/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090721.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, July 21, 2009, Vol. 13, No. 200 Headlines ABITIBIBOWATER INC: Proposes Ordinary Claims Settlement Procedures ABITIBIBOWATER INC: Schedules of Assets and Liabilities ABITIBIBOWATER INC: Statement of Financial Affairs ABITIBIBOWATER INC: Wants Lease Decision Deadline Moved to Aug. 14 ABITIBIBOWATER INC: Wants Plan Filing Deadline Moved to Dec. 14 ABITIBIBOWATER INC: Wants Removal Period Extended Through Nov. 12 ADVANTA CORP: To Issue $500 Mil. in RediReserve Certificates ADVANTA CORP: S&P Withdraws 'CCC' Counterparty Credit Rating AGT CRUNCH: Signs Pact to Sell Health Club in Smithtown, NY AMERICAN COMMUNITY: Court Approves Carl Marks as Fin'l Advisor AMERICAN COMMUNITY: Court OKs Blank Rome as Committee Counsel AMERICAN COMMUNITY: NachmanHays Retained as Panel Advisor AMERICAN INT'L: Completes Sale of Mexican Finance Operations AMERICAN INT'L: Shortlists Bidders for Taiwan Life Insurance Unit AMERICAN SAFETY: Moody's Gives Negative Outlook; Keeps 'B2' Rating APPALACHIAN OIL: Asks $200,000 Increase in Greystone DIP Facility ARIES MARITIME: Gets Commitment from Markin for $145MM Notes ARVINMERITOR INC: To Supply Drivetrain Components to Chinese Firm ASHLEY GLEN: Douglas Weiland Wants to Sell Project to Mercantile ATLANTIS SYSTEMS: TSX Delists Stock Effective August 11 BASIN WATER: Receives Delisting Notice from Nasdaq BB&T CORPORATION: Fitch Cuts Individual Rating to 'B' BEARD CO: Files Documents Presented at Shareholders' Meeting BEARINGPOINT INC: Signs Deal to Sell EMEA Practice for US$69MM BERNARD MADOFF: Windels Hiring to Pursue Avoidance Claims Approved BIOPURE CORP: Won't Appeal Nasdaq Delisting BRAVO HEALTH: S&P Gives Positive Outlook; Affirms 'B' Rating CALTEX HOLDINGS: Can Use Cash Collateral of NewStar Until Aug 8 CALTEX HOLDINGS: Files Schedules of Assets and Liabilities CAPITAL GROWTH: ACF Forbearance Period Expired July 17 CCS MEDICAL: Court Extends Schedules Filing Until September 8 CCS MEDICAL: Proposes Young Conaway as Bankruptcy Co-Counsel CCS MEDICAL: U.S. Trustee Sets Meeting of Creditors for August 21 CCS MEDICAL: Court Approves Epiq Bankruptcy as Claims Agent CCS MEDICAL: Plan Offers "Gift" for Unsecured Creditors CCS MEDICAL: Taps Alvarez & Marsal as Restructuring Advisor CCS MEDICAL: Wants to Hire Willkie Farr as Bankruptcy Co-Counsel CHARTER COMM: Asks for Oct. 23 to Decide on Leases CHARTER COMM: Creditors Proposes Huron as Financial Advisor CHARTER COMM: HSBC Bank Wary Plan Does Not Cure Defaults CHARTER COMM: Jenkinsburg City Withdraws Claim CHARTER COMM: Law Debenture Asks Allen to Testify at Plan Hearing CHARTER COMM: Majority of Voting Creditors Favor Plan CHARTER COMM: Prepetition Lenders File Sealed Plan Objections CHARTER COMM: SEC Objects to Plan; Balk at Non-Debtor Discharge CHARTER COMM: Wants Plan Exclusivity Until November 22 CISTERA NETWORKS: March 31 Balance Sheet Upside-Down by $1.9MM CIT GROUP: Obtains $3 Bil. Facility; Adopts Recapitalization Plan CIT GROUP: NRF Welcomes Deal with Bondholders to Avoid Bankruptcy CIT GROUP: Fitch Puts Ratings on Six Trusts Under Analysis CITIGROUP INC: Clients Seek to Bar Fund From New Investments CITIGROUP INC: Reports $4.3BB Q2 Net Income Due to $6.7BB Gain CITIGROUP INC: Weak Q2 Earnings Won't Affect S&P's Ratings COOPER-STANDARD: Gets Default Waiver Until August 14 COYOTES HOCKEY: Another Bidder Willing to Keep Team in Glendale CREATIVE LOAFING: Lays Off Senior Editor Eric Snider CRUSADER ENERGY: Has Approved Bonus Program for Executives CRUSADER ENERGY: Sued for Equitable Lien on Leases DAYTON SUPERIOR: Court Establishes August 25 Claims Bar Date DECODE GENETICS: Nasdaq Reinstates Listing of Common Stock DRYSHIPS INC: To Release Q2 2009 Results on July 30 DUANE READE: Expects 6.1% Rise in Net Sales for June 27 Quarter ECLIPS ENERGY: Randall N. Drake, CPA Raises Going Concern Doubt EDDIE BAUER: Golden Gate's $286-Mil. All Cash Bid Wins Auction EDISON MISSION: Downgraded by S&P 2 Notches to B ELBIT VISION: Brightman Almagor Expresses Going Concern Doubt ENERJEX RESOURCES: March 31 Balance Sheet Upside-Down by $3.7MM EPIX PHARMACEUTICALS: Throws In Towel; to Wind Down Operations EXCO RESOURCES: Moody's Reviews 'B2' Corporate Rating for Upgrade FLEETWOOD ENTERPRISES: AIP Completes $53MM Acquisition of RV Biz FREEGOLD VENTURES: Defaults on US$2.25 Million Tiomin Loan FULTON HOMES: Monthly Sales Increased Since March 2009 GEORGIA GULF: Extends Private Debt Exchange Offers to July 23 GOLFERS' WAREHOUSE: Worldwide Golf Sale Hearing Set for Aug. 5 GREAT CIRCLE: Court Confirms Reorganization Plan GREEN PLANET: Semple Marchal Raises Going Concern Doubt HAWAIIAN TELCOM: Court Denies Plan Exclusivity Extension HAWAIIAN TELCOM: D. Lamm Wants Payment of $10MM Admin. Claim HAWAIIAN TELCOM: May Use Cash Collateral Until August 31 HAWAIIAN TELCOM: Seeks to Expand Deloitte's Services HAWAIIAN TELCOM: To Assert Confidentiality of Some Plan Documents HEAVY LEASING: Case Summary & 16 Largest Unsecured Creditors HUNTSMAN CORP: S&P Affirms 'B' Corporate Credit Ratings HYDROGENICS CORP: Offers to Acquire Algonquin Power Income Fund INTEST CORP: Posts $2.7MM Net Loss in Quarter Ended March 31 ISCO INT'L: Unsecured Creditors & Stockholders May Get Nothing JUNIOR BOILES: Case Summary & 20 Largest Unsecured Creditors LANDSOURCE COMMUNITIES: Plan Confirmed; To Emerge as Newhall LANG HOLDINGS: Files for Chapter 11; Quick Sale Required LANG HOLDINGS: Case Summary & 30 Largest Unsecured Creditors LAUTH INVESTMENT: Taps Kirkland & AlixPartners for Restructuring LEAR CORP: Employs Curtis Mallet-Prevost as Conflicts Counsel LEAR CORP: Hires Brooks as Counsel for IP Matters LEAR CORP: Hires Kurtzman Carson Consultants as Claims Agent LEAR CORP: Proposes Management Incentive Plan LEAR CORP: Sec. 341 Meeting of Creditors Set for September 1 LEAR CORP: U.S. Trustee Appoints Unsecured Creditors Committee LOMBARD PUBLIC: S&P Cuts Rating on $53.995 Million Bonds to 'B+' LUNA INNOVATIONS: Hansen Verdict Forces Chapter 11 Filing LUNA INNOVATIONS: Bankruptcy Cues Nasdaq Delisting Notice LUNA TECHNOLOGIES: Files Chapter 11 After $36 Million Verdict LYONDELL CHEMICAL: Court Approves Reliance Nat'l Settlement LYONDELL CHEMICAL: Court OKs Entry Into City Gen. Settlement LYONDELL CHEMICAL: Court OKs Entry Into Surety Bond Agreements LYONDELL CHEMICAL: Gets Court Nod for Lubrizol Corp. Settlement LYONDELL CHEMICAL: LyondellBasell Reports 1st Quarter Results LYONDELL CHEMICAL: Parent Amends & Assumes Undertaking Pact LYONDELL CHEMICAL: Seeks to Lift Stay to Reject Biolab Pact LYONDELL CHEMICAL: Solutia Wants Equistar to Comply with Order MAGNA ENTERTAINMENT: Panel Can Hire Faskens Martineau as Counsel MANDALAY MEDIA: SingerLewak LLP Raises Going Concern Doubt MARCHFIRST INC: 7th Cir. Says Faxing Proofs of Claim Not Valid MARYLAND ECONOMIC: Moody's Reviews 'Ba2' Rating on Revenue Bonds MERCEDES HOMES: Files Chapter 11 Plan; Sees Sept. 30 Exit MERIDIAN CO: December 31 Balance Sheet Upside-Down by $4.6 Million METALDYNE CORPORATION: Wants Powertrain Auction Moved to Aug. 5 MIDWAY GAMES: Pays Mark Thomas $4.7MM from Warner Sale Proceeds MOORE-HANDLEY INC: Files for Bankruptcy Due to CIT Woes MORTGAGE GUARANTY: Moody's Reviews 'Ba2' Insurance Strength Rating MTM TECHNOLOGIES: McGladrey & Pullen Raises Going Concern Doubt NATASHA DREMLYUGA: Case Summary & 9 Largest Unsecured Creditors NAVIGATORS GROUP: S&P Assigns 'BB+' Preferred Stock Ratings NEW FRONTIER: Posts $1 Million Net Loss in Quarter Ended May 31 NEWPAGE CORP: Seeks Loan Amendment; to Hold Notes Offering NORANDA ALUMINUM: To Receive $23.625MM Settlement From 3 Insurers NORTEL NETWORKS: Customers Laud Avaya Acquisition NORTEL NETWORKS: RIM Says It Was Shut Out from Bidding for Assets NORTEL NETWORKS: To Sell Enterprise Solutions to Avaya for $475MM NORTEL NETWORKS: PBGC to Take Over Underfunded Pension Plans NPS PHARMACEUTICALS: Board Elects Colin Broom as Director NV BROADCASTING: Chapter 11 Filing Cues Moody's Rating Cut to 'D' OPUS WEST: To Seek Final Approval of Cash Use on July 24 PANDA ETHANOL: Stockholders Approve Liquidation Plan PATIENT SAFETY: Files Amendment to 2008 Annual Report PEREGRINE PHARMACEUTICALS: Posts $16.5MM Net Loss in Fiscal 2009 PETTERS COMPANY: Founder Gets 42-Day Delay in Fraud Trial PHOENIX FOOTWEAR: Closes Tandy Deal; Wrangler Brand Goes Too PHOENIX FOOTWEAR: Forbearance Period Extended; Has Hired Advisors PHYSICAL THERAPY AND FITNESS: Voluntary Chapter 11 Case Summary PILGRIM'S PRIDE: Assumes Railcar Lease with CIT Group PILGRIM'S PRIDE: Proposes to Reject 699 Contract-Grower Contracts PILGRIM'S PRIDE: Seeks to Sell Titus/Camp Property for $5.5 Mil. PILGRIM'S PRIDE: Transfers Trademarks to New Oxford PILGRIM'S PRIDE: Wants to Esimate FLSA Claims At $55,000,000 PITTSBURGH CORNING: Slated for January 2010 Confirmation POWER EFFICIENCY: Files Form 424B3 to Register 59,687,619 Shares POWERMATE CORP: Deadline to Remove Actions Extended to October 8 POWERMATE CORP: Inks Settlement Agreement with Northern Tool POWERMATE CORP: Wants Plan Filing Period Extended to September 17 PRIMEDIA INC: To Issue Q2 Results on Aug. 6; Gets Loan Amendments PROTEIN SCIENCES: Wants Dismissal of Involuntary Chapter 7 PROVIDENT ROYALTIES: Court Appoints Roossien as Chapter 11 Trustee PUEBLO BUILDING: Case Summary & 20 Largest Unsecured Creditors QIMONDA NA: U.S. Trustee Opposes Pre-Approved Break-up Fees QUANTUM CORP: To Hold Annual Shareholders' Meeting on August 19 QUEBECOR WORLD: Makes Post-Confirmation Plan Amendments QUEBECOR WORLD: Stipulations Taxing Authorities QUEBECOR WORLD: To Issue $75 Mil. 10% Sr. Notes Pursuant to Plan QUEBECOR WORLD: To Postpone Shareholders Meeting to May 2010 RATHGIBSON INC: Court Sets Deadlines for Proof of Claim Filing RATHGIBSON INC: Wants Court Approval to Employ Professionals RATHGIBSON INC: Sec. 341(a) Meeting of Creditors on Aug. 20 REGAL ENTERTAINMENT: Sells $400MM of 2019 Notes to Credit Suisse RELIANCE INTERMEDIATE: S&P Rates $250 Million Notes at 'BB-' RHODES COS: Court Approves Mediation With Creditors SAN FELICIANO: Files Schedules of Assets and Liabilities SAN FELICIANO: Taps SulmeyerKupetz as Bankruptcy Counsel SBARRO INC: Moody's Affirms 'Ca' Corporate Family Rating SAN FELICIANO: Section 341(a) Meeting Set for August 11 SAN PATRICIO: 7th Cir. Declines to Use Mootness to Dismiss Deal SEAL CORP: Says 96.4% of Subscription Rights Were Exercised SEALY CORP: Inks Indenture Regarding Issuance of $177MM 2016 Notes SEARS HOLDINGS: S&P Withdraws 'BB+' Rating on $4 Billion Facility SEMGROUP LP: Agree to End Litigation with Catsimatidis SENCORP: Wynnchurch Capital Closes $41MM Deal to Acquires Assets SINCLAIR BROADCAST: Unlikely to Enter Chapter 11, Analyst Says SINOBIOMED INC: To Acquire Healthcare Consumables Maker in China SYNCORA GUARANTEE: Completes Restructuring; Fixes $4BB Deficit ST LAWRENCE HOMES: Has August 20 Confirmation Hearing SUN-TIMES MEDIA: Fails to Make Payments to Five Pension Plans SYNTAX-BRILLIAN: Liquidating Plan Takes Effect TERRA NOSTRA: Debt-for-Equity Swap Selected; Plan Confirmed TH PROPERTIES: Gets Court OK to Obtain Financing From Hyperion THREE RIVERS: Files for Chapter 11 Bankruptcy Protection TITLEMAX HOLDINGS: Wants Plan Filing Period Extended to Dec. 18 TONGLI PHARMACEUTICALS: Earns $2 Million in Year Ended March 31 TRAVELPORT LLC: S&P Raises Corporate Credit Rating to 'B-' TRIBUNE CO: To Assume 54 Advertising Sales Agreements TRIBUNE CO: Assumes 36 Syndicated Program Pacts With CBS TRIBUNE CO: Court Extends Removal Period to November 3 TRIBUNE CO: Foundations Oppose Committee Examination TRIBUNE CO: Hires Dow Lohnes as Regulatory Counsel TRIBUNE CO: Warren Beatty Oppose Videotaped Deposition TVI CORP: Wants Exclusive Filing Period Extended to August 31 TVI CORP: Can Employ Houlihan Smith as Valuation Expert US SHIPPING: Court Approves Settlement With Blackstone & Cerberus VALUE CITY: Taps Storch Amini to Litigate Preference Claims VIA PHARMACEUTICALS: Receives Non-Compliance Notice From NASDAQ VISTEON CORP: Committee Proposes Ashby & Geddes as Counsel VISTEON CORP: Committee Proposes Brown Rudnick as Counsel VISTEON CORP: Court Approves Adequate Protection for Term Lenders VISTEON CORP: Court Approves Visteon Village Leases with GE Co. VISTEON CORP: GM, & Ford Oppose Key Employee Incentive Plan VISTEON CORP: GM & Union Oppose Severance & Retention Programs VISTEON CORP: Has Court Nod on Use of Cash Until July 30 VIVAKOR INC: March 31 Balance Sheet Upside-Down by $111,667 WABASH NATIONAL: Gets $35 Mil. Capital Infusion From Lincolnshire WALDEN RESERVE: Unsec. Creditors Won't Get Anything Under Plan WASHINGTON MUTUAL: Fitch Affirms Primary Servicer Ratings WATERGATE HOTEL: Set for Auction After Owner Defaults WCI COMMUNITIES: May Send Bankruptcy Plan to Creditors for Voting WESTMORELAND COAL: Unit to Pay $1.3 Million Settlement to MMS WILTON HOLDINGS: 2 Creditors File Involuntary Ch. 11 Petition WOODSIDE GROUP: Denies JPMorgan's Motion to Appoint Ch 11 Trustee WOODSIDE GROUP: Alameda, Liberty Liquidate; Others to Reorganize YELLOWSTONE CLUB: CrossHarbor Capital Completes Acquisition * Sixth Circuit Approves `Nunc Pro Tunc' Conversion * One in 84 American Homes in Foreclosure or Default * 59% of Restructuring Experts Suggest Bankruptcy Code Reform * Compensation for Top General Counsel Continues to Increase * Recession Grinding to a Halt, Federal Reserve and BoJ Say * Former GM Counsel Osborne Returns to Jenner & Block * S&P's Year-To-Date Tally of Defaulted Issuers Now 4x 2008's * S&P Expects to 2010 to Produce Lowest Auto Sales in Decades * Spec-Grade Market Set to Face Tough Second-Half, Says S&P * Large Companies With Insolvent Balance Sheets ********* ABITIBIBOWATER INC: Proposes Ordinary Claims Settlement Procedures ------------------------------------------------------------------ In the ordinary course of business, AbitibiBowater Inc. and its affiliates face a variety of threatened and actual litigation, including insurance disputes, relating to labor and employment issues, commercial disputes, real and personal property disputes, personal injury claims and environmental liabilities. By this motion, the Debtors seek ask the Court approve their proposed expedited procedures for settling routine disputes with respect to Ordinary Course Claims. Specifically, the Debtors ask Judge Carey to allow them to settle: (a) prepetition Ordinary Course Claims, which Claims will be deemed allowed for purposes of these Chapter 11 cases and will not be subject to distributions prior to confirmation a plan of reorganization in the Debtors' cases; and (b) postpetition Ordinary Course Claims and make payments in satisfaction of those Claims. The Debtors propose that with respect to each proposed settlement of either a Prepetition or Postpetition Claim for a settlement amount equal to or less than $200,000, the Debtors will be authorized to finalize and consummate the Settlement without providing advance notice to any party-in-interest and without the need for further Court authorization. The Debtors will file with the Court a written report no later than 30 days after the end of each calendar quarter -- beginning with the calendar quarter ending on December 31, 2009 -- describing the material terms of any Proposed Settlement that has been agreed during the preceding calendar quarter. The Debtors will provide a written notice of a Proposed Settlement with a settlement amount greater than $200,000 but less than or equal to $1,000,000, which will be served to (i) the Office of the U.S. Trustee for the District of Delaware; (ii) counsel to the Creditors Committee; (iii) counsel to the agents for the Debtors' prepetition secured bank facilities; (iv) counsel to the agent for the Debtors' postpetition lenders; (v) counsel to the agent for the Debtors' securitization facility; and (vi) the Monitor appointed in the Canadian Proceedings prior to the effective date of the Proposed Settlement. The Notice Parties may object to the Proposed Settlement within 10 days after mailing of the Notice. Absent any objection, the Debtors may consummate the Proposed Settlement without further Court order. With respect to any Proposed Settlement with a Settlement Amount greater than $1,000,000, the Debtors will file a motion seeking the approval of that Settlement pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure. The CCAA Applicants will also seek approval of all Proposed Settlements in the Canadian Proceedings. Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, asserts that the creation of streamlined procedures contemplates the settlement of Ordinary Course Claims in an efficient manner that will minimize administrative expenses and potential delays. The Settlement Procedures, he adds, will also promote the efficient and timely resolution of both Prepetition Claims and Postpetition Claims while minimizing the administrative burdens for the Debtors and their estates; and encourage the resolution of Ordinary Course Claims on terms favorable to the Debtors. Judge Carey will convene a hearing on August 4, 2009, to consider the Debtors' request. Objections, if any, must be filed by July 28. 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: Schedules of Assets and Liabilities ------------------------------------------------------- A. Real Property $0 B. Personal Property B.1 Cash on hand 0 B.2 Bank Accounts 0 B.3 Security Deposit 0 B.4 Household goods 0 B.5 Book, artwork and collectibles 0 B.6 Wearing apparel 0 B.7 Furs and jewelry 0 B.8 Firearms and other equipment 0 B.9 Insurance Policies 0 B.10 Annuities 0 B.11 Interests in an education IRA 0 B.12 Interests in IRA, ERISA, Keogh, et al. 0 B.13 Stock and Interests 100% Equity Interest in AbitibiBowater US 1 Unknown 100% Equity Interest in Bowater Inc. Unknown 100% Equity Interest in AbitibiBowater Holding - 100% Equity Interest in Bowater Newsprint South - 100% Equity Interest in Abitibi-Consolidated Inc. Unknown B.14 Interests in partnerships & joint venture 0 B.15 Government and corporate bonds 0 B.16 Accounts Receivable Intercompany notes & interest receivable, net 375,959,162 B.17 Alimony 0 B.18 Other Liquidated Debts Owing Debtor 0 B.19 Equitable or future interests 0 B.20 Contingent and non-contingent interests 0 B.21 Other Contingent and Unliquidated Claims Government of Canada Unknown The Levin Group Unknown B.22 Patents 0 B.23 Licenses, franchises & other intangibles 0 B.24 Customer lists or other compilations 0 B.25 Vehicles 0 B.26 Boats, motors and accessories 0 B.27 Aircraft and accessories 0 B.28 Office Equipment 0 B.29 Machinery, equipment and supplies in business 0 B.30 Inventory 0 B.31 Animals 0 B.32 Crops 0 B.33 Farming equipment and implements 0 B.34 Farm supplies, chemicals and feed 0 B.35 Other Personal Property Accounts Payable with Debit Balances 0 Long-term Pension Assets 0 Prepaid Expenses & Other Current Assets 329,570 TOTAL SCHEDULED ASSETS $376,288,732 ========================================================== C. Property Claimed as Exempt - D. Creditors Holding Secured Claims Andritz Inc. Unknown Associates Leasing (Canada) Ltd. Unknown Caterpillar Financial Services Unknown J&L Fiber Services Unknown J&L Fiber Services, Inc. Unknown Mayer Electric Supply Co., Inc. Unknown MB Financial Bank, N.A. Unknown Praxair Canada Inc. Unknown Wachovia Bank, National Association $204,000,000 Wachovia Bank, National Association 68,500,000 E. Creditors Holding Unsecured Priority Claims - F. Creditors Holding Unsecured Non-priority Claims Law Debenture Trust Company of New York 277,000,000 Others 0 TOTAL SCHEDULED LIABILITIES $549,000,000 ========================================================== 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: Statement of Financial Affairs -------------------------------------------------- William G. Harvey, AbitibiBowater Inc.'s senior vice president and chief financial officer, reports that AbitibiBowater, Inc., received income from its business operations during the two years immediately preceding the Petition Date, in these gross amounts: Source Amount ------ -------------- Year-To-Date 2009 Sales $1,121,877,693 Year Ended 2008 Sales $6,374,990,507 Year Ended 2007 Sales $3,603,505,289 Other than from the operation of its businesses, the Company's generated interest income in these amounts: Source Amount ------ -------------- Year-To-Date 2009 $11,395,842 Year Ended 2008 $34,250,004 No payments were made to creditors of AbitibiBowater Inc. within the 90 days immediately preceding the Petition Date, according to Mr. Harvey. Within one year to the Petition Date, the Company made payments, withdrawals and distributions to these insiders on account of director fees, expense reimbursements, salary gross payments, severance and other compensation: Insider Total Amount Paid ------- ----------------- Various U.S. officers $6,133,007 U.S. Board of Directors 496,827 Various Canada officers 3,676,104 Canada Board of Directors 304,219 McCormick, William 356,463 Nash, Gaynor 311,250 Weaver, John 5,970,576 Wharton, Darryl 361,564 Wolfe, Colin 1,128,170 Within one year to the Petition Date, AbitibiBowater, Inc., became a party to a pending proceeding captioned CEP v. AbitibiBowater (Dalhousie) relating to the termination of participation on pension plans. The Company also made payments or property transfers to these parties for consultation concerning debt consolidation, relief under the bankruptcy law or preparation of the Chapter 11 Petition within one year immediately preceding the Petition Date: Insider Amount/Value of Property ------- ------------------------ BMO Nesbitt Burns $2,517,990 Troutman Sanders LLP 2,120,544 Stikeman Elliott 1,970,527 Bracewell & Giuliani LLP 1,957,537 The Boston Consulting Group 1,615,702 Paul, Weiss, Rifkind, Wharton & Garrison 1,347,425 Blackstone Advisory 902,222 GE Capital Corp. 775,000 Deloitte Tax LLP 693,901 FTI Consulting 508,647 Barclays Bank 315,950 Debevoise & Plimpton LLP 303,372 Ernst & Young 257,165 Mayer Brown LLP 221,165 Ogilvy Renault LLP 62,396 Epiq Bankruptcy Solutions 52,570 Bowne 30,651 Young Conaway Stargatt & Taylor 12,474 According to Mr. Harvey, within two years to the Petition Date, AbitibiBowater Inc. transferred to Bowater Incorporated contribution of a Term Promissory Note dated as of May 12, 2008, in an original principal amount of $650,000,000. The Note was pledged to Wachovia Bank, National Association, as administrative agent under Bowater's prepetition credit agreement. The Company was a partner or owned 5% or more of the voting or equity securities of AbitibiBowater US 1 Holding Corp., AbitibiBowater US Holding LLC, Abitibi-Consolidated Inc., Bowater Incorporated and Bowater Newsprint South LLC within the six years immediately preceding the Petition Date. Mr. Harvey states that within six years to the Petition Date, these individuals kept or supervised the keeping of books of account and records of AbitibiBowater Inc.: * Alain Quenneville * Cassandra Price * Jocelyn Pepin * Joehl Ihrig * Joseph Johnson * William Harvey As of the Petition Date, Messrs. Quenneville, Ihrig, Johnson and Harvey had possession of the Company's books and records. PricewaterhouseCoopers LLP audited the books and records, or prepared a financial statement for AbitibiBowater, Inc., within two years to the Petition Date. Officers and directors of AbitibiBowater, Inc., who hold 0% stock ownership in the Company are: (1) Alain Grandmont (2) Allen Dea (3) Anthony F. Griffiths (4) David J. Paterson (5) Duane A. Owens (6) Gary J. Lukassen (7) Hon. Togo D. West (8) Jacques Bougie (9) Jacques P. Vachon (10) James T. Wright (11) John A. Rolls (12) John Q. Anderson (13) John W. Weaver (14) Jon Melkerson (15) Joseph B. Johnson (16) Lise LaChapelle (17) Paul C. Rivett (18) Pierre Rougeau (19) Richard B. Evans (20) Ruth R. Harkin (21) W. Eric Streed (22) William E. Davis (23) William G. Harvey (24) Yves LaFlamme Within one year preceding the Petition Date, Thor Thorsteinson, Messrs. Dea, Giffin and Weaver, and Ms. Owens terminated their relationship with the Company. The shareholders that assert stock ownership in AbitibiBowater Inc. are: Percentage of Insider Stock Ownership ------- --------------- Fairfax Financial Holding Limited 40.9% Lord Abbett & Co. LLC 6.8% Steelhead Partners, LLC 14.8% AbitibiBowater Inc. has been responsible for contributing to certain pension funds at any time within the six-year period immediately preceding the Petition Date. A full-text copy of the Pension Funds is available for free at: http://bankrupt.com/misc/AbitibiBowaterInc_SoFA25.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: Wants Lease Decision Deadline Moved to Aug. 14 ------------------------------------------------------------------ Section 365(d)(4) of the Bankruptcy Code provides a debtor with an initial 120-day period following the filing of a bankruptcy petition in which to elect to assume or reject unexpired leases of non-residential real property. Accordingly, AbitibiBowater Inc. and its affiliates' Lease Decision Period concludes on August 14, 2009. By this motion, the Debtors ask Judge Carey to extend the Lease Decision Period for 90 days, through and including November 12, 2009, with respect to 20 Leases which are of critical importance to their ongoing business, including plant, office, warehouse, industrial and timberland leases. The Debtors tell the Court that given their large and complex Chapter 11 cases, they need more time to evaluate the Leases and determine whether those Leases should ultimately be assumed or rejected in the context of the Debtors' business plan. An extended Lease Decision Period will allow the Debtors to retain maximum flexibility in restructuring their business operations. Absent an extension of Lease Decision Period, the Debtors could be forced to prematurely assume Leases that may later prove to be burdensome, which could give rise to large administrative expense claims against the estates and hamper the Debtors' ability to successfully reorganize, according to Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. In the alternative, the Debtors could be forced to prematurely reject certain Leases that ultimately could have benefited their estates, Mr. Greecher points out. Mr. Greecher asserts that the proposed extension will not unduly prejudice counterparties to the Leases as the Debtors are substantially complying with their postpetition obligations under Leases, in accordance with Section 365(d)(3). The Court will convene a hearing on August 4, 2009, to consider approval of the Debtors' request. Objections, if any, must be filed by July 28. 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: Wants Plan Filing Deadline Moved to Dec. 14 --------------------------------------------------------------- Section 1121(b) of the Bankruptcy Code provides a debtor with an initial period to file a Chapter 11 plan 120 days after the Petition Date. Section 1121(c)(3) provides that, if a debtor files a plan within the Exclusive Filing Period, then it has an initial period of 180 days after the Petition Date to solicit acceptances of that plan. Accordingly, the Initial Exclusive Plan Filing and Exclusive Solicitation Periods of AbitibiBowater Inc. and its debtor- affiliates will expire on August 14, 2009, and October 13, 2009. In accordance with Section 1121(d), the Debtors ask Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to extend (i) their Exclusive Plan Filing Period through December 14, 2009, and (ii) their Exclusive Solicitation Period through February 10, 2010. Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, tells the Court that the Debtors have made material progress in ensuring smooth Chapter 11 operations and Companies' Creditors' Arrangement Act proceedings in Canada, while continuing to develop their business strategy through restructuring their balance sheet and rationalizing their operations. Specifically, Mr. Greecher says, the Debtors have focused on: (a) minimizing the effect of the Chapter 11 filings on their business operations; (b) obtaining postpetition financing to provide adequate liquidity for a successful restructuring; (c) transitioning into Chapter 11 and establishing procedures for efficiently managing their cross-border restructuring efforts; and (d) optimizing the performance of their core operations. As the world's largest producer of newsprint by capacity, the Debtors aver that their capital structure consists of more than $1 billion of aggregate prepetition secured debt and more than $5 billion of aggregate unsecured debt. In addition, the Debtors' domestic and international operations are complex and large, thereby requiring more time than the statutory minimum Exclusive Periods, Mr. Greecher notes. Mr. Greecher adds that a variety of tasks lie ahead of the Debtors before they can propose a meaningful Chapter 11 plan, including finalizing a comprehensive business strategy to present to their principal stakeholders, including the Official Committee of Unsecured Creditors and their secured prepetition and postpetition lenders. Mr. Greecher contends that the proposed extension of the Exclusive Periods will not prejudice the interests of the Debtors' creditors, as the Debtors continue to make timely payment on their undisputed postpetition obligations. Rather, he avers, the proposed extension will afford parties-in-interest a meaningful and reasonable opportunity to formulate and negotiate a Chapter 11 plan. Absent an extension of the Exclusive Periods, any party-in- interest would be free to propose a plan of reorganization for each of the Debtors, which "would foster a chaotic environment with no central focus" and "critically impair the Debtors' ability to achieve an effective reorganization," Mr. Greecher says. The Court will convene a hearing on August 4, 2009, to consider approval of the Debtors' request. Objections, if any, must be filed by July 28. 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: Wants Removal Period Extended Through Nov. 12 ----------------------------------------------------------------- Pursuant to Rules 9006(b) and 9027 of the Federal Rules of Bankruptcy Procedure, AbitibiBowater Inc. and its affiliates ask the Bankruptcy 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 they are or may become parties, through and including November 12, 2009. Pursuant to Bankruptcy Rule 9027, the Debtors' existing removal action period for civil actions that have not been stayed pursuant to Section 362(a) of the Bankruptcy Code expired on July 15, 2009. Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that the size of the Debtors' business enterprise, which includes entities located and operating outside of the United States and involves multiple debtor-affiliates in their Chapter 11 cases, and the existing effort required to manage the Debtors' business enterprise operations have been formidable tasks. According to Mr. Greecher, the tasks and demands on the Debtors' personnel and professionals give rise to a legitimate need for additional time to review the Debtors' outstanding litigation matters and evaluate whether those matters should be removed pursuant to Bankruptcy Rule 9027. Any claim or cause of action relating to the Debtors' cases will suffer no discernible prejudice from the proposed extended Removal Periods, Mr. Greecher reasons, because prepetition causes of action against the Debtors are stayed by operation of the automatic stay under Section 362(a) of the Bankruptcy Code. The Debtors' request is also without prejudice to any party to a proceeding that the Debtors may ultimately seek to remove from seeking the remand of that action under Section 1452(b) of the Judiciary and Judicial Procedures Code at the appropriate time. The Debtors aver that absent an extension of the Removal Period, they would lose a potentially key element of their overall ability to manage litigation during their Chapter 11 cases even before that litigation would reasonably have been evaluated. Judge Carey will convene a hearing on August 4, 2009, to consider approval of the Debtors' request. Objections, if any, must be filed by July 28. By operation of Rule 9006-2 of the Local Rules for the U.S. Bankruptcy Court for the District of Delaware, the Debtors' Removal Period Deadline is automatically extended until the Court has had an opportunity to consider and act on the Debtors' extension request. 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). ADVANTA CORP: To Issue $500 Mil. in RediReserve Certificates ------------------------------------------------------------ Advanta Corp. filed with the Securities and Exchange Commission a Form S-3/A registration statement relating to its offer to issue $500,000,000 principal amount of senior unsecured debt securities, known as RediReserve variable rate certificates and investment notes. Advanta explains the RediReserve certificates and investment notes are senior unsecured debt obligations of Advanta Corp. that will rank equal in right of payment with existing and future unsecured senior debt, and effectively rank junior to all secured debt of Advanta Corp. and to all indebtedness and other liabilities of its subsidiaries. RediReserve certificates are non-negotiable instruments that do not have a maturity date and pay interest at a variable rate. A RediReserve certificate is a demand investment that is redeemable in whole or in part at any time at the option of the holder. Investment notes are non-negotiable term notes, each with a fixed maturity date, and pay interest at a fixed rate or variable rate, as provided in the applicable prospectus supplement. Advanta may offer investment notes from time to time with maturities ranging from 91 days to ten years, at Advanta's option. Advanta will establish interest rates for the securities offered by the prospectus from time to time in supplements to the prospectus. Advanta also may vary other terms of the securities offered by the prospectus from time to time in supplements to the prospectus. Unless Advanta provides otherwise in a prospectus supplement, Advanta will sell the RediReserve certificates and the investment notes directly through its employees. The RediReserve certificates and the investment notes are not investment grade. Although the RediReserve certificates and the investment notes are not rated by any of the rating agencies, Advanta's unsecured corporate debt is currently rated below investment grade by the rating agencies. Advanta's unsecured debt was rated CC with a negative outlook by Standard & Poor's, Caa3 with a negative outlook by Moody's Investor Services and C by Fitch Ratings. Advanta will not list the RediReserve certificates or the investment notes for sale on a securities exchange. Advanta does not expect that any active trading market for the securities will develop or be sustained. An investment in the RediReserve certificates or the investment notes involves risks. Neither the RediReserve certificates nor the investment notes are insured or guaranteed by any corporation, bank or other private entity or by the Federal Deposit Insurance Corporation or any other governmental agency. Advanta will receive all of the proceeds from the sale of the RediReserve certificates and the investment notes, from which Advanta will pay underwriters' discounts and commissions, if any. A full-text copy of the Prospectus is available at no charge at: http://ResearchArchives.com/t/s?3fa6 About Advanta Corp. Spring House, Pennsylvania-based Advanta Corp. (NASDAQ: ADVNB; ADVNA) -- http://www.advanta.com/-- manages one of the nation's largest credit card portfolios (through Advanta Bank Corp.) in the small business market. Founded in 1951, Advanta has long been an innovator in developing and introducing many of the marketing techniques that are common in the financial services industry. At March 31, 2009, the Company had $3.39 billion in total assets, $2.97 billion in total liabilities and $427.7 million in stockholders' equity. The Company had $75.9 million in net loss for the three months ended March 31, 2009, compared to net income of $18.3 million for the same period in 2008. * * * As reported by the Troubled Company Reporter on June 18, 2009, Fitch Ratings downgraded the long-term Issuer Default Rating of Advanta Corp. to 'Restricted Default' due to the initiation of a tender offer for all $100 million of its 8.99% trust preferred securities at 20% of face value. Fitch considers the transaction to be a coercive debt exchange according to its 'Coercive Debt Exchange Criteria' (March 3, 2009). In April 2009, Advanta elected to defer its semi-annual interest payments on the trust preferred securities and Fitch believes that investors who do not participate in the tender offer could face even worse recovery prospects in the event of liquidation. ADVANTA CORP: S&P Withdraws 'CCC' Counterparty Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that it withdrew its ratings on Advanta Corp., including the 'CCC' long-term counterparty credit rating and the 'C' preferred stock rating. The ratings were withdrawn due to a lack of market interest and in accordance with S&P's policies and procedures. AGT CRUNCH: Signs Pact to Sell Health Club in Smithtown, NY ----------------------------------------------------------- AGT Crunch Acquisition LLC, doing business as Crunch Fitness, has signed a deal to sell its fitness club in Smithtown, New York, absent higher and better offers for the property. The price, subject to auction, is $225,000 plus $52,800 to cure arrears on rent. The Smithtown location is among the assets not part of the sale to Angelo, Gordon & Co. Promptly after its bankruptcy filing, AGT Crunch said it has reached an agreement to be acquired by its senior secured lenders, New Evolution Fitness Company and certain investing affiliates of Angelo, Gordon & Co. NEFC and Angelo affiliates offered to credit bid as much as $40 million that they are owed under various financing agreements with Crunch, instead of paying cash. Crunch has also reached a deal with CH Fitness with respect to a $6 million bankruptcy loan to fund its operations as it restructures. AGT Crunch Acquisition Co. and its affiliates owned Crunch Fitness, chain of 19 high-end fitness clubs. The clubs, with 73,000 members, are located in New York, Chicago, Los Angeles and Rock Creek, Maryland. New York-based AGT Crunch Acquisition LLC and its affiliates filed for Chapter 11 on May 6, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-12889). Davin J. Hall, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Diana G. Adams, the U.S. Trustee for Region 2, appointed seven creditors to serve on the official committee of unsecured creditors in the Debtors' Chapter 11 cases. The petition listed assets of $104 million against $102 million in total liabilities. Debt includes $56.7 million on a first-lien loan now mostly owned by Angelo Gordon affiliates. There is a second-lien debt for another $22.7 million. AMERICAN COMMUNITY: Court Approves Carl Marks as Fin'l Advisor -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted American Community Newspapers, LLC, and its affiliates permission to employ Carl Marks as Financial Advisor, nunc pro tunc to April 28, 2009. Carl Marks has agreed to, among other things, (i) analyze the Debtors' financial and capital needs; (ii) review cash flow forecasts to understand and refine the liquidity forecast, provide ongoing updates and present updates to the lenders periodically as appropriate; (iii) review existing projections, internal budget, current performance variances, monthly and quarterly financials; (iv) review the Company's overall business plan and financial projections, current execution to the plan; (v) assist with further identification of actionable opportunities, cost related or otherwise, intended to improve the Company's performance; (vi) assist the company in evaluating optimal capital structures; (vii) communicate with the Company's creditors and stakeholders: (viii) review, assist and develop the restructuring business plan; (ix) advise as to any potential strategic or financial advisors who would be willing to work with the Company to fund its restructuring plans: (x) assist the Company in obtaining covenant relief through forbearance, amendment and any other means: (xi) assist the Company in negotiating any debt restructuring proposals from creditors and terms thereof; (xii) assist the Company is obtaining any and all forms of capital on terms acceptable to the Company; (xiii) advise the Company on all strategic alternatives; including a sale of assets and balance sheet restructuring: and (xiv) assist the Company in negotiations among the creditors to achieve consensus around the restructuring plan. As compensation for its services, Carl Marks will receive: (I) Monthly Advisory Fee. A fixed fee at the monthly rate of $75,000, which will be payable in advance for each monthly period in which the financial advisory services is provided; (II) Completion Fee. If the Debtors close on a restructuring, financing or transaction, a fee equal to $320,000. A provision providing for a "limitation on CMS liability" provided in the parties' financial advisory agreement has been stricken by the Court. Carl Marks will be required to apply with the Court any request for indemnification payment. About American Community Newspapers Headquartered in Addison, Texas, American Community Newspapers LLC -- http://www.americancommunitynewspapers.com/-- claims to be one of the top community newspaper publishers in the United States based on circulation, and operates in four of the most attractive major U.S. markets: Minneapolis -- St. Paul, Columbus, Dallas -- Fort Worth and Suburban Washington, D.C. -- Northern Virginia. The Company's award winning group of 86 newspapers and fourteen niche publications reaches approximately 1.4 million households in the suburban communities surrounding these major cities and enjoys market leading circulation penetration in all of its markets. The Company and four of its affiliates filed for Chapter 11 protection on April 28, 2009 (Bankr. D. Del. Lead Case No. 09-11446). Landis Rath & Cobb LLC and Lowenstein Sandler PC represents the Debtors in their restructuring efforts. The Debtors proposed Carl Marks & Co. Inc. as financial advisor, and Graubard Miller as special corporate counsel. On May 6, 2009, the Office of the United States Trustee appointed (i) Tembec Industries Inc., (ii) Vision Data, and (iii) Roosevelt Paper Co to an official committee of unsecured creditors. When American Community filed for bankruptcy protection, it listed assets between $50 million and $100 million, and debts between $100 million and $500 million. AMERICAN COMMUNITY: Court OKs Blank Rome as Committee Counsel ------------------------------------------------------------- The official committee of unsecured creditors in American Community Newspapers, LLC's Chapter 11 cases obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ Bank Rome LLP as its counsel, effective as of May 6, 2009. Blank Rome will represent the Committee and perform services for the Committee in connection with carrying out its fiduciary duties and responsibilities under the Bankruptcy Code consistent with section 1103(c) and other provisions of the Bankruptcy Code. Blank Rome will charge the Debtors' estates on an hourly basis in accordance with its ordinary and customary rates. The primary members of the Blank Rome engagement team for the Committee are: Rate ---- Michael Z. Brownstein $700.00 per hour Erin O. Harkiewicz $480.00 per hour David W. Carickhoff $430.00 per hour Stanley B. Tarr $395.00 per hour From time to time, other Blank Rome attorneys may be involved in the Chapter 11 cases as needed. Hourly rates of partners and counsel range from $425 to $785 per hour, associates' rates range from $245 to $485 per hour, and paralegals' rates range from $105 to $280 per hour. Blank Rome will also charge for actual and necessary costs. Michael Z. Brownstein, a partner at the Blank Rome, says his firm does not hold any interest adverse to the Debtors' estates and, while employed by the Committee, will not represent any person having an adverse interest in connection with these cases. He assures the Court that Blank Rome is a "disinterested person" as such term is defined in section 101(14) of the Bankruptcy Code. About American Community Newspapers Headquartered in Addison, Texas, American Community Newspapers LLC -- http://www.americancommunitynewspapers.com/-- claims to be one of the top community newspaper publishers in the United States based on circulation, and operates in four of the most attractive major U.S. markets: Minneapolis -- St. Paul, Columbus, Dallas -- Fort Worth and Suburban Washington, D.C. -- Northern Virginia. The Company's award winning group of 86 newspapers and fourteen niche publications reaches approximately 1.4 million households in the suburban communities surrounding these major cities and enjoys market leading circulation penetration in all of its markets. The Company and four of its affiliates filed for Chapter 11 protection on April 28, 2009 (Bankr. D. Del. Lead Case No. 09-11446). Landis Rath & Cobb LLC and Lowenstein Sandler PC represents the Debtors in their restructuring efforts. The Debtors proposed Carl Marks & Co. Inc. as financial advisor, and Graubard Miller as special corporate counsel. On May 6, 2009, the Office of the United States Trustee appointed (i) Tembec Industries Inc., (ii) Vision Data, and (iii) Roosevelt Paper Co to an official committee of unsecured creditors. When American Community filed for bankruptcy protection, it listed assets between $50 million and $100 million, and debts between $100 million and $500 million. AMERICAN COMMUNITY: NachmanHays Retained as Panel Advisor --------------------------------------------------------- The official committee of unsecured creditors in American Community Newspapers, LLC's Chapter 11 cases obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ NachmanHaysBrownstein LLC as its financial advisor, effective as of May 13, 2009. The Committee seeks the employment of NHB to assist it in evaluating the Debtors' businesses and assets during these chapter 11 cases. The Committee seeks to retain NHB to provide financial advisory services including, but not limited to: a) Reviewing and analyzing the business, management, operations, properties, financial condition and prospects of the Debtors; b) Determining the reasonableness of the projected performance of the Debtors; c) Monitoring, evaluating and reporting to the Committee with respect to the Debtors' near-term liquidity needs, material operational changes and related financial and operational issues; d) Assisting and procuring and assembling any necessary validations of asset values; e) Providing ongoing assistance to the Committee and the Committee's legal counsel in connection with the investigation of any potential estate claims or causes of action; f) Assisting the Committee in preparing documentation required in connection with supporting or opposing a sale of the Debtors' assets and participating in negotiations on behalf of the Committee with the Debtors or any group affected by a sale; g) Rendering testimony on behalf of the Committee; h) Providing a valuation of the assets and business of the Debtors and the property of the Debtors' estates; i) Reviewing and analyzing any inter-company claims and transfers between the Debtors and its non-Debtor affiliates; and j) Providing other services as requested by the Committee and agreed to by NHB. The primary members of the NHB engagement team for the Committee, are: Hourly Rate ----------- Edward T. Gavin, CTP $450.00 Angela C. Phllips $375.00 Current hourly rates for other principals, advisors and associates range from $275.00 to $525.00 per hour. NHB is disinterested as that term is defined under 11 U.S.C. Sec. 101(14) and has no connection with, and holds no interest adverse to, the Debtors, their estates, their creditors, or any party in interest in the Chapter 11 cases. About American Community Newspapers Headquartered in Addison, Texas, American Community Newspapers LLC -- http://www.americancommunitynewspapers.com/-- claims to be one of the top community newspaper publishers in the United States based on circulation, and operates in four of the most attractive major U.S. markets: Minneapolis -- St. Paul, Columbus, Dallas -- Fort Worth and Suburban Washington, D.C. -- Northern Virginia. The Company's award winning group of 86 newspapers and fourteen niche publications reaches approximately 1.4 million households in the suburban communities surrounding these major cities and enjoys market leading circulation penetration in all of its markets. The Company and four of its affiliates filed for Chapter 11 protection on April 28, 2009 (Bankr. D. Del. Lead Case No. 09-11446). Landis Rath & Cobb LLC and Lowenstein Sandler PC represent the Debtors in their restructuring efforts. The Debtors proposed Carl Marks & Co. Inc. as financial advisor, and Graubard Miller as special corporate counsel. On May 6, 2009, the Office of the United States Trustee appointed (i) Tembec Industries Inc., (ii) Vision Data, and (iii) Roosevelt Paper Co to an official committee of unsecured creditors. When American Community filed for bankruptcy protection, it listed assets between $50 million and $100 million, and debts between $100 million and $500 million. AMERICAN INT'L: Completes Sale of Mexican Finance Operations ------------------------------------------------------------ American International Group, Inc., has closed the sale of its consumer finance operations in Mexico, consisting of AIG Universal, S.A. de C.V., SOFOM E.N.R. and Markcenter Services, S. de R.L. de C.V, to Desarrollo de Negocios Integrados, S.A. de C.V., and Inversiones DNI, S.A. de C.V., companies related to Afirme Grupo Financiero and Consorcio Villacero. Terms of the transaction were not disclosed. "This sale continues the momentum of AIG's restructuring efforts," said Alain Karaoglan, Senior Vice President -- Divestiture. "We are pleased with the progress that we are making with the disposition of our global consumer finance businesses." UBS Investment Bank acted as financial advisor to AIG on this transaction. About American International 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 INT'L: Shortlists Bidders for Taiwan Life Insurance Unit ----------------------------------------------------------------- Citing people familiar with the matter, Amy Or and Rick Carew at The Wall Street Journal report that American International Group Inc. has shortlisted at least seven bidders to buy its Taiwan life insurance unit for about $2 billion. According to WSJ, the sources said that Taiwan's financial regulator told the private-equity companies -- Bain Capital LLC, Carlyle Group, Primus Financial Holdings Ltd. and MBK Partners Ltd. -- to form partnerships with either Chinatrust Financial Holding Co. or Fubon Financial Holding Co., if they are to win the bidding for Nan Shan Life Insurance Co. Citing the sources, the report states that Cathay Financial Holding Co. can bid on its own. Taiwan Financial Supervisory Commission secretary general Lu Ting- chieh said that the regulator hadn't banned private-equity funds from bidding on their own, but the commission will evaluate the bidders' experience in insurance and their plans for Nan Shan before approving a deal, WSJ relates. About American International 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 SAFETY: Moody's Gives Negative Outlook; Keeps 'B2' Rating ------------------------------------------------------------------ Moody's Investors Service revised American Safety Razor Company's ratings outlook to negative from stable due to the company's weaker than expected financial performance and Moody's expectations for limited headroom under its bank financial covenants. As part of this action, ASR's B2 corporate family rating, the B1 ratings on its first lien senior secured credit facilities, and the B3 rating on its second lien term loan were affirmed. The outlook revision reflects the company's weaker than expected financial performance due to the challenging economic environment, which has adversely impacted sales volumes of certain product lines. Additionally, the outlook revision reflects Moody's view that headroom under the financial maintenance covenants contained in its bank credit agreement will be very limited over the near to medium-term given step-downs. To the extent ASR is not able to repay debt or increase EBITDA as planned, Moody's believes that ASR would be challenged to maintain compliance with its financial maintenance covenants, which could affect its ability to access the revolver and constrain its liquidity profile. Notwithstanding these concerns, the affirmation of ASR's CFR reflects Moody's expectation that the company will continue to generate improved levels of free cash flow, which would be used to repay indebtedness. These ratings were affirmed: -- Corporate Family Rating at B2; -- Probability-of-Default Rating at B2; -- $35 million 1st Lien Revolving Credit Facility due 2012 at B1. Point estimate revised to (LGD3, 36%) from (LGD3, 38%); -- $225 million 1st Lien Term Loan due 2013 at B1. Point estimate revised to (LGD3, 36%) from (LGD3, 38%); -- $175 million 2nd Lien Term Loan due 2014 at B3 (LGD4, 58%). The last rating action on ASR was on September 21, 2006, when Moody's assigned a Probability of Default rating of B2, upgraded the ratings on the first lien senior secured credit facilities to B1 from B2, and upgraded the rating on the second lien senior secured term loan to B3 from Caa1 as per Moody's loss given default methodology. Headquartered in Cedar Knolls, New Jersey, American Safety Razor Company is a designer, manufacturer and marketer of brand name and private-label consumer and industrial products. Its principal products include wet shaving blades and industrial blades. In July 2006, ASR was acquired by Lion Capital, a UK-based private equity firm for $625 million. ASR is a 100% owned direct subsidiary of RSA Holdings Corporation of Delaware. Moody's analysis is based on consolidated financial statements issued by RSA. ASR reported revenues of $348 million for the last twelve month period ended April 4, 2009. APPALACHIAN OIL: Asks $200,000 Increase in Greystone DIP Facility ----------------------------------------------------------------- Appalachian Oil Co. and Greystone Business Credit II, L.L.C., have requested the U.S. Bankruptcy Court for the Eastern District of Tennessee for authorization to increase the maximum amount allowable to be borrowed under the postpetition financing arrangement that Greystone agreed to provide to Appalachian Oil from $3,150,000 to $3,350,000, to fund continuing operations of the Debtor. Greystone has agreed to advance up to $200,000 more in additional funds to the Debtor, provided that it is prepaid these additional advances prior to the repayment of any other sums to be received from the anticipated dale of the Debtor's business. The Debtor asks the Court to amend the terms of the order approving the compromise and settlement among the Debtor, the Official Committee of Unsecured Creditors, Greystone, former shareholders and landlords, to reflect modifications to the formula of the division of the net proceeds of the sale of the Debtor's assets. There will be carved out from Greystone's liens and claims to the net sale proceeds from the sale of the assets of the Debtor's estate for the benefit of general unsecured reditors, the following amounts: A. $250,000 of the first proceeds in excess of $4,200,000 of the net sale proceeds paid to Greystone; B. 5% of all net sale proceeds in excess of $4,450,000 until net sale proceeds of $8 million are reached; C. 10% of all net sale proceeds in excess of $8 million until net sale proceeds of $10 million are reached; and D. 5% of all net proceeds in excess of $10 million. About Appalachian Oil Bountville, Tennessee-based Appalachian Oil Co. is a fuel distributor and operator of 60 convenience stores. It has 22.5 million-gallon terminal serving customers in six states. Titan Global Holdings purchased Appco in September 2007. Appco operates 55 stores in Northeast Tennessee, Southwest Virginia, and Southeast Kentucky. Appalachian Oil sought Chapter 11 protection before the U.S. Bankruptcy Court for the Eastern District of Tennessee on February 9, 2009 (Case No. 09-50259). Mark S. Dessauer, Esq., at Hunter, Smith & Davis, in Kingsport, Tennessee, represents the Debtor as counsel. In its petition, the Debtor listed assets between $10 million and $50 million and the same range of debt. The Company's creditors with the biggest unsecured claims are BP Plc's Amoco/BP, owed $2.41 million, and fuel distributor Crescent Oil Co., owed $1.6 million. ARIES MARITIME: Gets Commitment from Markin for $145MM Notes ------------------------------------------------------------ Aries Maritime Transport Limited has entered into a commitment letter with Investment Bank of Greece, a member of the Marfin Popular Bank Group, to fully underwrite $145.0 million aggregate principal amount of 7% Senior Unsecured Convertible Notes due 2014 related to the Company's non-binding letter of intent for acquisition of control by Grandunion, Inc. Net proceeds from the Notes are expected to be used primarily to fund vessel acquisitions and partially repay existing indebtedness. On June 24, 2009, Aries Maritime signed a non-binding letter of intent with Grandunion, Inc., a company controlled by Nicholas Fistes and Michael Zolotas, that contemplates, among other things, the acquisition of three Capesize drybulk carriers with an approximate net asset value of $36.0 million in exchange for 15,977,778 newly issued shares of the Company and a change of control of the Company's board of directors. The commitment letter is contingent, among other things, on entering into definitive agreements with Grandunion, Inc., and amendments to Aries' existing credit facility. There is no assurance that the Company will enter into these definitive agreements. Jeff Parry, Chief Executive Officer of Aries Maritime, commented, "We are pleased to have entered into a commitment letter to fully underwrite the $145 million in principal amount of the Notes. This financing represents a critical step forward with respect to our strategic transaction with Grandunion. As we continue to make important progress towards entering definitive agreements, management remains focused on improving the operational performance and financial strength of our Company." Going Concern As reported by the Troubled Company Reporter on July 8, 2009, Aries Maritime said the audit report of the Company's independent registered public accounting firm, PricewaterhouseCoopers S.A., included in the Company's Form 20-F filed with the U.S. Securities and Exchange Commission contains an explanatory paragraph which notes that there are specific factors which raise substantial doubt about the Company's ability to continue as a going concern. These factors include the Company's 2008 and 2007 net losses and a previously announced re-classification of long term debt due to its inability to meet certain financial covenants under its revolving credit facility. Aries Maritime is currently in negotiations with its lenders to obtain waivers for certain financial covenants. The Company has plans in place to improve the performance and financial strength of the Company. These plans primarily relate to the reduction of expenses, possible sales of vessels and the potential addition of assets to enhance future cash earnings. At March 31, 2009, the Company had US$309,426,000 in total assets and US$248,010,000 in total liabilities. About Aries Maritime Aries Maritime Transport Limited (NASDAQ: RAMS) is an international shipping company that owns and operates products tankers and container vessels. The Company's products tanker fleet consists of five MR tankers and four Panamax tankers, all of which are double-hulled. The Company also owns a fleet of two container vessels with a capacity of 2,917 TEU per vessel. Five of the Company's 11 vessels are secured on period charters. Charters for two of the Company's products tanker vessels currently have profit-sharing components. ARVINMERITOR INC: To Supply Drivetrain Components to Chinese Firm ----------------------------------------------------------------- ArvinMeritor, Inc., has signed a strategic partnership with Yutong Group Co., Ltd. to supply drivetrain components for buses and coaches in China. "We are proud to partner with Yutong, the largest producer of high-end buses and coaches in the China market," said Tim Bowes, vice president and managing director of Asia Pacific for ArvinMeritor. "We believe this new business will strengthen the existing partnership we have with Yutong, as well as expand ArvinMeritor's presence in Asia." In addition to supplying premium non-drive and drive axles to Yutong, ArvinMeritor will now manufacture differential carriers and brake calipers at its facility in Wuxi, China, for application on Yutong's axles. The final product will be assembled at Yutong's plant in Zhenzhou, China. Production is expected to begin at the end of 2009. "We will build the carriers and air disc brakes in our Wuxi plant utilizing local suppliers," said Mr. Bowes. "We plan to continue to demonstrate our commitment to the China market by localizing the manufacturing of our products to meet the needs of our domestic customers." As part of this partnership, ArvinMeritor and Yutong will also sell and distribute standard aftermarket service kits for its products. About ArvinMeritor ArvinMeritor, Inc. -- http://www.arvinmeritor.com/-- is a global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. ArvinMeritor common stock is traded on the New York Stock Exchange under the ticker symbol ARM. ArvinMeritor posted a net loss of $47 million for the three months ended March 31, 2009, on sales of $1.11 billion. The Company had $2.87 billion in total assets; $1.29 billion in current liabilities, $1.37 billion in long-term debt, $654 million in retirement benefit obligations, $272 million in other liabilities, and $50 million in minority interests, resulting in $769 million in shareowners' equity. As reported by the Troubled Company Reporter on May 14, 2009, ArvinMeritor Inc. said in a regulatory filing with the Securities and Exchange Commission that it is possible the company may be required to obtain an amendment to the senior secured credit facility and its U.S. securitization facility by the end of its third fiscal quarter to allow additional flexibility under the senior secured debt to EBITDA covenant contained therein and, in the absence of a waiver, to prevent a default under such facilities. If amendments or waivers are not necessary before the end of the third quarter, it is increasingly likely that the company will require them prior to the end of the fiscal year. As reported by the TCR on June 11, 2009, Fitch Ratings kept ArvinMeritor's ratings on Watch Negative (IDR 'CCC'); (Secured 'B') and (Senior unsecured 'CC') as a result of Chrysler's and General Motors' bankruptcies. ASHLEY GLEN: Douglas Weiland Wants to Sell Project to Mercantile ---------------------------------------------------------------- Laura Kinsler at The Tampa Tribune reports that developer Douglas Weiland wants to sell his Ashley Glen LLC project to Mercantile Bank. According to Tribune, Mr. Weiland outlined the proposed sale in his Chapter 11 reorganization plan. Tampa Tribune relates that Mercantile Bank initiated foreclosure proceedings against Mr. Weiland's projects in February 2009 after he missed two mortgage payments. Selling or transferring Ashley Glen's assets to Mercantile Bank would satisfy the debt for all three projects, allowing the developer to maintain control of Summit View and Riverwood Estates, the report states, citing Mr. Weiland's attorney. Mr. Weiland said in court documents that Ashley Glen is worth more than $37 million, based on an appraisal done in May 2009. According to Tampa Tribune, Mr. Weiland has a contract to sell 43 acres at Ashley Glen to an apartment developer for $9 million. Matt Lucas, an attorney representing two creditors in the bankruptcy case, is pessimistic about the deal, Tampa Tribune states. "The last thing anyone wants right now is vacant land in Florida," the report quoted him as saying. Tampa Tribune reports that Mr. Lucas has accused Mr. Weiland and his development company of defrauding his client, WDG Construction, the general contractor at Riverwood Estates. WDG, according to Tampa Tribune, accused Mr. Weiland of illegally transferring millions in bond money from the Riverwood project to his development company to subsidize other failing projects. Tampa Tribune states that Riverwood's community development district issued $14.2 million in tax-free bonds that are in default. Mr. Weiland, Tampa Tribune relates, said that he shifted $4.6 million of bond money to Riverwood LLC. Court documents say that Mr. Weiland also paid $1.5 million in 2007 to Summit View for fill dirt that never was supplied. Every contractor who did work at Riverwood has sued for nonpayment, Tampa Tribune states. Ashley Glen LLC is a 260-acre mixed-use project planned for the northeast intersection of State Road 54 and the Suncoast Parkway in Pasco County. The Company and two affiliates filed for Chapter 11 bankruptcy protection on June 25, 2009 (Bankr. M.D. Fla. Case No. 09-13611). Alberto F Gomez, Jr., Esq., who has an office in Tampa, Florida, assists the Debtors in their restructuring efforts. Ashley Glen listed $10 million to $50 million in assets and $10 million to $50 million in debts. ATLANTIS SYSTEMS: TSX Delists Stock Effective August 11 ------------------------------------------------------- Atlantis Systems Corp. reports that on July 13, 2009, the TSX announced they will be de-listing AIQ stock effective August 11, 2009. This means that as of that date AIQ stock will no longer be traded on the TSX. Atlantis Systems has been under de-listing review since December 2008 and has been able to get two extensions on the strength of the activities that have been undertaken and plans that are in place. "Unfortunately, we have reached the maximum extension period that the TSX allows. This decision has no impact on our operational plans. Management is actively pursuing applications for a listing on an alternative exchange and expects to achieve this prior to the TSX de-listing deadline," the Company says. About Atlantis Systems Atlantis Systems (CA:AIQ) -- http://www.atlantissi.com/-- uses its core capabilities in simulation-aided design and engineering and e-learning, combined with various technology tools, to help customers in military aviation, civil aviation and nuclear energy ensure the feasibility, capability, and effective utilization of their complex assets. BASIN WATER: Receives Delisting Notice from Nasdaq -------------------------------------------------- Basin Water, Inc., received on July 16, 2009, notice from the Nasdaq Stock Market that it has determined that the Company's common stock will be delisted from the Nasdaq Stock Market as a result of the Company's Chapter 11 bankruptcy protection filing. The notification advises the Company that, in accordance with Listing Rules 5100, 5110(b) and IM 5100-1, unless the Company appeals the delisting determination, trading of the Company's common stock will be suspended at the opening of business on July 27, 2009. At that time, unless appealed, the Nasdaq Stock Market will file a Form 25-NSE with the Securities and Exchange Commission, which will remove the Company's securities from listing and registration on the Nasdaq Stock Market. The notification listed the Company's bankruptcy filing as the primary reason for the determination to delist the Company's common stock. The Company does not intend to request an appeal of this determination and therefore trading of the Company's common stock will be suspended at the opening of business on July 27, 2009. On July 16, 2009, the Company initiated voluntary proceedings under Chapter 11 to pursue a sale of the business. The Company has entered into an asset purchase or "stalking horse" agreement with an affiliate of Amplio group to buy the Company's assets, subject to an auction and Bankruptcy Court approval. About Basin Water Based in Rancho Cucamonga, California, Basin Water, Inc. -- http://www.basinwater.com/-- designs, builds and implements systems for the treatment of contaminated groundwater, industrial process water and air streams from municipal and industrial sources. It provides reliable sources of drinking water for many communities, and the ability to comply with environmental standards and recover valuable resources from process and wastewater streams. Basin Water has developed proprietary, scalable ion-exchange, biological and other treatment systems that effectively process contaminated water and air in an efficient, flexible and cost effective manner. BB&T CORPORATION: Fitch Cuts Individual Rating to 'B' ----------------------------------------------------- Fitch Ratings has downgraded the long-term and short-term Issuer Default Ratings of BB&T Corporation and its bank subsidiary, Branch Banking & Trust Company, to 'A+' from 'AA-' and to 'F1' from 'F1+', respectively. Fitch has removed BB&T's ratings from Rating Watch Negative, which they were placed on May 15, 2009, as part of Fitch's review of the major U.S. banks, which commenced on May 7, 2009. The Rating Outlook is Negative. A complete list of ratings follows at the end of this release. The downgrade reflects that BB&T's financial profile will continue to be challenged by the current credit environment. Fitch expects that the deteriorating economic environment will increase credit issues across various portions of BB&T's consumer and commercial loan portfolios, many that have performed well to date. In particular, the company's commercial real estate portfolio, centered in the southeastern U.S., which has experienced minimal credit issues, is expected to generate higher loss rates in the future. Further, it is anticipated that BB&T's residential acquisition, development, and construction portfolio, as well as its mortgage and home equity portfolios will experience increased pressure, as stress in the housing market becomes more prevalent across the company's footprint. Given Fitch's expectation of continued credit deterioration, asset quality and earnings performance will likely trend below historical norms. As such, Fitch has also downgraded the company's Individual rating to 'B'. Fitch believes the 'B' Individual rating better reflects BB&T's standalone financial profile, which denotes a bank with strong fundamentals and a sound capital cushion, but earnings and credit volatility is moderately higher than what is expected of those companies with Individual ratings of 'A/B' or higher. While Fitch expects the company's credit and performance metrics to trend lower, BB&T will likely continue to compare well to many of its peers. Further, the company's current ratings are supported by the strength of the company's significant regional franchise and its sustained credit fundamentals despite the difficult credit environment. BB&T's liquidity position is good and its sizeable branch network provides a healthy source of core funding. The company's capital position is considered sound and was augmented by the recently completed common stock issuance of $1.7 billion, which allowed BB&T to repay its $3.1 billion in preferred stock issued to the U.S. Treasury as part of its capital purchase program. BB&T was not required to raise capital, as the Federal Reserve's Supervisory Capital Assessment Program stress test indicated that the company had a sufficient capital buffer under a more adverse economic scenario. The Negative Outlook considers the prospect that the current negative trends in asset quality and earnings performance could materially worsen given Fitch's expectation of higher loss rates across various loan categories, particularly commercial real estate. Should BB&T's credit quality deteriorate substantially, this could lead to a further downgrade of the company's ratings. That said, BB&T's conservative underwriting and highly granular loan portfolio should contain credit deterioration, with problem assets and credit losses expected to remain at manageable levels. Furthermore, while Fitch has concerns about the company's real estate exposure, BB&T's combined residential ADC and commercial real estate portfolios, at approximately 20% of the loan book, are not substantially larger than its peers. Fitch has also widened the notching on BB&T's outstanding hybrid equity. As discussed in Fitch's press release, 'Expectations for Higher Loan Losses Driving U.S. Bank Ratings Review', dated May 7, 2009, an analysis of the notching between IDRs and hybrid equity instruments has been underway. Considering the deeply subordinated nature of these instruments and their loss absorption characteristics, as well as the existence of more senior subordinated obligations, Fitch believes it was prudent to widen the notching on BB&T's hybrid instruments. Fitch has already taken similar action on a number of other issuers. BB&T is among the largest banking companies in the U.S. with over $140 billion in assets and 1,500 branches, spanning the Southeast and Mid-Atlantic States. The company's operations also include a sizeable insurance agency franchise, as well as an investment banking company and a national finance company. Fitch has downgraded these ratings: BB&T Corporation -- Long-term IDR to 'A+' from 'AA-'; Outlook Negative; -- Short-term IDR to 'F1' from 'F1+'; -- Senior debt to 'A+' from 'AA-'; -- Subordinated debt to 'A' from 'A+'; -- Short-term debt to 'F1' from 'F1+'; -- Individual to 'B' from 'A/B'. Branch Banking & Trust Company -- Long-term IDR to 'A+' from 'AA-'; Outlook Negative; -- Short-term IDR to 'F1' from 'F1+'; -- Subordinated debt to 'A' from 'A+'; -- Short-term debt to 'F1' from 'F1+'; -- Long-term deposits to 'AA-' from 'AA'; -- Individual to 'B' from 'A/B'. BB&T Financial, FSB -- Long-term IDR to 'A+' from 'AA-'; Outlook Negative; -- Short-term IDR to 'F1' from 'F1+'; -- Individual to 'B' from 'A/B'. BB&T Capital Trust I BB&T Capital Trust II BB&T Capital Trust IV BB&T Capital Trust V -- Preferred Stock to 'A-' from 'A+'. Fitch has affirmed these ratings: BB&T Corporation -- Support at '5'; -- Support Floor at 'NF'. Branch Banking & Trust Company -- Short-Term deposit at 'F1+'; -- Support at '4'; -- Support Floor at 'B'. BB&T Financial, FSB -- Support at '4'; -- Support Floor at 'B'. BEARD CO: Files Documents Presented at Shareholders' Meeting ------------------------------------------------------------ At its Annual Meeting of Shareholders held on July 9, 2009, The Beard Company made a Power Point presentation. Included therein were two slides depicting the recent significant improvement in the Company's financial condition. The first slide contained comparative balance sheets showing the change in the Company's condition between December 31, 2008, and May 31, 2009. During the period (i) cash and cash equivalents increased $2,390,000; (ii) net property, plant and equipment decreased by only $242,000, reflecting the sale of the Company's remaining interest in the McElmo Dome CO2 field which was sold for $5,200,000; (iii) total debt decreased $1,247,000; and (iv) shareholders' equity (deficiency) increased $4,236,000, from $(3,012.000) to $1,224,000. A full-text copy of the slide is available at no charge at: http://ResearchArchives.com/t/s?3f96 The second slide included selected financial data which reflects the strong improvement in certain elements of the Company's financial performance between December 31, 2007, and May 31, 2009. Of particular note during the period were: (i) the improved earnings trend; (ii) the $10,409,000 increase in shareholders' equity; (iii) the $6,500,000 reduction in total debt; (iv) the 951% increase in Market Capitalization; and (v) the $5,280,000 increase in working capital. A full-text copy of the slide is available at no charge at http://ResearchArchives.com/t/s?3f97 In response to several questions at the Shareholders' Meeting concerning the current activities of Geohedral, LLC, the Chairman read a prepared statement. In his remarks, the Chairman noted that Geohedral is in the middle of a $1,800,000 cash call from its Members to give it the necessary funds to move forward on its mineral exploration and development project in southeastern Alaska. A full-text copy of his statement is available at no charge at: http://ResearchArchives.com/t/s?3f98 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. BEARINGPOINT INC: Signs Deal to Sell EMEA Practice for US$69MM -------------------------------------------------------------- BearingPoint, Inc., has entered into a definitive agreement with its European management team for the sale of the Company's Europe, Middle East and Africa practice for an aggregate purchase price of approximately US$69 million in total consideration. Under the terms of this agreement, BearingPoint's EMEA practice will become a legally independent entity owned by EMEA management and operated as one single partnership. Peter Mockler, executive vice president of BearingPoint EMEA, and his management team will remain in place, providing leadership stability and continuity that will aid in the successful transition of the practice through this process. In addition, the practice will continue to operate under the BearingPoint brand and will benefit from existing brand equity and awareness. "We are confident that this is the best path forward for our clients and employees," said Peter Mockler. "The EMEA leadership team and I are dedicated to the success of the practice and remain steadfast in our commitment to serving our clients." This sale is expected to be completed on or before August 31, 2009, and is subject to the satisfaction of certain conditions and bankruptcy court approval. There can be no assurance that the proposed sale will be approved by the Court or that the transaction will be completed. Asset Sales As reported by the Troubled Company Reporter, contemporaneous with their bankruptcy petitions, the Debtors filed a pre-packaged Joint Plan of Reorganization under Chapter 11 to implement the terms of their agreement with the secured lenders. BearingPoint intended a traditional reorganization by proposing to issue new stock to unsecured creditors and holders of $690 million in subordinated notes, pursuant to a Chapter 11 plan. The Debtors, however, changed course and sold off their units. PricewaterhouseCoopers LLP has purchased majority of BearingPoint's North American Commercial Services Practice, Bearingpoint's equity interests in a China unit for $25 million. Deloitte LLP bought BearingPoint's North American Public Services business for $350 million. They have also sought permission to sell their equity interests in BearingPoint, S.A., a subsidiary in Brazil pursuant to a Stock Purchase Agreement dated July 9, 2009, with Computer Sciences Corporation and CSC Brazil Holdings LLC. BearingPoint's Brazilian operations specialize in consulting and systems integration services. CSC has offered $7.9 million for the asset. The Debtors are also seeking to sell to Eclat Consulting, LLC, substantially all of the remaining contracts related to their Public Service Group assets that were not included in the sale to Deloitte LLP. Eclat has offered to purchase the legacy contracts for $15.1 million and to assume certain of BE's liabilities. About BearingPoint Inc. BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP - - has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next- generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 protection on February 18, 2009 (Bankr. S.D.N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal & Manges LLP, in Houston; Marcia J. Goldstein, Esq., Ronit J. Berkovich, Esq., and Jose R. Alcantar, Esq., at Weil Gotshal & Manges LLP, in New York, represent the Debtors as restructuring counsel. AlixPartners, LLP, is the Debtors' restructuring advisors. Greenhill & Co., LLC, is the Debtor's financial advisor & investment banker. Jeffrey S. Sabin, Esq., at Bingham McCutchen LLP represents the Creditors' Committee as counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of September 30, 2008. BERNARD MADOFF: Windels Hiring to Pursue Avoidance Claims Approved ------------------------------------------------------------------ Irving H. Picard, the trustee for the liquidation of the business of Bernard L. Madoff Investment Securities LLC, obtained permission from the U.S. Bankruptcy Court for the Southern District of New York 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. BIOPURE CORP: Won't Appeal Nasdaq Delisting ------------------------------------------- Biopure Corporation has received notice from The Nasdaq Stock Market, by letter dated July 17, 2009, that its common stock would be delisted from Nasdaq. The notice stated that because of concerns raised by the Company's filing for protection under Chapter 11 of the Bankruptcy Code, trading would be suspended at the opening of business on July 28, 2009. The Company does not intend to appeal this decision. As reported by the Troubled Company Reporter, Biopure filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Massachusetts. Biopure will continue to manage and operate its businesses and assets during the pendency of the bankruptcy case, subject to the supervision of the Bankruptcy Court. In connection with the filing Biopure entered into an agreement with OPK Biotech LLC for the sale of substantially all of its assets. The sale is subject to customary closing conditions, approval of the Bankruptcy Court and the conduct of a Bankruptcy Court supervised auction process in which Biopure will seek competing bids to achieve the highest price possible for its assets. Biopure Corporation Based in Cambridge, Massachusetts, Biopure Corporation -- http://www.biopure.com/-- develops and markets pharmaceuticals, called oxygen therapeutics, that are intravenously administered to deliver oxygen to the body's tissues. BRAVO HEALTH: S&P Gives Positive Outlook; Affirms 'B' Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said it revised its outlook on Bravo Health Inc. to positive from stable. Standard & Poor's also said that it affirmed its 'B' counterparty credit and senior secured debt ratings on Bravo. "We revised the outlook to positive because of S&P's expectation that in the near term, the company will be able to continue its strong earnings trend and grow statutory capital while reducing its financial leverage," said Standard & Poor's credit analyst Deep Banerjee. The ratings on Bravo reflect its concentrated geographic and product profile as well as its high financial leverage. Favorable offsetting factors include a good earnings profile, a good liquidity profile, and senior management expertise. Bravo has focused on growing its scale via organic growth and acquisitions. At the same time, Bravo has maintained its overall medical loss ratio in a tight band, which has resulted in good operating margins. In full-year 2009, S&P expects that Bravo will report about $1 billion-$1.2 billion of premiums, EBITDA of about $80 million- $85 million, and an EBITDA margin (excluding realized gains and losses) of approximately 6%-7%. Membership likely will reach 295,000 by year-end 2009, with Medicare PDP membership driving this growth and constituting about 225,000 of the total. S&P expects that low federal reimbursement rates for Medicare will weaken earnings beginning in 2010, but Bravo might be able to offset this decline somewhat through potential cost savings resulting from several ongoing health care and administrative cost initiatives. Bravo's statutory capital likely will grow, with the company maintaining a consolidated health risk-based capital ratio of more than 300% (authorized control level). S&P expects that its debt leverage will decrease to about 40%, with EBITDA interest coverage remaining above 5x at year-end 2009. "We could upgrade Bravo by one notch if the company's favorable financial profile continues over the next 12 months," said Mr. Banerjee. "Strong revenue and earnings trend, an improving capital position, and lower financial leverage would demonstrate this." Conversely, if the company were to experience unexpected deterioration in revenue or earnings, be materially affected by Medicare reimbursement changes in 2010, or have a significant decline in its statutory capital, S&P likely would take a negative rating action, such as revising the outlook back to stable. CALTEX HOLDINGS: Can Use Cash Collateral of NewStar Until Aug 8 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas has granted the Chapter 11 trustee appointed in CalTex Holdings, LP's bankruptcy case, authorization to use cash collateral of NewStar Financial, Inc. through the week ending August 8, 2009, to pay actual and necessary expenses in accordance with a budget. As of the petition date, NewStar asserts a secured debt obligation of $21,900,000. This obligation is secured by real estate, consisting of buildings, roads, electrical lines, railway spurs and access, highway access and other improvements (including about 200 heavy industrial manufacturing machines and related equipment associated with the Debtor's former paper production process as well as both ferrous and non-ferrous metals), which the Debtor says is valued at not less than $55,000,000. A further hearing regarding the Chapter 11 trustee's continued use of cash collateral will be held on August 10, 2009, at 10:30 a.m. CalTex Holdings LP is the owner of a 992-acre industrial property in Houston. CalTex Holdings LP was formed on December 12, 2006. Its limited partners were Sierra Mesa LLC and Paseo Group LLC. The general partner is CalTex Holdings GP, Inc., which owns a 1% limited partner interest. Paseo owns 75% of the stock of GP, and Sierra owns 25% of the stock of GP. CalTex filed for Chapter 11 protection on March 20, 2009 (Bankr. S.D. Tex. Case No. 09-31875). H. Rey Stroube, III, Esq., and S. Margie Venus, Esq., at Strong Pipkin Bissell & Ledyard, L.L.P., represent the Debtor as counsel. The Debtor listed assets of $50 million to $100 million and debts of $10 million to $50 million. CALTEX HOLDINGS: Files Schedules of Assets and Liabilities ---------------------------------------------------------- CalTex Holdings, LP, has filed with the U.S. Bankruptcy Court for the Southern District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $35,300,000 B. Personal Property (as amended) $31,493,516 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $29,758,890 E. Creditors Holding Unsecured Priority Claims $648,742 F. Creditors Holding Unsecured Non-priority Claims $1,149,697 ----------- ----------- TOTAL $66,793,516 $31,557,329 A copy of CalTex Holdings' schedule of assets and liabilities is available at http://bankrupt.com/misc/caltexholdings.SAL.pdf A copy of CalTex Holdings amended Schedule B is available for free at: http://bankrupt.com/misc/caltexholdingsamendedscheduleB.pdf CalTex Holdings LP is the owner of a 992-acre industrial property in Houston. CalTex Holdings LP was formed on December 12, 2006. Its limited partners were Sierra Mesa LLC and Paseo Group LLC. The general partner is CalTex Holdings GP, Inc., which owns a 1% limited partner interest. Paseo owns 75% of the stock of GP, and Sierra owns 25% of the stock of GP. CalTex filed for Chapter 11 protection on March 20, 2009 (Bankr. S.D. Tex. Case No. 09-31875). H. Rey Stroube, III, Esq., and S. Margie Venus, Esq., at Strong Pipkin Bissell & Ledyard, L.L.P., represent the Debtor as counsel. The Debtor listed assets of $50 million to $100 million and debts of $10 million to $50 million. CAPITAL GROWTH: ACF Forbearance Period Expired July 17 ------------------------------------------------------ Capital Growth Systems, Inc., reports that on July 9, 2009, the Company and its affiliates entered into a Forbearance Agreement dated as of July 7, with ACF CGS, L.L.C. ACF CGS agreed to forbear from exercising its rights with respect to the defaults specified in the agreement until July 17, 2009. The Company remains mum on the matter. Capital Growth on May 22 received from ACF CGS, as agent, a formal notification of certain covenant violations that occurred and continue to exist under its Loan Agreement dated November 19, 2008, with the Agent, and lender parties. The Company and its subsidiaries Global Capacity Group, Inc., CentrePath, Inc., 20/20 Technologies, Inc., 20/20 Technologies I, LLC, Nexvu Technologies, LLC, FNS 2007, Inc., Capital Growth Acquisition, Inc., Vanco Direct USA, LLC, to be known as Global Capacity Direct, LLC, and Magenta netLogic Limited, are borrowers under the Loan Agreement. The Borrowers have timely paid all debt service obligations under the Loan Agreement. Pursuant to the Forbearance Agreement, ACF CGS agreed to forbear from exercising its rights with respect to the defaults, provided there were no further defaults by any of the Borrowers during the interim period and that they complied with certain enumerated affirmative covenants, which included obligations: (i) engagement of a mutually acceptable consultant to work with the Borrowers with respect to financial advice and the preparation of certain designated reports; (ii) assist in the design and implementation of a vendor payment plan to reach settlements and deferrals with certain of the Borrowers' vendors; (iii) provide additional requested information to the Agent; (iv) not make payments in excess of $50,000 to any single vendor or payments outside of the ordinary course of business absent consent of the Agent; (v) enter into a financing transaction requiring the infusion of additional capital to the Company on terms acceptable to the Agent by July 15, 2009; and (vi) provide a cash payment of $1,000,000 to be held by the Agent (which payment has been made) and provided that the conditions to the new financing have been timely met and there are no other defaults with respect to the Forbearance Agreement, the Agent has agreed to return the cash payment to the Company -- which would continue as a portion of the proceeds of the loan funded under the Loan Agreement. The Borrowers have agreed that the Forbearance Agreement constitutes an additional "Loan Document" under the Loan Agreement. The Forbearance Agreement contemplates that from May 1, 2009, until the date that the Agent either waives all of the specified defaults or the parties otherwise agree, the Loan will continue to bear interest at the default rate of interest as specified in the Loan Agreement. It also provides that, as of the Effective Date, if certain specified conditions are met that the percentage of the collection that the Borrowers receive (if any) with respect to the account receivable with British Telecom, and to be applied toward pay down of obligations of the Borrowers under the Loan Agreement, shall be increased to 75%. The agreement also contains an acknowledgement that the $42,500 amendment fee paid by the Borrowers previously shall be in consideration for the forbearance of the enumerated defaults through the Effective Date, and that the Borrowers remain obligated with respect to all reasonable fees and disbursements of the Agent's counsel in connection with the Forbearance Agreement or other related matters. OTC Delisting An OTCBB Delinquency Notification dated April 16, 2009, stated that the Company was delinquent with respect to the filing of its Annual Report on Form 10-K for the year ended December 31, 2008 and that, absent timely curing of the delinquency, securities of the Company would not be eligible for quotation on the OTC Bulletin Board. On May 13, 2009, the Company filed a notice of appeal of the outside date for the delisting qualification with the Financial Industry Regulatory Authority. An oral hearing was held by the Company with FINRA as to the listing eligibility matter. On June 26, 2009, the Company received the notice of decision from the hearing officer that the Company's appeal was denied. The decision was not called for review by the FINRA National Adjudicatory Council pursuant to Rule 9760 and therefore the decision is effective upon service and constitutes the final action of FINRA with respect to the proceeding. As a result of the determination, the Company's Common Stock is currently ineligible for quotation on the Over the Counter Bulletin Board. The Company has retained independent registered public accountants to complete the audit of its financial statements for the year ended December 31, 2008, as well as to review its interim financial statements for the quarter ended March 31, 2009. On July 2, the Company said it intends, following completion of the audit and review, to file its Form 10-K for the year ended December 31, 2008, and its Form 10-Q for the quarter ended March 31, 2009, and to apply for reinstatement of quotation of its Common Stock on the Over the Counter Bulletin Board promptly following such filings. During the period from delisting until reinstatement -- if reinstatement is effected -- it is expected that the Company's Common Stock will be subject to quotation by broker/dealers electing to make a market in the Pink Sheets. There can be no assurances as to when, if at all, the Company's securities will be reinstated for trading on the Over the Counter Bulletin Board. About Capital Growth Systems Based in Chicago, Illinois, Capital Growth Systems Inc. (OTC BB: CGSY) doing business as Global Capacity Group Inc., delivers telecom integration services to systems integrators, telecommunications companies, and enterprise customers worldwide. It provides an integrated supply chain management system that streamlines and accelerates the process of designing, building, and managing customized communications networks. The Company also provides connectivity services for network integrators who bundle telecommunication solutions to enterprise customers; offers global pricing and quotation software and management services for data communications; and assists customers to reduce connectivity costs and attain understanding and control of their deployed communications network. CCS MEDICAL: Court Extends Schedules Filing Until September 8 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware to extended until September 8, 2009, CCS Medical, Inc., and its debtor- affiliates' time to file their schedules of assets and liabilities and statements of financial affairs. Founded in 1994, CCS Medical, Inc. -- http://www.ccsmed.com/-- has become a leading provider of medical supplies. CCS Medical assists patients that need diabetes test strips, insulin pumps, urological supplies, ostomy supplies, advanced wound care dressings and prescription drugs. Clear Water, Florida-based CCS Medical specializes in providing a convenient way for patients to receive supplies for their chronic illnesses in a manner that saves them time and money. CCS Medical, along with its affiliates, filed for Chapter 11 on July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of the filing, CCS Medical said that it had assets of $100 million to $500 million against debts of $500 million to $1 billion. Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the Debtors. Goldman, Sachs & Co., serves as investment banker and Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring advisor. Epiq Bankruptcy Solutions LLC is claims agent. CCS MEDICAL: Proposes Young Conaway as Bankruptcy Co-Counsel ------------------------------------------------------------ CCS Medical, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Young Conaway Stargatt & Taylor, LLP, as co-counsel. Young Conaway will, among other things: -- provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business, management of their properties and sale of their assets; -- prepare and pursue confirmation of a plan and approval of a disclosure statement; and -- prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports and other legal papers. Young Conaway will work with other professionals chosen to serve in the Chapter 11 cases to ensure that there is no unnecessary duplication of effort or cost. The Debtors have selected (a) Willkie Farr & Gallagher LLP as bankruptcy co-counsel; (a) Goldman, Sachs & Co. as financial advisor and investment banker; (c) Latham & Watkins, LLP; (d) Alvarez and Marsal North America, LLC as restructuring advisors; and (e) Epiq Bankruptcy Solutions as claims and noticing agent. The hourly rates of Young Conaway's personnel are: Robert S. Brady, partner $610 Mathew B. Lunn, associate $375 Kara Hammond Coyle, associate $330 Ryan M. Bartley, associate $260 Dennis Mason, paralegal $210 Mr. Brady tells the Court that Young Conaway received a $75,000 retainer in connection with the planning and preparation of initial documents and its proposed postpetition representation of the Debtors. In addition, Young Conaway received a $20,816 payment on account of fees and expenses through June 13, 2009. A part of the retainer was applied to the outstanding balances existing as of the petition date. The remainder will constitute a general retainer for postpetition services and expenses. Mr. Brady assures the Court that Young Conaway is a "disinterested person" as that term is defined in Section 101(14) of the bankruptcy Code. Mr. Brady can be reached at: Young, Conaway, Stargatt & Taylor The Brandywine Building, 17th Floor 1000 West Street PO Box 391 Wilmington, DE 19899 Tel: (302) 571-6600 About CCS Medical Founded in 1994, CCS Medical, Inc. -- http://www.ccsmed.com/-- has become a leading provider of medical supplies. CCS Medical assists patients that need diabetes test strips, insulin pumps, urological supplies, ostomy supplies, advanced wound care dressings and prescription drugs. Clear Water, Florida-based CCS Medical specializes in providing a convenient way for patients to receive supplies for their chronic illnesses in a manner that saves them time and money. CCS Medical, along with its affiliates, filed for Chapter 11 on July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of the filing, CCS Medical said that it had assets of $100 million to $500 million against debts of $500 million to $1 billion. Willkie Farr & Gallagher LLP serves as co-counsel to the Debtors. Goldman, Sachs & Co., serves as investment banker and Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring advisor. Epiq Bankruptcy Solutions LLC is claims agent. CCS MEDICAL: U.S. Trustee Sets Meeting of Creditors for August 21 ----------------------------------------------------------------- Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3, will convene a meeting of creditors in CCS Medical, Inc., and its debtor-affiliates' Chapter 11 cases on Aug. 21, 2009, at 10:00 a.m. The meeting will be held at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, Wilmington, Delaware. 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 office of the Debtor under oath about the Company's financial affairs and operations that would be of interest to the general body of creditors. Founded in 1994, CCS Medical, Inc. -- http://www.ccsmed.com/-- has become a leading provider of medical supplies. CCS Medical assists patients that need diabetes test strips, insulin pumps, urological supplies, ostomy supplies, advanced wound care dressings and prescription drugs. Clear Water, Florida-based CCS Medical specializes in providing a convenient way for patients to receive supplies for their chronic illnesses in a manner that saves them time and money. CCS Medical, along with its affiliates, filed for Chapter 11 on July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of the filing, CCS Medical said that it had assets of $100 million to $500 million against debts of $500 million to $1 billion. Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the Debtors. Goldman, Sachs & Co., serves as investment banker and Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring advisor. Epiq Bankruptcy Solutions LLC is claims agent. CCS MEDICAL: Court Approves Epiq Bankruptcy as Claims Agent ----------------------------------------------------------- The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware authorized CCS Medical Inc. and its debtor- affiliates to employ Epiq Bankruptcy Solution LLC as their notice, claims and balloting agent. The firm is expected to (i) perform certain noticing functions; (ii) assist the Debtors in analyzing and reconciling proofs of claim filed against the Debtors' estate; and (iii) assist the Debtors with balloting in connection with any proposed Chapter 11 plan. The firm's current hourly rates are: Designation Hourly Rate ----------- ----------- Senior Consultant $295 Senior Case Manager $225-$275 Case Manager (Level 2) $185-$220 IT Programming Consultant $140-$190 Case Manager (Level 1) $125-$175 Clerk $40-$60 Daniel C. McElhinney, executive director of the firm, assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About CCS Medical Founded in 1994, CCS Medical -- http://www.ccsmed.com/-- has become a leading provider of medical supplies. CCS Medical assists patients that need diabetes test strips, insulin pumps, urological supplies, ostomy supplies, advanced wound care dressings and prescription drugs. Clear Water, Florida-based CCS Medical specializes in providing a convenient way for patients to receive supplies for their chronic illnesses in a manner that saves them time and money. CCS Medical, along with its affiliates, filed for Chapter 11 on July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of the filing, CCS Medical said that it had assets of $100 million to $500 million against debts of $500 million to $1 billion. Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the Debtors. Goldman, Sachs & Co., serves as investment banker and Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring advisor. Epiq Bankruptcy Solutions LLC is claims agent. CCS MEDICAL: Plan Offers "Gift" for Unsecured Creditors ------------------------------------------------------- CCS Medical Inc. and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware a proposed joint Chapter 11 plan of reorganization, which provides for potential recovery to unsecured creditors in the form of cash or warrant, based on a "gift" provided by first lien lenders. According to the disclosure statement, the Plan provides for the restructuring of the Debtors' liabilities in a manner designed to maximize recovery to all stakeholders and to enhance the finance viability of the reorganized Debtors. In addition, the Plan provides for balance sheet restructuring that swaps the Debtors' current debt evidence by the first lien lender claims for $200 million in new notes and 100% of the new equity. Other secured and certain unsecured creditors will receive cash or warrants, as applicable. Furthermore, based on the valuation, it is not expected that there will be any recovery available for classes other than administrative expense claims, U.S. Trustee fees, fee claims, priority claims, priority non-tax claims, debtor-in-possession claims and first lien lender claims. However, the first lien lenders have agreed to provide a portion of their recovery on account of the first lien lender claims in the form of warrants and cash as a "gift" to certain holders of allowed second lien lender claims, allowed trade claims and allowed general unsecured claims. All of the Debtors' exciting commonstock and preferred shares will be cancelled and the holders will not be entitled to any recovery under the plan. The restructuring transactions contemplated by the Plan will substantially de-lever the Debtors and provide more needed liquidity. In connection with preparing the estimation of recoveries, the Debtors assumed that their ongoing enterprises value for purposes of the Plan is between $230 million and $286 million, based on the valuation prepared by Goldman Sachs $ Co. LLC. Under the Plan, holders of first lien lender claims, totalling $350 million, are expected to recover between 66% and 82%. Estimated recovery of holders of second lien lender claim, trade claim, and general unsecured claims has not been determined. A hearing is set for Aug. 20, 2009, at 10:30 a.m., to consider the adequacy of the Debtors' disclosure statement. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?3f9e A full-text copy of the Chapter 11 Plan is available for free at: http://ResearchArchives.com/t/s?3f9f About CCS Medical Founded in 1994, CCS Medical -- http://www.ccsmed.com/-- has become a leading provider of medical supplies. CCS Medical assists patients that need diabetes test strips, insulin pumps, urological supplies, ostomy supplies, advanced wound care dressings and prescription drugs. Clear Water, Florida-based CCS Medical specializes in providing a convenient way for patients to receive supplies for their chronic illnesses in a manner that saves them time and money. CCS Medical, along with its affiliates, filed for Chapter 11 on July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of the filing, CCS Medical said that it had assets of $100 million to $500 million against debts of $500 million to $1 billion. Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the Debtors. Goldman, Sachs & Co., serves as investment banker and Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring advisor. Epiq Bankruptcy Solutions LLC is claims agent. CCS MEDICAL: Taps Alvarez & Marsal as Restructuring Advisor ----------------------------------------------------------- CCS Mecial Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Alvarez & Marsal Healthcare Industry Group LLC as their restructuring advisor. The firm will assist the Debtors with respect to the management of their Chapter 11 restructuring process including the development of business and financial analyses and restructuring negotiations between the Debtors, and their advisors and creditors. Guy Sansone, managing director of the firm, will be responsible for the overall engagement. Mr. Sansone will charge $750 per hour for this engagement and the firm's other professionals will bill: Designation Hourly Rate ----------- ----------- Senior Directors $500-$575 Directors $425-$500 Senior Associates $325-$375 Associates $250-$325 Analysts $150-$225 The Debtors assure the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About CCS Medical Founded in 1994, CCS Medical -- http://www.ccsmed.com/-- has become a leading provider of medical supplies. CCS Medical assists patients that need diabetes test strips, insulin pumps, urological supplies, ostomy supplies, advanced wound care dressings and prescription drugs. Clear Water, Florida-based CCS Medical specializes in providing a convenient way for patients to receive supplies for their chronic illnesses in a manner that saves them time and money. CCS Medical, along with its affiliates, filed for Chapter 11 on July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of the filing, CCS Medical said that it had assets of $100 million to $500 million against debts of $500 million to $1 billion. Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the Debtors. Goldman, Sachs & Co., serves as investment banker and Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring advisor. Epiq Bankruptcy Solutions LLC is claims agent. CCS MEDICAL: Wants to Hire Willkie Farr as Bankruptcy Co-Counsel ---------------------------------------------------------------- CCS Medical, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Willkie Farr & Gallagher LLP as co-counsel. WF&G will, among other things: a) provide the Debtors with advice, represent the Debtors, and prepare all necessary documents on behalf of the Debtors, in the areas of bankruptcy law, corporate finance, employee benefits, and tax, well as with regard to commercial litigation, debt restructuring and asset dispositions; b) take all necessary actions to protect and preserve each of the Debtors' estates during the Chapter 11 cases, including the prosecution of actions by the Debtors, the defense of actions commenced against the Debtors, negotiations concerning litigations in which the Debtors are involved and the objections to claims filed against the estates; and c) prepare, on behalf of the debtors-in-possession, all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the Chapter 11 cases. WF&G will work closely with other professionals working in the Chapter 11 cases to avoid unnecessary duplication of efforts or costs. Michael J. Kelly, a member of WF&G, tells the Court that the hourly rates of WF&G's personnel are: Attorneys $290 - $995 Paralegals $105 - $260 Mr. Kelly adds that WF&G received retainers and payments totaling $1,674,951 for services performed prepetition. If any amounts, after application of all retainers, are owed to WF&G as of the petition date, WF&G will waive any claim relating thereto. Mr. Kelly assures the Court that WF&G is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Kelly can be reached at: Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, N.Y. 10019-6099 Tel: (212) 728-8000 Fax: (212) 728-8111 About CCS Medical Founded in 1994, CCS Medical, Inc. -- http://www.ccsmed.com/-- has become a leading provider of medical supplies. CCS Medical assists patients that need diabetes test strips, insulin pumps, urological supplies, ostomy supplies, advanced wound care dressings and prescription drugs. Clear Water, Florida-based CCS Medical specializes in providing a convenient way for patients to receive supplies for their chronic illnesses in a manner that saves them time and money. CCS Medical, along with its affiliates, filed for Chapter 11 on July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of the filing, CCS Medical said that it had assets of $100 million to $500 million against debts of $500 million to $1 billion. Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the Debtors. Goldman, Sachs & Co., serves as investment banker and Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring advisor. Epiq Bankruptcy Solutions LLC is claims agent. CHARTER COMM: Asks for Oct. 23 to Decide on Leases -------------------------------------------------- Section 365(d)(4) of the Bankruptcy Code provides that a debtor's unexpired lease of nonresidential real property will be deemed rejected if the trustee does not assume or reject the unexpired lease by the earlier of (i) the date that is 120 days after the order for the relief, or (ii) the date of entry of an order confirming a plan. Section 365(d)(4) provides, however, that the court may extend the period prior to the expiration of the 120-day period for 90 days on the debtor's motion for cause. Accordingly, the Debtors ask the Court, pursuant to Section 365(d)(4), to extend the time within which they may assume or reject unexpired leases of nonresidential real property through and including the earlier of: (a) October 23, 2009, which is 90 days after July 25, 2009, which in turn is the date that is 120 days from the Petition Date; or (b) the date of the entry of an order confirming a plan of reorganization in the bankruptcy cases. The Debtors further ask that the relief requested be without prejudice to their right to seek further extensions of the Lease Decision Period pursuant to Section 365(d)(4)(B)(ii) of the Bankruptcy Code. On the Petition Date, the Debtors filed their plan of reorganization, which provides that all unexpired leases of nonresidential real property, unless otherwise expressly rejected, will be assumed as of the effective date of the Plan, relates Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York. The Court subsequently entered an order authorizing and approving expedited procedures for the rejection of executory contracts and unexpired leases of personal and nonresidential real property, and authorizing the Debtors to reject certain unexpired leases of nonresidential real property. As of July 10, 2009, the Debtors were parties to over 850 leases of nonresidential real property that have not already been the subject of a notice of assumption or rejection. The Unexpired Leases, which include office, warehouse and other various leases, are critical to the operation of the Debtors' business and, in particular, the continued operation of their facilities, Mr. Cieri discloses. Significantly, he notes, certain of the Debtors' facilities and offices, from which the Debtors conduct key aspects of their business operations, are located on premises subject to certain of the Unexpired Leases. Accordingly, he asserts, the Unexpired Leases are valuable assets of the Debtors' bankruptcy estates and are integral to the continued operation of their businesses. The relief sought is precautionary, Mr. Cieri explains. The Debtors are seeking confirmation of their Plan very soon after the request will be heard, which confirmation will lead to the proposed assumption of the vast majority of the Debtors' Unexpired Leases on the Effective Date. If, however, confirmation of the Plan were delayed or even denied, the Debtors would need additional time to move to assume those Unexpired Leases that are valuable to the estates, and revisit their prior determinations, in light of changed circumstances, whether certain Unexpired Leases should be rejected, he points out. Mr. Cieri says that many of the Debtor entities are parties to the Unexpired Leases and all of the Debtors have been involved in numerous complex matters critical to their reorganization since the Petition Date. He argues that an improvident or premature rejection of the Unexpired Leases, without an extension to assume those Unexpired Leases proposed to be assumed by the Plan, would significantly harm the Debtors' estates. 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. 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). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 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. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: Creditors Proposes Huron as Financial Advisor ----------------------------------------------------------- The Official Committee of Unsecured Creditors in Charter Communications Inc.'s cases seeks the Bankruptcy Court's permission to retain Huron Consulting Services, LLC, as its financial advisor, nunc pro tunc to April 20, 2009. Huron's services are necessary to enable the Creditors Committee to assess and monitor the efforts of the Debtors and their professional advisors to maximize the value of the bankruptcy estates, and to reorganize successfully, says Marrien Neilson, senior vice president and trust officer of Bank of Oklahoma, a member of the Creditors Committee. As financial advisor, Huron will: -- assist the Creditors Committee in the review and analysis of financial information prepared by the Debtors, their accountants and other financial advisors; -- assist with monitoring and analysis of the Debtors' operations and financial condition, cash expenditures, Court filings, business plans, operating forecasts, strategy, projected cash requirements and cash management; -- attend at meetings of the Creditors Committee, the Debtors, their professionals, Court hearings and participate in other related matters; -- assist with review and analysis of any restructuring or plan of reorganization proposed by the Debtors or any other party, and provide assistance to the Creditors Committee in developing, structuring, evaluating and negotiating the terms and conditions of any restructuring or plan of reorganization; -- assist with review and analysis of proposed transactions for which the Debtors seek Court approval; -- review, analyze and recommend any proposed disposition of assets of the Debtors, debtor-in-possession financing, proposed operational changes, and any expenditures out of the ordinary course of the Debtors' businesses; -- review reports as to the Debtors' businesses and its operations, including assessing the value of non-debtor affiliates; -- analyze the prepetition property, liabilities and financial condition, including potentially unencumbered assets, of the Debtors, and the transfers with and among Debtors' affiliates; -- support any Court proceedings necessary or appropriate to the maximize recovery by the Creditors Committee's constituents; -- investigate cause of actions and possible preference items; and -- if requested, assist with seeking prospective lenders, due diligence, transaction support, negotiations with prospective lenders and optimizing the terms of a prospective transaction. As set forth in the parties' Engagement Letter, Huron will be paid a fixed allowance for compensation of $100,000 for the month of April 2009 and $200,000 per month thereafter, plus reimbursement of actual and necessary expenses incurred. The Creditors Committee notes that Huron is not owed any amounts with respect to prepetition fees and expenses. John C. DiDonato, Huron's managing director, assures the Court that Huron is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. 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. 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). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 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. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: HSBC Bank Wary Plan Does Not Cure Defaults -------------------------------------------------------- HSBC Bank USA, National Association, is the successor Indenture Trustee for the 8.75% Senior Notes due 2013 issued by CCO Holdings LLC and CCO Holdings Capital Corp. under that certain Indenture dated as of November 10, 2003. HSBC objects to the confirmation of the Debtors' Chapter 11 Plan of Reorganization because the Plan does not specify that it will cure defaults under the Indenture by paying default interest on existing monetary defaults. To the extent that the Plan does not provide for payment of default interest, it cannot satisfy Section 1124(2) of the Bankruptcy Code, contends Douglas L. Furth, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, in New York. "Further, the Plan does not state that it will pay HSBC its fees and expenses including those of its counsel, items that also must be paid under the Indenture and must be paid in order to reinstate the debt," Mr. Furth asserts. "Finally, the Plan must provide a mechanism by which the CCOH Notes Claims can become Allowed," he adds. Accordingly, HSBC objects to the Plan to the extent that it does not provide: (a) for payment of default interest in respect of the CCOH Notes from and after May 15, 2009, until paid; (b) for payment of HSBC's reasonable fees and expenses and those of its attorneys; and (c) a mechanism for the CCOH Notes Claim to become Allowed. HSBC reserves the right to supplement its objection in the event plaintiff JPMorgan Chase Bank, N.A., prevail in the adversary proceeding that JPMorgan commenced against Charter Communications Operating, LLC, and CCO Holdings, LLC, and in which case there will be cross-defaults under the Indenture that will require the payment of default interest from prior periods. 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. 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). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 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. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: Jenkinsburg City Withdraws Claim ---------------------------------------------- Douglas R. Ballard, Jr., Esq., at Fears, Lawrence & Turner, P.C., in Jackson, Georgia, informs the Court and parties-in-interest that the city of Jenkinsburg, in Georgia, has withdrawn its proof of claim filed in the Debtors' bankruptcy cases on April 20, 2009. The amount and nature of the Claim was not undisclosed. No reason was cited for the withdrawal. 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. 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). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 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. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: Law Debenture Asks Allen to Testify at Plan Hearing ----------------------------------------------------------------- Law Debenture Trust Company of New York presented to the Court on July 16, 2009, a request to file under seal its request, asking the Court to compel Paul Allen to appear and testify at the confirmation hearing on the Debtors' plan of reorganization on July 20, 2009. Gerard Uzzi, Esq., at White & Case LLP, in New York, asserts that the Motion to Compel references and attaches documents that have been designated by the Debtors and other parties as confidential or highly confidential, under the Court-approved confidentiality agreement and stipulated protective order dated April 6, 2009. R2 Investments, LDC, joins in and supports Law Debenture's request. Allen Does Not Want to Appear for Live Testimony Paul Allen seeks the Court's permission to file under seal his request for a declaration stating that he is not required to appear for live testimony at the confirmation hearing on the Debtors' Plan this July 20, 2009. A supporting declaration of Robert E. Zimet and accompanying exhibits will also be filed under seal. Mr. Allen contends that the documents he seeks to file under seal contain confidential information. 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. 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). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 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. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: Majority of Voting Creditors Favor Plan ----------------------------------------------------- Charter Communications, Inc., and its subsidiaries delivered to the U.S. Bankruptcy Court for the Southern District of New York on July 15, 2009, a further amended Joint Plan of Reorganization to reflect certain immaterial modifications to the Plan. "We are filing the Amended Plan in preparation of our upcoming confirmation hearing," said Neil Smit, Charter's president and chief executive officer. "Since filing our initial pre-arranged plan, we have been working constructively with our creditors and other stakeholders and appreciate their ongoing support. Throughout this process, Charter has maintained its focus on enhancing all aspects of our customers' experience and looks forward to continuing to meet their communications needs in the future." According to the Debtors, the further Amended Plan generally maintains all key terms provided under their pre-arranged Joint Plan of Reorganization filed in March 2009. The further Amended Plan provides additional consideration to holders of Convertible Senior Notes of Charter Communications, Inc. in the form of 15% Payment-in-Kind Preferred Stock in the reorganized company and potential amounts from a litigation escrow depending on the bankruptcy court determining which Charter entities are entitled to the proceeds of the litigation escrow. The further Amended Plan also adjusts the terms of the New Preferred Stock to: (i) increase the amount from $72 million to $138 million; (ii) change the mandatory redemption date from seven years after issuance to five years; (iii) adjust the changes in the dividend rate so the New Preferred Stock would have an increase in dividend rate to 17% and 19% in years four and five; and (iv) provide for the listing of the New Preferred Stock on a stock exchange along with the Company's new common stock. The Plan confirmation hearing is currently set for July 20, 2009. Copies of the latest version of the Plan and its blacklined version are available for free at: http://bankrupt.com/misc/CCI_Modified_Plan_071509.pdf http://bankrupt.com/misc/CCI_Redlined_Plan_071509.pdf Treatment of Claims The further Amended Plan provides revisions to the treatment of certain claims including: -- Class A-4 CCI Notes Claims to include Litigation Settlement Fund Proceeds, in an amount, if any, that the Court determines is owned by CCI and Holdco, in Class A-4 Claimants' distribution; -- Class C-4 Holdco Notes Claims to include Litigation Settlement Fund Proceeds, in an amount, if any, that the Court determines is owned by Holdco, in Class C-4 Claimants' distribution; and -- Class H-4 CCH II Notes Claims to clarify that: * CCH II Notes Claims will be Allowed in the aggregate amount of $2,586,033,908, which is increased from $2,575,678,701, plus postpetition interest; and * the Debtors may pay Postpetition Interest in cash if the applicable Debtors elect that option on or before the Plan's effective date. Revised Descriptions The further Amended Plan also revised the description of New Class B Stock to clarify that each share of New Class B Stock will be entitled to a number of votes so that the aggregate number of votes attributable to the shares of New Class B Stock held by the Authorized Class B Holders will equal 35%, determined on a fully diluted basis, of the combined voting power of the capital stock of the Reorganized Company. CII Settlement Claim's description is revised to clarify that the consideration that will be transferred by the Debtors to Paul Allen or his designees which, in the case of New Class B Stock, will be limited to Authorized Class B Holders, on account of the CII Settlement Claim will include, among others: -- 2% of the equity value of the Reorganized Company, after giving effect to the Rights Offering, but prior to the issuance of the Warrants and equity-based awards under the Management Incentive Plan; and -- 35%, determined on a fully diluted basis, of the combined voting power of the capital stock of Reorganized CCI. The description for "Board Representation" was also revised to clarify that the determination of each projected holder's voting power of 10% or more of the Reorganized Company on the Effective Date will be determined on an undiluted basis and after giving effect to the Overallotment Option based on the holder's pro rata share of New Class A Stock. Defined Terms Under the further Amended Plan, "Litigation Settlement Fund Proceeds" is defined to mean the $26,428,089 in litigation settlement proceeds being held in escrow pursuant to the February 10, 2009 Escrow Agreement by and among Charter Communications, Inc.; Charter Communications Holding Company, LLC; Charter Communications Holdings, LLC; CC V Holdings, LLC; Charter Communications Operating, LLC; and Wilmington Trust FSB, as escrow agent, and which relates to distributions to Class A-4 and C-4 Claimants. The term "Management Incentive Plan," is redefined to clarify that the Management Incentive Plan will include, among other things, an allocation of equity-based awards representing no less than 3% of the fully diluted New Common Stock outstanding on the Effective Date, after giving effect to the Rights Offering and the issuance of warrants, 50% of which will be distributed as determined by the Board of Directors no later than one month after the Effective Date. In addition, the description of Priority Tax Claims is revised to clarify that each holder of an Allowed Priority Tax Claim will receive at the option of the Debtors, one of these treatments on account of the Claim: (1) Cash in an amount equal to the amount of the Allowed Priority Tax, plus interest at the rate determined under applicable non-bankruptcy law; or (2) other treatment as may be agreed to by the Holder and the applicable Debtors or otherwise determined upon a Court order. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 billion. Although no assurances can be made, Charter believes that its Amended Plan satisfies necessary requirements and is hopeful that it will be confirmed by the Court. Plan Voting Results Disclosed Christopher R. Schepper of Kurtzman Carson Consultants LLC, and Jane Sullivan of Financial Balloting Group LLC filed on July 17, 2009, affidavits reporting the tabulation of votes on the Debtors' Joint Plan of Reorganization. KCC and FBG worked with the Debtors, Kirkland & Ellis LLP and AlixPartners LLP to solicit, review, determine the validity of, and tabulate ballots submitted to vote for the acceptance or rejection of the Plan by the holders of the voting Classes. According to Ms. Sullivan, a summary of the voting results show: ACCEPT REJECT -------------- -------------- Class Number Number ---- -------------- -------------- A-3 42 3 General Unsecured 93.33% 6.67% Claims against CCI A-4 12 30 CI Notes 28.57% 71.43% Claims B-3 4 1 General Unsecured 80% 20% Claims against CII B-4 1 0 CII Shareholder 100% 0% Claims C-3 87 3 General Unsecured 96.67% 3.33% Claims against Holdco, et al. C-4 1 0 Holdco Notes 100% 0% Claims D-3 0 0 General Unsecured 0% 0% Claims against CCHC E-3 0 0 General Unsecured 0% 0% Claims against CCH & Charter Comm. Holdings Capital Corp. E-4 155 117 CCH Notes 56.99% 43.01% Claims F-3 0 0 General Unsecured 0% 0% Claims against CIH & CCH I Holdings Capital Corp. F-4 317 216 CIH Notes 59.47% 40.53% Claims G-3 0 0 General Unsecured 0% 0% Claims against CCH I & CCH I Capital Corp. G-4 387 47 CCH I Notes 89.17% 10.83% Claims H-3 0 0 General Unsecured 0% 0% Claims against CCH II & CCH II Capital Corp. H-4 443 2 CCH II Notes 99.55% 0.45% Claims I-5 0 0 General Unsecured 0% 0% Claims against CCOH & CCO Holdings Cap. Corp. J-2 17 5 CCO Swap Agreements 77.27% 22.73% Claims J-6 4,111 165 General Unsecured 96.14% 3.86% Claims against CCO & its Subsidiaries ACCEPT REJECT -------------- -------------- Class Amount Amount ----- -------------- -------------- A-3 $2,585,381.27 $207.85 99.99% 0.01% A-4 $75,325,652.08 $353,791,425.35 17.55% 82.45% B-3 $2,713,693 $1 100% 0% B-4 $2,478,499,200 $0 100% 0% C-3 $6,599,958.16 $817.48 99.99% 0.01% C-4 $497,489,463.37 $0 100% 0% D-3 $0 $0 0% 0% E-3 $0 $0 0% 0% E-4 $343,185,013.69 $156,589,001.32 68.67% 31.33% F-3 $0 $0 0% 0% F-4 $2,181,484,866.13 $126,856,318.89 94.50% 40.53% G-3 $0 $0 0% 0% G-4 $3,802,122,586.36 $57,353,132.62 98.51% 1.49% H-3 $0 $0 0% 0% H-4 $2,255,375,028.76 $6,809,157.89 99.70% 0.30% I-5 $0 $0 0% 0% J-2 $171,883,127 $37,461,315 82.11% 17.89% J-6 $6,589,926,970.96 $266,693.60 100% 0% Full-text copies of the affidavits containing the tabulation results and the list of ballots excluded from tabulation are available for free at: http://bankrupt.com/misc/CCI_Affidavit_Schepper.pdf http://bankrupt.com/misc/CCI_Affidavit_Sullivan.pdf About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. 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). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 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. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: Prepetition Lenders File Sealed Plan Objections ------------------------------------------------------------- JPMorgan Chase Bank, N.A., Law Debenture Trust Company, Wells Fargo Bank, N.A., and Wilmington Trust Company separately file with the Court sealed or redacted objections to the Debtors' Plan of Reorganization. They also filed confidential memoranda, declarations and exhibits in support of their objections. The objecting parties likewise submitted separate notices of presentment of their request to file their objections under seal, including the accompanying declarations and exhibits. They contend that the objections have references to highly sensitive and confidential information. JPMorgan is the administrative agent for the Amended and Restated Credit Agreement, dated as of March 18, 1999, with CCO Holdings, LLC as guarantor and certain lenders. An unofficial committee of the unaffiliated Lenders, known as the First Lien Lender Group, which currently holds approximately $2 billion of indebtedness under the Credit Agreement, also filed its own memorandum of law and a declaration in opposition of the Plan's confirmation and in support of JPMorgan's objection. The First Lien Lender Group subsequently filed an amended table of authorities to its memorandum. Wells Fargo is the successor administrative agent and successor collateral agent for the third lien prepetition secured lenders to CCO Holdings, LLC, while Law Debenture is as the Indenture Trustee with respect to the $479 million in aggregate principal amount of 6.50% Convertible Senior Notes due 2027 issued by Charter Communications, Inc. Wilmington Trust Company is the indenture trustee for the holders of (i) the 8% Senior Second Lien Notes due 2012 and the 8.375% Senior Second Lien Notes due 2014 issued pursuant to an Indenture among Charter Communications Operating, LLC, and Charter Communications Operating Capital Corp., as issuers, and Wilmington Trust, as successor trustee, and (ii) the 10.875% Senior Second Lien Notes due 2014 issued pursuant to an Indenture among CCO and CCO Capital, as issuers, and Wilmington Trust, as indenture trustee. In its redacted objection, Law Debenture argued, among other things, that: -- the Plan seeks to cram down approximately "$500 million in notes at Charter using a gerrymandered class of approximately $1 million in unsecured otherwise pari passu claims"; -- the Plan artificially impairs the gerrymandered separate class of unsecured claims by providing for payment in full or reinstatement, essentially retaining the option to merely withhold postpetition interest; -- the treatment for this artificially impaired gerrymandered class is patently discriminatory as CCI Notes are to receive, at best, a recovery of only 19.4% as compared to payment in full for the gerrymandered class; -- although the holders of CCI Notes Claims are not being paid in full, distributions are being provided to Charter's controlling shareholder, Paul Allen, on account of his equity interests in Charter in direct violation of the absolute priority rule; and -- the Plan allows Mr. Allen to receive in excess of $2 billion in benefits and full releases in exchange for mostly out of the money claims and interests. 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. 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). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 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. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: SEC Objects to Plan; Balk at Non-Debtor Discharge --------------------------------------------------------------- The U.S. Securities and Exchange Commission asks Judge Peck to deny confirmation of the Debtors' Plan of Reorganization because the Plan's release and injunctive provisions contravene Section 524(e) of the Bankruptcy Code and applicable case law. Alan S. Maza, Esq., senior bankruptcy counsel to the SEC, contends that a Chapter 11 plan should not be used as a vehicle to discharge or release non-debtors, who may be independently liable to creditors or interest holders. He points out that allowing the releases and related injunctive provisions would result in non- debtors benefiting from a debtor's bankruptcy by effectively obtaining their own discharge with respect to past misconduct or wrongdoing. Releases have special significance for public investors, Mr. Maza reminds the Court. He notes that release provisions would prevent public investors from bringing or continuing actions against non- debtors, like officers and directors, for violations of the federal securities laws or breach of fiduciary duty under state law. Section 524(e) provides that only debts of the Debtors are affected by the Chapter 11 discharge provisions, Mr. Maza notes. Yet, in contravention of Section 524(e), the Plan provides for a release and injunction in favor of numerous non-debtor third parties to the detriment of public investors, whose shareholder interests are being cancelled under the Plan, and other potential claimants, he points out. "Unless the release and injunctive provisions related to non- debtor parties are deleted from the Plan, the Plan cannot satisfy the requirement of Section 1129(a)(1) of the Bankruptcy Code, which requires that a plan shall be confirmed only if it complies with all applicable provisions of Chapter 11," Mr. Maza tells the Court. He also contends that the Debtors have failed to describe with particularity the consideration tendered by Paul Allen and the other non-debtor beneficiaries in exchange for the Release and injunction that inure to their benefit. "Finally, the Release is not consensual and the Plan contains no mechanism for public investors to voluntarily consent to such relief," Mr. Maza avers. "Rather than being essential to resolving an extraordinary case, the Releases appear to be an attempt by the Debtors to give [Mr.] Allen, the officers, directors and other Releasees a benefit at the expense of Charter's investors, whose interests and potential claims would become worthless," he adds. 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. 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). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 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. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHARTER COMM: Wants Plan Exclusivity Until November 22 ------------------------------------------------------ Pursuant to Section 1121(b) of the Bankruptcy Code, a debtor has the exclusive right to file a plan of reorganization for a period of 120 days after the Petition Date. If a debtor files a plan within that 120-day exclusivity period, Section 1121(c)(3) provides 60 additional days during which the debtor has exclusive right to solicit votes with respect to that Plan. The period during which only Charter Communications Inc. and its affilaites may file a Plan will expire on July 25, 2009, and the period during which only the Debtors' Plan may be considered for acceptance or rejection, will expire on September 23, 2009. By this motion, the Debtors ask the Court to extend the deadline within which they may exclusively: (i) file a Plan through November 22, 2009, and (ii) the period within which they may solicit acceptances of that Plan through January 21, 2010. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, tells the Court that the request is precautionary, insofar as the Debtors filed their disclosure statement and plan of reorganization upon commencement of the Chapter 11 cases, solicitation has concluded, and the request will be heard at the outset of the same hearings at which the Court will begin consideration of whether to approve the proposed Plan. It is the Debtors' intention and hope not to have to utilize an extension of the Exclusive Periods to file another plan or solicit votes thereon, Mr. Cieri relates. Nevertheless, he points out, because the present Exclusive Filing Period expires on July 25, 2009, prudence dictates seeking an extension of the Exclusive Periods in the event additional time is needed to obtain confirmation. To that end, the Debtors assert that ample cause exists to extend the Exclusive Periods. Mr. Cieri asserts that within approximately four months since commencing the Chapter 11 cases, the Debtors have: (a) achieved a soft landing into bankruptcy for one of the largest cable companies in the country; (b) obtained approval of a disclosure statement that effects a highly complicated series of restructuring transactions, including the elimination of $8 billion of debt, as well as an equity rights and debt exchange offering; (c) successfully completed solicitation on the largest prearranged plan in history; and (d) filed the request on the eve of confirmation, prepared to emerge from Chapter 11 with a delevered capital structure and the enhanced ability to achieve further growth. "Put simply, the record of these [C]hapter 11 cases to date demonstrates a modest extension of the Exclusive Periods is warranted," Mr. Cieri tells Judge Peck. An extension of the Exclusive Periods may be unnecessary if the Plan is confirmed prior to the Exclusivity Expiration Dates, Mr. Cieri says. But if the Plan is not confirmed before July 25, he points out, the Debtors will need additional time to address any issues that may arise during confirmation, possibly to modify the Plan and re-solicit votes, or possibly to draft and file a new disclosure statement and plan. The confirmation hearing will commence July 20, 2009. Significantly, Mr. Cieri contends that an extension of the Exclusive Periods is unlikely to affect the Debtors' cash position because they have positive cash flow and, thus far, have not needed to rely on debtor-in-possession financing. Accordingly, he insists, factor weighs strongly in favor of extending the Debtors' Exclusive Periods. The request will be heard during the confirmation hearing currently set for July 20. Objections are due July 17. 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. 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). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 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. 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) CISTERA NETWORKS: March 31 Balance Sheet Upside-Down by $1.9MM -------------------------------------------------------------- Cistera Networks, Inc.'s balance sheet at March 31, 2009, showed total assets of $2,390,471, total liabilities of $4,304,328, resulting in a stockholders' deficit of $1,913,857. For the year ended March 31, 2009, the Company posted a net loss of $4,628,117 compared with a net loss of $5,252,420 in the same period in the previous year. At March 31, 2009, the Company has cash and cash equivalents of $1,493. Accounts receivable March 31, were $151,322. Accounts payable, accrued current liabilities, and related party payables totaled $2,044,863. The Company related that it has a secured bank line of credit with JPMorgan Chase Bank in the amount of $50,000. In addition, the Company has a factoring agreement with Allied Capital Partners, L.P., for its accounts receivable with a credit line of up to $1,500,000. A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?3f5f Based in Dallas, Cistera Networks Inc. (OTC BB: CNWT.OB) -- http://www.cistera.com/-- works within the IT industry, specifically the field of unified communications. Cistera provides converged application platforms for the enterprise that enhances the investment in IP Telephony. Going Concern Doubt On July 14, 2009, Farmer, Fuqua & Huff, P.C., in Plano, Texas, raised substantial doubt on Cistera Networks Inc.'s ability to continue as a going concern after it audited the company's financial statements for the years ended March 31, 2009, and 2008. The auditing firm pointed out that the company has suffered recurring losses from operations and has a net capital deficit. CIT GROUP: Obtains $3 Bil. Facility; Adopts Recapitalization Plan ----------------------------------------------------------------- CIT Group Inc. has entered into a $3 billion loan facility provided by a group of the Company's major bondholders. CIT further intends to commence a comprehensive restructuring of its liabilities to provide additional liquidity and further strengthen its capital position. The actions, including a $3 billion secured term loan with a 2.5 year maturity, are intended to provide CIT with liquidity necessary to ensure that its important base of small and middle market customers continues to have access to credit. Term loan proceeds of $2 billion are committed and available July 20, with an additional $1 billion expected to be committed and available within 10 days. Citing people familiar with the matter, Jeffrey McCracken and Serena Ng at The Wall Street Journal relate that on Thursday night, CIT officials believed that they had secured a $2 billion rescue-financing plan from J.P. Morgan Chase & Co., but that fell through by Friday morning. A person familiar with the matter said that J.P. Morgan would have considered lending if CIT were first to seek bankruptcy protection, but the bank "couldn't get comfortable with a deal outside (bankruptcy) court," The Journal relates. The Journal states that CIT's advisers then launched talks with its bondholders and by 5:00 p.m. on Friday, CIT had sent its first term sheet to bondholders. "We are pleased that CIT is in a position to continue to serve our valued small business and middle market customers," said Jeffrey M. Peek, Chairman and CEO. "We appreciate the loyalty of our customers and the support we have received from numerous industry associations, particularly over the past few weeks. We are also extremely grateful to our employees for their continued hard work and dedication. With [the] announcement, our Board of Directors, management team, advisors, and a steering committee of bondholders, who are lenders under the Term Loan Financing, are now actively focused on a restructuring plan that will better position our Company for the long term. We look forward to continuing to work closely with the bondholders and all of CIT's key stakeholders to achieve our objectives." As the first step in a broader recapitalization plan, CIT has commenced a cash tender offer for its outstanding Floating Rate Senior Notes due August 17, 2009, for $825 for each $1,000 principal amount of notes tendered on or before July 31, 2009. Lenders in the Term Loan Financing have agreed to tender all of their August 17 notes. The Company and the Term Loan Financing steering committee will work together on the balance of the recapitalization plan, which is expected to include a comprehensive series of exchange offers designed to further enhance CIT's liquidity and capital. Evercore Partners and Morgan Stanley are the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP and Wachtell, Lipton, Rosen & Katz are legal counsel in connection with the financing and restructuring plan. Barclays Capital is arranger and administrative agent for the Term Loan Financing. Latham & Watkins is legal counsel to Barclays Capital. The Company has cancelled its earnings release and conference call previously scheduled for July 23, 2009. The Company will report its results for the quarter ended June 30, 2009, when it files its quarterly report on Form 10-Q. According to Bloomberg, CIT has reported $3 billion of losses in the past eight quarters and has been in talks with lenders about funding its own possible bankruptcy. CIT may need as much as $6 billion to avoid filing for bankruptcy protection. CIT became a bank last year to qualify for emergency government funding. It received $2.33 billion from the government in December. As previously reported by the TCR, CIT said July 15 that it has been advised that there is no appreciable likelihood of additional government support being provided over the near term. The Company's Board of Directors and management, in consultation with its advisors, are evaluating alternatives. CIT has more than $1 billion of unsecured notes maturing in both third- and fourth-quarter 2009. Payments for these notes could become increasingly difficult to make if borrower draws increase significantly and CIT does not win regulatory approval of its strategic initiatives, Standard & Poor's said. CIT Group applied for access to government aid before $1 billion in bonds mature next month. Since Nov. 25 the Federal Deposit Insurance Corp. has backed $274 billion in bond sales under its Temporary Liquidity Guarantee Program. However, the FDIC was apprehensive to approve the application because of CIT Group's worsening credit quality. This led to reports that CIT Group, which serves as lender to 950,000 businesses, is preparing for a bankruptcy filing. According to the Wall Street Journal, CIT Group hired Skadden, Arps, Slate, Meagher & Flom, LLP, to prepare for a bankruptcy filing. 80 Cents-on-the-Dollar for Aug. 17 Notes As part of the restructuring plan, CIT has commenced a cash tender offer for its outstanding Floating Rate Senior Notes due August 17, 2009, upon the terms and subject to the conditions set forth in its Offer to Purchase dated July 20, 2009, and the related letter of transmittal. CIT is offering to purchase any and all of its August 17 Notes for $800 for each $1,000 principal amount of outstanding August 17 Notes tendered and not validly withdrawn prior to 12:00 midnight, New York City time, at the end of August 14, 2009 (unless extended by CIT). Holders who validly tender their August 17 Notes prior to 5:00 p.m., New York City time, on July 31, 2009 -- unless extended by CIT, the "early delivery time" -- and who do not validly withdraw their tenders, will be paid an additional $25 cash for each $1,000 principal amount of outstanding August 17 Notes tendered by the early delivery time. Tendered August 17 Notes may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on July 31, 2009 (unless extended by CIT), but not thereafter. Holders of August 17 Notes accepted in the Offer will also receive a cash payment equal to the accrued and unpaid interest in respect of such August 17 Notes from the most recent interest payment date to, but not including, the settlement date for the Offer. The Offer is conditioned upon, among other things, holders of August 17 Notes tendering and not withdrawing an amount of August 17 Notes equal to at least 90% of the aggregate principal amount of August 17 Notes outstanding -- Minimum Condition. The Minimum Condition may be waived by CIT and the Term Loan Financing steering committee. If the Minimum Condition is satisfied or waived, CIT intends to use the proceeds of the Term Loan Financing to complete the Offer and make payment for the August 17 Notes. There can be no assurances that the restructuring plan or the Offer can be completed successfully. Morgan Stanley & Co. Incorporated and BofA Merrill Lynch are the Dealer Managers for the Offer. D.F. King & Co., Inc., is the Depositary and Information Agent. Persons with questions regarding the Offer should contact Morgan Stanley & Co. Incorporated toll free at (800) 624-1808 or collect at (212) 761-5384 or BofA Merrill Lynch at (980) 388-4813, Attn. Debt Advisory Services. Requests for documents should be directed to D.F. King & Co., Inc., toll free at (800) 758-5880 or collect at (212) 269-5550. Financing Doesn't Bring Permanent Relief for CIT, Analyst Says "Even if they put together a deal today and postpone a bankruptcy filing, CIT may be back in the same place in the not-too-distant future because unemployment rates, business-loan delinquencies and corporate default rates are climbing. The outlook for the next six months looks pretty rough for many banks, including CIT," The Journal quoted investment consulting firm Weiss Research President Martin Weiss. The Journal quoted CreditSights Inc. analysts Adam Steer and David Hendler as saying, "The deal is a negative for bondholders as it does not fix the underlying problem and layers in more secured debt. Without a viable funding model, we believe CIT may still be at risk of filing for bankruptcy." WSJ, citing the sources, states that the charges CIT very high interest rates and doesn't permanently fix the Company's long-term financing needs. The Journal states that at an initial interest rate of more than 10.5%, the emergency loan is coming at a high cost to CIT, which makes loans to many of its customers at rates below 10%. The Journal says that the new loan could act like a "bridge" to a series of debt-exchange offers that CIT would launch to get bondholders to exchange some of their bonds for equity in the Company or for new debt that matures later. According to the report, sources said that the $3 billion loan is secured by all of CIT's $30 billion in assets that aren't currently tied to other loans. According to The Journal, CIT may also have to persuade many of its customers to stay with it. CIT said that in the 18 months through June 30, 2009, it hadn't lost a single major client, The Journal reports. The Journal, citing sources, said that the deal should keep CIT out of bankruptcy court. The Journal notes that the $3 billion injection from CIT's bondholders should help the Company meet a $1 billion bond payment due in August, while providing some fresh funding for new loan making. The deal, The Journal relates, buys time for CIT to restructure itself and minimizes losses of bondholders, who concluded that they would lose more if the Company filed for bankruptcy and sold assets at fire-sale prices. The report notes that if the deal is completed, it could help cut CIT's debt load, strengthen its capital position, alleviate pressure on CIT to pay down $1 billion in debt that comes due in August, and may also preserve the U.S. Treasury's $2.33 billion investment made as part of the Troubled Asset Relief Program. The Journal, citing people familiar with the matter, says that bondholders' longer-term vision for CIT depends on some forbearance from Federal Reserve and Federal Deposit Insurance Corp. officials, because without it, bondholders will be forced to continue to provide support for the lender. The Journal relates that another $1.7 billion in debt payments is due by year-end, and CIT must pay off another $8 billion in 2010. The Journal states that CIT and its bondholders hope that their effort to stabilize the Company will make bank regulators look more favorably on a CIT plan to transfer more of its loans from the holding company to its bank in Utah. The Journal says that to transfer more assets to the bank, CIT needs an exemption from the Federal Reserve and an approval from the Federal Deposit Insurance Corp. The Journal says that the transfers remain key because bondholders want CIT to remain a viable lender, continuing to issue new loans to its customers. Viability is essential for the second component of CIT's rescue plan, which is swapping out existing debt for new equity in the Company, The Journal notes. Citing a bondholder, the report states that lenders don't want to own a stake in a company without a clear future. Trade Groups Ask Gov't to Take Back Decision on Financing Thirty-two trade groups have written to the government, asking it to reverse its decision and extend aid to CIT to avert the Company's collapse. The groups said, "We are writing to impress upon you the very severe ramifications that a CIT bankruptcy would have on more than one million small and medium-sized businesses, their partners in the U.S. retail industry and the manufacturers and service providers that supply that sector . . . We urge the government to reconsider every possible option to address the current stresses confronting CIT and to prevent further tightening of the credit markets . . . Without CIT, thousands of retailers may be forced out of business because their suppliers will be put out of business. Such a ripple effect could set back the recovery of the manufacturing and retail sectors, and therefore the U.S. economy, by several years. CIT is one of the leading factoring companies in the United States and is a vital source of financing for manufacturers as well as the small and medium-sized vendors who are the primary suppliers of merchandise sold in U.S. retail establishments." As reported by the Troubled Company Reporter on July 16, 2009, CIT said that it was advised that there was no likelihood of additional government support being provided over the near term. CIT Group applied for access to government aid before $1 billion in bonds mature next month. Since November 25 the Federal Deposit Insurance Corp. has backed $274 billion in bond sales under its Temporary Liquidity Guarantee Program. However, the FDIC was apprehensive to approve the application because of CIT Group's worsening credit quality. Damian Paletta, Serena Ng, and Randall Smith at The Journal relate that CIT had been trying for months to improve its connections in Washington, spending almost $90,000 in 2008 on lobbying and $60,000 in the first quarter of 2009 and bringing former Congressman Christopher Shays onto its board of directors. CIT CEO Jeffrey Peek, during a conference call in April 2009, spoke of a plan to boost the Company's liquidity, which would have relied in part on a government debt-guarantee program. The Journal quoted a senior administration official as saying, "Their Plan A was: Seek assistance from the government. And their Plan B was: Ask again." According to The Journal, government officials and some CIT advisers and investors felt that CIT should have pursued a more drastic approach sooner. About CIT Group CIT Group Inc.-- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. CIT Group reported $75.7 billion in assets and $68.2 billion in liabilities, including $3 billion in deposits, at the end of the first quarter. As reported by the TCR on July 15, 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. "The downgrade reflects increased near-term liquidity concerns," said Standard & Poor's credit analyst Rian Pressman. Moody's Investors Service simultaneously 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. CIT GROUP: NRF Welcomes Deal with Bondholders to Avoid Bankruptcy ----------------------------------------------------------------- The National Retail Federation welcomed reports that CIT Group Inc. has reached an arrangement with its bondholders that would allow the lender to avoid bankruptcy. "It is encouraging to hear that CIT Group has reached an agreement with its bondholders to secure the funding needed to continue operations," NRF President and CEO Tracy Mullin said. "This comes as a great relief to the many retailers who depend on this major lender for financing. As we have said from the beginning, CIT could not be allowed to fail at a time when retailers are already struggling to survive the national recession. The news that CIT will be able to continue operations will be one less uncertainty for retailers about to embark on the all-important back-to-school and holiday shopping seasons." CIT is one of the few lenders who provide "factor" financing, serving about 2,000 small and mid-sized vendors who supply about 300,000 U.S. retailers with merchandise sold in their stores. Vendors typically accept orders from retailers with an agreement to be paid in 60 to 90 days. They then sell their accounts receivable to a factor in order to obtain the short-term financing needed to produce the goods ordered. Without factors, suppliers could be forced to shut their doors, or retailers would be required to pay up front and draw down on their own credit lines at a time when credit remains difficult to obtain. The National Retail Federation -- http://www.nrf.com/-- is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees -- about one in five American workers -- and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. About CIT Group CIT Group Inc.-- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. CIT Group reported $75.7 billion in assets and $68.2 billion in liabilities, including $3 billion in deposits, at the end of the first quarter. As reported by the TCR on July 15, 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. "The downgrade reflects increased near-term liquidity concerns," said Standard & Poor's credit analyst Rian Pressman. Moody's Investors Service simultaneously 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. CIT GROUP: Fitch Puts Ratings on Six Trusts Under Analysis ---------------------------------------------------------- Fitch Ratings has placed six trusts backed by student loan receivables under analysis in connection with the recent Fitch downgrade of CIT Group, Inc., to 'C' from 'BB-'. The affected trusts are linked to related entities directly or indirectly fully owned by CIT, including Education Lending Group, Inc., and Xpress Loan Servicing. Related entities are involved as the administrator, sponsor, paying agent or master servicer for the transactions. Fitch will assess the operational risk present in the transaction related to the potential disruption of the services provided by the affected entities. Fitch will gather information from the corporate analysts responsible for CIT's rating as well as directly from CIT and its affiliates, and also analyze possible structural remedies that may be present in the transactions. The review is expected to be completed within 30 days and the ratings may be affirmed, put on Rating Watch Negative, or downgraded. Fitch places these trusts under analysis (UA): -- Arizona Higher Education Loan Authority - 2005 Trust Indenture; -- Education Lending Group, Inc. - CIT Education Loan Trust 2005-1; -- Education Lending Group, Inc. - Education Funding Capital Trust - II; -- Education Lending Group, Inc. - Education Funding Capital Trust - III; -- Education Lending Group, Inc. - Education Funding Capital Trust - IV; -- PARTS Private Student Loan Trust 2007-CT1. CITIGROUP INC: Clients Seek to Bar Fund From New Investments ------------------------------------------------------------ Clients of Citigroup Inc.'s private-equity fund sought to bar it from making new investments after its co-chief quit and several high-profile deals collapsed, Jenny Strasburg, David Enrich, and Craig Karmin at The Wall Street Journal report, citing people familiar with the matter. Juan Bejar, co-chief of the fund, resigned in June 2009, leaving Felicity Gates to run the fund alone. WSJ relates that after Mr. Bejar left the fund, investors exercised their right to restrict the fund from making new investments for at least 120 days. Citigroup executives are searching for a successor to Mr. Bejar, says the report. WSJ relates that the fund, which amassed about $3.4 billion to invest in airports, roads, and other infrastructure projects, was supervised by Michael Froman, former operations chief of Citigroup Alternative Investments who left in January to become a senior White House aide. The report says that Mr. Froman's departure generated a high-level internal debate over how his stake in the infrastructure fund should be valued. WSJ states that Mr. Froman had a sizable stake in the Citi Infrastructure Investors fund, which he had received as part of his pay package. WSJ says that Mr. Froman, wary of conflicts of interest with his new government job, wanted to cash out. He proposed that Citigroup pay him at least $10 million for his stake, WSJ relates, citing people familiar with the matter. The sources said that Mr. Froman ultimately received White House permission to keep his interest in the fund, on the condition that he avoid matters involving the infrastructure fund or its investments, according to the report. According to WSJ, Citigroup executives agreed that Mr. Froman's funds were hurt by market forces beyond his control. Another fund supervised by Mr. Froman that was geared toward sustainable development projects was shelved last year because it failed to attract clients. Citigroup is trying to shed some funds, including its $12 billion Citi Property Investors fund, WSJ relates, citing people familiar with the matter. Citigroup Names Adrian Faure as Chief of Asian Equities Dow Jones Newswires reports that Citigroup said it has appointed Adrian Faure as chief of Asian equities excluding Australia and Japan, effective immediately. Mr. Faure was most recently the chief of Citi investment research Asia-Pacific. Brent Robinson, who was the deputy head of Citi investment research Asia-Pacific, will replace Mr. Faure as chief of Citi investment research Asia- Pacific, Dow Jones relates. Citigroup said in a statement that Mr. Faure will be responsible for the strategic direction and management of equities business across 16 markets in the Asia-Pacific region. Dow Jones states that Mr. Faure will work with Richard Heyes -- head of equities in Japan -- and Luke Randell, co-head of markets in Australia. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citigroup had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of September 30, 2008. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: Reports $4.3BB Q2 Net Income Due to $6.7BB Gain -------------------------------------------------------------- Citigroup Inc. reported a net income for the second quarter of 2009 of $4.3 billion, or $0.49 per diluted share. Second quarter revenues were $30.0 billion. These results include an $11.1 billion pre-tax ($6.7 billion after-tax) gain associated with the Morgan Stanley Smith Barney joint venture transaction, which closed on June 1, 2009. A full-text copy of Citigroup's Quarterly Financial Data Supplement 2Q09 is available at no charge at http://ResearchArchives.com/t/s?3f8a The results reflect Citigroup's previously announced realignment into two principal segments, Citicorp and Citi Holdings. A third segment Corporate/Other, consists of various corporate level activities. "For many quarters we have been consistently and successfully executing our plan to build financial strength and return Citi to sustained profitability and growth. We have made significant progress in recent quarters as evidenced in the significant decline in expenses, headcount, assets, including Citi's riskiest assets, as well as our 12.7% Tier 1 capital ratio," said Vikram Pandit, Chief Executive Officer of Citi. "This quarter also marks a key milestone in our plan, as we are now reporting our financial results to reflect the separation of Citi into two primary operating segments: Citicorp and Citi Holdings. "Citicorp is our core franchise and will be the source of Citi's long term profitability and growth. Citicorp is unique with institutional and consumer businesses operating on an unmatched global footprint. We will manage our businesses and assets in Citi Holdings to optimize their value over time. We have already announced the sale of a number of businesses within Citi Holdings, and its assets have been reduced by approximately $250 billion since the first quarter of 2008. "Our financial results today reflect the incredibly dedicated efforts of all of our people around the world and their success in implementing our plan. Our earnings of $4.3 billion reflect the benefit of the closing of the Smith Barney joint venture with Morgan Stanley, which was a key element in our Citi Holdings strategy. This quarter's results underscore the earnings power of Citicorp, with over $3 billion of net income. "As we look forward, we will continue the same relentless focus on executing our plan. We remain optimistic that our turnaround of Citi will gain speed. Our institutional business has a strong client franchise. Our most significant challenge now remains consumer credit. Losses in our consumer businesses have been growing for some time, but we see some positive signs of moderation in those loss trends. Sustainable profitability remains our primary goal," said Mr. Pandit. Citigroup Revenues were $30.0 billion, up $12.4 billion from prior year levels, primarily due to the Smith Barney gain on sale. Favorable revenue marks in Citi Holdings relative to the second quarter of 2008 also contributed to the increase, offset by the impact of foreign exchange, and declines in Regional Consumer Banking revenues, primarily in Cards. Credit costs of $12.4 billion, up 81%, consisted of $8.4 billion in net credit losses, and $3.9 billion loan loss reserve build. The total allowance for loans, leases and unfunded lending commitments was $37.0 billion, up from $21.9 billion in the prior year period. Operating expenses were $12.0 billion, down 21% from the prior year period, reflecting benefits from ongoing re-engineering efforts and the impact of foreign exchange. Quarterly operating expenses were down $3.7 billion from peak levels in the fourth quarter of 2007. The effective tax rate on continuing operations was 17% versus 51% in the prior-year period. The current quarter included a tax benefit of $129 million in continuing operations and $34 million in discontinued operations related to the conclusion of an IRS audit of various issues for the years 2003-2005. The effective tax rate for the prior year period was higher due to pretax losses incurred in higher tax rate jurisdictions. Total assets were $1.85 trillion, down 12% from the prior year level, and down 22% from peak levels in the third quarter of 2007. End of period total deposits were $805 billion, generally flat from the prior year period. Deposit growth was strong in Regional Consumer Banking in North America, where deposits were up 12% from the prior year period. Deposit growth in North America was offset by the impact of foreign exchange on deposits in other regions. Capital Position improved during the quarter. At the end of the second quarter, Citigroup's Tier 1 capital ratio was approximately 12.7%, up from 8.7% in the prior year period and 11.9% at March 31, 2009. Citicorp Citicorp revenues were $15.0 billion, down 11% from the year ago period driven by the impact of foreign exchange, greater credit losses flowing through the card securitization trusts in North America and lower volumes. Operating expenses were $7.8 billion, down 21% from the prior year period, primarily due to re- engineering initiatives, the impact of foreign exchange and reduced marketing. Credit costs were $2.8 billion, up 57% from the second quarter of 2008, reflecting $1.6 billion of net credit losses and a $1.2 billion reserve build. Citicorp's income was $3.1 billion, down 10% from the prior year period, as expense reductions offset a large portion of the decline in revenues and increase in credit costs. Regional Consumer Banking revenues were $5.6 billion, down 19% from the prior year period, driven by increasing credit losses flowing through the card securitization trusts in North America, the impact of foreign exchange, and lower loan and investment volumes. Expenses were $3.5 billion, down 17% from the prior year period, reflecting the impact of foreign exchange, re-engineering initiatives, headcount reductions and lower marketing expenditure. Credit costs of $2.0 billion were up 46% from year ago levels, and included $1.4 billion of net credit losses and $0.6 billion reserve build. Credit costs were up most significantly in North America and EMEA. North America Total revenues declined 17% from the prior year period to $1.8 billion. On a managed basis, revenues increased 1%. Retail banking revenues were flat with the prior year at $955 million, reflecting higher deposit and loan volumes, offset by lower deposit spreads and an asset sale gain recorded in the prior year period. Card GAAP revenues were down 30% from the prior year period to $806 million, reflecting higher credit losses in the securitization trusts, lower fees and a decrease in gains on sale, partially offset by pricing actions and lower funding costs. Card managed revenues of $2.5 billion were up 2% from prior year levels reflecting pricing actions and lower funding costs, partially offset by a decline in average managed card loans and lower fees. Card managed net interest margin increased to 10.51% from 8.12% in the second quarter of 2008. Total card purchase sales declined 18%. Income declined $184 million to a loss of $15 million, as rising credit losses more than offset the benefits of higher spreads in cards, greater deposit volume and expense reductions. Average retail banking deposits were up 12% from the prior year period to $136 billion, driven by growth in consumer CDs and commercial deposits. On a managed basis, average loans and leases increased 1% to $87.6 billion. Total credit costs were up 66% to $435 million, as compared to prior year levels primarily due to rising net credit losses in both cards and retail banking. Loan loss reserve build was $130 million, up slightly from year ago levels. The retail banking net credit loss ratio increased 174 basis points to 4.85%, while the card managed net credit loss ratio increased 471 basis points to 10.25%. Expenses declined by 16% to $1.3 billion, due to re-engineering saves and reductions in marketing expenses. Europe, Middle East and Africa Revenues declined by 22% from the prior year, to $394 million. More than half of the revenue decline is attributable to the impact of foreign exchange. Other drivers included lower wealth management and lending revenues due to lower volumes and spread compression. Investment sales and assets under management declined by 38% and 32%, respectively. Average loans for retail banking were down 22% from the prior year period, as a result of tighter underwriting criteria, branch closures and the impact of foreign exchange. Average deposits were down 24% from the prior year period, primarily due to the impact of foreign exchange. There was a net loss of $110 million in the current period, down from income of $37 million in the prior year period, as declining revenues and increasing credit costs were partially offset by expense reductions. Credit costs increased $216 million to $279 million as compared to the prior year period. Net credit losses increased from $48 million to $121 million, while the loan loss reserve build increased from $15 million to $158 million. Higher credit costs reflected continued credit deterioration, particularly in UAE, Turkey, Poland and Russia. The retail banking net credit loss ratio increased from 1.7% to 5.3%. Expenses were down 29% as compared to the second quarter of 2008, to $282 million on expense control actions, lower marketing expenditure and the impact of foreign exchange. Cost savings were achieved by branch closures, headcount reductions and other re- engineering efforts. Latin America Revenues were $1.8 billion, down 23% from the prior year period due to the impact of foreign exchange, lower credit card receivables and spread compression, partially offset by higher volumes in retail banking. Income was down 79% to $70 million, as compared to the prior year period, primarily due to lower card revenues and increasing credit costs. Credit costs were $766 million, up 8% from the prior year period, as deteriorating credit conditions were partially offset by the impact of foreign exchange. Card net credit loss rates increased from 11.4% in the second quarter of 2008 to 16.2%. Credit deterioration was particularly apparent in the Mexico card portfolio. Expenses were $1.0 billion, down 16% from the prior year period, driven by the impact of foreign exchange and reengineering actions, partially offset by restructuring charges. Average deposits were $36.0 billion, down 14% from the prior year period, due to the impact of foreign exchange. Asia Revenues were down 14%, to $1.6 billion from the prior year period, primarily driven by the impact of foreign exchange and lower investment product volumes. Income was $272 million, down 40% from the prior year period, as declining revenues and increasing credit costs were partially offset by expense reductions. Credit costs were $504 million, up 55% from the prior year period on deteriorating credit conditions, partially offset by the impact of foreign exchange. Loan loss reserve build increased to $150 million from $84 million. Card net credit loss rate increased to 6.0% from 3.4% in the prior year period. Credit deterioration was particularly apparent in the card portfolios in India and Korea. Expenses were $833 million, down 14% from the prior year period due primarily to re-engineering efforts, and the impact of foreign exchange. Average deposits were $87.6 billion, down 10% from prior year levels, primarily due to the impact of foreign exchange. Citi Holdings Citi Holdings revenues were $15.8 billion, up from $2.1 billion in the prior year period on the Smith Barney gain on sale and favorable net revenue marks relative to the prior year period, partially offset by lower volumes and greater credit losses flowing through the card securitization trusts in North America. Operating expenses were $3.8 billion, down 28% from the second quarter of 2008 on reengineering initiatives, lower headcount, and reduced marketing, partially offset by higher real estate owned and collection expenses. Credit costs were $9.9 billion, up 86% from the prior year period as net credit losses increased significantly and $2.7 billion was added to reserves. Citi Holdings assets have declined 22% to $649 billion reflecting asset run-off and management actions. Net income was $1.4 billion versus a loss of $5.3 billion in the prior year period primarily due to Smith Barney gain on sale. Positive revenue marks and expense reductions also contributed, partially offset by credit deterioration and lower volumes. Brokerage and Asset Management The closing of the Smith Barney joint venture transaction on June 1, 2009, generated an $11.1 billion pre-tax, $6.7 billion after-tax gain on sale. Brokerage and Asset Management (BAM) revenues were $12.3 billion in the current period, up from $2.5 billion in the second quarter of 2008, mainly driven by the gain on the Smith Barney transaction, offset partially by the absence of one month of Smith Barney revenues. Net income was $6.8 billion, up from $218 million in the prior year period, due to the Smith Barney gain on sale. Expenses were $1.1 billion, down 45% from the prior year period due to the absence of one month of Smith Barney expenses, lower variable compensation and re-engineering efforts. End of period assets were $56 billion, down 14%, consistent with management efforts to reduce assets. End of period assets include approximately $19 billion of Nikko Cordial Securities assets that are recorded on the balance sheet as Assets of Discontinued Operations held for sale. The sale of Nikko Cordial Securities was announced in May 2009. Local Consumer Lending Local Consumer Lending (LCL) revenues were $3.9 billion, down 37% from the prior year period, due to lower loan volumes, higher net credit losses flowing through the securitization trusts in North America, and special FDIC assessment. Expenses were $2.5 billion, down 17% compared to the second quarter of 2008, primarily driven by the impact of re-engineering efforts resulting in lower headcount as well as reduced advertising and marketing. Credit costs were $8.0 billion, up 65% from the prior year period, driven by higher net credit losses and increased loan loss reserve build for residential mortgage loans, as well as higher losses across remaining product categories. End of period assets were $392 billion, down 16% from the prior year period, primarily driven by lower loans due to run-off and the impact of credit-tightening. Net loss was $4.2 billion, versus a loss of $1.2 billion in the second quarter of 2008, driven by lower revenues and higher credit costs. Special Asset Pool Special Asset Pool (SAP) revenues were negative $519 million, compared to negative $6.6 billion in the second quarter of 2008, driven primarily by favorable net revenue marks relative to the second quarter of 2008. For the current quarter, net revenue marks were positive $1.0 billion versus negative $6.6 billion in the second quarter of 2008. The improvement in net revenue marks was primarily driven by positive marks on sub-prime related direct exposures in the second quarter of 2009, compared to net write-downs in the second quarter of 2008, as well as positive credit value adjustments on exposures to monoline insurers in the second quarter of 2009, compared with downward credit value adjustments in the second quarter of 2008. Expenses were $207 million, down 23% from the prior year period, reflecting lower volumes. Credit costs were $1.6 billion, up from $200 million in the prior year period, reflecting significant charge-offs of corporate loans. End of period assets were $201 billion, down 33% from the second quarter of 2008. Net loss was $1.2 billion versus a loss of $4.3 billion in the second quarter of 2008, as improvements in revenue marks more than offset increases in credit costs. Corporate/Other Corporate/Other revenues of negative $741 million are largely due to hedging activities. The net loss of $30 million is due to higher tax benefits held at Corporate. Discontinued Operations Discontinued operations net loss was $142 million versus a loss of $94 million in the year-ago period. The $142 million net loss largely reflects Nikko Cordial Securities, which is now classified as discontinued operations. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citigroup had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of September 30, 2008. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: Weak Q2 Earnings Won't Affect S&P's Ratings ---------------------------------------------------------- Standard & Poor's Ratings Services said that its rating on Citigroup Inc. (A/Stable/A-1, holding company) is not affected by the company's just-announced weak second-quarter earnings. Citi generated a pretax loss of $4.2 billion, adjusting for an $11.1 billion gain associated with finalization of the Morgan Stanley Smith Barney joint venture and $1.6 billion of fair-value losses on Citi's liabilities resulting from tightening credit spreads. Citi benefited from strong results of its investment- banking, trading, and transactions-services operations. The company has made strides in reducing costs: Operating expenses were down 21% in the second quarter from the year-earlier period. However, mounting credit costs have continued to affect consumer- banking earnings. Credit costs increased to $12.4 billion, including a $3.9 billion addition to loan-loss reserves. This brought the total allowance for credit-loss reserves to a high 5.6% of total loans, but S&P believes further additions to reserves could be necessary in coming quarters. Formation of MSSB boosted Citi's tangible common equity by $9.1 billion, contributing to an increase in its regulatory Tier 1 capital ratio to 12.7% at June 30, 2009, from 11.9% at March 31, 2009. Citi has an exchange offer pending whereby it could convert up to $58 billion of its outstanding hybrid capital issues to common stock. S&P believe completion of this offer (scheduled to occur July 29, 2009) may fully address the remaining weakness in Citi's common equity base. As part of the exchange, the U.S. government has agreed to exchange up to $25 billion of the preferred stock now held by Treasury, making the government Citi's largest owner. S&P plans to resolve the review of Citi's hybrid capital issues (CC/Watch Dev/--) shortly after results of the exchange offer are announced. COOPER-STANDARD: Gets Default Waiver Until August 14 ---------------------------------------------------- Cooper-Standard Holdings Inc., parent company of Cooper-Standard Automotive Inc., announced July 15 that it has secured a limited waiver agreement with lenders under its senior credit agreement and forbearance agreements with holders of its 7% senior notes due 2012 and 8-3/8% senior subordinated notes due 2014. The Company said it intends to continue discussions with its senior lenders and noteholders through the applicable waiver and forbearance periods to facilitate a restructuring of the Company's balance sheet. The Company's businesses will continue to operate normally during this process. Under the limited waiver agreement, the lenders under the Company's senior credit agreement have agreed to waive through August 14, 2009 certain events of default under the senior credit agreement, including the Company's non-payment of the interest payments due on the notes on June 15, 2009 within the applicable 30-day grace period. The waiver period will expire on July 28, 2009 in the event the lenders under the senior credit agreement do not provide a notice of continuation by July 27, 2009. Under the forbearance agreements, holders of more than 75% of the senior notes and holders of a majority of the senior subordinated notes agreed that through August 14, 2009 they will not exercise their rights and remedies under the indentures governing the notes relating to the Company's non-payment of the June 15th interest payments. "We appreciate the extended time and support from our lenders," said James S. McElya, Chairman and Chief Executive Officer of Cooper-Standard. "These agreements are a positive step in the process that we believe will result in an improved balance sheet that is more in line with today's new automotive market." About Cooper-Standard Automotive Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems, which are represented within the company's two operating divisions: North America and International. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. The Cypress Group is a New York-based private equity investment firm founded in 1994. Since its formation, Cypress has invested more than $3.5 billion of capital within its two funds. Cypress has an extensive track record of making growth-oriented investments in targeted industry sectors and building equity value alongside proven management teams. Goldman Sachs -- http://www.gs.com/pia-- is one of the world's largest private equity and mezzanine investors, having invested approximately US$66 billion in over 750 companies globally since 1986 and manages a diverse global portfolio of companies with 120 investment professionals active in the firm's New York, London, Hong Kong, Tokyo, San Francisco and Mumbai offices. GS Capital Partners is the private equity vehicle through which The Goldman Sachs Group, Inc. conducts its large privately negotiated corporate equity investment activities. As reported by the Troubled Company Reporter on July 20, 2009, Moody's Investors Service lowered the Probability of Default Rating of Cooper-Standard Automotive Inc. to D from Caa3; lowered the rating of the existing senior secured bank credit facilities to Ca from Caa2; lowered the rating of the guaranteed senior unsecured notes to C from Ca; and lowered the rating of the guaranteed senior subordinated notes to C from Ca. In a related action the Corporate Family Rating was affirmed at Ca and the Speculative Grade Liquidity Rating was affirmed at SGL-4. The PDR of D reflects the expiration of the 30 day grace period on the missed interest payments due June 15, 2009, under the indenture for the 7% senior notes due 2012 and 8-3/8% senior subordinated notes due 2014. As reported by the TCR on July 20, Standard & Poor's Ratings Services said it has lowered its corporate credit rating on Cooper-Standard Automotive Inc. to 'D' (default) from 'CC' and lowered the issue-level rating on the company's senior unsecured and subordinated debt to 'D' from 'C'. S&P also lowered the rating on the company's senior secured debt to 'CC' from 'CCC-'. We are not confident that Cooper-Standard will make the payments within the grace period," said Standard & Poor's credit analyst Nancy Messer. "Among other outcomes, the company might pursue a distressed exchange or file for bankruptcy under Chapter 11," she continued. COYOTES HOCKEY: Another Bidder Willing to Keep Team in Glendale --------------------------------------------------------------- A group of six investors is ready to bid on Phoenix Coyotes, the Globe and Mail reports. Daryl Jones, Research Edge LLC manager director and one of the six investors, told the Globe and Mail that his group is ready to submit an official bid. Mr. Jones said that his group is still finalizing its offer, but it will be in the same financial neighborhood as the one made by Jerry Reinsdorf. As reported by the Troubled Company Reporter on June 29, 2009, Mr. Reinsdorf, owner of Major League Baseball's Chicago White Sox and National Basketball Association's Chicago Bulls, offered to buy the bankrupt Phoenix Coyotes of the National Hockey League for $148 million. Mr. Reinsdorf's bid would challenge one from Jim Balsillie, co-chief executive officer of Blackberry-maker Research In Motion Ltd., who has offered $212.5 million on the condition he's allowed to move the team to Canada. Mr. Reinsdorf said that a new arena lease for Jobing.com Arena, the Coyotes home rink in suburban Glendale, is central to his bid. Mr. Jones said that his group also wants a new lease for the arena and he says that his group has had several meetings with City of Glendale officials. The group is composed of businessmen from both Canada and the United States. It met with NHL Commissioner Gary Bettman and Deputy Commissioner Bill Daly on Thursday. 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. CREATIVE LOAFING: Lays Off Senior Editor Eric Snider ---------------------------------------------------- Tampa Bay Business Journal reports that Creative Loafing Inc. laid off Eric Snider, its senior editor, as part of a restructuring of the alternative weekly's editorial staff. According to Business Journal, Creative Loafing editor David Warner said that as part of the newsroom restructuring, the Company is looking to focus more on Web-based operations and give its more expensive print operations less of a priority. Headquartered in Tampa, Florida, Creative Loafing, Inc. -- http://www.creativeloafing.com/-- publishes newspapers and magazines. The Company and eight of its affiliates filed for Chapter 11 protection on September 29, 2008 (Bankr. M.D. Fla. Lead Case No. 08-14939). Chad S. Bowen, Esq., and David S. Jennis, Esq., Jennis & Bowen, P.L., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of between $10 million and $50 million each. CRUSADER ENERGY: Has Approved Bonus Program for Executives ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Crusader Energy Group Inc. to adopt a bonus program for top executives. According to Bill Rochelle at Bloomberg News, the Debtor will pay the executives 1% of sale proceeds between $160 million and $300 million, provided that the value of a transaction isn't less than $200 million, and the award may not exceed 153% of an officer's base salary. As reported by the Troubled Company Reporter on Jun 26, 2009, Crusader told the Court that the Management Incentive Program is necessary to provide appropriate compensation to management given the additional responsibilities associated with the Chapter 11 cases, and to ensure that the participants are adequately motivated and incentivized to perform important tasks necessary to ensure an effective and orderly sale and reorganization of the Debtors' businesses. The principal features of the MIP are: a. Each of the MIP participants will be eligible to participate in a MIP pool, to be funded from the proceeds of any sale of the Debtors' assets, in an amount equal to 1% of (i) the aggregate value of any sales, minus (ii) $150,000,000, whether the sale occurs through a plan of reorganization or otherwise. b. Promptly after the closing of a sale, subject to the value payout levels, each MIP participant will be paid these percentages of the Incentive Payout that has not previously been paid to them: (i) David D. Le Norman -- 40%; (ii) Charles L. Mullens -- 20%; (iii) Roy A. Fletcher -- 20%; and Charles A. Paulson -- 20%. c. Under no circumstances will any MIP Participant be entitled to receive more than 130% of the MIP participant's respective annual salary as of the date of the filing of the motion. A copy of the document illustrating the Management Incentive Program is available at: http://bankrupt.com/misc/crusader.MIPillustration.pdf Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explores, develops and acquires oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. Crusader Energy and its affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No. 09- 31797). The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, L.L.P., serve as counsel to the Debtors. Holland N. Oneil, Esq., Michael S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne & Sewell, serves as counsel to the official committee of unsecured creditors as counsel. CRUSADER ENERGY: Sued for Equitable Lien on Leases -------------------------------------------------- Bill Rochelle at Bloomberg News reports that Gunn Oil Co., Cogent Exploration Ltd. and Apollo Exploration LLC, owners of oil- producing properties, sued Crusader Energy Group Inc., asking the Bankruptcy Court to rule that they have an "equitable vendor's lien against" oil and gas leases they sold Crusader. Crusader Energy bought 75% of the working interest in several leases in Texas. Crusader paid $12 million, with a final payment of $10 million due in 2011. Gunn Oil, et al., contend in their complaint that they have a lien under Texas law against the oil and gas lease to recover the $10 million they're owed. They say they are entitled to recover the $10 million from what Crusader otherwise would receive from its working interest. Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explores, develops and acquires oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. It has working interests in more than 1,000 wells. Crusader Energy and its affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No. 09- 31797). The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, L.L.P., represent the Debtors as counsel. Holland N. Oneil, Esq., Michael S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne & Sewell, represent the official committee of unsecured creditors as counsel. DAYTON SUPERIOR: Court Establishes August 25 Claims Bar Date ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has established August 25, 2009, at 5:00 p.m. as the general bar date for the filing of proofs of claim in Dayton Superior Corporation's bankruptcy case, and October 19, 2009, at 5:00 p.m. with respect to governmental units. Proofs of claim must be sent by overnight mail, courier service, hand delivery, regular mail or in person, so as to be actually received no later than the bar date, as applicable, to: Dayton Superior Claims Processing Center c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, California 90245 Headquartered in Dayton, Ohio, Dayton Superior Corporation -- http://www.daytonsuperior.com/-- makes and distributes construction products. Aztec Concrete Accessories Inc., Dayton Superior Specialty Chemical Corporation, Dur-O-Wa Inc., Southern Construction Products Inc., Symons Corporation and Trevecca Holdings Inc. were merged with the Company on December 31, 2004. The Company filed for Chapter 11 protection on April 19, 2009 (Bankr. D. Del. Case No. 09-11351). Keith A. Simon, Esq., Jude M. Gorman, Esq., and Joseph S. Fabiani, Esq., at Latham & Watkins LLP serve as the Debtors' bankruptcy counsel.. Russell C. Silberglied, Esq., John H. Knight, Esq., Paul N. Heath, Esq., and Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., serve as Delaware counsel. Dayton Superior had $288,709,000 in assets and $405,867,000 in debts as of February 27, 2009. DECODE GENETICS: Nasdaq Reinstates Listing of Common Stock ---------------------------------------------------------- The Nasdaq Listing and Hearing Review Council has advised deCODE genetics, Inc., that the listing of deCODE's common stock will be reinstated to the Nasdaq Global Market, effective at the open of the trading session on Monday, June 29, 2009. deCODE's common stock will continue to trade under the symbol DCGN. The reinstatement follows the Listing Council's reversal of a decision of the Nasdaq Listing Qualifications Panel pursuant to which the listing of deCODE's common stock was transferred to the Nasdaq Capital Market. In its Annual Report on Form 10-K for the year ended December 31, 2008, filed on March 31, 2009, deCODE genetics, Inc., reported that it had sufficient liquid funds to continue operations only into the second quarter of 2009. With the proceeds from an upfront payment from Celera Corp., anticipated receivables and cost-reduction measures, deCODE now anticipates that it will be able to continue operations through the second quarter of 2009 without obtaining additional financing. About deCODE Genetics deCODE genetics Inc. (Nasdaq: DCGN) -- http://www.decode.com/-- operates as a biopharmaceutical company that applies discoveries in human genetics to develop drugs and diagnostics for common diseases. The company serves pharmaceutical companies, biotechnology firms, pharmacogenomics companies, government institutions, universities, and other research institutions primarily in the United States, Europe, and internationally. The company was founded in 1996 and is headquartered in Reykjavik, Iceland. DRYSHIPS INC: To Release Q2 2009 Results on July 30 --------------------------------------------------- DryShips Inc. will release its results for the second quarter and six months ended June 30, 2009, after the market closes in New York on Thursday, July 30, 2009. DryShips' management team will host a conference call the following day on Friday, July 31, 2009, at 8:00 a.m. Eastern Daylight Time to discuss the Company's financial results. To join, participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote "DryShips". A replay of the conference call will be available until August 2, 2009. The United States replay number is 1(866) 247-4222; from the UK 0(800) 953-1533; the standard international replay number is (+44) (0) 1452 550 000 and the access code required for the replay is: 2133051# There will also be a simultaneous live webcast over the Internet, through the DryShips Inc. Web site -- http://www.dryships.com/ Participants to the live webcast should register on the Web site approximately 10 minutes prior to the start of the webcast. About DryShips Inc. DryShips Inc. -- http://www.dryships.com/-- based in Greece, is an owner and operator of drybulk carriers that operate worldwide. As of the day of this release, DryShips owns a fleet of 41 drybulk carriers comprising 7 Capesize, 28 Panamax, 2 Supramax and 4 newbuilding Drybulk vessels with a combined deadweight tonnage of over 3.6 million tons, 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips Inc.'s common stock is listed on the NASDAQ Global Market where trades under the symbol "DRYS." * * * As reported by the Troubled Company Reporter on June 19, 2009, DryShips signed an agreement with DnB NOR on waiver terms for US$86 million of its outstanding debt. No other details were provided. On June 9, DryShips signed an agreement on waiver terms with the Deutsche Bank AG, led syndicate on a US$1.125 billion facility. This facility covers drillships hull numbers 1865 and 1866 currently under construction at Samsung Heavy Industries. DUANE READE: Expects 6.1% Rise in Net Sales for June 27 Quarter --------------------------------------------------------------- Duane Reade Holdings, Inc., reports that net sales for the 13 weeks ended June 27, 2009, increased 6.1% to $479.1 million, from $451.4 million for the 13 weeks ended June 28, 2008. Net retail store sales, which exclude pharmacy resale activity, increased 4.2% to $450.3 million for the 13 weeks ended June 27, 2009, from $432.1 million for the 13 weeks ended June 28, 2008. Total same-store sales increased by 1.7% during the thirteen weeks ended June 27, 2009, with a front-end same store sales increase of 0.2% and a pharmacy same-store sales increase of 3.6%. Duane Reade estimates that Adjusted FIFO EBITDA for the 13 weeks ended June 27, 2009, will be slightly positive compared to the 13 weeks ended June 28, 2008. At June 27, 2009, total debt, including capital leases but excluding the liability associated with the Company's redeemable preferred stock, was $554.5 million. Availability under its asset-based revolving loan facility at quarter end was $67.5 million. The Company's estimate of Adjusted FIFO EBITDA for the 13 weeks ended June 27, 2009, is derived from its preliminary results of operations and is subject to completion of the quarterly review of its interim financial statements by its independent registered public accountants for this period. Actual results may differ from estimate due to, among other factors, special charges or other closing adjustments. As reported by the Troubled Company Reporter on July 14, 2009, Duane Reade Holdings' wholly owned subsidiaries, Duane Reade Inc. and Duane Reade, commenced fixed price offers to purchase for cash (i) any and all of the Issuers' $210 million outstanding aggregate principal amount of their Senior Secured Floating Rate Notes due 2010 and (ii) any and all of the Issuers' $195 million outstanding aggregate principal amount of 9.75% Senior Subordinated Notes due 2011: Tender Total Consideration Consideration Principal per $1,000 per $1,000 Amount Security Principal Consent Principal Outstanding Description Amount Payment Amount ----------- ----------- ------------- ------- ------------- Floating Rate $210,000,000 Notes $970 $30 $1,000 Subordinated $195,000,000 Notes $845 $30 $875 The TCR said July 17 that Moody's Investors Service assigned a Caa1 rating to Duane Reade's proposed new $210 million senior secured notes and a Caa3 rating to its proposed new $110 million senior subordinated notes. Moody's also affirmed Duane Reade's Caa1 Corporate Family Rating and Ca Probability of Default Rating. The rating outlook is stable. Proceeds from the issuance of these notes will be used to fund the company's cash tender offer for its outstanding $210 million senior secured and $195 million senior subordinated notes. Duane Reade's Caa1 CFR reflects the company's high leverage and weak coverage along with its geographic concentration in and disproportionate exposure to economic conditions in the intensely competitive New York metro market. The rating also incorporates Moody's expectation that free cash flow will be weak over the next twelve months due to relatively modest cash flow that is largely consumed by capital expenditures. About Duane Reade Founded in 1960, Duane Reade is the largest drug store chain in New York City, offering a wide variety of prescription and over- the-counter drugs, health and beauty care items, cosmetics, greeting cards, convenience foods and photofinishing. As of June 27, 2009, the Company operated 253 stores. At March 28, 2009, the Company had $708,637,000 in total assets and $872,340,000 in total liabilities, resulting in $163,703,000 stockholders' deficit. ECLIPS ENERGY: Randall N. Drake, CPA Raises Going Concern Doubt --------------------------------------------------------------- Randall N. Drake, CPA, PA in Clearwater, Florida raised substantial doubt about EClips Energy Technologies, Inc.'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 auditors pointed that the Company has had recurring losses and negative cash flows from operations. At December 31, 2008, the Company's balance sheet showed total assets of $1,347,418, total liabilities of $537,291 and stockholders' equity of $810,127. For the year ended December 31, 2009, the Company posted a net loss of $5,747,029 compared with a net loss of $6,052,995 for the same period in the previous year. The Company related that its cash was approximately $300 as of December 31, 2008, compared to $43,100 as of December 31, 2007, a decrease of approximately $42,800. This decrease is related to a decrease in gross profit between the years. The cash used in operations in 2008 increased from the cash used in operations in 2007 by approximately $713,000. Payroll expenses increased mainly due to the issuance of stock for services. The Company added that its working capital would not be sufficient to run its operations at current or proposed operating levels. A full-text copy of the Company's Form 10-K/A is available for free at http://ResearchArchives.com/t/s?3f9d About EClips Energy Technologies, Inc. EClips Energy Technologies, Inc. (OTC:ECET) fka World Energy Solutions, Inc., dba World Energy Solutions, is engaged in developing and manufacturing products and services, which save power and energy, and protects the environment. EET manufactures and sells transient voltage surge suppressors and related products, and commercial and residential energy-saving equipment and applications to distributors and customers throughout the United States. EDDIE BAUER: Golden Gate's $286-Mil. All Cash Bid Wins Auction -------------------------------------------------------------- Eddie Bauer Holdings, Inc., reports that Golden Gate Capital was selected as having the highest and best offer with an all cash bid of $286 million. The Golden Gate offer will be presented for court approval on July 22. The transaction is expected to close in early August. The Golden Gate offer will maintain the substantial majority of Eddie Bauer's stores and employees in a newly formed going concern company. Pursuant to the purchase agreement Eddie Bauer gift cards will be honored in the ordinary course of business. The transaction is not expected to result in any distribution to the stockholders of Eddie Bauer Holdings, Inc. 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. The TCR said July 17 that people familiar with the matter said that Iconix Brand Group Inc. and VF Corp. have presented bids for Eddie Bauer Holdings, Inc.'s assets, according to Jonathan Keehner and Lauren Coleman-Lochner at Bloomberg News. Bloomberg also said Eddie Bauer received an offer from Golden Gate and a joint bid from Hilco Consumer Capital and Gordon Brothers Group LLC. 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. EDISON MISSION: Downgraded by S&P 2 Notches to B ------------------------------------------------ Independent power producers Edison Mission Energy and subsidiary Midwest Generation Co. received a two-notch downgrade from Standard & Poor's lowering the corporate rating from 'BB-' to 'B'. The B rating from S&P is one notch below the rating issued in late June by Moody's Investors Service. In June, Moody's cut Edison Mission's corporate rating one click to B1 from Ba3. Moody's said the downgrade reflects its expectation that 2009 and 2010 earnings and cash flow are likely to be weaker than historical levels due to reduced electric demand, among other things. ELBIT VISION: Brightman Almagor Expresses Going Concern Doubt ------------------------------------------------------------- Brightman Almagor Zohar & Co., a member firm of Deloitte Touche Tohmatsu in Tel Aviv, Israel raised substantial doubt about Elbit Vision Systems 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 auditors noted the Company's recurring losses from operations and accumulated deficit. At December 31, 2008, the Company's balance sheet showed total assets of $17,201,000, total liabilities of $16,828,000 and shareholders' equity of $373,000. For the year ended December 31, 2008, the Company posted a net loss of $7,493,000 compared with a net loss of $1,342,000 for the same period in the previous year. As of December 31, 2008, the Company had a negative working capital of $4.1 million. A full-text copy of the Company's FORM 20-F is available for free at http://ResearchArchives.com/t/s?3fa3 Elbit Vision Systems Ltd. (OTC:EVSNF) operates as two main divisions: the Non-Destructive Automated Inspection Systems Division consisting of ScanMaster Systems Ltd., or ScanMaster Ltd.'s non-destructive inspection business and the Automated Optical Inspection Industry Division. The Company's systems are designed to overcome the limitations of human visual inspection. ENERJEX RESOURCES: March 31 Balance Sheet Upside-Down by $3.7MM --------------------------------------------------------------- EnerJex Resources, Inc.'s balance sheet at March 31, 2009, showed total assets of $7,680,178 and total liabilities of $11,473,802, resulting in a stockholders' deficit of $3,793,624. For its fiscal year ended March 31, 2009, the Company posted a net loss of $5,307,068 compared with a net loss of $4,827,935 for the same period in the previous year. The Company has historically met its capital requirements through debt financing, revenues from operations and the issuance of equity securities. As a result of the $200,000 monthly reduction of its borrowing base beginning April 2009, with the expectation that this monthly reduction would continue through December 2009, the Company has classified $1.7 million of the borrowings outstanding under its Credit Facility as a current liability. As the Company may be unable to provide the necessary liquidity, the Company is exploring strategic initiative and JV partnerships, well as sales of reserves in its existing properties to finance its operations and to service its debt obligations. On July 9, 2009, Weaver & Martin, LLC, in Kansas City, Missouri, raised substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial results for the years ended March 31, 2009, and 2008. The Company has suffered recurring losses and had negative cash flows. A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?3f60 EnerJex Resources, Inc. -- http://www.EnerJexResources.com/-- is an oil and natural gas acquisition, exploration and development company formed in December 2005. Operations are focused on the mid-continent region of the United States. The company acquires oil and natural gas assets that have existing production and cash flow. Once acquired, the company implements an exploration and development program to accelerate the recovery of the existing oil and natural gas as well as explore for additional reserves. Current production is approximately 270 gross barrels a day. EPIX PHARMACEUTICALS: Throws In Towel; to Wind Down Operations -------------------------------------------------------------- EPIX Pharmaceuticals, Inc., said that, in light of the Company's lack of capital and inability to obtain additional financing or consummate a strategic transaction, it has entered into an Assignment for the Benefit of Creditors, effective immediately, in accordance with Massachusetts law. The purpose of the Assignment is to conclude the Company's operations and provide for an orderly liquidation of its assets. The Company previously disclosed that it had sufficient cash to fund its operations only through August 2009, and the Company had been seeking a strategic alternative, including a financing, recapitalization, sale or disposition of one or more corporate assets, a potential merger or a strategic business combination, with various third parties for several months. The Assignment is a common law business liquidation mechanism under Massachusetts law that is an alternative to a formal bankruptcy proceeding. Under the terms of the Assignment, the Company transferred all of its assets to an assignee for orderly liquidation and distribution of the proceeds to the Company's creditors. The designated assignee for the Company is Joseph F. Finn, Jr. For creditors and other affected parties of EPIX, all inquiries related to this action should be addressed to Joseph F. Finn, Jr. at Finn, Warnke & Gayton, 167 Worcester Street, Suite 201, Wellesley Hills, MA 02481 (781-237-8840). Following the liquidation of the Company's assets and distribution of proceeds by the assignee, the Company does not expect that there will be any proceeds for distribution to the Company's stockholders. Elkan Gamzu, Ph.D., president and chief executive officer of EPIX, stated, "It is with great disappointment that the Company must proceed with this decision. Over the past several months we had taken several actions in an effort to improve the financial health of EPIX, including the retirement of our $100 million aggregate principle amount of 3.00% Convertible Senior Notes due 2024. Despite this and the efforts of our financial advisors who approached numerous third-parties over the past several months, we were unable to obtain additional funding to continue our operations or consummate a strategic transaction." As part of the Assignment and the Company's wind-down of its operations, the Company has terminated the employment of substantially all of its employees. The Company expects to retain its president and chief executive officer, Dr. Elkan Gamzu, for a short period of time to assist in the implementation of an orderly dissolution. 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. EXCO RESOURCES: Moody's Reviews 'B2' Corporate Rating for Upgrade ----------------------------------------------------------------- Moody's Investors Service placed EXCO Resources, Inc.'s ratings under review for upgrade. Ratings affected include EXCO's B2 Corporate Family Rating, B2 Probability of Default Rating, and Caa1 (LGD 5; 84%) senior unsecured note rating. The outlook had been negative pending firm announcement of a long awaited large leverage reduction plan and continued retention of bank borrowing capacity and covenant clearance sufficient to cover liquidity needs. The review for upgrade reflects the likely forthcoming major debt reduction and reduced ongoing drilling and development risk and capital spending burden if EXCO closes its property monetization and drilling and development joint venture with BG Group plc and its other pending modestly sized property divestitures. EXCO announced its agreement in principle to sell BG a 50% interest in producing and non-producing acreage in the firm's marquee Haynseville Haynesville Shale acreage and its final terms of sale with Encore Acquisition of other properties. The review will span the closing of the Haynesville JV and assess the likelihood of any further leverage reduction to come from EXCO's stated interest in further monetizations. While EXCO remains well hedged through 2010, with EXCO estimating that its existing hedge portfolio would cover approximately two-thirds of its pro-forma 2010 production at over $8/mcfe, 2011 production is far less hedged. Given the still highly uncertain natural gas outlook, Moody's believes leverage should continue to decline below pro-forma levels to be compatible with a higher rating in a potentially sustained lower price environment. Subject to successful final negotiations on the midstream portion of the transaction, EXCO believes the transaction would close by September 30. At closing, BG would pay EXCO a minimum of $655 million for 50% of EXCO's Haynesville and related East Texas/North Louisiana upstream producing and non-producing upstream properties and a minimum of $249 million for 50% of its associated midstream pipeline infrastructure. Price adjustments at closing for EXCO's capital outlays on the properties since January 1, 2009, would likely add significantly to BG's cash payments to EXCO. The divestitures to Encore are expected to raise approximately $375 million upon an expected closing in August 2009. All monetization proceeds would repay bank revolver debt and a $300 million unsecured term loan maturing next year. The emergence of EXCO's Haynesville Shale properties as an important long-term holding and as a partial monetization candidate contributed to both retaining the ratings and supporting the current review for upgrade. At this juncture, EXCO's hedge portfolio, sound production trends, and pro-forma leverage and liquidity would indicate adequate leverage and sustaining capex coverage to warrant a stable outlook. An upgrade would require comfort that leverage would have been cut substantially before the hedge portfolio rolls over into lower prices and that production, cash flow coverage, and the price outlook are also supportive of a higher rating. EXCO voices confidence that it will execute some form of additional asset monetization before the end of the year, perhaps as early as third quarter 2009. Moody's last rating action for EXCO was on August 30, 2007, at which time Moody's confirmed its B2 CFR after a review for downgrade and assigned a negative outlook. At that time, under Moody's Loss Given Default methodology, the senior unsecured note rating was also notched down from B3 (LGD 5; 77%) to Caa1 (LGD 5; 84%). EXCO Resources, Inc., is headquartered in Dallas, Texas. FLEETWOOD ENTERPRISES: AIP Completes $53MM Acquisition of RV Biz ---------------------------------------------------------------- American Industrial Partners Capital Fund IV, L.P., has completed the acquisition of the motorized recreational vehicle business of Fleetwood Enterprises, Inc. The transaction was an asset purchase pursuant to a Section 363 bankruptcy sale process and included the Goldshield Fiberglass fabrication business. As reported by the Troubled Company Reporter on June 26, 2009, AIP and Fleetwood reported that the U.S. Bankruptcy Court has approved the sale of Fleetwood's motor home assets to AIP for $53 million, subject to pre-closing conditions and post-closing adjustments. Fleetwood did not conduct an auction because no other qualified bids were received. The sale includes two motor home manufacturing facilities, two motor home service facilities, and Fleetwood's Gold Shield supply subsidiary, all presently located in Decatur, Indiana. It also includes the intellectual property for Fleetwood's existing motor home brands and certain machinery and equipment in Riverside, California. AIP may operate the Riverside facility for an undetermined period of time going forward. AIP has agreed to assume certain liabilities, including warranty obligations on Fleetwood motorized products. Fleetwood RV is one of North America's leading manufacturers of Class A and Class C motorized recreational vehicles and has established one of the industry's broadest and most respected distribution channels and product lines. Fleetwood RV will be jointly run by Chuck Wilkinson, CEO and John Draheim, President. Following company meetings with all associates in Decatur, Chuck Wilkinson, CEO of Fleetwood RV stated, "Our veteran workforce is enthusiastic and excited to return to their jobs building the best coaches in the industry." John Draheim, President of Fleetwood RV, added, "We are confident that the new company can capitalize on the strength of the Fleetwood RV Brand and strong relationships with the distribution channel that have been developed over the past 60 years." "AIP builds and invests in great American headquartered businesses and we believe Fleetwood RV represents an attractive investment opportunity. We are pleased to be partners with Chuck, John and all the talented associates at Fleetwood RV. We respect the long and successful history of the Company and greatly value the relationships that Fleetwood RV has with its dealers, customers, suppliers and associates and look forward to continuing and improving those relationships over time," said Dino Cusumano, Partner at AIP. Mr. Cusumano further commented that, "The Company's headquarters and manufacturing operations will be in Decatur, Indiana. We would like to thank the City of Decatur and the State of Indiana for their significant support during this process." Paul Bamatter, Partner at AIP, commented that, "Fleetwood RV will be organized as a separate standalone company within our portfolio of companies. Fleetwood RV will have one of the best balance sheets in the industry with no third party debt and a significant cash balance at close." Chuck Wilkinson said, "We look forward to partnering with the American Industrial Partners team and have charted a going forward operating agenda focused on developing new and leading products, further improving our quality and service levels and our cost position." John Draheim noted that, "Our customers and dealers have been extremely loyal to us over the years and we expect to repay that loyalty by ensuring that they are afforded innovative products built with exceptional quality, all at affordable prices. Our near-term outlook has turned positive as our dealer inventories have bottomed and retail sales have accelerated in the past few months." About American Industrial Partners American Industrial Partners -- http://www.aipartners.com/-- was founded in 1989 and is a private equity firm that makes control equity investments in mid-sized industrial companies that can benefit from the firm's systematic approach to implementing strategic and operational improvements. It is investing its fourth fund which recently closed with $405.5 million of committed capital. About Fleetwood Enterprises 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. FREEGOLD VENTURES: Defaults on US$2.25 Million Tiomin Loan ---------------------------------------------------------- Tiomin Resources Inc. said Friday Freegold Ventures Limited has not repaid the US$2.25 million secured loan due to Tiomin on July 15, 2009. The original bridge loan to Freegold was due January 15, 2009, and subsequently extended to February 10, and further extended to July 15. Tiomin and the other bridge loan lender have agreed to a further extension to August 15, 2009, during which period a final resolution is sought. Tiomin is reviewing its options to exercise its security rights to recover the bridge loan in the most accretive way for its shareholders. Freegold has said it is working to satisfy its various debt obligations and raise additional working capital, which may include the sale of individual projects. There is no assurance that Freegold will successfully conclude any such transaction or arrange financing to satisfy its creditors. Robert Jackson, President and CEO of Tiomin said, "This is a difficult time for many junior explorers and Freegold is no exception. However, Freegold's debt problems do not diminish the geological merit of its assets. We see value in Freegold's assets and seek a constructive resolution of this issue." About Freegold Friday Freegold Ventures Limited (CA:ITF) (FRANKFURT: FR4) is a North American exploration and development company that is currently exploring advanced-stage gold projects in Idaho and Alaska. Freegold holds a 100% interest in the Almaden gold project in southern Idaho, a 93% interest in the Golden Summit gold project outside Fairbanks, Alaska, and near the Fort Knox gold mine, a 100% interest in the Rob gold project near the Pogo gold mine in the Goodpaster Mining District of Alaska. It also has an exploration agreement with an option to lease the Vinasale gold project in central Alaska. About Tiomin Resources Tiomin Resources Inc. -- http://www.tiomin.com/-- is a mining company traded on The Toronto Stock Exchange with a focus on the exploration and development of base metals, precious metals, and titanium mineral sands projects. FULTON HOMES: Monthly Sales Increased Since March 2009 ------------------------------------------------------ J. Craig Anderson at The Arizona Republic reports that Fulton Homes Corp.'s sales have increased to more than 80 homes per month from 12 homes per month in March 2009. "In the last 16 weeks, we sold 348 homes. It's going to change the outcome of the bankruptcy," The Arizona Republic quoted Dennis Webb, Fulton Homes' vice president of operations, as saying. According to The Arizona Republic, real-estate consultant Jim Belfiore said that Fulton Homes' sevenfold increase in sales from March through Thursday has a lot to do with a decision by the Company to lower its prices significantly. Some larger Fulton Homes have sold for as little as $55 a square foot, which some experts have said is less than what it costs to build a home, The Arizona Republic states, citing Mr. Belfiore. The Arizona Republic relates that none of Fulton Homes' products exceeds $80 a square foot. Much of Fulton Homes' sales have been in geographic areas, primarily the Southeast Valley, where the Company has priced homes to be competitive with foreclosures, the report states, citing Mr. Belfiore. The Arizona Republic relates that Bank of America, the lead creditor in Fulton Homes' bankruptcy case, recently secured court permission to go after the Company's sales and home-warranty companies in its push for remittance. According to the report, a group of lenders led by Bank of America claims that Fulton Homes owes them some $160 million. The report states that on July 2, a judge ruled that the lenders could force Fulton Homes to defend its position in court with regard to the warranty and sales companies, but that it needed to wait until the bankruptcy case was concluded. Fulton Homes Corporation -- http://www.fultonhomes.com-- is a Tempe, Arizona-based homebuilder. The Company filed for Chapter 11 protection on January 27, 2009 (Bankr. D. Ariz. Case No. 09- 01298). Mark W. Roth, Esq., at Shughart Thomson & Kilroy PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed assets and debt between $100 million and $500 million each. GEORGIA GULF: Extends Private Debt Exchange Offers to July 23 ------------------------------------------------------------- Georgia Gulf Corporation has extended the expiration date for its private offers to exchange its outstanding 7.125 percent Senior Notes due 2013; 9.5 percent Senior Notes due 2014; and 10.75 percent Senior Subordinated Notes due 2016; and related consent solicitations until 12:00 midnight, New York City time July 23, 2009. The exchange offers provide for the exchange of the three issues of outstanding notes totaling $800 million in aggregate principal amount for an aggregate of 32,050,000 shares of the Company's convertible preferred stock, which are convertible into shares of its common stock on a one-for-one basis, and an aggregate of 1,430,000 shares of its common stock after giving effect to the previously announced 1-for-25 reverse stock split of the Company's common stock. Each exchange offer will expire at 12:00 midnight, New York City time, on July 23, 2009, unless extended. As of 5:00 PM ET on July 17, 2009 approximately $653.1 million, or 81.6 percent of the aggregate principal amount of the notes had been tendered in the exchange offers, comprised of $60.4 million, $434.6 million and $158.1 million of the $100 million, $500 million and $200 million in principal amount outstanding of the 2013, 2014 and 2016 notes, respectively. The minimum tender condition to consummation of the exchange offers has been lowered to 94 percent with the consent of the holders of a majority in principal amount of the notes. The exchange offers are also subject to further specified conditions. Full details of the exchange offers and related consent solicitations are included in the offering memorandum for the exchange offers, copies of which are available to Eligible Holders (as defined below) from Global Bondholder Services Corporation, the information agent, by calling (212) 430-3774 or toll free at (866) 873-7700. The exchange offers have been made, and the shares of convertible preferred stock and shares of common stock are being offered and will be issued, in a private transaction in reliance upon an exemption from the registration requirements of the Securities Act of 1933, only to holders of the notes (i) in the United States, that are "qualified institutional buyers," as that term is defined in Rule 144A under the Securities Act, or (ii) outside the United States, that are persons other than "U.S. persons," as that term is defined in Rule 902 under the Securities Act, in offshore transactions in reliance upon Regulation S under the Securities Act. Neither the shares of convertible preferred stock nor the shares of common stock have been registered under the Securities Act of 1933 or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. About Georgia Gulf Georgia Gulf Corporation is a manufacturer and international marketer of two integrated chemical product lines, chlorovinyls and aromatics. The Company's primary chlorovinyls products are chlorine, caustic soda, vinyl chloride monomer (VCM), vinyl resins and vinyl compounds. Its aromatics products are cumene, phenol and acetone. The Company has four business segments: chlorovinyls; window and door profiles, and moldings products; outdoor building products, and aromatics. As of December 31, 2008, the Company's balance sheet showed total assets of $1.61 billion and total liabilities of $1.75 billion resulting in total stockholders' deficit of $139.92 million. As of December 31, 2008, the Company had $90 million of cash on hand as well as $143 million of borrowing capacity available under its revolving credit facility. The Company reduced net debt by $83 million during 2008 and was in compliance with its debt covenants for the quarter ended December 31, 2008. At March 31, 2009, the Company had $1.56 billion in total assets and $1.66 billion in total liabilities, resulting in $97.3 million stockholders' deficit. * * * As reported in the Troubled Company Reporter on June 19, 2009, Standard & Poor's Ratings Services lowered its issue rating on Georgia Gulf Corp.'s $100 million 7.125% senior notes due 2013 to 'D' from 'C' and retained the '6' recovery rating, indicating S&P's expectation of negligible recovery (0%-10%) on the notes. At the same time, S&P kept its corporate credit rating on Georgia Gulf at 'D'. S&P retained its 'D' ratings on the company's $200 million 10.75% senior subordinated notes due 2016 and $500 million 9.5% senior notes due 2014. S&P also retained the '6' recovery ratings on these notes indicating S&P's expectation of negligible recovery (0%-10%). S&P lowered its corporate credit rating and these issue ratings on Georgia Gulf to 'D' on May 21, 2009, following a missed interest payment of $34.5 million on these notes. The TCR said on June 18 that Fitch Ratings downgraded Georgia Gulf's Issuer Default Rating to 'RD' from 'C' following its announcement of an extension of its exchange offer until July 1, 2009. The TCR on May 26, 2009, said Moody's Investors Service lowered Georgia Gulf's Probability of Default Rating from Caa3 to Caa3/LD reflecting the deemed limited default due to the non-payment of interest on its 9.5% Guaranteed Sr. Unsecured Notes due 2014 and the 10.75% Sr. Subordinated Notes due 2016. The TCR said July 17 that Georgia Gulf entered into extensions to the forbearance agreements with certain holders of its 9.5% Senior Notes due 2014; 10.75% Senior Subordinated Notes due 2016; and 7.125% Senior Notes due 2013. The forbearance agreements provide for the Company to continue to withhold at least until July 30, 2009, the $34.5 million of interest payments due April 15 on the 2014 notes and the 2016 notes and the $3.6 million interest payment due June 15 on the 2013 notes. GOLFERS' WAREHOUSE: Worldwide Golf Sale Hearing Set for Aug. 5 -------------------------------------------------------------- At Golfers' Warehouse, Inc.'s request, the Honorable Albert S. Dabrowski has scheduled a final hearing at 10:00 a.m. on August 5, 2009, to authorize and approve the sale of its six stores in Connecticut, Rhode Island, and Massachusetts to the highest bidder, free and clear of liens, claims and encumbrances. Golfers' Warehouse entered into an Asset Purchase Agreement dated July 9, 2009, for the sale of the stores to California-based retailer Worldwide Golf. Competing bids must be delivered to the Golfers' Warehouse's lawyers by 12:00 noon on August 3, 2009. In the event a competing bid is received, the Debtor will conduct an auction on August 4, 2009. Objections to the Sale, if any, must be fled by 4:00 p.m. on August 4, 2009, and served on: (i) the United States Trustee (ii) Counsel for the Debtor: Barry S. Feigenbaum, Esq. Rogin Nassau LLC 185 Asylum Street Hartford, CT 06103-3460 (iii) Counsel for Worldwide Golf: Julie A. Manning, Esq. Shipman & Goodwin LLP One Constitution Plaza Hartford, CT 06103 - and - Peter J. Barrett, Esq. Kutak Rock LLP 1111 East Main Street, Suite 800 Richmond, VA 23219 (iv) Counsel to Wachovia Bank, N.A.: Thomas Gugliotti, Esq. Updike, Kelly & Spellacy, P.C. One State Street Hartford, CT 06123-1277 - and - Rufus T. Dorsey, Esq. Parker Hudson, Rainer & Dobbs LLP 15000 Marquis Two Tower 285 Peachtree Center Avenue, NE Atlanta, GA 30303 (v) counsel to any Official Committee of Unsecured Creditors appointed in the Debtor's case. Golfers' Warehouse, Inc., filed for Chapter 11 protection (Bankr. D. Conn. Case No. 09-21911) on July 9, 2009, and estimated that its assets and debts fall in the range of $10 million to $50 million. GREAT CIRCLE: Court Confirms Reorganization Plan ------------------------------------------------ Great Circle Family Foods, LLC, the franchisee of Krispy Kreme Doughnut Corporation in Southern California, said the United States Bankruptcy Court for the Central District of California has confirmed its Second Amended Chapter 11 Plan of Reorganization. In conjunction with the Plan, Great Circle has: -- Substantially restructured its operations and balance sheet; -- Assured the ongoing operation of Southern California's 11 Krispy Kreme Doughnuts locations; -- Preserved approximately 240 jobs in Southern California; -- Forged a renewed, collaborative and sustainable relationship with its franchisor; and -- Established a solid platform from which to further penetrate its market. "This is an exciting day for everyone associated with Great Circle," commented Roger Glickman, Chief Executive Officer of Great Circle Family Foods, LLC. "Our restructuring has been a long and painful process, but we emerge as a healthy enterprise thanks to the dedication and hard work of our outstanding employees and to the loyalty of our cherished customers." Through the bankruptcy process, Great Circle was effectively able to address its financial challenges and create a solid foundation for future success. The Company looks forward to bringing more Krispy Kreme doughnuts to more Southern Californians by opening new, cost efficient stores in the coming years. "We are very pleased that our franchise partner Great Circle Family Foods has emerged from Chapter 11," said Steve Lineberger, President of U.S. Stores for Krispy Kreme Doughnut Corporation. "They are a strong operator, and we are very committed to assisting them as they move forward successfully. Krispy Kreme has developed an increasingly collaborative relationship with our franchisees as we continue our work to improve franchisee service and support levels. There is much that Krispy Kreme and Great Circle Family Foods can continue to learn from each other, and we look forward to being a part of their future." During the next few years, the Company will focus on retiring residual debt obligations and refurbishing stores, while looking for growth opportunities the new economy presents. 2nd Amended Plan Pursuant to the Second Amended Plan of Reorganization, all of the Debtors will be merged into and substantially consolidated with Great Circle Family Foods, LLC, as the Reorganized Debtor. On the Plan's Effective Date, all of the existing equity interests in all of the Debtors will be cancelled and extinguished. On the Plan Effective Date, the Reorganized Debtor will be owned 50% by the New Investor and 50% by the Liquidating Trust for the benefit of holders of allowed general unsecured creditors claims. Roger E. Glickman will serve as the initial Chairman of the Management Committee of the Reorganized Debtor as well as the Chief Executive Officer and Chief Financial Officer of the Reorganized Debtor, which are the same titles he holds at this time. Brett Garlinghouse will serve as the initial President of the Reorganized Debtor, which is the same title he holds at this time. The Reorganized Debtor will serve as the disbursing agent for purposes for making all distributions required to be made under the Plan. In exchange for a contribution of $150,000 of new cash, all of which will be paid to the holders of Class 4 allowed general unsecured claims, and various personal guarantees to GE Capital Franchise Finance Corp., the Debtors' primary secured creditor, and Krispy Kreme Doughnut Corp., Richard Reinis will receive 50% of the equity interests in the Reorganized Debtor. Richard Reinis owns October Acquisitions, LLC, the Debtors' other primary secured creditor. The Plan segregates the various claims against and interest in the Debtors as follows: Class Description Treatment ----- ----------- --------- 1 All Claims of GE Impaired; Entitled to Vote 2 All Claims of October Impaired; Entitled to Vote Acquisitions, LLC 3 Non-tax Priority Claims Unimpaired; Not Entitled to Vote 4 General Unsecured Impaired; Entitled to Vote Claims 5 Other Secured Claims Impaired; Entitled to Vote 6 All Equity Holders Not Entitled to Vote; Deemed to have rejected the Plan. GE will receive $250,000 cash plus 4 promissory notes from the Reorganized Debtor: Promissory Note 1 for $1,400,000, Promissory Note 2 for $90,000, Promissory Note 3 for $790,000, and Promissory Note 4 for $280,000. The debt owed to October Acquisitions, LLC, amounts to roughly $5,625,000. OA has agreed to permit the Reorganized Debtor to repay the full amount of OA's allowed secured and super-priority administrative claim of $210,127 over time and to voluntarily waive the balance of its claim of more than $5,400,000 in order to increase the distributions and value to be received by other general unsecured creditors. OA is owned by Richard Reinis. General unsecured creditors will receive a cash payment in the amount of $400,000 ($150,000 of which will be funded from the new cash contribtuion, with the other $250,000 to be funded from the Debtors' cash on hand) plus 50% of the stock in the Reorganized Debtor. Classes 1, 2, 4, and 5 are impaired under Plan and are entitled to vote under the Plan. All equity holders are deemed to have rejected the plan and are not entitled to vote. A full-text copy of the disclosure statement describing the Debtors' Second Amended Plan, dated February 18, 2009, is available at: http://bankrupt.com/misc/GreatCircle.DS2ndAmendedPlan.pdf http://bankrupt.com/misc/GreatCircle.DS2ndAmendedPlanPart2.pdf About Great Circle Family Foods Headquartered in Los Angeles, California, Great Circle is the franchisee and operator of Krispy Kreme Doughnuts stores in Southern California. Great Circle was founded in 1998. During the immediately succeeding years, it became Krispy Kreme's Franchisee of the Year, a franchise leader in quality, service and cleanliness, and a national award winner for technological advances in its reporting systems. By 2004, the Company had rapidly expanded to 31 locations, serving 800 wholesale accounts with its own distribution system, employing 1,500 people, and generating over $64 million in revenue. From 2004 to 2007, Great Circle retrenched. Countering negative sales trends, the Company terminated its massive wholesale business, eliminated the distribution system, sold or closed twenty locations, trimmed overhead, restructured substantial bank indebtedness, and improved certain strategic relationships, including its relationship with its franchisor. Most importantly, Great Circle changed its business model to the small format store concept now being used in international markets. Having accomplished much of its restructuring, the Company determined that completion required one more steps in the process. On August 22, 2007, Great Circle and its related entities filed voluntary bankruptcy petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Central District of California. This step enabled the Company to finalize a restructuring with secured creditors and to ensure that Great Circle may move forward with a viable business employing a hub and spoke retail system with new products and the same superb service that made it so successful from the outset. Great Circle Family Foods, LLC -- http://www.gcff.com/-- and five of its affiliates filed separate petions for Chapter 11 protection on Aug. 22, 2007 (Bankr. C.D. Calif. Lead Case No. 07-12600). David M. Poitras, Esq., at Jeffer, Mangels, Butler & Marmaro LLP; Holly Roark, Esq., Juliet Y. Oh, Esq., Kim Tung, Esq., Monica Y. Kim, Esq., Ovsanna Takvoryan, Esq., and Ron Bender, Esq., at Levene, Neale, Bender, Rankin & Brill, L.L.P.; and Mitchell N. Reinis, Esq., at Silver & Freedman, represent the Debtors. Weiland, Golden, Smiley, Wang Ekvall & Strok LLP represents the Official Committee of Unsecured Creditors as counsel. When the Debtors filed for protection from their creditors, they listed assets of between $1 million and $100 million and the same range in debts. GREEN PLANET: Semple Marchal Raises Going Concern Doubt ------------------------------------------------------- Semple, Marchal & Cooper, LLP, in Phoenix, Arizona, raised substantial doubt about Green Planet Group, Inc.'s ability to continue as a going concern after auditing the Company's financial results for the years ended March 31, 2009, and 2008. The auditors pointed to the Company's significant operating losses and negative working capital. At March 31, 2009, Green Planet's balance sheet, showed total assets of $21,499,863, total liabilities of $24,058,317, resulting in a stockholders' deficit of $2,558,454. For the fiscal year ended March 31, 2009, the Company posted a net loss of $3,823,415 compared with a net loss of $2,450,084 for the same period in the previous year. At March 31, 2009, the Company related that it does not have any significant commitments for capital expenditures. The Company is discussing with potential customers the manufacturing and delivery logistics and depending on the results of the negotiations. At March 31, 2009, the Company aggregate of accounts payable, accrued liabilities and notes due within one year increased by $12,570,712 from $4,268,746. These obligations together with operation costs will have to be funded from operations and additional funding from debt and equity offerings. Headquartered in Scottsdale, Arizona, Green Planet Group Inc. (OTC:GNPGE) -- http://www.greenplanetgroup.com/-- engages in ongoing research and development to create eco-friendly products and services for the new, Green Economy. GNPG provides gasoline, oil and diesel additives for engines, other transportation-related fluids and industrial lubricants. HAWAIIAN TELCOM: Court Denies Plan Exclusivity Extension -------------------------------------------------------- For reasons stated in open court, Judge King of the U.S. Bankruptcy Court for the District of Hawaii denied the request of Hawaiian Telcom Communications, Inc., and its affiliates to extend (i) their exclusive period to file a reorganization plan through September 30, 2009, and (i) their exclusive period to solicit acceptances of that plan through November 30, 2009. Judge King directed the Debtors, at a July 1, 2009 hearing, to consider reorganization plans that compete with their Joint Chapter 11 Plan of Reorganization dated June 3, 2009, according to Bloomberg News says. By virtue of the Court's current ruling, the Debtors' Exclusive Plan Filing Period expired on July 1, 2009, which was extended by one day pursuant to a bridge order, as amended. The Debtors' Exclusive Solicitation Period remains September 1, 2009. Debtors' Further Reply to Sandwich Isles Prior to entry of the Exclusivity Denial Order, the Debtors argued that the issues raised by Sandwich Isles are not relevant to whether cause exists to extend or terminate exclusivity. Prior to entry of the Exclusivity Denial Order, the Debtors argued that the issues raised by Sandwich Isles are not relevant to whether cause exists to extend or terminate exclusivity. Theodore D. C. Young, Esq., at Cades Schutte LLP, in Honolulu, Hawaii, maintained that contrary to Sandwich Isles' accusations, the Debtors' businesses are performing according to and ahead of projections. He further said that Sandwich Isles' proposal lacks, among others, support from the Debtors, the Secured Lenders, the Official Committee of Unsecured Creditors, and the equity sponsor or the International Brotherhood of Electric Workers, Local 1537. He asserted that even if Sandwich Isles is correct in its arguments, no basis exists to terminate exclusivity to allow a competitor to propose a plan that pays less than fair value for the assets and where the competitor does not have the support of a single creditor constituency. As to Sandwich Isles' arguments about the impact of regulatory requirements on the confirmability of the Plan, Mr. Young said that no legal or factual bars exist to the Secured Lenders and holders of senior notes' becoming the holders of the reorganized Hawaiian Telcom stock. Pursuant to Section 310(a) of Title 47 of the U.S. Code, the Federal Communications Commission can permit foreign holders to indirectly own greater than 25% of a regulated entity if the FCC finds it is in public interest. He further notes that Section 269-17.5 of Hawaii Revised Statutes does not bar foreign ownership, but rather imposes a Hawaii Public Utilities Commission approval requirement. More importantly, he insisted that allowing Sandwich Isles to file its proposed plan would result in unnecessary delay as Sandwich Isles must complete substantial diligence before filing a reorganization plan, which adds administrative costs to the Debtors' estates and will disrupt Hawaiian Telcom's emergence. "A material risk exists because terminating exclusivity will send the wrong message to employees, customers and creditors at a time when their collective support is most critical," he said. Committee's Comment For its part, the Creditors Committee also disagreed with the Debtors' Plan because the Plan was crafted by the Debtors and the Lenders without any meaningful input or review by it. Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii, said that, as will be proved by the Committee in a lien dispute action against the Lenders, the liens of the Lenders are worth substantially less than the entire enterprise value of the Debtors and significant value should be available to unsecured creditors under any plan that would be deemed confirmable. In this regard, the Committee asserted that the Debtors' Plan cannot be confirmed. The Committee, however, noted that Sandwich Isles' proposal is not sufficiently developed and does not provide sufficient value to the Debtors' estates. Thus, the Committee also does not support the Sandwich Isles Proposal at this time. Against this backdrop, the Committee told the Court that it should be permitted to share exclusivity with the Debtors after the Court's determination of the Lenders' summary judgment motion in the Lien Dispute scheduled on July 30, 2009. Mr. Muzzi contended that allowing the Committee to file its own Plan in the event it is successful in the Lien Dispute will help "level the playing field" for unsecured creditors. Accordingly, the Committee asked the Court to limit the Debtors' exclusivity extension to an additional 30 days to permit consideration of the Debtors' Exclusivity Motion after the Court's ruling on the Lenders' Summary Judgment Motion. He maintained that reconsidering the Debtors' Motion will permit the Debtors, the Lenders and the Committee to further consider the Sandwich Isles Proposal in the event Sandwich Isles is able to further develop its proposal at that time. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: D. Lamm Wants Payment of $10MM Admin. Claim ------------------------------------------------------------ In May 2009, Mark Douglas Lamm was riding his motorcycle with his 10-year old daughter, Shealyn Lamm, when a truck owned by Hawaiian Telcom Communications Inc. and its affiliates operated by their employee, made a left turn and drove directly into the path of Mr. Lamm and his passenger. Lissa D. Shults, Esq., at Shults & Tamm, ALC, in Honolulu, Hawaii, discloses that Mr. Lamm died in the hospital while his daughter suffered a severe tibial fracture. The Lamms assert tort damages exceeding $10,000,000. Ms. Shults notes that the Debtors are insured by policies of insurance, including a policy with First Insurance Company of Hawaii, which provides primary coverage for the Lamms' incident. Thus, pursuant to Section 503(b)(1)(A) of the Bankruptcy Code, the estate of Mark Douglas Lamm, and Beate Lamm, for herself and on behalf of Shealyn Lamm, ask the Court to compel payment of their administrative expense claim for $10,000,000 against the Debtors. The Lamms also demand that the Debtors notify those insurers of the tort damages. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: May Use Cash Collateral Until August 31 -------------------------------------------------------- Judge King authorized Hawaiian Telcom Communications Inc. and its affiliates' continued use of the cash collateral of their prepetition lenders, on a consensual basis, through and including August 31, 2009. The Third Cash Collateral Extension Order provides that the Debtors will pay to the Prepetition Agent on an ongoing basis: (1) The current cash payment of interest at the non-default rates at the times provided for in the Prepetition Credit Agreement, provided that from March 1, 2009, to August 31, 2009, those obligations will be satisfied by: -- payment of cash interest calculated at the non- default rates with respect to $300 million of the outstanding Senior Secured Debt; and -- the deemed payment of interest with respect to the balance of outstanding Senior Secured Debt, with the amount being included in the amount of Senior Secured Debt. (2) Cash payments equal to all accrued and unpaid non- default rate interest, fees and expenses then owing with respect to the Prepetition Obligations or provided for in the Prepetition Financing Documents; and (3) From time to time after the Petition Date, the current cash payment of documented fees and expenses as and when due and payable under the Prepetition Financing Documents, including fees and expenses of legal counsel and other professionals retained by the Prepetition Lenders. A full-text copy of the Third Extension Order dated June 30, 2009, is available for free at: http://bankrupt.com/misc/HawTel_3rdExtCashCollOrd.pdf About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: Seeks to Expand Deloitte's Services ---------------------------------------------------- Hawaiian Telcom Communications Inc. and its affiliates tell the Bankruptcy Court that they are in need of supplemental audits to remain in compliance with certain regulatory schemes. Accordingly, the Debtors seek the Court's permission to expand the scope of Deloitte & Touche LLP's services to include: (a) an audit of the Debtors' financial statements and a review of interim financial information. Specifically, under the Financial Statement Audit, Deloitte & Touche will: -- obtain an understanding of internal controls sufficient to plan the audit and to determine the nature, timing and extent of audit procedures to be performed; -- examine, on a test basis, evidence supporting the amounts and disclosures in the Debtors' financial statements; -- inquire directly of the Debtors' audit committee regarding its views about the risk of fraud and whether the Audit Committee has knowledge of any fraud or suspected fraud affecting the Debtors; -- assess the accounting principles used and significant estimates made by management; and -- evaluate the overall financial presentation; and (b) a limited scope of audit of financial statements of the Debtors' 401(k) plans for management employees and hourly employees and the Debtors' retiree welfare benefit trust for the year ended December 31, 2008 The Financial Statement Audit will express an opinion on the fairness of the presentation of the Debtors' financial statements for the year ended December 31, 2009, to conform with generally accepted accounting principles. Similarly, a review of interim financial information performed under Statements on Auditing Standards No. 100 will provide Deloitte & Touche a basis for communicating whether any material modifications should be made to the interim financial information to conform with generally accepted accounting principles. Moreover, the objective of the Limited Scope Audit is for Deloitte & Touche to issue an opinion on whether the form and content of the information included in the Plans' financial statements and supplemental schedules are presented to comply with 29 CFR 2520.103-8 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act. In connection with the Financial Statement Audit, the Debtors will pay Deloitte & Touche at the firm's customary hourly rates and fees: Title Rate per Hour ----- ------------- Partner/Director $375 to $450 Senior Manager $300 to $350 Manager $250 to $300 Senior $200 to $250 Staff $150 to $250 With respect to the Limited Scope Audits, the Debtors will pay Deloitte & Touche a fixed fee, which is $55,000 plus Hawaii general excise tax for 4.16% and a City and County of Honolulu surcharge of 0.546%. In addition, the Debtors note that the United States Trustee for Region 15 has agreed to not object to the time billed to the Limited Scope Audits being recorded in half-hour increments rather than the customary 1/10th hour increments. Deloitte & Touche will submit invoices for those services rendered since May 4, 2009. Paul H. Higo, partner at Deloitte & Touche, assures the Court that upon review, his firm does not hold or represent any interest materially adverse to the Debtors in the matters for which it has been employed. Accordingly, Deloitte & Touche remains a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code, he maintains. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAWAIIAN TELCOM: To Assert Confidentiality of Some Plan Documents ----------------------------------------------------------------- Theodore D.C. Young, Esq., at Cades Schutte LLP, in Honolulu, Hawaii, notes Hawaiian Telcom Communications Inc.'s plan process is now open to potential purchasers and plan sponsors and other parties-in-interest will be able to file competing plans in light of the Court's July 1, 2009 Exclusivity Period Extension Denial Order. Now that the Court has opened the process, interested parties will need to complete diligence and review of the Debtors' confidential materials in order to propose terms for a potential transaction or to file a competing plan. The Debtors are aware that the Official Committee of Unsecured Creditors intends to find potential plan sponsors and the Debtors are aware of one potential purchaser. Against this backdrop, the Debtors ask the Court to approve certain standardized procedures for third party-access to their confidential and competitively sensitive information. The Debtors propose a Protocol that consists of three tiers providing for greater access to the Debtors' confidential information, advisors and members of management: * Level One: If a potential purchaser or plan sponsor executes a Non-disclosure Agreement and provides information sufficient to show that it is qualified to pursue a transaction, it will be given access to the electronic data room containing confidential financial and operation materials, a company overview presentation prepared by the Debtors' management and access to interviews with the Debtors' advisors. To determine if a party is qualified, the party should provide the Debtors' financial advisor, Lazard Freres & Co, LLP, as well as the financial advisors to the Official Committee of Unsecured Creditors and the Secured Lenders with information sufficient to show its bona fides, including information regarding its market capitalization, revenue, EBITDA, liquidity and cash flow, debt capacity, history and experience of doing acquisitions or funds under management. To the extent the potential purchaser's information is contained in public disclosures, it can identify those materials for the advisors' review. The potential purchaser or plan sponsor should identify any financial institutions it intends to work with to the extent it will not self- finance the transaction. In addition, any potential purchaser or plan sponsor must pursue a plan that contemplates committed financing at the time the agreement is signed. Any proposed plan or transaction that contains contingent financing will not be viable proposal for the Debtors in the Chapter 11 cases. If Lazard Freres, or the financial advisors for the Committee and the Secured Lenders, determines that the party is qualified, then the qualified party should sign the form of Non-disclosure Agreement and will be given Level One access. To the extent any dispute arises regarding whether a potential purchaser or plan sponsor is a qualified party, the Debtors propose that those disputes be handled by the Court on an expedited basis. * Level Two: A qualified party that proposes a transaction or a Chapter 11 plan that gains support of the Debtors, the Secured Lenders, or the Committee will be given Level Two access. Level Two access will provide greater access to the Debtors' confidential and competitively sensitive information. After access to the scope of information made available through public filings and Level One access, parties are typically able to propose a transaction in sufficient detail to gain the support of the major constituencies. * Level Three: After the parties progress to a negotiated and substantially complete asset purchaser agreement or other transaction that is the basis for a Chapter 11 plan, the qualified potential purchaser or plan sponsor will be given access to the Debtors' most confidential and competitively secret information. Those "11th hour" disclosures would include materials that would directly harm the Debtors from disclosure to a strategic competitor. The 11th Hour Disclosures are standard industry practice and the Debtors should be allowed to rely on those protections to maintain the most commercially sensitive information. Mr. Young stresses that the Debtors' need to protect confidential information is substantial as disclosure of competitively sensitive information can impair the Debtors' business operations. He asserts that improper disclosure of confidential information would allow a competitor to: -- undercut the Debtors' business operations and efforts to maintain and grow their customer base, -- recruit key employees for hire with the knowledge of the details of their current compensation package, and -- advertise perceived network and IT system weaknesses to their customers that the competitors are targeting for their own business. The Proposed Protocol will effectuate the Court's July 1 Order while balancing third parties' need to obtain diligence against the Debtors' need to protect the confidentiality of its competitively sensitive information, Mr. Young maintains. The Proposed Protocol standardizes access to the Debtors' confidential information, while still allowing the Debtors to prudently manage the diligence process and its attendant costs, without jeopardizing their confidential and competitively sensitive information, he maintains. At the Debtors' behest, Judge King will hear the Debtors' Motion, on an expedited basis, on July 29, 2009. Objections are due July 28. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HEAVY LEASING: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Heavy Leasing, LLC 2525 E. Calle Bacardi Vail, Az 85641 Bankruptcy Case No.: 09-16511 Chapter 11 Petition Date: July 16, 2009 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: James M. Marlar Debtor's Counsel: Eric Slocum Sparks, Esq. 110 S Church Ave #2270 Tucson, Az 85701 Tel: (520) 623-8330 Fax: (520) 623-9157 Email: Eric@Ericslocumsparkspc.Com Estimated Assets: $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 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-16511.pdf The petition was signed by Chris O'Neil, member of the Company. HUNTSMAN CORP: S&P Affirms 'B' Corporate Credit Ratings ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including its 'B' corporate credit ratings, on Huntsman Corp. and its subsidiary Huntsman International LLC, and removed all ratings from CreditWatch with negative implications, where they were placed on June 26, 2007. The outlook is stable. At the same time, S&P assigned its 'B+' issue rating and its '2' recovery rating to Huntsman International LLC's $500 million term loan due 2016, indicating substantial recovery (70% to 90%) in the event of a default. The CreditWatch placement initially reflected announcements related to the proposed acquisition of Huntsman by Basell AF SCA, and later by Hexion Specialty Chemicals Inc. Subsequently, following the failure of these proposed transactions, the CreditWatch reflected concerns on liquidity and near-term debt maturities at Huntsman, along with weakness in operating performance. "The removal of the ratings from CreditWatch and the stable outlook recognize that key concerns related to Huntsman's onerous near-term debt maturity profile have been addressed by management actions following a recent $1.7 billion settlement in favor of the company," said Standard & Poor's credit analyst Paul Kurias. Utilizing proceeds from the settlement, Huntsman is in the process of redeeming about $500 million of debt maturing in the next several years. In addition, the company announced it plans to substantially reduce a $650 million revolving credit facility that matures in August 2010, which is supplanted by a large cash balance that bolsters liquidity. Pro forma for the settlement and the $500 million debt paydown, the cash balance as of March 31, 2009, is about $1.6 billion, an improvement over the actual liquidity levels reported on that date of $450 million in cash and about $600 million in revolving credit facility availability. The settlement consists of $620 million in cash, $500 million in seven-year senior secured term loan financing, and $600 million in seven-year unsecured note financing. Huntsman also received $12 million in reimbursement of litigation costs. HYDROGENICS CORP: Offers to Acquire Algonquin Power Income Fund --------------------------------------------------------------- Hydrogenics Corporation filed with the U.S. Securities and Exchange Commission a Form F-4 related to its offer to purchase all of the issued and outstanding trust units of Algonquin Power Income Fund together with any associated rights issued and outstanding under a Unitholder Rights Plan. Under the Offer, each Unitholder who validly deposits and does not withdraw Trust Units under the Offer is entitled to receive, in respect of each such Trust Unit, one common share of a new class of common shares in the capital of Hydrogenics. In addition, Hydrogenics has agreed to make a take-over bid to holders of the APIF Series 1 Debentures and the APIF Series 2 Debentures pursuant to which the Debentures will be exchanged for newly-issued debentures of Hydrogenics or, in the case of the APIF Series 1 Debentures, at the option of Debentureholders, for Hydrogenics Shares, subject to certain limits and conditions. The Board of Trustees has entered into the Support Agreement with Hydrogenics and 7188501 Canada Inc. -- as New Hydrogenics -- with respect to the Offer and the CD Exchange Offers. Pursuant to a plan of arrangement, substantially all of the assets and liabilities of Hydrogenics will be transferred to New Hydrogenics and the existing class of common shares of Hydrogenics will be redeemed for New Hydrogenics Shares. Following the redemption, the original shareholders of Hydrogenics will be shareholders of New Hydrogenics and will no longer have any interest in Hydrogenics. Trust Units will be taken up under the Offer and Debentures will be taken up under the CD Exchange Offers contemporaneously with the completion of the Plan of Arrangement. Pursuant to the registration statement, Hydrogenics is registering 77,981,867 shares of common stock for a proposed maximum aggregate offering price of $216,789,590. A full-text copy of the Registration Statement is available at no charge at http://ResearchArchives.com/t/s?3f86 As reported by the Troubled Company Reporter on July 10, 2009, Hydrogenics said in a filing with the Securities and Exchange Commission that its ability to continue as a going concern is dependent on the successful execution of the Company's business plan. The Company's ability to continue as a going concern is dependent on the successful execution of its business plan which involves: (i) securing additional financing to fund its operations; (ii) advancing product designs for efficiency, durability, cost reduction and entry into complimentary markets; (iii) increasing market penetration and sales; (iv) actively managing its liquidity; and (v) retaining and engaging staff. At present, the success of these initiatives cannot be assured due to the material uncertainties attributed to the Company's ability to obtain financing and meet its revenue targets. About Hydrogenics Corporation Based in Mississauga, Ontario, Canada, Hydrogenics Corporation -- http://www.hydrogenics.com/-- is a developer and provider of hydrogen generation and fuel cell products and services, serving the growing industrial and clean energy markets of today and tomorrow. Hydrogenics has operations in North America and Europe. INTEST CORP: Posts $2.7MM Net Loss in Quarter Ended March 31 ------------------------------------------------------------ inTEST Corporation posted a net loss of $2,755,000 for three months ended March 31, 2009, compared with a net loss of $1,326,000 for the same period in the previous year. At March 31, 2009, inTEST Corporation's balance sheet showed total assets of $16,605,000, total liabilities of $6,152,000 and stockholders' equity of $10,453,000. The Company related that net cash used in operations for the three months ended March 31, 2009, was $1.7 million compared to $452,000 for the same period in 2008. The increase in net cash used in operations reflects its higher net loss for the first quarter of 2009 as compared to the first quarter of 2008. During the first quarter of 2009, trade accounts and notes receivable decreased $887,000, inventories decreased $633,000 and accounts payable decreased $503,000, all of which reflect the reduction in the level of business during the first quarter of 2009. Purchases of property and equipment were $33,000 for the three months ended March 31, 2009. The Company has no significant commitments for capital expenditures for the balance of 2009, however, depending upon changes in market demand, it may make purchases as it deems necessary and appropriate. Net cash used in financing activities for the three months ended March 31, 2009, was $3,000, which represents payments made under capital lease obligations. The Company has a secured credit facility that provides for maximum borrowings of $250,000. This credit facility is secured by all the assets of inTEST Corporation, Temptronic Corporation and inTEST Silicon Valley Corporation, excluding all patents. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?3f9b About inTEST Corporation inTEST Corporation (NASDAQ:INTT) is an independent designer, manufacturer and marketer of manipulator and docking hardware, temperature management and tester interface products that are used by semiconductor manufacturers in conjunction with automatic test equipment in the testing of integrated circuits. The Company manages its business as three product segments: Manipulator and Docking Hardware Products, Temperature Management Products and Tester Interface Products. In October 2008, it acquired Sigma Systems Corp. Going Concern Doubt As reported in the Troubled Company Reporter on July 14, 2009, McGladrey & Pullen, LLP, in Blue Bell, Pennsylvania raised substantial doubt about inTEST Corporation's ability to continue as a going concern after auditing financial results for the year ended December 31, 2008. The auditors pointed to the Company's significant losses in three of the last five years including losses in 2007 and 2008. ISCO INT'L: Unsecured Creditors & Stockholders May Get Nothing -------------------------------------------------------------- ISCO International Inc. filed a voluntary petition for relief pursuant to Chapter 11 of the United States Bankruptcy Code on July 14, 2009. The petition was filed in the United States Bankruptcy Court for the Northern District of Illinois, Case No. 09-25416. The Company will continue to operate as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. On June 30, the Company said it has no assets with which to conduct its prior, normal business operations and anticipates that, within a very short time, it would implement some procedure to formally wind-up its business. Because of the continued liability of roughly $15 million to its secured lenders, the Company does not anticipate that any funds will be available for distribution to unsecured creditors or stockholders. On May 19, 2009, ISCO International received a letter from its transfer agent, Mellon Investor Services LLC, indicating that Mellon will be terminating the parties' Transfer Agent Agreement dated July 12, 2008. In Mellon's letter, it indicates that the Agreement will be terminated because the Company has not provided certain requested documentation to Mellon. As a result of the acquisition of substantially all of the assets of the Company by its secured lenders and the resulting cessation of its business operations, the Company has determined that it does not have the capabilities or resources necessary to cure the default under the Agreement and it does not intend to do so. Therefore, according to the terms of the letter, the Agreement will be terminated as of July 20, 2009. Upon termination, the Company will no longer have an independent transfer agent. As of June 30, the Company indicated it has not yet made any arrangements regarding the transfer of its shares after July 20, 2009, but plans to disclose additional arrangements with the Securities and Exchange Commission. On June 9, 2009, the Company received an Answer and Counterclaim from TAA Group, Inc., with respect to the lawsuit filed by the Company in March 2009 against TAA in connection with TAA's purchase of the Company's former subsidiary, Clarity Communication Systems Inc. In the Answer, TAA denies any liability to the Company and in the Counterclaim, TAA seeks $10 million in lost profits for its alleged lost contract opportunities. The Company believes that the Counterclaim is without merit. The Company has said it is currently evaluating the Counterclaim to determine how it intends to proceed. Based in Elk Grove Village, Illinois, ISCO International Inc. filed for bankruptcy on July 14, 2009 (Bankr. N.D. Ill. Case No. 09-25416). John H. Squires presides over the case. Joel A. Schechter, Esq., in Chicago, represents the Debtor. ISCO listed assets ranging from $1,000,001 to $10,000,000, and debts ranging from $10,000,001 to $50,000,000. JUNIOR BOILES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Junior Boiles Construction, LLC P.O. Box 5806 Midland, TX 79704-5806 Bankruptcy Case No.: 09-70166 Chapter 11 Petition Date: July 16, 2009 Court: United States Bankruptcy Court Western District of Texas (Midland) Debtor's Counsel: Wiley France James III, Esq. James & Haugland, P.C. P.O. Box 1770 El Paso, TX 79949-1770 Tel: (915) 532-3911 Fax: (915) 541-6440 Email: wjames@jghpc.com Total Assets: $253,265 Total Debts: $446,612 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/txwb09-70166.pdf The petition was signed by Alton Boiles Jr., president of the Company. LANDSOURCE COMMUNITIES: Plan Confirmed; To Emerge as Newhall ------------------------------------------------------------ Lennar Corporation said the U.S. Bankruptcy Court in Wilmington, Delaware has confirmed the plan of reorganization for LandSource Communities Development LLC. LandSource will emerge from bankruptcy as a reorganized company called Newhall Land Development, LLC. The confirmation clears the way for the reorganized company to emerge from Chapter 11 with more than $90 million in cash and free of debt. As part of the plan, Lennar will invest roughly $140 million in exchange for a 15 percent equity stake in the reorganized Newhall, the settlement and the release of all claims that might have been asserted against Lennar, and ownership of the equity in several projects that were formerly owned by LandSource. As reported by the Troubled Company Reporter on July 9, 2009, Barclays Bank PLC, as plan proponent and administrative agent under LandSource and its affiliates' First Lien Credit Agreement, sought and obtained the Court's permission to file a "Resolicitation Motion" on an expedited basis to ensure that the confirmation process of the Second Amended Plan of Reorganization for LandSource Communities Development LLC and its debtor affiliates may proceed with little delay. The Plan Proponent said it has also agreed to make certain modifications to the Second Amended Plan. Accordingly, the Plan Proponent filed a motion in Court on July 6, 2009, seeking approval of: (a) a supplemental disclosure to the Second Amended Disclosure Statement; (b) the supplement as containing "adequate information" as that term is defined under Section 1125(a)(1) of the Bankruptcy Code; and (c) various materials for distribution by mail to certain Holders of Claims in the Voting Classes. The Plan Proponent has made a number of modifications to the Second Amended Plan, after engaging in substantial negotiations, to resolve objections expected to be raised by the Official Committee of Unsecured Creditors and the administrative agent under the Debtors' Second Lien Credit Agreement. Those modifications are contained in the Modified Second Amended Plan and described in the Supplemental Disclosure. A full-text copy of the Modified Second Amended Plan blacklined against the Plan dated June 4, 2009, is available for free at: http://bankrupt.com/misc/LandS_Modified2ndAmendedPlan.pdf According to the Plan Proponent, it informed the Court of these developments at a June 30, 2009, telephonic hearing, whereby it outlined a process for resoliciting votes among the creditor classes affected by the modifications. The Plan Proponent says it worked closely with the Committee, the Debtors, the Second Lien Administrative Agent, the Office of the U.S. Trustee for Region 3 and Lennar to develop supplemental disclosure materials that fairly and completely reflect modifications to the Plan. The Supplement contains additional information with respect to: * the modified treatment of Holders of Claims in Classes 4 and 5; * the waiver of unsecured claims asserted by Lennar Corp. and LNR CPI Cross Valley Plaza LLC, LNR CPI Entrada Office LLC, LNR CPI Plaza West Hills LLC, LNR CPI Valencia Town Center Office LLC, LNR CPI West Creek Apartments LLC, LNR CPI West Creek Retail LLC, LNR Gateway V LLC, LNR Land Partners Sub LLC, LNR NWHL Holdings Inc., LNR Property Corporation and each of their affiliates -- the LNR Entities -- and release of avoidance actions against Lennar and LNR; * the LNR Equity Investment; * the revised equity ownership in the Reorganized Debtors resulting from the increase in utilization of the Rights Offering, the sale of equity interests to LNR, and the settlements with Class 4 and Class 5; * an updated Valuation Analysis, which pertains to a recovery analysis that identifies the effects of the modifications on plan recoveries; and * an updated "Sources and Uses" chart to take into account the modifications to the Second Amended Plan. A full-text copy of the Disclosure Statement Supplement is available for free at http://bankrupt.com/misc/LandS_Supp_DS.pdf The Supplement will allow holders of Claims in Classes 3, 4 and 5 time to review and analyze the revised treatment of those Classes of Claims under the Modified Second Amended Plan and vote to accept or reject the Modified Second Amended Plan accordingly, if a Ballot was not previously cast by the July 6, 2009 deadline, or change a prior cast vote. The Revised Solicitation Package consisted of (i) a written notice of the new confirmation hearing date and the deadline for voting on the Modified Second Amended Plan; (ii) the supplemental disclosure to the Second Amended Disclosure Statement; (iii) a blacklined version of the Modified Second Amended Plan; (iv) solely for those Holders of Claims in Classes 3, 4 and 5, an appropriate Ballot to be used for voting on the Modified Second Amended Plan; (v) solely for Holders of Claims in Class 4, an amended letter from the Second Lien Administrative Agent in support of the Modified Second Amended Plan; (vi) solely for Holders of Claims in Class 5, an amended letter from the Committee in support of the Modified Second Amended Plan; (vii) an amended letter from the Debtors in support of the Modified Second Amended Plan; (viii) a letter from the Plan Proponent in support of the Modified Second Amended Plan; and (ix) solely for those Holders of claims in Classes 3 and 4, a form to rescind any prior subscription agreement submitted to the Subscription Agent, at the Holder's option based upon the Modified Second Amended Plan. In light of the changes to the Modified Second Amended Plan, parties who previously opted into the Convenience Class may now choose to opt out. Judge Kevin Carey granted Barclay's request, and set a hearing to consider approval of the Resolicitation Motion on July 20, 2009. The Confirmation Hearing, originally scheduled to begin July 13, 2009, was adjourned to July 20, 2009, at 10:00 a.m. Eastern Time. Prior to the entry of the Court's ruling, Roberta A. DeAngelis, the Acting United States Trustee for Region 3, asserted that Barclays has placed the cart before the horse. The U.S. Trustee contended that the Plan Proponent should file its amended documents first and seek their approval, on shortened time if necessary, and then re-solicit votes. Barclays' request appears to eliminate any meaningful opportunity for review and response, the U.S. Trustee noted. About Lennar Corp. Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/ -- founded in 1954, is one of the nation's leading builders of quality homes for all generations. The Company builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance and closing services for both buyers of the Company's homes and others. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for Chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. Bankruptcy Creditors' Service, Inc., publishes LandSource Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandSource Communities Development LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) LANG HOLDINGS: Files for Chapter 11; Quick Sale Required -------------------------------------------------------- Lang Holdings Inc. filed a Chapter 11 petition before the U.S. Bankruptcy Court for the District of Delaware to sell the business, Bill Rochelle at Bloomberg News said. Debt includes $6.1 million on a term loan and $12.8 million owing on a revolving credit. Sun Lang Finance LLC purchased the secured debt before the filing and is offering $16 million in secured loans for the reorganization. According to Bloomberg, the terms of the DIP loan require filing a motion within 30 days to set up auction and sale procedures. The auction must take place within 85 days, and the sale must be completed inside 89 days. Lang Holdings Inc. is a supplier of calendars, greeting cards, stationery and back-to-school supplies. Lang Holdings includes a number of brands which are some of the most well known in the gift, specialty and mass merchandiser markets, including LANG, Avalanche Publishing and Turner Licensing. Headquartered in Delafield, Wisconsin, Lang Holdings owned by private equity firm Catterton Partners. The Company was acquired in 2003 by Catterton, who also owned Archway Cookies prior to its bankruptcy filing in 2008. The Company filed for Chapter 11 on July 16, 2009 (Bankr. D. Del. Case No. 09-12543). The petition said assets are more than $50 million while debt is less than $50 million. LANG HOLDINGS: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Lang Holdings, Inc. 514 Wells Street Delafield, WI 53018 Case No.: 09-12543 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Turner Acquisition, Inc. 09-12544 Avalanche Publishing Acquisition, Inc. 09-12545 Avalanche Publishing, Inc. 09-12546 The Lang Companies, LLC 09-12547 The Lang Store, Ltd. 09-12548 Type of Business: Lang Holdings Inc. is a supplier of calendars, greeting cards, stationery and back-to-school supplies. Lang Holdings includes a number of brands which are some of the most well known in the gift, specialty and mass merchandiser markets, including LANG, Avalanche Publishing and Turner Licensing. Headquartered in Delafield, Wisconsin, Lang Holdings owned by private equity firm Catterton Partners. The Company was acquired in 2003 by Catterton, who also owned Archway Cookies prior to its bankruptcy filing in 2008. Chapter 11 Petition Date: July 16, 2009 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Kevin J. Carey Debtor's Counsel: David R. Hurst, Esq. Young Conaway Stargatt & Taylor, LLP The Brandywine Bldg., 17th Fl 1000 West Street Wilmington, DE 19801 Tel: (302) 571-6600 Email: bankfilings@ycst.com Michael R. Nestor, Esq. Young Conaway Stargatt & Taylor The Brandywine Bldg. 1000 West Street, 17th Floor PO Box 391 Wilmington, DE 19899 Tel: (302) 571-6600 Fax: (302) 571-1253 Email: bankfilings@ycst.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Laurie Gilner, the company's president and CEO. Lang Holdings, Inc.'s List of 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DuHwei (Max Fame) Trade debt $1,817,134 Scotty Y. Whang Promissory Note $1,753,976 7 Red Bird Irvine, CA 92603 G&B Enterprise Asia Ltd. Trade Debt $1,495,395 Doosan Trade Debt $1,205,487 Fuda Stationary Trade Debt $458,385 Burton & Mayer, Inc. Trade Debt $443,399 Journal Sentinel Direct Trade Debt $376,206 Sing Cheong Trade Debt $354,745 Southern Imperial Inc. Trade Debt $354,158 Inland American Industrial Trade Debt $349,864 Mgmt., LLC Run Bao Trade Debt $343,631 Warehouse Specialists Inc. Trade Debt $337,054 Hornson Enterprises Ltd. Trade Debt $314,103 Kirkland & Ellis LLP Trade Debt $312,971 XPEDX Trade Debt $276,623 NFL Players, Inc. Trade Debt $265,504 Xinzhou Craft Trade Debt $264,745 Jiaxing Seagull Paper Trade Debt $253,738 Products Octagon Trade Debt $250,000 Major League Baseball Trade Debt $223,968 Properties Grant Thornton Trade Debt $189,330 Oracular Milwaukee Inc. Trade Debt $178,080 514 Wells, LLC Trade Debt $176,202 NBC Universal TV Group Trade Debt $166,645 Precision Color Graphics Ltd. Trade Debt $141,482 UPS Freight Trade Debt $131,285 New Berlin Associates Trade Debt $131,229 Codeworks Trade Debt $129,212 Totalogistix, Inc. Trade Debt $127,622 RSM McGladrey, Inc. Trade Debt $126,311 LAUTH INVESTMENT: Taps Kirkland & AlixPartners for Restructuring ---------------------------------------------------------------- Cory Schouten at IBJ.com reports that Lauth Group Inc. has hired Kirkland & Ellis and AlixPartners, two of the nation's most prominent bankruptcy and restructuring specialists, to handle the cases of Lauth Investment Properties LLC and two other units. Lauth Investments' executives said that they need the best attorneys and advisers to handle the Company's complex structure, renegotiate loans, and fight to retain control of properties, IBJ.com relates. According to IBJ.com, Lauth Investments asked Judge Basil H. Lorch for permission to set aside $3.5 million for legal services, and about $2.5 million has been authorized so far. Lynn M. LoPucki, a law professor at UCLA who has studied the cost of bankruptcy filings, said that attorney's fees in the Lauth Investments bankruptcy should total $3 million -- less than the $5.5 million the firm predicted through September, IBJ.com reports. IBJ.com states that Lauth Investments predicted that bankruptcy and professional fees through September could reach $5.5 million, which the Company won't be able to afford without spending down cash balances and securing $15 million in so-called debtor-in- possession financing. The report says that Lauth Investments' been trying to line up the financing for weeks, as the Company is in danger of running out of cash this month. According to IBJ.com, the bill for Lauth Investments' counsel will exceed $1 million for the first month, including $726,000 for AlixPartners. IBJ.com says that Kirkland & Ellis, which got a $1 million retainer when it signed on for the case, hadn't filed its own first itemized bill. IBJ.com relates that Lauth Investments' highest-paid attorneys are Jim Stempel -- who bills at $860 per hour -- and Reed Oslan, who bills at $795 per hour. The report states that the highest-paid AlixPartners adviser working on the Lauth Investments' bankruptcy case is Managing Director Jared Yerian, who billed $139,000 in May 2009. Inland American Real Estate Trust, Lauth Investments' largest creditor, said in court documents that the Company is using its highly paid attorneys to protect Lauth Group and its principals, before it is even clear if the Company can get financing. IBJ.com notes that Lauth Investments' attorneys and other advisers would have priority over other creditors in getting fees paid even if efforts to line up financing fail. Inland Tries to Trip Co. in Its Bankruptcy Inland has argued that Lauth Investments didn't have the authority for the bankruptcy filing. Lauth Investments CEO Bob Lauth said in a statement that the Company's bankruptcy filing wouldn't have been necessary if Inland had not moved to take control two Lauth subsidiaries in April, after the Debtor defaulted on an equity investment agreement. Lauth Investments' principals believe they have equity, though an exact figure won't be determined until properties are refinanced or sold over the next few years, but the bankruptcy proceedings should help maximize the assets for every creditor, IBJ.com says, citing Mr. Oslan. The court will hold the next hearing in the bankruptcy on July 23, IBJ.com states. Foreclosure Proceedings & Other Lawsuits Huntington, according to IBJ.com, started foreclosure proceedings this month against a Lauth-developed distribution building at Eaglepoint Business Park in Brownsburg. Wells Fargo is also suing Lauth Investments' top executives -- Robert Lauth Jr., Gregory Gurnik, Lawrence Palmer, and Michael Curless -- alleging that they committed felony fraud by secretly transferring millions of dollars in assets to their wives or family trusts. IBJ.com relates that the executives had promised the assets as collateral for the loans, an allegation that they denied. IBJ.com says that some creditors are angry at Lauth Investments' decision to add $480,000 in monthly management fees for about 60 properties controlled by the bankrupt entities, saying that the fees are another excuse to transfer money from bankrupt entities to non-bankrupt entities. The fees are being assessed on existing properties since fees from construction and development have dried up, the report states, citing an attorney for Lauth Investments. Carmel-based Lauth Property Group is one of the nation's top developers. Lauth Investment Properties, LIP Development, and LIP Investment are three holding companies affiliated with Lauth Property. Indianapolis, Indiana-based Lauth Investment Properties, LLC, and its two affiliates filed for Chapter 11 bankruptcy protection on May 1, 2009 (Bankr. S.D. Ind. Case No. 09-06065). Jeffrey J. Graham, Esq., at Taft Stettinius & Hollister LLP and Jerald I. Ancel, Esq., at Taft Stettinius & Hollister LLP assist the Debtors in their restructuring efforts. Lauth Investments listed $1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000 in debts. LEAR CORP: Employs Curtis Mallet-Prevost as Conflicts Counsel ------------------------------------------------------------- The Debtors seek the Court's authority to employ Curtis, Mallet- Prevost, Colt & Mosle LLP as their conflicts counsel, nunc pro tunc to the Petition Date. The Debtors believe that rather than resulting in any extra expense to the Debtors' estates, the retention of CMP as their conflicts counsel will promote the effective and economical representation of the Debtors in the Chapter 11 Cases. As conflicts counsel, CMP will: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their businesses and properties; (b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; (c) take necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors and representing the Debtors' interests in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the estates; (d) prepare motions, applications, answers, orders, appeals, reports and papers necessary to the administration of the Debtors' estates; (e) take any necessary action on behalf of the Debtors to obtain approval of a disclosure statement and confirmation of one or more chapter 11 plans; (f) represent the Debtors in connection with obtaining postpetition financing; (g) advise the Debtors in connection with any potential sale of assets; (h) advise the Debtors on the rights of offset and the applicability of the "safe harbor" provisions of the Bankruptcy Code; (i) appear before the Court, any appellate courts and the United States Trustee, and protect the interests of the Debtors' estates before those Courts and the United States Trustee; (j) consult with the Debtors regarding tax matters; and (k) perform other necessary legal services and provide other necessary legal advice to the Debtors in connection with the Chapter 11 cases, including: (i) the analysis of the Debtors' leases and executory contracts and the assumption, rejection or assignment; (ii) the analysis of the validity of liens against the Debtors' interests in property; and (iii) advice on corporate, litigation, employment, intellectual property, governmental investigatory, regulatory and environmental matters. The Debtors seek to retain CMP as their conflicts counsel because CMP has extensive expertise, experience and knowledge in the field of debtors' and creditors' rights and business reorganization under Chapter 11 of the Bankruptcy Code, as well as other areas of the law where the Debtors may need legal advice. The Debtors will pay CMP in accordance with the firm's current hourly rates: Professional Rate/Hour ------------ --------- Partners $675-$785 Counsel $525-$595 Associates $290-$575 Paraprofessionals $170-$210 Managing Clerks $415 Support Counsel $55-$325 The Debtors will also reimburse CMP for reasonable, out-of-pocket expenses. Steven J Reisman, Esq., at Curtis, Mallet-Prevost, Colt & Mosle LLP, in New York, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tappes as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restrcturing advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of US$1,270,800,000 against debts of US$4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: Hires Brooks as Counsel for IP Matters ------------------------------------------------- Lear Corp. and its affiliates seek the Court's authority to employ Brooks Kushman P.C., as their special counsel, nunc pro tunc to the Petition Date. The Debtors have selected Brooks Kushman because of the firm's long-standing representation of the Debtors and its attendant intimate knowledge of their business and affairs, as well as Brooks Kushman's extensive experience and expertise in the services for which it is to be employed. The Debtors seek to employ Brooks Kushman to advise them and their board of directors with respect to matters of intellectual property, protection and enforcement. Since 1995, Brooks Kushman has provided legal services regarding intellectual property matters to the Debtors. These services have included filing and enforcing the Debtors' patents, trademarks and other intellectual property, as well as representing the Debtors in certain intellectual property litigation and related services. Brooks Kushman will not serve as bankruptcy and reorganization counsel to the Debtors, and while certain aspects of the representation will necessarily involve both Brooks Kushman and the Debtors' bankruptcy and reorganization counsel, Kirkland & Ellis LLP, the Debtors believe that the services Brooks Kushman will provide will be complementary rather than duplicative of the services to be performed by such Kirkland and Ellis. The Debtors will pay Brooks Kushman based on the firm's current hourly rates: Professional Range ------------ ----- Paralegals $63-$88 Associates $106-$272 Shareholders $178-$306 The Debtors paid Brooks Kushman a retainer of $460,298 for its prepetition and postpetition services and expenses to be rendered or incurred for or on behalf of the Debtors. The Debtors have agreed that any portion of the advance payment retainer not used to compensate Brooks Kushman for its prepetition services and expenses ultimately will be used by Brooks Kushman to apply against the firm's other bills and will be placed in a segregated account. Earl J. LaFontaine, Esq., at Brooks Kushman P.C., in Southfield, Michigan, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tappes as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restrcturing advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of US$1,270,800,000 against debts of US$4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: Hires Kurtzman Carson Consultants as Claims Agent ------------------------------------------------------------ Lear Corp. and its affiliates are concerned that thousands of security holders and other parties-in-interest involved in the Chapter 11 cases may impose heavy administrative and other burdens on the Court and the Office of the Clerk of the Court. To relieve the Clerk's office of these burdens, the Debtors sought and obtained the Court's authority to employ Kurtzman Carson Consultants LLC as their notice and claims agent. KCC is one of the country's leading chapter 11 administrators, with experience in noticing, claims administration, solicitation, balloting and facilitating other administrative aspects of Chapter 11 Cases. The Debtors believe that KCC is fully equipped to handle the volume of mailing involved in properly sending the required notices to, and processing the claims of, creditors and other interested parties in the Chapter 11 Cases. As claims and noticing agent, KCC will: (1) notify all potential creditors of the filing of the bankruptcy petitions and of the setting of the first meeting of creditors, pursuant to Section 341(a) of the Bankruptcy Code, under the proper provisions of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure as determined by Debtors' counsel; (2) prepare and serve required notices in the Chapter 11 Cases, including: * notice of the commencement of the Chapter 11 Cases and the initial meeting of creditors under Section 341(a); * notices of objections to claims; * notices of any hearings on a disclosure statement and confirmation of a plan or plans of reorganization; and * other miscellaneous notices as the Debtors or Court may deem necessary or appropriate for an orderly administration of the Chapter 11 Cases; (3) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs, listing the Debtors' known creditors and the amounts owed; (4) provide access to the public for examination of copies of the proofs of claim or proofs of interest filed in the Chapter 11 Cases without charge during regular business hours; (5) furnish a notice of the last date for the filing of proofs of claims and a form for the filing of a proof of claim, after notice and form are approved by the Court; (6) file with Clerk an affidavit or certificate of service which includes a copy of the notice, a list of persons to whom it was mailed, and the date mailed, within 10 days of service; (7) docket all claims received by the Clerk's Office, maintain the official claims registers for each Debtor on behalf of the Clerk, and provide the Clerk with certified duplicate, unofficial Claim Registers on a monthly basis, unless otherwise directed; (8) record all transfers of claims, pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure, and will provide any notices of those transfers required by Bankruptcy Rule 3001(e); (9) specify, in the applicable Claims Register, these information for each claim docketed: (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant and agent, if applicable, who filed the claim, and (iv) the classification of the claim; (10) relocate, by messenger, all of the actual proofs of claim filed with the Court to KCC, not less than weekly; (11) upon completion of the docketing process for all claims received to date by the Clerk's Office for each case, turn over to the Clerk copies of the claims register for the Clerk's review; (12) make changes in the Claims Registers pursuant to Court Order; (13) maintain the official mailing list for each Debtor of all entities that have filed a proof of claim, which list will be available upon request by a party-in- interest or the Clerk; (14) Assist with, among other things, solicitation and calculation of votes and distribution as required in furtherance of confirmation of a plan of reorganization; (15) provide other claims processing, noticing, and administrative services as may be requested from time to time by the Debtors; (16) file with the Court the final version of the claims register immediately before the close of the Chapter 11 Cases; and (18) at the close of the case, box and transport all original documents, in proper format, as provided by the Clerk's Office, to the Federal Archives Record Administration, located at Central Plains Region, 200 Space Center Drive, Lee's Summit, Missouri. Thirty days prior to the close of the Chapter 11 cases, an Order dismissing the Agent will be submitted terminating the services of the Agent upon completion of its duties and responsibilities and upon the closing. In addition, KCC will assist the Debtors with, among other things: (a) maintaining and updating the master mailing lists of creditors; (b) gathering data in conjunction with the preparation of the schedules of assets and liabilities and statement of financial affairs; (c) tracking and administration of claims; and (d) performing other administrative tasks pertaining to the administration of the Chapter 11 cases as may be requested by the Debtors or the Clerk's Office. The Debtors will pay KCC based on the firm's current hourly rates: Professional Rate/Hour -------- --------- Clerical $45-$65 Project Specialist $80-$140 Consultant $165-$245 Senior Consultant $255-$275 Senior Managing Consultant $295-$325 Technology/Programming Consultant $145-$195 Weekend, holidays and overtime Waived Prior to the Petition Date, the Debtors paid KCC a retainer of $100,000. As part of the overall compensation, the Debtors have agreed to indemnify and hold harmless KCC, its officers, employees and agents except for gross negligence and willful misconduct. Michael J. Frishberg, vice president of Corporate Restructuring Services of Kurtzman Carson Consultants LLC, in El Segundo, California, assures the Court that KCC is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tappes as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restrcturing advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of US$1,270,800,000 against debts of US$4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: Proposes Management Incentive Plan --------------------------------------------- Lear Corp. and its affiliates seek the Bankruptcy Court's authority to implement a key management incentive plan. The Debtors developed the KMIP to award bonuses to approximately 29 key management employees, ncluding five "insiders," as that term is defined in Section 101(31) of the Bankruptcy Code, whom the Debtors determined are instrumental to their ability to develop a plan of reorganization, effect all actions necessary to exiting Chapter 11 within the established timeframe, and drive actions that maximize value of the estates and facilitate their successful restructuring. The insiders eligible to receive bonus payments under the KMIP consist of the Debtors' chief executive officer, chief financial officer, general counsel, president of the Debtors' seating division, and president of the Debtors' electrical and electronic systems division. Seventy-five percent of an eligible employee's total target award is based on certain Chapter 11 plan milestones. The remaining 25 percent of an eligible employee's total target award opportunity is based on the Debtors' satisfying, if not exceeding, certain operating earnings targets. A. Milestone Awards The Milestone Awards are based on the Debtors' achieving certain key milestones in the Chapter 11 cases and are allocated in this manner: * eligible employees will receive 25% of their total target award opportunity for filing by no later than 60 days after the Petition Date, a plan of reorganization that conforms to the terms of the Debtors' chapter 11 plan term sheet or other plan that the Debtors' board of directors determines is in the Debtors' best interests; and ? eligible employees will receive 50% of their total target award opportunity for consummating a plan of reorganization and emerging from chapter 11 by no later than 300 days after the Petition Date. B. Financial Performance Awards The Financial Performance Awards are based on the Debtors' achieving certain quarterly adjusted operating earnings targets set forth in the Debtors' long-term business plan developed during the first half of 2009. To the extent that the Debtors exceed these targets, payments on account of the Financial Performance Awards may exceed their target levels up to a maximum of 140% of that target level. If the Debtors' performance falls below the target levels but exceeds certain operating earnings thresholds set at a certain percentage of the target, the eligible employees may receive reduced payouts on account of the Financial Performance Awards. If performance is below the threshold level, no payments will be made. If the Debtors emerge from chapter 11 during the course of a quarter, the Financial Performance Awards will be prorated for the portion of the quarter before the Debtors' emergence. Marc Kieselstein, Esq., at Kirkland & Ellis LLP, in New York, says relates if the Debtors meet the milestones on which the Milestone Awards are based and if the Debtors achieve target- level performance with respect to the metrics on which the Financial Performance Awards are based, then the aggregate amount payable under the KMIP will be approximately $20,600,000. For eligible employees other than the Debtors' chief executive officer, the Milestone Awards will be paid within 10 days following the Debtors' achieving the key milestones on which the payments are based, and the Financial Performance Awards are payable quarterly, within 30 days of completion of the quarter, upon the Debtors' achieving certain adjusted operating earnings targets determined based on the Debtors' long-term business plan. All amounts payable to the Debtors' chief executive officer on account of the Milestone Awards and the Financial Performance Awards will be aggregated and will be paid in two installments: (a) 50% upon the Debtors' emergence from chapter 11; and (b) 50% upon the one-year anniversary of the Debtors' emergence. John R. Sinkular, principal in the Executive Compensation and Rewards line of business of Towers Perrin, had submitted with the Court a declaration in support of the Motion. The Debtors retained Towers Perrin to assist them in developing the KMIP. Mr. Sinkular relates that his firm analyzed information regarding the executive compensation structures present in other automotive supplier and general industry Chapter 11 cases and has determined that an incentive plan based only on short-term financial metrics would not be sufficiently aligned with the Debtors' success in achieving a quick restructuring through the Chapter 11 cases or with maximizing their long-term business prospects. "I believe that the KMIP awards are properly aligned with the Debtors' objective of maximizing the value of the enterprise and generally consistent with market practices, and therefore should reasonably incentivize the participating employees," Mr. Sinkular says. The prepetition secured lender steering committee and the ad hoc noteholder committee support the Debtors' request for approval of the KMIP. About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tappes as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restrcturing advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of US$1,270,800,000 against debts of US$4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: Sec. 341 Meeting of Creditors Set for September 1 ------------------------------------------------------------ Diana G. Adams, the U.S. Trustee for Region 2, will convene a meeting of the creditors of Lear Corporation and its debtor affiliates on September 1, 2009, at 2:00 p.m. The meeting will be held at the office of the U.S. Trustee located at 80 Broad Street, 4th Floor, in New York. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tappes as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restrcturing advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of US$1,270,800,000 against debts of US$4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: U.S. Trustee Appoints Unsecured Creditors Committee -------------------------------------------------------------- Diana G. Adams, the U.S. Trustee for Region 2, appoints seven members to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Lear Corporation and its 23 debtor- affiliates: (1) Pension Benefit Guaranty Corporation 1200 K Street, NW Washington, DC 20005 Attention: Dana Cann, Senior Financial Analyst Tel: (202) 326-4000 (Ext. 3810) Fax: (202) 842-2643 (2) International Union UAW 8000 East Jefferson Avenue Detroit, Michigan 48214 Attention: Niraj R. Ganatra, Associate General Counsel Tel: (313) 926-5216 Fax: (313) 926-6240 (3) The Bank of New York Mellon Trustee Company, N.A. 6325 West Campus Oval, Suite 200 New Albany, Ohio 43054 Attention: Donna J. Parisi, Vice President Tel: (614) 775-5279 Fax: (614) 775-5636 (4) Grammar Industries, Inc. 119 Matrix Parkway Piedmont, South Carolina 29650 Attention: Joel Snead, Director of Finance Tel: (864) 672-0025 (5) TK Holdings, Inc. 2500 Takana Drive Auburn Hills, Michigan 48326 Attention: Kevin Kennedy, Vice President of Sales Tel: (248) 377-6127 Fax: (248) 373-2897 (6) Tyco Electronics Corporation 1050 Westlake Drive Berwyn, Pennsylvania 19312-2423 Attention: Dino LaPaglia, Director of Finance and Accounting Tel: (610) 893-9412 Fax: (610) 893-9494 (7) Porter Engineered Systems, Inc. 28700 Cabot Drive - Suite 800 Novi, Missouri 48377 Attention: John E. Ball, Chairman and Chief Executive Officer Tel: (248) 994-8105 Fax: (248) 994-8102 About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tappes as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restrcturing advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of US$1,270,800,000 against debts of US$4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LOMBARD PUBLIC: S&P Cuts Rating on $53.995 Million Bonds to 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its rating on Lombard Public Facilities Corp.'s $53.995 million conference center and hotel series A-2 bonds to 'B+' from 'BB-'. The outlook remains negative. The downgrade reflects the project's poor performance in 2009. Net revenues for the project, including the hotel and restaurant, through May 2009 are 25% below the revised 2009 budget, largely due to the recession. If the project's financial performance remains at these levels through 2009, S&P estimates that the debt service coverage ratio for the series A bonds for 2009, including the $2 million city support, would be just above 1.0x, but slightly lower when the funding of the furniture, fixture, and equipment reserve is included. The project does have about $16.5 million in liquidity in various reserves available for senior bondholders. The project pays debt service from revenues from its 500-room Westin Hotels & Resorts hotel and conference center in the Village of Lombard, Ill., which opened in August 2007. Hotel net revenues secure the series A-2 bonds. Westin, a subsidiary of Starwood Hotels & Resorts Worldwide Inc. (BB/Stable/--) operates the hotel under a 15-year management contract. The negative outlook reflects S&P's expectation that the project will not achieve 1.0x coverage of all obligations, including the FF&E deposits, from project net income if the hotel continues its poor performance for the rest of the year. While the project has enough liquidity to support series A bond debt service for more than two years, S&P could lower the rating if the financial performance remains at this level for longer than one to two years. "We may revise the outlook back to stable if S&P see the project performance begin to improve and return to the 2008 levels," said Standard & Poor's credit analyst Jodi Hecht. LUNA INNOVATIONS: Hansen Verdict Forces Chapter 11 Filing --------------------------------------------------------- Luna Innovations Incorporated on Friday filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Western District of Virginia. The company emphasizes that it expects to continue to operate normally to serve customers, develop and manufacture products, and maintain employment at all facilities during the restructuring process. "The jury verdict in our dispute with Hansen Medical in April obviously presented a very serious potential negative outcome for Luna as well as its creditors, shareholders and other stakeholders," said Kent Murphy, chairman and chief executive officer. "In the absence of reasonable settlement of that dispute, we believe that today's filing is in the best interests of Luna and our shareholders, creditors and communities, while providing the first step toward securing a future for Luna. We intend to build on our history of innovation and product development, outstanding products, and excellent customer service. "[T]he jury in our litigation proposed an award to Hansen in excess of $36 million," Mr. Murphy added. "Since then, we have filed motions with the court in California to have the award reduced, and Hansen has filed motions to ask the court to increase the award. While we believe we have arguments as to why the award should be significantly reduced, there is no way to predict the outcome of the litigation." As part of its filing for reorganization, Luna is requesting the Virginia court to estimate Hansen's claims in litigation at less than $1.3 million. If that motion is successful before the court, the company believes the proposed reorganization plan would result in creditors receiving 100 percent of their allowed claims. "The plan that we proposed and filed, if confirmed by the court, would pay our creditors on their valid claims and leave our current shareholders in place while allowing us to continue to build upon the recent achievements of this company and the potential of our product pipeline," Mr. Murphy said. "It was after long and careful consideration with our board of directors and outside advisors that we concluded this was the right move. I believe that the actions taken . . . represent the best path for Luna and all of our stakeholders." Mr. Murphy stressed that Luna's business has continued to make progress in recent quarters despite the litigation. "Since the first quarter of 2007, we have grown our revenue base by approximately 20 percent while reducing our baseline expenses and increasing the efficiency of operations by nearly 20 percent," he said. "These results are a tribute to our employees and the work they do for our customers every day. We look forward to operating in the normal course of business during our restructuring to meet our customers' needs." About Luna Innovations Headquartered in Roanoke, Virginia, Luna Innovations Incorporated -- http://www.lunainnovations.com/-- is focused on sensing and instrumentation, and pharmaceutical nanomedicines. Luna develops and manufactures new-generation products for the healthcare, telecommunications, energy and defense markets. Its products are used to measure, monitor, protect and improve critical processes. LUNA INNOVATIONS: Bankruptcy Cues Nasdaq Delisting Notice --------------------------------------------------------- Luna Innovations Incorporated on Friday received a delisting determination letter from the Nasdaq Stock Market Listing Qualifications Staff indicating the Listing Qualifications Staff's decision to delist Luna's common stock from the Nasdaq Global Market pursuant to Nasdaq Marketplace Rules 5101, 5110(b) and IMa^'5101-1. The determination was made following Luna's action to file a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. The delisting determination letter further advises Luna that trading of Luna's common stock will be suspended at the opening of business on July 28, 2009 unless it requests a hearing before a Nasdaq Listing Qualifications Hearing Panel to appeal the proposed delisting. Luna intends to request a hearing to appeal the proposed delisting. Luna's common stock will remain listed on the Nasdaq Global Market pending the outcome of the hearing. About Luna Innovations Headquartered in Roanoke, Virginia, Luna Innovations Incorporated -- http://www.lunainnovations.com/-- is focused on sensing and instrumentation, and pharmaceutical nanomedicines. Luna develops and manufactures new-generation products for the healthcare, telecommunications, energy and defense markets. Its products are used to measure, monitor, protect and improve critical processes. LUNA TECHNOLOGIES: Files Chapter 11 After $36 Million Verdict ------------------------------------------------------------- Luna Technologies Inc. filed for Chapter 11 protection this morning before the U.S. Bankruptcy Court for the Western District of Virginia in Roanoke to deal with a $36.4 million jury verdict in favor of Hansen Medical Inc., Bill Rochelle at Bloomberg News reported. According to the report, Luna said it was attempting to have the court in California lower the verdict while Mountain View, California-based Hansen wants it higher. Luna said in a statement that it will ask the bankruptcy court to estimate the Hansen claim at $1.3 million. At the reduced amount, Luna said all creditors can be paid in full, and stockholders can retain ownership. Based in Roanoke, Virginia, Luna Technologies Inc. is a developer of pharmaceutical nanomedicines. It filed for Chapter 11 on July 17 (Bankr. W.D. Virginia Case No. 09-71810). The petition said assets are less than $10 million. LYONDELL CHEMICAL: Court Approves Reliance Nat'l Settlement ----------------------------------------------------------- The Debtors sought and obtained a Court order permitting Debtor Millennium Holdings, LLC, to enter into a settlement agreement with Reliance National Insurance Company Limited. London Market and Winterthur International America Insurance Company issued nine excess liability policies, wherein Reliance National participates, and which provide coverage for certain tort-like claims issued to Hanson Trust LLC between October 1, 1991 and October 1, 1996. Millennium Holdings' predecessors were subsidiaries of Hanson during the issued period and were thus covered by the Reliance Policies. The total limits of coverage to which Reliance National subscribed is $29,147,773. Each Reliance Policy is a high-level excess liability policy that provides coverage at an attachment point between $15,000,000 and $55,000,000. Since 1987, several governmental entities and private parties have asserted lead-related claims against Millennium Holdings, arising from the activities of Millennium Holdings' predecessor- in-interest, The Glidden Company, a lead-pigment manufacturer. In August 2005, Reliance National established a solvent scheme of arrangement to wrap up all of its business. The Scheme was approved by the U.S. Bankruptcy Court for the Southern District of New York in December 2006. In light of the lead-related cases pending against Millennium Holdings, Millennium Holdings filed a proof of claim along with forms preserving its right to participate in Reliance National's Scheme. Millennium Holdings and Reliance National attempted to agree on valuation for Millennium Holdings' claim under the Reliance Policies but were unable to do so. Accordingly, in May 2009, Millennium Holdings reopened negotiations with Reliance National resulting to an agreement resolving Millennium Holdings' claim on May 13, 2009. Pursuant to the Reliance Settlement, the parties agreed to a settlement amount as to the established liability of Reliance National under the Reliance Policies. The established liability takes into account (i) Millennium Holdings' history of success defending against lead-related claims, (ii) the Reliance Policies' high attachment points, and (iii) the risk of a low, or even zero recovery in the Scheme adjudication. In essence, the Debtors pointed out that the Reliance Settlement is favorable to their estates in light of the risk of obtaining (i) little or no recovery if the policies remained in force and Millennium Holdings never incurred sufficient lead-related liability; and (ii) a zero valuation in the adjudication pursuant to the Scheme. Similarly, the Debtors said that the Reliance Settlement allows Millennium Holdings to avoid the cost of completing the adjudication. At the Debtors' behest, the Court authorized the Debtors to file an exhibit to the Motion containing the Reliance Settlement because it contains sensitive information, specifically the settlement amount. The Debtors are directed to provide an unredacted copy of the agreement to counsel and financial advisors to (i) the Official Committee of Unsecured Creditors; and (ii) agents for the DIP Lenders. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately $8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan, which comprises a $3.25 billion in new loans and a $3.25 billion roll-up of existing loans; and a $1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Court OKs Entry Into City Gen. Settlement ------------------------------------------------------------ The Bankruptcy Court authorized debtor Millennium Petrochemicals Inc.'s entry into a settlement with City General Insurance Company, Limited. Millennium Petrochemicals is successor-in-interest to National Distillers and Chemical Corporation, including certain policies of insurance issued to National Distillers. The Insurance Policies provide Millennium Petrochemicals with insurance coverage for certain tort-like claims filed against it and its predecessors and are issued between October 1, 1957, and October 1, 1963. The total limit that City General subscribed to is $349,580. Each Subject Policy is an excess liability policy that provides coverage at an attachment point of either $1,000,000 or $4,000,000, and pays defense costs only after each corresponding underlying policy has been exhausted. As of September 30, 2008, Millennium Petrochemicals had incurred $10,536,390 in defense costs and $4,056,111 in payment of settlement or judgments totaling $14,592,501, in resolution of the Claims. After transfer from Generali Assurances Generales to City General of the Subject Policies on October 15, 2007, City General proposed the establishment of a solvent scheme arrangement known as Closure Plan in order to wrap up all of the business transferred to it by GAG. Subsequently, on January 30, 2009, Millennium Petrochemicals and City General entered into settlement negotiations designed to effect a buy-out by City General of its remaining liability under the Subject Policies in advance of the City General policyholder meeting on February 3, 2009. Pursuant to the City General Settlement, the parties agreed to a settlement amount as to the established liability under the City General Policies. The established liability takes into account that the policies have high attachment points and provide defense costs only after each corresponding underlying primary policy has been exhausted. City General's Closure Plan was sanctioned by the UK court on April 23, 2009, and is now effective. City General has stated that it will be authorized to pay the settlement amount owed to Millennium Petrochemicals under the City General Settlement beginning in May 2009. Andrew M. Troop, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, told the Court that approval of the Settlement Agreement is warranted because: (1) in light of the risk of obtaining a zero valuation in an adjudication proceeding, the City General Settlement has been accomplished on terms favorable to the Debtors' estates; (2) the City General Settlement allows Millennium Petrochemicals to avoid the substantial cost and uncertainty of litigation; and (3) the interests of the creditors favor approval of the City General Settlement. The Debtors have likewise sought and obtained the Court's approval to file under seal an exhibit containing the City General Settlement because it contains sensitive information, particular the settlement amount. The Debtors are directed to provide an unredacted copy of the agreement to counsel and financial advisors to (i) the Official Committee of Unsecured Creditors; and (ii) agents for the DIP Lenders. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately $8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan, which comprises a $3.25 billion in new loans and a $3.25 billion roll-up of existing loans; and a $1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Court OKs Entry Into Surety Bond Agreements -------------------------------------------------------------- Lyondell Chemical Co. and its affiliates are required to maintain insurance policies, including workers' compensation, directors and officers' liability and cargo insurance, as well as general and automobile liability insurance under the laws of states where they operate, pursuant to the operating guidelines issued by the United States Trustee for Region 2. Certain of those Insurance Policies carry with them bonding obligations requiring the Debtors to enter into surety bond agreements. Against this backdrop, the Debtors sought and obtained a Court order: (a) authorizing their entry into surety bond agreements with Westchester Fire Insurance Company and its affiliates, Argonaut Insurance Company and its affiliates, Zurich American Insurance Company, and other surety bond providers that they may want to enter into surety bond agreements going forward; (b) allowing the Surety Providers to draw upon the Collateral and apply the proceeds to the Debtors' obligations; (c) granting the Surety Providers security interests in and permitted liens on the Collateral provided by the Debtors and the proceeds; and (d) authorizing their entry into additional renewals or extensions of the Surety Bond Agreements without further Court order. Under the Surety Bond Agreements, the Debtors are required to indemnify the Surety Providers and provide collateral to those surety providers. The Collateral may take the form of letters of credit or cash. Certain of the surety bonds to be covered by the Surety Bond Agreements were originally issued prior to the Petition Date, and certain surety bonds may or will be issued postpetition. Christopher R. Mirick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, asserted that the Debtors' ability to conduct their businesses is dependent on their ability to obtain surety bonds and enter into the Surety Bond Agreements. He pointed out that the Surety Bond are necessary to guarantee performance by the Debtors to other entities, including payment of taxes due to governmental entities, financial performance of environmental clean-up and in accordance with Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation, and Liability Act, and other environmental laws, and their duties under their insurance programs. He added that the grant of collateral to secure the surety bonds is permissible under Section 364 of the Bankruptcy Code. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately $8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan, which comprises a $3.25 billion in new loans and a $3.25 billion roll-up of existing loans; and a $1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Gets Court Nod for Lubrizol Corp. Settlement --------------------------------------------------------------- Lyondell Chemical Co. and its affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New YOrk to enter into a Mutual Release and Settlement Agreement with Lubrizol Corporation and other parties. In December 2001, Lyondell, as successor-in-interest to ARCO Chemical Company and Atlantic Richfield Company, which is former parent of ARCO Chemical, filed a complaint in the U.S. District Court for the Eastern District of Texas, Beaumont Division against certain parties, including Lubrizol. The complaint asserts claims for recovery of response costs and contribution under Sections 107 and 113 of the Comprehensive Environmental Response, Compensation and Liability Act relating to the cleanup of the Turtle Bayou Superfund Site in Liberty County, Texas. The U.S. Government also brought a related action against certain parties that Lyondell and Atlantic Richfield had named as defendants -- a group of companies that in turn asserted third- party claims under the CERCLA against Lubrizol, including El Paso Tennessee Pipeline Company, EPEC Corporation, EPEC Polymers Inc., and Tennessee Gas Pipeline Company. The U.S. action was consolidated with the Lyondell action. Lyondell and Atlantic Richfield litigated their claims in the CERCLA Action and obtained a judgment against Lubrizol. Pursuant to the District Court's ruling dated December 3, 2007, Lubrizol was responsible for 15.92% of the cleanup costs at Turtle Bayou and was ordered to pay 15.92% of any of Lyondell's and Atlantic Richfield's future cleanup costs. In other postjudgment orders, the District Court awarded prejudgment interest for $809,321, and additional remediation costs of $27,933, making the total judgment owed by Lubrizol to Lyondell and Atlantic Richfield as of December 3, 2007, $5,540,106. In addition, the District Court ordered postjudgment interest at $3.25% from December 3, 2007, making the judgment amount including prejudgment interest as of December 2, 2008, $5,720,160. The Third-Party Plaintiffs were also awarded a similar judgment against Lubrizol. In January 2008, Lubrizol appealed the judgment to the U.S. Court of Appeals for the Fifth Circuit, and Lyondell and Atlantic Richfield cross-appealed. The Fifth Circuit set the case for oral argument for July 6, 2009. Christopher R. Mirick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, relates that as a result of negotiations among Lyondell, Atlantic Richfield, the Third Party Plaintiffs and Lubrizol, the parties entered into the Settlement Agreement to resolve the claims asserted in the CERCLA Action against Lubrizol. He notes that at the parties' request, the Fifth Circuit postponed the scheduled oral argument pending approval of the Settlement Agreement by the Bankruptcy Court. The Settlement Agreement provides that Lubrizol will pay a total settlement amount of $8,600,000, allocated as: -- $2,580,000 to Lyondell; -- $3,440,000 to Third Party Plaintiffs; -- $1,290,000 to Atlantic Richfield,; and -- $1,290,000 to trial counsel for Lyondell and Atlantic Richfield. Payment will be made within 30 days after Lubrizol receives notice of the Bankruptcy Court's approval of the Settlement Agreement. If the Bankruptcy Court's order is appealed, Lubrizol will make its payments within 30 days after the Bankruptcy Court's order is affirmed. If the Bankruptcy Court's order is reversed, Lubrizol will have no obligation to make any payments under the Settlement Agreement. A full-text copy of the Settlement Agreement is available for free at: http://bankrupt.com/misc/Lyondell_LubrizolSettlementAgr.pdf Mr. Mirick discloses that the settlement amount represents 90% of the District Court's judgment against Lubrizol. In this regard, he asserts that the Settlement Agreement falls within the range of "reasonableness" under Rule 9019 of the Federal Rules of Bankruptcy Code. This is particularly true where the cost and expense and risk of continued appellate litigation ?- not to mention delay in payment as a result ?- are considered, he stresses. Thus, the Settlement Agreement is fair and equitable, and is in the best interests of the Debtors' estates, he maintains. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately $8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan, which comprises a $3.25 billion in new loans and a $3.25 billion roll-up of existing loans; and a $1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: LyondellBasell Reports 1st Quarter Results ------------------------------------------------------------- LyondellBasell Industries AF S.C.A. posted quarterly financial results for the quarter ended March 31, 2009. The report was prepared on June 12, 2009, but was made available on LyondellBasell's Web site on July 14, 2009. LBI had a loss from continuing operations of $1,012 million in the first quarter of 2009 compared to a loss from continuing operations of $7,190 million in the fourth quarter 2008. The first quarter 2009 included Chapter 11 costs of $616 million, after tax, including $430 million related to impairments for the carrying value of the ethylene glycol facility in Beaumont, Texas, and the olefins plant at Chocolate Bayou, Texas. Operating activities used cash of $583 million in the first quarter of 2009 and $177 million in the first quarter of 2008. The use of cash in the first quarter 2009 reflected the effects of prepayments required by third parties as a result of LBI's Chapter 11 filing and certain annual payments relating to sales rebates, employee bonuses and property taxes as reflected in others, net, partially offset by working capital decreases. In the first quarter of 2009, the main components of working capital ?- accounts receivable and inventory, net of accounts payable ?- provided cash of $615 million compared to a use of cash of $54 million in the first quarter 2008. The decrease in those components during the first quarter of 2009 primarily reflected a $310 million decrease in inventory and a $332 million decrease in accounts receivable primarily due to selling finished product from inventory while LBI reduced operating rates, partially offset by a $27 million decrease in accounts payable due to less favorable payment terms and lower costs of feedstocks. A full-text copy of LyondellBasell's First Quarter 2009 Results is available for free at http://ResearchArchives.com/t/s?3f32 LyondellBasell Industries AF S.C.A and Subsidiaries Unaudited Consolidated Balance Sheets As of March 31, 2009 Assets Current assets: Cash and cash equivalents $690,000,000 Short-term investments 22,000,000 Accounts receivable: Trade, net 2,548,000,000 Related parties 162,000,000 Inventories 2,872,000,000 Prepaid expenses and other current assets 916,000,000 Deferred income tax assets 5,000,000 --------------- Total current assets 7,215,000,000 Property, plant and equipment, net 15,372,000,000 Investments and long-term receivables: Investment in PO joint ventures 942,000,000 Equity investments 1,093,000,000 Other investments and long-term receivables 84,000,000 Intangible assets, net 2,380,000,000 Other assets 344,000,000 --------------- TOTAL ASSETS $27,430,000,000 =============== Liabilities and Equity Liabilities not subject to compromise: Current liabilities: Current maturities of long-term debt 10,483,000,000 Short-term debt 5,613,000,000 Accounts payable: Trade 1,471,000,000 Related parties 212,000,000 Accrued liabilities 1,488,000,000 Deferred income taxes 235,000,000 --------------- Total current liabilities 19,502,000,000 Long-term debt 304,000,000 Other liabilities 1,517,000,000 Deferred income taxes 2,745,000,000 Commitments and contingencies Liabilities subject to compromise 10,466,000,000 Stockholders' equity: Common stock 60,000,000 Additional paid-in capital 563,000,000 Retained deficit (7,464,000,000) Accumulated other comprehensive loss (380,000,000) --------------- Total stockholder's equity (7,221,000,000) Non-controlling interests 117,000,000 --------------- Total equity (7,104,000,000) --------------- TOTAL LIABILITIES AND EQUITY $27,430,000,000 =============== LyondellBasell Industries AF S.C.A. and Subsidiaries Unaudited Consolidated Statements of Income For the Quarter Ended March 31, 2009 Sales and other operating revenues: Trade $5,807,000,000 Related parties 93,000,000 --------------- 5,900,000,000 Operating costs and expenses: Cost of sales 5,792,000,000 Selling, general and administrative expenses 207,000,000 Research and development expenses 42,000,000 --------------- 6,041,000,000 --------------- Operating income (loss) (141,000,000) Interest expense (445,000,000) Interest income 20,000,000 Other income, net 90,000,000 --------------- Loss from continuing operations before equity investments, reorganization items and income Taxes (476,000,000) Income (loss) from equity investments (20,000,000) Reorganization items (948,000,000) --------------- Loss from continuing operations before income taxes (1,444,000,000) Benefit from income taxes (432,000,000) --------------- Income (loss) from continuing operations (1,012,000,000) Income (loss) from discontinued operations, net of tax (4,000,000) --------------- NET LOSS ($1,016,000,000) =============== LyondellBasell Industries AF S.C.A. and Subsidiaries Consolidated Statements of Cash Flow For the Quarter ended March 31, 2009 Cash flows from operating activities: Net income (loss) ($1,016,000,000) (Income) loss from discontinued operations, net of tax 4,000,000 Adjustments to reconcile net income (loss) to net cash used in operating activities - continuing operations: Depreciation and amortization 416,000,000 Inventory valuation adjustment 55,000,000 Equity investments Amounts included in net income (loss) 20,000,000 Distributions of earnings 2,000,000 Deferred income taxes (434,000,000) Reorganization items 948,000,000 Changes in assets and liabilities that provided (used) cash: Accounts receivable 332,000,000 Inventories 310,000,000 Accounts payable (27,000,000) Repayment of accounts receivable securitization facility (503,000,000) Reorganization-related payments (22,000,000) Accrued interest 84,000,000 Prepaid expenses and other current assets (293,000,000) Other, net (455,000,000) --------------- Net cash used in operating activities - continuing operations (579,000,000) Net cash provided by (used in) operating activities - discontinued operations (4,000,000) --------------- Net cash used in operating activities (583,000,000) --------------- Cash flows from investing activities: Cash restricted for business acquisition - Expenditures for property, plant and equipmen (185,000,000) Proceeds from insurance claims 16,000,000 Acquisition of businesses, net of cash and debt acquired - Proceeds from disposal of assets 14,000,000 Short-term investments 12,000,000 Other (18,000,000) -------------- Net cash used in investing activities (161,000,000) --------------- Cash flows from financing activities: Proceeds from issuance of DIP term loan facility 2,050,000,000 Proceeds from note payable 100,000,000 Repayment of note payable (100,000,000) Repayment of DIP term loan facility (2,000,000) Net borrowings (repayments) under prepetition revolving credit facilities (766,000,000) Net repayment on revolving credit facilities (510,000,000) Repayment of long-term debt (49,000,000) Payment of debt issuance costs (93,000,000) Other, net (29,000,000) --------------- Net cash provided by financing activities 601,000,000 --------------- Effect of exchange rate changes on cash (25,000,000) --------------- Decrease in cash and cash equivalents (168,000,000) Cash and cash equivalents at beginning of period 858,000,000 --------------- Cash and cash equivalents at end of period $690,000,000 =============== About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately $8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan, which comprises a $3.25 billion in new loans and a $3.25 billion roll-up of existing loans; and a $1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Parent Amends & Assumes Undertaking Pact ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized debtor LyondellBasell AF S.C.A. to: (i) enter into, and perform under, a new parent undertaking, in connection with an amendment to securitization agreements related to a European Securitization Program; and (ii) assume the prepetition parent undertaking associated with the European Securitization Program pursuant to Section 365(a) of the Bankruptcy Code. As of January 6, 2009, certain wholly-owned non-Debtor subsidiaries of LBI were party to the European Securitization Program agreements, whereby the trade receivables originated by LBI's wholly-owned non-debtor subsidiary Basell Sales & Marketing Company B.V. and other non-Debtor subsidiaries were securitized. Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, relates that the European Securitization Program is essential to providing the necessary level of liquidity for the European operations of the subsidiaries of LBI and, in combination with the Debtors' DIP Facility, for the continued operations of all LyondellBasell businesses. LBI wishes to amend the European Securitization Program Agreements to: (i) add LBI's wholly-owned non-debtor subsidiary Lyondell Chemie Nederland B.V., as a party, and to provide for the sale of its trade receivables, for Lyondell Chemie to assume certain servicing functions in connection with the European Securitization Program, and (ii) for LBI to guarantee the obligations of Lyondell Chemie under the LCN Parent Undertaking. In connection with the Deed of Amendment, LBI will enter into the LCN Parent Undertaking, wherein it will guarantee Lyondell Chemie's performance and compliance with the obligations of its wholly-owned subsidiary, under the Securitization Agreements. The LCN Parent Undertaking is to ensure performance by Lyondell Chemie and Basell Sales, not to guarantee the credit of the underlying obligors of the trade receivables. All obligations of LBI under Parent Undertakings will be accorded administrative expense treatment pursuant to Sections 503(b) and 507(b) of the Bankruptcy Code. In connection with the amendments to the Securitization Agreements, LBI has agreed to assume the BSM Parent Undertaking. Upon assumption, all obligations of LBI under the BSM Parent Undertaking will be accorded administrative expense. Mr. Ellenberg notes that execution of the LCN Parent Undertaking falls within the ordinary course of business, and thus does not require authorization from the Court. However, in the event that the Court is to determine that the execution of the LCN Parent Undertaking is not ordinary course, the Court should authorize the action under Section 363(b) of the Bankruptcy Code, he says. Mr. Ellenberg stresses that the sale of trade receivables by Lyondell Chemie and Basell Sales pursuant to the European Securitization Program offers certain accounting and cash-flow advantages to Lyondell Chemie and Basell Sales, which advantages flow through to LBI, as Lyondell Chemie and Basell Sales' parent corporation, through increased share value. He adds that execution of the LCN Parent Undertaking will impose little additional burden on LBI. Similarly, LBI's guarantee of Basell Sales' obligations under the European Securitization Program will enable Basell Sales to continue operations and result in increased share value to LBI, additional liquidity to Basell Sales, and reduced the need for borrowing under the DIP Financing, he emphasizes. The lenders under the European Securitization Program have asked the Debtors to seek Court approval to Amend and Assume the Agreement, he relates. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately $8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan, which comprises a $3.25 billion in new loans and a $3.25 billion roll-up of existing loans; and a $1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Seeks to Lift Stay to Reject Biolab Pact ----------------------------------------------------------- In December 1994, Debtor Lyondell Chemical Company and its affiliates leased a portion of their manufacturing facility in Lake Charles, Indiana, to Biolab, Inc., a debtor subsidiary of Chemtura Corporation. In conjunction with the Lease, Lyondell provides Biolab with railcar switching services, pursuant to a Side Agreement dated January 11, 1999. Lyondell also provides Biolab utilities and related services, pursuant to an Amended and Restated Services Agreement dated February 3, 2003. In September 2005, Lyondell idled the Lake Charles facility. Lyondell, nevertheless, remained obligated to continue providing utility services to Biolab, as well as to Arch Chemicals, Inc., another entity with which Lyondell also entered into a utility- related services agreement. Prior to its ownership of the facility, Lyondell's predecessor-in-interest have contracted third parties, Veolia Water North America Operating Services LLC and Air Products L.P., to operate the utility infrastructure assets of the Lake Charles plant. Lyondell, as successor-in- interest, receives, and is obligated to pay Veolia and Air Products for the entire amount of the products and services, and recoups a portion of its costs from Arch and Biolab pursuant to each of the services agreements. Christopher R. Mirick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, discloses that costs under the Veolia Agreement and Air Products Agreement exceed the amounts Lyondell is able to recover from Arch and Biolab by over $6.5 million per year, resulting to substantial ongoing losses to Lyondell. Against this backdrop, Lyondell asks the Court to lift the automatic stay so that it can reject the Biolab Services Agreement and Side Agreement. Lyondell reserves its rights with respect to the Biolab lease as well as to all other Chemtura agreements. The hearing on Lyondell's Motion, initially set for June 2, has been is adjourned to June 23, 2009. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately $8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan, which comprises a $3.25 billion in new loans and a $3.25 billion roll-up of existing loans; and a $1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Solutia Wants Equistar to Comply with Order -------------------------------------------------------------- Solutia Inc. and Ascend Performance Materials, LLC, ask the U.S. Bankruptcy Court for the Southern District of New York to: (a) enforce the Court order dated March 13, 2009, requiring Debtor Equistar Chemicals, LP, to coordinate with the U.S. Environmental Protection Agency and Texas Commission on Environmental Quality in winding down and vacating, or long-term idling and any restart of its facility in Brazoria County, Texas; and (b) clarify that the March 13 Order does not authorize or permit Equistar to abandon the Equistar Facility. To recall, the March 13 Order authorized the long-term idling of Equistar's polymers facility in Brazoria County, Texas, and rejection of related contracts effective August 4, 2009. M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, relates that Equistar provided Solutia and Ascend, new owner of the Chocolate Bayou plant, a Transition Plan revealing Equistar's plans to vacate the Equistar Facility on August 4, 2009. The Transition Plan states that Equistar will abandon substantial amounts of property at the site, including among other things, chemicals, tanks, piping and subsurface sewer lines containing hazardous wastes, in a manner that, by Equistar's own admissions, presents imminent and substantial threats to human health and safety, the other operations at the Chocolate Bayou Plant and the environment. Mr. Labovitz stresses that Equistar's intent is without regard to legal requirements or human health, the environment or the safety of the workers of Ascend and other operators at the Chocolate Bayou Plant or members of the community. She also points out that Equistar has not provided the required notice of its intent to abandon the Equistar Facility, including the hazardous materials and equipment, nor has the Court conducted a hearing on the issue. Against this backdrop, Ms. Labovitz points out that Equistar should not be permitted to obtain a de facto abandonment through artful drafting and the use of terms as "idling" the facility when, in fact, Equistar will be abandoning the Equistar Facility. Until the time as Equistar provides notice and the Court holds a hearing regarding abandonment, Equistar is responsible under the relevant state and federal environmental laws to maintain the Equistar Facility, she contends. Mr. Labovitz further asserts that Equistar's closure and decontamination of the Equistar Facility must include the proper removal and disposal of the Equistar-owned chemicals currently in, at, and under the Equistar Facility, including the Equistar- owned facilities, tanks, piping and sewer lines. She adds that Solutia and Ascend are willing to work with Equistar to put appropriate agreements in place for the continued access to the Equistar Facility to ensure that Equistar's cleanup and shutdown of the Equistar Facility is completed, and to permit Equistar the time required to give proper notice of its intended abandonment. Similarly, Solutia and Ascend would not object to any extension of the August 4, 2009 contract rejection date to accommodate a hearing on Equistar's proposed abandonment. Judge Gerber will consider the joint request on July 21, 2009. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately $8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan, which comprises a $3.25 billion in new loans and a $3.25 billion roll-up of existing loans; and a $1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MAGNA ENTERTAINMENT: Panel Can Hire Faskens Martineau as Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted the official committee of unsecured creditors appointed in Magna Entertainment Corp., et al.'s bankruptcy cases, permission to employ Fasken Martineau DuMoulin LLP as Canadian counsel, nunc pro tunc to April 7, 2009. As the Committee's Canadian counsel, Fasken Martineau will: a) advise the Committee with respect to its rights, duties and powers in relation to matters of Canadian law in the Chapter 11 cases; b) assist and advise the Committee in its consultations with the Debtors in relation to maters of Canadian law relative to the administration of the of the Chapter 11 cases; and c) appear and represent the Committee as may be necessary in the Canadian proceedings and in other matters arising and currently pending in the Canadian legal system or before the Ontario Securities Commission. As compensation for its services, Fasken Martineau will seek payment based on the hourly rates of its professionals: Hourly Rate ----------- Partners $450-$1,000 Associates $320-$550 Students at Law $190 Paralegals $100-$290 Current hourly rates for the Fasken Martineau's lawyes expected to have primary responsibility for providing services to the Committee are: Jonathan A. Levin, Esq. Partner $940 Edmond F.B. Lamek Partner $750 Conor O'Neill Associate $320 Jonathan A. Levin, Esq., a partner at Fasken Martineau, assures the Court that the firm does not hold or represent any interest materially adverse the Committee and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Leven discloses that since 2007, William K. Orr, Esq., a partner at Fasken Martineau, has acted and continues to act as from time to time as an adviser to the independent members of the board of directors of Magna International Inc. 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. MANDALAY MEDIA: SingerLewak LLP Raises Going Concern Doubt ---------------------------------------------------------- SingerLewak LLP raised substantial doubt about Mandalay Media Inc.'s ability to continue as a going concern after auditing the Company's financial results for the year ended March 31, 2009. The auditor noted that the realization of a major portion of the assets is dependent upon continued operations of the Company, which is in turn dependent on the Company restructuring its financing arrangements, obtaining additional financing, and reaching accommodations with the holder of the Secured Note, and reaching a positive cash flow position while maintaining adequate liquidity. The Company related that one of the Company's operating subsidiaries, Twistbox, has sustained substantial operating losses since commencement of operations. The Company has also incurred negative cash flows from operating activities and the majority of the Company's assets are intangible assets and goodwill, which have been subject to impairment in the current year. In addition, Twistbox has a significant amount of debt, in the form of a Secured Note which becomes due within twelve months. The Company has guaranteed 50% of this debt, and the group is subject to covenants including a covenant to maintain a minimum cash balances of $4 million. The Company was not in breach of any covenants at March 31, 2009. There is a significant risk that the minimum cash balance covenant will be breached as the result of paying out the earn-out payment associated with the acquisition of AMV. The Company has initiated discussions with the holder of the Secured Note regarding a waiver for the covenant. At March 31, 2009, the Company's balance sheet showed total assets of $91,190,000, total liabilities of $42,166,000 and stockholders' equity of $49,024,000. For the year ended March 31, 2009, the Company posted a net loss of $41,600,000 compared with a net loss of $2,238,000 in the same period in the previous year. A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?3f81 About Mandalay Media, Inc. Mandalay Media, Inc. (OTC:MNDL) conducts its operations through its sole operating and wholly owned subsidiary, Twistbox Entertainment, Inc. Twistbox is a publisher and distributor of branded entertainment content, including images, video, television programming and games, for third-generation (3G) mobile networks. Twistbox publishes and distributes its content in over 40 countries representing more than one billion subscribers. Mandalay Media, Inc., completed its merger with Twistbox Entertainment, Inc., on February 12, 2008. Twistbox distributes its programming and services through on-deck relationships with mobile carriers and off-deck relationships with third-party aggregation, connectivity and billing providers. MARCHFIRST INC: 7th Cir. Says Faxing Proofs of Claim Not Valid -------------------------------------------------------------- In In re MarchFIRST Inc., Case No. 06-2738, the U.S. Court of Appeals for the Seventh Circuit in Chicago held that faxing a claim is not a valid substitute when claim-filing instructions require claim forms be sent by mail or hand delivery, Bill Rochelle at Bloomberg News said. The Court of Appeals, according to Mr. Rochelle, left open the possibility that a faxed claim would be adequate if two conditions were met: -- the fax must arrive before the filing deadline; and -- An original proof of claim must be sent strictly in accordance with filing instructions. According to the report, in the case at hand, the Seventh Circuit upheld dismissal of the claim because the fax didn't arrive by the deadline. MARYLAND ECONOMIC: Moody's Reviews 'Ba2' Rating on Revenue Bonds ---------------------------------------------------------------- Moody's Investors Service has placed the Ba2 rating on the Maryland Economic Development Corporation Student Housing Revenue Bonds (Bowie State University Project) Series 2003 on Watchlist for potential downgrade. This rating action affects approximately $20 million of debt outstanding. This rating action was prompted by Moody's review of MBIA Inc. and MBIA Insurance Corporation (currently rated Ba3/ NEG and B3 / NEG, respectively), which hold the debt service reserve fund of the Project in a Guaranteed Investment Contract. The GIC is currently collateralized by U.S. Government Treasury or Agency securities at 102% of the par value of the investment agreement. Non-performance of the GIC provider is a risk to bondholders in transactions where bond payments rely wholly or partially on a GIC. This is because there could be a need for the Trustee to draw on the debt service reserve fund during the time when the GIC provider is in bankruptcy and its assets are subject to an automatic stay under the U.S. Bankruptcy code. The last rating action was on July 29, 2008, when Moody's affirmed the Ba2 rating on the Series 2003 bonds with a negative outlook. MERCEDES HOMES: Files Chapter 11 Plan; Sees Sept. 30 Exit --------------------------------------------------------- Tricia Lynn Silva at San Antonio Business Journal reports that Mercedes Homes Inc. said on Friday that it has filed its reorganization plan and a disclosure statement with the U.S. Bankruptcy Court for the Southern District of Florida. According to Business Journal, Mercedes Homes officials said that the Company has reached agreements-in-principle with its secured creditors/banks and the unsecured creditors committee to resume homebuilding operations. Business Journal relates that if the Court grants formal approval to the Plan, Mercedes Homes hopes to emerge from Chapter 11 by September 30, 2009. The report states that Mercedes Homes will continue building "homes of enduring value and design at competitive prices" in Florida, Texas, North Carolina and South Carolina. Mercedes Homes officials said that going forward, the Company will have fewer product lines, according to the report. Headquartered in Melbourne, Florida, Mercedes Homes Inc. -- http://www.mercedeshomes.com-- operates a homebuilding company that was established in 1983 by Howard Buescher, a 23-year veteran of the homebuilding business and his daughter Susan Girard. The Company employs approximately 400 people who sell, and construct, homes of distinctive quality in over 80 communities in Florida, Texas and North and South Carolina. The Company and 10 affiliates filed for Chapter 11 protection on January 26, 2009 (Bankr. S.D. Fla. Lead Case No. 09-11191). Sean T. Cork, Esq., Tina M. Talarchyk, Esq., and Craig D. Hansen, Esq., at Squire, Sanders & Dempsey, LLP, represent the Debtors in their restructuring efforts. Richard M. Williamson and Alvarez & Marsal North American LLC serve as the Debtors' chief restructuring officer, Odyssey Capital Group LLC as valuation expert, Michael P. Kahn & Associates LLC as financial advisor and Kurtzman Carson Consultants LLC as claims and noticing agent. The Debtors' Schedules of Assets and Liabilities delivered to the bankruptcy court in March 2009 show $309 million in assets available to pay liabilities totalling $280 million, $224 million of which is owed to secured creditors. M. Bryant Gatrell, Esq., at Moore & Van Allen PLLC, represents the agent for the Debtors' prepetition first lien facilities. Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Exelrod, LLP, represents the agent for the Debtors' prepetition second lien facility. MERIDIAN CO: December 31 Balance Sheet Upside-Down by $4.6 Million ------------------------------------------------------------------ Meridian Co., Ltd.'s balance sheet at December 31, 2008, showed total assets of $2,451,676 and total liabilities of $7,110,954, resulting in a shareholders' deficit of $4,659,278. For the year ended December 31, 2008, the Company reported a net income of $137,069. The Company's primary source of liquidity is cash flow from financing activities. Net cash used in operating activities was $224,068 in 2008. The Company was not able to generate positive cash flow from operating activities over the last three years as it has recorded net losses in 2007 and 2006. On July 15, 2009, Choi, Kim & Park LLP in Los Angeles, California, raised substantial doubt about Meridian Co., 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 auditors noted the Company's significant operating losses and working capital deficit. A full-text copy of the Company's Form 20-F is available for free at http://ResearchArchives.com/t/s?3fa7 About Meridian Co. Headquartered at Songpa-gu, in Seoul, Korea, Meridian Co., Ltd., is engaged the research, development, manufacturing, and marketing of integrative medical devices in the healthcare industry. Meridian has established subsidiaries in China and Los Angeles. In 2004, it signed an exclusive distribution agreement with a company in Vancouver, B.C., Canada. Meridian currently sells four different products to healthcare practitioners throughout the domestic and overseas market. These include the LipoLaser, DPA (Digital Pulse Analyzer), the Lapex-2000, the ABR-2000, and the Meridian II. METALDYNE CORPORATION: Wants Powertrain Auction Moved to Aug. 5 --------------------------------------------------------------- In connection to the sale of the Debtors' powertrain assets to RHJ International S.A., Metaldyne Corporation and its debtor- affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to reschedule the proposed: * bidding and objection deadline from July 23, 2009 to Aug. 3, 2009; * auction date from July 24, 2009 to Aug. 5, 2009, if more than one qualified bid is received by the Debtors; and * sale hearing from July 27, 2009 to Aug. 7, 2009. The Debtors also ask the Court to change certain aspects of the bidding procedures order relating to the assumption and assignment of executor contracts and unexpired leases. The date revision is expected to allow the Debtors and the proposed stalking-horse bidder to: i) properly structuring certain foreign entity transactions necessary to close a sale of the powertrain assets; ii) addressing issues with the Pension Benefit Guaranty Corporation; and iii) renegotiate certain executory contracts and unexpired leases to be assumed and assigned in connection with the transaction and other deals being contemplated by the Debtors. Moreover, the extension of time will provide potential alternative bidders more time to complete their own due diligence and seek to structure a transaction and increase the likelihood that they will be able to propose a transaction that will maximize value for the Debtors' estates. Although RHJ International agreed to change the dates, the Debtors have not obtain consent from their lender Deutsche Bank AG, under a $20 million debtor-in-possession financing, regarding the date modification. According to the Troubled Company Reporter on June 17, 2009, the sale transaction is valued at approximately $100 million including up to $25 million in cash, a new $50 million secured note and the exchange of an existing EUR15 million demand note issued by Metaldyne GmbH for a term loan to RHJ International. About RHJ International RHJ International (Euronext: RHJI) -- http://www.rhji.com/-- is a limited liability company incorporated under the laws of Belgium, having its registered office at Avenue Louise 326, 1050 Brussels, Belgium. It is a diversified holding company focused on creating long-term value for its shareholders by acquiring and operating businesses. About Metaldyne Corporation Headquartered in Plymouth, Michigan, Metaldyne Corporation -- http://www.metaldyne.com/-- is a wholly owned subsidiary of Asahi Tec, a Shizuoka, Japan-based chassis and powertrain component supplier in the passenger car/light truck and medium/heavy truck segments. Asahi Tec is listed on the Tokyo Stock Exchange. Metaldyne is a global designer and supplier of metal based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel end, and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry. On January 11, 2007, in connection with a plan of merger, Asahi Tee Corporation in Japan acquired the shares of Metaldyne. On the same date, Asahi Tee contributed those shares to Metaldyne Holdings, and Asahi Tee thereby became the indirect parent of Metaldyne and its other units. RHJ International S.A. of Belgium now holds approximately 60.1% of the outstanding capital stock of Asahi Tec. The Company owns 23 different properties, including 14 domestic manufacturing facilities in six states, and more than 10 manufacturing facilities North America, Europe, South America and Asia. Metaldyne Corporation aka MascoTech, Inc., aka MascoTech Harbor, Inc., Riverside Acquisition Corporation and Metaldyne Subsidiary Inc. and its affiliates filed for Chapter 11 on May 27, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-13412). The filing did not include the company's non-U.S. entities or operations. Richard H. Engman, Esq., at Jones Day represents the Debtors in their restructuring efforts. Judy A. O'Neill, Esq., at Foley & Lardner LLP serves as conflicts counsel; Lazard Freres & Co. LLC and AlixPartners LLP as financial advisors; and BMC Group Inc. as claims agent. For the fiscal year ended March 29, 2009, the company recorded annual revenues of approximately US$1.32 billion. As of March 29, 2009, utilizing book values, the company had assets of approximately US$977 million and liabilities of US$927 million. MIDWAY GAMES: Pays Mark Thomas $4.7MM from Warner Sale Proceeds --------------------------------------------------------------- Midway Games Inc. disclosed in a filing with the Securities and Exchange Commission that the Debtors paid Mark E. Thomas and related entities $4.7 million from the proceeds of the recent sale of its assets. On July 1, 2009, the U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement by and among Midway's majority share holder, Mark E. Thomas, MT Acquisition Holdings LLC and Acquisition Holdings Subsidiary I, LLC, and the Official Committee of Unsecured Creditors in Midway Games' Chapter 11 cases, and its U.S. subsidiaries. The Settlement Agreement settles all claims that existed against the Debtors' Chapter 11 bankruptcy estates by the Thomas Parties. Pursuant to the Settlement Agreement, and effective upon the Sale Date, the Thomas Parties granted to the Committee, on behalf of the Debtors' estates and their unsecured creditors, an irrevocable proxy to vote AHS' shares of common stock in Midway and forever and irrevocably relinquished the right to vote the Shares. Completion of Assets Sale On July 10, 2009, pursuant to the Asset Purchase Agreement dated as of May 20, 2009, Midway and certain of its U.S. subsidiaries completed their sale of substantially all of their assets to Warner Bros. Entertainment Inc. in a sale approved by the Court on July 1, 2009. The aggregate gross purchase price is approximately $49 million, including the assumption of certain liabilities. As a result of the Section 363 Sale, these material charges for impairment are required under generally accepted accounting principles: -- an impairment and write down of $25 to 30 million of capitalized product development costs; -- an impairment and write down of approximately $41 million of goodwill; and -- an impairment and write down of approximately $3-5 million of fixed assets. The Section 363 Sale also triggered a payment due under the Company's Key Employee Incentive Plan which resulted in a one-time cash compensation charge of approximately $2.4 million. On July 14, 2009, Midway's management concluded that a material charge for impairment is required under generally accepted accounting principles in connection with the closing of its development studio in Newcastle, United Kingdom. On July 14, 2009, Midway notified 75 employees at its Newcastle Studio that their employment has been terminated and that Midway intended to close the Newcastle Studio immediately. The headcount reduction represents all of the employees at the Newcastle Studio and approximately 25% of Midway's worldwide workforce. Due to the closure of the Newcastle Studio, Midway's management has concluded that an impairment and write down of approximately $1.5 million of goodwill is required. There will be no future cash expenditures related to the impairment charge, and any additional future cash expenditures related to the closing of the Newcastle Studio are expected to be immaterial. On July 13, 2009, Midway complied with the federal Worker Adjustment and Retraining Notification Act and provided a 60-day notification to 60 employees at its Chicago, Illinois facility of its intention to close the Chicago Facility. The headcount reduction represents all of the employees at the Chicago Facility and approximately 20% of Midway's worldwide workforce. The Registrant expects that the majority of the headcount reduction will occur by the beginning of September 2009. A full-text copy of the Settlement Agreement is available for free at http://ResearchArchives.com/t/s?3f95 About Midway Games Midway Games Inc. (OTC Pink Sheets: MWYGQ), headquartered in Chicago, Illinois, with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. More information about Midway and its products can be found at http://www.midway.com/ The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09- 10465). David W. Carickhoff, Jr., Esq., Michael David Debaecke, Esq., and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard as their investment banker, Dewey & LeBoeuf LLP as special counsel, and Epiq Bankruptcy Solutions LLC as claims agent. MOORE-HANDLEY INC: Files for Bankruptcy Due to CIT Woes ------------------------------------------------------- Steven Church and William Rochelle at Bloomberg News report that hardware distributor Moore-Handley Inc. filed for Chapter 11 due to difficulty getting cash from troubled lender CIT Group Inc. According to the report, Moore-Handley said in court filings it has tried to negotiate with CIT, though "the federal government's recent decision not to support CIT's reorganization has thrown CIT into disarray and casts substantial doubt on CIT's ability to continue to fund theDebtor's working capital requirements." Moore-Handley is asking the U.S. Bankruptcy Court for the Northern District of Alabama for authority to use cash pledged as collateral to CIT even though it doesn't have consent from CIT. Moore-Handley owes CIT $18.8 million in secured debt, including $11.2 million on a revolving credit and $6.4 million on a term loan. Moore-Handley Inc. supplies tools and other items to hardware stores and home centers. With net sales of $145.5 million in 2008, it claims to be the second-largest independent hardware and building material distributor in the U.S. Moore-Handley filed for Chapter 11 on July 17, 2009 (Bankr. N.D. Ala. Case No. 09-4198). MORTGAGE GUARANTY: Moody's Reviews 'Ba2' Insurance Strength Rating ------------------------------------------------------------------ Moody's Investors Service has placed the Ba2 insurance financial strength ratings of Mortgage Guaranty Insurance Corporation under review for possible downgrade and the Ba2 insurance financial strength ratings of MGIC's wholly owned subsidiary, MGIC Indemnity Corporation, on review for possible upgrade. At the same time, Moody's affirmed the B3 senior debt ratings of MGIC Investment Corporation and changed the rating outlook to negative from developing. This rating action follows MGIC's recent announcement that it has received approval from the Office of the Commissioner of Insurance for the State of Wisconsin to reactivate MIC and that it expects to contribute up to $1 billion of capital from MGIC in two installments, the first being before July 31, 2009. According to Moody's, the rating action reflects the anticipated impact of the proposed restructuring and capital transfer on MGIC, its wholly owned subsidiary -- MIC, and the holding company -- MGIC Investment Corporation. In Moody's view, although the capital contribution to MIC will be considered an admitted asset and therefore have no implications to MGIC's regulatory capital position and risk to capital metric, the equity investment reduces the liquidity available to MGIC to pay claims arising from its insured portfolio. Furthermore, if the restructuring is completed, MGIC would cease writing new business and would be placed into run-off. On the other hand, the recapitalization and restructuring of MIC allows MGIC, through this subsidiary, to increase the volume of new and more profitable business writings. The B3 (negative outlook) senior debt rating of MGIC Investment Corporation reflects the constrained financial flexibility at the holding company and the current absence of unrestricted dividend capacity at MGIC. Debt service obligations over the next two years are likely to substantially strain the holding company's liquidity and subject the $120 million of debt maturing in 2011 to considerable refinancing risk. Moody's stated that the challenges for the mortgage insurance industry and for MGIC have not subsided. The deterioration in the macroeconomic environment, increasing jobless rate, and continued decline in house prices have increased loss expectations for even prime mortgages, which comprise a significant proportion of MGIC's insured portfolio. Furthermore, it is uncertain what the role of Fannie Mae and Freddie Mac and mortgage insurance may be in the future mortgage finance market. The industry has sought to preserve capital by tightening underwriting standards and reducing new business volumes given constrained capital access and rising incurred losses. In Moody's view, the restructuring would allow MGIC, through its wholly owned subsidiary, to continue to write new business and ultimately improve the earnings of the overall group. However, MGIC as a run-off entity, excluding its investment in MIC, is unlikely to retain significant levels of standalone capital in excess of amounts estimated to be required to pay claims or to meet minimum regulatory requirements. During the ratings review, Moody's will be evaluating MGIC's progress on achieving regulatory licensing and the approval of the GSEs who are the primary beneficiary of MGIC's insurance policies. MIC's designation as a GSE eligible mortgage insurer is critical to the completion of restructuring. Moody's will also be updating Moody's capital adequacy assessment for MGIC including refining loss estimates in light of recent performance trends and rescission rates. List Of Rating Actions These ratings were placed on review for possible downgrade: * Mortgage Guaranty Insurance Corp -- Ba2 insurance financial strength; These ratings were placed on review for possible upgrade: * MGIC Indemnity Corporation -- insurance financial strength at Ba2. These ratings were affirmed and the outlook changed to negative from developing: * MGIC Investment Corporation -- senior unsecured debt at B3; junior subordinated debt at Caa2; provisional rating on senior unsecured debt at (P)B3. The last rating action related to MGIC was on March 16, 2009, when Moody's affirmed MGIC's insurance financial strength rating at Ba2 and downgraded MGIC Investment Corp to B3 from B2. MGIC Investment Corporation, headquartered in Milwaukee, Wisconsin, is the holding company for Mortgage Guaranty Insurance Company, one of the largest US mortgage insurers with $220 billion of primary insurance in force at June 30, 2009. MTM TECHNOLOGIES: McGladrey & Pullen Raises Going Concern Doubt --------------------------------------------------------------- McGladrey & Pullen, LLP, in New York City, raised substantial doubt about MTM Technologies, Inc.'s ability to continue as a going concern after auditing the Company's financial results for the years ended March 31, 2009, and 2008. The auditors noted that the Company has recurring losses from operations and a working capital deficiency at March 31, 2009. At March 31, 2009, the Company's balance sheet showed total assets of $95,244,000, total liabilities of $86,753,000 and shareholders' equity of $8,491,000. For the year ended March 31, 2009, the Company posted a net loss of $39,644,000 compared with a net loss of $14,405,000 for the same period in the previous year. For the year ended March 31, 2009, its cash decreased $1.1 million to $2.1 million compared with $3.2 million at March 31, 2008. Working capital at March 31, 2009, was a deficit of $5.8 million as compared to a working capital deficit of $3.3 million at March 31, 2008. Included in current liabilities at March 31, 2009, are obligations of $6.8 million of related party notes payable and $15.7 million relating to the Company's secured financing facilities. A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?3f61 Headquartered in Stamford, Connecticut, MTM Technologies, Inc. (NASDAQ: MTMCD) - http://www.mtm.com-- is a national provider of innovative IT solutions and services to Global 2000 and mid-size companies. Partnered with industry-leading technology providers such as Cisco Systems, Citrix, Microsoft, HP, Sun Microsystems, EMC, and Avaya, MTM Technologies offers comprehensive solutions in the areas of access, convergence, consolidation, and virtualization. In addition, MTM Technologies provides a broad range of managed services, including system monitoring and management, hosting, security management, IP telephony management, and IT support, as well as IT staffing and training services. NATASHA DREMLYUGA: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Natasha Dremlyuga 25233 NE 52 Place Redmond, WA 98053 Bankruptcy Case No.: 09-17040 Chapter 11 Petition Date: July 16, 2009 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Jeffrey B. Wells, Esq. Attorney at Law 500 Union St, Ste 927 Seattle, WA 98101 Tel: (206) 624-0088 Email: eajbwellaw@aol.com Total Assets: $2,169,090 Total Debts: $2,568,982 A full-text copy of Ms. Dremlyuga's petition, including a list of her 9 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/wawb09-17040.pdf The petition was signed by Ms. Dremlyuga. NAVIGATORS GROUP: S&P Assigns 'BB+' Preferred Stock Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its preliminary 'BBB' senior debt, 'BBB-' subordinated debt, and 'BB+' preferred stock ratings on Navigators Group Inc.'s (BBB/Stable/--) universal shelf, which was filed. This new $500 million universal shelf replaces Navigators' previous $300 million shelf that expires July 17, 2009. "The filing was made in order to provide the company with financial flexibility, as it would be able to offer various types of securities, including debt, common stock, preferred stock, and trust preferred securities," said Standard & Poor's credit analyst Taoufik Gharib. "Although Navigators filed the universal shelf registration with the SEC, it currently has no plans to issue any new securities." The ratings reflect the group's strong competitive position in the marine insurance market and its strong capitalization supported by strong operating performance. The ratings are also supported by strong financial flexibility with strong leverage metrics and the contributions of its subsidiary, Lloyd's Syndicate 1221. Partially offsetting these positive factors are a business model that relies heavily on reinsurance capacity and a historically aggressive organic growth strategy into new products and regions. Navigators produced strong operating performance in 2008, with a combined ratio of 94.0% and a return on revenue of 14.8%. The group earned $107 million in pretax operating income in 2008, less than the $137 million achieved in 2007, primarily because of net losses of $19.1 from Hurricanes Gustav and Ike and realized investment losses of $38.3 million, mostly because of other-than- temporary impairments. Offsetting the decline in earnings are increased investment income and $50.7 million in favorable reserve development, which improved the combined ratio by 7.9 percentage points. Navigators' operating performance remained strong through the first three months of 2009 as the company generated pretax operating income of $28 million and a combined ratio of 92.9%, compared with $34 million and 89.2%, respectively, during the same period in 2008. Although the company experienced rate increases within its marine, offshore energy, and professional liability business, the decline in operating performance was attributable to lower favorable reserve development of $6 million, compared with $14 million during the same period in the previous year. Financial flexibility is strong, with modest debt leverage (18.1% as of December 31, 2008, and 17.8% as of March 31, 2009) and very strong interest coverage (10.1x as of December 31, 2008, and 10.7x as of March 31, 2009). Both financial leverage and interest coverage metrics are significantly better than Standard & Poor's threshold for the current rating level. Furthermore, as of year- end 2008, the holding company held $52.1 million ($80.3 million in first-quarter 2009) in cash and investments not backing any liabilities, which constituted more than 5.9x the annual interest expense of $8.9 million. NEW FRONTIER: Posts $1 Million Net Loss in Quarter Ended May 31 --------------------------------------------------------------- New Frontier Energy Inc. posted a net loss of $1,016,330 for three months ended May 31, 2009, compared with a net loss of $1,160,298 for the same period in the previous year. At May 31, 2009, the Company's balance sheet showed total assets of $16,338,550, total liabilities of $5,585,462 and stockholders' equity of $10,753,088. The Company has not generated positive cash flows from operating activities and used $324,476 in operating activities during the three months ended May 31, 2009. The primary sources of capital have been from sales of gas during the three months ended May 31, 2009. The Company's working capital requirements are expected to increase in line with the growth of its business. The Company has no lines of credit or other bank or off balance sheet financing arrangements. On May 20, 2009, Stark Winter Schenkein & Co., LLP in Denver, Colorado raised substantial doubt about New Frontier Energy, Inc.'s ability to continue as a going concern after auditing the Company's financial results for the years ended February 28, 2009, and February 29, 2008. The auditors noted the Company's significant losses from operations and its working capital deficiency. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?3fa8 New Frontier Energy Inc. (OTC:NFEI) is a domestic energy company engaged in the exploration for, and development of, oil and natural gas reserves in the continental United States. The Company operates in two business segments: oil and gas exploration and gas gathering. It explores for, produces and gathers oil and natural gas. NEWPAGE CORP: Seeks Loan Amendment; to Hold Notes Offering ---------------------------------------------------------- NewPage Corporation last week announced several concurrent transactions which are intended to increase NewPage's operating flexibility and reduce its indebtedness: 1. NewPage is seeking to amend certain provisions of its senior secured term loan credit facility and senior secured revolving credit facility, and to purchase and cancel a portion of the outstanding balance under the senior secured term loan facility. 2. NewPage also intends to engage in a proposed offering of new senior secured notes due 2014, yielding approximately $595 million of gross proceeds -- after original issue discount, but before fees and expenses -- pursuant to a confidential offering circular in a private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended. NewPage and NP Investor LLC, an affiliate of Cerberus Capital Management, L.P., the indirect controlling shareholder of NewPage Holding Corporation, are commencing a cash tender offer -- Second Lien Notes Tender Offer -- to purchase certain of NewPage's outstanding notes. In conjunction with the Second Lien Notes Tender Offer, NPI is also simultaneously commencing a cash tender offer to purchase certain of the outstanding notes of NewPage Holding and NewPage. In addition, Stora Enso Oyj, the holder of the NewPage Group Inc. Floating Rate Senior Unsecured PIK Notes due 2015 -- NewPage Group PIK Notes -- has agreed, subject to certain conditions, to contribute a portion of the NewPage Group PIK Notes upon the purchase and contribution by NPI of notes purchased by it in the NPI Offer. The series of existing notes that are subject to the Offers are: Notes Subject to the Second Lien Notes Tender Offer Total Consideration Principal Early Acceptable Amount Participation Bid Price Outstanding Premium(1) Range)(1)(2) ------------ ------------- ------------- NewPage Corp. $225,000,000 $30.00 $430 - $530 Floating Rate Senior Secured Notes due 2012 NewPage Corp. $806,000,000 $30.00 $450 - $550 10% Senior Secured Notes due 2012 Notes Subject to the NPI Offer Accept- Tender Principal ance Offer Early Total Amount Priority Consider- Partici- Consider- Outstanding Level ation(1) pation ation ------------ -------- --------- ------- --------- NewPage $196,200,700 1 $220.00 $30.00 $250.00 Holding Floating Rate Sr. Unsecured PIK Notes due 2013 ------------ -------- --------- ------- --------- NewPage $200,000,000 2 $320.00 $30.00 $350.00 Corp. 12% Sr. Sub Notes due 2013 (1) Per $1,000 principal amount of Notes. (2) Includes the $30.00 early participation premium. Both Offers are scheduled to expire at 12:00 Midnight, New York City time, on August 11, 2009, unless extended or earlier terminated. Holders who tender their notes before 5:00 p.m., New York City time, on July 28, 2009, will, upon acceptance, receive the total consideration, which includes an early participation premium. Holders who tender their notes after the Early Participation Time, but before the Expiration Time will, upon acceptance, receive the tender offer consideration but not the early participation premium. To the extent an Offer is not consummated, the early participation premium will not be paid in respect of any notes tendered in connection with such Offer. Second Lien Notes Tender Offer Under the terms of the Second Lien Notes Tender Offer, NewPage and NPI are, severally but not jointly, offering to purchase the maximum aggregate principal amount of its outstanding Floating Rate Senior Secured Notes due 2012 and 10% Senior Secured Notes due 2012 that NewPage and NPI together can purchase for $180 million, excluding accrued interest -- subject to increase by NewPage, the "Maximum Payment Amount" -- determined in accordance with a "modified Dutch Auction" procedure and otherwise on the terms and conditions set forth in the Second Lien Notes Tender Offer. NewPage will fund up to $130 million of the Maximum Payment Amount and NPI will fund up to $50 million of the Maximum Payment Amount. Notes purchased by NewPage and NPI will be allocated between NewPage and NPI on a pro rata basis as determined by their relative participation in the Maximum Payment Amount. NewPage intends to finance the Second Lien Notes Tender Offer with a portion of the proceeds from its proposed offering of new senior secured notes due 2014. The total consideration payable pursuant to the Second Lien Notes Tender Offer per $1,000 principal amount of Second Lien Notes validly tendered and accepted for purchase by NewPage and NPI will be determined based on a formula consisting of a base price (including an early participation premium) per $1,000 principal amount of notes equal to $430.00 for the Floating Rate Notes and $450.00 for the 10% Notes, plus a clearing premium not to exceed $100.00. The clearing premium with respect to the Second Lien Notes will be the lowest single premium at which NewPage and NPI will be able to spend the Maximum Payment Amount by accepting all validly tendered Second Lien Notes with bid premiums equal to or lower than the clearing premium. If the aggregate amount of Second Lien Notes validly tendered and not withdrawn at or below the clearing premium would cause NewPage and NPI to spend more than the Maximum Payment Amount, then holders of the Second Lien Notes tendered at the clearing premium will be subject to proration as described in the Second Lien Notes Tender Offer. NPI Offer Under the terms of the NPI Offer, NPI is offering to purchase for cash any and all of NewPage Holding's outstanding Floating Rate Senior Unsecured PIK Notes due 2013 and the maximum aggregate principal amount of NewPage's outstanding 12% Senior Subordinated Notes due 2013 such that the aggregate amount that NPI would be required to pay for purchase of the Subordinated Notes shall not exceed $85 million. All NewPage Holding PIK Notes validly tendered will be accepted for purchase before any tendered 12% Senior Subordinated Notes are accepted for purchase. Notes tendered may be withdrawn at any time prior to 5:00 p.m. New York City time, on July 28, 2009. Except as stated in the Offers to Purchase or as required by applicable law, Notes tendered prior to the Withdrawal Deadline may only be withdrawn in writing and before the Withdrawal Deadline, and Notes tendered after the Withdrawal Deadline and before the Expiration Time may not be withdrawn. Payment for tendered Notes will be made promptly following the acceptance of the Notes validly tendered by the Expiration Time, or if the Offers are extended, promptly following the Expiration Time. Holders of validly tendered and accepted 12% Senior Subordinated Notes due 2013 and Second Lien Notes will receive accrued and unpaid interest from the last interest payment date through the day prior to the date such Notes are purchased. Holders that validly tender their NewPage Holding PIK Notes, which are accepted for purchase by NPI, will not receive accretion past the last semi-annual accrual date, will not receive any amount with respect to accrued and unpaid interest since such date, and will receive only the total consideration or tender offer consideration, as applicable. Both offers are conditioned on the successful completion of the other Offer, the amendment of NewPage's senior secured term loan credit facility and senior secured revolving credit facility and the purchase and cancellation of a portion of the outstanding balance under the senior secured term loan credit facility, as well as certain other terms and conditions. The Second Lien Notes Tender Offer is also conditioned on the completion of NewPage's proposed offering of new senior secured notes due 2014. "We cannot assure you that any of these conditions will be satisfied, and NewPage and NPI may in their sole discretion waive or modify any conditions to, or terminate or extend, the Offers in which each is participating," NewPage says. In conjunction with the NPI Offer and the concurrent transactions, SEO has agreed, subject to certain conditions, to contribute to the issuer thereof up to $150 million in accreted principal amount of NewPage Group PIK Notes. The accreted principal amount of NewPage Group PIK Notes to be contributed will be determined by the principal amount of Subordinated Notes purchased pursuant to the NPI Offer and contributed by NPI to the issuer thereof. NPI currently intends to hold for investment any Notes purchased by it in the Offers and is under no obligation to contribute any Notes that it purchases. In the event that NPI does not contribute at least $100 million of the Subordinated Notes purchased by it, SEO will be under no obligation to contribute any amount of NewPage Group PIK Notes. The proposed amendments to NewPage's senior secured credit facilities are currently expected to include an increase in the rates and fees provided to lenders thereunder, the elimination of financial maintenance covenants through 2010 and the addition during such period of a minimum liquidity covenant, the modification or elimination of certain financial maintenance covenants thereafter, an extension of the maturity of at least a portion of the loans under NewPage's senior secured term loan credit facility and changes to permit additional purchases or redemptions of the Notes and the NewPage Group PIK Notes, subject to certain terms and conditions. The new senior secured notes are expected to be secured equally and ratably with NewPage's senior secured term loan facility by liens on the same assets that secure NewPage's senior secured term loan facility (other than stock pledges and intercompany notes). The proceeds of the private offering of senior secured notes will be used to purchase and cancel approximately $425 million of NewPage's senior secured term loan facility, finance NewPage's portion of the Second Lien Notes Tender Offer, and pay fees and expenses related to the transactions. The new notes proposed to be issued have not been registered under the Act or any state securities laws and unless so registered may not be offered or sold in the United States except pursuant to an exemption from registration. NewPage currently expects to provide an update on its expected results for the quarter ended June 30, 2009 prior to the Withdrawal Deadline. NewPage has retained Goldman, Sachs & Co. to act as arranger for the amendments to its credit facility. NewPage and NPI have retained Citi to serve as the lead dealer manager for the Offers and Banc of America Securities LLC, Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co. are acting as additional dealer managers. Barclays Capital Inc. is acting as co-manager for the Offers. Questions regarding the Offers may be directed to Citigroup Global Markets Inc. at (212) 723-6106 (collect) or (800) 558-3745 (toll-free). Requests for documents in connection with the Offers may be directed to Global Bondholder Services Corporation, the information agent for the Offers at (212) 430- 3774 or (866) 470-3700 (toll-free). March 31 Financials NewPage Holding Corporation swung to a net loss of $113,000,000 for the first quarter 2009 compared to a net income of $5,000,000 during the same period in 2008. NewPage Corp. also posted a net loss of $108,000,000 for the first quarter compared to an $8,000,000 net income during the same period in 2008. At March 31, 2009, NewPage Holding had $4,181,000,000 in total assets; $521,000,000 in total current liabilities, $3,150,000,000 in long-term debt, $616,000,000 in other long-term obligations; resulting in $106,000,000 in total deficit. At March 31, 2009, NewPage Corp. had $4,180,000,000 in total assets; $521,000,000 in total current liabilities, $2,963,000,000 in long-term debt, $616,000,000 in other long-term obligations; resulting in $80,000,000 in total equity. NewPage reports that, as of March 31, 2009, its principal sources of liquidity include cash generated from operating activities and availability under its revolving senior secured credit facility. The amount of loans and letters of credit available to NewPage pursuant to the revolving senior secured credit facility is limited to the lesser of $500,000,000 or an amount determined pursuant to a borrowing base -- $419,000,000 as of March 31, 2009. As of March 31, 2009, NewPage had $247,000,000 available for borrowing, after reduction for $89,000,000 in letters of credit and $83,000,000 in outstanding borrowings under the revolving senior secured credit facility. "We have not experienced any limitations in our ability to access funds available under our revolving credit facility and believe we will not experience any limitations in the future in accessing funds. In an effort to manage credit risk exposures under our debt and derivative instruments, we regularly monitor the credit- worthiness of the counterparties to these agreements. We believe our cash flow from operations, available borrowings under our revolving senior secured credit facility and cash and cash equivalents will be adequate to meet our liquidity needs for the next twelve months. However, given the uncertainty of the current economic environment, we cannot assure you that our business will generate sufficient cash flows from operations or that future borrowings will be available to us under our revolving senior secured credit facility in an amount sufficient to enable us to fund our liquidity needs," NewPage says. Aggregate indebtedness as of March 31, 2009, totaled $3,218,000,000, which includes $3,023,000,000 at NewPage. NewPage says beginning in 2011, its debt service requirements substantially increase as a result of scheduled payments of its indebtedness. "We anticipate that we will seek to refinance indebtedness prior to that time or retire portions of indebtedness with issuances of equity securities, proceeds from the sale of assets or cash generated from operations. Our ability to operate our business, service our debt requirements and reduce our total debt will depend upon our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, many of which are beyond our control, as well as the availability of revolving credit borrowings and other borrowings to refinance our existing indebtedness," NewPage says. A full-text copy of NewPage's quarterly report is available at no charge at http://ResearchArchives.com/t/s?3f99 About New Page Headquartered in Miamisburg, Ohio, NewPage Corporation is the largest coated paper manufacturer in North America, based on production capacity, with $4.4 billion in net sales for the year ended December 31, 2008. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. The papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. The mills have a total annual production capacity of approximately 4.4 million tons of paper, including approximately 3.2 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. As reported by the Troubled Company Reporter on July 2, 2009, Moody's Investors Service lowered the corporate family rating of NewPage Corporation to Caa1 from B2 and at the same time, downgraded the company's other debt ratings. NewPage's speculative grade liquidity rating remains at SGL-4 and the ratings outlook is negative. NORANDA ALUMINUM: To Receive $23.625MM Settlement From 3 Insurers ----------------------------------------------------------------- Noranda Aluminum Holding Corporation on July 15, 2009, announced a $23.625 million insurance settlement pursuant to the signing of a claim settlement agreement with the remaining three insurance carriers providing coverage related to the Company's pot line freeze claim from the January 2009 New Madrid smelter outage. Under the Release, which represents the final settlement of the Company's claim, the Company will receive proceeds totaling $23.625 million from the Insurers, which includes $5.25 million of claim advances previously received. Combined with the Company's previously announced $43.875 million settlement with Factory Mutual Insurance Company, provider of 65% of the coverage, the Release brings the total claim settlement to $67.5 million. On June 24, 2009, Noranda announced a $43.875 million partial insurance settlement, pursuant to the signing of a claim settlement agreement with Factory Mutual related to FM Global's portion of the Company's pot line freeze claim from the January 2009 New Madrid smelter outage. FM Global provides 65% of the coverage for the commercial property insurance policy that governs the Company's pot line freeze claim. Under the Release, the Company will receive proceeds totaling $43.875 million from FM Global, which includes the $9.75 million of claim advances previously received. About Noranda Aluminum Noranda Aluminum Holding Corporation -- http://www.norandaaluminum.com/-- is a leading North American integrated producer of value-added primary aluminum products, as well as high quality rolled aluminum coils. The Company has two businesses, an upstream and downstream business. The primary metals, or upstream business, produced approximately 261,000 metric tons of primary aluminum in 2008. The rolling mills, or downstream business, are one of the largest foil producers in North America and a major producer of light gauge sheet products. Noranda Aluminum Holding Corporation is a private company owned by affiliates of Apollo Management, L.P. As reported by the Troubled Company Reporter on July 17, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Noranda Aluminum Holding Corp. to 'CCC+' from 'SD'. The outlook is developing. NORTEL NETWORKS: Customers Laud Avaya Acquisition ------------------------------------------------- The International Nortel Networks Users Association voiced its support for Nortel's selection of Avaya as the "stalking horse" for its Enterprise Solutions business. The group of more than 4,000 Nortel customers worldwide believes the acquisition will allow the company to refocus its energy and resources on its solutions, and quiet concerns about the corporate structure that has beleaguered the company. "The events and actions leading to Nortel's bankruptcy have taken the focus of the market, the media and even customers away from the strength of their solutions," commented INNUA's Executive Director Victor Bohnert. "The strength of the enterprise solutions portfolio has never been in question, and the Avaya acquisition could enable a more effective go-to-market strategy for these solutions and strengthen the market position of the company." The majority of INNUA members have been Nortel customers for more than ten years and they depend on the reliable Nortel solutions they have in place. In a recent poll conducted after Nortel's bankruptcy filing in January, 80% of INNUA members said they intend to move forward with Nortel purchases or deployments. INNUA leadership recognizes the value its members place on their Nortel investments and therefore, INNUA will continue a deep strategic relationship with Nortel leadership and develop a relationship with Avaya throughout this transition to ensure the customer community's voice is heard. "On average INNUA members spend 5 times more on Nortel solutions than non-INNUA members," said INNUA's President Steve Ford. "Their loyalty to the Nortel product line makes the customer base one of Nortel's most valued assets." The organization says it will now turn its focus to the future. Bohnert went on to say, "This chapter in Nortel's history is closed. We understand that there is still much that can change during the auction process. However, we will begin working with Avaya as soon as it's appropriate to determine how we can best represent the collective voice of their new customers." About INNUA The International Nortel Networks Users Association -- http://www.innua.org/-- is an international, user-driven association serving Nortel users for more than 25 years. INNUA exists to educate and inform telecommunications and IT professionals while providing a professional network for those with common concerns to address and success stories to share. One of the industry's largest and most progressive user groups, INNUA is a community of more than 4,000 members in more than 70 chapters around the globe. NORTEL NETWORKS: RIM Says It Was Shut Out from Bidding for Assets ----------------------------------------------------------------- Research In Motion Limited said that it has effectively been prevented from submitting an offer for the Nortel Networks Wireless Business that is the subject of a bankruptcy auction scheduled to occur on July 24, 2009. The assets being sold are Nortel's CDMA and Long Term Evolution Access businesses. In its CDMA and Long Term Evolution Access businesses, Nortel develops current and next generation technology for wireless infrastructure and mobile devices. RIM sought to be qualified as a qualified bidder in Nortel's auction bidding process for the Wireless Business, but RIM was told it could be qualified only if it promised not to submit offers for other Nortel assets for a period of one year. In seeking to impose this condition, Nortel and its advisors were fully aware of RIM's desire to purchase other Nortel assets as part of a solution to retain key portions of Nortel's business under Canadian ownership. Despite repeated efforts, Nortel, its advisors and its court-appointed monitor have rejected RIM's repeated attempts to engage in meaningful discussions. Based on its preliminary review, RIM would be prepared to pay in the range of US $1.1 billion, subject to due diligence and the entering into of appropriate ancillary agreements, for the CDMA and Long Term Evolution Access businesses and certain other Nortel assets. RIM believes that such an offer would result in an extremely attractive price for Nortel creditors and value substantially in excess of the stalking horse bid made by Nokia Siemens Networks. Jim Balsillie, RIM's co-chief executive officer stated, "RIM is extremely disappointed that Nortel's world leading technology, the development of which has been funded in part by Canadian taxpayers, seems destined to leave Canada and that Canada's own Export Development Corporation is preparing to help by lending $300 million to another bidder. RIM remains extremely interested in acquiring Nortel assets through a Canadian ownership solution that would serve the dual purpose of keeping key wireless technologies in Canada and extending RIM's leadership in the research, development and distribution of leading edge wireless solutions, but RIM has found itself blocked at every turn." RIM believes that the loss of Canadian ownership of Nortel's CDMA and Long Term Evolution Access businesses may significantly, adversely affect national interests, with potential national security implications, and that the Government of Canada should review the situation closely. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) NORTEL NETWORKS: To Sell Enterprise Solutions to Avaya for $475MM ----------------------------------------------------------------- Nortel Networks Corporation said the Company, its principal operating subsidiary Nortel Networks Limited and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited, have entered into: -- a "stalking horse" asset and share sale agreement with Avaya Inc. for its North American, Caribbean and Latin America and Asia Enterprise Solutions business; and -- an asset sale agreement with Avaya for the Europe, Middle East and Africa portion of its Enterprise Solutions business, for a purchase price of US$475 million. The agreements include the planned sale of substantially all of the assets of the Enterprise Solutions business globally as well as the shares of Nortel Government Solutions Incorporated and DiamondWare, Ltd. Commenting on the announcement, Nortel President and Chief Executive Officer, Mike Zafirovski said, "We continue to be fully focused on running our operations and continuing to serve our customers while actively engaged in the sale of our businesses. We have determined that the sale of our businesses maximizes value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible. The CDMA and LTE Access stalking horse asset sale agreement announced on June 19th, and [the] agreements around our Enterprise business are solid proof of that value. This represents the best path forward, and we are advancing in our discussions with interested parties for our other businesses." "The many customers I have spoken with have been highly supportive of our efforts and transparency throughout this process. They value our employees and technology platforms and are appreciative of our service levels which are at multi-year highs." "[The] agreements underscore the value of Enterprise Solutions and the investments we have made in enterprise telephony, unified communications and data networking core competencies. If successfully completed, this transaction will provide clarity on the path forward for our Enterprise customers, partners and employees, and enable the industry to continue to benefit from Nortel-created technology, know-how and leading-edge innovation." "We have some of the best talent in the industry and will explore all potential opportunities for them as we move through this process." In EMEA any impact on the Enterprise Solutions workforce in connection with this proposed transaction will be considered as part of any required information and consultation process with employee representatives or employees. Joel Hackney, President, Enterprise Solutions added: "The successful buyer will gain access to an industry-leading portfolio that is optimized for real-time communications, bringing speed and simplicity to customers' network environments and allowing them to enhance collaboration, streamline business processes and improve productivity." Mr. Hackney continued: "Enterprise Solutions has strong relationships with key customers and partners around the world, and we have helped them achieve industry-leading differentiation and competitive advantages. We remain committed to serving them without interruption through this process and, as we move forward, we pledge to communicate our progress to the greatest extent possible." Chuck Saffell, Chief Executive Officer of Nortel Government Solutions, said, "Nortel Government Solutions has built a robust product and services business for U.S. Federal government customers. If successfully concluded, this agreement will offer Avaya the opportunity to continue to grow this business and bring further value to customers." "The addition of Nortel Enterprise Solutions will increase Avaya's global scale, expand our channel partner network, and strengthen our world-class portfolio of products and services," said Kevin Kennedy, president and CEO, Avaya. "This is a strategic opportunity to acquire talent and complementary assets that position the combined company for growth and success. We are committed to protecting the communications investments of the customers of Avaya and Nortel, and to effectively executing the integration of Nortel Enterprise Solutions and Avaya." "As the largest reseller of Avaya and Nortel equipment to Canadian business, Bell believes Avaya's history of leadership in enterprise communications makes it an ideal candidate for this proposed transaction," said Stephane Boisvert, President of Bell Business Markets. "Bell was the first major service provider to standardize on both Avaya and Nortel IP telephony solutions, and we are confident Avaya will continue to provide partners and customers with innovative business communications technologies and responsive customer support going forward." "Avaya's proposed acquisition of Nortel Enterprise Solutions is good news for our customers, who would benefit from the broadened range of compelling solutions," said Hanif Lalani, CEO, BT Global Services. "BT and Avaya have been working closely, and successfully, over the last couple of years. Building on our success, BT has plans to expand this engagement with Avaya over the next year to offer a full unified communications portfolio. Today's news strengthens this expansion plan." Details of Sale Process Nortel will file the stalking horse asset and share sale agreement with the United States Bankruptcy Court for the District of Delaware along with a motion seeking the establishment of bidding procedures for an auction that allows other qualified bidders to submit higher or otherwise better offers, as required under Section 363 of the U.S. Bankruptcy Code. A similar motion for the approval of the bidding procedures will be filed with the Ontario Superior Court of Justice. Following completion of the bidding process, final approval of the U.S. and Canadian courts will be required. In relation to the EMEA entities to which they are appointed, the UK Joint Administrators have the authority, without further court approval, to enter into the EMEA asset sale agreement on behalf of those relevant Nortel entities. In some EMEA jurisdictions, this transaction is subject to information and consultation with employee representatives prior to finalization of the terms of sale. In addition to the processes and approvals, consummation of the transaction is subject to the satisfaction of regulatory and other conditions and the receipt of various approvals, including governmental approvals in Canada and the United States and the approval of the courts in France and Israel. The stalking horse asset and share sale agreement and the EMEA asset sale agreement are also subject to purchase price adjustments under certain circumstances. Share Value; Certain Potential Tax Consequences of TSX Delisting Nortel does not expect that the Company's common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests. The Company and NNL applied to delist their shares from trading on the Toronto Stock Exchange and delisting occurred on June 26, 2009, at the close of trading. As a result of the TSX delisting, certain sellers of Nortel shares who are not residents of Canada for purposes of the Income Tax Act (Canada) may be liable for Canadian tax and may be subject to tax filing requirements in Canada as a result of the sale of such shares after June 26, 2009. Also, purchasers of Nortel shares from non-residents may have an obligation to remit 25% of the purchase price to the Canada Revenue Agency. Parties to sales of Nortel shares involving a non-resident seller should consult their tax advisors or the Canada Revenue Agency. About Avaya Avaya -- http://www.avaya.com/-- provides unified communications, contact centers, and related services directly and through its channel partners to leading businesses and organizations around the world. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) NORTEL NETWORKS: PBGC to Take Over Underfunded Pension Plans ------------------------------------------------------------ The Pension Benefit Guaranty Corporation said July 17 it will take responsibility for the underfunded pension plan covering some 23,000 employees and retirees of Nashville-based Nortel Networks, Inc., the U.S. subsidiary of Nortel Networks Corp., an international telecommunications technology concern headquartered in Toronto and formerly a unit of Bell Canada. The pension insurer's move comes as the company, in Chapter 11 bankruptcy, prepares to liquidate in a series of impending asset sales. None of the proposed transactions will include the pension plan. If the PBGC delayed action until after the sales, no entity would remain to finance or administer the plan, and the possibility of recovering on the agency's claims for unfunded pension liabilities would be severely diminished. The Nortel Networks Retirement Income Plan is 58 percent funded, with assets of $716 million to cover benefit liabilities of $1.23 billion, according to PBGC estimates. The agency expects to cover the entire $514 million shortfall. The plan was frozen as of Dec. 31, 2007, for all participants. The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ends on July 17, 2009. Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other participants will receive their pensions when they are eligible to retire. After it becomes trustee, the PBGC will send notification letters to all participants in the Nortel Networks plan. Under provisions of the Pension Protection Act of 2006, the maximum guaranteed pension the PBGC can pay is determined by the legal limits in force on the date of the plan sponsor's bankruptcy. Therefore participants in this pension plan are subject to the limits in effect on January 14, 2009, which set a maximum guaranteed amount of $54,000 for a 65-year-old. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed. Workers and retirees with questions may consult the PBGC Web site -- http://www.pbgc.gov/-- or call toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask for 800-400-7242. Retirees of Nortel Networks who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Assumption of the plan's unfunded liabilities will increase the PBGC's claims by $513.7 million and was not previously included in the agency's fiscal year 2008 financial statements. The PBGC is a federal corporation created under the ERISA. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NPS PHARMACEUTICALS: Board Elects Colin Broom as Director --------------------------------------------------------- The Board of Directors of NPS Pharmaceuticals, Inc., on July 9, 2009, elected Colin Broom M.D. as a director to fill a vacancy on the Board. Dr. Broom, 53, currently serves as Vice President, Chief Scientific Officer of ViroPharma Incorporated, a position he has held since May 2004. Prior to ViroPharma, Dr. Broom served as vice president of clinical development and medical affairs, Europe, for Amgen. Previously, he was vice president of clinical development for Hoechst Marion Roussel (now sanofi-aventis) and for 14 years worked for Glaxo and then SmithKline Beecham (now GlaxoSmithKline) in a range of leadership positions of increasing responsibility, including head of global oncology and vice president of CNS/GI. In connection with Dr. Broom's election, the Compensation Committee of the Board approved a grant of 36,000 options to Dr. Broom under the Company's 2005 Omnibus Equity Plan. The options will vest over four years and become exercisable 25% on the first anniversary of the date of grant and 6.25% every three months thereafter. Dr. Broom will also participate in the Company's non-employee director compensation program. Dr. Broom has been appointed to serve on the Audit Committee and the Compensation Committee. There are no arrangements or understandings between Dr. Broom and any other person pursuant to which Dr. Broom was selected as a director. "Colin brings strong leadership and an impressive track record in drug development to the NPS board of directors," said Peter G. Tombros, chairman of NPS. "His extensive R&D and regulatory experience in large pharmaceutical and smaller biotech companies will be very valuable as we advance our lead product candidates, GATTEX and NPSP558. On behalf of the NPS board of directors, it is a pleasure to welcome Colin and we look forward to his contributions to our future success." Dr. Broom brings 25 years of pharmaceutical industry experience to the NPS board of directors. Dr. Broom holds a bachelor of science degree in pharmacology from University College, London and a bachelor of medicine and bachelor of surgery degree from St. George's Hospital Medical School, London. He is a Member of the Royal College of Physicians and a Fellow of the Faculty of Pharmaceutical Medicine of the UK Colleges of Physicians. About NPS Pharmaceuticals Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing specialty therapeutics company for gastrointestinal and endocrine disorders with high unmet medical need. The Company is currently advancing two late-stage programs. Teduglutide, a proprietary analog of GLP-2, is in Phase 3 clinical development for intestinal failure associated with short bowel syndrome as GATTEX(TM) and in preclinical development for gastrointestinal mucositis and necrotizing enterocolitis. At March 31, 2008, the Company's balance sheet showed total assets of $200.7 million against total liabilities of $425.9 million, resulting in a stockholders' deficit of about $225.5 million. NV BROADCASTING: Chapter 11 Filing Cues Moody's Rating Cut to 'D' ----------------------------------------------------------------- Moody's Investors Service downgraded the Probability of Default Rating of NV Broadcasting, LLC (New Vision) to D from Caa2 and its Corporate Family Rating to Ca from Caa2 following its prearranged consensual restructuring under Chapter 11 of the U.S. Bankruptcy Code filed July 13, 2009. Moody's also downgraded instrument ratings as shown and will withdraw all ratings shortly. NV Broadcasting, LLC -- Probability of Default Rating, Downgraded to D from Caa2 -- Corporate Family Rating, Downgraded to Ca from Caa2 -- Senior Secured First Lien Bank Credit Facility, Downgraded to Caa3, LGD3, 32% from B3, LGD3, 31% -- Senior Secured Second Lien Bank Credit Facility, Downgraded to C, LGD5, 82% from Caa3, LGD5, 80% -- Outlook, Changed To Stable From Negative Parkin Broadcasting, LLC -- Senior Secured First Lien Bank Credit Facility, Downgraded to Caa3, LGD3, 32% from B3, LGD3, 31% -- Outlook, Changed To Stable From Negative The company has secured a $28 million (unrated) line of credit. The most recent rating action on New Vision occurred November 3, 2008, when Moody's downgraded its Corporate Family Rating and Probability of Default Rating to Caa2 from B3. NV Broadcasting, LLC, headquartered in Los Angeles, CA, owns and operates 13 major affiliated broadcast television stations and one CW and two MyTv affiliated broadcast stations in 9 markets. Its 2008 revenue was approximately $115 million. The company is primarily owned by HBK Capital Management. OPUS WEST: To Seek Final Approval of Cash Use on July 24 -------------------------------------------------------- Debtor Opus West LP seeks final approval from the Bankruptcy Court to use the cash collateral of Guaranty Bank with regard to the 121 Lakepointe Crossing I & II Real Estate Development Project and to grant the secured lender on the 121 Lakepointe Project adequate protection. Guaranty Bank Construction Loans OWLP acquired the land for the 121 Lakepointe Project in 2003. The Project consists of 1,254,248 square feet of space, contained in three industrial buildings, located on more than 60 acres of land in Lewisville, Texas. OWLP completed construction on the first two buildings in 2004. Expansion of Building 1 was completed in March 2009. Construction on Building 3 is currently underway. OWLP entered into a Construction Loan Agreement dated March 17, 2003, with Guaranty Bank, as lender. Guaranty Bank extended to OWLP constructions loans in two parts: Construction Loan Total Outstanding Debt Extended by Guaranty Bank as of May 31, 2009 ------------------------- ---------------------- A construction loan $16,675,000 in the principal amount of $18,320,000 for Phase I of the Project A construction loan $2,049,783 in the principal amount of $2,050,854 for Phase II of the Project The Phase I Loan and the Phase II Loan are secured by separate (1) Construction Deeds of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, and (2) Assignments of Leases and Rents, as evidenced by promissory notes in the amount of the loans. Both Loans are guaranteed by Opus West Corporation. The maturity date of the Phase I Loan and the Phase II Loan is January 17, 2010. Currently, the 121 Lakepointe Project generates approximately $262,067 per month in rental income and averages operational expenses of approximately $63,522 per month. The rents generated by the 121 Lakepointe Project are collectively referred to as OWLP's "Cash Collateral." The tenants at 121 Lakepointe Project make rental payments to one of two bank accounts held by Opus West Corporation. One account is at Wilmington Trust; the other is at Bank of America. Opus West Corporation periodically transfers funds from the Wilmington account to the Bank of America account. Need for Cash Collateral Access Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, in Dallas, Texas, tells the Court that as of the Petition Date, OWLP and Guaranty Bank were not able to agree on terms for the use of the Cash Collateral. However, the parties are hopeful that they will reach an agreement. Mr. Jessup asserts that OWLP has an urgent and immediate need for cash to continue to maintain its operations. Absent immediate authority to use the Cash Collateral, OWLP will not have sufficient funds with which to maintain operations during the interim period and throughout the duration of its bankruptcy case. OWLP believes it is essential it be allowed to use a limited amount of the Cash Collateral to continue the ongoing operations for preservation of assets and for the benefit of all parties-in-interest in its case, especially Guaranty Bank. The Cash Collateral, according to Mr. Jessup, will only be used to pay expenses that are set forth in the budget related to the 121 Lakepointe Project. The expenses set forth in the budget are those identified by OWLP as being necessary to maintain the value of the underlying property, he avers. OWLP says that with the assistance of its property managers, it has prepared a budget that shows its projected expenditures with respect to the 121 Lakepointe Project during the period from the Petition Date through the week ending October 2, 2009. A copy of the Cash Collateral Budget is available for free at: http://bankrupt.com/misc/OPUSWest_CashCollBudget_Oct02.pdf In exchange for the use of Cash Collateral, Guaranty Bank's interest in the 121 LakePointe Project will be adequately protected by the use of the Cash Collateral to protect and maintain the value of the 121 Lakepointe Project. The value of the 121 Lakepointe Project will not materially decline during the term of the proposed use of the Cash Collateral. Interim Order The Court grants interim approval of Opus West LP's request. OWLP is authorized to use the Cash Collateral for the ordinary course of business expenses set forth in the Budget. Guaranty Bank is also granted adequate protection in the form of: (a) the maintenance and protection of the 121 Lakepointe Project; (b) OWLP will permit Guaranty Bank, its employees, and agents full and unfettered access to knowledgeable agents and representatives and the books and records of OWLP; and (c) Guaranty Bank will hold a continuing lien on the 121 Lakepointe Project prior to the Petition Date, including all leases and rents. The Court is set to convene a final hearing on Opus West LLP's request on July 24, 2009. All parties-in-interest have until July 20 to file any objection or response. A full-text copy of the Interim Cash Collateral Order is available at: http://bankrupt.com/misc/OPUSWest_InterimCashCollORD.pdf 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. PANDA ETHANOL: Stockholders Approve Liquidation Plan ---------------------------------------------------- Panda Ethanol, Inc., said Friday that by written consent dated July 16, 2009, its stockholders voted to approve a dissolution and plan of liquidation. As of the close of business on July 16, 2009, Panda Ethanol's stock transfer books were closed, and Panda Ethanol submitted a request to the Pink Sheets to suspend quotation. Pursuant to the plan of liquidation, after payment of all claims, obligations and expenses owing to the Company's creditors, Panda Ethanol will distribute any funds or assets remaining to the holder of its preferred stock, who would be entitled to receive up to $2.5 million, plus accrued and unpaid dividends, and then to holders of common stock on a pro rata basis. The Company does not believe it will have any funds or assets remaining to make distributions to common stockholders. On January 23, 2009, the Company's subsidiaries holding and managing its Hereford ethanol refinery filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. Neither the Company nor its shareholders will receive any proceeds from the sale of the Hereford facility. Panda Ethanol has filed a certificate of dissolution with the Secretary of State of the State of Nevada. On March 30, 2009, Panda Ethanol filed a Form 15 with the Securities and Exchange Commission to deregister its common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, and suspend the company's reporting obligations under Sections 13(a) and 15(d) of the Exchange Act. The Company is no longer a public reporting company. About Hereford Biofuels Hereford Biofuels and three of its debtor-affiliates filed separate petitions for Chapter 11 relief of January 23, 2009 (Bankr. N.D. Tex. Lead Case No. 09-30453). Dan B. Prieto, Esq., Gregory M. Gordon, Esq., and Robert J. Jud, Esq., at Jones Day, represent the Debtors as counsel. Joseph M. Coleman, Esq., and Joseph A. Friedman, Esq., at Kane, Russell, Coleman & Logan, represent the official committee of unsecured creditors as counsel. When the Debtor filed for protection from its creditors, it listed between $50 million and $100 million in assets and between $100 million and $500 million in debts. Hereford Biofuels has asked the U.S. Bankruptcy Court for the District of Texas to convert their Chapter 1 cases to cases under Chapter 7. About Panda Ethanol Headquartered in Dallas, Texas, Panda Ethanol, Inc. (Pink Sheets: PDAE) -- http://www.pandaethanol.com-- is currently developing six 115 million gallon-per-year denatured ethanol projects located in Texas, Colorado and Kansas. Four of these facilities will each generate the steam used in the ethanol manufacturing process by gasifying upwards of 1 billion pounds of cattle manure per year. Panda Ethanol's founder is Panda Energy International, a privately held company which has built more than 9,000 MW of electric generation capacity at a cost of $5 billion. PATIENT SAFETY: Files Amendment to 2008 Annual Report ----------------------------------------------------- Patient Safety Technologies, Inc., filed with the Securities and Exchange Commission Amendment No. 2 on Form 10-K/A to its Annual Report on Form 10-K for the fiscal year ended December 31, 2008, originally filed on April 16, 2009. Amendment No. 1 on Form 10-K/A was filed on May 1, 2009. The purposes of Amendment No. 2 are: -- To reflect the revised report of the Company's independent registered public accounting firm, originally dated April 15, 2009, included in Item 8 of the Original Filing which now includes an explanatory paragraph with respect to the restatement of the Company's December 31, 2007, consolidated financial statements and certain December 31, 2006 account balances; -- To amend Part III to include the updated information now contained in the Company's definitive proxy statement on Schedule 14A relating to the Company's 2009 annual meeting of stockholders. Neither the revision of the Audit Report nor any of the other revisions has had an impact on, or reflected any changes to, any of the financial statements or related note disclosures included in the Original Filing as amended by Amendment No. 1. No other changes have been made to the Original Filing as amended by Amendment No. 1. In its April 2009 audit report, Squar, Milner, Peterson, Miranda & Williamson, LLP, indicated that the Company has incurred significant recurring net losses and negative cash flows from operating activities through December 31, 2008. These factors raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of Amendment No. 2 is available at no charge at: http://ResearchArchives.com/t/s?3f80 Patient Safety Technologies, Inc.'s operations are conducted through its wholly owned operating subsidiary, SurgiCount Medical, Inc. The Company's operating focus is the development, marketing and sales of products and services focused in the medical patient safety markets. At March 31, 2009, the Company had $8,030,000 in total assets, $12,704,000 in total liabilities and $4,674,000 in stockholders' deficit. At March 31, 2009, the Company has an accumulated deficit of $45,237,000 and a working capital deficit of approximately $8.9 million, of which $6.2 million represents the estimated fair value of warrant derivative liabilities. For the three months ended March 31, 2009, the Company incurred a loss of approximately $3.5 million and used approximately $1.3 million in cash to fund it operating activities. The Company has said existing cash resources, combined with projected cash flow from operations, will not be sufficient to fund working capital requirement for the next 12 months, and that to continue to operate as a going concern it will be necessary to raise additional capital. PEREGRINE PHARMACEUTICALS: Posts $16.5MM Net Loss in Fiscal 2009 ---------------------------------------------------------------- Peregrine Pharmaceuticals, Inc., posted a net loss of $16,524,000 for the year ended April 30, 2009, compared with a net loss of $23,176,000 in the same period in the previous year. The Company's balance sheet at April 30, 2009, showed total assets of $23,127,000, total liabilities of $22,226,000 and stockholders' equity of $901,000. At April 30, 2009, the Company has $10,018,000 in cash and cash equivalents. For the year ended April 30, 2009, the Company posted a net loss of $16,524,000 compared with a net loss of $23,176,000 in the same period in the previous year. The Company expressed that its ability to continue its clinical trials and development efforts is highly dependent on the amount of cash and cash equivalents on hand combined with its ability to raise additional capital to support its future operations. Unless and until it is able to generate sufficient revenues from Avid's contract manufacturing services and from the sale and licensing of its products under development, the Company expects the losses to continue for the foreseeable future. A full-text copy of the Company's Form 10-K is available for free at http://ResearchArchives.com/t/s?3f5e Headquartered in Tustin, California, Peregrine Pharmaceuticals Inc. (NASDAQ:PPHM) -- http://www.peregrineinc.com/-- is a clinical-stage biopharmaceutical company developing monoclonal antibodies for the treatment of cancer and hepatitis C virus infection. The company is advancing three separate clinical programs with its compounds bavituximab and Cotara that employ its two platform technologies: Anti-Phosphatidylserine therapeutics and Tumor Necrosis Therapy. Going Concern Doubt On July 10, 2009, Ernst & Young LLP expressed substantial doubt about Peregrine Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended April 30, 2009, and 2008. The auditing firm pointed to the Company's recurring losses from operations and recurring negative cash flows from operating activities. PETTERS COMPANY: Founder Gets 42-Day Delay in Fraud Trial --------------------------------------------------------- Sophia Pearson and Beth Hawkins at Bloomberg News report that Petters Group Worldwide founder Thomas Petters' fraud trial has been extended by 42 days, when U.S. District Judge Richard Kyle rescheduled the trial to October 26. According to Bloomberg, the trial had been set for September 14, but Mr. Petters' lawyers sought for a two-month postponement, noting the complexity of the case and citing charges filed against alleged co-conspirator Gregory Bell. Bloomberg relates that Mr. Bell was accused on July 10 by U.S. prosecutors and regulators of feeding client assets to the alleged scheme. Mr. Bell was charged with wire fraud, according to a complaint filed by the U.S. Securities and Exchange Commission. He allegedly helped conceal the fact that Petters owed more than $130 million to investors. Bloomberg quoted Judge Kyle as saying, "By the time of trial, more than a year will have passed from the defendant's arrest. In the court's view that is a sufficient amount of time to prepare, regardless of how daunting the task may have been." Mr. Petters was arrested in October 2008 on allegations that he ran a $2 billion fraud through the sale of notes related to consumer electronics. Mr. Petters and the Company have been facing charges of mail fraud, wire fraud, money laundering, and conspiracy. Based in Minnetonka, Minn., Petters Group Worldwide LLC is named for founder and chairman Tom Petters. The group is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide, LLC. Petters Company, Inc., Petters Group Worldwide, LLC, and eight other affiliates filed separate petitions for Chapter 11 relief on October 11, 2008 (Bankr. D. Minn. Lead Case No. 08-45257). James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company, Inc., listed debts of between $500 million and $1 billion, while its parent, Petters Group Worldwide, LLC, listed debts of not more than $50,000. As reported in the Troubled Company Reporter on October 7, 2008, Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota on October 6, 2008 (Case Nos. 08-45136, 08-35197 and 08- 35198). Petters Aviation, LLC is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's parent company. PHOENIX FOOTWEAR: Closes Tandy Deal; Wrangler Brand Goes Too ------------------------------------------------------------ Phoenix Footwear Group, Inc., reports that its wholly owned subsidiary, Chambers Belt Company, and Tandy Brands Accessories, Inc., closed on their sale agreement on July 9, 2009. Chambers and Tandy entered into an Amended and Restated Asset Purchase Agreement which amended and restated the original purchase agreement. The Amended Purchase Agreement provided for the additional sale of Chambers' Wrangler brand business together with the private label business. Chambers conducted the Wrangler business under a License Agreement dated January 1, 2007, between Chambers and Wrangler pursuant to which Chambers had the right to sell Wrangler branded products to the mass market -- Mass License -- and a License Agreement dated January 1, 2008, between Chambers and Wrangler pursuant to which Chambers had the right to sell to the western store market -- Western License. Chambers sold to Tandy substantially all of its assets -- excluding, among other assets, accounts receivable, cash and cash equivalents. Tandy assumed all of Chambers obligations arising after the closing under vendor and customer purchase orders, Chambers' Maquiladora Agreement and certain leases. Pursuant to the Amended Purchase Agreement, in partial payment of the purchase price, Tandy paid to Chambers at the closing roughly $3.5 million in immediately available funds, including roughly $2.6 million for inventory. During the first 30 days after closing, Tandy has the right to audit the cost component of the inventory payment. As additional purchase price consideration, during the first 12 months after the closing Tandy is obligated to pay Chambers on a monthly basis 21.5% of the net revenue that Tandy recognizes from sales during this period of Chambers former products. The generally include private label products previously sold by Chambers, Chambers trademark branded products and Wrangler branded products to the mass merchandise market and the western market. Tandy is obligated to pay Chambers minimum earn-out payments that in the aggregate are not less than $2.0 million. Concurrently with the closing of the Chambers asset sale, Chambers, Tandy and Wrangler entered into an Amendment, Assignment and Assumption of License Agreement pursuant to which Chambers assigned to Tandy all of its rights and Tandy assumed all of Chambers remaining obligations -- other than the remaining quarterly royalty obligations due Wrangler which continues to be Chambers' responsibility except in the case of a default on the license by Tandy -- under the Mass License -- which was amended to extend through and including June 30, 2010. Also, the same parties entered into an Amendment, Assignment and Assumption of License Agreement pursuant to which Chambers assigned to Tandy all of its rights and Tandy assumed all of Chambers remaining obligations under the Western License. The Amended Purchase Agreement contains limited representations and warranties, covenants and indemnification. At the closing, Phoenix Footwear executed and delivered its Guaranty dated July 9, 2008 guaranteeing Chambers post-closing obligations under the Amended Purchase Agreement. The Company said in April it expects to be able to fully extinguish its outstanding bank debt during fiscal 2009 after the Tandy deal. Wind Down With the Chambers asset sale completed, Chambers plans to wind- down its business by collecting its accounts receivable and Tandy earn-out payments and settling its accounts payable. Phoenix Footwear has said it expects to incur a total cost of between $900,000 and $1.3 million on a pre-tax basis over several quarters in connection with the winding down of Chamber's activities. For consolidated financial statement reporting purposes, commencing with the first quarter of the 2009 fiscal year -- which ended April 4, 2009 -- Phoenix Footwear began reporting Chambers as discontinued operations. In connection with the discontinuance, Phoenix Footwear estimates that it will incur a pre-tax charge of between $2.1 million and $2.5 million which will be recorded and reported in the second and third quarters of the 2009 fiscal year. The charge is expected to be comprised of roughly $500,000 to $600,000 of cash restructuring charges (related to severance payments and other costs associated with exiting the business) to be paid during the third and fourth quarters of the 2009 fiscal year and roughly $1.6 million to $1.8 million of non-cash restructuring charges (including write- offs of fixed assets, net of gain, and inventory). Pursuant to authority granted by the Compensation Committee by the Company's Board of Directors, on July 13, 2009, the Company increased the annual base salary of Dennis T. Nelson, the Company's Chief Financial Officer, Secretary and Treasurer, from $145,000 to $175,000. About Phoenix Footwear Headquartered in Carlsbad, California, Phoenix Footwear Group, Inc. (AMEX: PXG) -- http://www.phoenixfootwear.com/-- designs, develops and markets a diversified selection of men's and women's dress and casual footwear, belts, and other accessories. The Company's moderate-to-premium priced brands and licenses include the Tommy Bahama Footwear(R), Trotters(R), SoftWalk(R), Strol(R), H.S. Trask(R), and Altama(R) footwear lines, Chambers Belts(R)and Wrangler(R). * * * As reported by the Troubled Company Reporter on April 27, 2009, Phoenix Footwear has been in continuing default on its bank debt since September 27, 2008. As a result of this and the fact that the Company has had net losses for the past two fiscal years, the Company's independent registered public accountants -- Grant Thornton LLP, in Irvine, California -- have included a going concern explanatory paragraph in their report on the Company's financial statements included in the Company's Annual Report on Form 10-K for the 2008 fiscal year that the Company filed with the Securities and Exchange Commission. The Company reported net loss from continuing operations of $14.2 million for the fourth quarter of 2008, compared to a net loss from continuing operations of $12.8 million for the fourth quarter of fiscal 2007. For the full 2008 fiscal year, net losses from continuing operations totaled $18.8 million. In fiscal 2007, the Company recorded a net loss from continuing operations of $16.6 million. As of January 3, 2009, the Company had $33.1 million in total assets, $21.7 million in total liabilities, and $11.3 million in stockholders' equity. PHOENIX FOOTWEAR: Forbearance Period Extended; Has Hired Advisors ----------------------------------------------------------------- Phoenix Footwear Group, Inc., reports that effective July 9, 2009, the Company and its subsidiaries together with Wells Fargo National Bank Association entered into an Amendment and Forbearance Agreement. The Amendment amends and modifies certain terms of the Credit and Security Agreement dated June 10, 2008, among Phoenix Footwear and its subsidiaries and Wells Fargo. In connection with the Amendment, Wells Fargo provided its consent to the Chambers asset sale and released its security interest and lien on the transferred Chambers' assets. These changes were made to the Credit Agreement: -- the maximum availability under the line of credit was reduced to $6.5 million (subject to a borrowing base limit), -- the borrowing base was revised to reflect the Chambers asset sale and certain other requirements, -- the interest rate applicable to outstanding advances was changed to a daily three month LIBOR rate plus 5.50%, -- a new affirmative covenant was added that requires Phoenix Footwear to provide Wells Fargo with certain budgets and projections on a weekly basis and to participate in weekly teleconference calls, -- new financial covenants were added that require weekly minimum net sales and net cash flow, -- additional collateral was required in the form of a mortgage for the real property owed by Phoenix Footwear's wholly-owned subsidiary, Penobscot Shoe Company, which is located in Penobscot, Maine, and -- there was eliminated a $340,000 exit fee that was payable if the Credit Agreement is repaid in full and the line of credit terminated under certain circumstances. Under the Amendment, Wells Fargo agreed, during a forbearance period, to refrain from exercising any rights and remedies which it is or may become entitled to as a result of the existing past financial covenant defaults. Also, the Amendment provides for Wells Fargo to continue making advances under the line of credit, subject to the conditions of the Credit Agreement excluding, however, the Specified Events of Default. The forbearance period began on July 9, 2009 and ends on July 31, 2009, subject to earlier termination at the election of Wells Fargo in the event of an occurrence of any event of default under the Credit Agreement other than the Specified Events of Default, and subject to automatic termination in the event of the occurrence of certain insolvency proceedings involving Phoenix Footwear or its subsidiaries. The Amendment provides that the continuing forbearance by Wells Fargo is conditioned upon Phoenix Footwear's continuing engagement of a financial turnaround consulting firm -- which has occurred -- to provide specified financial consulting services and the repayment in full of all indebtedness owed to Wells Fargo before July 31, 2009. The Amendment requires Phoenix Footwear to pay a $340,000 forbearance fee, including $170,000 concurrent with the closing of the Chambers asset sale and $170,000 on the termination of the forbearance period. The proceeds from the Chambers asset sale were used to pay down the outstanding indebtedness owed by Phoenix Footwear and its subsidiaries under the Credit Agreement. Following this application of proceeds, Phoenix Footwear had $4.5 million outstanding under the Credit Agreement with remaining availability of $2.0 million. Chambers plans to collect its accounts receivable and the earn-out payments owed by Tandy to repay this indebtedness. In addition, Phoenix Footwear is in active discussions with several replacement lenders and has received proposals to refinance its Wells Fargo indebtedness. There can be no assurance that such refinancing will be obtained or that it will be on favorable terms and conditions. Prior to July 31, 2009, Phoenix Footwear plans to seek an extension of the forbearance period so that it may complete a refinancing of its remaining indebtedness and repay Wells Fargo in full. Based on the remaining collateral and Phoenix Footwear's restructured operations, Phoenix Footwear expects such a request to be granted. However, there is no assurance that it will be granted or the terms and conditions thereof. If such a request is not granted, Wells Fargo may accelerate Phoenix Footwear's indebtedness or foreclose on its assets. A full-text copy of the forbearance agreement and first amendment to credit and security agreement, dated July __, 2009, entered into by and among Phoenix Footwear Group, Inc., Penobscot Shoe Company, H.S. Trask & Co., Chambers Belt Company, and Phoenix Delaware Acquisition, Inc.; and Wells Fargo Bank, National Association, acting through its Wells Fargo Business Credit operating division, is available at no charge at: http://ResearchArchives.com/t/s?3f7d About Phoenix Footwear Headquartered in Carlsbad, California, Phoenix Footwear Group, Inc. (AMEX: PXG) -- http://www.phoenixfootwear.com/-- designs, develops and markets a diversified selection of men's and women's dress and casual footwear, belts, and other accessories. The Company's moderate-to-premium priced brands and licenses include the Tommy Bahama Footwear(R), Trotters(R), SoftWalk(R), Strol(R), H.S. Trask(R), and Altama(R) footwear lines, Chambers Belts(R)and Wrangler(R). * * * As reported by the Troubled Company Reporter on April 27, 2009, Phoenix Footwear has been in continuing default on its bank debt since September 27, 2008. As a result of this and the fact that the Company has had net losses for the past two fiscal years, the Company's independent registered public accountants -- Grant Thornton LLP, in Irvine, California -- have included a going concern explanatory paragraph in their report on the Company's financial statements included in the Company's Annual Report on Form 10-K for the 2008 fiscal year that the Company filed with the Securities and Exchange Commission. The Company reported net loss from continuing operations of $14.2 million for the fourth quarter of 2008, compared to a net loss from continuing operations of $12.8 million for the fourth quarter of fiscal 2007. For the full 2008 fiscal year, net losses from continuing operations totaled $18.8 million. In fiscal 2007, the Company recorded a net loss from continuing operations of $16.6 million. As of January 3, 2009, the Company had $33.1 million in total assets, $21.7 million in total liabilities, and $11.3 million in stockholders' equity. PHYSICAL THERAPY AND FITNESS: Voluntary Chapter 11 Case Summary --------------------------------------------------------------- Debtor: Physical Therapy and Fitness, LLC 30200 Schoenherr Road Warren, MI 48088 Bankruptcy Case No.: 09-62101 Chapter 11 Petition Date: July 16, 2009 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Walter Shapero 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: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Jack Rytel-Kuc, principal of the Company. PILGRIM'S PRIDE: Assumes Railcar Lease with CIT Group ----------------------------------------------------- Pursuant to Section 365 of the Bankruptcy Code and Rule 6006 of the Federal Rules of Bankruptcy Procedure, Pilgrim's Pride Corp. sought and obtained the Bankruptcy Court's authority to assume a railcar lease with CIT Group/Equipment Financing, Inc., as amended. Prior to the Petition Date, Pilgrim's Pride Corporation and CIT Group entered into the lease agreement pursuant to which the Debtors leased 15 5,200-cubic feet covered hopper cars for $555 per car per month and another 15 5,200 cubic feet covered hopper cars leased for $675 per car per month. In exchange for the Debtors' assumption of the Master Lease and Schedules accompanying the Lease, CIT agreed to modify the Railcar Lease by extending the expiration of the Schedules to March 31, 2012, and reducing the rental payments for the Equipment to $375 per car per month, retroactive to April 1, 2009. In light of these modifications, the Debtors agreed to reimburse CIT's attorneys' fees totaling $2,000 incurred in connection with the assumption of the Railcar Lease. The Equipment is necessary to the Debtors' business as it is used by the Debtors to transport materials to their customers in the most cost-efficient manner, according to the Debtors' counsel Stephen A. Youngman, Esq., at Weil, Gotshal & Manges in Dallas, Texas. Using an alternative means of transportation would increase the cost of transporting the materials to the Debtors' customers, Mr. Youngman asserted, with the concurrence of Lawrence Chek, Esq., at Hunton & Williams LLP, in Dallas, Texas, who represents the CIT Group. Due to the reduction in the monthly rental of the Equipment, the Debtors are prepared to give adequate assurance that payments on this lease will be timely, Mr. Youngman stressed. The Debtors and CIT have engaged in fair, arms length negotiations which have resulted in setting a monthly rental fee that the Debtors will be able to pay in a timely manner and which CIT is willing to accept. 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: Proposes to Reject 699 Contract-Grower Contracts ----------------------------------------------------------------- Pursuant to Section 365(a) of the Bankruptcy Code and Rule 6006 of the Federal Rules of Bankruptcy Procedure, Pilgrim's Pride Corp. and its affilaites seek the Court's authority to reject 699 agreements composed of: -- 544 Broiler Grower Agreements, a six-part schedule of which is available for free at: http://bankrupt.com/misc/PPC_rej_Broilergrowers1.pdf http://bankrupt.com/misc/PPC_rej_Broilergrowers2.pdf http://bankrupt.com/misc/PPC_rej_Broilergrowers3.pdf http://bankrupt.com/misc/PPC_rej_Broilergrowers4.pdf http://bankrupt.com/misc/PPC_rej_Broilergrowers5.pdf http://bankrupt.com/misc/PPC_rej_Broilergrowers6.pdf -- 103 Breeder Grower Agreements, a two-part schedule of which is available for free at: http://bankrupt.com/misc/PPC_rej_Breedergrowers1.pdf http://bankrupt.com/misc/PPC_rej_Breedergrowers2.pdf -- 52 Pullet Grower Agreements, a schedule of which is available for free at: http://bankrupt.com/misc/PPC_rej_Pulletgrowers1.pdf Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP in Dallas, Texas, informs the Court that pursuant to the Agreements, the Broiler Growers, the Breeder Growers and Pullet Growers own, operate and arrange for, as the case may be, the farms, chicken houses, equipment, utilities and labor required to raise and care for the Debtors' broilers, while the Debtors provide the live poultry as well as feed, veterinary services, technical assistance, and the Debtors' recommendations as to the technical aspects of efficiently growing, feeding and caring for the broilers. The Debtors have evaluated each of the Broiler, Breeder and Pullet Grower Agreements and have examined the costs associated with the Debtors' obligations under these Agreements. Based on this evaluation, the Debtors have concluded that continued compliance with the terms of the Broiler Grower Agreements would be burdensome and would provide no corresponding benefit to the Debtors or their estates, Mr. Youngman relates. Due to a reduction in operations, the Debtors no longer need to maintain the same number of Broiler, Breeder and Pullet Growers they formerly used. Prior to the Petition Date, Pilgrim's Pride Corporation idled two chicken processing plants and engaged in other restructuring and reorganization efforts that called for a reduction in growers. Following the Petition Date, PPC idled another two of its chicken processing plants and sold a third plant in mid-May 2009, including plants to which certain Broiler Growers supplied broiler chickens. Although unfortunate, the Debtors believe that idling these plants and the other restructuring initiatives are in the best interests of their estates and their creditors because of an industry-wide oversupply of chicken, weak consumer demand and a national recession, Mr. Youngman maintains. Mr. Youngman tells the Court a retroactive date of rejection is necessary, for without it, the Debtors may be forced to continue to incur unnecessary and wasteful expenses for contracts that no longer provide any tangible benefit to the Debtors' estates. The affected Broiler Growers will not be prejudiced by retroactive rejection as of the Proposed Rejection Dates because all or most of them received advance notice of the Debtors' intent to reject. The Debtors further ask the Court to direct that any claim for damages arising as a result of the rejection of the Broiler, Breeder and Pullet Grower Agreements be filed no later than 30 days after entry of the Order approving the rejection requests. The Court will convene a hearing to consider the requests on August 4, 2009, at 10:30 a.m. Objections are due by July 28. 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: Seeks to Sell Titus/Camp Property for $5.5 Mil. ---------------------------------------------------------------- Pilgrim's Pride Corp. owns approximately 4,000 acres of raw land in Titus and Camp Counties, which surrounds the company's headquarters in Pittsburg, Texas. PPC acquired the land in the late 1990s under a long-range plan to build a protein conversion plant and integrated poultry complex on the site and purchased the land surrounding the site as buffer land. Because Big Cypress Creek runs through the land, causing high water issues from time to time, the land is not suitable for other use by the Debtors, and the Debtors do not need it for an effective reorganization of their businesses, Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in Dallas, Texas, informs Judge D. Michael Lynn of the United States District Court for the Northern District of Texas, Forth Worth Division. Titus County Fresh Water District No. 1 made an offer to purchase (i) all of the land the Debtors own in the Titus and Camp Counties that is below 300 feet above sea level, and (ii) about 300 acres of the land that is more than 300 ft. above sea level because that portion of land is necessary to access the land that is 300 ft. below sea level. The Debtors and the Proposed Buyer believe that the Real Property subject to purchase will be approximately 3,060 acres. A map showing the location of the property is available for free at http://bankrupt.com/misc/PPC_titus_campctypros.pdf Disposing of the land will not have any adverse impact on the Debtors' long-range plans because the Proposed Buyer intends to use the land as undeveloped flood-control land, Mr. Youngman avers. Pursuant to the terms of the contract for the purchase and sale of the Real Property entered into between the Proposed Buyer and PPC on May 7, 2009, Titus County Fresh Water District has agreed to purchase the Real Property for $1,800 per acre plus $50,000 for a log cabin structure. Assuming the Real Property is comprised of the expected 3,060 acres, the total purchase price would be $5,558,000.00. To maximize the value of the Property, the Debtors sought and obtained the approval of Judge Lynn of bidding procedures in connection with the sale of the Property. Pursuant to the Bidding Procedures, all bidders must submit a Farm and Ranch Contract in the form promulgated by the Texas Real Estate Commission. The deadline for the submission of qualified bids is on July 14, 2009, at 12:00 p.m. Prevailing Central Time. Qualified bids are submitted to among other, Pilgrim's Pride Corp., and the Debtors' counsel, Weil Gotshal& Manges, LLP. The Debtors expect Qualified Bids to contain: (i) a purchase price that is at least $200,000 greater than $5,558,000; (ii) a mark-up of the Stalking Horse Agreement that reflects the bidder's proposed changes; (iii) the identity of the potential bidder and the officers or authorized agent who will appear on behalf of the bidder; (iv) evidence, satisfactory to the Debtors in their reasonable discretion of the bidder's financial means and operational ability to consummate the proposed transaction; (v) a provision that the bid will not be conditioned on the outcome of the unperformed due diligence by the bidder, board approval, or any financing contingency; and (vi) the Qualified Bidder's Good Faith Deposit equal to 10% of the cash purchase price. Good Faith Deposits of all Qualified Bidders will be held in an interest-bearing account for the Debtors' benefit until consummation of a transaction involving any other bidder for the real property. If a Successful Bidder fails to consummate an approved Sale because of a breach or failure to perform on the part of the Successful Bidder, the Debtors will not have any obligation to return the Good Faith Deposit and the Good Faith Deposit will irrevocably become the property of the Debtors. If more than two bids are timely received, the Debtors will conduct an auction on July 16, 2009, at 10:00 a.m. at the offices of Weil, Gotshal & Manges LLP at 200 Crescent Court, Suite 300, in Dallas, Texas. If no bid other than that of the Purchaser's is timely received, the Court will convene a hearing on July 21, 2009, at 11:00 a.m., to consider approval of the sale to the Purchaser. Objections to the sale are due by July 14. The Debtors also sought and obtained the Court's authority to enter into a stalking horse agreement with the Purchaser and authority to pay the commission and reimburse the expenses of a broker for the Property upon closing of the sale. 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: Transfers Trademarks to New Oxford --------------------------------------------------- Pursuant to Sections 105 and 363(b) of the Bankruptcy Code, the Pilgrim's Pride Corp. and its affiliates obtained the Bankruptcy Court's authority to transfer certain trademarks to New Oxford Foods, LLC. On March 8, 2008, Pilgrim's Pride Corporation entered into a purchase agreement with New Oxford, pursuant to which the Debtors sold certain of their turkey-related business to New Oxford Foods, LLC. Pursuant to the Purchase Agreement, New Oxford also entered into a co-pack agreement with PPC, pursuant to which New Oxford agreed to produce and package certain products for the Debtors until September 30, 2008. According to the Debtors' records, the Co-Pack Agreement was completed on November 3, 2008. Pursuant to the Purchase Agreement, the Debtors were obligated to transfer all of their rights, title and interest in the trademarks "Round Hill" and "Golden Acre" to New Oxford upon termination of the Co-Pack Agreement and processing agreement. The Debtors have conferred with the Official Committee of Unsecured Creditors regarding the proposed transfer of the Trademarks, and have been advised that the Creditors' Committee has no objection to the proposed transfer. 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: Wants to Esimate FLSA Claims At $55,000,000 ------------------------------------------------------------ Pilgrim's Pride Corp. and its affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas to estimate the claims asserted by the Fair Labor Standards Act Multidistrict Litigation Plaintiffs and the Fair Labor Standards Act South Carolina Litigation Plaintiffs for allowance and distribution purposes. To recall, the FLSA MDL Plaintiffs and the Fair Labor Standards Act South Carolina litigation have separate actions against Pilgrim's Pride Corporation in separate Courts which the Plaintiffs assert that the Debtors violated the Fair Labor Standards Act. Both groups of plaintiffs seek unpaid overtime compensation, allegedly owed to them for all time between the first and last compensable acts of a continuous workday. According to the Debtors' counsel, David W. Parham, Esq., at Baker & McKenzie LLP in Dallas, Texas, the Plaintiffs' combined claims are estimated to be at least $55,000,000. The Debtors believe resolving the FLSA claims in trials will likely take at least 18 months, without consideration of appeals. The claims, if not estimated or resolved, could present a significant impact on the Debtors' cash needs and liquidity and thus are claims which the Debtors need resolved, Mr. Parham tells the Court. The FLSA Claims are contingent and unliquidated claims, Mr. Parham says. Their resolution, absent estimation, will unduly delay the administration of the case, thus, the plan will be significantly delayed and distributions to creditors will be deferred, Mr. Parham avers. 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. PITTSBURGH CORNING: Slated for January 2010 Confirmation -------------------------------------------------------- Pittsburgh Corning Corp., a joint venture between Corning Inc. and PPG Industries Inc., is scheduled to seek confirmation of its Chapter 11 plan at hearings beginning January 11, 2010. Approving the plan on schedule would conclude an almost 10-year reorganization, Bill Rochelle at Bloomberg News said. The U.S. Bankruptcy Court for the Western District of Pennsylvania at the end of May 2009 approved the disclosure statement explaining the Debtors' plan designed to bring an end to the reorganization that began in April 2000 to deal with asbestos claims. Creditors entitled to vote on the Plan have until September 15, 2009, to do so. Pursuant to the Plan, asbestos claims will be channeled into a trust to be funded with contributions by the two companies and insurance policies. The asbestos claimants' committee and the representative of future claimants support the Plan. The Court refused to confirm a prior version of the Plan in December 2006, on the basis that the Plan was too broad in the treatment of allegedly independent asbestos claims not associated with Pittsburgh Corning. Amended Plan Pittsburgh Corning filed its Modified Third Amended Plan of Reorganization on January 29, 2009, which contemplates the resolution of certain current and future asbestos claims against Corning Incorporated and PPG Industries, Inc., arising from PCC products or activities. Pittsburgh Corning is owned 50% by Corning Incorporated and 50% by PPG Industries. In 2002, PPG entered into a settlement arrangement relating to asbestos claims, whereby it reserved approximately $900 million for that settlement. Under the modified settlement arrangement provided for in the Amended Plan, PPG's obligation is currently $735 million for claims that will be channeled to the trust. PPG will retain the approximately $165 million difference as a reserve for asbestos-related claims that will not be channeled to the trust. "This amended plan addresses the issues raised by the court in its 2006 opinion on the matter, and while we continue to believe PPG is not responsible for injuries caused by Pittsburgh Corning products, this amended plan would permanently resolve PPG's asbestos liabilities associated with Pittsburgh Corning," said James C. Diggs, PPG senior vice president, general counsel and secretary. "We believe the modified settlement arrangement and the remaining reserve are very advantageous for the company because the vast majority of PPG's asbestos-related claims will be paid or otherwise resolved by the trust." Under the modified settlement arrangement, PPG's obligation to the trust consists of cash payments over a 15-year period totaling $825 million, about 1.4 million shares of PPG stock or cash equivalent, and its shares in Pittsburgh Corning and Pittsburgh Corning Europe. The obligation under the modified settlement arrangement at December 31, 2008, totals $735 million or approximately $460 million net of the associated tax benefit. PPG's obligation under the modified settlement arrangement includes the net present value of the cash payments of $825 million, which will be adjusted quarterly to reflect the accretion of interest. In addition, PPG's participating historical insurance carriers will make cash payments to the trust of approximately $1.6 billion in a series of payments ending in 2027. PPG believes the Amended Plan meets the Court's concern on the treatment of allegedly independent asbestos claims not associated with Pittsburgh Corning. In a separate statement, Corning says its contributions to the settlement trust will begin after certain conditions are met, and the Plan is approved and no longer subject to appeal. The approval process could take one year or longer, Corning says. About PPG Industries Pittsburgh, Pennsylvania-based PPG Industries, Inc. -- http://www.ppg.com/-- is a global supplier of paints, coatings, chemicals, optical products, specialty materials, glass and fiber glass. The Company has more than 140 manufacturing facilities and equity affiliates and operates in more than 60 countries. Sales in 2008 were $15.8 billion. PPG shares are traded on the New York Stock Exchange (symbol: PPG). About Corning Corning Incorporated -- http://www.corning.com/-- makes specialty and ceramics for more than 150 years. Its products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy and metrology. About Pittsburgh Corning Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy protection in 2000 (Bankr. W.D. Pa. Case No. 00-22876). The Hon. Judith K. Fitzgerald presides over the case. The Bankruptcy Court authorized the retention of Reed Smith LLP as counsel for the Debtor under a general retainer, and the retention of Deloitte & Touche LLP as accountants for the Debtor. The United States Trustee appointed a Committee of Unsecured Trade Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to the Committee of Unsecured Trade Creditors, and Pascarella & Wiker, LLP, as financial advisor. The United States Trustee appointed a Committee of Asbestos Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of these professionals by the Committee of Asbestos Creditors: (i) Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell & Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as special insurance counsel; (iv) Legal Analysis Systems, Inc., as Asbestos-Related Bodily Injury Consultant; (v) L. Tersigni Consulting, P.C. as financial advisor, and (vi) Professor Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered. On February 16, 2001, the Court approved the appointment of Lawrence Fitzpatrick as the Future Claimants' Representative. The Bankruptcy Court authorized the retention of Meyer, Unkovic & Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as his special counsel, and Analysis, Research and Planning Corporation as his claims consultant. In December 2006, the Bankruptcy Court denied confirmation of an earlier version of the plan, citing that the plan was too broad in addressing independent asbestos claims that were not associated with the Debtor. POWER EFFICIENCY: Files Form 424B3 to Register 59,687,619 Shares ---------------------------------------------------------------- Power Efficiency Corporation filed a prospectus on Form 424B3 to register 59,687,619 shares of common stock that may be sold from time to time by selling stockholders. The Company will not receive any of the proceeds from the sale of the common stock sold. The Selling Stockholders may sell those shares from time to time in the public securities market. The Selling Stockholders may determine the prices at which they will sell the common stock, which prices may be at market prices prevailing at the time of such sale or some other price. The Company's common stock is traded on the National Association of Securities Dealers Over The Counter Bulletin Board under the symbol "PEFF." A full-text copy of the Prospectus is available at no charge at http://ResearchArchives.com/t/s?3f94 About Power Efficiency Corp. Based in Las Vegas, Power Efficiency Corporation (OTC BB: PEFF) -- http://www.powerefficiency.com/-- is a green energy company focused on efficiency technologies for electric motors. The company has developed a patented and patent-pending technology platform, called E-Save Technology(TM), which has been demonstrated in independent testing to improve the efficiency of electric motors by 15%-35% in appropriate application. Going Concern Doubt The audit report dated March 30, 2009, Sobel & Co., LLC, the Company's former independent registered public accounting firm -- which was included in the Company's Annual Report on Form 10-K for the year ended December 31, 2008 -- noted that the Company "has suffered recurring losses from operations, and the Company has experienced a deficiency of cash from operations. These matters raise substantial doubt as to the Company's ability to continue as a going concern." As reported by the Troubled Company Reporter, Power Efficiency dismissed Sobel & Co. On April 27, the Company's audit committee approved the engagement of BDO Seidman, LLP, as its new independent registered public accounting firm. At March 31, 2009, the Company had $3,897,780 in total assets and $2,304,694 in total liabilities. POWERMATE CORP: Deadline to Remove Actions Extended to October 8 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has extended the current deadline within which Powermate Corp., et al., may file notices of removal of any and all civil actions pending as of the petition date, pursuant to 28 U.S.C. Section 1452 and Rules 9006 and 9027 of the Federal Rules of Bankruptcy Procedure, through and including October 8, 2009. Headquartered in Aurora, Illinois, Powermate Corp. -- http://www.powermate.com/-- manufactures portable and home standby generators, air compressors, air tools, pressure washer and accessories. Products were distributed through mass retailers, home centers, specialty store chains, industry buying cooperatives, online e-Dealers, and independent hardware retailers. Prior to the Petition Date, the Debtors sold their air compressor business and related assets. Sun Capital Partners bought 95% of Powermate in 2004. Powermate Holding Corp. is the parent of Powermate Corp. In turn Powermate Corp. owns 100% of Powermate International Inc. The three companies filed for Chapter 11 protection on March 17, 2008 (Bankr. D. Del. Lead Case No.08-10498). Neil Herman, Esq., at Morgan, Lewis & Bokius, represents the Debtors as counsel. Kenneth Enos, Esq., and Michael Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors as local counsel. Monika J. Machen, Esq., at Sonnenschein Nath Rosenthal LLP, represents the Official Committee of Unsecured Creditors as counsel. Charlene D. Davis, Esq., Eric M. Sutty, Esq., and Daniel A. O'Brien, Esq., at Bayard P.A., represent the Creditors Committee as local counsel. In schedules filed with the Court, the Debtors listed total assets of and debts of over $69 million and $144 million, respectively. POWERMATE CORP: Inks Settlement Agreement with Northern Tool ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has approved the settlement agreement between Powermate Holding Corp., et al., and Northern Tool & Equipment Company, Inc., regarding the resolution of their collection action. Powermate Corporation f/k/a Coleman Powermate, Inc., commenced an action in the Court to recover, inter alia, the sum of $90,000 against Northern Tool. Northern Tool also filed a proof of claim asserting it has valid setoff, offsets, recoupment rights, deductions and/or claims against Powermate that eliminate liability, if any, to Powermate and would permit an affirmative recovery or claim against Powermate. Pursuant to the settlement agreement, the parties have agreed to release one another from any further claims or liabilities in order to avoid protracted litigation. About Powermate Corp. Headquartered in Aurora, Illinois, Powermate Corp. -- http://www.powermate.com/-- manufactures portable and home standby generators, air compressors, air tools, pressure washer and accessories. Products were distributed through mass retailers, home centers, specialty store chains, industry buying cooperatives, online e-Dealers, and independent hardware retailers. Prior to the Petition Date, the Debtors sold their air compressor business and related assets. Sun Capital Partners bought 95% of Powermate in 2004. Powermate Holding Corp. is the parent of Powermate Corp. In turn Powermate Corp. owns 100% of Powermate International Inc. The three companies filed for Chapter 11 protection on March 17, 2008 (Bankr. D. Del. Lead Case No.08-10498). Neil Herman, Esq., at Morgan, Lewis & Bokius, represents the Debtors as counsel. Kenneth Enos, Esq., and Michael Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors as local counsel. Monika J. Machen, Esq., at Sonnenschein Nath Rosenthal LLP, represents the Official Committee of Unsecured Creditors as counsel. Charlene D. Davis, Esq., Eric M. Sutty, Esq., and Daniel A. O'Brien, Esq., at Bayard P.A., represent the Creditors Committee as local counsel. In schedules filed with the Court, the Debtors listed total assets of and debts of over $69 million and $144 million, respectively. POWERMATE CORP: Wants Plan Filing Period Extended to September 17 ----------------------------------------------------------------- Powermate Corp. and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive period to file a plan until September 17, 2009, and their exclusive period to solicit acceptances thereof until November 17, 2009. This is the Debtors' fourth motion for the extension of their exclusivity periods. The Debtors tell the Court that their efforts throughout the Chapter 11 cases have been focused upon the successful wind-down of their estates and thus have not had sufficient time to negotiate with major case-parties regarding the formulation of a plan that will be acceptable to all parties-in- interest. This is the last request for an exclusivity extension available in the Bankruptcy Code. About Powermate Corp. Headquartered in Aurora, Illinois, Powermate Corp. -- http://www.powermate.com/-- manufactures portable and home standby generators, air compressors, air tools, pressure washer and accessories. Products were distributed through mass retailers, home centers, specialty store chains, industry buying cooperatives, online e-Dealers, and independent hardware retailers. Prior to the Petition Date, the Debtors sold their air compressor business and related assets. Sun Capital Partners bought 95% of Powermate in 2004. Powermate Holding Corp. is the parent of Powermate Corp. In turn Powermate Corp. owns 100% of Powermate International Inc. The three companies filed for Chapter 11 protection on March 17, 2008 (Bankr. D. Del. Lead Case No.08-10498). Neil Herman, Esq., at Morgan, Lewis & Bokius, represents the Debtors as counsel. Kenneth Enos, Esq., and Michael Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors as local counsel. Monika J. Machen, Esq., at Sonnenschein Nath Rosenthal LLP, represents the Official Committee of Unsecured Creditors as counsel. Charlene D. Davis, Esq., Eric M. Sutty, Esq., and Daniel A. O'Brien, Esq., at Bayard P.A., represent the Creditors Committee as local counsel. In schedules filed with the Court, the Debtors listed total assets of and debts of over $69 million and $144 million, respectively. PRIMEDIA INC: To Issue Q2 Results on Aug. 6; Gets Loan Amendments ----------------------------------------------------------------- PRIMEDIA Inc. will release its second quarter results before market open on Thursday, August 6, 2009, to be followed by a conference call at 10:00 a.m. (Eastern Time). Investors and interested parties may listen to a Webcast of the presentation by visiting the Company's Web site at http://www.primedia.com/under the Investor Relations section. To participate in the call, please dial 1-877-941-1465 if in the U.S., or 1-480-629-9678 if outside the U.S. The conference ID is 4117044. One should dial in at least five minutes prior to the start of the call. Amendments to Primedia Credit Facility On June 30, 2009, PRIMEDIA entered into an amendment to the Credit Agreement, dated as of August 1, 2007, with the lenders thereunder, The Bank of New York, as Syndication Agent, Lehman Brothers Inc., Fifth Third Bank and Citicorp North America, Inc., as Co-Documentation Agents and Credit Suisse, Cayman Islands Branch, N.A., as Administrative Agent. Among other things, the Amendment gives the Company the right, subject to the conditions set forth therein, to prepay or otherwise acquire with or for cash, on either a pro rata or non- pro rata basis, Term Loans of Banks who consent to such prepayment or acquisition, at a discount to the par value of such Term Loans at any time and from time to time on and after June 30, 2009, and on or prior to the second anniversary of such date; provided that the aggregate amounts expended by the Company in connection with all prepayments or acquisitions shall not exceed $35 million. All Term Loans prepaid or acquired shall be retired and extinguished and deemed paid effective upon such prepayment or acquisition. The Amendment also memorializes the reduction of the Revolving Loan Commitment of Lehman Commercial Paper Inc. to zero dollars and, as a consequence thereof, the Total Revolving Loan Commitment under the Credit Agreement has now been confirmed to have been reduced by $12 million to $88 million. The Company believed that the Total Loan Commitment under the Credit Agreement had been effectively reduced by $12 million as a result of bankruptcy proceedings related to Lehman Brothers Holdings Inc., the parent company of Lehman Brothers Inc. The Revolving Loan Commitment for each other Bank remains unchanged from each such Bank's Revolving Loan Commitment immediately prior to such reduction. Additionally, effective June 30, 2009, Lehman Brothers Inc. ceased to be a Co-Documentation Agent under the Credit Agreement. On June 3, PRIMEDIA said the New York Stock Exchange had informed the Company that it is in compliance with NYSE standards for continued listing. Headquartered in Atlanta, PRIMEDIA Inc. (NYSE: PRM) -- http://www.primedia.com/-- through its Consumer Source Inc. operation, is a provider of advertising-supported consumer guides for the apartment and new home industries. Consumer Source publishes and distributes more than 38 million guides such as Apartment Guide and New Home Guide to approximately 60,000 U.S. locations each year through its proprietary distribution network, DistribuTech. The Company also distributes category-specific content on its leading Web sites, including http://www.ApartmentGuide.com/,http://www.NewHomeGuide.com/and http://www.Rentals.com/,a comprehensive single unit real estate rental site. At March 31, 2009, the Company had $270,228,000 in total assets and $369,556,000 in total liabilities, resulting in $99,328,000 stockholders' deficiency. As reported by the Troubled Company Reporter on June 30, 2009, Standard & Poor's Rating Services lowered its corporate credit rating on Norcross, Georgia-based PRIMEDIA Inc. to 'B+' from 'BB-', reflecting S&P's expectation of continued operating weakness at the new homes and distribution segments in 2009, which is more than offsetting relatively flat performance at the apartment segment. The outlook is stable. At the same time, S&P lowered its issue-level rating on PRIMEDIA's secured debt to 'B+' (the same level as the corporate credit rating) from 'BB-'. The recovery rating of '3' remains unchanged, reflecting S&P's expectation for meaningful (50%-70%) recovery in the event of a payment default. PROTEIN SCIENCES: Wants Dismissal of Involuntary Chapter 7 ---------------------------------------------------------- Protein Sciences Corp. has filed before the U.S. Bankruptcy Court for the District of Delaware a motion to dismiss the involuntary Chapter 7 liquidation petition filed against it on June 22. According to Bill Rochelle, the Company says the petition was a tactic by would-be purchasers whose acquisition offer was voted down by Protein Sciences shareholders. As reported by the Troubled Company Reporter on June 23, 2009, creditors of Protein Sciences Corp. filed an involuntary Chapter 7 petition against the company before the U.S. Bankruptcy Court for the District of Delaware (Case No. 09-12151). The Creditors want the company liquidated to satisfy claims. A unit of Emergent BioSolutions Inc. holds the bulk of the debt listed on the petition at $11.5 million. According to Bloomberg, Emergent, last May, agreed to acquire "substantially all of the assets" of Protein Sciences after the company was granted "fast-track" status by the Food and Drug Administration for its FluBlok vaccine, according to a statement. As part of the deal, Emergent would pay $28 million in cash and take on Protein Science's debt, a 5-year note worth $20 million that could be converted to Emergent stock at a price of $12.50 a share, and as much $30 million more if FluBlok sales met certain milestones. Protein Sciences Corp. is a biopharmaceutical company that started making a vaccine to protect humans against the H1N1 influenza virus last week. Protein Sciences said in a June 15 statement it has started manufacturing "the first and only" vaccine, PanBlok, that would be able to combat the virus. The company said it would be able to produce at least 100,000 doses of the vaccine a week. PROVIDENT ROYALTIES: Court Appoints Roossien as Chapter 11 Trustee ------------------------------------------------------------------ The Hon. Sam A. Lindsey of the U.S. Bankruptcy Court for the Northern District of Texas appointed Dennis L. Roossien, Jr., Esq., at Munsch Hardt Kopf & Harr P.C. in Dallas, Texas, as Chapter 11 trustee to oversee the bankruptcy cases of Provident Royalties and its debtor-affiliates at the behest of the Ad Hoc Committee of Preferred Stockholders and the Official Committee of Unsecured Creditors. Mr. Roossien was named temporary receiver to marshal and preserve the Debtors' assets. Among other things, has can pursue any actions to recover assets from the receivership estates from third parties including Provident Asset Management. Based on the evidence presented by the Securities and Exchange Commission in a court action, the Debtors and their recent management have acted fraudulently or dishonestly, and have grossly mismanaged their assets and the investments entrusted to the Debtors by the preferred stockholders and presumably by the common stockholders as well, according to Jason B. Binford, Esq., counsel of the Ad Hoc Committee. Gardere Wynne Sewell LLP represents the Committee. About Provident Royalties Based in Dallas, Texas, Provident Royalties LLC owns working interests in oil and gas properties primarily in Oklahoma. Provident and its affiliates filed for Chapter 11 on June 22, 2009 (Bankr. N.D. Tex. Case No. 09-33886). Judge Harlin DeWayne Hale presides over the case. Patton Boggs LLP represents the Debtors as their bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. The Company listed between $100 million and $500 million each in assets and debts. PUEBLO BUILDING: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Pueblo Building Materials, Inc. 25446 San Fernando Road Santa Clarita, CA 91350 Bankruptcy Case No.: 09-18804 Chapter 11 Petition Date: July 16, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Michael Jay Berger, Esq. 9454 Wilshire Blvd 6th Flr Beverly Hills, CA 90212-2929 Tel: (310) 271-6223 Fax: (310) 271-9805 Email: michael.berger@bankruptcypower.com Estimated Assets: $50,000 to $100,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-18804.pdf The petition was signed by Jose Manuel Maldonado, president of the Company. QIMONDA NA: U.S. Trustee Opposes Pre-Approved Break-up Fees ----------------------------------------------------------- Qimonda Richmond, LLC, et al., filed on July 2, 2009, a motion for the approval of standardized bid protection procedures, which includes the awarding of break-up fees and payment of expense reimbursements, and bid procedures in connection with the anticipated multiple offers for the purchase of their assets. Specifically, the Debtors propose the following procedures: a. After the Debtors determine to designate a potential bidder as the stalking horse bidder for certain assets, the Debtors will consult with the Committee's professionals regarding such designation and any bidding protections requested in such bid. b. Thereafter, the Debtors will file with the Court a notice of entry into a stalking horse agreement. c. The stalking horse notice will be served by overnight mail and/or email on: (i) the Office of the U. S. Trustee for the District of Delaware; (ii) counsel to the Committee; (iii) counsel to the agent for the post-petition lenders; (iv) counsel to the QAG administrator; and (v) any parties requesting notice pursuant to Bankruptcy Rule 2002. d. If no objections to the stalking horse notice are filed with the Court within three business days of the filing and service of the stalking horse notice, the Debtors will submit the bidding protection order under a certificate of no objection for the Court's consideration. e. If a timely objection is received, the Debtors will schedule an expedited hearing with the Court for approval of the bidding protection order; provided, that such hearing will occur on at least one business day's notice. After entry of a bidding protection order, the Debtors will file a motion with the Court seeking approval of the stalking horse agreement and the sale of the applicable assets to the stalking horse bidder or the successful bidder at the auction pursuant to Section 363 of the Bankruptcy Code on notice to the Notice Parties and all entities known to have expressed a bona fide interest in acquiring the assets related to such stalking horse agreement. A hearing on the motion is scheduled for July 21, 2009, at 11:30 a.m. U.S. Trustee Objects Roberta A. DeAngelis, acting United States Trustee for Region 3, objects to the approval of the Debtors' motion on the ground that the allowance or award of inchoate or potential "break-up" fees runs afoul of the Third Circuit's ruling in Calpine Corp. v. O'Brien Envtl. Energy, Inc. (In re O'Brien Envtl. Energy, Inc.), 181 F.3d 527, 535 (3d Cir. 1999). According to the U.S. Trustee, in O'Brien, the Third Circuit held that a break up fee is payable to a prospective only in the event that a contemplated transaction is not consummated. Thus, the U.S. Trustee says, the pre-approval of break-up fees, whether they be designated as bidding incentives or otherwise, may be allowed as an administrative expense claim only after each sale is properly noticed to parties-in-interest, there is an opportunity for a hearing and the movant proves that, pursuant to Section 503(b)(1)(A), the administrative expense treatment for actual, necessary costs and expenses of preserving the estate is warranted. In this case, the U.S. Trustee relates, there are various asset sales contemplated and little, if any, information as to what is being sold or how the potential bid protections are to be determined let alone actually benefit the estate. The U.S. Trustee further requests that the Debtors confirm that there are no issues related to consumer privacy under Section 363(b)(1)2 of the Bankruptcy Code. Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading global memory supplier with a diversified DRAM product portfolio. The Company generated net sales of EUR1.79 billion in financial year 2008 and had -- prior to its announcement of a repositioning of its business -- approximately 12,200 employees worldwide, of which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond (Virginia, USA). The Company provides DRAM products with a focus on infrastructure and graphics applications, using its power saving technologies and designs. Qimonda is an active innovator and brings high performance, low power consumption and small chip sizes to the market based on its breakthrough Buried Wordline technology. Qimonda AG commenced insolvency proceedings with a local court in Munich, Germany, on January 23, 2009. Qimonda North America Corp., an indirect and wholly owned subsidiary of QAG, is the North American sales and marketing subsidiary of QAG. QNA is also the parent company of Qimonda Richmond LLC. QNA and QR filed for Chapter 11 on February 20 (Bankr. D. Del. Lead Case No. 09-10589). Mark D. Collins, Esq., at Richards Layton & Finger PA, has been tapped as counsel. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed seven creditors to serve on an official committee of unsecured creditors. Jones Day and Ashby & Geddes represent the Committee. In its bankruptcy petition, Qimonda listed more than $1 billion each in assets and debts. On June 15, 2009, QAG filed a petition for relief under Chapter 15 of the Bankruptcy Code (Bankr. E.D. Virginia Case No. 09-14766). QUANTUM CORP: To Hold Annual Shareholders' Meeting on August 19 --------------------------------------------------------------- Quantum Corporation will hold its annual shareholders' meeting on August 19, 2009, at 8:00 A.M., PDT. The meeting will be held at the Corporate Headquarters, 1650 Technology Drive, in San Jose, California. The purposes of the Annual Meeting are: -- To elect nine directors recommended by the Board to serve until the next Annual Meeting of Stockholders or until their successors are elected and duly qualified; -- To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending March 31, 2010; -- Provided that the Company has not effected a reverse stock split before August 19, 2009, to reauthorize the Company's Board of Directors to select and file one of several possible amendments to the Company's amended and restated certificate of incorporation which would effect a reverse stock split, pursuant to which any whole number of outstanding shares of the Company's common stock between and including three and 12 would be combined into one share of such stock; and -- To transact such other business as may properly come before the meeting or any adjournment or postponement. On June 29, 2009, Quantum entered into a Supplemental Senior Subordinated Term Loan Agreement, by and between the Company and EMC International Company, providing for up to $49.6 million of loans available in two tranches with identical terms except for their maturity date. On July 1, 2009, the Company borrowed amounts available under both tranches of the Term Loan Agreement -- $24.6 million under Tranche A and $21.7 million under Tranche B, an aggregate loan amount of $46.3 million. The proceeds of the EMC Loans were used to finance the purchase of $50.7 million in aggregate principal amount of its 4.375% Convertible Subordinated Notes due 2010 pursuant to a note purchase agreement between the Company and Tennenbaum Multi- Strategy Master Fund, a Cayman Islands partnership trust. Borrowings under the Term Loan Agreement are unsecured and not guaranteed by any other entities. Because the loans under the Term Loan Agreement were available in a single draw only, the Company may not make additional borrowings under the Term Loan Agreement. The EMC Loans outstanding under the Term Loan Agreement will mature on the earlier of (i) September 30, 2014, in the case of the Tranche A borrowings, and December 31, 2011, in the case of the Tranche B borrowings and (ii) in the case of either tranche of EMC Loans, if the Company replaces, refunds or refinances its existing senior secured credit agreement -- or enters into any amendment or restatement having the effect of any of the foregoing -- or repays in full all amounts outstanding under the Company's existing senior secured credit agreement, the later of one day after the date of any such occurrence or August 1, 2010; provided that if the EMC Loans mature because the Company repaid in full with cash on hand all amounts outstanding under its existing senior secured credit agreement, the Company will have the option to refinance the EMC Loans with senior secured loans or notes issued by the Company in exchange for the EMC Loans, on terms substantially the same as the EMC Loans -- with the Tranche A secured loans issued in exchange having a maturity date of September 30, 2014, and the Tranche B secured loans issued in exchange having a maturity date of December 31, 2011 -- but with security, covenants and events of default substantially the same as those contained in its existing senior secured credit agreement. The EMC Loans will bear interest at 12% per annum, payable quarterly in arrears. Note Purchase Agreement On June 26, 2009, the Company entered into a Note Purchase Agreement by and between the Company and the Seller, providing for the purchase by the Company of $50.7 million in aggregate principal amount of Notes from the Seller at a price of $950.00 per $1,000.00 principal amount of Notes, an aggregate purchase price of $48.2 million, plus any accrued and unpaid interest on the Notes. On July 1, 2009, the Company purchased for cancellation $50.7 million in aggregate principal amount of Notes pursuant to the Note Purchase Agreement. About Quantum Corp Headquartered in San Jose, California, Quantum Corporation -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive solutions. The Company provides an integrated range of disk, tape and software solutions. Quantum's solutions are all designed to provide information technology (IT) departments in a variety of organizations with tools for protecting, retaining and accessing their digital assets. The Company sells its products via its branded channels and through original equipment manufacturers (OEMs), such as Dell, Inc., Hewlett-Packard Company, International Business Machines Corporation and Sun Microsystems, Inc., Quantum divides its products into three categories: tape automation systems; disk- based backup systems and data management software, and devices and media. The devices and media category includes removable disk drives, standalone tape drives and media products. The Company works with a network of value-added resellers, OEMs and other suppliers to meet customers' data protection need. Quantum Corporation had $549,369,000 in total assets; and $215,730,000 in total current liabilities and $453,598,000 in total long-term liabilities, resulting in $119,959,000 in stockholders' deficit as of March 31, 2009. * * * As reported by the Troubled Company Reporter on July 10, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Quantum Corp. to 'B-' from 'CC'. S&P also raised the company's subordinated rating to 'CCC' from 'C'. S&P has removed all ratings from CreditWatch, where they were placed on April 3, 2009. The outlook is negative. The TCR said July 8, 2009, Moody's Investors Service upgraded Quantum's corporate family rating and probability of default rating each to B3, from Caa1 and Ca, respectively, following the announcement that the Company has repurchased more than $135 million of its 4.375% Convertible Subordinated Notes due 2010. The rating outlook is positive. QUEBECOR WORLD: Makes Post-Confirmation Plan Amendments ------------------------------------------------------- Quebecor World (USA), Inc., and its debtor affiliates seek authority from the United States Bankruptcy Court for the Southern District of New York to make post-confirmation modifications to the Third Amended Joint Plan of Reorganization pursuant to Section 1127 of the Bankruptcy Code. The Debtors seek to modify the Plan to, among others, incorporate the terms of the settlement entered into among the Debtors, Societe Generale (Canada), the SocGen Litigation Steering Committee, and consented to by the Official Committee of Unsecured Creditors, the Ad Hoc Group of Noteholders and the Syndicate Committee. The settlement is in resolution of the adversary proceeding commenced by the Creditors' Committee against SocGen. Moreover, the Debtors ask the Court to (a) find that the Plan modifications comply with Section 1127(b) having been consented to by SocGen and all holders of Class 4 Claims that voted to accept the Plan, and, therefore, do not require resolicitation, and (b) confirm the Plan, as modified. Michael J. Canning, Esq., at Arnold & Porter, LLP, in New York, asserts that it is critically important for the Debtors to maintain the timeline for confirmation of the Plan to preserve the value of their estates as going concern and to consummate the Plan consistent with the DIP Facility's July 21, 2009, termination date. Because the SocGen Compromise was not agreed upon until immediately prior to the commencement of the Confirmation Hearing, the Debtors, in consultation with the Creditors' Committee, the Ad Hoc Group of Noteholders and the Syndicate Committee, determined that it was in the best interests of the Debtors and their creditors not to delay confirmation of the Plan, but to proceed with confirmation of the Plan with the understanding that the Plan subsequently would be modified to incorporate the terms of the SocGen Compromise. The modifications to the Plan required to implement the SocGen Compromise do not affect the recoveries of any creditors other than the amount of consideration to be distributed to holders of Allowed SocGen Claims and holders of Allowed Class 4 Claims, as required by the Plan, Mr. Canning assures the Court. Mr. Canning also notes that the Disclosure Statement explaining the Plan describes parameters of a potential settlement of the SocGen Adversary Proceeding and the process by which the Debtors could modify the Plan to implement the terms of the settlement without the necessity of re-soliciting votes on the Plan. Plan Modifications These are the substantive modifications to the Plan required to implement the SocGen Compromise: A. Definitions * The definition of "Class 1 Reserve" will be deleted from the Plan because the concept of creating a reserve pending final resolution of the SocGen Adversary Proceeding is no longer necessary. * "Class 4 Securities Distribution" means the aggregate of (a) 18,067,896 -- instead of 16,473,629 -- shares of New Common Stock, and (b) 10,723,019 -- instead of 9,310,214 -- Warrant Bundles, in each case, after giving effect to the Syndicate Compromise and the SocGen Compromise, reduced by any New Common Stock and Warrant Bundles distributable to the holders of unsecured claims under the Canadian Plan. * The definition of "Released Parties" will be revised to include the "SocGen Released Parties," in accordance with the terms of the SocGen Compromise. B. Treatment of Claims and Interests * Article 4.1(b) of the Plan, governing the treatment of the SocGen Claims will be modified. The treatment of Allowed SocGen Claims pursuant to modified Article 4.1(b) of the Plan will be substantially similar to the treatment of Allowed Syndicate Claims under Article 4.1(a) of the Plan. * Article 6.17 of the Plan will be modified to include a description of the SocGen Compromise in connection with describing the means for implementation of the Plan. In addition to describing the distribution of the SocGen Compromise Amount to holders of Allowed Class 4 Claims, modified Article 6.17 also provides for the dismissal of the SocGen Adversary Proceeding and for the related release by the Debtors of the SocGen Released Parties for and from any claims or Causes of Action existing as of the Effective Date. C. Releases * In connection with and as consideration for the SocGen Compromise, the Debtors propose to modify the Plan to include the SocGen Released Parties as beneficiaries of certain of the Plan's release and exculpation provisions. In addition to these modifications, the Debtors propose to make a number of additional, minor conforming changes to other provisions of the Plan. In line with the proposed Plan modifications, the Debtors submitted to the Court a blacklined copy of the Plan available for free at http://ResearchArchives.com/t/s?3f28 Mr. Canning avers that the SocGen Compromise is an important component to consummation of the Plan. The Debtors believe that the SocGen Compromise eliminates uncertainty attendant to the ongoing litigation of the SocGen Adversary Proceeding, and the resolution of the SocGen Claims and the recovery of holders of Class 4 Claims. The modifications to the Plan are narrowly tailored to implement the terms of the SocGen Compromise, without impacting the rights of any parties other than those that have consented to the SocGen Compromise. Mr. Canning adds that the Plan, as modified, will continue to meet all of the requirements of the Bankruptcy Code, and the modifications to the Plan are permissible under Section 1127(b). In a declaration filed with the Court, Mr. Canning avers that the Motion is an important component to consummation of the Plan and it is imperative that the Debtors be afforded the opportunity to present the Emergency Motion for the Court's consideration at the earliest possible time, as the modifications to the Plan detailed in the Motion cannot be effected without an order of the Court. The Court will convene a hearing to consider the Motion on July 16, 2009, at 3:30 p.m. (Eastern Time). Debtors File Supplemental Plan Exhibits On July 15, 2009, the Debtors delivered to the Court further supplements to their Third Amended Plan to identify: (a) additional agreements subject to assumption, rejection or assignment pursuant to the Disclosure Statement Order and the Plan that were not identified on the Exhibits filed on June 9, 2009, or the Supplemental Exhibits filed on June 30, 2009; and (b) agreements that were identified on the Exhibits filed on June 9, 2009, or the Supplemental Exhibits filed on June 30, 2009, where information concerning their assumption, assignment or rejection has been modified or corrected; and (c) agreements that were identified on either the Assumption Exhibit or Rejection Exhibit but have been moved from one Exhibit to another; or removed from the Exhibits altogether. Copies of the Second Supplements are available for free at * Schedule of Assumed Executory Contracts and Unexpired Leases at http://bankrupt.com/misc/QWI_USPlan_2ndSuppEx7-1.pdf * Schedule of Rejected Executory Contracts and Unexpired at http://bankrupt.com/misc/QWI_USPlan_2ndSuppEx7-5.pdf Five Parties Object to Cure Amounts Five parties object to the proposed cure amounts of the executory contracts and unexpired leases to be assumed by the Debtors under the Third Amended Plan: Proposed Correct Party Cure Amount Cure Amount ----- ----------- ----------- GATX Corporation $410,759 $475,379 AT&T Corp. $107,127 $182,696 SBC Global Services, Inc. $33,108 $178,621 Bell South $26,463 $121,842 Columbia Gas of Ohio $4,753 $17,374 The Objectors ask the Court to require the Debtors to pay the exact cure amounts for the Debtors to fully cure the outstanding obligations they owed. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The Company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. In mid-2009, Judge James Peck of the United States Bankruptcy Court for the Southern District of New York and the Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice, in a joint hearing, approved the plan of compromise filed by Quebecor World Inc. and its affiliates in their cases before the Canadian Companies' Creditors Arrangement Act and the Chapter 11 plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates in the U.S. Bankruptcy Court. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Stipulations Taxing Authorities ----------------------------------------------- To resolve several taxing authorities' objections to the Third Amended Joint Plan of Reorganization, Quebecor World (USA) Inc. entered into separate stipulations with each of: -- the Virginia Department of Taxation, -- the State of Arizona Department of Revenue, -- the State of Louisiana Department of Revenue, -- the New York State Department of Taxation and Finance, and -- the Texas Comptroller of Public Accounts. Pursuant to the stipulation, the Debtors will remit all tax returns for all periods, both prepetition and postpetition for which returns are required to be filed within 90 days, and pay the taxes as are due and owing to each of the Taxing Authorities for the periods following both the Petition Date and the Plan confirmation date in the ordinary course of business and to the extent required by applicable law. The Debtors will modify the Plan to provide that Allowed Priority Tax Claims that are entitled to treatment as priority unsecured claims pursuant to Sections 507(a)(8) and 1129(a)(9)(C) of the Bankruptcy Code will accrue interest at the applicable statutory rate, commencing on the Plan's Effective Date, without regard to the date that the claim is finally determined to be an Allowed Priority Tax Claim pursuant to the Plan. Tax Claims that have been filed by the Taxing Authorities will be entitled to the treatment under the Plan, with interest to accrue at to the Taxing Authorities' statutory rates, to the extent that the claims are determined to be Allowed Priority Tax Claims. The ability of the Taxing Authorities to file amendments to the Claims, including amendments to revise the amount of the claims, will be preserved following the Plan's Effective Date, without prejudice to the Debtors' right to object to the Claims on any grounds other than the timeliness of amendments to the Claims. The Taxing Authorities' objections to the Plan will be withdrawn with prejudice. Accordingly, the Debtors ask the Court to approve the stipulations. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The Company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. In mid-2009, Judge James Peck of the United States Bankruptcy Court for the Southern District of New York and the Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice, in a joint hearing, approved the plan of compromise filed by Quebecor World Inc. and its affiliates in their cases before the Canadian Companies' Creditors Arrangement Act and the Chapter 11 plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates in the U.S. Bankruptcy Court. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: To Issue $75 Mil. 10% Sr. Notes Pursuant to Plan ---------------------------------------------------------------- Quebecor World Capital Corporation, disclosed in a filing with the United States Securities and Exchange Commission, that it will issue 10% Senior Guaranteed Notes due 2013 with a principal amount of $75,000,000, pursuant to the terms of the Debtors' Joint Plan of Reorganization. According to David McCarthy, president of QWCC, the issuance of the Notes is exempt from registration under the Securities Act of 1933, as amended, pursuant to the exemption provided by Section 1145(a)(1) of the Bankruptcy Code. To the extent that the solicitation constitutes an offer of new securities not exempt from registration under Section 1145(a)(1), QWCC is also relying on the exemption from Securities Act registration provided by Section 4(2) of the Securities Act and Regulation D. Mr. McCarthy says the Plan contemplates the restructuring of the outstanding debt of QWCC, QWCC's corporate parent company, Quebecor World Inc., and certain other subsidiaries of QWI, in part through the issuance by QWCC of the Notes. The Notes: -- mature as to principal and interest on the fourth anniversary of the date the Notes are issued; -- bear interest payable at 10% per annum in cash or 13% per annum in kind, at the option of QWCC and subject to the terms of certain senior indebtedness of QWI to be incurred on the Effective Date, until payment of the principal amount will have been duly provided for; -- will be guaranteed as to payment of principal and interest by QWI; and -- may be redeemed, at QWCC's option, in whole or in part, at any time and from time to time at the redemption prices if redeemed during the twelve-month period commencing on the first anniversary of the Issue Date and each of these anniversary year: Year Percentage ---- ---------- 2010 105% 2011 103% 2012 101% These are the capital stock and debt securities of QWCC on a consolidated basis as of June 30, 2009: Title of Class Amount Authorized Amount Outstanding -------------- ----------------- ------------------ Common Stock, par 3,000 1,000 value $1.00 per share 4.875% Senior $200,000,000 $200,000,000 Notes due 2008 (principal amount) (principal amount) 6.125% Senior $400,000,000 $400,000,000 Notes due 2013 (principal amount) (principal amount) 6.50% Guaranteed $150,000,000 $3,200,000 Debentures due (principal amount) (principal amount) 2027 As part of the Confirmation of the Plan, QWI will be renamed to Novink Corp., QWCC will be renamed to Novink (USA) Corp., and QWUSA will be renamed to Novink Printing (USA) Corp. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The Company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. In mid-2009, Judge James Peck of the United States Bankruptcy Court for the Southern District of New York and the Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice, in a joint hearing, approved the plan of compromise filed by Quebecor World Inc. and its affiliates in their cases before the Canadian Companies' Creditors Arrangement Act and the Chapter 11 plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates in the U.S. Bankruptcy Court. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: To Postpone Shareholders Meeting to May 2010 ------------------------------------------------------------ Quebecor World, Inc., asks the Quebec Superior Court of Justice to postpone the Company's annual meeting of shareholders until May 17, 2010. The Canadian Court previously allowed QWI to hold its Annual Shareholders' Meeting on or before September 30, 2009. Ernst & Young Inc., the Monitor of Quebecor World's proceeding under the Canadian Companies' Creditors Arrangement Act, relates that QWI applied to the Canadian Court pursuant to Sections 9 and 10 of the Canada Business Corporations Act to convene and hold an annual meeting of shareholders within the delay referred to in Subsection 133(1) of the CBCA. The Monitor says that on February 19, 2008, and February 26, 2009, QWI was relieved of the obligation to convene and hold an AMS, and was directed to convene and hold the Meeting within three months after the implementation of the Second Amended and Restated Canadian Plan of Reorganization and Compromise. The Monitor avers that the Canadian Plan provides that upon implementation, the board of directors of QWI will resign, and that a new board of directors will be formed of persons chosen by a search committee, established by and on behalf of QWI's creditors. According to the Monitor, considering the terms of the U.S. Debtors' Third Amended Joint Plan of Reorganization and the Canadian Plan, the appointment of a new board of directors by a selection committee, the fact that the financial information that would be made available to the shareholders in the event an AMS was held within three months from the implementation of the Canadian Plan has already have been made publicly available, QWI believes that it would be appropriated to further delay the obligation to hold a shareholders' meeting until May 17, 2010. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The Company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. In mid-2009, Judge James Peck of the United States Bankruptcy Court for the Southern District of New York and the Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice, in a joint hearing, approved the plan of compromise filed by Quebecor World Inc. and its affiliates in their cases before the Canadian Companies' Creditors Arrangement Act and the Chapter 11 plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates in the U.S. Bankruptcy Court. Bankruptcy Creditors' Service, Inc., publishes Quebecor World Bankruptcy News. The newsletter tracks the parallel proceedings undertaken by QWI and its affiliates under United States and Canadian bankruptcy laws. (http://bankrupt.com/newsstand/or 215/945-7000) RATHGIBSON INC: Court Sets Deadlines for Proof of Claim Filing -------------------------------------------------------------- The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for District of Delaware said that creditors of RathGibson Inc. and its debtor-affiliates to file proofs of claim 35 days after the Debtors file their schedules of assets and debts, and statement of financial affairs. Judge Sontchi set January 11, 2010, as deadline for any governmental units to file proofs of claim. About RathGibson 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. RathGibson, Inc., together with three affiliates, filed for Chapter 11 on June 13, 2009 (Bankr. D. Del. Case No. 09-12452). Attorneys at Young, Conaway, Stargatt & Taylor and Willkie Farr & Gallagher LLP serve as co-counsel. Jefferies & Company Inc. and Mesirow Financial Consulting LLC have been hired as financial advisors. Kelley Drye & Warren LLP serves as special corporate counsel. The petition says that Rathgibson has assets and debts of $100 million to $500 million. Attorneys at Stroock & Stroock & Lavan LLP and Richards, Layton & Finger P.A., represent an ad hoc committee of certain holders of Senior Notes. Scott Welkis, Esq., at Stroock & Stroock & Lavan also represents Wilmington Trust FSB, as administrative agent. RATHGIBSON INC: Wants Court Approval to Employ Professionals ------------------------------------------------------------ RathGibson Inc. and its debtor-affiliates ask the Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for District of Delaware for authority to employ professionals to assist them in their restructuring efforts, including: * Willkie Farr & Gallagher LLP as co-counsel; * Kelley Drye & Warren LLP as special corporate counsel; * Jefferies and Company Inc. as financial advisor and investment banker; * Mesirow Financial Consulting, LLC as financial advisors; and * The Garden City Group Inc. as claims and noticing agent. The firm's professionals and their hourly rates are: Firm Name Designation Hourly Rates --------- ----------- ------------ Wilkie Farr Attorney $465-$995 Mesirow Financial Director $700-$750 Kelley Drye Partners $550-$875 Jefferies and Company will be paid $150,000 per month and Garden City will be paid in accordance to the bankruptcy administration agreement. The Debtors assure the Court that the firms do hold any interest adverse to their estate and creditors, and is a "disinterested person as defined in Section 101(14) of the Bankruptcy Code. About RathGibson 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. RathGibson, Inc., together with three affiliates, filed for Chapter 11 on June 13, 2009 (Bankr. D. Del. Case No. 09-12452). Attorneys at Young, Conaway, Stargatt & Taylor and Willkie Farr & Gallagher LLP serve as co-counsel. Jefferies & Company Inc. and Mesirow Financial Consulting LLC have been hired as financial advisors. Kelley Drye & Warren LLP serves as special corporate counsel. The petition says that Rathgibson has assets and debts of $100 million to $500 million. Attorneys at Stroock & Stroock & Lavan LLP and Richards, Layton & Finger P.A., represent an ad hoc committee of certain holders of Senior Notes. Scott Welkis, Esq., at Stroock & Stroock & Lavan also represents Wilmington Trust FSB, as administrative agent. RATHGIBSON INC: Sec. 341(a) Meeting of Creditors on Aug. 20 ----------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors of RathGibson Inc. and its debtor-affiliates on Aug. 20, 2009, at 2:00 p.m., J. Caleb Boggs Federal Building, Room 2112 in Wilmington Delaware. 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. About RathGibson 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. RathGibson, Inc., together with three affiliates, filed for Chapter 11 on June 13, 2009 (Bankr. D. Del. Case No. 09-12452). Attorneys at Young, Conaway, Stargatt & Taylor and Willkie Farr & Gallagher LLP serve as co-counsel. Jefferies & Company Inc. and Mesirow Financial Consulting LLC have been hired as financial advisors. Kelley Drye & Warren LLP serves as special corporate counsel. The petition says that Rathgibson has assets and debts of $100 million to $500 million. Attorneys at Stroock & Stroock & Lavan LLP and Richards, Layton & Finger P.A., represent an ad hoc committee of certain holders of Senior Notes. Scott Welkis, Esq., at Stroock & Stroock & Lavan also represents Wilmington Trust FSB, as administrative agent. REGAL ENTERTAINMENT: Sells $400MM of 2019 Notes to Credit Suisse ---------------------------------------------------------------- Regal Entertainment Group, Regal Cinemas Corporation, an indirect wholly owned subsidiary of the Company, and certain subsidiaries of Regal Cinemas named as guarantors, on July 9, 2009, entered into a Purchase Agreement with Credit Suisse Securities (USA) LLC, as the representative of the initial purchasers, with respect to Regal Cinemas' issuance and sale of $400.0 million in aggregate principal amount of 8.625% Senior Notes due 2019. The net proceeds from the offering, after deducting the Initial Purchasers' discount and the estimated offering expenses payable by the Company, were approximately $381.3 million. The Company intends to use all of the net proceeds of the offering to repay a portion of its existing credit facility. The $400.0 million in aggregate principal amount of the Notes were sold to the Initial Purchasers at a price equal to 97.561% of their face value. The Notes are to be resold by the Initial Purchasers pursuant to Rule 144A and Regulation S of the Securities Act of 1933, as amended. The Notes are governed by an indenture, dated as of July 15, 2009, between Regal Cinemas, the Company and certain subsidiaries of Regal Cinemas named as guarantors, and U.S. Bank National Association, as trustee. The Notes will bear interest at a rate of 8.625% per year, payable semiannually in arrears in cash on July 15 and January 15 of each year, commencing on January 15, 2010. The Notes will mature on July 15, 2019. The Notes will be Regal Cinemas' general senior unsecured obligations and they will: (i) rank equally in right of payment with all of Regal Cinemas' existing and future senior unsecured indebtedness; (ii) rank senior in right of payment to all of Regal Cinemas' existing and future subordinated indebtedness, including its existing 9-3/8% senior subordinated notes due 2012; (iii) be effectively subordinated to all of Regal Cinemas' existing and future secured indebtedness, including all borrowings under the existing credit facility, to the extent of the value of the collateral securing such indebtedness; and (iv) be structurally subordinated to all existing and future indebtedness and other liabilities of any of Regal Cinemas' subsidiaries that is not a guarantor of the Notes. The Notes will be fully and unconditionally guaranteed on a joint and several senior unsecured basis by the Company and all of Regal Cinema's existing and future domestic restricted subsidiaries that guarantee its other indebtedness. The Guarantees will be the Guarantors' general senior unsecured obligations and they will: (i) rank equally in right of payment with all of the Guarantors' existing and future senior unsecured indebtedness, including the Company's 6-1/4% convertible senior notes due 2011; (ii) rank senior in right of payment to all of the Guarantors' existing and future subordinated indebtedness, including the guarantees of Regal Cinema's existing 9-3/8% senior subordinated notes due 2012; (iii) be effectively subordinated to all of the Guarantors' existing and future secured indebtedness, including the guarantees under the existing credit facility, to the extent of the value of the collateral securing such indebtedness; and (iv) be structurally subordinated to all existing and future indebtedness and other liabilities of any of the Guarantors' subsidiaries that is not a guarantor of the Notes. Prior to July 15, 2014, Regal Cinema may redeem all or any part of the Notes at its option at 100% of the principal amount plus a make-whole premium. Regal Cinema may redeem the Notes in whole or in part at any time on or after July 15, 2014, at the redemption prices: (i) during 2014, 104.313%, (ii) during 2015, 102.875%, (iii) during 2016, 101.438% and (iv) 2017 and thereafter, 100.000%, of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date. In addition, prior to July 15, 2012, Regal Cinema may redeem up to 35% of the original aggregate principal amount of Notes from the net proceeds of certain equity offerings at a redemption price of 108.625% of principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date. If Regal Cinema undergoes a change of control, holders may require Regal Cinema to repurchase all or a portion of their Notes at a price equal to 101% of the principal amount of the Notes being repurchased, plus accrued and unpaid interest, if any, to the repurchase date. The Indenture contains covenants that limit Regal Cinema's -- and its restricted subsidiaries' -- ability to, among other things: (i) incur additional indebtedness; (ii) pay dividends on or make other distributions in respect of its capital stock, purchase or redeem capital stock, or purchase, redeem or otherwise acquire or retire certain subordinated obligations; (iii) enter into certain transactions with affiliates; (iv) permit, directly or indirectly, it to create, incur, or suffer to exist any lien, except in certain circumstances; (v) create or permit encumbrances or restrictions on its ability to pay dividends or make distributions on its capital stock, make loans or advances to its subsidiaries (or Regal Cinema), or transfer any properties or assets to its subsidiaries (or Regal Cinema); and (vi) merge or consolidate with other companies or transfer all or substantially all of its assets. The Indenture also requires any of Regal Cinema's subsidiaries guaranteeing certain indebtedness of Regal Cinema or any Guarantor after the Notes are issued to execute a supplemental indenture by which it guarantees payment of principal and interest on the Notes on a senior unsecured basis. Note, however, that these covenants are subject to a number of important limitations and exceptions. The Indenture contains other customary terms, including, but not limited to, events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. The Purchase Agreement includes customary representations, warranties and covenants. Under the terms of the Purchase Agreement, the Issuer, the Company and the guarantors party thereto have agreed to indemnify the Initial Purchasers against certain liabilities. The purchasers are: Principal Amount of Offered Purchasers Securities ---------- ---------- Credit Suisse Securities (USA) LLC $157,580,000 Deutsche Bank Securities Inc. 96,970,000 J.P. Morgan Securities Inc. 77,580,000 Banc of America Securities LLC 48,480,000 Barclays Capital Inc. 19,390,000 ------------ Total $400,000,000 Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., and J.P. Morgan Securities Inc. serve as Book-Runners. Banc of America Securities LLC and Barclays Capital Inc. serve as Co- Managers. The Purchase Agreement notes that as of April 2, 2009, Regal Cinemas' subsidiaries that are not guarantors would have accounted for roughly $265.4 million, or 9.4%, of REG's total revenues for the 52 weeks ended April 2, 2009, roughly $229.3 million, or 8.9%, of REG's total assets and roughly $143.5 million, or 5.1%, of REG's total liabilities. The Consolidated EBITDA basket in the Restricted Payments Covenant will be calculated for the period starting on March 28, 2009 instead of March 28, 2008. Registration Rights Agreement On July 15, 2009, in connection with the sale of the Notes, Regal Cinemas and the Guarantors entered into a registration rights agreement with the Initial Purchasers of the Notes. Under the Registration Rights Agreement, Regal Cinemas has agreed to consummate an exchange offer pursuant to an effective registration statement filed with the Securities and Exchange Commission to allow purchasers of the Notes to exchange the Notes for a new issue of substantially identical debt securities registered under the Securities Act. Further, under certain circumstances described in the Registration Rights Agreement, Regal Cinemas has agreed to file a shelf registration statement to cover resales of the Exchange Notes. Specifically, Regal Cinemas has agreed to file within 90 days after July 15, 2009, the Exchange Offer Registration Statement, use its reasonable best efforts to have declared effective the Exchange Offer Registration Statement within 150 days after July 15, 2009, and use its reasonable best efforts, subject to applicable law, to consummate the exchange offer within 30 business days thereafter. If Regal Cinemas fails to comply with these time periods or with certain other obligations in the Registration Rights Agreement, then the annual interest rate on the Notes will increase by 0.25% per year for each subsequent 90- day period during which the Registration Default continues, up to a maximum additional interest rate of 0.50% per year over 8.625% If the Registration Default is corrected, then the applicable interest rate on such Notes will revert to 8.625%. A full-text copy of the Purchase Agreement is available at no charge at http://ResearchArchives.com/t/s?3f8d A full-text copy of the Registration Rights Agreement is available at no charge at http://ResearchArchives.com/t/s?3f8e A full-text copy of the Indenture Agreement is available at no charge at http://ResearchArchives.com/t/s?3f8f About Regal Entertainment Based in Knoxville, Tennessee, Regal Entertainment Group (NYSE: RGC) -- http://www.REGmovies.com/-- is the largest motion picture exhibitor in the world. The Company's theatre circuit, comprising Regal Cinemas, United Artists Theatres and Edwards Theatres, operates 6,782 screens in 549 locations in 39 states and the District of Columbia. Regal operates theatres in all of the top 33 and 44 of the top 50 U.S. designated market areas. As of April 2, 2009, the Company had $2,563,000,000 in total assets and $2,809,900,000 in total liabilities. * * * As reported by the Troubled Company Reporter on July 13, 2009, Moody's Investors Service rated Regal Cinemas' new $300 million 10-year senior unsecured notes B1. On July 14, 2009, the TCR said Standard & Poor's Ratings Services revised its recovery rating on Regal Cinemas's debt to '2', indicating S&P's expectation of substantial (70% to 90%) recovery for secured lenders in the event of a payment default, from '3'. In addition, S&P raised the issue-level rating on this debt to 'BB-' (one notch higher than the 'B+' corporate credit rating on the company) from 'B+', in accordance with S&P's notching criteria for a '2' recovery rating. On July 15, 2009, the TCR said Fitch Ratings assigned a 'B+/RR4' rating to Regal Cinemas' $400 million 8.625% senior unsecured notes. The 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. RELIANCE INTERMEDIATE: S&P Rates $250 Million Notes at 'BB-' ------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned its recovery rating of '4' to Reliance Intermediate Holdings LP's proposed issuance of 10-year US$250 million senior notes, due 2019. A recovery rating of '4' indicates S&P's expectation of average (30%-50%) recovery if a payment default occurs. The ratings and recovery are based on preliminary terms and conditions and are subject to review once final documentation is received. Standard & Poor's rates RIHLP's US$250 million senior notes 'BB-'. Ratings List Reliance Intermediate Holdings LP Recovery rating assigned US$250 million senior notes BB- Recovery rating 4 RHODES COS: Court Approves Mediation With Creditors --------------------------------------------------- Las Vegas Review-Journal reports that the Hon. Linda Riegle of the U.S. Bankruptcy Court for the District of Nevada has approved an agreement between The Rhodes Companies LLC and its creditors for mediation. The Rhodes, says Las Vegas Review-Journal, avoided a legal battle on Friday when first lien creditors, the agent for the second lien creditors, the unsecured creditors' committee, and others agreed to mediation. The report states that the agreement lets owner Jim Rhodes to continue using cash for business operations until August 28. According to the report, parties signing the agreement will go through up to three days of mediation over how to reorganize the companies and won't file potentially competing plans of reorganization until August 28. Based in Nevada, The Rhodes Companies LLC is a private master planned community developer and homebuilder in the Las Vegas valley. The company was founded in 1991. The company and its affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. D. Nev. Lead Case No. 09-14778). Zachariah Larson, Esq., at Larson & Stephens, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed both assets and debts between $100 million and $500 million. SAN FELICIANO: Files Schedules of Assets and Liabilities -------------------------------------------------------- San Feliciano Holding Company, LLC, has filed with the U.S. Bankruptcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ---------- ----------- A. Real Property $7,200,000 B. Personal Property $13,498 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $3,897,830 E. Creditors Holding Unsecured Priority Claims $57,845 F. Creditors Holding Unsecured Non-priority Claims $222,376 ---------- ---------- TOTAL $7,213,498 $4,178,051 A copy of San Feliciano's schedules of assets and liabilities is available at http://bankrupt.com/misc/sanfeliciano.SAL.pdf Based in Woodland Hills, Calif., San Feliciano Holding Company, LLC, filed for Chapter 11 protection on June 1, 2009 (Bankr. C.D. Calif. Case No. 09-16563). Victor A. Sahn, Esq., and Alexandra Kazhokin, at SulmeyerKupetz, serve as bankruptcy counsel. When the Debtor filed for protection from its creditors, it listed between $10 million and $50 million each in assets and debts. SAN FELICIANO: Taps SulmeyerKupetz as Bankruptcy Counsel -------------------------------------------------------- San Feliciano Holding Company, LLC, asks the U.S. Bankruptcy Court for the Central District of California permission to employ SulmeyerKupetz as bankruptcy counsel. As bankruptcy counsel, SulmeyerKupetz will: a) examine claims of creditors in order to determine their validity; b) give advice and counsel in connection with legal issues, including the use, sale or lease of property of the estate, etc.; c) negotiate with creditors holding secured and unsecured claims; and d) prepare and present a plan of reorganization and disclosure statement. SulmeyerKupetz provided prepetition services to the Debtor prior to the commencement of its bankruptcy filing. SulmeyerKupetz received $175,000 in funds on the petition date in connection with the Debtor's bankruptcy filing from David Schwartzman. SulmeyerKupetz also represents David Shwartzman in another Chapter 11 case filed with the Court on June 1, 2009 (Bankr. C.D. Calif. 09-16565). Victor A. Sahn, a member at SulmeyerKupetz, assures the Court that the firm does not represent any interest adverse to the Debtor or its estate and is a "disineterested person" as that term is defined n Section 101(14) of the Bankruptcy Code. SulmeyerKupetz's professionals bill: Hourly Rate ----------- Members and Senior Counsel $475-$700 Of Counsel $400-$425 Associates $295-$375 San Feliciano Holding Company, LLC, is part of the real estate development company that operates under the name DS Ventures, LLC. DS Ventures is owned primarily by David Schwartzman. Based in Woodland Hills, Calif., San Feliciano Holding Company, LLC filed for Chapter 11 protection on June 1, 2009 (Bankr. C.D. Calif. Case No. 09-16563). Victor A. Sahn, Esq., and Alexandra Kazhokin, at SulmeyerKupetz, serve as bankruptcy counsel. When the Debtor filed for protection from its creditors, it listed between $10 million and $50 million each in assets and debts. SBARRO INC: Moody's Affirms 'Ca' Corporate Family Rating -------------------------------------------------------- Moody's Investors Service affirmed the Ca Corporate Family rating and Probability of Default rating of Sbarro, Inc. At the same time, Moody's upgraded the company's 1st lien senior secured ratings to Caa1 (LGD 2, 17%) from Caa2 (LGD 2, 21%). Moody's also affirmed the company's senior unsecured rating at C (LGD 5, 77%) and SGL-4 speculative grade liquidity rating. The outlook is negative. The upgrade of the 1st lien senior secured revolver and term loan ratings to Caa1 reflects the establishment earlier this year of its 2nd lien senior secured term loan. This resulted in a higher level of liabilities that are junior to these securities and provides the 1st lien revolver and term loan lenders with a greater level of support in a distressed situation. Sbarro's Ca Corporate Family Rating reflects the company's persistently high leverage and weak coverage, as well as Moody's view that operating performance will continue to be negatively impacted by weak consumer spending. It also reflects significant competition in the pizza segment of the restaurant industry, and the high seasonality of cash flows. "Sbarro's probability of default remains high as persistently weak operating performance continues to negatively impact debt protection measures and liquidity", stated Bill Fahy, Senior Analyst. The negative outlook reflects Moody's expectation that operating performance and liquidity will continue to be negatively impacted by weak consumer spending. As a result, Moody's view Sbarro's liquidity as weak and believe its ability to remain compliant with its bank covenants is uncertain. This may require the company to pursue a covenant amendment or a more comprehensive financial restructuring over the intermediate term. Ratings upgraded are: -- $21.5 million senior secured revolver to Caa1 (LGD 2, 17%) from Caa2 (LGD 2, 21%) -- $183 million senior secured term loan to Caa1 (LGD 2, 17%) from Caa2 (LGD 2, 21%) Ratings affirmed are: -- Corporate family rating at Ca -- Probability of default rating at Ca -- $150 million senior unsecured notes at C (LGD 5, 77%) -- Speculative Grade Liquidity rating at SGL-4 The rating outlook is negative. Moody's last rating action for Sbarro occurred on February 12, 2009, when the company's CFR was lowered to Ca from Caa2. Sbarro, Inc., headquartered in Melville, New York, is a leading quick service restaurant concept that serves Italian specialty foods. Annual revenues are $356 million. SAN FELICIANO: Section 341(a) Meeting Set for August 11 ------------------------------------------------------- The first meeting of creditors in San Feliciano Holding Company, LLC's bankruptcy case will be held on August 11, 2009, at 10:00 a.m., at Room 10, 21051 Warner Center Lane, in Woodland Hills, CA 91367. 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 Debtor under oath about the Debtor's financial affairs and operations that would be of interest to the general body of creditors. Based in Woodland Hills, Calif., San Feliciano Holding Company, LLC, filed for Chapter 11 protection on June 1, 2009 (Bankr. C.D. Calif. Case No. 09-16563). Victor A. Sahn, Esq., and Alexandra Kazhokin, at SulmeyerKupetz, serve as bankruptcy counsel. When the Debtor filed for protection from its creditors, it listed between $10 million and $50 million each in assets and debts. SAN PATRICIO: 7th Cir. Declines to Use Mootness to Dismiss Deal --------------------------------------------------------------- Courts usually use the equitable mootness doctrine to dismiss an appeal from plan confirmation if the creditor taking the appeal didn't succeed in obtaining a stay of the confirmation order pending appeal. According to Bill Rochelle at Bloomberg News, the U.S. Court of Appeals for Fifth Circuit in New Orleans put the brakes on the idea of applying the doctrine of equitable mootness to dismiss appeals not involving a confirmed Chapter 11 reorganization plan. The Fifth Circuit appeals court declined to use the mootness doctrine to dismiss an appeal from a settlement in a Chapter 7 case, even though the settlement was implemented and money was distributed. In the case of a settlement, the Court said money paid out "would need to be repaid" if the settlement were set aside on appeal. It held that obtaining the return of money under a settlement "is not of the same nature or magnitude as the undoing of a complicated plan of reorganization." The doctrine pronounced by the court would seem to apply equally to settlements in Chapter 11 cases. The case is Technology Lending Partners LLC v. San Patricio County Community Action Agency (In re San Patricio County Community Action Agency), 08-40517, U.S. Court of Appeals for the Fifth Circuit (New Orleans). SEAL CORP: Says 96.4% of Subscription Rights Were Exercised ----------------------------------------------------------- Seal Corp. on July 13, 2009, announced the results of its rights offering. The Offering expired in accordance with its terms at 5:00 p.m., New York City time, on July 2, 2009. Sealy Corp. has been informed by the subscription agent that approximately 96.4% of the subscription rights were exercised for approximately $170.8 million aggregate principal amount of the Notes, which includes approximately $89.7 million by Sealy Holding LLC, the Company's majority shareholder. Sealy Corp. received oversubscription requests for $135,749,375 aggregate principal amount of Notes. The approximately $6.3 million aggregate principal amount available pursuant to the oversubscriptions were allocated among those who properly exercised their oversubscription privilege in accordance with the proration procedures described in the prospectus supplement for the rights offering for a total issuance by the Company of $177,132,000 aggregate principal amount of Notes. The closing of the rights offering and issuance of the Notes occurred on July 10, 2009. The Notes were approved for listing on the New York Stock Exchange on July 13, 2009, and will begin trading on the NYSE on July 17, 2009, under the symbol "ZZC". About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. At May 31, 2009, the Company had $1.0 billion in total assets; $222.8 million in current liabilities, $836.6 million in long-term obligations, net of current portion, $95.9 million in rights liability for convertible notes, $69.1 million in other liabilities, $6.7 million in deferred income tax liabilities; and $230.4 million in shareholders' deficit. * * * As reported by the Troubled Company Reporter on May 19, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating on Sealy Corp. to 'B' from 'B+'. At the same time, S&P lowered the issue-level ratings on the company's senior secured credit facilities to 'BB-', from 'BB', while maintaining the '1' recovery rating. S&P also lowered the issue-level rating on the Company's senior subordinated notes to 'CCC+' from 'B+', and revised the recovery rating on these notes to '6' (indicating the likelihood of negligible [0%-10%] recovery in a payment default) from '4'. At the same time, Standard & Poor's assigned its 'BB-' issue-level rating with a recovery rating of '1' (indicating the likelihood of very high [90%-100%] recovery) to Sealy Mattress' proposed seven-year $350 million senior secured notes due 2016, and a 'B' issue-level rating with a recovery rating of '4' (indicating the likelihood of average [30%-50%] recovery) to its proposed $177 million senior secured convertible pay-in-kind notes due 2016. Sealy's proposed $100 million asset-based revolving credit facility maturing in 2013 is not rated. On May 18, the TCR said Moody's Investors Service assigned a Ba3 rating to Sealy's proposed senior secured notes. At the same time, Sealy's B2 corporate family rating and probability-of- default rating was affirmed as was the Caa1 rating on the senior subordinated notes and SGL 3 liquidity rating. The ratings outlook remains negative. SEALY CORP: Inks Indenture Regarding Issuance of $177MM 2016 Notes ------------------------------------------------------------------ Sealy Corporation and Sealy Mattress Company -- as Co-Issuers -- on July 10, 2009, entered into an indenture, as amended and supplemented by a supplemental indenture governing the issuance of $177,132,000 in aggregate initial principal amount of 8% senior secured third lien convertible notes due 2016 that were offered and sold in connection with the consummation of Parent's rights offering, where Parent distributed at no charge to the holders of Parent common stock, par value $0.01 per share, transferable subscription rights to purchase the Notes. Summary of the terms of the Notes: -- General The Co-Issuers issued the Notes under the Indenture entered into among Parent, the Company, the guarantors party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent. -- Principal, maturity and interest The Notes have an initial aggregate principal amount of $177,132,000 and will mature on July 15, 2016. Interest on the Notes will accrue at the rate of 8% per annum and will compound on a semi-annual basis on January 15 and July 15, commencing on July 15, 2009. The Co-Issuers will not pay interest in cash on an interest payment date, but instead the principal amount of the Notes will be increased as of such interest payment date by an accretion amount equal to the interest payable for the interest period ending immediately prior to such interest payment date. -- All payments on the Notes, including principal and interest, are jointly and severally guaranteed on a senior secured basis by Sealy Mattress Corporation and all of the Company's existing wholly-owned domestic restricted Subsidiaries. -- Conversion rights Subject to Parent's right to terminate conversion rights in certain circumstances on or after July 15, 2012, holders may convert their Notes into shares of Common Stock (plus cash in lieu of fractional shares) at any time prior to the close of business on the business day immediately preceding the maturity date. The Notes are convertible into shares of Common Stock at an initial conversion price of $1.00 per share. The number of shares of Common Stock issuable upon conversion of any individual Note will increase on each interest payment date to reflect the accretion of interest on such Note for the immediately preceding interest period. The conversion price in effect at any given time will be subject to adjustment as set forth in the Indenture. In addition, following certain corporate transactions that occur prior to maturity, the Co-Issuers will decrease the conversion price for a holder that elects to convert its Notes in connection with such a corporate transaction in certain circumstances as described in the Indenture. -- Limitation of beneficial ownership No holder of the Notes (other than Kohlberg Kravis Roberts & Co. L.P., its affiliates and certain members of management) is permitted to receive shares upon conversion of the Notes to the extent such conversion will result in such holder becoming a "beneficial owner" under the securities laws by owning 5% or more of the shares of Common Stock. In addition, no holder of more than 5% of Common Stock at May 27, 2009 (other than Kohlberg Kravis Roberts, its affiliates and certain members of management) may receive shares upon conversion of the Notes to the extent such conversion will result in such holder becoming a "beneficial owner," directly or indirectly, of more than an additional 1% of the shares of Common Stock upon conversion of the Notes. The limitations on beneficial ownership will be terminated (i) upon 61 days' notice to Parent by any holder of Notes, solely with respect to the Notes beneficially owned by such holder, (ii) immediately upon delivery by Parent of notice of its election to terminate conversion rights to the extent permitted by the Indenture, (iii) immediately upon delivery by Parent of notice of a fundamental change (as defined in the Indenture) or (iv) on June 15, 2016. -- Termination of conversion rights On or after July 15, 2012, Parent may elect to terminate holders' conversion rights if (i) the closing sale price of the Common Stock equals or exceeds 250% of the conversion price then in effect for at least 20 consecutive trading days ending on the trading day immediately preceding the date of the notice of termination of conversion rights and (ii) as of the date of the notice of termination of conversion rights, the ratio of Parent's net debt measured as of the end of the most recently ended fiscal quarter to Parent's EBITDA for the most recently ended four full fiscal quarters is less than 3.4 to 1.0. -- Collateral The Notes and the guarantees are secured by a third- priority lien (subject to certain exceptions and permitted liens) on the capital stock of the Company and all the tangible and intangible assets of the Company and the subsidiary guarantors including, without limitation, the capital stock of any subsidiary held by the Company or any subsidiary guarantor (but limited to 65% of the voting stock of any such first-tier subsidiary that is a foreign subsidiary). The liens may be released in certain circumstances upon release of the liens securing the Company's new asset-based revolving credit facility maturing in 2013 or the Company's 10.875% senior secured notes due 2016. -- Ranking The Notes and the guarantees are the Co-Issuers' and the subsidiary guarantors' senior secured obligations. The indebtedness evidenced by the Notes and the guarantees: * ranks senior in right of payment to any existing and future subordinated indebtedness, including the Company's existing senior subordinated notes (and any guarantees thereof by the subsidiary guarantors thereof); * ranks equally in right of payment with all of the Co- Issuers' and the subsidiary guarantors' existing and future senior indebtedness, including the First Lien Notes and amounts outstanding under the ABL Revolver, subject to the senior prior liens on the Collateral securing the First Lien Notes, the ABL Revolver and certain refinancings thereof; * is secured on a third-priority lien basis by the Collateral, subject to certain permitted liens under the Indenture; * ranks equally to the Co-Issuers' and the subsidiary guarantors' obligations under any other pari passu lien obligations incurred after the issue date to the extent of the value of the Collateral; * is effectively subordinated to obligations of the Co-Issuers' and the subsidiary guarantors' under the First Lien Notes and ABL Revolver and certain refinancings of such debt and any other debt incurred after the issue date that has a senior-priority security interest in the Collateral relative to the Notes, in each case, to the extent of the value of the Collateral; * is effectively senior to any unsecured indebtedness of the Co-Issuers and the subsidiary guarantors to the extent of the value of the Collateral remaining after the payment of indebtedness benefiting from prior liens; and * is structurally subordinated to all existing and future indebtedness and other liabilities and preferred stock of Parent or the Company's non-guarantor subsidiaries (other than indebtedness and liabilities owed to the Company or one of its guarantor subsidiaries). The Indenture permits additional indebtedness or other obligations to be secured by the Collateral (i) on a lien priority basis senior or pari passu with the Notes, subject to certain limitations; and (ii) on a junior priority basis relative to the Notes, without regard to any such limitations. -- No optional redemption The Notes may not be redeemed by the Co-Issuers prior to the maturity date. -- Repurchase upon fundamental change A holder may require the Co-Issuers to repurchase some or all of its Notes for cash upon the occurrence of a fundamental change (as defined in the Indenture) at a price equal to 100% of the principal amount of the Notes being repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. -- Make whole event If certain transactions that constitute a "make whole event" (as defined in the Indenture) occur on or prior to the maturity date, under certain circumstances, Parent will decrease the conversion price with respect to any conversion of Notes in connection with such transaction. The decrease in the conversion price will be determined based on the conversion date and the price paid per share of the Common Stock in such transaction. -- Anti-dilution adjustments The Indenture includes customary anti-dilution adjustments. -- Restrictive covenants and other matters The Indenture includes affirmative and negative covenants that, subject to a number of significant qualifications and exceptions, limit the Company's ability and the ability of its subsidiaries to, among other things: -- incur additional indebtedness or issue certain preferred shares; -- create liens on certain assets to secure debt; -- agree to any restrictions on the ability of restricted subsidiaries to make payments to the Company; -- consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; and -- engage in transactions with affiliates. The Notes include customary events of default, including among other things payment defaults, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, material judgments and actual or asserted failure of certain guarantees or security interests to be in full force and effect. If an event of default occurs, the trustee or certain holders of the Notes, as applicable, may be entitled to take various actions, which may include the acceleration of amounts due under the Notes. About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. At May 31, 2009, the Company had $1.0 billion in total assets; $222.8 million in current liabilities, $836.6 million in long-term obligations, net of current portion, $95.9 million in rights liability for convertible notes, $69.1 million in other liabilities, $6.7 million in deferred income tax liabilities; and $230.4 million in shareholders' deficit. * * * As reported by the Troubled Company Reporter on May 19, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating on Sealy Corp. to 'B' from 'B+'. At the same time, S&P lowered the issue-level ratings on the company's senior secured credit facilities to 'BB-', from 'BB', while maintaining the '1' recovery rating. S&P also lowered the issue-level rating on the Company's senior subordinated notes to 'CCC+' from 'B+', and revised the recovery rating on these notes to '6' (indicating the likelihood of negligible [0%-10%] recovery in a payment default) from '4'. At the same time, Standard & Poor's assigned its 'BB-' issue-level rating with a recovery rating of '1' (indicating the likelihood of very high [90%-100%] recovery) to Sealy Mattress' proposed seven-year $350 million senior secured notes due 2016, and a 'B' issue-level rating with a recovery rating of '4' (indicating the likelihood of average [30%-50%] recovery) to its proposed $177 million senior secured convertible pay-in-kind notes due 2016. Sealy's proposed $100 million asset-based revolving credit facility maturing in 2013 is not rated. On May 18, the TCR said Moody's Investors Service assigned a Ba3 rating to Sealy's proposed senior secured notes. At the same time, Sealy's B2 corporate family rating and probability-of- default rating was affirmed as was the Caa1 rating on the senior subordinated notes and SGL 3 liquidity rating. The ratings outlook remains negative. SEARS HOLDINGS: S&P Withdraws 'BB+' Rating on $4 Billion Facility ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB+' issue-level rating on Sears Holdings Corp.'s $4.0 billion asset-based revolving credit facility due March 2010. S&P also withdrew its '1' recovery rating on the revolver. The ratings withdrawal follows the company's replacement of the credit facility with a new credit facility that will not be rated. The new amended and restated credit facility provides for a $1.7 billion tranche maturing March 2010 and a $2.4 billion tranche maturing Jun 2012. All other ratings on the company, including the 'BB-' corporate credit rating, remain unchanged. The rating outlook is negative. The 'BB-' corporate credit rating reflects the relatively high business risk associated with Sears department stores and Kmart discount department stores, weak profitability relative to the company's peers, and S&P's expectation that both Sears and Kmart will continue to face challenges in improving store productivity and profitability. S&P is also concerned about the company's historical use of cash flow to fund share repurchases and dwindling cash flow protection measures. Ratings List Sears Holdings Corp. Corporate Credit Rating BB-/Negative/-- Withdrawn Sears Holdings Corp. To From -- ---- $4B asset-based revolver due 2010 NR BB+ Recovery Rating NR 1 NR -- Not rated. SEMGROUP LP: Agree to End Litigation with Catsimatidis ------------------------------------------------------ SemGroup, L.P., and a group composed of John Catsimatidis and certain individuals and entities associated with him have reached an agreement that will end the litigation pending between them in Delaware and Oklahoma. The settlement agreement, which is subject to approval of the Delaware bankruptcy judge overseeing SemGroup's Chapter 11 case, provides for the resolution of various outstanding issues. As part of the agreement, Mr. Catsimatidis, and three other members of the Management Committee of SemGroup's general partner -- J. Nelson Happy, James Hansel, and Martin Bring -- will withdraw their objection to SemGroup's disclosure statement for its plan of reorganization and will support the company's reorganization plan. Additionally, Messrs. Catsimatidis, Happy, Hansel, and Bring will resign from the Management Committee effective as of the date of final judicial approval of the settlement. Lastly, United Refining will purchase SemMaterials' interest in an asphalt marketing joint venture for a one-time payment of $3.9 million. Matthew Coughlin is not a party to the settlement and will remain a member of the Management Committee. SemGroup plans to pursue its pending claims against Mr. Coughlin. About SemGroup SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SENCORP: Wynnchurch Capital Closes $41MM Deal to Acquires Assets ---------------------------------------------------------------- SENCORP and Wynnchurch Capital announced on Friday the closing of the sale of the assets of SENCORP to Wynnchurch's newly formed portfolio company, Senco Brands, Inc. The acquisition included the major brands SENCO and TyRex. The new company, Senco Brands, Inc., includes both of these well known brands, the SenSource global sourcing operation, and all of SENCORP's domestic and foreign businesses. The sale was approved on July 2, 2009, by the U.S. Bankruptcy Court. As reported by the Troubled Company Reporter on July 15, 2009, 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. About Wynnchurch Capital Located in the Chicago suburb of Rosemont, Illinois and founded in 1999, Wynnchurch Capital -- http://www.wynnchurch.com/-- is a middle-market private equity investment firm. Wynnchurch's strategy is to partner with middle market companies in the United States and Canada which have outstanding management teams and possess the potential for substantial growth and profit improvement. Wynnchurch Capital manages a number of private equity funds with capital under management in excess of $500 million specializing in management buyouts, recapitalizations, corporate carve-outs, restructurings and growth capital. 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. SINCLAIR BROADCAST: Unlikely to Enter Chapter 11, Analyst Says -------------------------------------------------------------- Wells Fargo Securities analyst Marci Ryvicker said that Sinclair Broadcast Group, Inc., was "posturing" in an effort to renegotiate its contracts with debt holders and was unlikely to enter Chapter 11 bankruptcy, Paige Albiniak at Broadcasting & Cable reports. As reported by the Troubled Company Reporter on July 14, 2009, that Sinclair Broadcast and its advisors, who were retained to assist the Company with restructuring its debt, on July 8, 2009, met with certain holders of its 3.0% and 4.875% Convertible Senior Notes, which convertible notes may be put back to the Company in May 2010 and January 2011, respectively, to discuss refinancing options with respect to the convertible notes. According to Sinclair Broadcast, it might not be able to address the put options exercisable in May 2010 and January 2011, related to its 3.0% Notes and 4.875% Notes, respectively. The Company said that failure to refinance or retire notes on their respective put dates could have a significant negative impact on the Company's operating results, the value of its securities and its financial condition, and could cause the Company to consider other restructuring and deleveraging alternatives, including a voluntary bankruptcy filling under Chapter 11 of the U.S. Bankruptcy Code. The TCR reported that Sinclair Broadcast said that Cunningham Broadcasting Corporation is facing a potential bankruptcy. Cunningham and Sinclair are parties to six local marketing agreements. Sinclair Broadcast said that a bankruptcy by Cunningham would cause a default under Sinclair Broadcast's Bank Credit Agreement, and may result in the rejection by Cunningham in its bankruptcy case of the LMAs. Any rejection by Cunningham of these agreements would result in material loss of revenue, business cash flow and enterprise value of Sinclair Broadcast. About Sinclair Broadcast Based in Baltimore, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. Sinclair's television group reaches approximately 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT and CW affiliates. As reported by the Troubled Company Reporter on July 19, 2009, Moody's Investors Service downgraded Sinclair Broadcast Group, Inc.'s Corporate Family Rating to Caa2 from B3 and Probability of Default Rating to Caa3 from Caa1. Associated debt ratings were lowered as detailed below and LGD assessments were updated to reflect the current debt mix and the above average family recovery rate as currently forecast and implied by the one notch differential between the CFR and PDR. The ratings were placed under review for further possible downgrade. According to the TCR on July 15, 2009, 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+'. At the same time, S&P placed its ratings on Sinclair Broadcast on CreditWatch with negative implications. SINOBIOMED INC: To Acquire Healthcare Consumables Maker in China ---------------------------------------------------------------- Sinobiomed Inc. has entered a letter of intent to acquire an undisclosed target company based in China that manufactures and distributes healthcare consumables to the acute care -- hospital and physician -- health care market. The Target company currently distributes in China, the USA, and Europe and plans to significantly increase its brand penetration in the US and Europe. The Target believes it is uniquely positioned with the combination of quality manufacturing experience in China, U.S.-based corporate governance and a seasoned U.S.-based executive management team. A summary of terms of the proposed transaction are: -- Purchase Price: Sinobiomed agrees to issue the Target's shareholders in aggregate that amount of shares of common stock of Sinobiomed equivalent to 50% of the post-closing issued and outstanding shares of common stock of Sinobiomed on a fully diluted basis. -- Funding Requirement: Prior to closing, there is a requirement for Sinobiomed to raise US$5 million in external funding to execute the Target's expansion plans. -- Engagement of Investment Bank: Upon closing of the transaction, Sinobiomed will engage an institutional investment bank to sponsor Sinobiomed's move to the OTCQX market or another trading forum acceptable to the board of directors of Sinobiomed Inc. -- Share Restrictions: The shares of common stock of Sinobiomed to be issued upon the closing of the transaction will be restricted shares as that term is defined under Rule 144 promulgated under the United States Securities Act of 1933, as amended. -- Formal Agreement: Additional terms, conditions and provisions governing the proposed transaction will be contained in a formal agreement which will be prepared and executed in form and substance satisfactory to the Target and Sinobiomed. Sinobiomed intends to complete the acquisition of the Target by August 31, 2009. Delinquent Reporting Sinobiomed has not filed its quarterly report for the period ended March 31, 2009, and its annual report for the period ended December 31, 2008. On May 20, 2009, the Company's securities were dropped from the OTCBB to the Pink Sheets as a result of the Company not filing its Form 10-K within the 30-day grace period after the extended deadline for the filing of the Form 10-K. Sinobiomed Inc.'s consolidated balance sheet at September 30, 2008, showed total assets of $8,355,042 and total liabilities of $16,506,425, resulting in total stockholders' deficit of $8,151,383. About Sinobiomed Sinobiomed Inc. formerly CDoor Corp. (OTC BB: SOBM) -- http://www.sinobiomed.com/-- was incorporated in the State of Delaware. The Company is a leading Chinese developer of genetically engineered recombinant protein drugs and vaccines. Based in Shanghai, Sinobiomed currently has 10 products approved or in development: three on the market, four in clinical trials and three in research and development. The Company's products respond to a wide range of diseases and conditions, including: malaria, hepatitis, surgical bleeding, cancer, rheumatoid arthritis, diabetic ulcers and burns, and blood cell regeneration. Going Concern Doubt Schumacher & Associates Inc., in Denver, expressed substantial doubt about Sinobiomed Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended December 31, 2007. The auditing firm reported that the Company has experienced losses since commencement of operations and has negative working capital and a stockholders' deficit. The Company is in the process of researching, developing, testing and evaluating proposed new pharmaceutical products and has not yet determined whether these products are technically or economically feasible. Management's plan is to actively search for new sources of capital, including government and non- government grants toward research projects and new equity investment. SYNCORA GUARANTEE: Completes Restructuring; Fixes $4BB Deficit -------------------------------------------------------------- Syncora Holdings Ltd. said Friday its wholly owned New York financial guarantee subsidiary, Syncora Guarantee Inc., completed substantially all of the steps of its comprehensive restructuring. On July 15, 2009, the Company closed substantially all the transactions contemplated by the master transaction agreement -- 2009 MTA -- between Syncora Guarantee and certain financial counterparties to Syncora Guarantee's credit default swap and financial guarantee policies and accepted the tender offer for certain residential mortgage-backed securities insured by Syncora Guarantee. As a result, pending the closing and settlement of all related transactions, the Company believes it will remediate its policyholders' surplus deficit in the range of $3.9 billion and $4.1 billion that is expected to be reported as of June 30, 2009. The restructuring will effectively relieve the Company of approximately $6.0 billion in losses and loss reserves. The Company expects that the successful remediation of its policyholders' surplus deficit will allow the Company to return to compliance with the New York State Insurance Department's minimum policyholders' surplus requirement of $65 million. Syncora Guarantee is not currently writing new insurance business and, along with its newly formed financial guarantee insurance subsidiary, Syncora Capital Assurance Inc., will not resume writing new insurance business. The NYID approved the transactions relating to the restructuring and directed that, upon the completion of each of the transactions so approved, the Company will confirm to the NYID that such closings have occurred and the impairment to its policyholders' surplus has been removed. The NYID will review such submission and notify the Company when the restriction on claims payments under the existing claims suspension order issued on April 10, 2009 is lifted so that the Company may recommence claim payments. The one remaining transaction not yet closed or subject to binding documentation and in settlement under the RMBS Tender Offer is documented by an executed letter agreement providing for negotiation of definitive agreements by July 31, 2009, failing which the associated term sheet terminates. "We are pleased to announce this very significant and unprecedented restructuring in the financial guarantee industry. We expect that the successful completion of all the various transactions will restore Syncora Guarantee to positive policyholders' surplus," commented Mike Esposito, Chairman of Syncora's Board of Directors. Acting Chief Executive Officer Susan Comparato added, "This result would not have been possible without the hard work and dedication of the Company's employees and its advisors. Thank you also to the NYID for their ongoing oversight of the restructuring process, which was essential in helping the Company achieve its goals. BSG Markets LLC and Deutsche Bank Securities, as dealer managers for the RMBS Tender Offer, should be commended for their efforts." Following the closing of the 2009 MTA, Syncora Guarantee's financial counterparties received 23,736,349 common shares of Syncora and 6,332,700 of the common shares of Syncora that were previously held in trust for the benefit of Syncora Guarantee were cancelled. As of July 15, 2009, Syncora had 59,339,343 total common shares outstanding, with the financial counterparties holding approximately 40% of the aggregate equity ownership. In addition, the financial counterparties received surplus notes of an aggregate amount of $625 million issued by Syncora Guarantee. Additionally, Syncora announced that in connection with the closing of the 2009 MTA, Syncora Capital Assurance reinsures on a cut-through basis substantially all of Syncora Guarantee's public finance and selected global infrastructure business. Policyholders reinsured by Syncora Capital Assurance will be notified of their ability to make claims directly to Syncora Capital Assurance. Syncora Capital Assurance also assumed, via novation from Syncora Guarantee, substantially all of Syncora Guarantee's financial guarantee insurance policies issued on any CDS contracts that were not commuted under the 2009 MTA. -- Information Regarding Syncora Guarantee's Financial Position Following the Consummation of the 2009 MTA, the RMBS Tender Offer and Related Transactions As of June 30, 2009, Syncora Guarantee expects to report a policyholders' surplus deficit in the range of $3.9 billion to $4.1 billion. The comprehensive restructuring to remediate the Company's policyholders' surplus deficit included three primary components: (1) the commutation and restructuring of substantially all of Syncora Guarantee's CDS portfolio; (2) the remediation of expected losses on the Company's insured RMBS; and (3) the creation of Syncora Capital Assurance. The closing of the transactions related to the 2009 MTA effectively commuted or restructured all of Syncora Guarantee's $56 billion of CDS exposure. The 2009 MTA provided for the effective commutation of the Company's financial guarantees of CDS relating to collateralized debt obligations of asset-backed securities -- ABS CDOs -- and other structured products with an aggregate par approximating $15 billion and case basis loss reserves in accordance with statutory accounting principles as permitted by the NYID approximating $4.6 billion. This represents all of Syncora Guarantee's CDS exposure for which the Company has reserves or expects losses with respect to ABS CDOs and substantially all of Syncora Guarantee's financial guarantee exposure to ABS CDOs with expected losses. The RMBS Tender Offer closed on July 15, 2009, and, upon settlement thereof, Syncora Guarantee will effectively commute approximately $3.8 billion of insured RMBS and approximately $1.2 billion in loss and loss reserves associated with Syncora Guarantee's RMBS portfolio. Syncora Guarantee achieved a total of 68.4 remediation points, or 95% of the target amount, in the RMBS Tender Offer. Along with the reinsurance of certain insured public finance and selected global infrastructure bonds by Syncora Capital Assurance, Syncora Guarantee has restructured or commuted in aggregate approximately $110 billion of par bonds insured. On a SAP basis, after giving effect to the transactions contemplated by the 2009 MTA, the RMBS Tender Offer and related transactions on a pro forma basis as if they had been consummated on June 30, 2009, Syncora Guarantee would expect to report total policyholders' surplus at June 30, 2009, in the range of $150 million to $210 million, as compared to an expected policyholders' surplus deficit (unaudited) at June 30, 2009 in the range of $3.9 to $4.1 billion. The policyholders' surplus of Syncora Capital Assurance, reflecting its initial capitalization and its assumption of certain business from Syncora Guarantee, is expected to be in the range of $265 million to $295 million. Combined projected pro forma summary balance sheet financial information of Syncora Guarantee and Syncora Capital Assurance, prepared in accordance with SAP, which gives effect to transactions contemplated by the 2009 MTA, the RMBS Tender Offer and related agreements as if they had been consummated on June 30, 2009: SYNCORA GUARANTEE Expected to be Reported Pro Forma Pro Forma ($ amounts in millions) 06/30/2009 Adjustments 06/30/2009 ---------- ----------- ---------- Assets Cash, invested assets, and accrued investment income $3,228 $(542) (a) $391 (364) (b) (1,249) (c) (572) (d) (111) (e) Investment in subsidiaries SGI-UK - 40 (f) 40 SCAI - 542 (a) 281 - (261) (b) Other assets 211 105 (d) 316 Total Assets $3,439 $(2,412) $1,027 Liabilities and Capital and Surplus Liabilities: Unpaid losses and loss adjustment expenses $6,353 $(4,624) (c) 384 (1,293) (d) (52) (e) Deferred premium revenue 711 (438) (b) 273 Mandatory contingency reserves 296 (187) (b) 98 (2) (c) (1) (d) (7) (e) Other liabilities 77 5 (c) 91 - 9 (e) - Total liabilities 7,437 (6,590) 847 Capital and Surplus: Surplus notes - 625 625 Preferred stock - Series B non-cumulative perpetual 200 200 Common stock and additional paid-in-capital 2,014 2,014 Accumulated deficit (6,212) 2,747 (c) (2,659) 827 (d) (61) (e) - 40 (f) - Total Capital and Surplus (3,998) 4,178 180 Total Liabilities and Capital and Surplus $3,439 $(2,412) $1,027 SYNCORA CAPITAL ASSURANCE Pro Forma ($ amounts in millions) 06/30/2009 ---------- Assets Cash, invested assets, and accrued investment income $542 (a) 364 (b) Investment in subsidiaries SGI-UK SCAI Other assets - Total Assets $905 Liabilities and Capital and Surplus Liabilities: Unpaid losses and loss adjustment expenses $- Deferred premium revenue 438 (b) Mandatory contingency reserves 187 (b) Other liabilities - Total liabilities 625 Capital and Surplus: Surplus notes 350 (a) Preferred stock - Series B non-cumulative perpetual Common stock and additional paid-in-capital 192 Accumulated deficit (261) (b) - Total Capital and Surplus 280 Total Liabilities and Capital and Surplus $905 The pro forma adjustments in the table below reflect the mid-point of the range of pro forma policyholders' surplus. (a) To record capitalization of Syncora Capital Assurance. (b) To record reinsurance and novation of certain business to Syncora Capital Assurance from Syncora Guarantee. (c) To record the commutation of certain of Syncora Guarantee's CDS contracts and related insurance policies. (d) To record the in-substance defeasement of RMBS tendered in connection with the RMBS Transaction Agreement, resumption of RMBS claim payments and direct purchases of RMBS. (e) To record certain other transactions related to the 2009 MTA. (f) To record permitted practice to admit the carrying value of Syncora Guarantee's UK subsidiary. A summary of combined net par outstanding and loss estimates for Syncora Guarantee and Syncora Capital Assurance expected as of June 30, 2009, and on a pro forma basis giving effect to the completion of the transactions contemplated by the 2009 MTA, the RMBS Tender Offer and related transactions, as if they had been completed on June 30, 2009: SYNCORA GUARANTEE AND SYNCORA CAPITAL ASSURANCE ON A COMBINED BASIS Expected Pro Forma Net Par Net Par Outstanding Outstanding Amounts in Millions 06/30/2009 Adjustments (1) 06/30/2009 ----------- --------------- ----------- Public Finance $53,065 $(477) $52,588 RMBS 8,303 (3,870) 4,433 ABS CDOs 14,117 (13,855) 262 CDOs of CDOs 1,425 (1,119) 306 All other 54,860 (379) 54,482 Total $131,771 $(19,700) $112,071 Expected Pro Forma Loss Loss Reserves Reserves 06/30/2009 Adjustments (1) 06/30/2009 ---------- --------------- ---------- Public Finance $34 $- $34 RMBS 1,588 (1,286) 302 ABS CDOs 4,318 (4,305) 13 CDOs of CDOs 338 (328) 10 All other 75 (50) 25 Total $6,353 $(5,969) $384 (1) Represents pro forma adjustments giving effect to the transactions contemplated by the 2009 MTA, the RMBS Tender Offer and related agreements as if they had been consummated on June 30, 2009. 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. ST LAWRENCE HOMES: Has August 20 Confirmation Hearing ----------------------------------------------------- St. Lawrence Homes Inc. will seek approval from the U.S. Bankruptcy Court for the Eastern District of North Carolina of its proposed reorganization plan at hearings beginning on August 20. According to Bill Rochelle at Bloomberg News, the Chapter 11 plan gives some projects back to the nine secured lenders. The reporte relates that where St. Lawrence retains a project, the lenders fund construction while paying fees to St. Lawrence for its services. Unsecured creditors could be paid in full if the build- out generates enough cash. Founded in 1987, St. Lawrence Homes, Inc. -- http://www.stlh.com/ -- is a North Carolina based homebuilder with additional operations in Ohio. It claims to be recognized as one of the largest privately held builders in the country. St. Lawrence filed for Chapter 11 on February 2 (Bankr. E.D. N.C., Case No. 09-00775). The Company, in its bankruptcy petition, listed assets of $158.2 million against debt totaling $116.4 million as of October 31. SUN-TIMES MEDIA: Fails to Make Payments to Five Pension Plans ------------------------------------------------------------- Court documents say that Sun-Times Media Group Inc. has failed to make more than $800,000 in required quarterly payments to its five pension plans. Ann Saphir and Lorene Yue at Crain's Chicago Business relate that the missed contributions were due on April 15. They include: -- $456,185 for a plan covering Chicago's newsroom employees, -- $284,581 for a plan covering Chicago office employees, -- $63,063 for a plan covering Pioneer Newspaper employees in the suburbs Citing a Pension Benefit Guaranty Corp. spokesperson, Crain's states that companies in bankruptcy proceedings are still required to make contributions to pension plans unless a waiver is obtained from the Internal Revenue Service. "We have complied with all applicable laws in connection with our failure to make pension contributions," Crain's quoted a Sun-Time Media spokesperson as saying. Crain's notes that the missed pension plan payments aren't related to Sun-Times Media's request to pay its executives hefty bonuses if they succeed in selling the Company. According to Crain's, a Sun-Times Media spokesperson said that any executive bonuses would be paid with proceeds from the sale and that not one single penny would come from money that could be used to fund daily operations. Crain's states that Sun-Times Media is trying to resolve with the IRS a tax bill of more than $500 million left over from its days of being run by former CEO Conrad Black, who was convicted of fraud charges in 2008. Sun-Times Media Group, Inc. -- http://www.thesuntimesgroup.com/-- (Pink Sheets:SUTM) owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. The Company and its affiliates conduct business as a single operating segment which is concentrated in the publishing, printing, and distribution of newspapers in greater Chicago, Illinois, metropolitan area and the operation of various related Web sites. The Company also has affiliates in Canada, the United Kingdom, and Burma. Sun-Times Media's balance sheet at September 30, 2008, showed total assets of $479.9 million, total liabilities of $801.7 million, resulting in a stockholders' deficit of roughly $321.8 million. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009 (Bankr. D. Del. Case No. 09-11092). James H.M. Sprayregan, P.C., James A. Stempel, Esq., David A. Agay, Esq., and Sarah H. Seewer, Esq., at Kirkland & Ellis LLP, assist the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. As of November 7, 2008, the Debtors listed $479,000,000 in assets and $801,000,000 in debts. SYNTAX-BRILLIAN: Liquidating Plan Takes Effect ---------------------------------------------- Syntax-Brillian Corp.'s Chapter 11 liquidating plan took effect June 7, 2009. According to Bill Rochelle at Bloomberg News, although Syntax-Brillian convinced the bankruptcy judge at a hearing in April to approve the liquidating Chapter 11 plan, the parties were wrangling over the precise terms until the confirmation order was signed July 6. Under the Plan, general unsecured claims will receive pro rata distributions from a liquidating trust after payment of the trust's expenses and a "liquidating trust funding reimbursement." Holders of allowed prepetition credit facility claims will receive their pro rata distributions from a lender trust, after payment in full of allowed DIP facility claims. The explanatory disclosure statement did not provide for the estimated recovery by secured and unsecured creditors given the uncertainty about how much will be collected in lawsuits. A full-text copy of the Debtors' 2nd amended Chapter 11 liquidating plan is available at: http://bankrupt.com/misc/syntax-brillian2ndamendedplan.pdf Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq: BRLC) -- http://www.syntaxbrillian.com/-- and its affiliated debtors, Syntax-Brillian SPE, Inc., and Syntax Groups Corp. design, develop, and distribute high-definition televisions (HDTVs) utilizing liquid crystal display (LCD) and, formerly, liquid crystal (LCoS) technologies. The Debtors sell their HDTVs under the Olevia brand name. SBC is also the sole shareholder of Vivitar Corp., a supplier of film cameras and a line of digital imaging products, including digital cameras. The Debtors filed separate petitions for Chapter 11 relief on July 8, 2008 (Bankr. D. Del. Lead Case No. 08-11407). Nancy A. Mitchell, Esq., Allen G. Kadish, Esq., and John W. Weiss, Esq., at Greenberg Traurig LLP in New York, represent the Debtors as counsel. Victoria Counihan, Esq., at Greenburg Traurig LLP in Wilmington, Delaware, represents the Debtors as Delaware counsel. Five members compose the official committee of unsecured creditors. Pepper Hamilton, LLP, represents the Committee as counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' balloting, notice, and claims agent. When the Debtors filed for protection from their creditors, they listed total assets of $175,714,000 and total debts of $259,389,000. TERRA NOSTRA: Debt-for-Equity Swap Selected; Plan Confirmed ----------------------------------------------------------- At a hearing held on July 1, 2009, the U.S. Bankruptcy Court for the Southern District of New York confirmed Chapter 11 trustee George M. Kelakos' amended Plan of Reorganization, as modified for Terra Nostra Resources Corp., dated May 19, 2009. Option C is selected as the reorganization transaction under the Plan. Under Option C, each holder of a general unsecured claim will receive a pro rata distribution of the New Common Stock in the Reorganized Debtor (which will receive the sale proceeds of $27,000,000 after satisfaction of all priority and secured claims and expenses) plus the net proceeds of the Causes of Action pursued by the Plan Administrator. As of the Plan's Effective Date, the trustee in discharged from his duties. As reported in the TCR on June 1, 2009, the U.S. Bankruptcy Court for the Southern District of New York approved the disclosure statement explaining the Chapter 11 trustee's amended Chapter 11 Plan of Reorganization for Terra Nostra Resources Corp. The Plan contemplated the consummation of one of three possible reorganization transactions to be selected by holders of allowed general unsecured claims in Class 4: (A) a sale of the Debtor's interest in the Chinese JVs to Zhang Ke, a natural citizen of the PRC, or his designees, for $27,000,000 (part of which will be used to satisfy all priority and secured claims and expenses), payable in installments through December 2010, and the New Common Stock in the Reorganized Debtor issued pro rata to holders of allowed Class 4 claims; (B) a combined sale and restructure consisting of transferring the Debtor's interest in SQSS and dividing STJMC into two facilities, one of which will be transferred to Zhang Ke or his designees, and the other of which the Reorganized Debtor will retain a 90% interest. The Reorganized Debtor will get $16,470,000; will make capital improvements to its facility; and the joint venture agreements for the Chinese JV's will be deemed rejected with no claims for damages asserted. The Shareholder Investor Group will contribute $10,000,000 in exchange for New Common Stock in the Reorganized Debtor, of which $7,210,000 will be used to fund operations of the Reorganized Debtor. $17,790,000 will be paid to the Plan Administrator to satisfy all administrative claims, gap period claims, priority tax claims, and the amounts necessary to fund distributions to all claimants in Classes 1 and 3; and thereafter to fund pro rata distributions to holders of allowed claims in Class 4; or (C) a debt-for-equity swap with the New Common Stock in the Reorganized Debtor issued pro rata to holders of allowed Class 4 claims. Holders of postpetition secured claims under Class 1 and priority claims under Class 3 will receive 100% payment of their allowed claims, with interest. Holders of Interests will receive nothing under the Plan and their interests will be cancelled. The Plan places the various claims against and interests in the Debtor into 5 classes: Class Description Treatment ----- ----------- -------- 1 Post-petition Secured Claims Unimpaired; Deemed to Accept 2 Other Secured Claims Impaired; Entitled to Vote 3 Priority Claims Unimpaired; Deemed to Accept 4 General Unsecured Claims Impaired; Entitled to Vote 5 Equity Impaired; Deemed to Reject A copy of the Disclosure Statement explaining the Trustee's amended Chapter 11 Plan of Reorganization is available for free at http://bankrupt.com/misc/terranostra.amendedDS.pdf Headquartered in Pasadena, California, Terra Nostra Resources Corp. (OTCBB: TNRO) owns a 51% interest in two China Joint Venture companies in the strategic copper and stainless steel industries. Creditors filed an involuntary Chapter 11 petition on November 25, 2008 (Bankr. S.D.N.Y. Case No. 08-14708). David C. McGrail, Esq., at the Law Offices of David C. McGrail, represents the Debtor as counsel. Karen Ostad, Esq., at Morrison & Foerster LLP, represents the petitioning creditors. TH PROPERTIES: Gets Court OK to Obtain Financing From Hyperion -------------------------------------------------------------- Alan J. Heavens at Philadelphia Inquirer reports that U.S. Bankruptcy Court Judge Stephen Raslavich has granted TH Properties LP permission to obtain up to $251,450 in financing from Hyperion Bank. According to Philadelphia Inquirer, TH Properties will use the money to complete the sale of five houses in the Company's Cliffside Manor development in Bedminster Township, Bucks County. TH Properties' lawyers told Judge Raslavich that two of the five houses in Cliffside Manor were scheduled to go to closing, Philadelphia Inquirer says. Philadelphia Inquirer relates that Judge Raslavich also authorized TH Properties to enter into a financing agreement with several of its secured lenders to continue insurance coverage on its properties. A hearing will also be held on TH Properties' motion to obtain $3 million in revolving credit to complete houses in six more developments, Philadelphia Inquirer states. Philadelphia-based T.H. Properties, L.P., has 12 working developments in Pennsylvania and New Jersey. Timothy Hendricks and his brother Todd started the firm in 1992. T.H. Properties and its affiliates filed for Chapter 11 bankruptcy protection on April 30, 2009 (Bankr. E.D. Pa. Case No. 09-13201). Barry E. Bressler, Esq., at Schnader, Harrison, Segal & Lewis, LLP, and Natalie D. Ramsey, Esq., at Montgomery McCracken Walker and Rhoads LLP represent the Debtors in their restructuring efforts. The Debtors listed assets between $100 million and $500,000,000, and debts between $10 million and $50 million. THREE RIVERS: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------- Three Rivers of Rutherford, LLC, had filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Middle District of Tennessee. Court documents say that B&M Paving Co. Inc. is Three Rivers' largest unsecured creditor and is owed about $142,400. MarCor Construction Inc. of Nashville is the Company's second largest unsecured creditor, owed almost $137,000. Citing Murfreesboro city engineer Sam Huddleston, Jenny Burns at Nashville Business Journal reports that Three Rivers was developing Three Rivers, a residential community of more than 600 homes that includes an assisted living center and a shopping center at Highway 99 and Cason Lane. Construction permits have been issued for about 70 homes and 20 townhomes, city records show. About 198 lots have been recorded as developed and ready to be sold to builders, says Business Journal. Mr. Huddleston said that construction of the community started in 2004, and that the first homes were started in 2006, Business Journal relates. Tennessee-based Three Rivers of Rutherford LLC is the developer of a commercial and residential development in southwest Murfreesboro. The Company filed for Chapter 11 bankruptcy protection on June 30, 2009 (Bankr. M.D. Tenn. Case No. 09-07306). Paul E. Jennings, Esq., at Paul E. Jennings Law Offices, P.C., assists the Company in its restructuring efforts. The Company listed up to $50,000 in assets and $1,000,001 to $10,000,000 in liabilities. TITLEMAX HOLDINGS: Wants Plan Filing Period Extended to Dec. 18 --------------------------------------------------------------- TitleMax Holdings LLC and its debtor-affiliates ask the Hon. Lamar W. Davis, Jr., of the U.S. Bankruptcy Court for the Southern District of Georgia to further extend theor exclusive periods to: -- file a Chapter 11 plan of reorganization until December 18, 2009; and -- solicit acceptances of that plan until February 18, 2010. The Debtors' initial exclusive plan filing and solicitation period will end on August 18, 2009, and October 17, 2009, respectively. The Debtors tell the Court that the initial periods prove inadequate for them to negotiate and file a plan. According to them, there are some items which will require additional time. The Debtors want to remove certain pending lawsuits to federal court and seek an extension of time to remove those cases. About Titlemax Holdings Savannah, Georgia-based Titlemax Holdings LLC dba TitleMax, TitleBucks, US TitlePawn, American Title,and CheckMax is a closely held title-lending company with about 550 locations in seven states -- Georgia, South Carolina, Tennessee, Mississippi, Missouri, Virginia and Illinois. It holds customers' vehicle titles in exchange for cash. The Company was founded in 1998 and has 1,800 employees. The Company and its affiliates filed for Chapter 11 protection on April 20, 2009 (Bankr. S. D. Ga. Lead Case No. 09-40805). DLA Piper LLP represents the Debtors in its restructuring efforts. The U.S. Trustee for Region 21 appointed seven creditors to serve on the official committee of unsecured creditors. Titlemax has assets and debts both ranging from $100 million to $500 million. TONGLI PHARMACEUTICALS: Earns $2 Million in Year Ended March 31 --------------------------------------------------------------- Tongli Pharmaceuticals (USA), Inc., reported a net income of $1,904,839 for the year ended March 31, 2009, compared with a net income of $265,437 for the same period in the previous year. As of March 31, 2009, the Company's balance sheet showed total assets of $9,556,196, total current liabilities of $1,726,164 and stockholders' equity of $7,830,031. Paritz & Company, P.A. in Hackensack, New Jersey raised substantial doubt about Tongli Pharmaceuticals (USA), Inc.'s ability to continue as a going concern after auditing the Company's financial results for the years ended March 31, 2009, and 2008. The auditors related that the Company has a working capital deficit of $275,450 and had minimum cash or available borrowing capacity as of March 31, 2009. The Company related that up to March 31, 2009, neither its cash flows from operations nor its bank loans had been sufficient to keep pace with the growth of its business and provide sufficient working capital to meet increased demand and production expansion. The Company is currently profitable and is exploring various alternatives to improve its financial position and continue to meet its obligations. A full-text copy of the Company's FORM 10-K is available for free at http://ResearchArchives.com/t/s?3fa5 Tongli Pharmaceuticals (USA), Inc., through a wholly owned subsidiary, Harbin Tianmu Pharmaceuticals Co., Ltd., develops, produces and sells a wide variety of Chinese drugs and healthcare products in The Peoples Republic of China. TP was formerly known as American Tony Pharmaceutical, Inc. The name change became effective on October 30, 2008, and was done to better represent the origin and ongoing business of the company. On August 12, 2008, American Tony completed a reverse merger with Aim Smart Corporation, a dormant public shell. Under the terms of the merger agreement, the former American Tony shareholders exchanged their shares for Aim Smart shares so that, upon the closing of the merger, the former American Tony shareholders owned 96.7% of the outstanding shares of Aim Smart. Aim Smart changed its name to American Tony prior to the change to TP. TRAVELPORT LLC: S&P Raises Corporate Credit Rating to 'B-' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on travel distributor Travelport LLC (the indirect subsidiary of Travelport Holdings Ltd. and subsidiary of Travelport Ltd.) to 'B-' from 'SD' (selective default), in accordance with its criteria for distressed debt redemptions, based on its view of the company's risk of a future payment default or another distressed debt repurchase. The outlook is stable. S&P did not raise its issue-level ratings, based on Travelport Ltd.'s July 2, 2009 8K filing, which indicated that the company, its subsidiaries, affiliates, officers, directors, and controlling shareholders may, periodically, purchase its debt securities or loans in open market or privately negotiated transactions. If the company or its affiliates purchased its debt securities or loans in open market or privately negotiated transactions, this would likely meet its criteria for a distressed debt redemption. These ratings accordingly remain unchanged, because S&P see an increased likelihood of such transactions. S&P also assigned an issue-level rating and recovery rating to Travelport LLC's new secured $150 million Term Loan C. The issue- level rating is 'B', one notch above the corporate credit rating. The recovery rating is '2', indicating expectations for substantial (70%-90%) recovery in the event of a payment default. The new tranche represents a draw under the accordion feature of the company's Second Amended and Restated Credit Agreement, and amortization and maturity are similar to those in the existing Term Loan B. "We expect the company's loss to widen in 2009, due to reduced revenues from weak travel demand and impairment charges taken at Orbitz, in which the company still holds a 48% stake," said Standard & Poor's credit analyst Betsy R. Snyder. "We expect the company to recover somewhat in 2010, along with stronger demand, but the company's credit metrics will remain constrained due to Travelport Holdings Ltd.'s substantial paid-in-kind debt, which S&P consolidates into S&P's ratios," she continued. As a result, S&P expects consolidated debt to EBTIDA to remain more than 8x through 2010, even with a recovery in earnings. If travel demand does not begin to recover in 2010, causing the company's liquidity to become constrained, Standard & Poor's would likely revise the outlook to negative. An outlook revision to positive is unlikely in the current weak economic and travel environment. TRIBUNE CO: To Assume 54 Advertising Sales Agreements ----------------------------------------------------- Debtor Tribune Media Services, Inc., seeks authority from Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to assume 54 prepetition local advertising sales agreements it entered with various third-party newspapers and assign those prepetition and postpetition LAS agreements to Advantage Newspaper Consultants Inc., in accordance with certain Contract Assignment and Revenue Share Agreement. A list of the 54 prepetition local advertising agreements is available for free at: http://bankrupt.com/misc/Tribune_LASassumed.pdf TMS is a party to numerous prepetition and postpetition local advertising agreements with newspapers, which, among other things, provide that TMS's sales representatives will coordinate with the newspapers' sales staff and apply their knowledge of local publishing markets to identify potential advertisers and to conduct sales presentations. The fees paid by local newspaper customers to TMS under the LAS Agreements generally range between $225 and $750 per week over the course of the one-year contract term. "Entry into the Assignment Agreement will allow TMS to focus on its core business of generating and distributing entertainment listings data and syndicating news and features content," Kate J. Stickles, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, says. Ms. Stickles adds that the Assignment Agreement will enable TMS to maximize operating cash flow from the local ad sales business by eliminating operating costs associated with the business while still allowing TMS to retain a portion of the revenue earned under the LAS Agreements. Over the next three years, TMS estimates that gross revenue derived from the LAS Agreements will result in average operating cash flow of approximately $453,000. In addition to the 54 Agreements, the Debtors also seek the Court's authority to assign LAS Agreements they entered into with various parties after the Petition Date. A list of the Assigned LAS Agreements is available for free at: http://bankrupt.com/misc/Tribune_LASassigned.pdf 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) TRIBUNE CO: Assumes 36 Syndicated Program Pacts With CBS -------------------------------------------------------- Tribune Co. and its affiliates sought and obtained the Bankruptcy Court's authority to assume 36 syndicated program agreements entered into with King World Productions, Inc., CBS Studios Inc., and CBS Television Distribution. Several of the Debtors are each parties to various prepetition syndicated program agreements with CBS for general entertainment programming, including television series and feature films. The CBS Agreements allow the Tribune Parties to broadcast specific syndicated television programs and feature films provided by CBS, in time periods that allow the corresponding Tribune television stations to schedule programming to maximize audience retention from program to program and to otherwise manage their broadcast schedules to greatest advantage. The Tribune Parties have the right to sell and inset commercial advertisements within the licensed programming window and to retain all the proceeds derived, an important source of revenue to the Tribune Parties. In consideration of the Tribune Parties' early assumption of the CBS Agreements, CBS agreed to waive and release 50% of its prepetition claims against the Tribune Parties owing under the CBS Agreements, which the Tribune Parties would otherwise be required to "cure" as a condition of the assumption of the CBS Agreements. The total prepetition amount owing under the CBS Agreement is $2,380,000. The Debtors also sought and obtained the Court's authority to cure defaults under the CBS Agreements at $1,178,796. The Debtors originally intended to assume 41 CBS Agreements but decided to remove five Agreements that have already expired. The Debtors are therefore authorized to assume 36 CBS Agreements, a list of which is available for free at: http://bankrupt.com/misc/Tribune_CBSamend.pdf As a result of the removal of the five expired leases, the cure amount proposed to be paid to CBS upon the assumption of the CBS Agreements has been reduced from $1,190,000 to $1,178,796. The Tribune Parties and CBS also sought and obtained the Court's authority to file under seal unredacted versions of certain syndicated program agreements. The Tribune Parties and CBS asserted that provisions of the CBS Agreements reflect information the parties legitimately expect to be maintained as confidential in light of its propriety or commercially competitively sensitive nature. The parties added that public dissemination of pricing information contained in the CBS Agreements could provide competitors and future contract counterparties of the Tribune Parties or CBS with a substantial and unfair advantage. No party objected to the Debtors and CBS' motion to file the certain agreements under seal. 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) TRIBUNE CO: Court Extends Removal Period to November 3 ------------------------------------------------------ Judge Kevin Carey extended until November 3, 2009, the time by which Tribune Co. and its affiliates need to file notices of removal of claims and causes of action relating to their Chapter 11 proceedings. Prior to the entry of the Order, the Debtors submitted with the Court a certification of no objection as to the Motion. 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) TRIBUNE CO: Foundations Oppose Committee Examination ---------------------------------------------------- As part of its statutory duties, the Official Committee of Unsecured Creditors in Tribune Co.'s cases has been investigating the acts, liabilities and financial condition of the Debtors, including without limitation, the series of transactions that took place in April 2007, which culminated with the consummation of the merger of Tribune Company and Tesop Corporation in December 2007. In connection with its investigation, the Committee has spoken to various parties involved and sent requests for information surrounding the Leveraged ESOP Transactions and the Merger to, among others, the Debtors and Samuel Zell. In addition, the Committee sent the Foundations detailed requests for information. Pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, the Committee asks the Court for authority to conduct examination of duly appointed representatives of the Robert R. McCormick Foundation and the Cantigny Foundation, both of which were major stockholders of Tribune Company prior to the merger. Foundations Object Robert R. McCormick Foundation and Cantigny Foundation assert that the motion of the Official Committee of Unsecured Creditors to conduct examination pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure should be denied because the Committee fails to establish good cause to compel the Foundations to endure the burden of an unnecessary production and examination. "The Foundations, mere shareholders, should not be required to expend their time and resources and bear the cost of producing duplicative documents so that the Committee can pursue an avoidance claim which the Committee has already identified, but which the Committee as yet has no authority to assert, and which cannot, as a matter of law, result in a judgment against the Foundations," asserts Mary E. Augustine, Esq., at Ciardi Ciardi & Astin, in Wilmington, Delaware, counsel to the Foundations. Moreover, Ms. Augustine points out, the documents the Committee has requested are part of public record. 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) TRIBUNE CO: Hires Dow Lohnes as Regulatory Counsel -------------------------------------------------- Tribune Co. and its affiliates sought and obtained the Court's authority to employ Dow Lohnes PLLC as their special counsel for certain Federal Communications Commission and broadcast regulatory matters. As regulatory counsel, Dow Lohnes will: (a) ensure full compliance of the Debtors with the rules, regulations and policies of the FCC and provisions of the Communications Act; (b) ensure that the Debtors and their affiliates satisfy the foreign ownership limitations contained in Section 310 of the Communications Act; (c) seek from the FCC, as necessary, appropriate ownership rule waivers to cover the newspaper-broadcast properties owned by certain of the Debtors and servicing the New York, Los Angeles, Chicago, Hartford and Miami markets; (d) obtain all other approvals and rule waivers that may be necessary pursuant to FCC rules, regulation and policies; (e) defend against any challenges to the FCC transfer applications including proceedings before the FCC, and if necessary, the United States Courts of Appeals; (f) work with bankruptcy and tax counsel for the Debtors to ensure that FCC requirements and procedures are fully coordinated with the complementary to the proceedings before the Bankruptcy Court; (g) ensure full compliance by the Debtors' broadcast stations with all the requirements of the FCC during and through the reorganization processes; and (h) prepare and file with the FCC, as directed by the Debtors, all necessary applications, reports and updates. The Debtors selected Dow Lohnes because of the firm's extensive expertise in providing services similar to the matters for which it is to be employed. The Debtors will pay Dow Lohnes in accordance with the firm's customary hourly rates: Professional Rate/Hour ------------ --------- Members $550-$795 Associates $255-$450 Para-professionals $130-$250 The Debtors will also reimburse Dow Lohnes for all necessary out- of-pocket expenses. John R. Feore, Esq., at Dow Lohnes PLLC, in Northwest, Washington D.C., assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the bankruptcy Code. Prior to the Order, the Debtors certified to the Court that no objection was filed as to the Application. 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) TRIBUNE CO: Warren Beatty Oppose Videotaped Deposition ------------------------------------------------------ Tribune Media Services, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to deny Mr. Beatty's motion to stay discovery. The Debtor asserts its efforts are fully consistent with the Federal Rules of Civil Procedure and further the goal of a timely and efficient resolution of the parties' dispute, which involves property of its estate worth tens of millions of dollars. In addition, the Debtor notes, Mr. Beatty's recent motion to lift automatic stay provides a further basis for allowing discovery to proceed. The Debtor adds targeted discovery will allow it to test, and the Court to fairly evaluate, Mr. Beatty's claims. The Official Committee of Unsecured Creditors joins the Debtor's objection. W. Beatty Responds to Tribune Media Warren Beatty asks the Court to overrule Debtor Tribune Media Services, Inc.'s objection to his Motion to Stay Discovery. Mr. Beatty asserts that as part of his Lift Stay Motion, Tribune is free to take limited discovery as provided for under Rule 9014 of the Federal Rules of Bankruptcy Procedure. Mr. Beatty says he is willing to the Debtor's discovery as long as his rights are protected. To that end, Mr. Beatty has proposed that all discovery will be without prejudice to his rights to, among other things: (a) seek dismissal of the adversary proceeding filed in the Bankruptcy Court; (b) seek relief from the automatic stay; (c) seek abstention; (d) seek to transfer venue of the Bankruptcy Action; and (e) respond to any of the Debtor's factual allegations and legal arguments. In response to the Debtors' objection to the lift stay motion, Mr. Beatty asserts that there is ample cause to lift the automatic stay and that Tribune presented no reasonable basis for denying his lift stay request. According to Mr. Beatty, Tribune would not suffer any legally cognizable prejudice if the stay were lifted. On other hand, Mr. Beatty asserts he would suffer significant prejudice by being required to litigate the dispute in the Bankruptcy Court. Mr. adds that the facts plainly establish that he will likely succeed on the merits. Mr. Beatty says he does not object to Tribune's request to asking the U.S. District Court for the District of California to transfer venue of the California Action should the Court lift the automatic stay so long as the automatic stay is modified to enable him to respond. Mr. Beatty also submitted exhibits, relating to the Dick Tracy Special, to support his declaration. A full-text copy of the Dick Tracy Special is available for free at: http://bankrupt.com/misc/Tribune_BeattyExhibits.pdf * * * Judge Carey directs Mr. Beatty to produce all documents in his custody related to the "Dick Tracy television special" that is identified in the declaration filed in support of his Lift Stay Motion. Judge Carey also directs Mr. Beatty to submit himself for deposition at a time and place mutually agreeable with the Debtors. Judge Carey held that discovery will be without prejudice to, and will not impair or restrict any of Mr. Beatty's right to (a) seek dismissal of the Adversary Action on the grounds of personal and improper venue; (b) seek relief from automatic stay; (c) seek abstention; (d) seek transfer of venue of the Adversary Action; and (e) respond to any factual allegations and legal arguments. W. Beatty's Deposition Tribune Media notifies the Court that it will take a deposition by oral examination of Mr. Beatty commencing July 23, 2009, at the law offices of Greenberg Glusker Fields Claman & Machtinger LLP, in Los Angeles, California. The deposition will be limited to matters raised in the declaration of Mr. Beatty in support of his Lift Stay Motion. The deposition will be transcribed by a court reporter and videotaped, and will be taken before a duly authorized officer pursuant to Rule 30 of the Federal Rule of Civil Procedure. In an emergency motion, Mr. Beatty asks the Court to prohibit any attempt by Tribune Media to videotape his deposition. Mr. Beatty contends a video record of his demeanor in responding to purely factual questions is unnecessary since Tribune Media will certainly be given the opportunity to take a more substantive deposition in the future. Although Tribune Media has offered to negotiate a protective order restricting dissemination of any videotape, Mr. Beatty believes that the Order would be inadequate to protect his privacy. Mr. Beatty relates that with the use of Internet, it is possible for the video to spread globally given that he is a public figure. Tribune Media will also take deposition of Jeffrey Bacon, Esq., at Savitsky, Satin & Bacon, in Santa Monica, California, in connection with the Motion. Lawsuit vs. Mr. Beatty On August 28, 1985, Debtor Tribune Media Services, Inc., and Warren Beatty entered into a written agreement pursuant to which TMS granted, among other things, motion picture, television, and customary related rights in the Dick Tracy Property to Mr. Beatty in accordance with and subject to the terms of the Agreement. Under the Dick Tracy Agreement, Mr. Beatty was to "attempt to enter into an agreement for the financing and distribution of a feature picture based on the Dick Tracy Property." The Dick Tracy Agreement included a provision by which TMS could effect a reversion of all rights granted to Mr. Beatty under the Agreement. Specifically, the Dick Tracy Agreement provided in relevant part that "within five years after the initial domestic release of the picture, or any subsequent theatrical picture or television series or special, photography has not commenced on either another theatrical motion picture or television series or special, TMS may give Mr. Beatty notice of its intention to effect reversion of all rights granted under the Agreement." If within two years after receipt of that notice, principal photography has not commenced, then TMS, by a further written notice to Mr. Beatty, may effect a reversion. In 1990, a theatrical motion picture entitled "Dick Tracy" was successfully completed by Mr. Beatty, and TMS received substantial monies under the Dick Tracy Agreement arising from the production and distribution of the motion picture. Other than certain initial payments related to the Dick Tracy motion picture, ongoing payments to TMS under the Dick Tracy Agreement are dependent on motion picture and television programs made by Mr. Beatty within the meaning of the Agreement. Since the 1990 Dick Tracy motion picture, Mr. Beatty has not completed a single theatrical motion picture, television series, or television special under the Dick Tracy Agreement, and TMS has not received any payments under the Dick Tracy Agreement other than those arising from the 1990 Dick Tracy motion picture. In November 2006, in light of Mr. Beatty's failure to make any productive use of the Dick Tracy Property, TMS served written notice of its intent to effect a reversion of all rights granted to Mr. Beatty. The Notice provides that, unless Mr. Beatty commenced principal photography on another theatrical motion picture or television series or special within two years, all rights granted to him would revert back to TMS. In April 2008, Mr. Beatty, according to TMS, asked that rather than commencing a project, TMS extend his rights to the Dick Tracy Property so that he would maintain control over certain Dick Tracy motion picture and television rights without needing to commence principal photography on a motion picture or television project under the Agreement until November 19, 2013. TMS rejected Mr. Beatty's proposal. In a letter dated November 18, 2008, TMS notified Mr. Beatty that all rights previously granted to Mr. Beatty to the Dick Tracy Property had automatically reverted to TMS by operation of the Dick Tracy Agreement and TMS' 2006 Reversion Notice. TMS received a $15,000 check from Mr. Beatty for an alleged half- hour Dick Tracy television special; however, TMS returned the check because principal photography on a television special had in fact not commenced. Instead, TMS asked for a tangible and legitimate proof that Mr. Beatty has commenced principal photography on a bona fide project. Mr. Beatty did not provide any tangible and legitimate proof that he has started on a Dick Tracy project, instead, he filed a lawsuit against TMS in the U.S. District Court for the Central District of California seeking for a declaration that he continued to enjoy all rights under the Agreement as a result of his alleged commencement of principal photography in November 2008 on a purported television special. By this adversary proceeding, TMS seeks the U.S. Bankruptcy Court for the District of Delaware to resolve, settle and gain unfettered use of certain Dick Tracy motion picture and television rights wrongly claimed by Mr. Beatty. Bryan Krakauer, Esq., at Sidley Austin, LLP, in Chicago Illinois, TMS' counsel, asserts that Mr. Beatty's ongoing assertion of alleged rights to the Dick Tracy Property interferes with TMS' ability to exploit the full value of this extremely lucrative property for the benefit of the Debtors' estate and creditors. TMS thus requires a judicial determination of the estate's rights in the Dick Tracy Property to remove Mr. Beatty's interference therewith and thereby give the Debtors' estate the ability to monetize the substantial asset. TMS, through this adversary proceeding, asks the Bankruptcy Court to declare that the Dick Tracy Property is, without restriction, the sole and exclusive property of the Debtors' estate under Section 541 of the Bankruptcy Code. Moreover, TMS asks the Bankruptcy Court to enter a permanent and mandatory injunction against Mr. Beatty from interfering with its rights to exercise complete and unfettered dominion and control over the Dick Tracy Property, including enjoining Mr. Beatty from: (i) causing the unauthorized publication of any Dick Tracy motion picture, television series, or television special; and (ii) engaging in any action that would otherwise interfere with TMS' rights to enter into business transactions regarding the motion picture and television rights to the Dick Tracy Property previously granted under the Dick Tracy Agreement. Mr. Beatty's lawyer, Bert Fields, called the adversary complaint "utter hogwash" and "just a Hail Mary pass", the Chicago Tribune reported. "Obviously, Warren would have preferred to go ahead with the picture, so he produced the special to extend the rights, and the contract very clearly says you can do that," Chicago Tribune quoted Mr. Fields as saying. "Warren has been trying to get cooperation from the Tribune corporation for years and getting nothing but the back of their hand," Mr. Field told the newspaper. 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) TVI CORP: Wants Exclusive Filing Period Extended to August 31 ------------------------------------------------------------- TVI Corporation, et al., ask the U.S. Bankruptcy Court for the District of Maryland to extend their exclusive period to file a plan until August 31, 2009, and their exclusive period to solicit acceptances thereof to October 30, 2009. Currently, the exclusive periods expire on July 30, 2009, for the filing date and September 30, 2009, for the acceptance date. The Debtors say that Houlihan Smith & Company, the Company's valuation expert and investment banker, still has to commence its valuation of their business, and this is not expected to be completed until after July 30. The Debtors add that they will also need time to finalize negotiations with their lender Branch Banking & Trust Co. and the official committee of unsecured creditors and to draft and file the plan and disclosure statement. Headquartered in Glenn Dale, Maryland, TVI Corporation -- http://www.tvicorp.com/-- supplies military and civilian emergency first responder and first receiver products, personal protection products and quick-erect shelter systems. The products include powered air-purifying respirators, respiratory filters and quick-erect shelter systems used for decontamination, hospital surge systems and command and control. The users of these products include military and homeland defense/homeland security customers. The Company and two of its affiliates filed for Chapter 11 protection on April 1, 2009 (Bankr. D. Md. Lead Case No. 09- 15677). Christopher William Mahoney, Esq., Jeffrey W. Spear, Esq., and Joel M. Walker, Esq., at Duane Morris LLP, represent the Debtors in their restructuring efforts. Debtors tapped Buccino & Associates, Inc., as their financial advisors and consultants. When the Debtor filed for protection from its creditors, it listed $10 million to $50 million in assets and $1 million to $10 million in debts. TVI CORP: Can Employ Houlihan Smith as Valuation Expert ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland has granted TVI Corporation, et al., permission to employ Houlihan Smith & Company Inc. as valuation expert and investment banker, nunc pro tunc to June 9, 2009. Andrew Smith, president of Houlihan, assures the Court that the firm does not represent or hold any interest materially adverse to the Debtors or their estate and that the firm is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. As valuation expert and investment banker, Houlihan will: -- prepare a valuation report and opinion of value currently intended to support the Debtors' plan of reorganization and disclosure statement; -- represent and assist the Debtors in exploring the potential sale of the assets of Signature Special Event Services, Inc.; and -- represent and assist the Debtors in identifying prospective purchasers of the assets of Signature Special Event Services, Inc. As compensation, and pursuant to the valuation engagement letter with the Debtor, Houlihan will receive: (i) a "valuation fee" of $75,000 consisting of two payments; $37,500 upon Court approval and $37,500 upon delivery of the valuation opinion to the Debtors; and (ii) an "expert testimony fee" if representatives are requested or required to testify before the Court. Said expert testimony fee will be based upon the actual Houlihan staff time required to prepare for and present expert testimony to the Court multiplied by Houlihan's hourly billing rates. Pursuant to the investment banking engagement letter, Houlihan will receive: (i) a non-refundable $5,000/month advisory fee and (ii) a success fee equal to 6% of the total consideration conveyed by prospective parties to the Debtors, including but not limited to cash, notes, stocks, contract payments in excess of historical amounts of prevailing arms-length terms and company property retained by the Debtors, less total monthly advisory fees paid by the Debtors. The minimum success fee due to Houlihan will be $50,000. Houlihan's current hourly rates are: Richard Houlihan $750 Andrew Smitch $750 Senior Managing Directors $400 Managing Directors $400 Vice Presidents $300 Associates $150 Analysts $100 Administrative & Clerical $75 Headquartered in Glenn Dale, Maryland, TVI Corporation -- http://www.tvicorp.com/-- supplies military and civilian emergency first responder and first receiver products, personal protection products and quick-erect shelter systems. The products include powered air-purifying respirators, respiratory filters and quick-erect shelter systems used for decontamination, hospital surge systems and command and control. The users of these products include military and homeland defense/homeland security customers. The Company and two of its affiliates filed for Chapter 11 protection on April 1, 2009 (Bankr. D. Md. Lead Case No. 09-15677). Christopher William Mahoney, Esq., Jeffrey W. Spear, Esq., and Joel M. Walker, Esq., at Duane Morris LLP, represent the Debtors in their restructuring efforts. Debtors tapped Buccino & Associates, Inc., as their financial advisors and consultants. When the Debtor filed for protection from its creditors, it listed $10 million to $50 million in assets and $1 million to $10 million in debts. US SHIPPING: Court Approves Settlement With Blackstone & Cerberus ----------------------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York approved a settlement agreement dated July 10, 2009, entered into by U.S. Shipping Partners LP and its debtor-affiliates with affiliates of the Blackstone Group and Cerberus Partners LP to resolves a state court action and an adversary proceeding are pending before the Court involving a dispute over the control and management of the Joint Venture. The Debtors say the settlement agreement provides substantial benefits to their estates and their creditors, which benefits include: -- payment to the product manager of $9.0 million upon the effective date of the settlement agreement; -- an additional payment of $2.3 million on the 40th day following the management transition period; -- an aggregate of $2.7 million paid in monthly installments commencing the first month after the effective date; -- up to $750,000 as provided for in the settlement agreement to the extent there are cost under-run provisional deduction; and -- the settlement and release of all claims and potential claims and causes of action against the estate by the Blackstone-Cerberus parties relating to a certain joint venture. The Debtors relate that Blackstone-Cerberus units alleged that certain non-monentary defaults had occurred under the governing agreement and sought to take various actions against the Joint Venture that would have substantially affected the Debtors' contract and property rights. Blackstone-Cerberus units own 60% of the interest in the Joint venter while the Debtors own the remaining interests. The Blackstone-Cerberus units also provided financing to the Joint Venture. About U.S. Shipping 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. The U.S. Trustee for Region 2 appointed three creditors to serve on the Official Committee of Unsecured Creditros. Craig A. Wolfe, Esq., Kelley Drye & Warren LLP, represent the Committee. U.S. Shipping listed $717,443,000 in assets and $606,534,000 in debts as of September 30, 2008. VALUE CITY: Taps Storch Amini to Litigate Preference Claims ----------------------------------------------------------- Value City Holdings, Inc., et al., ask the U.S. Bankruptcy Court for the Southern District of New York for authorization to employ Storch Amini & Munves PC as special counsel to analyze and litigate preference claims, effective as of June 29, 2009. As special counsel, Storch Amini will: a. at the Debtors' direction, undertake any investigation, litigation, mediation, arbitration or any other action on the Debtors' behalf to avoid and recover any preferential payments or payments that are otherwise avoidable; b. at the Debtors' request, appear, as appropriate, before the Court and any appellate court to protect the interests of the Debtors in connection with any preference action or other legal matter related thereto; and c. perform all other necessary legal services as requested by the Debtors in connection with the preference actions and these Chapter 11 cases. Storch Amini will be paid a special counsel fee, based upon collections realized on the recovery of any preference claim: a. 15% of the gross amount of any recovery prior to the filing of an answer by a defendant; b. 18% of any recovery after an answer is filed; c. 21% of any recovery after discovery responses are served; d. 24% of any recovery after a deposition commences; and e. 28% of any recovery occurring three weeks or less before the first scheduled trial or arbitration proceeding. However, in no event will Storch Amini's total special counsel fee exceed 24% of total recoveries of the estate. Storch Amini will only be paid out of recoveries actually received. Bijan Amini, Esq., a principal at Storch Amini, assures the Court that the firm does not hold or represent any interest materially adverse to the Debtors or their estates, and that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Value City Headquartered in Columbus, Ohio, Value City Holdings Inc. -- http://www.valuecity.com/-- operates a chain of department stores in the United States. The Company and eight of its affiliates filed for Chapter 11 protection on Oct. 26, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-14197). John Longmire, Esq., and Lauren C. Cohen, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors' in their restructuring efforts. Epiq Bankruptcy Solutions LLC is the claims, noticing and balloting agent for the Debtors. Glenn R. Rice, Esq., at Otterbourg Steindler Houston & Rosen, PC, represents the official committee of unsecured creditors as counsel. When the Debtors filed for protection from their creditors, they listed between $100 million and $500 million each in assets and debts. In November 2008, Judge James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York granted Value City Holdings permission to conduct going-out-of-business sales to be managed by liquidator and financial consultant Tiger Capital Group LLC. VIA PHARMACEUTICALS: Receives Non-Compliance Notice From NASDAQ --------------------------------------------------------------- VIA Pharmaceuticals, Inc., received a Staff Determination letter, dated July 15, 2009, from the NASDAQ Stock Market stating that the Company has not regained compliance with the minimum $2,500,000 stockholders' equity requirement for continued listing, as set forth in Listing Rule 5550(b), and that the Company's securities are, therefore, subject to delisting from The NASDAQ Capital Market. The Company said the notice was "anticipated." The Company intends to file an appeal of the NASDAQ Staff Determination by July 22, 2009 and to request a hearing before a NASDAQ Listing Qualifications Panel, which request will stay the delisting of the Company's securities pending the Panel's decision. There can be no assurance that the Panel will grant the Company's request for continued listing on The NASDAQ Capital Market. About VIA Pharmaceuticals Based in San Francisco, California, VIA Pharmaceuticals, Inc. -- http://www.viapharmaceuticals.com/-- is a biotechnology company focused on the development of compounds for the treatment of cardiovascular and metabolic disease. VIA's lead candidate, VIA- 2291, targets a significant unmet medical need: reducing inflammation in the blood vessel wall, which is an underlying cause of atherosclerosis and its complications, including heart attack and stroke. In addition, VIA's pipeline of drug candidates includes other compounds to address other underlying causes of cardiovascular disease: high cholesterol, diabetes and inflammation. VISTEON CORP: Committee Proposes Ashby & Geddes as Counsel ---------------------------------------------------------- The Official Committee of Unsecured Creditors of Visteon Corp. seeks the Court's authority to retain Ashby & Geddes, P.A., as its Delaware counsel nunc pro tunc to June 10, 2009. The Committee has selected Ashby & Geddes because of the firm's expertise on matters in handling bankruptcy and debt reorganization problems and procedures arising in the reorganization framework. The Debtors will pay for Ashby & Geddes' services based on the firm's current hourly rates: Professional Hourly Rate ------------ ----------- William P. Bowden $545 Gregory A. Taylor $380 Stacy L. Newman $205 Cathie J. Boyer $180 During the course of the Debtors' Chapter 11 cases, Ashy & Geddes will: (a) provide legal advice regarding the rules and practices of the Court applicable to the Committee's powers and duties as an official committee appointed under Section 1102 of the Bankruptcy Code; (b) provide legal advice regarding any disclosure statement and plan of reorganization and with respect to the processes for approving or disapproving a disclosure statement and confirming or denying confirmation of a Plan; (c) prepare and review applications, motions, complaints, answers, orders, agreements and other legal papers filed on behalf of the Committee for compliance with the rules and practices of the Court; (d) appear in Court to represent necessary motions, applications and pleadings and protect the interests of the Committee and unsecured creditors of the Debtors; and (e) perform other legal services for the Committee as the Committee believes may be necessary and proper. Gregory A. Taylor, Esq., at Ashby & Geddes, P.A., in Wilmington, Delaware, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corp. and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Committee Proposes Brown Rudnick as Counsel --------------------------------------------------------- The official committee of unsecured creditors of Visteon Corp. seeks the Court's authority to retain Brown Rudnick LLP as its co- counsel nunc pro tunc to June 8, 2009. The Committee believes it is necessary to employ Brown Rudnick to render professional services so that it may properly fulfill its duties under the Bankruptcy Code. The Committee has selected Brown Rudnick because of its extensive experience and knowledge in bankruptcy matters. The Debtors will pay Brown Rudnick's services based on the firm's customary hourly rates. The attorneys at Brown Rudnick who are anticipated to represent the Debtors and their current hourly rates are: Professionals Rate/Hour -------- --------- Robert J. Stark $800 Howard L. Siegel $835 Howard S. Steel $555 The Debtors will also reimburse Brown Rudnick for the firm's actual and necessary out-of-pocket expenses. Robert J. Stark, Esq., at Brown Rudnick LLP, in New York, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code; and does not hold or represent interest adverse to the Debtors or their estate. 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: Court Approves Adequate Protection for Term Lenders ----------------------------------------------------------------- Wilmington Trust FSB, the Debtors, and the Official Committee of Unsecured Creditors have sought and obtained the Bankruptcy Court's final approval of their stipulation to: (1) authorize the Debtors' use of Prepetition Term Loan Priority Collateral and Term Loan Cash Collateral in which Wilmington Trust and the Prepetition Term Lenders have an interest; (2) grant adequate protection to the Prepetition Term Lenders for any diminution in the value of the Prepetition Term Lenders' interest in the Prepetition Term Priority Collateral and Term Loan Cash Collateral, whether from the use of the Term loan Cash Collateral or the use, sale, lease, depreciation, or other diminution in value of the Prepetition Term Loan Priority Collateral, or as a result of the imposition of the automatic stay under Section 362(a) of the Bankruptcy Code; (3) approve certain stipulations by the Debtors concerning the Prepetition Term Loan Agreement and related documents, and the claims, liens, and security interest; (4) vacate and modify the automatic stay to the extent necessary to implement and effectuate the terms and provision of the Court's order; (5) limit the Debtors' right to surcharge certain collateral under Section 506(c) of the Bankruptcy Code; and (6) authorize the Debtors to use the Prepetition Term Loan Priority Collateral and Term Loan Cash Collateral, and grant the protections requested by Wilmington Trust. A full-text copy of the Court-approved Stipulation is available for free at: http://bankrupt.com/misc/Visteon_WilmingtonFinalOrd.pdf As of the Petition Date, the Debtors were parties to certain credit agreements and related guarantee and security agreements, which include: -- an Amended and Restated Credit Agreement dated April 10, 2007, in the original principal amount of $1.5 billion, among Visteon Corporation, as borrower, certain lenders, and Wilmington Trust as administrative agent for the Prepetition Term Lenders and as the successor to JPMorgan Chase Bank, N.A.; -- a Guarantee and Collateral Agreement dated June 13, 2006, as amended on April 10, 2007, among Visteon Corporation and the guarantors of the obligations under the Prepetition Term Loan Agreement and the Prepetition Term Agent; -- a Credit Agreement dated August 14, 2006, among certain loan parties, Ford Motor Company, as successor-assignee sole lender and Ford CCA LLC, as successor-assignee collateral guarantor of outstanding letters of credit, each as of May 13, 2009, and JPMorgan Chase Bank as administrative agent for the Prepetition Asset-Based Lending Lenders; and -- an Intercreditor Agreement dated June 13, 2006, among the Prepetition ABL Agent, the Prepetition Term Agent, Visteon, and certain Visteon affiliates. Wilmington Trustee previously said it does not consent to the Debtors' use of the Term Loan Priority Cash Collateral and Term Loan Cash Collateral, in particular: (i) the Term Loan Cash Collateral comprising of dividends or other distributions from Visteon's Foreign Subsidiaries and the Asian Subsidiaries, and all payment or other amounts received by the Loan Parties in respect of intercompany or inter-affiliate debt obligations owing to any Loan Party from any Foreign Subsidiary or Foreign Investment; and (ii) the Term Loan Priority Collateral comprising the Intellectual Property Collateral, including any IP Cash Collateral. "The evidence . . . would show that there is no question that any cash paid to U.S. Visteon will be lost to the Prepetition Agent and Prepetition Term Lenders, and that the valid, perfected, and enforceable first-priority liens and security interests of the Prepetition Agent and Prepetition Term Lenders are not adequately protected by the liens in the Debtors' proposed Interim Cash Collateral Order," Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Delaware, counsel for Wilmington Trust FSB, previously argued. "Since the payment of dividends from Foreign Subsidiaries will result in a substantial portion of the amount distributed by the Foreign Subsidiaries being paid as taxes, this inefficiency further reduces the value available to either the Debtors or the Prepetition Term Agent and the Prepetition Term Lenders." In this case, Mr. Abbott asserted, additional adequate protection is warranted, in the form of an order that makes clear that any dividends or other distributions from Visteon's Foreign Subsidiaries and Asian Subsidiaries, and other payments or amounts received by the Loan Parties in respect of intercompany or inter-affiliate debt obligations owing to any Loan Party from any Foreign Subsidiary Foreign Investment cannot be used or otherwise dissipated by the Debtors and cannot be commingled with other cash. 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: Court Approves Visteon Village Leases with GE Co. --------------------------------------------------------------- Visteon Corporation and its debtor affiliates sought and obtained permission from Judge Christopher Sontchi to enter into lease agreements with General Electric Company for a portion of a property known as "Visteon Village" located at One Village Center Drive, in Van Buren Township, Michigan. Visteon Village is a complex of nine buildings designed and constructed over a three-year period from 2001 to 2004 as new corporate headquarters and research campus for the Debtors. The construction of Visteon Village allowed the Debtors to consolidate operations formerly spread across 13 facilities throughout southeastern Michigan. Since August 2004, the Debtors have occupied a significant portion of the Visteon Village Facilities pursuant to a lease agreement dated as of October 31, 2002, as amended, by and between the Debtors and Oasis Holdings Statutory Trust. Under the Master Lease, the Debtors do not pay Oasis Holdings any amounts in respect of annual rent. However, the Debtors are responsible to all operating costs associated with the property, including real estate taxes. Additionally, the Master Lease permits the Debtors to sublease portions of Visteon Village in its sole discretion. Due to a reduction in the engineering and administrative headcount at the Visteon Village Facilities, the Debtors have reduced the required workspace and as a result, they no longer need the entirety of the leased space in Visteon Village. The Debtors assert that they have been incurring significant operating expenses in connection with property that is providing little, if any, value to their estates. The Debtors estimate that the operating expenses payable with respect to the vacant property covered by the GE Leases total approximately $1,200,000 annually, including an allocated portion of fixed Visteon Village costs. The Debtors note that the GE Leases will provide them with net income, on a net present value basis, of more than $10,500,000 over the 13-year term of the Building Lease. As is customary in commercial real estate transactions, the Building Lease contemplates the payment of certain brokerage commissions by the Debtors to their broker, Jones Lang LaSalle, and to GE's broker, CB Richard Ellis. To that effect, the Debtors also sought and obtained the Court's authority to pay commissions, totaling $2,088,595, to the Brokers. A full-text copy of the GE Lease Agreement is available for free at http://bankrupt.com/misc/Visteon_GELeaseAgreement.pdf The Debtors certified to the Court that no objection was filed with respect to their request. 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: GM, & Ford Oppose Key Employee Incentive Plan ----------------------------------------------------------- Five parties-in-interest objected to the Debtors' proposal to implement the Visteon Incentive Program, which consists of a key employee incentive plan, the 2009 annual incentive plan, and the current long-term incentive plan. The Objectors assert that the Debtors should demonstrate that the payments under the Incentive Plans are not retention payments to insiders, are justified by the facts and circumstances of the Debtors' cases, and represent the actual, necessary costs of preserving the estates in accordance with Section 503(b)(1)(A) and (c) of the Bankruptcy Code. The Objecting parties are: * Ford Motor Company, * General Motors Corporation, * U.S. Trustee, * Official Committee of Unsecured Creditors, and * The International Union, United Automobile, Aerospace and Agriculture Implement Workers of America. GM, Ford Motor, Chrysler Group LLC and Nissan North America, Inc., are currently in discussions with the Debtors regarding the terms of a DIP Credit Facility to provide the Debtors with sufficient financing to continue their operations and restructuring efforts in their Chapter 11 cases. Ford Motor opposes the $80,100,000 Incentive Program. Ford describes the Incentive Program as entirely "too rich" given current market and economic conditions where many suppliers have already eliminated payment of performance bonuses for 2009. Ford asserts that the AIP and LTIP are not justified by the facts and circumstances of the Debtors' bankruptcy cases and should not be approved. Moreover, Ford notes, the metrics of the KEIP are not reconcilable with the dynamics of the Debtors' cases and must be recalibrated. GM asserts the Debtors' Incentive Plan Motion is premature given that the Debtors have not yet reached an agreement with the proposed DIP Lenders on the terms of a DIP Facility. GM avers that absent an agreement on the DIP Facility, the Debtors will not have financing necessary to fund the Incentive Plans proposed by the Motion. GM tells the Court that approval of the Motion at this time may jeopardize the ability of the Debtors to finalize the terms of a DIP Facility by alienating potential lenders. Moreover, GM notes, in an industry where approximately 272,000 employees have been severed in the previous 12 months and where the Debtors' competitors are reducing their own workforce to similar extents, GM finds no justification for the extensive and above market incentive plans proposed. The UAW asserts the KEIP should spell out individualized personal goals an employee must meet to receive payment. In a business like that of the Debtors, with involves several different plants and the manufacture of several different products, personalized and plant-specific goals make sense but "one-size-fits-all" programs do not, the UAW contends. Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3, asserts the Debtors have not satisfied their burden under Section 503(b)(1)(A) and (c) to demonstrate that (i) payments under the Incentive Plans are not retention payments to "insiders,"; (ii) the Incentive Plans are justified by the facts and circumstances of the Debtors' cases; and (iii) the Incentive Plans represent the actual, necessary costs of preserving the estates. According to Ms. DeAngelis, the Court should not authorize the Debtors to offer bonuses that they cannot fund. The Committee asks the Court to disapprove the proposed payments with respect to the Debtors' officers and executive leaders until it has had an opportunity to ensure that the scope of the Debtors' proposed total compensation for management is reasonable in light of the overlapping incentive programs. According to the Committee, it appears that certain employees are slated for entitlements under both the Non-Insider Retention Plan and the KEIP. Participation should be limited to only one program, the Committee insists. The Committee contends that the proposed timing of payments contemplated under the Non-Insider Retention Program does not effectively incentivize the eligible employees to remain employed with the Debtors beyond or even throughout the reorganization process. To effectively incentivize eligible employees to lead a successful reorganization to fruition, the Committee seeks that any final order approving the Non-Insider Retention Program extend the second payment milestone to confirmation of a plan of reorganization. Debtors Respond to Objections The Debtors reiterate that the Incentive Plan Motion is not premature. They further assert that granting the Incentive Plan Motion will not cause alienation or attrition of potential DIP Lenders. The Debtors aver that the Retention Programs are necessary and sound exercise of their business judgment. 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: GM & Union Oppose Severance & Retention Programs -------------------------------------------------------------- General Motors Corporation, The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, and the Official Committee of Unsecured Creditors oppose Visteon Corp.'s proposed Severance and Retention Programs. The UAW objects to the Severance/Retention Program Motion to the extent that it does not satisfy the strict requirements that the proposed plans must meet under Section 503(c) of the Bankruptcy Code. The UAW says the Debtors must be evaluated under the restrictive provisions of Section 503(c). With respect to "insiders," the Debtors must satisfy the requirements of Section 503(c)(1) that: (i) an insider to receive payment has received a job offer at the same or greater rate of compensation; (ii) the services provided by that particular insider are "essential to the survival of the business;" and (iii) the payments do not exceed the limits set forth under the provision's monetary tests. For its part, GM asserts absent a final DIP Facility Agreement, the Debtors will not have financing necessary to fund the proposed retention and severance plans. GM, Ford Motor Company, Chrysler Group LLC and Nissan North America, Inc., are currently in discussions with the Debtors regarding the terms of a DIP Credit Facility to provide the Debtors sufficient financing to continue their operations and restructuring efforts under Chapter 11. According to GM, the proposed Severance/Retention Plans may jeopardize the ability of the Debtors to finalize the terms of the DIP Facility by alienating the proposed lenders. GM says the Debtors did not discuss the Proposed Severance/Retention Plans with the potential lenders before filing the Severance/Retention Motion. GM says it finds no justification for the proposed extensive and above market Retention and Severance Plans. The Creditors Committee asks the Court to deny the proposed payments with respect to officers and executive leaders until it has had an opportunity to ensure that the scope of the Debtors' proposed total compensation for management is reasonable in light of the overlapping incentive programs. It appears, the Committee points out, that certain employees are slated for entitlements under both the Non-Insider Retention Plan and the KEIP. Participation should be limited to only one program, the Committee emphasizes. The Committee avers the proposed timing of payments contemplated in the Non-Insider Retention Program does not effectively incentivize the eligible employees to remain employed with the Debtors beyond or even throughout the reorganization process. To effectively incentivize eligible employees to lead a successful reorganization to fruition, the Committee seeks that any final order approving the Non-Insider Retention Program extend the second payment milestone to confirmation of a plan of reorganization. In response, the Debtors contend that the UAW's objection lacks merit and should be overruled. The Debtors argue the excluding the unionized employees from the Severance Programs is reasonable because the unionized employees typically receive either severance benefits under a collective bargaining agreement or in conjunction with a plant closing agreement. The Debtors maintain that they properly determined that only their officers are "insiders" as other employees do not possess the broad decision- making authority necessary to have control of Visteon. The Debtors also relate that they determined that all employees, other than the officers, are properly categorized as non- management employees. Revised Proposed Order The Debtors filed with the Court a revised proposed form of the order approving the Severance/Retention Motion to reflect that they will be authorized to honor the Severance Program and the Non-Insider Retention Program provided that: (a) no "insider," as that term is defined in Section 101(31) of the Bankruptcy Code, will receive a payment under the Severance Program that exceeds 10 times the mean severance payment to the Debtors' non-management employees in the same calendar year; (b) executive leaders' severance benefits will be capped at nine months' base salary; and (c) any payments made under the Non-Insider Retention Program will be credited against any amounts payable to the same employee under the KEIP by an equal amounts; The Debtors will provide five business days in advance of making any severance payment to an officer of Visteon Corporation to the Office of the U.S. Trustee for the District of Delaware and the Creditors Committee. The Debtors will provide Notice Parties with five business days in advance of allocating currently unallocated Non-Insider Retention Program dollars to employees. Any payment made to any employee or critical employee under the Severance Program or Non-Insider Retention Program will be final and will not be subject to disgorgement, provided that the employee has executed a release of all claims against the Debtors. * * * The Associated Press reports that Judge Sontchi has denied the proposed Severance and Retention Plans for Visteon's non-union employees. Judge Sontchi said that the inclusion of 12 company officers violated bankruptcy law, according to AP. Judge Sontchi noted that there might be other officers among the 3,300 Visteon workers who would be covered under the Severance Plan, the news source adds. The Delaware Bankruptcy Court, however, said that Visteon can file revised severance and retention plans to specifically identify employees which are officers, AP relates. No formal written order has been made available in the Court dockets as of July 18, 2009. 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: Has Court Nod on Use of Cash Until July 30 -------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of New York entered a fourth interim order allowing Visteon Corporation and its debtor affiliates access to cash collateral through July 30, 2009, or the expiration date in any notice of an event of default. All objections that have not been settled, resolved or withdrawn are overruled. The Court acknowledged that the Debtors do not have available sources of working capital and financing to carry on the operation of their business without the use of Cash Collateral. The Court still conditions the Debtors' use of the cash collateral in the interim period pursuant to a budget. Accordingly, the Debtors prepared a three week budget covering the period from July 24, 2009, through August 7, 2009, a copy of which is available for free at: http://bankrupt.com/misc/Visteon_724CashBudget.pdf A full-text copy of the Fourth Supplemental Interim Cash Collateral Order is available for free at: http://bankrupt.com/misc/Visteon_4thCashOrd.pdf A final hearing on the Debtors' request will be held on July 28, 2009, at 2:00 p.m. Any objection to the cash collateral use request should be filed with the Court no later than July 24. 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) VIVAKOR INC: March 31 Balance Sheet Upside-Down by $111,667 ----------------------------------------------------------- Vivakor Inc.'s balance sheet at March 31, 2009, showed total assets of $3,540,265 and total liabilities of $3,651,932, resulting in a stockholder deficit of $111,667. For three months ended March 31, 2009, the Company posted a net loss of $505,237 compared with a net income of $7,430 for the same period in the previous year. The Company related that at March 31, 2009, it has $20,990 in cash and cash equivalents and its current liabilities consisted of $139,348 in accounts payable, $428,676 in accrued wages payable to our two officers and the executive chairman, $353,486 in loans and advances payable to related parties, a $152,455 grant payable and a $1,387,774 note payable. McGladrey & Pullen, LLP in Cedar Rapids, Iowa raised substantial doubt about Vivakor Inc.'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 auditors noted that the Company's ability to become a profitable operating company is dependent upon obtaining financing adequate to fulfill its research and market introduction activities, and achieving a level of revenues adequate to support the Company's cost structure. A full-text copy of the company's form 10-Q is available for free at http://ResearchArchives.com/t/s?3fa0 Headquartered in Coralville, Iowa, Vivakor Inc. (PINK:VIVK) -- http://www.vivakor.com/-- is a biomedical company inventing solutions for life. The development of substantive technologies and cures requires contribution from many scientific disciplines. Vivakor is the transdisciplinary innovation hub needed to advance this type of research with multifaceted business and commercialization strategies. WABASH NATIONAL: Gets $35 Mil. Capital Infusion From Lincolnshire ----------------------------------------------------------------- Wabash National Corporation has entered into a securities purchase agreement with Trailer Investments, LLC, an entity formed for this purpose by Lincolnshire Equity Fund III, L.P., a private equity investment fund managed by Lincolnshire Management, Inc., pursuant to which Trailer Investments will invest $35 million in the Company. Trailer Investments will purchase $20,000,000 of Series E redeemable preferred stock comprised of 20,000 shares of Series E redeemable preferred stock at a price per share of $1,000, $5,000,000 of Series F redeemable preferred stock comprised of 5,000 shares of Series F redeemable preferred stock at a price per share of $1,000, and $10,000,000 of Series G redeemable preferred stock comprised of 10,000 shares of Series G redeemable preferred stock at a price per share of $1,000. The dividend rates for the Series E redeemable preferred stock, Series F redeemable preferred stock and Series G redeemable preferred stock are 15% per annum, 16% per annum and 18% per annum, respectively. The dividends are payable quarterly and will be increased by 0.5% every quarter if the respective class of redeemable preferred stock is still outstanding after the 5 year anniversary of the closing of the transaction. During the first two years, dividends may be accrued at the election of the Company. In addition to the preferred stock, pursuant to the securities purchase agreement the Company will issue to Trailer Investments a warrant that is immediately exercisable at $0.01 per share for a number of newly issued shares of common stock representing 44.21% of the issued and outstanding common stock of the Company after giving effect to the issuance of the shares underlying the warrant, subject to upward adjustment to maintain that percentage if currently outstanding options are exercised and dilution protection for certain new issuances of shares of common stock, options, awards and other convertible instruments. The number of shares of common stock subject to the Warrant is also subject to upward adjustment to an amount equivalent to 49.99% of the issued and outstanding common stock of the Company on the original issuance date after giving effect to the issuance of the shares underlying the warrant in specified circumstances where the Company loses its ability to utilize its net operating loss carryforwards, including as a result of a stockholder of the Company acquiring greater than 5% of the outstanding common stock of the Company. The warrant is an integral part of the financing and is a condition to Trailer Investment's willingness to enter into the securities purchase agreement. Upon consummation of the investment contemplated by the securities purchase agreement, Trailer Investments will have the right to designate five out of twelve members to the Company's board of directors. Trailer Investments will also have the following rights: rights to information delivery and access to information and management of the Company; veto rights over certain significant matters of the Company's operations and business, subject to certain limitations and thresholds (including payments of dividends, issuance of securities of the Company, incurrence of indebtedness, liquidation and sale of assets, changes of the size of the Company's board of directors, amendments of organizational documents of the Company and its subsidiaries and certain other material actions by the Company); right of first refusal to participate in any future private financings subject to compliance with NYSE Shareholder Approval Policy; and certain other customary rights granted to investors in similar transactions. "This capital infusion will fortify our balance sheet, allowing us to put in place a capital structure that meets the needs of the Company during this economic downturn, including to obtain needed accommodations under our existing credit agreement," said Wabash National Corporation President and CEO Dick Giromini. "Having conducted a thorough process to evaluate strategic alternatives, we believe that this transaction is a necessary and effective step to protect the interests of our existing stockholders, and we look forward to working with Lincolnshire Management in the future." Michael J. Lyons, Senior Managing Director of Lincolnshire Management, said, "Wabash's market leading position and solid product line present an exciting investment opportunity for us. We are pleased to be partnering with this caliber of management team and look forward to working together and building upon Wabash's unique franchise." Waiver From Lenders In addition to the securities purchase agreement, the Company and certain of its subsidiaries have entered into an Amended and Restated Loan and Security Agreement, which amends and restates the Company's current revolving credit facility. The amendment and restatement will be effective upon the consummation of the investment contemplated by the securities purchase agreement and satisfaction of other closing conditions. The revolving credit facility, as amended, will provide for borrowings of up to $100 million, subject to a borrowing base and applicable reserves. Upon the revolving credit facility becoming effective, as amended, the lenders have agreed to waive specified defaults previously incurred by the Company. The consummation of the investment contemplated by the securities purchase agreement is subject to, among others, the following conditions: (i) the effectiveness of the amendment and restatement of the Company's revolving credit facility; (ii) compliance with the notice provisions under the exception to the NYSE Shareholder Approval Policy; (iii) the absence of any judgment, writ, order, injunction, award or decree enjoining or preventing the consummation of the investment; and (iv) the satisfaction of customary closing conditions. NYSE Shareholder Approval Policy The issuance of the warrant in connection with the investment would normally require approval of the Company's shareholders in accordance with the NYSE Shareholder Approval Policy. The board of directors of the Company has unanimously determined that the delay necessary in securing shareholder approval prior to the issuance of the warrant to Trailer Investments would seriously jeopardize the financial viability of the Company. In reaching this conclusion, the board of directors considered various factors, including factors specific to the Company and the extraordinary and highly uncertain economic and financial environment in the trailer industry. The audit committee of the board of directors, pursuant to an exception provided in the NYSE Shareholder Approval Policy for such a situation, expressly approved the Company's omission to seek the shareholder approval that would otherwise have been required under that policy. The NYSE has accepted the Company's application of the exception. The Company, in reliance on the exception, is mailing to all shareholders a letter notifying them of its intention to issue the warrant without seeking shareholder approval. The closing of the transactions contemplated by the securities purchase agreement will not occur until at least ten days after such notice is mailed. The transaction is expected to close as soon as practicable following the shareholder notice period described above. Wabash National Corporation's exclusive financial advisor for the transaction is BB&T Capital Markets, Inc., and its legal advisor is Hogan & Hartson LLP. Lincolnshire Management's legal advisor is Kirkland & Ellis LLP. As reported by the Troubled Company Reporter on June 4, 2009, Wabash National said it entered into (i) a first amendment to its forbearance agreement with its lenders, and (ii) a fourth amendment to its second amended and restated loan and security agreement with its lenders. On April 28, 2009, the Company entered into a Forbearance Agreement and Third Amendment to Second Amended and Restated Loan and Security Agreement, whereby Wabash's lenders under a Revolving Credit Facility agreed, among other things, to refrain from accelerating maturity of the Revolver Facility due to specified existing or anticipated events of default through the earlier of May 29, 2009, or the occurrence or existence of any event of default other than the existing and anticipated events of default. Under the further amendment, the lenders under the Revolver Facility agreed to continue to refrain from accelerating maturity of the Revolver Facility due to the existing and anticipated events of default through the earlier of July 31, 2009, or the occurrence or existence of any event of default other than the existing and anticipated events of default. In addition to the 60-day extension of the forbearance period, the lenders under the Revolver Facility also agreed, among other things, to reduce the previously established availability reserve from $22.5 million to $17.5 million through July 31, 2009, and to decrease the borrowing availability of eligible accounts receivable from 90% to 85%. Bank of America, N.A., a Rhode Island corporation, serves as agent for the Lenders. The Existing and Anticipated Events of Default covered by the Forbearance Agreement include: -- the Company's failure to deliver audited financial statements for fiscal year 2008 by March 31, 2009; -- the report of the Company's independent registered public accounting firm accompanying the Company's audited financial statements for fiscal year 2008 included an explanatory paragraph with respect to the Company's ability to continue as a going concern; -- the Company's failure to deliver prompt written notification of name changes of subsidiaries; -- the Company's failure to have a minimum fixed charge coverage ratio of 1.1:1.0 when the available borrowing capacity under the Revolving Credit Facility is below $30 million; and -- the Company requesting loans under the Revolving Credit Facility during the existence of a default or event of default under the Revolving Credit Facility. Wabash National owes the lenders $61,357,817 as of April 27, 2009. About Wabash National Headquartered in Lafayette, Indiana, Wabash National Corporation is one of the leading manufacturers of semi-trailers in North America. Established in 1985, the company specializes in the design and production of dry freight vans, refrigerated vans, flatbed trailers, drop deck trailers, dump trailers, truck bodies and intermodal equipment. Its innovative core products are sold under the DuraPlate(R), ArcticLite(R), FreightPro(TM) Eagle(R) and Benson(TM) brand names. The company operates two wholly owned subsidiaries; Transcraft (R) Corporation, a manufacturer of flatbed, drop deck, dump trailers and truck bodies; and Wabash National Trailer Centers, trailer service centers and retail distributors of new and used trailers and aftermarket parts throughout the U.S. WALDEN RESERVE: Unsec. Creditors Won't Get Anything Under Plan -------------------------------------------------------------- Walden Reserve, LLC, has filed a liquidating Chapter 11 plan and explanatory disclosure statement dated June 26, 2009, with respect to said plan with the U.S. Bankruptcy Court for the District of Kansas. The Debtor5,832 acres of real property located on the Cumberland Plateau in Tennessee has been sold and net proceeds retained by the Debtor will be used to pay administrative expenses and some secured claims. The Tennessee Property was sold at auction for $3.8 million. Closing occurred on May 8, 2009, and the Debtor realized net proceeds of $938,619. Under the Plan, allowed unsecured claims without priority and allowed undersecured claims will receive nothing under the Plan. Membership interests in the Debtor will receive nothing under the Plan. Claims of the unsecured creditors were scheduled in the approximate amount of $1,749,140. Classification of Claims and Interests Class 1: Allowed Secured Claim of Farm Credit Services of Mid- America, PCA. Class 2: Secured Claim of Cumberland County Tennessee. Class 3: Secured Claims of Eagles Nest, LLC, James and Amanda Sharp and Grisel Wiley. Class 4: Allowed Unsecured Prepetition Claims Without Priority and Allowed Undersecured Claims. Class 5: The Allowed Interests of the Debtor. Classes 1 through 5 are all impaired by this Plan. The Debtor scheduled nine secured creditors, with claims totalling $5,279,073.00. Claims of the unsecured creditors were scheduled in the approximate amount of $1,749,140. A hearing on approval of the disclosure statement will be held on August 19, 2009, at 9:30 a.m. Immediately following this disclosure statement hearing, there shall be a hearing on confirmation of the plan of liquidation. Objections to the disclosure statement or plan of liquidation are due by August 12, 2009. A full-text copy of Disclosure Statement is avaiable for free at: http://bankrupt.com/misc/waldenreserve.disclosurestatement.pdf About Walden Reserve Based in Overland Park, Kansas, Walden Reserve, LLC, formerly doing business as Renegade Mountain Partners LLC, is a real estate developer in the State of Tennessee. The Debtor filed for Chapter 11 protection on May 28, 2008 (D. Kan. Case No. 08-21230). Colin N. Gotham, Esq., at Evans & Mullinix, P.A., represents the Debtor in its restructuring efforts. Scott J. Goldstein, Esq., at Spencer, Fane, Britt & Browne LLP, represents the Committee of Unsecured Creditors as counsel. When the Debtor filed for protection from its creditors, it listed total assets of $14,637,288 and total debts of $7,085,320. WASHINGTON MUTUAL: Fitch Affirms Primary Servicer Ratings --------------------------------------------------------- Fitch Ratings affirms and removes Washington Mutual Bank's CMBS servicer ratings from Rating Watch Evolving: -- Primary servicer rating of 'CPS3+'; -- Master servicer rating of 'CMS3'; -- Special servicer rating of 'CSS3'. Fitch subsequently withdraws the ratings. Subsequent to its purchase of Washington Mutual, JP Morgan Chase sold Washington Mutual's entire CMBS servicing portfolio to KeyBank. The sale and transfer of the servicing rights closed at the end of April 2009. As a result, Washington Mutual is no longer participating as a CMBS servicer. Therefore, Fitch has decided to withdraw its CMBS servicer ratings. WATERGATE HOTEL: Set for Auction After Owner Defaults ----------------------------------------------------- The Watergate Hotel is set for a foreclosure auction July 21, Dan Levy at Bloomberg reported, citing mortgage holder PB Capital Corp. According to the report, PB Capital may bid on the 250-room property at 2650 Virginia Ave. NW using the unpaid balance of a $69.8 million loan that owner Monument Realty LLC defaulted on, said Bob Persico, a managing partner with the firm. The value of U.S. hotel properties in default or foreclosure almost doubled to $17.3 billion in the second quarter through June 24 from $9 billion at the end of the first quarter, according to data compiled by New York-based Real Capital Analytics. Hotel owners are defaulting as room rates and property values tumble in the recession and the securitized mortgage market remains dormant, Mr. Rochelle said. The Watergate Hotel in Washington is part of the complex made famous by a 1972 burglary that led to President Richard Nixon's resignation. WCI COMMUNITIES: May Send Bankruptcy Plan to Creditors for Voting ----------------------------------------------------------------- WCI Communities, Inc., said Friday the U.S. Bankruptcy Court for the District of Delaware presiding over its Chapter 11 cases has approved the adequacy of its Disclosure Statement for its Plan of Reorganization. At the hearing, it was announced that agreements on terms of the Plan had been reached with the steering committees for the Company's senior secured term and revolving lenders, the WCI Official Committee of Unsecured Creditors and representatives of a group of homeowners claiming damages related to Chinese drywall. The Court's approval paves the way for WCI to begin soliciting votes to accept its Plan of Reorganization, which already enjoys the support of the steering committees for the Company's secured term and revolving lenders and the Official Committee of Unsecured Creditors. It is anticipated that Plan materials and ballots will be mailed by July 24, 2009. The deadline for returning ballots is August 19, 2009, in accordance with instructions in the Bankruptcy Court's order and on the ballots. A hearing to confirm the Plan is scheduled for August 26, 2009. "We are very pleased to have cleared this important hurdle in our path toward exiting from Chapter 11," said David L. Fry, Interim President and Chief Executive Officer. "With the voting process about to begin, and with the firm support of our primary constituencies, WCI is squarely on track to emerge from Chapter 11 as a deleveraged lifestyle community developer and land holding company with the flexibility to navigate its business during these unprecedented times and beyond." Under the Plan, it is anticipated that the Company's senior secured lenders will receive new first lien debt in the aggregate amount of $450 million, which includes a $150 million payment-in- kind (PIK) component and an initial 95% equity stake in the reorganized company. The remaining 5% would be shared by the Company's unsecured creditors. The unsecured creditors' share would begin to increase when the new debt is fully retired and would reach a maximum of 34% after the secured lenders have received payments that are equivalent to the amount currently owed to them (approximately $740 million). The Plan also includes an agreement reached with the lead attorneys representing the Chinese drywall claimants. The terms of the agreement as described in the Plan provide for the creation of a Chinese Drywall Trust and allow the Chinese drywall claimants to pursue causes of action related to the manufacture and installation of defective imported drywall in their homes. "Today marks an important step in WCI's restructuring. The Company and its secured lenders and the Official Committee of Unsecured Creditors have been able to work together to maximize value under extremely challenging circumstances and to ensure that recoveries are allocated fairly among the Company's stakeholders," said Thomas Lauria, Esq., at White & Case, WCI's counsel in the Chapter 11 case. "This consensual resolution is a tribute to all involved, given that we had no agreement with any of our creditors when we commenced these cases just 11 months ago, and in light of the unprecedented events that have transpired since." About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. (Pink Sheets: WCIMQ) -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company with more than 50 years' experience in the design, construction and operation of leisure-oriented, amenity rich master-planned communities. It has operations in Florida, New York, New Jersey, Connecticut, Virginia and Maryland. The Company directly employs approximately 1,170 people, as well as approximately 1,800 sales representatives as independent contractors. 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. WESTMORELAND COAL: Unit to Pay $1.3 Million Settlement to MMS ------------------------------------------------------------- The U.S. Minerals Management Service has asserted transportation and gross inequity claims against Western Energy Company, a subsidiary of Westmoreland Coal Company, for federal coal royalties allegedly due and owing on payments received by Western Energy from customers. MMS claimed that revenues earned by Western Energy under the transportation agreements with its customers were, in reality, payments for the production and sale of coal, and therefore royalty bearing. On July 9, 2009, MMS and Western Energy entered into a settlement agreement whereby Western Energy will pay the sum of $12.2 million to resolve all issues surrounding the transportation claims for all periods through December 31, 2007, and will pay future royalties on the transportation proceeds in accordance with the established methodology of MMS. The customers at Western Energy have agreed to reimburse 80% of the settlement amount and to pay 80% of future royalty payments owed to MMS. MMS issued a demand for a royalty payment in connection with a settlement agreement dated February 21, 1997, between Western Energy and its customer, Puget Sound Energy, which reduced the price of coal paid by Puget Sound. On July 9, 2009, MMS and Western Energy entered into a settlement agreement whereby Western Energy will pay the assessed amount of approximately $1.3 million. Puget Sound Energy has agreed to reimburse Western Energy for all of the settlement costs. A full-text copy of the Settlement Agreement and Mutual Release between Western Energy Company, the United States Department of Justice, and the United States Department of the Interior, through its agency the Minerals Management Service dated July 9, 2009, is available at no charge at http://ResearchArchives.com/t/s?3f91 A full-text copy of the Settlement Agreement and Mutual Release between Western Energy Company and the Department of the Interior, through the Minerals Management Service dated July 9, 2009, is available at no charge at http://ResearchArchives.com/t/s?3f92 About Westmoreland Coal Headquartered in Colorado Springs, Colorado, Westmoreland Coal Company (AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States and an owner of highly clean and efficient independent power projects. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota, and Texas. Its current power operations include ownership and operation of the two-unit ROVA coal-fired power plant in North Carolina. Westmoreland is dedicated to meeting America's dual goals of low-cost power and a clean environment. * * * As of December 31, 2008, the Company's balance sheet showed total assets of $812.9 million, total debts of $269.1 million and shareholders' deficit of $217.5 million. In its 2008 Annual Report on Form 10-K, the Company noted that it has suffered recurring losses from operations, has a working capital deficit and a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. The report from KPMG LLP, in Denver, Colorado, the Company's independent registered certified public accounting firm, on the Company's consolidated financial statements for the year ended December 31, 2008, includes an explanatory paragraph reciting the factors that raise substantial doubt about its ability to continue as a going concern. WILTON HOLDINGS: 2 Creditors File Involuntary Ch. 11 Petition ------------------------------------------------------------- Two lenders filed an involuntary Chapter 11 petition in Delaware against Wilton Holdings Inc. The lenders, Deutsche Bank Trust Co. Americas and JGF Credit LLC, assert that they are each owed $104 million. The petitioners' claims were part of the financing for the August 2007 acquisition and merger of Wilton Industries Inc. and Dimensions Holdings LLC by an affiliate of GTCR Golder Rauner LLC. Wilton Holdings Inc. is a Woodbridge, Illinois-based baking- and crafts-supply company. Two lenders filed an involuntary Chapter 11 petition against the Company on July 20, 2009 (Bankr. D. Del. Case No. 09-12563). WOODSIDE GROUP: Denies JPMorgan's Motion to Appoint Ch 11 Trustee ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has denied the motion of J.P. Morgan Chase Bank, N.A., for an order appointing a Chapter 11 trustee for Alameda Investments, LLC, or, in the alternative, expanding the scope of the examiner's investigation and expanding the powers of the examiner in connection with the investigation. To the extent the motion seeks the appointment of an examiner for Alameda pursuant to Section 1104(c)(2), the motion is continued to August 17, 2009, at 10:30 a.m. Under Sec. 1104(c)(2) of the Bankruptcy Code, the Court is mandated to appoint an examiner if the Debtor's fixed, liquidated, unsecured debts exceed $5 million. As reported in the TCR on May 4, 2009, Woodside Group LLC, et al., asked the Court to deny the aforesaid motion of J.P. Morgan. The Debtors presented these arguments: A. The motion is supported by no evidence, much less the quantum of evidence needed to satisfy JPMorgan's high burden of proof. B. There is zero evidence of fraud, dishonesty, incompetence, or gross mismanagement of Alameda. The $254 million was not transferred by Alameda to its direct parent Liberty Holdings Group, LLC. C. Appointment of a trustee is unwarranted where the alleged pre-petition management or misconduct is unlikely to recur in Chapter 11. D. The appointment of a trustee is unnecessary since the official committee of unsecured creditors, JPMorgan or an estate representative for Alameda can take all appropriate actions. E. Expanding the Examiner's authority as requested is unwarranted, would impose great costs for no discernible benefit, and would be unfair to other creditors. As reported in the Troubled Company Reporter on April 17, 2009, JP Morgan, as administrative agent for the lenders that provided a loan to a joint venture of which Alameda was a member, wanted the examiner to investigate Alameda's and its parent Liberty's financial affairs, management and operations and determine whether, as a result of the nineteen asset transfers which were made by Alameda to Liberty on January 1, 2008, totalling over $254 million, and the payments, in excess of $3 million, made by Alameda paid to insiders throughout 2008, causes of action exist against Liberty and other transferees in the chain. JPMorgan also wanted the examiner to investigate if any of these insider transfers should be recharacterized as equity and treated as a fraudulent transfer. On December 15, 2008, examiner Paul S. Aronzon, who was appointed at the beginning of these cases, submitted his report. Mr. Aronzon, as part of his investigation, informed the Court that the Debtors and their creditors have a cognizable basis for asserting legal claims against the Company's management and shareholders. In his report, Mr. Aronzon said the Debtors hold these claims: 1. Breach of fiduciary duty 2. Gross negligence 3. Unjust enrichment 4. Conversion 5. Intentional fraudulent transfers 6. Constructive fraudulent transfers 7. Unlawful dividends under Nevada state law 8. Alter ego liability About Woodside Group Headquartered in North Salt Lake, Utah, Woodside Group LLC http://www.woodside-homes.com/-- is the parent company of multiple subsidiaries and through approximately 185 of those subsidiaries is primarily engaged in homebuilding operations in eight states. The operations of the Woodside Group are financed through Woodside Group's affiliate Pleasant Hill Investments, LC. Woodside Group, Pleasant Hill Investments and each of the 185 subsidiaries are the Debtors. Woodside Group also has subsidiaries and affiliates that are not debtors. On March 31, 2008, Woodside AMR 107, Inc., and Woodside Portofino, Inc., filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. On August 20, 2008, an Ad Hoc Group of Noteholders commenced the filing of involuntary petitions against the Debtors (other than AMR 107 and Portofino). On August 20, 2008, JPMorgan Chase Bank, N.A., on behalf of the Bank Group, commenced the filing of certain Joinders in the Involuntary Petition. On September 16, 2008, the Debtors filed a "Consolidated Answer to Involuntary Petitions and Consent to Order for Relief" and the Court entered the "Order for Relief Under Chapter 11." The Debtors are jointly administered under Case No. 08-20682. The Bankruptcy Cases are currently pending before the Honorable Peter Carroll in the United States Bankruptcy Court for the Central District of California (Riverside). Jeremy V. Richards, Esq., Linda F. Cantor, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, represent the Debtors as counsel. Susy Li, Esq., and Michael A. Sherman, Esq., at Bingham McCutchen LLP, in Los Angeles, Michael J. Reilly, Esq., Jonathan B. Alter, Esq., and Mark W. Deveno, Esq., at Bingham McCutchen LLP, in Hartford, Connecticut, act as counsel to the Ad Hoc Group of Noteholders. Donald L. Gaffney, Esq., at Snell & Wilmer LLP, in Phoenix Arizona, Michael B. Reynolds, Esq., Eric S. Pezold, Esq., at Snell & Wilmer LLP, in Costa Mesa, California, are counsel for JPMorgan Chase Bank, N.A., as Administrative Agent to Participant Lenders. David L. Gaffney, Esq., at Snell & Wilmer LLP, in Phoenix Arizona, and Michael B. Reynolds, Esq., and Eric S. Pezold, Esq., at Snell & Wilmer LLP, in Costa Mesa, California, are the proposed counsel to the Official Committee of Unsecured Creditors. During 2007, the Woodside Entities generated revenues exceeding $1 billion on a consolidated basis. As of December 31, 2007, the Woodside Entities had consolidated assets and liabilities of approximately $1.5 billion and $1.1 billion, respectively. As of the September 16, 2008 petition date, the Debtors have approximately $70 million in cash. The Woodside Entities employ approximately 494 employees. In its schedules, Woodside Group, LLC, listed total assets of $1,000,285,578 and total liabilities of $691,352,742. The schedules are unaudited. WOODSIDE GROUP: Alameda, Liberty Liquidate; Others to Reorganize ---------------------------------------------------------------- As reported in the TCR on July 16, 2009, the Hon. Peter Carroll of the U.S. Bankruptcy Court for the Central District of California approved a disclosure statement describing the second amended Chapter 11 plan of reorganization filed by Woodside Group LLC and its debtor-affiliates on July 2, 2009. Judge Carroll also approved the plan solicitation and voting procedures. Deadline for the receipt of ballots accepting or rejecting the plan is on August 31, 2009, by 5:00 p.m. A hearing is set for October 2, 2009, at 10:30 a.m., to consider confirmation of the Debtors' plan. Plan Overview The Plan effectuates a reorganization of the Debtors (other than Alameda Investments, LLC and Liberty Holdings Group, LLC) through the issuance of debt and equity in Newco, and the preservation of the Debtors' business operations and going concern value. The Liquidating Debtors -- Alameda and Liberty -- will liquidate all of their assets for the benefit of their respective creditors, in accordance with the provisions of the Plan. Holders of Interests will not receive or retain any property under the Plan, and any potential estate claims against insiders will be preserved and prosecuted and litigated. The Plan will be funded by way of the Debtors' cash on hand, revenues from ordinary course operations, proceeds of asset sales, and, if necessary, new financing. There will no substantive consolidation of the Debtor's estates under the Plan. Newco will be a new limited liability company to be formed which will own all of the ownership interests in Reorganized Woodside and Reorganized Pleasant Hill Investments. Pursuant to the Plan, holders of Allowed Reorganizing Debtor Financial Lender Claims, Allowed Reorganizing Debtor Bond Indemnity Claims (if the appropriate election is made by the Debtors pursuant to the Plan), and Allowed Reorganizing Debtor General Unsecured Claims will be allocated Restructured Debt and Restructured Equity of Newco in proportion to each Allowed Claim and the particular Debtors against which such Claim is Allowed. The Restructured Debt to be issued by Newco will be secured by substantially all of the Reorganized Debtors' assets (other than real property), and it will be guaranteed by the Reorganized Debtors. Holders of Allowed Alameda General Unsecured Claims, Allowed Liberty General Unsecured Claims, Allowed Alameda Bond Indemnity Claims, and Allowed Liberty Bond Indemnity Claims will receive their respective pro rata share of any available assets of Alameda and Liberty, respectively, after satisfaction of all senior claims. All existing Interests in Woodside and PHI will be extinguished and the holders of such Interests will not receive or retain any property on account of such Interests. Newco will be vested with the Interests in Reorganized Woodside and Reorganized PHI, and Rorganized Woodside will be vested directly or indirectly with the Interests in the Reorganized Debtor Subsidiaries. Finally, all other (senior) Allowed Claims, such as Administrative Claims, Priority Tax Claims, Priority Non-Tax Claims and Secured Claims, will be paid or otherwise satisfied pursuant to the terms of the the Plan. Treatment of Claims and Interests The Plan provides these classification and treatment of Claims against and Interests in the Debtors: Estimated Amount Class Type of Claim or Value of Claims Treatment ----- --------------------- ------------------ --------- RD 1 Priority Non-Tax $1,000,000 Unimpaired Claims RD 2 Secured Claims $2,000,000 Unimpaired RD 3 Essential Trade Claims $3,000,000 Unimpaired RD 4 Financial Lender Claims $717,000,000 Impaired RD 5 Bond Indemnity Claims $48,600,000 Impaired RD 6 General Unsecured Claims $176,000,000 Impaired RD 7 General Unsecured To be determined Impaired Convenience laims RD 8 De Minimis Convenience To be determined Impaired Claims RD 9 Pre-Relief Date Have Intercompany Claims Consented RD 10 Interests N/A Deemed to Reject LD 1 Alameda Priority Less than $1,000,000 Unimpaired Non-Tax Claims LD 2 Liberty Priority Less than $1,000,000 Unimpaired Non-Tax Claims LD 3 Alabama Secured Less than $1,000,000 Unimpaired Claims LD 4 Liberty Secured Less than $1,000,000 Unimpaired Claims LD 5 Alameda Bond $48,600,000 Impaired Indemnity Claims LD 6 Alameda General $200,000,000 Impaired Unsecured Claims LD 7 Alameda Bond Indemnity Claims $48,600,000 Impaired LD 8 Liberty General $169,000,000 Impaired Unsecured Claims LD 9 Pre-Relief Date Have Intercompany Claims Consented LD 10 Interests N/A Deemed to Reject RD Class 1, RD Class 2, RD Class 3, LD Class 1, LD Class 2, LD Class 3, and LD Class 4, being unimpaired, are deemed to have accepted the Plan. RD Class 4, RD Class 5, RD Class 6, RD Class 7, RD Class 8, LD Class 5, and LD Class 6, LD Class 7, and LD Class 8 are impaired under the Plan and entitled to accept or reject the Plan. RD Class 10 and LD Class 10 are presumened to reject the Plan. A full-text copy of the second amended disclosure statement describing Woodside Group's second amended Chapter 11 plan of reorganization dated July 2, 2009, is available for free at: http://bankrupt.com/misc/woodside.2ndamendedDS.pdf About Woodside Group Headquartered in North Salt Lake, Utah, Woodside Group LLC http://www.woodside-homes.com/-- is the parent company of multiple subsidiaries and through approximately 185 of those subsidiaries is primarily engaged in homebuilding operations in eight states. The operations of the Woodside Group are financed through Woodside Group's affiliate Pleasant Hill Investments, LC. Woodside Group, Pleasant Hill Investments and each of the 185 subsidiaries are the Debtors. Woodside Group also has subsidiaries and affiliates that are not debtors. On March 31, 2008, Woodside AMR 107, Inc., and Woodside Portofino, Inc., filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. On August 20, 2008, an Ad Hoc Group of Noteholders commenced the filing of involuntary petitions against the Debtors (other than AMR 107 and Portofino). On August 20, 2008, JPMorgan Chase Bank, N.A., on behalf of the Bank Group, commenced the filing of certain Joinders in the Involuntary Petition. On September 16, 2008, the Debtors filed a "Consolidated Answer to Involuntary Petitions and Consent to Order for Relief" and the Court entered the "Order for Relief Under Chapter 11." The Debtors are jointly administered under Case No. 08-20682. The Bankruptcy Cases are currently pending before the Honorable Peter Carroll in the United States Bankruptcy Court for the Central District of California (Riverside). Jeremy V. Richards, Esq., Linda F. Cantor, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, represent the Debtors as counsel. Susy Li, Esq., and Michael A. Sherman, Esq., at Bingham McCutchen LLP, in Los Angeles, Michael J. Reilly, Esq., Jonathan B. Alter, Esq., and Mark W. Deveno, Esq., at Bingham McCutchen LLP, in Hartford, Connecticut, act as counsel to the Ad Hoc Group of Noteholders. Donald L. Gaffney, Esq., at Snell & Wilmer LLP, in Phoenix Arizona, Michael B. Reynolds, Esq., Eric S. Pezold, Esq., at Snell & Wilmer LLP, in Costa Mesa, California, are counsel for JPMorgan Chase Bank, N.A., as Administrative Agent to Participant Lenders. David L. Gaffney, Esq., at Snell & Wilmer LLP, in Phoenix Arizona, and Michael B. Reynolds, Esq., and Eric S. Pezold, Esq., at Snell & Wilmer LLP, in Costa Mesa, California, are the proposed counsel to the Official Committee of Unsecured Creditors. During 2007, the Woodside Entities generated revenues exceeding $1 billion on a consolidated basis. As of December 31, 2007, the Woodside Entities had consolidated assets and liabilities of approximately $1.5 billion and $1.1 billion, respectively. As of the September 16, 2008 petition date, the Debtors have approximately $70 million in cash. The Woodside Entities employ approximately 494 employees. In its schedules, Woodside Group, LLC, listed total assets of $1,000,285,578 and total liabilities of $691,352,742. The schedules are unaudited. YELLOWSTONE CLUB: CrossHarbor Capital Completes Acquisition ----------------------------------------------------------- An investment partnership led by CrossHarbor Capital Partners, LLC, and comprised of a large group of Yellowstone Club members and Discovery Land Company LLC, completed the acquisition of the equity interests in the reorganized Yellowstone Club. Together with Discovery Land Company, CrossHarbor will manage and develop the private, world class ski and golf resort. As reported by the Troubled Company Reporter on June 4, 2009, the U.S. Bankruptcy Court for the District of Montana has approved Yellowstone Mountain Club's sale to CrossHarbor for $115 million. CrossHarbor agreed to pay $35 million in cash and provide a note worth $80 million to creditors. The Boston Globe reported the purchase price is less than a quarter of what CrossHarbor had offered in 2008. Court documents say that Credit Suisse Group and the other lenders will have the right to try to collect as much as $309 million that Yellowstone owed them. "We are pleased that we have acquired the Yellowstone Club so that we can provide the leadership, professional management and development expertise needed to ensure its long-term success," said Sam Byrne, Managing Partner and Co-Founder of CrossHarbor Capital Partners. "[T]he Club emerges from Chapter 11 as a well capitalized enterprise, positioned to maintain and build on its premier status for the benefit of the Club's members, employees and the Big Sky community. With a solid business plan now in place, we are confident that the Club has a very bright future." Mike Meldman of Discovery Land Company stated, "This is an important milestone for the Yellowstone Club. Most of all, we thank the Club's members and employees, who have worked tirelessly over the past nine months to make this transaction a reality. This is the start of a new chapter in the history of the Yellowstone Club, and we look forward to working closely with CrossHarbor, the members, all of the employees and the Big Sky community." On November 9, 2008, the Yellowstone Club filed for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Montana. Under the Chapter 11 Plan of Reorganization confirmed by the Court June 3, 2009, a $15 million fund will be established by CrossHarbor to ensure payment to local trade and other creditors of the Club, and it is anticipated that the allowed claims of all or substantially all general unsecured creditors will be paid in full. The designation of beneficiaries of the Trade Creditor Fund and reconciliation and allowance of their claims is proceeding on an expedited basis, in order that payments can be made as soon as possible. It is expected that most, if not all, such payments will be made in the next 30 to 60 days. Duane Morris LLP, Goulston & Storrs, P.C., and Crowley Fleck P.L.L.P. served as CrossHarbor's legal advisors and Goldman, Sachs & Co. served as financial advisor. About CrossHarbor CrossHarbor Capital Partners is a leading alternative investment firm specializing principally in real estate as well as distressed securities and private equity. About Discovery Land Company Discovery Land Company is one of the leading private-club and community developers in North America, having developed 16 successful luxury private clubs including Kukio on the Big Island of Hawaii; El Dorado in Los Cabos, Mexico, Madison Club in La Quinta, California, and Baker's Bay in the Abaco Islands of the Bahamas. About Yellowstone Club Located near Big Sky, Montana, Yellowstone Club -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Mountain Club LLC and its affiliates filed for Chapter 11 on November 10, 2008 (Bankr. D. Montana, Case No. 08- 61570). The Company's owner affiliate Edra D. Blixseth, filed for Chapter 11 on March 27, 2009 (Case No. 09-60452). Connie Sue Martin, Esq., David A. Ernst, Esq., Lawrence R Ream, Esq., Richard G. Birinyi, Esq., Stephen Deatherage, Esq., Thomas L. Hutchinson, Esq., and Troy Greenfield, Esq., at Bullivant Houser Bailey PC; and James A. Patten, Esq., at Patten, Peterman, Bekkedahl & Green PLLC, represent the Debtors as counsel. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors in the case are represented by J. Thomas Beckett, Esq., and David P. Billings, Esq., at Parsons, Behle and Latimer, as counsel, and James H. Cossitt, Esq., at local counsel. Credit Suisse, the prepetition first lien lender, is represented by Skadden, Arps, Slate, Meagher & Flom. * Sixth Circuit Approves `Nunc Pro Tunc' Conversion --------------------------------------------------- According to Bill Rochelle at Bloomberg News, the U.S. Court of Appeals for the Sixth Circuit in Cincinnati ruled on July 17 that a bankruptcy court has power to convert a case to Chapter 7 from Chapter 11, with the conversion effective as of an earlier date. The Sixth Circuit court found no provision in bankruptcy law or procedural rules prohibiting conversion as of an earlier date. The appeals court said dismissal "nunc pro tunc," is proper when the equities of the case require. The case is Mitan v. Duval (In re Mitan), 07-1915, U.S. Court of Appeals for the Sixth Circuit (Cincinnati). * One in 84 American Homes in Foreclosure or Default ---------------------------------------------------- RealtyTrac(R) released its Midyear 2009 U.S. Foreclosure Market Report, which shows a total of 1,905,723 foreclosure filings - default notices, auction sale notices and bank repossessions - were reported on 1,528,364 U.S. properties in the first six months of 2009, a 9 percent increase in total properties from the previous six months and a nearly 15 percent increase in total properties from the first six months of 2008. The report also shows that 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year. Foreclosure filings were reported on 336,173 U.S. properties in June, the fourth straight monthly total exceeding 300,000 and helping to boost the second quarter total to the highest quarterly total since RealtyTrac began issuing its report in the first quarter of 2005. Foreclosure filings were reported on 889,829 U.S. properties in the second quarter, an increase of nearly 11 percent from the previous quarter and a 20 percent increase from the second quarter of 2008. "In spite of the industry-wide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues to increase to record levels," noted James J. Saccacio, chief executive officer of RealtyTrac. "Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes' are now worth represent a potentially significant future risk. Stemming the tide of foreclosures is a critical component to stabilizing the housing market, so it is imperative that the lending industry and the government work in tandem to find new approaches to address this issue." Nevada, Arizona, Florida post top state foreclosure rates More than 6 percent of Nevada housing units (one in 16) received at least one foreclosure filing in the first half of 2009, giving it the nation's highest foreclosure rate during the six-month period. A total of 68,708 Nevada properties received a foreclosure filing from January to June, an increase of 23 percent from the previous six months and an increase of 61 percent from the first half of 2008. Arizona registered the nation's second highest state foreclosure rate in the first half of 2009, with 3.37 percent of its housing units (one in 30) receiving at least one foreclosure filing, and Florida registered the nation's third highest state foreclosure rate, with 3.08 percent of its housing units (one in 33) receiving at least one foreclosure filing. Other states with foreclosure rates ranking among the nation's 10 highest were California (2.94 percent), Utah (1.46 percent), Georgia (1.42 percent), Michigan (1.34 percent), Illinois (1.31 percent), Idaho (1.26 percent) and Colorado (1.25 percent). California, Florida, Arizona post highest foreclosure totals A total of 391,611 California properties received a foreclosure filing in the first half of 2009, the nation's highest total and 2.94 percent of the state's housing units (one in 34) - the nation's fourth highest state foreclosure rate. California foreclosure activity in the first half of 2009 increased nearly 14 percent from the previous six months and increased nearly 15 percent from the first half of 2008. With 268,064 properties receiving a foreclosure filing in the first six months of 2009, Florida documented the second highest state total. Florida foreclosure activity in the first half of 2009 increased 7 percent from the previous six months and was up nearly 42 percent from the first half of 2008. Arizona's 89,799 properties receiving a foreclosure filing in the first six months of 2009 was the third highest state total. Arizona foreclosure activity in the first half of 2009 increased 13 percent from the previous six months and was up nearly 55 percent from the first half of 2008. Other states with totals among the 10 highest in the country were Illinois (68,932), Nevada (68,708), Michigan (60,786), Ohio (58,937), Georgia (56,391), Texas (49,144) and Virginia (28,368). RealtyTrac(R) -- http://http:realtytrac.com/-- claims to be the leading online marketplace for foreclosure properties. * 59% of Restructuring Experts Suggest Bankruptcy Code Reform ------------------------------------------------------------- A hefty 59% of leading restructuring experts in the nation polled say Washington should move to reform flaws in the U.S. Bankruptcy Code, according to a survey by the global business-advisory firm AlixPartners LLP. In that same survey, when asked to identify an industry that "people aren't paying much attention to now but will see a surprising amount of restructuring" in the year ahead, 38% of respondents said municipalities, 19% said hospitals and 13% said the energy industry. That question was in addition to an earlier one in which respondents were asked to name the top 3 industries "most likely" to see restructuring in the next 12 months, a list headed up by autos, retail, commercial real estate and banking/finance. The survey, which was conducted by AlixPartners among 48 select bankruptcy lawyers, bankers, fund managers and other restructuring professionals, also found 67% of those polled saying the economy won't recover from the current recession until 2011 at the earliest, with 26% saying 2012 or later. Also, 62% said they see don't private equity becoming a major player in American M&A again until at least 2011, with 32% saying 2012 or later. "Given the severity of this recession, it looks like American industry and private-equity firms have their work cut out for them for some time to come," said Peter Fitzsimmons, AlixPartners' president of North America and also co-lead of the firm's turnaround and restructuring practice. "As we move through the recession, it's not just industries like autos and retail that are being affected -- as the experts in this survey noted. In fact, virtually every industry imaginable got at least one vote to the 'most-likely' list, including restaurants, aerospace, media, travel & leisure, professional-services firms and even 'green- technology' companies. Companies that hope to skirt danger during this period need to be more aggressive than perhaps they can even imagine at controlling costs and freeing up cash." When asked which part of the Bankruptcy Code most needs to be reformed, 50% of the respondents voting said the so-called "lease- assumption" language in Section 365 of the Code, which restricts the amount of time a bankrupt company has to assume or reject non- residential property leases to no more than 210 days after the commencement of its Chapter 11 case. This section, amended in 2005, has been blamed by some for leaving some companies, particularly retailers, with no choice but liquidation inside bankruptcy. Meantime, 19% of those voting pointed to the "exclusivity" language in Section 1121 as most in need of change, referring to the time period (exclusivity period) in which a debtor company retains the sole right to file a plan of reorganization--a time period that was effectively shortened in 2005. And another 19% said the "retention" language in Section 503, which sets stricter standards today than in the past as to employee retention at debtor companies, needs to be reformed the most. In all, 41% of all those polled said the Code is "seriously" flawed. About AlixPartners AlixPartners LLP -- http://www.alixpartners.com/-- is a global business advisory firm offering comprehensive services to improve corporate performance, execute corporate turnarounds, and provide litigation consulting and forensic accounting services. The firm was the recipient of a record four awards from the Turnaround Management Association in 2008. The firm has more than 900 professionals in 14 offices across North America, Europe, and Asia. * Compensation for Top General Counsel Continues to Increase ------------------------------------------------------------ Corporate Counsel, a publication for general counsel and in-house attorneys at corporations across the country, reported that the top in-house lawyers at the nation's largest corporations received a modest raise last year, despite the economic crisis that engulfed their employers. The magazine's 15th annual survey of the 100 best-paid chief legal officers in the U.S., published July 20, reveals that average salaries rose 5 percent, to $596,393, while the group's average cash payout (salary and bonus) grew to $1.8 million, a 2.6 percent increase. But, last year's average bonus/nonequity incentive award was up less than 1 percent, while non-cash compensation, traditionally an important component of overall earnings, dropped significantly. Complete survey results are available in the August issue of Corporate Counsel and on the Web at http://www.corpcounsel.com/ The top spot in the survey went to Gregory Doody, an expert in bankruptcy law whose take-home pay from the Calpine Corporation was $9.7 million, including a combined cash bonus of $9.4 million. Mr. Doody was hired in 2006 to lead the company out of bankruptcy and left in December to undertake a similar role at Charter Communications. Company shares, historically an important component of GC compensation, plunged in 2008. The average stock award fell 18 percent, to $1.1 million, the first decline in years. The average option award, once the darling of the tech bubble years, continued its decline, dropping 7 percent, to $669,719. "This is the first time since the dot-com bubble burst eight years ago that we saw any significant drop in stock-related compensation," said Anthony Paonita, editor in chief of Corporate Counsel. "The nation's GCs took a hit in the stock market, just like everyone else." GC bonuses generally stayed in sync with industry sector performance. Overall, the average bonus was $1.16 million, up slightly from $1.15 million in 2007. But the average for top lawyers in the struggling auto industry was much smaller, at $530,230. The average bonus for lawyers in the more profitable oil industries was almost twice that at $1 million. And despite the chaotic state of the finance industry, GCs at financial companies took home an average bonus of $2.2 million. Even though stock options have fallen out of favor, general counsel are still getting rich by cashing them out. Despite the dismal performance of last year's stock market, 37 general counsel made a total of $99 million by cashing in stock options, compared to 56 in the previous survey. Corporate Counsel has ranked the nation's 100 best-paid GCs since 1994. GCs are ranked based on publicly available cash compensation data drawn from examination of proxy statements for all Fortune 500 companies. Survey data includes cash and bonus packages, as well as the value realized on stock cash-outs. The list also provides GC equity, including restricted stock grants, option grants, and exercisable options. The award-winning Corporate Counsel is published by Incisive Media and is available on the Web at http://www.corpcounsel.com/ Incisive Media -- http://www.incisivemedia.com/-- is a leading global provider of specialized business news and information, in print, in person and online. The company's principal markets include financial services, legal services, commercial real estate, marketing services and risk management. Incisive Media's market-leading brands include Accountancy Age, Computing, Investment Week, Legal Week, LegalTech, Post, Real Estate Forum, Risk, Search Engine Strategies and The American Lawyer. * Recession Grinding to a Halt, Federal Reserve and BoJ Say ----------------------------------------------------------- In a Memo issued by the Federal Reserve on July 16, officials predict that the 18-month-long economic recession is grinding to a halt. Meanwhile Bank of Japan said on July 15 that Japan's economic downturn has reached the floor. China has also seen clearer economic recovery momentum in the first half of 2009, with its domestic industry taking on a prosperous scene. In a statement, Fairtheworld.com believes that the recovery signal sent by China, Japan and the U.S. indicates that main global economies are gradually bottoming out, which will instill confidence to global investment and employment markets. However, the gloom will not be dispelled immediately. In a prolonged period from now on, joblessness will remain high; there may be a lot of deficits or bankruptcies taking place in quite a number of enterprises. The best measure a company can take is to try its best to reduce cost, maintain and expand orders. Some lavishly-funded enterprises may take this opportunity to start a global merger & acquisition spree and attract talent with high salaries, in a bid to prepare for a future expansion after the recovery, Fairtheworld.com says. Fairtheworld predicts that the global merger & acquisition and recruitment surge will reach its peak before an economic re-bound, because all companies hope to get themselves ready before a genuine recovery. On the Net: http://www.Fairtheworld.com/ * Former GM Counsel Osborne Returns to Jenner & Block ----------------------------------------------------- Robert S. Osborne, Group Vice President and General Counsel of General Motors, will rejoin Jenner & Block in September 2009 as a Partner in its Chicago Office. Mr. Osborne returns to the Firm's highly regarded Corporate Department. "We are very excited that Bob is returning to Jenner & Block," said Managing Partner Susan C. Levy. "Bob is one of the most talented, principled, and highly respected corporate lawyers in the country, and we are proud to welcome him back to our Corporate Department from one of our most valued clients." "As a part of the senior management team at GM during what was arguably the most challenging period in the corporation's history, Bob will bring extraordinary insight to our clients and the issues they face," said Joseph P. Gromacki, Chair of Jenner & Block's Corporate Department and a member of the Firm's governing Policy Committee. "I am thrilled to welcome Bob back to the Firm, and I am delighted to work with him once again as my partner at Jenner & Block. His leadership, experience and extraordinary judgment will be a tremendous asset to the Firm." "I'm honored to practice again at Jenner & Block," said Mr. Osborne. "I have a deep respect -- both as a client and a partner at the Firm -- for the unwavering commitment to the highest ideals of the legal profession shared among the lawyers at Jenner & Block. I'm excited to rejoin my colleagues and counsel the Firm's clients on a range of transactional, governance and securities matters." "I am confident about GM's future and it was a privilege to work with the company's immensely talented executive and legal team," Mr. Osborne added. While at GM, Mr. Osborne had primary responsibility for GM's legal staff, office of export compliance and office of the secretary, and was a member of GM's senior management committee, the automotive strategy board. While at GM, he headed a global legal staff of more than 200 lawyers in 31 countries and led the legal teams that resolved complex securities litigation, negotiated a series of federal government loans and successfully executed a complex 363 sale and emergence from bankruptcy over a short period of time. Mr. Osborne had previously been a senior partner of the Firm, Chair of its Corporate Department and a member of its Management and Policy Committees from September 2002 until he joined GM in September 2006. Prior to joining Jenner & Block, he was a senior partner at Kirkland & Ellis, LLP. Mr. Osborne graduated from Harvard Law School, magna cum laude, in 1979 and from Harvard College, magna cum laude, in 1976. He is admitted to the bar in the states of Illinois, Michigan and New York. * S&P's Year-To-Date Tally of Defaulted Issuers Now 4x 2008's ------------------------------------------------------------- Three global corporate issuers defaulted during the week of July 14, bringing the 2009 year-to-date tally to 181 issuers -- nearly 4x the 46 defaults at this time in 2008, said an article published July 17 by Standard & Poor's. Two of the latest defaulters were based in the U.S. and one was based in Europe, bringing the default tallies by region to 130 issuers in the U.S., nine in Europe, 30 in the emerging markets, and 12 in the other developed region (Australia, Canada, Japan, and New Zealand). The first default this week was a result of a distressed exchange, upping the distressed exchange tally to 51 issuers so far this year, according to the article, titled "Global Corporate Default Update (July 10 - 16, 2009) (Premium)." Distressed exchanges have surged this year, with the midyear 2009 tally at more than 3x the full-year 2008 total and 12x the count of four issuers in 2007. The remaining two defaults resulted from restructuring--one Chapter 11 filing and one out-of-court restructuring. The 51 bankruptcy filings so far this year have surpassed the full-year 2008 total of 49 bankruptcy-related defaults. The sharp increase in corporate bankruptcies brings with it significant difficulties to private equity investors, particularly for those whose buyout activities in the past several years placed much of their risks squarely in the speculative-grade domain. Indeed, more than half of the defaulters this year either had or continue to have private equity involvement, which presents both challenges and opportunities to private equity investors during restructuring and reorganization. Of the global corporate defaulters so far this year, 41% of issues with available recovery ratings had recovery ratings of '6' (indicating our expectation for negligible recovery of 0%-10%), 16% of issues had recovery ratings of '5' (modest recovery prospects of 10%-30%), 13% had recovery ratings of '4' (average recovery prospects of 30%-50%), and 10% had recovery ratings of '3' (meaningful recovery prospects of 50%-70%). And for the remaining two rating categories, 12% of issues had recovery ratings of '2' (substantial recovery prospects of 70%-90%) and 9% of issues had recovery ratings of '1' (very high recovery prospects of 90%-100%). * S&P Expects to 2010 to Produce Lowest Auto Sales in Decades ------------------------------------------------------------- Fueled by economic crisis and transformation over the past year, the automotive industry has come to a crossroads. In an industry report card published July 20 by Standard & Poor's Ratings Services, titled, "Global Automakers Are In Transition, And Truckmakers Face Ongoing Weakness," we outline our expectations about the effects of sharp declines in sales and production, waning profitability, government incentives, and stricter emissions-reduction mandates on industry credit in the coming quarters. "Government aid might help avoid a crisis in the short term, but it could also impede the rationalization and reduction of overcapacity necessary for companies to reposition themselves in a new environment," said Standard & Poor's credit analyst Maria Bissinger. Despite sharp declines in sales that contributed to the bankruptcies of General Motors Corp. and Chrysler LLC and multiple defaults this year, S&P believes 2010 will be the year with the lowest auto sales in decades. Worldwide emphasis on more stringent regulations will continue to diminish profitability as companies engage in extensive research and development. Even for Japanese automakers, who are comparatively better-positioned in light of top-selling hybrid models and general financial strength, we expect production to remain weak through year-end as the industry transitions in its technology and product mix. In Europe, low consumer confidence, continued recession, and constrained credit are likely to stifle demand well into 2010 despite growth-inducing government support, such as the incentive programs in Germany, France, and Italy. S&P is also beginning to see signs of industry recovery in Korea, Brazil, Russia, India, and China as government support stimulates demand. Overall, despite any projected recoveries and stimulus-induced positive growth rates, shrinking profitability remains a concern for the industry worldwide as many companies struggle to regain the sales and market share lost over the past 12 months. * Spec-Grade Market Set to Face Tough Second-Half, Says S&P ----------------------------------------------------------- Speculative-grade corporate bonds have seen a strong rebound so far this year, said an article published July 17 by Standard & Poor's. The spread on Standard & Poor's speculative-grade index tightened 653 basis points (bps) this year and 760 bps since the spread peaked in mid-December 2008, according to the article, titled "U.S. Speculative-Grade Spreads Sector Index Review: Market Rally In The First Half Of 2009 (Premium)." The improvement in our spread index reflects a significant drop in liquidity risk and a decline in the probability of a long-drawn-out economic depression--which would produce apocalyptic default rates, says S&P. "Although spreads have tightened as market volatility has eased, aggregate credit quality is still in poor shape," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The pool of companies that face significant default risk is large, with 13% of speculative-grade companies rated 'CCC+' or lower and another 15% rated 'B-' at the end of June." Furthermore, S&P expects downgrades and defaults to continue. Downgrades have totaled 472 so far in 2009 but have slowed in recent months. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------- ------- ABSOLUTE SOFTWRE ABT CN 107 (7) 24 AFC ENTERPRISES AFCE US 131 (33) 2 AMR CORP AMR US 24,138 (3,000) (3,129) ARBITRON INC ARB US 189 (3) (22) ARRAY BIOPHARMA ARRY US 108 (54) 31 ARVINMERITOR INC ARM US 2,873 (719) 278 AUTOZONE INC AZO US 5,296 (45) (527) AVATAR HOLDINGS AVTR US 585 0 N.A. BAXTER INTL INC BAX US 14,952 0 3,568 BLOUNT INTL BLT US 499 (43) 175 BOARDWALK REAL E BEI-U CN 2,318 (5) N.A. BOARDWALK REAL E BOWFF US 2,318 (5) N.A. BOEING CO BA US 55,339 (509) (2,160) BOEING CO BAB BB 55,339 (509) (2,160) BP PRUD BAY-RTU BPT US 9 8 0 BRIGHAM EXPLOR BEXP US 365 2 17 BURCON NUTRASCIE BU CN 4 3 2 CABLEVISION SYS CVC US 9,551 (5,349) (367) CARDTRONICS INC CATM US 468 (22) (33) CARROLS RESTAURA TAST US 482 3 (39) CENTENNIAL COMM CYCL US 1,413 (992) 148 CENVEO INC CVO US 1,501 (221) 163 CHENIERE ENERGY CQP US 1,975 (408) 79 CHOICE HOTELS CHH US 333 (146) (10) CLOROX CO CLX US 4,464 (309) (866) DELTEK INC PROJ US 191 (48) 42 DISH NETWORK-A DISH US 7,063 (1,666) (422) DOMINO'S PIZZA DPZ US 473 (1,396) 99 DUN & BRADSTREET DNB US 1,614 (785) (176) DYAX CORP DYAX US 64 (41) 9 EINSTEIN NOAH RE BAGL US 168 (11) (52) ENERGY COMPOSITE ENCC US 0 0 0 EPICEPT CORP EPCT SS 12 (5) 4 EXELIXIS INC EXEL US 355 (88) 53 EXTENDICARE REAL EXE-U CN 1,833 (51) 98 FEMALE HEALTH FHCO US 13 9 8 FORD MOTOR CO F US 207,270 (16,476) (40,953) FORD MOTOR CO F BB 207,270 (16,476) (40,953) FX ENERGY INC FXEN US 38 7 7 GARTNER INC IT US 948 4 (223) GENTEK INC GETI US 430 (8) 102 GLG PARTNERS INC GLG US 345 (382) 101 GLG PARTNERS-UTS GLG/U US 345 (382) 101 GOLD RESOURCE CO GORO US 9 9 7 HALOZYME THERAPE HALO US 68 3 52 HEALTHSOUTH CORP HLS US 1,921 (656) (53) HERMAN MILLER MLHR US 767 8 242 HOLLY ENERGY PAR HEP US 469 0 (6) HUMAN GENOME SCI HGSI US 735 (3) 118 IDENIX PHARM IDIX US 96 9 50 IMAX CORP IMX CN 226 (98) 19 IMAX CORP IMAX US 226 (98) 19 IMS HEALTH INC RX US 2,026 4 328 INCYTE CORP INCY US 189 (256) 123 INTERMUNE INC ITMN US 193 (82) 121 IPCS INC IPCS US 545 (41) 62 JOHN BEAN TECH JBT US 559 (6) 78 JUST ENERGY INCO JE-U CN 535 (692) (358) KNOLOGY INC KNOL US 635 (52) 25 LINEAR TECH CORP LLTC US 1,491 (288) 995 LIONS GATE LGF US 1,667 (8) (819) LOGMEIN INC LOGM US 40 4 0 MAP PHARMACEUTIC MAPP US 78 4 32 MAXLIFE FUND COR MXFD US 0 0 0 MEAD JOHNSON-A MJN US 1,707 (897) 380 MEDIACOM COMM-A MCCC US 3,700 (463) (281) MEDIDATA SOLUTIO MDSO US 72 (13) (17) MEDIVATION INC MDVN US 211 0 128 MODAVOX INC MDVX US 5 2 (1) MOODY'S CORP MCO US 1,802 (919) (482) NATIONAL CINEMED NCMI US 604 (514) 89 NAVISTAR INTL NAV US 9,656 (1,447) 1,784 NPS PHARM INC NPSP US 200 (225) 87 OCH-ZIFF CAPIT-A OZM US 1,821 (177) N.A. OVERSTOCK.COM OSTK US 136 (4) 33 PALM INC PALM US 643 (108) 11 PDL BIOPHARMA IN PDLI US 219 (422) 79 PERMIAN BASIN PBT US 10 0 9 PETROALGAE INC PALG US 5 (23) (7) POTLATCH CORP PCH US 917 0 N.A. QWEST COMMUNICAT Q US 19,711 (1,164) (344) REGAL ENTERTAI-A RGC US 2,563 (246) (78) RENAISSANCE LEA RLRN US 58 0 (6) REVLON INC-A REV US 784 (1,095) 103 SALLY BEAUTY HOL SBH US 1,433 (702) 389 SANDRIDGE ENERGY SD US 2,670 (114) 118 SEMGROUP ENERGY SGLP US 354 (126) 27 SIGA TECH INC SIGA US 7 (6) (3) SOLARWINDS INC SWI US 91 (40) 23 SONIC CORP SONC US 828 (22) 75 STANDARD PARKING STAN US 231 0 (15) STEREOTAXIS INC STXS US 53 (4) 3 SUCCESSFACTORS I SFSF US 162 (7) 0 SUN COMMUNITIES SUI US 1,197 (68) N.A. SYNERGY PHARMACE SGYP US 0 (1) (1) TALBOTS INC TLB US 999 (184) (28) TAUBMAN CENTERS TCO US 2,922 (276) N.A. TENNECO INC TEN US 2,742 (304) 272 THERAVANCE THRX US 214 (144) 152 UAL CORP UAUA US 19,100 (144) 152 UNITED RENTALS URI US 3,976 (2,655) (2,348) VECTOR GROUP LTD VGR US 683 (56) 266 VENOCO INC VQ US 730 5 44 VERIFONE HOLDING PAY IT 843 (107) 33 VERIFONE HOLDING PAY US 843 (14) 299 VERIFONE HOLDING VF2 GR 843 (14) 299 VIRGIN MOBILE-A VM US 323 (14) (141) WALTER INVESTMEN WAC US 12 (281) N.A. WARNER MUSIC GRO WMG US 4,256 (44) (394) WEIGHT WATCHERS WTW US 1,087 (110) (313) WR GRACE & CO GRA US 3,726 (848) 892 ZYMOGENETICS INC ZGEN US 279 (374) 107 ********* 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 **