/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090715.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, July 15, 2009, Vol. 13, No. 194 Headlines ABITIBIBOWATER INC: Canada Court OKs Revised Securitization Deal ABITIBIBOWATER INC: Courts Approves $360 Million of DIP Financing ABITIBIBOWATER INC: Court Approves Cash Collateral Use ABITIBIBOWATER INC: EDC Injects $42.1 Million to DIP Facility ABITIBIBOWATER INC: Files Proposed Cross-Border Protocol ABITIBIBOWATER INC: U.S. Court OKs Amended Receivables Agreement ACCREDITED HOME: Can Implement Severance Policy for Employees ALASKA LODGES: Case Summary 9 Largest Unsecured Creditors ALLIS-CHALMERS ENERGY: S&P Raises Corporate Credit Rating to 'B-' AMERICAN ACHIEVEMENT: Releases Fiscal Third Quarter Results AMERICAN INT'L: Lead Bidders for AIG Investments Drop Out AMERICAN NATURAL: Increases Offering to 66.67 Mil. Shares AMRYEN LLC: Case Summary & 6 Largest Unsecured Creditors ANEKONA W: Secured Lenders Consent to Commissioner's Use of Cash ANTONELLY PENA: Case Summary 5 Largest Unsecured Creditors APOLLO PROPERTY: Case Summary & 8 Largest Unsecured Creditors ARDEN VAN UPP: Case Summary 1 Largest Unsecured Creditor ASARCO LLC: Harbinger and Citigroup Favor Debtor Plan ASARCO LLC: Court Approves Abitibi Settlement ASARCO LLC: No Public Comment on Mineral Creek Deal With Govt. ATLAS ENERGY: S&P Assigns 'B+' Rating on $150 Mil. Senior Notes AURORA OIL & GAS: Seeks Court OK to Make Royalty Payments BABCOCK QUARTER HORSES: Case Summary & 20 Largest Unsec. Creditors BARN INC: Case Summary & 12 Largest Unsecured Creditors BASHAS' INC: Will Shut Down 10 Stores After Filing for Bankruptcy BASHAS' INC: Case Summary & 30 Largest Unsecured Creditors BEARD COMPANY: Dilworth Unit Raises $5,275,000 to Fund Project BERNARD MADOFF: Picard Taps Windels to Pursue Avoidance Actions BERNARD MADOFF: Picard Sues HSBC, Herald Fund for $578 Million BICENT POWER: Moody's Reviews Ba3 & B1 Lien Ratings BISON BUILDING: Has Until August 27 to File Schedules & Statements BLAINE HOSPITALITY LLC: Case Summary & 20 Largest Unsec. Creditors BRENDA SERSTAD: Case Summary 20 Largest Unsecured Creditors BRENNER ASSOCIATES: Case Summary 20 Largest Unsecured Creditors BUILDING MATERIALS: To Assume Davis Framing Contracts CABRINI MEDICAL: St. Vincent Wants Buildings, Awaits Creditors' OK CAPROCK HOLDINGS: S&P Affirms 'B' Corporate Credit Rating CARITAS HEALTHCARE: St. Vincent Wants Cabrini Buildings CARLOS AYALA: Case Summary & 8 Largest Unsecured Creditors CASTLE KEY: AM Best Downgrades Allstate's FSR to 'B-' CHARITABLE LEADERSHIP: Moody's Junks Rating on $51.7 Mil. Bonds CHARTER COMM: Shareholder Herb Lair Sues Paul Allen CHINA HEALTH: Net Loss Widens t $2.7-Mil. for Fiscal Year 2008 CIT GROUP: Liquidity Concerns Prompt S&P to Junk Ratings CIT GROUP: Moody's Downgrades Senior Unsecured Rating to 'B3' CIT GROUP: Default Poses Risks to 1,881 Rated CDOs, Says S&P COACH AMERICA: Moody's Changes Outlook to Stable; Keeps B3 Rating COACH AMERICA: S&P Keeps B- Corp. Credit Rating; Outlook Positive COACHMEN INDUSTRIES: Retirement Plan Files Annual Report on 11-K COLLEEN INC: Bankr. Court Abstains from Non-Debtor Dispute COOPERATIVE BANKSHARES: Nasdaq to Delist Stock Effective July 20 COREL CORP: Management Eyes Prepaying Portion of Term Loan Debt COREL CORP: Swings to $4,125,000 Net Loss in 2nd Quarter 2009 CORUS BANKSHARES: Starwood Capital to Bid on Assets, Says WSJ COYOTES HOCKEY: Wayne Gretzky Agrees to Submit Financial Records COYOTES HOCKEY: Court Dumps Plea to Question Jerry Reinsdorf COYOTES HOCKEY: NHL to Testify About Bid Withdrawals CRUCIBLE MATERIALS: To Take $2.5 Million in Employee Trust DBSD NORTH AMERICA: Revises Plan to Address Objections DBSI INC: Judge Walsh Slows Potential Race to the Courthouse DEJOUR ENTERPRISES: Liquidity Risks Raise Going Concern Doubt DELPHI CORP: Asks for Court Nod to MDL Settlement Modifications DELPHI CORP: Enters Into Further Amendments to JPM DIP Loans DELPHI CORP: Fiduciary Counselors Want Claims Estimated at $227MM DELPHI CORP: Judge Gerber OKs GM Purchase of Delphi Assets DELPHI CORP: Unions, Other Parties Object to Modified Plan DELPHI CORP: Wants Exclusive Plan Period Extended to Sept. 30 DETROIT PUBLIC: May File for Bankruptcy to Cut Costs DIAL-A-MATTRESS: Blames Woes on Stores & Clash in Management DONALD BARUCH: Voluntary Chapter 11 Case Summary DYNAMOTIVE ENERGY: Net Loss Rises to $1.6MM in First Quarter EAGLE CREEK: Court Says No to Substantive Consolidation EDDIE BAUER: Bidders May Include Iconix, Hilco, Gordon Bros. EIGHTH AVENUE VENTURE: Case Summary & 19 Largest Unsec. Creditors EPIX PHARMA: Delisting Cues End of Kingsbridge Investment Deal EPIX PHARMA: Repurchases 3% Notes Due 2024 Held by Citi, Loomis FINN NICKEL: Initiates Voluntary Bankruptcy Proceedings FITNESS MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors FLEETWOOD ENTERPRISES: Has $28.9-Mil. Manufactured Housing Deal FLEMING ISLAND MEDICAL: Case Summary & 2 Largest Unsec. Creditors FLYING J: Merger Deal Allows Full Recovery to Creditors FONTAINEBLEAU: Banks Slam Lawsuit, Say Debtors Breached Pacts FONTAINEBLEAU: Court Extends Cash Collateral Use to Aug. 6 FONTAINEBLEAU: Las Vegas LLC's Schedules of Assets & Debts FONTAINEBLEAU: Las Vegas LLC's Statement of Financial Affairs FONTAINEBLEAU: Requests Termination of Convention Center Lease FORUM HEALTH: Pension Plan Underfunded by $207,300,000 FRANCHI EQUIPMENT: Files for Chapter 11 Bankruptcy Protection FRONTIER AIRLINES: Court Approves Republic-Led Auction for Biz. FRONTIER AIRLINES: Court OKs Entry of Bombardier Plane Financing GENERAL GROWTH: Court Directs Payments to Deutsche Bank GENERAL GROWTH: Intends to File Schedules by August 31 GENERAL GROWTH: Proposes to Decide on All Leases by Nov. 12 GENERAL GROWTH: Wants Open Ended Deadline to Remove Civil Actions GENERAL GROWTH: Wants Plan Filing Deadline Moved to February 2010 GENERAL MOTORS: Beijing Sees Opel as Global Stepping Stone GENERAL MOTORS: In Talks for GM Daewoo Financing GENERAL MOTORS: In Talks on Providing DIP Loans to Visteon GENERAL MOTORS: No Deal Yet With eBay for New GM Auto Auctions GENERAL MOTORS: Rejects Promotional Deals & Supply Contracts GENERAL MOTORS: RHJ in Talks with GM Over Stake in Opel GENERAL MOTORS: Six Directors Step Down From Old GM GENERAL MOTORS: Toyota May Close Abandoned Joint Venture GJ DEVELOPMENT: Case Summary & 10 Largest Unsec. Creditors GLASS WHOLESALERS: BofA to Sell Assets at July 23 Public Auction GOLDEN LAND: Case Summary 2 Largest Unsecured Creditors GREDE FOUNDRIES: Conway Del Genio Staff Is CRO GREDE FOUNDRIES: Wants More Time to File Schedules & Statements GREEK CATHOLIC UNION: AM Best Affirms "cc" Credit Rating HALLWOOD ENERGY: Can Use $140,000 of FEI Shale Cash Collateral HAWAII MEDICAL: Court Denies Plea to Extend Plan Exclusivity HAWAII SUPERFERRY: Guggenheim Wants Parent Case Dismissed HAYES LEMMERZ: Aims to Force Purchase of Georgia Plant HAYES LEMMERZ: Stahl Cowen Retained by Retirees' Committee HCA INC: Files Prospectus for BofA, Merrill Sale of Securities HEARTHSTONE - MLC: Voluntary Chapter 11 Case Summary HEMIWEDGE INDUSTRIES: Delinquent Reporting Cues OTC Removal Notice HOMER CITY: S&P Downgrades Rating on $237 Mil. Bonds to 'BB-' IMAX CORP: Appoints Gary Moss as COO Effective July 20 INTERMET CORP: Court Approves Liquidation Plan, Sale to Revstone JAMES MCREYNOLDS: Case Summary & 20 Largest Unsecured Creditors JOHN MARTIN: Case Summary & 7 Largest Unsecured Creditors KAREN COBB: Case Summary & 13 Largest Unsecured Creditors KB TOYS: Toys "R" Us to Shield Intellectual Property Assets LEHMAN BROTHERS: PwC Recovers $8.7-Bil. for U.K. Units LJ FOOD DISTRIBUTION: Case Summary & 20 Largest Unsec. Creditors LKQ CORP: S&P Puts 'B' Rating on New Universal Shelf Registration M & M JEWELERS: Case Summary & 9 Largest Unsecured Creditors MAGNACHIP SEMICONDUCTOR: Court Establishes July 29 Bar Date MAGNACHIP SEMICONDUCTOR: July 30 Disclosure Statement Hearing Set MAGNACHIP SEMICONDUCTOR: May Access Cash Collateral Until Sept 30 MAGNACHIP SEMICONDUCTOR: Section 341(a) Meeting Set for July 29 MAGNA ENTERTAINMENT: Wants to Sell Austria Racetrack for EUR6.5MM MARC DREIER: Sentenced to 20 Yrs. in Prison; Must Pay $387.7MM MERISANT WORLDWIDE: Denies Non-Compete Breach in Heartland Pact MERRILL CORPORATION: Amendments and Waivers Cue S&P's Junk Ratings MICROMET INC: Reinhardt Resigns as SVP and Chief Medical Officer MORRIS PUBLISHING: Forbearance Period Extended to July 31 NATIONAL PROCESSING: Moody's Gives Neg. Outlook; Keeps 'B3' Rating NEW ORLEANS SEWERAGE: S&P Raises Rating on Debt to 'BB' NORWOOD PROMOTIONAL: Lenders Want Prompt Payment of $100-Mil. OPUS WEST: Proposes Pronske & Patel as Conflicts Counsel OPUS WEST: Hires BMC Group as Notice and Claims Agent OPUS WEST: Taps Phoenix Capital as Chief Restructuring Officer ORDEAN WICKA: Case Summary & 20 Largest Unsecured Creditors PHILADELPHIA GAS: S&P Puts Rating on Gas Revenue Refunding Bonds PHOENIX WORLDWIDE: Wants Schedules Filing Extended Until July 22 PILGRIM'S PRIDE: 135 Trade Creditors Sell $2,247,615 in Claims PILGRIM'S PRIDE: Chicken Plants Dispute Sent to Mediation PILGRIM'S PRIDE: Court OKs Airgas Adequate Protection Deal PILGRIM'S PRIDE: Creditors Suit Vs. CoBank Tolled Until Aug. 3 PLIANT CORP: Wants Ruling Allowing Apollo Plan Suspended PMT INVESTMENTS: Voluntary Chapter 11 Case Summary PORTER HAYDEN: Asbestos Insurance Assigned to Trust PORTRAIT CORP: Bankr. Ct. Abstains from Postconfirmation Dispute PREFERRED INSURERS: AM Best Gives B+ for Financial Strength PRIZE PROPERTIES: Voluntary Chapter 11 Case Summary PROPEX INC: Court Sets July 31 Administrative Claims Bar Date PROPEX INC: Court to Hold Hearing on Disc. Statement Today PROPEX INC: Fabrics Estate Files 1st Amended Plan of Liquidation QMG HOLDINGS: S&P Withdraws 'CCC+' Corporate Credit Rating QUAIL RIDGE: Sent to Chapter 7 Bankruptcy by Four Creditors RAAD ENTERPRISES: Case Summary & 5 Largest Unsecured Creditors RATHGIBSON INC: Wilmington Trust Only a DIP Agent, Not Lender REAL MEX: Moody's Changes Ratings on $130 Mil. Notes to 'B3' REGAL CINEMAS: Fitch Assigns 'B+/RR4' Rating on $400 Mil. Notes ROCKY MOUNTAIN: Defaults on Bond Payments; Files for Ch 11 Bankr. ROME CORP: Debtor Has Title to Propane Tank Under Vt. UCC ROUNDY'S SUPERMARKETS: S&P Affirms 'B' Corporate Credit Rating ROYAL WEST: Drew Dillworth Appointed as Receiver SAFETY-KLEEN SYSTEMS: S&P Withdraws 'BB-' Corporate Credit Rating SCANCELLI PRINTS: Case Summary & 20 Largest Unsecured Creditors SCOTT ROSEBERRY JEWELL: Case Summary & 20 Largest Unsec. Creditors SENCORP: Sells Assets Quickly to Wynnchurch Capital SERGIO GARCIA: Case Summary & 20 Largest Unsecured Creditors SINCLAIR BROADCAST: S&P Downgrades Corporate Credit Rating to 'B-' SOBER LIFESTYLE: Case Summary & 11 Largest Unsecured Creditors SOUTHEAST REAL ESTATE: Case Summary & 20 Largest Unsec. Creditors SYNCORA GUARANTEE: BCP to Waive Condition to RMBS Exchange Offer TOUSA INC: Trial to Void Prepetition Lenders' Liens Begins TRIBUNE CO: May Send Cubs to Chapter 11 to Complete Sale TRONOX INC: Kendall Files Class Action Against Executives TUSCANY RESERVE: Has $23.9-Mil. Secured Debt to Compass Bank US SHIPPING: Reaches Pact With Creditors, Awaits Court Ruling VALIDUS HOLDINGS: AM Best Places Ratings Under Review VINEYARD CHRISTIAN: Can Sell MPAC to City of Malibu for $15MM VISTEON CORP: Court Approves Rothschild as Investment Banker VISTEON CORP: Sonwil Distribution Appeals Lease Rejection VUANCE LTD: Fahn Kanne Raises Going Concern Doubt WALTER INVESTMENT: Files Financial Reports to Meet NYSE Notice WBO ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors WCI COMMUNITIES: Creditors, Insurers Object to Disc. Statement WR GRACE: Confirmation Schedule Amended Due to Objections WR GRACE: Court Approves Venable as Counsel for GPDS Suit WR GRACE: Gets Court Nod for Minimum Payments for Pension Plans WR GRACE: Libby Claimants Object to Plan Confirmation WR GRACE: Reaches Settlement with Royal & Arrowood YOUNG BROADCASTING: 10 Stations May End Up in UBS's Arms * Consumer Confidence Falls to Lowest Since March * D&O Policy Doesn't Cover Suit for Creditor Benefit * Bankruptcy Filings at Springfield District Up 20% in May 2009 * International Airplane Manufacturing Deflates, Fairtheworld Says * Marc Sherman Joins A&M Dispute Analysis & Forensic Services * Upcoming Meetings, Conferences and Seminars ********* ABITIBIBOWATER INC: Canada Court OKs Revised Securitization Deal ---------------------------------------------------------------- The Honorable Mr. Justice Clement Gascon, J.S.C., of the Superior Court Commercial Division for the District of Montreal in Quebec, Canada, entered an order on June 15, 2009, approving the Amended and Restated Receivables Purchase Agreement among (1) Abitibi- Consolidated, Inc. and Abitibi Consolidated Sales Corporation or "the Abitibi Group" as Originators, (2) Abitibi Consolidated U.S. Funding Corp. and Donohue Group as Guarantors, (3) Citibank, as Agent, and (4) Barclays Capital Inc., as Syndication Agent. ACI and ACSC originate accounts receivables under an Amended and Restated Receivables Purchase Agreement with ACI Funding, Eureka Securitization, PLC, Citibank, Citibank, N.A., London Branch, as agent. The Amended and Restated Securitization Program was previously approved, on a final basis, by Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware on May 27, 2009. As previously reported, the CCAA Applicants noted that the most significant amendments to the existing Receivables Purchase Agreement under the Amended Securitization Program include: -- the naming of Citibank, N.A., as the successor agent; -- the revision of the calculation of the advance rate; -- the inclusion of covenants to require maintenance of credit insurance programs; and -- the modification of certain events of termination. In this regard, the Canadian Court held that these documents, among other ancillary documentation, in connection with the implementation and effectuation of the Amended Securitization Program are "ratified and approved": (a) The Amended and Restated Purchase and Contribution Agreement among ACI and ACSC as sellers and ACI Funding as purchaser; and (b) The Guaranty and Undertaking Agreement among ACI, Citibank and various guarantors. Mr. Justice Gascon has authorized ACI to perform under financing agreements, including Undertaking Agreements, a Deposit Account Control Agreement, a Blocked Account Agreement, a Pledged Deposit Accounts Agreement, a Third Amended and Restated Four Party Agreement, an Intercompany Agreement and an Accounts Receivables Policy. The Canadian Court has also authorized ACI to use the proceeds of the arrangements contemplated by the Amended Securitization Program in the operation of their business. ACSC is directed to pay fees and expenses of ACCC as borrower, ACI as guarantor, other guarantors, a host of lenders and Wells Fargo Bank, N. A., as term agent under the Credit and Guaranty Agreement dated as of April 1, 2008, which amounts will be set off and compensated without regard to reciprocity or solidarity against postpetition amounts owed by ACSC to ACI or ACCC. Mr. Justice Clement clarified that the consummation of the transactions contemplated by the Amended Securitization Program does not provide a basis for substantive consolidation of the assets and liabilities of ACI and ACSC. ACI's transfers of Receivables and Securities will be valid and enforceable against all persons. Mr. Justice Gascon held that the Ad Hoc Committee of the Senior Secured Noteholders' objection to the approval of the Amended Securitization Program is "insufficient and unjustified under the circumstances." The Ad Hoc Committee asked the Canadian Court to rule that no payments should be made by ACI to Donohue Group for adequate protection expenditures. A full-text copy of the Canadian Court order approving the Amended Securitization Program dated June 15, 2009, is available for free at: http://bankrupt.com/misc/ABHCCAA_June15SecuritizationORD.pdf CCAA Applicants Complete Amended Securitization Program AbitibiBowater Inc. related in a public statement that it has completed an amendment and restating of its existing accounts receivable securitization program for the Company's Abitibi- Consolidated subsidiary. The amended US$270 million program, which Citibank, N.A. and Barclays Capital Inc., led as joint lead arrangers, provides the Company with the liquidity necessary to conduct ongoing business operations during AbitibiBowater's restructuring and allows the previously court-authorized sale of receivables and related rights to continue. "Completing the amendment to this securitization program is an important milestone as we work through the stabilization period of the Company's restructuring process," stated David J. Paterson, President and Chief Executive Officer. "We appreciate the confidence shown by our financial partners as AbitibiBowater strives to emerge, as rapidly as possible, from the creditor protection filings a stronger, more sustainable organization." The Company had obtained an interim court order in the U.S. as well as a Canadian court order authorizing Abitibi-Consolidated to enter into an amended and restated securitization program. AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third- party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over- the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Courts Approves $360 Million of DIP Financing ----------------------------------------------------------------- Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware authorized AbitibiBowater Inc. and its affiliates to borrow and obtain extensions of credit up to $360,000,000, under a Senior Secured Superpriority Debtor-in-Possession Credit Agreement, dated as of April 21, 2009, with Fairfax Financial Holdings Ltd. and Avenue Investments, L.P., as initial lenders, and Law Debenture Trust Company of New York, as administrative and collateral agent. Judge Carey clarified that $154 million of the $360 million loan may be accessed upon further approval from the Bankruptcy Court. The Debtors may use the proceeds of the DIP Facility for (i) working capital, (ii) other general corporate purposes, (iii) payment of related transaction costs, fees and expenses, and (iv) costs associated with administration of the Debtors' cases. Judge Carey authorized the Debtors to pay all fees and expenses required under or related to the DIP Loan Documents as they become due, including agent fees, closing fees and exit fees, and reasonable fees and expenses of attorneys and other professionals. The Debtors are authorized and directed to grant the DIP Collateral Agent, subject to the Carve-Out, valid, enforceable and perfected security interests in and liens on all personal, real and mixed property of the U.S. Debtors, including (x) all intercompany debt, (y) 100% of the capital stock held by the Debtors in domestic subsidiaries and 65% of the capital stock held in their foreign subsidiaries, as immediately junior to valid, enforceable and perfected Liens upon the Cash Collateral pursuant to Section 364(c)(3) of the Bankruptcy Code. A full-text copy of the DIP Final Order is available for free at: http://bankrupt.com/misc/ABH_FinalORDDIP&CashColl.pdf The Bankruptcy Court's Final Order is consistent with the amended proposed order submitted by the Debtors, which provides that under the DIP Facility: -- Bowater Canada Finance Corporation will not be subject to any liens, DIP Superpriority Claims or Adequate Protection Claims; -- the Debtors are prohibited from transferring any Cash Collateral to BCFC; and -- BCFC will be deemed excluded from the "Bowater Debtors" and will not be a guarantor of the DIP Obligations. Canadian Court Recognizes U.S. Final DIP Order At the behest of the CCAA Applicants, Mr. Justice Gascon declared that the final order issued by Bankruptcy Judge Carey, authorizing the Debtors to enter into a Postpetition Credit Agreement "is recognized and given full force and effect in all provinces and territories of Canada" with respect to the CCAA Applicants. The U.S. Debtors are required to obtain the Recognition Order from the Canadian Court giving full force and effect of the Bankruptcy Court's Final DIP Order. Failure to comply with such requirement constitutes an event of default under the DIP Facility. About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Court Approves Cash Collateral Use ------------------------------------------------------ Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware authorized AbitibiBowater Inc. and its affiliates, on a final basis, to use cash collateral -- including cash maintained in deposit and securities accounts subject to prepetition control agreements -- and other collateral that is subject to prepetition liens under their prepetition credit facilities pursuant to Section 363(c) and (e) of the Bankruptcy Code. In accordance with Sections 361 and 363(e) of the Bankruptcy Code, these Prepetition Agents under the U.S. and Canadian Prepetition Credit Agreements are granted, for the benefit of the Prepetition Lenders, adequate protection to the extent of diminution in the value of their Prepetition Collateral: * Wachovia Bank, National Association as the Prepetition Agent under that Credit Agreement dated as of May 31, 2006, as amended, among Bowater, Bowater Alabama LLC, Bowater Newsprint South LLC and Bowater Newsprint South Operations LLC, as the guarantors and a host of lenders; and * The Bank of Nova Scotia as administrative agent under the Credit Agreement dated as of May 31, 2006, among Bowater Canada, as Canadian borrower, Bowater Alabama, Bowater Newsprint South Operations, Bowater Newsprint South LLC, and certain of the Canadian Guarantors, as guarantors, and a host of lenders. The net cash proceeds from the disposition of Prepetition Collateral -- other than proceeds of intercompany Claims, proceeds of accounts receivable and from the sale or disposition of inventory in the ordinary course and obsolete, worn-out or surplus equipment in an aggregate amount not greater than US$3,000,000 -- will not constitute Cash Collateral, the Court clarified. A full-text copy of the Final Cash Collateral Order is available for free at http://bankrupt.com/misc/ABH_FinalORDDIP&CashColl.pdf About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: EDC Injects $42.1 Million to DIP Facility ------------------------------------------------------------- Export Development Canada (EDC) announced mid June that it provided USD 42.1 million as part of a USD 270 million syndicated Debtor in Possession (DIP) facility for Abitibi Consolidated Inc. (Abitibi). "EDC and Abitibi have a longstanding relationship, so EDC was happy that it could help provide some much needed support at a critical time in its restructuring efforts," said Eric Siegel, President and CEO of EDC. The DIP will provide Abitibi with working capital financing to maintain on-going liquidity while under the Companies' Creditors Arrangement Act (CCAA) and Chapter 11 in the U.S. The transaction marks EDC's first participation in a syndicated DIP facility. "EDC has been a trusted partner for more than 40 years and its support of our risk management and financing programs is very much appreciated," said William Harvey, Senior Vice President and Chief Financial Officer of AbitibiBowater. EDC is Canada's export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC's knowledge and partnerships are used by more than 8,300 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, a recognized leader in financial reporting and economic analysis, and has been recognized as one of Canada's Top 100 Employers for eight consecutive years. About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Files Proposed Cross-Border Protocol -------------------------------------------------------- To ensure that the Chapter 11 cases and the CCAA Proceedings of AbitibiBowater Inc. and its debtor affiliates are coordinated to avoid inconsistent or duplicative activities, all parties are adequately informed of key issues in the Restructuring proceedings, the substantive rights of all parties are protected, and the judicial integrity of the Bankruptcy and Canadian Courts are preserved, the Debtors filed an amended request for the approval of the Cross-Border Protocol. Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that the Protocol has been established to harmonize and coordinate activities for the orderly and efficient administration of the restructuring proceedings of the Debtors in the Bankruptcy and Canadian Courts. The Amended Cross-Border Protocol essentially provides that: (1) the Bankruptcy and Canadian Courts may communicate with one another with respect to any procedural matter relating to the AbitibiBowater Restructuring Proceedings; (2) the Courts may contact each other to determine the appropriate process on issues of proper jurisdiction raised by interested parties in either of the Restructuring Proceedings; (3) the Courts may, but are not obligated to, coordinate activities in the Restructuring Proceedings with respect to any action, lawsuit, request, application or contested matters that may be determined in a single Court; and (4) the Courts may conduct joint hearings on issues in the Chapter 11 or CCAA Proceedings, as may be necessary. The Cross-Border Protocol also comes with provisions that relate to (i) the retention and compensation of professionals, (ii) procedures for resolving disputes, and (iii) the preservation of rights. The implementation of the Cross-Border Protocol does not provide that Bankruptcy and Canadian Courts, the Debtors, any creditor and any party-in-interest have approved or engaged in any infringement on the sovereignty of the United States or Canada, Mr. Greecher clarifies. About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: U.S. Court OKs Amended Receivables Agreement ---------------------------------------------------------------- Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware previously authorized AbitibiBowater, Inc., and its debtor affiliates to enter into the Amended and Restated Securitization Program, a "receivables purchase facility" among (1) Abitibi-Consolidated, Inc. and Abitibi Consolidated Sales Corporation or "the Abitibi Group" as Originators, (2) Abitibi Consolidated U.S. Funding Corp. and Donohue Group as Guarantors, (3) Citibank, as Agent, and (4) Barclays Capital Inc., as Syndication Agent. ACI and ACSC originate accounts receivables under an Amended and Restated Receivables Purchase Agreement with ACI Funding, Eureka Securitization, PLC, Citibank, Citibank, N.A., London Branch, as agent. Subsequently, the Court entered a final order on July 1, 2009, approving in connection with implementation of the Amended and Restated Securitization Program, these amended and restated receivables agreements as of June 16, 2009: (1) Amended and Restated Guaranteed Receivables Purchase Program among ACSC and ACI as Originators, Donohue Corp., as guarantors, and ACI Funding; (2) Amended and Restated Receivables Purchase Agreement or ARRPA, among ACI Funding, Eureka, Citibank, N.A., Citibank, N.A., London Branch, and ACI and ACSC in their capacity as Subservicers and Originators; (3) Amended and Restated Purchase and Contribution Agreement or ARPCA among ACI and ACSC as Sellers and ACI Funding as Purchaser, through which the Originators may sell or contribute Receivables; and (4) other ancillary documentation as may be required or desirable in connection with the entry into, and implementation and effectuation of the Amended and Restated Receivables Purchase Program. The Court further permitted the Parties to perform their obligations under certain Financing Agreements under each of the Amended and Restated Receivables Agreements, consisting of (i) certain Undertaking Agreements, (ii) a Deposit Account Control Agreement, (iii) a Blocked Accounts Agreement, (iv) a Pledged Deposit Accounts Agreement, (v) a Second Amended and Restated Four Party Agreement for Sold Accounts, (vi) an Intercompany Agreement, (vii) Accounts Receivable Policy (Shipments) General Terms and Conditions, and (viii) Waiver Agreements. The Final Order essentially covers the terms of an Interim Order entered by Judge Carey on June 11, 2009, a full-text copy of which is available for free at: http://bankrupt.com/misc/ABH_June11ReceivablesInterimOrder.pdf The Debtors filed these Amended and Restated Receivables Agreements as supplemental exhibits to substantiate their request for the approval of the Agreements: * http://bankrupt.com/misc/ABH_2ndAmendedARCPA.pdf * http://bankrupt.com/misc/ABH_2ndAmendedRPA.pdf * http://bankrupt.com/misc/ABH_Guaranty&UndertakingPact.pdf Judge Carey also authorized the Guarantors under the Amended and Restated Receivables Purchase Program to guarantee in full all obligations of ACI Funding and to execute a guarantee in favor of Citibank, N.A., London Branch, as Agent. ACI Funding is also authorized to pay certain fees in consideration of the services of the Agent and the Banks and Barclays Capital, Inc., as Syndication Agent in structuring, negotiating and syndicating the Amended and Restated Receivables Purchase Program. The Originators may use the proceeds of the arrangements contemplated by the Financing Agreements in the operation of the Debtors' businesses. Judge Carey authorized the use of collateral, including "cash collateral" under Section 363 of the Bankruptcy Code, which is subject to valid and perfected liens in favor of the Wells Fargo Bank, N.A., as successor-in-interest to Goldman Sachs Credit Partners L.P., in its capacity as administrative agent and collateral agent, pursuant to that certain Credit and Guaranty Agreement dated April 2008 among ACCC as borrower, ACI and Donohue Group as guarantors and a host of lenders. As adequate protection, Goldman Sachs is granted replacement liens and superpriority claims, subject to the Carve-Out, to the extent of any postpetition diminution in the value of ACCC Term Lenders' interest in the Prepetition Collateral. The Debtors forever waive and release any and all claims against Goldman Sachs arising from or related to any acts or transactions. In accordance with Section 364(0)(1) of the Bankruptcy Code, the Guaranty Obligations, the Agent Obligations and the Receivables Obligations will constitute allowed senior administrative expense claims against each of the Guarantors with priority over any and all administrative expenses, adequate protection claims, diminution claims and all other claims against the Guarantors, other than the Adequate Protection Claims of the ACCC Term Lenders. Neither ACI Funding, the Agent, the Syndication Agent or any bank will be deemed to act as "responsible person" or "owner or operator" of the Debtors' operations or management, the Court ruled. Any objections with respect to Interim Order that have not been withdrawn, waived or settled, and ail reservations of rights, are denied and overruled, Judge Carey ruled. A full-text copy of the Receivables Final Order is available at no charge at: http://bankrupt.com/misc/ABH_July1ReceivablesFinalOrder.pdf Debtors & Term Lenders Stipulate On Adequate Protection To recall, the ACCC Term Lenders pointed out that the Debtors have failed to establish that the requirements of Section 363(f) of the Bankruptcy Code have been met to justify sales of Accounts Receivables, free and clear of the Term Loan Lenders' liens and security interests. The ACCC Term Lenders also said the Debtors have not offered to provide "adequate protection" sufficient to protect the Term Lenders' interests against diminution in the value of their collateral resulting from the use of Cash Collateral in relation to the Amended and Restated Securitization Program. Accordingly, to resolve the matter, the Debtors and the Term Lenders entered into a Court-approved stipulation that provides for these specific forms of adequate protection to the ACCC Term Loan Agent, on its behalf and on behalf of the Term Lenders: (1) First Priority Liens on, and security interests in, all postpetition assets of the Donohue Group of the same nature, scope and type as the assets that comprise the U.S. Prepetition Collateral; (2) First Priority Liens on, and security interests in, all unencumbered assets of the Donohue Group; and (3) Administrative Priority Claims against the Donohue Group under Section 503(b) of the Bankruptcy Code, which will be (i) a claim equal to the amount of (x) the Prepetition Interest Claim plus (y) accrued Interest claim, and (ii) a claim equal to the amount of the Diminution Claim during the Adequate Protection Period. The Donohue Group will pay all reasonable fees and expenses of the ACCC Term Loan Administrative Agent and the ACCC Term Loan Collateral Agent under the ACCC Term Loan. The parties agree that the forms of Adequate Protection will be granted to the ACCC Term Lenders for the period from and including the Petition Date through June 1, 2009, or at a later date on which the Securitization Program is refinanced, replaced or refunded. About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ACCREDITED HOME: Can Implement Severance Policy for Employees ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted Accredited Home Lenders Holding Co. and its affiliates permission to implement a severance policy for employees. Under the severance policy, no employee will receive a payment that exceeds 10 times the amount of the average severance pay given to the Debtors' non-management employees over the previous calendar year. Three officers would be eligible for a severance payment of five months' salary if they remain with the Debtors until the Debtors terminate their employment. Accredited Home Lenders Holding Co. -- http://www.accredhome.com/ -- is a mortgage banker servicing U.S. markets for conforming and non-prime residential mortgage loans operating throughout the U.S. and in Canada. Founded in 1990, the company is headquartered in San Diego. The Company was acquired by Lone Star Funds for $300 million in October 2007. Lone Star also owns Bruno's Supermarkets LLC and Bi-Lo LLC, two grocery retailers in Chapter 11. Accredited Home and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Del. Lead Case No. 09-11516). The Debtors selected Hunton & Williams LLP as Chapter 11 counsel. Pachulski Stang Ziehl & Jones LLP serves as co-counsel of the Debtors. Kurtzman Carson Consultants is the Debtors' claims agent. Roberta A. DeAngelis, acting United States Trustee for Region 3, has appointed three members to the official committee of unsecured creditors. The Debtors' assets range from $10 million to $50 million and its debts from $100 million to $500 million. ALASKA LODGES: Case Summary 9 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Alaska Lodges, Inc. dba Alaska's Fishing Unlimited Lodge 3713 42nd Avenue South St. Petersburg, FL 33711 Bankruptcy Case No.: 09-14966 Chapter 11 Petition Date: July 13, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Camille J. Iurillo, Esq. Iurillo & Associates PA 600 First Avenue North, Suite 308 St. Petersburg, FL 33701 Tel: (727) 895-8050 Fax: (727) 895-8057 Email: ciurillo@iurillolaw.com Total Assets: $3,146,712 Total Debts: $1,732,462 A list of the Company's 9 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb09-14966.pdf The petition was signed by Merrill F. Wood, president and director of the Company. ALLIS-CHALMERS ENERGY: S&P Raises Corporate Credit Rating to 'B-' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based Allis-Chalmers Energy Inc. to 'B-' from 'SD' (selective default). The outlook is negative. At the same time, S&P raised the issue-level rating on Allis- Chalmers' unsecured notes to 'B-' (the same as the corporate credit rating) from 'D'. S&P revised the recovery rating on this debt to '4' from '3' indicating expectations of average (30%-50%) recovery of principal in the event of a payment default. "The rating actions reflect S&P's reassessment of default risk and recovery prospects under the new capital structure," said Standard & Poor's credit analyst Amy Eddy. Allis-Chalmers purchased and retired about $75 million in face value of senior unsecured debt for cash consideration of approximately $46 million. The 'SD' corporate credit rating had reflected S&P's view that the exchange was distressed with the bondholders receiving a value significantly less than par. The new corporate credit rating reflects decreased interest expense due to the reduction in debt levels and the company's enhanced liquidity profile. However, in S&P's view the changes are relatively minor given the company's large debt levels and S&P remain concerned about weak industry fundamentals. Low natural gas prices prompted many exploration and production companies to significantly curtail capital spending, which has caused a severe drop-off in demand for oilfield services. S&P expects that poor industry conditions may exist for several quarters, resulting in low utilization and pricing pressure that could further erode profitability and cash flow. Pro forma for the recent recapitalization, S&P expects Allis- Chalmers' total funded debt to be approximately $529 million. Standard & Poor's considers the convertible preferred stock that Allis-Chalmers issued as part of the recapitalization to have minimal equity content. The instrument has some equity-like features in that the dividends can accumulate on the preferred shares for the first three years. Nonetheless, the entity that owns the preferred stock has an influential stake in the company. S&P's concern is that as an influential stakeholder, the entity can cause this instrument to be refinanced. The negative outlook reflects S&P's concern that continued weakness in core oilfield services markets over the near term could continue to pressure Allis-Chalmers' credit quality if industry conditions do not show signs of stabilizing (or improving) over the second half of the year. If liquidity deteriorates materially from current levels or if S&P expects it to violate its interest coverage covenant of 2x S&P could lower the rating. Stabilization of ratings at the current 'B-' level would necessitate a few quarters of strengthening equipment utilization, margins, and cash flow. AMERICAN ACHIEVEMENT: Releases Fiscal Third Quarter Results ----------------------------------------------------------- AAC Group Holding Corp. and American Achievement Corporation filed with the Securities and Exchange Commission their report on Form 10-Q for the third quarter ended May 30, 2009. American Achievement is an indirect wholly owned subsidiary of AAC Group Holding, each of which are separate public reporting companies. AAC Group Holding -- or Intermediate Holdings -- is a wholly owned subsidiary of American Achievement Group Holding Corp. -- Parent Holdings. On June 2, 2009, Intermediate Holdings became a wholly owned subsidiary of American Achievement Intermediate Holding Corp, a newly formed wholly-owned subsidiary of Parent Holdings. AAC Group Holding reported net income of $21,162,000 for the three months ended May 30, 2009, compared to $19,257,000 for the three months ended May 31, 2008. AAC Group Holding reported net income of $11,164,000 for the nine months ended May 30, 2009, compared to $5,231,000 for the nine months ended May 31, 2008. AAC Group Holding reported $462,788,000 in total assets and $448,829,000 in total liabilities at May 30, 2009. American Achievement reported net income of $25,242,000 for the three months ended May 30, 2009, compared to $23,538,000 for the three months ended May 31, 2008. It reported net income of $18,644,000 for the nine months ended May 30, 2009, compared to $12,560,000 for the nine months ended May 31, 2008. American Achievement reported $461,072,000 in total assets and $333,556,000 in total liabilities at May 30, 2009. American Achievement acknowledges it has a significant amount of indebtedness. On May 30, 2009, Intermediate Holdings had total indebtedness of $328,400,000, of which $131,500,000 was 10.25% senior discount notes, $150,000,000 was 8.25% senior subordinated notes and $46,900,000 was indebtedness under the existing senior secured credit facility. The Company says the Second Amendment to its Amended Senior Credit Facility modified the availability under the existing revolving facility from $40,000,000 to $25,000,000 and extended the term through March 25, 2011. The Company has $23,300,000 in available revolving loan borrowings under the Amended Senior Credit Facility as of May 30, 2009. The Company is currently in compliance with financial covenants in all of the agreements governing the outstanding indebtedness. The Company says interest accrued on the 10.25% senior discount notes in the form of an increase in the accreted value of the notes through October 1, 2008. Thereafter, cash interest on the 10.25% senior discount notes accrues and is payable semiannually in arrears on April 1 and October 1 of each year, at a rate of 10.25% per annum. The Company says initial interest payment of $6,700,000 was made on April 1, 2009. This payment was funded by AAC, and was accounted for as a capital distribution from AAC and reflected as a reduction of AAC's additional paid-in capital. At May 30, 2009, Parent Holdings had indebtedness in addition to the indebtedness at Intermediate Holdings and AAC of $120,600,000, of which $113,100,000 consisted of 12.75% Senior PIK Notes due October 1, 2012 -- Parent Holdings Notes -- and $7,500,000 consisted of mandatory redeemable series A preferred stock of Parent Holdings. Interest accrues on the Parent Holdings Notes at 16.75% per annum. Through April 2011, interest on the notes is payable in the form of additional notes semi-annually in arrears on April 1 and October 1 of each year. On October 1, 2011, and thereafter, interest will be payable in cash semi-annually in arrears April 1 and October 1 of each year. The Parent Holdings Notes mature on October 1, 2012. At maturity, Parent Holdings is required to repay the notes at a repayment price of 103.188% of the aggregate principal amount thereof, plus accrued and unpaid interest through the maturity date. The holders of the mandatory redeemable series A preferred stock of Parent Holdings are entitled to receive cumulative dividends at a rate of 14% per annum, when, as and if declared by the board of directors of Parent Holdings. The redemption obligation for the mandatory redeemable series A preferred stock of Parent Holdings matures in January 2013. Accumulated undeclared dividends at May 30, 2009, totalled $4,400,000. Cash Tender Offer On June 4, 2009, Parent Holdings commenced a cash tender offer to purchase any and all of its $110 million outstanding 12.75% senior PIK notes at an offer price of approximately $210.11 per $1,000 per principal amount of the notes. Payment for the notes that are purchased in the tender offer may be partially funded with cash borrowed by AAC under the Amended Senior Credit Facility and distributed to Parent Holdings. The Second Amendment to the Amended Senior Credit Facility allows AAC to make restricted payments to Parent Holdings in an amount not to exceed $15,000,000 for the purpose of repayment, redemption or repurchase of indebtedness of Parent Holdings and Intermediate Holdings. Payment for the notes that are purchased in the tender offer will be partially funded with proceeds of the sale of Series A Preferred Stock of American Achievement Intermediate Holding Corp., a newly formed subsidiary of Parent Holdings. "We expect that cash generated from operating activities and availability under the senior secured credit facility will be our principal sources of liquidity. Due to the current unfavorable economic environment, we expect continued softness in sales for the rest of this year and into next year. We expect our productivity initiatives and cost containment measures to partially offset the impact of lower sales on our operating income. We expect most of our net operating loss carryforward will be utilized by the end of fiscal year 2009, which will impact our future cash outflows for income taxes. Based on our current and planned level of operations, we believe our cash flow from operations, available cash on hand and available borrowings under the senior secured credit facility will be adequate to meet our liquidity needs for at least the next twelve months," the Company says. A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?3f1f About American Achievement AAC Group Holding Corp., together with American Achievement Corporation, manufactures and supplies class rings, yearbooks and other graduation-related scholastic products for the high school, college, junior high school and elementary school markets and of recognition products, such as letter jackets, and affinity jewelry designed to commemorate significant events, achievements and affiliations. The Company markets its products and services primarily in the United States and operates in four reporting segments: class rings, yearbooks, graduation products and other. The Company's corporate office is located in Austin, Texas and its manufacturing facilities are located in Austin, Dallas, El Paso and Waco, Texas; Louisville, Kentucky; Manhattan, Kansas; and Juarez, Mexico. * * * As reported by the Troubled Company Reporter on June 5, 2009, Moody's Investors Service upgraded American Achievement Group Holding Corp.'s corporate family rating to Caa1 from Caa2 and its probability of default rating to Caa2 from Caa3. The upgrade is due largely to debt reduction and improved liquidity as a result of the company's amended Credit Agreement extends the company's revolving credit facility until March 2011 and more flexibility under its financial covenants. In addition, Moody's upgraded the AAC Group Holdings senior discount notes to Caa2 from Caa3 and American Achievement Corporation's senior subordinated notes to B2 from B3 also based on the Loss Given Default methodology and changes to the capital structure following the repayment of $28 million of the company's term loan. The rating outlook is stable. The TCR on June 9, 2009., said Standard & Poor's Ratings Services lowered its corporate credit rating on American Achievement to 'CC', with a negative outlook, from 'CCC+'. At the same time, S&P lowered the issue-level rating on ultimate parent company American Achievement Group Holding Corp.'s 12.75% senior PIK notes to 'C' from 'CCC-'. S&P placed the 'B' issue-level rating for AAC's senior secured credit facilities, the 'CCC+' issue-level rating for the company's 8.25% senior subordinated notes, and the 'CCC-' rating for intermediate holding company AAC Group Holding Corp.'s 10.25% senior discount notes on CreditWatch with positive implications. S&P's rating actions follow the company's announcement of the cash tender offer. S&P expects to raise these ratings if the tender offer is successful. AMERICAN INT'L: Lead Bidders for AIG Investments Drop Out --------------------------------------------------------- Franklin Templeton Investments Inc. and its lead adviser in the buyout effort, Charles E. Johnson, have withdrawn their offers for American International Group Inc.'s asset-management unit, AIG Investments, citing irreconcilable strategic differences within the bidding group, Jenny Strasburg and Liam Pleven at The Wall Street Journal report, citing people familiar with the matter. According to WSJ, Franklin Templeton and Mr. Johnson had a two- month negotiation with AIG before dropping out of the bidding race for AIG Investments. WSJ states that AIG received in March interest from a range of bidders for AIG Investments, whose potential price has fluctuated from $800 million to $300 million. Sources said that Franklin Templeton's bidding partners are currently seeking to pursue a deal without the company, and potentially with a new partner, WSJ relates. WSJ quoted an AIG spokesperson as saying, "This deal remains on track and we're quite satisfied with the progress." According to the report, some AIG executives said that a deal could still be possible despite Franklin Templeton's exit, but AIG representatives also said that the process might be reopened to other suitors. WSJ reports that Win Neuger, AIG Investments CEO and who has played a key role in the talks, said that he has represented executives and investment managers on issues including keeping workers and overall compensation and equity stakes for hundreds of staffers. WSJ notes that as negotiations have now failed to produce a deal, Mr. Neuger's role in the talks raised concerns among other unit executives. "There were people who had raised the question . . . whether I was trying to cut a deal for myself, or whether the senior executive committee was trying to cut a deal for itself," the report quoted Mr. Neuger as saying. Mr. Neuger said that talks involved compensation for all employees of the business for sale, and that his role in the talks wasn't the reason the negotiations were taking longer than expected, according to the report. 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. AMERICAN NATURAL: Increases Offering to 66.67 Mil. Shares --------------------------------------------------------- American Natural Energy Corporation said on June 4, 2009, that it intends to seek to raise additional capital, subject to TSX Venture Exchange approval, proposed to be used to fund a transaction with Dune Energy, Inc. and for working capital purposes. The Company says the offering has been amended to offer up to 66.67 million shares of ANEC's common stock at a price of US$0.03 per share. Subscribers' subscriptions will be held by an escrow agent pending the receipt of funds necessary to close the Dune transaction. The offering will terminate on July 31, 2009, unless extended by ANEC to no later than August 31, 2009. If completed, such a transaction will result in dilution to the present holders of ANEC's Common Stock. As reported by the Troubled Company Reporter on June 11, 2009, ANEC increased its offering to 50 million shares. The offer and sale of the securities by ANEC to subscribers has not been, and will not be, registered under the U.S. Securities Act of 1933, as amended, and the securities may not be offered or sold in the United States absent registration under the Act or an available exemption from the registration requirements. The offer and sale of its securities is intended to be made pursuant to the exemption from the registration requirements of the U.S. Securities Act afforded by Regulation D and in reliance upon Regulation S under that Act and will result in the issuance of "restricted securities" as defined in Rule 144 under the Act. There can be no assurance that ANEC will be successful in raising the additional capital through the sale of its Common Stock. About American Natural Energy American Natural Energy Corporation (TSX Venture:ANR.U) is a Tulsa, Oklahoma-based company engaged in the acquisition, development, exploitation and production of oil and natural gas. It has operations in St. Charles Parish, Louisiana. The Company acquired the assets and outstanding stock of Couba Operating Company in December 2001, after Couba was forced into chapter 7 bankruptcy in March 2000. The case was later converted to Chapter 11 and in May 2001, the Company joined with Couba in submitting to the Bankruptcy Court a plan of reorganization whereby the Company would acquire substantially all the assets -- consisting of physical oil and gas facilities -- and capital stock of Couba. The plan was finally confirmed November 16, 2001. Going Concern Doubt As reported in the Troubled Company Reporter on April 30, 2009, Malone & Bailey, PC, in Houston, Texas, the independent registered public accounting firm of American Natural Energy Corporation raised substantial doubt about the Company's ability to continue as a going concern. American Natural Energy has sustained substantial losses in 2008 and 2007, totaling approximately $61,000 and $3.2 million, and had a working capital deficiency at December 31, 2008, of approximately $20.3 million. Production from the Company's drilling program increased during 2008 compared to 2007; however, its revenue has not been sufficient to fund operations. As of December 31, 2008, American Natural Energy does not have any available borrowing capacity under existing credit facilities, and its current assets are $154,000 compared with current liabilities of $20.4 million. American Natural Energy's current liabilities include approximately $10.8 million of secured indebtedness, which was due September 2006 and is currently in default and accounts payable, revenues payable, notes payable, and other current obligations aggregating to approximately $9.6 million. AMRYEN LLC: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Amryen, LLC P.O. Box 2624 Orange, CA 92859 Bankruptcy Case No.: 09-22265 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Charles T. Wright, Esq. Piet & Wright 3130 S. Rainbow Blvd., Ste. 304 Las Vegas, NV 89146 Tel: (702) 566-1212 Fax: (702) 566-4833 Email: todd.wright@pietwright.com Total Assets: $26,000 Total Debts: $3,061,661 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/nvb09-22265.pdf The petition was signed by Winston Lee, owner of the Company. ANEKONA W: Secured Lenders Consent to Commissioner's Use of Cash ---------------------------------------------------------------- Secured creditors First Hawaiian Bank and Central Pacific Bank ask the U.S. Bankruptcy Court for the District of Hawaii to authorize Anekona W, LLC, to enter into a stipulation to: -- allow the commissioner, appointed prepetition as custodian of the Debtor's real property, to continue in possession, custody and control of the real property; -- allow the Commissioner to use cash collateral to pay reasonable and ordinary expenses of operating the Debtor's hotel business; and -- grant First Hawaiian Bank and Central Pacific Bank replacement liens and security interest against the estate's postpetition assets and proceeds thereof. The secured lenders relate that as of January 22, 2009, the Debtor was indebted to FHB $5,065,250 including accrued interest and cost. The FHB debt is secured by a first mortgage lien on the real property. They also assert that as of May 18, 2009, the Debtor was indebted to CPB $5,225,057 including accrued interest and cost, pursuant to the CPB Note. The CPB Note is secured by, inter alia, a second mortgage lien on the real property. According to the secured lenders, as of May 18, 2009, the outstanding balance, pursuant to the line of credit with Brian Anderson, Trustee of the Brian A. Anderson revocable living trust and Joan Anderson, trustee of the Joan G. Anderson revocable living trust, was $1,147,923 including accrued interest. The line of credit is secured by the Anekona W Mortgage 2. The United States Trustee for the District of Hawaii tells the Court that the U.S. Trustee does not disagree that the state court had the authority to appoint the Commissioner prior to bankruptcy, however, under the Bankruptcy Code, that authority did not supplant the jurisdiction of the bankruptcy court to direct the appointment of a trustee in Chapter 11 cases and does not effect the status of the Commissioner as a custodian. About Anekona W, LLC Headquartered in Kamuela, Hawaii, Anekona W, LLC, is in the Miscellaneous Personal Services, N.E.C. industry. The Company filed for Chapter 11 on May 27, 2009 (Bankr. D. Hawaii Case No. 09-01181). William H. Gilardy, Jr., AAL, ALC represents the Debtor in their restructuring efforts. The Debtor has assets and debts both ranging from $10 million to $50 million. ANTONELLY PENA: Case Summary 5 Largest Unsecured Creditors ---------------------------------------------------------- Debtors: Antonelly Pena Yvette Pena 241 Hidden Valley Ln Vacaville, CA 95688 Bankruptcy Case No.: 09-34460 Chapter 11 Petition Date: July 13, 2009 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Thomas Holman Debtors' Counsel: Mikalah R. Liviakis, Esq. 1024 Iron Point Rd Folsom, CA 95630 Tel: (916) 357-6696 Total Assets: $1,428,923 Total Debts: $1,633,491 A list of the Company's 5 largest unsecured creditors is available for free at: http://bankrupt.com/misc/caeb09-34460.pdf The petition was signed by the Joint Debtors. APOLLO PROPERTY: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Apollo Property Partners LLC 5644 Westheimer, Suite 805 Houston, Tx 77056 Bankruptcy Case No.: 09-35021 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Wesley W. Steen Debtor's Counsel: Leonard H. Simon, Esq. Pendergraft & Simon L.L.P. 2777 Allen Parkway, Suite 800 Houston, TX 77019 Tel: (713) 737-8207 Fax: (832) 202-2810 Email: lsimon@pendergraftsimon.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A full-text copy of the Debtor's petition, including a list of its 8 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/txsb09-35021.pdf The petition was signed by Prieur J. Leary Jr., managing member of the Company. ARDEN VAN UPP: Case Summary 1 Largest Unsecured Creditor -------------------------------------------------------- Debtor: Arden Van Upp aka Dee Rich aka Dee Elmalik 2550 Webster Street San Francisco, CA 94115 Bankruptcy Case No.: 09-31932 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Mitchell R. Hadler, Esq. Law Offices of Mitchell R. Hadler 1450 Sutter, St. #508 San Francisco, CA 94109 Tel: (415) 626-6897 Email: mrhadler@sbcglobal.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor identified Peter Hadiaris, Esq. with services claim for $20,000 as its largest unsecured creditor. The petition was signed by Arden Van Upp. ASARCO LLC: Harbinger and Citigroup Favor Debtor Plan ----------------------------------------------------- Harbinger Capital Partners Master Fund I Ltd. has filed a proposed Chapter 11 plan for Asarco LLC, which plan was among three plans sent to creditors for voting. Nevertheless, Harbinger and Citigroup Global Markets Inc. have written a letter urging creditors to vote for the Company's plan, and not to vote on parent Grupo Mexico SAB's proposed plan. According to Harbinger, the Debtors' Plan provides for maximum recoveries to, and expeditious and equitable treatment of, all holders of claims, including holders of bond claims. Harbinger and Citigroup, which own two-thirds of Asarco's bonds and debentures, say that the Parent Plan may be non-confirmable as it deprives creditors of the right to collect $500 million in post- bankruptcy interest. The bondhoders say they proposed their own plan just in case Asarco's plan couldn't be confirmed "for some unforeseeable reason." Asarco LLC, in its letter urging creditors to vote for its own plan, promises creditors a recovery of 75% to 87% plus a realistic possibility of being paid in full from the multi-billion dollar judgment obtained by the Debtors against their Parent. It notes that, in contrast, the Parent Plan (i) offers an uncertain prospect of collecting 95% of their claims under a plan that may be neither confirmable nor feasible, and which caps creditor recoveries by insisting that creditors release that multi- billion dollar judgment against the Parent, (ii) does not provide for a prospect that creditors may recover over $500 million in post- petition interest. Grupo Mexico, through affiliate ASARCO Inc., wants creditors to vote against the two other plans. It insists its Plan provides for better value, as among other things, the Plan offers greater cash consideration and distribution to creditors: -- The Parent Plan offers more than $1.52 billion in cash at close, and distributes 97% of the allowed amounts of general unsecured claims on the effective date. -- The Debtor's Plan offers only $1.1 billion upfront and offers 76% recovery, in cash, in a best case scenario; and -- The Harbinger Plan offers only $500 million upfront, and offers to pay 61% of the allowed amounts, in cash, on the effective date. The official committee of unsecured creditors recommends that creditors vote in favor of Asarco LLC's plan. It says that the Parent Plan may not be confirmable if the Parent fails to achieve a collective bargaining agreement with unions. The official committee of asbestos claimants in Asarco LLC's case supports both the Parent's and the Debtors' Plans. It opposes the Harbinger Plan as it does not provide for a Section 524(g) trust to compensate current and future victims of asbestos disease. Copies of the disclosure statement explaining the three plans, as divided into five parts, are available for free at: http://bankrupt.com/misc/ASARCO_Joint_DS_070609_01.pdf http://bankrupt.com/misc/ASARCO_Joint_DS_070609_02.pdf http://bankrupt.com/misc/ASARCO_Joint_DS_070609_03.pdf http://bankrupt.com/misc/ASARCO_Joint_DS_070609_04.pdf http://bankrupt.com/misc/ASARCO_Joint_DS_070609_05.pdf About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). ASARCO LLC filed a plan of reorganization on July 31, 2008, premised on the sale of the Debtors' assets to Sterlite USA for $2.6 billion. By October 2008, ASARCO LLC informed the Court that Sterlite refused to close the proposed sale and thus, the Original Plan could not be confirmed. The parties has since renewed their purchase and sale agreement and ASARCO LLC has obtained Court approval of a settlement and release contained in the new PSA for the sale of the ASARCO assets for $1.1 billion in cash and a $600 million note. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted its own plan which allows it to keep its equity interest in ASARCO LLC by offering full payment to ASARCO's creditors. AMC offered provide up to $2.7 billion in cash and a $440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Court Approves Abitibi Settlement --------------------------------------------- Judge Schmidt authorized ASARCO LLC to enter into a compromise and settlement with Abitibi-Consolidated, Incorporated, regarding the Buchans, Newfoundland Site, pursuant to Section 363(b)(1) of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure. The Buchan Mine site, located on the island of Newfoundland in the province of Newfoundland and Labrador, in Canada, comprises former mining areas and offsite facilities used in a joint mining operation between ASARCO and Abitibi, including the Botwood ship loading facility, and any location at which hazardous substances from the property have come to be located. The Site was jointly operated by ASARCO, Abitibi and their predecessors under a series of agreements, including the "Price-ASARCO 1976 Co-Tenancy Agreement and Schedules," from 1928 until it was closed in 1984. Remediation of the Site is ongoing. ASARCO and Abitibi entered into a voluntary Environmental Compliance Schedule with the Newfoundland Department of Environment and Lands and Environment Canada, pursuant to which ASARCO and Abitibi agreed to, among other things, undertake remediation, as set forth in the original schedule and all amended and extended compliance schedules with respect to the Site. Progress under the ECS has been achieved, but several items still need to be completed. Most recently, the Town of Buchans and the Newfoundland Department of Environment and Conservation requested additional testing at the Site. Abitibi asserts that the testing lead to the discovery of new response costs and obligations not previously required under the ECS. Abitibi thus filed Claim No. 9312 relating to the Site in the Debtors' bankruptcy cases. The Claim was scheduled for hearing as part of the case management order, establishing procedures for disallowance or estimation of the Debtors' environmental liabilities to potentially responsible parties. ASARCO and Abitibi subsequently conducted negotiations regarding the Claim and entered into mediations, ultimately arriving at a resolution of their dispute with respect to the Site. ASARCO and Abitibi agree that: (a) Abitibi will have an allowed general unsecured claim for $7,000,000 in settlement and full satisfaction of all claims and causes of action against ASARCO; (b) ASARCO and Abitibi covenant not to sue or assert claims or causes of action against each other, and provide each other with mutual releases; and (c) Abitibi releases ASARCO from all outstanding obligations to perform work under the Co-Tenancy Agreement and any other outstanding obligations with respect to the Site, including environmental compliance schedules and orders or similar documents related to the Site. 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: No Public Comment on Mineral Creek Deal With Govt. -------------------------------------------------------------- The United States of America on behalf of the United States Department of Interior notified Judge Schmidt of the absence of any public comment in connection with the Court-approved compromise and settlement among ASARCO LLC, the state of Arizona and the United States Government regarding natural resource damage claims for Mineral Creek, the Gila River, and the San Pedro River, in Arizona. The United States reiterates that its Agreement with ASARCO is fair, reasonable and lawful. Since the Court has already approved the Agreement, no further action is required from the Court. The United States of America and the state of Arizona have alleged that ASARCO LLC is liable for natural resource damages to Mineral Creek and the Gila River related to releases from Ray Mine and the Hayden Facility. Thus, the U.S. Government filed Claim No. 10745 and Arizona filed Claim Nos. 10827 and 10830, asserting claims against ASARCO under the Comprehensive Environmental Response, Compensation, and Liability Act, the Clean Water Act, and other environmental statutes for natural resource damages and related costs for injuries to and loss of natural resources related to the Sites and for natural resource damage assessment costs. The Ray Mine is a copper mining facility near Kelvin, Arizona, which discharges into Mineral Creek, a tributary of the Gila River. The Hayden Facility is a smelter facility located in Hayden Arizona along the Gila River. Arizona, the Government, and ASARCO have been able to reach an agreement resolving their dispute related to the natural resource damages at the Sites. The salient terms of the Agreement are: (a) The Government and Arizona will have a joint indivisible allowed general claim for $3,773,604; (b) The Government will have an additional allowed general unsecured claim for $226,396; (c) ASARCO will convey by quit claim deed to the Arizona Game and Fish Commission three tracts of land and any associated water rights. Arizona agrees to certain conditions regarding any water rights that may be associated with the Properties; (d) ASARCO will have the exclusive right to conduct mitigation projects unrelated to the Agreement at the Properties and apply to the appropriate governmental agency for mitigation credits for a period of five years from the effective date of a confirmation order by the Court; (e) The Agreement does not address or resolve in any way any other claims and causes of action of the Government and Arizona relating to the Sites, Ray Mine, and the Hayden Facility; and (f) Arizona and the Government covenant not to sue or assert claims or causes of action against the Debtors for natural resource damages, and the parties will exchange mutual releases. A full-text copy of the Settlement Agreement is available for free at: http://bankrupt.com/misc/ASARCO_Settlement_NRD&Arizona.pdf Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, contends that the Agreement resolves ASARCO's liabilities relating to natural resource damages at the Sites, and saves attorneys' and expert witness fees that would otherwise be expended in prosecuting the estimation of the Claims. He notes that Arizona and the Government asserted a total of $5,662,329 in claims for natural resource damages in addition to unliquidated amounts. 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) ATLAS ENERGY: S&P Assigns 'B+' Rating on $150 Mil. Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned issue-level and recovery ratings to Atlas Energy Operating Co. LLC and Atlas Energy Finance Corp.'s proposed $150 million senior unsecured notes. The entities are wholly owned subsidiaries of Atlas Energy Resources LLC (B+/Stable/--). The issue-level rating is 'B+' (the same as the corporate credit rating on the parent company). S&P assigned a recovery rating of '4', indicating average (30% to 50%) recovery in the event of a payment default. "S&P's recovery analysis incorporates an updated valuation of the company's reserve base, the proposed notes offering and the expected reduction in the company's borrowing base as a result of the note offering," said Standard & Poor's credit analyst David Lundberg. The company intends to use proceeds to pay down debt outstanding under its revolving credit facility. As of March 31, 2009, Moon Township, Pennsylvania-based Atlas, an independent oil and gas exploration and production company, had $944 million in balance sheet debt. The corporate credit rating on Atlas is 'B+' and the outlook is stable. Ratings List Atlas Energy Resources LLC Corporate Credit Rating B+/Stable/-- Ratings Assigned Atlas Energy Operating Co. LLC Atlas Energy Finance Corp. $150 Mil. Sr. Unsec Notes (Proposed) B+ Recovery Rating 4 AURORA OIL & GAS: Seeks Court OK to Make Royalty Payments --------------------------------------------------------- Aurora Oil & Gas Corporation and its subsidiary, Hudson Pipeline & Processing Co., LLC, are asking the U.S. Bankruptcy Court for the Western District of Michigan for authority to make royalty payments and to satisfy other obligations of critical vendors. As reported by the Troubled Company Reporter, Aurora and Hudson sought Chapter 11 protection on July 12, 2009. Sanford R. Edlein, the Companies' Chief Restructuring Officer and a Managing Director with Huron Consulting Group, LLC, said, "We hope to use Chapter 11 to facilitate a global restructuring of the Companies' debt obligations and expect to work on a consensual plan with the lenders to minimize our time in bankruptcy, while at the same time exploring other potential value-maximizing opportunities." "Ultimately, we hope to operate in Chapter 11 in the ordinary course as was done prior to this bankruptcy filing," he added. The Companies will continue to operate their businesses as "debtors-in-possession" in accordance with sections 1107 and 1108 and other applicable provisions of the Bankruptcy Code, which require court approval of matters outside the ordinary course of business. No trustee, examiner, or official committee has been appointed. The Companies have worked diligently to facilitate a global restructuring transaction, including entering into several amendments and forbearance agreements with BNP Paribas and the lenders under the Senior Secured Credit Facility and D.E. Shaw Laminar Portfolios, LLC and the lenders under the Second Lien Term Loan. The Companies have not yet been able to obtain agreement on the terms of such a restructuring and intend to utilize the bankruptcy process to attempt to achieve a consensual restructuring or some other appropriate alternative. Huron Consulting Group, LLC, continues to advise Aurora on its restructuring efforts, focusing on cost reduction and containment initiatives, streamlining the organization, and facilitating communication with its lender and other creditor constituencies. About Aurora Oil & Gas Based in Traverse City, Michigan, Aurora Oil & Gas Corporation (Pink Sheets: AOGS) is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production, with its primary operations in the Antrim Shale of Michigan, the New Albany Shale of Indiana and Kentucky. The Company and one affiliate filed for Chapter 11 protection on July 12, 2009 (Bankr. W.D. Mich. Case Nos. 09-08254 and 09-08255). Judge Scott W. Dales presides over the case. Stephen B. Grow, Esq., at Warner Norcross & Judd, LLP, in Grand Rapids, Michigan; and Joel H. Levitin, Esq., and Richard A. Stieglitz Jr., at Cahill Gordon & Reindel LLP in New York, serve as the Debtors' counsel. Aurora listed assets and debts both ranging from $100,000,001 to $500,000,000. BABCOCK QUARTER HORSES: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Babcock Quarter Horses, Inc. 594 CR 131 Gainesville, TX 76240 Case No.: 09-42232 Type of Business: The Debtor operates a ranch. Chapter 11 Petition Date: July 13, 2009 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Bill F. Payne, Esq. 100 North Main Street Paris, TX 75460-4222 Tel: (903) 784-4393 ext. 40 Email: lgarner@moorefirm.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Jim Babcock, the company's president. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sterling Bank $720,000 17370 Preston Road Dallas, Texas 75252 Viagen $75,150 Curtis Graves $45,000 Wick Phillips, LP $34,324 National Reined Cow Horse $11,721 Association Dell Business Credit $9,245 Quarter Horse News $6,398 Joseph, Mann & Creed Kubota Credit Corporation $4,405 De Lage Landen $4,376 Tractor Supply Co. $4,116 Pronto Staffing-GVL $4,040 Select Breeders Southwest $3,626 Inc. North Texas Medical Center $2,864 Staples Credit Plan $2,768 England Products $2,600 Merial $2,575 Spencer Tile and Marble $2,458 Takgear $2,241 Pro Management $2,198 Horse Mall USA $1,990 BARN INC: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------- Debtor: The Barn, Inc. 305 Rothney Road Southern Pines, NC 28387 Bankruptcy Case No.: 09-81150 Chapter 11 Petition Date: July 13, 2009 Court: United States Bankruptcy Court Middle District of North Carolina (Durham) Debtor's Counsel: Katharine McLeod, Esq. Webb & Graves, PLLC 910 N. Sand Hills Blvd. P.O. Box 1437 Aberdeen, NC 28315 Tel: (910) 944-9555 Fax: (910) 944-7641 Email: katharine.mcleod@webbandgraves.com Total Assets: $2,350,000 Total Debts: $3,385,405 A full-text copy of the Debtor's petition, including a list of its 12 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ncmb09-81150.pdf BASHAS' INC: Will Shut Down 10 Stores After Filing for Bankruptcy ----------------------------------------------------------------- Lynn Ducey at Phoenix Business Journal reports that Bashas' Inc., which has sought Chapter 11 protection due to a recession that has hit Arizona, would close 10 stores on July 21. Business Journal says this year has been a particularly difficult one for Bashas', which disclosed layoffs of about 3% of its staff, or 350 employees, in February 2009. Business Journal relates that Bashas' said in April 2009 that it was evaluating underperforming stores, and officials identified these 10 stores that would be closed: -- Bashas' at 1919 E. Ray Road, Chandler; -- Bashas' at 6085 W. Chandler Blvd., Chandler; -- Bashas' at 4321 E. Baseline Road, Gilbert; -- Bashas' at 4727 E. Bell Road, Phoenix; -- Bashas' at 18785 S. Interstate 19 Frontage Road, Green Valley; -- Bashas' at 687 S. Lake Powell Blvd., Page; -- Bashas' at 1761 E. Arizona 69, Prescott; -- Food City at 1648 S. 16th St., Phoenix; -- Food City at 4338 W. Thomas Road, Phoenix; and -- Food City at 4335 W. Glendale Ave., Glendale According to Business Journal, Bashas' operations affect all aspects of Arizona's economy, from buying local produce and food stuffs to hiring workers and revenue that contributes to the state and municipal taxes. Bashas' contracts with professionals including plumbers, electricians, and designers, says the report. "In Arizona, economic conditions have been especially dismal and Bashas' has not been immune to these market forces," Business Journal quoted Bashas' President and Chief Operating Officer Mike Proulx as saying. According to the report, Mr. Proulx said that the credit crisis, belt-tightening by consumers, Arizona's economy, and an ongoing dispute with the United Commercial Foodworkers Union have contributed to the Company's current situation. A spokesperson of Local 99 of the United Food and Commercial Workers International Union said that the union is ready to "engage in constructive dialogue" with Bashas', Business Journal reports. Bashas' has secured a $45 million debtor-in-possession financing and is working with constituents towards a reorganization plan. The Company hopes to emerge from Chapter 11 at the end of first quarter 2010, according to its CEO. Bashas' Inc. is a 77-year-old grocery chain in Arizona. BASHAS' INC: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Bashas' Inc. aka National Grocery aka Bashas Food aka Bashas' United Drug aka Food City aka Eddie's Country Store aka A,J. Fine Foods aka Western Produce aka Bashas' Distribution Center aka Sportsman's aka Bashas' Dine P.O. BOX 488 Chandler, AZ 85244 Case No.: 09-16050 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Bashas' Leaseco, Inc. 09-16051 Sportsman's L.L.C. 09-16052 Type of Business: The Debtor operates retail grocery stores. Chapter 11 Petition Date: July 12, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: James M. Marlar Debtor's Counsel: Frederick J. Petersen, Esq. Mesch, Clark & Rothschild, P.C. 259 N. Meyer Avenue Tucson, AZ 85701 Tel: (520) 624-8886 Fax: (520) 798-1037 Email: ecfbk@mcrazlaw.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 The petition was signed by Edward N. Basha III, the company's vice-president. Bashas' Inc.'s List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cardinal Health Merchandise trade $2,758,378 P.O. Box 402605 payable Atlanta, GA 30384-2605 Phoenix Coca-Cola Bottling Merchandise trade $2,560,560 2200 6th Ave payable Seattle, WA 98121 Frito Lay Inc. Merchandise trade $1,188,134 P.O. Box 643104 payable Pittsburgh, PA 15264-3104 Shamrock Foods Merchandise trade $1,068,196 P.O. Box 52420 payable Phoenix, AZ 85072-2420 Kalil Bottling Co. Merchandise trade $1,035,068 P.O. Box 26888 payable Tucson, AZ 85726-6888 Pepsi Cola - Phoenix Merchandise trade $1,007,583 P.O. Box 1076 payable Safford, AZ 85548 Source Interlink Dist LLC Merchandise trade $659,738 75 Remittance DR payable Chicago, IL 60675-6427 Swire Coca-Cola USA Merchandise trade $588,916 P.O. Box 1440 payable Draper, UT 84020 Holsum Bakery Inc. Merchandise trade $538,613 P.O. Box 842176 payable Dallas, TX 75284-2176 Kellogg Sales Co. Merchandise trade $501,997 P.O. Box 100918 payable Pasadena, CA 91189-0918 Southern Wine & Spirits Merchandise trade $454,835 of Ari payable 2375 S 45th Ave. Phoenix, AZ 85043 General Mills Finance Merchandise trade $453,725 Inc 2/16 payable P.O. Box 120845 Dallas, TX 75312-0845 Mission Foods Merchandise trade $436,988 P.O. Box 843777 payable Dallas, TX 75284-3777 Kraft Foods Inc 2/13 Merchandise trade $381,868 Bank One payable Pasadena, CA 91189-0139 Alliance Bev/Canyon DIV Merchandise trade $357,006 Alliance Beverage Dist payable Co. LLC Phoenix, AZ 85005-6066 Ocotillo Wholesale Merchandise trade $356,365 c/o Bashas' Inc. payable Chandler, AZ 85248 Coliman Pacific Corp Merchandise trade $343,971 Garcia payable P.O. Box 13727 Tempe, AZ 85284 United Natural Foods Merchandise trade $333,042 West Inc. payable File 30362 P.O. Box 60000 San Francisco, CA 94160 Nabisco Biscuit Co. Merchandise trade $324,861 P.O. Box 100223 payable Pasadena, CA 91189-0223 DLJ Produce Inc. Merchandise trade $319,164 P.O. Box 2398 payable West Covina, CA 91793 Oroweat Foods Co. Merchandise trade $316,987 ATTN: Marta Champion payable Fort Worth, TX 76134 Hickmans Egg Ranch Merchandise trade $314,590 Crystal Saxton payable 817 E Indian School Phoenix, AZ 85014 Abbot Nutrition Merchandise trade $313,514 75 Remittance Dr payable Ste 1310 Chicago, IL 60675-1310 Southwind Foods LLC Merchandise trade $311,686 4735 Columbus Ave payable Bellingham, WA 98229 Blazer Wilkinson LLC Merchandise trade $306,495 P.O. Box 7428 payable Spreckels, CA 93962-7428 Nestle USA Inc 2/15 Merchandise trade $303,318 P.O. Box 841933 payable Dallas, TX 75284-1933 Sarah Farms Merchandise trade $301,320 2751 E Palo Verde payable Yuma, AZ 85365 Pepsi Cola Bottling Merchandise trade $301,244 4980 Railhead Ave payable Flagstaff, AZ 86004 Conagra Foods Sales Inc Merchandise trade $301,005 P.O. Box 409232 payable Atlanta, GA 30384-9232 Georgia-Pacific Corp Merchandise trade $287,990 P.O. Box 281523 payable Atlanta, GA 30384-1523 BEARD COMPANY: Dilworth Unit Raises $5,275,000 to Fund Project -------------------------------------------------------------- The Beard Company said its subsidiary, Beard Dilworth, LLC, has raised the additional $5,275,000 needed to fund the development of the Dilworth Field in Kay County, Oklahoma. BDLLC announced the purchase of the Dilworth Field on April 20, 2009. The properties purchased are situated in Sections 17, 18, and 20, Township 28 North, Range 1 East in Kay County, Oklahoma. The new funding increases the amount raised by BDLLC to fund the purchase and development of the Dilworth Field to a total of $7,000,000. The development funding is being provided by RSE Energy, LLC (80%), True Energy Exploration, LLC (10%) and Royal Energy, LLC (10%), which will own their respective interests in the project directly rather than as partners in BDLLC. It has been estimated that the Dilworth Field has produced more than 70 million barrels of oil since the discovery well was completed in 1911. The secondary recovery project that BDLLC will pursue under its contemplated development program is estimated to have a production potential of several million barrels of oil field-wide. The investors in BDLLC, who put up $1,725,000 to fund the purchase, and the new investor group that is putting up $5,275,000 to fund the development, will each receive a 3.5-to-1 return before payout. After payout of the $24,500,000, BDLLC will own 9.86% of the Field, the new investor group will own 30.14%, The Beard Company will back in for 10%, and Subsurface Minerals Group LLC, the former owner (which has approximately $10,000,000 invested in the Field), will back in for a 50% interest. The Company will actually own a 10% interest BPO by virtue of its $700,000 investment in BDLLC, and 14% APO as a result of its 10% back-in plus its 4% APO interest in BDLLC. Under the contemplated development program, BDLLC intends to drill four additional production wells and three additional disposal wells to complete the secondary recovery phase of the project. If, as anticipated, BDLLC achieves or exceeds its targeted injection and recovery rates, it estimates that the $24,500,000 payout will occur during 2010, based upon an oil price of approximately $50 per barrel. "As we stated when we announced the original purchase, both Bill Beard and I believe that the Dilworth Field represents the best, and has the most upside potential relative to the investment required, of any oil deal we've ever seen," stated Herb Mee, Jr., President of The Beard Company. "We are tremendously excited about the future potential of the Field, which we believe will play a key role in the turnaround currently underway at the Company. Dilworth should serve as a fitting companion to the potential we believe exists in our Geohedral investment." About The Beard Company Based in Oklahoma City, Oklahoma, The Beard Company (OTCBB: BRCO) creates, acquires, or invests in businesses that management believes have high growth or above-average profit potential and can enhance shareholder value. The Company will from now on be involved in oil and gas activities; coal reclamation activities; and minerals exploration and development through its Geohedral investment. Going Concern Doubt As reported in the Troubled Company Reporter on April 23, 2008, Cole & Reed, P.C., in Oklahoma City, expressed substantial doubt about The Beard Company's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended December 31, 2007, and 2006. Cole & Reed pointed to the company's recurring losses and negative cash flows from operations. The Beard Company's consolidated balance sheet at March 31, 2009, showed $1,672,000 in total assets; $2,102,000 in total current liabilities, $420,000 in long-term debt, $2,250,000 in long-term debt for related entities, and $169,000 in other long-term liabilities. BERNARD MADOFF: Picard Taps Windels to Pursue Avoidance Actions --------------------------------------------------------------- Irving H. Picard, the trustee for the liquidation of the business of Bernard L. Madoff Investment Securities LLC, asks the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Windels Marx Lane & Mittendorf, LLP, as special counsel, nunc pro tunc to June 9, 2009. On April 21, 2009, the U.S. Trustee appointed Alan Nisselson as interim trustee for the Chapter 7 case of Bernard L. Madoff. Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno and Steven Morganstern, through their attorneys, Milberg LLP, had filed an involuntary petition for relief under Chapter 7 against Madoff. On June 9, the Bankruptcy Court entered an order approving the consolidation of the Madoff estates. Immediately upon the Chapter 7 trustee's appointment, Windels Marx began to analyze Mr. Madoff's financial affairs and assets and to review the status of various legal proceedings involving Mr. Madoff. Windels Marx, has, among other things, agreed to (i) bring actions including, without limitation, Chapter 5 avoidance actions, with respect to potential assets of Mr. Madoff, (ii) liquidate any assets of Mr. Madoff, including but not limited to, any assets turned over to the consolidated estate that may be forfeited by the United States, and (iii) pursue litigation to recover all assets of Mr. Madoff. Windels Marx will be compensated at its normal hourly rates, less a 10% discount: Level of Experience Discounted Rates ------------------- ---------------- Alan Nisselson (Partner) $510 Howard L. Simon (Partner) $445 Regina Griffin (Special Counsel) $390 Les Barr (Special Counsel) $390 Kim Longo (Senior Associate) $315 Junior to Midlevel Associates $210-245 Senior Paralegal $210 Junior Paralegal $140 The firm may be reached at: Windels Marx 156 West 56th Street New York, NY 10019 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. 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. BERNARD MADOFF: Picard Sues HSBC, Herald Fund for $578 Million -------------------------------------------------------------- Irving H. Picard, the trustee for the liquidation of the business of Bernard L. Madoff Investment Securities LLC, has filed before the U.S. Bankruptcy Court for the Southern District of New York a complaint against HSBC Holdings Plc and a Cayman Islands-based hedge fund Herald Fund SPC. According to Mr. Picard, Herald Fund knew or should have known that Madoff's investment advisory business was predicated on fraud. Hedge funds and funds of funds like Herald Fund were sophisticated investors that accepted fees from their customers based on purported assets under management or stock performance in consideration for the diligence they were expected to exercise in selecting and monitoring investment managers like Madoff. Herald Fund failed to exercise reasonable due diligence of BLMIS and its auditors in connection with the Ponzi scheme, Marc E. Hirschfield, Esq., at Baker & Hostetler LLP, in New York, asserts. On October 2, 2008, BLMIS wired $113,000,000 from the BLMIS Bank Account to HSBC. On or about November 4, 2008, BLMIS wired another $423,000,000 from the BLMIS Bank Account to HSBC. Additionally, during the months of September, October and November 2008, BLMIS withdrew funds from the Herald Fund Account on 40 occasions and made tax payments to the appropriate tax authorities on behalf of Herald Fund totaling $1,487,933. Together, these 42 transfers, all of which were apparently done for the benefit of Herald Fund, totaled $537,487,933 and took place within 90 days of the Filing Date. According to Mr. Hirschfield, the 90-Day Transfers are avoidable and recoverable under sections 547, 550(a)(1) and 551 of the Bankruptcy Code and applicable provisions of SIPA, particularly 15 U.S.C. Sec.8fff-2(c)(3). On January 9, 2008, BLMIS wired $20,000,000 from the BLMIS Bank Account to HSBC. Additionally, between December 2006 and August 2008, BLMIS withdrew funds from the Herald Fund Account on 214 occasions to make tax payments to the appropriate tax authorities on behalf of Herald Fund totaling $5,823,339. These transfers, combined with the 90-Day Transfers, all of which were apparently done for the benefit of Herald Fund, totaled $563,311,273 and took place within two years of the Filing Date. According to Mr. Hirschfield, the Two-Year Transfers are avoidable and recoverable under Sections 548(a), 550(a)(1) and 551 of the Bankruptcy Code and applicable provisions of SIPA, particularly 15 U.S.C. Sec. 78fff-2(c)(3). On September 9, 2004, BLMIS wired $11,800,000 from the BLMIS Bank Account to HSBC. Additionally, between June 2004 and December 2006, BLMIS withdrew funds from the Herald Fund Account on 278 occasions to make tax payments to the appropriate tax authorities on behalf of Herald Fund totaling $2,922,574. These transfers, combined with the 90-Day and Two-Year Transfers, all of which were apparently done for the benefit of Herald Fund, totaled $578,033,847 and were made during the six years prior to the Filing Date. According to Mr. Hirschfield, the Six-Year Transfers are avoidable and recoverable under sections 544, 550(a)(1) and 551 of the Bankruptcy Code, applicable provisions of SIPA, particularly 15 U.S.C. Sec. 78fff-2(c)(3), and applicable provisions of N.Y. Debt. & Cred. Sec. 273-276. 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. 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. BICENT POWER: Moody's Reviews Ba3 & B1 Lien Ratings --------------------------------------------------- Moody's Investors Service has placed the Ba3 first lien and B1 second lien ratings of Bicent Power LLC under review for possible downgrade. The review will consider the degree to which refinancing risk has increased as a result of the project's financial underperformance to-date and the likelihood that the project may continue to underperform going forward. In 2008, fully consolidated debt service coverage (including project debt at Hartwell and the commodity swap embedded loan) was just 1.07x, well below the initial forecast of 1.38x. Performance also fell short of expectations in the second half of 2007, when coverage was just 1.00x compared to a forecast of 1.19x. While coverage is expected to improve to 1.58x in 2009, it will still be far short of management's initial base case forecast of 2.24x. Furthermore, the improvement in 2009 is primarily attributable to the expected receipt of a significant one-time bonus payment for the completion by Colorado Energy Management, a Bicent subsidiary that provides power plant EPC contractor service, of a gas-fired generation unit it constructed for a third party. Largely due to this underperformance, Moody's now expects that Bicent will have repaid $40 million less debt by the end of 2009 than was anticipated at the time of the sale of one of Bicent's assets, the Mountainview wind farm, in early 2008. This will result in a first lien debt balance of $169 million, 30% more than previously anticipated, and will have an ongoing impact on Bicent's financial metrics due to the terms of repayment, which are based upon a cash sweep. The review will also consider whether the current one notch distinction between the first and second lien debt remains appropriate or whether wider notching is merited in light of the increased refinancing risk. In the event of a failed refinancing, any resulting losses may disproportionately affect the second lien debt. Lastly, the review will take into account the impact that Bicent's upcoming sale of its 50% interest in the Hartwell gas- fired generating facility may have on its business risk profile. Based on Moody's understanding of the proposed terms the sale, it will result in a meaningful reduction in debt/kw. However, the affect on Bicent's other financial metrics is expected to be mixed. Furthermore, the sale will reduce the asset diversification that has been an important credit strength of the company in Moody's opinion. The last rating action on the company's debt occurred on July 9, 2007 when definitive ratings of Ba3 and B1 were assigned to its first and second lien credit facilities respectively. Bicent Power LLC is an independent power generation company headquartered in Easton, MD. It is owned by Beowulf Energy LLC and Natural Gas Partners. Bicent owns a portfolio of five electric power generating facilities with an aggregate capacity of 536 MW consisting of a 120 MW coal unit located in Montana (Hardin), three gas-fired combustion turbines in Colorado and one in California, and a 50% interest in a CT in Georgia. Bicent also owns Colorado Energy Management, a provider of power plant EPC, refurbishment, and O&M services. BISON BUILDING: Has Until August 27 to File Schedules & Statements ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas extended until Aug. 27, 2009, Bison Building Holdings, Inc., and its debtor-affiliates' time to file its schedules and statements of financial affairs. Houston, Texas-based Bison Building Holdings, Inc., and its affiliates filed for Chapter 11 on June 28, 2009 (Bankr. S.D. Tex. Case No. 09-34452). David Ronald Jones, Esq., at Porter & Hedges, L.L.P., represents the Debtors. At the time of the filing, the Company said it had assets and debts of $50 million to $100 million. BLAINE HOSPITALITY LLC: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Blaine Hospitality, LLC 10580 Baltimore Street NE Minneapolis, MN 55449 Bankruptcy Case No.: 09-44554 Chapter 11 Petition Date: July 13, 2009 Court: United States Bankruptcy Court District of Minnesota (Minneapolis) Judge: Robert J. Kressel Debtor's Counsel: Joseph W. Dicker, Esq. 1406 West Lake Street, Suite 208 Minneapolis, MN 55408 Tel: (612) 827-5941 Fax: (612) 822-1873 Email: joe@joedickerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mnb09-44554.pdf The petition was signed by William Folkerts, chief governor of the Company. BRENDA SERSTAD: Case Summary 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Brenda L. Serstad N8331 Bulgrin Road Portage, WI 53901-9402 Bankruptcy Case No.: 09-14595 Chapter 11 Petition Date: July 13, 2009 Court: United States Bankruptcy Court Western District of Wisconsin, http://www.wiw.uscourts.gov (Madison) Judge: Chief Judge Robert D. Martin Debtor's Counsel: Eric R. Preu, Esq. 15 N. Pinckney St., Ste 200 P.O. Box 828 Madison, WI 53703 Tel: (608) 258-8555 Email: epreu@ks-lawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/wiwb09-14595.pdf The petition was signed by Ms. Serstad. BRENNER ASSOCIATES: Case Summary 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Brenner Associates, Inc. dba National Marketing Services 300 Atrium Drive, Floor 3 Somerset, NJ 08873 Bankruptcy Case No.: 09-27870 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Stephen V. Falanga, Esq. Connell Foley LLP 85 Livingston Avenue Roseland, NJ 07068 Tel: (973) 535-0500 Fax: (973) 535-9217 Email: sfalanga@connellfoley.com Estimated Assets: $500,001 to $1,000,000 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/njb09-27870.pdf The petition was signed by William Brenner, president of the Company. BUILDING MATERIALS: To Assume Davis Framing Contracts ----------------------------------------------------- According to Bill Rochelle at Bloomberg News, Building Materials Holding Corp. is seeking approval from the U.S. Bankruptcy Court for the District of Delaware to ratify agreements made in 2006 along with the purchase of a California framing business from brothers Randolph and George Davis. The 2006 agreements call for contingent payments depending on the profitability of the Davis business. The contingent payment was $3 million last year and could be roughly the same this year. In return, the Davis brothers agreed to continue working for the business and not compete. BMHC, Bloomberg relates, said the Davis framing business is "highly profitable." To ensure that the Davis brothers don't quit and go into competition, BMHC wants court authority to make the contingent payment and assume the obligations of performing the 2006 purchase agreement. The Court will convene a hearing to consider approval of the reuest on July 29. Building Materials Holding Corporation -- http://www.bmhc.com/-- is one of the largest providers of building materials and residential construction services in the United States. BMHC serves the homebuilding industry through two recognized brands: as BMC West, it distributes building materials and manufacture building components for professional builders and contractors in the western and southern states; as SelectBuild, it provides construction services to high-volume production homebuilders in key markets across the country. BMHC and 11 affiliates filed for bankruptcy on June 16, 2009 (Bankr. D. Del. Lead Case No. 09-12074). Judge Kevin J. Carey handles the case. Michael A. Rosenthal, Esq., and Matthew K. Kelsey, Esq., at Gibson, Dunn & Crutcher LLP; and Sean M. Beach, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as bankruptcy counsel. Paul Croci, at Peter J. Solomon Company, serves as financial advisor. Joseph Spano at Alvarez & Marsal North America, LLC, serves as restructuring advisor. The Debtors' tax consultant is KPMG LLP; tax advisor is PricewaterhouseCoopers LLP; and claims and notice agent is The Garden City Group, Inc. As of March 31, 2009, the Debtors had total assets of $480,148,000 and total debts of $481,314,000. CABRINI MEDICAL: St. Vincent Wants Buildings, Awaits Creditors' OK ------------------------------------------------------------------ Saint Vincent Catholic Medical Centers wants to move certain services to Cabrini Medical Center. The services SVCMC wants to move to CMC including inpatient psychiatry, Crain's New York Business reported. Crain's relates that Saint Vincent COO Arthur Webb is hopeful that the hospital will secure approval from Cabrini's secured and unsecured creditors to buy or lease several of its buildings. The report says that Saint Vincent's proposal will be weighed against a possible open auction for the properties. Cabrini Medical Center was founded in 1892 by a woman who would be known as Mother Cabrini, and was later canonized as Saint Frances Xavier Cabrini. She sought funding from the Vatican for the hospital as a facility to treat poor immigrant Italians in New York. The hospital is being sponsored by the Provincial of the Missionary Sisters of the Sacred Heart of Jesus, Stella Maris Province. The Company filed for Chapter 11 bankruptcy protection on July 9, 2009 (Bankr. S.D. N.Y. Case No. 09-14398). Frank A. Oswald, Esq., at Togut, Segal & Segal LLP assists the Company in its restructuring efforts. The Company listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in debts. CAPROCK HOLDINGS: S&P Affirms 'B' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' corporate credit rating on Houston-based satellite communications provider CapRock Holdings Inc. At the same time, S&P revised its recovery ratings on the $187.5 million senior secured first-lien credit facility at CapRock's wholly owned subsidiary, CapRock Communications Inc., to '3' from '4'. The issue-level rating on the credit facility remains at 'B', the same level as the corporate credit rating. The '3' recovery rating indicates expectations for meaningful (50%-70%) recovery in the event of a payment default. The improvement in the first-lien recovery rating reflects prospects for greater value for the company in a reorganization. In addition, S&P affirmed the 'CCC+' issue-level rating (two notches below the corporate credit rating) and '6' recovery rating on the company's $65 million second-lien term loan facility. The '6' recovery rating indicates expectations for negligible (0%-10%) recovery in the event of a payment default. "The ratings on CapRock reflect its highly leveraged financial profile and weak business profile, resulting, in part, from increased uncertainty in its indirect government services business segment," said Standard & Poor's credit analyst Naveen Sarma, "and its limited size and scale which provides minimal capacity for operational missteps." Tempering factors include the company's focus on a high-end niche market, with significant customer-switching costs and strong growth in its energy business segment. Debt outstanding as of March 31, 2009, totaled approximately $227 million. CARITAS HEALTHCARE: St. Vincent Wants Cabrini Buildings ------------------------------------------------------- Crain's New York Business reports that Saint Vincent Catholic Medical Centers wanted to move certain services, such as inpatient psychiatry, to Cabrini Medical Center. According to Crain's, Saint Vincent's chief operating officer Arthur Webb is hopeful that the hostpital will secure approval from Cabrini's secured and unsecured creditors to buy or lease several of its buildings. The report says that Saint Vincent's proposal will be weighed against a possible open auction for the properties. Crain's relates that Saint Vincent and NYU Langone are awaiting the state's reply on their joint request for $25 million. Saint Vincent is seeking "resources to make sure we are able to pursue a viable, creditworthy proposal to the Sisters" that also appeals to fellow creditors and "I remain optimistic, even in these critical times, that we can put together a proposal that will win the day," Crain's quoted Mr. Webb as saying. Citing Mr. Webb, Crain's reports that Saint Vincent has two mortgages from Sun Life Assurance Company of Canada, Cabrini's largest secured creditor. According to the report, Mr. Webb said that Saint Vincent has enjoyed a "good relationship for a number of years" with the company, which may help smooth acceptance for its proposal. About Caritas Health Care Inc. Caritas Health Care Inc. is the owner of Mary Immaculate Hospital and St. John's Queens Hospital. Caritas, created by Wyckoff Heights Medical Center, purchased the two hospitals in a bankruptcy sale in early 2007 from St. Vincent Catholic Medical Centers of New York. St. John's has 227 generate acute-care beds while Mary Immaculate has 189. Caritas Health Care and eight of its affiliates filed for Chapter 11 on February 6, 2009 (Bankr. E.D. N.Y., Lead Case No. 09-40901). Adam T. Berkowitz, Esq., at Proskauer Rose LLP, has been tapped as counsel. JL Consulting LLC is the Debtors' restructuring advisors. Caritas in its bankruptcy petition estimated assets of $50 million to $100 million, and debts of $100 million to $500 million. About Saint Vincent Catholic Medical Centers Saint Vincent Catholic Medical Centers -- http://www.svcmc.org/-- is anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Its behavioral health services also provide supportive housing programs for people with mental illness throughout the Metropolitan area. Saint Vincent's is the designated provider for the New York and New Jersey region of the US Family Health Plan sponsored by the US Department of Defense. Saint Vincent's serves as the academic medical center of New York Medical College in New York City. The healthcare organization is sponsored by the Roman Catholic Bishop of Brooklyn and the president of the Sisters of Charity of New York. Saint Vincent Catholic Medical Centers of New York and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' Chapter 11 cases. On September 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represented the Official Committee of Unsecured Creditors. As of April 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. The Debtors filed their Chapter 11 plan of reorganization and a disclosure statement explaining that Plan on February 9, 2007. On June 1, 2007, the Debtors filed an Amended Plan & Disclosure Statement. (Saint Vincent Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CARLOS AYALA: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------- Debtors: Carlos Ayala Elsa Ayala 3817 Saint Nichalos Modesto, CA 95356 Bankruptcy Case No.: 09-22209 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtors' Counsel: Randolph Goldberg, Esq. 4000 S Eastern Ave #200 Las VegaS, NV 89119 Tel: (702) 735-1500 Email: randolphgoldberg@yahoo.com Total Assets: $1,444,394 Total Debts: $1,498,692 A full-text copy of the Debtors' petition, including a list of their 8 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-22209.pdf The petition was signed by the Joint Debtors. CASTLE KEY: AM Best Downgrades Allstate's FSR to 'B-' ----------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating (FSR) to B- (Fair) from B+ (Good) and issuer credit ratings (ICR) to "bb-" from "bbb-" of Castle Key Group (Castle Key) and its members, formerly known as Allstate Floridian Insurance Group (headquartered in St. Petersburg, FL). The outlook for all ratings is negative. The rating downgrades and negative outlook are based on Castle Key's continued deterioration in risk-adjusted capitalization, particularly as measured by A.M. Best on a catastrophe stress tested basis. As the group is the dedicated Florida property writer for its parent company, Allstate Insurance Company (Allstate) (Northbrook, IL), Castle Key continues to maintain significant exposure to hurricanes and is susceptible to market dislocations and regulatory changes. The ratings also reflect the group's continued unprofitable operating performance. Although Castle Key is separately capitalized and is not reinsured by Allstate, the ratings recognize the historical financial and operational support provided by Allstate. Despite the recent re-branding from Allstate Floridian Insurance Group to Castle Key, A.M. Best expects that parental support regarding the claims paying ability of Castle Key commensurate with the revised ratings will be maintained in the event of frequent and/or severe hurricane activity. To the extent such parental support is not provided, it would be necessary for A.M. Best to re-evaluate the ratings of Castle Key and potentially the current FSR of A+ (Superior) and ICRs of "aa-" of Allstate and all of the remaining Allstate Insurance Group member companies. The FSR has been downgraded to B- (Fair) from B+ (Good) and the ICRs to "bb-" from "bbb-" of Castle Key Group and its following members: -- Castle Key Insurance Company (formerly Allstate Floridian Insurance Company) -- Castle Key Indemnity Company (formerly Allstate Floridian Indemnity Company) -- Encompass Floridian Insurance Company -- Encompass Floridian Indemnity Company About Castle Key Group Castle Key Group, formerly known as Allstate Floridian Insurance Co., is the subsidiary of Allstate Insurance Co. that handles property insurance policies in Florida. CHARITABLE LEADERSHIP: Moody's Junks Rating on $51.7 Mil. Bonds --------------------------------------------------------------- Moody's Investors Service has downgraded the rating to Caa1 from B3 on Charitable Leadership Foundation's $51.7 million of Series 2002A bonds (Center for Medical Science Project) which were issued through the City of Albany Industrial Development Agency. The rating has been removed from watchlist. The outlook is stable at the lower rating level. Bond proceeds were used to construct a biomedical research facility in the University Heights district of Albany, with Charitable Leadership Foundation ultimately providing a guaranty of debt service payments. The Center for Medical Science is a New York state not-for-profit corporation, which was formed by CLF to own and operate the bond-financed research facility. The rating action reflects Moody's concerns about the precipitous decline in CLF's levels of cash and publicly traded marketable securities and the resulting deterioration in the strength of the Foundation's guaranty agreement, and ongoing concerns about the financial health of one of the main building tenants, whose lease payments cover close to half of debt service annually. Although the Foundation's guaranty and past large portfolio of marketable assets were originally the key factors in assignment of the rating on the bonds, the rating now relies mainly on the expected continued receipt of lease payments from tenants in the facility. The Foundation's financial strength has diminished dramatically and is no longer a key credit factor. Legal Security: Obligations under the Installment Sale Agreement are a general obligation of the Foundation; debt service reserve fund ($5.646 million Citigroup Guaranteed Investment Contract); mortgage lien on the leasehold interest in facility and a security interest in the equipment; pursuant to the Assignment of Rents, the Foundation and the Issuer (City of Albany IDA) pledge and assign to the Trustee all right, title, and interest to all Leases. Although the expectation is that lease payments from building tenants will adequately cover debt service, the Foundation also entered into a Guaranty Agreement with the Trustee. Under this agreement, which is unconditional and remains in effect for the life of the bonds, the Foundation guarantees debt service on the bonds. The lease payments made by tenants inhabiting the research facility do not flow through the Foundation's audited financial statements. Rather, the lease payments and the offsetting debt service payments on the bonds are captured within the audit of the Center for Medical Science. Debt-Related Derivatives: none Credit Challenges: * Extremely thin levels of cash and marketable securities at CLF, resulting in significantly diminished strength of the guaranty provided by CLF. By Moody's calculation, the Foundation's total financial resource base declined from nearly $50 million in FY 2006 (following receipt of a large unrestricted trust gift) to $28.7 million as of 12/31/08, representing a 43% decline in a two year timeframe. Further, the Foundation's levels of program-related investments and loans to other not-for-profit organizations grew to nearly $23 million in FY 2008. By CLF's management's reporting (unaudited), the Foundation's liquid investments (including cash, cash equivalents, and publicly traded debt and equity securities) totaled approximately $145,000 as of July 7, 2009. * Growing liabilities of the Foundation, including contingent liabilities and loans payable. As of July 2009, CLF's management reports that it owes close to $2.6 million in loans payable to two not-for-profit organizations (funds borrowed for cash flow purposes). Further, although CLF sold shares of preferred stock in 2008, the purchaser of the stock has the option of canceling the sale and requiring repayment of nearly $500,000 back from CLF through December 31, 2009. * Weak financial position of Ordway Research Institute, Inc., a tenant in the Center for Medical Science building, which makes lease payments covering nearly half of the annual debt service payments. Ordway is a not-for-profit research organization which was created by Charitable Leadership Foundation and has received significant start-up funding from CLF over the years. Ordway has focused on diversification of its grant and gift funding and CLF management reports that it has not provided funding to CLF during the past 6 months. As of 6/30/08, Ordway had negative unrestricted net assets, and Moody's believes that Ordway's financial resource base is very thin with little margin for error. Further, Ordway's management reports plans to increase its debt levels, including use of a bank loan and equipment leases, over the next few months in order to renovate research facilities for a newly recruited researcher. * Moody's believes that the financial covenant within the guaranty agreement that the Foundation maintain at least 90% of its unrestricted net assets in Liquid Assets has not been met for years. By Moody's calculation, as of 12/31/08, CLF had $1.1 million of cash, cash equivalents, and publicly traded equities compared to approximately $26 million of unrestricted net assets, less appreciation on assets which are not Liquid Assets (Moody's calculates the covenant at 4%). However, CLF has interpreted the Guaranty Agreement covenant calculation differently from Moody's, including debt service reserve funds and debt service funds captured in the audit of the Center for Medical Science as Liquid Assets. Further, CLF includes approximately $4.3 million of loans receivable as Liquid Assets, and uses an alternative calculation of net assets (rather than the audited net assets amount). CLF's calculates this covenant to be 81% as of 12/31/08 (still below the 90% covenant requirement). Per the Guaranty Agreement, breach of this particular covenant beyond a 90-day cure period would allow for acceleration of the bonds at request of 75% of the Bondholders. * The Charitable Leadership Foundation, which was established in 1999, has a relatively short operating history and small management team and is largely governed by a single member of the Foundation's establishing family. Unlike almost all Moody's-rated not-for-profit organizations, the Foundation does not have a self-perpetuating Board of Trustees overseeing the organization's financial operations and preservation of financial resources. Credit Strengths: * The bonds are secured by a debt service reserve fund, which is funded with a $5.6 million guaranteed investment contract. CLF's management reports that the full debt service payment was made on July 1, 2009, with the next debt service payment scheduled for January 1, 2010. * In addition to Ordway, another major tenant within the research facility is Health Research Inc., a not-for-profit which administers research grants for the New York State Department of Health. The Wadsworth Center, a large state department of health laboratory, occupies the space leased by HRI. The original term of this lease was for 16 years (compared to the bonds which mature in 2027). HRI's lease payments cover approximately 47% of debt service. Outlook The negative outlook primarily reflects Moody's concerns that Ordway, a major tenant within the facility, could face financial pressures as it increases its other debt and lease commitments. Any pressure on Ordway's self-sufficiency and its ability to make its ongoing annual lease payments to cover debt service could result in weakening of the rating. What could change the rating -- UP Significant growth of the Foundation's liquid reserves through the sale of private investments and collection of loans payable coupled with evidence that Ordway and other tenants can fully support lease and debt service payments on an ongoing basis without support from CLF. What could change the rating -- DOWN Failure of any of the building tenants to make its full lease payments in any year; use of the debt service reserve fund; acceleration of the bonds as a result of an event of default within the guaranty agreement or bond documents Key Indicators For Charitable Leadership Foundation: (Audited FY 2008 financial data unless otherwise noted; CLF has a 12/31 fiscal year end): * Total cash, cash equivalents, and publicly traded equity securities as of 7/7/08 (unaudited): $145,000 * Total cash, cash equivalents, and publicly traded equity securities as of 12/31/07: $15.4 million * Total Net Assets as of 12/31/08: $28.7 million, including $12.5 million of loans receivable and $10.4 million of program related investments * Amount of Series 2002A bonds outstanding: $51.7 million Rated Debt: * Series 2002A Civic Facility Revenue Bonds: Caa1 The rating on the Series 2002A bonds was assigned by evaluating factors believed to be relevant to the credit profile of Charitable Leadership Foundation such as 1) the business risk and competitive position of the issuer versus others within its industry or sector, ii) the capital structure and financial risk of the issuer, iii) the projected performance of the issuer over the near to intermediate term, iv) the issuer's history of achieving consistent operating performance and meeting budget or financial plan goals, v) the nature of the dedicated revenue stream pledged to the bonds, vi) the debt service coverage provided by such revenue stream, vii) the legal structure that documents the revenue stream and the source of payment, and vii) the issuer's management and governance structure related to payment. The last rating action was on April 9, 2009, when the B3 rating on the Series 2002A bonds was maintained on watchlist for possible downgrade. CHARTER COMM: Shareholder Herb Lair Sues Paul Allen --------------------------------------------------- Shareholder Herb Lair has filed a complaint alleging securities fraud against Charter Communications Inc. Chairman Paul Allen and two other executives in the U.S. District Court for the Eastern District of Arkansas, in Little Rock, Bloomberg News reports. Mr. Lair has accused Mr. Allen, Chief Executive Officer Neil Smit, and Chief Financial Officer Eloise Schmitz of making misleading public statements about Charter's prospects before filing for bankruptcy protection. According to court documents, Mr. Lair argues that Charter's stock traded at artificially high prices because of those statements. Andrew M. Harris of Bloomberg News says that Mr. Lair is seeking class action status for the case, plus unspecified damages. 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) CHINA HEALTH: Net Loss Widens t $2.7-Mil. for Fiscal Year 2008 -------------------------------------------------------------- China Health Care Corporation said in a an amended Form 10-K filed with the Securities and Exchange Commission that at September 30, 2008, its balance sheet showed total assets of $1,499,720 against total liabilities of $6,173,173, resulting to a stockholders' deficit of $4,673,454. For the year ended September 30, 2008, the Company posted a net loss of $2,701,352 compared with a net loss of $1,218,980 for the same period in the previous year. For the year ended September 30, 2008, its financing activities generated cash of $1,129,323 compared with $432,871 in 2007. The increase in cash generated in financing activities of $696,452 for the year ended September 30, 2008, was due to the increase of proceeds from issuance of common stock and short-term loans. The Company does not expect any more cash payment or accrued payment for dividends in near term as the majority of the CPS has been converted. Innotech (a shareholder of UPMG) loaned $384,615 (equivalent to HK$3,000,000) and $512,820 (equivalent to HK$4,000,000) to UPMG on January 10, 2008, and January 25, 2008, as the working capital of UPMG. Going Concern Doubt Samuel H. Wong & Co., LLP, in South San Francisco, California, raised substantial doubt about China Health's ability to continue as a going concern after auditing the Company's financial results for the years ended September 30, 2008, and 2007. The auditor noted that the Company continued to incur losses and working capital deficiencies. The Company has a negative cash flow from operations of $1,457,854 for the year ended September 30, 2008, and a working capital deficiency of $4,812,117. The Company continues to make efforts to procure outside financing to strengthen its financial position. A full-text copy of the Company's Form 10-K/A is available for free at http://ResearchArchives.com/t/s?3f1e About China Health China Health Care Corp. provides consultancy services to the VIP Maternity & Gynecological Centers in the People's Republic of China. These services are provided in conjunction with Johns Hopkins International, LLC, a U.S. based healthcare provider, and based upon a Consultancy Agreement with JHI. The Company is currently under contracts to provide consultancy services to a total of five VIP Birthing Centers in the PRC and to manage a private hospital in Macau. CIT GROUP: Liquidity Concerns Prompt S&P to Junk Ratings -------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on CIT Group Inc., including lowering the counterparty credit ratings to 'CCC+/C' from 'BB-/B'. The ratings remain on CreditWatch, where they were placed with negative implications on June 12, 2009. CIT has been unable to secure government-guaranteed funding under the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program. "The downgrade reflects increased near-term liquidity concerns," said Standard & Poor's credit analyst Rian Pressman. "We believe that diminished market confidence in CIT's longer term prospects may further strain its liquidity," Mr. Pressman added. "We had previously believed that CIT's liquidity resources were sufficient to repay unsecured debt maturities through at least first-quarter 2010. However, this assumption did not consider the possibility of a significant increase in draws on its committed credit lines." At March 31, 2009, CIT had more than $5 billion in outstanding financing commitments. CIT has more than $1 billion of unsecured notes maturing in both third- and fourth-quarter 2009 -- payments that could become increasingly difficult to make if borrower draws increase significantly and CIT does not win regulatory approval of its strategic initiatives. CIT remains in discussion with regulators regarding its pending TLGP application. The company is also exploring with its regulators alternative liquidity solutions that do not involve TLGP, including near-term transfers of assets into CIT Bank through Section 23A waivers. However, its ability to pursue such strategies also hinges on regulatory approval. If CIT cannot ultimately access TLGP or pursue alternative liquidity solutions, S&P believes it might attempt to restructure its debt, perhaps in bankruptcy or through an exchange offer S&P would view as distressed. S&P's expectations for CIT's financial performance remain unchanged. S&P expects that it will continue to report operating losses for the remainder of 2009 and possibly into 2010. S&P will update this CreditWatch listing as developments unfold. If CIT cannot issue debt under the TLGP or pursue alternative liquidity solutions, S&P could lower its ratings on the company by more than one notch, indicating the increased probability of a troubled debt restructuring or, possibly, a bankruptcy filing. CIT GROUP: Moody's Downgrades Senior Unsecured Rating to 'B3' ------------------------------------------------------------- Moody's Investors Service downgraded the senior unsecured rating of CIT Group Inc. to B3 from Ba2. Additionally, Moody's placed CIT's long-term ratings on review for further possible downgrade. The company's short-term rating remains Not Prime. The downgrade of CIT's ratings is based on Moody's growing concern with CIT's liquidity position and prospects for survival of the franchise. In Moody's view, CIT has made inadequate progress in advancing its near-term liquidity initiatives to maintain an appropriate liquidity runway, including pending applications with the firm's regulators regarding access to TLGP and 23A asset transfers to CIT Bank. Longer term, Moody's believes that CIT faces significant challenges in achieving a funding profile that would provide a stable and cost effective source of funding to support its businesses. As a consequence, Moody's believes the firm's probability of default has increased and that the possibility that CIT will undergo significant, and potentially disruptive, organizational and ownership change has increased. During recent quarters, CIT has generated liquidity by reducing origination of new earning assets, resulting in a partial run-off of its loan and lease portfolios, and by securitizing and selling certain assets. However, Moody's had previously estimated that, considering CIT's sizeable debt maturities in March and April 2010, the firm would need to supplement its liquidity sources during 2009 with a combination of 1) approval to issue U.S. government guaranteed debt under the FDIC's Temporary Liquidity Guaranty Program (TLGP), and/or 2) exemptions by the Federal Reserve under section 23A of the Banking Act to allow CIT to transfer additional assets to CIT Bank to be funded by deposits. In April 2009, CIT was given approval to transfer $5.7 billion of student loans and $3.5 billion of related debt into its bank subsidiary. Moody's continues to believe that additional asset transfers to CIT Bank are additional possible options, though CIT has indicated that it continues to discuss these transfers, as well as TLGP issuance, with its regulators. Moody's is concerned that delays in obtaining the necessary approvals has resulted in a smaller margin of error with respect to the firm meeting its obligations for the balance of 2009. CIT has $2.4 billion of debt maturities between July and December 2009. Additionally, Moody's believes that damage to the franchise has become a more prominent issue. CIT customers concerned with the company's status could make higher than expected draws on their funding commitments with the firm, which would worsen its immediate liquidity challenges. At the end of the first quarter 2009, CIT's financing and leasing commitments to its customers totaled $5.3 billion, a meaningful percentage of which involve CIT as sole lender or lead agent. The firm's capacity to fund an unexpected increase in loan advances is limited, in Moody's view. Longer term, this risk could also further decrease CIT's access to capital and prospects for maintaining franchise viability. Moody's is also concerned that, notwithstanding any further achievements the firm may make in respect of its near-term liquidity profile, the prospects for its longer-term funding and business profile remain ambiguous. CIT's access to traditional unsecured debt will likely be constrained for the foreseeable future. Though the firm has embarked on a strategy to shift its funding profile to incorporate greater use of deposit funding through CIT Bank, Moody's believes that CIT will likely require significant third party capital to effect the organizational and business changes necessary to obtain funding stability as a commercial bank. Also, given the size of the firm's balance sheet and funding needs, its ability to gather enough deposits in the near to medium term to meaningfully reduce its dependence on wholesale funding is limited. During CIT's planned transition, Moody's is concerned that the firm's franchise positioning in its individual businesses is under significant pressure, due to constraints in its ability to meet its customers' needs as well as the reputational damage sustained as a result of its recent performance and negative news flow. Moody's widened the notching of the senior subordinated debt relative the senior unsecured debt rating to reflect the increased potential loss-given-default for this class of securities. During its review, Moody's will monitor CIT's pending applications with its regulators for access to TLGP and 23A exemptions and their potential to improve the firm's near-term liquidity profile. Moody's will also examine CIT's longer-term options for achieving funding stability and the ensuing uncertainties should the firm need to undertake actions that are disruptive to its business prospects or that disadvantage creditors. Moody's expects that its review period will be brief. These ratings were downgraded: CIT Group, Inc.: * Issuer rating -- to B3 from Ba2 * Senior Unsecured -- to B3 from Ba2 * Senior Secured -- to B2 from Ba1 * Senior Subordinated -- to Caa2 from Ba3 * Junior Subordinated -- to Caa3 from B2 * Preferred Stock -- to Ca from Caa1 CIT Group (Australia) Limited: * Backed Senior Unsecured -- to B3 from Ba2 * CIT Group Funding Company of Canada: * Backed Senior Unsecured -- to B3 from Ba2 The last rating action was on April 23, 2009, when CIT's ratings were downgraded and assigned a negative outlook. CIT Group, Inc., is a global commercial finance company located in New York City and Livingston, New Jersey. CIT GROUP: Default Poses Risks to 1,881 Rated CDOs, Says S&P ------------------------------------------------------------ Standard & Poor's Ratings Services stated July 14 that 1,881 rated synthetic collateralized debt obligation transactions have exposure to CIT Group Inc. S&P prepared a table that outlines, by region, the number of synthetic transactions and tranches with exposure to CIT. S&P downgraded CIT to CCC+/Watch Neg/C on July 13, 2009. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Synthetic CDO Exposure to CIT Asia-Pacific U.S. Europe (excl. Japan) Japan --- ----- ------------ ----- No. of transactions 701 977 99 104 No. of tranches 1,003 1,182 129 156 COACH AMERICA: Moody's Changes Outlook to Stable; Keeps B3 Rating ----------------------------------------------------------------- Moody's Investors Service has changed the ratings outlook of Coach America Holdings, Inc., to stable from negative and affirmed all ratings, including the B3 corporate family and probability of default ratings. The outlook change follows progress from Coach America's operational improvement plan which should enable the company to achieve and maintain return and interest coverage metrics on par with the B3 rating level. Improvements in pricing, asset utilization, and leveraging of direct expenses have driven better financial performance. The outlook anticipates: 1) that volumes could face pressure into 2010; 2) that recent margin improvements should hold while volumes remain weak; 3) that fuel prices should remain moderate near-term. The outlook also reflects an adequate liquidity profile, which assumes Coach America will maintain the borrowing availability and cash on hand to comfortably fund maintenance capital spending and seasonal working capital needs, in concert with lease buy-out, and acquisition / expansion spending. The B3 corporate family rating affirmation reflects the company's small size, high leverage, and an expectation that surplus cash flow remaining after maintenance capital spending should be limited over the rating horizon. The affirmation acknowledges that recent margin improvements have largely stemmed from substantial cost cuts that occurred as volumes declined and fuel prices were moderate; ability to fully sustain recent margin levels could prove challenging when demand growth returns. Other ratings affirmed: -- $30 million guaranteed 1st lien senior secured revolving credit facility due 2013 -- B2 LGD3, to 40% from 41% -- $50 million guaranteed 1st lien senior secured letter of credit facility due 2014 -- B2 LGD3, to 40% from 41% -- $195 million guaranteed 1st lien senior secured term loan due 2014 -- B2 LGD3, to 40% from 41% -- $50 million guaranteed 1st lien senior secured delayed draw term loan due 2014 -- B2 LGD3, to 40% from 41% -- $55 million guaranteed 2nd lien term loan due 2014 -- Caa2 LGD5, 88% Moody's last rating action on Coach America occurred April 21, 2008, when the B3 corporate family rating and negative outlook were affirmed. Coach America's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Coach America's core industry and Coach America's ratings are believed to be comparable to those of other issuers of similar credit risk. Coach America Holdings, Inc., headquartered in Dallas, Texas, is the largest charter bus operator and second largest motorcoach services provider in the United States. The company had 2008 revenues of approximately $480 million. COACH AMERICA: S&P Keeps B- Corp. Credit Rating; Outlook Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Dallas, Texas-based Coach America Holdings Inc. to positive from stable. At the same time, S&P affirmed its 'B-' long-term corporate credit and 'B' senior secured debt ratings, (one notch above the corporate credit rating), while leaving the recovery rating unchanged at '2', indicating expectations of a substantial (70%-90%) recovery in the event of a payment default. S&P also affirmed the 'CCC' second-lien credit facility rating, (two notches below the corporate credit rating), and left the recovery rating unchanged at '6', indicating expectations of a negligible (0%-10%) recovery in the event of a payment default. S&P revised its outlook to positive from stable because S&P expects that the company will continue to implement operational improvements and strengthen its financial profile, despite the effects of the prolonged U.S. recession. S&P believes that over the next year, earnings and cash flow should continue to benefit from the repricing of existing contracts, lucrative new contract wins, and one small accretive acquisition completed during 2008. Earnings should also benefit from numerous cost-cutting measures, including closing or restructuring of underperforming locations, as well as efficiency and operational improvements. Coach does not publicly disclose financial information. "The outlook reflects S&P's expectation that the company's financial profile should continue to benefit from improvements in operating performance that S&P believes will continue over the long term," said Standard & Poor's credit analyst Funmi Afonja. S&P could raise the ratings if continued operating gains cause adjusted debt to EBITDA to consistently move below 5x. "If the company cannot maintain this trend of improving operating performance and the 2009 results are similar to those of 2008, S&P could revise the outlook back to stable," she continued. COACHMEN INDUSTRIES: Retirement Plan Files Annual Report on 11-K ---------------------------------------------------------------- The Coachmen Industries, Inc. Retirement Plan and Trust filed its annual report on Form 11-K for the year ended December 31, 2008. The Plan, among others, reported net assets available for benefits of $18,929,215 at December 31. A full-text copy of the Form 11-K report is available at no charge at http://ResearchArchives.com/t/s?3f27 About Coachmen Industries Coachmen Industries, Inc., is one of America's premier systems- built construction companies under the ALL AMERICAN HOMES(R) and MOD-U-KRAF(R) brands, as well as a manufacturer of specialty vehicles. Coachmen Industries, Inc. is a publicly held company with stock listed on the New York Stock Exchange (NYSE) under the ticker COA. * * * In March 2009, Coachmen's independent public accounting firm, Ernst & Young LLP, said that despite the Company's sale of the assets related to its RV Segment, its recurring net losses and lack of current liquidity raise substantial doubt about its ability to continue as a going concern. Coachmen said its ability to continue as a going concern is highly dependent on its ability to obtain financing or other sources of capital. COLLEEN INC: Bankr. Court Abstains from Non-Debtor Dispute ---------------------------------------------------------- WestLaw reports that a bankruptcy court had to abstain from hearing, pursuant to the mandatory abstention provision, a removed state court action brought by an issuer of money orders that a Chapter 11 debtor was in the business of selling against banks where the debtor did business, for the banks' alleged conversion in improperly using trust funds of the money order company to satisfy their own claims against the debtor. The proceeding involved purely state law claims, over which the court could exercise only "related to" but not "core" jurisdiction. The claims could not have been commenced in a federal forum but for the debtor's Chapter 11 filing. Moreover, the case could be tried in state court within one year of its being remanded. In re Colleen, Inc., --- B.R. ----, 2009 WL 1883866 (Bankr. D. Md.). Based in Baltimore, Maryland, Colleen, Inc., aka A & B Check Cashing -- http://www.abcheckcashing.com/-- specializes in cashing in all types of checks, and provides other financial services. The Debtor filed for Chapter 11 protection on June 28, 2006 (Bankr. D. Md. Case No. 06-13748). In August 2006, the Court appointed Zvi Guttman as the Debtor's Chapter 11 Trustee, and Mr. Guttman is represented by Brent C. Strickland, Esq., at Whiteford, Taylor & Preston LLP, in Baltimore. When the Debtor sought protection from its creditors, it disclosed assets of $467,000 and debts totaling $11,800,000. COOPERATIVE BANKSHARES: Nasdaq to Delist Stock Effective July 20 ---------------------------------------------------------------- Cooperative Bankshares, Inc., reports that The Nasdaq Stock Market, Inc. has determined to remove from listing the Company's common stock, effective at the opening of the trading session on July 20, 2009. Based on a review of the information provided by the Company, Nasdaq Staff determined that the Company no longer qualified for listing on the Exchange pursuant to Listing Rules 5100, 5110(b) and IM-5100-1. The Company was notified of the Staffs determination on June 22, 2009. The Company did not appeal the Staff determination to the Hearings Panel, and the Staff determination to delist the Company became final on July 1, 2009. The Nasdaq Staff Determination was a result of the fact that Cooperative Bank, the Company's wholly owned subsidiary, was closed by the North Carolina Commissioner of Banks on June 19, 2009 and the Federal Deposit Insurance Corporation was appointed as the Bank's receiver. On that same date, First Bank, Troy, North Carolina, acquired substantially all banking operations, including substantially all of the deposits, of the Bank and purchased most of the Bank's assets in a transaction facilitated by the FDIC. Pursuant to the Nasdaq Staff Determination, trading in the Company's common stock was halted by Nasdaq on June 22, 2009. Bankruptcy As a result of the Bank's receivership, the Company has ceased operations and expects to liquidate or seek bankruptcy protection, according to the Troubled Company Reporter on June 24, 2009. If the Company were to liquidate or seek bankruptcy protection, the Company believes that there would be no assets available to holders of the capital stock of the Company. As of May 31, 2009, Cooperative Bank had total assets of $970 million and total deposits of approximately $774 million. In addition to assuming all of the deposits of the failed bank, First Bank agreed to purchase approximately $942 million of assets. The FDIC will retain the remaining assets for later disposition. About Cooperative Bank Chartered in 1898, Cooperative Bank in Wilmington, North Carolina, provides a full range of financial services through 21 offices and one loan origination office in North Carolina and three offices in South Carolina. The Bank's subsidiary, Lumina Mortgage, Inc., is a mortgage-banking firm, originating and selling residential mortgage loans through four offices in North Carolina. COREL CORP: Management Eyes Prepaying Portion of Term Loan Debt --------------------------------------------------------------- Corel Corporation says due to the uncertainties presented by the current state of the global economy and the Company's financial performance, there is a risk it may be in violation of certain debt covenants with lenders over the next 12 months. However, due to its current excess cash position, Corel says management is investigating the option to pre-pay a portion of its term loan debt. This would reduce interest expense and total amount of long-term debt, which would ease the Company's ability to meet the financial covenants under its senior credit facility. Corel reported a net loss of $4,125,000 for the three months ended May 31, 2009, compared with a net income of $930,000 for the same period in 2008. Corel reported a net loss of $5,661,000 for the six months ended May 31, 2009, compared with a net income of $900,000 for the same period in 2008. Corel reported $217,990,000 in total assets and $230,109,000 in total liabilities, resulting in $12,119,000 of stockholders' deficit at May 31, 2009. Corel's working capital deficiency at May 31, 2009, was $13,200,000, an increase of $6,900,000 from the November 30, 2008 working capital deficiency of $6,300,000. Corel says based on its current senior debt facility, a significant balloon payment will be required in fiscal 2012. "We are unable to currently assess our ability to maintain our creditworthiness over this period, which would be required to refinance this payment at or prior to that date," according to Corel. Corel has a five-year $75,000,000 revolving line of credit facility, of which roughly $69,000,000 is unused as of May 31, 2009. Management believes based on the current market conditions, forecasts and the Company's debt covenant restrictions, that limited amounts, if any, of the line of credit will be available to the Company over the next 12 months. "Ultimately, we would need to obtain approval from our lenders for permitted transactions as defined in the credit agreement. Management has not used, and does not anticipate using the revolving line of credit to fund operating requirements and debt re-payments over the next 12 months," Corel says. As of May 31, 2009, Corel is in full compliance with all debt covenants with lenders. Corel is required to meet these financial covenants: -- a maximum total leverage ratio, which is defined as the ratio of total debt to trailing four quarter consolidated Adjusted EBITDA, as defined in the credit agreement, to be less than specified amounts over the term of the facility as follows: Period Ratio ------ ----- November 30, 2008 through November 29, 2009 3.00 November 30, 2009 through November 29, 2010 2.75 November 30, 2010 through November 29, 2011 2.50 November 30, 2011, thereafter 2.25 -- a minimum fixed charge coverage ratio, which is defined as the ratio of trailing four quarter consolidated Adjusted EBITDA to fixed charges (fixed charges include interest paid, scheduled repayment of principal on long-term debt, capital expenditures and taxes paid) as follows: Period Ratio ------ ----- Through to November 29, 2010 2.00 November 30, 2010 through November 29, 2011 2.25 November 30, 2011, thereafter 2.50 About Corel Corp. Corel Corp. (NASDAQ:CREL) (TSX:CRE) -- http://www.corel.com/-- is one of the world's top software companies with more than 100 million active users in over 75 countries. The Company provides high quality, affordable and easy-to-use Graphics and Productivity and Digital Media software. The Company's products are sold through a scalable distribution platform comprised of Original Equipment Manufacturers (OEMs), the Company's global e- Stores, and the Company's international network of resellers and retail vendors. The Company's product portfolio includes CorelDRAW(R) Graphics Suite, Corel(R) Paint Shop Pro(R) Photo, Corel(R) Painter(TM), VideoStudio(R), WinDVD(R), Corel(R) WordPerfect(R) Office and WinZip(R). The Company's global headquarters are in Ottawa, Canada, with major offices in the United States, United Kingdom, Germany, China, Taiwan, and Japan. * * * The Troubled Company Reporter reported on November 6, 2008, that Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit and senior secured debt ratings, on Ottawa-based packaged software provider Corel Corp. At the same time, S&P removed the ratings from CreditWatch with negative implications, where they were placed March 31, 2008. The outlook is stable. At August 31, Corel had US$159 million of debt outstanding. COREL CORP: Swings to $4,125,000 Net Loss in 2nd Quarter 2009 ------------------------------------------------------------- Corel Corporation filed with the Securities and Exchange Commission its quarterly report on Form 10-Q for the period ended May 31, 2009. Corel reported a net loss of $4,125,000 for the three months ended May 31, 2009, compared with a net income of $930,000 for the same period in 2008. Corel reported a net loss of $5,661,000 for the six months ended May 31, 2009, compared with a net income of $900,000 for the same period in 2008. Corel reported $217,990,000 in total assets and $230,109,000 in total liabilities, resulting in $12,119,000 of stockholders' deficit at May 31, 2009. Corel's working capital deficiency at May 31, 2009, was $13,200,000, an increase of $6,900,000 from the November 30, 2008, working capital deficiency of $6,300,000. Based on its current business plan, internal forecasts and the risks that are present in the current global economy, Corel believes that cash generated from operations and existing cash balance will be sufficient to meet working capital and operating cash requirements over the next 12 months. In the past quarter, Corel generated $780,000 of operating cash flows, despite the fact that its changes to its working capital reduced operating cash flows by $4,500,000. In fiscal 2008, the Company generated an increase in cash of $25,600,000, largely driven by its operating cash flows, increasing its cash and cash equivalents to $50,300,000. In the first six months of fiscal 2009, the main driver of the decrease in cash of $18,100,000 was a loan repayment -- cash sweep payment -- of $17,500,000. "Despite our reduced operating income in the current economy, we are not generating negative cash flows from our operating activities, and we expect our operating cash flows to remain relatively stable or potentially improve over the next 12 months. The cash sweep payment due under our senior credit facility on March 1, 2010, has been estimated to be $13.0 million. Given our current cash balance of $32.1 million, our ability to maintain slightly positive operating cash flows in these uncertain times, and the fact that our next cash sweep payment is estimated to be $13.0 million, we believe we are in an adequate cash position for the next 12 months," Corel says. "Over the next 12 months our operating cash flows could decrease as we continue to face revenue uncertainty. The revenue uncertainty will be largely offset by a reduction in our operating expenditures, including through the additional cost reduction initiatives announced on April 2, 2009, our global restructuring plan implemented in May 2009, an elimination of salary increases for fiscal 2009, a reduction in expenditures such as the charges associated with the evaluation of strategic alternatives, a reduction in discretionary spending and a reduction in our capital expenditures," according to Corel. "The benefits of our restructuring activities and our cost curtailment initiatives are evident in our operating expenditures for the six months ending May 31, 2009, which have decreased by 24.1% from the same period in the prior year. We expect this level of reduced expenditures to continue for the remainder of fiscal 2009 and into fiscal 2010. We also have no significant liabilities for our defined pension benefit plan, our past restructuring activities, and do not expect significant cash flows from tax uncertainties and in particular our tax contingency with the province of Ontario. "We expect that our actions to reduce operating expenses will allow us to generate operating cash flows sufficient to sustain operations, to address future cash sweep payments noted above, and to offset, in whole or in part, the potential impact of a decrease in future revenues. We also believe the global positioning of our diverse group of products will reduce the revenue risks created by the uncertainty in the present economy." A full-text copy of Corel's quarterly report is available at no charge at http://ResearchArchives.com/t/s?3f21 About Corel Corp. Corel Corp. (NASDAQ:CREL) (TSX:CRE) -- http://www.corel.com/-- is one of the world's top software companies with more than 100 million active users in over 75 countries. The Company provides high quality, affordable and easy-to-use Graphics and Productivity and Digital Media software. The Company's products are sold through a scalable distribution platform comprised of Original Equipment Manufacturers (OEMs), the Company's global e- Stores, and the Company's international network of resellers and retail vendors. The Company's product portfolio includes CorelDRAW(R) Graphics Suite, Corel(R) Paint Shop Pro(R) Photo, Corel(R) Painter(TM), VideoStudio(R), WinDVD(R), Corel(R) WordPerfect(R) Office and WinZip(R). The Company's global headquarters are in Ottawa, Canada, with major offices in the United States, United Kingdom, Germany, China, Taiwan, and Japan. * * * The Troubled Company Reporter reported on November 6, 2008, that Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit and senior secured debt ratings, on Ottawa-based packaged software provider Corel Corp. At the same time, S&P removed the ratings from CreditWatch with negative implications, where they were placed March 31, 2008. The outlook is stable. At August 31, Corel had US$159 million of debt outstanding. CORUS BANKSHARES: Starwood Capital to Bid on Assets, Says WSJ ------------------------------------------------------------- Private equity firm Starwood Capital Group is bidding on Corus Bankshares Inc.'s assets, The Wall Street Journal reported, citing people familiar with the matter. According to the Journal, Starwood Chairman and CEO Barry Sternlicht said that his firm is bidding for a bank, although he did not identify the bank. Mr. Sternlicht said that bank is heavily concentrated in real-estate lending and has more than 110 construction loans. Lingling Wei and Nick Timiraos at the Journal notes that construction loans made up 88% of Corus Bankshares' outstanding loans at the end of the first quarter. The Journal says that investors don't seem to be interested in acquire the entire Corus Bankshares, but instead are looking at purchasing the bank's assets out of receivership if regulators take over. Bank regulators, according to the report, gave Corus Bankshares a June 2009 deadline to raise capital or find a buyer. Corus Bankshares hired in June a crisis-management firm that specializes in restructuring distressed, midsize companies. WSJ notes that if Corus Bankshares were placed into receivership, the bank would represent the first major bank failure brought on by declining commercial real-estate loans in this downturn. Based in Chicago, Illinois, Corus Bankshares, Inc. (NASDAQ: CORS) is a bank holding company. Corus conducts its banking operations through its wholly-owned banking subsidiary Corus Bank, N.A. As reported by the Troubled Company Reporter on April 28, 2009, Corus Bankshares' audited financial statements for the fiscal year ended December 31, 2008, included in the Company's Annual Report on Form 10-K, filed on April 7, 2009, contained a going concern qualification from Ernst & Young, LLP, its independent registered accounting firm. On April 1, the Company received a letter from Nasdaq indicating that the Company failed to comply with the continued listing requirements set forth in Marketplace Rule 4310(c)(14). The Notice arises as a result of the Company's failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2008, on or before March 31, 2009. On April 7, the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2008. As a result of the filing, the Company received a letter from Nasdaq saying that it is now in compliance with Marketplace Rule 4310(c)(14). As of December 31, 2008, the Company had $8.35 billion in total assets and $8.07 billion in total liabilities. The Company posted $456.4 million in net loss for year 2008. COYOTES HOCKEY: Wayne Gretzky Agrees to Submit Financial Records ---------------------------------------------------------------- Phoenix Coyotes head coach Wayne Gretzky has given in to the City of Glendale's demands for financial records. According to Examiner.com, Mr. Gretzky told the Hon. Redfield T. Baum of the U.S. Bankruptcy Court for the District of Arizona that he will cooperate with the City in its pursuit of financial documents. As reported by the Troubled Company Reporter on July 13, 2009, Mr. Gretzky was contesting a request by the city, the Company's biggest creditor, to turn over personal financial records, reversing a statement he said earlier that he would be willing to hand over tax records and other financial documents to the city. Mr. Gretzky's lawyers had filed a motion in the Court to block the city's request, citing personal privacy. Judge Baum expects that Mr. Gretzky will give the city the documents they wish to have by Friday, Examiner.com states. Examiner.com relates that while the legal team of Phoenix Coyotes owner Jerry Moyes also told Judge Baum that they will release documents requested by the City of Glendale, with the exception of some e-mails, due to the expenses involved, and some tax documents. Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. As widely reported, Jim Balsillie, Research in Motion Ltd.'s co- chief executive officer, offered to buy the Phoenix Coyotes for $212 million and move the NHL team to Hamilton, Ontario, and the League balked at the relocation proposal. Mr. Balsillie was unsuccessful in 2007 when he attempted to buy and relocate the Nashville Predators, and lost a similar bid in 2006 to buy and relocate the Pittsburgh Penguins. COYOTES HOCKEY: Court Dumps Plea to Question Jerry Reinsdorf ------------------------------------------------------------ Examiner.com reports that the Hon. Redfield T. Baum of the U.S. Bankruptcy Court for the District of Arizona has rejected a request to have Jerry Reinsdorf questioned by Jerry Moyes' legal team. According to Examiner.com, a lawyer representing Mr. Reinsdorf said that his client's group, Glendale Hockey, LLC, hasn't been served with a document requesting a release of information to Mr. Moyes' group (under a motion called "Discovery 2004"). Mr. Reinsdorf's representative asked the Court to deny any future request for such documents, says Examiner.com. Examiner.com relates that Mr. Reinsdorf's group accused Mr. Moyes' legal team of bid chilling, saying that requests for multiple documents could drive away Reinsdorf from placing a formal bid on the team. Examiner.com states that a lawyer for the City of Glendale had spoken with Judge Baum via telephone, telling him that requesting documents discussing the ongoing talks between the city and Mr. Reinsdorf's group were inappropriate for Moyes' group to ask for at this time. "The only thing that happens when you open up Discovery before a bid is placed, is they [the bidders] walk out of the room," Examiner.com quoted Judge Baum as saying. Examiner.com reports that a "deposition date" of July 24 was set up for Mr. Reinsdorf in case Judge Baum reverses his ruling. Examiner.com states that Jim Balsillie and his group, PSE Sports & Entertainment, LP, told Judge Baum that they wished to sit in on a deposition regarding the August 5 auction date, but said that they had no interest in participating in the deposition. The National Hockey League's lawyer tried to block that plea, saying that it gives Mr. Balsillie's group "an unfair advantage," but Judge Baum said that he could see no reason as to why they couldn't listen in, Examiner.com relates. Examiner.com says that NHL Commissioner Gary Bettman and Deputy Commissioner Bill Daly will have to deliver depositions between July 28 and 29 at the NHL offices in New York. Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. As widely reported, Jim Balsillie, Research in Motion Ltd.'s co- chief executive officer, offered to buy the Phoenix Coyotes for $212 million and move the NHL team to Hamilton, Ontario, and the League balked at the relocation proposal. Mr. Balsillie was unsuccessful in 2007 when he attempted to buy and relocate the Nashville Predators, and lost a similar bid in 2006 to buy and relocate the Pittsburgh Penguins. COYOTES HOCKEY: NHL to Testify About Bid Withdrawals ---------------------------------------------------- According to Bill Rochelle at Bloomberg News, the National Hockey League officials have agreed to testify under oath before the U.S. Bankruptcy Court for the District of Arizona to shed light on allegations that the NHL discouraged other bidders from submitting offers in competition with the $148 million proposal for the Phoenix Coyotes from Jerry Reinsdorf. NHL has favored Mr. Reinsdorf's bid as it allows the team to stay in Arizona. The U.S. Trustee has raised questions as to why only Mr. Reinsdorf has submitted a bid, when there were four potential bidders for the Phoenix Coyotes. The U.S. Trustee also raised the issue on why the league's deputy commissioner said there was a "coalescing" of interest in the $148 million Reinsdorf bid. As reported by the Troubled Company Reporter on July 1, Mr. Reinsdorf, owner of Major League Baseball's Chicago White Sox and National Basketball Association's Chicago Bulls, has offered $148 million to keep the Phoenix Coyotes team of the National Hockey League in Glendale. Mr. Reinsdorf's bid would challenge one from Jim Balsillie, co-chief executive officer of Blackberry- maker Research In Motion Ltd., who has offered $212.5 million on the condition he's allowed to move the team to Canada. Judge Redfield T. Baum of the U.S. Bankruptcy Court directed an auction to entertain bids to keep the team in the area before considering bids that would require relocation of the team, which would take time to complete and which the NHL opposes. Mr. Reinsdorf was the sole bidder at the local auction. Judge Baum previously said that if the auction fails to attract an acceptable offer, a September 10 auction for bids that requires relocation will be held. Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. Jim Balsillie, Research in Motion Ltd.'s co-chief executive officer, offered to buy the Phoenix Coyotes for $212 million and move the NHL team to Hamilton, Ontario, and the League balked at the relocation proposal. Mr. Balsillie was unsuccessful in 2007 when he attempted to buy and relocate the Nashville Predators, and lost a similar bid in 2006 to buy and relocate the Pittsburgh Penguins. CRUCIBLE MATERIALS: To Take $2.5 Million in Employee Trust ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on July 28 to consider approval of a request to release $2.5 million from an employee trust to Crucible Materials Corp. According to Bill Rochelle at Bloomberg News, Crucible Materials has some $2.5 million held in trust to pay benefits under non-qualified deferred compensation arrangements for senior officers. The trust agreement says the benefits can be paid so long as Crucible doesn't turn insolvent. In view of the bankruptcy, the trustee is willing to pay the money to Crucible so long as the bankruptcy judge requires payment. Based in Syracuse, New York, Crucible Materials Corporation -- http://www.crucible.com/-- aka Crucible Specialty Metals, Crucible Service Centers, Crucible Compaction Metals, Crucible Research and Trent Tube makes stainless and alloy steel for use in the aircraft, automotive, petrochemical, and other industries. The Company sold its trent tubes unit to Plymouth Tube in 2007. The Company and its affiliate, Crucible Development Corporation, filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. The Debtors engaged Duff & Phelps Securities LLP as investment banker; RAS Management Advisors LLC as business advisor; and Epiq Bankruptcy Solutions LLC as claims agent. Roberta A. DeAngelis, United States Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors. The Debtors listed assets and debts both ranging from $100 million to $500 million. DBSD NORTH AMERICA: Revises Plan to Address Objections ------------------------------------------------------ DBSD North America Inc. and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York a disclosure statement describing a second amended joint Chapter 11 plan of reorganization after Wells Fargo Bank N.A., Space Systems/Loral Inc., and the Official Committee of Unsecured Creditors objected to the prior version of the Plan. Wells Fargo, Space Systems and the Committee told the Court that the Plan and Disclosure Statement failed to disclose the detailed assumptions, calculations, or analysis supporting the alleged reorganization value of the Debtors, and specifying whether the Debtors will assume or reject certain contracts, among other things. To obtain approval of a disclosure statement, a plan proponent must show that the disclosure statement contains adequate information necessary for creditors to make an informed judgment of the plan. Approval of the disclosure statement will allow the plan proponent to solicit votes on, and then seek confirmation of, the plan. The Second Amended Plan provides for certain changes to the estimated recovery by unsecured creditors: Estimated Estimated Recovery Under Recovery Under The First The Second Claims and Interest Amended Plan Amended Plan ------------------- -------------- ------------ Prepretition Claim 100% 100% Senior Notes Claim 57%-81% 57%-81% Other Secured Claim 100% 100% Other Priority Claim 100% 100% General Unsecured Claim 2%-16% 1%-17% Unsec. Convenience Cl. Claim 25% 25% The estimated recovery for holders of allowed general unsecured claims of approximately 17% is based upon the estimated amount of $11.6 million of allowed general unsecured claims. This estimate does not include potential litigation claims, which could exceed $211 million, resulting in an estimated recovery for holders of allowed general unsecured claims of approximately 1%. In addition, under the Second Amended Plan, intercompany claims and intercompany interests will be reinstated while other equity and existing stockholder interests will be canceled. On the effective date of the Plan, the reorganized Debtors may enter into a new credit facility. The proceeds of the facility will be used to (i) pay cash amounts required under the Plan; and (ii) provide for the reorganized Debtors' capital expenditure and liquidity needs. The Debtors will issue warrants to the existing stockholders in three tranches: -- warrants representing 5.00% of the new common stock will be exercisable if the aggregate equity valuation upon a valuation event is equal to or greater than $1.0 billion, plus; -- warrants representing 2.50% of the new common stock will be exercisable if the aggregate equity valuation upon a valuation event is equal to or greater than $1.5 billion, plus; -- warrants representing 2.50% of the new common stock will be exercisable if the aggregate equity valuation upon a valuation event is equal to or greater than $2.0 billion. If the warrants are extended below so that they are exercisable after the second anniversary of the Effective Date, the relevant valuation thresholds will be increased at the rate of 30% per annum beginning on the second anniversary of the Effective Date. A full-text copy of the Second Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?3f2e A full-text copy of the Second Amended Plan is available for free at http://ResearchArchives.com/t/s?3f30 About DBSD North America Inc. Headquartered in Reston, Virginia, DBSD North America Inc. aka ICO Member Services Inc. offers satellite communications services. The company and nine of its affiliates filed for Chapter 11 protection on May 15, 2009 (Bankr. S.D.N.Y. Lead Case No. 09- 13061). James H.M. Sprayregen, Esq., Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, in New York; and Marc J. Carmel, Esq., Sienna R. Singer, Esq., at Kirkland & Ellis LLP, in Chicago, serve as the Debtors' counsel. Jefferies & Company is the proposed financial advisors to the Debtors. The Garden City Group Inc. is the court-appointed claims agent for the Debtors. When the Debtors sought for protection from their creditors, they listed between $500 million and $1 billion each in assets and debts. DBSI INC: Judge Walsh Slows Potential Race to the Courthouse ------------------------------------------------------------ WestLaw reports that a bankruptcy statute requiring the trustee to timely perform all obligations of the debtor under any unexpired lease of nonresidential real property, until the lease was assumed or rejected, did not automatically entitle the lessor to an administrative expense claim for any obligations not timely performed by the trustee or debtor-in-possession. Disagreeing with other bankruptcy court decisions to the contrary, a bankruptcy judge in Delaware held that the appropriate remedy, if a debtor's obligations under a lease went unperformed, was to cause the lease to be rejected in a timely fashioned manner. In re DBSI, Inc., -- B.R. ----, 2009 WL 1949649 (Bankr. D. Del.). In his Memorandum Opinion, the Honorable Peter J. Walsh says that granting Ridgmar Trust relief from the stay would cause significant prejudice to DBSI Housing's estate as it continues to resolve numerous outstanding disputes. Indeed, Judge Walsh observes, it is unclear if and to what extent DBSI Housing is administratively solvent; if the automatic stay is lifted, Ridgmar Trust may recover a greater percentage of its claims than similarly-situated creditors. Moreover, Judge Walsh says, "by lifting the stay, I may encourage a race to the courthouse by parties seeking similar orders, which will cause undue hardship and expense to the estate. In contrast, Ridgmar Trust will suffer little prejudice if I do not lift the stay: they simply will have to wait a few extra months to recover an amount most likely well under $100,000. This hardship obviously does not outweigh the hardship likely to be suffered by DBSI Housing's estate if the stay is lifted. Accordingly, Ridgmar Trust's request for relief from the stay is denied." About DBSI Inc. Headquartered in Meridian, Idaho, DBSI Inc. and its affiliates were engaged in numerous commercial real estate and non-real estate projects and businesses. On November 10, 2008, and other subsequent dates, DBSI and 180 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-12687). Lawyers at Young Conaway Stargatt & Taylor LLP represent the Debtors as counsel. The Official Committee of Unsecured Creditors tapped Greenberg Traurig, LLP, as its bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' notice claims and balloting agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million. Joshua Hochberg, a former head of the Justice Department fraud unit, has been named examiner to investigate allegations of fraud by the Debtors and their management. DEJOUR ENTERPRISES: Liquidity Risks Raise Going Concern Doubt ------------------------------------------------------------- Dejour Enterprises Ltd. disclosed in a filing with the Securities and Exchange Commission that its continued existence is dependent upon management's ability to raise required funding through future equity issuances, debt, asset sales or a combination thereof. The Company adds that the management is also aware that significant material uncertainties exist, related to current economic conditions that could cast significant doubt upon the entity's ability to continue to finance its exploration activities. As a result, the management plans on reducing spending in order to preserve cash and maintain liquidity until overall market conditions improve. The management is not able to assess the likelihood or timing of improvements in the equity markets for raising capital for future acquisitions or expenditures. This uncertainty represents a liquidity risk and may impact the Company's ability to continue as a going concern in the future. For the year ended December 31, 2009, the Company incurred a net loss of $20,890,753 compared with a net loss of $26,810,673 in 2007. At December 31, 2008, the Company's balance sheet showed total assets of C$62,305,736, total liabilities of $17,942,059 and shareholders' equity of C$44,363,677. A full-text copy of Form 20-F is available for free at: http://ResearchArchives.com/t/s?3f29 Dejour Enterprises Ltd. (TSE:DEJ) is engaged in the business of exploring and developing energy projects with a focus on oil and gas exploration in Canada and the United States and through its interest in Titan Uranium Inc., which holds uranium exploration properties located in the Athabasca Basin in northern Saskatchewan, and the Thelon Basin, Nunavut, Canada. The Company holds approximately 140,000 net acres of oil and gas leases in various regions, including the Peace River Arch of northwestern British Columbia and northeastern Alberta, Canada and the Piceance and Uinta basins in the United States Rocky Mountains. The Company's wholly owned subsidiaries include Dejour Energy (USA) Corp., Dejour Energy (Alberta) Ltd. and Wild Horse Energy Ltd. During the year ended December 31, 2008, in Peace River Arch, Canada, the Company acquired 6,350 net acres in a new Montney formation natural gas prospect in British Columbia. DELPHI CORP: Asks for Court Nod to MDL Settlement Modifications --------------------------------------------------------------- Pursuant to Section 363(b)(1) of the Bankruptcy Code and Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, Delphi Corp. and its affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve proposed modifications to two stipulated settlements in the multidistrict litigation against Delphi Corporation, certain Delphi affiliates, and certain current and former directors and officers of Delphi under the federal securities laws and the Employee Retirement Income Security Act of 1974 in the United States District Court for the Eastern District of Michigan. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, tells the Court that on May 28, 2009, the Michigan District Court conducted a chambers conference attended by the Debtors, the Securities Lead Plaintiffs, the ERISA Named Plaintiffs, and a number of other settling parties. At the chambers conference, the District Court received an update regarding the Debtors' reorganization process and the negotiations among the parties. The District Court then provided guidance as to the proper procedures with respect to notice and the District Court's consideration of any changes to the MDL Settlements. The parties continued to engage in negotiations, and on July 10, 2009, entered into the Second Securities Stipulation Modification and the Amended ERISA Stipulation Modification -- MDL Settlements -- subject to approval by the District Court and the Bankruptcy Court. Mr. Butler notes that the three principal changes to the MDL Settlements are: (i) the classification and treatment of the allowed claims and interests granted to the Securities Class and the ERISA Class; (ii) the elimination of the Debtors' obligation to pay to the Securities Class $15 million in cash pursuant to an agreement with a third party; and (iii) streamlining of the conditions to the effective date of the MDL Settlement. Specifically, Mr. Butler reminds the Court that the Final MDL Settlements Order granted to the Securities Lead Plaintiffs, as representatives of the Securities Class, an allowed claim for $179 million. Similarly, under the Final MDL Settlement Approval Order, the ERISA Named Plaintiffs, as representatives of the ERISA Class, were allowed an interest for $24.5 million. However, under the Modifications, the Debtors will have no obligation to propose any particular treatment to the Securities Allowed Claim and ERISA Allowed Interest under the Confirmed First Amended Joint Plan of Reorganization, as modified. Under the Modifications, the Securities Allowed Claim and ERISA Allowed Interest will have the same priority as general unsecured claims in the event that the Debtors' Modified Plan provides for a par plus accrued recovery for general unsecured creditors. Moreover, under the Securities Stipulation Modification, the Debtors had an obligation to cause to be paid to the Securities Lead Plaintiffs' escrow agent $15 million pursuant to an agreement with a certain third party. The $15 million payment was due within 10 days after the substantial consummation of the Debtors' Confirmed Plan and was a condition to the effective date of the settlement. However, given the Debtors' current financial condition, the parties agreed to eliminate the $15 million payment and the corresponding condition to the effective date of the settlement. Mr. Butler further notes that one of the conditions set forth in Final MDL Settlement Order requires distribution of the Delphi Net Consideration, pursuant to the Securities Stipulation, as soon practicable after satisfaction of certain conditions or the Bankruptcy Effective Date. Given that the Debtors have not substantially consummated the Confirmed Plan, the Bankruptcy Effective Date has not occurred and the MDL Settlements have not become effective. Against this backdrop, the releases provided in the stipulations will have not taken effect, leaving the Debtors without the paramount benefit of the settlement bargain. Thus, for the settlement to become effective, the Modifications eliminate the conditions related to the Debtors' distribution of the Delphi Net Consideration, if any, to the Securities Class and the Delphi Consideration, if any, to the ERISA Class following the Bankruptcy Effective Date. Once those conditions are satisfied, the MDL Settlements, including the releases of the Debtors, will become effective, without regard to the substantial consummation of a plan of reorganization. Accordingly, Mr. Butler emphasizes, the modified treatment of the Securities Allowed Claim and the ERISA Allowed Interest will make it easier for the Debtors to obtain the Court's approval of changes to the Confirmed Plan. Absent the Modifications, he points out, that the general unsecured creditors might object to the Modified Plan due to the treatment given to the Securities Allowed Claim and the ERISA Allowed Interest. He further notes that those objections would be more difficult to resolve given that the modifications to the Confirmed Plan would provide general unsecured creditors and others with only a partial recovery. The Modifications remove an obstacle to the approval of changes to the Confirmed Plan and the Debtors' emergence from Chapter 11 as soon as practicable, he asserts. Similarly, Mr. Butler says, the Modifications are beneficial to the Debtors and their estates because the Debtors will not have to choose from a range of unattractive options that includes paying the $15 million from their own limited and dwindling cash reserves or potentially breaching the provision of the Securities Stipulation Modification that required the Debtors to cause the payment of the $15 million. Mr. Butler also notes that a third settlement agreement, and Insurance Stipulation, will be affected by the Modifications because the effective date of the Insurance Stipulation is tied to the effective date of the MDL Settlements. The Insurance Stipulation will be deemed effective upon the effective date of the MDL Settlements. Judge Drain will consider the Debtors' request on July 23, 2009. Objections are due July 20. A full-text copy of the Modified MDL Settlements is available for free at http://bankrupt.com/misc/Delphi_ModMDLSettlements.pdf About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on December 20, 2007. The Court confirmed the Debtors' First Amended Plan on January 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DELPHI CORP: Enters Into Further Amendments to JPM DIP Loans ------------------------------------------------------------ Delphi Corporation disclosed with the U.S. Securities and Exchange Commission its entry into a "twelfth amendment" to the DIP Accommodation Agreement with JP Morgan Chase Bank, N.A., and certain requisite lenders under a $4.35 billion DIP Credit Facility. The DIP Accommodation Twelfth Amendment was executed on July 10, 2009. Delphi Vice President and Chief Financial Officer John D. Sheehan relates that the DIP Accommodation Twelfth Amendment provides that: (a) A Repayment Obligation will be triggered on July 14, 2009, unless on or before July 13, 2009, a satisfactory term sheet has been received by the Debtors. (b) The Accommodation Period will terminate on July 15, 2009, in the event that the requisite DIP Lenders have notified the Debtors that a term sheet detailing terms of a global resolution of matters relating to General Motors Corporation's contribution to the resolution of the Debtors, is satisfactory on or before July 14, 2009. (c) The DIP Accommodation Twelfth Amendment postpones until July 14, 2009, the date by which interest payments with respect to the Tranche C Term Loan must be paid, which payments are to be applied ratably to repayments of principal amounts outstanding under the Tranche A Facility and the Tranche B Term Loan Facility. (d) The DIP Accommodation Twelfth Amendment provides that the requisite DIP Lenders have 35 business days to notify the Debtors that the Confirmed First Amended Joint Plan of Reorganization, as modified on June 1, 2009, is not satisfactory. Mr. Sheehan notes that as of July 13, 2009, about $230 million remains outstanding under the Tranche A Facility, $311 million under the Tranche B Term Loan, and $2.75 billion under the Tranche C Term Loan under the Amended and Restated DIP Credit Facility. A full-text copy of the DIP Accommodation Twelfth Amendment dated July 10, 2009, is available for free at: http://ResearchArchives.com/t/s?3f1c About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on December 20, 2007. The Court confirmed the Debtors' First Amended Plan on January 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DELPHI CORP: Fiduciary Counselors Want Claims Estimated at $227MM ----------------------------------------------------------------- Pursuant to Rule 3018(a) of the Federal Rules of Bankruptcy Procedure, Fiduciary Counselors, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to estimate its claims to allow it to vote on the Delphi Corp.'s Confirmed First Amended Joint Plan of Reorganization, as modified on June 1, 2009. The Fiduciary Counselors Inc. is an independent fiduciary under the Debtors' pension plans, which include (1) the Delphi Corporation Retirement Program for Salaried Employees, (2) the Delphi Hourly-Rate Employees Pension Plan, (3) the ASEC Manufacturing Retirement Program, (4) the Delphi Mechatronic Systems Retirement Program, (5) the Packard Hughes Interconnect Non-Bargaining Retirement Plan, and (6) the Packard Hughes Interconnect Bargaining Retirement Plan. The Pension Plans are employee benefit plans under Section 507(a)(4) of the Bankruptcy Code. The Fiduciary Counselors timely filed proofs of claim on behalf of the Pension Plans. The Claims were calculated and based on the most recent information available and included liquidated amounts for contributions that were due and unpaid and unliquidated amounts for contributions that were not yet due. According to the Fiduciary Counselors, no objection has been filed to the Claims. Moreover, the Fiduciary Counselors relates that the Debtors provided it with ballots for only the Salaried Plan, the Hourly Plan and the PHI Bargaining Plan, with each of the Ballots identifying each Pension Plan's Claim as $1 for voting purposes. While the Debtors' Confirmed Plan originally provided for the assumption and continuation of the Pension Plans, under the Modified Plan, the Pension Plans will not be assumed or continued, except with respect to the Hourly Plan, which will be "addressed by GM." More importantly, the Fiduciary Counselors points out that the Modified Plan is silent with respect to the treatment of the Pension Plans' Claims. Against this backdrop, the Fiduciary Counselors contends that the ballots for $1 and for only three of the Pension Plans are hardly commensurate with the Pension Plans' economic stake in the Debtors' Chapter 11 cases. Subsequently, the Fiduciary Counselors presented to the Court the actual amounts of the Claims for each Plan: Salaried Plan $212,949,000 ASEC Plan 1,980,879 Mechatronic Plan 1,338,300 PHI Bargaining Plan 3,512,635 PHI Non-Bargaining Plan 7,784,055 -------------- Total $227,564,869 About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on December 20, 2007. The Court confirmed the Debtors' First Amended Plan on January 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DELPHI CORP: Judge Gerber OKs GM Purchase of Delphi Assets ---------------------------------------------------------- During a July 13, 2009 hearing, General Motors Corp. sought and obtained approval from Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York in its Chapter 11 case to purchase certain of Delphi Corp.'s assets, The Wall Street Journal reports. Judge Gerber has stated that Old GM, which is left in bankruptcy, could take steps to effectuate the transaction, WSJ notes. However, it is New GM that will fund the transaction, including $1.1. billion in payments to Delphi and its creditors, $2 billion equity investment in Parnassus Holdings, and $250 million interim postpetition financing under the GM-Delphi Liquidity Arrangement, WSJ adds. For its part, GM's counsel Robert Lemons, Esq., told Judge Gerber that "the situation remains in flux," according to Bloomberg News. As embodied in the Master Disposition Agreement entered with Delphi and Parnassus Holdings, GM Components, an affiliate of GM, will acquire all of the equity and assets primarily related to Delphi's global steering business and certain United Auto Workers sites, including facilities located in Grand Rapids, Michigan; Rochester, New York; Kokomo, Indiana; and Lockport, New York. In court papers filed in the GM bankruptcy case, it is noted that the Master Disposition Agreement will terminate if by July 15, 2009, the Bankruptcy Court handling the GM case does not approve of GM's entry into the Master Disposition Agreement and related pacts. In a declaration served prior to the July 13 hearing, GM told Judge Gerber that its most reliable and cost-effective option to secure the supply of parts from Delphi's facilities would be to enter into the transaction agreements with Delphi and Parnassus Holdings. A formal order has yet to be entered in GM's bankruptcy docket. Before the July 10, 2009 deadline elapsed, several entities were reportedly interested in the Delphi assets. Elliott Management and Wilbur Ross have shown interest in Delphi's assets, specifically Delphi's international operations. Billionaire Carl Icahn was cited as the first potential buyer of the Delphi assets after the contemplated sale was opened to the public. Subsequently, TRW Automotive Holdings and Appaloosa Management L.P. were also reported to be interested in Delphi, Reuters disclosed, citing sources familiar with the matter. Reuters further noted that TRW was looking into Delphi's books. Similarly, Appaloosa Management, Delphi's former plan investor, was also considering a bid for the Delphi assets, Reuters said. The potential bidders, however, didn't put forth a formal offer for the Delphi assets by the July 10 bid deadline. Section 363 Implementation Agreement In connection with their proposed Chapter 11 plan of reorganization, Delphi Corp. submitted to the Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York a Section 363 Implementation Agreement, also known as the first amendment to the Master Disposition Agreement, executed among the Debtors and GM Components Holdings LLC, and Parnassus Holdings II LLC, an affiliate of Platinum Equity Capital Partners II, L.P., on July 2, 2009. The Master Disposition Agreement requires the Debtors, GM Components and Parnassus to enter into the Section 363 Implementation Agreement to implement a sale transaction under Section 363 of the Bankruptcy Code in the event the Court does not approve the Modified Plan. The 363 Agreement had to be executed by July 2 for the Debtors to receive continued financing under the Amended and Restated GM-Delphi Arrangement. A full-text copy of the Section 363 Implementation Agreement is available for free at: http://bankrupt.com/misc/Delphi_Sec363ImplementationAgr.pdf Moreover, in connection with the Modified Plan and the Section 363 Implementation Agreement, the Debtors, GM Components, and Platinum Equity entered into a letter agreement on July 2, 2009, whereby GM Components agreed to fund up to $50,000,000 of wind-up costs relating to Delphi, following the consummation of the Modified Plan or the Section 363 Implementation Agreement. The salient terms of the Letter Agreement are: (a) On the closing date, GM Components will advance to Reorganized DPH Holdings $10,000,000, or at the company's request, GM Components may advance all or a portion of the Closing Date Advance; (b) During the period commencing on the date after the Closing Date and ending on December 31, 2013, GM Components will advance to Reorganized DPH Holdings, upon its request, $40,000,000, which amounts may be repaid and readvanced; and (c) Post-closing advances will only be available to Reorganized DPH Holdings on the last day of each calendar month; provided that the additional request is accompanied by an updated Wind Up Budget, which is set forth in the Master Disposition and conforms with the Letter Agreement. A full-text copy of the Letter Agreement is available for free at: http://bankrupt.com/misc/Delphi_WindUpCostsPact.pdf About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on December 20, 2007. The Court confirmed the Debtors' First Amended Plan on January 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DELPHI CORP: Unions, Other Parties Object to Modified Plan ---------------------------------------------------------- International Union of Electronic, Electric, Salaried, Machine and Furniture Workers, Communications Workers of America asserts that the Debtors' Confirmed First Amended Joint Plan of Reorganization, as modified on June 1, 2009, or the proposed sale of the Debtors' sale of substantially all assets is not in the best interest of the Debtors' estates and creditors. Accordingly, the IUE-CWA files this objection to create a contested matter and permit it to conduct discovery regarding the Modified Plan or the alternative sale. Other parties that have recently filed objections are: -- the International Union of Operating Engineers Locals 832S, 18S, and 101S, and the International Brotherhood of Electrical Workers and its Local 663, and the International Association of Machinists and Aerospace Workers and its District 10 and Tool and Die Makers Lodge 78, -- Computer Sciences Corporation, -- Pima County, -- American Aikoku Alpha Inc., and -- Brazeway, Inc. The IUOE, et al., insist that liability for the participants' benefits remains the responsibility of the Debtors, unless that liability is transferred to General Motors Corporation's Hourly Rate Pension Plan pursuant to implementation agreements. They say they are not able to assess the ramifications of the Confirmed First Amended Joint Plan of Reorganization, as modified, for active, inactive and retired employees of the Debtors who are participants in the Debtors' Hourly Rate Pension Plan. Computer Sciences Corporation opposes the Debtors' First Amended Joint Plan of Reorganization, as modified on June 1, 2009, and the proposed alternative sale of the Debtors' assets because both options propose to transfer and assign the Master Services Agreement between Computer Sciences and the Debtors, which termination is subject to an adversary proceeding commenced by Computer Sciences against the Debtors. Pima County complains that the Debtors' Confirmed First Amended Joint Plan of Reorganization violates Section 1129(a)(9)(D) of the Bankruptcy Code because it proposes to pay secured claims within seven years of the Effective Date. Pima County asserts that its Claim No. 10248 for $7,969, being a claim for property taxes incurred before the Petition Date and payable without penalty after one year before the Petition Date, would fall under Section 507(a)(8)(B) but for its secured status, and must be paid within five years of the Effective Date. American Aikoku Alpha Inc. points out that the Debtors' Confirmed First Amended Joint Plan of Reorganization, as modified on June 1, 2009, will not assume its purchase order, which is subject to a stipulation previously entered with the Debtors. Under the stipulation, American Aikoku will receive a $413,908 cure payment to cure all defaults for two purchase orders, including the Purchase Order that will not be assumed under the Plan. Brazeway, Inc., disputes the notice of non-assumption served on its purchase orders under the Confirmed First Amended Plan of Reorganization, as modified. Brazeway contends that none of its Contracts were terminated nor has expired. Brazeway asserts that it continues to supply parts and materials to the Debtors pursuant to the previous notices of assumption and assignment of the Contracts, which amended the purchase orders. Brazeway further asserts that it received every indication from the Debtors' employees that the Contracts will be assumed and assigned as part of the Debtors' sale under Section 363 of the Bankruptcy Code. Brazeway thus alleges that the Debtors unilaterally and unjustifiably attempted to avoid payment of $1,835,146 as prepetition cure amounts required under Section 365 of the Bankruptcy Code. About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on December 20, 2007. The Court confirmed the Debtors' First Amended Plan on January 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DELPHI CORP: Wants Exclusive Plan Period Extended to Sept. 30 ------------------------------------------------------------- Delphi Corp. and its affiliates previously filed a supplement containing proposed modifications to their Confirmed First Amended Joint Plan of Reorganization and accompanying disclosure statement on June 1, 2009. The Debtors also entered into a Master Disposition Agreement with GM Components Holdings, an affiliate of General Motors Corporation, and Parnassus Holdings II, LLC, an affiliate of Platinum Equity Capital Partners II, L.P., which agreement is integral to the Modified Plan. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate & Meagher & Flom LLP, in Chicago, Illinois, discloses that although the Debtors believe that a reorganization plan is superior to an asset sale because it provides a comprehensive resolution to their Chapter 11 cases and provides the opportunity for value to be distributed to general unsecured creditors, the Debtors have also committed to a sale of the company to the potential buyers pursuant to Section 363 of the Bankruptcy Code if sufficient stakeholder support can not be obtained to achieve confirmation and substantial consummation of the Modified Plan. The Debtors hope to close the transactions contemplated under the Master Disposition Agreement on or before July 31, 2009. Since those transactions are complicated subject to foreign governmental approval regarding investment, antitrust, monopolization, restraint of trade and competition antitrust, the Debtors acknowledge that the closing may not occur by July 31, 2009. That closing, however, must occur by September 30, 2009, or the parties can terminate the Disposition Agreement, Mr. Butler states. In addition, if procedures established by the Amended Modification Procedures Order result in the Debtors' seeking to consummate an alternative transaction to the Master Disposition Agreement, the Debtors may need additional time to consummate that transaction, Mr. Butler points out. Against this backdrop, the Debtors believe that further extension of the Exclusive Periods is justified. The Debtors specifically ask Judge Drain to further extend the exclusivity period, solely as between them and the Official Committee of Unsecured Creditors, to: (a) file a plan of reorganization, through and including September 30, 2009; and (b) solicit acceptances of that plan, through and including November 30, 2009. Delphi's current Exclusive Plan Filing Period expires on July 31, 2009, and the Exclusive Solicitation Period ends September 30, 2009. Mr. Butler avers that the Debtors have made progress in their reorganization and that among others: * The Debtors have obtained Court approval of the Supplement to the Modified Plan and have commenced solicitation with respect to the Modified Plan; * Pursuant to the transactions contemplated under the Master Disposition Agreement, the Debtors would get $3.6 billion in emergence capital and capital commitments; * The Debtors have obtained Court approval of the Amended and Restated GM-Delphi Arrangement, whereby GM will provide an additional $250 million in interim financing to the Debtors; * The Court granted the Debtors' motion asserting the prior lien defense and reclassifying reclamation claims as general unsecured claims, subject to settlement of the proposed order upon reclaiming creditors; * The Debtors have reconciled 17,000 proofs of claim filed in their Chapter 11 cases, aggregating $34 billion in liquidated amounts plus certain unliquidated amounts. As of June 30, 2009, the Debtors have objected to 14,000 claims, asserting $10.3 billion, and the Court has granted relief with respect to $10.5 billion in asserted liquidated claims; * The Debtors have filed their 34th Omnibus Objection to Claims; * The Debtors participated in the judicial mediation before Judge Cecila Morris with other parties-in-interest, including the Committee, the DIP Lenders, GM, and the U.S. Department of the Treasury's Auto Task Force; * The Debtors entered into further amendments with the requisite DIP Lenders to the DIP Accommodation Agreement, which extended the date on which the Accommodation Period would end if the requisite DIP Lenders have not delivered a notice indicating approval of a term sheet by July 7, 2009; * The Debtors obtained Court approval for the establishment of July 15, 2009, as the administrative claim bar for filing proofs of administrative expense with respect to an alleged postpetition claims against the Debtors through June 1, 2009; and * The Debtors advanced an action against the Plan Investors and related parties with respect to the Investors' refusal to honor their commitments under the Equity Purchase and Commitment Agreement by conducting depositions of expert witnesses, by serving their opposition to Goldman Sachs & Co.'s summary judgment motion, and by completing oral arguments related to that summary judgment motion. Mr. Butler says the Debtors have continued to negotiate with certain of their stakeholders, including JPMorgan Chase Bank, N.A., as DIP Agent, and the requisite DIP Lenders. The Debtors, he adds, continue to pay their bills as they become due, including the statutory fees paid quarterly to the United States Trustee for Region 2. However, Mr. Butler notes that the tasks of closing the transactions contemplated under the Master Disposition Agreement and Court approval of the Modified Plan remain as unresolved contingencies in the Debtors' Chapter 11 cases. Moreover, the Debtors face several challenges that are unique to the distressed automobile industry, he avers. Nevertheless, Mr. Butler maintains that the Debtors' request for further extension of the Exclusive Periods is not a negotiation tactic. Judge Drain will consider the Debtors' request on July 23, 2009. Objections are due July 16. About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on December 20, 2007. The Court confirmed the Debtors' First Amended Plan on January 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DETROIT PUBLIC: May File for Bankruptcy to Cut Costs ---------------------------------------------------- Darrell Preston at Bloomberg News reports that Detroit Public Schools, which has experienced budget deficits for seven years, may consider filing for bankruptcy protection to sell off assets and cut costs. Citing Mr. Wasko, Bloomberg states that Robert C. Bobb, who Michigan Governor Jennifer Granholm appointed in January as emergency financial manager for Detroit Public, recommended bankruptcy as an option for addressing deficit. According to Bloomberg, Mr. Bobb proposed a $1.18 billion budget for fiscal 2010 that would result in the district generating $17.4 million more revenue than it spends. A budget report says that the $1.18 billion budget doesn't erase a $276.8 million deficit from fiscal 2009 and prior years. Bloomberg quoted Mr. Wasko as saying, "To cut spending to the levels needed to pay off this deficit would take 80 percent to 90 percent of our revenue. That's not something parents would have any interest in accepting." The budget document shows that that since Gov. Granholm appointed Mr. Bobb, he has closed 29 schools and fired 17.7% or 2,451 workers, as part of an effort to lessen costs and restructure underperforming schools. Bloomberg states that the district has $1.6 billion of debt, which might be reorganized or restructured in bankruptcy. The district said in its financial statement that it borrowed $210 million in 2005 to cover its deficit in a deal that added $20 million a year to annual debt service through 2020. Citing Mr. Wasko, Bloomerg states that school officials have met with retired bankruptcy judge Ray Reynolds Graves and other attorneys to discuss whether Chapter 9 bankruptcy, which is for government entities, would be good for the district. Detroit Public Schools is a school district that covers all of the city of Detroit, Michigan, United States. The district had 194 schools as of 2008. DIAL-A-MATTRESS: Blames Woes on Stores & Clash in Management ------------------------------------------------------------ Sarah E. Needleman at The Wall Street Journal reports that Napoleon Barragan -- owner of Dial-A-Mattress, which is being acquired by Sleepy's LLC -- blamed the Company's financial problems on its stores as well as a culture clash brought on by new management. Citing Mr. Barrragan, WSJ says that several stores quickly failed as they were located in secondary retail areas selected for their low rents. WSJ relates that Mr. Barragan said that he probably should have opened a handful of stores in prime locations and concentrated on his original direct-marketing formula. Newly hired executives also often clashed with Dial-A-Mattress' entrepreneurial culture, WSJ reports. The report quoted Joe Vicens, a company veteran who became chief operating officer of national sales in 2006, as saying, "The constant battling led to a loss of opportunities." It also led to poor communication among Dial-A-Mattress' management, the report states, citing Messrs. Barragan and Vicens. This led to a failure to recognize that poorly located showrooms were damaging the bottom line, even as overall revenues were rising due largely to Internet and phone sales, the report states. According to the report, Mr. Barragan said, "If you don't know how much you are losing, it's difficult to prevent that from continuing to happen." Mr. Barragan admitted that he should have "groomed internal talent" for some management positions and worked on "a more unified culture," WSJ reports. Founded in 1976, 1800mattress.com -- http://www.1800mattress.com/ -- is the leading national multi-channel (internet, chat, call center and showrooms) retailer of mattresses, box springs and bedding products. It features products by all major brands, including custom sizes, sofa beds, Murphy beds, futons, and adjustable and organic beds. As reported by Troubled Company Reporter on March 23, 2009, creditors filed a Chapter 7 petition for Dial-A-Mattress Operating Corp. et al. (Bankr. E.D.N.Y. Case No. 09- 41966). 1-800-Mattress Corp. and Dial-A-Mattress countered by filing voluntary Chapter 11 petitions. Marc L. Hamroff, Esq., Leslie A. Berkoff, Esq., and Theresa A. Driscoll, Esq., at Moritt Hock Hamroff & Horowitz LLP, serve as the Debtors' counsel. DONALD BARUCH: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Donald E. Baruch 218 E. Bearss Ave., Ste 405 Tampa, FL 33613 Bankruptcy Case No.: 09-14825 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Paul DeCailly, Esq. DeCailly PLC 3111 W. Martin Luther King Blvd, Suite 100 Tampa, FL 33607 Tel: (813) 286-2909 Fax: (866) 906-5977 Email: pdecailly@pdlaw.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Mr. Baruch. DYNAMOTIVE ENERGY: Net Loss Rises to $1.6MM in First Quarter ------------------------------------------------------------ Dynamotive Energy Systems Corporation reported its financial results for the three months ended March 31, 2009. At March 31, 2009, the Company's balance sheet showed total assets of US$33,247,363, total liabilities of US$12,933,207 and shareholders' equity of US$20,314,156. For the three months ended March 31, 2009, the Company posted a net loss of US$1,691,199 compared with a net loss of US$1,432,819 for the same period in the previous year. In a Form 20-F filed with the Securities and Exchange Commission on July 7, 2009, the Company related that the ability of the Company to continue as a going concern is in substantial doubt and is dependent on achieving profitable operations, commercializing its BioOil production technology and obtaining the necessary financing in order to develop this technology. The outcome of these matters cannot be predicted at this time. The Company said its future operations are dependent on the market's acceptance of its products in order to ultimately generate future profitable operations, and the Company's ability to secure sufficient financing to fund future operations. There can be no assurance that the Company's products will be able to secure market acceptance. Management plans to raise additional equity financing to enable the Company to complete its development plans. A full-text copy of the financial result for three months ended March 31, 2009, is available for free at: http://ResearchArchives.com/t/s?3f1d Dynamotive Energy Systems Corporation (OTC BB: DYMTF.OB) -- http://www.dynamotive.com/-- is an energy solutions provider headquartered in Vancouver, Canada, with offices in the United States, United Kingdom and Argentina. Its carbon/greenhouse gas neutral fast pyrolysis technology uses medium temperatures and oxygen-less conditions to turn dry waste biomass and energy crops into BioOil(TM) for power and heat generation. BioOil(TM) can be further converted into vehicle fuels and chemicals. EAGLE CREEK: Court Says No to Substantive Consolidation ------------------------------------------------------- WestLaw reports that a bankruptcy court would not exercise its general equitable powers in order to order the substantive consolidation of the separate Chapter 11 estates of limited liability companies established to develop one specific tract of land in different parts of North and South Carolina. With the possible exception of individual investors, parties had dealt with the debtors as separate single purpose entities, and there was no cross-collateralization between development projects. Furthermore, the debtors' records were fairly accurate concerning how funds were disbursed, and their records did not present the degree of hopeless entanglement on which to base substantive consolidation. In re Eagle Creek Subdivision, LLC, --- B.R. ----, 2008 WL 5109782 (Bankr. E.D.N.C.). Charlotte, North Carolina-based Eagle Creek Subdivision, LLC, and its debtor-affiliates are real estate developers managed by Landcraft Management LLC. Eagle Creek owns 489 lots worth about $24.5 million. The companies are also known as Landcraft Properties or Landcraft Communities. Eagle Creek and some affiliates filed Chapter 11 petition on June 27, 2008 (Bankr. E.D.N.C. Case No. 08-04292), followed by more affiliates in September and October 2007. Judge J. Rich Leonard presides over the jointly administered cases. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., represents the Debtors in their restructuring efforts. Eagle Creek estimated assets between $10 million and $50 million and debts between $10 million to $50 million. EDDIE BAUER: Bidders May Include Iconix, Hilco, Gordon Bros. ------------------------------------------------------------ Iconix Brand Group Inc., owner of the Rocawear brand, and private-equity firm Golden Gate Capital and some liquidators may be among the bidders at the July 16 auction for Eddie Bauer Inc., Bill Rochelle at Bloomberg News reported. Liquidators who may bid include Hilco Merchant Resources LLC and Gordon Brothers Group LLC, Mr. Rochelle said, citing a person familiar with the process. The U.S. Bankruptcy Court for the District of Delaware will consider approval of the results of the July 16 auction at a sale hearing on July 22. As reported by the Troubled Company Reporter on July 1, 2009, Eddie Bauer has obtained approval of a sale process under which, an affiliate of CCMP Capital Advisors, LLC, will serve as stalking horse bidder. Absent higher and better bids at the auction, Eddie Bauer will be sold to the CCMP affiliate for $202 million cash. At the June 29 joint hearing, the Ontario Superior Court of Justice approved a parallel sale of the Canadian side of the business, Bloomberg's Bill Rochelle said. About Eddie Bauer Established in 1920 in Seattle, Washington, Eddie Bauer is a specialty retailer that sells outerwear, apparel and accessories for the active outdoor lifestyle. The Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style and customer service. Eddie Bauer products are available at 371 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebauer.com/ Eddie Bauer participates in a joint venture in Japan and has licensing agreements across a variety of product categories. Eddie Bauer, Inc., was a subsidiary of Spiegel, Inc. Eddie Bauer Inc. emerged from Spiegel's 2003 chapter 11 case as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Eddie Bauer Holdings, Inc., and eight affiliates filed for bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No. 09-12099). Judge Mary F. Walrath presides over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as local counsel. The Debtors' restructuring advisors are Alvarez and Marsal North America LLC. Their financial advisors are Peter J. Solomon Company. Kurtzman Carson Consultants LLC acts as claims and notice agent. As of April 4, 2009, Eddie Bauer had $525,224,000 in total assets and $448,907,000 in total liabilities. EIGHTH AVENUE VENTURE: Case Summary & 19 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Eighth Avenue Venture II, LLC 702 NE 8th Avenue Delray Beach, FL 33483 Bankruptcy Case No.: 09-24125 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Ronald Lewis, Esq. 445 E Palmetto Park Rd Boca Raton, FL 33432 Tel: (561) 367-1771 Fax: (561) 368-0293 Email: rlewis@beltlawyers.com Total Assets: $926,951 Total Debts: $2,430,396 A full-text copy of the Debtor's petition, including a list of its 19 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-24125.pdf EPIX PHARMA: Delisting Cues End of Kingsbridge Investment Deal -------------------------------------------------------------- EPIX Pharmaceuticals, Inc., on July 9, 2009, issued notice to terminate, effective July 10, an agreement under which Kingsbridge Capital Limited has a commitment to buy interests in EPIX. The Committed Equity Financing Facility, which was entered into pursuant to the Common Stock Purchase Agreement between Kingsbridge and the Company, dated as of August 4, 2008, provided for a three-year commitment by Kingsbridge to purchase up to approximately 8.3 million newly-issued shares of the Company's common stock in tranches that would be issued and priced at a discount ranging from 6% to 12% depending on the volume-weighted average price of the Company's Common Stock during an eight-day pricing period. As conditions to any draw-down under the CEFF by the Company, however, the closing price of the Company's Common Stock was required be at least $1.25 per share and the Common Stock was required to be listed on The NASDAQ Stock Market or another specified national securities exchange, in each case, on the day before the commencement of the draw-down. The Company's Common Stock was delisted from the NASDAQ Capital Market on May 14, 2009. Prior to termination, the Company conducted one draw-down under the CEFF, in September 2008, pursuant to which the Company issued to Kingsbridge 94,627 shares of Common Stock at an aggregate purchase price of $113,750. The delisting of the Company's common stock was a "Designated Event" under the Indenture, dated as of June 7, 2004, by and between the Company and U.S. Bank National Association, as amended, governing the Company's remaining $3.2 million aggregate principal amount of 3% Convertible Senior Notes Due 2024. The Company retired $96.8 million of the original $100 million aggregate principal amount of Notes in connection with an exchange offer that was consummated on May 7, 2009. As a result of the occurrence of the Designated Event, in accordance with and pursuant to the terms of the Indenture, each holder of the outstanding $3.2 million aggregate principal amount of the Notes has the right, at its option, to require the Company to repurchase in cash such holder's Notes at 100% of the principal amount of the Notes, plus accrued and unpaid interest. Under the Indenture, the Company was required to send a notice regarding this option to the holders of the Notes by June 3, 2009. The Indenture required the Company to repurchase any submitted Notes on a date fixed by the Company that is no earlier than 30 business days and no later than 45 business days following the date of the notice sent to holders. In April, as reported by the Troubled Company Reporter, EPIX Pharmaceuticals said it was looking to raise at least $50 million from a capital raising transaction prior to the end of August 2009. As of December 31, 2008, the Company had $24.6 million of cash and cash equivalents to fund future operations. It believes that its cash and cash equivalents, along with anticipated revenue that it expects to earn during the first half of 2009, will fund its operations only through the end of August 2009. If it is unable to obtain additional capital to fund operations beyond August 2009, it will not be able to sustain operations and would be required to cease operations or seek bankruptcy protection. In March, the Company tried to reduce its cost structure by eliminating approximately 50% of its workforce, narrowing the focus of its research and development efforts to its lead clinical programs, PRX-03140 being developed for the treatment of Alzheimer's disease and PRX-08066 being developed for the treatment of pulmonary hypertension associated with chronic obstructive pulmonary disease, and it partnered preclinical programs with SmithKline Beecham Corporation (GlaxoSmithKline) and Cystic Fibrosis Foundation Therapeutics, Incorporated. It also reduced its research and development obligations under its collaboration agreement with GlaxoSmithKline through September 13, 2009, for programs other than the PRX-03140 program. The Company noted that, in addition to reducing its future net expenses, these efforts also significantly reduced its ability to achieve projected revenues. About EPIX Pharmaceuticals EPIX Pharmaceuticals, Inc. (NASDAQ:EPIX), is a biopharmaceutical company focused on discovering and developing novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform. The company has a pipeline of internally-discovered drug candidates currently in clinical development to treat diseases of the central nervous system -- see http://www.trialforAD.com/-- and lung conditions. EPIX also has collaborations with leading organizations, including GlaxoSmithKline, Amgen and Cystic Fibrosis Foundation Therapeutics. EPIX PHARMA: Repurchases 3% Notes Due 2024 Held by Citi, Loomis --------------------------------------------------------------- EPIX Pharmaceuticals, Inc., on July 9, 2009, entered into a privately negotiated Exchange Agreement with Citigroup Global Markets Inc. to purchase $2.896 million aggregate principal amount of the Company's 3% Convertible Senior Notes due 2024 held by Citigroup, including accrued but unpaid interest on the Citigroup Notes. The purchase price for the Citigroup Notes consisted of $521,280 in cash and 3,644,352 shares of the Company's common stock, par value $0.01 per share. Also on July 9, the Company entered into a privately negotiated Note Purchase Agreement with Loomis, Sayles & Company, L.P., to purchase $215,000 aggregate principal amount of the Company's 3% Convertible Senior Notes due 2024 held by Loomis, including accrued but unpaid interest on the Loomis Notes. The purchase price for the Loomis Notes consisted of $74,413.65 in cash. The Company consummated the purchase of the Citigroup Notes and Loomis Notes on July 9. After consummation of the purchase of the Citigroup Notes and Loomis Notes, $50,000 aggregate principal amount of the Company's 3% Convertible Senior Notes due 2024 remain outstanding. The issuance of the Common Stock to Citigroup in exchange for the Citigroup Notes was made by the Company pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, contained in Section 3(a)(9) thereunder on the basis that the transaction constituted an exchange with an existing holder of the Company's securities and no commission or other remuneration outside the consideration under the Exchange Agreement was paid or given directly or indirectly to any party for soliciting such exchange. The Company's Common Stock was delisted from the NASDAQ Capital Market on May 14, 2009. The delisting was a "Designated Event" under the Indenture, dated as of June 7, 2004, by and between the Company and U.S. Bank National Association, as amended, governing the Company's remaining $3.2 million aggregate principal amount of 3% Convertible Senior Notes Due 2024. The Company retired $96.8 million of the original $100 million aggregate principal amount of Notes in connection with an exchange offer that was consummated on May 7, 2009. As a result of the occurrence of the Designated Event, in accordance with and pursuant to the terms of the Indenture, each holder of the outstanding $3.2 million aggregate principal amount of the Notes has the right, at its option, to require the Company to repurchase in cash such holder's Notes at 100% of the principal amount of the Notes, plus accrued and unpaid interest. Under the Indenture, the Company was required to send a notice regarding this option to the holders of the Notes by June 3, 2009. The Indenture required the Company to repurchase any submitted Notes on a date fixed by the Company that is no earlier than 30 business days and no later than 45 business days following the date of the notice sent to holders. In April, as reported by the Troubled Company Reporter, EPIX Pharmaceuticals said it was looking to raise at least $50 million from a capital raising transaction prior to the end of August 2009. As of December 31, 2008, the Company had $24.6 million of cash and cash equivalents to fund future operations. It believes that its cash and cash equivalents, along with anticipated revenue that it expects to earn during the first half of 2009, will fund its operations only through the end of August 2009. If it is unable to obtain additional capital to fund operations beyond August 2009, it will not be able to sustain operations and would be required to cease operations or seek bankruptcy protection. In March, the Company tried to reduce its cost structure by eliminating approximately 50% of its workforce, narrowing the focus of its research and development efforts to its lead clinical programs, PRX-03140 being developed for the treatment of Alzheimer's disease and PRX-08066 being developed for the treatment of pulmonary hypertension associated with chronic obstructive pulmonary disease, and it partnered preclinical programs with SmithKline Beecham Corporation (GlaxoSmithKline) and Cystic Fibrosis Foundation Therapeutics, Incorporated. It also reduced its research and development obligations under its collaboration agreement with GlaxoSmithKline through September 13, 2009, for programs other than the PRX-03140 program. The Company noted that, in addition to reducing its future net expenses, these efforts also significantly reduced its ability to achieve projected revenues. About EPIX Pharmaceuticals EPIX Pharmaceuticals, Inc. (NASDAQ:EPIX), is a biopharmaceutical company focused on discovering and developing novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform. The company has a pipeline of internally-discovered drug candidates currently in clinical development to treat diseases of the central nervous system -- see http://www.trialforAD.com/-- and lung conditions. EPIX also has collaborations with leading organizations, including GlaxoSmithKline, Amgen and Cystic Fibrosis Foundation Therapeutics. FINN NICKEL: Initiates Voluntary Bankruptcy Proceedings ------------------------------------------------------- Belvedere Resources Ltd. reported that that its subsidiary, Finn Nickel OY has decided to initiate voluntary bankruptcy proceedings. Voluntary bankruptcy proceedings will not impact the solvency of the parent company or Belvedere Resource Finland OY. Belvedere Resources Finland OY holds the gold assets of the group. Further to Belvedere's press release of July 7, 2009, the negotiations between Finn Nickel and other parties, that would have enabled Finn Nickel to continue, have, despite management's and its principle creditor's best attempts, proved unsuccessful. Given the grave cash position of Finn Nickel, its current liabilities and no foreseeable way in the short term, to generate revenues or to re-capitalize; the board of Finn Nickel has instructed Finn Nickel management to immediately initiate proceedings for voluntary bankruptcy. Finn Nickel's main assets include the Hitura and Sarkiniemi nickel mines, the Hitura and Luikonlahti processing plants, the permitted Hautalampi Ni-Co-Cu project and a number of exploration properties. Belvedere remains the largest creditor of Finn Nickel. Finn Nickel OY is a wholly-owned subsidiary of Belvedere Resources Ltd., a company based in Vancouver, Canada. FITNESS MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Fitness Management Group, Inc. fdba Peak Fitness XI, LLC fdba Peak Fitness Lake Norman, LLC fdba Peak Fitness Fuquay Varina, LLC fdba Peak Fitness Training, LLC fdba Peak Fitness Jonestown, LLC fdba Peak Fitness Lincolnton, LLC fdba Peak Fitness V, LLC fdba Peak Fitness Statesville, LLC fdba Peak Fitness Creedmoor, LLC fdba Advanced Body Solutions II, LLC fdba Peak Fitness III, LLC fdba Fitness Edge, LLC fdba Peak Fitness Pineville, LLC fdba Peak Fitness Xcel Xpress Concord, LLC fdba Peak Fitness Holdings, LLC fdba Peak Fitness, LLC fdba Fitness Equipment Exchange, LLC fdba Peak Fitness Greenville, LLC fdba Peak Fitness X, LLC fdba Peak Fitness Buck Jones, LLC fdba Peak Fitness 15501, LLC fdba Peak Fitness Knightdale, LLC fdba Peak Fitness IV, LLC fdba Peak Fitness Duraleigh, LLC fdba Peak Fitness Steele Creek, LLC fdba Peak Fitness Garner, LLC fdba Peak Fitness Laurens, LLC fdba Peak Fitness LN2, LLC fdba Peak Fitness Harrisburg, LLC fdba Peak Fitness Clemmons, LLC fdba Peak Fitness Wade Hampton, LLC fdba Peak Fitness WS, LLC fdba Peak Fitness Cedar Ridge, LLC fdba Peak Fitness II, LLC fdba Peak Fitness Yadkinville, LLC fdba Peak Fitness Xcell Xpress Rock Hill, LLC fdba Peak Fitness Maynard, LLC fdba Peak Fitness Peachwood, LLC fdba Peak Fitness University, LLC fdba GGCK, Inc. P.O. Box 2220 Davidson, NC 28036 Bankruptcy Case No.: 09-31863 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Western District of North Carolina (Charlotte) Judge: J. Craig Whitley Debtor's Counsel: James H. Henderson, Esq. 1201 Harding Place Charlotte, NC 28204-2248 Tel: (704) 333-3444 Fax: (704) 333-5003 Email: henderson@title11.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $10,000,001 to $50,000,000 Schedules of assets and liabilities attached to the Petition showed that Fitness Management Group has $0 assets and $12,347,202 in debts, including $1,264,000 owed to secured creditors. A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ncwb09-31863.pdf The petition was signed by Jeff Stec, president of the Company. FLEETWOOD ENTERPRISES: Has $28.9-Mil. Manufactured Housing Deal --------------------------------------------------------------- According to Bill Rochelle at Bloomberg News, Fleetwood Enterprises Inc., is selling its manufactured housing operation, including eight plants, to Cavco Industries Inc. and Third Avenue Value Fund for $28.9 million, absent higher and better offers for the assets. Under the proposed procedures submitted to the U.S. Bankruptcy Court for the Central District of California, Fleetwood will conduct an auction on August 7, if its receives qualified bids by August 4. It will seek approval of the results of the auction at a sale hearing on August 12. Founded in 1950, Fleetwood Enterprises, Inc., and its various subsidiaries produce, distribute, and service recreational vehicles and manufactured housing. Fleetwood employed 2,100 people in 14 plants located in 10 states. Based in Riverside, California, the Company, together with 19 of 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 also tapped Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. Fleetwood was authorized in June to sell its recreational vehicle business for $53 million to private-equity investor American Industrial Partners. FLEMING ISLAND MEDICAL: Case Summary & 2 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Fleming Island Medical Building, Ltd. 1590 Island Lane, Suite 28 Fleming Island, FL 32003 Bankruptcy Case No.: 09-05663 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Fleming Island Auto Service Center, Ltd. 09-05664 Island Walk, LLC 09-05666 East West Retail Center, LLC 09-05667 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Kevin B. Paysinger, Esq. Bankruptcy Law Firm of Lansing J. Roy P.O. Box 10399 Jacksonville, FL 32247 Tel: (904) 391-0030 Fax: (904) 391-0031 Email: court@jacksonvillebankruptcy.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flmb09-05663.pdf The petition was signed by John W. O'Connor. FLYING J: Merger Deal Allows Full Recovery to Creditors ------------------------------------------------------- Flying J Inc. and Pilot Travel Centers LLC have entered into a preliminary merger agreement that will provide a framework for Flying J's core travel plaza business to emerge from Chapter 11 bankruptcy protection. Under the terms of the Letter of Intent filed with the U.S. Bankruptcy Court in Delaware, the value indicated would allow all Flying J creditor obligations to be paid in full. Pilot has also agreed to provide $100 million in Debtor- in-Possession financing for Flying J's operations, subject to Court approval and various conditions. "After a careful and exhaustive review of the alternatives available, we have concluded that a merger with Pilot represents the best possible outcome for Flying J, our creditors, our customers, and our employees," said Crystal Call Maggelet, Chairman of the Board of Flying J. "Over the next few months, we will negotiate definitive agreements to merge our companies. This transaction will allow us to emerge from the bankruptcy process relatively quickly thereafter and to start a new chapter in the Flying J story." Jimmy Haslam, CEO of Pilot, said, "We believe that by combining Flying J and Pilot we will better serve our customers by more efficiently providing them with the products and services they need. We look forward to working closely with Flying J and its employees during the Chapter 11 emergence process, and as we take the next steps of a new beginning for both of our companies." The preliminary merger agreement with Pilot pertains specifically to Flying J's core travel plaza business, and it excludes Longhorn Pipeline, Big West Oil, Flying J Oil & Gas, Haycock Petroleum, and Transportation Alliance Bank. Flying J is in the process of pursuing or evaluating alternatives for each of these other businesses. Pilot's legal advisor is White & Case LLP. About Pilot Pilot Travel Centers LLC is the nation's largest retail operator of Travel Centers, catering to the professional driver and traveling motorist in 41 states with over 300 retail interstate properties. The company is headquartered in Knoxville, Tennessee and employs 13,000 nation-wide. About Flying J Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FONTAINEBLEAU: Banks Slam Lawsuit, Say Debtors Breached Pacts ------------------------------------------------------------- Debtor Fontainebleau Las Vegas, LLC, sued a group of banks led by Bank of America, N.A., as administrative agent, on June 9, 2009, for alleged breach under their financing commitment to fund the Debtor's multi-billion-dollar casino-resort development in Las Vegas, Nevada. The Debtor complained that BofA, along with Merrill Lynch Capital Corporation, JPMorgan Chase Bank, N.A., Barclays Bank PLC, Deutsche Bank Trust Company Americas, The Royal Bank of Scotland PLC, Sumitomo Mitsui Banking Corporation New York, Bank of Scotland, HSH Nordbank AG, New York Branch, and MB Financial Bank, N.A., have "unjustifiably" failed and refused to provide the $770,000,000 in revolver financing under certain credit agreements aggregating $1.85 billion for the casino-resort development. The Debtor also alleged that Deutsche Bank encouraged other revolver lenders to breach their obligations under the credit agreement. Banks Oppose Complaint Defendants Bank of America N.A., Merrill Lynch Capital Corporation, JPMorgan Chase Bank, N.A., Barclays Bank PLC, Deutsche Bank Trust Company Americas, The Royal Bank of Scotland plc, Sumitomo Mitsui Banking Corporation, Bank of Scotland plc, MB Financial Bank, N.A., and HSH Nordbank AG, New York Branch, dispute some of the facts alleged in the Complaint, which they believe constitute an incomplete and misleading characterization of their Credit Agreement with Debtor Fontainebleau Las Vegas. LLC. The Banks do not dispute that Fontainebleau Las Vegas, submitted a March 2, 2009 Notice of Borrowing seeking $350 million under the Delay Draw Term Loan and $670 million under the Revolving Loan. However, they do dispute any suggestion that the Notice of Borrowing was proper under the Credit Agreement. The Banks assert that the Notice of Borrowing did not comply with the provisions of the Credit Agreement, which required that "unless the Total Delay Draw Commitments have been fully drawn, the aggregate outstanding principal amount of all Revolving Loans . . . [will] not exceed $150,000,000." According to Mark D. Bloom, Esq., at Greenberg Traurig, P.A., in Miami, Florida, the Notice of Borrowing also did not comply with the Credit Agreement, because it sought to borrow an amount that exceeded the availability under the Revolving Loans. Moreover, the Banks assert that the Debtor breached the Credit Agreement and defaulted on numerous covenants, terms and conditions of the Credit and Disbursement Agreements, compliance with which was a condition precedent to its right and ability to borrow funds under the Credit Agreement. Accordingly, the Banks assert that the Debtor acted inequitably in keeping from the Banks the true facts about the status of the Project and its problems. In a separate filing, the Banks pointed out that the motion for partial summary judgment should be denied because long before the Debtor issued the March Notice of Borrowing, the Debtor has materially and repeatedly breached the Credit Agreement that they now ask the Court to "enforce" against the Banks. "There are overwhelming indicia of numerous Fontainebleau defaults and misrepresentations that give rise to myriad disputed factual issues that Fontainebleau does not even try to address," Mr. Bloom notes. "These fact issues are fatal to [Fontainebleau's] tactical, premature, pre-discovery, pre-answer Motion. It is abundantly clear why Fontainebleau wants to avoid discovery -- to keep its breaches, defaults and misrepresentations from the Lenders and the Court. It is also abundantly clear that the extraordinary 'relief' that Fontainebleau seeks has no basis in law or fact." Various parties submitted declarations in support of the Banks' opposition to the Partial Summary Judgment Motion including: * Marc Costantino, executive director of JPMorgan Chase Bank, N.A., in the Credit Risk Management Group, * Valerie Shapiro, vice president of Deutsche Bank Trust Company Americas in the Workout and Restructuring group, * Robert W. Barone, a senior vice president and principal of Inspection and Valuation International, Inc., * Henry Yu, senior vice president at Bank of America, * Charles Sullivan, group head and senior vice president in the Real Estate Department, Americas Division, at Sumitomo Mitsui Banking Corporation, * Henry Wessel, vice president of MB Financial Bank, N.A., * Vlad Barshtak, vice president in the Global Restructuring Group of The Royal Bank of Scotland plc, * Aaron Rubinstein, Esq., a member at Kaye Scholer LLP, counsel to HSH Nordbank AG, * Daniel L. Cantor, Esq., a member at O'Melveny & Myers LLP, counsel to Bank of America, N.A. and Merrill Lynch Capital Corporation, * Jean-Marie L. Atamian, Esq., a member at Mayer Brown LLP, counsel to Sumitomo Mitsui Banking Corporation, * Anthony L. Paccione, Esq., a member at Katten Muchin Rosenman LLP, counsel to Bank of Scotland, * Thomas C. Rice, Esq., a member at Simpson Thacher & Bartlett LLP, counsel to Barclays Bank PLC, Deutsche Bank Trust Company Americas, JPMorgan Chase Bank, N.A., and The Royal Bank of Scotland plc, and * William M. Scott IV, Esq., partner at Sheppard Mullin Richter & Hampton LLP, counsel to bank of America, N.A. Fontainebleau Disputes Motion to Withdraw Reference, Seek Partial Summary Judgment The Debtor assert that the Motion to Withdraw Reference is a thinly veiled tactic designed to delay the resolution of their exigent and case-dispositive claims against the Banks for breach of their funding obligations. The Debtor notes that the Banks' improper motivations were revealed when they attempted to invoke the Withdrawal Motion as a reason to deny the expedited schedule sought by Fontainebleau in Court -- a schedule that was ultimately approved by Judge Cristol. The Debtor maintains that the outcome of its Complaint will determine whether it will obtain the funds necessary to complete construction and reorganize, or fail in that effort and, regrettably, be compelled to liquidate their business. In a separate filing, the Debtor asks the Court render partial summary judgment with respect to a discrete legal issue -- whether the Banks breached the Credit Agreement by refusing to honor the March 2 Notice -- and a single statutory remedy: a turnover under Section 542 of the Bankruptcy Code. Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, in Miami, Florida, relates that the Debtor and the Banks properly acknowledge that the Credit Agreement is unambiguous, and accordingly can be interpreted as a matter of law without resort to extrinsic evidence. According to Mr. Baena, both the Debtor and the Banks also acknowledge the remaining operative facts, and, in particular, the chronology and correspondence pursuant to which the March 2 Notice was submitted and rejected. Mr. Baena says that this is precisely the type of issue meant to be dealt with by summary judgment, and as the Court has already recognized in granting expedition, a timely ruling will substantially improve the likelihood of a reorganization. Mr. Baena relates that the Banks have attempted to bury these narrow legal issues in an avalanche of paper. In an effort to create an illusion of disputed "facts" and distract the Court from the plain meaning of the Credit Agreement, the Banks have submitted lengthy opposition papers including affidavits, declarations and exhibits. But, Mr. Baena argues, nothing in the highly voluminous and repetitive submission raises a genuine issue of material fact that can defeat summary judgment. Moreover, Mr. Baena says, despite the Banks' assertion to the contrary, the Debtor is not seeking specific performance on its Summary Judgment Motion. It is seeking only a statutory turnover of property of the estate, Mr. Baena relates. Jed I. Bergman, Esq., a member at Kasowitz, Benson, Torres & Friedman LLP, submitted to the Court an affirmation in further support of the Debtor's Motion for Partial Summary judgment. Banks Say Debtor Blatantly Mischaracterizes Applicable Case Law In Making Extraordinary Assertions In response, the Banks argue that the Debtor blatantly mischaracterizes applicable case law in making the extraordinary assertion that, because the quintessential breach of contract action is allegedly critical to the administration of their estate, the Complaint is somehow transmogrified into a core proceeding. The Banks say that the sleight of hand should not be countenanced as it ignores both Supreme Court and Eleventh Circuit precedent that prepetition contract, tort, and equity claims based on state law -- like those alleged by the Debtor -- are non-core claims, regardless of the impact those claims might have on the estate. Moreover, the Banks assert that it is the Debtor that has created any alleged "delay" by initiating the non-core action in the Court. The Banks aver that prompt withdrawal of the reference is the best way to ensure an expeditious and final resolution of the dispute while promoting judicial efficiency. Committee Wants to Intervene The Official Committee of Unsecured Creditors have asked the Court's approval to intervene in the Complaint as a matter of right under Rule 24 of the Federal Rules of Civil Procedure. The Committee asserted that the Complaint is potentially the most significant aspect of the Debtor's Chapter 11 case because its outcome will have a significant and material effect on the claims of all creditors in the cases, including those creditors holding unsecured claims, for which the Committee is acting as a fiduciary. The Court, however, denied the Committee's request, without prejudice. Prior to the Court's ruling, the Banks argued that the Committee has no basis to intervene because the fact that general unsecured creditors might receive a benefit from a potential outcome of the litigation does not give the Committee a legally cognizable interest in the Complaint for purposes of Rule 24. Jeffrey H. Beck Appointed as Mediator At the Court's directive, Mr. Baena notifies the Court and parties-in-interest that pursuant to Local Rule 9019-2(B)(1) of the United States Bankruptcy Court for the Southern District of Florida, the Debtor and the Banks have selected Jeffrey H. Beck as mediator. CCCS Seeks Protective Order In response to a deposition notice and request for production of documents issued by Barclays Bank, PLC, Deutsche Bank Trust Company Americas, JP Morgan Chase Bank, NA, and Royal Bank of Scotland PLC, CCCS International asks the Court enter a protective order preventing the Banks from taking the deposition of a CCCS representative and from requiring CCCS to produce documents. CCCS, which performs various construction management services for the Debtor related to the Project, asserts that in addition to the lack of sufficient notice, it cannot participate in the deposition because of a substantial concern that it will be pursued for violating an alleged confidentiality agreement. Lawrence H. Meuers, Esq., at Meuers Law Firm, P.L., in Naples, Florida, says that the Debtor has repeatedly warned that it will indeed seek recovery under the confidentiality provision in the event CCCS violates the section of a proposal for work at the Project issued by the Debtor. In any event, Mr. Meuers relates, any information CCCS may possess is unrelated to the present contractual matter. Mr. Meuers avers that the Banks cannot establish good cause to require the deposition of CCCS since there are other available sources from which the Banks can readily obtain the same information, and thereby avoid CCCS from being accused of violating the confidentiality agreement and consequently being subjected to a claim for damages. The hearing on CCCS' request, originally scheduled for July 13, 2009, has been moved to July 20, at 10:00 a.m. Debtor Favors Deposition The Debtor informs the Court that CCCS's Motion was not filed at the Debtor's request or encouragement. To the contrary, the Debtor relates, it only learned of CCCS's Motion hours before it was filed when its counsel contacted CCCS's counsel to determine logistical information about the deposition and document production. Mr. Baena avers that the Debtor has never invoked the confidentiality provisions of its agreement with CCCS to interfere with a subpoena. The Debtor thus has no objection to the CCCS deposition going forward. While the information sought by the Banks may raise confidentiality issues between the Debtor and CCCS, any issues can be addressed in a customary confidentiality agreement, a draft of which the Debtor is prepared to draft and circulate to CCCS and the Banks. Subject to the parties entering into a confidentiality agreement, the Debtor suggests that the deposition of CCCS be coordinated with party discovery in the adversary proceeding in a manner that is consistent with Rule 45(c)(1) of the Federal Rules of Civil Procedure. 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 Extends Cash Collateral Use to Aug. 6 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida has further authorized Fontainebleau Las Vegas Holdings, LLC and its affiliates, on a second interim basis, to use the Cash Collateral solely and exclusively for the disbursements set forth in their Budget for the period from July 7, 2009, until the earliest to occur of (a) the date that the Interim Order or a Final Order ceases to be in full force and effect or (b) the occurrence and continuation of a Termination Event. A Termination Event will constitute any of these events: * August 6, 2009; * the Debtors fail to comply with any of the terms of the Interim Order; * the Debtors seek any modification or extension of the Interim Order without the prior written consent of the Term Lender Steering Group, or any order be entered, other than with the consent of the Term Lender Steering Group, amending, supplementing, or modifying the Order in any material respect or terminating the use of Cash Collateral by the Debtors pursuant to the Interim Order; * the cumulative aggregate cash disbursements exceed 105% of cumulative aggregate amount of cash disbursements for four weeks projected in the Budget line "Weekly Subtotal" during the term of the Budget; and * an application filed by any Debtor for the approval of any Superpriority Claim or any lien in any of the Cases which is senior to the Adequate Protection Obligations or Adequate Protection Liens. The Debtors' authority to use the Cash Collateral will automatically terminate upon the occurrence of a Termination Event, all without further order or relief from the Court, Judge Cristol says. All of the rights and protections provided to the Prepetition Secured Parties under the Order will survive the Termination Event. From and after the Petition Date, all proceeds of the Collateral, including all of the Debtors' existing or future cash and Cash Collateral, will not be used to pay expenses of the Debtors or to make debt payments except for those debt payments, expenses or disbursements that are expressly permitted under the Order and are consistent with the Budget. Subject to entry of the Final Order, no administrative expense claims will be charged or assessed against the Collateral or attributed to the Prepetition Secured Parties with respect to their interests in the Collateral pursuant to the provisions of Section 506(c) or otherwise by, through, or on behalf of the Debtors, without the prior written consent of the Term Lender Steering Group, and no consent will be implied from any action either with or without notice to, the Prepetition Agent or Term Lender Steering Group. Judge Cristol notes that the Prepetition Agent or the Term Lender Steering Group have not consented to the use of Lender Funds subsequent to the Petition Date. Neither the Prepetition Agent nor the Term Lender Steering Group have agreed to any use of Lender Funds that occurred prior to the Petition Date, except if the agreement was provided in writing. The Debtors will, on or before July 20, 2009, at 4:00 p.m., serve by United States mail, first class postage prepaid, copies of the Cash Collateral Motion, the Interim Order, and a notice of the Final Hearing or a further interim hearing to be held on July 27, 2009, at 2:00 p.m., to consider entry of the Final Order or interim order, as the case may be, on the Interim Notice Parties. Objections to the Motion are due on July 23, 2009, at 4:00 p.m. A full-text copy of the Second Interim Cash Collateral Order is available for free at: http://bankrupt.com/misc/FB_CashColl_2ndInterimOrd.pdf 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: Las Vegas LLC's Schedules of Assets & Debts ---------------------------------------------------------- A. Real Property Parcel 162-09-602-002 & 162-09-704-001 Unknown B. Personal Property B.1 Cash on hand $0 B.2 Bank Accounts Bank of America - 1233056005 0 Bank of America - 1233055997 0 Bank of America - 1233056968 0 Bank of America - 1233055973 1,103 Bank of America - 1233055959 0 Bank of America - 1233055954 0 Bank of America - 0049-6833-2450 212,415 Bank of America - 5010-0242-2583 0 Bank of America - 5010-0808-8743 326 Bank of America - 5010-0808-8730 269,475 Bank of America - 5010-0242-1021 (245,588) Bank of America - 5010-0120-3813 4,914,086 Bank of America - 5010-0120-3826 0 BofA Mutual Funds Services - 0238-5090110384 136,682,078 BofA Mutual Funds Services - 0238-5090110385 0 BofA Mutual Funds Services - 0576-5090110382 50,069,093 B.3 Security Deposits Architectural Materials, LLC 37,525 Bilzin Sumberg Baena Price 1,000,000 Brownstein, Hyatt, & Faber 24,309 Buchanan Ingersoll & Rooney PC 458,563 Chief Manufacturing 24,663 Communications Integrators Inc 54,332 Couristan Carpets 58,238 Cummins-Allison Group 109,113 CVPS Inc 41,530 Deco Lav, Inc 130,130 DWI Holdings Inc 1,856,023 Fulbright & Jaworski LLP 34,309 Global Lighting 103,110 Gray Bern Holdings 90,565 Haycock Petroleum Co 25,000 Hennigan, Bennett & Dorman LLP 4,550,000 Hoshizaki Western Dc Inc 98,284 Inre Media 28,722 International Bedding Co. 349,939 It Just Works Software Corp 101,250 Javse Realty 96,047 Jefferies & Company 1,250,000 JL Furnishings, LLC 80,335 Kasowitz, Benson, Torres. & Friedman, LLP 1,300,000 Kurtzman Carson Consultants 50,000 Lusive Decor 20,928 Mark David 58,154 Milliken & Company 369,678 Murrays Iron Works Inc. 150,300 Neidhardt, Inc. 87,973 NV Gaming Control 192,941 Paul, Hastings, Janofsky 25,000 Project Light LLC 946,005 Prospetto Project Lighting 64,498 RJF International Corp 26,235 Sahara Las Vegas Corp 100,000 Schwimmer Drapery, Inc 432,343 Sitrick And Company Inc 80,000 Still, LLC 32,061 Surrounding.Com 21,212 Tai Ping Carpets 138,159 Tekvisions, Inc 91,000 The Conran Shop 3,020 The Dumbell Man Fitness Equip 67,152 The Rainmaker Group Las Vegas 77,647 Trans-Lux Corporation 150,244 Wolf Gordon 57,717 Others 337,192 B.5 Art Objects & Other Collections A Gift from the Earth - Sculpture 1,000,000 Abstract #144 - Painting 40,500 Art World (Hitting Las Vegas?) - Paintings (3) 24,000 Back Side of Chaos - Black - Painting 25,000 Back Side of Chaos - Blue - Painting 25,000 Back Side of Chaos - Red - Painting 25,000 Ballroom Chandelier - Sculpture 60,000 Black 101 (Tear Drop M Series) - Sculpture 25,000 Blue 105 (Tear Drop M Series) - Sculpture 25,000 Blue as Form of Night - Painting 28,000 By the River #2 - Painting 48,000 Chakra - Painting 230,000 Cube 21 - Sculpture 55,325 Double Orange Coney Island Vodou - Painting 27,000 Eye Candy - Painting 36,000 Fast Orange - Painting 24,000 Good and Bad Government - Painting 50,000 Green 102 (Tear Drop M Series) - Sculpture 25,000 Gusher (formerly titled "Hex 2") - Painting 24,000 Hi Fii - Painting 72,000 In Time Like Glass - Painting 47,812 Index - Painting 45,000 Lister - Painting 21,293 Magical Space Forms - Painting 58,500 Multi -Color 104 - Sculpture 25,000 Ngaraunga Set 78 - drawing 32,000 Reflector Wizards - Painting 200,000 Reverse Atlas series (proof set) - Prints Unknown Spinwheel - Paintings (58) 58,000 Spinwheel - Paintings (779) 779,000 Staring into the Sun - Painting 27,000 This Is It (All Blue Rain) - Painting 37,000 Untitled - Painting 120,000 Untitled (blue) - Painting 45,000 Untitled (indigo) - Painting 45,000 Untitled (medium disc #2) - Painting 34,000 Venus Bleue - Sculptures (30) 1,300,000 White 103 (Tear Drop M Series) - Sculpture 25,000 Yellow Looshe - Painting 225,000 Others 197,136 B.9 Interests in Insurance Policies 0 B.12 Interests in IRA, ERISA or other Pension Plans 0 B.13 Business Interests and stocks 0 B.14 Interests in partnerships 0 B.16 Accounts Receivable Fontainebleau Las Vegas Retail, LLC 134,263,464 B.18 Other Liquidated Debts 0 B.20 Contingent and noncontingent interest 0 B.21 Other Contingent & Unliquidated Claims 0 Fontainebleau Las Vegas, LLC v. Bank of America, N.A. et al. Undetermined Nevada Dept of Taxation Unknown B.23 Licenses and other general intangibles "Fontainebleau" Name Unknown Expires 6/5/2014, plus five year renewals unless notice of non- renewal six month prior to end of term Unknown Development Agreement with Clark County Unknown B.24 Customer lists 0 B.25 Vehicles 0 B.27 Aircraft and accessories 0 B.28 Office equipment, furnishings and supplies Computer Software Polaris 1,478,501 Computers and Computer Equipment 501,516 Furniture Fixtures & Equipment Polaris Office 189,114 Office Furniture and Equipment Polaris Office 302,698 B.29 Machinery 0 Administrative, Facilities and IT FF&E 20,178,256 Common Area FF&E 20,968,041 Engineering Equipment Polaris Office 12,329 Exterior Signage 20,890,714 Food and Beverage Operating Equipment 8,540,494 Gaming FF&E 1,724,409 Hotel Operating Equipment 7,537,706 Kitchen Equipment 879,231 Rooms FF&E 39,752,813 B.30 Inventory 0 B.35 Other Personal Property 0 TOTAL SCHEDULED ASSETS $469,794,286 ======================================================== C. Property Claimed as Exempt N/A D. Secured Claim Aztech Inspection Services LLC $667,739 Bank of America 9,546,125 Bank of America NA as Administrative Agent 1,036,666,666 Barclays Bank Plc London 9,347,467 Desert Plumbing & Heating 260,743 Deutsche Bank AG New York 6,580,079 Duray JF Duncan Ind Inc 5,884,363 George M Raymond Co 1,169,821 Merrill Lynch Capital Services 9,532,108 Nedco Supply 61,260 Quality Transportation 1,084,456 Royal Bank Of Scotland 12,952,934 Tractel LTD 1,184,023 Turnberry West Construction 345,399,009 U.S. Bank Nat'l Assoc. as Indenture Trustee 675,000,000 W R Grace & Co Unknown Wells Cargo Unknown Young Electric Sign Co 9,200,266 Others 5 E. Unsecured Priority Claims Biorato, Angelica 2,518 Buzbee, Linda E 4,158 Corral, Rene C 1,331 Frost, Walter A 1,384 Ghirardi, Darleen S 21,465 Hernandez, Kathryn M 18,257 Herrell, Pamela S 2,077 Hiromoto, Thelma 2,977 Holloway, Maya L 2,610 Nevada Dept Of Taxation 36,524 Ribeiro, Scott A 10,168 Rod, Timothy J 8,046 Samuels, Robert F 6,546 Turner, Kathryn R 18,888 Weiler, Gregg A 1,824 White, Richard C 18,390 Whitney, Paul R 5,933 Others 2,408 F. Unsecured Non-priority Claims See: http://ResearchArchives.com/t/s?3ee4 41,251,834 TOTAL SCHEDULED LIABILITIES $2,165,954,402 ======================================================== 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: Las Vegas LLC's Statement of Financial Affairs ------------------------------------------------------------- Howard C. Karawan, chief restructuring officer of Fontainebleau Las Vegas, LLC, says that the company earned $35,890 from its business operations during the two years before the Petition Date: Period Amount ------ ------ 01/01/09 - 05/31/09 $13,440 01/01/08 - 12/31/08 $1,200 01/01/07 - 12/31/07 $21,250 FLV also earned an aggregate of $41,391,274, from sources other than the operation of its business during the two years before the Petition Date: Source Amount ------ ------ 01/01/09 - 05/31/09 (Bank Interest/ Equipment Sale) $528,448 01/01/08 - 12/31/08 (Bank Interest) $18,530,608 01/01/07 - 12/31/07 (Bank Interest) $22,332,218 FLV made payments or transfers to creditors within 90 days immediately before the Petition Date, a list of which is available for free at http://bankrupt.com/misc/FLV_SOFAs_3b.pdf FLV also made payments totaling $862,413,057, to "insiders" as defined in Section 101(31) of the Bankruptcy Code within one year immediately preceding the Petition Date for the benefit of creditors who are insiders. A list of the Insider Payments is available for free at http://bankrupt.com/misc/FLV_SOFAs_3c.pdf FLV is a party to several lawsuits and administrative proceedings within one year immediately preceding the Petition Date: Suit Caption Nature Status ------------ ------ ------ Ann Stager, et al, Development All briefs have been Petitioners, v. Dispute filed with the Court Clark County with no oral argument Board of Commissioners, scheduled per order Respondent and of the Court. Fontainebleau Las Vegas, Awaiting opinion. LLC, Real Party in Interest and Respondent in Intervention CCCS International v. Breach of A stipulation to Fontainebleau Las Vegas, Contract extend time for LLC, Fontainebleau Las Defendants to file answer has been Vegas II, LLC and granted to June 15, Fontainebleau Resorts, LLC 2009 Fontainebleau Las Vegas Breach of Notice of dismissal LLC v. Bank of America, Contract as to Camulos Master N.A.; Merrill Lynch Capital Fund LP on April 28, Corporation; JPMorgan Chase 2009 Bank, N.A.; Barclays Bank PLC; Deutsche Bank Trust Company Americas; The Royal Bank of Scotland PLC; Sumitomo Mitsui Banking Corporation New York; Bank of Scotland; HSH Nordbank AG, New York Branch; Camulos Master Fund LP; MB Financial Bank, N.A. Mona Elmohamed v. ATC/ Personal Discovery has Vancom, Inc. d/b/a Citizens Injury officially closed Area Transit; Henry L. Action with limited Moore, Turnberry/Las Vegas discovery pending, Boulevard, L.P., Turnberry/ specifically, the Las Vegas Boulevard, Inc., deposition of Henry Turnberry/Las Vegas Moore, the bus driver Boulevard, LLC, Turnberry and employee of Pavilion Partners, Limited Defendant, Citizens Partnership, Turnberry Area Transit. Trial Pavilion Managers, Limited is set for Partnership, Turnberry West, September 9, 2009. Inc. FLV gave $10,000 as gifts and charitable contributions to individuals and organizations within one year immediately preceding the Petition Date: Organization Date Value ------------ ---- ----- Opportunity Village 10/08/2008 $3,500 Opportunity Village 10/23/2008 $6,500 Within one year before the Petition Date, FLV also paid made payments totaling $6,849,507, to law firms and other professionals involved in the preparation of the Debtor's Chapter 11 petition. A list of the professional fee payments is available for free at http://bankrupt.com/misc/FLV_SOFAs_9.pdf FLV also transferred properties, either absolutely or as security, in the ordinary course of business one year before the Petition Date: Property Description Transferee Date and Value Received ---------- ---- -------------------- Wells Fargo NA 11/04/2008 Security interest in lease at Town Square Ste 300, 3rd FI, Building F securing $675 million mortgage notes Bank of America NA 07/15/2008 Security interest in lease at Town Square Ste 300, 3rd FI, Building F securing $1,850,000,000 mortgage notes FLV provided notice to a governmental unit of a release of Hazardous Material on its sites: Date of Site Governmental Unit Notice Environmental Law ---- ----------------- ------- ----------------- 2777 Las Vegas State of Nevada 03/14/08 CERLA 107(q) and Blvd. South Dept. of Nev. Rev. Stat. Las Vegas, NV Environment Section 89109 Protection 459.930.6(c) 2777 Las Vegas State of Nevada 02/01/07 NAC 445A.227.1 Blvd. South Dept. of Las Vegas, NV Environment 89109 Protection FLV has been a member of a consolidated group for tax purposes within six years immediately prior to the Petition Date: Parent Corporation Taxpayer I.D. Number -------------- -------------------- Fontainebleau Equity Holdings, LLC 20-8901639 Fontainebleau Las Vegas Holdings, LLC, owns 100% of Fontainebleau Las Vegas, LLC's common stocks. 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: Requests Termination of Convention Center Lease -------------------------------------------------------------- Fontainebleau Las Vegas Holdings, LLC, and Tomorrow 33 Convention, L.P. are parties to a lease agreement for the lease of Suites P- 100 and P-250 in the Plaza Building located at 101 Convention Center Drive, in Las Vegas, Nevada, as amended on June 16, 2008. By this motion, the Debtors seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to reject the 101 Convention Center Lease effective as of June 29, 2009. As security for the 101 Convention Center Lease, the Landlord received an irrevocable letter of credit from Bank of America, N.A. for $117,630 and a cash deposit totaling $30,086. On June 12, 2009, the Landlord provided the Debtors with a notice of default under the 101 Convention Center Lease, asserting that they owed approximately $30,195, in past due rental payments for the month of June 2009. The Landlord drew the full amount of the LOC. The Debtors then gave the Landlord formal written notification of their intent to reject the 101 Convention Center Lease. The Debtors note that they no longer intend to use the Rental Space as it is not necessary for an effective and efficient reorganization of their estates. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. 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) FORUM HEALTH: Pension Plan Underfunded by $207,300,000 ------------------------------------------------------ The Pension Benefit Guaranty Corp. said that Forum Health's pension plan is underfunded by an estimated $207,300,000 Vindy.com reports. Forum said in a July 6 statement that its pension plan - - whose 7,132 participants have mostly retired -- is underfunded by more than $100 million, but it didn't give a specific figure. According to Vindy.com, Forum is seeking to end its pension plan and turn it over to the PBGC. Forum said in court documents that its short-term survival will be threatened if it can't immediately begin terminating the pension plan and turning it over to the PBGC. Vindy.com states that Forum also wants to void its nurses' and service works' union contracts at Northside. Based in Warren, Ohio, Forum Health -- http://www.forumhealth.org/ -- offers health care services. The primary service area consists of the northeast Ohio counties of Mahoning, Trumbull and Columbiana; and northeast Ohio counties of Ashtabula, Geauga and Portage and the Pennsylvania counties of Mercer and Lawrence. Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). Paul W. Linehan, Esq., and Shawn M Riley, Esq., at McDonald Hopkins LLC, are lead counsel to the Debtors. The Debtors have also tapped Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA as co- counsel; Kurtzman Carson Consultants LLC as claims, noticing and balloting agent; and Huron Consulting Services LLC as financial advisors. Alston & Bird LLP represents the official committee of unsecured creditors formed in the Chapter 11 cases. At the time of its filing, Forum Health estimated that it had assets and debts both ranging from $100 million to $500 million. FRANCHI EQUIPMENT: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------- Boston Business Journal reports that Franchi Equipment Co. Inc. has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District Of Massachusetts, listing estimated assets and debts of $500,000 to $1,000,000. George J. Nader at Riley & Dever PC in Lynnfield, Massachusetts, assists Franchi in its restructuring efforts. Franchi Equipment Co. Inc. is based in Marlborough, Massachusetts. Web sites run for the construction trade suggest that Franchi serves companies in that sector. FRONTIER AIRLINES: Court Approves Republic-Led Auction for Biz. --------------------------------------------------------------- Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York approved the proposed investment agreement between Frontier Airlines Holdings, Inc., and Republic Airways Holdings, Inc., disclosed a company statement dated July 13, 2009. Pursuant to the investment agreement, Republic has agreed to purchase 100% of the stock of Frontier Holdings upon its emergence from bankruptcy for $108.75 million, so long as certain conditions are met. Frontier Airlines Holdings would become a wholly owned subsidiary of Republic, an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. Frontier Airlines and Lynx Aviation would maintain their current names and continue to operate as usual. The Republic investment agreement provides for an auction period, during which time Frontier may seek higher or otherwise better competing bids. If Frontier identifies that bid, it can terminate the Republic investment agreement and accept the other offer. Under the auction procedures approved by the Court, any interested bidders must submit an initial proposal by Aug. 3, 2009, and a final proposal by Aug. 10. Frontier and its advisors, in consultation with the Official Committee of Unsecured Creditors appointed in Frontier's Chapter 11 cases, will conduct an auction, if necessary, on Aug. 11 to consider all qualified proposals and determine the highest or otherwise best proposal, the statement added. Frontier currently expects to emerge from Chapter 11 this autumn. Prior to the Court's approval of the request, the Debtors submitted to Judge Drain an amended proposed order reflecting immaterial changes to the Investment Agreement and Auction Procedures, a blacklined copy of which is available for free at: http://bankrupt.com/misc/BlacklinedRepublicInvstmnt&Auction.pdf Magin Reacts James A. Magin, holder of 20,000 shares of Frontier stock, notes that it is "disturbing" that the Republic Purchase Plan converts current Frontier common shares to Republic equity, "and holders of that equity will not receive any recovery." According to Mr. Magin, the Plan should be rejected unless equitable consideration is given to all Frontier stockholders. About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Court OKs Entry of Bombardier Plane Financing ---------------------------------------------------------------- Judge Robert D. Drain the U.S. Bankruptcy Court for the Southern District of New York, authorized the Debtors to negotiate, finalize, enter into, and perform under, a definitive loan documentation with Bombardier Inc. The Loan would provide Lynx Aviation, Inc., the Debtors' wholly owned subsidiary, with secured postpetition financing in connection with the purchase of MSN 4265, a Q400 Series aircraft. The Court held that the Term Sheet governing the Loan Documentation is fair and reasonable, reflects the Debtors' exercise of prudent business judgment consistent with their fiduciary duties, and constitutes reasonably equivalent value and fair consideration. Under the agreement, Bombardier has agreed to provide a loan to Lynx for 70% of the Net Purchase Price -- or for a lesser percentage as Lynx may designate -- to be disbursed in conjunction with delivery of the Aircraft to the Debtors. The Loan will be (i) secured by the Aircraft and related collateral, and (ii) guaranteed by Frontier due to be repaid on January 15, 2010. The Court further authorized the Debtors to grant: (a) Bombardier administrative expense claims pursuant to Sections 503(b)(1) and 507(a)(2) of the Bankruptcy Code under the Loan Documentation, and (b) valid first priority security interests in, and liens on, the Aircraft pursuant to Section 364(c)(2). No other liens, will be granted to any third party on the Aircraft. Judge Drain modified the automatic stay under Section 362 of the Bankruptcy Code solely to the extent necessary to permit Bombardier -- upon a five-day notice to the Debtors and the Official Committee of Unsecured Creditors -- to exercise remedies in the event that the Debtors default under the Loan Documentation without further Court order. The Loan Documentation will constitute valid and binding obligations of the Debtors. No postpetition payment by, or postpetition obligation of, the Debtors under the Loan Documentation will be stayed, restrained, voidable or recoverable under the Bankruptcy Code, Judge Drain ruled. Prior to the Court's approval, the Debtors filed with the Court a certificate of no objection to their request. About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Court Directs Payments to Deutsche Bank ------------------------------------------------------- Deutsche Bank Trust Company Americas, administrative agent for lenders for debtors Fashion Show Mall, LLC and Phase II Mall Subsidiary, LLC, which operate Fashion Show Mall, LLC, and Shoppes at Palazzo, tells the Court that Fashion Show and Palazzo failed to make interest payments calculated at LIBOR plus 600 basis points due June 1, 2009. Instead, the Debtors sent a payment reflecting an interest calculated at the much lower rate of LIBOR plus 225 basis points. As a result, Fashion Show is in arrears for $2,085,776 in unpaid interest at the contract rate, and Palazzo is in arrears for $806,073 in unpaid interest at the contract rate. Robert J. Rosenberg, Esq., at Latham & Watkins LLP, in New York, relates that the Debtors insisted that they had been invoiced of the June 1 interest payment at the non-default interest of LIBOR plus 225 basis points. The Debtors also noted a case law applying Section 506(b) of the Bankruptcy Code suggesting that the appropriate rate of interest on the Fashion Show and Palazzo Loans was within the limited discretion of the Court and that the lower, LIBOR plus 225 basis points spread was appropriate. Deutsche Bank disputes the Debtors' contentions that they had been erroneously invoiced and demanded immediate payment of the June 1 interest payment. Mr. Rosenberg stresses that as of June 16, 2009, the Debtors have not complied with Deutsche Bank's demands and stated that they do not intend to pay the full amount of contract rate interest. Accordingly, Deutsche Bank asks the Court to: (i) enforce the Final Cash Collateral Order dated May 14, 2009 by directing the Debtors to continue paying to Deutsche Bank the monthly interest at the rate of LIBOR plus 600 basis points; and (ii) direct the Debtors to immediately pay the full amount of non-default contract rate interest due under the Loan Agreements, including (x) $2,085,776 to Deutsche Bank as Fashion Show Agent; and (y) $806,073 to Deutsche Bank as Palazzo Agent; and Mr. Latham asserts that the Final Cash Collateral Order directed compliance with the Debtors' prepetition obligations to pay non- default contract interest to Deutsche Bank pursuant to loan documents. He argues that nothing in the Final Cash Collateral Order permitted the Debtors to revise that rate, but the Debtors did so, even after Deutsche Bank pointed out the error. Accordingly, the Debtors have willfully violated the Court's order, he asserts. He also points out the application of Section 506(b) in this context is not even at issue because the Court's order requiring payment of non-default contract rate interest as adequate protection was made pursuant to Sections 361 and 363(e). In furtherance of Deutsche Bank's Motion, Donald Berger and Robert J. Rosenberg filed declarations, which are accessible for free at: * Berger Declaration http://ResearchArchives.com/t/s?3ee8 * Rosenberg Declaration http://ResearchArchives.com/t/s?3ee9 Debtors Respond On behalf of the Debtors, Adam P. Strochak, Esq., at Weil, Gotshal & Manges LLP, in New York, clarifies that the interest rate set forth in the first and second amendments to the Loan Agreements negotiated with Deutsche Bank and the Lenders -- LIBOR plus 600 basis points -- is effectively a default interest and is beyond the scope of adequate protection contained in the Final Cash Collateral Order. Mr. Strochak insists that the appropriate adequate protection interest is LIBOR plus 225 basis points, which is the pre- maturity, non-default rate of interest. In this context, he points out that the Court should not allow the form of the amendments to trump the substance of the forbearance agreements, and require the Debtors to pay an interest rate 375 basis points higher than the pre-maturity, non-default rate and 75 points higher than the default rate that would have been applicable had the loans simply defaulted in November 2008. As the interest rates specified in the amendments were imposed only after the defaults had occurred, those interest rates are default interest rates, he maintains. Moreover, Mr. Strochak emphasizes that regardless of the rate at which current interest is paid as adequate protection, the Debtors have already demonstrated that the properties are adequately protected by the Debtors' comprehensive adequate protection package. The Debtors are thus providing the secured creditors with adequate protection, he adds. Indeed, he notes that nothing precludes the Lenders from asking for additional adequate protection as may be necessary. Accordingly, the Debtors ask the Court to find that the appropriate rate for the payment of current interest at "the non- default contract rate set forth in the Adequate Protection Party's credit documentation" is the pre-maturity, non-default rate set forth in the Original Loan Agreements -- LIBOR plus 225 basis points. Court Rules in Deutsche Bank's Favor Judge Gropper grants Deutsche Bank's Motion in its entirety. Judge Gropper states that the Final Cash Collateral Order requires the Debtors to pay the current interest as adequate protection. The Debtors are thus directed to pay to Deutsche Bank the full amount of non-default contract rate interest due from time under the Loan Agreements that is 30-day LIBOR plus 6%. Those payments will include the payment tendered by Debtors on June 1, 2009, (x) the payment of an additional $2,085,776 to Deutsche Bank as the Fashion Show Agent and (y) the payment of an additional $806,073 to Deutsche Bank as Palazzo Agent. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Intends to File Schedules by August 31 ------------------------------------------------------ At the request of General Growth Properties Inc., Judge Allan Gropper extended the time in which the Debtors must file their schedules of assets and liabilities, statements of financial affairs, and schedules of executory contracts and unexpired leases through July 31, 2009. Subsequently, the Debtors asked the Court to further extend the time in which they must file their Schedules and Statements through and including August 31, 2009. Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in New York, told the Court that the Debtors have been diligently working to complete their Schedules and have made significant progress. However, the Debtors have determined that they will not be able to complete their Schedules by the July 31 deadline, and would require an additional 30-day extension to finalize their Schedules in light of the size of their Chapter 11 cases and ordinary course accounting procedures. More importantly, Mr. Youngman stressed, the Debtors have focused on various time sensitive aspects of their Chapter 11 cases, including stabilizing their businesses and ensuring a smooth transition into Chapter 11 while, at the same time, continuing to run their business and conduct day-to-day operations. He noted that the transition into Chapter 11 for each of the 388 Debtors has been complicated by the existence of 362 non-debtor entities that continue to be integrated with the 388 Debtors. Moreover, as set forth in the Debtors' Motion to Extend Exclusive Periods, the Debtors are resolving significant contingencies, which remain pending, in their Chapter 11 cases, Mr. Youngman pointed out. Given the magnitude of the continuing information gathering and collation necessary to provide complete and accurate information in their Schedules, more time will be required to complete the Schedules, he insisted. The Debtors assure the Court that the U.S. Trustee for the Region 2 has consented to their proposed extension. Judge Gropper will consider the Debtors' Motion on July 28, 2009. Objections are due July 23. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Proposes to Decide on All Leases by Nov. 12 ----------------------------------------------------------- Pursuant to Section 365(d)(4) of the Bankruptcy Code, General Growth Properties Inc. and its affiliates ask the Court to extend the period in which they may assume or reject unexpired leases, through and including November 12, 2009. Section 365(d)(4)(A) of the Bankruptcy Code provides for an initial period of 120 days after the Petition Date during which a debtor may assume or reject unexpired leases of nonresidential real property under which the debtor is the lessee. The Debtors' Unexpired Leases will be deemed rejected on August 15, 2009, unless (i) the Unexpired Leases are either assumed or rejected on or before August 14, 2009, or (ii) the Lease Decision period is extended pursuant to Section 365(d)(4). Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in New York, discloses that since the Petition Date, the Debtors have focused on stabilizing their businesses and ensuring a smooth transition into Chapter 11 while, at the same time, focusing on other time sensitive aspects of their Chapter 11 cases. Against this backdrop, he points out that the Debtors can not make any determinations concerning the assumption or rejection of the Unexpired Leases on or before August 14, 2009. He also contends that given the size and complexity of the Debtors' Chapter 11 cases, the Unexpired Leases may interrelate with the Debtors' other contractual agreements and legal obligations with respect to the property leased under the Unexpired Leases. Thus, he argues that the Debtors should not be forced at this early stage of their bankruptcy cases to incur administrative claims or reject what may prove to be valuable assets before they have had a full opportunity to explore their options with respect to the Unexpired Leases in the context of a reorganization plan. Against this backdrop, Mr. Youngman argues that cause exists to grant the Debtors' request. For one, the Debtors are timely paying for the use of the property leased under the Unexpired Leases at the applicable lease rates and are continuing to perform their obligations under those leases in a timely manner, to the extent required by Section 365(d)(3), he notes. He further asserts that the Debtors' proposed extension of the Lease Decision Period could not damage the lessors in an amount beyond compensation as is available to the lessors under the Bankruptcy Code. Pending the Debtors' election to assume or reject the Unexpired Leases, he assures the Court that the Debtors will continue to perform all of their undisputed obligations arising after the Petition Date, including payment of postpetition rent. Accordingly, the proposed extension of the Lease Decision Period will facilitate the Debtors' efforts to maximize value by allowing them additional time to analyze the Unexpired Leases thoroughly, he maintains. Judge Gropper will consider the Debtors' request on July 22, 2009. Objections are due July 16. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Wants Open Ended Deadline to Remove Civil Actions ----------------------------------------------------------------- Pursuant to Rules 9006(b) and 9027 of the Federal Rules of Bankruptcy Procedure, General Growth Properties Inc. and its affiliates ask the Court to extend the time within which they may file notices of removal of civil actions and proceedings in state and federal courts to which the Debtors are or may become parties, until the date of entry of an order confirming any reorganization plan in the Debtors' Chapter 11 cases. Pursuant to Rule 9027(a)(2), the Debtors' existing removal action period for civil actions that have not been stayed pursuant to Section 362(a) of the Bankruptcy Code expires on July 15, 2009. With respect to a postpetition Civil Action, the Debtors have only thirty days from receipt to determine whether removal is appropriate. Adam P. Strochak, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that since the Petition Date, the Debtors' resources have been divided between the day-to-day demands of operating their business and those matters that have arisen in the course of their Chapter 11 cases. He notes that the Debtors and their employees have worked on time-consuming tasks, including stabilizing their business operations, securing DIP financing, preparing schedules of assets and liabilities and statements of financial affairs, and responding to motions to dismiss. Against this backdrop, in less than three months since the Petition Date, the Debtors have not had an opportunity to thoroughly examine each of the civil actions to determine the feasibility or benefit of removal, he points out. Mr. Strochak discloses that the Debtors are involved in 600 prepetition lawsuits, many of which are subject to the automatic stay. In addition, the Debtors are aware of hundreds of personal injury claims related to their shopping center operations that were made against the company prepetition, but which have not yet been relitigated and may ripen during the postpetition period. Absent an extension of the Removal Period, the Debtors would be compelled to remove many prepetition actions in order to preserve their right to do so, he argues. This scenario, he continues, will prompt unnecessary litigation that might be avoided by granting the Debtors additional time to assess their litigation liabilities in light of a reorganization plan. On the contrary, he emphasizes that extension of the Removal Period will give the Debtors the time necessary to comprehensively assess their litigation docket and determine whether it is in their best interest to remove any case to federal court under Rule 9027. Extending the deadline for removal of actions will make resolution of those cases more efficient, allowing the Debtors to focus their immediate attention on their reorganization, rather than on procedural aspects of prepetition litigation, he maintains. * * * Judge Gropper will hear the Debtors' request on July 22, 2009. Objections are due July 16. In a bridge order, Judge Gropper rules that the Debtors' deadline to file notices of removal of civil actions is extended until the time that an order determining the Debtors' Motion is entered. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Wants Plan Filing Deadline Moved to February 2010 ----------------------------------------------------------------- Section 1121(b) of the Bankruptcy Code provides for an initial period of 120 days after the commencement of a Chapter 11 case during which a debtor has the exclusive right to propose and file a Chapter 11 plan. Section 1121(c)(3) provides that if a debtor files a plan within the 120-day Plan Period, it has a period of 180 days after the Petition Date to obtain acceptance of that plan, during which time competing plans may not be filed. General Growth Properties, Inc. and its debtor-affiliates' exclusive plan filing period expires on August 14, 2009, and exclusive solicitation period on October 13, 2009. By this Motion, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to extend: (i) their Exclusive Plan Filing Period to February 26, 2010; and (ii) their Exclusive Solicitation Period to that plan to April 23, 2010. Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that although the Debtors' Chapter 11 cases are less than three months, the Debtors have already made substantial progress towards reorganization: * The Debtors' focus during the first 60 days of their Chapter 11 cases was to stabilize their business, and obtain relief with respect to DIP Financing and authority to use cash collateral, the cash management system, employee compensation and benefits, insurance programs, among others. The Debtors completed a competitive DIP Financing and obtained use of cash collateral in one of the most challenging economic climates in history. * The Debtors have spent significant resources to managing the impact of filing 388 entities. Given the interconnectivity among the 388 Debtors and the 362 non- debtors, this process involved the implementation of an extensive compliance system to ensure that the Debtors meet the requirements set forth in the Court's orders. * The Debtors have expended a significant amount on the litigation relating to motions to dismiss filed in their Chapter 11 cases. * The Debtors have worked diligently on time-consuming tasks for the administration of their Chapter 11 cases, including managing project level litigation; preparing schedules of assets and liabilities and statements of financial affairs; dealing with issues related to leases; working towards resolving material lawsuits; working with the U.S. Trustee for Region 2 to provide financial information; and complying with reporting requirements under the Bankruptcy Code. Despite the progress made by the Debtors, Mr. Holtzer points out that significant unresolved claims filed against the Debtors, and the completion of the analysis of the Debtors' executory contracts and unexpired leases, remain pending. With respect to the determination of outstanding claims, Mr. Holtzer says the Debtors have been working steadfastly in preparing their Schedules of Assets and Liabilities and Statements of Financial Affairs. Once the Schedules are filed, the Debtors can begin assessing their prepetition claims, an essential element for an effective Chapter 11 plan. While many of those matters are incidental to any Chapter 11 case, they are compounded by the size and complexity of the Debtors' Chapter 11 cases, Mr. Holtzer tells the Court. Accordingly, he stresses that in light of the Debtors' Chapter 11 cases, the Debtors' initial Exclusive Periods do not provide the Debtors adequate time to develop a Chapter 11 plan. Mr. Holtzer adds that the Debtors have sufficient liquidity and are paying their dues as they come due. In light of the Debtors' steps toward a successful rehabilitation of their business, the Debtors have sufficient resources to meet all required postpetition payment obligations, he says. Mr. Holtzer clarifies that the Debtors are not seeking the extension to delay the reorganization to pressure creditors to accede to a plan that is unsatisfactory to them. On the contrary, he notes, the Debtors' reorganization is proceeding at a fast pace and their relationship with the Official Committee of Unsecured Creditors and other creditors is cordial and constructive. Mr. Holtzer adds that the Debtors' proposed extension of the Exclusive Periods is not a negotiation tactic but a reflection that the Debtors' Chapter 11 cases are not yet ripe for the formulation and confirmation of a viable Chapter 11 plan. He points out that the Debtors have consistently conferred with their constituencies on all major substantive and administrative matters in their Chapter 11 cases. He assures the Court that the proposed extension will not harm the Debtors' creditors, but will increase the likelihood of a greater distribution to the Debtors' stakeholders by facilitating an orderly, efficient and cost- effective plan process for the benefit of all creditors. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Beijing Sees Opel as Global Stepping Stone ---------------------------------------------------------- Beijing Automotive Industry Holding Co. sees its acquisition of General Motors Corporation's German unit, Adam Opel GmbH unit, as a stepping stone towards expanding the Chinese automaker's global presence. A top executive of Beijing Automotive told the Wall Street Journal that the Chinese automaker would aim to build Opel's brands in China if it wins in the bidding for Opel. The German government has expressed support for Canadian autoparts maker, Magna International Inc., as the winning bidder for Opel. Magna's financing for Opel is backed by a Russian bank, Sberbank Rossia, and automaker OAO GAZ Group. Reports said GM is in dispute with Magna over the use of Opel's technology and the extent of the Russian companies' access to GM's technology in Opel. Beijing Automotive made a bid for Opel valued at EUR660 million. Magna, according to the Journal, offered to invest EUR500 million. A third bidder, Belgian RHJ International, also made a bid for Opel. The Journal, citing analysts, stated that a major obstacle in the sale of Opel to Beijing Automotive is the fact that the Chinese automaker could turn Opel into GM's competitor in China, the only major car market still growing and one of the "few bright points" in GM's global business in recent years. The Beijing Auto executive refuted the opinion arguing that its strategy would benefit GM, which would continue to own 49% of Opel, 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$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. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: In Talks for GM Daewoo Financing ------------------------------------------------ General Motors Company is in "constructive" negotiations with the Korea Development Bank on providing new financing for GM Daewoo, as confirmed by GM Chief Financial Officer Ray Young over Reuters Television. GM develops and produces fuel-efficient small cars through the Daewoo brand, which accounts for about a quarter of GM's total auto production. KDB assisted GM's takeover of Daewoo Motor, which ran bankrupt in 2002. The Bank still holds a 22% stake in the Daewoo, "making it the second-largest shareholder behind GM," according to the report. South Korean officials have said that they are waiting see resolution of New GM's restructuring before completing talks on new financing support for GM Daewoo, Reuters noted. Mr. Young told Reuters that GM Daewoo is "a critical element of the new General Motors," offering strategic importance to the Company. 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$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. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: In Talks on Providing DIP Loans to Visteon ---------------------------------------------------------- General Motors Corporation, Ford Motor Company, Chrysler Group LLC and Nissan North America, Inc., are currently in discussions with Visteon Corporation regarding the terms of a debtor-in-possession credit facility to provide Visteon with sufficient financing to continue its operations and restructuring efforts in its Chapter 11 case. The DIP Facility may include the funding of certain of Visteon's retention, severance and incentive plans. GM opposed filed papers in the U.S. Bankruptcy Court for the District of Delaware, which is overseeing Visteon's Chapter 11 case, asking the Delaware Court to deny Visteon's proposed implementation of a Visteon Incentive Program and severance and retention programs. GM opposed the approval of the Proposed Plans as it may jeopardize Visteon's ability to finalize the terms of the DIP Facility by alienating the Proposed DIP Lenders. James S. Yoder, Esq., at White and Williams LLP, in Wilmington, Delaware, counsel to GM, says Visteon did not discuss the Proposed Plans with the Proposed DIP Lenders prior to the filing of the Motions. He adds that the Proposed DIP Lenders have not yet reached an agreement on the terms of the DIP facility or any retention, severance or incentive plans to be included in and covered by the DIP Facility. Mr. Yoder adds that Visteon's Motions are premature. "If the DIP Facility is not finalized, the Debtors will have no financing with which to fund the Proposed Plans," Mr. Yoder avers. The Proposed Plans are expected to cost Visteon millions of dollars, Bloomberg News 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$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. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: No Deal Yet With eBay for New GM Auto Auctions -------------------------------------------------------------- eBay confirmed that no partnership has been forged with General Motors Company, clarifying New GM's statement that it was heading toward making car purchases more convenient through an eBay Motors auction site, The New York Times reports. "We are excited about a potential new adventure that supports GM's dealers by expanding on how they already reach consumers through new approaches. [However], no plans have been finalized," Rob Chesney, vice president of eBay Motors and Marketplaces, said in a statement. New GM Communications Vice President Tom Pyden told The New York Times that GM and eBay had engaged in long-term discussions and that "a partnership was in the works." The test with eBay would let customers either buy new cars at auction or at a fixed price using eBay's "Buy It Now" option, according to the report. 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$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. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: Rejects Promotional Deals & Supply Contracts ------------------------------------------------------------ General Motors Corp., now known as Motors Liquidation Co., seeks the U.S. Bankruptcy Court for the Southern District of New York's authority to reject 19 executory contracts with these parties effective August 3, 2009: * Comcast Corp * Edscha North America Inc. * Electronic Data Systems Corporation * Knowledge Learning Corporation * ITT Automotive Electrical Systems, Inc. * Karmann Manufacturing LLC * Play by Play Sports, LLC doing business as Notre Dame Sports Properties To be rejected are two promotional agreements, eight manufacturing supply contracts for Pontiac vehicles, five manufacturing supply contracts for Chevrolet vehicles, and four miscellaneous contracts. 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$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. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: RHJ in Talks with GM Over Stake in Opel ------------------------------------------------------- RHJ International said July 13 that it is in negotiations with General Motors Corporation over the acquisition of a majority stake in GM's European subsidiary Adam Opel GmbH, which includes Vauxhall in the UK. These discussions have been taking place over a number of weeks and are at an advanced stage. RHJ International (Euronext: RHJI) is a diversified holding company focused on creating long-term value for its shareholders by acquiring and operating businesses in attractive industries. For further information visit http://www.rhji.com/ 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$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. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: Six Directors Step Down From Old GM --------------------------------------------------- Motors Liquidation Company, formerly known as General Motors Corporation, informs the Securities and Exchanged that Erskine B. Bowles, John H. Bryan, Armando M. Codina, and George M.C. Fisher resigned as directors of the company on July 6, 2009. Similarly, Motors Liquidation says Eckhard Pfeiffer resigned as director on July 7, 2009, and Karen Katen on July 8, 2009. Motors Liquidation President Al Koch relates that the resignations were effective immediately and were not due to any disagreement with Old GM. 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$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. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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: Toyota May Close Abandoned Joint Venture -------------------------------------------------------- Toyota Motor Corp., may close New United Motor Manufacturing Inc., in Fremont, California, which was a joint venture abandoned by General Motors Co. As previously reported, GM confirmed in June 2009, that it is terminating the NUMMI venture 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. In response, Toyota said it is considering whether it's economically feasible to build cars alone without GM. Toyota added, however, that it "must seriously consider dissolving the venture under the current business environment." 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$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. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. 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) GJ DEVELOPMENT: Case Summary & 10 Largest Unsec. Creditors ---------------------------------------------------------- Debtor: GJ Development, LLC 2185 Quail Court Grand Junction, CO 81507 Bankruptcy Case No.: 09-23832 Chapter 11 Petition Date: July 11, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Guy B. Humphries, Esq. 1801 Broadway, Ste. 1100 Denver, CO 80202 Tel: (303) 832-0029 Fax: (303) 382-4165 Email: guyhumphries@msn.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 10 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob09-23832.pdf The petition was signed by Cliff Anson, manager of the Company. GLASS WHOLESALERS: BofA to Sell Assets at July 23 Public Auction ---------------------------------------------------------------- Bank of America, N.A., will sell the collateral securing the repayment of the indebtedness of Glass Wholesalers, Ltd., at a public auction to be held at Katten Muchin Rosenman LLP, 525 West Monroe Street, Chicago, Ilinois 60661 on July 23, 2009, at 9:00 a.m. Bank of America is successor by merger to LaSalle - Business Credit, LLC, as lender, pursuant to a Loan and Security Agreement dated as of August 28, 2006, under which Glass Wholesalers, Ltd., was borrower, and an Assignment of Partnership Interests dated as of August 28, 2006, with Charles R. Lawrence and GWI, LLC, Included in the sale are: (A) certain properties of the Borrower, whether now or hereafter owned, existing, acquired or arising and wherever now or hereafter located, including: -- all accounts, and all goods whose sale, lease or other disposition by the Borrower has given rise to Accounts and have been returned to, repossessed or stopped in transit by, Borrower; -- all chattel paper, instruments, documents and general intangibles; -- all inventory; -- goods (other than Inventory), including, without limitation, equipment, vehicles and fixtures; -- all investment property; -- all Deposit accounts, bank accounts, deposits and cash; -- all letter of credit rights; -- commercial tort claims; -- any other property of Borrower now or hereafter in Possession, custody or control of Lender or any agent or Any parent, affiliate or subsidiary of Lender or any Participant with Lender in the Loans for any purpose; -- all additions and accessions to, substitutions for, and Replacements, products and Proceeds for the foregoing Property and (B) all of Mr. Lawrence's rights, title, and interest as a partner in Borrower; and (C) all of GWI's rights, title, and interest as a partner in Borrower. The assets will be offered for sale, in bulk, with reserve, and sold to the highest bidder at the conclusion of the public auction, as determined by Lender in its sole and absolute discretion, on an "AS IS, WHERE IS" basis, with all faults, without recourse, and without any express or implied representations or warranties whatsoever. All bidders will present an earnest money deposit for not less than 25% of their initial bid for the assets. For further information concerning the sale, interested bidders may contact: Joshua A. Gad-Harf, Esq. Katten Muchin Rosenman LLP 625 West Monroe Street Chicago, Illinois 60661 Tel: (312) 902-5208 The USGlass News Network reported July 14, 2009 that Bob Lawrence, president of Glass Wholesalers, told USGNN that his company has been negotiating a pay-off of the loan with BofA, but if no agreement is reached, the Company "is prepared to make a protective chapter 11 reorganization filing, and has arranged for alternative Debtor-in-Possession funding with a major lender." Based in Houston, Glass Wholesalers, Ltd., wholesales general construction machinery & equipment, hardware, chemicals & allied products, glass construction materials, and manufactures glass doors. GOLDEN LAND: Case Summary 2 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Golden Land, L.L.C. 205 Sequoia Way Aptos, CA 95003 Bankruptcy Case No.: 09-55556 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Donald Charles Schwartz, Esq. Law Offices of Donald Charles Schwartz 7960B Soquel Dr. #291 Aptos, CA 95003 Tel: (831) 685-4700 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 A list of the Company's 2 largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb09-55556.pdf The petition was signed by Wendell Gutter, member of the Company. GREDE FOUNDRIES: Conway Del Genio Staff Is CRO ---------------------------------------------- At the request of Grede Foundries Inc., the U.S. Bankruptcy Court for the Western District of Wisconsin has entered an order allowing Conway Del Genio Gries & Co. LLC to provide restructuring services, including having its member Eric W. Ek serving as chief restructuring officer a the pendency of the Chapter 11 case of Grede. The firm has agreed to: a) provide Mr. Ek as CRO, who will report and be accountable to the board of directors and who will supervise and direct all other officers and employees of the Debtor except the chairman of the board; b) provide appropriate personnel to supervise accounting functions and direct the chief financial officer in the preparation of plans and strategies; c) gather and analyze data, interview appropriate management and evaluate the Debtor's existing financial forecasts and budgets to determine the extent of the Debtor's financial challenges; d) review the Debtor's current liquidity forecast and assist management in modifying and updating such forecasts based upon current information, the firm's observation and other information as it becomes available; and e) assist the Debtor in the evaluation of its business plan, preparing new plans and developing and modeling various strategic alternatives, including recommending strategic alternatives regarding in-court restructuring of some or all of the Debtor's current indebtedness, obligations or liabilities, including by way of a potential sale of all or part of the Debtor's assets or business; The firm will be paid $175,000 per month for this engagement. The Debtor assured the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Based in Reedsburg, Wisconsin, Grede Foundries Inc. -- http://www.grede.com/-- produces ductile iron, grey iron and specialty metal parts. It serves the automotive, heavy truck, off-highway, diesel engine and industrial markets and is one of the largest cast-iron foundry companies in the United States. The Company filed for Chapter 11 protection on June 30, 2009 (Bankr. W.D. Wis. Case No. 09-14337). The Debtor selected Whyte Hirschboek Dudek S.C. as its attorney, and Kurtzman Carson Consultants LLC as notice and claims agent. In its Chapter 11 petition, the Debtor said it has $143,983,000 in assets and $148,243,000 in debts. GREDE FOUNDRIES: Wants More Time to File Schedules & Statements --------------------------------------------------------------- Grede Foundries Inc. asks the U.S. Bankruptcy Court for the Western District of Wisconsin for an additional 30 days to file its schedules of assets and liabilities, and statements of financial affairs. Absent an extension, the Debtor would have been required to file the schedules and statements on July 15, 2009. Based in Reedsburg, Wisconsin, Grede Foundries Inc. -- http://www.grede.com/-- produces ductile iron, grey iron and specialty metal parts. It serves the automotive, heavy truck, off-highway, diesel engine and industrial markets and is one of the largest cast-iron foundry companies in the United States. The Company filed for Chapter 11 protection on June 30, 2009 (Bankr. W.D. Wis. Case No. 09-14337). The Debtor selected Whyte Hirschboek Dudek S.C. as its attorney, and Kurtzman Carson Consultants LLC as notice and claims agent. In its Chapter 11 petition, the Debtor said it has $143,983,000 in assets and $148,243,000 in debts. GREEK CATHOLIC UNION: AM Best Affirms "cc" Credit Rating -------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of C- (Weak) and issuer credit rating of "cc" of Greek Catholic Union of the USA (GCU) (Beaver, PA). The outlook for both ratings is negative. Concurrently, A.M. Best has assigned a category NR-4 to the FSR and an "nr" to the ICR in response to a request from GCU's management. Based in Beaver, Penn., the Greek Catholic Union of the USA -- http://www.gcuusa.com/-- is the oldest continuous fraternal benefit society for Rusyn immigrants and their descendants in the United States. GCU operates largely as an insurance organization with assets of over $500 million. It also manages Seven Oaks Country Club and a housing development community on its estate. HALLWOOD ENERGY: Can Use $140,000 of FEI Shale Cash Collateral -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved on July 2, 2009, Hallwood Energy, L.P., et al.'s emergency motion to use cash collateral of FEI Shale, L.P., the maximum amount of $140,000 for the month of June 2009. Prepetition, FEI Shale advanced approximately $95 million under a Farmount Agreement and has received approximately 20% of Hallwood's interest in substantially all of its assets. As approved by the Court, the Debtors will withdraw the funds from a "project account" under the Farmount Agreement. The Account had $6.7 million as of the petition date. The Debtors are allowed to use cash collateral to pay their G&A expenses, excluding any amounts owed to the Hallwood Group Incorporated. Based in Dallas, Texas, Hallwood Energy, L.P. -- http://www.hallwoodenergy.com/-- is an upstream energy corporation, engaging in the exploration, acquisition, development and production of oil and gas properties. The Company and five of its affiliates filed separate petitions for Chapter 11 relief on March 1, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31253). Scott Mark DeWolf, Esq., Kathleen M. Patrick, Esq., and Sean Joseph McCaffity, Esq., at Rochelle McCullough L.L.P., represent the Debtors in their restructuring efforts. Blackhill Partners LLC serves as the Debtors' business consultant. Brian A. Kilmer, Esq., at Okin Adams & Kilmer LLP, represents the official committee of unsecured creditors. In its bankruptcy petition, Hallwood estimated having assets between $50 million and $100 million, and debts between $100 million and $500 million. HAWAII MEDICAL: Court Denies Plea to Extend Plan Exclusivity ------------------------------------------------------------ Linda Chiem at Pacific Business News reports that the Hon. Robert Faris of the U.S. Bankruptcy Court for the District of Delaware has denied Hawaii Medical Center LLC's request to extend its exclusive period to file a Chapter 11 plan beyond July 15. Pacific Business quoted Hawaii Medical Chief Operations and Restructuring Officer Salim Hasham as saying, "While we believe that our plan offers the best option for Hawaii Medical Center to thrive and continue to serve the community, we know that others have their own ideas for restructuring and we welcome their participation in the process." According to Pacific Business, the Hawaii Medical submitted its plan on March 30. As reported by the Troubled Company Reporter on June 25, 2009, Judge Faris already approved Hawaii Medical's disclosure statement. St. Francis Healthcare System of Hawaii, one of Hawaii Medical's creditors, filed an objection to the Company's disclosure statement on Friday, claiming that the Debtor's reorganization plan withheld pertinent information from creditors, Star Bulletin relates. Star Bulletin says that St. Francis Healthcare asked that the Court let other parties to submit reorganization plans. St. Francis Healthcare said in court documents that the plan is an "ill-conceived and gap-filled effort" and Hawaii Medical officials "merely seek to prolong exclusivity to maintain their head start and to disadvantage others who seek a say in this reorganization, an inappropriate use of exclusivity as a means to pressure creditors and leverage parties in interest." Pacific Business relates that St. Francis Healthcare said that it will file its own reorganization plan for Hawaii Medical. Pacific Business reports that creditors will vote to approve or reject Hawaii Medical's plan sometime after a hearing scheduled for August 3. Hawaii Medical Center is the first for-profit, physician-owned hospital in the state. In January 2007, Hawaii Physician Group LLC together with Cardiovascular Hospitals of America (CHA), a leading U.S. hospital management company, established the new Hawaii Medical Center with two hospital campuses on Oahu - HMC West in Ewa Beach and HMC East in Liliha. HPG membership is nearly 130 physicians strong and the group retains 49% ownership of HMC, with the other 51% retained by CHA. Wichita, Kansas-based CHA Hawaii LLC, and its affiliates -- including Hawaii Medical Center LLC -- filed for Chapter 11 protection on Aug. 29, 2008 (Bankr. D. Del. Case No. 08-12027). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtors in their restructuring efforts. The Debtors listed assets of between $1 million and $10 million and liabilities of between $50 million and $100 million when they filed for bankruptcy. HAWAII SUPERFERRY: Guggenheim Wants Parent Case Dismissed --------------------------------------------------------- Hawaii Superferry Inc. filed a liquidating Chapter 11 plan that projects a 2.2% recovery for unsecured creditors owed $25 million. The principal asset is almost $700,000 in cash. According to Bill Rochelle at Bloomberg News, while Guggenheim Corporate Funding LLC says the operating company can go ahead with its liquidating plan, it wants the Chapter 11 case of Hawaii Superferry's parent dismissed. Guggenheim is owed $51.7 million on notes issued by the holding company HSF Holding Inc. Guggenheim says dismissal of HSF's case would let it recover $7.5 million held in escrow for its claim. According to NetDockets, in support of its motion, Guggenheim argues that cause for dismissal exists because there is "a lack of good faith purpose" for HSF Holding's bankruptcy case. Guggenheim points to seven factors, which include, (i) The only asset in HSF Holding's case is the Hawaii Superferry stock that is subject to Guggenheim's lien, (ii) Guggenheim "appears to be the only creditor" of HSF Holding, and (iii) HSF Holding has no on-going business or employees. Wilmington, Delaware-based HSF Holding Inc. operates as the parent company of Hawaii Superferry, Inc., a Hawaiian inter-island ferry scheduled to commence operations in early 2007. HSF and Hawaii Super Ferry 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. HAYES LEMMERZ: Aims to Force Purchase of Georgia Plant ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has lifted the automatic stay to allow Hayes Lemmerz International Inc. to proceed with a lawsuit against Punch Property International NV to continue. According to Bill Rochelle at Bloomberg News, Hayes and Punch reached an agreement that would continue the pending lawsuit, which arose in connection with the sale of a plant in Gainesville, Georgia. Mr. Rochelle recounts that the parties signed a contract last year in which Punch Property would buy the facility for $5.13 million when Hayes Lemmerz stopped operating at the plant. After Hayes Lemmerz halted operations, Punch Property didn't complete the purchase. Hayes Lemmerz sued, asking the court to force the buyer to complete the purchase. Punch Property counterclaimed, seeking the return of its $1 million deposit plus punitive damages based on claims it was fraudulently induced into the contract. About Hayes Lemmerz Originally founded in 1908, Hayes Lemmerz International, Inc. (NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. The Company is also a supplier of automotive powertrain components. The Company has global operations with 23 facilities, including business, sales offices and manufacturing facilities, located in 12 countries around the world. The Company sells products to every major North American, Asian and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world. The Company and certain affiliates filed for bankruptcy on May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching agreements with lenders holding a majority of the Company's secured debt. The Company's principal bankruptcy attorneys are Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co., LLC, serves as the Company's financial advisors. AlixPartners, LLP, serves as the Company's restructuring advisors. The Garden City Group, Inc., serves as the Debtors' claims and notice agent. As of January 31, 2009, the Debtors had total assets of $1,336,600,000 and total debts of $1,405,200,000. This is the Company's second trip to the bankruptcy court, dubbed a Chapter 22, which was precipitated by an unprecedented slowdown in industry demand and a tightening of credit markets. The Company plans to reduce its debt and restructure its balance sheet. Hayes Lemmerz and its direct and indirect domestic subsidiaries and one subsidiary in Mexico first filed for bankruptcy in December 2001 before the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 filings were precipitated by declining market conditions and the Company's excessive debt burdens, according to Mr. Clawson, who also served as chairman and chief executive officer at that time. The Court confirmed the Company's reorganization plan in May 2003, allowing the Company to exit bankruptcy in June 2003. In accordance with the 2003 Plan, approximately $2.1 billion in pre-petition debt and other liabilities were discharged. The Plan provided for holders of prepetition secured claims to receive $478.5 million in cash and 53.1% of the reorganized company common stock. Holders of senior note claims were to receive $13 million in cash and 44.9% of the New Common Stock, and holders of general unsecured claims were to receive 2% of the New Common Stock. Hayes Lemmerz' prior common stock and securities were cancelled as of June 3, 2003. HAYES LEMMERZ: Stahl Cowen Retained by Retirees' Committee ---------------------------------------------------------- Stahl Cowen Crowley Addis LLC has been selected to serve as counsel for the Retiree Committee of Hayes Lemmerz Corporation. As reported by the Troubled Company Reporter on July 14, 2009, Roberta A. DeAngelis, the United States Trustee for Region 3, appointed nine individuals to serve on the retiree committee for Hayes Lemmerz International Inc. and its debtor-affiliates. The Stahl Cowen team will be led by Jon Cohen and Trent Cornell. Stahl Cowen has previously represented Retiree Committees in the Keystone Steel (FV Steel, Inc.), Wagner Castings, Intermet Company, Dana Corporation and Delphi Corporation bankruptcies. The firm also represents the National Chrysler Retirement Organization in the Chrysler bankruptcy and the GM National Retiree Association in the GM bankruptcy. Stahl Cowen has had the unique privilege of representing more Retiree Committees than any other firm in the United States. In addition to its broad bankruptcy practice, Chicago-based Stahl Cowen focuses on serving the needs of business enterprises, including commercial litigation and dispute resolution, employment matters, day-to-day business operation issues, mergers and acquisitions, real estate development and investment, land use projects, corporate and real estate financing, asset protection planning, wealth transfer and charitable and municipal organizations. The firm's partners, many of whom honed their legal skills at some of Chicago's largest law firms, provide clients with sophisticated legal advice while remaining sensitive to the economic cost of their work. On the Net: http://www.stahlcowen.com/ About Hayes Lemmerz Originally founded in 1908, Hayes Lemmerz International, Inc. (NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. The Company is also a supplier of automotive powertrain components. The Company has global operations with 23 facilities, including business, sales offices and manufacturing facilities, located in 12 countries around the world. The Company sells products to every major North American, Asian and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world. The Company and certain affiliates filed for bankruptcy on May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching agreements with lenders holding a majority of the Company's secured debt. The Company's principal bankruptcy attorneys are Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co., LLC, serves as the Company's financial advisors. AlixPartners, LLP, serves as the Company's restructuring advisors. The Garden City Group, Inc., serves as the Debtors' claims and notice agent. As of January 31, 2009, the Debtors had total assets of $1,336,600,000 and total debts of $1,405,200,000. This is the Company's second trip to the bankruptcy court, dubbed a Chapter 22, which was precipitated by an unprecedented slowdown in industry demand and a tightening of credit markets. The Company plans to reduce its debt and restructure its balance sheet. Hayes Lemmerz and its direct and indirect domestic subsidiaries and one subsidiary in Mexico first filed for bankruptcy in December 2001 before the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 filings were precipitated by declining market conditions and the Company's excessive debt burdens, according to Mr. Clawson, who also served as chairman and chief executive officer at that time. The Court confirmed the Company's reorganization plan in May 2003, allowing the Company to exit bankruptcy in June 2003. In accordance with the 2003 Plan, approximately $2.1 billion in pre-petition debt and other liabilities were discharged. The Plan provided for holders of prepetition secured claims to receive $478.5 million in cash and 53.1% of the reorganized company common stock. Holders of senior note claims were to receive $13 million in cash and 44.9% of the New Common Stock, and holders of general unsecured claims were to receive 2% of the New Common Stock. Hayes Lemmerz' prior common stock and securities were cancelled as of June 3, 2003. HCA INC: Files Prospectus for BofA, Merrill Sale of Securities -------------------------------------------------------------- HCA Inc. filed with the Securities and Exchange Commission a prospectus on Form 424B3. HCA Inc. says the prospectus has been prepared for and may be used by Banc of America Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and their affiliates in connection with offers and sales of the debt securities related to market-making transactions in such debt securities effected from time to time. The affiliates may act as principal or agent in such transactions, including as agent for the counterparty when acting as principal or as agent for both counterparties, and may receive compensation in the form of discounts and commissions, including from both counterparties, when they act as agents for both. The sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices. HCA Inc. will not receive any proceeds from such sales. A full-text copy of the Prospectus is available at no charge at: http://ResearchArchives.com/t/s?3f2b About HCA, Inc. Headquartered in Nashville, Tennessee, HCA Inc. -- http://www.hcahealthcare.com/-- is the nation's leading provider of healthcare services. As of June 30, 2008, HCA operated 169 hospitals and 107 freestanding surgery centers, including eight hospitals and eight freestanding surgery centers operated through equity method joint ventures. The Company has a $9.26 billion stockholders' deficit as of December 31, 2008, compared to $9.60 billion stockholders' deficit a year ago. * * * The Troubled Company Reporter said on May 8, 2009, Fitch Ratings affirmed HCA, Inc.'s ratings: Issuer Default Rating at 'B'; Secured Bank Credit Facility at 'BB/RR1'; First Lien Notes at 'BB/RR1'; and Second Lien Notes at 'B+/RR3'. HEARTHSTONE - MLC: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Hearthstone - MLC, Inc. 13400 Sutton Park Drive South, Suite 1402 Jacksonville, FL 32224 Bankruptcy Case No.: 09-05671 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Brian G. Rich, Esq. Berger Singerman PA 315 South Calhoun Street, Suite 712 Tallahassee, FL 32301 Tel: (850) 561-3010 Fax: (850) 561-3013 Email: brich@bergersingerman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company says it does not have unsecured creditors who are non- insiders when it filed its petition. The petition was signed by Mitchell R. Montgomery, president of the Company. HEMIWEDGE INDUSTRIES: Delinquent Reporting Cues OTC Removal Notice ------------------------------------------------------------------ Hemiwedge Industries, Inc., formerly Shumate Industries, Inc., reports that on June 19, 2009, the OTC Bulletin Board notified the Company that it was delinquent with respect to its Quarterly Report for the period ended March 31, 2009 due to such filing being incomplete. As a result, the Company is not current in its reporting obligations. A full-text copy of the Company's bare quarterly report is available at no charge at http://ResearchArchives.com/t/s?3f2a Pursuant to NASD Rule 6530, unless the delinquent filing is received and time stamped by the Securities and Exchange Commission's EDGAR system on July 20, 2009, the Company's common stock will not be eligible for quotation on the OTCBB and will be removed. "We have the right to request a review by a FINRA Hearing officer of the determination that our security is ineligible for quotation under Rule 6530. A hearing request will stay the removal of our common stock from the OTCBB, pending the Hearing Officer's decision, but only if it is accompanied by evidence/receipt of a wire transfer in the amount of $4,000," the Company says. "If we do not timely appeal the Staff's determination to a Hearing Officer and provide evidence/receipt of payment, the removal announcement will be posted on the Daily List at http://www.OTCBB.comat approximately 2:00 pm on July 21, 2009, and our common stock would be removed effective July 22, 2009, at which time our common stock would be traded on the 'pink sheets.' "[W]e have no intention of filing an appeal, nor do we anticipate being able to correct the deficiency in our filing by the grace period expiration date. However, we intend to re-apply for quotation on the OTCBB at such time as we become current in our reporting obligations." The Company notes that it continues to pursue all strategic options directed at maximizing shareholder value. Options could include a possible merger, the sale of all or a portion of the company, restructuring, recapitalization, and other transactions. "The evaluation of these options is ongoing and we will update stockholders when a new plan has been adopted," the Company says. On October 8, 2008, the Company and its wholly owned subsidiary Shumate Machine Works, Inc., consummated the sale of substantially all of Machine Works' assets to American International Industries, Inc. The sale was effected pursuant to an asset purchase agreement pursuant to which Machine Works transferred substantially all of its assets and certain enumerated liabilities to Purchaser. The aggregate purchase price was $6,703,749 consisting of assumption by Purchaser of (i) $5 million of promissory notes due Stillwater National Bank and Trust Company and (ii) $1,703,749 of certain other liabilities, including without limitation, accounts payable of Machine Works. The Company also issued 1,401,170 shares of common stock to the Purchaser as a purchase price adjustment of $420,351. In February 2009, the Company changed its name from "Shumate Industries, Inc." to "Hemiwedge Industries, Inc." to emphasize and focus on its valve product technology after the sale of its contract machining business. At December 31, 2008, the Company had $2,692,700 in total assets and $6,580,108 in total liabilities. HOMER CITY: S&P Downgrades Rating on $237 Mil. Bonds to 'BB-' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered the rating on Homer City Funding LLC's $237 million bonds due 2019 and $510 million bonds due 2026 to 'BB-' from 'BB'. The outlook is negative. "This rating action is in connection with the two-notch downgrade of the corporate credit rating of Edison Mission Energy to 'B' from 'BB-'," said Standard & Poor's credit analyst Swami Venkataraman. "It also reflects deterioration in HC's cash flows due to weak merchant market conditions." Typically, Standard & Poor's does not rate a wholly owned subsidiary higher than its owner. However, S&P elevates ratings on HC above its ratings on EME, because of structural features as well as economic incentives that should prevent HC from being included in such a proceeding. The ratings differential between HC and EME has narrowed more than the maximum of three notches, because the standalone credit quality of HC does not support a higher rating. Lending covenants prevent distributions to EME, unless senior debt coverages exceed 1.7x historically for one year and prospectively for two years. HC's profitability is also affected by the current market conditions. In fact, with gas prices having fallen disproportionately low with respect to coal, gas-fired generation is displacing coal during several hours. This is forcing even plants like HC to cycle more, as a result of which HC suffered opacity violations during Q1 2009. The project had to slow down its ramp rate as well as better tune its boilers to get back into compliance. HC has had a somewhat unreliable operating track record in the last few years, with forced outages exceeding 10% in two of the last three years as well as in the first quarter of 2009. The financial impact thus far has been limited since outages did not occur in the important summer months and the generally rising dark spreads of the past few years supported strong finance performance. As merchant cash flows weaken, operational performance becomes more important. EME has instituted EPRI's boiler tube failure analysis program to reduce tube leak problems over time and is also re-evaluating critical spares inventory policies. IMAX CORP: Appoints Gary Moss as COO Effective July 20 ------------------------------------------------------ IMAX Corporation disclosed in filings with the Securities and Exchange Commission that on June 25, 2009, IMAX appointed Gary Moss, 50, to the newly created position of Chief Operating Officer effective July 20, 2009. Prior to joining the Company, Mr. Moss served for four years as Chief Operating Officer and Chief Financial Officer of Concert Productions International, a major promoter of rock concerts and tours in North America, and an operating subsidiary of Live Nation Inc. Mr. Moss worked with EMI Group Canada Inc., as Vice President, Finance for nine years, and with Sega of Canada, Inc. as Vice President of Finance for two years. Mr. Moss is a Chartered Accountant and received his Bachelors of Commerce from University of KwaZulu-Natal, South Africa. On June 5, 2009, the Company entered into an employment agreement with Mr. Moss to serve as the Company's Chief Operating Officer commencing on July 20, 2009. Under the terms of the agreement Mr. Moss will receive an annual base salary of $400,000, which is subject to annual review. The agreement further provides that Mr. Moss is entitled to participate in the Company's Management Bonus Plan with a target annual performance bonus of 50% of his base salary. Mr. Moss is entitled to be paid a minimum bonus of 50% of the pro-rated amount of base salary with respect to the 2009 fiscal year. In addition, on July 20, 2009, Mr. Moss shall receive a grant of 75,000 options to purchase common shares in accordance with the Company's Stock Option Plan, which options shall vest as to 10% on July 20, 2010, 15% on July 20, 2011, 20% on July 20, 2012, 25% on July 20, 2013 and 30% on July 20, 2014. These options will expire on July 20, 2016. The agreement provides that in the event of termination without cause, Mr. Moss would be entitled to receive accrued and unpaid salary, perquisites and business expenses and any outstanding vacation pay within 30 days of such termination. The agreement further provides upon a termination without cause, in the first year of employment, Mr. Moss would continue to receive base salary, automobile allowance and benefits for a period of six months, increasing by one month for each additional year of employment to a maximum of 20 months. Mr. Moss is required to mitigate the amount of any severance paid by the Company during the severance period by seeking other employment. On the date Mr. Moss obtains other employment, the remaining required salary payments would be reduced by half. Mr. Moss' agreement contains non-solicitation, confidentiality and non-competition provisions. On June 9, 2009, IMAX entered into an agreement with funds managed by Plainfield Asset Management LLC, pursuant to which the Company repurchased $44.3 million aggregate principal amount of the Company's 9-5/8% Senior Notes due December 1, 2010, from Plainfield at a price of $977.50 per $1,000 principal amount of Senior Notes. About IMAX Corporation IMAX Corporation specializes in digital, large-screen and three- dimensional film presentation; the company typically leases or sells its projection and sound systems, and licenses the use of its trademarks. With annual revenue of approximately $115 million, IMAX maintains headquarters in Mississauga, Ontario, Canada. * * * As reported by the Troubled Company Reporter on June 16, 2009, Moody's Investors Service affirmed the Caa1 corporate family rating and positive outlook for IMAX following its recently executed equity issuance (approximately $70 million gross proceeds) and the repurchase of approximately $44 million of its 9.625% Senior Notes due December 2010. On July 6, the TCR said Standard & Poor's Rating Services revised its rating outlook on IMAX Corp. to positive from stable. S&P also affirmed the existing ratings on the company, including the 'CCC+' corporate credit rating. "The rating action reflects the company reducing debt maturing in 2010 by $44 million," said Standard & Poor's credit analyst Tulip Lim. "It also reflects S&P's view that EBITDA will begin to improve from the contribution of theaters under revenue-sharing arrangements and increasing DMR (Digital Re-Mastering) receipts due to the continued widening of the network, which could improve prospects for refinancing debt maturing in 2010." INTERMET CORP: Court Approves Liquidation Plan, Sale to Revstone ---------------------------------------------------------------- The U.S. Bankruptcy Court for the [District of Delaware] has approved the proposed liquidation plan of Intermet Corp. and the sale of substantially all of its assets to Revstone Industries LLC, Michael Bathon at Bloomberg News reported. Intermet Corp. declared Revstone to be the winner of the auction for its cast metals auto parts business with a bid of $11 million, subject to adjustments. Intermet contemplated, as part of its reorganization plan, on giving up its business to first-lien lenders, owed some $35 million, in exchange for debt, absent higher and better offers for the business. Intermet's plan was supported by the official committee of unsecured creditors and first- and second-lien lenders. Under the Plan, holders of administrative expense claims under Sec. 503(b)(9) of the Bankruptcy Code, estimated at $6 million, are to recover 35% to 50% of their allowed claims. The second- lien lenders owed $107 million and unsecured creditors with $93 million in claims are expected to recover not more than 2%. Equity holders are out of the money. A full-text copy of the disclosure statement explaining the Debtors' Joint Chapter 11 Plan, dated May 28, 2009, is available at http://bankrupt.com/misc/intermet.DS.pdf Based in Fort Worth, Texas, Intermet Corp. designs and manufactures machine precision iron and aluminum castings for the automotive and industrial markets. The Company and its debtor- affiliates filed for Chapter 11 protection on August 12, 2008 (D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as the Debtors' counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as the Debtors' claims, notice and balloting agent. An official committee of unsecured creditors has been formed in this case. In its petition, Intermet Corp. listed assets $50 million to $100 million and debts of $100 million to $500 million. This is the Debtors' second bankruptcy filing. Intermet Corp., along with its debtor-affiliates, filed for Chapter 11 protection on September 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represented the Debtors. In their previous bankruptcy filing, the Debtors listed $735,821,000 in total assets and $592,816,000 in total debts. Intermet Corporation emerged from its first bankruptcy filing in November 2005. JAMES MCREYNOLDS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Joint Debtors: James Stewart McReynolds Susan McGurn McReynolds 10647 Sonoma Ridge Eden Prairie, MN 55347 Bankruptcy Case No.: 09-44482 Chapter 11 Petition Date: July 9, 2009 Court: United States Bankruptcy Court District of Minnesota (Minneapolis) Judge: Chief Judge Nancy C. Dreher Debtors' Counsel: Cass Weil, Esq. Moss & Barnett 4800 Wells Fargo Center 90 South Seventh St Minneapolis, MN 55402 Tel: (612) 347-0316 Fax: (612) 339-6686 Email: weilc@moss-barnett.com Sarah E. Doerr, Esq. Moss & Barnett 4800 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402 Tel: (612) 877-5297 Email: doerrsarah@moss-barnett.com Total Assets: $3,135,792 Total Debts: $3,297,147 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mnb09-44482.pdf The petition was signed by the Joint Debtors. JOHN MARTIN: Case Summary & 7 Largest Unsecured Creditors --------------------------------------------------------- Joint Debtors: John P. Martin Joyce Martin 1968 Cummings Dr Los Angeles, CA 90027-1727 Bankruptcy Case No.: 09-27592 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Vincent P. Zurzolo Debtors' Counsel: Brian B. Alavi, Esq. 3250 Wilshire Blvd, Suite 812 Los Angeles, CA 90010 Tel: (213) 632-6060 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 7 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-27592.pdf The petition was signed by the Joint Debtors. KAREN COBB: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Karen Lynette Cobb 17229 Bluff Vista Court Riverside, CA 92503 Bankruptcy Case No.: 09-25620 Chapter 11 Petition Date: July 12, 2009 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Richard M. Neiter Debtor's Counsel: Michael R. Totaro, Esq. Totaro & Shanahan P.O. Box 789 Pacific Palisades, CA 90272 Tel: (310) 573-0276 Fax: (310) 496-1260 Email: mtotaro@aol.com Total Assets: $1,020,445 Total Debts: $2,023,033 A full-text copy of Ms. Cobb's petition, including a list of her 13 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-25620.pdf The petition was signed by Ms. Cobb. KB TOYS: Toys "R" Us to Shield Intellectual Property Assets ----------------------------------------------------------- Toys R Us-Delaware Inc. told the U.S. Bankruptcy Court for the District of Delaware, which oversees KB Toys Inc.'s Chapter 11 proceedings, that it wants to make sure there's no overlap between certain intellectual property the debtors are looking to sell, and customer data and related IP that Toys "R" Us previously bought from a company that once ran KB's online stores, according to Law360. About KB Toys Headquartered in Pittsfield, Massachusetts, KB Toys, Inc. -- http://www.kbtoys.com/-- operates a chain of retail toy stores. On Jan. 14, 2004, the Debtor and 69 of its affiliates filed for protection under Chapter 11 of the Bankruptcy Code, which were administratively consolidated under Case No. 04-10120. Two of the 200 bankruptcy cases remain open, KB Toys Inc. and KB Toy of Massachusetts Inc. In connection with the emergence of KB Toys from bankruptcy in August 2005, and the subsequent organizational restructuring, the assets and operations of many of these prior debtors were transferred among then existing debtor entities and consolidated with KB Toys Group. Furthermore, most of the entities involved were either dissolved or were merged into surviving entities, and several of them changed their names. The company, together with eight of its affiliates, again filed for Chapter 11 on December 11, 2008 (Bankr. D. Del. Lead Case No. 08-13269). Joel A. Waite, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Wilmer Cutler Pickering Hale and Dorr LLP as their co-counsel, FTI Consulting Inc. as financial and restructuring advisor, and Epiq Bankruptcy Solutions LLC as claims and noticing agent. According to Bloomberg, KB listed assets of $241 million against debt totaling $362 million in its Chapter 11 petition filed on December 11. The debts include $143 million in unsecured claims; and $200 million in secured claims, including $95.1 million owed to first-lien creditors where General Electric Capital Corp. serves as agent; and $95 million owed to second-lien creditors. As reported by the Troubled Company Reporter on December 22, 2008, the Hon. Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware allowed KB Toys Inc. to start going-out-of-business sales. LEHMAN BROTHERS: PwC Recovers $8.7-Bil. for U.K. Units ------------------------------------------------------ The joint administrators of Lehman Brothers International (Europe) updated the creditor community July 15 with the issue of their progress report for the last six months. The administrators are pursuing the objective of achieving a better result for LBIE's creditors as a whole than would be likely if LBIE were immediately wound up. To that end the report provides details of the work undertaken and progress made towards achieving that aim. Steve Pearson, joint administrator and partner at PricewaterhouseCoopers LLP said: "The collapse of Lehman Brothers last September was one of the defining moments of the current economic and financial crisis and we stated at the time that the administration of Lehman Brothers International (Europe) would be an exceptionally complex task. Six months into the administration, we are pleased to be able to update the creditor community with the progress we have made. Key achievements to date include the recovery of $8.7bn and gaining control of over $35bn in securities. "In the last six months, we have been working to implement a structure which will maximise recoveries and enable claims to be agreed. This has now been achieved and results are coming through. Returning assets to clients remains a key priority. "The task continues to be challenging and we are working closely with regulators, institutions and counterparties amongst other stakeholders to ensure the best outcome." Key achievements to date: * LBIE's equities business was sold to Nomura Holdings Inc. Over 2,400 jobs were preserved and related employee claims against the estate were mitigated * Control has been asserted over the assets of the Company and its clients, including over $35.5bn in securities * $8.7bn has been recovered to date and is held as cash on deposit or investments * An interim mechanism for the return of assets has been implemented. $12.2bn (46%) of Client Assets have been returned or released to 14 March 2009 * Policies have been formed for handling the estimated 839,000 pending and failed trades, including deleting many from exchanges * The liquidators have identified and valued the majority of LBIE's estimated 130,000 over-the-counter derivative contracts * Revised employee reward and retention processes have been implemented for the retained 360 employees. These focus activities and reward on the objectives of the Administration * A mechanism for the systematic return of Client Assets has been identified, shared with the High Court, the Committee, key industry groups and the market. * The IT environment, critical to the protection and recovery of value from the estate, has been stabilised and annual IT costs have been reduced by over $200m per annum * The exit from overseas branches has been largely concluded, realizing over $150m to date. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, were appointed as joint administrators to Lehman Brothers International Europe and other related entities on 15 September 2008. The joint administrators have been appointed to wind down the business in as orderly a manner as possible. Tom Cahill at Bloomberg News reported that Lehman Brothers Holdings Inc. may return hedge-fund assets as soon as next year that were frozen when LBHI filed for Chapter 11. PwC, according to the report, plans to ask a U.K. court to block any creditor claims for assets after this year, the accounting firm said in a statement. That would allow PwC to return money Lehman had held in trust for fund managers as soon as the first quarter of 2010, Mr. Cahill 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). LJ FOOD DISTRIBUTION: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: L.J. Food Distribution, Inc., an Indiana Corporation 1601 37th Avenue, Suite 2 Munster, IN 46321 Bankruptcy Case No.: 09-25154 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Jacqueline P. Cox Debtor's Counsel: Robert R. Benjamin, Esq. Querrey & Harrow, Ltd. 175 West Jackson Boulevard, Suite 1600 Chicago, IL 60604 Tel: (312) 540-7000 Fax: (312) 540-0578 Email: rbenjamin@querrey.com Total Assets: $531,571 Total Debts: $990,320 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilnb09-25154.pdf The petition was signed by Lampton Jones, president of the Company. LKQ CORP: S&P Puts 'B' Rating on New Universal Shelf Registration ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' preliminary ratings to Chicago-based LKQ Corp.'s new universal shelf registration of an unspecified amount of securities. The ratings on LKQ reflect the company's weak business risk profile and its aggressive financial risk profile. LKQ is the nation's largest provider of recycled automotive original equipment manufacturer products and related services, and its sales and distribution facilities reach most major markets in the U.S. LKQ is also the largest nationwide provider of aftermarket collision replacement products and refurbished bumper covers and wheels. LKQ had total balance sheet debt of $639 million as of March 31, 2009. For the complete corporate credit rationale on LKQ, see the summary analysis published July 13, 2009. Ratings List LKQ Corp. Corporate credit rating BB-/Stable/-- Ratings Assigned Shelf Subordinated debt (prelim) B Senior unsecured debt (prelim) B M & M JEWELERS: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: M & M Jewelers, Inc. 100 West Second Street Owensboro, KY 42303 Bankruptcy Case No.: 09-41094 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Western District of Kentucky (Owensboro) Judge: David T. Stosberg Debtor's Counsel: Russ Wilkey, Esq. 111 W. Second Street Owensboro, KY 42303 Tel: (270) 685-6000 Fax: (270) 683 2229 Email: dcwilkey@wilkeylaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $100,001 to $500,000 A full-text copy of the Debtor's petition, including a list of its 9 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/kywb09-41094.pdf The petition was signed by J. Craig Grant, president of the Company. MAGNACHIP SEMICONDUCTOR: Court Establishes July 29 Bar Date ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has established July 29, 2009, at 4:00 p.m. as the general bar date for the filing of proofs of claim in MagnaChip Semiconductor Finance Company, et. al.'s bankruptcy cases, and December 9, 2009, at 4:00 p.m. with respect to all governmental units. Proofs of claim must be filed, together with supporting documentation, so as to be received on or before the applicable bar dates, at: MagnaChip Semiconductor c/o Omni Management Group, LLC 16161 Ventura Boulevard, Suite C PMB 448 Encino, CA 91436. 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. MAGNACHIP SEMICONDUCTOR: July 30 Disclosure Statement Hearing Set ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has set a hearing for 3:00 p.m. on July 30, 2009, to consider approval of the disclosure statement with respect to MagnaChip Semiconductor Finance Company, et. al.'s Joint Chapter 11 Plan. Objections or other responses to the approval of the disclosure statement, if any, must be filed with the Court no later than 4:00 p.m. on July 24, 2009. As reported in the Troubled Company Reporter on July 7, 2009, 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, which was filed with the Court on June 29, 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%. 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. 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. MAGNACHIP SEMICONDUCTOR: May Access Cash Collateral Until Sept 30 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted MagnaChip Semiconductor Finance Company, et. al., authorization to access, on a final basis, the First Lien Lenders and the Seond Lien Noteholders' cash collateral until September 30, 2009, in accordance with a budget. MagnaChip owes $95 million to the first lien lenders and $500 million to the second lien noteholders. As adequate protection for the Debtors' use of cash collateral, the First Lien Lenders, in addition to their continuing first priority liens in all prepetition collateral, are granted first priority liens in all of the replacement collateral. This replacement collateral consists of all the Debtors' real and personal property and proceeds thereof, whether now owned or subsequently acquired, including prepetition collateral, but excluding any proceeds of avoidance actions recovered or avoided under Chapter 5 of the Bankruptcy Code. As further adequate protection, the First Lien Lenders are also granted a super-priority administrative expense claim under Sections 503(b), 507(a)(1) and 507(b) of the Bankruptcy Code to the extent of any diminution in the value of their interest in the prepetition collateral, including cash collateral. Second Lien Noteholders, in addition to their continuing second priority liens in all prepetition collateral, are granted second priority liens in all of the replacement collateral, as well as a super-priority administrative claim under Sections 503(b), 507(a)(1) and 507(b) to the extent that the decline in value of their interest in the prepetition collateral exceeds the value of their junior liens in the replacement collateral. This junior claim, however will not extend to any proceeds of avoidance actions. The Debtors' authorization to use cash collateral will terminate immediately on September 30, 2009, unless earlier terminated due to the occurrence of a termination event, including, inter alia, the consummation of any sale or other disposition of all, or substantially all, of the assets of the Debtors, entry of an order converting any of the cases to Chapter 7, or the dismissal of any of the Debtors' cases. A full-text copy of the supplemental budget modifying the intial approved budget is available at: http://bankrupt.com/misc/magnachip.supplementalbudget.pdf 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. MAGNACHIP SEMICONDUCTOR: Section 341(a) Meeting Set for July 29 ---------------------------------------------------------------The first meeting of creditors in MagnaChip Semiconductor S.A. and its debtor-affiliates' bankruptcy cases will be held on July 29, 2009, at 4:00 p.m., J. Caleb Boggs Federal Courthouse, 844 King Street, 2nd Floor, Room 2112, Wilmington, Delaware 19801. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. 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. MAGNA ENTERTAINMENT: Wants to Sell Austria Racetrack for EUR6.5MM ----------------------------------------------------------------- Magna Entertainment Corp., et al., ask the U.S. Bankruptcy Court for the District of Delaware for authorization to sell Magna Racino, a horse racing facility on 650 acres of land in Ebreichsdorf, Austria, to Bvsarantaexi Beteiligungsverwaltung GmBH for EUR6,500,001. The racing facility is owned by MEC Grundstucksentwicklungs GmbH (Austria)(Magna Racino), an indirect non-debtor subsidiary of Magna Entertainment. MEC Magna Racing Veranstaltungs GmbH, another indirect non-debtor subsidiary, operates the tracks and other facilities at Magna Racino. The Debtors want to close the sale of assets no later than July 31 and have requested the Court to waive the 10-day stay required pursuant to Bankruptcy Rule 6004(h). Since Magna Racino and Magna Operations are wholly owned by MEC's non-debtor subsidiaries, the assets may be sold without an order of the Court, but out of an abundance of caution and, at the request of the official committee of unsecured creditors, the Debtors have requested for the Court's approval of the sale. Objections to the sale motion are due on July 20, 2009. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a fifty% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. L. Katherine Good, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC, has been tapped as financial advisor and Kurtzman Carson Consultants LLC, as claims agent. Magna Entertainment Corp. had total assets of $1.054 billion and total liabilities of $947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MARC DREIER: Sentenced to 20 Yrs. in Prison; Must Pay $387.7MM -------------------------------------------------------------- Chad Bray at The Wall Street Journal reports that U.S. District Judge Jed Rakoff in Manhattan has sentenced Marc Dreier to 20 years in prison and fined him $387.7 million in restitution. As reported by the Troubled Company Reporter on July 9, 2009, Mr. Dreier asked the court to sentence him to no more than 12-1/2 years in prison. Mr. Dreier pleaded guilty in May to eight felony charges, including fraud and money laundering related to a scheme to sell bogus promissory notes to investors. Mr. Dreier faced a possible sentence of 145 years, or until the age of 204. According to WSJ, prosecutors from the U.S. attorney's office in Manhattan had asked Mr. Dreier be sentenced to 145 years in prison. Judge Rakoff indicated that he would approve the government's request for $746 million in forfeiture, says WSJ. Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On December 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier has been charged by the U.S. government for conspiracy, securities fraud and wire fraud before the U.S. District Court for the Southern District of New York (Manhattan) (Case No. 09-cr-00085-JSR). Dreier LLP filed for Chapter 11 on December 16, 2008 (Bankr. S. D. N.Y., Case No. 08-15051). Judge Robert E. Gerber handles the case. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, has been retained as counsel. The Debtor listed assets between $100 million to $500 million, and debts between $10 million to $50 million in its filing. Wachovia Bank National Association, Sheila M. Gowan as trustee for Chapter 11 estate of Dreier LLP, and Steven J. Reisman as postconfirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that sent Mr. Dreier to bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D. N.Y., Case No. 09-10371). The petitioners assert claims totaling $88.5 million. Diamond McCarthy LLP represents Ms. Gowan; Curtis, Mallet Prevost, Colt & Mosle LLP, Mr. Reisman; and McCarter & English LLP, Wachovia Bank. MERISANT WORLDWIDE: Denies Non-Compete Breach in Heartland Pact --------------------------------------------------------------- Heartland Sweeteners LLC asks the U.S. Bankruptcy for the District of Delaware to lift the automatic stay to allow it to serve notices of potential violations by Merisant U.S., Inc., of their tolling agreement. Like Merisant, Heartland is engaged in the business of manufacturing and distributing artificial sweeteners. However, Heartland's products include sucralose as the key ingredient. The Heartland sweeteners are marketed and sold using either private label packaging or packaging that bears the Nevella(R) trademark owned by Heartland. Pursuant to a toll agreement scheduled to expire Dec. 31, 2009, Merisant has agreed to provide certain manufacturing services for Heartland in the production of some Heartland products. Under a distribution agreement, the parties agreed to a joint marketing and distribution of the Heartland and Merisant sweeteners. According to Heartland, both agreements provide for non compete covenants, under which Merisant may not solicit or sell tabletop sweetener products containing sucralose in the United States. Heartland is concerned that Merisant is actively attempting to and is selling tabletop sweeteners containing sucralose in the United States. Heartland is further concerned that Merisant's strategy and plan to exit bankruptcy relies upon selling tabletop sucralose products in violation of its agreements with Heartland. Merisant is also obligated to keep certain information from and about Heartland confidential. Heartland has received reports that Merisant representatives have disclosed information about Heartland which Heartland believes is covered by the confidentiality agreements in place. According to Raymond H. Lemisch, Esq., at Benesch, Friedlander, Coplan & Aronoff, LLP, "cause" exists for lifting the automatic stay because Heartland merely seeks authority to deliver notices consistent with the terms of the Toll Agreement and Distribution Agreement, and it is well settled that a bankruptcy filing does not enlarge the debtor's contract rights. Merisant's Response Merisant says that the Distribution Agreement was rescinded on July 29, 2008, and thus there exists no agremeent pursuant to which Heartland could properly sent notice. Merisant also says that the Toll Agreement was properly terminated on April 29, 2009. Merisant has commenced an adversary proceeding with the Bankruptcy Court, seeking a judgment that it has not violated any of the agreements with Heartland. Merisant says that Heartland's lift stay request should be denied since the adversary proceeding will determine all the issues raised by Heartland. In the adversary proceeding, Merisant contends that after Heartland failed to perform its obligations under the Distribution Agreement for nearly ayear and then expressly repudiated the agreement in July 2008, Merisant exercised its legal right to rescind the Distribution Agreement. Merisant's rescission extinguished that agreement, and it was excused form performing under the contract, says Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP. About Merisant Worldwide Headquartered in Chicago, Illinois, Merisant Worldwide Inc. -- http://www.merisant.com/-- sells low-calorie tabletop sweetener. The Debtor's brands are Equal(R) and Canderel(R). The Debtor has principal regional offices in Mexico City, Mexico; Neuchatel, Switzerland; Paris, France; and Singapore. In addition, the Debtor owns and operates manufacturing facilities in Manteno, Illinois, and Zarate, Argentina, and own processing lines that are operated exclusively for the Debtor at plants located in Bergisch and Stendal, Germany and Bangkrason, Thailand. As of March 28, 2008, the Debtor has 20 active direct and indirect subsidiaries, including five subsidiaries in the United States, six subsidiaries in Europe, five subsidiaries in Mexico, Central America and South America, and three subsidiaries in the Asia Pacific region, including Australia and India. Furthermore, the Debtor's Swiss subsidiary holds a 50% interest in a joint venture in the Philippines. Merisant Worldwide holds 100% interest in Merisant Company. Merisant Worldwide and five of its units filed for Chapter 11 protection on January 9, 2009 (Bankr. D. Del. Lead Case No. 09-10059). Sidley Austin LLP represents the Debtors in their restructuring efforts. Young, Conaway, Stargatt & Taylor LLP represents the Debtors' as co-counsel. Blackstone Advisory Services LLP is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC, is the Debtors' Claims and Noticing Agent. Winston & Strawn LLP represents the official committee of unsecured creditors as counsel. Ashby & Geddes, P.A., is the Committee's Delaware counsel. The Debtors had $331,077,041 in total assets and $560,742,486 in total debts as of November 30, 2008. MERRILL CORPORATION: Amendments and Waivers Cue S&P's Junk Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on St. Paul, Minnesota-based Merrill Corporation and its issue-level ratings on subsidiary Merrill Communications LLC by three notches. The recovery ratings on Merrill's debt issues remain unchanged. The corporate credit rating was lowered to 'CCC' from 'B'. The rating outlook is negative. The rating action follows the execution of amendments and waivers to the company's first- and second-lien credit agreements, driven by a violation of the total leverage covenant as of the quarter ended April 30, 2009 and the late delivery of the company's audited financial statements for the fiscal year ended January 31, 2009. The lowering of the corporate credit rating to 'CCC' reflects a provision of the amended agreements which requires the company, under certain circumstances, to repurchase up to $70 million of its indebtedness by February 1, 2011, through a combination of either a Dutch tender auction or a debt for equity exchange. "The downgrade reflects S&P's view that the repurchase of debt through a tender offer could be conducted at a significant discount to par and that S&P might consider this to be tantamount to a default given the distressed financial condition of the company," said Standard & Poor's credit analyst Michael Listner. "Similarly, S&P would view a debt for equity exchange as a restructuring of the company's debt obligations, as lenders may receive less value than the promise of the original securities (i.e., the cash payment of scheduled interest and principal on the loans)." Upon the consummation of either of these events, S&P would likely lower the company's corporate credit rating to 'SD' (selective default) and the respective issue-level rating of the participating debt class to 'D'. Shortly thereafter, S&P would reevaluate the company's capital structure and assign a new corporate credit rating and issue-level rating. MICROMET INC: Reinhardt Resigns as SVP and Chief Medical Officer ---------------------------------------------------------------- Dr. Carsten Reinhardt on July 6, 2009, resigned as senior vice president and chief medical officer of Micromet, Inc. The resignation is to be effective at the close of business on September 30. Dr. Reinhardt will continue to consult for the Company from October 1 until December 31, 2009. The Company is conducting a search for a senior level drug development executive with oncology clinical development expertise and experience with the drug approval process in the U.S. and Europe. The Company has entered into a Separation Agreement and a Consulting Agreement with Dr. Reinhardt in connection with his resignation. Pursuant to the Agreements, in addition to the payment of salary through the Separation Date, the Company has agreed to make a severance payment to Dr. Reinhardt in the amount of EUR240,000 to be paid in two installments, with EUR160,000 to be paid on October 1, 2009, and EUR80,000 to be on or after January 1, 2010. In addition, the vesting of Dr. Reinhardt's stock options will continue through September 30, 2010, and Dr. Reinhardt will have the right to exercise the vested options until June 30, 2011. Under the Consulting Agreement, Dr. Reinhardt will continue to advise the Company and assist in transition matters until December 31, 2009 but will not receive any additional compensation beyond the payments described. About Micromet Inc. Micromet Inc. (Nasdaq: MITI) -- http://www.micromet-inc.com/-- is a biopharmaceutical company developing novel, proprietary antibodies for the treatment of cancer, inflammation and autoimmune diseases. Four of its antibodies are currently in clinical trials, while the remainder of the product pipeline is in preclinical development. At March 31, 2009, the company's balance sheet showed total assets of $72,272,000; total current liabilities of $24,250,000, deferred revenue, net of current portion of $7,036,000, other non-current liabilities of $2,067,000, and long-term debt obligations of $2,021,000; and total stockholders' equity of $36,898,000. Going Concern Doubt In its annual report on Form 10-K for the year ended December 31, 2008, Micromet said that as of December 31, it had an accumulated deficit of $198,200,000, and it expects to continue to incur substantial, and possibly increasing, operating losses for the next several years. "The conditions create substantial doubt about our ability to continue as a going concern," the Company said. However, Ernst & Young LLP, in McLean, Virginia, the Company's independent accountants, did not include a going concern language in its March 16, 2009 audit report. MORRIS PUBLISHING: Forbearance Period Extended to July 31 --------------------------------------------------------- Morris Publishing Group, LLC, has obtained an extension until July 31, 2009, to make a $9.7 million interest payment on its senior subordinated notes. Holders of more than 80 percent of the outstanding amount of senior subordinated notes have agreed to extend the forbearance period for the payment, which originally was due Feb. 1, 2009. Morris Publishing's senior bank group also agreed to extend until July 31, 2009, the waiver of the cross default arising from the overdue interest payment on the senior subordinated notes. Morris Publishing Group, LLC -- http://morris.com/-- is a privately held media company based in Augusta, Ga. Morris Publishing currently owns and operates 13 daily newspapers as well as nondaily newspapers, city magazines and free community publications in the Southeast, Midwest, Southwest and Alaska. NATIONAL PROCESSING: Moody's Gives Neg. Outlook; Keeps 'B3' Rating ------------------------------------------------------------------ Moody's revised National Processing Company Group, Inc.'s ratings outlook to negative from stable as a result of weaker than expected financial performance and very limited headroom under its bank financial covenants, which constrains the company's liquidity profile. NPC's B3 corporate family rating, B2 ratings on its first lien senior secured credit facilities, and Caa2 rating on its second lien term loan were affirmed. The negative ratings outlook reflects NPC's reduced liquidity profile as a result of very limited headroom under its credit agreement's financial maintenance covenants and weaker than expected financial performance over recent quarters. Moody's believes that continued underperformance by the company and further tightening of the financial covenant levels later this year could result in further contraction in covenant cushions could result in a possible covenant breach. NPC's B3 CFR reflects the company's: i) high levels of financial leverage from its buyout of Bank of America's independent sales organization portfolio in 2006; ii) very limited headroom for its financial covenants under its bank credit agreement (which is expected to decline even further given pending covenant step-down in late 2009); and iii) expectation for continued volume and revenue pressure over the near-term. Additionally, NPC's B3 CFR is constrained by its sole focus on the small and medium-sized merchant market, which is more susceptible to failures in an economic downturn than larger-scale merchants, which could lead to increased merchant attrition rates. Conversely, NPC's B3 CFR is supported by the company's: i) recurring revenue-model from clients under multi-year contracts; ii) good scale amongst SMB-focused merchant acquirers: iii) its good cash flow generation capabilities, iv) its diverse customer base with minimal customer concentration by size or sector; and iv) the favorable long-term trends in electronic payment processing. This rating was affirmed: -- Corporate Family Rating at B3 -- $50M Senior Secured revolver due 2012 at B2 (LGD3, 35%) -- $390M Senior Secured 1st Lien TL due 2013 at B2 (LGD3, 35%) -- $140M Senior Secured 2nd Lien TL due 2014 at Caa2 (LGD5, 88%) The ratings outlook is negative. The last rating action on NPC was on October 9, 2006, when Moody's assigned the first-time B3 CFR, B2 ratings to its first lien senior secured credit facilities and Caa2 rating to its second lien senior secured term loan facility. National Processing Company Group, Inc., is a provider of credit and debit card-based payment processing services focused on small and medium business merchants across the U.S, as well as community banks, financial institutions and municipal governments. The company's products and services enable merchants to accept credit and debit cards as payment for their merchandise and services by providing transaction processing, risk management, POS terminal support, merchant assistance and chargeback services. The company generated approximately $286 million in revenues for the last- twelve-month period ended March 31, 2009. NEW ORLEANS SEWERAGE: S&P Raises Rating on Debt to 'BB' ------------------------------------------------------- Standard & Poor's Ratings Services raised its underlying rating on New Orleans Sewerage and Water Board, Louisiana's revenue debt to 'BB' from 'B' due to active rebuilding efforts, the system's ability to borrow from the sewer fund, and the adjustment of water rates to improve system liquidity. The outlook is stable. In S&P's view, the rating continues to reflect the system's $295 million five-year capital improvement program; historical reluctance to adjust water rates to cover operating and debt service expenditures; negative system liquidity; and weak annual debt service coverage. These weaknesses, in S&P's opinion, are mitigated by the possibility of the Gulf Opportunity Zone Program and Community Disaster Loan being forgiven; the efforts of the Road Home program to assist residents in their rebuilding efforts, which is reflected in the growth in customers since fiscal 2006; and the ability of the Sewerage and Water Board to make their debt service payments since January 2008. Water system net revenues secure the bonds. Legal provisions require a 1.3x net revenue coverage requirement and a closed flow of funds. "The stable outlook reflects management's implementation of a five-year water rate increase, which should allow the system to improve their financial position and address their capital needs," said Standard & Poor's credit analyst Sarah Smaardyk. "The service area's pace of redevelopment and repopulation will be critical to the bonds' pledged revenue streams and, therefore, could provide upward or downward rating pressure." Flood and hurricane damage to the system was substantial, and board officials will continue to emphasize repairs in upcoming years. In October 2006, water and sewer service was once again completely available throughout the entire system for the first time since Hurricane Katrina hit New Orleans. NORWOOD PROMOTIONAL: Lenders Want Prompt Payment of $100-Mil. ------------------------------------------------------------- According to Bill Rochelle at Bloomberg News, the term loan lenders want Norwood Promotional Products Holdings to promptly pay the $99.5 million they are owed from the proceeds of the sale of Norwood's business. Norwood sold its business early this month for $123 million to pen and lighter maker Societe Bic SA. Bank of New York Mellon, the lenders' agent, wants the Bankruptcy Court to order an immediate turnover of the funds. BNY said that the payment is being held up by a dispute of some sort involving the company, the creditors' committee and the lender for the reorganization, which was already paid $7.4 million. 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. OPUS WEST: Proposes Pronske & Patel as Conflicts Counsel -------------------------------------------------------- Opus West Corporation and its debtor-affiliates ask the U.S Bankruptcy Court Northern District of Texas for authority to employ Pronske & Patel, P.C., as conflicts counsel. PronskePatel will represent the Debtors with respect to certain claims, controversies and causes of action in which Greenberg Taurig, LLP, the Debtors' general bankruptcy counsel, has a conflict of interest. The hourly rates of PronskePatel personnel are: Rackee V. Patel $350 Vickie L. Driver $300 Christina W. Stephenson $195 Lawyers $160 - $500 Legal Assistants/Paralegals $85 - $100 Ms. Driver, a partner at PronskePatel, tells the Court that prepetition, the firm received a $100,000 advanced retainer. PronskePatel drew down $2,731 in fees prior to the petition date leaving a balance of $97,269. Ms. Driver assures the Court that PronskePatel is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Driver can be reached at: Pronske & Patel, P.C. 1700 Pacific Avenue Suite 2260, Dallas, TX 75201 Tel: (214) 658-6500 About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C. is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. OPUS WEST: Hires BMC Group as Notice and Claims Agent ----------------------------------------------------- The U.S. Bankruptcy Court Northern District of Texas authorized Opus West Corporation and its debtor-affiliates to employ BMC Group as balloting, noticing and claims agent. BMC is expected to: -- maintain a proof of claim docket; -- process the proofs of claim; and -- record transfers of claims. Tinamarie Feil, president of client services of BMC Group, told the Court that pre-bankruptcy, BMC received a $50,000 payment for fees and expenses incurred in preparation of the Debtors' Chapter 11 filing. BMC agreed to cap its fees, expenses and hourly rates for the services at the $50,000 retainer amount. Ms. Feil assures the Court that BMC Group is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing, and disposing of real estate development project located in western U.S. The Company and its debtor-affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N. D. Tex. Lead Case No. 09-34356) Clifton R. Jessup, Jr., Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. The Debtors have assets and debts both ranging from $100 million to $500 million. OPUS WEST: Taps Phoenix Capital as Chief Restructuring Officer -------------------------------------------------------------- Opus West Corporation and its debtor-affiliates ask the U.S Bankruptcy Court Northern District of Texas for authority to employ Phoenix Capital Partners, LLC as chief restructuring officer. PCP will, among other things: -- manage the Company's business affairs until the earlier of confirmation of a reorganization plan or conversion of the bankruptcy case to Chapter 7; -- analyze, negotiate and implement actions or measures regarding employee and staffing levels at Opus West Corporation and retention terms or terminations; and -- ensure that the value of the real estate and other assets of the Company are properly managed and maintained. The Debtors proposes to pay PCP a monthly fee of $91,667 for its services of the CRO. John Greer, managing member of PCP, tells the Court that PCP received a $275,000 retainer. Mr. Greer assures the Court that PCP is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C. is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. ORDEAN WICKA: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: Ordean B. Wicka aka Dean B Wicka dba Lake View Adult Homes Shirley M. Wicka 606 33rd St. Everett, WA 98201 Bankruptcy Case No.: 09-16795 Chapter 11 Petition Date: July 9, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Thomas T. Glover Debtors' Counsel: David W. Freese, Esq. 18604 76th Ave W Edmonds, WA 98026 Tel: (425) 776-9171 Email: freese@integraonline.com Total Assets: $1,280,510 Total Debts: $5,216,999 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wawb09-16795.pdf The petition was signed by the Joint Debtors. PHILADELPHIA GAS: S&P Puts Rating on Gas Revenue Refunding Bonds ---------------------------------------------------------------- Standard & Poor's Ratings Services has assigned its 'BBB-' long- term rating to Philadelphia, Pennsylvania's gas works revenue refunding bonds, eighth series A (fixed rate), issued for Philadelphia Gas Works under its 1998 ordinance. The bonds are subordinate to closed senior lien bonds (also rated 'BBB-') and senior to PGW's junior subordinate bonds (rated 'BB+'). At the same times, Standard & Poor's has affirmed its ratings on PGW's debt outstanding. The outlook is stable. In S&P's opinion, the ratings reflect a sizable service territory (with weak demographics); dependence on Pennsylvania Public Utility Commission's approval for base rate increases, coupled with already high rates; stabilized collections, financial operations, and coverage levels; and moderately high debt levels. "We believe that recent improvement in collecting billed revenue, more stringent collection tools, a string of relatively mild winters, and recent PUC approval of a base rate increase stabilize the rating," said Standard & Poor's credit analyst Jeffrey Panger. The enhanced collections, coupled with the city's supportive actions (including a loan to PGW that it repaid in 2008 and the grant-back to PGW of its $18 million in annual dividend payment since 2004) have helped PGW restore coverage of fixed obligations to what S&P believes are adequate levels for the rating. Standard & Poor's expects that in conjunction with the fixed rate bonds, PGW will issue about $255 million of eighth series B-E variable rate bonds backed by letters of credit. The fixed- and variable-rate bonds will refund $313.62 million sixth series variable-rate debt obligation bonds outstanding. PGW is the nation's largest municipally owned gas utility, serving about 506,000 customers in Philadelphia. It had been plagued by low collection rates for several years. S&P believes that natural gas price volatility, weather conditions, and the service territory's demographics all highly influence PGW's collection rates. The stable outlook reflects S&P's expectations that measures of debtholder protection will remain weak but adequate for the borderline investment-grade rating as long as management continues to cut costs and achieve the higher rate of collections; the city is willing to forgo the usual dividend payment; and regulators are willing to approve rates necessary to maintain coverage and liquidity at the currently minimally adequate levels. PHOENIX WORLDWIDE: Wants Schedules Filing Extended Until July 22 ---------------------------------------------------------------- Phoenix Worldwide Industries, Inc., asks the U.S. Bankruptcy Court for the Southern District of Florida to extend until July 22, 2009, the time to file its schedules of assets and liabilities, schedule of executory contracts and unexpired leases, and statement of financial affairs. Miami, Florida-based Phoenix Worldwide Industries, Inc. -- http://www.phoenixworldwide.com/-- dba Phoenix Worldwide Industries, Inc.- Forensic Vehicle Division and Phoenix IVS Division develops surveillance technologies for government and law enforcement agencies. The Company filed for Chapter 11 on June 29, 2009 (Bankr. S. D. Fla. Case No. 09-23201). Jeffrey P. Bast, Esq., at Bast Amron LLP represents the Debtor in its restructuring efforts. The Debtor has assets and debts both ranging from $10 million to $50 million. PILGRIM'S PRIDE: 135 Trade Creditors Sell $2,247,615 in Claims -------------------------------------------------------------- During the period May 28 to June 22, 2009, about 135 trade creditors of Pilgrim's Pride Corp. transferred their claims totaling $2,247,615: Total Claim Transferee Amount ---------- ----------- Argo Partners $339,251 ASM Capital L.P and ASM Capital, III 456,660 Contrarian Funds, LLC 73,774 Equity Trust Co. 470,838 Fair Harbor Capital, LLC 148,134 Hain Capital Holdings, Ltd. 279,749 Liquidity Solutions, Inc. 381,734 Sierra Liquidity Fund, LLC 5,885 US Debt Recovery and US Debt Recovery II LLC 81,683 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: Chicken Plants Dispute Sent to Mediation --------------------------------------------------------- The Douglas-Coffee Parties composed of the Douglas-Coffee County Industrial Authority; the City of Douglas, Georgia; Coffee County, Georgia; and various growers of the Douglas Division, asked the U.S. Bankruptcy Court for the Northern District of Texas to direct Pilgrim's Pride to comply with a prior order regard to sitting down with the prospective purchaser for its chicken processing plants and a mediator. The Debtors previously decided to idle their chicken processing plants in Douglas, Georgia; El Dorado, Arkansas; and Farmerville, Louisiana by mid-May 2009. The affected chicken growers objected arguing that idling will put them out of business. Accordingly, the Debtors obtained authority from Judge D. Michael Lynn to sell the El Dorado and Douglas complexes, free and clear of all liens and encumbrances and subject to better and higher bids. The El Dorado complex, located at 1902 South West Ave., in El Dorado, Arkansas, has an associated feed mill and a hatchery with a capacity of approximately 1,512,000 eggs per week. The complex would employ 1,650 workers when operating at full capacity, is a union facility, and is served by 172 growers with 598 houses. The Douglas complex, located at 113 McNeal Drive, in Douglas, Georgia, also has an associated feed mill and a hatchery with a capacity of 2,042,000 eggs per week. The complex would employ 1,300 workers when operating at full capacity, is a non-union facility, and is served by 160 growers with 668 houses. The Court's order approving uniform bidding procedures for the El Dorado and Douglas complexes provides that if a Qualified Bid in whole or in part, is received, the Debtors, after consultation with the Official Committee of Unsecured Creditors and Steven A. Felsenthal, the Court-appointed mediator, may determine that the Qualified Bid justifies entering into a "stalking horse" agreement for a particular Facility, and pursue the sale either in connection with the Auction or pursuant to another sale process. Pursuant to the Bidding Procedures Motion and the Bidding Procedures Order, the Douglas-Coffee County Industrial Authority, and Amick Farms, LLC, as the Prospective Purchaser, on May 15, 2009, submitted a joint Qualified Bid for the Debtor's Douglas poultry processing plant, hatchery and feed mill. On May 22, 2009, the Debtors e-mailed and faxed the Prospective Purchaser that the Debtors considered the Bid to be inadequate and not in the best interest of the Debtor's, and accordingly, rejected the Bid. The correspondence noted that the "bank groups" supported that determination, although the unsecured creditors committee was not taking a position. Counsel for the DCP, Sidney L. Cottingham, Esq., at Cottingham & Porter, P.C., laments that prior to the rejection, the Debtors have not sat down with the Prospective Purchaser and the court- appointed mediator as clearly instructed by the court during the Bidding Procedures Hearing. Further, prior to the rejection, the Prospective Purchaser was still fervently working on various financial aspects of the Bid, felt it was in active negotiation with the Debtor, had ordered an updated Phase I, and otherwise was engaged in due diligence with respect to the Bid, Mr. Cottingham adds. "We've played by the book but there has been no meeting in the middle," the Wall Street Journal quoted JoAnne Lewis, executive director of the Douglas-Coffee County Economic Development Authority, as saying. Despite having been rejected by Pilgrim's Pride for submitting a bid too low, the El Dorado Officials and investors still hope on getting a shot at buying the El Dorado Poultry Facility, NWAnews.com reported. The Journal, however, reported that El Dorado government officials have given up trying to find a buyer for Pilgrim's El Dorado facility. In light of the parties' dispute, Judge D. Michael Lynn suggested mediation for the parties to resolve the issue. 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: Court OKs Airgas Adequate Protection Deal ---------------------------------------------------------- Airgas, Inc., together with its subsidiaries, Airgas Southwest, Inc., Airgas South, Inc., Airgas Mid South, Inc., and Airgas Carbonic, Inc., d/b/a Dry Ice, obtained approval from the U.S. Bankruptcy Court for the Northern District of Texas of adequate protection agreement they entered into with Pilgrim's Pride Corp. and its affiliates. The agreement is with respect to the protection of certain equipment provided by the Airgas Entities to the Debtors, which the Debtors currently possesses and use in the ordinary course of their business. Pilgrim's Pride Corporation and the Airgas Entities are parties to a prepetition Purchase Agreement under which the Airgas Entities sell CO2 "dry ice" pellets, CO2 liquids, and other liquids and gases and related ancillary products to PPC. In addition, the Airgas Entities provide PPC with certain equipment, including dry ice boxes, cylinders, and trailers necessary for the transportation, use and storage of the Goods. The salient provisions of the Adequate Protection Agreement are: (a) except to return Equipment to the Airgas Entities, the Debtors will not transfer any Equipment in their possession at any time during the course of their bankruptcy cases to any non-Debtor unless otherwise allowed pursuant to the Purchase Agreements or mutually agreed by the Debtors and the Airgas Entities; (b) the Debtors will not encumber any Equipment in their possession at any time during the course of their bankruptcy cases, unless otherwise allowed pursuant to the Purchase Agreements; (c) the Debtors will maintain and preserve any Equipment in their possession in a commercially reasonable manner in accordance with the prior course of dealings with the Airgas Entities; and (d) the Debtors will enable the Airgas Entities to collect their owned Equipment in the ordinary course and in accordance with the terms of the Purchase Agreements. 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: Creditors Suit Vs. CoBank Tolled Until Aug. 3 -------------------------------------------------------------- The Official Committee of Unsecured Creditors and CoBank ACB sought and obtained Judge Lynn's approval of a stipulation tolling until August 3, 2009, all time periods and schedule related to the adversary proceeding. On behalf of the Debtors and their estates, the Official Committee of Unsecured Creditors filed an adversary proceeding against CoBank ACB asking the Court to declare that CoBank's liens on certain of the Debtors' assets are unperfected. The Committee also sought to avoid CoBank's liens pursuant to Section 544(a)(1) or (a)(2) of the Bankruptcy Code. CoBank made certain loans to Pilgrim's Pride Corporation, as borrower, pursuant an Amended and Restated Credit Agreement, dated September 21, 2006. Under the Credit Facility, the Debtors granted CoBank security interests in: -- all of PPC's equipment attached to or used in connection with the "Pledged Facilities" and any replacements or substitutions of these; -- all of PPC's right, title and interest to insurance policies covering the Equipment; -- all books and records relating to the Equipment or Insurance; and -- the proceeds of these items. According to the Committee's counsel, Jason S. Brookner, Esq., at Andrews Kurth LLP, in Dallas, Texas, the Security Agreement relating to the Credit Agreement is governed by Colorado law. Under Section 9-301 of the Colorado Uniform Commercial Code, perfection of a security interest is governed by the local law of the jurisdiction in which the debtor is organized. PPC is a Delaware corporation, thus, Mr. Brookner asserts, the Delaware UCC governs the issue of whether CoBank, as agent, properly perfected its security interest in the Personal Property Collateral. In its lawsuit, the Committee complains that the UCC financing statement filed by CoBank with the Delaware Secretary of State in July 2001 is defective, and CoBank's lien is thus unperfected, because it does not include or cover the Personal Property Collateral located at the "Pledged Facilities" in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, South Carolina, and Tennessee; Lee County, North Carolina; Angelina and Nacogdoches, Texas; and a tract located in Shelby County, Texas. Because CoBank's liens on the Personal Property Collateral located at the Unperfected Facilities were unperfected, the Court should declare CoBank's liens to be unperfected and avoided under applicable law, the Committee asserts. Pursuant to Sections 1107 and 544(a)(1), the Debtors have, as of the Petition Date, the rights and powers of, or may avoid any transfer of property or any obligation incurred that is voidable by a creditor that extends credit to the Debtors at the time of the Petition Date, Mr. Brookner asserts. Because CoBank's liens on the Personal Property Collateral located at the Unperfected Facilities were unperfected as of the Petition Date, the liens should be avoided pursuant to Sections 544(a)(1) or (a)(2), the Committee maintains. 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. PLIANT CORP: Wants Ruling Allowing Apollo Plan Suspended -------------------------------------------------------- Pliant Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to stay its orders eliminating exclusivity and allowing private equity fund Apollo Management to put forth a competing restructuring plan, according to Law360. Headquartered in Schaumburg, Illinois, Pliant Corporation produces polymer-based films and flexible packaging products for food, beverage, personal care, medical, agricultural and industrial applications. The Company has operations in Australia, New Zealand, Germany, and Mexico. Pliant and 10 of its affiliates filed for Chapter 11 protection on January 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as Canadian counsel. As of September 30, 2005, the Company had $604.3 million in total assets and $1.19 billion in total debts. The Debtors emerged from Chapter 11 on July 19, 2006. Pliant Corp. and its affiliates again filed for Chapter 11 after reaching terms of a pre-packaged restructuring plan. The voluntary petitions were filed February 11, 2009 (Bank. D. Del. Case Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath presides over the cases. Jessica C.K. Boelter, Esq., at Sidley Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, provide bankruptcy counsel to the Debtors. Epiq Bankruptcy Solutions LLC acts as claims and noticing agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. The Creditors Committee selected Lowenstein Sandler PC as its counsel. As of September 30, 2008, the Debtors had $688.6 million in total assets and $1.03 billion in total debts. PMT INVESTMENTS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: PMT Investments, LLC 22931 14 MILE RD Clinton Twp., MI 48035 Bankruptcy Case No.: 09-61495 Chapter 11 Petition Date: July 9, 2009 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Robert N. Bassel, Esq. P.O. Box T Clinton, MI 49236 Tel: (248) 677-1234 Fax: (248) 369-4749 Email: bbassel@gmail.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Paul Turkal, president of the Company. PORTER HAYDEN: Asbestos Insurance Assigned to Trust --------------------------------------------------- According to Bill Rochelle at Bloomberg News, Judge Andre Davis of the U.S. District Court for the District of Maryland in Baltimore rejected several arguments made by an insurance company to avoid liability for asbestos claims against Porter Hayden & Co.. National Union Fire Insurance Co. of Pittsburgh argued that it had no liability on the policies because bankruptcy bars the creditors from bringing suits against the company; assigning the insurance policy to the trust violated the policy; and the trust is not an insured. Judge Andre Davis rejected all of the arguments, noting that the policy hadn't been assigned, only delegated to the trust. Even if the policy were assigned in violation of the policy, it wouldn't have voided the policy. The fact that creditors can't sue in bankruptcy doesn't mean there isn't liability covered by the policy, Judge Davis said. The case involved Maryland state insurance law. The result may not be the same in all states, Mr. Rochelle points out. About Porter Hayden Headquartered in Baltimore, Maryland, Porter Hayden sold and installed insulation products. The Company went out of business in 1989. Since then, its activities have been limited to running off its asbestos claims, securing insurance coverage for the claims, and paying claims and related expenses. The Company filed for chapter 11 protection on March 15, 2002 (Bankr. D. Md. Case No. 02-54152). Paul Nussbaum, Esq., at Whiteford, Taylor & Preston, LLP, represents the Debtor. Philip Milch, Esq., at Campbell & Levine, represents the Unsecured Creditors Committee. Edward Harron, Esq., at Young Conaway, is counsel for the Legal Representative for Future Asbestos Claimants. Following a rare joint hearing before the U.S. District Court for the District of Maryland and the U.S. Bankruptcy Court for the District of Maryland, the Chapter 11 reorganization plan for Porter Hayden Company was approved on July 7, 2006. An Asbestos Trust, a pool of funds for payment of tens of thousands of existing claimants and potentially thousands of future claimants, was also created. PORTRAIT CORP: Bankr. Ct. Abstains from Postconfirmation Dispute ---------------------------------------------------------------- WestLaw reports that a bankruptcy court would exercise its discretion to permissively abstain from hearing a postconfirmation dispute between a purchaser of the Chapter 11 debtor's assets and another non-debtor party suing it in another forum for its alleged trademark infringement, though the purchaser, by way of defense to these trademark infringement claims, asserted that the infringement claims were barred by language in the bankruptcy court's sales order stating that the sale would be "free and clear of any prepetition or postpetition liens, claims, encumbrances, defenses and interests." The issues raised by the dispute overlapped significantly with those before the federal district court in the trademark infringement action and could be decided by the district court. The dispute was only tangentially related to the debtor's bankruptcy, and commencement of the proceeding in bankruptcy court raised more than a suggestion of forum shopping. In re Portrait Corp. of America, Inc., --- B.R. ----, 2009 WL 1922209 (Bankr. S.D.N.Y.). Portrait Corporation of America Inc. -- http://pcaintl.com/-- provided professional portrait photography products and services in Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany, and the United Kingdom. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on August 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represented the Debtors in their restructuring efforts. Berenson & Company LLC served as the Debtors' Financial Advisor and Investment Banker. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP represented the Official Committee of Unsecured Creditors, and Peter J. Solomon Company served as financial advisor for the Committee. At June 30, 2006, the Debtor had total assets of $153,205,000 and liabilities of $372,124,000. After selling its assets to CPI Corp. for $82.5 million in June 2007, the estate obtained confirmation of a Chapter 11 plan to distribute those sale proceeds in July 2007. PREFERRED INSURERS: AM Best Gives B+ for Financial Strength ----------------------------------------------------------- A.M. Best Co. has assigned a financial strength rating of B+ (Good) and an issuer credit rating of "bbb-" to Preferred Contractors Insurance Company Risk Retention Group, LLC (PCIC) (Billings, MT). The outlook assigned to both ratings is stable. These rating actions reflect PCIC's adequate capitalization and its quality management team, which has substantial expertise in marketing the type of business PCIC writes. Also inuring to the ratings is incorporation of a favorable business plan, upon which the profitability and liquidity metrics of the ratings are based. Partially offsetting these positive rating factors are the Company's volatile operating results during the first three years of operation, high expense ratio and limited business profile. An additional offsetting factor is execution risk associated with the implementation of PCIC's business plan. Further rating factors are the company's fundamental business strategies, which include providing stable insurance coverage coupled with quality service for its members. Reflecting its limited business profile, PCIC as an insurer is exclusively oriented toward one class of insures, who act to concatenate the company's spread of risk. PCIC maintains a conservative operating strategy by limiting participation in its insurance program to members. Its geographic diversification is adequate since PCIC is registered in 20 states and has registrations pending in other states. The company is writing a consistent book of business and is familiar with the accounts it writes. The insurance program provides general liability coverage to general contractors and subcontractors in the residential and commercial construction industry. The Company has consistently posted negative underwriting profits in its three short years of operations. However, the ratings recognize PCIC's financial projected operating results indicating favorable returns. A.M. Best has concerns with PCIC meeting the goals included in its business plan, with the existing competitive pressures as well as economic volatility. A.M. Best will closely monitor the quarterly performance of PCIC, and any material negative deviation from its business plan in terms of management, earnings, capitalization or risk profile could result in negative rating pressure and a possibly downgrading of the ratings. Based in Billings, Mont., Preferred Contractors Insurance Company Risk Retention Group, LLC (PCIC) -- http://www.pcicrrg.com/-- provides personalized underwriting process that allows clients to tailor coverage to properly outfit the contractor with excellent coverage and rates. PRIZE PROPERTIES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Prize Properties, LLC 3780 Hancock Street, Suite G San Diego, CA 92110 Bankruptcy Case No.: 09-09817 Chapter 11 Petition Date: July 9, 2009 Court: United States Bankruptcy Court Southern District of California (San Diego) Judge: James W. Meyers Debtor's Counsel: Thomas C. Nelson, Esq. 550 West C Street, Suite 1850 San Diego, CA 92101 Tel: (619) 236-1245 Email: tom@tcnlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Mac Bagby, authorized of the Company. PROPEX INC: Court Sets July 31 Administrative Claims Bar Date ------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Tennessee has entered an order requiring administrative claimants to file motions for allowance and payment of administrative expense claims arising on or after the Petition Date on or before July 31, 2009, 5:00 p.m. The indenture trustee pursuant to an indenture dated as of December 1, 2004, as supplemented, pursuant to which 10% Senior Notes due 2012 were issued, will not be required to file a motion to request payment of administrative expense claims. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. In Europe, the company has manufacturing facilities in Germany, Hungary and the United Kingdom. The Company and its debtor-affiliates filed for Chapter 11 protection on January 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of USUS$562,700,000, and total debts of USUS$551,700,000. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Court to Hold Hearing on Disc. Statement Today ---------------------------------------------------------- Fabrics Estate Inc., Fabrics Estate Holdings Inc., Concrete Estate Systems Corporation, Fabrics Estate International Holdings I Inc., and Fabrics Estate International Holdings II Inc., formerly known as Propex Inc. and its debtor affiliates, filed with the Court an amended Motion for Approval of the Disclosure Statement and the certain Plan Solicitation Procedures. The Debtors urge the Court to establish July 15, 2009, the first day of the Disclosure Statement Hearing, as the record date for purposes of determining which creditors and equity security holders are entitled to vote on the Plan and which non-voting creditors and equity security holders are entitled to receive certain informational materials. With regards to the special distribution and voting procedures for beneficial holders of bonds, the Debtors propose that Epiq Bankruptcy Solutions, LLC, not Wilmington Trust as previously requested, be required to compile a list of current nominal holders of the Debtors' 10% senior notes due December 1, 2012, and to deliver Solicitation Packages to each of the Nominal Holders. The Debtors propose to cause Epiq to transmit the Solicitation Packages to the Beneficial Holders by sending the materials by courier or overnight delivery no later than the Solicitation Date to the Nominal Holders, who will promptly transmit a Solicitation Package to each Beneficial Holder for whom the Nominal Holder holds or held those securities. The Debtors further propose that the Solicitation Packages to be transmitted to the Beneficial Holders will include a ballot for the Beneficial Holders and a return envelope provided by, and addressed to, the appropriate Nominal Holder. Beneficial Holders will be required to return their ballots to the appropriate Nominal Holders. Upon receipt by the Nominal Holders of ballots returned from Beneficial Holders, the Nominal Holders must then summarize the individual votes of the Beneficial Holders from the Beneficial Holders' ballots on a master ballot to be provided to the Nominal Holders by the Debtors. The Nominal Holders will then return the Master Ballot to Epiq by the ballot return date. The Debtors will serve a copy of the Amended Plan Solicitation Procedures Motion on the Nominal Holders. The Debtors aver that this procedure adequately recognizes the complex structure of the securities industry, enables them to transmit materials to the Nominal Holders and ultimately, to the Beneficial Holders of the Bonds, and affords those persons with a fair and reasonable opportunity to vote. All ballots will be accompanied by return envelopes addressed to Epiq, or in the case of Beneficial Holders, the address of appropriate Nominal Holder. The Debtors further propose that ballots cast by creditors who have timely filed proofs of claim in unliquidated or unknown amounts that are not the subject of an objection before the commencement of the Confirmation Hearing, will have their ballots counted towards satisfying the numerosity requirement of Section 1126(c) of the Bankruptcy Code, but will only have their ballots count $1 towards satisfying the aggregate claim amount requirements of Section 1126(c). PBGC Objects The Pension Benefit Guaranty Corporation, a wholly owned United States government corporation that administers the defined benefit pension plan termination insurance program under Title IV of the Employee Retirement Income Security Act of 1974, asserts the Disclosure Statement violates Section 524(e) of the Bankruptcy Code because of its failure to provide sufficient information concerning the injunction relating to non-debtors. PBGC contends that the injunction is overbroad and would prevent PBGC from carrying out its statutory duties to enforce the fiduciary provisions of the ERISA against non-debtors. PBGC has filed claims, totaling more than $20,000,000, with respect to the pension plans against each of the Debtors, representing claims for which the Debtors are jointly and severally liable to the pension plans. PBGC argues that the Debtors' proposed Joint Disclosure Statement fails to inform creditors of facts that may affect the value of any recovery on and treatment of their claims and therefore, does not provide adequate information. The Court is set to convene a hearing on July 15, 2009, to consider the adequacy of the Disclosure Statement. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. In Europe, the company has manufacturing facilities in Germany, Hungary and the United Kingdom. The Company and its debtor-affiliates filed for Chapter 11 protection on January 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of USUS$562,700,000, and total debts of USUS$551,700,000. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Fabrics Estate Files 1st Amended Plan of Liquidation ---------------------------------------------------------------- Fabrics Estate Inc., Fabrics Estate Holdings Inc., Concrete Estate Systems Corporation, Fabrics Estate International Holdings I Inc., and Fabrics Estate International Holdings II Inc., formerly known as Propex Inc. and its debtor affiliates, delivered to the U.S. Bankruptcy Court for the Eastern District of Tennessee their First Amended Joint Plan of Liquidation on July 10, 2009. The Amended Plan reflects, among other things, the changes made to the Debtors' company names pursuant to the Revised Asset Purchase Agreement between the Debtors and Xerxes Operating Company LLC and Xerxes Foreign Holding Corp. The Amended Plan also includes additional provisions for the treatment of certain claims, including the Indenture Trustee Fee Claims and Prepetition Unsecured Note Claims. * Indenture Trustee Fee Claims On or after the Plan Effective Date, the Indenture Trustee Fee Claims will be treated as an administrative claim against the Debtors pursuant to Section 503(b) of the Bankruptcy Code and will be paid by the Liquidating Trust without the need for the Indenture Trustee, Gene Davis, to file an application for allowance with the Bankruptcy Court. To receive payment of the Indenture Trustee Fee Claims, the Indenture Trustee must provide reasonable customary detail or invoices in support of those Claims to the Liquidating Trust no later than 15 days after the Effective Date. The Liquidating Trust will have the right to file an objection to the Indenture Trustee Fee Claims based on a "reasonableness" standard within 20 days after receipt of supporting documentation. The Liquidating Trust will pay any Indenture Trustee Fee Claims by the later of (i) 30 days after the receipt of supporting documentation from the Indenture Trustee; or (ii) 10 business days after the resolution of any objections to the claims of the Indenture Trustee with respect to the portion of the Indenture Trustee Fee Claims subject to that objection. Any disputed amount of the Indenture Trustee Fee Claims will be subject to the jurisdiction of the Bankruptcy Court. In the event that the Liquidating Trust and the Indenture Trustee are unable to resolve a dispute with respect to an Indenture Trustee Fee Claim, the Indenture Trustee may elect to submit any dispute to the Bankruptcy Court for resolution or assert its Charging Lien to obtain payment of the disputed Indenture Trustee Fee Claim. * Prepetition Unsecured Note Claims Class 3 consists of Allowed General Unsecured Claims, including Allowed Prepetition Unsecured Note Claims. The Amended Plan provides that on the Effective Date, the Prepetition Unsecured Note Claims will be allowed for $152,000,000 in the aggregate, including principal and accrued unpaid interest as of the Petition Date. Each holder of an Allowed General Unsecured Claim will receive its pro rata share of the General Unsecured Claim Distribution from the Liquidating Trust after payment in full of Allowed Administrative Expense Claims, Allowed Priority Tax Claims, and all Class 1 and Class 2 claims. Distributions on Account of Prepetition Unsecured Notes will be made to the Indenture Trustee or with the prior consent of the Indenture Trustee, through the facilities of Depository Trust Company, or if applicable, the Liquidating Trustee. If a distribution is made to the Indenture Trustee, the Indenture Trustee, in its capacity as disbursing agent, will administer the distribution in accordance with the Plan and Indenture. Distribution to the holders of Prepetition Unsecured Notes will be made to the record holders of the Prepetition Unsecured Note Claims within five business days after the Distribution Date. The record holder will provide the name, address and holdings of each registered holder as of the Distribution Date and must be consistent with the applicable Prepetition Unsecured Note Claim. The Amended Plan also added certain items with respect to the Liquidating Trust: * The Liquidating Trust, not the Liquidating Trustee, will assume liability for and incur obligation to make the Distributions required to be made under the Plan and to handle all aspects of the claims contest and dispute process on and after the Effective Date. * The Liquidating Trust will take possession of the Trust Assets and will conserve, protect, collect and liquidate all assets that constitute part of the Trust Assets and have all the responsibility to review, analyze and prosecute avoidance of actions under the Plan and Liquidating Trust Agreement. * The Liquidating Trustee will be entitled to receive compensation for services rendered at customary rates charged by the Liquidating Trustee for its services. An agreement letter for the Liquidating Trustee will be filed as part of the Plan Supplement. * All cash necessary for the Liquidating Trust to make distributions pursuant to the Plan will be obtained from existing cash balances, including the sale proceeds and the remaining portions of the carve out and the other assets of the Liquidating Trust. * The Liquidating Trust will be obligated to file all applicable state and federal tax returns on behalf of the Debtors' estates. Payment of any fees and expenses of the Indenture Trustee will be the sole responsibility of the Liquidating Trust. A full-text copy of the Debtors' 1st Amended Joint Plan of Liquidation is available for free at: http://bankrupt.com/misc/Propex_1stAmendedPlan.pdf A full-text copy of the Debtors' 1st Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/Propex_1stAmendedDisclosure.pdf http://bankrupt.com/misc/Propex_1stADisclosurePart2.pdf The Debtors also attached certain exhibits to its Amended Disclosure Statement. They include a glossary of defined terms, a notice for the voting classes, forms of the ballots, and monthly operating reports for May and June 2009. The Disclosure Statement Hearing is currently set for July 15, 2009. About Propex Inc. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. In Europe, the company has manufacturing facilities in Germany, Hungary and the United Kingdom. The Company and its debtor-affiliates filed for Chapter 11 protection on January 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. Propex Inc., and its affiliates delivered to the Court a Joint Plan of Reorganization and Disclosure Statement on October 29, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of USUS$562,700,000, and total debts of USUS$551,700,000. Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by Propex Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) QMG HOLDINGS: S&P Withdraws 'CCC+' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Newton, Massachusetts-based business-to-business publisher and trade show holding company QMG Holdings Inc., which S&P analyzed on a consolidated basis with operating subsidiary Questex Media Group Inc. The ratings withdrawal reflects the lack of financial information on the company. Ratings List Withdrawn QMG Holdings Inc. To From -- ---- Corporate Credit Rating NR CCC+/Negative/-- Questex Media Group Inc. To From -- ---- Secured First Lien NR CCC+ Recovery Rating NR 4 Secured Second Lien NR CCC- Recovery Rating NR 6 QUAIL RIDGE: Sent to Chapter 7 Bankruptcy by Four Creditors ----------------------------------------------------------- Boston Business Journal reports that Peter Manning, Chris Manning, James Pomposelli, and John Eaton have filed an involuntary Chapter 7 petition against Quail Ridge Country Club. According to court documents, Messrs. Manning, Pomposelli, and Eaton claim that Quail Ridge owed them $50,000 each. The Acton-Boxborough Beacon reported in June that Quail Ridge was recently sold and in a separate transaction leased by some former members. According to The Acton-Boxborough Beacon, the new operators took steps including killing a $75,000 initiation fee, to try to revive the course. Quail Ridge Country Club is a private, member-owned community and club spread out over 578 acres of pines, palms, oaks, hibiscus, bougainvillea and other varieties of trees, shrubs and bushes. Featuring apartments, villas and luxurious custom homes, this low- density community offers 36 holes of championship golf by Joe Lee, an active lifestyle and close proximity to the culture and amenities of the Palm Beaches. RAAD ENTERPRISES: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Raad Enterprises LLC 3768 Prado De Oro Calabasas, CA 91302 Bankruptcy Case No.: 09-18490 Chapter 11 Petition Date: July 9, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Sammy Zreik, Esq. 21515 Hawthorne Blvd, Ste 980 Torrance, CA 90503 Tel: (888) 972-9477 Fax: (4240 247-9672 Email: sammy.zreik@wkzlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-18490.pdf The petition was signed by Mohammad Rad, president of the Company. RATHGIBSON INC: Wilmington Trust Only a DIP Agent, Not Lender ------------------------------------------------------------- Wilmington Trust is serving as administrative agent to a group of lenders, not extending credit, in a transaction that provides financing to RathGibson Inc., an Illinois-based manufacturer which filed for Chapter 11 protection in the United States Bankruptcy Court for the District of Delaware on July 13, 2009. Wilmington Trust issued the statement to clarify its role in RathGibson's bankruptcy. According to Wilmington Trust, news reports surfaced that may have led readers to believe that Wilmington Trust is providing up to $80 million of debtor-in-possession financing to RathGibson. In fact, Wilmington Trust represents the lenders exclusively as an agent providing loan administration services, for which it is paid a fee. Wilmington Trust is not a lender to RathGibson and has no credit exposure to the manufacturing company. The RathGibson transaction has no effect on Wilmington Trust's balance sheet, credit quality, or financial condition. Wilmington Trust's commercial lending activities are focused on privately held or family-owned companies in the mid-Atlantic region. Wilmington Trust's Corporate Client Services business offers institutional trustee, agency, asset management, retirement plan, and administrative services for clients worldwide who use capital market financing structures, as well as those who seek to establish or maintain nexus, or legal residency, for special purpose entities. Because Wilmington Trust does not underwrite securities offerings or provide investment banking services, it is able to deliver corporate trust services that are conflict-free. Wilmington Trust Corporation is a financial services holding company that provides Regional Banking services throughout the mid-Atlantic region, Wealth Advisory Services for high-net-worth clients in 36 countries, and Corporate Client Services for institutional clients in 88 countries. Its wholly owned bank subsidiary, Wilmington Trust Company, which was founded in 1903, is one of the largest personal trust providers in the United States and the leading retail and commercial bank in Delaware. Wilmington Trust Corporation and its affiliates have offices in Arizona, California, Connecticut, Delaware, Florida, Georgia, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Pennsylvania, South Carolina, Vermont, the Cayman Islands, the Channel Islands, London, Dublin, Frankfurt, Luxembourg, and Amsterdam. As reported by the Troubled Company Reporter on July 14, 2009, RathGibson, Inc., and its domestic affiliates have begun reorganization proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In connection with the filing, RathGibson also has filed a proposed plan of reorganization that provides for holders of allowed general unsecured creditors to be unimpaired and paid in full on undisputed amounts owed prior to the bankruptcy filing. The plan has the unanimous support of the Company's prepetition secured lender, Boards of Directors, and the management leadership of the Company, as well as certain key noteholders. The plan, if consummated, will result in significantly reducing the Company's debt burden. The Chapter 11 filing marks an important step in RathGibson's ongoing efforts to position the Company for long-term success. As reported by the Troubled Company Reporter on July 14, 2009, RathGibson and its domestic affiliates have begun reorganization proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. RathGibson filed a proposed plan of reorganization that provides for holders of allowed general unsecured creditors to be unimpaired and paid in full on undisputed amounts owed prior to the bankruptcy filing. The plan has the unanimous support of the Company's prepetition secured lender, Boards of Directors, and the management leadership of the Company, as well as certain key noteholders. The plan, if consummated, will result in significantly reducing the Company's debt burden. The Chapter 11 filing marks an important step in RathGibson's ongoing efforts to position the Company for long-term success. Based in Lincolnshire, Illinois, RathGibson -- http://www.RathGibson.com/, http://www.GreenvilleTube.com/and http://www.ControlLine.com/-- is a worldwide manufacturer of highly engineered stainless steel, nickel, and titanium tubing for diverse industries such as chemical, petrochemical, energy -- power generation, energy -- oil and gas, food, beverage, pharmaceutical, biopharmaceutical, medical, biotechnology, and general commercial. Manufacturing locations include: Janesville, Wisconsin, North Branch, New Jersey, Clarksville, Arkansas (Greenville Tube), and Marrero, Louisiana (Mid-South Control Line). In addition to the sales offices in Janesville, North Branch, and Marrero, RathGibson has also strategically placed sales offices in Houston, Texas, USA; Shanghai, China; Manama, Bahrain; Melbourne, Australia; Seoul, Republic of Korea; Mumbai, India; Singapore; Vienna, Austria; and Buenos Aires, Argentina. REAL MEX: Moody's Changes Ratings on $130 Mil. Notes to 'B3' ------------------------------------------------------------ Moody's Investors Service upgraded Real Mex Restaurant Inc.'s Speculative Grade Liquidity rating to SGL-3 from SGL-4, recognizing its improved liquidity as a result of the recently completed refinancing. Moody's also revised the rating on the company's newly issued $130 million 14% 2nd lien senior secured notes due 2012 to B3 from the initial provisional rating of (P)B3, upon closing of the transaction. Proceeds from the issuance were mainly used to refinance the 10% 2nd lien senior secured notes due April 1, 2010. The Caa2 Corporate Family Rating remains unchanged, while the rating outlook is revised to stable from developing. Although the actual issuance amount of $130 million was higher than the originally proposed $110 million, the pro-forma total funded debt post-transaction is slightly lower than the proposed debt structure, due to the exchange by a lender under the Senior Unsecured Credit Facility of $15.0 million of such unsecured debt for $4.6 million aggregate principal amount of the new senior secured notes. Other changes related to the refinancing, such as the maturity extension to June 2012 from January 2010 of the 1st lien senior secured credit facilities and relaxation of financial covenants therein under, are generally in line with Moody's expectation. However, Moody's considers the exchange of unsecured term loan with less amount of new secured notes a distressed exchange on the term loan, thus has changed the PDR to Caa2/LD to reflect a "limited default". The PDR will revert to Caa2 in approximately three business days. "The completion of the refinancing has improved its liquidity, and affords the company more time and flexibility to deal with its operating challenges," said Moody's analyst John Zhao. "The rating outlook is stable now as a result." The rating action is: Rating upgraded: * Speculative Grade Liquidity rating -- to SGL-3 from SGL-4 Rating revised: * $130 million 2nd lien senior secured notes due 2012 -- to B3 (LGD2, 28%) from (P)B3(LGD2, 26%) * Probability of Default Rating -- to Caa2/LD from Caa2 Ratings affirmed: * Corporate Family Rating -- at Caa2 Ratings withdrawn: * $105 million 2nd lien senior secured notes due 2010 -- at B3 * Rating outlook: changed from developing to stable The last rating action on Real Mex occurred on June 19, 2009 when its Moody's assigned a provisional rating of (P)B3 to its proposed 2nd lien senior secured notes new issuance. Real Mex Restaurants, Inc., headquartered in Cypress, California, is a leading Mexican-themed restaurant chain operator that owns, operates and franchises casual dining restaurants primarily under the El Torito, Chevys Fresh Mex and Acapulco Mexican Restaurant concepts. At March 29, 2009, Real Mex operated 189 restaurants of which 155 were located in California and the remainder were located in 12 other states. Total revenues for twelve months ending March 29, 2009, were approximately $545 million. REGAL CINEMAS: Fitch Assigns 'B+/RR4' Rating on $400 Mil. Notes --------------------------------------------------------------- Fitch Ratings has assigned a 'B+/RR4' rating to Regal Cinemas Corp.'s (indirect wholly owned subsidiary of Regal Entertainment Group) $400 million 8.625% senior unsecured notes. These notes are expected to rank senior to Regal Cinemas' existing 9.375% senior subordinated notes and junior to the secured bank facility. In addition, the $400 million in notes are structurally senior to RGC's 6.25% convertible notes. Proceeds of the notes are expected to be used to repay borrowings under the Regal Cinemas' bank term loan due 2013. Fitch has taken these rating actions: RGC -- Issuer Default Rating affirmed at 'B+'; -- Senior unsecured convertible notes affirmed at 'CCC/RR6'. Regal Cinemas: -- IDR affirmed at 'B+'; -- Senior secured facility upgraded to 'BB+/RR1' from 'BB/RR2'; -- Senior unsecured notes assigned 'B+/RR4'; -- Senior subordinated notes affirmed at 'B-/RR6'; The Rating Outlook is Stable. Fitch has expected movie theaters to continue to demonstrate their hit-driven characteristics (i.e. dependence on a strong supply of films from the studios), and as such the solid film slate to date has driven industry attendance up approximately 9%. While Fitch believes attendance and box office revenue is relatively uncorrelated with the macro-economy, operating performance is susceptible to meaningful volatility and weakness. Fitch remains concerned with exhibitors' limited control over their core revenue stream, relatively inflexible cost structures and high debt levels. Also, Fitch acknowledges acquisition risk may be heightened within the movie exhibitor industry due to National Amusements, Inc. intentions to sell assets. Movie exhibitors generate nominal free cashflow with which to finance acquisitions and have track records of debt-funded consolidation activity. To the extent financing was available, Fitch would expect any acquisition of part of NAI portfolio to be predominantly debt financed. Intermediate-term risks include increased competition from at-home entertainment media, collapsing film distribution windows, increasing indirect competition from other distribution channels (such as DVD, video on demand or the Internet), and RGC's history of aggressive common and special dividend payouts. (Fitch notes the company did cut its common dividend 40% earlier in 2009.) As of March 31, 2009, RGC's concession revenues have remained stable despite the weak economic conditions. Fitch remains cautious that high margin concessions (85% gross margin; 26% of RGC's total revenues), may be vulnerable to reduced per-guest concession spending due to cyclical factors or a re-acceleration of commodity prices. The ratings continue to reflect RGC's size and position as the largest domestic movie exhibitor, with 6,773 screens in 549 theaters. RGC's portfolio has higher-than average screens per location (approximately 12) and Fitch expects the company to continue to improve its relatively modern theater circuit in a disciplined manner. The ratings also reflect solid geographic diversity and sound operating performance. As of March 31, 2009, liquidity is made up of $187 million in cash and $92.3 million in credit facility availability (reduced by $2.7 million in letters of credit and $5 million exposure to Lehman), under its $100 million credit facility, which matures in October 2011. Total debt as of March 31, 2009 was $2 billion and lease adjusted leverage, based on Fitch's calculations, was 5.6 times (x) (unadjusted leverage was 3.9x). The company has no significant maturity until 2011. The January 2009 amendment provided (in addition to delaying covenant step downs) RGC with the ability to (1) conduct a Dutch Auction and repurchase up to $300 million in term loans by October 17, 2009; and (2) when calculating the leverage and adjusted leverage ratios (for compliance purposes only), RGC may exclude up to $200 million in debt that is subordinated to the bank credit agreement debt, issued for the purpose of refinancing term loan debt. The reduction in term loan borrowings from the issuance of the $400 million note will provide additional financial flexibility within the bank covenants to withstand EBITDA declines. RGC's Recovery Ratings (RR) reflect Fitch's expectation that the enterprise value of the company, and hence, recovery rates for its creditors, will be maximized in a restructuring scenario (going- concern), rather than a liquidation. Fitch estimates an adjusted, distressed enterprise valuation of $1.6 billion using a 5x multiple. The 'RR1' Recovery Rating for the company's credit facilities reflects Fitch's belief that 91%-100% expected recovery is reasonable. While Fitch does not assign Recovery Ratings for the company's operating lease obligations, it is assumed that the company rejects only 30% of its remaining $3.6 billion in operating lease commitments due to their significance to the operations in a going-concern scenario and is liable for 15% of those rejected values. The 'RR4' Recovery Ratings for Regal Cinemas' senior unsecured notes (equal in ranking to the rejected operating leases) reflect an expectation of 31%-50% recovery. The 'B-/RR6' rating for Regal Cinemas' senior subordinated notes reflects the bonds structural seniority over RGC's convertible notes ('CCC/RR6') and Fitch's expectation for zero recovery. ROCKY MOUNTAIN: Defaults on Bond Payments; Files for Ch 11 Bankr. ----------------------------------------------------------------- Greg Avery at Denver Business Journal reports that Rocky Mountain Instrument Co. has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Colorado, when it defaulted on its bond payments. Rocky Mountain listed American National Bank as the holder of industrial bonds arranged in 1998 in conjunction with the city of Lafayette, says Business Journal. According to Business Journal, the default threatened to put Rocky Mountain's headquarters property at 106 Laser Dr. into foreclosure. Court documents say that Rocky Mountain failed last year to refinance its debts or sell its laser technology business to recapitalize the rest of the Company. According to Business Journal, Rocky Mountain blamed its collapse on a raid by U.S. Department of Defense investigators in 2007 and global recession. Business Journal relates that investigators of the military's Defense Criminal Investigative Service, or DCIS, arrived at Rocky Mountain's headquarters on October 11, 2007, and confiscated computers and files as part of a probe that the Company's lawyers said was related to U.S. export controls restricting technology with weapons applications. An employee filed a complaint with the DCIS that led to the raid, Steve Hahn, Rocky Mountain executive vice president and who is part of the Hahn Family LLLP ownership of the Company, said in court documents. According to court documents, Mr. Hahn said that the employee claimed that Rocky Mountain committed a "procedural violation" of export controls by allowing specifications for an unspecified product to go overseas. Rocky Mountain said that it received government licenses to send such specifications to overseas suppliers, Business Journal states. The DCIS probe, according to Business Journal, has produced no charges against Rocky Mountain, but Mr. Hahn said that the raid led to a 15% decline in business as some cllients lost confidence in the Company. Citing Mr. Hahn, the report states that the recession caused a decline in Rocky Mountain's sales and the Company lost money through 2008. Court documents say that Rocky Mountain asked the Court's permission to use $1.06 million of its available lines of credit before the end of July to keep operating and fulfill customer orders. Mr. Hahn said in court documents that more money could be needed between the end of July and the end of October to keep the Rocky Mountain functioning. According to Business Journal, Rocky Mountain wants to use the cash to keep employees, saying that they are highly specialized and it would take months to train any replacements that the Company could find. Lafayette, Colorado-based Rocky Mountain Instrument Inc. is a high-tech optics company. The Company and its laser subsidiary makes a variety of photonics products for industry and defense use, including optics that defense giant Lockheed Martin Corp. planned to use in its F-22 fighter currently under development. TheCompany has offices in Russia and South Korea in addition to its Lafayette site. ROME CORP: Debtor Has Title to Propane Tank Under Vt. UCC --------------------------------------------------------- WestLaw reports that under Vermont's version of the Uniform Commercial Code (UCC), as predicted by a Vermont bankruptcy court, title shifts to a buyer of goods upon the delivery of such goods, by operation of law, even when the parties have explicitly agreed that title will remain in the seller post-delivery. This result was compelled by the statutory language and the overwhelming weight of authority, the bankruptcy court concluded, even though the approach might punish a seller of goods who acted in good faith and relied upon candid representations of the party with whom it was contracting. Thus, title to a propane tank system that was installed prepetition on a Chapter 7 debtor's property by a gas company passed by operation of law when the system was delivered and installed, even though the debtor and the gas company orally and explicitly agreed that the gas company would retain title to the system until it was paid for by the debtor, and even though the gas company contended that trade usage supported its ownership claim. The gas company was left only with a reservation of a security interest, which it failed to perfect as of the date of the trustee's sale of the debtor's assets. Therefore, the assets buyer acquired the system free and clear of any lien or interest of the gas company. In re Rome Family Corp., --- B.R. ----, 2009 WL 1886056 (Bankr. D. Vt.). ROUNDY'S SUPERMARKETS: S&P Affirms 'B' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'B' corporate credit rating and stable outlook for Milwaukee-based Roundy's Supermarkets Inc. In assessing multiemployer pension plan risk for Roundy's Supermarkets, S&P made a number of analytical assumptions and adjustments based on confidential information provided to us by these companies. Based on S&P's criteria, multiemployer pension liabilities are treated as debt-like obligations, net of tax. The current ratings do not assume any recovery in the market value of multiemployer pension plan assets. For certain multiemployer pension plans, S&P adjusted current pension deficits to reflect expectations for some future benefit reductions. EBITDA is adjusted to reflect only the present value of future benefits earned by employees for services rendered during the period Withdrawal liabilities already incurred from exiting multiemployer pension plans are viewed as debt-like obligations and added to debt. In assessing the overall impact of multiemployer pension plan deficits to a company's corporate credit rating S&P took into account a number of factors including the impact on credit metrics, future expectations for these deficits, historical operating performance, S&P's expectations for future operating performance, and the company's liquidity needs. "The ratings on Roundy's Supermarkets Inc. reflect its highly leveraged capital structure, its participation in the highly competitive supermarket industry and its geographic concentration in Wisconsin and Minnesota," said Standard & Poor's credit analyst Stella Kapur. In 2008, Roundy's Supermarket experienced marginal same-store sales growth. However, quarterly performance during the year was inconsistent. In 2008, the company's operations underperformed in the second quarter because of increased price investment and promotional activity and recovered in the fourth quarter, the result of a reduction in promotion activity and operating costs. Despite this, Roundy's ended the year with slightly better operating margins, which compare favorably to industry peers. Operating margins continued to improve in the company's first quarter of 2009, despite a slight decline in overall sales. Roundy's remains highly leveraged. At April 4, 2009, lease- adjusted debt to EBITDA was 5.2x and EBITDA interest coverage was 2.9x. After adjusting for multiemployer obligations, leverage remains consistent with current ratings. The company's covenants tightened further in the first quarter of 2009 and are scheduled to tighten again in the first quarter of 2010. However, given S&P's expectations for the company to generate around $63 million of free operating cash flow in 2009, S&P believes the company has the flexibility to further reduce the outstanding amount of its term loan to remain in compliance with its covenants, as it has done in the past. On January 3, 2009, Roundy's Supermarkets made an optional $75 million prepayment on its term loan which improved the covenant cushion on its bank facility. ROYAL WEST: Drew Dillworth Appointed as Receiver ------------------------------------------------ Paul Brinkman at South Florida Business Journal reports that Drew Dillworth of Stearns Weaver Miller Weissler Alhadeff & Sitterson has been named as receiver for Royal West Properties' bankruptcy. Business Journal quoted Peter Valori, who filed the bankruptcy petition against Royal West on behalf of three creditors, as saying, "The Company agreed to the bankruptcy moving forward, and an order of relief was entered last week . . . . In an unusual move, the Company moved for the appointment of a Chapter 11 Trustee, and all creditors in attendance at the first hearing agreed." Business Journal relates that Mr. Dillworth secured the offices of Royal West and started an analysis of its affairs. According to the report, Mr. Dillworth said said, "I've only recently been appointed in the matter and am in the process of investigating the financial affairs so that I can file an initial report with the court." According to Business Journal, Royal West hired bankruptcy counsel Scott Brown of Tabas, Freedman, Soloff, Miller & Brown as its counsel. Business Journal relates that an additional list of creditors was filed with the bankruptcy court, naming hundreds of claims, mostly under $1,000, from individuals and small companies in Sarasota, Longboat Key, and Fort Myers. The recession hit many buyers of properties who could no longer afford to pay their mortgages, Business Journal says, citing Jose Fuentes, the acting controller at Royal West. The report says that Royal West's business method was to acquire property for development and then finance the sale, assigning the note to its investors. Payments on notes stopped in December 2008, Business Journal relates, citing Mr. Valori. According to Business Journal, that Gaston E. Cantens, who created and ran Royal West, brought in many friends and associates in as Royal West Properties investors. Mr. Valori said that Royal West told investors that it has about $17 million in assets and $44 million in debt, but it wasn't accurate, as it didn't take into account the full value of all land holdings, Business Journal states. Miami, Florida-based Royal West Properties, Inc., is one of the largest real estate investment companies in Miami's Cuban-American community. The Company was put into Chapter 11 bankruptcy by creditors Fernando Barboza, Nestor Barboza, and Panamanian company Corita Corp. on May 27, 2009 (Bankr. S.D. Fla. Case No. 09-20334). SAFETY-KLEEN SYSTEMS: S&P Withdraws 'BB-' Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings, including its 'BB-' corporate credit rating, on Plano, Texas-based Safety- Kleen Systems Inc. at the company's request. SCANCELLI PRINTS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Scancelli Prints, Inc. 1900 Van Winkle Street East Rutherford, NJ 07073 Bankruptcy Case No.: 09-27872 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Maureen Tighe Debtor's Counsel: Eric R. Perkins, Esq. McElroy, Deutsch, Mulvaney & Carpenter 40 West Ridgewood Avenue Ridgewood, NJ 07450 Tel: (201) 445-6722 Fax: (201) 445-5376 Email: perkins_57@msn.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb09-27872.pdf The petition was signed by Kerop Ozanian, president of the Company. SCOTT ROSEBERRY JEWELL: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Joint Debtors: Scott Roseberry Jewell aka Jewell Property Management, LLC aka Jewell Property Management Security, DLLC Gabriella Ines Pecora 19334 Green Lakes Loop Bend, OR 97702 Bankruptcy Case No.: 09-35461 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court District of Oregon Judge: Elizabeth L. Perris Debtors' Counsel: Anthony V. Albertazzi, Esq. 1070 Nw Bond, St #202 Bend, OR 97701 Tel: (541) 317-0231 Email: cilaw75@gmail.com Total Assets: $5,178,756 Total Debts: $6,175,204 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/orb09-35461.pdf The petition was signed by the Joint Debtors. SENCORP: Sells Assets Quickly to Wynnchurch Capital --------------------------------------------------- According to Bill Rochelle at Bloomberg News, SENCORP was authorized by the U.S. Bankruptcy Court for the Southern District of Ohio, in Cincinnati to sell its assets to Wynnchurch Capital Ltd. for $41 million in cash plus debt assumption. An auction was scheduled for July 1, under which Wynnchurch was the stalking horse bidder with its $41 million offer. Under the contract, SENCORP would sell the assets to Wynnchurch absent higher and better bids at the auction. About SENCORP Headquartered in Cincinnati, Ohio, SENCORP makes and sells branded pneumatic and battery powered staplers, nailers and screw systems and collated staples, nails and screws. SENCORP's brand names are well known in the industry for quality, reliability and service. Certain aspects of SENCORP's businesses, including the SENCO name, have existed for over 50 years. Most of the Company's top ten customers have purchase products. SENCORP and its affiliates filed for Chapter 11 on May 8 (Bankr. S. D. Ohio Case No. 09-12869) to facilitate the sale of its assets under 11 U.S.C. Sec. 363 to an investor group led by Wynnchurch Capital, Ltd., and including Great Lakes Equity Partners. The Debtors are tapping The Garden City Group, Inc., as notice, claims and balloting agent; Mesirow Financial, Inc., as Investment Banker; Morris-Anderson & Associates Ltd., for advice on restructuring alternatives; Latham & Watkins LLP as bankruptcy counsel; and Frost Brown Todd LLC as co-counsel. The secured lenders are represented by Katten Muchin Rosenman LLP. The Debtors have assets and debts both ranging from $100 million to $500 million. SERGIO GARCIA: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Joint Debtors: Sergio Garcia Marisa Garcia 11448 Valley Court St. John, IN 46375 Bankruptcy Case No.: 09-22828 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Northern District of Indiana (Hammond Division) Judge: J. Philip Klingeberger Debtors' Counsel: Gordon E. Gouveia, Esq. 433 W. 84th Drive Merrillville, IN 46410 Tel: (219) 736-6020 Fax: (219) 736-2545 Email: GEG_law@Ameritech.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/innb09-22828.pdf The petition was signed by the Joint Debtors. SINCLAIR BROADCAST: S&P Downgrades Corporate Credit Rating to 'B-' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Hunt Valley, Maryland-based TV broadcaster Sinclair Broadcast Group Inc. to 'B-' from 'B+'. All issue-level ratings on Sinclair were also lowered by two notches. At the same time, S&P placed these ratings on CreditWatch with negative implications. S&P's rating action is in response to Sinclair's announcement that Cunningham Broadcasting Corp., its LMA partner in six markets, could enter bankruptcy proceedings by the end of July (the termination date of its $33.5 million term loan), which would cause a default and potential acceleration under Sinclair's bank credit facility. Sinclair has initiated negotiations with Cunningham, which could lead to an amendment of the LMAs to put Cunningham in a more favorable financial position or to an equity or debt contribution from Sinclair. Sinclair's credit facility contains certain cross-default provisions with respect to Cunningham as a "material third-party licensee." A default by Cunningham would therefore cause a default under Sinclair's credit facility and accelerate repayment of Sinclair's debt. S&P believes that Sinclair has the financial resources to advance funds to Cunningham to repay its term loan, if necessary, on the due date, but that doing so would leave the company with significantly diminished revolving credit capacity. Cunningham is owned by family members of the Smith brothers, Sinclair's majority owners. Also, Sinclair has been in litigation for several years concerning its plan to acquire all of Cunningham's TV stations. The company also announced that it has initiated discussions regarding refinancing options for its convertible notes with put options exercisable in May 2010 and January 2011. "In resolving S&P's CreditWatch listing, S&P will monitor the Cunningham situation and could lower S&P's rating on Sinclair by several notches if it appears increasingly likely that Cunningham will not be able to renew or repay its term loan, or if Sinclair is ultimately unwilling to meet Cunningham's obligations," noted Standard & Poor's credit analyst Deborah Kinzer. S&P could lower the Sinclair rating to 'D' if Cunningham defaults, causing a cross-default to Sinclair's debt. If the Cunningham matter is settled without a bankruptcy, S&P will reevaluate the Sinclair ratings based on the terms of the Cunningham resolution and all other issues affecting Sinclair's near-term business and financial outlook. These include its liquidity position, S&P's expectation of higher leverage, and uncertainties related to the refinancing of its putable convertible notes. SOBER LIFESTYLE: Case Summary & 11 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Sober Lifestyle, Inc. 702 NE 8th Avenue Delray Beach, FL 33483 Bankruptcy Case No.: 09-24119 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Ronald Lewis, Esq. 445 E Palmetto Park Rd Boca Raton, FL 33432 Tel: (561) 367-1771 Fax: (561) 368-0293 Email: rlewis@beltlawyers.com Total Assets: $4,745 Total Debts: $1,808,620 A full-text copy of the Debtor's petition, including a list of its 11 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-24119.pdf The petition was signed by Louis S. Weltman, president of the Company. SOUTHEAST REAL ESTATE: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Southeast Real Estate Holdings LLC 1100 SW 4th Avenue Delay Beach, FL 33444 Bankruptcy Case No.: 09-24122 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Erik P. Kimball Debtor's Counsel: Ronald Lewis, Esq. 445 E Palmetto Park Rd Boca Raton, FL 33432 Tel: (561) 367-1771 Fax: (561) 368-0293 Email: rlewis@beltlawyers.com Total Assets: $1,304,401 Total Debts: $3,641,289 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/flsb09-24122.pdf The petition was signed by Louis S. Weltman, president of the Company. SYNCORA GUARANTEE: BCP to Waive Condition to RMBS Exchange Offer ---------------------------------------------------------------- The BCP Voyager Master Funds SPC, Ltd., acting on behalf of and for the account of the Distressed Opportunities Master Segregated Portfolio, said yesterday in connection with the Fund's offer for 55 classes of residential mortgage backed securities insured by Syncora Guarantee Inc. that it does not expect that at least 72 remediation points will be tendered into or otherwise committed through alternative settlements and purchases to the offer. The Fund intends to waive that condition to the offer, subject to Syncora Guarantee receiving the consent of certain counterparties to Syncora Guarantee's credit default swap transactions and financial guarantee insurance policies to the waiver of a comparable condition in the master transaction agreement entered into between Syncora Guarantee and such counterparties. The offer was slated to expire at 4:59 p.m., New York City time, July 14, 2009, unless extended. The offer and related financing are also conditioned on the consummation of an agreement entered into between Syncora Guarantee and certain counterparties to Syncora Guarantee's credit default swap transactions and financial guarantee insurance policies, the tender of a minimum amount of RMBS, approval of the New York Department of Insurance and certain other conditions. Holders of RMBS that have tendered or will tender their RMBS into the offer are no longer able to withdraw their tendered RMBS. The offer by the Fund and any transactions with Syncora Guarantee are being conducted only with qualified institutional buyers and are exempt from registration under Section 4(2) of the Securities Act of 1933, as amended. Any securities that may be issued pursuant to such transactions have not been and, at the time of the closing of the transaction, will not be registered under the Securities Act or any state securities laws. The securities may not be offered or sold in the United States absent registration under, or an applicable exemption from, the registration requirements of the Securities Act and applicable state securities laws. About Syncora Guarantee Inc. Syncora Guarantee Inc. -- http://www.syncora.com/-- is a wholly owned subsidiary of Syncora Holdings Ltd. Syncora Holdings Ltd. is a Bermuda-domiciled holding company. In April 2009, Standard & Poor's Ratings Services revised its financial strength and financial enhancement ratings on Syncora Guarantee Inc. to 'R' from 'CC'. Standard & Poor's also revised its counterparty credit rating on Syncora to 'D' from 'CC'. An insurer rated 'R' is under regulatory supervision because of its financial condition. The 'CC' counterparty credit, financial strength, and financial enhancement ratings on Syncora Guarantee U.K. Ltd. are unchanged because at this time, that company is not subject to any regulatory orders that mandate the suspension of claims payments. TOUSA INC: Trial to Void Prepetition Lenders' Liens Begins ---------------------------------------------------------- The trial on the official committee of unsecured creditors of Tousa Inc.'s adversary proceeding against prepetition lenders began July 13, 2009. The Creditors Committee, in its lawsuit filed before the U.S. Bankruptcy Court for the Southern District of Florida, claims that Tousa's operating subsidiaries were required to guarantee and pledge their assets for an $800 million loan that gave them no benefit. As a result, the Committee wants to knock out the security interests granted to the lenders. Tousa filed a revised Chapter 11 plan in April 2009 designed to permit the company to emerge from bankruptcy before the lawsuit concludes. The trial will decide how much, if anything, unsecured creditors recover in the bankruptcy. As reported by the Troubled Company Reporter on July 9, 2009, Bankruptcy Court, at the behest of Tousa, has dismissed the third party complaints brought by Citicorp North America, Inc., as administrative agent for the first lien term loan lenders, and Wells Fargo Bank, N.A., as administrative agent for the second lien term loan lenders against Tousa. Under their Third-Party Complaint, Citicorp and Wells Fargo allege that if the Official Committee of Unsecured Creditors establishes its allegations that the Conveying Subsidiaries were insolvent on July 31, 2007, then the Debtors would have materially breached their obligations under the First and Second Lien Term Loan Credit Agreements. Judge John K. Olson, in his opinion dismissing the Third-Party Complaint, noted that the Committee never contends that Tousa and all of its subsidiaries together were made insolvent -- the Committee only contends that the operating subsidiaries were made insolvent. Judge Olson said that the solvency guarantee given by Tousa only says that the companies are solvent on a consolidated basis. 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. 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) TRIBUNE CO: May Send Cubs to Chapter 11 to Complete Sale -------------------------------------------------------- Greg Bensinger and Gadi Dechter at Bloomberg News report that Tribune Co., which is already in Chapter 11, may send The Chicago Cubs to bankruptcy to complete the sale of the Major League baseball franchise. Tribune wants to expedite the team's estimated $900 million sale to interested bidders, including Incapital LLC Chairman Tom Ricketts, Bloomberg cited four people familiar with the plan. A Cubs bankruptcy would be a legal maneuver to clear the team from any future liability in the Tribune bankruptcy, Bloomberg said, citing two of the people familiar with the matter. Sam Zell, chief executive officer of Tribune, pledged the Company's interest in the Cubs as collateral when he negotiated the deal to take the publisher private in 2007. Michael J. Cramer, a former president of the Texas Rangers who teaches sports business at New York University, says the move could guarantee that the Cubs are sold free and clear of Tribune's creditors interests and liens. The Cubs is one of the most popular franchises in MLB. It drew more than three million spectators to 95-year-old Wrigley Field in each of the past five seasons. According to Bloomberg, the Cubs, if it files, will become the first Major League Baseball team in 39 years to file for bankruptcy. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRONOX INC: Kendall Files Class Action Against Executives --------------------------------------------------------- Kendall Law Group, led by a former federal judge and U.S. Attorney, said a class action has been filed against executives of Tronox, Inc., on behalf of investors who purchased stock that was artificially inflated between November 28, 2005, and January 12, 2009. Tronox is not named in the action as a defendant because it filed for bankruptcy protection in January 2009. Any shareholder, who purchased Tronox stock during the time period, may move the Court to serve as lead plaintiff in the class action. According to the complaint -- filed in the U.S. District Court for the Southern District of New York -- the Defendants failed to disclose important adverse facts about Tronox's environmental and tort liabilities. When the market learned of the true facts about the Company, the price of Tronox stock plummeted. Although every case is different, Kendall Law Group has participated in the recovery of over $800 million for defrauded shareholders. Led by a former federal judge and U.S. Attorney, the firm has the credentials to pursue any type of complex securities litigation in the nation. The Troubled Company Reporter said July 14, 2009, that Coughlin Stoia Geller Rudman & Robbins LLP and Izard Nobel LLP commenced class actions before the U.S. District Court for the Southern District of New York on behalf of purchasers of Tronox, Inc., common stock (Class A or Class B) between November 28, 2005 and January 12, 2009, inclusive. The lawsuit charges Kerr-McGee Corporation, Anadarko Petroleum Corporation and certain of Kerr-McGee and Tronox's executives with violations of the Exchange Act. The lawsuit alleges that, throughout the Class Period, the Defendants failed to disclose material adverse facts about the Company's true financial condition, business and prospects. Specifically, it alleges that the Defendants failed to disclose the true scope and extent of Tronox's environmental and tort liabilities. When the market learned of the true facts about the Company, the price of Tronox stock declined precipitously. The suit seeks to recover damages on behalf of all purchasers of Tronox common stock during the Class Period. Tronox was spun-off from Kerr-McGee in a two-step transaction. In November 2005, Kerr-McGee sold 17.5 million shares of Tronox Class A shares in an initial public offering for $14.00 per share generating proceeds for Kerr-McGee of $225 million. After the IPO, Kerr-McGee continued to hold 56.7% of Tronox's outstanding common stock. In March 2006, Kerr-McGee distributed the balance of the shares that it owned as Class B shares to its shareholders as a dividend. About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The Company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The Company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D. N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TUSCANY RESERVE: Has $23.9-Mil. Secured Debt to Compass Bank ------------------------------------------------------------ According to Bill Rochelle at Bloomberg News, Tuscany Reserve LLC, filed a Chapter 11 petition on July 10, disclosing a $23.9 million debt owed to the secured lender Compass Bank. Tuscany Reserve LLC owns a 274-unit apartment project in Baton Rouge, Louisiana. The project was completed in 2008. It is 65% percent occupied. Tuscany Reserve filed a Chapter 11 petition on July 10, 2009 (Bankr. M.D. La. Case No. 09-11027). Douglas S. Draper, Esq., serves as the Debtor's counsel. Its petition says that assets and debts are between $10,000,001 and $50,000,000. US SHIPPING: Reaches Pact With Creditors, Awaits Court Ruling ------------------------------------------------------------- Lloydslist.com reports that U.S. Shipping Partners LP has forged an agreement with its creditors and is awaiting the Court's approval. Lloydslist.com relates that under the agreement, creditors would get ownership of the new company in return for concessions and restructuring of their debt. U.S. Shipping Partners L.-- http://www.usslp.com/-- provides long-haul marine transportation services for refined petroleum, petrochemical and commodity chemical products in the U.S. domestic "coastwise" trade. Its existing fleet consists of twelve tank vessels: five integrated tug barge units; one product tanker; three chemical parcel tankers and three ATBs. U.S. Shipping has embarked on a capital construction program to build additional ATBs and, through a joint venture, additional tank vessels that upon completion will result in U.S. Shipping having one of the most modern versatile fleets in service. The Company and its affiliates filed for Chapter 11 bankruptcy protection on April 29, 2009 (Bankr. S.D.N.Y. Case No. 09-12711). Alfredo R. Perez, Esq., at Weil Gotshal & Manges, assists the Debtors in their restructuring efforts. U.S. Shipping listed $717,443,000 in assets and $606,534,000 in debts as of September 30, 2008. VALIDUS HOLDINGS: AM Best Places Ratings Under Review ----------------------------------------------------- A.M. Best Co. has placed the financial strength rating of A- (Excellent) and issuer credit rating (ICR) of "a-" of Validus Reinsurance Ltd. (Validus) (Bermuda) under review with negative implications. A.M. Best also has placed the ICR of "bbb-" and the indicative ratings of "bbb-" on senior debt, "bb+" on subordinated debt and "bb" on the preferred stock of Validus Holdings, Ltd (Validus Holdings) (Bermuda) [NYSE:VR] under review with negative implications. On July 9, 2009, Validus Holdings signed a definitive agreement to acquire the outstanding stock of IPC Holdings Ltd (IPC) (Bermuda) [NYSE:IPCR] in exchange for a .9727 common voting share of Validus Holdings for each IPC common share and cash consideration of $7.50 per share. The under review status reflects the uncertainties associated with this transaction including the execution risk in completing the deal as well as integrating both companies. Additionally, A.M. Best remains concerned with the heightened risk profile of the combined entity due to the significant property catastrophe business written by Validus Holdings and IPC. This concern is exacerbated by the timing of the transaction during the Atlantic wind storm season, which may result in undesirable correlations in a severe event. About Validus Holdings, Ltd. Validus Holdings Ltd. -- http://www.validusre.bm/-- is a provider of reinsurance and insurance, conducting its operations worldwide through two wholly-owned subsidiaries, Validus Reinsurance, Ltd., and Talbot Holdings Ltd. Validus Re is a Bermuda based reinsurer focused on short-tail lines of reinsurance. Talbot is the Bermuda parent of the specialty insurance group primarily operating within the Lloyd's insurance market through Syndicate 1183. * * * As reported in the Troubled Company Reporter on July 14, 2009, Validus Holdings Limited and IPC Holdings Limited's board of directors have approved a definitive amalgamation agreement that will create a leading Bermuda carrier in the short-tail reinsurance and insurance market. Under the terms of the agreement, IPC shareholders will receive US$7.50 in cash and 0.9727 Validus voting common shares for each IPC common share. VINEYARD CHRISTIAN: Can Sell MPAC to City of Malibu for $15MM ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has approved the sale of Vineyard Christian Fellowship of Malibu's real property and personal property located at 23825 Stuart Ranch Road, Malibu, California to the City of Malibu for $15 million. As reported in the Troubled Company Reporter on May 29, 2009, the City of Malibu submitted a $15 million bid for Vineyard Christian Fellowship of Malibu's Malibu Performing Arts Center. The City of Malibu is considering making MPAC as its permanent city hall. A January 2008 appraisal valued MPAC at $27.6 million. Citing Malibu Mayor Andy Stern, Malibu Times reported that the City believes that $15 million "is a very fair price for the purchase of a building that will become Malibu's city hall. If the City is the successful bidder at the auction, the City will issue certificates of participation to fund the purchase." Malibu, California-based Vineyard Christian Fellowship of Malibu owns real property in Malibu, California, on which it operates a multi-purpose office building and recording studio. The company filed for Chapter 11 protection on September 12, 2008 (Bankr. C.D. Calif. Case No. 08-16951). James Stang, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtor as counsel. Reem J. Bello, Esq., at Weiland, Golden, Smiley, Wang Ekval & Strok, LLP, represents the Chapter 11 trustee as counsel. In its schedules, the Debtor listed total assets of $34,344,046 and total debts of $18,670,082. VISTEON CORP: Court Approves Rothschild as Investment Banker ------------------------------------------------------------ Visteon Corp. tells the U.S. Bankruptcy Court for the District of Delaware that they have consensually resolved the objection of the Official Committee of Unsecured Creditors regarding the retention of Rothschild Inc. as their investment banker and financial advisor. The Debtors' counsel certified to the Court that the Debtors modified Section 5 of the Rothschild Engagement Letter to provide that Rothschild will credit against the Completion Fee: (a) 50% of the Monthly Fees earned from July 2009 through December 2009 and paid to Rothschild, and 30% of the Monthly Fees earned from January 2010 through June 2010 and paid to Rothschild; (b) 40% of any New Capital Fee earned and paid on account of a debtor-in-possession financing, 50% of the portion, if any, of a New Capital Fee earned and paid on account of any other New Capital Raise raised only to refinance existing borrowed-money indebtedness of the Company and 30% of any other New Capital Fees paid; (c) 50% of the first $3.5 million of the Merger & Acquisition Fees paid to Rothschild and 75% of any further M&A Fees paid to Rothschild. Accordingly, Judge Christopher Sontchi approves the Debtors' retention of Rothschild, as amended and agreed by the Debtors and the Committee. As investment banker and financial advisor to the Debtors, Rothschild will: (1) identify or initiate potential transactions; (2) review and analyze the Debtors' assets and liabilities and the operating and financial strategies of the Debtors; (3) review and analyze the business plans and financial projections prepared by the Debtors including, but not limited to, testing assumptions and comparing those assumptions to historical Debtor and industry trends; (4) evaluate the Debtors' debt capacity in light of its projected cash flows and assist in the determination of an appropriate capital structure for the Debtors; (5) assist the Debtors and its other professionals in reviewing the terms of any proposed Transactions, and if directed, in evaluating alternative proposals for a Transaction; (6) determine a range of values for the Debtors and any securities that the Debtors offer or propose to offer in connection with a Transaction; (7) advise the Debtors on the risks and benefits of considering a Transaction, with respect to the Debtors' intermediate and long-term business prospects and strategic alternatives to maximize the business enterprise value of the Debtors; (8) review and analyze any proposals the Debtors receive from third parties in connection with a Transaction, including, without limitation, any proposals for debtor-in-possession financing, as appropriate; (9) assist or participate in negotiations with the parties-in- interest, including, without limitation, any current or prospective creditors of, holders of equity in, or claimants against the Debtors or their representatives in connection with a Transaction; (10) advise the Debtors with respect to, and attend, meetings of the Debtors' board of directors, creditor groups, official constituencies and other interested parties, as necessary; (11) if requested by the Debtors, participate in hearings before the Court and provide relevant testimony with respect to various matters and issues arising in connection with any proposed plan of reorganization; and (12) render other financial advisory and investment banking services as may be agreed upon by Rothschild and the Debtors. 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: Sonwil Distribution Appeals Lease Rejection --------------------------------------------------------- Sonwil Distribution Center, Inc., takes an appeal to the U.S. District Court for the District of Delaware from Judge Sontchi's order authorizing the Debtors to reject certain non-residential real property nunc pro tunc to the Petition Date, including particularly Sonwil's lease agreement with the Debtors. Judge Sontchi authorized the Debtors to reject the Redico Management, Inc., Sonwil Distribution Center, Inc., and I-70 Storage Inc., leases. The Debtors' leases with Redico and I-70 Storage are deemed rejected as of the Petition Date. The Sonwil Lease is deemed rejected effective May 29, 2009. Judge Sontchi overruled an objection lodged by Sonwil. Sonwil Distribution Center, Inc., landlord of the "Buffalo Lease," opposed the Debtors' Lease Rejection Motion to the extent that it seeks to effect rejection of its lease retroactive to the Petition Date. Sonwil asserts it is not appropriate for the rejection of the Buffalo Lease to be effective before it can have control of the lease premises. Sonwil also notes that the Debtors have yet to surrender the keys to the premises. In reply, the Debtors asserted that the Buffalo Lease and the Concordia Lease subject for rejection were already vacated as of the end of October 2008. The Debtors tell the Court that the locks on the Buffalo Lease were changed after they vacated the premises and they didn't retain any key to the premises. With regards to the Concordia Lease, the Debtors tell the Court that they attempted to return the keys, but I-70 Storage had asked to keep them largely to assist in marketing the property to potential tenants. 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) VUANCE LTD: Fahn Kanne Raises Going Concern Doubt ------------------------------------------------- Fahn Kanne & Co. in Tel-Aviv, Israel raised substantial doubt about Vuance Ltd.'s ability to continue as a going concern after auditing the Company's financial results for the years ended December 31, 2008, and 2007. The auditor noted that the Company had an accumulated deficit of $42,294,000 and total shareholders' deficit of $1,867,000. At December 31, the Company's balance sheet showed total assets of $8,935,000, total liabilities if $10,802,000 and shareholders' deficit of $1,867,000. For the year ended December 31, 2008, the Company posted net loss of $12,358,000 compared with net loss of $11,311,000 for the same period in the previous year. As of December 31, 2008, the Company's cash and cash equivalents totaled $812,000, compared to $2,114,000 as of December 31, 2007. Restricted cash totaled $2,150,000 as of December 31, 2008, compared to $3,172,000 as of December 31, 2007. The main decrease in restricted cash deposit is related to a bank deposit to secure a guarantee to a supplier, related to a certain project of the Company with a European country which was paid to the supplier according to the agreement, offset by cash which is pledged to its major Convertible Bond holder in 2008. Part of the restricted cash is invested in deposits, which mature within up to one year, and is used to secure agreements with a customer or a bank, and the other part is cash which is pledged to its major convertible bond holder. Marketable securities totalled $0 as of December 31, 2008, compared to $4,054,000 as of December 31, 2007. The decrease in the marketable securities compared to December 31, 2007, was due to the sale of its remaining OTI shares. A full-text copy of the Form 20-F is available for free at: http://ResearchArchives.com/t/s?3f26 Vuance Ltd. (USA) (NASDAQ:VUNC) develops and markets end-to-end security solutions in a range of applications for improved credentialing, accountability, electronic access control, and tracking of assets and personnel. The Company's solutions encompass access control, urban security, and critical situation management systems, well as long-range active radio frequency identification in the public safety, education, commercial, and government sectors. It operates in the United States, through its wholly owned subsidiary, Vuance, Inc. Vuance operates in Asia Pacific through its wholly owned subsidiary, Supercom Asia Pacific Limited. The Company offers three principal products suites to its customers: Active RFID, Passive RFID, and Credentialing and Incident Management Suite. WALTER INVESTMENT: Files Financial Reports to Meet NYSE Notice -------------------------------------------------------------- Walter Investment Management Corp., formerly Hanover Capital Mortgage Holdings, Inc., on July 7, 2009, notified the NYSE Amex of its failure to timely file financial information required for Walter Investment Management, LLC -- Spinco -- in a Form 8-K/A due on July 6. On July 8, the Company received notice from Amex indicating that, due to the failure to timely file the pro forma financial statements of the business acquired on April 17, 2009, the Company did not meet certain of the Exchange's continued listing standards. Specifically, the notice provides that the Company is not in compliance with Sections 134 and 1101 of the NYSE Amex LLC Company Guide and therefore is in violation of its listing agreement with the Exchange. In February 2009, Hanover Capital Mortgage Holdings -- HCM; Walter Industries, Inc. -- Walter; Spinco; and JWH Holding Company, LLC - - JWHHC -- entered into a Second Amended and Restated Agreement and Plan of Merger. On April 17, Hanover and the other parties to the Merger Agreement completed the transactions contemplated by the Merger Agreement, which included the spin-off by Walter Industries of Spinco, the payment of a taxable dividend by Spinco to holders of its limited liability company interests, and the subsequent merger of Spinco into HCM. At the closing of the Merger, Hanover changed its name to Walter Investment Management Corp. The Registration Statement on Form S-4 filed by HCM in conjunction with the merger transaction included the financial statements of JWHHC, which was the parent of each entity comprising Walter's Financing business as well as its Homebuilding business. The financial statements included in continuing operations all of Walter's Financing business with Walter's Homebuilding business treated as a discontinued operation of JWHHC. On July 10, the Company filed with the Securities and Exchange Commission as Exhibits to the Form 8-K/A financial information related to the business acquired on April 17 that was required to be reported by the Company by July 6: -- Spinco audited financial statements as of December 31, 2008 and 2007, and for the years ended December 31, 2008, 2007 and 2006. See http://ResearchArchives.com/t/s?3f23 -- Spinco unaudited financial statements as of March 31, 2009, and for the three months ended March 31, 2009 and 2008. See http://ResearchArchives.com/t/s?3f24 -- Unaudited pro forma condensed combined financial statements for the year ended December 31, 2008, and as of March 31, 2009, and the three months then ended. See http://ResearchArchives.com/t/s?3f25 The Company believes that as a result of the filing, it has taken all action necessary to bring the Company back into compliance with the Exchange's continued listing standards, but awaits formal confirmation by the Exchange. The financial statements included in the Exhibits are those of Spinco, which represents all of the assets and liabilities of Walter's Financing business transferred to Spinco by Walter prior to the spin-off and Merger. The financial statements of Spinco differ from those of JWHHC in part because they do not include the discontinued operations of Walter's Homebuilding business, which was never owned by Spinco. The remaining differences between continuing operations reflected in the JWHHC financial statements and in the Spinco financial statements represent the elimination of the worker's compensation program in the captive insurance business that was part of Walter's Financing business but was not transferred to Spinco by Walter. Financial statement line items impacted by this difference are other assets, accounts payable, accrued expenses, premium revenue and claims expense. Hanover Capital Mortgage Holdings, Inc., was is a mortgage REIT staffed by mortgage capital markets professionals. HCM invested in prime mortgage loans and mortgage securities backed by prime mortgage loans. In February 2009, Hanover; Walter Industries, Inc.; Walter Investment Management Corp.; and JWH Holding Company, LLC entered into a Second Amended and Restated Agreement and Plan of Merger. On April 17, 2009, the parties completed the Merger, which included the spin-off by Walter Industries of Walter Investment, the payment of a taxable dividend by Walter Investment to holders of its limited liability company interests, and the subsequent merger of Walter Investment into Hanover. At the closing of the Merger, Hanover changed its name to Walter Investment Management Corp. Based in Tampa, Florida, Walter Investment -- http://www.walterinvestment.com/-- is an asset manager, mortgage servicer and mortgage portfolio owner specializing in subprime, non-conforming and other credit-challenged mortgage assets. The Company currently has $1.9 billion of assets under management and pro-forma annual revenues of approximately $200 million. The Company is structured as a real estate investment trust and employs roughly 225 people. Pre-merger, Hanover reported $12,347,000 in total assets and $56,410,000 in total liabilities at March 31, 2009. WBO ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: WBO Enterprises, LP dba Farpointe Cellar dba Farpointe Wine Bistro 1125 Legacy Drive, Suite 100 & 101 Frisco, TX 76092 Bankruptcy Case No.: 09-34513 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- O&W Enterprises, LP 09-34514 Farpointe Holdings, LP 09-34516 WBO General Partner, LLC 09-34517 O&W General Partner, LLC 09-34518 Chapter 11 Petition Date: July 10, 2009 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Brian A. Kilmer, Esq. Okin Adams & Kilmer LLP 3102 Maple Ave., Suite 450 Dallas, TX 75201 Tel: (214) 800-2390 Fax: (888) 865-2118 Email: bkilmer@oakllp.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/txnb09-34513.pdf The petition was signed by Greg Wilemon. WCI COMMUNITIES: Creditors, Insurers Object to Disc. Statement -------------------------------------------------------------- WCI Communities Inc.'s latest disclosure statement has run into opposition from creditors and insurers, among others, that claim the Debtor fails to adequately illuminate the path to profit envisioned in the reorganization plan, according to Law360. Headquartered in Bonita Springs, Florida, WCI Communities, Inc. (Pink Sheets: WCIMQ) -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company. It has operations in Florida, New York, New Jersey, Connecticut, Massachusetts, Virginia and Maryland. The company directly employs roughly 1,800 people, as well as roughly 1,800 sales representatives as independent contract employees. The Company and 126 of its affiliates filed for Chapter 11 protection on August 4, 2008 (Bankr. D. Del. Lead Case No. 08-11643 through 08-11770). On July 2, 2009, debtor-affiliates WCI 2009 Corporation, WCI 2009 Management LLC and WCI 2009 Asset Holding LLC filed separate Chapter 11 petitions (Case No. from 09- 12269 to 09-12271). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., and Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida, represent the Debtors as counsel. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, represent the Debtors as Delaware counsel. Lazard Freres & Co. LLC is the Debtors' financial advisor. Epiq Bankruptcy Solutions LLC is the claims and notice agent for the Debtors. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP; and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. WR GRACE: Confirmation Schedule Amended Due to Objections --------------------------------------------------------- Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware held the Phase I of the confirmation hearing of W.R. Grace & Co. and its debtor affiliates' Joint Plan of Reorganization from June 22 and 23, 2009. Phase I addressed, among other things, (i) whether the Plan improperly affects the rights of the Debtors' insurers, and (ii) the standing of the Debtors' insurers to litigate certain Confirmation objections. At the Debtors' behest, Judge Fitzgerald designated these deadlines related to Phases I and II of the Confirmation Hearing: July 13, 2009 -- Deadline for Plan Proponents to file Phase I objections to Insurers' exhibits July 16, 2009 -- Deadline for Debtors to provide Court with relevant documents related to Phase I July 16, 2009 -- Deadline for Phase I Post-Trial brief submissions July 20, 2009 -- Deadline for Phase II Pre-Trial Submissions, consisting of (i) a statement of issues, (ii) a list of witnesses, and (iii) exhibits, if any July 21, 2009 -- Phase I Post-Trial Submissions telephonic hearing, if needed July 27, 2009 -- Phase II Pre-Trial Hearing, as part of the Grace Omnibus Hearing August 13, 2009 -- Deadline for Supplemental Phase II Pre-Trial Submissions August 17, 2009 -- Plan Proponents and Insurers' Phase II Telephonic Meet and Conference August 18, 2009 -- Supplemental Phase II Pre-Trial Hearing September 8-11 & 14-17, 2009, -- Phase II Confirmation Hearing The Court will address, at the July 27, 2009 Pre-Trial Hearing, the actual number of days the parties anticipate using for the Phase II Confirmation Hearing. Dan Speights, representing Anderson Memorial Hospital, responded to the Debtors' proposed schedule regarding the Phase II Pre- Trial Proceedings and asked for an additional seven days to file his Phase II Pre-Trial Brief. The Bank Lenders also sought and obtained the Court's permission to respond to the Debtors' objection to their motion to amend the third case management order. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WR GRACE: Court Approves Venable as Counsel for GPDS Suit --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized the Debtors to employ Venable LLP as their special litigation counsel in connection with a pending lawsuit in the Circuit Court for Howard County, Maryland, filed by Global Printing & Design Solutions, Inc. The Debtors have previously employed Venable as "ordinary course professional". Payment to each of the OCPs by the Debtors is limited to $50,000 per month and up to a total $1,200,000 per OCP professional during the pendency of the Debtors' Chapter 11 Cases. Because Venable's fees in relation to the Global Printing Litigation, as well as fees for other services the firm provides to the Debtors, have begun to exceed the monthly cap and are expected to do so for some time to come, the Debtors are filing the application so that Venable may be regularly compensated for its services pursuant to Sections 330 and 331 of the Bankruptcy Code. As special litigation counsel, Venable will: (a) advise the Debtors, their counsel, and their board of directors with respect to employment, employee benefit, workers' compensation and corporate and securities matters; (b) act as counsel for the Debtors and any related party in the Global Printing Litigation; and (c) perform other related services as the Debtors may deem necessary or desirable. The Debtors will pay Venable based on these fees: Professional Hourly Rate ------------ ----------- G. Stewart Webb, Jr., Esq. $635 Colleen M. Mallon, Esq. $415 Alexander W. Major, Esq. $285 Mathew R. Swinburne, Esq. $265 Jeffery P. Ayres, Esq. $495 Elizabeth R. Hughes, Esq. $580 Other Partners $415 to $660 Associates $265 to $400 Paralegals $175 to $225 About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WR GRACE: Gets Court Nod for Minimum Payments for Pension Plans --------------------------------------------------------------- The official committee of asbestos personal injury claimants in W.R. Grace & Co.'s Chapter 11 cases expressed no objections to W.R. Grace's request for authority to make pension payments. The PI Committee earlier engaged in discussions with the Debtors as to the advisability of continuing to provide a defined benefit plan to the Debtors' employees. Accordingly, the U.S. Bankruptcy Court for the District of Delaware authorized the Debtors to make the legally required minimum payment contributions to the Grace Retirement Plans due on July 15, 2009, September 15, 2009, October 15, 2009, and January 15, 2010. The Debtors sought the Court's authority to contribute $30,375,532 for the minimum contributions. The Grace Retirement Plans are underfuded by most accepted measures, disclosed Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware. As of January 1, 2009, the amount by which the Grace Retirement Plans were funded ranges from ($113 million) to ($375 million), depending on the measure used. Moreover, the total market value of assets as of January 1, 2009, was about $560 million, with a decrease of about $214 million from January 1, 2008, when the market value was $774 million. According to Ms. Davis, the decrease in the asset value during 2008 was caused by the result of asset return of (25.9%) during 2008 and $59.2 million that was paid out of the Grace Retirement Plans during the year, offset by the Debtors' contribution of about $49.0 million. She adds that virtually all of the Debtors' current employees are covered by one of the Grace Retirement Plans. The Grace Salaried Plan alone covers over 1,900 active, salaried employees, of a total U.S. workforce of approximately 3,000 employees, or more than 60% of the Debtors' U.S. workforce. The legally required minimum contributions to the Grace Retirement Plans for the 09-10 Funding Period are: Payment Due Date Contributions Plan Year ------------- ------------- --------- July 15, 2009 $8,164,422 2009 Sept. 15, 2009 4,824,756 2008 Oct. 15, 2009 8,628,679 2009 Jan. 15, 2010 8,757,675 2009 The Debtors' management believes that continuing to make at least the legally required minimum contributions to each of the Grace Retirement Plans is essential to maintaining the morale of the Debtors' workforce and its confidence in management, and thereby the productivity and long-term profitability of the Debtors' businesses. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WR GRACE: Libby Claimants Object to Plan Confirmation ----------------------------------------------------- Claimants injured by exposure to asbestos from W.R. Grace & Co.'s operations in Lincoln County, Montana further objected to the Debtors' First Amended Plan of Reorganization complaining that in the Plan's present form, the Trust Distribution Procedures operates "to exclude legitimate Libby Claims by creating disease and diagnostic criteria that are not consistent with standard practice in medicine." The TDP essentially governs the process for treatment and distribution of asbestos-related personal injury claims in the Debtors' cases. In addition, the Libby Claimants assert that the TDP criteria for "Severe Asbestosis" and "Severe Disabling Pleural Disease" is discriminatory because the TDP improperly requires an FEVI/FVC ratio of over 65% and excludes the use of CT scans. Adam C. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, contends that the FEV1/FVC ratio "is the hallmark for measuring the presence of obstructive disease." Imposing a FEVI/FVC ratio requirement of 65% or higher -- indicating the absence of obstructive disease -- discriminates against the large group of patients, especially in Libby, who have an obstructive defect along with asbestos disease. According to Mr. Landis, the TDP provides that "evidence of bilateral asbestos-related non-malignant disease" specially includes use of CT scans for Levels II for mild asbestosis/pleural disease, III for moderate asbestosis/pleural disease, as well as V and VI for cancers, but not for Level TV-A for severe asbestosis or Level TV-B severe pleural disease. "This is not medically reasonable, since the same diagnostic criteria are used for asbestos-related disease whether mild, moderate, or severe," Mr. Landis says. Moreover, he continues, denial of the use of CT scans at Level IV is not medically reasonable and is discriminatory against the Libby Claimants -- whose disease is more clearly seen on CT scan. Mr. Landis further complains that the TDP medical criteria arbitrarily exclude patients with unilateral disease, which, as a result, excludes many legitimate claims. The Plan provision for indemnification of the Fresenius Indemnified upon distribution to creditors under the Plan "makes the Plan unconfirmable," as it oversteps the bounds of the Bankruptcy Code, according to Mr. Landis. "Given that the objections contained in the Supplement are newly discovered through discovery and since the Plan Proponents' trial brief is not due until August 7, 2009, there is no harm or prejudice to the Plan Proponents by allowing the submission of the Supplement," Mr. Landis says. Summary of Final Objections W.R. Grace & Co. and its debtor affiliates submitted to Judge Fitzgerald a chart summarizing the objections of various parties to the Debtors' Joint Plan of Reorganization, and the Debtors' response to each objection. The chart, divided into either Phase I or Phase II issues, is further divided into the specific issues raised by certain objectors to the Plan. A full-text copy of the chart can be accessed at no charge at http://bankrupt.com/misc/grace_chartplanOBJ.pdf The Debtors later amended the chart to reflect several changes in their responses and the status of each objection. A blacklined copy of the chart is available for free at: http://bankrupt.com/misc/grace_chartplanOBJblckln.pdf About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WR GRACE: Reaches Settlement with Royal & Arrowood -------------------------------------------------- W.R. Grace & Co. and its affiliates seek the U.S. Bankruptcy Court for the District of Delaware's permission to enter into a settlement and mutual release agreement with Arrowood Indemnity Company, as corporate successor-in-interest to Royal Indemnity Company, Arrowpoint Capital Corp., and Royal Indemnity Company. The settlement and mutual release agreement, which pertains to late-year excess policies allegedly issued by Royal to certain of the Debtors on account of asbestos-related claims, provides that Arrowood pay a settlement amount reflecting alleged liabilities for amounts one or more of the Debtors are or may become liable for certain asbestos claims. A full-text copy of the proposed agreement can be accessed at no charge at http://bankrupt.com/misc/grace_royalsettlment.pdf Royal has issued certain liability insurance policies to certain of the Debtors before the Petition Date. In another filing, Arrowood said a notice of the settlement was published on July 2, 2009, in the national edition of USA Today. Libby Claimants React The Libby Claimants -- a group of claimants who assert claims arising from injuries by exposure to asbestos from the Debtors' operations in Lincoln County, Montana -- contend that the proposed Settlement should be denied because: (1) it fails to disclose facts demonstrating that it meets the standards established by the Third Circuit for approval of settlements under bankruptcy law; (2) it releases insurance coverage that is available to the Libby Claimants, not in competition with any other creditors of the Debtors' estate, and as to which the Libby Claimants have a vested interest under Montana Law; (3) it requires the Court to enter injunctions and releases in favor of the Royal Parties that are "impermissibly broad." Adam C. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, specifies that the Proposed Settlement was negotiated on the premise that a 1995 settlement agreement between the parties -- through which products coverage under the primary policies were settled -- had already disposed of all asbestos coverage. However, contrary to the provision under the Settlement, no bargains for any consideration of the release were made with respect to unresolved coverage under the Primary Policies. The Injunctions provided under the Settlement "include parties that may not be beneficiaries of an injunction under Section 524(g) of the Bankruptcy Code. Moreover, any Injunction protecting the Royal Parties should not include insurance coverage "for which they are paying nothing for the protection." Accordingly, Mr. Landis says, the Proposed Settlement may not be approved because "it is a sub rosa plan of reorganization." Mr. Landis tells the Court that the Libby Claimants initiated formal and informal discovery concerning the Settlement and conferred with Settlement parties. Unfortunately, the Settlement parties did not accept the Libby Claimants' proposal for an expedited discovery program that would enable the Libby Claimants to adequately respond to the proposal within the time frame of the omnibus hearing scheduled on August 24, 2009. Against this backdrop, the Libby Claimants ask Judge Fitzgerald to defer consideration of the Settlement to the Confirmation Hearing. In a separate request, the Libby Claimants also sought leave from the Case Management Order to enable them to have the Motion to Defer heard on an expedited basis. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. As reported by the Troubled Company Reporter on March 11, 2009, the Bankruptcy Court approved the disclosure statement explaining the First Amended Chapter 11 Joint Plan of Reorganization filed by W.R. Grace and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, and authorized Grace to begin soliciting plan votes. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Parties entitled to vote on the Plan must file objections to Plan confirmation, if any, no later than 4:00 p.m. Eastern time on May 20, 2009. Supplements to the Plan may be filed until May 10. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) YOUNG BROADCASTING: 10 Stations May End Up in UBS's Arms -------------------------------------------------------- Young Broadcasting, Inc.'s financial adviser, UBS, could take over the Company's 10 stations in an equity-for-debt swap, if no bid that reaches the minimum assigned by the Company is submitted by July 14 auction, Leslie Turk at The Independent reports, citing sources. According to The Independent, many believe that it is more likely that submitted bids won't reach the minimum Broadcasting & Cable reports that, presuming that one of the bids even meets the minimum amount assigned, the announcement of a winning bidder in the auction of Young Broadcasting's 10 stations will be delayed for a few days. As reported by the Troubled Company Reporter on July 10, 2009, at least three companies may be interested in obtaining all or a part of Young Broadcasting. These firms could be eyeing Young Broadcasting: -- Local TV LLC, -- Nexstar Broadcasting Group, and -- Silver Point Capital. According to Broadcasting & Cable, sources close to the deal said that "the rumor mill of interesed suitors has come down to Oak Hill Capital, the money behind Local TV LLC," and equity group H.I.G. The Independent notes that the July 14 auction may not have any resolution. Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young, Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV - Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV - Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO-TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV- Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Company and its affiliates filed for Chapter 11 protection on February 13, 2009, (Bankr. S.D.N.Y. Lead Case No. 09-10645). Jo Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP, represents the Debtors in their restructuring efforts. Andrew N. Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP, represents the official committtee of unsecured creditors as counsel. The Debtors selected UBS Securities LLC as consultant; Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker chief restructuring officer. The Debtors listed total assets of $575,600,070 and total debts of $980,425,190. * Consumer Confidence Falls to Lowest Since March ------------------------------------------------- According to Bill Rochelle at Bloomberg News, consumer confidence fell to 64.6, the lowest since March and lower than all of the predictions from the 59 economists surveyed by Bloomberg News. Consumer sentiment was 70.8 the month before, according to the index prepared by Reuters/University of Michigan. * D&O Policy Doesn't Cover Suit for Creditor Benefit ---------------------------------------------------- According to Bill Rochelle at Bloomberg News, the U.S. Court of Appeals for the Ninth Circuit in San Francisco, ruled on July 10 that a company cannot sidestep the "insured versus insured" exclusion by assigning the claim to a trust for the benefit of creditors. The case Biltmore Associates LLC v. Twin City Fire Insurance Co. Case No. 06-16417, involved a company that filed for Chapter 11 and sued its officers for breach of fiduciary duty for wasting the Company's assets. The insurer, which provided directors and officers' liability insurance coverage for the Company, refused to defend, saying the suit wasn't covered as a result of the exclusion carving out coverage for claims by the company itself. Bloomberg relates that the officers agreed to settle for $175 million, and the claim was assigned by the company to a trust for creditors. The trust in turn sued the insurance company under the policy. The Ninth Circuit blocked off several arguments meant to avoid the exclusion in the policy. Although a debtor-in-possession in Chapter 11 is considered an entity separate from the company for some purposes, the court said it's the same entity when it comes to a so-called D&O policy. The court also said it didn't matter that the insurance company ultimately was being sued for the behalf of creditors. * Bankruptcy Filings at Springfield District Up 20% in May 2009 --------------------------------------------------------------- Jeremy Elwood at Sbj.net reports that filing made to the Springfield district of the U.S. Bankruptcy Court for the Western District of Missouri increased 20% to 1,212 filings through May 2009, compared to the first five months in 2008. According to Sbj.net, bankruptcy filings in Springfield rose almost 29% in 2008 compared to 2007, and up 83% since 2006. Sbj.net relates that the increase in bankruptcies in recent years seems to undo some of the reduction in filings created by bankruptcy reform that took effect in August 2005. Sbj.net says that total filings in Springfield are still down almost 40% from their peak in 2005, when the Bush administration passed the Bankruptcy Abuse Prevention and Consumer Protection Act. According to the report, the reforms made it harder for individuals and businesses to file Chapter 7 bankruptcy, pushing them toward reorganization under Chapters 11 or 13, which currently make up almost 20% of the total in Springfield, compared to less than 10% four years ago. Sbj.net quoted Ted Tinsman -- a bankruptcy attorney with Springfield-based Smith, Montgomery & Associates Attorneys at Law -- as saying, "A lot of people are using personal credit for the business when the business is not viable. When I do a case for someone who has closed their doors, there's usually personal debt fallout where they've used their personal credit to fund business activities. That's not just with this recession -- that's the No. 1 mistake I see people make." Sbj.net relates that Chapter 7 liquidation filings in 2008 increased 33% compared to 2007. Dropping confidence levels among businesspeople also caused the bankruptcy filings, Sbj.net says, citing Springfield bankruptcy attorney Gary Bishop at Mann, Walter, Bishop & Sherman PC. Mr. Bishop, according to the report, said, "It has to do with the liquidity of investments and the turnaround time people can expect to see a profit from their outlay of capital. I think people were accustomed to that being quick. The average (speculative) house builder, for example, was used to that home turning around rapidly, and now that's no longer true . . . . I have not seen bankruptcy filings so far -- and I view this as a good thing -- spike among individuals for whatever reason. People are filing, but it's been fairly consistent throughout this whole downturn." Sbj.net quoted Mr. Tinsman as saying, "The high unemployment levels mean loss of income, making it so that people already in bankruptcy are unable to make the payments under their reorganization plan." According to Sbj.net, Sheila Collins, who filed for Chapter 7 bankruptcy protection in June, said, "The construction industry is in such turmoil, and although I did a lot of research on it and it seemed like the business was going to work, the overall level of residential construction has dried up. It's an odd situation. We felt like things were going in the right direction, but just not fast enough, soon enough." * International Airplane Manufacturing Deflates, Fairtheworld Says ------------------------------------------------------------------ Just as the bankruptcy of U.S. auto giants set off a chain of reactions, in the civil aviation manufacturing area, the shrinking orders of Boeing and Airbus will probably pose a risk to the whole supply chain. Fairtheworld.com points out that the financial crisis has cut international transactions and tourism activities sharply, worse still, there's the impact of H1N1 flu pandemic and recent air crash incidents. Combined, these factors have dragged down the number of travelers and the business of airline companies. Also, the continued hike of aviation oil products is stressing the operational cost of airline companies. Sharp business shrinkage and rising cost have jointly deal a blow to airline companies, most of which are now losing money. This has forced them to reduce, delay or cancel plane purchasing plans, throwing the evil to airplane manufactures. The International Air Transport Association said early in June that, the passenger traffic of international airlines this year will be down 8% and the freight volume down 17%. About a $9 billion loss is forecasted for the international airline transportation industry in the year. In addition, figures show that Boeing and Airbus got a lean order amount in the first half of the year. Bar those cancelled orders, the newly-acquired order was 66 units for Airbus and, pitifully, 1 unit for Boeing. Fairtheworld.com predicts that the global aero manufacturing industry will be affected; the aero parts makers will produce less as customers order less. It bodes ill for the aero parts manufacturing industry. Meanwhile the Chinese are lavishing their strong interest and hiked enthusiasm on big planes. It is estimated that at least 50% of the planned airplanes by Chinese manufactures will need global sourcing. China is yet to develop capacities to produce large plane engines and avionic devices. This presents good opportunity to the global aero manufacturing industry. Making early entry into the Chinese market and seizing cooperative opportunities will help buffer the impact of financial crisis on these enterprises and will provide a gateway into the supply chain of a country which is set to become the third largest airplane manufacturer. China's Big Plane Plan and its huge helicopter shortfall offer wide market space for global aircraft manufacturers. The "Fair N Fair" 3D Virtual Expo platform, developed by Fairtheworld.com, is providing a connecting platform for these manufactures, linking airplane manufactures, aero parts makers, airline companies and other airplane purchasers together. Fairtheworld, with its brand- new concept of "e-commerce matrix" and its strength to integrate industrial chains, will invite global aero manufacturers to share the Chinese cake. On the Net: http://fairtheworld.com/ * Marc Sherman Joins A&M Dispute Analysis & Forensic Services ------------------------------------------------------------- As government investigations and regulatory probes increase amidst the fallout from the global economic crisis, Marc Sherman has joined Alvarez & Marsal as a managing director in the Dispute Analysis & Forensic Services practice. Based in Washington, D.C., Mr. Sherman will serve an integral role in the continued expansion of the practice, which operates in offices around the world. Formerly a managing director, head of the Washington, D.C., office and national practice leader of the fraud and white collar practice of Huron Consulting, Mr. Sherman specializes in financial and white collar investigations, and dispute damages. He brings more than 30 years of experience in consulting and forensic accounting and has conducted investigations in the areas of the Foreign Corrupt Practices Act, financial reporting, anti-money laundering, ethics and integrity, government investigations and general financial fraud. He has worked on numerous investigations with the U.S. Department of Justice and other law enforcement agencies. "As the economic crisis ripples across the globe, investigations and regulatory probes have become more common and complicated," said Bill Abington, a managing director and head of A&M's Dispute Analysis & Forensic Services practice. "Marc brings extensive experience in helping companies in the U.S. and abroad work through white collar investigations, financial fraud and other complex disputes. We are delighted to welcome him to the team." Mr. Sherman has served as an expert in forensic accounting, lost profits, financial fraud, business appraisal and accounting matters. He has testified in federal and state courts, internationally and in arbitrations before the American Arbitration Association and the International Chamber of Commerce International Court of Arbitration. He also serves as an arbitrator in post acquisition disputes. Mr. Sherman spent many years as a partner with KPMG, where he held numerous senior roles, including national partner-in-charge of forensic and litigation services, national partner-in-charge of compliance and ethics practice, Mid-Atlantic partner-in-charge of corporate transactions and professional practice partner. Before KPMG, he was in the real estate and construction business, where he was involved with property development, acquisition, financing and construction. A graduate of the University of Baltimore, Mr. Sherman holds a J.D. from the University of Maryland School Of Law. He is a Certified Public Accountant in Maryland and Washington, D.C., a Certified Fraud Examiner, a Certified Insolvency and Reorganization Advisor and holds a certification from the American Institute of Certified Public Accountants in Financial Forensics. He is a board member, treasurer and executive committee member of the D.C.-based Council for Court Excellence and a member of the Economic Club of Washington. Mr. Sherman also serves on the faculty of Georgetown University, where he teaches Forensic Accounting in the Business School graduate program. About A&M Dispute Analysis & Forensic Services For 25 years, Alvarez & Marsal (A&M) -- http://www.alvarezandmarsal.com/-- is a global professional services firm, has set the standard for working with organizations to solve complex problems, improve performance, drive critical change and maximize value for stakeholders. The firm has nearly 1600 professionals in offices across North America, Europe, the Middle East, Asia and Latin America. A&M has amassed a diverse group of seasoned professionals with deep financial, accounting, economic, regulatory, industry and technical expertise around the globe who provide investigation and litigation services in cases such as Lehman Brothers and Washington Mutual. This group includes forensic accountants; certified public accountants and chartered accountants; certified fraud examiners; former chief executives; former SEC, Financial Services Authority, and Officer of the Comptroller of the Currency professionals; PHD economists; interim management professionals; banking and securities professionals; chartered financial analysts; and forensic technology specialists. A&M provides critical assistance in litigation and arbitration, financial investigations and restatements and forensic technology. A founder of the modern day restructuring industry, Alvarez & Marsal has been honored numerous times by the Turnaround Management Association and has been recognized as one of the top ten best firms to work for by Consulting Magazine. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- July 10, 2009 THE INTERNATIONAL COUNCIL OF SHOPPING CENTERS Retail Bankruptcy: What You Need To Know Cuba Libre, Atlantic City, N.J. Contact: (732) 694 1800 or http://www.icsc.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ July 29-Aug. 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Westin Hilton Head Island Resort & Spa, Hilton Head Island, S.C. Contact: http://www.abiworld.org/ Aug. 6-8, 2009 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Conference Hotel Hershey, Hershey, Pa. Contact: http://www.abiworld.org/ Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 7-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 21-23, 2010 INSOL International Annual Regional Conference Madinat Jumeirah, Dubai, UAE Contact: 44-0-20-7929-6679 or http://www.insol.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 6-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: July 2, 2009 ********* 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. Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, 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 ***