the company. Accordingly, in line with the development of a budget and related business plan, the Debtors and their advisors designed a Management Incentive Plan that is narrowly tailored and reflects the Debtors' current situation and overall macroeconomic conditions. Under the Incentive Management Plan, these members of the Debtors' senior management will be critical to the ongoing functionality of the Debtors' businesses: (1) Tommy McAden, as executive vice president and chief financial officer; (2) George Yeonas, as executive vice president and chief operating officer; and (3) Clint Ooten, as vice president of human resources and administration. Mr. Singerman emphasizes that the Debtors' Senior Management possesses the knowledge, experience and skill necessary to support the Debtors' remaining projects and asset maximization for the benefit of the Debtors' estates. Indeed, he notes, in more than two months since the controlled asset monetization was commenced, the Debtors' Senior Management has led efforts that resulted in a $16 million improvement in estimated realizations. Accordingly, pursuant to Section 363(b) and 503(c) of the Bankruptcy Code, the Debtors seek the Court's authority to implement the Management Incentive Plan, nunc pro tunc to April 1, 2009, and to continue through March 31, 2010. The key terms of the Management Incentive Plan are: (1) During fiscal year 2008, the annual base payment for Senior Management has been: CFO $750,000 COO $750,000 VP of Human Resources $350,000 Effective on the first day of the month succeeding approval of the Management Incentive Plan, the annual base payment for Senior Management will be: CFO $500,000 COO $500,000 VP of Human Resources $350,000 Senior Management will each receive a one-year contract with an effective date of April 1, 2009. The Plan Administrator and Oversight Committee will have the option to extend the contracts of the Senior Management in three or six month intervals, at existing base payment levels. (2) Senior Management will be entitled to receive variable incentive payment. Payments are based on the achievement of certain targets during the Plan Period. There are two six-month measurement periods -- April 2009 through September 2009 and October 2009 through March 2010 -- and the maximum aggregate Incentive Payment that can be paid to Senior Management during the Plan Period is $1.1 million. (3) The Management Incentive Plan establishes four Achievement Targets that serve as measurement factors and are weighted: -- Projected proceeds from consolidated home closings is weighted 20%; -- Blended average selling price for all construction in progress sold is weighted 20%; -- Blended average selling price for all land sales is weighted 20%; and -- Cumulative operating cash flow is weighted 40%. (4) Senior Management will receive Incentive Payment in these percentages: CFO 38.6% COO 38.6% VP of Human Resources 22.8% (5) Senior Management will receive 50% of their earned Incentive Payment for each half yearly measurement period 15 days after the end of each period. The remaining 50% will be held back and paid out upon termination or within six months of the end of the Plan Period, whichever is first. (6) If any member of Senior Management is terminated involuntarily without cause part-way through a six-month period, that member of Senior Management's Incentive Payment will be calculated on a pro-rata basis up to the day of termination and paid 15 days following the end of the period together with all other holdbacks from previous periods that are due. (7) Each member of Senior Management earned a bonus for performance in fiscal year 2008. The fiscal year 2008 bonus amounts for Senior Management were: CFO $375,000 COO $375,000 VP of Human Resources $175,000 The designated fiscal year 2008 bonus amounts will be paid out as: -- 50% will be paid upon approval of the Management Incentive Plan by the Court; -- 25% will be paid on October 31, 2009; and -- 25% will be paid upon termination. (8) Each member of Senior Management is entitled to an additional bonus of 50% of fiscal year 2008 salary in the event that net creditor recoveries equal or exceed an amount of the first lien debt outstanding and they remain employed through at least March 31, 2010. The net recovery threshold is set at $325 million. The Management Incentive Plan also contemplates that Senior Management severance benefits will remain in place under the Debtors' existing policy. The Debtors estimate that severance payments to Senior Management will total $296,000, assuming a March 31, 2010 termination date. Each member of Senior Management with more than one year of tenure at the time of termination will be paid one month of Consolidated Omnibus Budget Reconciliation Act coverage on termination, and each member of Senior Management with more than two years of tenure will be paid two months of COBRA coverage upon termination. The Debtors estimate that COBRA payments to Senior Management to aggregate $6,000. Each member of Senior Management will be entitled to four weeks of paid vacation time for the Incentive Plan Period. Mr. Singerman assures the Court that the costs associated with the Management Incentive Plan are more than justified by the benefits expected to be realized. He contends that absent Senior Management's leadership and accomplishment of the Debtors' principal goals, the Debtors would be faced with a disorderly liquidation or "fire sale" of their remaining assets, resulting in a loss of return to creditors much greater than the amount allocated as incentive payments to the members of Senior Management. He also clarifies that the Management Incentive Plan does not involve any payments to insiders "for the purpose of inducing such person to remain with the debtor's business" that would be prohibited under Section 503(c)(1) of the Bankruptcy Code. Similarly, the Management Incentive Plan (i) does not provide for any severance payments (i) other than those payments under the Debtors' existing policy and authorized by the Court, or (ii) are greater than 10 times the amount of mean severance pay given to non-management employees, Mr. Singerman adds. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Lenders Group Objects to Columbia Sussex's Claims ---------------------------------------------------------------- The Steering Committee of Lenders under a certain Credit Agreement dated January 3, 2007, as amended, objects to Columbia Sussex Corporation's application for allowance and payment of (i) a priority claim of at least $631,361 under Section 507(a)(5) of the Bankruptcy Code as contributions to an employee benefit plan within 180 days before the Petition Date, and (ii) an administrative expense claim of at least $5,296,496 under Sections 503(b)(1) and (b)(3)(D) of the Bankruptcy Code. The Steering Committee asserts Columbia Sussex has failed to provide any evidence to support its claims. Michael R. Lastowski, Esq., at Duane Morris LLP, in Wilmington, Delaware, notes that Columbia Sussex is referred to as a Yung Entity under the Debtors' Chapter 11 Plans, pursuant to which a litigation trust will be created to pursue causes of action against the Yung Entities, and any claims against the estates in favor of the Yung Entities are potentially subject to set-off or reduction against judgments obtained against them, subordination or recharacterization in future proceedings initiated by the estates, the Debtors, the reorganized Debtors or the litigation trust. Maintaining the right of the reorganized Debtors, the estates and the litigation trust to set off judgments obtained against the Yung Entities is necessary to ensure that the estates and creditors will reap the full benefit of any judgments against the Yung Entities in the event the Yung Entities are unable to pay the full amount of any judgment entered against them, Mr. Lastowski asserts. The Lenders Steering Committee reserves all rights to amend its objection, as well as engage in all future proceedings with respect to the Administrative Claim Motion. TROPICANA ENT: Lenders Group Objects to Wimar Tahoe Admin. Claim ---------------------------------------------------------------- The Steering Committee of Lenders under a certain Credit Agreement dated January 3, 2007, as amended, opposes the request of Wimar Tahoe Corporation Corporation, formerly Tropicana Casino & Resorts, Inc., for the allowance and payment of administrative expense claims of at least $2,055,259 under Section 503(b)(1)(A) of the Bankruptcy Code. The Steering Committee asserts that Wimar Tahoe has failed to carry its burden of proof that all or any portion of its claims is either valid or entitled to administrative or priority status. Wimar Tahoe is defined as Yung Entity under the Debtors' Chapter 11 Plans, pursuant to which a litigation trust will be created to pursue causes of action against the Yung Entities, and any claims against the estates in favor of the Yung Entities are potentially subject to set-off or reduction against judgments obtained against them, subordination or recharacterization in future proceedings initiated by the estates, the Debtors, the reorganized Debtors or the litigation trust. Michael R. Lastowski, Esq., at Duane Morris LLP, in Wilmington, Delaware, contends that maintaining the right of the reorganized Debtors, the estates and the litigation trust to set off judgments obtained against the Yung Entities is necessary to ensure that the estates and creditors will reap the full benefit of any judgments against the Yung Entities in the event the Yung Entities are unable to pay the full amount of any judgment entered against them. The Lenders Steering Committee reserves all rights to amend its objection, as well as engage in all future proceedings with respect to the Administrative Claim Motions. 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) TWIN CITIES: Files Chapter 11 in St. Paul, Minnesota ---------------------------------------------------- Twin Cities Stores Inc., filed Chapter 11 again on June 30 before the U.S. Bankruptcy Court for the District of Minnesota in St. Paul (Case No. 09-34468), after emerging from a previous bankruptcy reorganization in 2004, Bloomberg's Bill Rochelle reported. The new petition say assets are less than $10 million while debt exceeds $10 million. Liabilities include $17.6 million on two secured loans. The company also owes almost $4 million to the state of Minnesota for unpaid fuel taxes. Twin Cities Stores Inc. owns 61 convenience stores and gasoline stations. Dealers operate 25 of the locations while Twin Cities is operating 7. The remaining stores are closed and not operating. USG CORP: Court Formally Closes Chapter 11 Case ----------------------------------------------- Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware formally closed the Chapter 11 case of USG Corporation on June 30, 2009, almost nine years since the Delaware-based company filed for bankruptcy protection. Judge Fitzgerald has issued a final decree closing USG Corp.'s bankruptcy case, the only remaining open case after the Court closed the bankruptcy proceedings of the other USG affiliates in October 2006. In connection with the closure of the USG Chapter 11 case, Judge Fitzgerald has also ordered the termination of the appointment and services of Logan & Company Inc., as the claims, noticing and balloting agent of the Court. The termination will take effect on July 20, 2009. In the event any party files pleadings or seeks to re-open the USG case after its approval for any reason that does not affect USG, the company will not be required to participate in any matters including hearings, except to the extent USG in its sole discretion elects to do so or the Court requires, Judge Fitzgerald held. USG will also not be responsible for any obligations stemming from or related to those matters including any fees payable to the Office of the U.S. Trustee. In response to Garlock Sealing Technologies LLC's objection, Judge Fitzgerald ordered the Clerk of the Court to "accept for filing on the docket" of USG's case, without requiring any party to file a request to re-open the case, the annual reports of the United States Gypsum Asbestos Personal Injury Settlement Trust and any court papers, pursuant to which any party seeks to invoke the exclusive jurisdiction of the Court provided for in USG's joint plan of reorganization, and a provision in the order confirming that plan. Garlock Sealing filed an objection, asking the Court to permit any party to invoke the Court's jurisdiction under the plan confirmation order in the future without having to move for the re-opening of USG's case. USG's plan of reorganization was confirmed by the Court on June 16, 2006, and was declared effective on June 20, 2006. USG then emerged from bankruptcy and assumed the business and management of its assets as a reorganized company. About USG Corporation Based in Chicago, Ill., USG Corporation -- http://www.usg.com/-- through its subsidiaries, manufactures and distributes building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. The Debtors emerged from bankruptcy protection on June 20, 2006. As reported by the Troubled Company Reporter on February 2, 2009, Standard & Poor's Ratings Services lowered its ratings on USG Corp., specificially its corporate credit rating frin 'BB-' to 'B+', with negative outlook. "The downgrade reflects our expectation that USG's operating results will continue to be strained during the next several quarters due to contracting commercial construction activity and the ongoing depressed level of housing, resulting in reduced wallboard and ceiling time and grid demand," said Standard & Poor's credit analyst Thomas Nadramia. "As a result, S&P expects that the company's liquidity position, which S&P deem to currently be adequate for the rating at more than $500 million, could somewhat narrow during 2009." USG CORP: Garlock Settles Dispute with Asbestos PI Trust -------------------------------------------------------- Garlock Sealing Technologies LLC has asked the U.S. Bankruptcy Court for the District of Delaware to approve a stipulation dismissing the complaint it lodged against the trustees of the United States Gypsum Asbestos Personal Injury Settlement Trust. Garlock filed the complaint to compel Lewis Sifford, Philip Pahigian and Charles Koppelman to conduct a prompt review of its claims purportedly entitled for payment under the Asbestos PI Trust. The Trust was created pursuant to the Chapter 11 plan of USG Corporation and its affiliated debtors to process and pay asbestos personal injury claims. The USG Asbestos Trust was created pursuant to the Chapter 11 Plan of Reorganization of USG Corporation and its affiliated debtors to process and pay asbestos personal injury claims. Lewis Sifford, Philip Pahigian and Charles Koppelman administer the Trust. Garlock is the judgment-debtor in three judgments entered in the Circuit Court for the City of Baltimore, in Maryland, in favor of Reginald Puller, Paul Wilson and Gary Snyder who suffered from malignant mesothelioma allegedly caused by their exposure to asbestos found in products manufactured by Garlock and certain USG Debtors. The Puller Plaintiffs, however, did not pursue claims against the Debtors in the tort system by virtue of their bankruptcy cases. The jury returned verdicts in favor of the Puller Plaintiffs against Garlock. After giving Garlock credit for the shares of co-defendants that paid settlements to the Puller Plaintiffs in the tort system, the trial courts entered judgments in favor of the Puller Plaintiffs in the sum of $3,883,495 in Mr. Puller's case, $1,863,870 in Mr. Wilson's case, and $4,149,850 in Mr. Snyder's case. About USG Corporation Based in Chicago, Ill., USG Corporation -- http://www.usg.com/-- through its subsidiaries, manufactures and distributes building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. The Debtors emerged from bankruptcy protection on June 20, 2006. As reported by the Troubled Company Reporter on February 2, 2009, Standard & Poor's Ratings Services lowered its ratings on USG Corp., specificially its corporate credit rating frin 'BB-' to 'B+', with negative outlook. "The downgrade reflects our expectation that USG's operating results will continue to be strained during the next several quarters due to contracting commercial construction activity and the ongoing depressed level of housing, resulting in reduced wallboard and ceiling time and grid demand," said Standard & Poor's credit analyst Thomas Nadramia. "As a result, S&P expects that the company's liquidity position, which S&P deem to currently be adequate for the rating at more than $500 million, could somewhat narrow during 2009." USG CORP: Asbestos PI Trust's 2008 Annual Report ------------------------------------------------ Philip Pahigian, Lewis Sifford and Charles Koppelman, trustees of the United States Gypsum Asbestos Personal Injury Settlement Trust created pursuant to the joint plan of reorganization of USG Corporation and its affiliated debtors, filed in Court an annual report and account of the trust for the period from January 1 to December 31, 2008. The purpose of the annual report is to fulfill the reporting requirements of the United States Gypsum Asbestos Personal Injury Settlement Trust Agreement and to apprise the Court of actions taken by the Asbestos PI Trustees. The Trustees reported that during the 12-month period ending Dec. 31, 2008, they held formal meetings attended by Dean Trafelet, who served as futures claims representative, and members of the Asbestos Trust Advisory Committee, namely Russell Budd, John Cooney, Theodore Goldberg, Steven Kazan, Perry Weitz and Joseph Rice. In addition to the formal meetings, the Trustees also held executive session and special purpose meetings, including meetings to address Asbestos Trust policies and claim processing matters, held regularly at scheduled weekly teleconferences. They also devoted time to Trust matters outside of the scheduled meetings. Activities included preparing for the timely transfer of the trust assets, receiving and deploying those assets with investment managers, designing and implementing processes to receive, process, and pay claims, among other things. During the reporting period, Analysis Research Planning Consulting served as the Asbestos Trust's executive director, Cambridge Associates LLC as investment advisor, and Campbell & Levine LLC as general counsel. Delaware Claims Processing Facility continues to process the Trust's claims. The Asbestos Trust also continues to retain Northern Trust, Mercator, Hansberger, Southeastern and Gryphon as non-U.S. equity managers; Northern Trust as U.S. equity manager; BlackRock, Schroders, Northern Trust and M.D. Sass as intermediate-term municipal bond managers; and BlackRock and Columbia as short-term municipal bond managers. Morgan Stanley, an intermediate-term bond manager, was terminated by the Asbestos Trust in 2008 because of significant changes to the portfolio management team. The municipal bond team at M.D. Sass was acquired by Eaton Vance on December 31, 2008, and was renamed Eaton Vance Tax-Advantaged Bond Strategy (TABS). Northern Trust served as Custodian for the Trust's investment accounts. Summary of Claims As of December 31, 2008, the Asbestos Trust had paid a total of 2,152 Prepetition Liquidated PI Trust Claims. Of the claims paid, 142 were malignancy claims and 2,010 were non-malignancy claims. After application of the payment percentage and applicable sequencing adjustment, the Trust paid approximately $11.52 million to asbestos victims in settlement of their Prepetition Liquidated PI Trust Claims. The malignant to non- malignant ratio of the Prepetition Liquidated PI Trust Claims paid in number was 1 is to 14, and the malignant to non-malignant ratio of the Prepetition Liquidated Trust Claims in dollars paid was 2 is to 1. As of December 31, 2008, the Trust had received 214,469 Unliquidated PI Trust Claims and paid a total of 54,986 claims. Of the claims paid, about 7,650 were malignancy claims and 47,336 were non-malignancy claims. After application of the payment percentage and applicable sequencing adjustment, the Trust paid about $600.61 million to asbestos victims in settlement of their Unliquidated PI Trust Claims. The malignant to non-malignant ratio of the Unliquidated PI Trust Claims paid in number was 1 is to 6 and the malignant to non-malignant ratio of the Unliquidated Trust Claims in dollars paid was 4 is to 1. During the reporting period, the Trust paid a total of 1,729 Prepetition Liquidated PI Trust Claims. Of the claims paid, 73 were malignancy claims and 1,656 were non-malignancy claims. After application of the payment percentage and applicable sequencing adjustment, the Trust paid approximately $3.46 million to asbestos victims in settlement of their Prepetition Liquidated PI Trust Claims. The malignant to nonmalignant ratio of the Prepetition Liquidated PI Trust Claims paid in number was 1 is to 25 and the malignant to non-malignant ratio of the Prepetition Liquidated Trust Claims in dollars paid was 1 is to 1. During the reporting period, the Trust received 90,756 Unliquidated PI Trust Claims and paid a total of 49,805 claims. Of the claims paid, there were 7,146 malignancy claims and 42,659 non-malignancy claims. After application of the payment percentage and applicable sequencing adjustment, the Trust paid approximately $562.96 million to asbestos victims in settlement of their Unliquidated PI Trust Claims. The malignant to nonmalignant ratio of the Unliquidated PI Trust Claims paid in number was 1/6 and the malignant to nonmalignant ratio of the Unliquidated Trust Claims in dollars paid was 4/1. USG Asbestos Personal Injury Settlement Trust Special-Purpose Statements of Assets, Liabilities & Net Assets Available for Payment of Claims As of December 31, 2008 Assets: Cash & cash equivalents $357,730,127 Investments Investments in bonds, at fair market value 2,659,246,742 Equity investments, at fair market value 324,095,719 Interest receivable 37,879,280 Income tax receivable 6,000,000 -------------- Total assets 3,384,951,868 Liabilities: Accrued expenses & accounts payable 2,130,728 Settled but unpaid claims 0 -------------- Total liabilities 2,130,728 Net assets available for payment of claims $3,382,821,140 ============== USG Asbestos Personal Injury Settlement Trust Special-Purpose Statements of Changes in Net Assets Available for Payment of Claims As of December 31, 2008 Additions: Interest & dividend income $123,548,594 Net appreciation in fair market value of investments 0 -------------- Total additions 123,548,594 Deductions Personal injury claim expense 566,176,688 Net depreciation in fair market value of investments 246,886,861 Operating expenses 10,434,526 Claims processing expenses 6,268,215 -------------- Total deductions 829,766,290 (Decrease) increase in net assets available for payment of claims (706,217,696) Net assets available for payment of claims: Beginning of period 4,089,038,836 End of period $3,382,821,140 ============== USG Asbestos Personal Injury Settlement Trust Special-Purpose Statements of Cash Flows For Year Ended December 31, 2008 Cash flows from operating activities: (Decrease) increase in net assets available for payment of claims ($706,217,696) Adjustments to reconcile increase in net assets available for the payment of claims to net cash (used in) provided by operating activities: Net depreciation (appreciation) in fair market value of investments 246,886,861 Amortization of premiums on bonds, net 26,762,714 Changes in operating assets and liabilities Interest receivable (11,749,773) Income taxes receivable 0 Accrued expenses, accounts payable 367,803 Settled but unpaid claims (3,144,450) -------------- Net cash (used in) provided by operating activities (447,094,541) Cash flows from investing activities: Sales and maturities of bonds 3,071,609,801 Purchases of bonds (3,132,602,896) Sales of equity securities 85,625,518 Purchases of equity securities (99,016,923) -------------- Net cash used in investing activities (74,384,500) Net decrease in cash and cash equivalents (521,479,041) Cash and cash equivalents, beginning of the period 879,209,168 -------------- Cash and cash equivalents, end of the period $357,730,127 ============== About USG Corporation Based in Chicago, Ill., USG Corporation -- http://www.usg.com/-- through its subsidiaries, manufactures and distributes building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. The Debtors emerged from bankruptcy protection on June 20, 2006. As reported by the Troubled Company Reporter on February 2, 2009, Standard & Poor's Ratings Services lowered its ratings on USG Corp., specificially its corporate credit rating frin 'BB-' to 'B+', with negative outlook. "The downgrade reflects our expectation that USG's operating results will continue to be strained during the next several quarters due to contracting commercial construction activity and the ongoing depressed level of housing, resulting in reduced wallboard and ceiling time and grid demand," said Standard & Poor's credit analyst Thomas Nadramia. "As a result, S&P expects that the company's liquidity position, which S&P deem to currently be adequate for the rating at more than $500 million, could somewhat narrow during 2009." VISTEON CORP: $5.1MM for Pre-Bankr. Debt to Foreign Vendors Okayed ------------------------------------------------------------------ Judge Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware has authorized, on a final basis, Visteon Corp. to pay not more than $5,100,000 for prepetition claims of certain vendors, service providers, landlords, regulatory agencies, and governments located outside the United States. The Debtors are to coordinate with FTI Consulting Inc. as the official committee of unsecured creditors' financial advisor with respect to foreign claims report. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, attorney for the Debtors, told the Court that as a result of the global nature of their operations, the Debtors regularly transact business with suppliers located in China, South Korea, Taiwan, Japan, Portugal, Brazil, Hungary, Germany, France, the Czech Republic, and Mexico. Certain of the Foreign Vendors are sole source suppliers of custom engineered parts who supply goods to the Debtors that cannot be obtained from other sources or cannot be obtained from other sources without significant delays, Ms. Jones said. The Debtors believe there is a significant risk that non-payment of even a single invoice could cause a Foreign Vendor to stop shipping goods to the Debtors on a timely basis or to completely sever its business relationship with the Debtors. Moreover, if Foreign Vendors are not paid, they may take precipitous action against the Debtors based on an erroneous belief that they are not subject to the automatic stay provisions of Section 362(a) of the Bankruptcy Code. "Although the automatic stay applies to protect the Debtors' assets wherever they are located in the world, attempting to enforce the Bankruptcy Code in foreign countries is often a fruitless exercise," Ms. Jones averred. "Moreover, even if it could be enforced, the automatic stay by itself would not protect assets of the Debtors' non-debtor affiliates, which could remain at risk of seizure or setoff," Ms. Jones maintained. The Debtors condition the payment of the Foreign Vendor Claims on the agreement of the Foreign Vendors to continue supplying goods or services postpetition on normal customary trade terms, practices, and programs that were most favorable to the Debtors and that were in effect within 120 days before the Petition Date. If a Foreign Vendor accepts a payment and later refuses to supply goods to the Debtors on customary trade terms, then the Debtors may declare that any payment be deemed to have been made in payment of then outstanding postpetition obligations owed to that Foreign Vendor. In that event, the Debtors suggest that: (a) the Foreign Vendor repay any payment of a Foreign Claim to the extent that the aggregate amount of those payments exceed postpetition obligations then outstanding, without the right of any setoffs, claims, provision for payment of reclamation, or trust fund claims; or (b) the Debtors will apply that payment against any outstanding administrative claim held by that Foreign Vendor. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corp. and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Committee Retains KCC as Web Site Administrator ------------------------------------------------------------- The official committee of unsecured creditors in Visteon Corp.'s cases seeks the U.S. Bankruptcy Court for the District of Delaware's authority to implement certain procedures to ensure its compliance with Section 1102(b)(3)(A) of the Bankruptcy Code, including establishing a Committee Web site. Section 1102(b)(3) provides that a committee appointed under subsection(a) will provide access to information for creditors who holds claims of the kind represented by the committee. Section 1102(b)(3)(A), however, does not indicate how a creditors' committee should provide "access to information," and provides no guidance on the extent to which a committee is obligated to provide confidential or proprietary information to its constituency. Thus, to satisfy its statutory obligations, the Committee proposes Information Procedures pursuant to which it will establish and maintain a Web site to: (i) serve as an access point for unsecured creditors to receive certain non-confidential information and non- privileged information; and (ii) allow it to solicit and receive comments from unsecured creditors regarding the Debtors' Chapter 11 cases. The information available on the Committee Web site will include, among other things: * general information regarding the Debtors' Chapter 11 cases; * contact information of the Debtors, the Debtors' counsel and the Committee's counsel; * the date by which unsecured creditors must file their proofs of claims; * the voting deadline with respect to any Chapter 11 plan of Reorganization; * the claims docket as established by the Debtors and Kurtzman Carson Consultants LLC; * a general overview of the Chapter 11 process; * the Debtors' monthly operating reports; * a list of upcoming omnibus hearing dates and the calendar of matters on those hearing dates; * answers to frequently asked questions; and * links to other relevant Web sites. In addition, the Committee will establish an e-mail address to allow unsecured creditors to send questions and comments. If an Unsecured Creditor submits a written request by electronic mail for the Committee to disclose information, the Committee will, within 20 days after receiving the Information Request, respond to the Unsecured Creditor. The Committee will not be required to provide access to information to any entity that has not demonstrated to the satisfaction of the Committee that it holds claims of the kind described in Section 1102(b)(3). If the Committee denies Information Requests because it believes that the Information Request implicates Confidential Information or Privileged Information or the Information Request is unduly burdensome, the Unsecured Creditor may seek an order from the Court compelling the Committee to disclose certain information for cause. The Information Procedures will not authorize the Committee to provide any creditor or other entity access to non-public information, including: (a) non-public information concerning the Debtors' assets, liabilities, business operations, business practices, business plans, intellectual property and trade secrets, financial projections, financial and business analyses and compilations and studies, unless those information becomes generally available to the public or is becomes available to the Committee on a non-confidential basis; and (b) communications among the Committee members, including information regarding specific positions taken by Committee members and communications among or between Committee members and Official Committee professionals. In addition, the Information Procedures will not authorize the Committee to provide any creditor or other entity with any information subject to attorney-client privilege or the attorney work product doctrine. KCC as Web site Administration Agent In order to establish and maintain the Committee Web site in an efficient manner, the Committee seeks to retain Kurtzman Carson Consultants LLC as its Web site administration agent. As Kurtzman is already serving as the Debtors' notice, claims and soliciting agent, the Committee represents that having Kurtzman serve as its Web site administration agent will create efficiencies in disseminating information to the unsecured creditors and cost saving to the Debtors' estates. Within five days of the creation of the Committee Web site, the Committee will provide notice of Information Procedures to those parties listed in the Debtors' creditor matrix maintained by Kurtzman. Kurtzman will be paid for its services as Web site Administration Agent based on the firm's standard hourly rates: Services Rate/Hour -------- --------- Clerical $45 to $65 Project Specialist $80 to $140 Consultant $165 to $245 Senior consultant $255 to $275 Senior Managing Consultant $295 to $325 Technology/Programming Consultant $145 to $195 Weekend, holidays, and overtime Waived Kurtzman will also be paid for its necessary and actual expenses and supplies. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corp. and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Applies to Hire Crowell As Antitrust Counsel ---------------------------------------------------------- Pursuant to Sections 327(e) and 328 of the Bankruptcy Code, Visteon Corp. and its affiliates seek the U.S. Bankruptcy Court for the District of Delaware's authority to employ Crowell & Moring LLP as their special antitrust counsel nunc pro tunc to the Petition Date. The Debtors relate that they selected Crowell because of the firm's extensive experience and knowledge in antitrust and trade regulation practice, including civil litigation and investigations, mergers and acquisitions, criminal grand jury investigation and trials, and counseling on ways to manage antitrust risks in all manner of business transactions. The Debtors expect Crowell to continue to represent them in an anti-trust action entitled Emerson Elec., et al. v. Le Carbone S.A., et al., originally commenced in the U.S. District Court for the Eastern District of Michigan, and subsequently transferred to the U.S. District Court for the District for the District of New Jersey. The Emerson plaintiffs, including Visteon Corporation, allege that the defendants engaged in a worldwide conspiracy, the purpose and effect of which was to fix, raise, maintain, and stabilize prices, and to allocate markets and customers for electrical carbon products sold in the United States in violation of Section 1 of the Sherman Act, 15 U.S.C. Visteon Corporation and the other Emerson plaintiffs sought to recover damages for the alleged overcharges. The Debtors intend to pay Crowell a contingent fee of 30% of any amount that is recovered by Visteon Corporation. The Debtors also intend to reimburse the firm for its pro rata share of certain actual and necessary expenses or fees incurred. The Debtors add that they ask Crowell to undertake specific matters beyond the scope of its responsibilities. Jerome A. Murphy, Esq., at Crowell & Moring LLP, in Northwest, Washington, D.C., assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. He maintains that Crowell does not hold or represent an interest adverse to the Debtors or their estates. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corp. and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) * Earnings Drop Worldwide as Unemployment Discourage Consumers -------------------------------------------------------------- Jack Kaskey and Melita Marie Garza at Bloomberg News report that earnings at such companies as Ford Motor Co. and ArcelorMittal may continue to decline in the next three months as the highest unemployment in a quarter-century keeps consumers from spending. Data compiled by S&P and Bloomberg say the year-over-year profit slide for Standard & Poor's 500 Index members may narrow to 21% from July through September, after a decline of an estimated 34% in the second quarter. Earnings, according to Bloomberg, may rise by year-end based on comparisons to late 2008, which was roiled by the meltdown in financial markets. Profits dropped more than 60% from October through December and about 33% in the first quarter of this year. Consumers in the U.S., the world's largest economy, remain concerned about jobs after unemployment reached a 26-year high in June, Bloiomberg stated, citing analysts and investors. Until Americans start spending again on cars, cell phones and clothes, most U.S., Asian and European companies may keep squeezing out costs, the report relates. * Hotels May Lead Commercial Real Estate in Defaults ---------------------------------------------------- Bloomberg News reported that Kenneth Rosen, a University of California economist, said that up to 20 percent of all loans to hotels may be in default by the end of next year. Mr. Rosen predicted that hotels would have the highest foreclosure rate among commercial real estate. A study by Real Capital Analytics Inc. shows that $17.9 billion in hotel properties were in foreclosure or default at the end of the second quarter, compared with $9 billion at the close of the first quarter. * No Jury Trial on Turnover Action, First Circuit Holds ------------------------------------------------------- In the case Braunstein v. McCabe (Case No. 08-1690), U.S. Court of Appeals for the First Circuit in Boston ruled on June 26 that a turnover action brought by a bankruptcy trustee doesn't entitle the defendant to a jury trial. The Circuit Court said that its opinion is the first Court of Appeals ruling on the issue. The Boston appellate court said that a majority of district and bankruptcy courts hold there is no right to a jury. The First Circuit in Boston analyzed the Supreme Court's 1989 opinion Granfinanciera SA v. Nordberg, where a fraudulent transfer action involved equitable claims where there is no right to a jury trial based on precedent going back to English common law. The Circuit concluded that a turnover action is also equitable in nature. It said that a turnover action is a "judicial innovation by which the court seeks efficiently and expeditiously to accomplish ends prescribed by statute, which, however, left the means largely to judicial ingenuity." While the Circuit Court upheld the lower courts in holding there was no jury trial right, the appeals court reversed the district court and concluded that major repairs on a houseboat weren't in the ordinary course of business. * Prime Mortgage Delinquencies Rise Sharply in 2009 --------------------------------------------------- Delinquencies on prime mortgages climbed to 2.9% as of March 31, compared with 1.1 percent one year before, Bill Rochelle at Bloomberg News said, citing a government report. According to the report, first-time foreclosure filings were up 22% between the fourth quarter of 2008 and the first quarter of 2009. * Unemployment Rate Climbed to 9.5% in June ------------------------------------------- The unemployment rate in June climbed to 9.5% from 9.4% the month before. "When this administration took office, the economy was shedding jobs at a rate of 700,000 per month. This past June our economy lost 467,000 jobs, bringing the total number of jobs lost since this recession began to 6.5 million. The overall unemployment rate increased to 9.5 percent," U.S. Labor Secretary Hilda L. Solis said. The unemployment level in June is more than forecast and more than the 322,000 decline in May, Bloomberg's Bill Rochelle said. "The department has released more than $57 million in National Emergency Grants to help communities cope with mass layoff events and other emergencies," Ms. Solis added. "We additionally have released $1.7 billion in incentive payments to states that update their unemployment insurance eligibility requirements so that more workers - including recent entrants to the workforce and part-time workers - can access benefits. So far 25 states and the District of Columbia have qualified for these payments. "As the administration's policies take hold, there are signs that the economy is gaining strength. Consumer confidence is rising, and the housing and financial markets are stabilizing," Ms. Solis added. Unemployment is the highest since August 1983, Bloomberg said. * David J. Bell Joins Capstone Advisory Group --------------------------------------------- Capstone Advisory Group, LLC said David J. Bell has joined the firm. Mr. Bell specializes in providing financial restructuring and advisory services to creditors, companies, financial sponsors, 3rd parties, and other parties-in-interest in financially distressed matters. Prior to joining Capstone, Mr. Bell was a Managing Director in the Workout and Restructuring Group of Deutsche Bank. He had a twelve year career at Deutsche Bank, devoting substantially all of his time there working on financially distressed situations with a particular focus on assets in the Bank's global leveraged loan portfolio. Mr. Bell has extensive experience in leveraged syndicated lending situations, working with lender groups and distressed borrowers on complex matters as both an advisor and principal. He has provided expert testimony in bankruptcy court. From 1990 through 1997, Mr. Bell was a senior member of Policano & Manzo. During this time he represented various parties in many cases, notable matters including The Circle K Corporation, Camelot Music, Inc., The Grand Union Co., Cumberland Farms, Smith Corona Corp., Eli S. Jacobs, Donald J. Trump, and JWP, Inc. As a banker for Deutsche Bank, Mr. Bell was the senior officer responsible for a multitude of distressed loan situations including Atlas Air Worldwide Holdings, Worldcom, Boston Chicken, Xerox, Comdisco, Finova Capital Corp., Encompass Services, Wellman, Inc., and The Grand Union Co. Mr. Bell holds a BS in Accounting from Villanova University and an MS with a concentration in Taxation from Seton Hall University. He attended New York University and completed graduate course work in the Stern School of Business MBA program. Mr. Bell is a Certified Public Accountant and an NASD licensed Registered Representative. He is a member of the New Jersey Society of Certified Public Accountants, the American Institute of Certified Public Accountants and the Risk Management Association. On the Net: http://www.capstoneag.com * Wachtell Lipton Doubles Merger Work Despite Fall in Deals Volume ------------------------------------------------------------------ Lindsay Fortado at Bloomberg reports that Wachtell, Lipton, Rosen & Katz was the top legal adviser on mergers and acquisitions for the first half of 2009 after advising on deals worth double those it did a year ago. The firm, co-founded by Martin Lipton, who created the "poison- pill" takeover defense, advised buyers, sellers or targets on $150 billion in deals this year, up from $70 billion at the same time last year, cornering a 20% share of the global M&A market. Deal volume has fallen 44 percent this year to $759 billion, according to data compiled by Bloomberg. According to Ms. Fortado, Wachtell is advising on three of the 10 largest deals in the first half, including Wyeth in its $64 billion takeover by Pfizer Inc., the largest deal of the year, and Schering-Plough Corp. in its acquisition by Merck & Co. for $47 billion, the second-largest. Six of the top 10 law firms for 2009 are working on Pfizer's acquisition of Wyeth, and four are working on Merck's takeover of Schering-Plough. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Stock- Total Total holders Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------- ------ ABSOLUTE SOFTWRE ABT CN 107 (7) 24 AFC ENTERPRISES AFCE US 131 (33) 2 AMER AXLE & MFG AXL US 2,072 (452) 64 AMR CORP AMR US 24,518 (3,108) (3,545) ARBITRON INC ARB US 189 (3) (22) ARVINMERITOR INC ARM US 2,873 (719) 278 AUTOZONE INC AZO US 5,296 (45) (527) AVATAR HOLDINGS AVTR US 585 0 N.A. BLOUNT INTL BLT US 499 (43) 175 BOARDWALK REAL E BEI-U CN 2,318 (5) N.A. BOARDWALK REAL E BOWFF US 2,318 (5) N.A. BOEING CO BA US 55,339 (509) (2,160) BOEING CO BAB BB 55,339 (509) (2,160) BP PRUD BAY-RTU BPT US 9 8 0 BRIGHAM EXPLOR BEXP US 365 2 17 BURCON NUTRASCIE BU CN 4 3 2 CABLEVISION SYS CVC US 9,551 (5,349) (367) CENTENNIAL COMM CYCL US 1,413 (992) 148 CENVEO INC CVO US 1,501 (221) 163 CHENIERE ENERGY CQP US 1,975 (408) 79 CHOICE HOTELS CHH US 333 (146) (10) CLOROX CO CLX US 4,464 (309) (866) CYTORI THERAPEUT CYTX US 27 (5) 12 DELTEK INC PROJ US 191 (48) 42 DISH NETWORK-A DISH US 7,063 (1,666) (422) DOMINO'S PIZZA DPZ US 473 (1,396) 99 DUN & BRADSTREET DNB US 1,614 (785) (176) EINSTEIN NOAH RE BAGL US 168 (11) (52) ENERGY COMPOSITE ENCC US 0 0 0 EPICEPT CORP EPCT SS 12 (5) 4 EXELIXIS INC EXEL US 355 (88) 53 EXTENDICARE REAL EXE-U CN 1,833 (51) 98 FORD MOTOR CO F US 207,270 (16,476) 12,631 FORD MOTOR CO F BB 207,270 (16,476) 12,631 FX ENERGY INC FXEN US 38 7 7 GARTNER INC IT US 948 4 (223) GENTEK INC GETI US 430 (8) 102 GLG PARTNERS INC GLG US 345 (382) 101 GLG PARTNERS-UTS GLG/U US 345 (382) 101 GOLD RESOURCE CO GORO US 9 9 7 HALOZYME THERAPE HALO US 68 3 52 HEALTHSOUTH CORP HLS US 1,921 (656) (53) HERMAN MILLER MLHR US 767 8 242 HOLLY ENERGY PAR HEP US 469 0 (6) IDENIX PHARM IDIX US 96 9 50 IMAX CORP IMX CN 226 (98) 19 IMAX CORP IMAX US 226 (98) 19 IMS HEALTH INC RX US 2,026 4 328 INCYTE CORP INCY US 189 (256) 123 INTERMUNE INC ITMN US 193 (82) 121 IPCS INC IPCS US 545 (41) 62 JOHN BEAN TECH JBT US 559 (6) 78 JUST ENERGY INCO JE-U CN 535 (692) (358) KNOLOGY INC KNOL US 635 (52) 25 LINEAR TECH CORP LLTC US 1,491 (288) 995 LIONS GATE LGF US 1,667 (8) (819) LOGMEIN INC LOGM US 40 4 0 MAP PHARMACEUTIC MAPP US 78 4 32 MAXLIFE FUND COR MXFD US 0 0 0 MEAD JOHNSON-A MJN US 1,707 (897) 380 MEDIACOM COMM-A MCCC US 3,700 (463) (281) MEDIDATA SOLUTIO MDSO US 72 (13) (17) MEDIVATION INC MDVN US 211 0 128 MODAVOX INC MDVX US 5 2 (1) MOODY'S CORP MCO US 1,802 (919) (482) NATIONAL CINEMED NCMI US 604 (514) 89 NAVISTAR INTL NAV US 9,656 (1,447) 1,784 NPS PHARM INC NPSP US 200 (225) 87 NYMOX PHARMACEUT NYMX US 0 (1) 0 OCH-ZIFF CAPIT-A OZM US 1,821 (177) N.A. OVERSTOCK.COM OSTK US 136 (4) 33 PALM INC PALM US 643 (108) 11 PDL BIOPHARMA IN PDLI US 219 (422) 79 PERMIAN BASIN PBT US 10 0 9 PETROALGAE INC PALG US 5 (23) (7) POTLATCH CORP PCH US 917 0 N.A. QWEST COMMUNICAT Q US 19,711 (1,164) (344) REGAL ENTERTAI-A RGC US 2,563 (246) (78) RENAISSANCE LEA RLRN US 52 (3) (11) REVLON INC-A REV US 784 (1,095) 103 SALLY BEAUTY HOL SBH US 1,433 (702) 389 SANDRIDGE ENERGY SD US 2,670 (114) 118 SEMGROUP ENERGY SGLP US 349 (124) 23 SIGA TECH INC SIGA US 7 (6) (3) SOLARWINDS INC SWI US 91 (40) 23 SONIC CORP SONC US 821 (43) 26 STANDARD PARKING STAN US 231 0 (15) STEREOTAXIS INC STXS US 53 (4) 3 SUCCESSFACTORS I SFSF US 162 (7) 0 SUN COMMUNITIES SUI US 1,197 (68) N.A. TALBOTS INC TLB US 999 (184) (28) TAUBMAN CENTERS TCO US 2,922 (276) N.A. TENNECO INC TEN US 2,742 (304) 272 THERAVANCE THRX US 214 (144) 152 UAL CORP UAUA US 19,100 (2,655) (2,348) UNITED RENTALS URI US 3,976 (56) 266 UNIVERSAL ENERGY UEG CN 417 2 (17) VECTOR GROUP LTD VGR US 683 5 44 VENOCO INC VQ US 730 (107) 33 VERIFONE HOLDING PAY IT 843 (107) 33 VERIFONE HOLDING PAY US 843 (14) 299 VERIFONE HOLDING VF2 GR 843 (14) 299 VIRGIN MOBILE-A VM US 323 (14) 299 WALTER INVESTMEN WAC US 12 (281) (141) WARNER MUSIC GRO WMG US 4,256 (44) N.A. WEIGHT WATCHERS WTW US 1,087 (110) (394) WR GRACE & CO GRA US 3,726 (848) (313) ZYMOGENETICS INC ZGEN US 279 (374) 892 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Ma. Theresa Amor J. Tan Singco, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission **