/raid1/www/Hosts/bankrupt/TCR_Public/090729.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, July 29, 2009, Vol. 13, No. 208
Headlines
AGILENT TECHNOLOGIES: Varian Deal Won't Move Moody's 'Ba1' Rating
AGRIPROCESSORS INC: Settles Labor Charges for $1 Million
AIRGAS INC: Moody's Upgrades Senior Subordinated Ratings to 'Ba1'
AMC ENTERTAINMENT: Launches Exchange Offer for 2019 Senior Notes
AMC ENTERTAINMENT: Registers Notes for Resale by Citi, JPMorgan
AMERICAN HOMEBUILDERS: Section 341(a) Meeting Set for September 2
ANGIOTECH PHARMACEUTICALS: May Issue Securities to Raise $250MM
APPLIED SOLAR: Files for Chapter 11 Bankruptcy Protection
ANTHRACITE CAPITAL: Issues 1.37MM Shares to Holder of 2027 Notes
ANTHRACITE CAPITAL: Expects Interest Income to Decline in Q2 2009
ASARCO LLC: Parties Get Ready For August 10 Confirmation Hearing
ASARCO LLC: To Reimburse SCC Judgement Bidders' Costs
ASARCO LLC: To Sell 37-Acre Fulton County Property
ASARCO LLC: Wants Parent to Produce Plan-Related Documents
ASARCO LLC: Wants Withdrawal of Reference of Confirmation Issues
AVIS BUDGET: Closes $450 Million Term Asset-Backed Notes
AVIZA TECHNOLOGY: Committee Taps Binder Malter as Counsel
AVIZA TECHNOLOGY: Files Schedules of Assets and Liabilities
BANK OF AMERICA: Will Close Up to 10% of Branches to Cut Expenses
BEARD CO: Files Pro Forma Financials to Reflect McElmo Sale
BIOPURE CORP: Court Okays August 20 Asset Sale
CABRINI MEDICAL: Names Grubb & Ellis as Real Estate Broker
CABRINI MEDICAL: Selects Garfunkel Wild as Sepcial Counsel
CABRINI MEDICAL: U.S. Trustee Appoints Five-Member Creditors Panel
CABRINI MEDICAL: Wants Kurtzman Carson as Claims & Noticing Agent
CALIFORNIA STATE: Governor Arnold Schwarzenegger Inks Budget Plan
CATALYST PAPER: Refinances $75MM of Debt Related to Joint Venture
CENTRO NP: Taps McGladrey & Pullen as Independent Accountants
CHAMPION ENTERPRISES: May Issue Securities to Raise Up to $350MM
CHRYSLER LLC: Creditors Win More Time to Bring Daimler Claim
CIT GROUP: May Have Difficulty Selling Railcars and Aircraft
CIT GROUP: Ignored Alternative Financing Offer; Investors Grumble
CITIGROUP INC: Citi Funding to Issue $53.5MM in ELKS Due Aug. 2010
CITIGROUP INC: Citi Funding to Issue Fixed Upside Return Notes
CITIGROUP INC: Jeff Walsh Named as Controller, Head of Accounting
CITIGROUP INC: Won't Pull Out From Asia Despite Assets Sale
CMR MORTGAGE II: Wants Plan Filing Period Extended to October 30
COMMERCIAL CAPITAL: Wants Access to Cash Collateral of WestLB
COMMERCIAL CAPITAL: Taps Peters Law as Counsel for Investor Issues
CONSECO INC: Bankers Unit Inks Strategic Alliance with Humana
COYOTES HOCKEY: NHL to Back Any Bid That Keeps Team in Arizona
DELPHI CORP: Platinum Equity Comments on Auction Results
DELTA AIR LINES: 215 Pilots Accept Early Retirement Offer
DELTA AIR LINES: Appeals Court Blocks Mesa Contract Termination
DELTA AIR LINES: Raises Planned Capacity Cuts to 10% in 2009
DELTA AIR LINES: Reports 2nd Quarter 2009 Results
DRUG FAIR: Gets Until Nov. 18 to File Reorganization Plan
ELECTROGLAS INC: Can Borrow $1,000,000 from DIP Lenders
ELECTROGLAS INC: Files Proposed Bid Protocol for Sale of Business
ELECTROGLAS INC: Taps Morrison and Foerster as Attorneys
ELECTROGLAS INC: Wants to Employ Morrison & Foerster as Co-Counsel
ELECTROGLAS INC: Wants to Hire Gide Loyrette as Special Counsel
EVA-TONE INC: Textron Seeks to Convert Case to Chapter 7
FAIRCHILD CORP: Files Amended Schedules of Assets and Liabilities
FAIRPOINT COMMUNICATIONS: Moody's Changes Rating to 'Caa3/LD'
FANNIE MAE: Diana Taylor Resigns from Board of Directors
FLEETWOOD ENTERPRISES: To Net $19MM From Sale of Housing Biz
FLYING J: Bankr. Court Keeps Kinder Morgan Litigation in Texas
FORD MOTOR: S&P Changes Outlook to Developing; Keeps 'CCC+' Rating
FORUM HEALTH: Two Unions Agree to Contract Concessions
FREESCALE SEMICONDUCTOR: Posts $481 Million Net Loss in Q2 2009
GENERAL MOTORS: China's BAIC Dropped from Opel Bidding Race
GEORGETOWN INDIANA: Ponders Bankruptcy Over $1.45-Mil. Debt
GOLFERS' WAREHOUSE: Proposes Rogin Nassau as Bankruptcy Counsel
GSI HOLDINGS: Moody's Downgrades Corporate Family Rating to 'B3'
HAIGHTS CROSS: Extends 2011 Notes Exchange Offer Until July 30
HALLWOOD ENERGY: HPI Files Competing Plan and Disclosure Statement
HARMAN INTERNATIONAL: S&P Cuts Corporate Credit Rating to 'B+'
HARVEST OIL: Can Use Lenders' Cash Collateral Until August 4
HARVEST OIL: Court Sets August 4 Bar Date for Proofs of Claim
HARVEST OIL: Taps Grant Thornton as Accountants & Fin'l Advisors
HARVEST OIL: Wants Plan Filing Period Extended to August 28
HAYES LEMMERZ: Asks Court to Rule on Dispute with U.S. Bank, N.A.
HAYES LEMMERZ: Disclosure Statement Hearing Adjourned to Aug. 18
HYDROGENICS CORP: Shareholders Approve Plan on Algonquin Deal
HYMAN COS: Taps Focus Management as Financial Advisor
IMPLANT SCIENCES: Addresses SEC Concern on Controls & Procedures
IRVINE SENSORS: Grant Thornton Out; Squar Milner In as Accountants
LEAR CORP: Ajax Plant to Re-Open, Kitchner Gets New Jobs
LEAR CORP: RSM Richter's 1st Report on Lear Canada
LEAR CORP: RSM Richter Named Information Officer in CCAA Case
LEAR CORP: Seaboard & SSI Wants Adequate Protection on Liens
LEHMAN BROTHERS: Subordination of Rights Valid Under English Law
LIFE SCIENCES: To Respond to Class Actions on Lion Merger
MAGNACHIP SEMICONDUCTOR: Committee Balks at Disclosure Statement
METALDYNE CORP: HHI's $78-Mil. Is New Lead Bid for Powertrain
METALDYNE CORP: RHJ Terminates Purchase Agreement
METALS USA: Posts $13.8 Million Q2 2009 Net Income
MICHAEL VICK: Can Make Conditional Comeback to NFL
NATIONAL GOLD: Files for Chapter 11 After Gold Coins Seized
NEXEN INC: $1 Bil. Note Issuance Won't Affect Moody's 'Ba1' Rating
NOBLE INTERNATIONAL: ArcelorMittal Discloses 58% Equity Stake
NORTEL NETWORKS: Gets Canadian and U.S. Court OK on Ericsson Deal
NORTEL NETWORKS: CALA Chapter 11 Database
NORTEL NETWORKS: Presents Settlement With Moline Dispatch
NORTEL NETWORKS: Seeks to Assume Contracts with Chrysler
NORTEL NETWORKS: Wants to Access L/Cs in Excess of $30 Million
NORTEL NETWORKS: Wants to Allow Chubb to Pay Litigation Costs
PALM INC: FY2009 Net Loss Widens to $732 Million From Year Ago
PALM INC: Registers 8.5MM Shares Under Employee Plans
PALM INC: Shares Redacted Copy of Microsoft License Agreement
PARMALAT SPA: BofA to Pay US$100MM to Settle 2004 Lawsuit
PATRICK INDUSTRIES: Board Taps Crowe Horwath as Accountants
PHILADELPHIA NEWSPAPERS: August 21 Claims Bar Date Set
PINNACLE ENTERTAINMENT: Moody's Puts B2 Rating on $375 Mil. Notes
PINNACLE ENTERTAINMENT: S&P Assigns 'BB' Rating on $375 Mil. Notes
PUREDEPTH INC: Realigns R&D Operations in Auckland, New Zealand
RAZZ ELECTRIC: Equipment, Vehicles to Be Auctioned Off Aug. 1
REALOGY CORP: Reports $62.1MM Exposure in Cendant Legacy Action
ROC PREF: S&P Corrects Ratings on Preferred Shares to BB+ From BB-
SECURITY BANK: To File for Chapter 7 After Banks Seized
SEMGROUP LP: SemCanada Crude Files Chapter 15 Petition
SEMGROUP LP: SemCanada Voluntary Chapter 15 Case Summary
SENIOR HEALTH INSURANCE: AM Best Affirms FSR at C (Weak)
SFK PULP: S&P Maintains 'CCC+' Long-Term Corporate Credit Rating
SIX FLAGS: Files Chapter 11 Plan & Disclosure Statement
SIX FLAGS: Treatment of Claims Under Chapter 11 Plan
SOUTH FINANCIAL: DBRS Downgrades Senior Debt to BB
SPECTRUM BRANDS: Scotts Miracle to Take Over Facility for $1.4MM
SPECTRUM BRANDS: $45.8 Million in Claims Filed as of July 22
SPECTRUM BRANDS: Allen & Co Approved as Equity Committee Advisor
SPECTRUM BRANDS: Files 2007 & 2008 401(K) Plan Reports
SPECTRUM BRANDS: R. Dewberry Wants Stay Lifted to Pursue PI Action
SPECTRUM BRANDS: The Wards Want Stay Relief for PI Action
SPORT CHALET: Amends Form 10-K to Include D&O Information, etc.
SPRINT NEXTEL: Will Acquire Virgin Mobile USA for $483 Million
STATION CASINOS: Files for Chapter 11 Bankruptcy Protection
SUNRISE SENIOR: Appoints Richards as Chief Accounting Officer
SUNRISE SENIOR: Cancels Shares Under Employee Stock Purchase Plan
SUNRISE SENIOR: No Assurance on Refinancing by December
SUNRISE SENIOR: District Court Grants Final OK on DC Class Actions
SUNRISE SENIOR: Registers 8.15MM Shares Under 2008 Incentive Plan
SYNIVERSE TECHNOLOGIES: Moody's Gives Stable Outlook on Ba3 Rating
TAMALPAIS BANCORP: Defers Payments on Trust Preferred Shares
THORNBURG MORTGAGE: Continues to Explore Sale of Adfitech
TRIBUNE CO: Assumes 36 Agreements with CBS
TRIBUNE CO: Employs Dow Lohnes As Regulatory Counsel
TRIBUNE CO: To Assume 54 Advertising Sales Agreements
UBS AG: Settlement Talks With US Justice Dept., Swiss Gov't Go On
UNIVERSAL ENERGY: Dec. 31 Balance Sheet Upside-Down by $833,000
US AIRWAYS: Ben Mitchell, et al. Settle With PrimeFlight
US AIRWAYS: Releases Second Quarter 2009 Financial Results
US AIRWAYS: To Cut 600 Jobs To Trim Expenses
US AIRWAYS: S&P Puts 'B-' Corp. Rating on CreditWatch Negative
UTGR INC: Twin River to Suspend Live Greyhound Racing on Aug. 8
VIRGIN MOBILE: Sprint Nextel to Acquire Firm for $483 Million
VITAMIN SHOPPE: S&P Puts 'B' Corp. Rating on CreditWatch Negative
WASHINGTON MUTUAL: Asks for 3rd Extension to Plan Deadlines
WEXTRUST CAPITAL: District Court OKs SEC-Backed Liquidation Plan
WHITE KNIGHT: DBRS Downgrades Floating Rate Notes to BB
WINDSOR QUALITY: Moody's Gives Positive Outlook; Keeps 'B1' Rating
WL HOMES: Over 30 Res'l Properties to be Sold; Bids due August 17
WOLVERINE TUBE: Johnson Resigns as SVP-Sales & Customer Relations
WOLVERINE TUBE: KPMG Out, Crowe Horwath in as Accountant
* Auto Dealer ABS Transactions Performing Within Expectations
* Almost $165 Billion in Commercial Loans Due in 2009
* Upcoming Meetings, Conferences and Seminars
*********
AGILENT TECHNOLOGIES: Varian Deal Won't Move Moody's 'Ba1' Rating
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Moody's Investors Service commented that Agilent Technologies,
Inc.'s recently announced agreement to acquire Varian Inc. for
$1.5 billion in cash will have no impact on the company's Ba1
corporate family rating.
The last rating action on Agilent was on July 14, 2008, when
Moody's affirmed the company's ratings and revised the outlook to
positive from stable in light of Agilent's execution of its
business model and solid financial performance.
Headquartered in Santa Clara, California, Agilent is a leading
measurement technology company serving the communications,
electronics, life sciences, and chemical analysis industries. Net
revenues and EBITDA (Moody's adjusted) for the twelve months ended
April 30, 2009, were $5.2 billion and $813 million, respectively.
AGRIPROCESSORS INC: Settles Labor Charges for $1 Million
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According to Bill Rochelle at Bloomberg News, the Chapter 11
trustee for Agriprocessors Inc. reached a settlement with Iowa
state labor regulators where a $10 million fine for making illegal
deductions from workers' wages was reduced to $1 million and will
be paid as a priority claim.
As reported by the TCR on July 27, 2009, the Bankruptcy Court
approved the Ch. 11 trustee's sale of most of the assets of
Agriprocessors Inc. to SH Industries in exchange for $8.5 million
in secured debt.
Headquartered in Postville, Iowa, Agriprocessors Inc. --
http://www.agriprocessor.com/-- operates a kosher meat and
poultry packing processors located at 220 North West Street. The
Company maintains an executive office with 50 employees at 5600
First Avenue in Brooklyn, New York.
The decline into bankruptcy began when immigration authorities in
May 2008 raided the plant in Postville, Iowa, and arrested 389
workers for having forged immigration documents. The Company
filed for Chapter 11 protection on November 4, 2008 (Bankr.
E.D.N.Y. Case No. 08-47472). The case, according to McClatchy-
Tribune, has been transferred to Iowa. Kevin J. Nash, Esq., at
Finkel Goldstein Rosenbloom & Nash represents the Company in its
restructuring effort. In its petition, the Company listed assets
of $100 million to $500 million and debts of $50 million to $100
million.
A Chapter 11 trustee was installed after Chief Executive Officer
Sholom Rubashkin was jailed on federal bank-fraud charges.
AIRGAS INC: Moody's Upgrades Senior Subordinated Ratings to 'Ba1'
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Moody's Investors Service assigned a Baa3 Issuer Rating to Airgas
Inc and upgraded its guaranteed senior subordinated debt ratings
to Ba1 from Ba2. The upgrade and assignment of an investment
grade issuer rating reflects its relatively consistent performance
over the past three year despite a record pace of acquisitions
followed by a substantial decline in US economic activity over the
past three quarters. The outlook is positive.
Moody's also withdrew Airgas' Ba1 Corporate Family Rating, Ba1
Probability of Default Rating and LGD point estimates due to the
upgrade. These actions conclude the review that was initiated on
May 27, 2009.
The rating assignment and upgrade reflects the stable financial
metrics the continuing reduction in debt, despite a recession in
the U.S. The strengthening of Airgas' key credit metrics over the
past three years has occurred against the backdrop continued heavy
acquisition spending ($1.4 billion in the three years prior to the
fourth calendar quarter of 2008) and the relatively modest
negative impact on the company's financial metrics from the
largest economic downturn in several decades. Airgas' has
experienced less than a 5% reduction in EBITDA and Gross Cash Flow
(cash flow from operations has actually increased due to working
capital reductions) from all-time peak levels during the last
fiscal year, which ended on March 31, 2009. Furthermore, the
recession has slowed acquisition activity, which should provide
the company with an opportunity to further reduce debt in fiscal
2010. Moody's expects Airgas will continue to perform well
despite the weak macro-economic environment in North America and
will begin to refinance $1.1 billion of debt maturing prior to
July 2012, resulting from the expiration of its credit facility
(revolver and term loan).
John Rogers, Senior Vice President at Moody's stated, "The
stability of Airgas' earnings and cash flow result from a large
annual annuity of almost $500 million from cylinder rentals, high
margins on industrial and specialty gases, and a very diverse
customer base with low turnover."
The positive outlook reflects Moody's expectation that credit
metrics in fiscal 2010 will remain on par with the 2009 despite a
modestly weaker earnings and cash flow generation due to the US
recession. The rating could be raised as Debt/EBITDA falls
sustainably below 3.0x, Retained Cash Flow/Debt rises toward 25%
and the company makes significant headway in addressing future
debt maturities. There could be negative pressure on the ratings
and/or outlook if the company delays its refinancing of debt
maturities.
Ratings assigned:
Airgas Inc.
* Issuer rating at Baa3
Ratings upgraded:
Airgas Inc.
* Senior subordinated notes at Ba1
Ratings withdrawn:
Airgas Inc.
* Corporate Family Rating -- Ba1
* Probability of Default Rating -- Ba1
Moody's last rating action on Airgas was on May 27, 2009 when its
ratings were placed under review for possible upgrade from Ba1.
Airgas Inc., headquartered in Radnor, Pennsylvania, is the largest
independent distributor of industrial, medical and specialty gases
and related equipment in North America. Airgas reported
$4.2 billion in revenue for the LTM ending June 30, 2009.
AMC ENTERTAINMENT: Launches Exchange Offer for 2019 Senior Notes
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AMC Entertainment Inc. filed with the Securities and Exchange
Commission amendments to the Form S-4 Registration Statement and
Preliminary Prospectus in connection with its offer to exchange up
to $600,000,000 in aggregate principal amount of its registered
8.75% Senior Notes due 2019 and the guarantees thereof for a like
principal amount of its unregistered 8.75% Senior Notes due 2019.
AMC filed Amendment No. 1 on July 16. A copy of Amendment No. 1
is available at no charge at http://ResearchArchives.com/t/s?401d
AMC filed Amendment No. 2 on July 23. A copy of Amendment No. 2
is available at no charge at http://ResearchArchives.com/t/s?401c
The terms of the exchange notes and the guarantees are identical
to the terms of the original notes and the guarantees in all
material respects, except for the elimination of some transfer
restrictions, registration rights and additional interest
provisions relating to the original notes. The notes are fully
and unconditionally guaranteed by all domestic restricted
subsidiaries of AMC Entertainment Inc. that guarantee AMC
Entertainment Inc.'s other indebtedness. The notes will be
exchanged in denominations of $1,000 and in integral multiples of
$1,000.
No deadline has been set for the Exchange Offer.
About AMC Entertainment
Headquartered in Kansas City, Missouri, AMC Entertainment Inc.
-- http://www.amctheatres.com/-- is a theatrical exhibition
company. As of April 2, 2009, AMC owned, operated or held
interests in 307 theatres with a total of 4,612 screens,
approximately 99% of which were located in the United States and
Canada. Revenues for fiscal 2009 were $2.3 billion.
* * *
As reported in the Troubled Company Reporter June 1, 2009,
Standard & Poor's Ratings Services affirmed its ratings on AMC
Entertainment Inc.'s proposed senior unsecured notes due 2019,
following the company's announcement that it now intends to issue
$600 million of notes (upsized from $300 million). The issue-
level rating remains at 'B-' (one notch lower than the 'B'
corporate credit rating on AMC) and the recovery rating remains at
'5', indicating S&P's expectation of modest (10% to 30%) recovery
for noteholders in the event of a payment default.
According to the Troubled Company Reporter on May 29, 2009,
Moody's Investors Service rated AMC Entertainment, Inc.'s new
$600 million senior unsecured notes B1. Proceeds will be used to
retire AMC's $250 million 8.625% notes due August 2012 and to
bolster liquidity by reducing outstanding amounts under its
$200 million senior secured revolving term loan due January, 2012
and adding to the company's cash balance.
On May 28, 2009, Standard & Poor's Ratings Services said it
assigned an issue-level rating of 'B-' (one notch lower than the
'B' corporate credit rating on the company) to AMC Entertainment
Inc.'s new $300 million senior unsecured notes due 2019, along
with a recovery rating of '5', indicating S&P's expectation of
modest (10%-30%) recovery for noteholders in the event of payment
default.
AMC ENTERTAINMENT: Registers Notes for Resale by Citi, JPMorgan
---------------------------------------------------------------
AMC Entertainment Inc. filed with the Securities and Exchange
Commission a Form S-1 Registration Statement and Prospectus in
connection with offers and sales by J.P. Morgan Securities Inc.
and Credit Suisse Securities (USA) LLC related to market-making
transactions involving of an indeterminate amount of the Company's
securities.
The AMC securities are:
-- The 8.75% Senior Notes due 2019:
* Aggregate Principal Amount: $600,000,000
* Maturity Date: June 1, 2019
* Interest Payment Date: Semi-annually on June 1 and
December 1 of each year.
* Redemption: The Senior Notes will be redeemable after
June 1, 2014. Prior to June 1, 2012, the Company may
redeem up to 35% of the Senior Notes using the proceeds
of certain equity offerings.
-- The 11% Series B Senior Subordinated Notes due 2016:
* Aggregate Principal Amount: $325,000,000
* Maturity Date: February 1, 2016
* Interest Payment Date: Semi-annually on February 1 and
August 1 of each year.
* Redemption: The 2016 Notes will be redeemable after
February 1, 2011. Prior to February 1, 2009, the
Company may redeem up to 35% of the 2016 Notes using
the proceeds of certain equity offerings.
-- The 8% Series B Senior Subordinated Notes due 2014:
* Aggregate Principal Amount: $300,000,000
* Maturity Date: March 1, 2014
* Interest Payment: Semi-annually on March 1 and
September 1 of each year.
* Redemption: The 2014 notes will be redeemable on or
after March 1, 2009.
The 8.75% Senior Notes due 2019 are AMC's senior unsecured
obligations and rank in right of payment to any of its existing
and future subordinated debt and rank equally in right of payment
with each other and any of its existing and future senior debt and
are effectively subordinated to any of its secured debt, including
its new senior secured credit facility, as to the assets securing
the debt.
The 8% Senior Subordinated Notes due 2014 and the 11% Senior
Subordinated Notes due 2016 are AMC's senior subordinated,
unsecured obligations, pari passu with each other and in right of
payment with all of its existing and future senior subordinated
indebtedness and are effectively subordinated to all of its
secured indebtedness, including the indebtedness under its new
senior secured credit facility, to the extent of the value of the
assets that secure such indebtedness, and the liabilities of its
non-guarantor subsidiaries.
Each of the Senior Notes are fully and unconditionally guaranteed
on a senior basis and each of the Senior Subordinated Notes are
fully and unconditionally guaranteed on a senior subordinated
basis, in each case by its existing and future subsidiaries that
guarantee its other indebtedness on a joint and several basis.
The notes are structurally subordinated to all existing and future
liabilities of its subsidiaries that do not guarantee the notes.
If AMC fails to make payments on the notes each of its
subsidiaries that are guarantors must make them instead.
If a change of control occurs, and unless AMC has exercised its
right to redeem all of the notes, the holders will have the right
to require the Company to repurchase all or a portion of the
notes at a purchase price in cash equal to 101% of the principal
amount thereof, plus accrued and unpaid interest to the date of
repurchase.
Credit Suisse Securities (USA) and J.P. Morgan Securities may act
as principals or agents in the market-making transactions. The
sales will be made at prices related to prevailing market prices
at the time of sale. AMC will not receive any of the proceeds of
the sales. The closing of the offerings of the notes, which
constituted delivery of the notes by AMC, occurred on February 24,
2004, in the case of the 2014 Notes, January 26, 2006, in the case
of the 2016 Notes and June 9, 2009, in the case of the Senior
Notes.
A full-text copy of the Registration Statement is available at no
charge at http://ResearchArchives.com/t/s?401b
About AMC Entertainment
Headquartered in Kansas City, Missouri, AMC Entertainment Inc.
-- http://www.amctheatres.com/-- is a theatrical exhibition
company. As of April 2, 2009, AMC owned, operated or held
interests in 307 theatres with a total of 4,612 screens,
approximately 99% of which were located in the United States and
Canada. Revenues for fiscal 2009 were $2.3 billion.
The Company's principal direct and indirect owned subsidiaries are
American Multi-Cinema Inc., Grupo Cinemex, S.A. de C.V., and AMC
Entertainment International Inc.
* * *
As reported in the Troubled Company Reporter June 1, 2009,
Standard & Poor's Ratings Services affirmed its ratings on AMC
Entertainment Inc.'s proposed senior unsecured notes due 2019,
following the company's announcement that it now intends to issue
$600 million of notes (upsized from $300 million). The issue-
level rating remains at 'B-' (one notch lower than the 'B'
corporate credit rating on AMC) and the recovery rating remains at
'5', indicating S&P's expectation of modest (10% to 30%) recovery
for noteholders in the event of a payment default.
According to the Troubled Company Reporter on May 29, 2009,
Moody's Investors Service rated AMC Entertainment, Inc.'s new
$600 million senior unsecured notes B1. Proceeds will be used to
retire AMC's $250 million 8.625% notes due August 2012 and to
bolster liquidity by reducing outstanding amounts under its
$200 million senior secured revolving term loan due January, 2012
and adding to the company's cash balance.
On May 28, 2009, Standard & Poor's Ratings Services said it
assigned an issue-level rating of 'B-' (one notch lower than the
'B' corporate credit rating on the company) to AMC Entertainment
Inc.'s new $300 million senior unsecured notes due 2019, along
with a recovery rating of '5', indicating S&P's expectation of
modest (10%-30%) recovery for noteholders in the event of payment
default.
AMERICAN HOMEBUILDERS: Section 341(a) Meeting Set for September 2
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The U.S. Trustee for Region 21 will convene a meeting of creditors
in American Homebuilders, Inc.'s Chapter 11 case on September 2,
2009, at 12:00 p.m. The meeting will be held at Suite 1-200, 300
North Hogan St., Jacksonville, Florida.
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.
Jacksonville, Florida-based American Homebuilders, Inc., operates
a real estate business. The Company filed for Chapter 11 on
July 10, 2009 (Bankr. M.D. Fla. Case No. 09-05668). Brian G.
Rich, Esq., at Berger Singerman PA, represents the Debtor in its
restructuring efforts. The Debtor said that it has assets and
debts both ranging from $10,000,001 to $50,000,000.
ANGIOTECH PHARMACEUTICALS: May Issue Securities to Raise $250MM
---------------------------------------------------------------
Angiotech Pharmaceuticals, Inc., has filed with the Securities and
Exchange Commission a Form S-3 Registration Statement and
Prospectus in connection with its plan to offer up to $250,000,000
in securities.
Angiotech may offer to the public from time to time in one or more
series or issuances:
-- Common Shares, without par value;
-- Class I Preference Shares, without par value;
-- warrants to purchase Common Shares, Class I Preference
Shares or Debt Securities;
-- debt securities consisting of debentures, notes or other
evidences of indebtedness; or
-- units consisting of any combination of Common Shares,
Class I Preference Shares, Warrants or Debt Securities.
The prospectus provides a general description of the securities
Angiotech may offer. Each time Angiotech sells securities,
Angiotech will provide specific terms of the securities offered in
a supplement to the prospectus. The prospectus supplement may
also add, update or change information contained in this
prospectus.
A full-text copy of the Prospectus is available at no charge at:
http://ResearchArchives.com/t/s?4021
Based in Vancouver, British Columbia, Angiotech Pharmaceuticals
Inc. (NASDAQ: ANPI, TSX: ANP)-- http://www.angiotech.com/-- is a
pharmaceutical and medical device company with over 1,500
dedicated employees. Angiotech discovers, develops and markets
innovative treatment solutions for diseases or complications
associated with medical device implants, surgical interventions
and acute injury.
At March 31, 2009, the Company's balance sheet showed total assets
of $401.1 million and total liabilities of $688.5 million,
resulting in a stockholders' deficit of about $287.4 million.
APPLIED SOLAR: Files for Chapter 11 Bankruptcy Protection
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Applied Solar, Inc., has filed for Chapter 11 bankruptcy
protection in the U.S. Bankruptcy Court for the Middle District of
North Carolina.
Reuters relates that Applied Solar listed $17.6 million in assets
and $29.1 million in liabilities. Among the largest creditors are
Stellar-SFPUC CDD, owed $579,825 on a warranty; Edwards Angell
Palmer & Dodge LLP, owed $432,785 on a trade debt; and Tahoe-
Sierra Nevada College owed $209,140 on a warranty.
As reported by the Troubled Company Reporter on July 20, 2009,
Applied Solar entered into a definitive loan and security
agreement with The Quercus Trust, originally dated May 18, 2009,
and since amended several times, pursuant to which Applied Solar
borrowed $1,251,000 from The Quercus Trust. Applied Solar also
reported that as a condition of the financing, the Loan Agreement
required the Company to file for reorganization and protection
from creditors pursuant to Chapter 11 of the U.S. Bankruptcy Code
by July 15, 2009.
Applied Solar, Inc., a Nevada Corporation, is a "next-generation"
solar energy company. The Company develops, commercializes and
licenses clean energy solutions, innovative solar products and
energy management applications.
Applied Solar was formerly known as Barnabus Energy Inc., Barnabus
Enterprises Inc. and Open Energy Corporation. Applied Solar Inc.
and its affiliate Solar Communities I LLC filed for Chapter 11 on
July 24 (Bankr. D. Del. Case No. 09-cv-12624).
ANTHRACITE CAPITAL: Issues 1.37MM Shares to Holder of 2027 Notes
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Anthracite Capital, Inc., on July 24, 2009, agreed to issue
1,317,000 shares of its common stock, par value $0.001, in
exchange for $3,951,000 aggregate principal amount of the
Company's 11.75% Convertible Senior Notes due 2027 held by a
holder pursuant to an exchange agreement with a holder.
The exchange is expected to settle on July 29, 2009. The shares
of the Company's common stock were issued in reliance upon the
exemption set forth in Section 3(a)(9) of the Securities Act of
1933 for securities exchanged by the issuer and an existing
security holder where no commission or other remuneration is paid
or given directly or indirectly by the issuer for soliciting such
exchange.
Anthracite Capital did not identify the holder.
On July 22, 2009, Anthracite Capital issued $31,250,000 aggregate
principal amount of junior subordinated notes due October 30, 2035
to Taberna Preferred Funding II, Ltd. in exchange for $25,000,000
aggregate liquidation amount of trust preferred securities of
Anthracite Capital Trust I beneficially owned by Taberna pursuant
to a Junior Subordinated Indenture, dated as of July 22, 2009,
between the Company and The Bank of New York Mellon, as trustee,
and an exchange agreement, dated as of July 22, 2009, between the
Company and Taberna.
Pursuant to the Indenture, the Notes bear a fixed interest rate of
0.75% per year until the earlier of (i) July 22, 2013 and (ii) the
date on which all of the existing senior secured loans under the
Company's senior secured credit facilities with Bank of America,
Deutsche Bank and Morgan Stanley are fully amortized, including
certain deferred restructuring fees. After the Modification
Period, the Notes bear interest at the same rate as the Exchanged
Securities. Interest payments are payable quarterly, commencing
on July 30, 2009. The first interest payment due on July 30, 2009
under the Notes is for the interest period from April 30, 2009.
All obligations under the Exchanged Securities, including accrued
and unpaid interest thereunder, were accordingly fully discharged
and satisfied.
Under the Indenture, from July 22, 2009 until the end of the
Modification Period, the Company will be subject to limitations on
its ability (i) to pay cash dividends on shares of its common
stock or preferred stock or redeem, purchase or acquire any equity
interests and (ii) to create, incur, issue or otherwise become
liable for new debt other than trade debt, similar debt incurred
in the ordinary course of business or debt in exchange for or to
provide the funds necessary to repurchase, redeem, refinance or
satisfy the Company's existing secured and senior unsecured debt.
In addition, during the Modification Period, the cure period for a
default in the payment of interest when due is three days. The
Notes are contractually senior to the Company's remaining junior
subordinated notes. The Notes otherwise generally have the same
terms, including maturity date, as the Exchanged Securities.
Pursuant to the exchange agreement, the Company paid a transaction
fee of approximately $250,000 to cover third party fees and costs
incurred in connection with the exchange.
On July 1, 2009, the Company issued 900,000 shares of its common
stock, par value $0.001, in exchange for $3,000,000 aggregate
principal amount of its 11.75% Convertible Senior Notes due 2027
with a holder of such notes pursuant to an exchange agreement
entered into on June 26, 2009 between the Company and the holder.
The shares of the Company's common stock were issued in reliance
upon the exemption set forth in Section 3(a)(9) of the Securities
Act of 1933 for securities exchanged by the issuer and an existing
security holder where no commission or other remuneration is paid
or given directly or indirectly by the issuer for soliciting such
exchange.
About Anthracite Capital
Anthracite Capital, Inc., is a specialty finance company focused
on investments in high yield commercial real estate loans and
related securities. Anthracite is externally managed by BlackRock
Financial Management, Inc., which is a subsidiary of BlackRock,
Inc., one of the largest publicly traded investment management
firms in the United States with roughly $1.307 trillion in global
assets under management at December 31, 2008. BlackRock Realty
Advisors, Inc., another subsidiary of BlackRock, provides real
estate equity and other real estate-related products and services
in a variety of strategies to meet the needs of institutional
investors.
Anthracite Capital reported net income of $25.5 million for the
three months ended March 31, 2009, compared to $53.9 million for
the same period in 2008. Anthracite Capital had $4.85 billion in
total assets, including cash and cash equivalents of
$3.87 million, and $4.22 million in total liabilities, resulting
in $584.0 million in stockholders' equity at March 31, 2009.
Going Concern Doubt
The Company's independent registered public accounting firm has
issued an opinion on the Company's consolidated financial
statements that states the consolidated financial statements have
been prepared assuming the Company will continue as a going
concern and further states that the Company's liquidity position,
current market conditions and the uncertainty relating to the
outcome of the Company's ongoing negotiations with its lenders
have raised substantial doubt about the Company's ability to
continue as a going concern. The Company obtained agreements from
its secured credit facility lenders on March 17, 2009, that the
going concern reference in the independent registered public
accounting firm's opinion to the consolidated financial statements
is waived.
ANTHRACITE CAPITAL: Expects Interest Income to Decline in Q2 2009
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Anthracite Capital Inc. reports that as a result of a continued
rise in delinquencies in commercial real estate loans and
commercial mortgage-backed securities during the second quarter of
2009, the Company's cash flow has been negatively affected. While
the Company has not finalized its results for the second quarter
of 2009, the Company expects its interest income also declined
which will negatively impact its second quarter financial results.
The Company believes that this negative trend has continued into
the beginning of the third quarter of 2009.
Pursuant to amendments to its secured credit facilities with Bank
of America, Deutsche Bank and Morgan Stanley which closed in May
2009, the Company is required to make quarterly payments to reduce
the principal balances under the facilities, commencing on
September 30, 2009. The negative trend may have a material
adverse effect on the Company's ability to meet the Paydown
Requirements and continue operations as a going concern.
The Company continues to seek ways to refinance or restructure its
unsecured indebtedness, thereby reducing its interest expense and
improving liquidity.
On July 21, 2009, the Company received a three-month extension of
the waiver of covenant breach under its secured credit facility
with BlackRock Holdco 2, Inc. The Waiver, which had been extended
to July 22, 2009, has been further extended by BlackRock Holdco 2,
Inc. to October 22, 2009.
About Anthracite Capital
Anthracite Capital, Inc., is a specialty finance company focused
on investments in high yield commercial real estate loans and
related securities. Anthracite is externally managed by BlackRock
Financial Management, Inc., which is a subsidiary of BlackRock,
Inc., one of the largest publicly traded investment management
firms in the United States with roughly $1.307 trillion in global
assets under management at December 31, 2008. BlackRock Realty
Advisors, Inc., another subsidiary of BlackRock, provides real
estate equity and other real estate-related products and services
in a variety of strategies to meet the needs of institutional
investors.
Anthracite Capital reported net income of $25.5 million for the
three months ended March 31, 2009, compared to $53.9 million for
the same period in 2008. Anthracite Capital had $4.85 billion in
total assets, including cash and cash equivalents of
$3.87 million, and $4.22 million in total liabilities, resulting
in $584.0 million in stockholders' equity at March 31, 2009.
Going Concern Doubt
The Company's independent registered public accounting firm has
issued an opinion on the Company's consolidated financial
statements that states the consolidated financial statements have
been prepared assuming the Company will continue as a going
concern and further states that the Company's liquidity position,
current market conditions and the uncertainty relating to the
outcome of the Company's ongoing negotiations with its lenders
have raised substantial doubt about the Company's ability to
continue as a going concern. The Company obtained agreements from
its secured credit facility lenders on March 17, 2009, that the
going concern reference in the independent registered public
accounting firm's opinion to the consolidated financial statements
is waived.
ASARCO LLC: Parties Get Ready For August 10 Confirmation Hearing
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Judge Richard S. Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas granted the request of ASARCO LLC and
its debtor affiliates to include letters recommending their plan
of reorganization in the Plan Solicitation Packages. He also
authorized the inclusion of recommendation letters from:
-- Americas Mining Corporation recommending the Parent's Plan;
-- Harbinger Capital Partners Master Fund I, Ltd., and
Citigroup Global Markets, Inc., recommending the Harbinger
Plan and the Debtors' Plan;
-- the Official Committee of Unsecured Creditors recommending
the Debtors' Plan;
-- the Official Committee of Asbestos Claimants recommending
the Debtors' and the Parent's Plans; and
-- Future Claims Representative Robert C. Pate recommending
the Debtors' and the Parent's Plans.
A full-text copy of the Court Order, including the
Recommendations Letters, can be obtained for free at:
http://bankrupt.com/misc/ASARCO_Order_Recommendation.pdf
In addition to the Recommendations Letters, several parties filed
separate declarations, proffers and affidavits in support of the
Debtors' Plan. They include:
-- Carl S. Lane, a managing director of AlixPartners, LLP, and
a financial advisor to the Debtors;
-- George M. Mack, a managing director in the New York office
of the Restructuring and Finance Group of Barclays Capital
Incorporated, ASARCO's financial advisor and investment
banker; and
-- Professor Kenneth N. Klee.
In a separate filing, Sidney L. Strickland, Jr., presented to the
Court a proffer in support of the Parent's Plan.
Parties Submit Witness Lists
Interested parties submitted to the Court lists of their
respective potential witnesses in accordance with the Court's
third order revising objection deadlines and discovery procedures
to govern the Disclosure Statement Hearing, the confirmation
hearing, and other related matters. The parties are:
-- ASARCO Incorporated and Americas Mining Corporation, which
intend to call on:
* Lisa Poulin of CRG Partners Group, LLC;
* Mark Travers of ENVIRON International Corporation;
* Adrian Brown of AdrianBrown Consultants, Inc.;
* Sydney L. Strickland, former secretary of the Surface
Transportation Board; and
* any rebuttal witness designated or called by any other
party;
-- the Official Committee Of Unsecured Creditors of ASARCO
LLC, which will call on Charles E. Bates, Ph.D., among
others; and
-- Harbinger Capital Partners Master Fund I, Ltd., and
Citigroup Global Markets, Inc., which will call on any
witness designated or called by any other party, and any
other witness necessary to rebut the testimony and evidence
of any rebuttal witness designated by any other party.
Parties Submit Expert Reports
Moreover, several witnesses and experts filed proffers, expert
reports and testimonies in connection the confirmation hearing,
including:
-- Shannon Ratliff for Harbinger Capital Partners Master Fund
I, Ltd., and Citigroup Global Markets, Inc.;
-- Lisa M. Poulin for ASARCO Incorporated and Americas Mining
Corporation; and
-- Mark A. Peterson regarding projected liabilities for
asbestos personal injury claims for the Future Claims
Representative and Official Committee of Unsecured
Creditors of the Subsidiary Debtors.
Rebuttal Reports
Certain witnesses and experts also submitted rebuttal reports and
proffers. They are:
-- George M. Mack and Kenneth N. Klee for ASARCO LLC;
-- Mark A. Peterson for the FCR and the Official Committee of
Unsecured Creditors of the Subsidiary Debtors; and
-- Joseph I. Hitter and Lisa M. Poulin for the Parent.
FCR & Subsidiary Committee Seek to Seal Reports
Future Claims Representative Robert C. Pate and the Official
Committee of Unsecured Creditors of the Subsidiary Debtors seek
the Court's authority to file the expert reports of Robert B.
Thompson and James P. Sinclair under seal in connection with
the confirmation hearing.
The FCR and the Subsidiary Committee contend that the Expert
Reports contain confidential and privileged information obtained
from documents produced by the Debtors under certain
confidentiality and non-waiver of privilege agreements.
The FCR and the Subsidiary Committee also sought and obtained an
order for an expedited hearing on the request to seal.
Court Sets Klee's Deposition
At a status conference held last July 15, 2009, Judge Schmidt
signed an agreed order that if ASARCO intends to rely on
Professor Ken Klee as an expert witness at the confirmation
hearings, Mr. Klee's expert report should be filed with the Court
and that Mr. Klee should be available for deposition no later
than August 4, 2009.
Parent Balks at ASARCO-Set Klee's Schedule
The Parent asks the Court to enforce the Agreed Order and enter
another order compelling the Klee Deposition to be scheduled for
a date that is "mutually agreeable" among the Debtors and the
Parent. The Parent argues that ASARCO LLC unilaterally scheduled
Mr. Klee for deposition at a date that conflicts the hearing on
the parties' adversary proceeding on tax disputes.
In the alternative, the Parent asks that the Court to enter an
order continuing the Tax Trial to a later date, which will
provide ASARCO with relief for its conflict on deposition with
the Parent's corporate representative as well as the dispute over
the Klee Deposition. The Parent also asks for an expedited
hearing on its request.
Confidentiality Agreements
(a) ASARCO and Union Pacific
In connection with the August 10, 2009 hearing on the
confirmation of the three plans of reorganization filed in the
Debtors' bankruptcy cases, ASARCO LLC and Union Pacific Railroad
Company entered into a confidentiality agreement and protective
order, as approved by Judge Schmidt, governing certain requests
for documents and related discovery or wishes to have access to
materials produced in response to another party's requests.
As per the parties' Agreement, confidential information will only
be used to litigate over the issue of whether the Plans should be
confirmed, among other provisions.
An e-mail from Carlosrod22@aol.com, a former employee of ASARCO
in El Paso, Texas, was forwarded to the Court saying that he and
certain unnamed others have been searching for manifest, permits
or anything that could point as to what toxic chemicals were
incinerated by ASARCO LLC in the 1990s. "I feel very strong
about the transporter being Union Pacific," Mr. Carlos says. "If
Asarco puts a Gag Order and or a Protective Order forcing Union
Pacific from disclosing any information I will never be able to
find what was transported," he tells Judge Schmidt. He,
therefore, asks the Court to delay the hearing on the stipulation
until he receives the information he seeks.
Mr. Carlos further says that ASARCO LLC is trying to keep
information from its former employees that were exposed to the
toxic hazardous chemicals, which ASARCO illegally incinerated
without permits, and worst, without informing the employees of
the dangers.
(b) Asbestos Committee and Wilmington Trust
The Official Committee of Asbestos Claimants and Wilmington Trust
Company entered into a confidentiality agreement and agreed
protective order to protect Wilmington Trust's confidential
documents that the Asbestos Committee wishes to access in
connection with the confirmation hearing. Judge Schmidt approved
the parties' agreement and protective order.
(c) Asbestos Committee and Deutsche Bank
The Asbestos Committee and Deutsche Bank Trust Company Americas
also entered into a Court-approved confidentiality agreement
because they wish to have access to each other's confidential
information.
Miller Submits Support for FFIC
Meanwhile, Alan B. Miller, a professor in Health Care Management,
and Insurance and Risk Management at The Wharton School, in
University of Pennsylvania, submits a declaration in support of
Fireman's Fund Insurance Company's objections to the confirmation
of the three Plans.
* * *
According to minutes of the hearing, the Court rules that the
deposition of Mr. Klee will take place July 30, 2009, at 1:00
p.m.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
US$2.6 billion. By October 2008, ASARCO LLC informed the Court
that Sterlite refused to close the proposed sale and thus, the
Original Plan could not be confirmed. The parties has since
renewed their purchase and sale agreement and ASARCO LLC has
obtained Court approval of a settlement and release contained in
the new PSA for the sale of the ASARCO assets for US$1.1 billion
in cash and a US$600 million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to US$2.7 billion in cash and a
US$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: To Reimburse SCC Judgement Bidders' Costs
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ASARCO LLC asks the U.S. Bankruptcy Court for the Southern
District of Texas to approve the reimbursement of all or a
portion of actual, documented due diligence expenses incurred by
certain bidders selected to proceed to the second phase of the
stalking-horse bidder selection process in connection with the
potential auction and potential sale of all or a portion of the
judgment entered on April 15, 2009, by the U.S. District Court
for the Southern District of Texas, Brownsville Division, in
favor of ASARCO, in the litigation against Americas Mining
Corporation relating to shares of Southern Peru Copper Company,
now known as Southern Copper Corporation.
In relation to the Reimbursement Request, ASARCO also seeks
authority to file under seal an exhibit on a summary of
indicative offers and an exhibit on the amounts of reimbursement
funds. ASARCO asserts that the Exhibits contain trade secrets.
Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas,
relates that the Debtors' Plan of Reorganization is to be funded
with ASARCO's cash on hand and the cash proceeds of the sale of
the ASARCO LLC operating assets to Sterlite (USA) Inc., interests
in the $770 million Sterlite promissory note secured by the
ASARCO LLC operating assets, and the SCC Judgment, which awarded
ASARCO:
(a) 260,093,694 shares of SCC common stock, which represents
approximately 30.6% of the 850,000,000 total shares of SCC
common stock currently outstanding, and which, using SCC's
closing price of $19.59 per share on July 2, 2009, are
worth approximately $5.1 billion; and
(b) $1,382,307,217 in cash related to money damages and pre-
judgment interest, plus post-judgment interest, accruing
at the statutory rate of 0.6% per annum, on the money
damages and dividends paid on the SCC shares from Apr. 15,
2009, until payment of the SCC Judgment.
Maximizing the value of ASARCO LLC's assets for the benefit of
all creditors and stakeholders under a plan of reorganization has
been the overarching goal in this reorganization, Mr. Kinzie
notes. To that end, after weeks of discussing and evaluating
various options for monetizing the SCC Judgment, ASARCO decided
to engage its financial advisors, Barclays Capital Inc., to
evaluate available strategic alternatives regarding the SCC
Judgment, including a sale of all or a portion of the SCC
Judgment through a competitive auction process.
Barclays is now in the midst of a two-part bid solicitation
process, subject to a topping auction, which is intended to
induce parties to submit their highest and best bid at the outset
of the process, create a level-playing field, and maximize value
for the benefit of ASARCO and its bankruptcy estate, Mr. Kinzie
tells the Court. To date, he notes, the Bid Solicitation Process
has developed into the selection of potential bidders from those
that submitted indicative bids, second phase due diligence and
expense reimbursement.
Going forward, ASARCO anticipates the Bid Solicitation Process to
progress. ASARCO, however, says it may eliminate and develop the
following process as necessary, (i) invitation for binding
proposals, (ii) evaluation of binding bids, (iii) entry into a
stalking-horse purchase agreement, and (iv) conduct of topping
auction.
ASARCO believes that the Bid Solicitation Process is fair and
reasonable, and will serve to procure the highest and best
stalking-horse offer for the SCC Judgment. The Bid Solicitation
Process will, among other things, retain for the benefit of the
Debtors' bankruptcy estates the prospect of a successful sale of
the SCC Judgment to a stalking-horse bidder, while enabling
ASARCO to solicit higher or better bids at a topping auction, Mr.
Kinzie maintains.
If approved, Mr. Kinzie says, the Expense Reimbursement will only
be distributed to qualified bidders. He asserts that the Expense
Reimbursement is necessary to attract and incent qualified
parties to undertake the necessary due diligence, a significant
portion of which will entail highly sophisticated legal analysis,
and to make the capital commitment required to have a meaningful
auction of the SCC Judgment.
ASARCO Seeks Protective Order
On Parent's Discovery Request
In connection with the Reimbursement Motion, the Parent served on
ASARCO LLC on July 21, 2009, notices of intent to take the
deposition of George Mack, managing director at Barclays Capital
Inc., the Debtors' financial advisor, and other ASARCO LLC
representatives. Among others, the Parent wants Mr. Mack to give
testimony related to bidders' requests for expense reimbursement,
bidders' requests for confidentiality and the need for expense
reimbursement as a component of an auction process.
In a separate request, ASARCO LLC seeks a protective order with
respect to the Parent's discovery request. ASARCO contends that
the Parent's Discovery Requests are overly broad and seek
confidential testimony and documents, most of which are not
reasonably calculated to lead to the discovery of admissible
evidence related to the reimbursement motion.
"The Parent's Discovery Requests are a thinly-veiled attempt by
the Parent to peek behind the curtain of the extremely
confidential workings of the SCC judgment sale process in order
to gain an upper hand as bidder for that judgment and to drive
down the value of that asset," Mr. Kinzie asserts. "This is a
familiar Parent tactic that this Court has previously rejected,"
he asserts, citing that the Parent attempted this very maneuver
of requesting extremely confidential information of the details
of potential plan sponsors' bids and ASARCO's evaluation of the
Parent bid in relation to ASARCO's request for bid protections
and just prior to the May 2008 plan sponsor selection meeting.
"The Parent seeks to squelch competition in the sale of the SCC
judgment and to use discovery in the bankruptcy action to gain an
impermissible upper hand in an auction process," Mr. Kinzie
contends. The Parent's Discovery Requests, he notes, seek to
discover the details of the SCC judgment sale process, the very
indications of interest against which the Parent would compete,
the process by which ASARCO will select Qualified Bidders, and
the process by which ASARCO will select a stalking-horse bidder
for the SCC judgment.
"No potential purchaser of the SCC judgment should have all of
these materials," Mr. Kinzie emphasizes. "With them it would
take little effort for a potential purchaser to calculate the
perfect bid for the SCC judgment -- one that is just a hair
better than those of its fellow competitors considering the
criteria ASARCO intends to use to evaluate bids. That flies in
the face of an auction's very purpose -- maximizing value," he
adds, among other assertions.
Parent & Committee Respond to Reimbursement Request
Americas Mining Corporation and Asarco Incorporated oppose the
reimbursement of any bidder, who is under no obligation make a
binding proposal to purchase the SCC Judgment, as unnecessary and
unprecedented. The Parent also objects to the filing of Exhibits
under seal and insists that it, and other constituencies in the
bankruptcy cases, is entitled to the knowledge contained in the
Exhibits. In the alternative, the Parent contends that limited
disclosure of certain facts contained in the Exhibits is the most
equitable method of balancing the Debtors' interest in
confidentiality with the Parent and other stakeholders' ability
to protect their respective interests in connection with the
potential auction and sale of the SCC Judgment.
On the other hand, the Official Committee of Unsecured Creditors
of ASARCO LLC contends that it has not had an opportunity to
review the bid process outlined in the request nor consult with
the Debtors. It maintains that the SCC Judgment is one of the
major assets of the Debtors' estates and thus, management and
potential disposition of that asset is of principal concern to
creditors. The Committee, thus, asks the Court to adjourn the
matter until it is given the time to meet with Barclays and
counsel to the Debtors to understand the expectations of the
bidding process, and to determine if the expenditure of estate
funds is in the best interests of the Debtors' estates.
* * *
According per the minutes of a July 21, 2009 hearing, the Court
has reset the date to consider ASARCO's reimbursement request
upon the submission of further evidence. The requested Exhibits
were filed under seal during the July 21 hearing, and additional
attachments were added on July 23.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
US$2.6 billion. By October 2008, ASARCO LLC informed the Court
that Sterlite refused to close the proposed sale and thus, the
Original Plan could not be confirmed. The parties has since
renewed their purchase and sale agreement and ASARCO LLC has
obtained Court approval of a settlement and release contained in
the new PSA for the sale of the ASARCO assets for US$1.1 billion
in cash and a US$600 million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to US$2.7 billion in cash and a
US$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: To Sell 37-Acre Fulton County Property
--------------------------------------------------
ASARCO LLC seeks the Court's permission to sell a 37.18-acre of
real property in Fulton County, Illinois, to Dennis L. and
Christina M. Miller for $134,125, free and clear of liens,
claims, encumbrances and interests and subject to higher and
better bids.
The Millers' $13,000 earnest money deposit will be held in the
Toohill Law Office Real Estate Funds Account until the date of
closing, relates Tony M. Davis, Esq., at Baker Botts L.L.P., in
Houston, Texas. The deposit and the remaining balance will be
paid in cash to ASARCO, upon approval of the Court and upon
delivery of a Quit-Claim Deed. He notes that ASARCO has agreed
to pay the 2008 real property taxes when they become due and
payable in 2009 in an anticipated amount of $155.
ASARCO reserves the right to re-enter the Fulton County Premises
to do additional reclamation work required by the Illinois
Department of Mines and Minerals. The Millers agree to grant
ASARCO, its agents and employees access to the Property, and to
cooperate with ASARCO in completing any necessary reclamation at
ASARCO's sole expense. ASARCO also agrees to pay for any crops
damaged due to any additional reclamation work.
To solicit higher and better offers for the Property, ASARCO has
published a notice of the proposed sale of the Property in the
Farmington Bugle, with the advertisement to run for two weeks.
No other offers for the Property have been received, according to
Mr. Davis.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
US$2.6 billion. By October 2008, ASARCO LLC informed the Court
that Sterlite refused to close the proposed sale and thus, the
Original Plan could not be confirmed. The parties has since
renewed their purchase and sale agreement and ASARCO LLC has
obtained Court approval of a settlement and release contained in
the new PSA for the sale of the ASARCO assets for US$1.1 billion
in cash and a US$600 million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to US$2.7 billion in cash and a
US$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Wants Parent to Produce Plan-Related Documents
----------------------------------------------------------
ASARCO LLC asks the Bankruptcy Court to compel Americas Mining
Corporation and Asarco Incorporated to produce documents relevant
to the Parent's Modified Fifth Amended Plan of Reorganization for
the Debtors.
Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas,
contends that the Court should order the Parent to produce the
requested financial information and communications between the
Parent and financial institutions because those documents are
relevant to the issue of the feasibility of the Parent's Plan,
and the Parent has provided no good reason for refusing to
produce the requested documents.
Mr. Kinzie also asserts that the Parent has not argued that the
requested financial information and communications with financial
institutions are irrelevant to the feasibility of the Parent's
Plan, nor could it. Instead, the Parent has provided three
insufficient reasons for failing to produce the requested
documents, Mr. Kinzie points out, which are:
(1) Sterlite (USA), Inc., purportedly has refused to produce
financial information requested by the Parent;
(2) The Parent believes the financial information it has
produced to ASARCO should provide ASARCO with the
information it needs; and
(3) The Parent has produced all documents provided by the
Parent and Grupo Mexico SAB de C.V., to possible lenders
of financing to fund the Parent's Plan.
ASARCO seeks from the Parent documents relating to the sources of
the Parent Contribution, and those relating to the financial
ability of the Parent to close under the terms of the Parent's
Plan.
Parent Objects
The Parent asks the Court to deny ASARCO LLC's request as it
seeks the production of documents beyond the permissible scope of
discovery. The Parent argues that ASARCO LLC's request (i) seeks
information that is irrelevant and confidential and which must be
protected from disclosure, (ii) fails to inform the Court of all
the financial information provided to ASARCO by the Parent, and
(iii) seeks information, which it neither sought nor obtained
from Sterlite.
Charles A. Beckham, Jr., Esq., at Haynes and Boone, LLP, contends
that ASARCO's request is an unfortunate use of the Court's and
the parties' time. He points out that as the Parent has
previously advised ASARCO, the documents sought in the three
categories either do not exist or are confidential, proprietary,
irrelevant, and well beyond the permissible scope of discovery.
* * *
The Court grants in part and denies in part ASARCO LLC's request.
Judge Schmidt directs the Parent to produce to ASARCO LLC these
documents:
(a) All documents relating to the financial ability of the
Parent to close under the terms of the Parent's Plan;
(b) All documents relating to the Parent's and Grupo Mexico's
capacity to borrow money, including analyses of the
Parent's and Grupo Mexico's capacity to borrow money;
(c) Standalone financial statements and balance sheets for
AMC, unconsolidated with its subsidiaries; and
(d) Standalone financial statements and balance sheets for
ASARCO Incorporated, unconsolidated with its subsidiaries.
The Court also rules that if the Parent obtains a commitment
letter or other definitive agreement to fund the Parent's Plan
from financial institutions, the Parent should immediately
produce to ASARCO LLC the letter or agreement and all
communications between the Parent or Grupo Mexico, on the one
hand, and the financial institutions providing the commitment or
agreement, on the other hand, including loan or letter of credit
applications, presentations, and terms sheets or summary of
indicative terms regarding the financing.
If the Parent obtains a commitment letter or other definitive
agreement to fund the Parent's Plan from financial institutions,
Judge Schmidt directs the Parent, within a reasonable period of
time, to allow ASARCO LLC to depose a corporate representative of
the Parent regarding the letter or agreement and the negotiations
between the Parent or Grupo Mexico with the financial
institutions providing the letter or agreement.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
US$2.6 billion. By October 2008, ASARCO LLC informed the Court
that Sterlite refused to close the proposed sale and thus, the
Original Plan could not be confirmed. The parties has since
renewed their purchase and sale agreement and ASARCO LLC has
obtained Court approval of a settlement and release contained in
the new PSA for the sale of the ASARCO assets for US$1.1 billion
in cash and a US$600 million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to US$2.7 billion in cash and a
US$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Wants Withdrawal of Reference of Confirmation Issues
----------------------------------------------------------------
ASARCO LLC, Americas Mining Corporation, Asarco Incorporated,
the Official Committee of Asbestos Claimants, the Future Claims
Representative, and the Official Committee of Unsecured Creditors
of ASARCO LLC jointly ask:
(a) the U.S. Bankruptcy Court for the Southern District of
Texas, pursuant to Section 157(d) of the Judicial and
Judiciary Procedures Code, to withdraw the reference
of confirmation-related and related injunction requests to
the U.S. District Court for the Southern District of
Texas;
(b) the District Court, after appropriate consideration, to
refer the confirmation issues back to the Bankruptcy Court
for evidentiary hearing and the issuance of proposed
findings of fact and conclusions of law; and
(c) the District Court, in accordance with the withdrawal of
reference, after considering the Bankruptcy Court's
proposed findings and conclusions and any related
objections, enter a confirmation order and enter the
requested injunction.
The Debtors, et al., further propose that interested parties be
allowed 10 days to object to the Bankruptcy Court's proposed
findings of fact and conclusions of law.
The proposed procedure complies with statutory requirements,
avoids delay, and most efficiently resolves the issues presented
by confirmation and related injunction requests, Jack L. Kinzie,
Esq., at Baker Botts L.L.P., in Dallas, Texas, asserts.
Mr. Kinzie notes that the Bankruptcy Court approved the Joint
Disclosure Statement with respect to three competing plans
proffered by the Debtors, the Parent, and Harbinger Capital
Partners Master Fund I, Ltd., on July 2, 2009. The Disclosure
Statement Order also established procedures for issuing notices,
soliciting votes, and preparing and tabulating ballots with
respect to the three Plans. The Bankruptcy Court has scheduled
the confirmation hearings to begin August 10, 2009, and to
continue through August 19, 2009, if necessary. Notice of the
scheduled confirmation hearing has been provided to parties-in-
interest.
"A significant issue throughout this bankruptcy case has been the
resolution of substantial asbestos-related liability asserted
against the Debtors," Mr. Kinzie relates. He reminds that Court
that both the Debtors' Plan and the Parent's Plan propose to
transfer asbestos-related liability to an Asbestos Trust, which
will be funded by Plan assets that will be used to resolve
asbestos-related claims and demands. Both the Debtors' and the
Parent's Plans also provide for issuance of a permanent
channeling injunction pursuant to Section 524(g) of the
Bankruptcy Code with respect to all asbestos-related claims.
Both Plans require, among other things, that the District Court
make or affirm various findings with respect to the requested
injunction.
Mr. Kinzie contends that withdrawing the reference with respect
to confirmation and injunction-related issues would vest
responsibility for entering any confirmation order and injunction
in the District Court, and avoid statutory construction questions
regarding the meaning of the phrase "or affirmed" under Section
524(g)(3)(A). At the same time, Mr. Kinzie points out, referring
confirmation and injunction-related issues back to the Bankruptcy
Court to conduct an evidentiary hearing and make findings of fact
and conclusions of law recognizes the Bankruptcy Court's
expertise, its familiarity with the parties, and its experience
in hearing and adjudicating numerous issues in the course of the
multi-year ASARCO bankruptcy. "The combination of withdrawal and
referral, thus, provides for an efficient process that conserves
judicial resources and follows statutory directive," he says.
Mr. Kinzie also asserts that the requested procedure accords with
requirements of both the Debtors' and the Parent's Plans, which
Plans condition effectiveness on, among other things, a finding
made or affirmed by the District Court that the plan complies
with Section 524(g). He adds that the proposed procedure avoids
unnecessary delay that might result if a confirmation order were
issued by the Bankruptcy Court and appealed to the District
Court, but at the same time allows a reasonable time for parties
to object to the Bankruptcy Court's proposed findings and
conclusions and be heard, if necessary on any objections.
Judge Schmidt issued a report and recommendation on the Motion to
Withdraw Reference on July 21, 2009, whereby he agrees with the
Debtors' assertions on the proposed procedure of the withdrawal
of reference of confirmation-related issues and for the referral
of issues to the Bankruptcy Court for evidentiary hearing. A
full-text copy of the Court' report and recommendation is
available for free at:
http://bankrupt.com/misc/ASARCO_Schmidt_Findings_072109.pdf
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
ASARCO LLC filed a plan of reorganization on July 31, 2008,
premised on the sale of the Debtors' assets to Sterlite USA for
US$2.6 billion. By October 2008, ASARCO LLC informed the Court
that Sterlite refused to close the proposed sale and thus, the
Original Plan could not be confirmed. The parties has since
renewed their purchase and sale agreement and ASARCO LLC has
obtained Court approval of a settlement and release contained in
the new PSA for the sale of the ASARCO assets for US$1.1 billion
in cash and a US$600 million note.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted its own plan which allows it to keep its equity
interest in ASARCO LLC by offering full payment to ASARCO's
creditors. AMC offered provide up to US$2.7 billion in cash and a
US$440 million guarantee to assure payment of all allowed creditor
claims, including payment of liabilities relating to asbestos and
environmental claims. AMC's plan is premised on the estimation of
the approximate allowed amount of the claims against ASARCO.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
AVIS BUDGET: Closes $450 Million Term Asset-Backed Notes
--------------------------------------------------------
Avis Budget Group Inc. reports that on July 23, 2009, its Avis
Budget Rental Car Funding (AESOP) LLC subsidiary closed its
$450,000,000 aggregate principal amount of Series 2009-1 9.31%
Rental Car Asset Backed Notes.
The 9.31% notes were priced to yield 9.5%, have an expected final
payment date in October 2012 and are rated A2 by Moody's Investors
Service. They represent the first term asset-backed securities
offering by a car rental company since 2007.
The Issuer issued the Series 2009-1 Notes under the Series 2009-1
Supplement, dated July 23, 2009, between the Issuer and The Bank
of New York Mellon Trust Company, N.A., as trustee and as Series
2009-1 Agent, to the Second Amended and Restated Base Indenture,
dated as of June 3, 2004, as amended, between the Issuer and The
Bank of New York Mellon Trust Company, N.A., as trustee.
The Series 2009-1 Notes are secured under the Base Indenture
primarily by vehicles in Avis' domestic rental fleet and other
related assets.
Certain of the purchasers of the Series 2009-1 Notes, and the
trustee, and their respective affiliates, have performed and may
in the future perform, various commercial banking, investment
banking and other financial advisory services for us and our
subsidiaries for which they have received, and will receive,
customary fees and expenses.
"We are excited to participate in the return of the term ABS
market and to be seeing strong investor interest in Avis Budget's
securitization program. This transaction, which follows a $325
million operating lease transaction that we announced in May,
represents a significant next step toward meeting our fleet
financing needs for 2010," said David B. Wyshner, Avis Budget
Group Executive Vice President and Chief Financial Officer. "We
will continue to look at additional fleet funding opportunities as
market conditions improve."
Based on the Company's current fleet composition, the notes are
expected to provide the Company with an advance rate of nearly 70%
on applicable collateral.
The Series 2009-1 Notes have not been and will not be registered
under the Securities Act of 1933, as amended, or any applicable
state securities laws, and may not be offered or sold in the
United States without registration under the Securities Act or
pursuant to any applicable exemption from such registration.
About Avis Budget
Based in Parsippany, New Jersey, Avis Budget Group, Inc., provides
car and truck rentals and ancillary services to businesses and
consumers in the United States and internationally.
* * *
As reported by the Troubled Company Reporter on April 30, 2009,
Standard & Poor's Ratings Services assigned a '6' recovery rating
to Avis Budget Car Rental LLC's (CCC+/Developing/--) unsecured
notes, indicating expectations of negligible (0%-10%) recovery of
principal in the event of a payment default. Avis Budget Car
Rental LLC is a subsidiary of Avis Budget Group Inc.
(CCC+/Developing/--).
AVIZA TECHNOLOGY: Committee Taps Binder Malter as Counsel
---------------------------------------------------------
The official committee of unsecured creditors of Aviza Technology,
Inc., et al., has filed an ex-parte motion with the U.S.
Bankruptcy Court for the Northern District of California for the
employment of Binder & Malter, LLP, as its counsel, effective as
of July 2, 2009.
As the Committee's counsel, Binder & Malter will:
a. advise the committee with respect to its powers and duties
in the Debtors' cases;
b. assist the Committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors; and
c. provide aid and assistance in monitoring the progress of the
Debtors' administration of the cases.
Julie H. Rome-Banks, Esq., a partner at Binder & Malter, assures
the Court that the firm does not hold or represent any interest
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.
Ms. Rome-Banks discloses that the firm previously represented
creditor Ultra Clean Technologies in 2001, but that Ultra Clean
Technologies is not a current client of the firm and there have
been no discussions between the firm and Ultra Clean regarding the
Debtors or these bankruptcy cases. The firm also represented
creditor Lintelle Engineering Inc. in 1999 in an action action
brought by a bankruptcy trustee against the company.
Binder & Malter's hourly rates are:
Heinz Binder, Esq. $495
Michael W. Malter, Esq. $495
Gayle Zickgraff Green, Esq. $495
Robert G. Harris, Esq. $450
Julie H. Rome-Banks, Esq. $450
David B. Rao, Esq. $425
Wendy W. Smith, Esq. $425
Roya Shakoori, Esq. $325
Paralegals and law clerks $175
About Aviza Technology Inc.
Headquartered in Scotts Valley, California, Aviza Technology Inc.
(NASDAQ GM:AVZA) -- http://www.aviza.com/-- designs,
manufactures, sells and supports semiconductor capital equipment
and process technologies for the global semiconductor industry and
related markets. The Company's systems are used in a variety of
segments of the semiconductor market for advanced silicon for
memory devices, 3-D packaging and power integrated circuits for
communications. The Company's manufacturing, R&D, sales and
customer support facilities are located in the United Kingdom,
Germany, France, Taiwan, China, Japan, Korea, Singapore and
Malaysia.
The Company and two of its subsidiaries, Aviza Inc. and Trikon
Technologies Inc., filed for Chapter 11 bankruptcy protection on
June 9, 2009 (Bankr. N.D. Calif. Case No. 09-54511). Judge Roger
L. Efremsky presides over the Chapter 11 case. Attorneys at the
Law Offices of Murray and Murray represent the Debtors. At the
time of the filing, Aviza Technology estimated assets and debts of
$10 million to $50 million.
AVIZA TECHNOLOGY: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
Aviza Technology, Inc., has filed with the U.S. Bankruptcy Court
for the Northern District of California its schedules of assets
and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ---------- -----------
A. Real Property $0
B. Personal Property $2,557,408
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $28,916,951
E. Creditors Holding
Unsecured Priority
Claims $206,103
F. Creditors Holding
Unsecured Non-priority
Claims $9,185,009
---------- -----------
TOTAL $2,557,408 $38,308,063
A copy of Aviza Technology's schedules of assets and liabilities
is available at http://bankrupt.com/misc/aviza.SAL.pdf
About Aviza Technology Inc.
Headquartered in Scotts Valley, California, Aviza Technology Inc.
(NASDAQ GM:AVZA) -- http://www.aviza.com/-- designs,
manufactures, sells and supports semiconductor capital equipment
and process technologies for the global semiconductor industry and
related markets. The Company's systems are used in a variety of
segments of the semiconductor market for advanced silicon for
memory devices, 3-D packaging and power integrated circuits for
communications. The Company's manufacturing, R&D, sales and
customer support facilities are located in the United Kingdom,
Germany, France, Taiwan, China, Japan, Korea, Singapore and
Malaysia.
The Company and two of its subsidiaries, Aviza Inc. and Trikon
Technologies Inc., filed for Chapter 11 bankruptcy protection on
June 9, 2009 (Bankr. N.D. Calif. Case No. 09-54511). Judge Roger
L. Efremsky presides over the Chapter 11 case. Attorneys at the
Law Offices of Murray and Murray represent the Debtors. At the
time of the filing, Aviza Technology estimated assets and debts of
$10 million to $50 million.
BANK OF AMERICA: Will Close Up to 10% of Branches to Cut Expenses
-----------------------------------------------------------------
Jerry Hirsch at Los Angeles Times reports that Bank of America
Corp. spokesperson James Mahoney said that the bank could close up
to 10% of its branches to lessen expenses and adjust to changes in
how clients conduct banking.
Citing Mr. Mahoney, The Associated Press relates that BofA is
working on the branch closure plan. According to LA Times,
closing the branches would save BofA money but not necessarily
reduce customers' access.
"The fact is that an increasing number of consumers, especially
younger ones, and businesses rarely go to branches anyway. By
maintaining and growing its mobile and online offerings, BofA
should be able to retain such consumers as customers. I expect
the bank to place considerably more emphasis on enhancing its
mobile and online technology. Remote deposit capture, person-to-
person payments, mobile-based promotions and other new services
are now probably a lot closer to the center of BofA's radar
screen," The LA Times quoted Boston financial research and
consulting firm Celent senior analyst Red Gillen as saying.
According to The LA Times, Boenning & Scattergood Inc. research
analyst Jason O'Donnell said, "Closing branches actually makes a
lot of sense from a standpoint of trying to cut costs and have
profitability. BofA does have the luxury of looking back and
getting rid of overlap and overhead."
Based in Charlotte, North Carolina, Bank of America --
http://www.bankofamerica.com/-- is one of the world's largest
financial institutions, serving individual consumers, small and
middle market businesses and large corporations with a full range
of banking, investing, asset management and other financial and
risk-management products and services. The Company serves more
than 59 million consumer and small business relationships with
more than 6,100 retail banking offices, nearly 18,700 ATMs and
online banking with nearly 29 million active users. Following the
acquisition of Merrill Lynch on January 1, 2009, Bank of America
is among the world's leading wealth management companies and is a
global leader in corporate and investment banking and trading
across a broad range of asset classes serving corporations,
governments, institutions and individuals around the world. Bank
of America offers support to more than 4 million small business
owners. The Company serves clients in more than 150 countries.
Bank of America Corporation stock is a component of the Dow Jones
Industrial Average and is listed on the New York Stock Exchange.
The bank needed the government's financial help in completing its
acquisition of Merrill Lynch.
Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth
management, capital markets and advisory companies with offices in
40 countries and territories. As an investment bank, it is a
leading global trader and underwriter of securities and
derivatives across a broad range of asset classes and serves as a
strategic advisor to corporations, governments, institutions and
individuals worldwide. Merrill Lynch owns approximately half of
BlackRock, one of the world's largest publicly traded investment
management companies with more than $1 trillion in assets under
management. Merrill Lynch's operations are organized into two
business segments: Global Markets and Investment Banking (GMI) and
Global Wealth Management (GWM).
As reported by the Troubled Company Reporter on March 27, 2009,
Moody's Investors Service lowered the senior debt rating of Bank
of America Corporation to A2 from A1, the senior subordinated debt
rating to A3 from A2, and the junior subordinated debt rating to
Baa3 from A2. The preferred stock rating was downgraded to B3
from Baa1. The holding company's short-term rating was affirmed
at Prime-1.
BEARD CO: Files Pro Forma Financials to Reflect McElmo Sale
-----------------------------------------------------------
The Beard Company filed an amendment to its Form 8-k filed on
May 14, 2009, which reported on the completion of the disposition
of the Company's remaining interest in the McElmo Dome CO2 Unit in
southwest Colorado which officially closed on May 8, 2009.
The Company filed the amendment to report the Pro Forma Condensed
Balance Sheets and the Pro Forma Condensed Statements of
Operations reflecting the McElmo Dome disposition.
The Company said it recognized a gain of $4,902,000 as a result of
the sale of the Company's interest in the assets. The Company
said it accrued $4,910,000 in legal fees associated with the sale
of the McElmo Dome Field.
A full-text copy of the Company's Pro Forma March 31, 2009, and
December 31, 2008 Balance Sheets is available at no charge at:
http://ResearchArchives.com/t/s?402a
A full-text copy of the Company's Pro Forma March 31, 2009 and
December 31, 2008 Statements of Operations is available at no
charge at http://ResearchArchives.com/t/s?402b
On April 14, 2009, Beard Co. and its wholly owned subsidiary,
Beard Oil Company, entered into a letter agreement with Charles R.
Wiggins to sell all of their remaining interest in the McElmo Dome
CO2 Unit in southwest Colorado for a total cash consideration of
$5,200,000. The Purchaser made a down payment of $1,300,000 to
the Company upon execution of the letter agreement. The Purchaser
was required to pay the $3,900,000 balance to the Company no later
than May 8, 2009, at which time the Company was required to
deliver title to the interest free and clean of all encumbrances.
The Purchaser had the right to assign part or all of his interest
in the letter agreement prior to the Closing Date, and assigned
1/2 of his right to Ken Kamon.
On May 7, 2009, Purchasers wired the $3,736, 626 balance of the
consideration (net of certain adjustments totaling $163,374) to
the Company, and the Company paid off two of its secured lenders
holding the Interest sold as collateral. A third secured lender
was paid off on May 8, 2009, at which time the sale was officially
closed. Transfer of production became effective on March 1, 2009.
There is no material relationship between the Purchasers and the
Company or any of its affiliates, other than with respect to the
transaction.
McElmo Dome is believed to be the largest producing CO2 field in
the world. Prior to the sale, the Company owned approximately a
0.34979234% working interest (0.2942287% net revenue interest) and
an overriding royalty interest equivalent to a net revenue
interest of approximately 0.0598188%, giving the Company a total
net revenue interest of approximately 0.3540485% in the Unit.
Although the Company's Interest in the Unit was small, it has been
of great significance to the Company, accounting for 90% of total
revenues from continuing operations and 97% of the operating
profit of the Company's two profitable segments for 2008.
About The Beard Company
The Beard Company creates, acquires, or invests in businesses,
primarily related to natural resources, that management believes
have high growth or above-average profit potential and can enhance
shareholder value. The Company is involved in oil and gas
activities; coal reclamation activities; minerals exploration and
development through its Geohedral investment, and e-commerce
activities conducted through its starpay(TM) subsidiary. The
Company is headquartered in Oklahoma City and its common stock
trades on the OTC Bulletin Board under the symbol "BRCO".
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.
BIOPURE CORP: Court Okays August 20 Asset Sale
----------------------------------------------
U.S. Bankruptcy Court for the District of Massachusetts has
approved the August 20 sale of Biopure Corp. According to
MassDevice, bidders have until August 13 to submit offers for
Biopure. MassDevice relates that the bids will be opened on
August 18, and the court would give its final approval to the deal
two days later.
As reported by the Troubled Company Reporter on July 17, 2009,
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.
MassDevice relates that Biopure will be in court on August 10 to
seek permission to retain and pay Newbury, Piret Companies Inc. as
its strategic advisor, and to exclude certain compensation
information from the official court record.
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.
Biopure filed for Chapter 11 bankruptcy protection on July 16,
2009 (Bankr. D. Mass. Case No. 09-16725). Christopher J. Panos,
Esq., at Craig and Macauley, P.C., assists the Debtor in its
restructuring efforts. The Debtor listed $5,076,000 in assets and
$2,729,000 in debts.
CABRINI MEDICAL: Names Grubb & Ellis as Real Estate Broker
----------------------------------------------------------
Cabrini Medical Center asks the U.S. Bankruptcy Court for the
Southern District of New York for permission to employ Grubb &
Ellis New York Inc. as exclusive real estate broker.
The firm will:
a) market the Debtor's real estate using such advertising,
canvassing, solicitation of outside brokers and other
promotional and marketing activities as agreed upon
in consultation with the Debtor;
b) provide assistance with negotiations regarding any
potential transactions involving the real estate;
c) analyze and make recommendations regarding
offers for transactions involving the real estate; and
d) assist with consummation of any transactions involving the
real estate.
The firm will be paid in this manner:
a) for sale price up to and including $65,000,000, a fee of
1.25%;
b) for sale price between $65,000,000 and $95,000,000, a fee of
1.5%;
c) for sale price greater than $95,000,000, a fee of 1.75%;
d) 0.75% of the sale price if a contract for the real estate is
entered into with St. Vincent Catholic Medical Center during
the first 60 days of the Broker's engagement. If a contract
of sale is entered with St. Vincent Catholic Medical Center
after the first 60 days of the Broker's engagement, the fee
structure described in (a) and (c);
e) $100,000 if the real estate is sold to a secured creditor;
and
f) if the real estate is leased, the commission will be 2% of
the capitalized value of the average rent for the first
25 years of the net lease, at a capitalization rate shall
of 8%.
The Debtor assures the Court that the firm does not hold any
interest adverse to the Debtor's estate and creditors, and is a
"Disinterested Person" as defined in Section 101(14) of the
Bankruptcy Code.
The Company filed for Chapter 11 bankruptcy protection on July 9,
2009 (Bankr. S.D.N.Y. Case No. 09-14398). Frank A. Oswald, Esq.,
at Togut, Segal & Segal LLP, assists the Company in its
restructuring efforts. The Company listed $50,000,001 to
$100,000,000 in assets and $100,000,001 to $500,000,000 in debts.
CABRINI MEDICAL: Selects Garfunkel Wild as Sepcial Counsel
----------------------------------------------------------
Cabrini Medical Center asks the U.S. Bankruptcy Court for the
Southern District of New York for permission to employ Garfunkel,
Wild & Travis P.C. as special healthcare, regulatory, corporate,
real estate, banking and finance counsel.
The firm will:
a) assist the Debtor in negotiating and documenting
arrangements and agreements with their lenders, suppliers
and other parties relating to general corporate, healthcare,
finance and other non-bankruptcy related matters;
b) provide regulatory advice to the Debtor and consult with the
Debtor on healthcare and other non-bankruptcy related
matters;
c) assist in the preparation and prosecution of non-bankruptcy
administrative and litigation matters relating to the
Debtor's businesses;
d) provide continuing legal advice in connection with
healthcare, regulatory, corporate, finance and other non-
bankruptcy related issues;
e) provide supporting information necessary to object to
claims;
f) assist in providing non-bankruptcy, corporate and commercial
assistance as may relate to the sale, lease or other
disposition of the Debtor's assets; and
g) perform other non-bankruptcy related legal services and
assistance desirable and necessary to the efficient and
economic administration of the estate.
The firm's professionals and their standard hourly rates:
Professional Designation Hourly Rate
------------ ----------- -----------
Robert A. Wild, Esq. healthcare member $495
Judith Eisen, Esq. healthcare member $490
Burton S. Weston, Esq. corporate member $490
David Biehl, Esq. real estate member $460
Andrew L. Zwerling, Esq. healthcare member $390
Sean P. Leyden, Esq. real estate member $365
Andrew J. Schulson, Esq. finance member $380
B. Scott Higgins, Esq. finance member $325
Afsheen A. Shah, Esq. senior attorney $285
Jason his, Esq. associate $240
The Debtor assures the Court that the firm does not hold any
interest adverse to the Debtor's estate and creditors, and is a
"Disinterested Person" as defined in Section 101(14) of the
Bankruptcy Code.
The Company filed for Chapter 11 bankruptcy protection on July 9,
2009 (Bankr. S.D.N.Y. Case No. 09-14398). Frank A. Oswald, Esq.,
at Togut, Segal & Segal LLP, assists the Company in its
restructuring efforts. The Company listed $50,000,001 to
$100,000,000 in assets and $100,000,001 to $500,000,000 in debts.
CABRINI MEDICAL: U.S. Trustee Appoints Five-Member Creditors Panel
------------------------------------------------------------------
Diana G. Adams, the U.S. Trustee for Region 2, appoints five
members to the official committee of unsecured creditors in the
Chapter 11 cases of Cabrini Medical Center.
The Creditors Committee members are:
1. Shore Pharmaceutical Providers, Inc.
Attn: Joann Billman
11000 River Center
100 East East Rivercenter Boulevard
Covington, KY 41011
Tel: (859) 392-7398
2. Consolidated Edison Company of New York, Inc.
Attn: Leon Z. Mener, Assistant General Attorney
No. 4 Irving Place, Room 1875
New York, NY 10003
Tel: (212) 460-2916
3. New York State Nurses Association
Attn: Mary Louise Cahill
120 Broadway
New York, NY 10020
Tel: (212) 785-8157 ext. 164
4. A. Kingsbury Co., Inc.
Attn: Philip J. Bilello, CFO
170 Finn Court
Farmingdale, NY 11735
Tel: (631) 844-1700
5. Owens & Minor
Attn: Andrea Lewis
7437 Industrial Boulevard
Allentown, PA 18106
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
expense. They may investigate the Debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also Attnempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
About Cabrini Medical Center
Cabrini Medical Center was founded in 1892 by a woman who would be
known as Mother Cabrini, and was later canonized as Saint Frances
Xavier Cabrini. She sought funding from the Vatican for the
hospital as a facility to treat poor immigrant Italians in New
York. The hospital is being sponsored by the Provincial of the
Missionary Sisters of the Sacred Heart of Jesus, Stella Maris
Province.
The Company filed for Chapter 11 bankruptcy protection on July 9,
2009 (Bankr. S.D. N.Y. Case No. 09-14398). Frank A. Oswald, Esq.,
at Togut, Segal & Segal LLP assists the Company in its
restructuring efforts. The Company listed $50,000,001 to
$100,000,000 in assets and $100,000,001 to $500,000,000 in debts.
CABRINI MEDICAL: Wants Kurtzman Carson as Claims & Noticing Agent
-----------------------------------------------------------------
Cabrini Medical Center asks the U.S. Bankruptcy Court for the
Southern District of New York to employ certain professionals to
serve in the Chapter 11 case.
The Debtor selected Kurtzman Carson as claims agent claims and
noticing agent.
The Official Committee of Unsecured Creditors in Cabrini Medical
Center's Chapter 11 case also asks authority from the Court to
employ Craig Freeman at Alston & Bird LLP to represent their
concerns.
The Committee's proposed counsel can be reached at:
Alston & Bird LLP
90 Park Avenue
New York, NY 10016
Tel: (212) 212 210-9591
Fax: (212) 922-3891
Cabrini Medical Center was founded in 1892 by a woman who would be
known as Mother Cabrini, and was later canonized as Saint Frances
Xavier Cabrini. She sought funding from the Vatican for the
hospital as a facility to treat poor immigrant Italians in New
York. The hospital is being sponsored by the Provincial of the
Missionary Sisters of the Sacred Heart of Jesus, Stella Maris
Province.
The Company filed for Chapter 11 bankruptcy protection on July 9,
2009 (Bankr. S.D. N.Y. Case No. 09-14398). Frank A. Oswald, Esq.,
at Togut, Segal & Segal LLP assists the Company in its
restructuring efforts. The Company listed $50,000,001 to
$100,000,000 in assets and $100,000,001 to $500,000,000 in debts.
CALIFORNIA STATE: Governor Arnold Schwarzenegger Inks Budget Plan
-----------------------------------------------------------------
Stu Woo at The Wall Street Journal reports that Gov. Arnold
Schwarzenegger has signed a plan to close California's $24 billion
budget shortfall.
According to WSJ, Gov. Schwarzenegger used his line-item veto
powers to cut about $500 million in spending, in addition to
$15.6 billion in reductions approved by legislators. WSJ notes
that the new cuts mostly hit health and children's programs.
California Senate President Darrell Steinberg said in a statement,
"We will fight to restore every dollar of additional cuts to
health and human services. The Senate held the line and passed a
budget revision package with a sufficient reserve that met the
governor's test. We question whether the majority of these vetoes
are legal."
WSJ relates that Gov. Schwarzenegger had wanted a $26 billion
budget plan, with $24 billion to close the deficit plus a
$2 billion reserve fund, but legislators negotiated the figure
down to $24 billion. According to the report, Mr. Schwarzenegger
said that it forced him to make the line-item cuts to create a
$500 million reserve fund.
WSJ states that the spending plan:
-- closes a $24 billion gap in a $92 billion general-fund
budget for the fiscal year ending June 2010;
-- takes almost $4 billion from local-government funds;
-- relies on accounting gimmicks to close the remaining
Deficit; and
-- will inject cash into California's near-empty coffers,
opening the way for the state to stop paying creditors
with IOUs. California had issued 209,000 IOUs worth
$1.1 billion as of Tuesday.
CATALYST PAPER: Refinances $75MM of Debt Related to Joint Venture
-----------------------------------------------------------------
Catalyst Paper Corporation said its hydro joint venture, Powell
River Energy Inc., has successfully raised $95 million of first
mortgage bonds maturing in July 2016 to refinance $75 million of
non-recourse debt due on July 24, 2009. The new bonds are priced
at an interest rate of 6.45%, payable semi-annually. The
transaction was scheduled to close on July 24, 2009.
Catalyst has a 50% interest in Powell River Energy with Great
Lakes Hydro Income Fund holding an equivalent stake. After fees
and other expenses, the additional $18 million in funds raised in
this refinancing is to be distributed equally to the joint venture
partners.
On June 23, 2009, Catalyst said in response to the continued
deterioration in market conditions affecting the forest products
industry generally and newsprint in particular, it was reviewing
alternatives to address the maturity of its senior unsecured
notes. The review will focus on refinancing alternatives for its
US$354 million of 8.625% notes and its US$250 million of 7.375%
notes which mature in 2011 and 2014, respectively.
"Given the extremely challenging market conditions that we are
managing through, and the lack of any signs of a meaningful
recovery, it's appropriate to consider options well ahead of the
stated maturities," said Chief Financial Officer David Smales.
"The two-year window to the first maturity represents a relatively
short period given current market and credit conditions."
Catalyst has engaged Genuity Capital Markets to assist in this
process.
About Catalyst Paper
Catalyst Paper Corporation (TSX:CTL) manufactures diverse
specialty printing papers, newsprint and pulp. Its customers
include retailers, publishers and commercial printers in North
America, Latin America, the Pacific Rim and Europe. With six
mills strategically located in British Columbia and Arizona,
Catalyst has a combined annual production capacity of 2.5 million
tonnes. The company is headquartered in Richmond, British
Columbia, Canada and its common shares trade on the Toronto Stock
Exchange under the symbol CTL.
* * *
As reported by the Troubled Company Reporter on June 30, 2009,
Standard & Poor's Rating Services lowered its ratings, including
its long-term corporate credit rating, on Catalyst Paper to 'CCC+'
from 'B'. S&P also placed the ratings on CreditWatch with
negative implications. "The downgrade and CreditWatch placement
reflect the company's recent announcement that it is looking at
refinancing alternatives for its 2011 and 2014 unsecured notes,"
said Standard & Poor's credit analyst Jatinder Mall.
The TCR said July 10, 2009, Moody's Investors Service lowered the
corporate family rating of Catalyst Paper to B3 from B1 and at the
same time, downgraded the company's senior unsecured debt ratings
to Caa1 from B2. Catalyst's SGL-3 speculative grade liquidity
rating was affirmed and the long term ratings outlook is negative.
The rating action reflects Moody's expectation that the rapid
deterioration in industry conditions will cause Catalyst's
financial performance to weaken materially over the next 12 to 18
months.
CENTRO NP: Taps McGladrey & Pullen as Independent Accountants
-------------------------------------------------------------
Centro NP LLC reports that on July 24, 2009, it engaged McGladrey
& Pullen, LLP as the Company's independent registered public
accounting firm for the fiscal year ending December 31, 2009.
On June 24, 2009, Centro NP received notification from the United
States firm of PricewaterhouseCoopers LLP of their resignation as
the Company's independent registered public accounting firm.
PwC-US's resignation was due to litigation involving the Company's
ultimate parent company against its auditors, the
PricewaterhouseCoopers firm in Australia. There are no
disagreements between the Company and PwC-US as contemplated under
Item 304(a)(1) of Regulation S-K.
The reports of PwC-US on the Company's consolidated financial
statements for the fiscal years ended December 31, 2007 and 2008
did not contain an adverse opinion or a disclaimer of opinion, and
were not qualified or modified as to uncertainty, audit scope or
accounting principle, except that PwC-US's reports contained an
explanatory paragraph regarding substantial doubt as to the
Company's ability to continue as a going concern.
During the fiscal years ended December 31, 2007 and 2008, and
through June 24, 2009, there were no disagreements with PwC-US on
any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which, if
not resolved to the satisfaction of PwC-US, would have caused PwC-
US to make reference thereto in its reports on the consolidated
financial statements for such years.
During the Company's two most recent fiscal years, and in the
subsequent interim period through July 24, neither the Company nor
anyone on its behalf consulted McGladrey regarding (i) the
application of accounting principles to a specified transaction,
either completed or proposed; or the type of audit opinion that
might be rendered on the Company's financial statements, nor did
McGladrey provide any written report or oral advice to the Company
that was an important factor considered by the Company in reaching
a decision as to any accounting, auditing or financial reporting
issue; or (ii) any matter that was either the subject of a
disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions of Regulation S-K) or a reportable
event (as defined in Item 304(a)(1)(v) of Regulation S-K).
Centro NP LLC owns and develops community and neighborhood
shopping centers throughout the United States. The Company was
formed in February 2007 to succeed the operations of New Plan
Excel Realty Trust, Inc.
As of March 31, 2009, the Company had $3,714,839,000 in total
assets and $2,041,421,000 in total liabilities.
In its quarterly report for the period ended March 31, 2009, filed
in May 2009, Centro NP said there is substantial doubt about its
ability to continue as a going concern given its liquidity is
subject to, among other things, its ability to negotiate
extensions of credit facilities; its reliance upon funding
provided by an entity that it does not control; current
prohibition upon its ability to incur further indebtedness and the
existence of restrictions upon operations which increase the risk
of default and cross-default of existing debt. In addition,
uncertainty also exists due to the liquidity issues currently
experienced by the Company's parent and the ultimate parent
investors, Centro Properties Limited and Centro Property Trust.
Centro NP had said management is working with both its lenders and
the lenders of its affiliated entities, and also with management
of the ultimate parent investors of the Company, to access a
number of options that address the Company's ongoing liquidity
issues. Factors that may impact this include the current and
future condition of the credit market and the US retail real
estate market.
Centro NP had said the extension of certain debt facilities to
December 31, 2010, provides the Company with more time to consider
a range of different plans to address its longer term liquidity
issues and potential funding from distributions from the Residual
Joint Venture and potential asset sales, among other things,
should provide the Company with the ability to pay its debts as
and when they become due and payable.
As reported by the Troubled Company Reporter on May 22, 2009,
Standard & Poor's Ratings Services affirmed its 'CCC+' long-term
corporate credit rating on Centro NP. Centro NP's senior
unsecured note ratings were also affirmed at 'CCC+', and a
recovery rating of '3' was assigned to these notes, reflecting
S&P's expectation of meaningful recovery prospects for bondholders
in the event of a default. At the same time, the ratings were
removed from CreditWatch with developing implications, where they
were initially placed on January 3, 2008. The rating outlook on
the long-term rating is negative.
CHAMPION ENTERPRISES: May Issue Securities to Raise Up to $350MM
----------------------------------------------------------------
Champion Enterprises Inc. filed with the Securities and Exchange
Commission on July 1, 2009, a registration statement and
prospectus on Form S-3 in connection with its plan to issue up to
$350,000,000 in securities.
Champion Enterprises may offer to sell from time to time, in one
or more offerings, in amounts, at prices and on terms determined
at the time of any such offering, (i) shares of common stock; (ii)
shares of preferred stock, which may be issued in one or more
series; (iii) depositary shares representing shares of preferred
stock, (iv) debt securities, which may be guaranteed by certain of
its subsidiaries, (v) warrants, (vi) subscription rights, (vii)
purchase contracts, and (viii) purchase units.
Champion may offer and sell the securities to or through one or
more underwriters, dealers and agents, or directly to purchasers,
on a continuous or delayed basis.
The prospectus describes some of the general terms that may apply
to the securities. The specific terms of any securities to be
offered will be described in a supplement to the prospectus. The
prospectus supplement may also add, update or change information
contained in the prospectus.
Champion's common stock is listed on the New York and Chicago
Stock Exchanges under the trading symbol "CHB." Each prospectus
supplement will indicate if the securities offered thereby will be
listed on any securities exchange.
The prospectus may not be used to sell securities unless
accompanied by a prospectus supplement.
A full-text copy of the prospectus is available at no charge at:
http://ResearchArchives.com/t/s?4022
Champion Enterprises, Inc., headquartered in Troy, Michigan, is a
producer of manufactured housing, modular homes, and steel-framed
modular buildings and operates 30 manufacturing facilities in
North America and the United Kingdom. Champion Enterprises is a
holding company that conducts its operations though Champion Home
Builders Co. and its subsidiaries. Revenues for the last 12 month
through April 4, 2009, totaled approximately $842 million.
As reported by the Troubled Company Reporter on July 2, 2009,
Moody's Investors Service downgraded the Corporate Family Rating
and Probability of Default Rating to Caa3 from Caa1 Champion
Enterprises, Inc., but relocated the ratings to Champion Home
Builders Co. Moody's explained Champion Enterprises no longer has
any rated debt since the company repaid its 7.625% senior secured
notes due 2009. Moody's said the downgrades reflect the greater
than expected deterioration in Champion's operating performance
due to the continued downturn in the global economy and reduced
demand for manufactured housing and modular homes.
CHRYSLER LLC: Creditors Win More Time to Bring Daimler Claim
------------------------------------------------------------
A Chrysler LLC settlement over the automaker's sale to a group led
by Fiat SpA was changed to give creditors another week to bring a
potential lawsuit against Daimler AG, Carla Main at Bloomberg
said. Creditors were given until midnight on July 27, instead of
July 20, to submit a demand to bring lawsuits against Daimler,
according to papers filed in U.S. Bankruptcy Court in Manhattan.
They have until Aug. 11, rather than Aug. 4, to bring a complaint.
The original settlement, entered into June 5, released Daimler and
affiliates from claims on condition that creditors file a demand
to make a claim within 45 days. Creditors are probing the
automaker's 1998 acquisition by Daimler-Benz AG and 2007 sale to
an affiliate of Cerberus Capital Management LP.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge
and Mopar(R) brand vehicles and products. The Company has dealers
worldwide, including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan, and Australia. In
2007, Cerberus Capital Management LP acquired an 80.1% stake in
Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake.
On April 30, Chrysler LLC and 24 affiliates sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the terms
approved by the Bankruptcy Court, the company formerly known as
Chrysler LLC on June 10, 2009, formally sold substantially all of
its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CIT GROUP: May Have Difficulty Selling Railcars and Aircraft
------------------------------------------------------------
CIT Group Inc. may have difficulty selling its railcar and
aircraft leasing businesses. According to Carla Main at Bloomberg
News, CIT Group may get low bids for railroad and aircraft leasing
units as competing sellers, the recession and the threat of
bankruptcy drive down prices. Ms. Main relates that CIT Chief
Executive Officer Jeffrey Peek is weighing the sale of the
businesses, a person familiar with the deliberations said, in a
market where General Electric Co. and American International Group
Inc. have failed to find buyers for rail and aircraft
subsidiaries.
According to Bloomberg, analysts and investors said Warren
Buffett's Berkshire Hathaway Inc. and Leucadia National Corp. are
potential buyers.
CIT has 116,000 railcars and some 300 aircraft, making it the
third-largest in both businesses. CIT, according to reports, is
planning to sell both businesses in order to raise cash and cut
debt. According to The Wall Street Journal, CIT explored a sale
of its railcar-leasing business in 2008 and collected bids from
potential buyers, but executives stopped the sale because the bids
were too low.
As reported by the TCR on July 21, CIT Group 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.
As the first step in a planned restructuring of its liabilities,
CIT commenced a cash tender offer for its outstanding floating-
rate senior notes due August 17, 2009. The price offered is less
than face value, and the company has indicated that without a
successful tender offer it may have to file for bankruptcy
protection.
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 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's worsening
credit quality.
This led to reports that CIT, 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.
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 20, Standard & Poor's Ratings
Services said that it downgraded CIT Group Inc., including
lowering its long-term counterparty credit rating to 'CC' from
'CCC+'. The ratings remain on CreditWatch Negative, where they
were placed June 12, 2009. "The downgrade reflects S&P's belief
that there is an increased risk that CIT may declare bankruptcy in
the near term or take other actions that will be detrimental to
debt holders," said Standard & Poor's credit analyst Rian M.
Pressman, CFA.
Moody's Investors Service simultaneously lowered CIT Group Inc.'s
senior unsecured rating to Ca from B3 and issuer rating to Ca from
B3. The downgrade follows CIT's announcement that that it expects
no additional support from the U.S. government and that it is
evaluating alternatives, which Moody's believes includes a high
probability of a near-term bankruptcy filing.
CIT GROUP: Ignored Alternative Financing Offer; Investors Grumble
-----------------------------------------------------------------
Serena Ng and Kate Haywood at The Wall Street Journal report that
CIT Group investors are complaining that the Company "largely
ignored" their offer of alternative financing.
WSJ relates Thomas Lauria, a White & Case LLP attorney
representing CIT investors, said that the investors had offered to
make $3 billion in funds immediately available to CIT, plus an
additional $3 billion "if requested by the Company." Citing Mr.
Lauria, WSJ says that the funds would have helped CIT buy back its
bonds due in August.
Citing Mr. Lauria, WSJ states that in a letter sent to CIT's board
and CEO Jeffrey Peek on July 24, the investors expressed
frustration over the Company's decision to accept a $3 billion
rescue package from six large bondholders when other, potentially
cheaper, options were on the table. Their offer could have
provided the lender with up to $6 billion in funds, the report
says, citing Mr. Lauria. "We never received a meaningful response
to our proposal," and "repeated attempts to engage" with CIT's
advisers in the three days before the Company reached a deal with
bondholders were largely ignored, leading the rival group to
assume CIT had gotten a "superior proposal," the report quoted Mr.
Lauria as saying.
According to WSJ, some investors were surprised to learn that CIT
was paying at least $100 million in upfront fees and had pledged
substantially all its "unencumbered assets" as collateral for a
$3 billion loan from investors including Allianz SE's Pacific
Investment Management Co., Oaktree Capital and Centerbridge
Partners. CIT, WSJ relates, said that it had received $2 billion
of that amount and expected the remaining $1 billion by the end of
this month.
WSJ says that the interest rate on the investors' proposed loan
had a minimum 13%, but its upfront fee would have been 3% versus
5% on the package CIT accepted. The group had proposed an "exit
fee" of 3% versus 2% on the agreed-upon loan, which also imposes a
6.5% fee on CIT if it repays early, according to WSJ.
WSJ reports that CIT said it "evaluated a wide range of funding
options proposed by a number of financial institutions and market
participants" before agreeing to the $3 billion loan from its
major bondholders. The board determined that the loan, as well as
a restructuring it will undertake, would be "the best course of
action to provide additional liquidity and further strengthen
CIT's capital position," WSJ quoted the Company as saying.
WSJ quoted CreditSights analysts Adam Steer and David Hendler as
saying, "CIT is still saddled with the underlying issue that it
lacks a viable operating model. Consequently, we believe a
bankruptcy filing is still a likely possibility."
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.
CITIGROUP INC: Citi Funding to Issue $53.5MM in ELKS Due Aug. 2010
------------------------------------------------------------------
Citigroup Inc. filed with the Securities and Exchange Commission a
pricing supplement on Form 424B2 in connection with Citigroup
Funding Inc.'s offering of $53,530,000 in Equity LinKed Securities
Based Upon the Common Stock of JPMorgan Chase & Co.
Citigroup Funding will issue 5,353,000 Equity LinKed Securities
due August 25, 2010, at public offering price of $10 per ELKS.
According to the pricing supplement, ELKS(R) are equity-linked
investments that offer current income as well as limited
protection against the decline in the price of the common stock on
which the ELKS are based. The ELKS pay a fixed coupon, with a
yield greater than both the current dividend yield of the
Underlying Equity and the yield that would be payable on a
conventional debt security of the same maturity issued by
Citigroup Funding. The ELKS will pay a semi-annual coupon equal
to 10.5% per annum.
The ELKS are a series of unsecured senior debt securities issued
by Citigroup Funding. Any payments due on the ELKS are fully and
unconditionally guaranteed by Citigroup Inc., Citigroup Funding's
parent company. The ELKS will rank equally with all other
unsecured and unsubordinated debt of Citigroup Funding and, as a
result of the guarantee, any payments due under the ELKS will rank
equally with all other unsecured and unsubordinated debt of
Citigroup Inc. The return of the principal amount of investment
in the ELKS at maturity is not guaranteed. The ELKS are not
deposits or savings accounts, are not insured by the Federal
Deposit Insurance Corporation or by any other governmental agency
or instrumentality, and are not guaranteed by the FDIC under the
Temporary Liquidity Guarantee Program.
A full-text copy of the Pricing Supplement is available at no
charge at http://ResearchArchives.com/t/s?4027
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. At June 30, 2009, Citigroup had
total assets of $1.84 trillion and total liabilities of
$1.69 trillion.
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: Citi Funding to Issue Fixed Upside Return Notes
--------------------------------------------------------------
Citigroup Inc. filed with the Securities and Exchange Commission a
free writing prospectus on Form FWP and a pricing supplement on
Form 424B2 in connection with Citigroup Funding Inc.'s offering of
$2,900,000 in Fixed Upside Return Notes Based Upon the iShares(R)
Russell 2000 Index Fund Due August 5, 2010.
Citigroup Funding will issue 29,000 Fixed Upside Return Notes
Based Upon the iShares(R) Russell 2000 Index Fund Due August 5,
2010, at public offering price of $10 per Note.
The Notes are investments linked to an exchange-traded fund that
offer a potential return at maturity that depends on whether the
Ending Price of the Underlying Equity is greater than, equal to or
less than its Starting Price. The Notes are not principal
protected and do not pay periodic interest. The Notes have a
maturity of approximately one year and are issued by Citigroup
Funding Inc. Some key characteristics of the Notes include:
(A) Fixed Upside Return
The Notes offer investors a potential Fixed Upside Return
of 17%. Thus,
-- If the Ending Price of the Underlying Equity is
greater than or equal to its Starting Price, at
maturity, the investor will receive for each Note held
the $10 principal amount per Note plus the product of
(i) $10 and (ii) the Fixed Upside Return of 17% on the
Notes. Therefore, because the Fixed Upside Return is
limited to 17% of the principal amount of the Notes,
in no circumstance will the amount the investor
receives at maturity exceed $11.70, even if the Ending
Price of the Underlying Equity exceeds its Starting
Price by more than 17%.
-- If the Ending Price of the Underlying Equity is less
than its Starting Price, at maturity the investor will
receive for each Note held a fixed number of shares of
the Underlying Equity equal to the Equity Ratio (or if
the investor elects, the cash value of those shares
based on the Ending Price of the Underlying Equity),
in which event the amount per Note the investor
receives at maturity will be less than the amount of
the original investment in the Notes and could be zero
(except under limited circumstances where the investor
receives shares of the Underlying Equity and the
Closing Price of the shares increases from the
Valuation Date to maturity).
(B) No Principal Protection
The Notes are not principal protected. If the Ending
Price of the Underlying Equity is less than its
Starting Price, the investor will participate fully in
such decline and the value of the Notes at maturity
will be less than the amount of the initial investment
and could be zero (except under limited circumstances
where the investor receives shares of the Underlying
Equity and the Closing Price of the shares increases
from the Valuation Date to maturity).
(C) No Periodic Income Payments
The Notes do not offer current income, which means that
the investor will not receive any periodic interest or
other periodic payments on the Notes. The investor will
not be entitled as a holder of the Notes to receive
dividend payments or other distributions, if any, made on
the Underlying Equity, unless and until the investor
receives Underlying Equity at maturity. The investor
will also not receive any dividend payments or other
distributions, if any, on the stocks comprising the
Russell 2000(R) Index, the index upon which the
iShares(R) Russell 2000 Index Fund is based.
(D) The Notes are a series of unsecured senior debt
securities issued by Citigroup Funding. Any payments due
on the Notes are fully and unconditionally guaranteed by
Citigroup Inc., Citigroup Funding's parent company. The
Notes will rank equally with all other unsecured and
unsubordinated debt of Citigroup Funding, and as a result
of the guarantee any payments due under the Notes at
maturity will rank equally with all other unsecured and
unsubordinated debt of Citigroup Inc. The return of the
principal amount of the investment in the Notes at
maturity is not guaranteed.
(E) The Notes are not deposits or savings accounts, are not
insured by the Federal Deposit Insurance Corporation or
by any other governmental agency or instrumentality, and
are not guaranteed by the FDIC under the Temporary
Liquidity Guarantee Program.
A full-text copy of the Free Writing Prospectus is available at no
charge at http://ResearchArchives.com/t/s?4028
A full-text copy of the Pricing Supplement is available at no
charge at http://ResearchArchives.com/t/s?4029
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. At June 30, 2009, Citigroup had
total assets of $1.84 trillion and total liabilities of
$1.69 trillion.
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: Jeff Walsh Named as Controller, Head of Accounting
-----------------------------------------------------------------
The Board of Directors of Citigroup Inc. appointed Jeffrey R.
Walsh as Controller and Chief Accounting Officer of Citigroup on
July 21, 2009.
Mr. Walsh, 51, has been with Citigroup for more than 19 years in a
variety of product, regional and functional finance roles,
including Controller for the Global Consumer Businesses, Interim
Global Consumer CFO, Senior Finance Officer for International
Operations, EMEA Consumer CFO and UK Country Controller.
Previously, Mr. Walsh spent 11 years with KPMG.
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. At June 30, 2009, Citigroup had
total assets of $1.84 trillion and total liabilities of
$1.69 trillion.
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: Won't Pull Out From Asia Despite Assets Sale
-----------------------------------------------------------
Peter Stein and Rick Carew at The Wall Street Journal report that
Citigroup CEO Vikram Pandit has assured Asia that the bank
wouldn't retreat from the region even as the financial crisis has
forced it to shrink its balance sheet by about 25%.
As reported by the Troubled Company Reporter on July 2, 2009,
Citigroup Inc.'s Nikko Citi Holdings Inc. reported that a
definitive agreement had been executed to sell the shares of
NikkoCiti Trust and Banking Corporation to Nomura Trust & Banking
Co. Ltd.
The Journal quoted Mr. Pandit as saying, "There's no question in
our mind that Asia is going to represent a disproportionate amount
of the world's growth over the next decade" and that will result
in big opportunities for Citi to expand its presence in trade
finance, custody business and cross-border cash flows.
According to The Journal, Mr. Pandit said that he hopes to
continue expanding Citigroup's business in the two biggest engines
of growth in Asia, China and India, despite tough local
restrictions that tie its hands more than in some other markets.
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.
CMR MORTGAGE II: Wants Plan Filing Period Extended to October 30
----------------------------------------------------------------
CMR Mortgage Fund II, LLC, asks the U.S. Bankruptcy Court for the
Northern District of California to extend its exclusive period to
file a plan until October 30, 2009, and its exclusive period to
solicit acceptances thereof until December 30, 2009.
The Debtor tells the Court that much still remains to be done
before a plan can be formulated, including the establishment of
registration-exempt DIP financing from investors. Most
importantly, the Debtor says that an investors' committee has not
yet been appointed and that the initial organizational meeting has
not yet occurred.
San Francisco, California-based CMR Mortgage Fund II, LLC, is a
limited liability company organized for the purpose of making or
investing in business loans secured by deeds of trust or mortgages
on real properties located primarily in California. The Company
previously funded lending activities through loan pay downs or pay
offs, as well as by selling its membership interests, and by
selling all or a portion of interests in the loans to individual
investors. The Company commenced operations in February 2004.
The Company ceased accepting new members in the third quarter of
2006.
The Company filed for Chapter 11 protection on March 31, 2009
(Bankr. N. D. Calif. Case No. 09-30788). Robert G. Harris, Esq.,
at the Law Offices of Binder and Malter, represents the Debtor as
counsel. The Debtor listed between $10 million and $50 million
each in assets and debts.
COMMERCIAL CAPITAL: Wants Access to Cash Collateral of WestLB
-------------------------------------------------------------
CCI Funding I, LLC, asks the U.S. Bankruptcy Court for the
District of Colorado to enter an agreed order authorizing the
Debtors to use cash collateral of WestLB AG, New York Branch and
granting adequate protection to WestLB. The mortgage loans held
by CCIF are collateral for CCIF's obligations to WestLB under a
Credit and Security Agreement dated as of January 5, 2007.
Cash of approximately $1,463,352 is being held on deposit in a
Collection Account, all of which constitutes cash collateral of
WestLB.
As adequate protection, CCIF has agreed to grant WestLB a
replacement lien on CCIF's assets. CCIF and WestLB have also
agreed that if they entor into a debtor in possession financing
facility with WestLB as DIP lender, then the amounts of cash
collateral advanced hereunder will be treated as post-potition
debtor in possession loans under the DIP loan facility.
CCIF tells the Court that it requires immediate access to cash to
pay (a) servicing fees and expenses, (b) legal fees and expenses
in connection with foreclosures and other remedial actions, and
(c) certain other expenses related to preserving the value of the
mortgage loans.
About Commercial Capital, Inc.
Greenwood Village, Colorado-based Commercial Capital, Inc. --
http://www.commercialcapitalinc.com/-- and its affiliate, CCI
Funding I, LLC, are commercial real estate lenders and investment
partners engaging in short-term commercial mortgage. Commercial
Capital and CCI Funding filed separate petitions for Chapter 11 on
April 22, 2009, and April 24, 2009, respectively (Bankr. D. Colo.
Lead Case No. 09-17238). Robert Padjen, Esq., at Laufer and
Padjen LLC, assists Commercial Capital in its restructuring
efforts. In its bankruptcy petition, Commercial Capital listed
between $100 million and $500 million in assets, and between
$50 million and $100 million in debts. CCI Funding listed between
$100 million and $500 million each in assets and debts.
COMMERCIAL CAPITAL: Taps Peters Law as Counsel for Investor Issues
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado has granted
Commercial Capital, Inc. permission to employ the Peters Law Firm,
LLC, as its special counsel, nunc pro tunc to April 27, 2009.
Peters Law will:
a) advise the Debtor respecting investor complaints or other
inquiries concerning its lending or other commercial
activities;
b) represent the Debtor respecting any litigation commenced by
investors or creditors concerning its lending or other
commercial practices; and
c) respond to any governmental inquiries concerning its lending
or other commercial practices.
Peter Law's current hourly rates are:
Stephen C. Peters, Esq. $450
Todd E. Mair, Esq. $295
To the best of the Debtor's knowledge, Peters Law represents no
interest adverse to it or its estate, and that the firm is a
disinterested person as required by the Bankruptcy Code.
The Court ordered that all post-petition fees and expenses to be
paid to Peters Law by the Debtor, including accounting services
and forensic services rendered by professionals retained by Peters
Law on behalf of the Debtor, will be subject to prior Court
approval.
About Commercial Capital, Inc.
Greenwood Village, Colorado-based Commercial Capital, Inc. --
http://www.commercialcapitalinc.com/-- and its affiliate, CCI
Funding I, LLC, are commercial real estate lenders and investment
partners engaging in short-term commercial mortgage. Commercial
Capital and CCI Funding filed separate petitions for Chapter 11 on
April 22, 2009, and April 24, 2009, respectively (Bankr. D. Colo.
Lead Case No. 09-17238). Robert Padjen, Esq., at Laufer and
Padjen LLC, assists Commercial Capital in its restructuring
efforts. In its bankruptcy petition, Commercial Capital listed
between $100 million and $500 million in assets, and between
$50 million and $100 million in debts. CCI Funding listed between
$100 million and $500 million each in assets and debts.
CONSECO INC: Bankers Unit Inks Strategic Alliance with Humana
-------------------------------------------------------------
Bankers Life and Casualty Company and Humana announced a strategic
alliance under which Bankers will offer Humana's Medicare
Advantage plans to its policyholders and consumers nationwide
through their career agency force.
"We are pleased to be partnering with Humana to make their
Medicare products available to our nearly 1.4 million
policyholders and prospective customers," said Scott Perry,
President of Bankers, the national life and health insurer
focusing on the retirement market. "Humana's valuable portfolio of
competitive products will provide a range of excellent options to
address their health-related concerns. This relationship further
positions us as a leading provider of supplemental health products
to middle market senior Americans, and we look forward to a long
and productive relationship."
Bankers will offer Humana's Medicare Advantage plans, along with
its own line of Medicare supplement products, through its career
sales force consisting of 5,270 agents in 244 sales offices across
the United States.
"Bankers Life and Casualty shares Humana's commitment to
protecting the futures of seniors by offering them products that
meet their health care needs," said Lance Hoeltke, Vice President
of Strategic Alliances with Humana. "We're proud to be in
partnership with such a high-caliber team of sales professionals."
About Humana
Humana Inc., headquartered in Louisville, Ky. --
http://www.humana.com/-- is one of the nation's largest publicly
traded health and supplemental benefits companies, with roughly
10.4 million medical members. Humana is a full-service benefits
solutions company, offering a wide array of health and
supplementary benefit plans for employer groups, government
programs and individuals.
Over its 48-year history, Humana has consistently seized
opportunities to meet changing customer needs. The company is a
leader in consumer engagement, providing guidance that leads to
lower costs and a better health plan experience throughout its
diversified customer portfolio.
About Bankers Life and Casualty Company
Established in 1879 in Chicago, Bankers Life and Casualty Company
-- http://www.bankers.com/-- focuses on the insurance needs of
the retirement market. The nationwide company, a subsidiary of
Conseco, Inc., offers a broad portfolio of life and health
insurance retirement products designed especially for seniors.
About Conseco Inc.
Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) --
http://www.conseco.com/-- is the holding company for a group of
insurance companies operating throughout the United States that
develop, market and administer supplemental health insurance,
annuity, individual life insurance and other insurance products.
The company became the successor to Conseco Inc. (Old Conseco), in
connection with its bankruptcy reorganization. CNO focuses on
serving the senior and middle-income markets. The company sells
its products through three distribution channels: career agents,
professional independent producers and direct marketing. CNO
operates through its segments, which includes Bankers Life,
Conseco Insurance Group, Colonial Penn, other business in run-off
and corporate operations.
* * *
As reported in the Troubled Company Reporter on January 6, 2009,
Fitch Ratings has downgraded the ratings assigned to Conseco Inc.
The rating outlook on Conseco Inc. and its subsidiaries remains
negative. Fitch downgraded these ratings: (i) issuer default
rating to 'BB-' from 'BB'; (ii) senior secured bank credit
facility to 'BB-' from 'BB+'; and (iii) senior unsecured debt to
'B' from 'BB-'.
On March 4, 2009, A.M. Best downgraded the financial strength
ratings of Conseco's primary insurance subsidiaries to "B" from
"B+" and such ratings have been placed under review with negative
implications.
Conseco reported a first quarter 2009 net income of $24.5 million
compared to a net loss of $7.2 million in the year-earlier
quarter. Conseco had $28.5 billion in total assets, $26.9 billion
in total liabilities, and $1.59 billion in stockholders' equity as
of March 31, 2009.
Conseco said it has significant indebtedness which will require
over $165 million in cash to service in the next 12 months
(including the additional interest expense required after the
modification to its Second Amended Credit Facility. Pursuant to
Conseco's Second Amended Credit Facility, Conseco must maintain
certain financial ratios. The levels of margin between the
financial covenant requirements and the Company's financial
status, both at March 31, 2009, and the projected levels for the
next 12 months, are relatively small and a failure to satisfy any
of the financial covenants at the end of a fiscal quarter would
trigger a default under the Second Amended Credit Facility.
Achievement of the Company's operating plans is a critical factor
in having sufficient income and liquidity to meet debt service
requirements for the next 12 months and other holding company
obligations and failure to do so would have material adverse
consequences for the Company.
COYOTES HOCKEY: NHL to Back Any Bid That Keeps Team in Arizona
--------------------------------------------------------------
William Daly, the deputy commissioner for the National Hockey
League, said that the league will support any bidder that wants to
keep Phoenix Coyotes in Arizona, Ben Klayman at Reuters reports.
As reported by the Troubled Company Reporter on June 25, 2009, the
Hon. Redfield T. Baum of the U.S. Bankruptcy Court for the
District of Arizona approved an accelerated schedule for an
auction sale among local bidders who would keep the team in
Glendale, Arizona. The local bidder deadline would be August 5.
Judge Baum also set September 10 as a fallback date for a
relocation auction.
Reuters quoted Mr. Daly as saying, "We're hopeful that we don't
get to the second auction in September. It's been our goal to
give this team an opportunity to be successful in Phoenix. Now, I
think it's a sorting out process where the court takes the process
from here."
Ice Edge -- which includes Phoenix Coyotes minority owner John
Breslow and former Research In Motion executive Anthony LeBlanc,
as well as executives from Connecticut research firm Research Edge
-- has filed a nonbinding letter of intent for up to $150 million
for the team, Reuters relates. The court has been flexible in the
past and it will be interesting how he handles Ice Edge missing a
June 24 deadline for a formal offer, the report states, citing
Mr. Daly. According to Reuters, the group also is in talks to add
Wayne Gretzky.
Canwest News Service reports that Jim Balsillie -- the co-chief
executive officer of Research In Motion -- and Phoenix Coyotes
asked the court to set September 15 as the deadline for the sale
of the team. Canwest News says that the court ruled that it
wouldn't support Mr. Balsillie's bid to move the Phoenix Coyotes
to Hamilton in time for next season, citing tight timelines
involved in the transaction as one of its reasons. Judge Redfield
T. Baum had said that there wasn't enough time to work through the
issues based on Mr. Balsillie's original deadline of June 29.
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.
According to a USA Today report May 30, NHL Commissioner Gary
Bettman had said the league was within "20 minutes" of completing
a deal to resolve the Phoenix Coyotes' financial woes when owner
Jerry Moyes placed the team under bankruptcy protection. Mr.
Bettman had said that deal would have "fixed [the team's problems]
in a way that we thought was going to work quite well in our
view."
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.
DELPHI CORP: Platinum Equity Comments on Auction Results
--------------------------------------------------------
Platinum Equity issued a statement in regard to Delphi
Corporation's bankruptcy auction:
"Delphi Corporation's Debtor in Possession Lenders presented a
Credit Bid that valued their credit claims at more than
$3.4 billion and refused to release their liens on Delphi's
assets, forcing a conclusion to the auction stage of the Delphi
bankruptcy process. Platinum Equity and Delphi's DIP lenders are
continuing their on-going discussions in advance of the Sale
Hearing on Wednesday.
"We look forward to working on the next phase of this process with
Delphi, its lenders and General Motors -- all of whom have
acknowledged the value of Platinum Equity's operating expertise.
We continue to believe that with the right plan, Delphi can
establish itself as a strong, viable competitor in the global
automotive industry."
Platinum Equity -- http://www.platinumequity.com/-- is a global
M&A&O(R) firm specializing in the merger, acquisition and
operation of companies that provide services and solutions to
customers in a broad range of business markets, including
information technology, telecommunications, logistics, metals
services, manufacturing and distribution. Since its founding in
1995 by Tom Gores, Platinum Equity has completed nearly 100
acquisitions with more than $27.5 billion in aggregate annual
revenue at the time of acquisition.
As reported by the Troubled Company Reporter on July 28, 2009,
Delphi said that, following a two-day auction process conducted in
New York City, Delphi's Board of Directors, following consultation
with Delphi's official committee of unsecured creditors and its
largest U.S.-based union, designated a pure credit bid received
from JPMorgan Chase Bank, N.A. -- in its capacity as
administrative agent under the Amended and Restated Revolving
Credit, Term Loan and Guaranty Agreement dated May 9, 2008 -- as
the "Successful Bid".
The Pure Credit Bid transaction, which is also supported by
General Motors Company, is based on a transaction structure that
is similar to the transaction announced on June 1, 2009, with
Parnassus Holdings, LLC, an affiliate of Platinum Equity Capital
Partners, L.P., and GM Components Holdings, LLC, a GM affiliate,
and would be implemented through a modified reorganization plan or
through a section 363 asset sale if the Modified Plan is not
approved by the Bankruptcy Court for the Southern District of New
York.
Delphi also said GM and the DIP Lenders agreed to modify financing
agreements with Delphi that are intended to provide sufficient
liquidity through consummation of the Modified Plan through a
combination of GM loans, Delphi's use of certain cash collateral
accounts pledged to the DIP Lenders and the repatriation of excess
liquidity from Delphi's global affiliates.
About Delphi Corp
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies. Delphi technology is also found in computing,
communications, consumer accessories, energy and medical
applications. Delphi has approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.
The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on December 20,
2007. The Court confirmed the Debtors' First Amended Plan on
January 25, 2008. The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DELTA AIR LINES: 215 Pilots Accept Early Retirement Offer
---------------------------------------------------------
As widely reported, Air Line Pilots Association, confirmed on
July 16, 2009, that 215 of their represented members at Delta Air
Lines, Inc., took the Company's early-retirement offers.
Two hundred one of the pilots who took the retirement incentive
packages come from Northwest Airlines Corporation, which merged
with Delta in October 2008. The pilots have until July 31, 2009,
to revoke their decisions, according to the Atlanta Business
Chronicle.
As previously reported, Delta and ALPA announced in May 2009,
that the airline planned to eliminate some of its pilots. The
job cuts would be "designed to address what management perceives
to be a current pilot staffing overage," including severance
pays, retiree travel and medical benefits "for a limited time."
Subsequently, Delta and ALPA's Master Executive Council at the
airline reached a tentative agreement on an early retirement
program to cut pilot positions in the Company. Eligible pilots
should have at least 10 years of service as of December 31, 2009,
and their service and age added together must equal 55. Pilots
enrolled for eligibility within June 1 and July 15, 2009.
Pilots with 20 years or more of service will be eligible for nine
months severance pay at 75 pay hours per month. Takers who have
had less than 20 in total years of service will be eligible for
six months severance at 75 pay hours per month, according to the
report.
Among travel and other benefits, pilots who will opt for retiree
or healthcare plans will receive 100% coverage for three months,
which will convert to retiree coverage under Union rules, the
report adds.
Delta told the Atlanta Journal-Constitution that the Company has
"continued to take every step possible to offer frontline
employees voluntary retirement and leave options as we manage
through difficult economic conditions."
Delta has previously cut approximately 6,500 jobs throughout the
Company through voluntary buyouts and early retirement programs,
which have not included pilots.
Combined, Delta and Northwest employ more than 12,000 pilots.
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline. From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.
The merger closed on October 29, 2008.
Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington, represented the Northwest Debtors in their
restructuring efforts. The Official Committee of Unsecured
Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C., as its bankruptcy counsel. When the
Northwest Debtors filed for bankruptcy, they listed $14.4 billion
in total assets and $17.9 billion in total debts. On May 21,
2007, the Court confirmed the Northwest Debtors' amended plan.
That amended plan took effect May 31, 2007. (Northwest Airlines
Bankruptcy News Issue No. 114; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. Timothy R.
Coleman at The Blackstone Group L.P. provided the Delta Debtors
with financial advice. Daniel H. Golden, Esq., and Lisa G.
Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided
the Official Committee of Unsecured Creditors with legal advice.
John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and
James S. Feltman at Mesirow Financial Consulting, LLC, served as
the Committee's financial advisors. On April 25, 2007, the Court
confirmed the Delta Debtors' plan. That plan became effective on
April 30, 2007. The Court entered a final decree closing 17 cases
on September 26, 2007. (Delta Air Lines Bankruptcy News;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DELTA AIR LINES: Appeals Court Blocks Mesa Contract Termination
---------------------------------------------------------------
The U.S. Court of Appeals for the 11th Circuit affirmed a
preliminary injunction in favor of Mesa Air Group Inc.,
preventing Delta Air Lines, Inc., from terminating its 50-seat
Delta Connection contract with Freedom Airlines Inc., a Mesa Air
Group, Inc., subsidiary, according to reports.
As previously reported, Delta intended to reject the Contract as
of May 3, 2008, due to operational performance that has fallen
below minimum levels. Delta specifically alleged that Mesa
failed to maintain a specified completion rate -- the percentage
of scheduled flights that are flown within September and
February.
Subsequently, Mesa won in its lawsuit filed to block Delta from
terminating the Contract. Mesa reasoned out that Delta's alleged
"below performance thresholds" is attributed to Delta's flight
cancellations at New York's John F. Kennedy International
Airport. Mesa further noted in May 2009, that cancellation of
the Contract might affect the carrier's operations and compel it
to seek bankruptcy protection.
Delta called the ruling "a preliminary step," noting that it
intends to fully make its case in district court, according to
Pacific Business News.
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline. From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.
The merger closed on October 29, 2008.
Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington, represented the Northwest Debtors in their
restructuring efforts. The Official Committee of Unsecured
Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C., as its bankruptcy counsel. When the
Northwest Debtors filed for bankruptcy, they listed $14.4 billion
in total assets and $17.9 billion in total debts. On May 21,
2007, the Court confirmed the Northwest Debtors' amended plan.
That amended plan took effect May 31, 2007. (Northwest Airlines
Bankruptcy News Issue No. 114; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. Timothy R.
Coleman at The Blackstone Group L.P. provided the Delta Debtors
with financial advice. Daniel H. Golden, Esq., and Lisa G.
Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided
the Official Committee of Unsecured Creditors with legal advice.
John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and
James S. Feltman at Mesirow Financial Consulting, LLC, served as
the Committee's financial advisors. On April 25, 2007, the Court
confirmed the Delta Debtors' plan. That plan became effective on
April 30, 2007. The Court entered a final decree closing 17 cases
on September 26, 2007. (Delta Air Lines Bankruptcy News;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DELTA AIR LINES: Raises Planned Capacity Cuts to 10% in 2009
------------------------------------------------------------
Delta Air Lines, Inc., said on June 11, 2009, that it is planning
to decrease system capacity by 10% as compared to 2008, primarily
due to declining revenues.
In a memo addressed to the Company's 70,000 employees, Delta
disclosed that passenger revenues dropped 20 percent in the first
four months of 2009, compared to the same time last year. Delta
officials attribute the decline to rising jet fuel prices,
coupled with declining air travel.
To recall, Delta announced in December 2008, that it planned to
cut capacity by 6 to 8 percent in 2009, to combat the global
economic slowdown and softening traffic. Delta said it must take
the necessary steps to adjust its business accordingly and make
certain seat capacity meets customer demand.
The increased capacity cuts are brought about by revenue losses
that are due in part to the swine flu, Delta President Ed Bastian
noted. Delta is anticipating "a drop of $125 million to
$150 million during the second quarter" because of the H1N1 virus'
impact on travel, says CNN.com.
In addition, Delta is trimming its international capacity by 15
percent, which is an increase from the 10 percent that the
Company previously announced. Among other services, non-stop
services from Atlanta to Seoul and to Shanghai, as well as
Cincinnati to Frankfurt and to London-Gatwick will be suspended.
According to Delta spokeswoman Susan Elliott, the Company is also
"reassessing staffing needs," as it intends to prevent
involuntary furloughs for frontline employees amid the increased
capacity cuts.
As a direct result of the increased capacity reduction, Atlantic
Southeast Airlines is furloughing 56 pilots, reports AJC.
The report adds that other regional carriers of Delta are also
furloughing pilots, including Comair, Inc., and Mesaba Airlines.
A full-text copy of the memo is available for free at:
http://ResearchArchives.com/t/s?3fef
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline. From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.
The merger closed on October 29, 2008.
Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington, represented the Northwest Debtors in their
restructuring efforts. The Official Committee of Unsecured
Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C., as its bankruptcy counsel. When the
Northwest Debtors filed for bankruptcy, they listed $14.4 billion
in total assets and $17.9 billion in total debts. On May 21,
2007, the Court confirmed the Northwest Debtors' amended plan.
That amended plan took effect May 31, 2007. (Northwest Airlines
Bankruptcy News Issue No. 114; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. Timothy R.
Coleman at The Blackstone Group L.P. provided the Delta Debtors
with financial advice. Daniel H. Golden, Esq., and Lisa G.
Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided
the Official Committee of Unsecured Creditors with legal advice.
John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and
James S. Feltman at Mesirow Financial Consulting, LLC, served as
the Committee's financial advisors. On April 25, 2007, the Court
confirmed the Delta Debtors' plan. That plan became effective on
April 30, 2007. The Court entered a final decree closing 17 cases
on September 26, 2007. (Delta Air Lines Bankruptcy News;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DELTA AIR LINES: Reports 2nd Quarter 2009 Results
-------------------------------------------------
Delta Air Lines, Inc., reported financial results for the June
2009 quarter. Key points include:
* Delta's net loss for the June 2009 quarter was $199
million, excluding $58 million in merger-related
expenses(1), or $0.24 loss per share. Delta's reported
net loss for the June 2009 quarter was $257 million, or
$0.31 per share.
* Excluding merger-related expenses and $390 million in
realized fuel hedge losses, Delta's net profit was $191
million.
* In the June 2009 quarter, consolidated unit costs,
excluding fuel and special items, were up 2%, on a 7%
decline in system capacity.
* Delta has achieved more than $200 million in synergy
benefits in the first half of 2009 from its merger with
Northwest Airlines.
* Delta generated $834 million in operating cash flow during
the quarter and had $5.4 billion in unrestricted liquidity
as of June 30, 2009.
"The industry faces substantial challenges from
unprecedented revenue declines and volatile fuel prices, but
Delta is the best positioned network carrier to weather these
economic conditions. I want to thank the Delta people for their
hard work and dedication during these difficult times," said
Richard Anderson, Delta's chief executive officer. "Delta has
more flexibility and a proven track record of acting quickly to
adapt our business to economic challenges. We continue to focus
on cost discipline and preserving liquidity, while adjusting our
fleet and network and accelerating merger benefits."
Revenue Environment
Delta's operating revenue on a GAAP basis grew 27% to $7 billion
in the June 2009 quarter compared to the prior year period as a
result of its merger with Northwest Airlines. On a combined
basis, total operating revenue declined $2.1 billion, or 23%, and
total unit revenue (RASM) declined 17%.
2Q09 2Q08 Incr 2Q09 2Q08 Incr
(in millions) GAAP GAAP (Decr) GAAP Combined (Decr)
---- ---- ------ ---- -------- ------
Passenger $5,903 $4,770 24% $5,903 $7,914 (25%)
Cargo 173 160 8% 173 373 (54%)
Other, net 924 569 62% 924 801 15%
------ ------ ------ -------- ------
Total
Operating
Revenue $7,000 $5,499 27% $7,000 $9,088 (23%)
------ ------ ------- --------
On a combined basis:
* Passenger revenue decreased 25%, or $2 billion, compared
to the prior year period due to the global economic
recession, the estimated $125 million to $150 million
impact of the H1N1 virus and a 7% capacity reduction.
Passenger unit revenue (PRASM) declined 20%, driven by a
19% decline in yield.
* Cargo revenue declined 54%, or $200 million, reflecting
lower volume and yield due to the recession. Freighter
capacity was 50% lower year over year, as Delta continues
to reduce capacity to achieve its plan of discontinuing
all freighter flying by the end of 2009.
* Other, net revenue grew 15%, or $123 million, primarily
due to increased baggage fee revenue and improved terms
from Delta's affinity card agreement with American
Express.
Comparisons of revenue-related statistics include:
Increase (Decrease)
2Q09 (GAAP) versus 2Q08 (Combined)
----------------------------------------
2Q09 ($M) Change Unit
GAAP YOY Revenue Yield Capacity
--------- ------- ------- ----- --------
Passenger Revenue
Domestic $2,723 (24.8%) (18.0%) (18.6%) (8.3%)
Atlantic 1,131 (29.5%) (26.2%) (26.4%) (4.5%)
Latin America 287 (21.4%) (18.1%) (14.6%) (4.0%)
Pacific 423 (37.2%) (25.3%) (16.8%) (15.9%)
--------- ------- ------- ------- ------
Total mainline 4,564 (27.2%) (20.9%) (20.1%) (7.9%)
Regional 1,339 (18.8%) (18.7%) (17.8%) (0.2%)
--------- ------- ------- ------- ------
Consolidated $5,903 (25.4%) (19.9%) (19.1%) (6.9%)
"The global recession continues to significantly impact our
business and we are not planning for any meaningful recovery this
year," said Edward Bastian, Delta's president. "In view of this
revenue environment, we are focused on maintaining high levels of
liquidity, generating a revenue premium, and maintaining our unit
cost advantage."
Cost Discipline
In the June 2009 quarter, Delta's operating expense on a GAAP
basis increased $413 million year over year. This increase is
primarily due to the impact of the company's merger with Northwest
Airlines, partially offset by lower fuel price in the June 2009
quarter and a $1.2 billion intangibles impairment charge recorded
in the June 2008 quarter. On a combined basis, excluding merger-
related expenses and prior year special items, operating expense
decreased $1.9 billion due to significantly lower fuel expense.
(in millions, 2Q09 2Q08 Incr 2Q09 2Q08 Incr
except where noted) GAAP GAAP (Decr) GAAP Combined (Decr)
------ ------ ------ ---- -------- ------
Operating expense $6,999 $6,586 6% $6,999 $10,474 (33%)
Operating expense
ex-special items $6,941 $5,286 31% $6,941 $8,850 (22%)
Consolidated
CASM (cents) 11.55 16.66 (31%) 11.55 15.99 (28%)
Consolidated CASM
ex-fuel expense
and special
items (cents) 8.06 7.98 1% 8.06 7.88 2%
Mainline CASM
(cents) 10.62 15.52 (32%) 10.62 15.08 (30%)
Mainline CASM
ex-fuel expense
and special
items (cents) 7.20 6.88 5% 7.20 7.06 2%
Non-operating
expense ($254) ($76) NM ($254) ($155) 64%
On a combined basis:
* Both consolidated and mainline unit cost (CASM),
excluding merger-related and fuel expenses and prior year
special items, increased 2% year over year in the June
2009 quarter due to higher pension expense.
* Non-operating expenses excluding special items increased
$99 million in the June 2009 quarter primarily due to non-
cash debt discount amortization.
Liquidity Position
As of June 30, 2009, Delta had $5.4 billion in unrestricted
liquidity, including $4.9 billion in cash, cash equivalents and
short-term investments and $500 million available under an undrawn
line of credit. Delta generated $834 million in cash from
operations, and $509 million in free cash flow for the quarter.
Net investing activities during the quarter were $325 million. In
addition, during the quarter, debt and capital lease payments
totaled approximately $400 million, and the company issued
$330 million in debt related to aircraft purchases.
"In a difficult economic environment, Delta generated $834 million
of cash from operations in the June quarter, allowing us to fund
our debt obligations, make investments in our business, and
increase our liquidity position," said Hank Halter, chief
financial officer. "In addition, the hard work of the Delta
people in achieving merger synergies and their focus on cost
discipline resulted in a consolidated non-fuel CASM increase of
only 2% compared to the prior year on a 7% capacity reduction."
Merger with Northwest
Delta has achieved more than $200 million in synergy benefits from
its merger with Northwest Airlines in the first half of 2009, and
expects to generate at least $500 million in total synergies in
2009. Synergies achieved year to date have improved revenue from
increased market share, Delta's affinity card agreement and
alignment of frequent flyer programs. In addition, costs have
been reduced through streamlined overhead, facilities and
technology, elimination of dedicated freighter flying and supply
chain savings.
The company is on track in its integration efforts and continues
to expect it will achieve its Single Operating Certificate by the
end of 2009. Recent achievements include:
* Announcing a transatlantic joint venture with Air
France/KLM with an estimated $12 billion in annual revenue
which will result in more flight choices, frequencies,
convenient flight schedules, competitive fares and
harmonized services for customers. When fully implemented
in 2012, the joint venture is expected to generate
approximately $200 million in annual incremental pre-tax
profits for Delta;
* Using the Delta and Northwest fleets more effectively
across the combined network by launching additional cross-
fleeting markets, such as New York-JFK to Narita;
* Completing the integration and re-branding of more than
200 airports, or more than 80% of total stations;
* Beginning pilot and flight attendant training to prepare
for single carrier operations;
* Harmonizing onboard products for both domestic and
international service, including regional carriers; and
* Painting 120 pre-merger Northwest aircraft in Delta
livery.
Fuel Price and Related Hedges
Delta hedged 76% of its fuel consumption for the June 2009
quarter, which drove $390 million in realized fuel hedge losses
for the period. As a result, Delta's average fuel price for the
June 2009 quarter was $2.06 per gallon, which includes $0.33 per
gallon associated with fuel hedge losses.
This table represents the fuel hedges Delta had in place as of
July 17, 2009:
3Q09 4Q09 2010
---- ---- ----
Call options 30% 22% 9%
Collars - - 1%
Swaps 22% 17% -
---- ---- ----
Total 52% 39% 10%
---- ---- ----
Downside participation 78% 83% 99%
Avg. crude call strike $75 $82 $71
Avg. crude swap $64 $62 -
All-in projected fuel price/gallon $2.17 $2.05
Hedge loss/gallon included in
projected price $0.11 -
September 2009 Quarter Guidance
Delta's projections for the September 2009 quarter,
presented on a combined basis, include:
3Q 2009 Forecast
----------------
Fuel price, including taxes and hedges $2.17
Operating margin 1% - 3%
Capital expenditures $270 million
Total liquidity as of Sept. 30, 2009 $5.0 billion
3Q 2009 Forecast
(compared to 3Q 2008)
---------------------
Consolidated unit costs,
excluding fuel expense Flat to up 2%
Mainline unit costs,
excluding fuel expense Up 1% to 3%
System capacity Down 4% - 5%
Domestic Down 3% - 4%
International Down 6% - 7%
Mainline capacity Down 5% - 7%
Domestic Down 4% - 6%
International Down 5% - 7%
DELTA AIR LINES, INC.
Unaudited Consolidated Statements of Operations
Three Months Ended June 30, 2009
Operating Revenue:
Passenger
Mainline $4,564,000,000
Regional Carriers 1,339,000,000
-----------------
Total Passenger Revenue 5,903,000,000
Cargo 173,000,000
Other, net 924,000,000
-----------------
Total Operating Revenue 7,000,000,000
Operating expenses:
Salaries and related costs 1,891,000,000
Aircraft fuel and related taxes 1,812,000,000
Contract carrier arrangements 965,000,000
Depreciation and amortization 383,000,000
Aircraft maintenance 392,000,000
Contracted services 376,000,000
Passenger commissions 329,000,000
Landing fees and other rents 315,000,000
Passenger service 161,000,000
Aircraft rent 119,000,000
Impairment of goodwill & intangible assets -
Restructuring and merger-related items 58,000,000
Other 198,000,000
-----------------
Total operating expenses 6,999,000,000
-----------------
Operating income (loss) 1,000,000
Other income (loss):
Interest expense (324,000,000)
Interest expense 9,000,000
Miscellaneous, net 61,000,000
-----------------
Total other expense, net (254,000,000)
-----------------
Loss before income taxes (253,000,000)
Income Tax (Provision) Benefit (4,000,000)
-----------------
Net Loss ($257,000,000)
=================
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline. From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.
The merger closed on October 29, 2008.
Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington, represented the Northwest Debtors in their
restructuring efforts. The Official Committee of Unsecured
Creditors retained Scott L. Hazan, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C., as its bankruptcy counsel. When the
Northwest Debtors filed for bankruptcy, they listed $14.4 billion
in total assets and $17.9 billion in total debts. On May 21,
2007, the Court confirmed the Northwest Debtors' amended plan.
That amended plan took effect May 31, 2007. (Northwest Airlines
Bankruptcy News Issue No. 114; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. Timothy R.
Coleman at The Blackstone Group L.P. provided the Delta Debtors
with financial advice. Daniel H. Golden, Esq., and Lisa G.
Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provided
the Official Committee of Unsecured Creditors with legal advice.
John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and
James S. Feltman at Mesirow Financial Consulting, LLC, served as
the Committee's financial advisors. On April 25, 2007, the Court
confirmed the Delta Debtors' plan. That plan became effective on
April 30, 2007. The Court entered a final decree closing 17 cases
on September 26, 2007. (Delta Air Lines Bankruptcy News;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DRUG FAIR: Gets Until Nov. 18 to File Reorganization Plan
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
extended until November 18, 2009, Drug Fair Group, Inc.'s
exclusive period to file a Chapter 11 plan and until January 18,
2010, its period to solicit acceptances of that plan.
In its request for an extension, Drug Fair told the Court that its
efforts had been focused on winding down its business, which had
resulted in the successful liquidation of substantially all of its
assets, and thus, had not had sufficient time to formulate and
propose a plan.
After commencing the Chapter 11 cases, Drug Fair and its units
began going out of business sales at approximately 24 locations.
On April 27, 2009, the Court approved the sale of 31 remaining
stores to Walgreen Co. for about $54 million. The Debtors are
winding down assets not included in those transactions.
About Drug Fair Group
Headquartered in Somerset, New Jersey, Drug Fair Group, Inc. --
http://www.drugfair.com/or http://www.costcuttersonline.com/--
fka Community Distributors, Inc., operates pharmacies and general
merchandise stores in northern and central New Jersey. The
Company, with stores in central and northern New Jersey, is
indirectly owned by Sun Capital Partners Inc., a private-equity
investor based in Boca Raton, Florida.
Drug Fair and CDI Group, Inc., filed for Chapter 11 protection on
March 18, 2009 (Bankr. D. Del. Lead Case No. 09-10897). Domenic
E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr
Harrison Harvey Branzburg & Ellers, represent the Debtors in their
restructuring efforts. Epiq Bankruptcy Solutions, LLC, is the
Debtors' notice and claims agent. The petition says that Drug
Fair had assets of $50 million to $100 million and debts of $100
million to $500 million.
The official committee formed in the Chapter 11 case retained
Warren J. Martin, Jr., Esq., and Brett S. Moore, Esq., at Porzio
Bromberg & Newman, P.C., as general counsel and Norman L. Pernick,
Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., as Delaware counsel. The Committee also
tapped J.H. Cohn LLP as financial advisors and forensic
accountants.
ELECTROGLAS INC: Can Borrow $1,000,000 from DIP Lenders
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has granted
Electroglas, Inc., et al., authorization and approval, to enter
into an agreement to obtain post-petition financing of up to
$2,000,000 from QVT Fund LP, Quintessence Fund L.P., Peninsula
Master Fund Ltd. and Peninsula Technology Fund LP, subject to the
entry of the final order.
In the interim, the Debtors are authorized to borrow, $1,000,000,
in accordance with a budget.
A further interim hearing on the motion will be held on July 30,
2009, at 11:30 a.m.
The DIP facility will be secured by senior first-priority liens
upon all pre-petition and post-petition property of the Debtors.
Said DIP liens will be subject only to the first prepetition liens
of Comerica Bank and the carve-out for professional fees, U.S.
Trustee fees, and Bankruptcy Court fees.. The DIP lenders are
also granted superpriority claims with priority over all
administration expenses, other than superpriority claims granted
to Comerica and the Carve-Out.
Under the DIP agreement, the maturity of the DIP facility will be
the earlier of (i) October 9, 2009 or (ii) the consummation of a
sale of the Debtors' assets in form and substance satisfactory to
the lenders. Interest rate will be 12% p.a. and default interest
will be 14% p.a.
A copy of the DIP motion is available at:
http://bankrupt.com/misc/electroglas.DIPmotion.pdf
The Debtors also received authorization to use cash collateral of
Comerica and the Note Parties, other than excluded cash
collateral, in the amounts set forth in the original budget,
through the earliest to occur of: (a) the entry of the final
order, (b) October 9, 2009, and (c) the occurrence of the
termination date, to fund operating expenses and fund professional
and other fees associated with the sale of substantially all of
the Debtors' assets.
The Note Parties refers to the holders of the Debtors' 6.25% notes
due 2027, and Bank of New York Mellon Trust Company, N.A., as
trustee and collateral agent for the noteholders. T
he termination date refers to the earliest to occur of
(a) October 9, 2009; (b) the closing of a sale of the Debtors'
assets, (c) the effective date of a plan of reorganization for any
of the Debtors confirmed pursuant to Section 1129 of the
Bankruptcy Code, or (d) the date that is the commitment
termination date (as defined in the DIP Credit Agreement) and (e)
the occurrence of a DIP Event of a Default and/or Cash Collateral
Event of Default.
As adequate protection for any diminution in the value of its
interest in the prepetition collateral, including cash collateral,
Comerica is granted replacement liens upon all present and after-
acquired property of the Debtors, and superpriority claims, senior
in all respects to the DIP liens and superpriority claims granted
to the DIP lenders and the replacement liens and superpriority
claims granted to the note parties, subject and subordinate only
to the Carve-Out.
San Jose, California-based Electroglas, Inc., supplies
semiconductor manufacturing test equipment and software to the
global semiconductor industry, and have been in the semiconductor
equipment business for more than 40 years. The Debtors' other
major source of revenue comes from their business of designing,
manufacturing, selling and supporting motion control systems for
advanced technologies.
The Company and Electroglas International, Inc., filed for Chapter
11 on July 9, 2009 (Bankr. D. Del. Lead Case No. 09-12416).
David B. Stratton, Esq., and James C. Carignan, Esq., at Pepper
Hamilton LLP represent the debtors in their restructuring efforts.
No official committee of unsecured creditors has been appointed in
the Chapter 11 cases. The Debtors listed total assets of
$19,625,000 and total debts of $31,542,000.
ELECTROGLAS INC: Files Proposed Bid Protocol for Sale of Business
-----------------------------------------------------------------
Electroglas, Inc., et al., ask the U.S. Bankruptcy Court to (i)
approve bid procedures for the sale of substantially all of their
assets to the bidder offering the highest or otherwise best offer
and (ii) schedule an auction and a hearing to consider approval of
the sale.
To facilitate the sale process, the Debtors have attached a
proposed of the proposed form of the asset purchase agreement to
their motion, a copy of which is available at:
http://bankrupt.com/misc/electroglas.APA.pdf
The Company has not been able to find a stalking horse bidder, but
if an agreement with a stalking horse bidder is entered into
before the auction, a break up-fee fee of 3% of its qualified bid
will be paid, if the stalking horse bidder is not the successful
bidder at the auction.
All bids must be accompanied by:
(a) a good faith deposit in the amount of 10% of the proposed
purchase price;
(b) executed transaction documents to effect the proposed sale;
and
(c) written evidence of the bidder's financial ability to close
the sale and adequate assurance of future performance under
all executory contracts and leases to be assumed and
assigned.
Bids may not be conditioned on obtaining financing or any internal
approval, or on the outcome or review of due diligence.
The proposed bid procedures have set these dates of the deadline
for the submission of bids, the auction and the sale hearing:
Bid Deadline : August 18, 2009, at 12:00 noon
Auction, if necessary : August 19, 2009, at 12:00 noon
Sale hearing : On or before August 26, 2009
Sale Objection deadline: at least (7) business days prior to
the sale hearing.
The auction will be held at the offices of Morrison & Forerster
LLP, 1290 Avenue of the Americas, New York, NY 10104.
San Jose, California-based Electroglas, Inc., supplies
semiconductor manufacturing test equipment and software to the
global semiconductor industry, and have been in the semiconductor
equipment business for more than 40 years. The Debtors' other
major source of revenue comes from their business of designing,
manufacturing, selling and supporting motion control systems for
advanced technologies.
The Company and Electroglas International, Inc., filed for Chapter
11 on July 9, 2009 (Bankr. D. Del. Lead Case No. 09-12416).
David B. Stratton, Esq., and James C. Carignan, Esq., at Pepper
Hamilton LLP represent the debtors in their restructuring efforts.
No official committee of unsecured creditors has been appointed in
the Chapter 11 cases. The Debtors listed total assets of
$19,625,000 and total debts of $31,542,000.
ELECTROGLAS INC: Taps Morrison and Foerster as Attorneys
--------------------------------------------------------
Electroglas Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware for authority to employ
Morrison and Foerster LLP as their attorneys.
The firm will, among other things:
-- attend meetings and negotiate with representative of
creditors and others parties in interest with respect to
matters that relate to the services provided by the firm
prepetition, to the extent not duplicating Pepper Hamilton
LP's services;
-- advise and assist the Debtors in connection with the
implementation and closing of any potential sale of assets in
these Chapter 11 cases and realted contract rejections or
assumption and assignment issues, including any amendments
thereto or restructuring thereof; and
-- represent the Debtors in connection with obtaining any
postpetition financing or use of cash collateral, as the
relate to the services provided by the firm, to the extent
not duplicative of Pepper Hamilton's services.
The firm's professionals are expected to have primary
responsibility for providing services to the Debtors and their
standard hourly rates are:
Professional Designation Hourly Rate
------------ ----------- -----------
G. Larry Engle, Esq. Partner $750
Justin L. Bastian, Esq. Partner $695
Tessa J. Schwartz, Esq. Partner $625
James J. DeCristofaro, Esq. Associate $615
Vincent J. Novak, Esq. Associate $495
Samantha Martin, Esq. Associate $350
The Debtors assure the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
San Jose, California-based Electroglas, Inc., operates a
semiconductor manufacturing machinery. The Company and
Electroglas International, Inc., filed for Chapter 11 on July 9,
2009 (Bankr. D. Del. Lead Case No. 09-12416.). David B. Stratton,
Esq., and James C. Carignan, Esq., at Pepper Hamilton LLP
represents the debtors in their restructuring efforts. No
official committee of unsecured creditors has been appointed in
the Chapter 11 cases. The Debtors listed total assets of
$19,625,000 and total debts of $31,542,000.
ELECTROGLAS INC: Wants to Employ Morrison & Foerster as Co-Counsel
------------------------------------------------------------------
Electroglas, Inc., et al., ask the U.S. Bankruptcy Court for the
District of Delaware for authorization to employ Morrison &
Foerster LLP, as their attorneys, nunc pro tunc to the petition
date.
As counsel to the Debtors, Morrison & Foerster will:
(a) attend meeting and negotiate with representatives of
creditors and other parties in interest with respect to
matters that relate to the services provided by the firm
prepetition, to the extent not duplicative of the Pepper
Hamilton services;
(b) advise and assist the Debtors in connection with the
implementation and closing of any potential sale of assets
in these chapter 11 cases and related contract rejections
or assumption and assignment issues, including any
amendments thereto or restructuring thereof; and
(c) represent the Debtors in connection with obtaining any
postpetition financing or use of cash collateral, as they
relate to the services provided by the firm, to the extent
to the extent not duplicative of the Pepper Hamilton
services.
Morrison & Foerster's hourly rates are:
Partners $600-$900
Of Counsel $395-$875
Associates $295-$640
Paraprofessionals $165-$270
Morrison & Foerster's professionals who are expected to have
primary responsibility for providing services to the Debtors in
these chapter 11 cases and their hourly rates are:
G. Larry Engel, Esq. Bankruptcy/Comm'l Law Partner $750
Justin L. Bastian, Esq. Corporate Partner $695
Tessa J. Schwartz, Esq. Technology Transactions Partner $625
James J. DeCristofaro, Esq. Bankruptcy/Comm'l Law Associate $615
Vincent J. Novak, Esq. Bankruptcy/Comm'l Law Associate $495
Samantha Martin, Esq. Bankruptcy/Comm'l Law Associate $350
G. Larry Engel, Esq., a partner at Morrison & Foerster, assures
the Court that the frim does not hold or represent an interest
adverse to the Debtors or their estates.
Out of an abundance of caution, Mr. Engel discloses that two
current partners, one current of Counsel, and two current
associates of the firm were all previously attorney at Lovells
LLP. Lovells LLP is the firm currently retained by some of the
noteholders in these Chapter 11 cases.
Mr. Engel also discloses that the firm has in the past represented
and currently represents, among others, Comerica Bank, Flextronics
Industrial Ltd., FormFactor Inc, and UBS O'Connor LLC and some of
their affiliated entities in matters wholly unrelated to the
Debtors' cases.
San Jose, California-based Electroglas, Inc., operates a
semiconductor manufacturing machinery.
The Company and Electroglas International, Inc., filed for Chapter
11 on July 9, 2009 (Bankr. D. Del. Lead Case No. 09-12416.).
David B. Stratton, Esq., and James C. Carignan, Esq., at Pepper
Hamilton LLP represents the debtors in their restructuring
efforts. No official committee of unsecured creditors has been
appointed in the Chapter 11 cases. The Debtors listed total
assets of $19,625,000 and total debts of $31,542,000.
ELECTROGLAS INC: Wants to Hire Gide Loyrette as Special Counsel
---------------------------------------------------------------
Electroglas Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware for authority to employ Gide
Loyrette Nouel as special purpose counsel.
The firm will, among other things, advise the Debtors with respect
to the implementation and winding up of their French brand located
in Seyssinet-Pariset; render advice to them respecting French
legal and procedural requirements and customs in connection with
the wind up; attend meetings with third parties and participating
in negotiations; and perform all other legal services and provide
all other legal advice requested by the Debtors with respect to
France matters.
The firm's professionals designated to represent the Debtors and
their current standard hourly rates are:
Professional Designation Hourly Rate
------------ ----------- -----------
Philippe Xavier-Bender, Esq. Partner EUR500
Philippe Despres, Esq. Partner EUR480
Sylvain Beaumont, Esq. Sr. Associate EUR450
Deborah Attali, Esq. Sr. Associate EUR450
The Debtors assure the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
San Jose, California-based Electroglas, Inc., operates a
semiconductor manufacturing machinery. The Company and
Electroglas International, Inc., filed for Chapter 11 on July 9,
2009 (Bankr. D. Del. Lead Case No. 09-12416.). David B. Stratton,
Esq., and James C. Carignan, Esq., at Pepper Hamilton LLP
represents the debtors in their restructuring efforts. No
official committee of unsecured creditors has been appointed in
the Chapter 11 cases. The Debtors listed total assets of
$19,625,000 and total debts of $31,542,000.
EVA-TONE INC: Textron Seeks to Convert Case to Chapter 7
--------------------------------------------------------
Jane Meinhardt at Tampa Bay Business Journal reports that Textron
Financial Corp. has asked the U.S. Bankruptcy Court for the Middle
District of Florida to convert Eva-tone Inc.'s Chapter 11
reorganization case to Chapter 7 liquidation or to dismiss the
case, saying that the Debtor "continues to bleed cash".
Business Journal relates that Textron Financial, Eva-tone's
principal secured creditor and which holds a $1.9 million claim,
voted against the Company's reorganization plan.
Business Journal states that Carl Evans, Eva-tone's CEO, said that
the Company would wind down its Clearwater operations in the next
several weeks and then close that facility. According to the
report, about 50 workers will be laid off. Eva-tone plans to keep
operating its fully staffed fulfillment center in Mocksville,
North Carolina, says the report.
Textron Financial said in court documents that Eva-tone's
operations "are so fundamentally flawed that the debtor is not
capable of rehabilitation and a successful emergence from Chapter
11." Textron Financial alleged that Eva-tone hasn't developed a
sustainable business plan or a reorganization plan that offers
"any hope" of success.
Eva-tone's monthly operating reports show that it has lost more
than $1.3 million since the start of 2009, with declines in the
performance of its business lines.
Headquartered in Clearwater, Florida, Eva-tone Inc. --
http://www.evatone.com-- offers audio duplication, compact
disc and CD-ROM replication. The company filed for Chapter 11
protection on November 3, 2008 (Bankr. M.D. Fla. Case No.
08-17445). Rod Anderson, Esq., at Holland & Knight LLP,
represents the Debtor. When the Debtor filed for protection from
its creditors, it listed assets and debts between $10 million and
$50 million each.
FAIRCHILD CORP: Files Amended Schedules of Assets and Liabilities
-----------------------------------------------------------------
The Fairchild Corporation filed with the U.S. Bankruptcy Court for
the District of Delaware amendments to its schedules of assets and
liabilities:
Name of Schedule Assets Liabilities
---------------- ------------ --------------
A. Real Property $6,647,233
B. Personal Property $904,988,382
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $2,707
E. Creditors Holding
Unsecured Priority
Claims $80,000
F. Creditors Holding
Unsecured Non-priority
Claims $1,119,949,686
------------ --------------
TOTAL $911,635,615 $1,120,032,393
A copy of the Debtor's amended schedules is available at:
http://bankrupt.com/misc/fairchild.amendedSAL.pdf
Based in McLean, Virginia, The Fairchild Corporation
(OTC:FCHD.PK) -- http://www.fairchild.com/-- (i) distributes
aircraft parts and services, (ii) owns and develops commercial
real estate, and (iii) designs and produces motorcycle apparel for
Harley Davidson and other parties. It owns a 49% interest in
PoloExpress, a motorcycle protective apparel and accessories
business, operating 96 retail shops in Switzerland and Germany.
Fairchild and 60 of its affiliates filed for Chapter 11 protection
on March 18, 2009 (Bankr. D. Del Lead Case No. 09-10899). Steven
J. Reisman, Esq., Timothy A. Barnes, Esq., and Veronique A.
Hodeau, Esq., at Curtis, Mallet-Prevost, Cold & Mosle LLP, are
bankruptcy counsel to the Debtors. Jason M. Madron, Esq., Michael
J. Merchant, Esq., and Mark D. Collins, Esq., at Richards, Layton
& Finger, P.A., serve as the Debtors' co-counsel. On April 6,
2009, Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3,
appointed three creditors to serve on the official committee of
unsecured creditors of the Debtors.
At Jan. 31, 2009, Fairchild had $89,433,000 in assets against
$228,095,000 in debts.
FAIRPOINT COMMUNICATIONS: Moody's Changes Rating to 'Caa3/LD'
-------------------------------------------------------------
Moody's Investors Service respositioned FairPoint's Probability of
Default Rating to Caa3/LD from Caa3 to reflect the limited default
that has occurred following the effectiveness of the company's
tender offer to exchange its 13-1/8% senior unsecured notes due
2018. The net effect of the exchange will be a reduction of the
company's cash interest expense in the second and third quarters
of 2009 to help it stay in compliance with the interest coverage
covenant for those two quarters. FairPoint also warned in its
filings that, absent the exchange, it may not be able to make the
scheduled October 1, 2009 interest payment on the notes. These
key features and the targeting of the pending covenant defaults
cause the transaction to be viewed as analogous to a partial
restructuring and a deemed limited default by Moody's. The "/LD"
suffix will be removed after three business days.
The ratings and the negative outlook reflect Moody's belief that
further restructuring of the balance sheet is inevitable, as the
company's current capital structure is unsustainable based on the
probable EBITDA and cash flow that the company will generate from
its operations in relation to its debt structure over the forward
rating horizon.
These summarizes the rating actions taken by Moody's:
Adjustment:
Issuer: FairPoint Communications, Inc.
-- Probability of Default Rating, Adjusted to Caa3/LD from Caa3
Moody's most recent rating action for FairPoint was on June 29,
2009. At that time, Moody's downgraded FairPoint's corporate
family rating to Caa2 from B3, and lowered ratings of its senior
secured and senior unsecured debts to Caa1 from B2 and to Ca from
Caa3, respectively. These rating actions followed the company's
announcement that it had commenced a tender offer to exchange is
13-1/8% senior unsecured notes, due 2018.
Fairpoint, headquartered in Charlotte, North Carolina, is the
eight largest wireline telecommunications company in the U.S.,
serving about 1.4 million access lines in primarily rural areas
and small- and medium-sized cities.
FANNIE MAE: Diana Taylor Resigns from Board of Directors
--------------------------------------------------------
Federal National Mortgage Association reports that on July 22,
2009, Diana L. Taylor resigned from the Board of Directors of
Fannie Mae, effective as of that date.
As reported by the Troubled Company Reporter on July 27, 2009,
Citigroup Inc.'s Board of Directors appointed three new outside
directors, including Ms. Taylor.
Ms. Taylor was the former Superintendent of Banks for the New York
State Banking Department, and current Managing Director of
Wolfensohn Capital Partners, a fund manager.
The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) --
commonly known as Fannie Mae, is a shareholder-owned U.S.
government-sponsored enterprise. Fannie Mae has a federal charter
and operates in America's secondary mortgage market, providing
mortgage bankers and other lenders funds to lend to home buyers at
low rates.
Fannie Mae was created in 1938, under President Franklin D.
Roosevelt, at a time when millions of families could not become
homeowners, or risked losing their homes, for lack of a consistent
supply of mortgage funds across America. The government
established Fannie Mae to expand the flow of mortgage funds in all
communities, at all times, under all economic conditions, and to
help lower the costs to buy a home.
In 1968, Fannie Mae was re-chartered by the U.S. Congress as a
shareholder-owned company, funded solely with private capital
raised from investors on Wall Street and around the world.
Fannie Mae is the U.S. largest mortgage buyer, according to The
New York Times.
As of March 31, 2009, Fannie Mae had $919,638,000,000 in total
assets and $938,567,000,000 in total liabilities, resulting in
Fannie Mae stockholders' deficit of $19,066,000,000. At March 31,
2009, Fannie Mae had $137,000,000 in non-controlling interest,
resulting in total deficit of $18,929,000,000.
Conservatorship
As reported by the Troubled Company Reporter, the U.S. government
took direct responsibility for Fannie Mae and Freddie Mac, placing
the government-sponsored enterprises under conservatorship on
September 7, 2008. James B. Lockhart, director of Federal Housing
Finance Agency, said that Fannie Mae and Freddie Mac share the
critical mission of providing stability and liquidity to the
housing market. Between them, the Enterprises have $5.4 trillion
of guaranteed mortgage-backed securities (MBS) and debt
outstanding, which is equal to the publicly held debt of the
United States. Among the key components of the conservatorship,
the FHFA, as conservator, assumed the power of the Board and
management.
FLEETWOOD ENTERPRISES: To Net $19MM From Sale of Housing Biz
------------------------------------------------------------
Fleetwood Enterprises, Inc., reports that the Company and certain
of its subsidiaries on July 21, 2009, entered into an Asset
Purchase Agreement with FH Holding, Inc., an affiliate of Cavco
Industries, Inc.
The Purchaser agreed to purchase certain of the manufactured
housing business assets of the Sellers for $18,000,000 in cash,
plus the sum of the current assets of the Sellers included in the
Transferred Assets, less the sum of the current liabilities of the
Sellers assumed bye the Purchaser, and subject to certain other
adjustments as specified in the Purchase Agreement. The net
proceeds from the proposed transaction are expected to be roughly
$19 million.
The consummation of the proposed transaction is subject to certain
closing conditions as specified in the Purchase Agreement,
including being subject to a potential overbid and the completion
of the bankruptcy court approval process. The net proceeds of the
transaction, after paying costs associated with the transaction,
will be used to satisfy the obligations of the Company and its
subsidiaries to their creditors. The Company does not anticipate
that there will be proceeds ultimately available to the Company
from this transaction and other potential asset sales sufficient,
after payments to creditors, to result in any distribution to the
stockholders of the Company.
As reported by the Troubled Company Reporter on July 20, 2009, the
Hon. Meredith A. Jury of the U.S. Bankruptcy Court for the Central
District of California approved bidding procedures that governs
the sale of the Debtors' housing assets.
Cavco and Third Avenue Trust were named as stalking-horse bidder
for the Debtors' assets.
The TCR said a bid for the Debtors' assets must be accompanied by
a deposit in the amount of $2.1 million. The bid must equal or
exceed the sum of:
i) The minimum cash component of purchaser's offer of
$28.9 million for the housing assets; plus,
ii) The minimum overbid amount of $950,000, which
represents: (a) a break-up fee payable to the
purchaser in the amount of $450,000; (b) reimbursement
of actual, reasonable expenses of the purchaser up to
$400,000, and (c) an overbid in the amount of $100,000.
All bids must be delivered by August 4, 2009, no later than
4:00 p.m. Pacific Time.
An auction will be held on August 7, 2009, at 10:00 a.m., Pacific
Time, at the offices of Gibson, Dunn & Crutcher LLP, 3161
Michelson Drive in Irvine, California, followed by a sale hearing
on August 12, 2009, at 1:30 p.m., Pacific Time.
A full-text copy of the Asset Purchase Agreement, dated July 21,
2009, by and between Fleetwood Enterprises, Inc. and each of its
subsidiaries, and FH Holding, Inc. -- excluding schedules and
exhibits which the Company agrees to provide the Securities and
Exchange Commission upon request -- is available at no charge at
http://ResearchArchives.com/t/s?4011
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.
FLYING J: Bankr. Court Keeps Kinder Morgan Litigation in Texas
--------------------------------------------------------------
WestLaw reports that Chapter 11 debtor-pipeline owners, which
sought to transfer the venue of their adversary proceeding against
the company with which they had contracted for the provision of
storage terminals, failed to establish, for purposes of 28 U.S.C.
Sec. 1404(a), the general change of venue statute applicable to
civil cases filed in an appropriate district court, that transfer
of the proceeding from Texas bankruptcy court to the Delaware
district court where they had filed their bankruptcy petitions
would be for the convenience of the parties and witnesses, and in
the interest of justice. Substantially all relevant witnesses and
evidence were located in or near Houston, Texas, while no evidence
or witnesses were in Delaware. The outcome of the proceeding
would not materially affect the proposed sale of the pipeline, and
hence the debtors' bankruptcy cases. The Texas bankruptcy court,
which had heard and considered lengthy oral arguments and briefs
regarding the matter, had greater knowledge over issues specific
to the adversary. In addition, Texas, where the pipeline and the
parties' employees were located, had a significant interest in the
proceeding, while Delaware did not. Finally, Texas law, not the
law of Delaware, was implicated in the proceeding. The court
noted, too, that the presumption that a debtor's "home court" is
the proper venue for adversary proceedings applies to core
matters, not to non-core matters such as the state-court contract
claims at issue in the instant proceeding. Longhorn Partners
Pipeline L.P. v. KM Liquids Terminals, L.L.C., --- B.R. ----, 2009
WL 1917308 (Bankr. S.D. Tex.).
Longhorn Partners Pipeline, L.P. and other affiliates filed
chapter 11 bankruptcy petitions (Bankr. D. Del. Case No. 08-13384,
jointly administered with In re Flying J Inc.) on December 22,
2008. Longhorn owns a pipeline that transports commodities to
storage facilities located in Houston, Texas. Longhorn contracted
with GATX Terminals Corporation to provide storage terminals for
Longhorn. KM Liquids Terminals, L.L.C. (owned by Kinder Morgan)
is the successor in interest to GATX Terminals Corporation.
On December 4, 2006, Longhorn filed a state court lawsuit against
Kinder Morgan in the 15th Judicial District of Harris County,
Texas. Longhorn alleges that Kinder Morgan breached the contract
by failing to provide Longhorn with promised exclusive access to
terminals, refusing to provide required notices, documents, and
audits, and overcharging Longhorn for deficiency payments.
Longhorn also contends that it was forced to lease additional
storage facilities and lost business because of Kinder Morgan's
breach. Longhorn seeks actual, consequential, and special damages
and a declaratory judgment clarifying the parties' rights and
obligations under the contract. On March 12, 2009, Kinder Morgan
removed the state court lawsuit to the United States District
Court for the Southern District of Texas, and District Court Judge
Lake referred the proceeding to the Bankruptcy Court (Bankr. S.D.
Tex. Adv. Pro. No. 09-03182) pursuant to the District Court's
General Order of Reference. The General Order automatically
refers all bankruptcy cases and related adversary proceedings to
the bankruptcy courts.
On March 26, 2009, Longhorn filed a motion to transfer venue from
Texas to Delaware. The Honorable Marvin Isgur considered the
motion and evidence at a June 17, 2009 hearing. Longhorn
generally alleged that the adversary proceeding should be heard by
the Delaware Court because the litigation relates to Longhorn's
pipeline and the pipeline is an important asset in its bankruptcy
cases. Kinder Morgan contended that most if not all of the
relevant parties, evidence, potential witnesses, and state
agencies with an interest in the litigation are in or near
Houston, Texas.
About Flying J
Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/--
is among the 20 largest private companies in America, with 2007
sales exceeding $16 billion. The fully integrated oil company
employs approximately 14,700 people in the U.S. and Canada through
its interstate operations, transportation, refining and supply,
exploration and production, as well as its financial services and
communications, divisions.
Flying J and six of its affiliates filed for bankruptcy on
December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying
J sought Chapter 11 protections after a precipitous drop in oil
prices and disruption in the credit markets brought to bear
significant short-term pressure on the company's liquidity
position.
Attorneys at Kirkland & Ellis LLP represent the Debtors as
counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors'
Delaware Counsel. Blackstone Advisory Services L.P. is the
Debtors' investment banker and financial advisor. Epiq Bankruptcy
Solutions LLC is the Debtors' notice, claims and balloting agent.
In its formal schedules submitted to the Bankruptcy Court, Flying
J listed assets of $1,433,724,226 and debts of $640,958,656.
An official committee of unsecured creditors has been appointed in
the case. Pachulski Stang Ziehl & Jones LLP has been tapped as
counsel for the creditors' panel.
FORD MOTOR: S&P Changes Outlook to Developing; Keeps 'CCC+' Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services said it has revised its outlook
on Ford Motor Co. and related entities to developing from
negative. At the same time, S&P affirmed its ratings, including
the 'CCC+' issuer credit ratings on Ford and Ford Motor Credit Co.
LLC, as well as the 'B-' ratings on FCE Bank PLC, Ford Credit's
European bank, maintaining the one-notch rating differential
between FCE and its parent, Ford Credit.
"The outlook revision reflects early signs of progress by Ford in
reducing cash use from its automotive operations and stabilizing,
if not improving, its U.S. market share," said Standard & Poor's
credit analyst Robert Schulz.
The company reported that it used $1.2 billion in cash, including
cash restructuring costs and upfront subvention payments to Ford
Credit, in its global automotive operations in the second quarter
of 2009, much less than that used in the two previous quarters
($4.0 billion in the first quarter of 2009 and $7.4 billion in the
fourth quarter of 2008).
In S&P's view, there is now potential for us to raise Ford's
ratings in the next year or so, although the possibility for a
downgrade remains significant. For example, S&P could consider
raising the rating under this scenario:
-- If Ford's cash use and losses from global automotive
operations continue to diminish significantly, leaving
sustainable cash balances of at least $15 billion;
-- If Ford improves its highly leveraged capital structure,
including addressing its bank credit maturity profile; and
-- If Ford is able to cope successfully with the evolving
competitive structure of the global auto industry.
However, S&P could still lower the rating on Ford if continued
weakness in the global auto market for the remainder of 2009 and
in 2010 and a very slow global economic recovery prevent Ford from
further stemming its cash use, as this would reduce liquidity and,
in S&P's view, increase refinancing risk from the company's
sizable bank debt maturities in late 2011. Also, S&P still
believes that the very fragile state of the interrelated auto
supply base poses some risks to Ford's liquidity.
The cash use is being caused by weak auto sales in almost every
market, but especially in the U.S. and Europe. S&P's economists
forecast U.S. light-vehicle sales of about 9.9 million units this
year, the lowest in nearly 40 years and down 25% from the
13.2 million units sold in 2008. S&P currently expect sales to
rise to 11.2 million units in 2010, but even with this
improvement, sales would still be 15% below the weak levels of
2008. The outlook for other major auto markets, including Europe,
will also remain bleak, in S&P's view, until economic
stabilization becomes apparent. S&P expects sales in Europe to be
lower in 2010 than in 2009, in part because of a shifting of sales
from various government scrappage incentives. Ford and other
high-volume automakers in Europe have benefited from these
incentive plans in 2009, but S&P believes the boost to sales will
be short-lived.
S&P believes Ford still faces the possibility of falling below the
necessary levels of cash to run its automotive business--but
perhaps not in 2009, given the progress it has shown in the first
half of this year. S&P estimates that this could occur if cash
use in its automotive operations, including restructuring charges,
exceeded about $12 billion total in 2009 and 2010. In S&P's view,
the most likely catalysts for cash use of this magnitude would be
if auto sales remained unchanged or worsened in 2010 from already
weak 2009 levels, or if another spike in gas prices caused renewed
pressure on Ford's product mix, which is still heavily weighted
toward light trucks despite the company's successful initial steps
to enhance its small and midsize car offerings.
S&P believes fundamental business risks will remain unchanged well
into 2010 at least, most notably the company's exposure to weak
vehicle demand globally, but also the substantial execution risk
of the company's ongoing restructuring and repositioning.
Items that Ford can address over time, such as its manufacturing
overcapacity, labor costs, and product line-up, may not, in S&P's
view, be sufficient to produce any meaningful free cash flow in
the immediate future, although a stabilization of industry sales,
even at low levels, would lead to lower cash use in 2009. Ford
stated that the relatively strong second-quarter cash performance
may not continue in the third quarter. Industry sales remain weak
in nearly all of Ford's key sales regions. Consequently, S&P
expects Ford's cash use to continue through the end of this year
and perhaps into 2010; however, in S&P's view, there is an
increasing likelihood that cash use will be measurably lower than
it was in 2008 as the company benefits from slashed costs and
reduced outflows from working capital effects.
S&P believes Ford may avoid revisiting its informal request for
$9 billion in loans from the U.S. government if industry sales
begin to recover later this year. If the government were to
eventually provide funding, S&P stresses that S&P would likely
view such assistance as buying more time rather than as solving
the automaker's fundamental business risks, especially
deteriorating global demand. S&P believes Ford Credit has been
less constrained recently than its peers in its ability to provide
financing for Ford customers; this and other factors have
contributed to Ford's market share stabilization.
Ford Credit relies heavily on the short-term debt and
securitization markets to fund its automotive finance business,
and these markets have been affected by the broader capital market
turmoil. But S&P believes the auto-related asset-backed
securities markets are showing signs of improvement. In S&P's
view, Ford Credit's various existing rated retail auto loan
securitizations are currently performing within S&P's rating
expectations.
S&P believes the company has limited unencumbered assets it could
use to support additional borrowing. Ford said it is exploring a
possible sale of its Volvo unit, although under the terms of
Ford's credit agreement, half of the proceeds from any Volvo sale
must be used to repay secured debt. S&P does not expect Ford to
sell a stake in Ford Credit.
The developing outlook indicates S&P's view that there is at least
a one-in-three possibility that S&P could raise or lower the
corporate credit rating during the next year.
S&P could consider revising the outlook to positive or raise the
rating if, among other things, the global light-vehicle sales
outlook begins to show sustained improvement, if Ford's prospects
for generating free cash flow and profits in its automotive
manufacturing business improve significantly, and if the fragile
supply base does not cause a significant reduction in Ford's
liquidity. For example, S&P could raise Ford's rating if its cash
use and losses continue to diminish significantly, leaving
sustainable cash balances of more than $15 billion; if Ford's
capital structure--including its bank credit maturity profile--
improves; and if Ford demonstrates an ability to cope successfully
with the evolving competitive structure of the global auto
industry.
S&P could revise the outlook back to negative or review the rating
for a downgrade if continued weakness in the global auto market in
the remainder of 2009 and in 2010 and a very slow global economic
recovery prevents Ford from reducing its cash use much further,
preventing profitability and changes to its bank debt maturity
structure. S&P could lower the ratings if, among other things,
S&P believed cash balances would drop significantly below $10
billion at any time, although in S&P's view, this is increasingly
less likely to occur in 2009. S&P believes the most likely
trigger for a financial restructuring or bankruptcy filing remains
a reduction in cash balances approaching levels that are
insufficient to operate the business, caused by low vehicle sales
and production rather than by any decision to file for bankruptcy
to further improve its cost structure.
FORUM HEALTH: Two Unions Agree to Contract Concessions
------------------------------------------------------
Tribune Chronicle reports that the Youngstown General Duty Nurses
Association and the Service Employees International Union 1199
have agreed to contract concessions to help Forum Health Inc.
emerge from Chapter 11 bankruptcy protection.
As reported by the Troubled Company Reporter on July 22, 2009, the
Hon. Kay Woods of the U.S. Bankruptcy Court for the Northern
District of Ohio, at the behest of Forum Health Inc. and the Ohio
Nurses Association/Youngstown General Duty Nurses Association,
postponed until July 31 the evidentiary hearing on Forum Health's
motion to overturn their collective bargaining agreement, to give
the Company and the unions more time to negotiate an agreement.
The Youngstown General Duty agreed on Sunday to a deal that would
save Forum Health $4 million per year, Tribune Chronicle relates.
The Service Employees already agreed on Friday to wage freezes,
suspension of 401(k) matches, and other contract concessions,
Tribune Chronicle says.
Based in Warren, Ohio, Forum Health -- http://www.forumhealth.org/
-- offers health care services. The primary service area consists
of the northeast Ohio counties of Mahoning, Trumbull and
Columbiana; and northeast Ohio counties of Ashtabula, Geauga and
Portage and the Pennsylvania counties of Mercer and Lawrence.
Forum Health and its affiliates filed for Chapter 11 protection on
March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). Paul W.
Linehan, Esq., and Shawn M Riley, Esq., at McDonald Hopkins LLC,
are lead counsel to the Debtors. The Debtors have also tapped
Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA as co-
counsel; Kurtzman Carson Consultants LLC as claims, noticing and
balloting agent; and Huron Consulting Services LLC as financial
advisors. Alston & Bird LLP represents the official committee of
unsecured creditors formed in the Chapter 11 cases. At the time
of its filing, Forum Health estimated that it had assets and debts
both ranging from $100 million to $500 million.
FREESCALE SEMICONDUCTOR: Posts $481 Million Net Loss in Q2 2009
---------------------------------------------------------------
Freescale Semiconductor, Inc., filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q for the
second quarter ended July 3, 2009.
Freescale Semiconductor reported consolidated net loss of
$481 million for the three months ended July 3, 2009, wider
compared to a net loss of $184 million during the three-month
period ended June 27, 2008. Freescale, however, posted a net
income of $1.27 billion for the six months ended July 3, 2009,
compared to a net loss of $429 million for the six months ended
June 27, 2008.
Freescale reported lower net sales from year ago. Freescale
posted net sales of $824 million for the three months ended
July 3, 2009, compared to $1.47 billion during the three-month
period ended June 27, 2008. Freescale posted net sales of
$1.66 billion for the six months ended July 3, 2009, compared to
$2.87 billion for the six months ended June 27, 2008.
As of July 3, 2009, Freescale had $5.69 billion in total assets
and $9.05 billion in total liabilities, resulting in $3.35 billion
in stockholders' deficit.
As of July 3, 2009, Freescale's corporate credit ratings from
Standard & Poor's, Moody's and Fitch were B-, Caa1 and CCC,
respectively.
During the third quarter of 2006, one of Freescale's foreign
subsidiaries requested and received a draw from an existing
Japanese yen-denominated revolving loan agreement to repay an
intercompany loan. In the fourth quarter of 2008, the foreign
subsidiary drew down an additional $37 million under this
revolving loan to enhance its cash position and liquidity.
In the third quarter of 2009, Freescale entered into an amended
arrangement for this revolving loan balance, whereby it will make
quarterly payments of roughly $14 million beginning in the third
quarter of 2009 and concluding in the fourth quarter of 2010. The
land and buildings located at Freescale's Sendai, Japan
manufacturing facility are pledged as collateral on this revolving
loan until the fourth quarter of 2010 when the loan is fully
repaid. In addition, Freescale's land and buildings at its
Sendai, Japan design center are pledged as collateral until the
fourth quarter of 2009. In connection with the amended
arrangement, $29 million has been reclassified as long-term debt.
As of July 3, 2009, $86 million was outstanding under this loan.
Freescale said it is required to make debt service payments under
the terms of its debt agreements. The remaining obligated debt
payments for 2009 as of July 3, 2009, are $51 million. Future
obligated debt payments are $102 million in 2010, $44 million in
2011, $688 million in 2012, $3.276 billion in 2013, $3.043 billion
in 2014 and $764 million thereafter.
A full-text copy of Freescale's second quarter report is available
at no charge at http://ResearchArchives.com/t/s?4026
About Freescale Semiconductor
Freescale Semiconductor -- http://www.freescale.com/-- is a
global leader in the design and manufacture of embedded
semiconductors for the automotive, consumer, industrial,
networking and wireless markets. The privately held company is
based in Austin, Texas, and has design, research and development,
manufacturing or sales operations around the world.
GENERAL MOTORS: China's BAIC Dropped from Opel Bidding Race
-----------------------------------------------------------
Brian Parkin at Bloomberg News reports that Beijing Automotive
Industry Holding Co. has been excluded from bidding for General
Motors Co.'s Opel unit in Europe, leaving Canadian car-parts maker
Magna International Inc. and Belgian investment company RHJ
International SA in the race.
Bloomberg relates that following talks in Berlin on Wednesday, GM
negotiators and aides from Chancellor Angela Merkel's government
agreed to drop BAIC from the Opel race.
"We have agreed to continue detailed talks with both Magna and
RHJI to secure Opel's future," Bloomberg quoted John Smith, GM's
chief negotiator for the sale of Opel, as saying in a July 23
statement.
Beatrix Brodkorb, a spokeswoman for the Berlin-based Economy
Ministry, confirmed BAIC's exclusion in a July 23 interview, but
didn't say why the Chinese carmaker was rejected, Bloomberg
discloses.
On July 24, 2009, the Troubled Company Reporter-Europe, citing
BBC News, reported the German government said that after initial
evaluations of the three bids for Opel, it still favors a deal
with Magna.
BAIC's Bid
Cathy Chan at Bloomberg News reports that BAIC may have its
success to blame for the failure to buy GM's Opel unit.
"Beijing Auto is on the rise and GM has no interest in
strengthening a rival in China," Bloomberg quoted Zhu Xuedong, an
analyst at Industrial Securities in Shanghai, as saying. "The
center of gravity in the industry is shifting to China."
Bloomberg says BAIC's bid for Opel offered more cash and asked for
less government aid than those of Magna and RHJ. BAIC, Bloomberg
discloses, offered EUR660 million (US$940 million) for a 51
percent stake of Opel. The bid required EUR2.64 billion in
government loan guarantees, 40 percent less than Magna's,
Bloomberg notes. According to Bloomberg, a transfer of Opel's
technology to BAIC could heighten competition for GM in China,
where it is the largest overseas automaker.
Headquartered in Detroit, Michigan, General Motors Corp.
(NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM
employs about 266,000 people around the world and manufactures
cars and trucks in 35 countries. In 2007, nearly 9.37 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.
As reported by the Troubled Company Reporter, GM reported net loss
of US$6.0 billion, including special items, in the first quarter
of 2009. This compares with a reported net loss of US$3.3 billion
in the year-ago quarter. As of March 31, 2009, GM had
US$82.2 billion in total assets and US$172.8 billion in total
liabilities, resulting in US$90.5 billion in stockholders'
deficit.
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors'
restructuring officer. GM is also represented by Jenner & Block
LLP and Honigman Miller Schwartz and Cohn LLP as counsel.
Cravath, Swaine, & Moore LLP is providing legal advice to the GM
Board of Directors. GM's financial advisors are Morgan Stanley,
Evercore Partners and the Blackstone Group LLP.
General Motors changed its name to Motors Liquidation Co.
following the sale of its key assets to a company 60.8% owned by
the U.S. Government.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GEORGETOWN INDIANA: Ponders Bankruptcy Over $1.45-Mil. Debt
-----------------------------------------------------------
The town board of Georgetown, Indiana, is considering filing for
bankruptcy protection over a potential $1.45 million debt, the
Associated Press reported.
The Department of Local Government Finance, however, says federal
law requires that a municipality be specifically authorized by
state law to file for bankruptcy.
Georgetown faces $1.45 million debt to a contractor and the nearby
city of New Albany over stalled plans to build its own sewage
treatment plant.
GOLFERS' WAREHOUSE: Proposes Rogin Nassau as Bankruptcy Counsel
---------------------------------------------------------------
Golfers' Warehouse, Inc., asks the U.S. Bankruptcy Court for the
District of Connecticut for authorization to employ Rogin Nassau
LLC as counsel.
Rogin Nassau will:
a. give the Debtor legal advice concerning the powers and
duties of a debtor-in-possession;
b. assist the Debtor in preparation of schedules, reports,
pleadings and other legal papers required or desirable on
behalf of the Debtor as debtor-in-possession;
c. represent Debtor in connection with adversary proceedings,
contested matters and other proceedings which may be
instituted in this Court;
d. perform all other legal services for the Debtor as debtor-
in-possession which may be necessary herein.
The hourly rates of Rogin Nassau's personnel are:
Partner $275 - $485
Associate $175 - $225
Rogin Nassau received a $96,445 retainer for services to be
rendered in connection with the Chapter 11 case.
To the best of the Debtor's knowledge, Rogin Nassau is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached at:
Rogin Nassau LLC.
185 Asylum Street, 22nd Floor
Hartford, CT 06103
Tel: (860)-278-7480
Fax: 860-278-2179
The Debtor also related that it has selected Altman & Company as
management consultant.
The Official Committee of Unsecured Creditors in Golfers'
Warehouse' Chapter 11case selected Charles J. Filardi, Jr., at
Filardi Law Offices, LLC, to represent their concerns.
About Golfers' Warehouse, Inc.
Hartford, Connecticut-based Golfers' Warehouse, Inc., aka Golfers'
Warehouse, Golfers' Clubhouse and Golf Clubhouse operates a golf
equipment and retail store.
The Company filed for Chapter 11 on July 9, 2009 (Bankr. D. Conn.
Case No. 09-21911.) The Debtor said that its assets and debts both
range from $10,000,001 to $50,000,000.
GSI HOLDINGS: Moody's Downgrades Corporate Family Rating to 'B3'
----------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family and
probability of default ratings of GSI Holdings to B3 from B2. The
ratings outlook is stable.
The downgrade reflects lower order volumes that have weakened the
company's credit metrics to levels on par with the B3 rating.
Declining orders have impacted both of GSI's operating segments:
Grain and Protein. Although Grain sales are likely to show
greater rebound potential in coming months since U.S. farm income
levels should be good near-term, swine oversupply and low pork
prices will likely prolong weak Protein sales. GSI has cut costs
in response but the company's high leverage should increase and
remain elevated through 2010.
The B3 rating reflects an expectation of continued slim interest
coverage metrics through 2010, juxtaposed with a good competitive
position, and favorable long-term demand potential for the
company's products.
The stable outlook reflects GSI's low asset-intensity, recent cost
cuts and adequate liquidity profile. The company's low
maintenance spending needs and reduced overhead should minimize
revolver borrowing to cover losses. The stable outlook
contemplates that covenant headroom will likely tighten with
upcoming financial ratio test step-downs, but should remain below
required thresholds, and that revolver borrowing for potential
acquisition spending will be minimal.
Other rating changes:
GSI Holdings LLC
* $50 million first lien revolver to B2, LGD 3, 35% from B1 LGD 3,
36%
* $305 million first lien term loan to B2, LGD 3, 35% from B1 LGD
3, 36%
Concurrent with the rating actions, the corporate family rating
and probability of default ratings have been reassigned to GSI
Holdings LLC from GSI Holdings Corp.
Moody's last rating action on GSI occurred July 16, 2007 when the
corporate family rating of B2 was assigned.
GSI Holdings, LLC, a subsidiary of GSI Holding Corp. headquartered
in Assumption, IL, is a leading manufacturer and supplier of
agricultural equipment. The company's products include grain
storage systems (69% of FY08 sales), and swine and poultry
production equipment (31%) that are sold through a network of over
1,000 independent dealers in approximately 75 countries. Revenues
in 2008 were over $600 million.
HAIGHTS CROSS: Extends 2011 Notes Exchange Offer Until July 30
--------------------------------------------------------------
Haights Cross Communications, Inc. said the expiration date for
its private exchange offer and consent solicitation to qualified
investors to exchange HCC's 12-1/2% Senior Discount Notes Due 2011
for shares of common stock of HCC has been extended until 11:59,
New York City time, on July 30, 2009, unless terminated or further
extended.
Unless the Company is able to timely complete the Exchange Offer,
it anticipates taking advantage of the applicable 30-day grace
period with respect to payment of the semi-annual interest of
approximately $8.4 million due August 3, 2009 on its Senior
Discount Notes to pursue the completion of the Exchange Offer.
The Company's current forbearance agreement and credit agreement
for its senior secured term loan prohibits the Company from making
interest payments on the Senior Discount Notes while the Company
remains in default under the Credit Agreement. The cure of such
default will require, among other things, the successful
completion of the Exchange Offer. Under the applicable indenture
relating to the Discount Notes, use of the 30-day grace period
does not constitute a default that permits acceleration of the
Discount Notes.
As of the close of business on July 27, 2009, the Company was
advised by the information and exchange agent for the Exchange
Offer that approximately $100 million (at maturity), or 74%, of
Senior Discount Notes had been tendered and not validly withdrawn.
Senior Discount Notes which have been validly tendered to the
Exchange Offer to date and not withdrawn remain tendered and
subject to the Exchange Offer. Eligible Holders who have already
tendered Senior Discount Notes need not take any additional
actions to tender their Senior Discount Notes.
The consummation of the Exchange Offer is conditioned upon the
satisfaction or waiver of a number of conditions including, among
others: (i) at least 95% of the aggregate principal amount of the
Senior Discount Notes being validly tendered for exchange and not
revoked, and Eligible Holders representing such Senior Discount
Notes delivering their consents to the Proposed Amendments; and
(ii) the execution of a satisfactory amendment to the Credit
Agreement. The Company is also seeking to extend its current
Forbearance Agreement, which expires on July 30, 2009, to provide
the Company with further time to complete Exchange Offer (as
extended) and other restructuring transactions.
In the event that HCC is not able to successfully complete the
restructuring, including the Exchange Offer, HCC intends to
explore all other restructuring alternatives available to it at
that time, which may include an alternative out-of-court
restructuring or the commencement of a Chapter 11 case and plan of
reorganization, with or without a pre-arranged plan of
reorganization. There can be no assurance that any alternative
restructuring arrangement or plan could be accomplished.
The Exchange Offer is being made, and the new shares of Common
Stock are being offered, only to Eligible Holders, who consist of
accredited investors, or persons other than U.S. persons, in a
transaction that is exempt from the registration requirements of
the Securities Act of 1933. Any such securities may not be
offered or sold absent registration or an applicable exemption
from the registration requirements of the Securities Act.
About Haights Cross Communications
Founded in 1997 and based in White Plains, NY, Haights Cross
Communications -- http://www.haightscross.com/-- is a premier
educational and library publisher dedicated to creating the finest
books, audio products, periodicals, software and online services,
serving the following markets: K-12 supplemental education, public
and school libraries, and consumers. Haights Cross companies
include: Triumph Learning, Buckle Down Publishing and Options
Publishing, and Recorded Books.
* * *
Haights Cross has been in default under the Indentures for its
Senior Notes and Senior Discount Notes and under the Credit
Agreement after it failed to file audited financial statements on
time. Ernst & Young LLP in New York City, its independent
registered public accounting firm also has raised substantial
doubt about its ability to continue as a going concern. The
adverse opinion caused the Company to violate a separate covenant
of the Credit Agreement.
At March 31, 2009, the Company had $228,965,000 in total assets;
$408,679,000 in total current liabilities and $14,238,000 in total
long-term liabilities, resulting in $193,952,000 in stockholders'
deficit. As of March 31, 2009, the Company had an available cash
balance of $34.5 million. Haights Cross does not expect that its
cash on hand and cash generated from operations will be sufficient
to fund the repayment of its senior secured term loan under the
Credit Agreement should it be declared due.
HALLWOOD ENERGY: HPI Files Competing Plan and Disclosure Statement
------------------------------------------------------------------
Hall Phoenix/Inwood, Ltd., has filed a joint Chapter 11 plan of
reorganization for Hallwood Energy, L.P., and its affiliated
debtors, and a disclosure statement explaining the Plan with the
U.S. Bankruptcy Court for the Northern District of Texas in
Dallas. HPI is the largest secured and unsecured creditor of the
Debtors holding claims of at least $118,000,000 secured by
substantially all of the Debtors' assets.
As reported in the TCR on May 25, 2009, the Debtors have filed
their Chapter 11 plan of reorganization. The Debtors' plan
assumes the equitable subordination and recharacterization of the
claims of HPI and convertible debt holders to equity. General
unsecured claims will receive their pro rata share of 30% of
available cash within 30 days after the Plan's Effective Date and
additional distributions occurring at 120 days intervals
thereafter. Class A equity interests, estimated at $201,000,000,
will be cancelled and extinguished.
HPI says unlike its plan, the Debtors' plan depends "virtually
entirely" on the success of three separate and uncertain events:
(1) the Debtors' winning costly and protracted litigation to
subordinate HPI's debt and the debt of all holders of
convertible subordinated notes, to substantively consolidate
the Debtors' estates, and to recover over $6 million from
FEI Shale, LP;
(2) the Debtors raising $25 million in new capital investments;
and
(3) the Debtors drilling successful and profitable wells and
achieving future business success, "a task the Debtors'
dismal historical business performance simply does not
support."
Court Grants HPI's Stay Motion
On April 8, 2009, HPI filed a motion for relief from the automatic
stay, claiming that it is entitled to relief from the automatic
stay because, among other things, its interests in the Debtors'
assets are not adequately protected, and because the Debtors do
not have any equity in the property securing HPI's loans, and that
said property in not necessary to an effective reorganization. ]
At a hearing on June 25, 20098, the Bankruptcy Court lifted the
stay to permit HPI to foreclose, to take immediate possession of
its cash collateral, and to immediately assume control and
management of the Debtors' assets. The Court also found that
there was no validity to the Debtors' claims to subordinate the
debt of HPI.
HPI's Plan
HPI's Plan contemplates (i) the formation of three trusts (Trust
I, Trust II and Trust III) for the benefit of creditors into which
certain causes of action will be transferred so that said causes
of action, including claims against the Debtors' officers,
directors and professionals and The Hallwood Group Incorporated,
the largest limited partner of the Debtors, can be pursued for the
benefit of creditors and (ii) a settlement of all claims of the
Debtors against HPI, its affiliated entities, officers and
directors, including a dismissal of and release of all claims by
the Debtors for subordination and breach of fiduciary duty.
Under the terms of the settlement, HPI will have an allowed
secured claim of $90 million and an allowed unsecured claim of
$90 million. The litigation will be dismissed with prejudice and
HPI will fulfill its obligations under the Plan including
advancing the costs of operating the trusts, releasing its liens
on certain causes of action and contributing HPI's direct claims
to the Trust. HPI will also receive a conveyance of all of its
collateral except those causes of action transferred to Trust I.
Trade Creditors will receive the following preferred treatment as
a result of the agreement reached between the Committee and HPI:
from Trust I, the first $1,000,000 after payment of certain other
claims and administrative costs and then 10% of all recoveries;
from Trust II, 60% of all recoveries after payment of
administrative costs; and from Trust III, 100% of all recoveries
after repayment of any borrowings by Trust III and after payment
of administrative costs.
HPI says the official committee of unsecured creditors supports
confirmation of its plan.
HPI says it believes that the pursuit of the causes of action by a
Trustee, as opposed to the Debtors, will significantly increase
the odds that recoveries will provide a material return to
unsecured creditors, and furthermore, under its plan, unsecured
creditors will also receive the recoveries from the pursuit of
HPI's direct claims against Hallwood Group.
All classes under the plan are impaired and are entitled to vote.
Holders of interests of equity security holders will have their
interests cancelled and will receive nothing. For purposes of
plan solicitation all classes of claims except priority wage
claims under Class 1 are impaired and are, therefore, entitled to
vote. Class 12 interests are deemed to have rejected the Plan.
A full-text copy of HPI's competing plan is available for free at:
http://bankrupt.com/misc/hallwoodenergy.HPIplan.pdf
A full-text copy of HPI's explanatory disclosure statement with
respect to its plan is available at:
http://bankrupt.com/misc/hallwoodenergy.HPI.DS.pdf
Based in Dallas, Texas, Hallwood Energy, L.P. --
http://www.hallwoodenergy.com/-- is an upstream energy
corporation, engaging in the exploration, acquisition, development
and production of oil and gas properties.
The Company and five of its affiliates filed separate petitions
for Chapter 11 relief on March 1, 2009 (Bankr. N.D. Tex. Lead Case
No. 09-31253). Scott Mark DeWolf, Esq., Kathleen M. Patrick,
Esq., and Sean Joseph McCaffity, Esq., at Rochelle McCullough
L.L.P., represent the Debtors in their restructuring efforts.
Blackhill Partners LLC serves as the Debtors' business consultant.
Brian A. Kilmer, Esq., at Okin Adams & Kilmer LLP, represents the
official committee of unsecured creditors. In its bankruptcy
petition, Hallwood listed assets between $50 million and
$100 million, and debts between $100 million and $500 million.
HARMAN INTERNATIONAL: S&P Cuts Corporate Credit Rating to 'B+'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it has lowered its
corporate credit rating on Harman International Industries Inc.
and the rating on the company's $400 million unsecured notes to
'B+' from 'BB+'. The ratings were removed from CreditWatch, where
they had been placed with negative implications on April 30, 2009.
The outlook is stable.
"The downgrade reflects S&P's assumptions that Harman's weak
profitability will continue and that the company will use more
cash in the next 18 months than S&P expected for the previous
rating because the economic outlook has weakened," said Standard &
Poor's credit analyst Nancy Messer. S&P believes Harman's
liquidity is limited for now to cash on hand because Harman's
revolving bank facility is fully drawn, and the company is
prevented from incurring additional debt by a restriction (which
expires in October 2010) in the $400 million convertible notes
held by Kohlberg Kravis Roberts & Co. L.P.
S&P believes the cause of the company's weak financial results
will continue to be the poor global market for light vehicles for
2009 and 2010, and the soft performance of Harman's automotive and
consumer divisions will more than offset ongoing profitability in
the company's professional division.
S&P believes Harman's fiscal 2009 (June year end) revenues could
decline about 30% from 2008 levels, and fiscal 2010 revenues will
recover modestly but remain about 25% below the fiscal 2008 level.
S&P also believe the company could use cash in 2010, given weak
auto production in Europe, continuing restructuring expenditures,
and the lack of apparent economic boosters in the U.S. or Europe
that will cause a significant increase in consumer spending on
cars. S&P expects light-vehicle sales to decline about 25% in
North America in calendar-year 2009 versus 2008, to 9.9 million
units. In 2010, S&P expects vehicle sales in North America to
increase by 13%, but only to about 11 million units (still below
the 2008 level of 13.2 million). S&P expects auto registrations
in Europe to decline as well in calendar-year 2009, but by less
than in the U.S., partly because of various national scrappage
programs designed to boost sales. Still, these schemes have had
less benefit to the sales of high-end vehicles that carry Harman's
products, suggesting less year-over-year downside effect in 2010
if scrappage schemes are not renewed.
S&P currently expects Harman to generate positive EBITDA for
fiscal 2010 after a very weak 2009, as cost savings and launch
activity begin to benefit earnings. Still, S&P expects fiscal 2010
EBITDA to remain below the 2008 level.
The company also is executing an operational turnaround plan
designed to save $400 million annually when complete. This
activity raises execution risk and uses cash in the near term, but
the plan appears to be on track to achieve its goals. An
unprecedented amount of new business was launched in fiscal 2008
and 2009, an important effort that is now complete. S&P believes
Harman's margins should eventually benefit from ongoing
restructuring initiatives combined with profit expansion from
recently launched business when production begins to rise as
European and U.S. economies rebound. For now, S&P believes
Harman's efforts to rationalize its cost basis are being overtaken
by the magnitude of the global economic downturn and its negative
effect on revenues and cost absorption.
Harman's weak business risk profile as a provider of sophisticated
audio technology for the auto market reflects S&P's assumption
that reversing recently deteriorated profitability will remain a
challenge for the intermediate term. The company's EBITDA was
negative in the third fiscal quarter because of a significant 42%
sales decline year over year and lower contributions from new
launches. S&P believes the business's profit potential may be at
risk despite ongoing restructuring efforts, Harman's dependence on
technological innovation, and its sales concentration on premium
vehicles -- Audi/Volkswagen AG accounts for about 15% of sales,
BMW AG 13%, and Daimler AG 10%.
S&P views Harman's financial risk profile as highly leveraged
because of the company's deteriorated EBITDA, constrained
liquidity, and lack of positive free cash flow in the first nine
months of fiscal 2009, which have been historically robust. The
current senior management team was installed after a failed 2007
leveraged buyout attempt by KKR and the retirement of
founder Sidney Harman in 2008. In S&P's opinion, the current
management is focused on operational improvements and is committed
to regaining a more stable financial risk profile. Still, KKR,
which holds the $400 million convertible notes, controls one seat
on Harman's board of directors. S&P does not expect KKR to make a
second LBO attempt, given a standstill agreement, but its presence
in the corporate capital and governance structures raises
uncertainty about financial policies.
S&P expects Harman to use a significant amount of cash in the year
ahead because of high cash restructuring costs and working capital
requirements. When production volumes increase with the eventual
end of the recession, working capital requirements will also
increase, as it will for most suppliers. Although the company's
cash on hand should prove adequate to carry the company into
fiscal 2011 when it could turn free-cash-flow-positive, S&P
believes financing flexibility will be limited in the interim.
The stable outlook reflects S&P's belief that Harman's cash
cushion will provide sufficient financial flexibility to manage
through the ongoing trough of the auto market until October 2010,
when its indebtedness constraint falls away. This assumes
stability in the auto market with no further significant drop in
production volumes in the U.S. or Europe.
S&P could revise the outlook to negative if S&P came to believe
that the risk of Harman's weak earnings and cash flow, because of
the deteriorated global auto markets, would continue to outpace
the benefits of restructuring initiatives and recently launched
new programs. For example, S&P could revise the outlook to
negative or lower the rating if the company's liquidity worsened
in fiscal 2010 because of negative EBITDA and/or cash use
exceeding S&P's assumption of about $100 million. S&P could also
revise the outlook to negative if the company were to pursue a
transforming acquisition or large dividend payout in the year
ahead that could pressure liquidity.
S&P could revise the outlook to positive or raise the ratings if
Harman were able to stem its cash flow consumption rate, achieve
and demonstrate that it can sustain an operational breakeven point
that better fits lower expected intermediate-term global auto
production levels, and bolster liquidity. S&P believes this
outcome is less likely in the year ahead because of difficult
global market conditions and S&P's view that the weak global
economy and deteriorated production volumes for its European auto
customers will pressure earnings in the year ahead.
HARVEST OIL: Can Use Lenders' Cash Collateral Until August 4
------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Louisiana
has granted Harvest Oil & Gas, LLC, and its debtor-affiliates'
authority, on an interim basis, to access cash collateral of
Wayzata Investments Partners, LLC, as agent for certain lenders,
and Macquarie Bank Limited and its affiliates to meet payroll,
ongoing operational expenses and other business costs and expenses
in accordance with a budget.
The Debtors will not pay wages or salary to any party who is not
working for the Debtors.
The Debtors are authorized to use the cash collateral from
June 29, 2009, through August 4, 2009. This is the Court's fifth
amended interim cash collateral order.
The prepetition lenders will retain their security interests and
liens on the cash collateral to the fullest extent and relative
priority as set forth in their respective prepetition security
agreements.
As partial adequate protection for any use or diminution in the
value of their collateral, the prepetition lenders are granted
security interests and liens in all of the property and assets of
the Debtors' estates, as may be acquired postpetition, including
all cash collateral in the DIP Account.
A final hearing on the Debtors' emergency cash collateral motion
will be heard on August 4, 2009, at 10:00 a.m.
About Harvest Oil and Gas, LLC
Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC --
http://www.harvest-oil.com/-- is engaged on acquisition,
development and exploration of energy resources. The Debtor and
its debtor-affiliates filed for Chapter 11 protection on March 31,
2009 (Bankr. W.D. La. Lead Case No. 09-50397). Robin B.
Cheatham, Esq., at Adams & Reese LLP, represents the Debtors in
their restructuring efforts. The Debtors listed between
$100 million and $500 million each in assets and debts.
HARVEST OIL: Court Sets August 4 Bar Date for Proofs of Claim
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Louisiana
has established August 4, 2009, as the bar date for the filing of
proofs of claim in each of Harvest Oil and Gas, LLC, and its
affiliated debtors' bankruptcy cases.
The Debtors have filed all of their statements and schedules,
including schedules of claims. Holders of scheduled claims that
are disputed or unliquidated are required to file proofs of claim.
A copy of Harvest Oil's schedules of assets and debts is available
at http://bankrupt.com/misc/HarvestOil.SAL.pdf
About Harvest Oil and Gas, LLC
Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC --
http://www.harvest-oil.com/-- is engaged on acquisition,
development and exploration of energy resources. The Debtor and
its debtor-affiliates filed for Chapter 11 protection on March 31,
2009 (Bankr. W.D. La. Lead Case No. 09-50397). Robin B.
Cheatham, Esq., at Adams & Reese LLP, represents the Debtors in
their restructuring efforts. The Debtors listed between
$100 million and $500 million each in assets and debts.
HARVEST OIL: Taps Grant Thornton as Accountants & Fin'l Advisors
----------------------------------------------------------------
Harvest Oil & Gas, LLC, et al., ask the U.S. Bankruptcy Court for
the Western District of Louisiana for authorization to employ
Grant Thornton LLP as their accountants and financial advisors,
nunc pro tunc to July 20, 2009.
Grant Thornton will provide these services:
a. Financial Advisory Services
(i) review of and assistance in the preparation of financial
information for distribution to creditors and other
parties-in-interest, including, but not limited to,
analyses of cash receipts and disbursements, financial
statement items and proposed transactions for which
bankruptcy court approval is sought;
(ii) assistance with analysis, tracking and reporting
regarding cash collateral and debtor-in-possession
financing arrangements and budgets;
(iii) assistance with implementation of bankruptcy accounting
procedures as required by the Bankruptcy Code and
generally accepted accounting principles, including, but
not limited to, Statement of Position 90-7.
b. Tax Advisory Assistance
(i) other tax matters as requested by the Debtors or their
counsel to assist the Debtors in its business and
reorganization.
Loretta R. Cross, a partner at Grant Thornton, assures the Court
that the firm does not hold or represent an interest 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.
Grant Thornton will bill the Debtors at their normal and customary
hourly rates, which are:
Partners/Principals/Directors $590-$665
Senior Managers/Managers $400-$550
Senior Associates $280-$360
Associates $210-$225
Paraprofessionals $160
About Harvest Oil and Gas, LLC
Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC --
http://www.harvest-oil.com/-- is engaged on acquisition,
development and exploration of energy resources. The Debtor and
its debtor-affiliates filed for Chapter 11 protection on March 31,
2009 (Bankr. W.D. La. Lead Case No. 09-50397). Robin B.
Cheatham, Esq., at Adams & Reese LLP, represents the Debtors in
their restructuring efforts. The Debtors listed between
$100 million and $500 million each in assets and debts.
HARVEST OIL: Wants Plan Filing Period Extended to August 28
-----------------------------------------------------------
Harvest Oil & Gas, LLC, et al., ask the U.S. Bankruptcy Court for
the Western District of Louisiana to extend their exclusive
periods to file a plan and solicit acceptances thereof through and
including August 28, 2009, and October 28, 2009, respectively.
The Debtors say that they are currently undergoing a five-week
audit of their production records by the State of Louisiana,
Office of Mineral Resources, Department of Natural Resources,
which began on June 16, 2009. Additionally, the Debtors say they
have been busy attending to continuous document and information
requests by Wayzata Investment Partners, LLC, which have detracted
from their ability to work on additional reserve data.
Wayzata holds a second lien on substantially all of Saratoga
Resources, Inc.'s assets.
The Debtors currently await the completion of Collarini
Associates' mid-year report, which has been delayed due to
Collarini's focus upon the document and information requests of
Wayzata and its reserve expert, Netherland Sewell & Associates,
Inc. Collarini is a third party engineering company which also
prepared a reserve report in connection with Saratoga's
accquisition of all the equity interests in Harvest Group LLC and
Harvest Oil & Gas, LLC.
The Debtors say the Collarini mid-year reserve report is necessary
for the completion of their disclosure statement and plan of
reorganization, as it will provide the basis for their plan.
About Harvest Oil and Gas, LLC
Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC --
http://www.harvest-oil.com/-- is engaged on acquisition,
development and exploration of energy resources. The Debtor and
its debtor-affiliates filed for Chapter 11 protection on March 31,
2009 (Bankr. W.D. La. Lead Case No. 09-50397). Robin B.
Cheatham, Esq., at Adams & Reese LLP, represents the Debtors in
their restructuring efforts. The Debtors listed between
$100 million and $500 million each in assets and debts.
HAYES LEMMERZ: Asks Court to Rule on Dispute with U.S. Bank, N.A.
-----------------------------------------------------------------
Hayes Lemmerz International Inc seeks for a declaratory judgment
with the U.S. Bankruptcy Court for the District of Delaware,
expressing concern that the lack of clarity on the indenture
agreement that the company claims are central to its Chapter 11
exit, according to Law360. The Debtors asked the Court to weigh
in on a dispute with the U.S. Bank National Association over
certain terms of their agreement, report notes.
Originally founded in 1908, Hayes Lemmerz International, Inc.
(NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel
wheels for passenger cars and light trucks and of steel wheels for
commercial trucks and trailers. The Company is also a supplier of
automotive powertrain components. The Company has global
operations with 23 facilities, including business, sales offices
and manufacturing facilities, located in 12 countries around the
world. The Company sells products to every major North American,
Asian and European manufacturer of passenger cars and light trucks
and to commercial highway vehicle customers throughout the world.
The Company and certain affiliates filed for bankruptcy on
May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching
agreements with lenders holding a majority of the Company's
secured debt. The Company's principal bankruptcy attorneys are
Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co.,
LLC, serves as the Company's financial advisors. AlixPartners,
LLP, serves as the Company's restructuring advisors. The Garden
City Group, Inc., serves as the Debtors' claims and notice agent.
As of January 31, 2009, the Debtors had total assets of
$1,336,600,000 and total debts of $1,405,200,000. This is the
Company's second trip to the bankruptcy court, dubbed a
Chapter 22, which was precipitated by an unprecedented slowdown in
industry demand and a tightening of credit markets. The Company
plans to reduce its debt and restructure its balance sheet.
Hayes Lemmerz and its direct and indirect domestic subsidiaries
and one subsidiary in Mexico first filed for bankruptcy in
December 2001 before the U.S. Bankruptcy Court for the District of
Delaware. The Chapter 11 filings were precipitated by declining
market conditions and the Company's excessive debt burdens,
according to Mr. Clawson, who also served as chairman and chief
executive officer at that time. The Court confirmed the Company's
reorganization plan in May 2003, allowing the Company to exit
bankruptcy in June 2003. In accordance with the 2003 Plan,
approximately $2.1 billion in pre-petition debt and other
liabilities were discharged. The Plan provided for holders of
prepetition secured claims to receive $478.5 million in cash and
53.1% of the reorganized company common stock. Holders of senior
note claims were to receive $13 million in cash and 44.9% of the
New Common Stock, and holders of general unsecured claims were to
receive 2% of the New Common Stock. Hayes Lemmerz' prior common
stock and securities were cancelled as of June 3, 2003.
HAYES LEMMERZ: Disclosure Statement Hearing Adjourned to Aug. 18
----------------------------------------------------------------
Hayes Lemmerz International, Inc., said the hearing to approve the
disclosure statement with respect to its proposed plan of
reorganization has been adjourned to August 18, 2009.
The Plan and disclosure statement were filed with the United
States Bankruptcy Court for the District of Delaware on July 2,
2009, and the hearing to approve the disclosure statement was
originally scheduled for July 30, 2009. The three-week
adjournment will allow the Company additional time to continue
negotiations with creditors and other constituents with respect to
the final Plan. The Company already has the overwhelming support
of its senior secured lenders regarding the reorganization
contemplated by the Plan.
The Company confirms that it continues to be on track with its
restructuring goals. It has adequate DIP financing available and
continues to enjoy the strong support of its senior secured
lenders during this process. It is making progress in
negotiations with representatives of its unsecured creditors,
including the holders of its senior notes, the Pension Benefit
Guaranty Corporation and both hourly and salaried retirees, to
reach resolutions that will significantly reduce the burden of
these liabilities on the Company. The Company expects to emerge
from its restructuring as a leaner, stronger competitor well
positioned to continue its leadership in the global wheel market.
About Hayes Lemmerz
Originally founded in 1908, Hayes Lemmerz International, Inc.
(NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel
wheels for passenger cars and light trucks and of steel wheels for
commercial trucks and trailers. The Company is also a supplier of
automotive powertrain components. The Company has global
operations with 23 facilities, including business, sales offices
and manufacturing facilities, located in 12 countries around the
world. The Company sells products to every major North American,
Asian and European manufacturer of passenger cars and light trucks
and to commercial highway vehicle customers throughout the world.
The Company and certain affiliates filed for bankruptcy on
May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching
agreements with lenders holding a majority of the Company's
secured debt. The Company's principal bankruptcy attorneys are
Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co.,
LLC, serves as the Company's financial advisors. AlixPartners,
LLP, serves as the Company's restructuring advisors. The Garden
City Group, Inc., serves as the Debtors' claims and notice agent.
As of January 31, 2009, the Debtors had total assets of
$1,336,600,000 and total debts of $1,405,200,000. This is the
Company's second trip to the bankruptcy court, dubbed a
Chapter 22, which was precipitated by an unprecedented slowdown in
industry demand and a tightening of credit markets. The Company
plans to reduce its debt and restructure its balance sheet.
Hayes Lemmerz and its direct and indirect domestic subsidiaries
and one subsidiary in Mexico first filed for bankruptcy in
December 2001 before the U.S. Bankruptcy Court for the District of
Delaware. The Chapter 11 filings were precipitated by declining
market conditions and the Company's excessive debt burdens,
according to Mr. Clawson, who also served as chairman and chief
executive officer at that time. The Court confirmed the Company's
reorganization plan in May 2003, allowing the Company to exit
bankruptcy in June 2003. In accordance with the 2003 Plan,
approximately $2.1 billion in pre-petition debt and other
liabilities were discharged. The Plan provided for holders of
prepetition secured claims to receive $478.5 million in cash and
53.1% of the reorganized company common stock. Holders of senior
note claims were to receive $13 million in cash and 44.9% of the
New Common Stock, and holders of general unsecured claims were to
receive 2% of the New Common Stock. Hayes Lemmerz' prior common
stock and securities were cancelled as of June 3, 2003.
HYDROGENICS CORP: Shareholders Approve Plan on Algonquin Deal
-------------------------------------------------------------
Hydrogenics Corporation on Monday said its shareholders passed a
special resolution to approve an arrangement under the Canada
Business Corporations Act in connection with the non-dilutive
financing transaction to be implemented pursuant to a support
agreement among Hydrogenics, the trustees of Algonquin Power
Income Fund and a newly created subsidiary of Hydrogenics, which
was announced on June 12, 2009.
The special resolution was approved by approximately 99% of the
votes cast by shareholders present in person or represented by
proxy at Hydrogenics' special meeting.
Hydrogenics hosted a conference call on Monday at 10:00 a.m.
Eastern for the special meeting of holders of common shares of
Hydrogenics. During the meeting, the holders were asked to
approve the arrangement in connection with the Algonquin deal.
For the Arrangement to be approved by the Hydrogenics
shareholders, the resolution must be passed by at least 66-2/3% of
the votes cast by shareholders, represented in person or by proxy,
at the special meeting.
Under the terms of the Transaction, Hydrogenics will also make
offers to acquire all the outstanding units and convertible
debentures of Algonquin Power in connection with the Transaction,
resulting in, among other things, securityholders who accept the
offers becoming securityholders of Hydrogenics. Upon completion
of the Arrangement, current shareholders of Hydrogenics will
become shareholders of New Hydrogenics, which will be renamed
Hydrogenics Corporation, and which is expected to assume
Hydrogenics' current listings on the Toronto Stock Exchange and
Nasdaq Global Market.
The Arrangement is subject to, among other things, final approval
of the Ontario Superior Court of Justice which is expected to be
sought on July 29, 2009. Provided that final approval of the
Court is obtained, and that all other conditions precedent to the
Transaction are satisfied or waived, the Arrangement and
Transaction are expected to close in September 2009.
Going Concern Doubt
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. Hydrogenics has
operations in North America and Europe.
HYMAN COS: Taps Focus Management as Financial Advisor
-----------------------------------------------------
Focus Management Group has been appointed as Financial Advisor to
the Hyman Companies, Inc., under an Order entered by the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania. The
Company voluntarily filed for Chapter 11 bankruptcy relief on
March 3, 2009.
Hyman operates a chain of accessory boutiques in the United
States. Its boutiques offer various jewelry products, such as
necklaces, bracelets, earrings, pins, rings, enhancers, silver
products, platinum plated products, and minaudieres and pillboxes,
as well as handbags and watches. Founded in 1987, the company is
headquartered in Allentown, Pennsylvania.
Focus Management Group is providing Hyman with advisory services
following the Company's Chapter 11 filing, including the
preparation of cash forecasts, budgets, projections, filing
documents and Plan negotiations. Focus is also assisting Hyman in
the preparation of SOFAs, Schedules and Monthly Operating Reports
and post petition is performing a broad range of financial
reporting, consulting and advisory services on behalf of the
Company as required in its Chapter 11 case.
The Focus team is led by John Bambach, Jr., Managing Director, and
Howard Cohen, Senior Consultant. Mr. Bambach, a Certified
Turnaround Professional, has over 20 years of bankruptcy and
turnaround management in a diverse range of industries. Mr.
Cohen, a Certified Public Accountant, has over 30 years of
business restructuring experience, with specific expertise in
bankruptcy, debtor and creditor rights, turnaround consulting and
strategic planning. Both are based out of Focus' Philadelphia
office, and can be reached at 267-207-2724 or via e-mail at
j.bambach@focusmg.com or h.cohen@focusmg.com
About Focus Management Group
Focus Management Group provides nationwide professional services
in turnaround management, insolvency proceedings, business
restructuring and operational improvement with a senior-level team
of 120 professionals. Headquartered in Tampa, FL, with offices in
Atlanta, Chicago, Cleveland, Los Angeles and Philadelphia, the
firm provides a full portfolio of services to distressed companies
and their stakeholders, including secured lenders and equity
sponsors.
About Hyman Cos.
Allentown, Pennsylvania-based The Hyman Companies, Inc. -- aka
Landau, The Landau Collection, Boccelli, Landau Costume Jewelry,
and Bijou Bijou -- filed for Chapter 11 bankruptcy protection on
March 3, 2009 (Bankr. E.D. Pa. Case No. 09-20523). Edmond M.
George, Esq., at Obermayer Rebmann Maxwell & Hippel, LLP, assists
the Company in its restructuring efforts. The Company listed
$1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000
in debts.
IMPLANT SCIENCES: Addresses SEC Concern on Controls & Procedures
----------------------------------------------------------------
Implant Sciences Corp. filed with the Securities and Exchange
Commission Amendment No. 4 on Form 10-K/A to modify its Annual
Report on Form 10-K for the fiscal year ended June 30, 2008,
originally filed on October 14, 2008.
The Company filed Amendment No. 4 in response to certain comments
made by the staff of the Securities and Exchange Commission. In
response to such comments, the Company (i) amended Part II, Item
9A (Controls and Procedures) and (ii) filed currently dated
certifications of its Chief Executive Officer and Chief Financial
Officer, as required under Sections 302 and 906 of the Sarbanes-
Oxley Act of 2002.
The Company said management, with the participation of the
Company's Chief Executive Officer and Chief Financial Officer,
failed to complete its report on internal control over financial
reporting and was unable to complete the evaluation as to the
effectiveness of the Company's disclosure controls and procedures
as of June 30, 2008. Based on the Company's inability to complete
its report on internal control over financial reporting and
conclude the evaluation of the Company's disclosure controls and
procedures as of June 30, 2008, the Company's Chief Executive
Officer and Chief Financial Officer concluded that, as of such
date, the Company's disclosure controls and procedures were not
effective.
The Company said the failure to complete the evaluation of the
effectiveness of the Company's internal control over financial
reporting is due to insufficient accounting resources and
inadequate oversight of the process and expertise associated with
the documentation and assessment of internal controls.
Subsequent to June 30, 2008, the Company (i) dedicated internal
and external staff to document and test internal controls, (ii)
increased the oversight and training of the accounting staff in
internal controls and (iii) commenced the process of drafting
written policies and procedures. Further, the Company's
management, with the participation of its Chief Executive Officer
and Chief Financial Officer completed an evaluation of the
effectiveness of the Company's internal control over financial
reporting as of June 30, 2008, based on the framework in Internal
Control Integrated Framework issued by the Committee of the
Sponsoring Organizations of the Treadway Commission and concluded
that the Company's internal controls over financial reporting were
effective.
About Implant Sciences
Wakefield, Massachusetts-based Implant Sciences Corporation (NYSE
Alternext US: IMX) -- http://www.implantsciences.com/-- develops,
manufactures and sells sophisticated sensors and systems for the
Security, Safety and Defense industries. The Company has
developed proprietary technologies used in its commercial portable
and bench-top explosive trace detection systems which ship to a
growing number of locations domestically and internationally.
The Company had $8,296,000 in total assets and $16,112,000 in
total liabilities resulting in $7,816,000 in stockholders' deficit
at March 31, 2009. The Company had an accumulated deficit of
approximately $70,224,000 and a working capital deficit of
$7,088,000 as of March 31, 2009.
Going Concern Doubt
The Company has suffered recurring losses from operations and must
repay in full the balance of its senior secured convertible
promissory note on December 10, 2009. The promissory note was
recorded at $3,741,000 as of March 31, 2009, and has a liquidation
value of $4,600,000. The Company said these conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
UHY LLP on October 14, 2008, expressed substantial doubt about
Implant Sciences' ability to continue as a going concern after
auditing the company's consolidated financial statements for the
fiscal year ended June 30, 2008, and 2007. The auditing firm
pointed to the Company's recurring losses from operations.
IRVINE SENSORS: Grant Thornton Out; Squar Milner In as Accountants
------------------------------------------------------------------
Irvine Sensors Corporation on July 20, 2009, advised Grant
Thornton LLP that it was dismissed as the Company's principal
independent registered public accounting firm.
On July 22, Squar, Milner, Peterson, Miranda & Williamson, LLP,
was engaged as the Company's new principal independent registered
public accounting firm to audit the Company's financial
statements.
The decision to change accountants was recommended and approved by
the audit committee of the board of directors of the Company.
Grant Thornton's report on the Company's consolidated financial
statements for the fiscal years ended September 28, 2008 and
September 30, 2007, did not contain an adverse opinion or a
disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope, or accounting principles, except that
Grant Thornton's report for the fiscal years ended September 28,
2008 and September 30, 2007, included a paragraph regarding
uncertainty about the Company's ability to continue as a going
concern and the report for the fiscal year ended September 30,
2007, also included an explanatory paragraph regarding the
restatement of the Company's consolidated financial statements as
of October 1, 2006 and October 2, 2005 and for each of the two
years ended October 1, 2006 and October 2, 2005.
During the two fiscal year period ended September 28, 2008, and
for the period from September 29, 2008 through the Notice Date,
there have been no disagreements between the Company and Grant
Thornton on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure,
which, if not resolved to Grant Thornton's satisfaction, would
have caused Grant Thornton to make reference to the subject matter
of such disagreements in connection with the issuance of its
report on the Company's financial statements.
During the two fiscal year period ended September 28, 2008, and
for the period from September 29, 2008 through the Notice Date,
Grant Thornton did not advise the Company that any "reportable
events" -- as defined in Item 304(a)(1)(v) of Regulation S-K
promulgated by the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended -- occurred during
such periods, except that during the two fiscal year period ended
September 28, 2008, Grant Thornton communicated with management
and the audit committee of the Company's board of directors that
there were material weaknesses in internal control over financial
reporting, which were reported and described in Item 9A(T) of the
Company's Annual Report on Form 10-K for the fiscal year ended
September 28, 2008 filed with the SEC, in Item 9A of the Company's
Annual Report on Form 10-K for the fiscal year ended September 30,
2007 filed with the SEC and in the Company's Quarterly Reports on
Form 10-Q filed with the SEC during the periods covered by those
Annual Reports.
As reported in the Company's Annual Report on Form 10-K for the
fiscal year ended September 28, 2008, the Company believes such
material weaknesses were subsequently remediated as of the end of
fiscal 2008. The audit committee of the board of directors of the
Company discussed the subject matter of these material weaknesses
with Grant Thornton. The Company has authorized Grant Thornton to
respond fully to the inquiries of the Company's new independent
registered public accounting firm concerning the material
weaknesses.
The Company says during the two fiscal year period ended
September 28, 2008, and for the period from September 29, 2008
until the engagement of Squar Milner, neither the Company, nor
anyone on its behalf, consulted Squar Milner on any matters
described in Item 304(a)(2) of Regulation S-K.
About Irvine Sensors
Irvine Sensors Corporation -- http://www.irvine-sensors.com/--
headquartered in Costa Mesa, California, is a vision systems
company engaged in the development and sale of miniaturized
infrared and electro-optical cameras, image processors and stacked
chip assemblies and research and development related to high
density electronics, miniaturized sensors, optical interconnection
technology, high speed network security, image processing and low-
power analog and mixed-signal integrated circuits for diverse
systems applications.
Grant Thornton LLP in Irvine, California, in a letter dated
January 9, 2009, pointed out that the Company incurred net losses
of $21.6 million, $22.1 million, and $8.4 million for the years
ended September 28, 2008, September 30, 2007, and October 1, 2006,
respectively, and the Company has a working capital deficit of
$16.1 million at September 28, 2008. "These factors, among
others, raise substantial doubt about the company's ability to
continue as a going concern."
As of March 29, 2009, the Company's balance sheet showed total
assets of $9,129,500 and total liabilities of $ 13,731,000,
resulting in stockholders' deficit of $4,601,500.
LEAR CORP: Ajax Plant to Re-Open, Kitchner Gets New Jobs
--------------------------------------------------------
The Canadian Auto Workers members at auto parts maker Lear Seating
in Kitchener and Ajax, Ontario have approved two new collective
agreements, adding new jobs to both communities.
The agreements were a crucial piece in ensuring these
facilities will manufacture parts for the next generation of GM
and Chrysler vehicles built in Canada.
At Lear Ajax, the agreement was ratified by CAW Local 1090 members
by 83 per cent. The plant, which closed in May of this
year, will re-open in October 2010, employing 250 people.
Workers will start being recalled in February 2010, with all of
the recalls completed by February 2011.
"Workers are amazed that a plant that closed this year will
now be opening its doors again next year," said Steve Batchelor,
CAW Local 1090 president.
"Hundreds of people who lost their jobs will be able to return,
it's an amazing success story," said Jerry Dias, assistant to CAW
national president. "The union played a critical role in bringing
these jobs back to both communities."
In Kitchener, CAW Local 1524 members approved the deal by 88
per cent. The agreement was set to expire in 2010 and has been
extended by a year, with 147 new jobs being added. Currently
there are approximately 325 people on lay-off from the plant.
"This is great news, especially in light of all of the closure and
lay-off announcements we've experienced across the region," said
Tim Mitchell, CAW Local 1524 president. "Workers are thrilled that
instead of more lay-offs, there will finally be people called back
to their jobs."
A deal has not yet been reached for the Whitby, Ontario plant.
The CAW is the largest private sector union in Canada with
over 225,000 members from coast to coast.
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: RSM Richter's 1st Report on Lear Canada
--------------------------------------------------
RSM Richter Inc., the Court-appointed information officer of Lear
Canada, Lear Canada Investments Ltd., Lear Canada Corporation
Ltd., relates that the purpose of the CCAA proceeding is to allow
Lear Group the opportunity to restructure their businesses and
operations pursuant to a plan of reorganization.
According to the report, Lear Canada is a partnership, 99.9%
owned by Lear Corporation Canada Ltd., and 0.1% of which is owned
by Lear Canada Investments Ltd. Lear Corporation Canada Ltd.,
and Lear Canada Investments Ltd., are wholly-owned indirect
subsidiaries of Lear Corporation, a U.S. Debtor, and the parent
company in the Lear Group.
The report adds that all management decisions regarding the
Canadian Applicants' operations are made by officers and
directors of the Canadian Applicants from the U.S. Debtors' head
office in Michigan. The business and operations of the Canadian
Applicants are fully integrated into the business and operations
of the U.S. Debtors. The Canadian Applicants rely on the U.S.
Debtors in all aspects of their business operations, including
administration.
According to RSM Richter, the Canadian Applicants have incurred
losses of approximately CND$80,000,000 since January 1, 2008.
The reasons for the recent significant operating losses are
principally attributed to the well publicized state of the
automotive sector.
The May 31, 2009 balance sheets reflect that Lear Canada had cash
in its operating accounts of approximately $20,000,000 and equity
of approximately $66,000,000, inclusive of an intercompany
receivable of approximately $82,000,000 from its parent, Lear
Corporation.
RSM Richter tells the Court that Lear Canada:
(a) is insolvent on a balance sheet basis after adjusting for
the likely recoverable value of the intercompany
receivable owing to it from Lear Corporation;
(b) is continuing to generate operating losses given the state
of the automotive sector;
(c) will not be able to continue to operate in the normal
course due to its integration with the business and
operations of the U.S. Debtors; and
(d) transacts with the same customers and many of the same
suppliers as the U.S. Debtors and, accordingly, its
operations do not appear viable in the long term absent a
comprehensive restructuring of the Lear Group.
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: RSM Richter Named Information Officer in CCAA Case
-------------------------------------------------------------
The Honorable Madam Justice Pepall appointed RSM Richter Inc. as
information officer for applicants Lear Canada, Lear Canada
Investments Ltd., and Lear Corporation Canada Ltd., effective
July 9, 2009.
As information officer, RSM Richter will:
(a) report to the Court and deliver a report once every three
months outlining the status of the U.S. Proceedings;
(b) provide any creditor, for greater certainty, J.P. Morgan
Chase Bank N.A., with any information in response to
reasonable requests.
The Court clarified that RSM Richter will not take possession of
the Applicants' property and will take no part in the management
or supervision of the management of the Business and will not be
deemed to have taken or maintained possession or control of the
Business or Property. The Court also prohibits RSM Richter to
employ any employee of the Applicants.
The Applicants will pay RSM Richter its reasonable fees and
disbursements on a monthly basis.
RSM Richter, RSM Richter's counsel, and the Applicants' counsel
are granted a charge on the Property, which charge will not
exceed an aggregate amount of $750,000 as security for their
professional fees and disbursements incurred.
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: Seaboard & SSI Wants Adequate Protection on Liens
------------------------------------------------------------
Prior to the Petition Date, Lear Corporation and Seaboard Marine,
Ltd., entered into a service contract pursuant to which Seaboard
provides carriage of manufacturing automobile and component
transportation parts. On the other hand, SSI Ocean Services,
Inc., provides consolidation and ocean transportation of Goods
for the Debtor on certain trade lanes.
Seaboard asserts that, as of the Petition Date, it is owed
$245,214 for current and past carriage services and there are
eight containers in transit. In addition, Seaboard possesses
Goods of the Debtor and, pursuant to the Contract, will likely be
called upon to provide additional carriage services for the
Debtor. SSI, for its part, asserts it is owed $79,045 by the
Debtor for current and past carriage services provided.
The Debtor wants Seaboard Marine to relinquish possession of the
Goods and use and consume the Goods prior to remitting payment.
Seaboard contends that if it relinquishes possession of the Goods
to the Debtor, it will lose its perfected security in those
Goods.
By this motion, Seaboard and SSI ask the Court to direct the
Debtors to provide them adequate protection with respect to their
lien on the Goods. Seaboard and SSI suggest that this be in the
form of a prepayment for carriage services, replacement lien or
an agreement by the Debtor to pay for the Goods before Seaboard
must relinquish possession.
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)
LEHMAN BROTHERS: Subordination of Rights Valid Under English Law
----------------------------------------------------------------
Perpetual Trustee Company Limited, acting in its capacity as
trustee for retail investors in Australia, New Zealand and Papua
New Guinea, yesterday obtained a judgment in the English High
Court to the effect that certain provisions which allow for the
subordination of the rights or beneficial entitlements of Lehman
Brothers Special Financing Inc. on its bankruptcy or default are
valid and effectual under English law.
Perpetual was represented by English lawyers from Sidley Austin
working together with lawyers from the Australian firm of Henry
Davis York. The action -- dubbed Perpetual Trustee Company
Limited v BNY Corporate Trustee Services Limited and Lehman
Brothers Special Financing Inc. (together with a similar case
called Belmont Park Investments Pty Limited and Others v BNY
Corporate Trustee Services Limited and Lehman Brothers Special
Financing Inc.) -- has been closely monitored by market
participants given its potentially far-reaching significance to
similar synthetic CDO and other derivative transactions in which
parties have deliberately selected English law to govern their
dealings.
The proceedings were brought by Perpetual as the holder of certain
credit-linked notes issued as part of the "Dante" Note Programme
sponsored by LBSF and its affiliates. The proceedings were
brought against BNY Corporate Trustee Services Limited. LBSF
obtained an order under which it was joined as party to the
proceedings.
The Court considered a variety of issues including the issue of
whether BNY should be prevented from applying "Noteholder
Priority" in relation to the distribution of the proceeds of the
Collateral over which it was directed to enforce security
following an acceleration of the Notes held by Perpetual. The
documents (which were governed by English law) provided for a
reversal of the priority of payments to allow Perpetual (as holder
of the Notes) to be paid ahead of LBSF (as Swap Counterparty) if
there was an Event of Default in relation to LBSF under the Swap
Agreement. An Event of Default under the Swap Agreement had
occurred as a result of the Chapter 11 Bankruptcy filing of LBSF
in the United States and other events.
While BNY adopted a neutral stance on the substantive issues, LBSF
maintained that certain provisions of the US Bankruptcy Code --
the so-called "ipso facto" rule -- and, in the alternative,
provisions of English law, operated to prevent the reversal of the
priority of payments.
The decision confirms that provisions in contracts governed by
English law that subordinate the rights or beneficial entitlements
of the swap counterparty on an insolvency or other default will
not generally be prohibited by English law. The efficacy of
provisions such as these is widely perceived to be an important
assumption in the assignment by credit rating agencies of credit
ratings to credit-linked notes and other instruments. The
validity of provisions such as these as a matter of US law has yet
to be determined by the US courts and is presently the subject of
litigation in the US.
Leave to appeal has been granted.
As to the question of whether the English Court will permit the
application of foreign insolvency laws (by virtue of an
application under the Cross Border Insolvency Regulations 2006 to
invalidate the subordination provisions, the English Court
adjourned the proceedings to permit an appropriate application for
recognition and assistance under the CBIR to be made by LBSF.
Sidley Austin is one of the world's largest full-service law
firms, with approximately 1,700 lawyers practising in 16 U.S. and
international cities, including Beijing, Brussels, Frankfurt,
Geneva, Hong Kong, London, Shanghai, Singapore, Sydney and Tokyo.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offered a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo were complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for Chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on
September 16 (Case No. 08-13600). Several other affiliates
followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on September 22 reached an
agreement to purchased Lehman Brothers Holdings, Inc.'s operations
in Europe and the Middle East less than 24 hours after it reached
a deal to buy Lehman's operations in the Asia Pacific for
US$225 million. Nomura paid only $2 dollars for Lehman's
investment banking and equities businesses in Europe, but agreed
to retain most of Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which has filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion (US$33 billion) in liabilities in
its petition. Akio Katsuragi, a former Morgan Stanley executive,
runs Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LIFE SCIENCES: To Respond to Class Actions on Lion Merger
---------------------------------------------------------
Life Sciences Research, Inc., declares it will respond
appropriately to class action lawsuits in connection with the
Company's entry into a definitive merger agreement on July 8,
2009, with Lion Holdings, Inc. and its subsidiary Lion Merger
Corp., entities controlled by Andrew Baker.
Pursuant to the proposed merger, Lion would acquire all of the
outstanding shares of the Company for $8.50 per share.
The Company reports the filing on July 13, 2009, of a First
Amended Complaint in the class action lawsuit, Berger v. Life
Sciences Research, et al. The First Amended Complaint, like the
original lawsuit, was filed in Superior Court of New Jersey,
Chancery Division, Somerset County (Civil Action No. SOM-C-12006-
09), and names as defendants Mr. Baker, all other members of the
Company's Board of Directors and the Company. The First Amended
Complaint alleges, among other things, that the directors breached
their fiduciary duties with respect to the Baker Merger; that
Baker controls LSR and its directors; that the merger price
constitutes inadequate consideration; and that certain terms of
the merger agreement unfairly benefit Mr. Baker at the expense of
the other stockholders, including the absence of appraisal rights,
accelerated vesting of restricted stock, restrictions on the
solicitation of negotiations with respect to third party
proposals, and termination fees. The First Amended Complaint
further alleges that the directors were motivated to accept
Baker's offer because of concerns that a public dispute with Baker
would draw unwanted attention from animal rights activists. The
First Amended Complaint seeks unspecified damages and other
relief.
The Company also reports the filing on July 17, 2009, of a second
purported class action lawsuit, Ramaiah v. Baker, et al. The
complaint was filed in Superior Court of New Jersey, Chancery
Division, Somerset County and names as defendants Mr. Baker, all
other members of the Company's Board, the Company and Lion. This
complaint also alleges, among other things, that the Board
breached its fiduciary duties in connection with the Baker Merger
by agreeing to sell the Company for an unfair price pursuant to an
unfair process and that the merger agreement contains preclusive
deal protection provisions by virtue of its "no shop" and
"standstill" clauses and termination fees. This complaint seeks
unspecified damages and other relief.
About Life Sciences Research
Headquartered in East Millstone, New Jersey, Life Sciences
Research Inc. (NYSE Arca: LSR) -- http://www.lsrinc.net/-- is a
global contract research organization providing product
development services to the pharmaceutical, agrochemical and
biotechnology industries. LSR operates research facilities in the
United States and the United Kingdom.
At March 31, 2009, the Company's balance sheet showed total assets
of $173.8 million and total liabilities of $185.0 million,
resulting in a stockholders' deficit of $11.2 million.
MAGNACHIP SEMICONDUCTOR: Committee Balks at Disclosure Statement
----------------------------------------------------------------
The Official Committee of Unsecured Creditors objected to
MagnaChip Semiconductor LLC's disclosure statement for its
proposed Chapter 11 plan, claiming that a better deal could come
along in the near future, according to Law360.
Headquartered in South Korea, MagnaChip Semiconductor LLC --
http://www.magnachip.com/-- is a leading, Asia-based designer and
manufacturer of analog and mixed-signal semiconductor products for
high volume consumer applications. The Company has a broad range
of analog and mixed-signal semiconductor technology and
intellectual property, supported by its 29-year operating history,
large portfolio of registered and pending patents and extensive
engineering and manufacturing process expertise. Citigroup
Venture Capital Equity Partners LP was part of the investor group
that acquired MagnaChip in 2004 from Hynix Semiconductor Inc.
MagnaChip Semiconductor S.A. and five other entities filed for
Chapter 11 on June 12, 2009, in the U.S. Bankruptcy Court for the
District of Delaware. The Chapter 11 cases are jointly
administered under Case No. 09-12008, MagnaChip Semiconductor
Finance Company. Judge Peter J. Walsh handles the case. Curtis
A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq.,
and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP,
represent the Debtors as counsel. Howard A. Cohen, Esq., at
Drinker Biddle & Reath serves as counsel for the official
committee of unsecured creditors. Omni Management Group LLC is
the Debtors' claims agent. In its petition, Magnachip
Semiconductor Finance Company listed assets below $50,000 and
debts of more than $1 billion.
In their formal schedules, MagnaChip Semiconductor S.A. disclosed
$951,917,782 in assets against $845,903,186 in debts while
MagnaChip Semiconductor B.V. disclosed assets of $762,465,739
against debts of $1,800,612,084.
METALDYNE CORP: HHI's $78-Mil. Is New Lead Bid for Powertrain
-------------------------------------------------------------
Metaldyne Corp. has informed the Bankruptcy Court that it has
signed a deal under which HHI Holdings Inc. will be the new lead
bidder for its powertrain business.
Metaldyne said HHI Holdings' bid is superior for lack of
contingencies. The HHI offer is $78 million cash, Bill Rochelle
at Bloomberg News said.
Hephaestus Holdings, Inc., a portfolio company of KPS Capital
Partners LP with other automotive holdings, has submitted a
binding proposal for all of Metaldyne's Sintered Products,
European Forgings and Vibration Controls Products operations
located in Europe, Asia, Brazil, Mexico and the U.S. In addition,
HHI, through an affiliate, has agreed to purchase the company's
Bluffton, Ind.; Litchfield, Mich., and, subject to certain
conditions, the Twinsburg, Ohio, plant. KPS Capital Partners will
provide HHI with a significant additional cash investment to
support letters of credit and working capital needs of the
Powertrain businesses post closing.
HHI, through its Jernberg Holdings Inc., Impact Forge Group Inc.
and Kylos Bearing International Inc. subsidiaries, is an
independent manufacturer of forged parts and wheel bearings for
the North American automotive industry
RHJ International was originally expected to become the stalking
horse bidder with its $100 million offer, which included $25
million in cash, a $50 million note, and a $20 million note owed
by a German subsidiary and debt assumption. The deal with RHJ,
however, allowed it to back out of the contract if the financial
investigation wasn't completed to its satisfaction by July 2.
As reported by the TCR on July 21, Metaldyne asked the Bankruptcy
Court to reschedule the bidding deadline from July 23, 2009 to
Aug. 3, 2009; and the auction date from July 24, 2009 to Aug. 5,
2009. Metaldyne had said the extension would allow it and the
proposed stalking horse bidder to:
i) properly structure certain foreign entity transactions
necessary to close a sale of the powertrain assets;
ii) address 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.
Metaldyne also said the extension 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.
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.
METALDYNE CORP: RHJ Terminates Purchase Agreement
-------------------------------------------------
RHJ International said its purchase agreement with Metaldyne
Corporation to buy certain powertrain and other Metaldyne
operating assets and the stock of certain foreign subsidiaries of
Metaldyne was not approved by the bankruptcy court and has
terminated. The sale of Metaldyne is being conducted under a
court-supervised sale process pursuant to Section 363 of the U.S.
Bankruptcy Code and RHJI may elect to participate in the sale
auction scheduled to be held on August 5, 2009.
RHJ International -- http://www.rhji.com/-- (Euronext: RHJI) is a
diversified holding company focused on creating long-term value
for its shareholders by acquiring and operating businesses in
attractive industries.
As reported by the Troubled Company Reporter on July 28, 2009,
Metaldyne said the U.S. Bankruptcy Court for the Southern District
of New York approved:
-- Hephaestus Holdings, Inc. as the stalking horse bidder for
most of its Powertrain operations; and
-- Revstone Industries LLC as the stalking horse bidder for
most of its Chassis operations.
The auctions will be held in early August.
Hephaestus Holdings, Inc., a portfolio company of KPS Capital
Partners LP with other automotive holdings, has submitted a
binding proposal for all of Metaldyne's Sintered Products,
European Forgings and Vibration Controls Products operations
located in Europe, Asia, Brazil, Mexico and the U.S. In addition,
HHI, through an affiliate, has agreed to purchase the company's
Bluffton, Ind.; Litchfield, Mich., and, subject to certain
conditions, the Twinsburg, Ohio, plant. KPS Capital Partners will
provide HHI with a significant additional cash investment to
support letters of credit and working capital needs of the
Powertrain businesses post closing.
HHI, through its Jernberg Holdings Inc., Impact Forge Group Inc.
and Kylos Bearing International Inc. subsidiaries, is an
independent manufacturer of forged parts and wheel bearings for
the North American automotive industry.
The final auction date for the Powertrain sale is August 5, 2009.
It will be held at the offices of Jones Day at 222 East 41st
Street, New York, N.Y. Additional bids for the company's
Powertrain operations are due by August 3, 2009.
Revstone, a private equity company, is bidding on the purchase of
Metaldyne's chassis operations in Edon, Ohio; Greensboro, N.C.;
Barcelona, Spain, and Iztapalapa, Mexico.
The final auction date for the Chassis sale is August 3, 2009. It
will also be held at the Jones Day offices at 222 East 41st
Street, New York, N.Y. Additional bids for the Chassis business
are due by July 31, 2009.
A stalking horse bid is a binding proposal on a bankrupt company's
assets from an interested buyer chosen by the bankrupt company.
Once the stalking horse is approved by the court other potential
buyers may submit competing bids for the bankrupt company's
assets.
"I am very pleased we have identified stalking horse bidders for
most of our Powertrain and Chassis operations," said Thomas A.
Amato, chairman, president and CEO of Metaldyne. "The industrial
logic between HHI and Metaldyne Powertrain as well as Revstone and
Metaldyne Chassis is sound. The Metaldyne operations being
purchased have strong product portfolios, advanced technologies
and perform well operationally. We believe they would be strong
additions to their businesses.
"It is our plan to sell Metaldyne's operations on a going concern
basis. We believe this is the best way to preserve as many jobs
as possible, best serve our customers and will allow certain of
our operations to emerge from bankruptcy as quickly as possible,"
Mr. Amato said.
At the onset of Metaldyne's bankruptcy process, the company said
private equity firm RHJ International had submitted a non-binding
letter of intent to purchase certain portions of its Powertrain
assets while The Carlyle Group, also a private equity company, had
submitted a non-binding letter of intent to purchase portions of
the Chassis operations. However, as part of the sale process
undertaken by Metaldyne's advisors, the bids submitted by HHI and
Revstone presented better alternatives than other bids.
"We are pleased to have so much interest in our operations from
such well-respected companies," Mr. Amato said.
Metaldyne is also seeking buyers for its Balance Shaft Module and
its Tubular Products businesses.
Metaldyne is a market leader in balance shaft modules. It has
good technology, a diverse customer base and growth potential. It
currently supplies components for the fuel-efficient I-4 engine.
Balance shaft modules are produced at Metaldyne's plants in
Fremont, Ind., and Pyeongtaek, Korea.
The Tubular Products operations are housed at Metaldyne's Hamburg,
Mich., plant, which produces fabricated exhaust manifolds and
other tube-formed products.
Metaldyne's Balance Shaft Module and Tubular businesses are being
marketed by the investment banking firm Donnelly Penman &
Partners. Metaldyne's Powertrain and Chassis operations are being
marketed by Lazard.
Metaldyne and its U.S. subsidiaries filed voluntary petitions in
the United States Bankruptcy Court for the Southern District of
New York under Chapter 11 of the U.S. Bankruptcy Code on May 27
primarily as a result of liquidity, excess leverage, and pension
and lease costs compounded by the unusually low production volumes
in the North American automotive industry. The filing did not
include the company's non-U.S. entities or operations. Metaldyne
has a $19.85 million debtor-in-possession (DIP) facility in place
with agent bank Deutsche Bank AG, New York, but funded by certain
of Metaldyne's OEM customers.
"Overall we remain on track both in financial performance and in
our divestiture process," Amato said. "I am confident Metaldyne's
better performing operations will emerge from bankruptcy quickly.
I am very proud of the hard work and commitment of our employees
to restructure the company and keep our costs down without
sacrificing safety, quality, and customer support."
About Metaldyne
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 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.
Metaldyne had revenues in 2008 of approximately $1.57 billion.
Metaldyne employs more than 4,400 employees at 33 facilities in 14
countries.
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.
METALS USA: Posts $13.8 Million Q2 2009 Net Income
--------------------------------------------------
Metals USA Holdings Corp. last week announced its operating
results for the quarter ended June 30, 2009. Sales revenues for
the second quarter were $267.8 million compared to $593.1 million
of sales revenues for the same period last year. Adjusted EBITDA,
a non-GAAP financial measure used by Metals USA and its creditors
to monitor the performance of the business, was a negative
$13.5 million for the second quarter compared to second quarter
2008 Adjusted EBITDA of $92.6 million. Second quarter 2009 net
income was $13.8 million compared to net income of $39.8 million
for the same period last year.
Lourenco Goncalves, the Company's Chairman, President and CEO
stated: "We are pleased with the results of our continuing
inventory reduction efforts. The cash generated by our actions
allowed us to repay a significant portion of our outstanding debt
during the first half of 2009." Mr. Goncalves added: "We believe
Metals USA is well positioned to benefit from an improving
environment we anticipate for the second half of the year."
The Company had $166.0 million drawn under its asset-based credit
facility at June 30, 2009, with excess availability of
$69.1 million. Total liquidity, defined as excess availability
plus cash, was $122.6 million at June 30, 2009. Net debt of
$522.3 million on June 30, 2009 was $255.2 million lower than net
debt of $777.5 million on December 31, 2008 due primarily to a
decrease in working capital and debt repurchases. Total debt of
$575.8 million at June 30, 2009 consisted of outstanding advances
under the $625 Million Asset Based Loan Facility in the amount of
$166.0 million, outstanding 11-1/8 % Senior Secured Notes in the
amount of $226.3 million, outstanding PIK Toggle Notes of
$177.5 million, and $6.0 million of other long term debt. Capital
expenditures were $1.4 million for the current quarter and
$2.3 million year-to-date. Net cash provided by operating
activities for the first six months of 2009 was $183.0 million.
The Company recognized depreciation and amortization expenses
during the quarter of $4.8 million. Interest expense for the
quarter was $17.2 million, which included $3.8 million of interest
on the Company's Senior Floating Rate Toggle Notes due 2012 that
was paid entirely in kind. Operating income (loss) was a loss of
$19.1 million for the second quarter of 2009, compared to
$83.4 million of operating income recorded in the same period last
year. Second quarter 2009 results included charges related to
lower-of-cost or market adjustments consisting of a pre-tax
inventory write-down of $20.7 million, partially offset by
$14.6 million of increased gross margin from previous LCM write-
downs on inventory sold during the period.
At June 30, 2009, the Company had $722.1 million in total assets
and $761.3 million in total liabilities, resulting in
$39.2 million of stockholders' deficit.
Metals USA posted a net loss of $20.6 million on net sales of
$330.2 million for the three months ended March 31, 2009, compared
to a net income of $9.6 million on net sales of $489.0 million for
the same period in 2008. Metals USA had $877.4 million in total
assets and $722.1 million in total liabilities as of March 31,
2009, resulting in $155.3 million in stockholders' equity.
About Metals USA
Metals USA Inc. -- http://www.metalsusa.com/-- provides products
and services in the heavy carbon steel, flat-rolled steel, non-
ferrous metals, and building products markets.
* * *
As reported by the Troubled Company Reporter on April 15, 2009,
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Houston-based Metals USA Holdings Corp. and on its
wholly owned subsidiary, Metals USA Inc., to 'CCC+' from 'B-'. At
the same time, S&P lowered its rating on the senior secured notes
and the senior unsecured pay-in-kind toggle notes to 'CCC-' from
'CCC'.
The recovery rating remains at '6' on these issues, indicating
negligible (0%-10%) recovery in the event of a payment default.
The outlook is negative. All ratings are removed from
CreditWatch, where they were placed with negative implications on
March 18, 2009, due to the sharp deterioration in steel market
conditions in North America over the past several months and S&P's
expectation that operating conditions will remain challenging in
the near-term.
MICHAEL VICK: Can Make Conditional Comeback to NFL
--------------------------------------------------
Michael Vick has been conditionally reinstated to the National
Football League. According to NFL, Mr. Vick can practice
immediately and play in the preseason's final two games if he can
find a team that will hire him.
Aaron Kuriloff at Bloomberg relates that NFL Commissioner Roger
Goodell will consider letting Mr. Vick play in regular-season
games by the middle of October, or Week Six. Bloomberg quoted
Mr. Goodell as saying, "This step-by-step approach is not meant to
be a further punishment and should not be viewed as such. It is
intended to maximize the prospect that you can successfully resume
your career and your life."
NFL Players Association Executive Director DeMaurice Smith said in
a statement, "We are pleased that he is on the right path to
return not only to the field, but as a contributing member of his
community. I and our community of players will continue to
support him as he looks to make the most of his second chance."
According to Bloomberg, former Indianapolis Colts coach Tony Dungy
has agreed to work with Mr. Vick as an adviser and mentor.
Mr. Goodell, Bloomberg relates, said that Mr. Vick is required to
obey the court's terms of his conditional release, including a
provision banning him from owning a dog. The report says that
Mr. Vick must follow a written plan submitted to Mr. Goodell that
details his proposed living arrangements, his finances, and his
efforts on behalf of the Humane Society of the United States.
Bloomberg reports that Mr. Goodell said he believes a strong
support network will give Mr. Vick the best chance of earning a
full reinstatement.
Mr. Vick is still serving three years' probation, Bloomberg says,
citing NFL.
About Michael Vick
Michael Dwayne Vick, born June 26, 1980, in Newport News,
Virginia, is a suspended National Football League quarterback
under contract with the Atlanta Falcons team. In 2007, a U.S.
federal district court convicted him and several co-defendants of
criminal conspiracy resulting from felonious dog fighting and
sentenced him to serve 23 months in prison. He is being held in
the United States Penitentiary at Leavenworth, Kansas.
Mr. Vick is also under indictment for two related Virginia state
felony charges for his role in the dogfighting ring and related
gambling activity. His state trial has been delayed until he is
released from federal prison. He faces a maximum 10-year state
prison term if convicted on both counts.
Mr. Vick filed a Chapter 11 petition on July 7, 2008 (Bankr.
E.D. Va. Case No. 08-50775). Dennis T. Lewandowski, Esq., and
Paul K. Campsen, Esq., at Kaufman & Canoles, P.C., represent the
Debtor in his restructuring efforts. Mr. Vick listed assets of
$10 million to $50 million.
NATIONAL GOLD: Files for Chapter 11 After Gold Coins Seized
-----------------------------------------------------------
National Gold Exchange, Inc., has filed for Chapter 11 bankruptcy
protection in the U.S. Bankruptcy Court for the Middle District of
Florida.
National Gold listed $10 million to $50 million in assets and
$50 million to $100 million in debts.
Janet Leiser at Tampa Bay Business Journal reports that National
Gold's bankruptcy filing followed Sovereign Bank's confiscation of
the Company's multimillion-dollar gold coin collection. The gold
coins, according to the report, served as collateral on
$35 million in loans.
Records say that a Hillsborough circuit court judge let Sovereign
Bank seize the coins amid allegations that National Gold owner,
Mark Yaffe, had fraudulently overstated the collection's value to
the bank. Business Journal relates that Sovereign Bank sent a
team unannounced to Tampa on July 10 to complete a physical
inventory of National Gold's coins, and later requested authority
to take the coins after finding evidence that the collection might
not be worth $33.6 million as Mr. Yaffe stated.
Court documents say that Sovereign Bank said that it discovered
discrepancies in National Gold's financial books after Lutz
attorney David E. Hammer wrote a June 30 letter to the bank
alleging that Mr. Yaffe sold $15 million of its inventory to
complete construction of his $25 million Avila mansion. Records
show that the almost 30,000-square-foot house is listed for sale
with Smith & Associates.
Elizabeth Sousa, Sovereign Bank's senior vice president and
commercial market manager for the precious metals and specialty
lending division, said in court documents that bank executives
were at first skeptical of the accusations since Mr. Hammer is in
a lawsuit with National Gold Exchange. According to court
documents, Ms. Sousa said that Sovereign Bank was worried about
National Gold's financial viability for these reasons:
-- its credit line was maxed out,
-- it issued checks that bounced, and
-- the Company lost $881,000 on trading in gold futures.
Tampa, Florida-based National Gold Exchange, Inc., operates a gold
and silver rare coin wholesaler.
NEXEN INC: $1 Bil. Note Issuance Won't Affect Moody's 'Ba1' Rating
------------------------------------------------------------------
Moody's Investors Service said that Nexen Inc.'s proposed
$1 billion notes issuance will not impact its Baa3 senior
unsecured rating, Ba1 subordinated rating or stable outlook as the
proceeds are bsing used to shore up liquidity ahead of the July
2012 maturity of its $3 billion revolver maturity.
The last rating action on Nexen was a downgrade of its senior
unsecured and subordinated ratings to Baa3 and Ba1, respectively
on March 24, 2009.
Nexen Inc. is a Calgary, Alberta based oil & gas exploration and
production company that at the end of 2008 had 926 million barrels
of oil equivalent net proved reserves (85% oil and 67% developed).
NOBLE INTERNATIONAL: ArcelorMittal Discloses 58% Equity Stake
-------------------------------------------------------------
ArcelorMittal S.A. reports that in a Schedule 13D/A filing with
the Securities and Exchange Commission on July 20, 2009, that it
is the beneficial owner of roughly 58% of Noble International,
Ltd.'s common stock. The calculation of ArcelorMittal's
beneficial ownership includes shares issuable upon conversion of a
convertible subordinated loan made by ArcelorMittal to the Company
in the principal amount of $50 million, based upon the conversion
rate of $15.75 per share.
As reported by the Troubled Company Reporter, Noble on July 17,
2009, closed the sale to ArcelorMittal Netherlands B.V., a
subsidiary of ArcelorMittal S.A., of the Company's European
business, consisting of the shares of Noble European Holdings
B.V., together with the direct and indirect holdings and assets of
Noble BV. As consideration for the Transferred Assets,
ArcelorMittal (a) accepted the Transferred Assets subject to
roughly EUR78 million in borrowed money, (b) delivered $2.1
million to the Company by wire transfer and (c) permitted the
Company to retain $2.0 million received by Noble BV prior to
closing for the transfer of its 49% equity interest in Sumisho
Noble (Thailand) Co., Ltd.
At the closing, each of the Company and ArcelorMittal executed and
delivered a mutual general release of substantially all of the
claims that such party and its affiliates had against the other
party. The Company was not released with respect to the
subordinated debt owed by the Company to ArcelorMittal and its
affiliate in the original principal amount of $65 million.
About ArcelorMittal
ArcelorMittal -- http://www.arcelormittal.com/-- is a global
supplier of steel, with operations in more than 60 countries. In
2008, ArcelorMittal had revenues of $124.9 billion and crude steel
production of 103.3 million tonnes, representing approximately 10%
of world steel output. ArcelorMittal is listed on the stock
exchanges of New York (MT), Amsterdam (MT), Paris (MT), Brussels
(MT), Luxembourg (MT) and on the Spanish stock exchanges of
Barcelona, Bilbao, Madrid and Valencia (MTS).
About Noble International
Headquartered in Warren, Michigan, Noble International, Ltd. --
http://www.nobleintl.com/home.html/-- provides flat, tubular,
shaped and enclosed formed structures to automotive original
equipment manufacturers and their suppliers, for use in automobile
applications, including doors, fenders, body side panels, pillars,
bumpers, door beams, load floors, windshield headers, door tracks,
door frames, and glass channels.
Noble International and its affiliates filed for Chapter 11
protection on April 15, 2009 (Bankr. E.D. Mich. Case No. 09-
51720). The Debtors proposed Foley & Lardner LLP as their general
bankruptcy counsel. Conway Mackenzie, Inc., has been tapped as
the Debtors' financial advisors. The official committee of
unsecured creditors is represented by Jaffe Raitt Heuer & Weiss,
P.C. The Debtors disclosed total assets of $190,763,000 and total
debts of $38,691,000, as of January 10, 2009.
NORTEL NETWORKS: Gets Canadian and U.S. Court OK on Ericsson Deal
-----------------------------------------------------------------
Nortel Networks Corporation said that at a joint hearing July 28,
the Company, its principal operating subsidiary Nortel Networks
Limited, and certain of its other subsidiaries including Nortel
Networks Inc., obtained orders from the Ontario Superior Court of
Justice and the United States Bankruptcy Court for the District of
Delaware approving the sale agreement with Telefonaktiebolaget LM
Ericsson for substantially all of Nortel's CDMA business and LTE
Access assets for a purchase price of US$1.13 billion.
As reported by the Troubled Company Reporter, under the asset sale
agreement, Ericsson will purchase substantially all of Nortel's
CDMA business which is the second largest supplier of CDMA
infrastructure in the world, and substantially all of Nortel's LTE
Access assets giving it a strong technology position in next
generation wireless networks. Also as part of this agreement, a
minimum of 2,500 Nortel employees supporting the CDMA and LTE
Access business will receive offers of employment from Ericsson.
Completion of the sale is subject to regulatory and other
customary closing conditions, and the purchase price is subject to
certain post-closing adjustments. Nortel will work diligently
with Ericsson to close the sale later this year.
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: CALA Chapter 11 Database
-----------------------------------------
Debtor: Nortel Networks (CALA) Inc.
1500 Concord Terrace
Sunrise, Florida 33323
Bankruptcy Case No.: 09-12515
Debtor-affiliates that filed separate Chapter 11 petitions on
January 14, 2009:
Entity Case No.
------ --------
Nortel Networks Inc. 09-10138
Nortel Networks Capital Corporation 09-10139
Alteon WebSystems, Inc. 09-10140
Alteon Websystems International, Inc. 09-10141
Xros, Inc. 09-10142
Sonoma Systems 09-10143
Qtera Corporation 09-10144
CoreTek, Inc. 09-10145
Nortel Networks Applications Management Solutions 09-10146
Nortel Networks Optical Components Inc. 09-10147
Nortel Networks HPOCS Inc. 09-10148
Architel Systems (U.S.) Corporation 09-10149
Nortel Networks International Inc. 09-10150
Northern Telecom International Inc. 09-10151
Nortel Networks Cable Solutions Inc. 09-10152
Debtor-affiliates that filed Chapter 15 petitions on Jan. 14,
2009, and June 2009:
Entity Case No.
------ --------
Nortel Networks Corporation 09-10164
Nortel Networks Limited 09-10166
Nortel Networks Technology Corporation 09-10167
Nortel Networks International Corporation 09-10169
Nortel Networks Global Corporation 09-10168
Nortel Networks UK Limited 09-11972
Chapter 11
Petition Date: July 14, 2009
Bankruptcy Court: U.S. Bankruptcy Court
District of Delaware
Bankruptcy Judge: Honorable Kevin Gross
Debtors' Counsel: Andrew R. Remming, Esq.
aremming@mnat.com
Ann C. Cordo, Esq.
acordo@mnat.com
Derek C. Abbott, Esq.
dabbot@mnat.com
Morris, Nichols, Arhst & Tunnell
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347
Tel No. 302-6589200
Fax No. 302-6583989
Cleary Gottlieb Steen & Hamilton LLP
Estimated Assets: $100 million to $500 million
Estimated Debts: $500 million to $1 billion
A list of Nortel Networks CALA's 20 largest unsecured creditors
is available for free at:
http://bankrupt.com/misc/NNCALA_20unsecuredcred.pdf
Nortel Networks Inc. and its affiliated debtors sought and
obtained a Court order approving the joint administration of
their Chapter 11 cases and the recently filed bankruptcy case of
Nortel Networks (CALA) Inc. under Case No. 09-10138.
Nortel Networks (CALA), an affiliate of NNI, filed a voluntary
case under Chapter 11 on July 14, 2009. With headquarters in
Sunrise, Florida, the company is one of the Nortel units that
operate in the Caribbean and Latin American region.
Nortel Networks (CALA) has minority ownership interest in Nortel
Networks de Colombia S.A., and has two direct subsidiaries --
Nortel Networks de Guatemala Ltda. and Nortel Trinidad and Tobago
Limited. The company has about 205 employees, 187 of whom work
at its headquarters in Florida.
In connection with the proposed administration of their cases,
the Debtors sought and obtained a court ruling directing that
certain orders previously issued in their cases also govern the
bankruptcy case of Nortel Networks (CALA), including orders on
the payment of employee wages and benefits, continued use of the
cash management system, and payment to foreign suppliers, among
others.
Nortel Networks (CALA) was also granted bankruptcy protection and
was authorized by the Court to file until September 30, 2009, its
financial reports on companies where it holds a controlling or
substantial interest.
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 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: Presents Settlement With Moline Dispatch
---------------------------------------------------------
Nortel Networks Inc. and its affiliated debtors sought and
obtained the Court' permission to enter into a settlement with
Moline Dispatch Publishing Co LLC.
The Settlement provides for the termination of the parties'
Purchase and License Agreement and a mutual release of claims
under the Agreement. Under the deal, NNI agree to release Moline
from any remaining liability, including the payment of about
$647,000 for services and products it provided to Moline in
exchange for a release of claim that Moline may assert under the
Purchase Agreement.
The parties signed the Purchase and License Agreement in
connection with Moline's acquisition of a Wimax Network from NNI.
Moline wanted to offer voice and higher data capabilities to its
subscribers and selected NNI to provide the network for that
purpose.
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 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: Seeks to Assume Contracts with Chrysler
--------------------------------------------------------
Nortel Networks Inc. and its affiliated debtors seek approval of
the U.S. Bankruptcy Court for the District of Delaware to assume
two of their contracts with Chrysler LLC.
Chrysler, a Michigan-based automaker which is currently in
bankruptcy protection, entered into the Contracts to avail of
NNI's maintenance services for its network. The Contracts, which
are in the form of purchase orders, are among the agreements that
had been designated for assumption and assignment as part of the
sale of Chrysler's assets to Fiat S.p.A. Chrysler has proposed
to pay a sum of $1,705,930 to NNI as part of the assumption of
the Contracts.
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 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: Wants to Access L/Cs in Excess of $30 Million
--------------------------------------------------------------
Nortel Networks Inc. and its affiliated debtors ask the U.S.
Bankruptcy Court for the District of Delaware to confirmat that a
prior order it issued permits the issuance of letters of credit
and performance bonds with a face amount of up to $30 million, and
the posting of collateral to secure those letters of credit and
bonds even if the collateral exceeds $30 million.
Attorney for the Debtors, Ann Cordo, Esq., at Morris Nichols
Arsht & Tunnell LLP, in Wilmington, Delaware, says that the
Debtors have identified two parties that could potentially
provide them with more than $30 million in face amount of letters
of credit or performance bonds.
The Debtors relate that while they acknowledge that the Final
Order caps the aggregate face amount of letters of credit or
performance bonds that may be issued at $30 million, they believe
that it is in their best interest to enter into both agreements.
"The Debtors believe it is in their interest to enter into both
facilities in order to provide them flexibility with regard to
the issuance of any particular letter of credit or performance
bond from time to time, because certain contractual obligations
can only be supported by a performance bond and not a letter of
credit or vice versa," Ms. Cordo points out. She adds that it
would also provide the Debtors flexibility in case one of the
providers does not elect to continue providing the support
available under those uncommitted facilities.
A hearing to consider approval of the Debtors' request is
scheduled for August 4, 2009. Parties-in-interest have until
July 28, 2009, to file their objections.
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 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: Wants to Allow Chubb to Pay Litigation Costs
-------------------------------------------------------------
Nortel Networks Inc. and its affiliated debtors ask the U.S.
Bankruptcy Court for the District of Delaware to authorize Chubb
Insurance Company of Canada to pay litigation costs that are
covered under the Debtors' insurance policy.
Chubb provides insurance coverage to all units of Canada-based
Nortel Networks Corporation, including NNI and their directors
and officers, through the Nortel Networks executive protection
policy. The policy, which covers the period from August 31, 1998
to November 1, 2001, provides coverage for litigation defense
costs and fees stemming from civil and criminal investigations,
among other things.
Chubb is reportedly willing to pay the costs and fees of the
Nortel directors and officers who are facing lawsuits and are
under investigations by the securities commissions in both the
United States and Canada. The insurance company, however,
requested that a court approval first be obtained before it makes
the appropriate payments.
The hearing to consider approval of NNI's request is scheduled
for July 28, 2009. Creditors and other concerned parties have
until July 21 to file their objections.
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 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)
PALM INC: FY2009 Net Loss Widens to $732 Million From Year Ago
--------------------------------------------------------------
Palm Inc. filed with the Securities and Exchange Commission its
Form 10-K for the fiscal year ended May 29, 2009.
Palm reported revenues of $735,872,000 for the year ended May 31,
2009, compared to $1,318,691,000 for the same period in 2008 and
$1,560,507,000 in 2007. Palm's net loss widened to $732,188,000
in fiscal year 2009 from a net loss of $105,419,000 in FY2008 and
a net income of $56,383,000 in FY2007.
During fiscal year 2009, revenues from Sprint represented roughly
43% of Palm's total revenues.
As at May 31, 2009, Palm had $643,236,000 in total assets compared
to $1,180,262,000 from a year ago. Palm swung to a $413,865,000
stockholders' deficit as at May 31, 2009, from $111,020,000 in
stockholders' equity a year ago.
As at May 31, 2009, Palm had total current liabilities of
$342,442,010; long-term debt of $390,000,000; non-current deferred
revenues of $13,077,000; non-current tax liabilities of
$5,783,000; Series B redeemable convertible preferred stock of
$265,412,000; and Series C redeemable convertible preferred stock
of $40,387,000.
Palm believes it has sufficient cash, cash equivalents and short-
term investments to meet anticipated operating cash requirements
and debt service or repayment obligations for at least the next 12
months, despite reporting net losses since the beginning of fiscal
year 2008.
Palm said its ability to maintain required liquidity levels will
depend significantly on factors such as:
-- the sustained commercial success of Palm Pre;
-- the timely launch and commercial success of future
products based on its Palm webOS;
-- the level of continuing sales of its Treo and Centro
smartphones; and
-- its ability to manage operating expenses and capital
spending and successfully manage growth.
A full-text copy of the Company's FY2009 Annual Report is
available at no charge at http://ResearchArchives.com/t/s?4024
On July 1, 2009, Palm said Jon Rubinstein -- following his
appointment as Company President and Chief Executive Officer
effective June 12, 2009 -- reorganized the Company's marketing
organization to bring more focus to both product marketing and
corporate branding, creating two new executive marketing roles
that will report directly to him. Palm said Kathleen C. Mitic
accepted the product marketing role and on June 29, 2009, joined
Palm as its Senior Vice President, Product Marketing. In
connection with this reorganization, the employment of Brodie C.
Keast, the Company's current Senior Vice President, Marketing,
terminated on or about July 15, 2009, following an appropriate
transition period.
About Palm Inc.
Headquartered in Sunnyvale, California, Palm Inc. (Nasdaq:PALM)
-- http://www.palm.com/-- provides mobile computing solutions
worldwide. The company offers Palm Treo smartphones, Palm
LifeDrive mobile managers, and Palm handheld computers, as well as
software, services, and accessories.
PALM INC: Registers 8.5MM Shares Under Employee Plans
-----------------------------------------------------
Palm Inc. filed with the Securities and Exchange Commission its
Registration Statement on Form S-8 relating to an additional
6,984,343 shares of Palm's common stock, par value $0.001 per
share, issuable under its Amended and Restated 1999 Stock Plan,
and an additional 1,479,582 shares of Common Stock issuable under
its Amended and Restated 1999 Employee Stock Purchase Plan.
A full-text copy of the Registration Statement is available at no
charge at http://ResearchArchives.com/t/s?4025
Headquartered in Sunnyvale, California, Palm Inc. (Nasdaq:PALM)
-- http://www.palm.com/-- provides mobile computing solutions
worldwide. The company offers Palm Treo smartphones, Palm
LifeDrive mobile managers, and Palm handheld computers, as well as
software, services, and accessories.
PALM INC: Shares Redacted Copy of Microsoft License Agreement
-------------------------------------------------------------
Palm Inc. filed with the Securities and Exchange Commission a
redacted copy of its Microsoft OEM Embedded Operating Systems
License Agreement. Palm also filed copies of subsequent
amendments to the License Agreement.
The redacted copy of the agreement is available at no charge at
http://ResearchArchives.com/t/s?4023
About Palm Inc.
Headquartered in Sunnyvale, California, Palm Inc. (Nasdaq:PALM)
-- http://www.palm.com/-- provides mobile computing solutions
worldwide. The company offers Palm Treo smartphones, Palm
LifeDrive mobile managers, and Palm handheld computers, as well as
software, services, and accessories.
PARMALAT SPA: BofA to Pay US$100MM to Settle 2004 Lawsuit
---------------------------------------------------------
Bank of America has reached a settlement with Parmalat SpA and
other Parmalat entities of litigation in the U.S. and Italy
stemming from the dairy company's 2003 bankruptcy.
The settlement resolves the 2004 lawsuit Parmalat filed in the
U.S. seeking US$10 billion, as well as Parmalat's multiple claims
and potential claims against Bank of America and its employees in
various proceedings in Italy.
The global settlement is valued at a total of US$100 million with
a cash and a non-cash component. Further details of the agreement
will become available only after it has been filed in the U.S.
District Court for the Southern District of New York, where the
case is being heard.
While Bank of America does not comment on client relationships,
the agreement removes barriers to future possible normalized
business between the two companies.
"The legal record to date -- including the recent unanimous ruling
in our favor from the three judge panel in Milan -- makes it clear
that no one at Bank of America knew or could have known of the
true financial condition of Parmalat. We have defended ourselves
vigorously in these cases and are satisfied with this outcome,"
Bank of America said in a statement.
Bank of America -- http://www.bankofamerica.com/-- is one of the
world's largest financial institutions, serving individual
consumers, small- and middle-market businesses and large
corporations with a full range of banking, investing, asset
management and other financial and risk management products and
services. The company serves roughly 53 million consumer and
small business relationships with more than 6,100 retail banking
offices, nearly 18,500 ATMs and award-winning online banking with
29 million active users. The company serves clients in more than
150 countries. Bank of America Corporation stock is a component
of the Dow Jones Industrial Average and is listed on the New York
Stock Exchange.
About Parmalat S.p.A.
Headquartered in Milan, Italy, Parmalat S.p.A.
-- http://www.parmalat.net/-- sells nameplate milk products
that can be stored at room temperature for months. It also has
about 40 brand product lines, which include yogurt, cheese,
butter, cakes and cookies, breads, pizza, snack foods and
vegetable sauces, soups and juices.
The company's U.S. operations filed for Chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors. When the U.S. Debtors filed
for bankruptcy protection, they reported more than
US$200 million in assets and debts. The U.S. Debtors emerged from
bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases. The Parma Court has declared the units
insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the Cayman
Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman)
Ltd. serve as Joint Provisional Liquidators in the cases. On
Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case
No. 04-10362, in the United States Bankruptcy Court for the
Southern District of New York. In May 2006, the Cayman Island
Court appointed Messrs. MacRae and Cleaver as Joint Official
Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham
& Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon,
Herlands Randolph, represent the Finance Companies in the Sec. 304
case.
The Honorable Robert D. Drain presides over the Parmalat Debtors'
U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat
permanent injunction.
PATRICK INDUSTRIES: Board Taps Crowe Horwath as Accountants
-----------------------------------------------------------
Patrick Industries Inc. said in a regulatory filing with the
Securities and Exchange Commission that on June 22, 2009, the
Audit Committee of the Company's Board of Directors selected Crowe
Horwath LLP as its independent registered public accounting firm
for the fiscal year ending December 31, 2009.
Also on June 22, the Audit Committee informed Ernst & Young LLP
that it will be dismissed as the Company's independent registered
public accounting firm.
The decision to change independent registered accounting firms was
made by the Company's Audit Committee following the solicitation
of proposals from three other registered public accounting firms.
The decision of the Audit Committee was ratified by the Board of
Directors.
The decision was made following a review of the proposals
submitted, including the price and services to be provided. The
Audit Committee also gave significant consideration to changes in
the condition of the overall economic environment, the industries
in which the Company operates, and in the markets it serves.
During the fiscal years ended December 31, 2008, and 2007 and the
subsequent interim period through June 22, 2009, the Company had
(i) no disagreements with E&Y on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, any of which that, if not resolved to
E&Y's satisfaction, would have caused it to make reference to the
subject matter of any such disagreement in connection with its
reports for such years and interim period and (ii) no reportable
events within the meaning of Item 304(a)(1)(v) of Regulation S-K
during the two most recent fiscal years or the subsequent interim
period.
E&Y's reports on the Company's consolidated financial statements
for the fiscal years ended December 31, 2008 and 2007 do not
contain any adverse opinion or disclaimer of opinion, nor are they
qualified or modified as to uncertainty, audit scope, or
accounting principles.
During the Company's two most recent fiscal years ended December
31, 2008 and 2007, and the subsequent interim period through the
date of the Company's appointment of Crowe Horwath on June 22,
2009, neither the Company nor anyone on its behalf consulted with
Crowe Horwath regarding any of the matters or events set forth in
Item 304(a)(2)(i) or (ii) of Regulation S-K.
As reported by the Troubled Company Reporter, Patrick on July 22,
2009, said it signed a definitive agreement to sell certain assets
of its aluminum extrusion operation located in Mishawaka, Indiana
to Patrick Aluminum, Inc., a member of the UMC family of
companies. The transaction is expected to be completed by the end
of July 2009. Net proceeds from the sale are expected to be
approximately $7.4 million and are subject to final transaction
costs and certain closing adjustments.
The aluminum extrusion operation produces and paints semi-
fabricated and fabricated aluminum extrusions for structural and
non-structural applications and comprised Patrick's Engineered
Solutions business segment. The business segment was classified
as a discontinued operation in the fourth quarter of 2008.
At March 1, 2009, Patrick was in violation of the Consolidated
EBITDA financial covenant under the terms of its credit agreement.
On April 14, 2009, the Company entered into a Third Amendment to
the Company's Credit Agreement dated May 18, 2007. The Third
Amendment amended and added certain definitions, terms and
reporting requirements and included these provisions:
(a) The lenders waived any actual or potential Event of
Default resulting from the Company's failure to comply
with the one-month and two-month Consolidated EBITDA
covenants for the fiscal months ended March 1, 2009, and
March 29, 2009.
(b) The financial covenants were modified to establish new
one-month and two-month minimum Consolidated EBITDA
requirements that will be effective beginning with the
fiscal months ended June 28, 2009, and July 26, 2009,
respectively. Until that date, there is no applicable
minimum Consolidated EBITDA requirement.
(c) The definition of Consolidated EBITDA was amended to
exclude the effects of losses and gains due to
discontinued operations and restructuring charges,
subject to approval of the administrative agent.
(d) The revolving commitments were reduced by $5.0 million to
a maximum of $30.0 million.
(e) The monthly borrowing limits under the revolving
commitments were reset in conjunction with projected
monthly cash flows.
(f) The Company will provide an appraisal by a lender
approved firm of each parcel of real estate owned by the
Company and its subsidiaries within 60 days of the
effectiveness of the Third Amendment.
(g) The receipt of net cash proceeds related to any asset
disposition, other than proceeds attributable to
inventory and receivables, will be used to pay down
principal on the term loan.
Effective with the Third Amendment, the Company's credit facility
consists of a term loan and a revolving line of credit.
Borrowings under the revolving commitments are subject to a
borrowing base, up to a borrowing limit. The maximum borrowing
limit amount was reduced from $33.0 million (as defined in the
second amendment to the Credit Agreement) to $29.0 million. The
principal amount outstanding under the term loan at March 29,
2009, remained unchanged under the amended terms. The interest
rates for borrowings under the revolving line of credit and the
term loan, and the expiration date of the Credit Agreement also
remained unchanged. The Company's ability to access the
borrowings is subject to compliance with the terms and conditions
of the credit facility including the financial covenants.
Effective with the December 2008 amendment to the Credit
Agreement, the Company has the option to pay a portion of the
interest in kind on its term loan. At March 29, 2009, the Company
elected the PIK Interest option and increased the principal amount
outstanding under the term loan by roughly $300,000.
About Patrick Industries
Patrick Industries, Inc. -- http://www.patrickind.com/-- is a
major manufacturer of component products and distributor of
building products serving the manufactured housing, recreational
vehicle, kitchen cabinet, home and office furniture, fixture and
commercial furnishings, marine, and other industrial markets and
operates coast-to-coast through locations in 13 states. Patrick's
major manufactured products include decorative vinyl and paper
panels, wrapped moldings, cabinet doors and components, slotwall
and slotwall components, and countertops. The Company also
distributes drywall and drywall finishing products, interior
passage doors, flooring and roofing products, vinyl and cement
siding, ceramic tile, and other miscellaneous products.
PHILADELPHIA NEWSPAPERS: August 21 Claims Bar Date Set
------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
has established August 21, 2009, as the deadline for the filing of
proofs of prepetition secured and unsecured claims or
administrative expense claims pursuant to Sec. 503(b)(9) of the
Bankruptcy Code.
Governmental units have until December 10, 2009, to file their
proofs of claim.
Proofs of claim must be submitted so as to be received on or
before the applicable bar date to:
a) if by mail:
The Garden City Group, Inc.
Attn: Philadelphia Newspapers, LLC (PMH)
P.O. Box 9000 #6528
Merrick, NY 11566-9000
b) if by hand or overnight delivery service:
The Garden City Group, Inc.
Attn: Philadelphia Newspapers, LLC (PMH)
105 Maxess Road, Melville, NY 11747
Philadelphia Newspapers, LLC -- http://www.philly.com/-- owns and
operate numerous print and online publications in the Philadelphia
market, including the Philadelphia Inquirer, the Philadelphia
Daily News, several community newspapers, the region's number one
local Web site, philly.com, and a number of related online
products. The Company's flagship publications are the Inquirer,
the third oldest newspaper in the country and the winner of
numerous Pulitzer Prizes and other journalistic recognitions, and
the Daily News.
Philadelphia Newspapers and its debtor-affiliates filed for
Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D.
Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors'
bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth
Paxson LLP is the local counsel. The Debtors' financial advisor
is Jefferies & Company Inc. The Debtors listed assets and debts
of $100 million to $500 million.
PINNACLE ENTERTAINMENT: Moody's Puts B2 Rating on $375 Mil. Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Pinnacle
Entertainment, Inc.'s new $375 million senior unsecured notes due
2017. The company's B2 Corporate Family Rating, B2 Probability of
Default Rating, and Ba2 senior secured bank loan ratings were
affirmed. Pinnacle's senior subordinated notes were lowered to
Caa1 from B3. The rating outlook is stable.
Proceeds from the new note offering will be used to refinance all
of the company's outstanding $134 million 8.75% senior
subordinated notes due 2013 and repay $200 million in revolving
credit borrowings.
The downgrade of Pinnacle's senior subordinated notes reflects the
increase in the amount of debt which has a priority of claim
senior to the subordinated debt as a result of the new senior
unsecured note issue. The downgrade also anticipates that the new
senior unsecured note transaction will close.
Pinnacle's B2 Corporate Family Rating considers that its leverage
is high -- debt/EBITDA is currently about 5.7 times -- and
expected to increase during the next 18 months. The ratings also
recognize the company's significant concentration in Louisiana,
competitive challenges in New Orleans and Southern Indiana, and
the December 2010 expiration of its revolving credit facility.
Favorable rating consideration is given to Pinnacle's positive
consolidated EBITDA trend, leading market share position in Lake
Charles, Louisiana, and Moody's expectation that the company's St.
Louis, Missouri casino developments will contribute favorably to
Pinnacle's long-term diversification effort.
The stable outlook incorporates Moody's expectation that
Pinnacle's River City casino development in St. Louis, Missouri
will contribute positively to the company's overall EBITDA
performance and debt reduction efforts once it opens.
These ratings were affirmed and LGD point estimates adjusted:
* Corporate Family Rating at B2
* Probability of Default Rating at B2
* $531 million senior secured revolver expiring in 2010 at Ba2
(LGD 2, 13%) from (LGD 2, 17%)
This new rating was assigned:
* $375 million senior unsecured notes due 2017 at B2 (LGD 3, 46%)
These ratings were lowered and LGD point estimates adjusted:
* $277 million 8.25% senior subordinated notes to Caa1 (LGD 5,
82%) from B3 (LGD 5, 76%)
* $380 million 7.5% senior subordinated notes to Caa1 (LGD 5, 82%)
from B3 (LGD 5, 76%)
* $134 million 8.75% senior subordinated notes to Caa1 (LGD 5,
82%) from B3 (LGD 5, 76%)
Moody's will withdraw the rating on the 8.75% senior subordinated
notes once the transaction closes and these notes are repaid.
Moody's last rating action for Pinnacle was on March 31, 2008 when
the company's rating outlook was revised to stable from positive
and its ratings were affirmed.
Pinnacle owns and operates casinos in Nevada, Louisiana, Indiana,
Missouri, and Argentina. Company generates approximately
$1 billion of annual net revenues.
PINNACLE ENTERTAINMENT: S&P Assigns 'BB' Rating on $375 Mil. Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its issue-level and
recovery ratings to Las Vegas-based Pinnacle Entertainment Inc.'s
proposed $375 million senior unsecured notes due 2017. The notes
were rated 'BB' (two notches higher than the 'B+' corporate credit
rating on the company) with a recovery rating of '1', indicating
S&P's expectation of very high (90% to 100%) recovery for lenders
in the event of a payment default. Proceeds from the proposed
notes will be used to tender for all outstanding 8.75% senior
subordinated notes and to repay approximately $200 million in
revolver borrowings. (These ratings are based upon preliminary
terms and conditions).
Following completion of the proposed transactions, S&P expects to
revise S&P's recovery rating on Pinnacle's remaining subordinated
debt to '5', indicating S&P's expectation of modest (10% to 30%)
recovery for lenders in the event of a payment default, from '3'.
S&P would also lower S&P's issue-level rating on this debt to 'B'
(one notch lower than the 'B+' corporate credit rating) from 'B+',
in accordance with S&P's notching criteria for a '5' recovery
rating. As a result of this, S&P is currently placing the 'B+'
issue-level rating on the 8.25% and 7.50% senior subordinated debt
issues on CreditWatch with negative implications.
Also, S&P affirmed its 'B+' corporate credit rating on Pinnacle.
The rating outlook is stable.
S&P also affirmed its ratings on Pinnacle's senior secured
revolver credit facility, which was reduced to $531 million from
$650 million as part a recently executed amendment. The issue-
level rating remains at 'BB' (two notches higher than the 'B+'
corporate credit rating), and the recovery rating remains at '1',
indicating S&P's expectation of very high (90% to 100%) recovery
for lenders in the event of a payment default.
"The rating on Pinnacle reflects its aggressive growth strategy
and high debt leverage," said Standard & Poor's credit analyst Ben
Bubeck. "The company's geographically diverse portfolio, its
experienced management team with a solid operating track record,
and strong operating results at the newer properties somewhat
temper these factors. In addition, a recently executed amendment
to the senior secured revolving credit facility has alleviated
S&P's concerns around the company's ability to remain in
compliance with its consolidated leverage covenant, although the
company continues to face a December 2010 expiration date on this
facility."
The 'B+' corporate credit rating incorporates the expectation that
consolidated EBITDA will grow in the mid-teens percentage area in
2009, from about $160 million in 2008, driven predominantly by the
ramp up of Lumiere Place, as well as continued strong performance
at L'Auberge du Lac. S&P also expects Pinnacle to benefit from a
business model focusing on regional gaming markets, which S&P
expects to perform more favorably over the next several quarters
than destination-oriented markets, such as the Las Vegas Strip.
In addition, S&P expects that cost-containment efforts will allow
management to keep the EBITDA margin relatively stable.
Consolidated EBITDA for the 12 months ended June 30, 2009, was
about $188 million -- a significant improvement from performance
in 2008, given a strong first half of 2009. This was largely a
result of the ramp-up of Lumiere Place, which generated
$20.5 million of EBITDA in the six months ended June 30, 2009,
compared to modestly positive EBITDA in the prior-year period. In
addition, EBITDA at L'Auberge du Lac grew 9% in the six months
ended June 30, 2009, largely due to an expansion at the property
completed in January 2008. As of June 30, 2009, EBITDA coverage
of interest expense was in the low-2x area, and operating lease-
adjusted total debt to EBITDA was in the mid-5x area. These
measures are in line with the current rating, but will likely
weaken over the next several quarters as debt levels increase to
fund spending related to development projects.
PUREDEPTH INC: Realigns R&D Operations in Auckland, New Zealand
---------------------------------------------------------------
PureDepth Inc. reports that on July 23, 2009, it implemented a
restructuring plan to better align resources with its strategic
plans. The restructuring will result in a realignment and
reduction affecting personnel in its Auckland, New Zealand
offices.
PureDepth maintains three facilities, its U.S. corporate
headquarters in Redwood City, California, its research and
development center in Auckland Zealand and its country office in
Tokyo, Japan. The facility lease in New Zealand expires on
October 31, 2011. It has a provision for a second term which, if
exercised, will commence November 1, 2011, and expire October 31,
2014.
For the three months ended April 30, 2009, PureDepth reported net
losses of $1.7 million which is consistent when compared to the
$1.5 million reported in the three months ended April 30, 2008.
PureDepth's net losses are primarily derived from total operating
expenses and will continue to be so until its licensing revenues
become significant. PureDepth's operations have not generated net
income to date and are not expected to do so in the year ending
2010. In the three months ended April 30, 2009, the company
incurred non-recurring costs and expenses associated with measures
taken to reduce ongoing cost structure. PureDepth expects total
costs and expenses to be lower in future quarters as a result.
At April 30, 2009, PureDepth had $9,412,434 in total assets, and
$16,845,453 in total liabilities, resulting in $7,433,019 in
stockholders' deficit.
PureDepth, Inc., along with its wholly owned subsidiaries,
PureDepth Limited, PureDepth Incorporated Limited, PureDepth Japan
KK, and predecessor parent entity, Deep Video Imaging Limited,
develops, markets, licenses, and supports multi-layer display
technology. The Company also sells prototype MLD-enabled display
devices and related components that it manufactures. The
Company's technology has application in industries and markets
where LCD monitors and displays are utilized including location
based entertainment, computer monitors, telecommunications, mobile
phones and other hand held devices.
RAZZ ELECTRIC: Equipment, Vehicles to Be Auctioned Off Aug. 1
-------------------------------------------------------------
United Country Bonnette Auction Company announced yesterday the
auction Saturday, August 1, 2009, at 9 a.m. of electrical,
construction and powerline equipment and vehicle assets of Razz
Electric, according to Barbara Bonnette, auctioneer.
"This is a tremendous opportunity to buy construction and
powerline equipment at your price," commented Bonnette. "This sale
was ordered by the U.S. Bankruptcy Court and all items will sell
to the highest bidders."
There are over 350 lots in the auction, including late model heavy
duty trucks, semi trucks, travel trailers, campers, utility
trailers, pole trailers, and flat-bed trailers. In addition there
are all types of construction, powerline, farming and specialty
electrical tools and equipment.
The auction will be conducted live at 3804 McKeithen Drive in
Alexandria and is open to the public. Bidders must register prior
to bidding. Interested parties who cannot attend the live auction
may bid online using EquipmentFacts.com. Items may be previewed
Friday, July 31, from 9 a.m. to 5 p.m.
For more information about the auction, visit
http://www.BonnetteAuctions.com/or call (318) 443-6614.
Contact: Barbara Bonnette
United Country Bonnette Auction Company
Tel: (318) 443-6614
info@bonnetteauctions.com
REALOGY CORP: Reports $62.1MM Exposure in Cendant Legacy Action
---------------------------------------------------------------
Realogy Corporation reports that on July 1, 2009, in a nine-year
old legacy litigation matter unrelated to real estate, the Second
Circuit Court of Appeals issued an order affirming a grant of
summary judgment against Cendant Corporation -- now known as Avis
Budget Group, Inc. -- for roughly $98 million plus post-judgment
interest and payment of plaintiffs' reasonable attorneys' fees in
the action captioned CSI Investment et. al. vs. Cendant et. al.
The Credentials Action is a contingent liability of Cendant
assigned to Realogy and Wyndham Worldwide Corporation under a
Separation and Distribution Agreement dated as of July 27, 2006.
Under the terms of the Separation Agreement, Realogy is
responsible for 62.5% of this Cendant liability.
The Realogy portion of the damage award -- including accrued
interest -- was $62.1 million and as of July 23, 2009, had been
paid in full by Realogy's surety through draws on a letter of
credit issued under Realogy's credit facility.
"We expect the court to promptly enter a satisfaction of judgment
(subject to plaintiffs' right to petition the court for reasonable
attorneys' fees) and release and discharge the surety bond," said
Anthony E. Hull, Realogy's Executive Vice President, Chief
Financial Officer and Treasurer.
Realogy has reimbursed its lenders for the amounts disbursed.
Realogy's outstanding letters of credit under its senior secured
credit facility decreased by roughly $62.1 million -- thereby
increasing its available capacity under the revolving credit
facility by a like amount -- and Realogy's available cash
decreased by roughly $62.1 million.
At March 31, 2009, the Company had reserved $64 million for the
Credentials Action. Accordingly, Realogy's financial results were
not materially impacted by the Second Circuit Court of Appeals
order.
Tax Receivable Prepayment Agreement
On June 26, 2009, Realogy entered into a Tax Receivable Prepayment
Agreement with Wright Express Corporation, pursuant to which WEX
simultaneously paid Realogy $51 million, less expenses of roughly
$2.0 million, as prepayment in full of its remaining contingent
obligations to Realogy under Article III of the Tax Receivable
Agreement, dated February 22, 2005, among WEX, Cendant and Cendant
Mobility Services Corporation (n/k/a Cartus Corporation).
Realogy's characterization of the net proceeds will be consistent
with prior payments under the TRA.
Cendant and WEX had entered into the TRA in connection with
Cendant's disposition of the WEX business in an initial public
offering in February 2005. As a result of the initial public
offering, the tax basis of WEX's tangible and intangible assets
increased to their fair market value.
Pursuant to the TRA, WEX had agreed to pay Cendant 85% of tax
savings related to the increased tax basis of the assets and their
related amortization over a 15-year period. The actual amount of
payments, if any, and the timing of receipt of any payments were
variable, depending upon a number of factors, including whether
WEX earned sufficient taxable income to realize the full tax
benefit of the amortization of its assets.
Pursuant to the Separation and Distribution Agreement dated as of
July 27, 2006, by and among Cendant, Realogy, Wyndham Worldwide
Corporation and Travelport Inc., Realogy acquired from Cendant the
right to receive 62.5% of the payments by WEX to Cendant under the
TRA and assumed 62.5% of the liabilities and obligations of
Cendant to WEX under the TRA.
About Realogy
Realogy Corporation is one of the largest real estate service
companies in the United States with reported revenues of about
$4.7 billion for the year ended December 31, 2008. Realogy was
incorporated in January 2006 to facilitate a plan by Cendant
Corporation to separate Cendant into four independent companies -
one for each of Cendant's real estate services, travel
distribution services, hospitality services (including timeshare
resorts), and vehicle rental businesses. The separation became
effective July 2006.
At March 31, 2009, Realogy had $8.62 billion in total asseets,
$9.62 billion in total liabilities, and $997 million in
stockholders' deficit.
Moody's Investors Service on December 19, 2008, lowered its
corporate family rating on Realogy to Caa3 from Caa2 following the
company's withdrawal of an exchange offer to holders of its senior
unsecured cash pay, unsecured toggle and subordinated notes.
As reported by the Troubled Company Reporter on March 3, 2009,
Moody's said Realogy's announcement that its private equity
sponsor, Apollo Management, L.P., may invest up to $150 million in
the company during fiscal 2009 will have no immediate impact on
Realogy's credit ratings, liquidity rating or the negative rating
outlook.
ROC PREF: S&P Corrects Ratings on Preferred Shares to BB+ From BB-
------------------------------------------------------------------
Standard & Poor's Ratings Services corrected its ratings on ROC
PREF Corp.'s preferred shares by raising them.
These actions mirror the correction of the rating on the Tranched
Investment-Grade Enhanced Return Securities 2004-11 credit-linked
notes issued by HSBC Bank USA N.A., to which the ratings on the
preferred shares are linked.
Ratings Corrected
ROC PREF Corp.
Rating
------
Class To From
----- -- ----
Preferred shares
Global scale: BBB+ BB-
Canada scale: P-2(High) P-3(Low)
SECURITY BANK: To File for Chapter 7 After Banks Seized
-------------------------------------------------------
As a result of the closure of its six banks, Security Bank Corp.
and its wholly owned subsidiary, Security Interim Holding
Corporation, intend to file voluntary petitions in the United
States Bankruptcy Court for the Middle District of Georgia, Macon
Division, seeking relief under Chapter 7 of Title 11 of the United
States Code.
As a result of the FDIC being appointed receiver of the Banks, the
assumption of deposits by State Bank & Trust and the planned
Chapter 7 bankruptcy filings, the Company and Security Interim
have ceased all business activity and operations. Following the
filings, the Court will appoint a bankruptcy trustee who will be
responsible for liquidating the Company and Security Interim.
The six bank subsidiaries of Security Bank Corporation, Macon,
Georgia, were closed July 24 by the Georgia Department of Banking
and Finance, which appointed the Federal Deposit Insurance
Corporation as receiver. To protect the depositors, the FDIC
entered into a purchase and assumption agreement with State Bank
and Trust Company, Pinehurst, Georgia, to assume all of the
deposits of the six bank subsidiaries of Security Bank
Corporation.
The six banks involved in the transaction were: Security Bank of
Bibb County, Macon, GA, with $1.2 billion in total assets and $1
billion in deposits; Security Bank of Houston County, Perry, GA,
with $383 million in assets and $320 million in deposits; Security
Bank of Jones County, Gray, GA, with $453 million in assets and
$387 million in deposits; Security Bank of Gwinnett County,
Suwanee, GA, with $322 million in assets and $292 million in
deposits; Security Bank of North Metro, Woodstock, GA, with $224
million in assets and $212 million in deposits; and Security Bank
of North Fulton, Alpharetta, GA, with $209 million in assets and
$191 million in deposits.
As of March 31, 2009, the six banks had total assets of
$2.8 billion and total deposits of approximately $2.4 billion. In
addition to assuming all of the deposits of the failed bank, State
Bank and Trust Company will acquire $2.4 billion in assets. The
FDIC will retain the remaining assets for later disposition.
SEMGROUP LP: SemCanada Crude Files Chapter 15 Petition
------------------------------------------------------
SemCanada Crude Co., the Canadian unit of SemGroup Energy Partners
LP, filed for Chapter 15 bankruptcy in the U.S. (Case No.
09-17829). The company listed assets of $100,000 to $500,000 and
debt of more than $1 billion in Chapter 15 documents filed
yesterday in U.S. Bankruptcy Court in Wilmington, Delaware.
Chapter 15 allows a company to seek protection from creditors in
the U.S. while its primary bankruptcy case is pending in another
country.
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)
SEMGROUP LP: SemCanada Voluntary Chapter 15 Case Summary
--------------------------------------------------------
Chapter 15 Petitioner: Ernst & Young Inc.
as Monitor
Chapter 15 Debtor: SemCanada Crude Company
8th Avenue S.W., Suite 1000
Calgary T2P 3S8
Canada
Chapter 15 Case No.: 09-12637
Debtor-affiliates filing separate Chapter 15 petitions:
Entity Case No.
------ --------
SemCAMS ULC Shannon 09-12638
CEG Energy Options, Inc. 09-12639
A.E. Sharp Limited 09-12641
SemCanada Energy Company 09-12642
Type of Business: The Debtors engage in diversified services for
the North American crude oil and refined
products industry.
Chapter 15 Petition Date: July 27, 2009
Court: District of Delaware
Judge: Brendan Linehan Shannon
Chapter 15 Petitioner's Counsel: Mary Caloway, Esq.
mary.caloway@bipc.com
Jeffrey M. Carbino, Esq.
jeffrey.carbino@bipc.com
Buchanan Ingersoll & Rooney PC
The Brandywine Building
1000 West Street, Suite 1410
Wilmington, DE 19801-1054
Tel: (302) 552-4200
Fax: (215) 665-8760
Estimated Assets: $100,000 to $500,000
Estimated Debts: More than $1 billion
SENIOR HEALTH INSURANCE: AM Best Affirms FSR at C (Weak)
--------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating (FSR) of
C (Weak) and issuer credit rating (ICR) of "ccc+" of Senior Health
Insurance Company of Pennsylvania (SHIP, formerly known as Conseco
Senior Health Insurance Company) (Bensalem, PA). The outlook for
both ratings is negative.
Concurrently, A.M. Best has withdrawn the ratings at the company's
request and assigned a category NR-4 to the FSR and "nr" to the
ICR. This rating action reflects the decision of SHIP's management
to withdraw from A.M. Best's interactive rating process.
Despite continued statutory operating losses ($37 million in the
first quarter of 2009), SHIP's current absolute and risk-adjusted
capitalization is adequate. A.M. Best believes that SHIP will
likely require a combination of rate increases, reduced benefits
and policyholder forfeitures to maintain sufficient capitalization
over the long term. Additionally, as a private company, SHIP has
no access to additional capital. A.M. Best notes that SHIP should
benefit from lower expenses going forward as it operates without a
profit motive.
About SHIP
Senior Health Insurance Company of Pennsylvania (SHIP) --
http://www.shipltc.com/about/-- is a non-profit that is focused
exclusively on providing high quality service and meeting the Long
Term Care policy commitments of policyholders. SHIP is owned by
the Senior Health Care Oversight Trust, an independent trust
created by the Pennsylvania Insurance Department and governed by a
prestigious Board of Trustees.
SFK PULP: S&P Maintains 'CCC+' Long-Term Corporate Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said it maintained its 'CCC+'
long-term corporate credit rating on Longueuil, Quebec-based SFK
Pulp Fund, as well as the ratings on its subsidiaries, on
CreditWatch with negative implications, where S&P placed them
April 22, 2009.
The ratings remain on CreditWatch as SFK's amended its credit
agreement with lenders after violating covenants since June 30.
"While S&P views the credit agreement as positive, the fund still
faces significant headwinds due to a lack of a long-term virgin
fiber supply contract for its key St. Felicien northern bleached
softwood kraftpulp pulp mill and weak pulp market conditions,"
said Standard & Poor's credit analyst Jatinder Mall.
SFK's cash flows could be negatively affected, in S&P's opinion,
if the company cannot secure long-term virgin fiber supply
contracts for its St. Felicien mill. Currently, the St. Felicien
mill has its fiber supply secured through the end of August 2009,
but new supply contracts based on market fiber prices in Quebec
could negatively affect the mill's cost position and
profitability, as Quebec virgin fiber prices are the highest in
North America. S&P expects that declining demand for pulp and
reduced selling prices will likely result in SFK generating
negative EBITDA during the next several quarters. In the next
several quarters, S&P expects liquidity to decline, because of
weak pulp demand, lower selling prices, and a higher Canadian
dollar, although S&P believes moderating input costs will
partially offset these factors.
Standard & Poor's expects to resolve the CreditWatch after S&P has
a better understanding of what steps SFK is taking to ensure
sufficient virgin fiber supply for its St. Felicien mill and what
impact new supply contracts will have on the mill's cost position
and cash flows.
SIX FLAGS: Files Chapter 11 Plan & Disclosure Statement
-------------------------------------------------------
Six Flags, Inc., and its debtor affiliates delivered to the U.S.
Bankruptcy Court for the District of Delaware on July 22, 2009,
their Joint Plan of Reorganization and Disclosure Statement
explaining the Plan.
According to Jeffery R. Speed, chief financial officer of Six
Flags, the Plan is expected to (i) give holders of Allowed Claims
greater recovery from the estates of the Debtors than the
recovery that they would receive in a liquidation of the Debtors
under Chapter 7 of the Bankruptcy Code; and (ii) afford the
Debtors the ability to continue in business and preserve ongoing
employment for their employees.
The Plan is negotiated with and supported by JP Morgan Chase
Bank, N.A., as administrative agent under the Debtors'
Prepetition Credit Agreement, and Participating Prepetition
Lenders.
The Plan provides these terms:
* The claims against the Debtors arising under the Prepetition
Credit Agreement will be exchanged for 92% of the new equity
in the Reorganized Six Flags, Inc., subject to dilution on
account of the Long-Term Incentive Plan, plus a new term
loan in an aggregate amount of $600,000,000.
* The Debtors would have the flexibility to obtain a new credit
facility of up to $150,000,000 upon exit, and financing for
"put" obligations of up to an additional $150,000,000.
* Unsecured claims against Six Flags Operations, including
those arising under the 2016 Notes Indentures, will be
exchanged for 7% of the new equity in the Reorganized SFI,
subject to dilution on account of the Long-Term Incentive
Plan.
* Unsecured Claims against SFI, including those arising under
Unsecured Notes Indentures, will be exchanged for 1% of
the new equity in Reorganized SFI, subject to dilution on
account of the Long-Term Incentive Plan.
* Substantially all other secured and unsecured claims held by
the Debtors' creditors will be unimpaired.
* The Holders of Perfected Income Equity Redeemable Shares and
existing equity interests in SFI will receive no recovery.
Surrender of Existing Securities
Each holder of Unsecured Notes is required to surrender the notes
to the Indenture Trustee, or in the event these notes are held in
the name of a nominee of the Depository Trust Company, the
Disbursing Agent will seek the cooperation of the Depository
Trust Company to provide appropriate instructions to the
Indenture Trustee. No distributions under the Plan will be made
for or on behalf of any holder unless the note is received by the
Indenture Trustee.
Issuance of New Common Stock
The issuance by Reorganized SFI of the New Common Stock on and
after the Effective Date is authorized pursuant to the Plan
without the need for any further corporate action and without any
further action by the holders of Claims of Preconfirmation Equity
Interests. As provided in the Postconfirmation Organizational
Documents, which will be included with the Plan Supplement, New
Common Stock may be issued in more than one series, will be
identical in all respects, and will have equal rights and
privileges.
All existing equity interests in SFI will be canceled under the
Plan. All existing equity interests in SFO will be canceled, and
100% of the newly-issued common stock of SFO will be issued to
SFI on the Effective Date in consideration for SFI's distribution
of the New Common Stock in Reorganized SFI to certain holders of
Allowed Claims.
The existing equity interests in all Debtors other than SFI and
SFO will remain unaltered by the Plan.
Exit Financing
The exit facility will consist of a secured revolving or multi-
draw term credit facility with a commitment of approximately
$150,000,000 and will be on terms favorable than those described
in the Restructuring Agreement. The proceeds of the Exit
Facility will be used to meet working capital and other corporate
needs of the Postconfirmation SFI, thereby facilitating its
mergence from bankruptcy. The exit facility will likely be
secured by first priority liens upon all existing and after-
acquired assets of the Debtors, with liens being pari passu with
the liens securing the New Term Loan, provided that following an
event of default, all collateral proceeds would be allocated to
the Exit Facility on a "first-out" basis relative to payments
made on account of the New Term Loan.
New Term Loan
The Plan also provides for a new secured term loan to be issued
on the Effective Date in the initial aggregate amount of
$600,000,000, which will satisfy in part, the Debtors'
obligations under the Prepetition Agreement.
The New Term Loan will mature five years from the Effective Date
and will incur interest rates at 7% above LIBOR, with a LIBOR
floor of 2.50%, provided that, prior to the second anniversary of
the Effective Date, 1.50% of that interest may, at the Debtors'
option, be paid in kind and any interest that is paid in kind
will be added to principal and deemed an additional New Term
Loan.
The Reorganized Debtors will pay 103% of principal plus accrued
interest if those loans are redeemed prior to the first
anniversary of the Effective Date; 101.5% of principal plus
accrued interest if those loans are redeemed prior to the second
anniversary of the Effective Date; and par for any redemption
occurring thereafter.
The New Term Loan will contain restrictive covenants that limit,
to an agreed amount, the amount that can be paid from operational
cash flow to satisfy "put" notices from holders of units in the
limited partnerships that own the Partnership Parks. The
Debtors, however, will be permitted to finance up to an
additional $150 million to make payments on account of future
"put" notices.
The New Term Loan will be secured by a first lien on
substantially all assets of the Reorganized Debtors, which lien
will rank pari passu with the liens securing the Exit Facility.
However, following an event of default, all collateral proceeds
would be allocated to the New Term Loan on a "last-out" basis
relative to payments made on account of the Exit Facility.
Long-Term Incentive Plan
Management, selected employees, and directors of Reorganized SFI
will be allocated stock options or restricted stocks in
Reorganized SFI equal to 10% on a fully diluted basis.
Immediately following the Effective Date, the aggregate
allocations to management under the LTIP will consist of 3.75% of
the equity of SFI on a fully diluted basis in the form of
options, all of which will be allocated to the members of the
Reorganized Debtors' management in accordance with each of their
employment agreements.
Any additional allocations following the Effective Date will be
determined by the Postconfirmation Board, provided that
management will not be able to participate therein for the year
following the Effective Date absent full approval of the
Postconfirmation Board.
Executory Contracts and Unexpired Leases
All Executory Contracts and Unexpired Leases that exist between
the Debtors and any person or entity will be deemed assumed by
the Debtors as of the Effective Date, except for any Executory
Contracts or Unexpired Leases: (i) that has been rejected
pursuant to an order of the Court, (ii) which a motion for
rejection has been filed prior to the Effective Date or (iii)
that is specifically designated to be rejected.
Postconfirmation Board
The Postconfirmation Board will consist of 11 members, seven of
whom will be selected by the Participating Lenders, one of whom
will be the Chief Executive Officer of SFI, and three of whom
will the following the three current directors of SFI.
Vesting of Assets
On the Effective Date, the Debtors, their properties and
interests in property and their operations will be released from
the custody and jurisdiction of the Bankruptcy Court, and all
property of the estates of the Debtors will vest in the
Reorganized Debtors free and clear of all Claims, Liens, and
encumbrances, except as proved in the Plan.
A full-text copy of the Debtors' Chapter 11 Plan is available for
free at http://bankrupt.com/misc/SixF_PlanofReorganization.pdf
A full-text copy of the Debtors' Disclosure Statement is also
available free of charge at http://bankrupt.com/misc/SixF_DS.pdf
About Six Flags Inc.
Headquartered in New York City, Six Flags, Inc., is the world's
largest regional theme park company with 20 parks across the
United States, Mexico and Canada.
Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr.
D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T.
Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings,
Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors'
lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine
Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP,
serves as special counsel. Houlihan Lokey Howard & Zukin Capital
Inc., serves as financial advisors, while KPMG LLC acts as
accountants. Kurtzman Carson Consultants LLC serves as claims and
notice agent. As of March 31, 2009, Six Flags had $2,907,335,000
in total assets and $3,431,647,000 in total liabilities.
Bankruptcy Creditors' Service, Inc., publishes Six Flags
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Six Flags Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000).
SIX FLAGS: Treatment of Claims Under Chapter 11 Plan
----------------------------------------------------
Six Flags Inc. and its affiliates' Joint Plan of Reorganization
contemplates for these classification and treatment of claims:
Class Description Treatment
----- ----------- ---------
N/A Administrative Paid in full, in Cash, on the
Expense Claims later of the Effective Date
or when the Claim becomes
Allowed. Claims incurred in
the ordinary course of
business will be paid in full
or performed, as applicable,
in the ordinary course of
business.
Estimated Recovery: 100%
N/A Professional Paid in full, in Cash, in
Compensation and accordance with the order of
Reimbursement the Court allowing any Claim.
Claims
Estimated Amount:
Undetermined
Estimated Recovery: 100%
N/A Priority Tax Either (i) paid in full, in
Claims Cash, on the Effective Date
or as soon as practicable, or
(ii) commencing on the
Effective Date, over a period
not exceeding five years from
and after the Petition Date,
in equal semi-annual Cash
payments with interest for
the period after the
Effective Date at the rate
determined under applicable
non-bankruptcy law.
Estimated Amount:
Undetermined
Estimated Recovery: 100%
1 Other Priority Unimpaired. Deemed to accept
Claims the Plan, not entitled to
vote. Paid in full, in Cash.
Estimated Recovery: 100%
2 Secured Tax Claims Unimpaired. Deemed to accept
the Plan, not entitled to
vote. Either paid in full in
Cash on the Effective Date or
paid over a period not
exceeding five years from and
after the Petition Date in
equal semi-annual Cash
payments with interest at the
rate determined under
non-bankruptcy law.
Estimated Recovery: 100%
3 Other Secured Unimpaired. Deemed to accept
Claims the Plan, not entitled to
vote. Either (i) reinstated,
(ii) paid in full in Cash, or
(iii) receive the Collateral
securing Other Allowed
Secured Claim and any
required interest.
Estimated Amount: $0
Estimated Recovery: 100%
4 Six Flags Theme Impaired. Entitled to vote.
Parks Prepetition On each periodic Distribution
Credit Agreement Date, each holder of an
Claims Allowed Prepetition Credit
Agreement Claim will receive
its Ratable Proportion of the
New Term Loan and 92% of
newly issued New Common Stock
in Reorganized SFI, subject
to dilution, by the Long-Term
Incentive Plan, in full and
complete satisfaction of the
STFP Prepetition Credit
Agreement Claim.
Estimated Amount: $1.12
billion, plus accrued and
unpaid interest
Estimated Recovery: 100%
5 SFTP TW Guaranty Impaired. Entitled to vote.
Claims On the Effective Date, SFTP's
guaranty of the obligations
under the TW Loan will be
discharged and TW will
receive a new guaranty of the
obligations under the TW Loan
by Reorganized SFTP.
Estimated Amount:
Undetermined
Estimated Recovery: 100%
6 SFTP TW Indemnity Impaired. Entitled to vote.
Claims On the Effective Date, the
SFTP's guaranty of the
obligations under the
Subordinated Indemnity
Agreement will be discharged
and exchanged for a new
guaranty of the obligations
under the Subordinated
Indemnity Agreement by
Reorganized SFTP.
Estimated Amount:
Undetermined
Estimated Recovery: N/A
7 Subsidiary Unsecured Unimpaired. Deemed to accept
Claims the Plan, not entitled to
vote. Each Allowed
Subsidiary Unsecured Claim
will be either (i)
reinstated, or (ii) paid in
full in Cash.
Estimated Recovery: N/A
8 Six Flags Operations Impaired. Entitled to vote.
Prepetition Credit On the Effective Date, SFO's
Agreement Claims guaranty of the obligations
under the Prepetition Credit
Agreement will be discharged
and exchanged for a new
guaranty of the obligations
under the New Term Loan by
Reorganized SFO.
Estimated Amount: Contingent
and unliquidated
Estimated Recovery: N/A
9 SFO Time Warner Impaired. Entitled to vote.
Guaranty Claims On the Effective Date, SFO's
guaranty of the obligations
under the TW Loan will be
discharged and TW will
receive a new guaranty of the
obligations under the TW Loan
by Reorganized SFO.
Estimated Recovery: N/A
10 SFO TW Indemnity Impaired. Entitled to vote.
Claims On the Effective Date, SFO's
guaranty of the obligations
under the Subordinated
Indemnity Agreement will be
discharged and exchanged for
a new guaranty of the
obligations under the
Subordinated Indemnity
Agreement by Reorganized SFO.
Estimated Recovery: N/A
11 SFO Unsecured Claims Impaired. Entitled to vote.
On each periodic Distribution
Date, Allowed SFO Unsecured
Claims receive a Distribution
Pro Rata Share of 7% of newly
issued New Common Stock in
Reorganized SFI, subject to
dilution by the Long-Term
Incentive Plan.
Estimated Recovery: __%
12 SFI TW Guaranty Impaired. Entitled to vote.
Claims On the Effective Date, SFI's
guaranty of the obligations
under the TW Loan will be
discharged and TW will
receive a new guaranty of the
obligations under the TW Loan
by Reorganized SFI.
Estimated Recovery: N/A
13 SFI TW Indemnity Impaired. Entitled to vote.
Claims On the Effective Date, SFI's
guaranty of the obligations
under the Subordinated
Indemnity Agreement will be
discharged and exchanged for
a new guaranty of the
obligations under the
Subordinated Indemnity
Agreement by Reorganized SFI.
Estimated Recovery: N/A
14 SFI Unsecured Claims Impaired. Entitled to vote.
On each periodic Distribution
Date, Allowed SFI Unsecured
Claims receive a Distribution
Pro Rata Share of 1% of newly
issued New Common Stock in
Reorganized SFI, subject to
dilution by the Long-Term
Incentive Plan.
Estimated Recovery: __%
15 Subordinated Impaired. Deemed to reject
Securities Claims the Plan, not entitled to
vote. No distribution.
Estimated Amount: $0
Estimated Recovery: 0%
16 Preconfirmation Unimpaired. Deemed to accept
Subsidiary Equity the Plan, not entitled to
Interests vote. Unaltered by the terms
of the Plan.
Estimated Amount: N/A
Estimated Recovery: N/A
17 Preconfirmation SFO Impaired. Deemed to reject
Equity Interests the Plan, not entitled to
vote. No distribution.
Estimated Amount: N/A
Estimated Recovery: 0%
18 Preconfirmation SFI Impaired. Deemed to reject
Equity Interests the Plan, not entitled to
vote. No distribution.
Estimated Amount: N/A
Estimated Recovery: 0%
Under the Plan, at the election of the Debtors and with the
consent of the Participating Lenders, Intercompany Claims will be
(i) adjusted, released or discharged as of the Effective Date,
(ii) contributed to the capital of the obligor, or (iii)
Reinstated and left Unimpaired.
About Six Flags Inc.
Headquartered in New York City, Six Flags, Inc., is the world's
largest regional theme park company with 20 parks across the
United States, Mexico and Canada.
Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr.
D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T.
Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings,
Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors'
lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine
Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP,
serves as special counsel. Houlihan Lokey Howard & Zukin Capital
Inc., serves as financial advisors, while KPMG LLC acts as
accountants. Kurtzman Carson Consultants LLC serves as claims and
notice agent. As of March 31, 2009, Six Flags had $2,907,335,000
in total assets and $3,431,647,000 in total liabilities.
Bankruptcy Creditors' Service, Inc., publishes Six Flags
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Six Flags Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000).
SOUTH FINANCIAL: DBRS Downgrades Senior Debt to BB
--------------------------------------------------
DBRS has today downgraded the ratings of The South Financial
Group, Inc. (The South or the Company) and its related entities,
including its Issuer & Senior Debt rating to BB from BBB (low).
At the same time, DBRS downgraded The South's banking subsidiary's
Deposit & Senior debt rating to BB (high) from BBB. All ratings
were placed on Negative trend.
The rating actions conclude a review with Negative Implications
initiated by DBRS in April 2009. The downgrade reflects The
South's struggle with steepening asset quality deterioration over
the past year and a half, given its moderate earnings capacity,
and DBRS's expectation of sustained elevated credit costs and
expenses going forward. Even excluding recent goodwill impairment
charges, recent results have been negatively impacted by high
credit costs and expenses, mostly related to the Company's
sizeable Florida commercial real estate portfolio (CRE).
Furthermore, DBRS remains concerned with the higher risk nature of
the Company's significant CRE concentration.
The Negative ratings trend reflects DBRS's perception that
substantial amounts of potential losses remain embedded in the
Company's loan portfolios, especially given declining real estate
valuations and rising unemployment. Moreover, DBRS comments that
The South's financial flexibility in raising future capital will
be somewhat limited after it completes its capital plan. DBRS
notes that sustained elevated asset quality erosion will likely
result in negative rating actions.
The South's ratings reflect its augmented capital position,
adequate liquidity, and its presence in the highly stressed, yet
demographically attractive states of South Carolina, North
Carolina and Florida. Ratings also reflect the Company's weak
asset quality and continued lack of profitability.
The South reported a Q2 2009 net loss applicable to common
shareholders of $111.5 million. The loss reflected a $131 million
provision for loan loss reserves, a $13 million loss on OREO, a
$9.4 million loss on non-mortgage loans held for sale and
$7 million in loan collection and foreclosed asset expense.
Partially offsetting the headwinds was a 13 basis points widening
of net interest margin to 2.96%, higher service charges on deposit
accounts and an increase in debit card income. DBRS notes that
the expanding NIM reflected lower deposit costs.
The South's asset quality remains severely stressed. Acquisition,
construction and development loans, especially those originated in
Florida represent the bulk of the Company's loan delinquencies and
charge-offs. At June 30, 2009, the South's NPAs represented a
high 5.94% of loans versus 5.08% at March 31, 2009. Meanwhile,
NCOs for Q2 2009 increased to a high 4.91% of average loans, from
4.36% for the prior quarter. Roughly 68% of net charge-offs were
CRE related, the majority of which was Florida based acquisition,
development and construction loans. Meanwhile 67% of nonaccrual
loans were CRE, of which 53% were in Florida. DBRS comments that
The South's CRE portfolio represents a concentration, constituting
approximately 42% (excludes owner-occupied loans) of total loans
and 5.2 times (x) tangible common equity. DBRS comments that the
Company's reserves to non-performing assets were fairly moderate
at 51%. DBRS perceives that significant amounts of potential
losses remain embedded in The South's core portfolio, particularly
within its residential construction and mortgage portfolios.
Positively, The South has and will continue to bolster its capital
position. During Q2 2009, the company issued $75 million of
common stock, which enhanced its capital ratios and provided
additional loss absorption capacity. At June 30, 2009, the
Company's estimated Tier 1 and Total risk based capital ratios
were solid at 12.36% and 13.65%, respectively. Additionally, the
company's tangible common equity ratio was healthy at 6.07%.
During July 2009, the Company issued an additional $10 million of
common stock and sold an ancillary business for a small gain.
Additionally, during Q3 2009, the Company anticipates converting
$190 million in mandatory convertible preferred stock to common
shares, expects to tender a $25 million exchange of trust and REIT
preferred securities for common stock, and anticipates additional
gains from the sale of other ancillary businesses. DBRS comments
that failure to accomplish these exchanges and capital builds
would likely result in further rating actions.
DBRS notes that The Company's liquidity position is adequate, yet
remains somewhat pressured by a large wholesale funding reliance
of 47% (as of March 31, 2009). The South's sound quality
securities portfolio, which represents roughly 15% of total
assets, access to the FHLB and Federal Reserve Discount Window,
round out its liquidity profile. Furthermore, The South's
parent's fundamentals remain solid, punctuated by a sizeable cash
position.
About The South Financial Group
The South Financial Group, Inc., is a bank holding company. The
South operates principally through Carolina First Bank, a South
Carolina-chartered commercial bank, which conducts banking
operations in South Carolina and North Carolina (as Carolina
First), in Florida (as Mercantile), and on the Internet (as Bank
CaroLine). The subsidiaries provide a range of financial
services, including deposits, loans, treasury management, merchant
processing, full-service brokerage and investments, business and
personal insurance, trust, investment management, and financial
planning. As of December 31, 2008, The South conducted business
through 82 branch offices in South Carolina, 71 in Florida, and 27
in North Carolina. As of December 31, 2008, it had $13.6 billion
in assets, $10.2 billion in loans, $9.4 billion in deposits, and
$1.6 billion in shareholders' equity.
SPECTRUM BRANDS: Scotts Miracle to Take Over Facility for $1.4MM
----------------------------------------------------------------
Business First of Columbus reports that Scotts Miracle-Gro Co.
told state officials that it will invest about $1.4 million to
take over a facility from Spectrum Brands Inc.
State documents say that the facility would make soils, mulch, and
fertilizer products and serve as a regional hub. According to
Business First, an estimated 63 jobs at an average hourly pay of
$14.50 could be created in Orrville within three years. The state
said that a portion of those jobs would be given to former
Spectrum employees, Business First relates.
According to Business First, the Development Department on Monday
approved a six-year, 40% tax credit for Scotts, valued at
$106,490, for the lease of a 550,000-square-foot manufacturing
plant in Orrville.
Based in Cibolo, Texas, Spectrum Brands, Inc. --
http://www.spectrumbrands.com/-- supplies consumer batteries,
lawn and garden care products, specialty pet supplies, shaving and
grooming products, household insect control products, personal
care products, and portable lighting. Spectrum Brands' business
is operated in three reportable segments: (a) Global Batteries and
Personal Car; (b) Global Pet Supplies; and (c) Home and Garden.
Spectrum Brands has roughly 5,960 employees worldwide, with about
2,700 of those employees working within the United States. In
addition, Spectrum Brands holds a 50% interest in a domestic
entity; minority interests (less than 25% each) in a domestic
entity and a foreign entity; a limited partnership interest in a
foreign entity; and a 100% interest in a foreign trust.
Spectrum Brands, Inc., and 13 subsidiaries filed separate
Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead
Case No. 09-50455). The Hon. Ronald B. King presides over the
cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr.,
Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B.
Kingman, Esq., in San Antonio, serve as the Debtors' counsel.
Sutherland Asbill & Brennan LLP acts as special counsel; Perella
Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as
tax consultant; and Logan & Company Inc. as claims and noticing
agent. As of September 30, 2008, Spectrum Brands had
$2,247,479,000 in total assets and $3,274,717,000 in total
liabilities.
An official committee of equity security holders -- composed of
Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and
the Peter and Karen Locke Living Trust -- was appointed by the
U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009.
The Equity Committee has tapped Alston & Bird LLP as its
bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spectrum Brands Inc. and its various subsidiaries.
(http://bankrupt.com/newsstand/or 215/945-7000)
SPECTRUM BRANDS: $45.8 Million in Claims Filed as of July 22
------------------------------------------------------------
The Clerk of the U.S. Bankruptcy Court for the Western District
of Texas, San Antonio Division, filed a 28-page schedule of
claims filed in the bankruptcy case of Spectrum Jungle Labs
Corporation, a copy of which is available for free at:
http://bankrupt.com/misc/Spectrum_ClaimsReg_Jul22.pdf
The schedule discloses that as of July 22, 2009, 383 claims
totaling $45,758,757 were filed against the Debtors.
About Spectrum Brands
Based in Cibolo, Texas, Spectrum Brands, Inc. --
http://www.spectrumbrands.com/-- supplies consumer batteries,
lawn and garden care products, specialty pet supplies, shaving and
grooming products, household insect control products, personal
care products, and portable lighting. Spectrum Brands' business
is operated in three reportable segments: (a) Global Batteries and
Personal Car; (b) Global Pet Supplies; and (c) Home and Garden.
Spectrum Brands has roughly 5,960 employees worldwide, with about
2,700 of those employees working within the United States. In
addition, Spectrum Brands holds a 50% interest in a domestic
entity; minority interests (less than 25% each) in a domestic
entity and a foreign entity; a limited partnership interest in a
foreign entity; and a 100% interest in a foreign trust.
Spectrum Brands, Inc., and 13 subsidiaries filed separate
Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead
Case No. 09-50455). The Hon. Ronald B. King presides over the
cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr.,
Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B.
Kingman, Esq., in San Antonio, serve as the Debtors' counsel.
Sutherland Asbill & Brennan LLP acts as special counsel; Perella
Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as
tax consultant; and Logan & Company Inc. as claims and noticing
agent. As of September 30, 2008, Spectrum Brands had
$2,247,479,000 in total assets and $3,274,717,000 in total
liabilities.
An official committee of equity security holders -- composed of
Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and
the Peter and Karen Locke Living Trust -- was appointed by the
U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009.
The Equity Committee has tapped Alston & Bird LLP as its
bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spectrum Brands Inc. and its various subsidiaries.
(http://bankrupt.com/newsstand/or 215/945-7000)
SPECTRUM BRANDS: Allen & Co Approved as Equity Committee Advisor
-----------------------------------------------------------------
The Official Committee of Equity Security Holders in Spectrum
Brands Inc.'s case obtained the Court's authority to retain Allen
& Company LLC as its financial advisors nunc pro tunc to March 25,
2009.
Christopher P. Mittleman of the Mittleman Brothers, as Equity
Committee Chair, says the Committee has selected Allen & Company
because the firm's professionals have considerable experience in
matters concerning finance. The Committee believes that Allen &
Company is well qualified to provide financial advisory services
to the Committee.
As financial advisor, Allen & Company will:
(a) analyze business plans and forecasts of the Debtors;
(b) evaluate the assets and liabilities of the Debtors;
(c) evaluate the stand-alone business plan of the Debtors;
(d) assess the financial issues and options concerning the
Debtors' Chapter 11 Plan(s) of reorganization or any other
Chapter 11 plan(s);
(e) analyze and review the financial and operating statements
of the Debtors;
(f) assist in the determination of an appropriate capital
structure for the Debtors;
(g) analyze strategic alternatives available to the Debtors;
(h) evaluate the Debtors' debt capacity in light of its
projected cash flows; and
(i) provide other financial advisory and investment banking
services as may be agreed upon by Allen & Company and the
Committee.
AS financial advisor, Allen & Company will be paid:
(i) a Monthly Fee of $200,000, plus
(ii) a Restructuring Fee of $2,000,000 earned and payable upon
the confirmation of any restructuring or similar
transaction which results in consideration or distribution
in any form being paid to any or the equity security
holders. Commencing on the fourth month 50% of the
subsequent Monthly Fee will be creditable against the
Restructuring Fee;
(iii) reimbursement for reasonable and necessary expenses
incurred in connection with the services performed for the
Equity Committee; and
(iv) an indemnification of Allen & Company relating to Allen's
engagement by the Equity Committee.
Enrique Senior, managing director of Allen & Company, assures the
Court that his firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code and that Allen
& Company does not have an interest materially adverse to the
interest of the Debtors, the estate or any class of its creditors
or security holders.
The Debtors, in response, did not agree with the retention
application and asked the Court to deny the application by reason
of their insolvency. The Debtors are joined in by Harbinger
Capital Partners, which contended that the Debtors' estates
should not be prospectively compelled to pay for Allen &
Company's services to the Committee where the Debtors are
insolvent and there is not a significant likelihood that equity
holders are entitled to any distribution under a plan of
reorganization.
Prior to the Debtors' and Harbingers' objections, the Committee's
Application to retain Allen & Company was already dismissed by
the Court as moot.
About Spectrum Brands
Based in Cibolo, Texas, Spectrum Brands, Inc. --
http://www.spectrumbrands.com/-- supplies consumer batteries,
lawn and garden care products, specialty pet supplies, shaving and
grooming products, household insect control products, personal
care products, and portable lighting. Spectrum Brands' business
is operated in three reportable segments: (a) Global Batteries and
Personal Car; (b) Global Pet Supplies; and (c) Home and Garden.
Spectrum Brands has roughly 5,960 employees worldwide, with about
2,700 of those employees working within the United States. In
addition, Spectrum Brands holds a 50% interest in a domestic
entity; minority interests (less than 25% each) in a domestic
entity and a foreign entity; a limited partnership interest in a
foreign entity; and a 100% interest in a foreign trust.
Spectrum Brands, Inc., and 13 subsidiaries filed separate
Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead
Case No. 09-50455). The Hon. Ronald B. King presides over the
cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr.,
Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B.
Kingman, Esq., in San Antonio, serve as the Debtors' counsel.
Sutherland Asbill & Brennan LLP acts as special counsel; Perella
Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as
tax consultant; and Logan & Company Inc. as claims and noticing
agent. As of September 30, 2008, Spectrum Brands had
$2,247,479,000 in total assets and $3,274,717,000 in total
liabilities.
An official committee of equity security holders -- composed of
Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and
the Peter and Karen Locke Living Trust -- was appointed by the
U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009.
The Equity Committee has tapped Alston & Bird LLP as its
bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spectrum Brands Inc. and its various subsidiaries.
(http://bankrupt.com/newsstand/or 215/945-7000)
SPECTRUM BRANDS: Files 2007 & 2008 401(K) Plan Reports
------------------------------------------------------
Spectrum Brands, Inc., filed with the United States Securities
and Exchange Commission its 401(K) Plan on Form 11-K for the
years ended December 31, 2008 and 2007.
The Plan, originally effective as of July 1, 1983, was amended
and restated in its entirety on May 1, 2006. The Plan, as
amended and restated, is intended to qualify as a profit-sharing
plan under Internal Revenue Code Section 401(a), and includes a
cash or deferred arrangement that is intended to qualify under
Code Section 401(k). The Plan is maintained for the exclusive
benefit of eligible employees and their beneficiaries.
The Plan is a defined contribution plan covering the employees of
various companies under Spectrum Brands, Inc. The purpose of the
Plan is to provide supplemental support for participants upon
their retirement. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended.
1. Eligibility
Each Company employee who was an eligible employee immediately
prior to a merger date continued to be an eligible employee
subsequent to the merger. Each Company employee, other than a
United Industries Bargaining Unit Employee or a Rayovac union
employee, will become an eligible employee as of the next
enrollment date following the date on which they become an
employee.
Each United Industries Bargaining Unit Employee who was not an
eligible employee immediately prior to the merger date will
become an eligible employee as of the next enrollment date
following the date on which they completed one year of eligible
service.
Each Rayovac union employee who was not an eligible employee
immediately prior to the merger date will become an eligible
employee as of the enrollment date coinciding with or next
following the date on which they completed 180 days of eligible
service.
2. Contributions
Active participants are permitted to make contributions to the
Plan in whole percentages up to 50% of their pretax annual
compensation, as defined in the Plan document, subject to
applicable limits of the Internal Revenue Code.
The employer is required to match the first 3% of the eligible
employee's compensation that he or she contributes to the Plan
and 50% of the next 2% of the eligible employee's compensation
that he or she contributes to the plan. Additional amounts may
also be contributed at the option of the employer.
The employer is required to match 25% of each United Industries
Bargaining Unit Employee's tax deferred contributions up to 6% of
their compensation. Additional amounts may also be contributed
at the option of the employer. Company contributions to
participant accounts are limited to the applicable limits of the
Internal Revenue Code.
3. Participant Accounts
Each participant's account is credited with the participant's
contributions and an allocation of the Company's contributions
and Plan earnings, and charged with an allocation of
administrative expenses. Allocations of Company contributions,
Plan earnings, and administrative expenses are based on
participant's compensation or account balances, as defined in the
Plan document.
4. Vesting
A participant is fully vested in his or her account balance
attributable to both the employee and employer contributions made
prior to January 1, 2007. A participant's vested interest in
employer contributions made on or after January 1, 2007 varies by
division. Participants should refer to the Plan document for a
more complete description of the Plan's vesting provisions.
5. Forfeited Accounts
As of December 31, 2008, forfeited non-vested accounts totaled
$29,022. These accounts will be used to reduce future Company
contributions.
6. Investment Fund Options
Participant contributions and investment earnings were directed
by the individual Plan participants to certain investment choices
offered under the Plan. Descriptions of the investment fund
options at December 31, 2008 are:
* Spectrum Brands, Inc. Common Stock
* PIMCO Core Plus Bond Fund
* Vanguard 500 Index Fund
* Loomis Sayles Value A Fund
* First American Small Cap Select A Fund
* American Funds Growth Fund of America Fund
* First American Mid Cap Value Fund
* First American Mid Cap Value Fund A
* Guaranteed Income Fund
* MFS International New Discovery
* Oakmark Equity and Income Fund
* Franklin Micro Cap Value Fund
* SSGA S&P Mid Cap Fund
* Oppenheimer Global Fund
* TimesSquare Mid Cap Growth Fund Class Premier (GR)
7. Payment of Benefits
Benefits may be paid to the participant or beneficiary upon
death, disability, retirement or termination of employment, as
defined in the plan agreement. The plan provides for normal
retirement at age 65. The total vested portion of a
participant's account balance is distributed in the form of a
lump-sum payment or an annuity. Participants may be eligible for
a hardship withdrawal from their pretax participant account under
certain circumstances and with the Plan Administrator's approval.
A full-text copy of Spectrum's Form 11-K report is available for
free at http://ResearchArchives.com/t/s?3fac
Spectrum Brands, Inc. 401(k) Plan
Statement of Net Assets Available for Benefits
December 31
2008 2007
---- ----
Investments $94,377,895 $130,262,301
Receivables:
Participant Contributions 136,911 66,251
Employer Contributions 434,816 429,569
----------- -----------
Total receivables 571,727 495,820
Net assets available for benefits $94,949,622 $130,758,121
=========== ============
Spectrum Brands, Inc. 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2008
2008
-----
Increase in Assets:
Interest and dividends $1,843,567
Participant contributions 9,323,972
Employer contributions 4,510,228
Rollover contributions 349,306
Other income 127,773
-----------
Total Increases 16,154,846
Deductions from Assets:
Net depreciation in fair
value of investments 37,134,583
Distributions and benefits paid 14,741,120
Administrative expenses 87,642
------------
Total deductions 51,963,345
Total Net Decrease (35,808,499)
Net Assets Available for Plan Benefits:
Beginning of Year 130,758,121
END OF YEAR $94,949,622
===========
About Spectrum Brands
Based in Cibolo, Texas, Spectrum Brands, Inc. --
http://www.spectrumbrands.com/-- supplies consumer batteries,
lawn and garden care products, specialty pet supplies, shaving and
grooming products, household insect control products, personal
care products, and portable lighting. Spectrum Brands' business
is operated in three reportable segments: (a) Global Batteries and
Personal Car; (b) Global Pet Supplies; and (c) Home and Garden.
Spectrum Brands has roughly 5,960 employees worldwide, with about
2,700 of those employees working within the United States. In
addition, Spectrum Brands holds a 50% interest in a domestic
entity; minority interests (less than 25% each) in a domestic
entity and a foreign entity; a limited partnership interest in a
foreign entity; and a 100% interest in a foreign trust.
Spectrum Brands, Inc., and 13 subsidiaries filed separate
Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead
Case No. 09-50455). The Hon. Ronald B. King presides over the
cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr.,
Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B.
Kingman, Esq., in San Antonio, serve as the Debtors' counsel.
Sutherland Asbill & Brennan LLP acts as special counsel; Perella
Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as
tax consultant; and Logan & Company Inc. as claims and noticing
agent. As of September 30, 2008, Spectrum Brands had
$2,247,479,000 in total assets and $3,274,717,000 in total
liabilities.
An official committee of equity security holders -- composed of
Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and
the Peter and Karen Locke Living Trust -- was appointed by the
U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009.
The Equity Committee has tapped Alston & Bird LLP as its
bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spectrum Brands Inc. and its various subsidiaries.
(http://bankrupt.com/newsstand/or 215/945-7000)
SPECTRUM BRANDS: R. Dewberry Wants Stay Lifted to Pursue PI Action
------------------------------------------------------------------
Ronald W. Dewberry has a pending civil action against the Debtors
in the United States District Court for the Western District of
Kentucky, Bowling Green Division, seeking to recover damages
related to personal injuries which Mr. Dewberry suffered at the
Debtors' premises in Cave City, Kentucky, on March 6, 2008.
The District Court Action was not yet set for trial at the time
the Debtors' bankruptcy proceedings were filed, but discovery had
commenced and been exchanged.
As part of the discovery process, Mr. Dewberry has determined
that the Debtors are insured under a policy with Liberty Mutual
Insurance Company, which provided coverage to the Debtors during
that time. However, the policy provides for a "self-insured
amount" of $750,000. Although the Debtors' claim in the District
Court Action requests damages in excess of $1,500,000, it appears
from the policy language that the Defendants may be required to
pay the first $750,000 of any damages.
In this regard, Mr. Dewberry asks the Court to lift the stay so
that the District Court Action may proceed to mediation or trial,
so that, after judgment, Mr. Dewberry can submit any claim
outside the scope of insurance coverage to the Court for payment
in the event that it is not paid in full under the Debtors' Plan
of Reorganization.
About Spectrum Brands
Based in Cibolo, Texas, Spectrum Brands, Inc. --
http://www.spectrumbrands.com/-- supplies consumer batteries,
lawn and garden care products, specialty pet supplies, shaving and
grooming products, household insect control products, personal
care products, and portable lighting. Spectrum Brands' business
is operated in three reportable segments: (a) Global Batteries and
Personal Car; (b) Global Pet Supplies; and (c) Home and Garden.
Spectrum Brands has roughly 5,960 employees worldwide, with about
2,700 of those employees working within the United States. In
addition, Spectrum Brands holds a 50% interest in a domestic
entity; minority interests (less than 25% each) in a domestic
entity and a foreign entity; a limited partnership interest in a
foreign entity; and a 100% interest in a foreign trust.
Spectrum Brands, Inc., and 13 subsidiaries filed separate
Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead
Case No. 09-50455). The Hon. Ronald B. King presides over the
cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr.,
Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B.
Kingman, Esq., in San Antonio, serve as the Debtors' counsel.
Sutherland Asbill & Brennan LLP acts as special counsel; Perella
Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as
tax consultant; and Logan & Company Inc. as claims and noticing
agent. As of September 30, 2008, Spectrum Brands had
$2,247,479,000 in total assets and $3,274,717,000 in total
liabilities.
An official committee of equity security holders -- composed of
Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and
the Peter and Karen Locke Living Trust -- was appointed by the
U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009.
The Equity Committee has tapped Alston & Bird LLP as its
bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spectrum Brands Inc. and its various subsidiaries.
(http://bankrupt.com/newsstand/or 215/945-7000)
SPECTRUM BRANDS: The Wards Want Stay Relief for PI Action
---------------------------------------------------------
John Ward and Rosemarie Ward ask the Court to modify the
automatic stay, pursuant to Section 362 of the Bankruptcy Code,
to allow them to proceed with their personal injury action
against Eight In One Pet Product Inc., a division of Spectrum
Brands, Inc.
In October 2007 while still employed by U.P.S., John Ward was
injured while delivering packages to the Debtors' premises in
Hauppauge, New York. The incident caused Mr. Ward to suffer
multiple knee injuries with surgeries and other injuries which
required surgical intervention. He remains totally disabled.
This incident prompted the Wards to file an action in the Supreme
Court of the State of New York County of Suffolk.
There is insurance coverage in this matter for the Debtors to
satisfy any judgment or settlement in the sum of $1,000,000 with
Liberty Mutual Insurance Co. covering the period from April 1,
2007, to April 1, 2008.
Knowing that Debtors have a $1,000,000 insurance with Liberty
Mutual to satisfy any judgment in the PI action, the Wards agree
to pursue their Action against the Debtors only to the extent of
the insurance coverage, and seeks to lift the stay so their case
can proceed.
If the stay is not lifted and the Wards are not permitted to
continue the action against the Debtors, the Wards assert that
they will be severely prejudiced by the inability to proceed with
their personal injury action against the Debtors, wherein they
could suffer irreparable injury, loss and damage.
Liberty Mutual Objects
Liberty Mutual does not agree with the Wards' motion to lift stay
with intent to pursue insurance proceeds from Liberty Mutual.
Accordingly, Liberty Mutual asks the Court to deny the motion,
contending that the Wards have not provided evidence of personal
injury, no evidence of liability and no evidence of an existing
court action in their motion.
About Spectrum Brands
Based in Cibolo, Texas, Spectrum Brands, Inc. --
http://www.spectrumbrands.com/-- supplies consumer batteries,
lawn and garden care products, specialty pet supplies, shaving and
grooming products, household insect control products, personal
care products, and portable lighting. Spectrum Brands' business
is operated in three reportable segments: (a) Global Batteries and
Personal Car; (b) Global Pet Supplies; and (c) Home and Garden.
Spectrum Brands has roughly 5,960 employees worldwide, with about
2,700 of those employees working within the United States. In
addition, Spectrum Brands holds a 50% interest in a domestic
entity; minority interests (less than 25% each) in a domestic
entity and a foreign entity; a limited partnership interest in a
foreign entity; and a 100% interest in a foreign trust.
Spectrum Brands, Inc., and 13 subsidiaries filed separate
Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead
Case No. 09-50455). The Hon. Ronald B. King presides over the
cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr.,
Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B.
Kingman, Esq., in San Antonio, serve as the Debtors' counsel.
Sutherland Asbill & Brennan LLP acts as special counsel; Perella
Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as
tax consultant; and Logan & Company Inc. as claims and noticing
agent. As of September 30, 2008, Spectrum Brands had
$2,247,479,000 in total assets and $3,274,717,000 in total
liabilities.
An official committee of equity security holders -- composed of
Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and
the Peter and Karen Locke Living Trust -- was appointed by the
U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009.
The Equity Committee has tapped Alston & Bird LLP as its
bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes Spectrum Brands
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spectrum Brands Inc. and its various subsidiaries.
(http://bankrupt.com/newsstand/or 215/945-7000)
SPORT CHALET: Amends Form 10-K to Include D&O Information, etc.
---------------------------------------------------------------
Sport Chalet Inc. filed Amendment No. 1 to its Annual Report on
Form 10-K/A for the fiscal year ended March 29, 2009, to include
information required by Items 10, 11, 12, 13, and 14 under Part
III, initially filed with the Securities and Exchange Commission
on June 29, 2009:
Item 10 -- Directors, Executive Officers and Corporate
Governance
Item 11 -- Executive Compensation
Item 12 -- Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters
Item 13 -- Certain Relationships and Related Transactions,
and Director Independence
Item 14 -- Principal Accountant Fees and Services
When the Company filed the Original Filing it incorporated, as
permitted by SEC rules, by reference information required by Part
III of Form 10-K from the definitive proxy statement, relating to
the Company's annual meeting of stockholders, that it expected to
be filed within 120 days following its fiscal year ended March 29,
2009. The information is being included in the Form 10-K/A
because the Company will file its definitive proxy statement with
the SEC after the originally anticipated date. Reference to the
proxy statement on the cover page of the Form-10K/A has been
deleted and information with respect to the outstanding number of
common shares on the cover page of the Form 10-K/A has been
updated.
In its Annual Report, the Company reported net loss for the fourth
quarter of fiscal 2009 ended March 29, 2009, of $11.1 million
compared to a net loss of $2.8 million for the fourth quarter of
fiscal 2008.
Net loss for fiscal 2009 was $52.2 million, including a non-cash
impairment charge and income tax valuation allowance recorded in
the third quarter, compared to a net loss of $3.4 million in
fiscal 2008. Excluding the non-cash impairment charge and
valuation allowance, net loss for fiscal 2009 was $35.6 million.
This compares to a net loss of $2.1 million in fiscal 2008, which
excludes a non-cash impairment charge in the third quarter of
fiscal 2008.
As of March 29, 2009, the Company had $151,055,000 in total
assets; $93,643,000 in total current liabilities and $25,217 in
deferred rent; and $32,086,000 in stockholders' equity.
A copy of the Company's Annual Report filed on June 26, 2009, is
available at no charge at http://ResearchArchives.com/t/s?402d
A copy of Amendment No. 1 to the Annual Report is available at no
charge at http://ResearchArchives.com/t/s?402c
On June 29, 2009, the Company said it has taken a number of
actions and implemented several corporate initiatives in an
attempt to increase sales, improve operating performance, maximize
shareholder value and position Sport Chalet for long-term growth.
The announcement follows a comprehensive review beginning in
October 2008 of the Company's financial performance in light of
the continued economic downturn in Sport Chalet's core markets --
California, Nevada, Arizona, and Utah.
The Company's initiatives include:
-- On May 4, 2009, Sport Chalet amended its existing loan
agreement with Bank of America, N.A. to increase financial
flexibility. As a result of the initiatives taken by the
Company, Bank of America approved loan amendments
favorable to Sport Chalet and agreed to covenants that
require a $5.4 million EBITDA profit in fiscal 2010, a
$24 million improvement from fiscal 2009. Sport Chalet
has reported to the bank that results have exceeded plan
in the first two months of fiscal 2010.
-- Sport Chalet has implemented an aggressive inventory
management program, which has led to historic lows of aged
winter apparel and hardlines, along with footwear, general
apparel, and other key categories of hardlines. This is
due in part to the renewed commitment by the Company to
better inventory control, new executive leadership in
merchandising, along with the implementation and roll out
of SAP computer systems. The result has been fresh
assortments on the floor and an enhanced borrowing base.
From January through May 2009, the Company received a
total of $138.6 million in fresh inventory at retail. The
Company believes it has the freshest and cleanest
inventory in the Company's history.
-- The Company has approached landlords of all of its
55 stores, as well as of the corporate office,
distribution center, and Team Sales division about
restructuring lease terms. To date, these efforts have
resulted in projected savings of roughly $17 million,
$14 million of which is over the next three years, with
many leases to include kick-out clauses, percentage rent
and co-tenancy clauses. The Company continues to
negotiate aggressively for additional concessions.
-- Sport Chalet revised its store operating model by creating
four models based on individual store performance,
increasing the number of full-time versus part-time
employees and freezing incentive and salary programs. This
resulted in a $7.2 million reduction in payroll in the
second half of fiscal 2009 and is expected to further
reduce payroll expense by $10.7 million in fiscal 2010.
The Company also began approaching expense vendors
concerning elimination or reduction of non-critical
programs, implementing aggressive cost containment and
renegotiations. In the second half of fiscal 2009, Sport
Chalet reduced $2.8 million in annual expenses, which
includes advertising and marketing, professional fees,
supplies, utilities, travel and other costs. The Company
expects an additional $9.4 million reduction in expenses
throughout fiscal 2010.
-- Sport Chalet completed on-time and on-budget the launch of
its new sportchalet.com Web site with enhanced
capabilities on March 23, 2009. The Company established a
leadership position in ecommerce in the sporting goods
industry by selecting Marketlive, Sapient, Shopatron,
Bazaarvoice, and Experian CheetahMail to run the Web site.
This new business is expected to achieve average store
sales volume by the end of the fiscal year and continue to
grow. It is also expected to be one of Sport Chalet's
primary advertising and marketing vehicles in the future.
-- The Company continued to aggressively move forward with
its Sport Chalet Action Pass program, which was initiated
in November 2007 to enhance the Company's customer
relationship management capabilities. As of June 29, the
Company has over 720,000 members and is signing 6,000 to
8,000 new members each week. Over 40% of all sales are
being generated by Action Pass members. As a result the
Company has been able to shift a significant portion of
its marketing activities away from traditional channels
and towards direct marketing to Action Pass members, the
Company's best customers, which is expected to result in a
higher return on advertising investment.
About Sport Chalet
Sport Chalet Inc. -- http://www.sportchalet.com/-- founded in
1959 by Norbert Olberz, operates full service specialty sporting
goods stores in California, Nevada, Arizona and Utah. The Company
offers more than 50 services for the serious sports enthusiast,
including backpacking, canyoneering, and kayaking instruction,
custom golf club fitting and repair, snowboard and ski rental and
repair, SCUBA training and certification, SCUBA boat charters,
team sales, racquet stringing, and bicycle tune-up and repair
throughout its 55 locations.
SPRINT NEXTEL: Will Acquire Virgin Mobile USA for $483 Million
--------------------------------------------------------------
The boards of directors of Sprint Nextel Corporation and Virgin
Mobile USA, Inc., have approved a definitive agreement for Sprint
to acquire Virgin Mobile USA for a total equity value of
approximately $483 million, which includes the value of Sprint's
current 13.1% fully diluted ownership interest in Virgin Mobile
USA. In addition, at closing Sprint will retire all of Virgin
Mobile USA's outstanding debt, which is $248 million net of cash
and cash equivalents as of March 31, 2009, but is expected to be
no more than $205 million net of cash and cash equivalents on
September 30, 2009.
This acquisition will strengthen Sprint's position in the growing
prepaid segment by bringing together under one umbrella the iconic
Virgin Mobile brand with Sprint's successful Boost Mobile
business. These complementary prepaid brands, each with a
distinctive offer, style and appeal to different customer
demographics, will continue to serve existing and prospective
customers following the completion of the transaction.
Following the closing of the transaction, Sprint's prepaid
business will be led by Dan Schulman, current Virgin Mobile USA
chief executive officer, who will report directly to Dan Hesse,
Sprint Nextel president and chief executive officer. Bringing
exceptional telecom leadership credentials to Sprint, Schulman
will be responsible for the business strategy and growth of the
prepaid segment. Matt Carter will continue to lead Boost Mobile
and will report to Schulman.
"The acquisition of Virgin Mobile USA positions Sprint for even
greater success in the prepaid wireless segment," said Mr. Hesse.
"Prepaid is growing at an unprecedented rate with consumers keenly
focused on value. Virgin Mobile is an iconic brand in the
marketplace that will complement our Boost Mobile brand."
"I have known Dan Schulman for many years, and I feel very
fortunate that a leader with Dan's talents is joining Sprint to
take us to even greater heights in prepaid," added Mr. Hesse.
"Virgin Mobile USA redefined the U.S. prepaid segment when we
launched seven years ago," said Mr. Schulman. "Sprint is
committed to growing its prepaid business and this transaction
will provide us with the resources and opportunities to compete
more aggressively, and strengthen our position in prepaid."
Transaction Benefits:
-- Strengthens Sprint's position in the fast growing prepaid
segment.
-- Enhances cross selling of full suite of Sprint products and
services across a larger target audience.
-- Free cash flow accretive for Sprint before synergies.
-- Synergies to be derived from general and administrative
reductions, operational efficiencies, and streamlined
distribution.
-- Sprint gains deeper managerial talent with additional
expertise in the prepaid segment.
Terms of the Transaction
Under the terms of the agreement, Virgin Mobile USA stockholders
will receive shares of common stock of Sprint based on the
exchange ratios described in more detail below, and cash in lieu
of fractional shares.
Virgin Mobile USA Public Stockholders
Each public stockholder, holding in aggregate approximately
39.7 million shares on a fully diluted basis or 43.3% ownership,
will receive Sprint shares having a 10-day average closing price
equivalent to $5.50 per Virgin Mobile USA share, subject to:
-- The exchange ratio for public stockholders will be based on
Sprint's 10-day average closing share price ending two
trading days prior to closing.
-- The exchange ratio will be subject to a collar such that in
no event will the exchange ratio be lower than 1.0630 or
higher than 1.3668.
The Virgin Group
-- The exchange ratio for the Virgin Group will in all
circumstances be equal to 93.09% of the exchange ratio for
the public stockholders equating generally to $5.12 per
Virgin Mobile USA share for common stock owned by the
Virgin Group (including shares into which preferred stock
held by it is convertible.)
-- Preferred shares owned by Virgin Group will be converted
into common stock based on the Virgin Group exchange ratio
at a conversion price of $8.50.
-- Virgin Group owns approximately 26.0 million shares on a
fully diluted basis or 28.3% ownership, of Virgin Mobile
USA.
SK Telecom
-- The exchange ratio for the SK Telecom will in all
circumstances be equal to 89.84% of the exchange ratio for
the public stockholders, equating generally to $4.94 per
Virgin Mobile USA share for common stock owned by SK Telecom
(including shares into which preferred stock held by it is
convertible.)
-- Preferred shares owned by SK Telecom will be converted into
common stock based on the SK Telecom exchange ratio at a
conversion price of $8.50.
-- SK Telecom owns approximately 14.0 million shares on a fully
diluted basis or 15.3% ownership, of Virgin Mobile USA.
Based on the terms of the agreement, Sprint currently expects to
issue between 81.4 million and 104.7 million shares of its common
stock in exchange for all Virgin Mobile USA common stock,
excluding Sprint's 13.1% stake, and all Virgin Mobile USA
preferred stock.
Following the closing of the transaction, Virgin Mobile USA will
continue to license the Virgin Mobile USA brand from the Virgin
Group under the terms of an amended and restated Trademark License
Agreement. Sprint will pay $12.7 million for the initial term,
which will continue through the end of 2021. The agreement
contains several renewal provisions that will allow Virgin Mobile
USA to extend the term until 2047.
Sprint will pay Virgin Group approximately $50 million at closing
as payment in full for net operating losses available to be
utilized by Virgin Mobile USA in the future under the Tax
Receivable Agreement.
All of Virgin Mobile USA's outstanding debt will be retired at the
closing of the transaction including amounts due under the Senior
Secured Credit Facility and the Related Party Subordinated Secured
Revolving Credit Agreements.
The payments at the closing of the transaction for the Trademark
License Agreement, the Tax Receivable Agreement and Virgin Mobile
USA's subordinated debt will be made either in cash or stock, at
Sprint's option.
The transaction is subject to various closing conditions,
including the approval of the transaction agreement by Virgin
Mobile USA's stockholders, the receipt of applicable regulatory
approvals, and other customary closing conditions. The Virgin
Group and SK Telecom have agreed to vote a portion of the Virgin
Mobile USA voting shares owned by them that, when aggregated with
the voting shares owned by Sprint, comprise approximately 40% of
the outstanding voting power. The transaction is expected to be
completed in the fourth quarter of 2009 or in early 2010.
Sprint was advised by Wells Fargo Securities and King & Spalding.
Deutsche Bank Securities Inc., Colonnade Advisors LLC and Foros
Advisors LLC are acting as financial advisors to an independent
special committee of the Board of Directors of Virgin Mobile and
Deutsche Bank Securities Inc. also has provided a fairness opinion
to the committee. Virgin Mobile USA was also advised by Simpson
Thacher & Bartlett LLP.
About Sprint Nextel
Sprint Nextel Corporation is a communications company offering a
comprehensive range of wireless and wireline communications
products and services that are designed to meet the needs of
individual consumers, businesses and government subscribers.
Sprint Nextel is the third largest wireless communications company
in the United States based on the number of wireless subscribers.
Sprint Nextel is also one of the largest providers of wireline
long distance services and one of the largest carriers of Internet
traffic in the nation.
* * *
As reported by the Troubled Company Reporter on April 7, 2009,
Standard & Poor's Rating Services revised its outlook on Sprint
Nextel and its subsidiaries to negative from stable. At the same
time, S&P affirmed all other ratings on the company, including the
'BB' corporate credit rating. Total funded debt outstanding as of
December 31, 2008, was about $22 billion.
"The outlook revision reflects our concerns that Sprint Nextel's
credit measures could deteriorate further in 2009," said Standard
& Poor's credit analyst Allyn Arden, "given the Company's weaker
business position stemming from the ongoing erosion of its
subscriber base." Total debt to EBITDA was 3.9x for 2008, up from
2.8x a year ago as revenue and EBITDA fell by 11% and 29%,
respectively, largely because of the loss of post-paid customers
that totaled 4.1 million and a decline in average revenue per
user.
STATION CASINOS: Files for Chapter 11 Bankruptcy Protection
-----------------------------------------------------------
Station Casinos, Inc., and certain of its non-casino subsidiaries
have filed voluntary petitions to reorganize under Chapter 11 of
the United States Bankruptcy Code in Reno, Nevada.
Pursuant to an agreement with the Company's senior secured
lenders, none of the Company's casino operating subsidiaries or
affiliates were included in the Chapter 11 filings and the Company
will continue normal operations at all of its properties under the
direction of its existing management team. In addition to cash
generated from its operating subsidiaries and affiliates, the
Company has in place an agreement with its senior secured lenders
that, subject to court approval, permits it to borrow, as needed,
up to $150 million of cash from one of its non-operating
subsidiaries.
"Station Casinos is a great company and our 18 casinos and resorts
continue to generate positive cash flow, but the global recession
has severely impacted our company, just as it has every other
company in the gaming industry. The restructuring of our debt
will provide us with the financial flexibility necessary to meet
the challenges of the current economic environment. Equally
important, it will provide the resources necessary for us to
continue to invest in our properties, take advantage of
opportunities as they arise and ultimately enable us to emerge as
a stronger company," said Frank J. Fertitta III, Chairman and
Chief Executive Officer of Station Casinos.
"All of our casinos will continue to operate as usual and we will
continue to provide our guests with the same great value and
entertainment choices they have always enjoyed at our properties,"
said Kevin Kelley, Chief Operating Officer of Station Casinos.
"From our loose slots, to honoring points earned in our Boarding
Pass program, to our great promotions and contests-like our
upcoming Great Giveaway Football Contest, it's business as usual
at Station Casinos," Mr. Kelley said.
"Just as importantly, our Team Members will see no difference in
their jobs. We greatly value our Team Members and will do
everything we can during these difficult economic times to reward
them for their excellent performance," Mr. Kelley said. "It's no
accident that Station was recognized by FORTUNE Magazine as one of
the '100 Best Companies to Work For' in 2005, 2006, 2007 and 2008.
We are committed to our Team Members, just as they are committed
to us and to meeting the needs of our guests."
Station Casinos said in a filing with the U.S. Securities and
Exchange Commission that in connection with the filing of the
bankruptcy case, the Company entered into a Second Forbearance
Agreement and Second Amendment to the Credit Agreement with the
lenders holding a majority of the commitments under its senior
secured credit facility pursuant to which the lenders agreed,
among other things, to forbear from exercising their default-
related rights, remedies and powers or privileges against certain
subsidiaries that guarantee the Company's obligations under the
Credit Facility through the earlier of the effective date of a
plan of reorganization under the Chapter 11 Case or January 31,
2010, unless earlier terminated. A copy of the Forbearance
Agreement, without exhibits, is available at:
http://ResearchArchives.com/t/s?4031
Tamara Audi at The Wall Street Journal reports that Station
Casinos filed for bankruptcy after failing to reach a prearranged
agreement with its lenders. According to WSJ, bondholders hold
$2.3 billion of Station Casinos' $5.7 billion debt. WSJ notes
that the lack of an agreement with bondholders could mean a long
haul in bankruptcy court, but Station Casinos Chief Accounting
Officer Tom Friel said that "all the lenders are on board" with
the move to file.
According to WSJ, Mr. Friel said that after months of talks, "we
feel it's helpful to have the formal court process to resolve some
of the issues. You've got a whole bunch of different
constituencies who have a bunch of agendas on how they want the
world to be. This will hopefully help us move closer to getting a
deal done."
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
SUNRISE SENIOR: Appoints Richards as Chief Accounting Officer
-------------------------------------------------------------
The Board of Directors of Sunrise Senior Living, Inc., on July 20,
2009, appointed C. Marc Richards as the Company's new Chief
Accounting Officer, effective immediately.
In that role, Mr. Richards will serve as the Company's Principal
Accounting Officer. Mr. Richards succeeds Julie A. Pangelinan as
Chief Accounting Officer. Ms. Pangelinan became the Company's
Chief Financial Officer, effective as of May 29, 2009.
From November 2007 to July 2009, Mr. Richards, 38, was a Vice
President of JE Robert Companies and functioned as the Controller
for JER Investors Trust, a publicly traded real estate investment
trust that invests in real estate loans, commercial mortgage
backed securities and other structured finance products. While
serving in this capacity, Mr. Richards supervised the accounting
and financial reporting functions, Sarbanes-Oxley Act compliance
and REIT tax compliance of JER Investors Trust.
From May 2006 to October 2007, Mr. Richards served as Vice
President and Corporate Controller of Republic Property Trust, a
publicly traded owner, operator and redeveloper of commercial
office buildings in the Metropolitan D.C area, which was acquired
by Liberty Property Trust in August 2007. In this role, Mr.
Richards supervised the accounting and financial reporting
functions of Republic Property Trust.
From July 1999 to May 2006, Mr. Richards served in a variety of
accounting positions with increasing responsibilities at The Mills
Corporation, a publicly traded developer, owner and manager of a
diversified portfolio of regional shopping malls and retail
entertainment centers, which was acquired by Simon Property Group
and Farallon Capital in May 2007. The positions included: Group
Vice President of Corporate Accounting (until May 2006), Vice
President of Corporate and Property G/L Accounting (2004-2006),
Director of Corporate Accounting (2003-2004), Director of Property
Accounting (2001-2003), and Property Controller (1999-2001).
Mr. Richards' initial annual base salary is $235,000 and his
target annual bonus is 50% of his base salary and will be pro-
rated. Subject to approval by the Compensation Committee of the
Company's Board of Directors, he will be eligible to receive an
option grant under the Company's 2008 Omnibus Incentive Plan for
50,000 shares of Company common stock. The option will vest at a
rate of one-third on each of the first three anniversaries of the
date of grant. The exercise price will equal fair market value on
the date of grant, as determined in accordance with the Plan.
In connection with his appointment as the Company's new Chief
Accounting Officer, the Company is entering into a separation pay
agreement with Mr. Richards. Under this agreement, in the event
his employment is terminated by the Company other than for cause
and a change in control has not occurred, he will be entitled to
receive severance of one years' salary. If a change in control has
occurred within the preceding 24-month period and his employment
is terminated other than for cause or he terminates his employment
for good reason, he will be entitled to receive severance of one
years' salary plus his target annual bonus for the year in which
the termination occurs. In either case, his receipt of the
severance payment will be subject to his execution of a general
release of claims. In addition, the Company expects to enter into
an indemnification agreement with Mr. Richards.
About Sunrise Senior Living
McLean, Virginia-based Sunrise Senior Living, Inc. --
http://www.sunriseseniorliving.com-- employs roughly 40,000
people. As of December 31, 2008, Sunrise operated 435 communities
in the United States, Canada, Germany and the United Kingdom, with
a combined capacity for approximately 54,000 residents. Sunrise
offers a full range of personalized senior living services,
including independent living, assisted living, care for
individuals with Alzheimer's and other forms of memory loss, as
well as nursing, rehabilitative and hospice care.
The Company had $1,247,759,000 in total assets and $1,123,412,000
in total liabilities at March 31, 2009. The Company has debt of
$622.5 million including scheduled debt maturities of
$196.6 million in 2009 and long-term debt that is in default of
$265.8 million, including $202.2 million that is in default as a
result of its failure to pay principal and interest on debt
related to its German communities and $63.6 million which results
from its failure to meet financial covenants.
In its May 2009 regulatory filing with the Securities and Exchange
Commission, the Company said it is working with its lenders to
either re-schedule certain of the obligations or obtain waivers.
SUNRISE SENIOR: Cancels Shares Under Employee Stock Purchase Plan
-----------------------------------------------------------------
Sunrise Senior Living, Inc., filed with the Securities and
Exchange Commission Post-Effective Amendment No. 1 relates to the
Registration Statement on Form S-8 (Registration No. 333-120738)
of the Company pursuant to which the Company registered shares of
its common stock, par value $0.01 per share, that were issuable to
participants in the Company's Employee Stock Purchase Plan. The
Company is no longer offering shares of the Common Stock pursuant
to the Plan. Accordingly, the Company removes from registration
under the Registration Statement all 1,302,929 shares of the
Common Stock that remain unsold and unissued.
About Sunrise Senior Living
McLean, Virginia-based Sunrise Senior Living, Inc. --
http://www.sunriseseniorliving.com-- employs roughly 40,000
people. As of December 31, 2008, Sunrise operated 435 communities
in the United States, Canada, Germany and the United Kingdom, with
a combined capacity for approximately 54,000 residents. Sunrise
offers a full range of personalized senior living services,
including independent living, assisted living, care for
individuals with Alzheimer's and other forms of memory loss, as
well as nursing, rehabilitative and hospice care.
The Company had $1,247,759,000 in total assets and $1,123,412,000
in total liabilities at March 31, 2009. The Company has debt of
$622.5 million including scheduled debt maturities of
$196.6 million in 2009 and long-term debt that is in default of
$265.8 million, including $202.2 million that is in default as a
result of its failure to pay principal and interest on debt
related to its German communities and $63.6 million which results
from its failure to meet financial covenants.
In its May 2009 regulatory filing with the Securities and Exchange
Commission, the Company said it is working with its lenders to
either re-schedule certain of the obligations or obtain waivers.
SUNRISE SENIOR: No Assurance on Refinancing by December
-------------------------------------------------------
Sunrise Senior Living, Inc., filed with the Securities and
Exchange Commission a copy of a July 23, 2009 article regarding
the Company posted on Dow Jones Newswire.
Sunrise said certain matters in the article attributed to Sunrise
or its executives, including the ability of Sunrise to refinance
its indebtedness, may be forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Sunrise is a party to a variety of indebtedness, including a
Credit Agreement, dated as of December 2, 2005. Sunrise said
there can be no assurance it will be able to refinance its
indebtedness, including the Credit Agreement, and there can
likewise be no assurance as to any other matter discussed or
attributed to Sunrise or its executives in the article.
Sunrise Chief Executive Mark Ordan was quoted in the article as
saying, "We need to refinance this company by December. I'm 100%
confident we'll do so."
"We're not just buying time. I hope in the coming weeks and months
to have a resolution [with our lenders]," said Mr. Ordan,
according to the article.
According to Veronica Dagher at Dow Jones, "Sunrise has debt of
about $623 million, including scheduled maturities of around
$197 million in 2009, according to its March 31 quarterly filing.
That's in sharp contrast to its current market capitalization of
about $71 million and roughly $34 million of cash on hand. A
sizable portion of Sunrise's debt in default is from its failure
to pay principal and interest on debt related to its German
communities, causing it to seek standstill agreements with
lenders."
"According to industry observers, Sunrise's future lies largely in
its ability to restructure that debt, resolve issues with other
lenders and right-size its operations so the company can return to
profitability," Ms. Dagher wrote.
A full-text copy of the Dow Jones article shared by Sunrise is
available at no charge at http://ResearchArchives.com/t/s?401e
The Company clarified its actual results could vary materially as
a result of various factors, including, but not limited to,
changes in Sunrise's anticipated cash flow and liquidity;
Sunrise's ability or inability to maintain adequate liquidity to
operate its business and execute its restructuring; Sunrise's
ability or inability to refinance its Bank Credit Facility and
other debt due in 2009 or raise funds from other capital sources;
and other risks detailed in Sunrise's 2008 Annual Report on Form
10-K filed with the SEC, as may be amended or supplemented in
Sunrise's Form 10-Q filings or otherwise. Sunrise assumes no
obligation to update or supplement forward-looking statements.
About Sunrise Senior Living
McLean, Virginia-based Sunrise Senior Living, Inc. --
http://www.sunriseseniorliving.com-- employs roughly 40,000
people. As of December 31, 2008, Sunrise operated 435 communities
in the United States, Canada, Germany and the United Kingdom, with
a combined capacity for approximately 54,000 residents. Sunrise
offers a full range of personalized senior living services,
including independent living, assisted living, care for
individuals with Alzheimer's and other forms of memory loss, as
well as nursing, rehabilitative and hospice care.
The Company had $1,247,759,000 in total assets and $1,123,412,000
in total liabilities at March 31, 2009. The Company has debt of
$622.5 million including scheduled debt maturities of
$196.6 million in 2009 and long-term debt that is in default of
$265.8 million, including $202.2 million that is in default as a
result of its failure to pay principal and interest on debt
related to its German communities and $63.6 million which results
from its failure to meet financial covenants.
In its May 2009 regulatory filing with the Securities and Exchange
Commission, the Company said it is working with its lenders to
either re-schedule certain of the obligations or obtain waivers.
SUNRISE SENIOR: District Court Grants Final OK on DC Class Actions
------------------------------------------------------------------
Sunrise Senior Living, Inc., reports that on June 26, 2009, the
U.S. District Court for the District of Columbia granted final
approval of the settlement of a federal securities class action
lawsuit entitled In Re: Sunrise Senior Living Systems Securities
Litigation, which had been brought against Sunrise Senior Living,
Inc., and certain of its current or former directors and officers.
Under the settlement, all claims against the Company and the
individual defendants have been dismissed with prejudice, in
exchange for payment to the class of $13.5 million, of which
$13.4 million has been paid by insurance proceeds and $100,000 has
been paid by the Company.
On June 26, the D.C. District Court also granted final approval of
the settlement of a stockholder derivative lawsuit entitled In re
Sunrise Senior Living Derivative Litigation, Inc., in which the
Company was named as a nominal defendant and certain of the
Company's current or former directors and officers were named as
individual defendants.
Under the settlement:
-- all claims against the Company and the individual
defendants have been dismissed with prejudice;
-- in addition to corporate governance measures that it
already has implemented or is in the process of
implementing, the Company has agreed to (1) require
independent directors to certify that they are independent
under the rules of the New York Stock Exchange and to give
prompt notification of any changes in their status that
would render them no longer independent and (2) implement
a minimum two-year vesting period, with appropriate
exceptions, for stock option awards to employees. In
addition, Paul J. Klaassen, the Company's non-executive
chairman, and the Company have agreed that the 700,000
stock options granted to Mr. Klaassen in conjunction with
his previous employment agreement executed in September
2000 will be repriced from (a) $8.50 per share, the price
set on September 11, 2000 by the Compensation Committee of
the Company's Board based on the prior day's closing
price, to (b) $13.09 per share, the closing price on the
business day prior to November 10, 2000, the date on which
the Company's full Board approved the terms of the
employment agreement; and
-- the plaintiffs could apply to the court for an award of
attorneys' fees and expenses, with the Company or its
insurers agreeing to pay the amount awarded not to exceed
$1.0 million. On June 26, the court approved an award to
the plaintiffs of attorneys' fees and expenses totaling
$1.0 million, the entire amount of which was to be paid by
insurance within 10 days.
The settlement of the District of Columbia stockholder derivative
action includes a release that encompasses the claims at issue in
the Delaware stockholder derivative lawsuit entitled Young, et al.
v. Klaassen, et al. Counsel for the plaintiffs in the Delaware
action participated in the negotiated resolution of the District
of Columbia action, they will share in the fee award in the
District of Columbia action, and they have agreed not to seek an
award of fees in the Delaware action. Once the order of dismissal
in the District of Columbia action becomes final for purposes of
preclusion under Delaware law, the parties have agreed to jointly
apply to the Delaware Court of Chancery for an order and final
judgment dismissing the Delaware action with prejudice on the
grounds that the settlement in the District of Columbia action
conclusively resolved the claims in the Delaware action.
About Sunrise Senior Living
McLean, Virginia-based Sunrise Senior Living, Inc. --
http://www.sunriseseniorliving.com-- employs roughly 40,000
people. As of December 31, 2008, Sunrise operated 435 communities
in the United States, Canada, Germany and the United Kingdom, with
a combined capacity for approximately 54,000 residents. Sunrise
offers a full range of personalized senior living services,
including independent living, assisted living, care for
individuals with Alzheimer's and other forms of memory loss, as
well as nursing, rehabilitative and hospice care.
The Company had $1,247,759,000 in total assets and $1,123,412,000
in total liabilities at March 31, 2009. The Company has debt of
$622.5 million including scheduled debt maturities of
$196.6 million in 2009 and long-term debt that is in default of
$265.8 million, including $202.2 million that is in default as a
result of its failure to pay principal and interest on debt
related to its German communities and $63.6 million which results
from its failure to meet financial covenants.
In its May 2009 regulatory filing with the Securities and Exchange
Commission, the Company said it is working with its lenders to
either re-schedule certain of the obligations or obtain waivers.
SUNRISE SENIOR: Registers 8.15MM Shares Under 2008 Incentive Plan
-----------------------------------------------------------------
Sunrise Senior Living, Inc., filed with the Securities and
Exchange Commission a Form S-8 Registration Statement to register
8,157,228 shares of common stock to be issued under the Sunrise
Senior Living, Inc. 2008 Omnibus Incentive Plan.
The proposed maximum offering price per share is $1.19 to $1.33
and the proposed maximum aggregate offering price is $10,189,714.
The Registration Statement also applies to rights to purchase
Series D Junior Participating Preferred Stock of Sunrise Senior
Living, Inc., pursuant to the Rights Agreement, dated April 24,
2006, as amended by a First Amendment, dated November 19, 2008,
between the Company and American Stock Transfer & Trust Company,
as Rights Agent. The rights are attached to, and tradable only
with, the Common Stock registered.
In accordance with the terms of the 2008 Omnibus Incentive Plan,
the 4,800,000 shares of Common Stock that are issuable under the
2008 Plan are subject to increase by the number of shares of
Common Stock covered by outstanding equity awards under prior
plans that are not purchased, are forfeited or expire, or
otherwise terminate without delivery of any shares subject thereto
or are settled in cash in lieu of shares, after September 17,
2008.
As of September 17, 2008, the Company had outstanding under the
Prior Plans (a) options to purchase 3,154,921 shares of Common
Stock, (b) 623,996 shares of restricted Common Stock, and (c)
4,466 restricted Common Stock units. Subsequent to September 17,
2008 and through the date of the filing of this registration
statement on Form S-8, equity awards under the Prior Plans
relating to (a) an aggregate of 596,420 shares of Common Stock
have been forfeited or have expired or otherwise terminated
without delivery of any shares subject thereto or settled in cash
in lieu of shares -- Forfeited Equity Awards -- and (b) an
aggregate of 421,689 shares of Common Stock and 4,466 restricted
Common Stock units have vested or been issued. Accordingly, the
Registration Statement includes (i) 4,800,000 shares of Common
Stock that are originally issuable under the 2008 Plan, (ii) up to
596,420 additional shares of Common Stock covered by Forfeited
Equity Awards under the Prior Plans and (iii) up to 2,760,808
additional shares of Common Stock that may be issuable in
accordance with the 2008 Plan, which number represents the maximum
aggregate number of shares of Common Stock covered by equity
awards under the Prior Plans outstanding as of July 23, 2009, that
may expire, be forfeited or not be purchased, or otherwise be
terminated without delivery or be settled in cash in lieu of
shares.
"Prior Plans" consists of the Company's existing 1995 Stock Option
Plan, as amended; 1996 Non-Incentive Stock Option Plan, as
amended; 1997 Stock Option Plan, as amended; 1998 Stock Option
Plan, as amended; 1999 Stock Option Plan, as amended; 2000 Stock
Option Plan, as amended; 2001 Stock Option Plan, as amended; 2002
Stock Option and Restricted Stock Plan, as amended; and 2003 Stock
Option and Restricted Stock Plan, as amended.
A full-text copy of the Registration Statement is available at no
charge at http://ResearchArchives.com/t/s?401f
About Sunrise Senior Living
McLean, Virginia-based Sunrise Senior Living, Inc. --
http://www.sunriseseniorliving.com-- employs roughly 40,000
people. As of December 31, 2008, Sunrise operated 435 communities
in the United States, Canada, Germany and the United Kingdom, with
a combined capacity for approximately 54,000 residents. Sunrise
offers a full range of personalized senior living services,
including independent living, assisted living, care for
individuals with Alzheimer's and other forms of memory loss, as
well as nursing, rehabilitative and hospice care.
The Company had $1,247,759,000 in total assets and $1,123,412,000
in total liabilities at March 31, 2009. The Company has debt of
$622.5 million including scheduled debt maturities of
$196.6 million in 2009 and long-term debt that is in default of
$265.8 million, including $202.2 million that is in default as a
result of its failure to pay principal and interest on debt
related to its German communities and $63.6 million which results
from its failure to meet financial covenants.
In its May 2009 regulatory filing with the Securities and Exchange
Commission, the Company said it is working with its lenders to
either re-schedule certain of the obligations or obtain waivers.
SYNIVERSE TECHNOLOGIES: Moody's Gives Stable Outlook on Ba3 Rating
------------------------------------------------------------------
Moody's Investors Service revised Syniverse Technologies, Inc.'s
ratings outlook to stable from negative. Additionally, Moody's
affirmed the company's Ba3 corporate family rating, Ba3
probability of default rating, and updated the LGD assessment for
the company's individual debt instruments. The change in outlook
reflects the company's recent operating performance, successful
integration of the Billing Services Group acquisition, and
expectations for continued operational resilience despite the
macroeconomic environment. Additionally, the stable outlook
reflects the company's contract renewal with Verizon Wireless, a
company which contributed 14% of Syniverse's total net revenue in
2008, as well as greater visibility regarding the near-to-medium
term impact of Verizon Wireless's acquisition of Alltel
Corporation, also a sizeable Syniverse customer.
These ratings were affirmed:
* Corporate family rating -- Ba3
* Probability of default rating -- Ba3
These LGD assessments were changed:
* $43.8 million (including US$and Euro tranches) senior secured
revolving credit facility due 2013 - to Ba2 (LGD3-32%) from Ba2
(LGD3-35%)
* $330.1 million (including US$and Euro tranches) senior secured
term loan due 2014 -- to Ba2 (LGD3-32%) from Ba2 (LGD3-35%)
* $175 million senior notes due 2013 -- to B2 (LGD5-86%) from B2
(LGD5 -- 88%)
The outlook is stable.
Syniverse's Ba3 corporate family rating is driven by the strength
of the company's US market position and its growing international
presence, that coupled with the company's improved cost structure
enable it to generate strong cash flows and improved credit
metrics post integration of the BSG acquisition. The positive
underlying trends of the company's core wireless connectivity and
interoperability services, the relatively resilient recent
operating performance and the company's moderate leverage
(particularly on a net-debt basis) suggest upwards rating
pressure. However, the company continues to be constrained by its
relatively small size and exposure to ongoing telecom industry
consolidation and operational changes.
Moody's notes that Syniverse had approximately $174 million in
cash and cash-to-Moody's adjusted debt of about 32% as of March
31, 2009 which provides the company with flexibility to further
reduce leverage. However, Moody's expects the company to
prioritize its cash resources to pursue strategic acquisitions to
further diversify its product portfolio and to expand its
international exposure rather than driving leverage to lower
levels on a sustained basis, which puts downward pressure on the
rating.
Since increasing pro forma leverage to approximately 4x to acquire
BSG in December 2007, Syniverse has largely integrated the company
realizing cost synergies, grown its international presence, and
reduced its leverage. For the LTM period ended March 31, 2009,
Syniverse's Moody's adjusted debt to EBITDA leverage was
approximately 2.5x. Additionally, the company generated positive
free cash flow each quarter following the acquisition, increasing
the company's Moody's adjusted free cash flow-to-debt ratio to
over 21% for the LTM period ended March 31, 2009 from
approximately 17% for full year 2007. Moody's notes that this
operating performance was achieved despite the global economic
decline reflecting the strength of the company's market position,
the value that the company's customer base places on its services,
and the positive underlying trends within the company's core
markets, especially bolstered by the growing usage of mobile data
services.
Moody's expects Syniverse's total net revenue, EBITDA, and free
cash flow for 2009 to be moderately below 2008 levels, due in
large part to a renegotiated agreement with Verizon Wireless, and
the carryover effect of an in-sourcing agreement between Sprint
and Alltel for mobile data roaming services. However Moody's
expects the expansion of mobile data usage across its customers'
networks to drive resurgence of revenue growth for the business in
2010.
The last rating action for Syniverse was June 25th, 2007, when
Moody's assigned ratings to the company's new debt issuance to be
used to refinance a portion of existing debt and finance the
acquisition of BSG. Additionally, Moody's last publication
regarding Syniverse was July 2, 2008 discussing the company's
recent operating performance and the anticipated impact from
Verizon Wireless's pending acquisition of Alltel.
Based in Tampa, Florida, Syniverse Technologies is a provider of
technology outsourcing to wireless telecommunications carriers
with revenues of approximately $500 million for the LTM period
ended March 31, 2009.
TAMALPAIS BANCORP: Defers Payments on Trust Preferred Shares
------------------------------------------------------------
Tamalpais Bancorp is deferring payments on $13.4 million of
outstanding trust preferred securities "to prudently manage its
capital position" and is "currently evaluating alternatives to
improve shareholder value including raising capital," CEO Mark
Garwood said this week while discussing second quarter results.
Under the governing indentures, the Company has the right,
assuming no default has occurred, to defer payments of interest on
the junior subordinated debentures at any time for a period not to
exceed ten consecutive semi-annual periods.
In 2006, Tamalpais Bank issued $3,093,000 of 30-year, variable
rate junior subordinated debentures, and repackaged them into
Cumulative Trust Preferred Securities issued by San Rafael Capital
Trust II, a wholly owned non-consolidated subsidiary of the
Company. The securities mature on September 1, 2036. The junior
subordinated debentures issued by the Trust are redeemable in
whole or in part on or after September 1, 2011, or at any time in
whole, but not in part, upon the occurrence of certain events.
The interest rate on the debentures is paid quarterly at the
three-month LIBOR plus 175 bps. The debenture is subordinated to
the claims of depositors and other creditors of the Bank. As of
December 31, 2008, the interest rate on the junior subordinated
debenture was 3.93%.
In 2007, the Bank issued $10,310,000 of 30-year, variable rate
junior subordinated debentures, and repackaged them into
Cumulative Trust Preferred Securities issued by San Rafael Capital
Trust III, a wholly owned non-consolidated subsidiary of the
Company. The proceeds were used to pay off the debentures
previously issued in 2002. The security matures on December 1,
2037, but is callable on December 1, 2012. The interest rate on
the debenture is paid quarterly at the three-month LIBOR plus 144
basis points. The debenture is subordinated to the claims of
deposits and other creditors of the Bank. As of December 30, 2008,
the interest rate was 3.62%.
Based in San Rafael, California, Tamalpais Bancorp, through its
wholly owned subsidiaries Tamalpais Bank and Tamalpais Wealth
Advisors, offers business and consumer banking through its seven
Marin County full service branches, and wealth advisory services
to high net worth families and institutional clients. The Company
had $703 million in assets and $371 million in assets under
management as of June 30, 2009. Shares of the Company's common
stock are traded on the NASDAQ Capital Market System under the
symbol TAMB.
THORNBURG MORTGAGE: Continues to Explore Sale of Adfitech
---------------------------------------------------------
Thornburg Mortgage Inc. along with the Creditors' Committee in its
bankruptcy case explored the possibility of selling the operations
of ADFITECH Inc., court filings reveal.
According to a monthly operating report filed by ADFITECH, as of
the end of May 2009 no stalking horse bidder was identified.
ADFITECH said the parties continue to explore the sale option.
Thornburg Mortgage and its subsidiaries filed their monthly
operating reports for the period May 1, 2009 through and including
May 31, 2009, with the United States Bankruptcy Court for the
District of Maryland:
-- Thornburg Mortgage, Inc., and certain subsidiaries filed
one operating report.
See http://ResearchArchives.com/t/s?402e
-- ADFITECH filed a separate operating report.
See http://ResearchArchives.com/t/s?402f
Thornburg, et al., reported $3,422,501 in cash receipts and
$686,341 in disbursements during the period. Thornburg et al.
ended the period with $19,584,127 in cash.
As of May 31, Thornburg, et al., had $407,137,529 in total assets
and $3,683,712,970 in total liabilities, resulting in owners'
deficit of ($3,276,575,441). Thornburg et al. reported a net
income of $1,699,770 for the month.
ADFITECH reported $2,933,944 in cash receipts and $2,070,230 in
disbursements during the period. ADFITECH closed the period with
$8,848,739 in cash.
As of May 31, ADFITECH had $ 28,793,776 in total assets and
$1,639,689,059 in total liabilities, resulting in stockholders'
deficit of $1,610,895,283. ADFITECH reported a net income of
$549,454 for the month.
About Thornburg Mortgage
Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA)
-- http://www.thornburgmortgage.com/-- is a single-family
residential mortgage lender focused principally on prime and
super-prime borrowers seeking jumbo and super-jumbo adjustable
rate mortgages. It originates, acquires, and retains investments
in adjustable and variable rate mortgage assets. Its ARM assets
comprise of purchased ARM assets and ARM loans, including
traditional ARM assets and hybrid ARM assets.
Thornburg Mortgage, Inc., and its four affiliates filed for
Chapter 11 on May 1 (Bankr. D. Md. Lead Case No. 09-17787). Judge
Duncan W. Keir is handling the case.
David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, has
been tapped as counsel. Orrick, Herrington & Sutcliffe LLP is
employed as special counsel. Jim Murray, and David Hilty, at
Houlihan Lokey Howard & Zukin Capital, Inc., have been tapped as
investment banker and financial advisor. Protiviti Inc. has also
been engaged for financial advisory services. KPMG LLP is the tax
consultant. Epiq Systems, Inc., is claims and noticing agent. In
its bankruptcy petition, Thornburg listed total assets of
$24,400,000,000 and total debts of $24,700,000,000, as of
January 31, 2009.
TRIBUNE CO: Assumes 36 Agreements with CBS
------------------------------------------
Tribune Co. and its affiliates sought and obtained the 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: Employs 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)
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: 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)
UBS AG: Settlement Talks With US Justice Dept., Swiss Gov't Go On
-----------------------------------------------------------------
UBS AG is continuing its settlement talks with the U.S. Justice
Department and the Swiss government, Carrick Mollenkamp at The
Wall Street Journal reports, citing people familiar with the
matter.
UBS is under a global tax probe. The Justice Department and
Internal Revenue Service have asked a federal judge to provide
access to thousands of accounts that U.S. citizens set up at UBS
as part of a probe into off-shore tax evasion, but the Company is
fighting the request in court, says WSJ.
According to WSJ, the source said that the talks are expected to
result in a postponement of an August 3 hearing in federal court
in Miami.
As reported by the Troubled Company Reporter on July 15, 2009,
Judge Alan Gold approved the delay in the U.S. tax authority's
case against UBS AG. U.S. Department of Justice and UBS asked to
postpone a July 13 hearing so they could discuss a settlement.
Judge Gold, presiding over the District Court for the Southern
District of Florida, said that he would further delay the hearing
if the countries got close to a settlement in the next two weeks.
He said that he expected the two parties to give an update on
July 29 on whether they were close to coming to an agreement.
Based in Zurich, Switzerland, UBS AG (VTX:UBSN) --
http://www.ubs.com/-- is a global provider of financial services
for wealthy clients. UBS's financial businesses are organized on
a worldwide basis into three Business Groups and the Corporate
Center. Global Wealth Management & Business Banking consists of
three segments: Wealth Management International & Switzerland,
Wealth Management US and Business Banking Switzerland. The
Business Groups Investment Bank and Global Asset Management
constitute one segment each. The Industrial Holdings segment
holds all industrial operations controlled by the Group. Global
Asset Management provides investment products and services to
institutional investors and wholesale intermediaries around the
globe. The Investment Bank operates globally as a client-driven
investment banking and securities firm. The Industrial Holdings
segment comprises the non-financial businesses of UBS, including
the private equity business, which primarily invests UBS and
third-party funds in unlisted companies.
As reported in the Troubled Company Reporter-Europe, UBS has
amassed more than US$53 billion in writedowns and losses since the
credit crisis began. The bank expects to post a loss in the
second quarter of 2009. The bank's net loss for full-year 2008
widened to CHF19.697 billion from of CHF5.247 million in the prior
year. Net losses from continuing operations totaled
CHF19.327 billion, compared with losses of CHF5.111 billion in the
prior year. UBS attributed the losses to negative revenues in its
fixed income, currencies and commodities (FICC) area. For the
2008 fourth quarter, UBS incurred a net loss of CHF8.100 billion,
down from a net profit of CHF296 million. Net loss from
continuing operations was CHF7.997 billion compared with a profit
of CHF433 million. The Investment Bank recorded a pre-tax loss of
CHF7.483 billion, compared with a pre-tax loss of CHF2.748 billion
in the prior quarter. This result was primarily due to trading
losses, losses on exposures to monolines and impairment charges
taken against leveraged finance commitments. An own credit charge
of CHF1.616 billion was recorded by the Investment Bank in fourth
quarter 2008, mainly due to redemptions and repurchases of UBS
debt during this period.
UBS said it will further reduce its headcount to 15,000 by the end
of the year. UBS's personnel numbers reduced to 77,783 on
December 31, 2008, down by 1,782 from September 30, 2008, with
most staff reductions at its investment banking unit.
UNIVERSAL ENERGY: Dec. 31 Balance Sheet Upside-Down by $833,000
---------------------------------------------------------------
Universal Energy Corp.'s balance sheet at December 31, 2008,
showed total assets of $2,351,378 and total liabilities of
$3,184,940, resulting in a stockholders' deficit of $833,562.
For the year ended December 31, 2009, the Company reported a net
income of $619,729 compared with a net loss of $14,044,872 for the
same period in the previous year.
The Company's cash and cash equivalents at December 31, 2008, was
$82,524 compared with $234,987 at December 31, 2007.
The Company related that its cash and cash equivalents are
limited. In the short term, it will require substantial
additional funding prior to December 31, 2009, in order to
maintain its current level of operations. If the company is
unable to raise additional funding, it will be forced to either
substantially scale back its business operations or curtail its
business operations entirely.
On a longer-term basis, the Company anticipates generating its
revenues from the sale of oil and gas products from its proven oil
and gas wells in Louisiana. The Company's future cash
requirements will depend on many factors, including the pace and
scope of its drilling programs, the costs involved in replacing
depleted reserves, and other costs associated with growing its oil
and gas operations. The Company intends to seek additional
funding through public or private financing transactions. If it
is unable to raise additional funds, it will be forced to either
scale back its business efforts or curtail its business activities
entirely.
Going Concern Doubt
Mark Bailey & Company, Ltd., in Reno, Nevada raised substantial
doubt about Universal Energy Corp.'s ability to continue as a
going concern after auditing the Company's financial results for
the year ended December 31, 2008. The auditor noted that the
Company suffered recurring losses from operations and has a net
capital deficiency.
A full-text copy of the Company's Form 10-K is available for free
at http://ResearchArchives.com/t/s?4015
About Universal Energy
Headquartered in Lake Mary, Florida, Universal Energy Corp. (OTC
BB: UVSE) is an independent energy company engaged in the
acquisition and development of crude oil and natural gas leases in
the United States and Canada. The Company's minority working
interests in drilling prospects currently consist of land in
Alberta, Canada, Louisiana and Texas.
US AIRWAYS: Ben Mitchell, et al. Settle With PrimeFlight
--------------------------------------------------------
After extensive discussions and exchange of information, Ben
Mitchell, Ricardo Engerman, Dennis Cashman, Raji Lahcen, Donald
Willoughby, Anthony Smith, Stephen Touma, Joseph Mathieu, Isaac
Williams, Donald Chandler, Wilmer Preston, Kevin Davis, Lee
Hardin, Steven McCoy, Michael Kalinowski, and all others
similarly-situated individuals have reached a proposed settlement
with one of the defendants, PrimeFlight Aviation Services. The
settlement amount is $750,000, approximately half of the full
federal minimum wage damages for a nationwide class of
PrimeFlight skycaps that Plaintiffs sought for their "shortage"
theory of liability.
Under the Agreement, skycaps who participate in the settlement
will receive up to the full amount of the difference between the
lower "service" rate they received and the full minimum
wage for all hours they worked performing curbside check-in
services for any airline that has imposed a $2 or $3 per bag
charge for curbside check-in since December 2005.
As part of the Agreement, the PrimeFlight skycaps:
(a) would not continue to pursue claims against US Airways or
other airlines that require the airline to be determined
to be an employer or joint employer of the PrimeFlight
skycaps;
(b) would not continue to pursue minimum wage claims or
retaliatory discharge claims against US Airways or other
airlines. They will, however, be able to continue to
pursue claims seeking to recover damages for the
imposition of the bag charges themselves on grounds that
do not require the airlines to be their employer or joint
employer; and
(c) will continue to pursue their claims against US Airways
for tortious interference, unjust enrichment, and the
Massachusetts Tips Law. These remaining causes of action
will allow the PrimeFlight skycaps to continue to pursue
in this lawsuit their claims for the recovery of the bag
charges, which they contend customers believed were their
tips. These causes of action will also allow the
PrimeFlight skycaps to continue to pursue their claims
related to US Airways' elimination of skycap services for
curbside check-in after the filing of the lawsuit.
Ben Mitchell, et al. assert that the settlement is a fair
resolution of their claims against PrimeFlight. The settlement
will allow the PrimeFlight skycaps to obtain some immediate
recovery and still continue to pursue their significant claims
against US Airways, they relate.
Ben Mitchell, et al. also sought and obtained the Court's
preliminary approval of the proposed settlement.
A final hearing is scheduled for September 24, 2009.
Confidentiality Stipulation
The parties agree that certain business information that will be
exchanged during discovery is confidential and should be
protected from re-disclosure to any third-party, disclosure in
the public domain, and in particular, protected from use for any
purpose outside of the litigation.
Thomas Gearheart, et at. Seek to Intervene
Thomas Gearheart, Corey Eaddy, Timothy Robinson, Marshal Glass,
Clarence Glaster, James McFarland, and Sergerrie Taylor ask the
Court to set aside its order granting the Motion for Preliminary
Approval of the Class settlement Action on the grounds that the
Order was defective as a matter of law. The Intervenors assert
that the Electronic Order of June 23, 2009 violates Rule 23 of
the Federal Rules of Civil Procedure. The Intervenors claim that
applicable law requires proponents of a nationwide class
settlement to obtain certification of a settlement class as part
of the preliminary approval process.
James D. Gotz, Esq., at Kreindler & Kreindler, LLP, in Boston
Massachusetts, attorney for the Intervenors, relates that Ben
Mitchell, et al. lacked standing to pursue the settlement they
have achieved, and the Court lacked jurisdiction to approve it.
In addition, Mr. Gotz says, in the confines of a multi-state wage
and hour settlement, variances in state wage and hour laws
require a rigorous analysis for purposes of demonstrating the
settlement's fairness -- which the plaintiffs in the Action made
no effort to address. Mr. Gotz notes that the notice mailed to
class members fails to comply with due process, as it contains
false and misleading statements that employees who are not even
arguably encompassed within the Mitchell Action have an
obligation to either participate, or opt-out. The Notice fails
to adequately and fairly describe what claims are being released,
Mr. Gotz avers.
The Intervenors assert that setting aside the Order would allow
the parties to adequately address those defects to ensure that
the rights of all class members are properly protected.
PrimeFlight and Ben Mitchell, et al. Object
Defendant PrimeFlight asks the Court to deny the Motion to
Intervene as it is premature and unsupported. According to
PrimeFlight, the Court has not yet certified the Action as a
class under Federal Rule 23, nor has it denied Ben Mitchell, et
al.'s request for certification. Thus, PrimeFlight asserts, the
rights of any interested persons have not been hindered,
interfered with or impeded by the fact that a potential
Settlement is on the table.
Ben Mitchell, et al., for their part, maintain that intervention
is not appropriate means for the Intervenors to assert their
concerns considering that three of the seven individuals who have
moved to intervene are not class members and, thus, their rights
would not be affected in any way by the proposed settlement. As
to the four who are class members, Ben Mitchell, et al., tell the
Court they have the right to opt-out of the settlement so that
their rights will not be affected, or if they prefer they may
object to the settlement and present their objections to the
Court at the final approval hearing.
"There is no reason for these individuals to intervene at this
stage of the settlement process," Shannon Liss-Riordan, Esq., at
Lichten & Liss-Riordan, P.C., in Boston Massachusetts, says. She
adds that the settlement class is properly certified under Rule
23. Moreover, Ms. Liss-Riordan relates, the settlement class
meets the requirements for certification and is properly
certified as multi-state class. She claims that the notice
mailed to class members properly explains the scope of the
settlement and how the settlement affects their rights.
In response, the Intervenors assert that the defects in the
settlement may not be resolved by the opt-out mechanism, as the
opt-out mechanism is not available prior to ruling on
certification, and courts have expressly rejected use of the opt-
out mechanism as a method of curing defects raised by
Intervenors.
US Airways Responds
US Airways told the Court that the Intervenors' Motion brought to
its attention a need for clarification of the scope of the
settlement. Specifically, US Airways notes, three of the named
plaintiffs are not employed by PrimeFlight namely, Kevin Davis,
Lee Hardin and Steven McCoy. Thus, US Airways asks the Court to
order plaintiffs to clarify the status and claims of Messrs.
Davis, Hardin and McCoy.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) --
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways Inc., Allegheny
Airlines Inc., Piedmont Airlines Inc., PSA Airlines Inc.,
MidAtlantic Airways Inc., US Airways Leasing and Sales Inc.,
Material Services Company Inc., and Airways Assurance Limited LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. In the Company's second
bankruptcy filing, it listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The USAir II bankruptcy plan became effective on September 27,
2005. The Debtors completed their merger with America West on the
same date. (US Airways Bankruptcy News; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
According to the TCR in September 2008, Michael Lowry, project
manager for AVIATION WEEK's latest Top-Performing Companies, said
USAir has a "high risk" for a bankruptcy filing in 2009.
As reported by the Troubled Company Reporter on May 12, 2009,
Fitch Ratings affirmed the Issuer Default Rating of US Airways
Group, Inc. at 'CCC'. Fitch also revised LCC's Senior secured
credit facility rating to 'B+/RR1' from 'B/RR1'; and Senior
unsecured rating to 'C/RR6' from 'CC/RR6'. Fitch assigned a
rating of 'C/RR6' to the company's new 7.25% senior unsecured
convertible notes. The new notes mature in 2014 and have an
initial conversion price of approximately $4.57 per share.
Proceeds from the new notes will be used for general corporate
purposes. Fitch no longer has a Rating Outlook on LCC. LCC's
Rating Outlook had been 'Negative.'
LCC's ratings reflect ongoing concern regarding the airline's
liquidity position over the medium term, especially given the
potential for prolonged weakness in demand driven by the global
recession.
US AIRWAYS: Releases Second Quarter 2009 Financial Results
----------------------------------------------------------
US Airways Group, Inc., reported its second quarter 2009 results.
For the second quarter, the Company reported a net profit of
$58 million, or $0.42 per diluted share. This compares to a net
loss of $568 million, or ($6.17) per share for the same period
last year. Excluding special items, the Company reported a net
loss of $95 million for its second quarter 2009, or ($0.77) per
share. This compares to a net loss excluding special items of
$102 million, or ($1.12) per share for the same period last year.
The effects of fuel hedging continue to significantly impact the
Company's financial results. The Company believes an enhanced
understanding of fundamental year-over-year financial performance
can be gained by adjusting for these hedging impacts. In the
second quarter 2008, the Company reported a realized fuel hedging
gain of $192 million, while in the second quarter of 2009, the
Company reported a realized fuel hedging loss of $135 million.
Excluding these net realized losses/gains on fuel hedging
transactions and special items, the Company reported a net profit
of $40 million for the second quarter 2009 versus a net loss of
$294 million for the same period last year.
US Airways Group, Inc. Chairman and CEO Doug Parker stated, "We
are pleased to report a second quarter GAAP profit, as well
as a profit excluding special items and fuel hedging
transactions, particularly in this difficult economic
environment. The global economic recession severely impacted
business demand for air travel, which drove our revenues down by
more than 18 percent versus last year.
"At US Airways, we took aggressive action to address this
weakening demand by reducing capacity, introducing additional a
la carte revenue streams, and prudently controlling costs. These
steps are having a positive impact as evidenced by our
$334 million year-over-year improvement in earnings excluding
special items and fuel hedging transactions. We also raised new
capital and increased our cash balance to help withstand a
prolonged economic downturn.
"Importantly, our team of 33,000 employees continues to run a
great operation. While operating one of the most efficient
schedules of the major hub-and-spoke carriers, on a year-to-date
basis, US Airways posted an on-time arrival rate of 79 percent,
improved baggage handling by more than 40 percent, and reduced
customer complaint metrics by 30 percent versus the same period
last year -- all while operating at record load factors.
"Looking forward to the second half of 2009, the revenue
environment continues to be difficult to forecast. We have seen
an encouraging, though modest improvement in revenues over the
past several weeks, but we are not counting on a quick recovery.
Instead, we are preparing for a continued difficult environment
and believe the steps we have taken and the outstanding work of
our team have us extremely well positioned to meet the challenges
ahead," concluded Mr. Parker.
Revenue and Cost Comparisons
Total revenues in the second quarter were down 18.4 percent versus
the second quarter of 2008 due to a 5.6 percent decline in total
available seat miles (ASMs), lower leisure yields as a result of
fare sales to stimulate demand, and the reduction in business
demand resulting from the global economic recession. Total
revenue per available seat mile was 12.09 cents, down 13.6
percent versus the same period last year. Mainline passenger
revenue per available seat mile (PRASM) in the second quarter was
9.42 cents, down 17.6 percent versus the same period last year.
Express PRASM was 17.47 cents, down 15.2 percent versus the
second quarter 2008. Total mainline and Express PRASM was 10.76
cents, which was down 16.9 percent versus the second quarter
2008.
Total operating expenses in the second quarter were down 33.2
percent over the same period last year due to a 58.9 percent
decrease in mainline and Express fuel expense. Mainline cost per
available seat mile (CASM) in the second quarter was 10.44 cents,
down 31.9 percent versus the same period last year. Excluding
fuel, realized gains/losses on fuel hedging instruments, and
special items, mainline CASM was 8.14 cents, down 2.1 percent
from the same period last year, on a 5.6 percent decline in
mainline ASMs.
Chief Financial Officer Derek Kerr stated, "During the quarter, we
continued our focus on cost management. Although we decreased our
mainline capacity by almost six percent, our mainline CASM
(excluding fuel and special items) decreased by more than two
percent."
Liquidity/Financing
Mr. Kerr continued, "Even with the challenging capital markets, we
were successful in raising approximately $234 million in net
proceeds during the second quarter through an underwritten
offering of common stock and convertible senior notes. Also,
since March 31, we have secured financing commitments totaling
approximately $700 million and now have financing in place for
all but one of the 25 new aircraft that have been or will be
delivered in 2009."
As of June 30, 2009, the Company had $2.3 billion in total cash
and investments, of which $0.6 billion was restricted, up from
$2.1 billion, of which $0.7 billion was restricted on March 31,
2009.
Second Quarter Special Items
During its second quarter, the Company recognized special items
totaling a credit of $153 million. These special items included
$156 million of unrealized net gains associated with the Company's
fuel hedge contracts. The unrealized gains in the second quarter
of 2009 are the result of the application of mark-to-market
accounting in which unrealized losses recognized in prior periods
are reversed as hedge transactions are settled in the current
period. In addition, in connection with previously announced
capacity reductions, the Company recorded $1 million in charges
for lease return costs and penalties related to certain aircraft.
The Company also recorded a non-cash asset impairment charge
totaling $2 million.
Other Notable Accomplishments
* Earlier, announced a partnership with Gogo(R) Inflight
Internet to provide Wi-Fi Internet access onboard 50 A321
aircraft, which will roll out in early 2010. Full Internet
service will include Web, Instant Messaging, email and VPN
access, which will be available for purchase to passengers
with laptops or Wi-Fi enabled devices.
* Continued to drive significant improvements throughout the
operation. On a year-to-date basis through June 2009,
baggage handling improved by more than 40 percent, while
customer complaints decreased during the same period by
approximately 30 percent. The airline's year-to-date on-
time performance of 79.3 percent ranks second among the
major hub-and-spoke carriers.
* Expanded a la carte revenue by enabling online payment for
checked bags. Customers now have the option to pre-pay $15
for their first checked bag and $25 for their second
checked bag by using Web check-in. Customers who pay for
checked bags at the airport will incur an additional $5
service fee per bag.
* Inaugurated new service to Birmingham, U.K., Oslo, Norway,
and Tel Aviv, Israel from Philadelphia International
Airport, and resumed service between US Airways' Charlotte
hub and Paris' Charles De Gaulle Airport.
* Announced a new codeshare agreement with Qatar Airways that
will enable seamless travel for US Airways customers
between the United States and Qatar.
* Expanded the airline's Buy on Board program by introducing
premium snacks on all domestic flights over one hour
(excluding Shuttle flights).
Analyst Conference Call/Webcast Details
US Airways conducted a live audio webcast of its earnings call.
An archive of the call/webcast will be available at
www.usairways.com under the About US >> Investor Relations
portion of the Web site through Aug. 23, 2009.
The airline also provide its investor relations guidance on its
Web site. The investor relations update page also includes the
airline's capacity, fleet plan, and estimated capital spending
for 2009.
About US Airways
US Airways was America's number one on-time airline in 2008 among
the major hub-and-spoke airlines according to the U.S. Department
of Transportation's (DOT) monthly Air Travel Consumer Report. US
Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,200 flights per day and serves more than 200
communities in the U.S., Canada, Europe, the Caribbean and Latin
America. The airline employs more than 33,000 aviation
professionals worldwide and is a member of the Star Alliance
network, which offers our customers more than 17,000 daily
flights to 916 destinations in 160 countries worldwide. And for
the eleventh consecutive year, the airline received a Diamond
Award for maintenance training excellence from the Federal
Aviation Administration (FAA) for its Charlotte, North Carolina
hub line maintenance facility. For more company information,
visit usairways.com.
A full-text copy of US Airways' financial results is available
for free at http://ResearchArchives.com/t/s?3fe5
US Airways Group, Inc
Condensed Consolidated Balance Sheet
As of June 30, 2009
ASSETS
Current Assets
Cash and cash equivalents $1,483,000,000
Restricted cash 46,000,000
Accounts receivable, net 372,000,000
Materials and supplies, net 230,000,000
Prepaid expenses and other 443,000,000
--------------
Total current assets 2,574,000,000
Property and equipment
Flight equipment 3,648,000,000
Ground property and equipment 874,000,000
Less accumulated depreciation and amort. (1,054,000,000)
--------------
3,468,000,000
Equipment purchase deposits 310,000,000
--------------
Total property and equipment 3,778,000,000
Other assets
Other intangibles, net of accumulated amort. of
$100 million and $87 million, respectively 532,000,000
Restricted cash 534,000,000
Investments in marketable securities 214,000,000
Other assets, net 226,000,000
-------------
Total other assets 1,506,000,000
-------------
Total assets $7,858,000,000
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of debt and capital leases $465,000,000
Accounts payable 448,000,000
Air traffic liability 963,000,000
Accrued compensation and vacation 174,000,000
Accrued taxes 190,000,000
Other accrued expenses 882,000,000
--------------
Total current liabilities 3,122,000,000
Noncurrent liabilities and deferred credits
Long-term debt and capital leases,
net of current maturities 4,073,000,000
Deferred gains and credits, net 355,000,000
Postretirement benefits other than pensions 106,000,000
Employee benefit liabilities and other 538,000,000
---------------
Total noncurrent liabilities and def. credits 5,072,000,000
Commitments and contingencies
Stockholders' deficit 1,000,000
Additional paid-in capital 1,963,000,000
Accumulated other comprehensive income 94,000,000
Accumulated deficit (2,381,000,000)
Treasury stock, common stock (13,000,000)
--------------
Total stockholders' equity (336,000,000)
--------------
Total liabilities and stockholders' equity $7,858,000,000
==============
US Airways Group, Inc.
Condensed Consolidated Statement of Operations
Three Months Ended June 30, 2008
Operating revenues:
Mainline passenger $1,724,000,000
Express passenger 642,000,000
Cargo 20,000,000
Other 272,000,000
---------------
Total operating revenues 2,658,000,000
Operating expenses:
Aircraft fuel and related taxes 440,000,000
Loss(gain) on fuel hedging instruments, net (21,000,000)
Salaries and related costs 549,000,000
Express expenses 625,000,000
Aircraft rent 174,000,000
Aircraft maintenance 184,000,000
Other rent and landing fees 142,000,000
Selling expenses 99,000,000
Special items, net 1,000,000
Depreciation and amortization 62,000,000
Other 281,000,000
--------------
Total operating expenses 2,536,000,000
Operating income (loss) 122,000,000
Non-operating income(expense):
Interest income 6,000,000
Interest expense, net (77,000,000)
Other, net 7,000,000
--------------
Total non-operating expense, net (64,000,000)
--------------
Income (loss) before income taxes 58,000,000
Income tax provision 0
--------------
Net income (loss) $58,000,000
==============
US Airways Group, Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
For Six Months Ended June 30, 2009
Net Cash provided by operating activities $360,000,000
Cash flows from investing activities:
Purchases of property and equipment (578,000,000)
Purchases of marketable securities 0
Sales of marketable securities 20,000,000
Proceeds from sale of other investments 0
Decrease(increase) in long-term restricted cash 6,000,000
Proceeds from dispositions of prop. and equip. 52,000,000
Increase in equipment purchase deposits (43,000,000)
--------------
Net Cash used in investing activities (543,000,000)
Cash flows from financing activities:
Repayments of debt and capital lease
obligations (175,000,000)
Proceeds from issuance of debt 749,000,000
Deferred financing costs (8,000,000)
Proceeds from issuance of common stock 66,000,000
--------------
Net Cash provided by financing activities 632,000,000
--------------
Net increase(decrease) in cash and cash equiv. 449,000,000
Cash and cash equivalents at beginning period 1,034,000,000
--------------
Cash and cash equivalents at end of period $1,483,000,000
==============
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) --
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways Inc., Allegheny
Airlines Inc., Piedmont Airlines Inc., PSA Airlines Inc.,
MidAtlantic Airways Inc., US Airways Leasing and Sales Inc.,
Material Services Company Inc., and Airways Assurance Limited LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. In the Company's second
bankruptcy filing, it listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The USAir II bankruptcy plan became effective on September 27,
2005. The Debtors completed their merger with America West on the
same date. (US Airways Bankruptcy News; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
According to the TCR in September 2008, Michael Lowry, project
manager for AVIATION WEEK's latest Top-Performing Companies, said
USAir has a "high risk" for a bankruptcy filing in 2009.
As reported by the Troubled Company Reporter on May 12, 2009,
Fitch Ratings affirmed the Issuer Default Rating of US Airways
Group, Inc. at 'CCC'. Fitch also revised LCC's Senior secured
credit facility rating to 'B+/RR1' from 'B/RR1'; and Senior
unsecured rating to 'C/RR6' from 'CC/RR6'. Fitch assigned a
rating of 'C/RR6' to the company's new 7.25% senior unsecured
convertible notes. The new notes mature in 2014 and have an
initial conversion price of approximately $4.57 per share.
Proceeds from the new notes will be used for general corporate
purposes. Fitch no longer has a Rating Outlook on LCC. LCC's
Rating Outlook had been 'Negative.'
LCC's ratings reflect ongoing concern regarding the airline's
liquidity position over the medium term, especially given the
potential for prolonged weakness in demand driven by the global
recession.
US AIRWAYS: To Cut 600 Jobs To Trim Expenses
--------------------------------------------
US Airways Group Inc. will eliminate around 600 airport service
and baggage-handling jobs to minimize costs after summer ends in
September, Bloomberg News reports. Robert Isom, chief operating
officer of US Airways said in a memo sent to employees that the
company fell short in a bid to shrink the payroll by not filling
open positions.
"We find ourselves with more employees than our operation
requires," Mr. Isom wrote. Attrition rates are in the "low
single digits," he added according to Bloomberg.
Bloomberg said the rest of the reduction will come from switching
some baggage-handling and other ground jobs to outside
contractors.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) --
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways Inc., Allegheny
Airlines Inc., Piedmont Airlines Inc., PSA Airlines Inc.,
MidAtlantic Airways Inc., US Airways Leasing and Sales Inc.,
Material Services Company Inc., and Airways Assurance Limited LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. In the Company's second
bankruptcy filing, it listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The USAir II bankruptcy plan became effective on September 27,
2005. The Debtors completed their merger with America West on the
same date. (US Airways Bankruptcy News; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
According to the TCR in September 2008, Michael Lowry, project
manager for AVIATION WEEK's latest Top-Performing Companies, said
USAir has a "high risk" for a bankruptcy filing in 2009.
As reported by the Troubled Company Reporter on May 12, 2009,
Fitch Ratings affirmed the Issuer Default Rating of US Airways
Group, Inc. at 'CCC'. Fitch also revised LCC's Senior secured
credit facility rating to 'B+/RR1' from 'B/RR1'; and Senior
unsecured rating to 'C/RR6' from 'CC/RR6'. Fitch assigned a
rating of 'C/RR6' to the company's new 7.25% senior unsecured
convertible notes. The new notes mature in 2014 and have an
initial conversion price of approximately $4.57 per share.
Proceeds from the new notes will be used for general corporate
purposes. Fitch no longer has a Rating Outlook on LCC. LCC's
Rating Outlook had been 'Negative.'
LCC's ratings reflect ongoing concern regarding the airline's
liquidity position over the medium term, especially given the
potential for prolonged weakness in demand driven by the global
recession.
US AIRWAYS: S&P Puts 'B-' Corp. Rating on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'B-' corporate credit ratings, on US Airways Group Inc. and
its subsidiaries on CreditWatch with negative implications, due to
concerns about future cash flow generation and liquidity.
US Airways reported a second-quarter 2009 net profit of
$58 million, boosted by fuel hedge gains. These gains largely
offset losses booked in the first quarter, so that the first half
result was a net loss of $45 million. This result was better than
those of most peer "legacy carriers". However, the company, like
other U.S. airlines, faces weak passenger demand, and will likely
see lower earnings and cash outflows in the second half of the
year. US Airways' unrestricted cash and short-term investments
totaled slightly less than $1.5 billion (S&P does not include
$214 million carrying value of long-term auction rate securities)
as of
June 30, 2009. This is equal to about 13% of trailing 12 months'
revenues, roughly comparable with the figures for AMR Corp. (B-
/Watch Neg/--) and UAL Corp. (B-/Watch Neg/--). S&P is also
reviewing the ratings on these companies for a possible downgrade.
"We will evaluate US Airways' liquidity outlook, including any
additional efforts to raise cash through new financings, to
resolve the CreditWatch listing," said Standard & Poor's credit
analyst Phil Baggaley. "Our review of ratings on aircraft-backed
debt will also consider any material changes in collateral
coverage of those obligations," he continued.
UTGR INC: Twin River to Suspend Live Greyhound Racing on Aug. 8
---------------------------------------------------------------
Katherine Gregg at Projo.com reports that UTGR Inc.'s Twin River
will suspend live greyhound racing on August 8, as planned.
According to Projo.com, legislative leaders decided against trying
to override Rhode Island Governor Donald L. Carcieri's veto.
As reported by the Troubled Company Reporter on July 1, 2009, Gov.
Carcieri's spokesperson, Amy Kempe, said that the governor would
veto the legislation that would force Twin River racetrack-casino
to extend its schedule of greyhound races to 200 days, instead of
125 days. The bill also permits the racetrack to allow gambling
around-the-clock, instead of having 24-hour gambling only on
weekends and holidays.
Projo.com relates that the General Assembly's Democratic leaders
still seem intent on overriding Governor Carcieri's veto of the
bill when legislators return in early September, and possibly as
early as September 2.
Projo.com notes that UTGR could still file in U.S. Bankruptcy
Court a motion for relief from a contract requiring them to pay a
$9 million annual subsidy to the current group of dog owners who
have banded together as the Rhode Island Greyhound Owners
Association. The report says that about $5.5 million has been
paid so far.
According to Projo.com, Twin River spokesperson Patti Doyle said
that the consortium BLB Investors, which owns the gambling hall,
would resume the races with a less-expensive cast of dogs, if a
court voids the contract and the lawmakers subsequently require a
full season of racing.
Dog racing, Projo.com states, has effectively ended in New
Hampshire, and will end in Massachusetts on January 1.
Projo.com relates that the next bankruptcy court hearing will be
on August 18. The reprot says that it remains unclear who will
run Twin River after the lenders seize control. Harrah's
Entertainment, according to the report, has expressed an interest.
UTGR Inc. is the operator of the Twin River racetrack-casino in
Lincoln, Rhode Island. UTGR filed for Chapter 11 on June 23
(Bankr. D. Rhode Island Case No. 09-12418). The Debtors selected
Jager Smith P.C. as counsel, and Winograd, Shine & Zacks P.C. as
their co-counsel. It also hired Zolfo Cooper LLC as bankruptcy
consultants and special financial advisors. In its bankruptcy
petition, the Company estimated assets of less than $500 million
and debt exceeding $500 million.
VIRGIN MOBILE: Sprint Nextel to Acquire Firm for $483 Million
-------------------------------------------------------------
The boards of directors of Sprint Nextel Corporation and Virgin
Mobile USA, Inc., have approved a definitive agreement for Sprint
to acquire Virgin Mobile USA for a total equity value of
approximately $483 million, which includes the value of Sprint's
current 13.1% fully diluted ownership interest in Virgin Mobile
USA. In addition, at closing Sprint will retire all of Virgin
Mobile USA's outstanding debt, which is $248 million net of cash
and cash equivalents as of March 31, 2009, but is expected to be
no more than $205 million net of cash and cash equivalents on
September 30, 2009.
This acquisition will strengthen Sprint's position in the growing
prepaid segment by bringing together under one umbrella the iconic
Virgin Mobile brand with Sprint's successful Boost Mobile
business. These complementary prepaid brands, each with a
distinctive offer, style and appeal to different customer
demographics, will continue to serve existing and prospective
customers following the completion of the transaction.
Following the closing of the transaction, Sprint's prepaid
business will be led by Dan Schulman, current Virgin Mobile USA
chief executive officer, who will report directly to Dan Hesse,
Sprint Nextel president and chief executive officer. Bringing
exceptional telecom leadership credentials to Sprint, Schulman
will be responsible for the business strategy and growth of the
prepaid segment. Matt Carter will continue to lead Boost Mobile
and will report to Schulman.
"The acquisition of Virgin Mobile USA positions Sprint for even
greater success in the prepaid wireless segment," said Mr. Hesse.
"Prepaid is growing at an unprecedented rate with consumers keenly
focused on value. Virgin Mobile is an iconic brand in the
marketplace that will complement our Boost Mobile brand."
"I have known Dan Schulman for many years, and I feel very
fortunate that a leader with Dan's talents is joining Sprint to
take us to even greater heights in prepaid," added Mr. Hesse.
"Virgin Mobile USA redefined the U.S. prepaid segment when we
launched seven years ago," said Mr. Schulman. "Sprint is
committed to growing its prepaid business and this transaction
will provide us with the resources and opportunities to compete
more aggressively, and strengthen our position in prepaid."
Transaction Benefits:
-- Strengthens Sprint's position in the fast growing prepaid
segment.
-- Enhances cross selling of full suite of Sprint products and
services across a larger target audience.
-- Free cash flow accretive for Sprint before synergies.
-- Synergies to be derived from general and administrative
reductions, operational efficiencies, and streamlined
distribution.
-- Sprint gains deeper managerial talent with additional
expertise in the prepaid segment.
Terms of the Transaction
Under the terms of the agreement, Virgin Mobile USA stockholders
will receive shares of common stock of Sprint based on the
exchange ratios described in more detail below, and cash in lieu
of fractional shares.
Virgin Mobile USA Public Stockholders
Each public stockholder, holding in aggregate approximately
39.7 million shares on a fully diluted basis or 43.3% ownership,
will receive Sprint shares having a 10-day average closing price
equivalent to $5.50 per Virgin Mobile USA share, subject to:
-- The exchange ratio for public stockholders will be based on
Sprint's 10-day average closing share price ending two
trading days prior to closing.
-- The exchange ratio will be subject to a collar such that in
no event will the exchange ratio be lower than 1.0630 or
higher than 1.3668.
The Virgin Group
-- The exchange ratio for the Virgin Group will in all
circumstances be equal to 93.09% of the exchange ratio for
the public stockholders equating generally to $5.12 per
Virgin Mobile USA share for common stock owned by the
Virgin Group (including shares into which preferred stock
held by it is convertible.)
-- Preferred shares owned by Virgin Group will be converted
into common stock based on the Virgin Group exchange ratio
at a conversion price of $8.50.
-- Virgin Group owns approximately 26.0 million shares on a
fully diluted basis or 28.3% ownership, of Virgin Mobile
USA.
SK Telecom
-- The exchange ratio for the SK Telecom will in all
circumstances be equal to 89.84% of the exchange ratio for
the public stockholders, equating generally to $4.94 per
Virgin Mobile USA share for common stock owned by SK Telecom
(including shares into which preferred stock held by it is
convertible.)
-- Preferred shares owned by SK Telecom will be converted into
common stock based on the SK Telecom exchange ratio at a
conversion price of $8.50.
-- SK Telecom owns approximately 14.0 million shares on a fully
diluted basis or 15.3% ownership, of Virgin Mobile USA.
Based on the terms of the agreement, Sprint currently expects to
issue between 81.4 million and 104.7 million shares of its common
stock in exchange for all Virgin Mobile USA common stock,
excluding Sprint's 13.1% stake, and all Virgin Mobile USA
preferred stock.
Following the closing of the transaction, Virgin Mobile USA will
continue to license the Virgin Mobile USA brand from the Virgin
Group under the terms of an amended and restated Trademark License
Agreement. Sprint will pay $12.7 million for the initial term,
which will continue through the end of 2021. The agreement
contains several renewal provisions that will allow Virgin Mobile
USA to extend the term until 2047.
Sprint will pay Virgin Group approximately $50 million at closing
as payment in full for net operating losses available to be
utilized by Virgin Mobile USA in the future under the Tax
Receivable Agreement.
All of Virgin Mobile USA's outstanding debt will be retired at the
closing of the transaction including amounts due under the Senior
Secured Credit Facility and the Related Party Subordinated Secured
Revolving Credit Agreements.
The payments at the closing of the transaction for the Trademark
License Agreement, the Tax Receivable Agreement and Virgin Mobile
USA's subordinated debt will be made either in cash or stock, at
Sprint's option.
The transaction is subject to various closing conditions,
including the approval of the transaction agreement by Virgin
Mobile USA's stockholders, the receipt of applicable regulatory
approvals, and other customary closing conditions. The Virgin
Group and SK Telecom have agreed to vote a portion of the Virgin
Mobile USA voting shares owned by them that, when aggregated with
the voting shares owned by Sprint, comprise approximately 40% of
the outstanding voting power. The transaction is expected to be
completed in the fourth quarter of 2009 or in early 2010.
Sprint was advised by Wells Fargo Securities and King & Spalding.
Deutsche Bank Securities Inc., Colonnade Advisors LLC and Foros
Advisors LLC are acting as financial advisors to an independent
special committee of the Board of Directors of Virgin Mobile and
Deutsche Bank Securities Inc. also has provided a fairness opinion
to the committee. Virgin Mobile USA was also advised by Simpson
Thacher & Bartlett LLP.
About Virgin Mobile USA Inc.
Headquartered in Warren, New Jersey, Virgin Mobile USA Inc. (NYSE:
VM) -- http://www.virginmobileusa.com/-- provides wireless, pay-
as-you-go communications services without annual contracts. The
company was founded as Virgin Mobile USA, LLC, a joint venture
between Sprint Nextel and the Virgin Group, and launched its
service nationally in July 2002. In October 2007, it completed
its initial public offering and a related reorganization.
At March 31, 2009, the Company had $323,814,000 in total assets
and $605,594,000 in total liabilities.
VITAMIN SHOPPE: S&P Puts 'B' Corp. Rating on CreditWatch Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its ratings
on North Bergen, New Jersey-based Vitamin Shoppe Industries Inc.,
including the 'B' corporate credit rating, on CreditWatch with
positive implications.
"The CreditWatch listing follows Vitamin Shoppe's S-1 filing with
the SEC for an IPO of up to $125 million in common stock," said
Standard & Poor's credit analyst Jackie Oberoi. Proceeds from the
IPO are expected to be used to redeem the company's series A
preferred stock and to repurchase notes. If the transaction is
successful, it could result in a meaningful improvement in the
company's capital structure and enhance its flexibility.
S&P will resolve the CreditWatch listing after the IPO and a
meeting with management to evaluate the company's business
strategies and financial policies.
WASHINGTON MUTUAL: Asks for 3rd Extension to Plan Deadlines
-----------------------------------------------------------
Washington Mutual, Inc., and WMI Investment Corp. ask Judge Mary
F. Walrath of the U.S. Bankruptcy Court for the District of
Delaware to further extend their exclusive right to:
(a) file a plan of reorganization through October 21, 2009; and
(b) solicit acceptance of that plan through December 21, 2009.
The Debtors' current Exclusive Plan Filing Period is through
July 23, 2009, and their current Exclusive Solicitation Period is
through September 21, 2009.
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, asserts that the Debtors have made
significant progress in administering their Chapter 11 cases and
have taken steps necessary for confirmation of a plan, including:
(a) hiring several former WMB employees;
(b) gaining access to important business records;
(c) filing required schedules and monthly financial reports;
(d) entering into an agreement with JPMorgan Chase Bank,
National Association, concerning the payment of certain
vendors;
(e) reviewing and rejecting unnecessary and burdensome
contracts and leases;
(f) reconciling claims and the filing of seven omnibus claims
objections;
(g) facilitating the sale of certain of the Debtors'
investments and other assets;
(h) securing assets that rightfully belong to the Debtors,
including the proceeds of the American Savings Bank
litigation; and
(j) undertaking a complex tax analysis.
Notwithstanding these accomplishments, Mr. Collins notes, there
is still substantial uncertainty regarding the legal ownership of
certain of the Debtors' significant assets, as demonstrated by
the Debtors' pending litigation with JPMorgan and the Federal
Deposit Insurance Corporation.
In addition, the Debtors are also a party to an adversary
proceeding commenced by JPMorgan in the U.S. Bankruptcy Court for
the Southern District of New York, seeking a declaratory judgment
with respect to the ownership of disputed assets, to which the
Debtors filed counterclaims, Mr. Collins adds. Conversely, the
Debtors also commenced an adversary proceeding demanding that
turn over certain deposit funds.
Moreover, the Debtors note that, pursuant to Rule 2004 of the
Federal Rules of Bankruptcy Procedure, they have asked the Court
to allow the examination of JPMorgan in order to investigate
potential claims against JPMorgan based on alleged misconduct,
which may be the subject of a lawsuit filed in Texas federal
court captioned American Nat'l Ins. Co., et al. v. JPMorgan Chase
& Co., et al.
In light of complexity of the Debtors' Chapter 11 cases, the
unresolved contingencies in the D.C. Action and the interplay
between the Adversary Proceedings, "it is uncertain, at this
time, when a decision will be made regarding the assets available
for distribution to the Debtors' creditors," Mr. Collins tells
the Court.
Mr. Collins informs the Court and parties-in-interest that the
Official Committee of Unsecured Creditors has agreed to, and
supports, the Debtors' requested Exclusive Periods Extension.
Judge Walrath will convene a hearing on August 24, 2009, to
consider approval of the Debtors' request. Objections, if any,
must be filed by August 10.
By operation of Rule 9006-2 of the Local Rules for the U.S.
Bankruptcy Court for the District of Delaware, the Debtors'
Exclusive Periods are automatically extended until the Court
has had an opportunity to consider and act on the Debtors'
extension request.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries. The Company
operates in four segments: the Retail Banking Group, which
operates a retail bank network of 2,257 stores in California,
Florida, Texas, New York, Washington, Illinois, Oregon, New
Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and
Connecticut; the Card Services Group, which operates a nationwide
credit card lending business; the Commercial Group, which conducts
a multi-family and commercial real estate lending business in
selected markets, and the Home Loans Group, which engages in
nationwide single-family residential real estate lending,
servicing and capital markets activities.
Washington Mutual Bank was taken over September 25 by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns
100% of the equity in WMI Investment. Weil Gotshal & Manges
represents the Debtors as counsel. When WaMu filed for protection
from its creditors, it listed assets of $32,896,605,516 and debts
of $8,167,022,695. WMI Investment listed assets of $500,000,000
to $1,000,000,000 with zero debts.
Bankruptcy Creditors' Service Inc. publishes Washington Mutual
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Washington Mutual Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
WEXTRUST CAPITAL: District Court OKs SEC-Backed Liquidation Plan
----------------------------------------------------------------
Judge Denny Chin of the U.S. District Court for the Southern
District of New York has approved a plan to liquidate the estate
of WexTrust Capital LLC and distribute proceeds to defrauded
investors and creditors.
After 10 months of investigation, Timothy J. Coleman, the
receiver, determined that the most prudent and equitable course of
action is a liquidation of the receivership estate and
distribution of the proceeds to creditors and victims of the
alleged Ponzi scheme. The Plan was formulated in cooperation with
the Securities and Exchange Commission.
The Receiver expects defrauded investors will recover 5 cents to
50 cents on the dollar. The Plan proposes a pro rata distribution
of assets, under which each investor would receive a distribution
based on a certain percentage -- not yet determined -- of the
amount originally invested. Judge Chin denied proposals by some
investors that distribution should be made based on level of risk,
timing of investment, tracing analysis or some other factor.
The Plan proposes this priority of claims: (1) administrative
claims of the estate; (2) tax liabilities of the estate; (3)
secured creditors; and (4) unsecured creditors and defauded
investors.
In his 44-page opinion, Judge Chin acknowledged that the Plan is
"controversial in many respects," noting that it includes
provisions "calling for liquidation of the receivership estate,
and a subsequent pro rata distribution of the proceeds that
draws no distinctions among investors." He nevertheless said that
the plan was "fair and reasonable."
The International Consortium of Wextrust Creditors has argued that
the District Court no longer has jurisdiction over the case as an
appeal is pending before the Second Circuit of one of the District
Court's prior decisions. Judge Chin, however, said that the
District Court continues to have jurisdiction as the decision
being appealed involves a preliminary injunction.
"The reason the Wextrust entities are in shambles is not -- as is
typical in a bankruptcy case -- because of poor conditions or
garden variety mismanagement. The reason is fraud," Judge Chin
also pointed out. He says that under the circumstances it would
be inequitable to force the case into bankruptcy, where the
bankruptcy court would have less flexibility in determining the
most equitable approach to distribute assets to victims.
A copy of the District Court's Plan Order is available at;
http://bankrupt.com/misc/Wextrust_Plan_Order.pdf
Real Estate Portfolio to Be Liquidated
At a May 21 hearing, the receiver said that the estate has cash on
hand of $15 million to $20 million through its commodity funds.
The estate also has a portfolio of commercial real estate that has
a book value of $250 million. The receiver, however, said that
given the state of the commercial real estate market, the market
value of the assets is almost certain to be below the book value.
Secured claims against the estate total $200 million
According to its Web site, the receiver is currently managing many
commercial and residential properties and that many of these
properties will become available for purchase. The receiver
expects that he would be able to liquidate the real estate
portfolio within six to 18 months.
The real estate portfolio has four principal components:
1. Hotels managed by Axela Hospitality, LLC. Although the
hotels are valuable, they have little or no equity due to
economic conditions.
2. Commercial properties managed by Wextrust Equity Partners.
The fair market value of these properties is greater than
the secured debt, according to valuations by the receiver.
3. Residential properties managed by Wextrust Development
Group, LLC. The fair market value of these properties is
less than the secured debt.
4. High yield real estate loans held by various entities.
Majority of these loans are in default.
From 2006 to 2008, the WexTrust's principals conducted seucrities
offerings to invest in diamond mines in South Africa and Namibia,
ultimately raising $54 million. Of that amount, $40 million was
transferred to a South African company called Pure African
Minerals (Pty) Limited. The Receiver has been unable to ascertain
precisely what happened to the $40 million, and has commenced
litigation in South Africa to gain access to books and records.
About WexTrust Capital
Chicago, Illinois-based WexTrust Capital, LLC was a private equity
and specialty finance company specializing in investment
opportunities ranging from real estate to specialty finance and
investment banking.
WexTrust founders Joseph Shereshevsky and Joseph Byers were
arrested in August 2008 and accused of cheating investors in a
Ponzi scheme and were indicted on criminal charges by a federal
grand jury. The Securities and Exchange Commission has also
pursued a civil case against the two on allegations that they
operated a Massive Ponzi scheme that defrauded more than 1,000
investors of approximately $255 million. Both the civil and
criminal cases are pending before United States District Judge
Denny Chin in the Southern District of New York.
The Wextrust receivership -- http://www.wextrustreceiver.com/--
was created by order of the United States District Court for the
Southern District of New York on August 11, 2008. The Court has
appointed Timothy J. Coleman to act as Receiver for the Wextrust
group of companies. The Receiver is charged with managing the
Wextrust companies, and with taking other actions required by law
and by the Court's orders.
The SEC was represented by:
Alistaire Bambach, Esq.
Neal Jacobson, Esq.
Steven G. Rawlings, Esq.
Danielle Sallah, Esq.
Securities & Exchange Commission
New York Regional Office
Thee World Financial Center, Room 4300
New York, New York 10281
Attorneys for the Receiver are:
Martin J. Bienenstock, Esq.
Leo V. Gagion, Esq.
Mark S. Radke, Esq.
Dean C. Gramlich, Esq.
John K. Warren, Esq.
DEWEY & LEBOEUF LLP
1301 Avenue of the Americas
New York, New York 10019-6092
The International Ad-Hoc Committee of Wextrust Creditors were
represented by
Shalom Jacob, Esq.
Shumuel Vasser, Esq.
DECHERT LLP
1095 Avenue of the Americas
New York, New York 10036
Attorneys for the Int'l Consortium of Wextrust Creditors are:
Martin S. Siegel, Esq.
BROWN RUDNICK LLP
Seven Times Square
New York, New York 10036
WHITE KNIGHT: DBRS Downgrades Floating Rate Notes to BB
-------------------------------------------------------
DBRS has today downgraded the Floating Rate Notes (the Notes)
issued by White Knight Investment Trust (WKIT) to BB (high) from
BBB (low).
WKIT is a bankruptcy-remote special-purpose vehicle whose business
is strictly limited to entering into and administering WKIT's
asset interests (the Asset Interests), which consist of tranche
investments in six highly rated underlying credit default swaps
(CDSs).
As part of the restructuring, a significant amount of leverage was
employed for each of the synthetic collateralized debt obligation
(CDO) tranches. However, the concept of margin calls to increase
the funded amount for negative mark-to-market movements on the
value of each underlying Asset Interest was removed for all
transactions. As a result, the rating of the Notes is primarily
based on the credit quality of the Asset Interests.
The Notes have been downgraded on multiple occasions subsequent to
the restructuring due to the credit deterioration of many of the
underlying corporate credits referenced by one of the six CDSs.
On May 11, 2009, DBRS downgraded the Transaction to BBB (low) and
placed the rating Under Review with Negative Implications due to
further downgrades affecting multiple mortgage insurers referenced
by the Transaction.
Over the past few weeks, a number of the Transaction's underlying
reference entities have experienced significant downgrades. For
example, CIT Group Inc. (CIT) was downgraded from BBB (high) to CC
over multiple rating actions by DBRS between June 15, 2009, and
July 22, 2009; this rapid credit deterioration has had a negative
impact on the Transaction. The Transaction portfolio has 0.83%
exposure to CIT, which is now assigned a very high probability of
default.
As a result of the downgrades to CIT and other corporate obligors,
the required subordination levels from the DBRS CDO Toolbox have
increased due to certain reference entities being assigned a
greater probability of default, and the previous rating assigned
is no longer appropriate.
The Transaction had an initial subordination level of 15% and the
total loss to date from credit events is 3.24%. The Transaction
will require further losses of 11.76% before losses from
additional credit events would begin to flow through to
noteholders. Since the Transaction references 120 equally
weighted corporate obligors, at least 15 additional credit events
would be required for the CDO tranche to be affected.
DBRS rates the Notes at the level of the lowest-rated transaction
funded by the Notes. Three of the five other CDO transactions
funded by WKIT have also been downgraded; however, the Transaction
remains the lowest-rated transaction and its rating therefore
determines the highest possible rating for WKIT overall.
WKIT has the following challenges:
-- The Transaction has 43% exposure to non-investment-grade
obligors. Further rating migration or defaults could
negatively affect the rating of the Transaction.
-- Of the portfolio's underlying ratings (notional-weighted),
57% are currently on negative watch or negative trend by at
least one rating agency.
-- Due to the significant amount of leverage employed in each
underlying CDS, the collateral-commingling arrangement at
final maturity subjects noteholders to the risk that an
incurred loss experienced under any of the six underlying CDO
tranches will result in severe losses to the Notes.
The scheduled maturity of the Notes is December 20, 2016. DBRS is
actively monitoring the credit quality of WKIT and will provide
further updates as necessary.
WINDSOR QUALITY: Moody's Gives Positive Outlook; Keeps 'B1' Rating
------------------------------------------------------------------
Moody's Investors Service changed the rating outlook of Windsor
Quality Food Company, Ltd. to positive from stable, following
Windsor's progress in reducing leverage and improving financial
flexibility as a result of cost cuts and other initiatives that
have boosted margins and cash flow generation. Moody's affirmed
Windsor's other ratings, including its corporate family rating of
B1 and probability of default rating of B2.
Ratings affirmed, and certain LGD percentages revised:
* Corporate family rating at B1
* Probability of default rating at B2
* $100 million senior secured revolving credit agreement expiring
in November 2011 at B1 (LGD 3); LGD percentage to 35% from 38%
* $140 million senior secured term loan maturing in November 2012
at B1 (LGD3); LGD percentage to 35% from 38%
Windsor's B1 corporate family rating and B2 probability of default
rating incorporate the company's strong market positions in the
narrow but fast-growing ethnic frozen foods category, the
favorable demographic trends for these products, and improved
leverage and profit margins as cost cuts and other initiatives
have gained traction. The ratings are also supported by Windsor's
strong track record of steady organic sales growth. Nonetheless,
the company competes against much larger and better capitalized
competitors who can allocate more funds to support their own
brands and their market shares.
Moody's most recent rating action for Windsor on July 31, 2008,
downgraded the company's long-term ratings, including its
corporate family rating to B1 from Ba3, probability of default
rating to B2 from B1, and assigned a stable outlook.
Windsor Quality Food Company, Ltd., is a privately held frozen
food manufacturer based in Houston, Texas. The company's two
major divisions are Windsor Foods, which specializes in ethnic and
other frozen food categories (e.g., Italian, Asian, Mexican, and
coated appetizers) sold through foodservice, consumer and
industrial distribution channels; and Quality Sausage, which
produces pre-cooked meats for industrial and foodservice channels.
The company's sales for the twelve months ended April 4, 2009,
were approximately $680 million.
WL HOMES: Over 30 Res'l Properties to be Sold; Bids due August 17
-----------------------------------------------------------------
In a legal notice, Binswanger and The Flynn Company, acting on
behalf of the Chapter 7 trustee of WL Homes and John Laing Homes,
will offer for sale, through a controlled bidding process, over 30
of the Debtors' residential properties located in northern and
southern California, Colorado, Maryland, Texas and Utah.
Bids are due on or before August 17, 2009, at 12:00 p.m. (EDT).
Full information on the bid procedures is available at:
http://www.wlhomesliquidation.com/
Headquartered in Irvine, California, WL Homes LLC, dba John Laing
Homes, sells and builds houses. The Debtor and five of its
affiliates filed for Chapter 11 protection on February 19, 2009
(Bankr. D. Del. Lead Case No. 09-10571). Laura Davis Jones, Esq.,
and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP,
represent the Debtors' in their restructuring efforts. The U.S.
Trustee for Region 2 appointed creditors to serve on the Official
Committee of Unsecured Creditors of the Debtors' Chapter 11 cases.
Ashby & Geddes represents the Committee. When the Debtors sought
protection from their creditors, they listed assets of more than
$1 billion, and debts between $500 million and $1 billion.
As reported in the TCR on June 10, 2009, the Bankruptcy Court
converted WL Homes LLC and its debtor affiliates' Chapter 11 cases
to cases under Chapter 7 liquidation, at the request of the
official committee of unsecured creditors.
WOLVERINE TUBE: Johnson Resigns as SVP-Sales & Customer Relations
-----------------------------------------------------------------
Wolverine Tube, Inc., says Garry K. Johnson, Senior Vice
President, Sales and Customer Relations, has resigned effective on
July 31, 2009. Mr. Johnson has been in this position since 2002.
He previously held the positions of Vice President, Sales from
1998 until 2002, Industrial Marketing Manager from 1990 until
1998, Field Sales Representative from 1981 until 1990 and
Production Supervisor from 1979 until 1981. Mr. Johnson has been
employed by the Company for 29 years.
Wolverine Tube is a global manufacturer and distributor of copper
and copper alloy tube, fabricated products, and metal joining
products.
The Company had total assets of $237.1 million and $261.2 million
in total liabilities, resulting $47.7 million in stockholders'
deficit at December 31, 2008.
As reported by the Troubled Company Reporter on June 29, 2009,
Wolverine Tube does not currently have additional borrowing
capacity, and future funding requirements with respect to its
liquidity requirements could vary materially from the Company's
current estimates. "Those matters raise substantial doubt about
the Company's ability to continue as a going concern," KPMG, LLP,
in Birmingham, Alabama, its independent auditors, said in a report
dated June 11, 2009.
WOLVERINE TUBE: KPMG Out, Crowe Horwath in as Accountant
--------------------------------------------------------
Wolverine Tube, Inc., reports that on July 21, 2009, KPMG, LLP,
was dismissed as the independent registered public accounting firm
of the Company based on the recommendation of the Audit Committee
of Wolverine's Board of Directors and subsequently approved by
Wolverine's Board of Directors.
Wolverine retained Crowe Horwath, LLP, as its new independent
registered public accounting firm. The decision to retain Crowe
as independent registered public accounting firm was made by the
Audit Committee of the Board of Directors.
Wolverine says the reports issued by KPMG on the financial
statements of Wolverine for the years ended December 31, 2008, and
December 31, 2007, did not contain an adverse opinion or a
disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope or accounting principle, except that
KPMG's report on Wolverine's financial statements for the years
ended December 31, 2008, and December 31, 2007, contained an
explanatory paragraph indicating that substantial doubt exists
about Wolverine's ability to continue as a going concern.
During each of the years ended December 31, 2008, and
December 31, 2007, and through July 21, 2009, there were no
disagreements between Wolverine and KPMG on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreement(s),
if not resolved to the satisfaction of KPMG would have caused them
to make reference thereto in their reports on the financial
statements for such years; and there was one "reportable event" as
that term is used in Item 304(a)(1)(v) of Regulation S-K occurring
during the years ended December 31, 2008, and December 31, 2007,
and through July 21, 2009. The subject matter of this reportable
event was discussed by the audit committee of the board of
directors of Wolverine, with KPMG, and Wolverine has authorized
KPMG to respond fully to the inquiries of any successor accountant
concerning the subject matter of such reportable event. The
reportable event was a material weakness disclosed in the 10-K for
the period ending December 31, 2008, regarding:
-- Lack of risk assessment controls to ensure sufficient
personnel with adequate knowledge and experience to
identify and account for complex accounting and financial
reporting issues;
-- Ineffective controls over the preparation and review of
quarterly financial information. Specific deficiencies
identified included:
* Lack of sufficient policies and procedures to ensure
journal entries are accompanied by sufficient
documentation and were adequately reviewed and approved
for completeness and accuracy prior to being recorded;
* Ineffective operation of monitoring controls ensuring
account reconciliations are properly and timely
prepared with adequate supporting documentation and
review for completeness, accuracy, and timely resolution
of reconciling items; and
* Ineffective operation of monitoring controls around the
review of financial statements to ensure the
completeness and accuracy of the balance sheet,
statement of operations and cash flows; and
-- Ineffective operation of controls surrounding the
completeness, accuracy and timeliness of communication
between personnel responsible for financial reporting and
those involved with the negotiation of transactions which
resulted in an incomplete understanding of the financial
reporting consequences of complex transactions.
Wolverine relates it engaged Crowe to audit its financial
statements for the year ending December 31, 2009. During the
years ended December 31, 2008, and December 31, 2007, and through
July 21, 2009, neither Wolverine or anyone on Wolverine's behalf
has consulted with Crowe regarding (i) the application of
accounting principles to a specific transaction, either completed
or proposed, or the type of audit opinion that might be rendered
on Wolverine's financial statements, or (ii) any matter that was
either the subject of a disagreement as that term is used in Item
304 (a)(1)(iv) of Regulation S-K and the related instructions to
Item 304 of Regulation S-K or a reportable event as that term is
used in Item 304(a)(1)(v) and the related instructions to Item 304
of Regulation S-K.
About Wolverine Tube
Wolverine Tube, Inc., is a global manufacturer and distributor of
copper and copper alloy tube, fabricated products, and metal
joining products.
The Company had total assets of $237.1 million and $261.2 million
in total liabilities, resulting $47.7 million in stockholders'
deficit at December 31, 2008.
As reported by the Troubled Company Reporter on June 29, 2009,
Wolverine Tube does not currently have additional borrowing
capacity, and future funding requirements with respect to its
liquidity requirements could vary materially from the Company's
current estimates. "Those matters raise substantial doubt about
the Company's ability to continue as a going concern," KPMG, LLP,
in Birmingham, Alabama, its independent auditors, said in a report
dated June 11, 2009.
* Auto Dealer ABS Transactions Performing Within Expectations
-------------------------------------------------------------
U.S. auto-related dealer floorplan ABS transactions entering early
amortization due to manufacturer or finance company bankruptcy are
largely performing within expectations, though material concerns
remain over valuation declines in a still challenged macro
environment, according to Fitch Ratings. Related pressures remain
particularly acute for the domestic OEMs with GM and Chrysler
continuing to reposition after emergence from bankruptcy.
While underlying asset performance has generally remained within
expectations, Fitch believes dealer floorplan ABS performance has
benefited materially from direct and indirect support as well as
the facilitation of new alliances. The deterioration in the
financial profile of the domestic auto manufacturers and
challenges of working through significant inventory levels has
brought into sharper focus the material connections of
manufacturers to their dealers and the dealer's material role in
this financing chain.
Observing the relationship between dealers, the manufacturer and
the finance company before and during bankruptcy has demonstrated
operating and logistical links uncommon in other structured
finance asset classes, according to Senior Director Ravi Gupta.
Fitch believes that these linkages will make achieving 'AAA'
ratings on dealer floorplan ABS associated with manufacturers with
weak credit profiles unattainable. 'Other asset classes commonly
feature more granularity of their pools and direct access to the
assets, significantly influencing their ability to achieve the
highest rating levels,' said Gupta.
Positively, the structural triggers tied to the recent bankruptcy
filings of General Motors Corp. and Chrysler LLC have resulted in
the Superior Wholesale Inventory Financing Trust XI and Master
Chrysler Financial Owner Trust transactions entering rapid
amortization and paying out monthly collections prior to their
scheduled termination dates.
In the case of the SWIFT XI trust, which began rapid amortization
following the June 1, 2009 bankruptcy filing of General Motors
Corp., in accordance with the transaction documentation, principal
is being allocated sequentially amongst the outstanding notes.
Through the July 2009 distribution period, the class A notes have
paid down to approximately $1.05 billion from an original balance
of $2 billion. Subordinate notes remain at their original
balances and will begin to receive principal following the payout
of the class A notes. From a collateral performance perspective,
losses have remained low and consistent with historical averages
while monthly payment rates, improved to 32.60% for the July 2009
distribution period from 22.7% for June. Even with the improved
new vehicle sales demonstrated by the increasing MPRs, evidence of
bloated dealer inventories remains. Aging of vehicle inventory
over 180 days reached approximately 33% of the portfolio during
the July period, the highest levels Fitch has witnessed for this
transaction and a material increase from the first quarter 2009
averages of approximately 13%.
The MCFOT trust entered rapid amortization following the April 30,
2009 bankruptcy filing of Chrysler LLC. The Class A notes are
receiving 100% of the principal allocations and the bonds have
paid down to approximately $345 million through the July 2009
distribution period from their original balance of $1 billion.
Losses, which trended to their highest levels following the
bankruptcy filing, averaging .38% per month for the April through
June 2009 distribution periods, still remain low on a nominal
basis and have improved through the July period. MPRs showed
improvement during the July 2009 distribution period, increasing
to 42.6% from 26% in June benefiting materially from the impact of
trust balance declines on the MPR calculations. Inventory aging,
similar to the General Motors case, remains a concern, with
approximately 5% of the pool being supported by vehicle inventory
that has aged beyond 360 days.
The other remaining transactions continue to revolve in accordance
with their transaction documents.
Should monthly payment rates and losses not materially deteriorate
from current levels, the SWIFT XI and MCFOT transactions should
repay full principal within the next few months. Key potential
impacts to performance would include new developments that would
infringe on the support provided to the sector, disorderly unwinds
of dealers that have been targeted for closure or economic
conditions deteriorating further and creating additional
constraint on consumer interest in automotive purchasing.
Fitch currently rates five outstanding U.S. auto-related dealer
floorplan ABS transactions, all of which are associated with the
three U.S. domestic auto manufacturers and are detailed below.
Fitch downgraded all transactions on April 14, 2009 and placed
each of them on Rating Watch Negative following continued system-
wide deterioration in the domestic auto industry and the
heightened financial risk of each of the auto manufacturers. Each
transaction remains on Rating Watch Negative.
These classes are fixed- and floating-rate notes issued by
Chrysler Financial LLC (MCFOT), Ford Motor Credit Company (FCFMOT)
and GMAC LLC (SWIFT and SMART) secured by loans made by each
company to franchised vehicle dealerships to support their
purchase and flooring of vehicles manufactured by the related
manufacturer:
Master Chrysler Financial Owner Trust:
-- Series 2006-A term 'A'.
Ford Credit Floorplan Master Owner Trust A:
-- Series 2006-4 class A 'AA';
-- Series 2006-4 class B 'BBB'.
Superior Wholesale Inventory Financing Trust (SWIFT XI):
-- Series 2005-A class A 'AA';
-- Series 2005-A class B 'BBB';
-- Series 2005-A class C 'BB';
-- Series 2005-A class D 'B''.
Superior Wholesale Inventory Financing Trust (SWIFT 2007-AE-1):
-- Class A notes 'AA';
-- Class B notes 'BBB';
-- Class C notes 'BB';
-- Class D notes 'B''.
SWIFT Master Auto Receivables Trust:
-- Series 2007-2 class A 'AA';
-- Series 2007-2 class B 'BBB';
-- Series 2007-2 class C 'BB';
-- Series 2007-2 class D 'B'.
All transactions remain on Rating Watch Negative by Fitch.
* Almost $165 Billion in Commercial Loans Due in 2009
-----------------------------------------------------
Almost $165 billion in U.S. commercial real estate loans will
mature this year and need to be sold or refinanced as rents and
occupancies fall, according to First American CoreLogic. The
U.S. South has the most maturing loans with 60,893 mortgages
valued at $96 billion coming due on shops, offices, hotels,
apartment buildings and land, followed by the West with 20,549
mortgages maturing for a value of $35 billion.
Meanwhile, national housing prices fell 9.2% in May compared to a
year ago representing the smallest year-over-year decline recorded
in 2009 and the lowest since December 2007, according to data from
First American CoreLogic and its LoanPerformance Home Price Index
(HPI). May's decline was a 0.5% improvement over the 9.7% decline
in April.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
July 29-Aug. 1, 2009
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Conference
The Westin Hilton Head Island Resort & Spa,
Hilton Head Island, S.C.
Contact: http://www.abiworld.org/
Aug. 6-8, 2009
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Conference
Hotel Hershey, Hershey, Pa.
Contact: http://www.abiworld.org/
Sept. 10-11, 2009
AMERICAN BANKRUPTCY INSTITUTE
Complex Financial Restructuring Program
Hyatt Regency Lake Tahoe, Incline Village, Nevada
Contact: http://www.abiworld.org/
Sept. 10-12, 2009
AMERICAN BANKRUPTCY INSTITUTE
17th Annual Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nevada
Contact: http://www.abiworld.org/
Oct. 2, 2009
AMERICAN BANKRUPTCY INSTITUTE
ABI/GULC "Views from the Bench"
Georgetown University Law Center, Washington, D.C.
Contact: http://www.abiworld.org/
Oct. 7-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
Oct. 20, 2009
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Paris Las Vegas, Las Vegas, Nev.
Contact: http://www.abiworld.org/
Dec. 3-5, 2009
AMERICAN BANKRUPTCY INSTITUTE
21st Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 21-23, 2010
INSOL
International Annual Regional Conference
Madinat Jumeirah, Dubai, UAE
Contact: 44-0-20-7929-6679 or http://www.insol.org/
Apr. 29-May 2, 2010
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 17-20, 2010
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 7-10, 2010
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Ocean Edge Resort, Brewster, Massachusetts
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2010
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Conference
The Ritz-Carlton Amelia Island, Amelia, Fla.
Contact: http://www.abiworld.org/
Aug. 5-7, 2010
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 6-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
22nd Annual Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: July 19, 2009
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Danilo Munnoz, 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 **