/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090814.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, August 14, 2009, Vol. 13, No. 224 Headlines 1031 TAX GROUP: 2 Ex-Employees Get 100 Years for Role in Fraud ABITIBIBOWATER INC: Blackstone Engagement Letter Revised ABITIBIBOWATER INC: Delaware Court Approves Cross-Border Protocol ABITIBIBOWATER INC: Expedited Contract Rejection Protocol Approved ABITIBIBOWATER INC: Fee Auditor Appointed in Bankruptcy Case ABITIBIBOWATER INC: To Lay Off 175 Head Office Personnel ADVANSTAR COMMUNICATIONS: Moody's Cuts Corporate Rating to 'Caa3' AJA NEW YORK: Case Summary & 30 Largest Unsecured Creditors AMERICAN ACHIEVEMENT: Moody's Cuts Default Rating to 'Caa2/LD' AMERICAN INT'L: New CEO Hiring Raises Conflict for Potential Deals AMERICAN INT'L: Has Deal to Sell Hong Kong Finance Unit AMERICAN INT'L: AIGFP Investment Assets Sale Nets $1.9-Bil. ARCLIN US: U.S. Trustee Appoints 5-Member Creditors Committee ARENA FOOTBALL: Sent to Chapter 7 Liquidation by Creditors AVISTA CORP: Moody's Changes Outlook on 'Ba1' Rating to Positive AVIZA TECHNOLOGY: Has Deal to Sell Assets to Sumitomo BALLY TOTAL: District Court Junks Carrera, et al., Appeal BEARINGPOINT INC: Court Approves Sale of European Division BIOSANTE PHARMA: Posts $4.6MM Net Loss in Quarter Ended June 30 BLACKWATER MIDSTREAM: Posts $1-Mil. Net Loss for Second Quarter BOSTON GENERATING: Moody's Junks Ratings on 1st Lien From 'B3' BRANDYWINE REALTY: Fitch Keeps BB+ IDR; Pref Stock 2 Notches Down BTH LLC: Voluntary Chapter 11 Case Summary CABLEVISION SYSTEMS: Amends Quarterly Report to Include XBRL Docs CALPINE CORP: To Repurchase Bank Debt at Discount CATHOLIC CHURCH: Greens Drop Civil Case vs. Diocese of Fairbanks CATHOLIC CHURCH: Sinnott Withdraws as Counsel for Oregon Priests CATHOLIC CHURCH: Status Report on Suit vs. Insurers on Sept. 30 CENA LLC: Case Summary & 20 Largest Unsecured Creditors CHRYSLER LLC: Old CarCo Schedules $21BB Assets vs. $26.9BB Debts CHRYSLER LLC: Creditors Committee Launches Bankruptcy Web Site CHRYSLER LLC: Anchor Wants Case Transferred Back to Ohio Court CHRYSLER LLC: McKenna Long Advised Canada in Deals With Automakers CHRYSLER LLC: Mexico Plants to Continue Production of Cruiser CHRYSLER LLC: Old Carco's Interests in Non-Debtor Entities CHRYSLER LLC: Warren Workers to Lose Jobs if Tax Appeals Succeed CIT GROUP: Adopts Plan to Protect Net Operating Losses COLONIAL BANCGROUP: FDIC Directs CBG Florida REIT Shares Swap COLONIAL BANCGROUP: DBRS Assigns 'C' Rating to Preferred Stock COOPER-STANDARD: Canada Unit's CCAA Restructuring Database COOPER-STANDARD: Intends to Pay $3.5 Mil. in Prepetition Taxes COOPER-STANDARD: Proposes Kurtzman Carson as Claims Agent COUNTRY COACH: Recreation Live to Buy 6 Motor Coaches, 50% Stake COYOTES HOCKEY: Largest Creditor Now Backing Reinsdorf Bid CRM USA: AM Best Affirms Trust Preferred Securities at 'BB' CRUCIBLE MATERIALS: Delays Plant Shutdown to Find Buyer DAE AVIATION: S&P Downgrades Corporate Credit Rating to 'B-' DELPHI CORP: European Union OKs Plants Purchase by GM DETROIT PUBLIC SCHOOLS: Manager May Decide on Bankr. This Month DEX MEDIA WEST: Earns $30.6 Million in Quarter Ended June 30 DIRECTV HOLDINGS: Fitch Upgrades Issuer Default Rating From 'BB' DOLLAR THRIFTY: Deutsche Bank Amends Loan to Limits L/C Issuance DONNIE FLYNN KING: Case Summary & 12 Largest Unsecured Creditors DYNEGY INC: Fitch Downgrades Issuer Default Rating to 'B-' EUROFRESH INC: May Now Send Plan to Creditors for Voting FARMERS MUTUAL INSURANCE: AM Best Rates Financial Strength at B- FINLAY ENTERPRISES: Can Initially Use GE Capital's Cash Collateral FINLAY ENTERPRISES: Gets Sept. 21 Schedules Filing Extension FINLAY ENTERPRISES: Selling Orange Facility, Closing 129 Locations FLEETWOOD ENTERPRISES: Judge OKs Sale of Housing Business to Cavco FONTAINEBLEAU: Court OKs Genovese as Committee's Co-Counsel FONTAINEBLEAU: Court OKs Fox Rothschild as Co-Counsel FONTAINEBLEAU: Engagement of Moelis Approved on Interim Basis FORD MOTOR: Likely to Close Volvo Sale This Year, Sweden Says FRONTIER AIRLINES: Republic Beats Southwest in Bankruptcy Auction FRONTIER AIRLINES: Union Contingencies Sink Southwest Bid FRONTIER AIRLINES: Court OKs Entry Into ACG Aircraft Lease FRONTIER AIRLINES: Records 92% Mainline Load Factor for July FRONTIER AIRLINES: Teamsters to Hold Vote on New Contract Aug. 20 GENERAL GROWTH: Judge Gropper Declines to Drop SPE's Ch. 11 Cases GENERAL GROWTH: Sues Center Partners, et al., to Halt Urban Action GENERAL GROWTH: Wants Prepetition Class Suits vs. D&Os Stayed GENERAL MOTORS: Receives Supporting Documents on Bids for Opel GENERAL MOTORS: European Union OKs Sale of Delphi Plants GENERAL MOTORS: Florida Courts Enforce Stay on GM-Related Cases GENERAL MOTORS: FRG & Brittingham Want Docs. for PI Suit GENERAL MOTORS: H. Wice's Notice of Appeal Over Wage Claim Lawsuit GENERAL MOTORS: Holden Unit Gets AU$200 Mil. Credit Aid From EFIC GENERAL MOTORS: New GM Pulls Out of Mercury Disposal Partnership GENERAL MOTORS: New GM May Fire More Workers as Few Accept Buyout GENERAL MOTORS: U.S. Senate Says No to Equity Distribution GENERAL MOTORS: Sonic Expects $3.3 Million in Dole-Outs GENERAL MOTORS: Saab May Get Loan Guarantees Exceeding $600 Mil. GENERAL MOTORS: To Cut Production in Spain if Magna Bid Succeeds GLOBAL CROSSING: S&P Gives Positive Outlook, Affirms 'B-' Rating GLOBAL SAFETY: Files Plan; Senior Lenders to Get 100% Equity GMAC INC: ResCap Posts $841MM Net Loss in Quarter Ended June 30 GREEKTOWN HOLDINGS: June 2009 Revenues Total $28.8MM, MGCB Reports GREEKTOWN HOLDINGS: To Pay Fines for Political Contributions HARRIS BLDG I LLC: Case Summary & 6 Largest Unsecured Creditors HELLER EHRMAN: Former Chairman Denies Insider Payments HILLMAN GROUP: S&P Raises Corporate Credit Rating to 'B' HORNBECK OFFSHORE: Moody's Rates New Senior Unsec. Notes to 'Ba3' HORNBECK OFFSHORE: S&P Assigns 'BB-' Rating on $200 Mil. Notes HOST HOTELS: Moody's Affirms 'Ba1' Senior Unsecured Debt Rating ICICI BANK: Moody's Puts Prim-1 Rating to Commercial Paper IMPEL INC: Files for Chapter 11 Bankruptcy Protection INSIGNIA SOLUTIONS: Posts $49,642 Net Loss in Qtr. Ended June 30 JEFFREY ABREU PROSPER: Case Summary & 20 Largest Unsec. Creditors JEH INC: Case Summary & 20 Largest Unsecured Creditors JOHN DUNCAN CRERAR: Case Summary & 9 Largest Unsecured Creditors JOSEPH YAKUBIK: Case Summary & 20 Largest Unsecured Creditors JS KEMPF: Files for Chapter 7 Bankruptcy Protection KIMAN CHANG: Case Summary & 12 Largest Unsecured Creditors LEAR CORP: Committee Proposes Lowenstein Sandler as Counsel LEAR CORP: Committee Proposes Mesirow as Financial Advisors LEAR CORP: Court Approves Kirkland as Bankruptcy Attorneys LEAR CORP: Gets Court OK for Winston Strawn as Special Counsel LEAR CORP: Proposes Miller Buckfire as Investment Banker LEHMAN BROTHERS: To Lose $500MM if Shinsei Bank Controls Unit LENNY DYKSTRA: Court to Hear Index's Ch. 7 Conversion Plea Sept. 1 LITTLE TRAVERSE: S&P Downgrades Senior Unsec. Debt Rating to 'CC' MAGUIRE PROPERTIES: Says No Impairment Charge on Park Place I Deal MEDIACOM COMMUNICATIONS: Amends Tender Offer for 2011, 2013 Notes MEDIACOM COMMUNICATIONS: Files Pro Forma Info on Transfer Deal MEDIACOM COMMUNICATIONS: Posts $34.4 Mil. Net Income for Q2 2009 MEDIACOM LLC: Loan Upsizing Won't Affect S&P's 'BB-' Rating MERCER INT'L: Zero Turnout Prompts Extension of Exchange Offer METABASIS THERA: June 30 Balance Sheet Upside-Down by $441,000 METALDYNE CORP: Panel Can Retain Huron Consulting as Fin'l Advisor NORTEL NETWORKS: Court OKs Network Svcs. Pact With Chrysler NORTEL NETWORKS: Panel's Akin Gump Bills $960,000 for June Work NORTEL NETWORKS: To Auction Off Voice Applications Business NORTHERN NEWS: Case Summary & 8 Largest Unsecured Creditors OMNOVA SOLUTIONS: Moody's Gives Stable Outlook; Keeps 'B2' Rating ON ASSIGNMENT: Weak Operations Won't Affect Moody's 'Ba3' Rating ONE COMMUNICATIONS: Moody's Withdraws B2 Rating on $275 Mil. Notes ONE COMMUNICATIONS: S&P Puts 'B' Rating on CreditWatch Negative ORLEANS HOMEBUILDERS: Eyes Amendment to Revolving Credit Facility ORLEANS HOMEBUILDERS: Inks Employment, Non-Compete Deal with Vesey ORLEANS HOMEBUILDERS: Wachovia Consents to Exchange Transaction PEQUOT CAPITAL: SEC May Sue Co. for Insider-Trading PIONEER 74 LOTS: Voluntary Chapter 11 Case Summary PHYSICIANS FORMULA: Posts $591,000 Profit But Defaults on Loan POLYFUEL INC: Fails to Find Buyer, to Cease Operations QUEST RESOURCE: Restatement Prompts Delay of Q2 2009 Fin'l Report RALPH MILLER: Voluntary Chapter 11 Case Summary REALOGY CORP: Has $27M Q2 Loss, Needs Lower Leverage Ratio in Q3 REGAL ENTERTAINMENT: Files Second Quarter Report on Form 10-Q RESIDENTIAL CAPITAL: Posts $841MM Net Loss in Qrtr. Ended June 30 REVLON INC: Offers to Swap New Preferreds for Class A Shares SAINT VINCENT: Chapter 11 Case Reassigned to Judge C. Morris SAINT VINCENT: Frances Alvarez Allowed to File Claim SEMGROUP LP: Court OKs $65.35MM Sale of SemFuel Assets to Noble SEMGROUP LP: Names New President of SemStream SONIC AUTOMOTIVE: Delays Effective Date of 6% Notes Registration SONIC AUTOMOTIVE: Expects $3.3 Million in Dole-Out from GM SONIC AUTOMOTIVE: Posts $26,000 Net Income for 2nd Quarter 2009 SPANSION INC: Court Approves Warren H. Smith as Fee Auditor SPANSION INC: Gets Court OK to Hire K&L for ITC Action SPANSION INC: Has Court Nod for Morrison as Litigation Attorneys SPRINT NEXTEL: To Raise $500 Million by Issuing Notes Due 2017 SPRINT NEXTEL: To Raise $1.3 Billion by Issuing 8.375% Notes STANT PARENT: Seeks to Sell All Assets to Vapor Acquisition TABERNA PREFERRED III: Fitch Cuts Ratings on 2 Classes of Notes TABERNA PREFERRED IV: Fitch Downgrades Ratings on 2 Notes to 'D' TABERNA PREFERRED VI: Interest Nonpayment Cues Fitch's Rating Cut TAYLOR BEAN: Moody's Takes Rating Actions on Ocala Funding Notes TBS INTERNATIONAL: Posts $16MM Net Loss in Quarter Ended June 30 TOM NEBEL: Chapter 7 Trustee Not Bound by State Court Fee Award TONY BLAKES: Case Summary & 20 Largest Unsecured Creditors TOUSA INC: Gets Nod to Reject 75 Deals With Subcontractors TOUSA INC: Wachovia Gets Court Nod for Foreclosure Proceeding TOUSA INC: Wins Nod to Sell JV Membership Interests to Centex TRANSMERIDIAN EXPLORATION: Court Confirms Amended Chapter 11 Plan TRIBUNE CO: Court OKs Deloitte & Touche as Financial Advisor TRIBUNE CO: Lazard Freres Charges $200,000 for May Work TRUMP ENTERTAINMENT: Noteholders Offer Coastal-Backed Plan TRUMP ENTERTAINMENT: Examiner for Aborted Sale, Trump Deal Pushed TUCKAHOE CREDIT: S&P Gives Negative Outlook; Affirms 'BB' Rating UAL CORP: Files Second Quarter Report on Form 10-Q UAL CORP: Parties Oppose Cases Closing, Cite Unresolved Issues UAL CORP: Regen Appeals Disallowance of $4.89 Mil. Cure Claim UAL CORP: To Reduce Flight Attendant Count by 2,100 by August 31 UNITED COMMERCIAL: Moody's Junks Deposit, Long-Term Issuer Ratings USA INC: S&P Raises Corporate Credit Rating to 'B-' From 'CCC' VIKING SYSTEMS: Posts $386,533 Net Loss in Quarter Ended June 30 VMV LLC: Case Summary & 4 Largest Unsecured Creditors WESTMORELAND COAL: Posts $10.5 Million Net Loss for Q2 2009 XERIUM TECHNOLOGIES: Files Transcript of Aug. 5 Conference Call YRC WORLDWIDE: Bankruptcy Increasingly Likely, Analyst Says * Business Filings in Second Quarter Up 11.8% * CFTC Proposes New Rules for Bankrupt Commodity-Broker Assets * Florence Lentini Joins E&Y's Transaction Advisory Services * BOOK REVIEW: Bankruptcy in United States History ********* 1031 TAX GROUP: 2 Ex-Employees Get 100 Years for Role in Fraud -------------------------------------------------------------- Two former employees of Edward H. Okun, who was sentenced to 100 years in prison on Aug. 4, 2009, after a three-week jury trial, were sentenced August 13 before U.S. District Judge Robert E. Payne for their roles in a scheme to defraud and obtain approximately $126 million in client funds held by The 1031 Tax Group LLP. Lara Coleman, the former chief operating officer of Investment Properties of America, was sentenced to 10 years in prison and ordered to pay full restitution. MS. Coleman pleaded guilty on Jan. 6, 2009, to conspiring to commit mail and wire fraud and to making a material false statement to federal investigators. According to the plea agreement and statement of facts, Ms. Coleman and others used 1031TG and its subsidiaries in a scheme to obtain millions of dollars of client funds by false pretenses. Section 1031 of the Internal Revenue Code allows investment property owners to defer the capital gains tax that would otherwise be due on properties sold, if the proceeds are used to purchase new property in a specified time frame. To facilitate such exchanges, investment property owners deposit the proceeds from the sale of their property with qualified intermediaries and sign exchange agreements, which include various promises by the qualified intermediaries to clients regarding the safekeeping of exchange funds in trust. In the plea agreement and statement of facts, Ms. Coleman admitted that 1031TG falsely represented that it would hold client funds solely to complete the clients' 1031 exchanges. Ms. Coleman admitted that after obtaining clients' exchange proceeds with that false promise, she and others misappropriated roughly $132 million in client funds to support the lavish lifestyle of the owner of 1031TG, pay operating expenses for the owner's various companies, invest in commercial real estate and purchase additional qualified intermediary companies to obtain access to additional client funds. In addition, Ms. Coleman admitted that she lied to federal investigators about statements she made in 2006 to internal attorneys for Investment Properties of America about the amount of money she and others had misappropriated. Robert D. Field II was sentenced August 13 to five years in prison and was ordered to pay full restitution for his participation in the conspiracy to defraud 1031TG customers. Mr. Field was the chief financial officer of a holding company that was set up, in part, to oversee both IPofA and 1031TG, although neither company was ever officially made a subsidiary of the holding company. The sentencing of Richard Simring, the chief legal officer, has been continued. Mr. Field pleaded guilty on July 3, 2008, and Simring pleaded guilty on July 24, 2008. The case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica A. Brumberg for the Eastern District of Virginia and Trial Attorney Brigham Q. Cannon of the Criminal Division's Fraud Section. This continuing investigation is being conducted by the U.S. Postal Inspection Service, the Internal Revenue Service and the FBI. About The 1031 Tax Group Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- was a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The Company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Gerard A. McHale, Jr., was appointed Chapter 11 trustee. Jonathan L. Flaxer, Esq., and David J. Eisenman, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, represent the Chapter 11 trustee. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. The Debtors' operating report for the month ended Sept. 30, 2007, showed net loss of $67,903 on $0 revenues. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. Former CEO Edward H. Okun is in federal prison at Northern Neck Regional Jail in Warsaw, Virginia, after being convicted of mail fraud, among other charges. Mr. Okun allegedly engaged in several misappropriations of funds of 1031 Tax Group and other entities. The funds were used for Mr. Okun's lavish lifestyle including acquiring properties and luxury asset. ABITIBIBOWATER INC: Blackstone Engagement Letter Revised -------------------------------------------------------- AbitibiBowater Inc. and its affiliates previously said they intend to pay Blackstone Advisory Services L.P., as their financial advisors, a $375,000 monthly fee and an $11,000,000 restructuring fee, among other. Wachovia Bank National Association and the Bank of Nova Scotia argued that the Debtors' proposed compensation for Blackstone "is excessive." Following significant discussions, the Debtors, the Objectors and Blackstone reached a consensual resolution to Blackstone's fees, pursuant to a Revised Engagement Letter, which essentially provides that: * No funds to satisfy the fees and expense of Blackstone will be allocated to, or paid by, the CCAA Applicants, whether directly or indirectly, including through an intercompany transfer from any CCAA Applicant to another entity for the purpose of making the payment; * No funds to satisfy the fees and expenses of BMO Nesbitt Burns, Inc., as financial advisor to the CCAA Applicants, will be allocated to, or paid by, the Debtors; and * Blackstone's and BMO's fees will not be considered a shared expense of the Debtors and the CCAA Applicants. The U.S. Debtors and the CCAA Applicants, however, will be permitted to continue ordinary course transactions between and among them consistent with past practices and in accordance with their cash management system approved by the Bankruptcy Court. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes Abitibibowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Delaware Court Approves Cross-Border Protocol ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved in all respects AbibitiBowater Inc. and its affiliates' request for the establishment of administrative and procedural guidelines to manage their insolvency proceedings under the Chapter 11 cases in the U.S. Bankruptcy Court for the District of Delaware and the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended, in the Superior Court, Commercial Division, for the Judicial District of Montreal, Canada. The Protocol has been established to harmonize and coordinate activities for the orderly and efficient administration of the restructuring proceedings of the Debtors in the Bankruptcy and Canadian Courts, so as to maximize the value of each of their estates. The Motion is also subject to approval by the Canadian Court, as it may be amended or supplemented. No funds to satisfy the fees or expense of Blackstone L.P. will be allocated to, or paid by, the CCAA Applicants, whether directly or indirectly, including through an intercompany transfer from any CCAA Debtor to another entity. The CCAA Applicants and the Chapter 11 Debtors are permitted to continue ordinary course transactions between and among them, consistent with past practices and in accordance with any orders approved by the Canadian Court. Blackstone's fees, however, will not be considered a shared expense of the CCAA Debtors. The operations of the U.S. Debtors and the CCAA Debtors are interconnected in that many of their issuances are guaranteed by one or more cross-border entities, according to Pauline K. Morgan, Esq., Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware. The U.S. Debtors and the CCAA Debtors also rely on each other in the ordinary course of their operations, including in areas of the use of group insurance and a shared sales force. These arrangements provide substantial benefits to both the U.S. Debtors and the CCAA Debtors and thus, they desire to manage their Insolvency Proceedings in a coordinated fashion so as to maximize the value of each of their estates. Thus, in light of their Chapter 11 cases in the U.S. Bankruptcy Court for District of Delaware and the insolvency proceeding under the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended, in the Superior Court, Commercial Division, for the Judicial District of Montreal, Canada, the Debtors believe that it is necessary to establish a set of administrative and procedural guidelines. Accordingly, they seek approval of a proposed Cross-Border Protocol. Through the implementation of the Protocol, the Bankruptcy Court, the Canadian Court, the Debtors, creditors and interested parties will not be deemed to have approved or engaged in any infringement on the sovereignty of the United States or Canada. The Bankruptcy Court and the Canadian Court each may coordinate activities as may be deemed appropriate to harmonize and coordinate the administration of the Debtors' proceedings, specifically: -- The Bankruptcy Court and the Canadian Court may communicate with one another, with or without counsel present, with respect to any procedural matter relating to the Debtors' Proceedings. -- If the issue of the proper jurisdiction of either Court to determine an issue is raised by any interested party in either of the Debtors' Proceedings with respect to any relief sought in either Court, either Court may consult with the other Court to determine an appropriate process by which the issue of jurisdiction will be determined. -- The Courts may, but are not obligated to, coordinate activities in the Debtors' Proceedings so that a subject matter may be determined in a single Court. -- The Courts may conduct joint hearings with respect to any matter in which both Courts consider that joint hearing to be necessary or advisable. The Cross-Border Protocol also contains other provisions that, among other things, concern (i) retention and compensation of estate representatives and professionals, (ii) procedures for resolving disputes, and (iii) the preservation of certain rights. A full-text copy of the Cross-Border Court-to-court Protocol is available for free at: http://bankrupt.com/misc/ABH_CrossBorderProtocol.pdf About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes Abitibibowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Expedited Contract Rejection Protocol Approved ------------------------------------------------------------------ At AbitibiBowater Inc.'s behest, Judge Kevin Carey authorizes, but does not require, the Debtors to implement uniform expedited procedures for the rejection of contracts that contain unfavorable terms, provide services the Debtors no longer need, and are burdensome to the estates, pursuant to Section 365 of the Bankruptcy Code. Essentially, the Expedited Contract Rejection Procedures provide that: (1) The Debtors will notify the Court regarding the contracts they intend to reject, and will provide the Notice of Rejection to the counterparties of the Contract, the U.S. Trustee, the Official Committee of Unsecured Creditors, the monitor appointed in the Debtors' proceedings under Canada's Companies' Creditors' Arrangement Act, and other parties entitled to receive the Notice under Rule 2002 of the Federal Rules of Bankruptcy Procedure. (2) The Notice of Rejection will contain information relating to, among other things, the subject of the rejection and its terms, as well as the counterparties to the Contract. (3) Objections to a proposed Rejection must be filed with the Court, and served on the Debtors and the Notice Parties within 10 days from the time that the Notice is filed. Unresolved Objections will be heard before the Court. Absent any Objection, or in the event that the Rejection is withdrawn or overruled, the Rejection will be deemed effective. (4) Counterparties to a Rejected Contract may set off or use a security deposit without obtaining approval from the Court. (5) The Debtors will remove personal property in any non- residential property lease, which is the subject of a Rejected Contract. (6) As of the Rejection Date, the Debtors will turn over to the lessor the control of any equipment that is the subject of a Rejected Contract. The lessor is granted relief from the automatic stay under Section 362 of the Bankruptcy Code to allow it to repossess the Equipment. (7) Proofs of claim relating to the Contract Rejections must be filed by the counterparties on or before the Claims Bar Date, or 30 days after the Rejection Date. In the event the Debtors seek to reject contracts under the CCAA, they intend to comply with the requirements for rejection or repudiation of the contracts in the U.S. and Canada. The Debtors maintain that absent the Expedited Procedures for managing the Contract Rejection process, they will likely incur significant amount of administrative costs in connection with filings separate request for the rejection of each Contract. The Expedited Procedures will not prevent the Debtors from seeking further remedy in relation to the Contracts that they intend to reject, Judge Carey rules. The Debtors confirmed that they received no objections to their request. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes Abitibibowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Fee Auditor Appointed in Bankruptcy Case ------------------------------------------------------------ To supervise the compensation and reimbursement process of bankruptcy professionals, the Bankruptcy Court approved the employment of Direct Fee Review LLC as fee auditor in the Chapter 11 cases of AbitibiBowater Inc. and its affiliates. The selection of Direct Fee as fee auditor is pursuant to agreements reached among the Debtors, the Official Committee of Unsecured Creditors and the Office of the United States Trustee for the District of Delaware. Specifically, the Fee Auditor will: (a) review all fee applications filed by estate professionals in the Debtors' cases; (b) during the course of its review of fee applications, consult, as it deems appropriate, with each professional concerning the fee application; (c) during the course of its examination of the fee applications, review any document filed in the Chapter 11 cases; (d) within 20 days after a professional files a quarterly interim fee application, serve an initial report on that professional to quantify and present factual data relevant to whether the requested fees, disbursements and expenses meet the standards of Section 330 of the Bankruptcy Code; (e) within 15 days after the service of the Initial Report, engage in informal communication with each professional, the purpose of which is to resolve matters raised in the Initial Report; (f) following communications with the professional and its review of any supplemental information in response to the Initial Report, conclude the informal response period by filing with the Court a report with respect to each fee application 15 days after the service of the Initial Report; and (g) serve each Final Report on the U.S. Trustee, counsel for the Creditors' Committee, counsel for the Debtors and each professional whose fees and expenses are addressed in the Final Report, which will be in a format designed to quantify and present factual data relevant to whether the requested fees and expenses of each professional meet the applicable standards of Section 330. The Final Report will also inform the Court of all proposed consensual resolutions of the fee and expense reimbursement request for each professional and the basis for the proposed consensual resolution. The Fee Auditor will endeavor to reach consensual resolution with each professional with respect to that professional's requested fees and expenses. The Fee Auditor may also use the informal response process to revise findings contained in the Initial Report. Furthermore, each professional may provide the Fee Auditor with verbal or written supplemental information which the professional believes is relevant to the Initial Report. Direct Fee will be paid in accordance with its customary rates, which include $175 per hour for the "declarant," and $175 per hour for Don F. Oliver. The firm will also be reimbursed fro necessary out-of-pocket expenses. W. Joseph Dryer, a member of Direct Fee, ascertained that his firm does not hold or represent any interest adverse to the Debtors. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes Abitibibowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: To Lay Off 175 Head Office Personnel -------------------------------------------------------- In an effort to further reduce overhead costs, AbitibiBowater is trimming down its head office staff by 25%, which essentially would translate terminating 175 employees of the about 700 people working in head office functions in Montreal and in the U.S., The Canadian Press reports. The soon-to-be terminated workers are expected to be identified come September 1, 2009, the news source relates. The Canadian Press notes that CEO Dave Peterson related in a message to employees that other cost-cutting measures will be taken in the coming months, including: -- the suspension of the 2009 incentive compensation programs, including special equity awards; -- a reduction of warehousing and inventory levels; -- limitations of in-house contractors; -- the suspension of many association memberships; -- the reduction of business travel expenses; and -- the review of corporate lease arrangements. "The implementation of these measures is critical in order for the company to ultimately emerge -- as rapidly as possible -- from creditor protection filings a stronger, more sustainable organization," Mr. Paterson was quoted by the Canadian Press as saying. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes Abitibibowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ADVANSTAR COMMUNICATIONS: Moody's Cuts Corporate Rating to 'Caa3' ----------------------------------------------------------------- Moody's Investors Service has downgraded Advanstar Communications, Inc.'s Corporate Family and Probability of Default ratings each to Caa3 from Caa1 prompted by Moody's concern that continuing weak market conditions will result in liquidity pressure, significantly increase the risk of default, and reduce the recovery prospects in a downside scenario. Details of the rating action are: Ratings downgraded: Advanstar Communications, Inc * Corporate Family Rating -- to Caa3 from Caa1 * Probability of default rating - to Caa3 from Caa1 * Senior secured first lien term loan due 2014 -- to Caa1, LGD2, 25% from B2, LGD2, 26% * Senior secured second lien term loan due 2014 -- to Ca, LGD5, 73% from Caa2, LGD5, 74% The rating outlook remains negative. Moody's does not rate $98 million of senior unsecured notes issued by intermediate holding company, Advanstar, Inc., or $25 million of redeemable notes issued by holding company -VSS- AHC Holdings LLC. The downgrade of the CFR to Caa3 largely reflects a material decline in Advanstar's recent operating performance (Q109 sales were down close to 30% largely as a result of protracted recessionary conditions) and Moody's concern that declining sales could result in a substantial depletion of the company's liquid resources over the near term, absent additional equity contributions. In addition, the downgrade of the CFR indicates Moody's expectation that declining EBITDA combined with debt accretion will cause leverage to continue to rise. The ratings reflect Moody's view that decreased investor appetite for the B-2- B sector has reduced the value of Advanstar's business substantially below the company's current debt level, presenting weak recovery prospects to debtholders in a default scenario. Since the retirement of its revolver in September 2008, Advanstar is no longer subject to any financial ratio maintenance tests under its senior secured credit facilities; accordingly the company faces no prospects of a covenant default under its senior secured loan agreement. Nonetheless, the Caa3 PDR indicates Moody's view that further depletion of the company's cash resources will increase the likelihood of default over the near- to-intermediate term, even assuming that the company utilizes cash of approximately $10 million currently held by its parent (VSS-AHC Holdings) which is available for the company's future capital needs. The negative rating outlook underscores Moody's concern that Advanstar will continue to suffer from recessionary pressure as its customers continue to cut-back on their travel budgets, trade show attendance and spending on exhibit space, particularly in the retail, healthcare and powersports segments. In addition, the negative outlook expresses Moody's view that both magazine advertising and trade show spending will face increasing secular pressure in the face of electronic substitution, the latter providing relatively low barriers to entry for emerging competitors. The last rating action occurred on January 14, 2009, when Moody's downgraded Advanstar's CFR to Caa1. Advanstar's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected financial and operating performance of the company over the near-to-intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Advanstar's core industry and Advanstar's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in Woodland Hills, California, Advanstar Communications is a leading provider of integrated marketing solutions for the fashion and licensing, power sports and automotive and life sciences segments. AJA NEW YORK: Case Summary & 30 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: AJA New York Restaurant Holdings, LLC dba Burger King 217-04 Northern Blvd., Suite 19 Bayside, NY 11361 Bankruptcy Case No.: 09-46885 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- AJA 417-425 Fulton Street, LLC 09-46886 AJA 510 Fulton Street, LLC 09-46887 AJA Cropsey Avenue, LLC 09-46888 AJA Cross Bay Boulevard, LLC 09-46889 AJA Foster Avenue, LLC 09-46890 AJA Ft. Hamilton Parkway, LLC 09-46892 AJA Knapp Street, LLC 09-46894 AJA Linden Avenue, LLC 09-46896 AJA Utica Avenue, LLC 09-46898 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn)) Judge: Dennis E. Milton Debtor's Counsel: Beth Ann Bivona, Esq. Damon Morey LLP The Avant Building 200 Delaware Avenue, Suite 1200 Buffalo, NY 14202 Tel: (716) 858-3849 Fax: (716) 856-5510 Email: bbivona@damonmorey.com Williams F. Savino, Esq. Damon Morey LLP The Avant Building 200 Delaware Avenue, Suite 1200 Buffalo, NY 14202 Tel: (716) 858-3790 Fax: (716) 856-5510 Email: wsavino@damonmorey.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 30 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nyeb09-46885.pdf The petition was signed by Christina M. Dunbar, chief financial officer and treasurer of the Company. AMERICAN ACHIEVEMENT: Moody's Cuts Default Rating to 'Caa2/LD' -------------------------------------------------------------- Moody's Investors Service lowered American Achievement Group Holding Corp.'s probability of default rating to Caa2/LD and its Senior PIK Note rating to Ca following the company's cash tender offer for approximately $65 million of notes for an aggregate purchase price of approximately $23 million. The probability of default rating was lowered to Caa2/LD to reflect that, in Moody's view, this transaction constituted a distressed exchange, which is an event of default under Moody's definition of default. In approximately 3 days, Moody's expects the remaining portion of the Senior PIK notes to be rated Caa3 per the LGD framework and the LD (limited default) will be removed from the PDR. Moody's affirmed AAC's Caa1 corporate family given the still high leverage and Moody's ongoing view that the potential for debt impairment remains. Moreover, despite lower leverage, interest coverage is still weak. Moody's affirmed the AAC Group Holdings senior discount notes at Caa2 (LGD-3, 51%) affirmed American Achievement Corporation's senior subordinated notes at B2 (LGD-2, 19%) and senior secured bank debt at B1 (LGD-1, 2%, adjusted), based on changes to the capital structure following the distressed exchange and per the Loss Given Default methodology. The rating outlook is stable. These ratings were lowered: American Achievement Group Holding Corp. * Probability-of-default rating to Caa2/LD from Caa2 * $45 million (approximate value) Senior PIK notes due 2012 to Ca from Caa3 These ratings were affirmed: AAC Group Holding Corp. * $132 million (current value) Senior discount notes due 2012 Caa2 (LGD-3, 51%) American Achievement Holding Corp. * Corporate Family Rating Caa1 American Achievement Corporation * $150 million senior subordinated notes due 2012 to B2 (LGD-2, 19%) American Achievement Corporation * $25 million senior secured revolving credit facility due 2010 to B1 (LGD-1, 2%) * $47 million senior secured term loan due 2011 to B1 (LGD-1, 2%) The rating outlook is stable. AAC's Caa1 corporate family rating reflects the company's still high leverage, weak coverage of total interest expense (including non-cash holding company interest expense), small scale, narrow product focus on yearbooks and class rings, and some regional concentration in the Southern U.S. Moreover, the current economic environment constrains the company's already limited growth prospects. In Moody's view there is an ongoing potential for future distressed exchange as evidenced by the amendment to the credit agreement permitting distributions to the company's holding companies for interest expense and debt repayment. With the current transaction, pro-forma debt-to-EBITDA is between 7 and 7.5 times. Notwithstanding these risks, the rating is supported by AAC's substantial market shares in each of its niche product segments, its high customer retention rates, good operating margins, and its highly efficient manufacturing footprint. The rating is further supported by AAC's large network of exclusive independent sales representatives and its ability to meet the high requirements of its customers under narrow production and delivery timeframes that serves as a competitive advantage. Moody's also note operational improvements following some plant rationalization and capital investment in new presses. Moody's last rating action was on June 3, 2009, when Moody's upgraded AAC's corporate family to Caa1 from Caa2, probability of default rating to Caa2 from Caa3 and changed the rating outlook to stable. Headquartered in Austin, Texas, American Achievement Corporation is a leading provider of school-related affinity products and services. The company holds strong market shares in each of its product segments -- yearbooks, class rings, and graduation products. Revenues for the last 12 months ended May 30, 2009, were $294 million. AMERICAN INT'L: New CEO Hiring Raises Conflict for Potential Deals ------------------------------------------------------------------ Leslie Scism and Joann S. Lublin at The Wall Street Journal report that American International Group Inc.'s appointment of Robert Benmosche as CEO has raised a conflict-of-interest issue for at least one potential deal for the sale of its assets. According to The Journal, Mr. Benmosche is a former chairperson and CEO of MetLife Inc., which is in talks with AIG about a possible deal for all or part of the Company's foreign life- insurance units. Mr. Benmosche holds 500,000 MetLife shares and about two million MetLife stock options, many of which currently are worthless, the report states, citing a person familiar with the matter. The Journal relates that an AIG spokesperson said that the Company's board was aware of certain conflicts of interest going into the hiring of Mr. Benmosche regarding his holdings in other companies and would "adopt appropriate procedures to address any potential conflicts as necessary." Citing people familiar with the matter, The Journal states that Mr. Benmosche, under an arrangement AIG directors and Mr. Benmosche worked out about the potential conflict of interest, would recuse himself from talks involving any potential MetLife purchase of AIG assets. The sources said that "an arm of the board would take that on," possibly through the creation of a special transaction committee, The Journal relates. MetLife regulatory filings say that Mr. Benmosche is in line to get a $98,000-a-month pension from MetLife starting January 2010, for 20 years. About American Int'l Headquartered in New York, AIG Global Real Estate has $24.3 billion of assets under management in 50 countries around the world. Prior to joining AIG, Mr. Glasgow served as the Chief Operating Officer of Scanlan Kemper Bard Companies, LLC, the real estate private equity firm. Previously, he held various senior positions at PacifiCorp, including Chief Financial Officer. Mr. Glasgow also served as Chairman, President and CEO of PacifiCorp Holdings, which included PacifiCorp Financial Services, NERCO, Inc., and Pacific Telecom. His career also includes leadership positions in venture capital management, including BCN Data Systems, and international joint venture controlled by Bechtel, and he has served as a director of numerous public and private companies. Mr. Glasgow earned a bachelor's degree in economics, magna cum laude, from the Wharton School of Business at the University of Pennsylvania and a law degree, magna cum laude, from Harvard University. Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets. At March 31, 2009, AIG had $819.75 billion in total assets and $765.53 billion in total liabilities. At September 30, 2008, AIG had $1.022 trillion in total assets and $950.9 billion in total debts. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMERICAN INT'L: Has Deal to Sell Hong Kong Finance Unit ------------------------------------------------------- American International Group Inc. has entered into an agreement to sell 100 percent of its shares of AIG Finance (Hong Kong) Limited to China Construction Bank Asia for $70 million in cash, subject to typical closing adjustments, plus the repayment of intra-group indebtedness and deposits of approximately US$557 million. The transaction is subject to the satisfaction of certain conditions, including approvals by appropriate regulatory authorities. AIG Finance is a leading issuer of credit cards in Hong Kong, operating as a restricted license bank that offers a variety of financial products and services. As of June 30, 2009, AIG Finance had more than 500,000 customers, total net loan receivables of HK$4.8 billion and a retail deposits balance of HK$1 billion. Deutsche Bank acted as financial advisor to AIG on this transaction. About American Int'l Headquartered in New York, AIG Global Real Estate has $24.3 billion of assets under management in 50 countries around the world. Prior to joining AIG, Mr. Glasgow served as the Chief Operating Officer of Scanlan Kemper Bard Companies, LLC, the real estate private equity firm. Previously, he held various senior positions at PacifiCorp, including Chief Financial Officer. Mr. Glasgow also served as Chairman, President and CEO of PacifiCorp Holdings, which included PacifiCorp Financial Services, NERCO, Inc., and Pacific Telecom. His career also includes leadership positions in venture capital management, including BCN Data Systems, and international joint venture controlled by Bechtel, and he has served as a director of numerous public and private companies. Mr. Glasgow earned a bachelor's degree in economics, magna cum laude, from the Wharton School of Business at the University of Pennsylvania and a law degree, magna cum laude, from Harvard University. Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets. At March 31, 2009, AIG had $819.75 billion in total assets and $765.53 billion in total liabilities. At September 30, 2008, AIG had $1.022 trillion in total assets and $950.9 billion in total debts. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMERICAN INT'L: AIGFP Investment Assets Sale Nets $1.9-Bil. ----------------------------------------------------------- AIG Financial Products Corp. has completed the sale of its energy and infrastructure investment assets, realizing aggregate net proceeds in excess of $1.9 billion. Gerry Pasciucco, AIGFP Chief Operating Officer said, "The completion of the sales effort for this portfolio is a significant milestone in the ongoing process of winding down AIGFP's business. The aggregate net proceeds realized for AIG represent very strong execution in challenging market conditions." This disposition effort, which began during the fall of 2008, concluded with AIGFP's sale of its lease equity interest in the Bruce Mansfield power generation plant operated by FirstEnergy Corp. The Mansfield sale follows recent closings of three other sales: a tax equity interest in the Stanton wind farm in west Texas and two lease equity interests in portfolios of rail cars operated by BNSF Railway Company. AIGFP has previously announced certain other asset sales from the portfolio, including its interest in Tenaska Marketing Ventures, its interest in two volumetric production payment transactions and its stake in three operating Spanish solar photovoltaic power plants. "These recent asset sales provide a positive conclusion to a very successful disposition program for AIGFP's energy and infrastructure portfolio," Mr. Pasciucco said. About American Int'l Headquartered in New York, AIG Global Real Estate has $24.3 billion of assets under management in 50 countries around the world. Prior to joining AIG, Mr. Glasgow served as the Chief Operating Officer of Scanlan Kemper Bard Companies, LLC, the real estate private equity firm. Previously, he held various senior positions at PacifiCorp, including Chief Financial Officer. Mr. Glasgow also served as Chairman, President and CEO of PacifiCorp Holdings, which included PacifiCorp Financial Services, NERCO, Inc., and Pacific Telecom. His career also includes leadership positions in venture capital management, including BCN Data Systems, and international joint venture controlled by Bechtel, and he has served as a director of numerous public and private companies. Mr. Glasgow earned a bachelor's degree in economics, magna cum laude, from the Wharton School of Business at the University of Pennsylvania and a law degree, magna cum laude, from Harvard University. Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets. At March 31, 2009, AIG had $819.75 billion in total assets and $765.53 billion in total liabilities. At September 30, 2008, AIG had $1.022 trillion in total assets and $950.9 billion in total debts. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the U.S. Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. ARCLIN US: U.S. Trustee Appoints 5-Member Creditors Committee ------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee, Region 3, has formed a 5-member committee of unsecured creditors in Arclin US Holdings Inc.'s bankruptcy cases. The members of the official creditors' committee are: 1. Quality Carriers, Inc. Attn: Lorrel Margelowsky 4041 Park Oaks Blvd. Suite 200 Tampa, FL 33610 Phone: 813-569-7374 Fax: 813-569-1574 2. Georgia Gulf Chemicals & Vinyls, LLC Attn: Bradley Reynolds 115 Perimeter Center Place Atlanta, GA 30346 Phone: 770-395-4521 Fax: 770-395-4514 3. Univar USA Inc. Attn: John Canini PO Box 34325 Seattle, WA 98124 Phone: 425-889-3617 Fax: 425-889-3671 4. Kapstone Charleston Kraft LLC Attn: Timothy Davisson 1101 Skokie Blvd., Suite 300, Northbrook, IL 60062 Phone: 847-239-8817 Fax: 847-919-6851 5. INEOS Phenol Attn: Ronald D. Coyle 7770 Rangeline Road Theodore, AL 36582 Phone: 251-443-3070 Fax: 251-443-3072 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Arclin US Holdings Arclin's U.S. companies -- Arclin US Holdnigs, Inc.; Marmorandum LLC; Arclin Chemicals Holding Inc.; Arclin Industries U.S.A., Inc; Arclin Fort Smith Inc., Arclin U.S.A. Inc.; and Arclin Surfaces Inc. -- filed voluntary petitions for Chapter 11 on July 27, 2009 (Bankr. D. Del. Lead Case No. 09-12628). Frederick Brian Rosner, Esq., at Messana Rosner & Stern, LLP, serves as counsel for the Debtors. Dechert LLP is co-counsel while Alvarez & Marsal securities LLC is the investment banker. Kurtzman Carson Consultants LLC serves as claims and noticing agent. The petition says that Arclin US's assets and debts are between $100,000,001 and $500,000,000. Arclin's Canadian companies also made a filing with the Ontario Superior Court of Justice and have obtained an Initial Order authorizing Arclin to reorganize under the Companies' Creditors Arrangement Act. Ernst & Young serves as CCAA monitor. Arclin's subsidiaries in Mexico are not included in the filings. The Mexican affiliates -- Arclin Mexican Holdings S.A. de C.V., Arclin Mexico S.A. de C.V., and Arclin Operadora S.A. de C.V. -- are not subject to any insolvency proceedings. ARENA FOOTBALL: Sent to Chapter 7 Liquidation by Creditors ---------------------------------------------------------- According to a report by Chicago Tribune, Arena Football League LLC was sent to Chapter 7 liquidation on August 7 by creditors owed a total of $300,000. The involuntary petition was signed by Gridiron Enterprises Inc., Johnson & Bell Ltd., and Sheraton New Orleans Hotel. Gridiron is the largest of the three creditors, with $272,000 owed to it, Chicago Tribune said. Attorney Richard Lauter of Freeborn & Peters LLP in Chicago is representing the petitioners. The case is In re Arena Football League LLC, 09-29024, U.S. Bankruptcy Court, Northern District of Illinois (Chicago). As reported by the TCR on July 22, 2009, AFL has cancelled the 2009 season and is considering filing for bankruptcy protection. AFL, which has $14 million in debt, would need $10 million to $12 million in new capital for it to return in 2010, Sports Business Journal said. The Arena Football League was founded in 1987 as an American football indoor league by Jim Foster. It is played indoors on a smaller field than American football, resulting in a faster and higher-scoring game. The sport was invented in 1986, and patented, in 1990 by Mr. Foster, a former executive of the United States Football League and the National Football League. Almost two months after the New Orleans Voodoo folded on the league's owners chose to cancel the 2009 season to work on developing a long-term plan to improve its economic model. AVISTA CORP: Moody's Changes Outlook on 'Ba1' Rating to Positive ---------------------------------------------------------------- Moody's Investors Service changed the rating outlook for Avista Corp. and its affiliate Avista Corp. Capital Trust II to positive from stable. In addition, Moody's affirmed all ratings of Avista Corp. (Baa1 senior secured, Baa3 senior unsecured, Baa3 Issuer Rating) and Avista Corp. Capital Trust II (Ba1 Trust Preferred Securities). The change in rating outlook primarily reflects improving financial performance following recent rate increases in the company's service territory. Reasonably supportive outcomes in Avista's more frequent rate filings, of late, have given rise to better cost recovery resulting in improved cash flow and key credit metrics which compare favorably to Avista's current ratings and business risk profile. For both the year ended 2008 and LTM 2Q09, Avista has been able to demonstrate CFO pre w/c to total adjusted debt percentages in the high teens and CFO pre w/c to total adjusted interest coverage close to 4.0x. If Avista continues to receive supportive regulatory treatment in future rate proceedings and demonstrates an ability to sustain improvements in key metrics, even in the midst of a large capital program and a strategy to increase its dividend payout to approximate the industry average of 60-70%, then its prospects for achieving a higher rating would improve. Moody's last rating action on Avista occurred on August 3, 2009, when its senior secured rating was upgraded to Baa1 from Baa2 in coordination with Moodys' action to upgrade most senior secured ratings of investment-grade regulated utiliites. The last fundamental ratings action on the company occurred on December 20, 2007, when Avista's ratings were upgraded by one notch and a stable rating outlook was assigned, following the June 2007 divestiture of its trading and marketing operations through the sale of its Avista Energy subsidiary. Avista Corp. is an energy company, primarily involved in the production, transmission and distribution of energy through its Avista Utilities division, as well as other modest-sized energy- related businesses. Avista's headquarters are in Spokane, Washington. AVIZA TECHNOLOGY: Has Deal to Sell Assets to Sumitomo ----------------------------------------------------- Aviza Technology, Inc., and certain of its subsidiaries have entered into a definitive agreement to sell certain assets to Sumitomo Precision Products Co., Ltd. Pursuant to the terms of the agreement, Aviza has agreed to sell to SPP substantially all of Aviza's assets related to its system, service, parts, spares and upgrade businesses for batch thermal products and technologies, atmospheric-pressure chemical vapor deposition products and technologies, physical vapor deposition products and technologies, chemical vapor deposition products and technologies, and plasma etch products and technologies, as well as its service, parts, spares and upgrade business for atomic layer deposition products and technologies. Aviza's headquarters and batch systems manufacturing facilities in Scotts Valley, California and the property on which they are located are not being sold to SPP pursuant to the terms of the agreement. In exchange for these assets, SPP has agreed to pay Aviza a purchase price comprised of three components: -- approximately $15 million in cash at closing, subject to certain adjustments; -- a recourse promissory note with an aggregate principal amount of $10 million that will bear interest at the prime rate, will mature 18 months after the closing date, will be secured by the purchased accounts receivable and inventory and certain purchased intellectual property, will be subject to mandatory monthly prepayments of principal to the extent that SPP's collection of accounts receivable and sales of inventory securing the note, subject to certain adjustments, exceed $10 million, and will be guaranteed by SPP; and -- a non-recourse promissory note with an aggregate principal amount that will be finalized after the closing date but which Aviza currently expects to be approximately $31.5 million that will not bear interest, will mature 18 months after the closing date, will be secured by the purchased accounts receivable and inventory, and will be subject to mandatory monthly prepayments of principal to the extent that SPP's collection of accounts receivable and sales of inventory securing the note, as adjusted, exceed $20 million. On the maturity date, SPP will have the option of either repaying the outstanding principal amount of the non-recourse note in full or returning any remaining uncollected accounts receivable and unsold inventory to Aviza. SPP has also agreed to assume certain liabilities of Aviza and its subsidiaries, including the lease for Aviza's facility in South Wales and approximately $5 million of operating liabilities. Aviza's board of directors unanimously approved the agreement and the transactions contemplated by the agreement. The agreement and the closing of the transactions contemplated by the agreement are subject to the approval of the United States Bankruptcy Court and other customary closing conditions. Aviza expects that the proceeds of the transactions will be used to repay the lenders under its secured credit facility and its unsecured creditors. Aviza does not expect that the proceeds from the transactions contemplated by the agreement will be sufficient to pay its unsecured creditors in full, and thus Aviza does not believe that holders of Aviza's common stock will receive any proceeds from the transactions contemplated by the agreement. 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. BALLY TOTAL: District Court Junks Carrera, et al., Appeal --------------------------------------------------------- Judge Jed S. Rakoff, U.S.D.J. at the U.S. District Court for the Southern District of New York, affirmed the decision of Judge Lifland denying the requests of Cesar Carrera, Kevin Lai and Danna Brown to (i) allow a class proof of claim and (ii) lift the automatic stay or, in the alternative, for class certification in the Debtors' cases. Judge Lifland ruled, among other things, that Mr. Carrera, et al., could not demonstrate that their request is consistent with the goals of bankruptcy and satisfactory of the requirements of Rule 23 of the Federal Rules of Civil Procedure. Mr. Carrera, et al., had also filed against the Debtors in the Los Angeles County Superior Court, an action that sought recovery of wages that the Debtors allegedly refused to pay. Judge Rakoff noted that a subsequent memorandum explaining the District Court's ruling will be issued in due course. In December 2005, Cesar Carrera, Kevin Lai and Danna Brown, on behalf of similarly situated individuals, filed a class action lawsuit styled Carrera, et. al. v. Bally Total Fitness Corporation, et. al., at the Lost Angeles County Superior Court. The Class Action seeks to recover statutorily mandated wages and compensation that the Debtors allegedly refused to pay. The Carrera Action was brought on behalf of employees in approximately 65 fitness clubs operated by Bally in California. On behalf of the Carrea Plaintiffs, James M. Trush, Esq., at Vanderberg & Feliu, LLP, in New York, said the Carrera Plaintiffs filed unliquidated class proofs of claim and individual claims on February 6, 2009, in the Debtors' cases. "Not only is it inefficient to put each individual class member to this type of effort to prove Bally's wrongdoing, it is impossible to expect that any individual class member could devote the resources, time, and effort to litigate their claim, when the potential recovery on an individual claim is relatively modest," he told the Court. About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China, and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R), and Sports Clubs of Canada (R) brands. Bally Total and its affiliates filed for Chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre- packaged Chapter 11 plan. Joseph Furst, III, Esq., at Latham & Watkins, L.L.P., represents the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had US$408,546,205 in total assets and US$1,825,941,54627 in total liabilities. The Debtors filed their Joint Prepackaged Plan & Disclosure Statement on July 31, 2007. The Court confirmed the Plan in September 2007. The Plan was declared effective October 1, 2007. Bally Total Fitness Holding Corp. and its debtor-affiliates and subsidiaries again filed voluntary petitions under Chapter 11 on December 3, 2008 (Bankr. S.D.N.Y., Lead Case No. 08-14818). Their counsel is Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York. As of September 30, 2008, the Company (including non-debtor affiliates) had consolidated assets totaling approximately $1.376 billion and recorded consolidated liabilities totaling approximately $1.538 billion. Bally Total Fitness Holding and its 42 debtor-affiliates delivered their Joint Plan of Reorganization and Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York on June 10, 2009. Bankruptcy Creditors' Service, Inc., publishes Bally Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings of Bally Total Fitness Holding Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000) BEARINGPOINT INC: Court Approves Sale of European Division ---------------------------------------------------------- According to Tiffany Kary at Bloomberg News, Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York has authorized BearingPoint Inc. to sell its European division and intellectual property to BE Partners BV as part of a management buyout worth $69 million to creditors. As reported by the TCR on July 31, 2009, BearingPoint said it is working with BE Partners B.V. -- a newly formed company established by a significant majority of the managing directors of the Company's practice in Europe, Middle East and Africa -- towards completion of the sale of the Company's EMEA practice to the local management by August 31, 2009. The Board of Directors of BearingPoint on April 20, 2009, authorized the Company to enter into a non-binding term sheet for the sale of its EMEA business to local management. On July 17, the Company; BE Holdings I CV, a subsidiary of the Company; certain other affiliates of the Company; and the Purchaser entered into an Agreement for the Sale and Purchase of the Share Capital of BearingPoint Europe Holdings B.V., BearingPoint's European holding company. The Purchaser will acquire all of the Company's EMEA practice for an aggregate purchase price of roughly $69 million in total consideration. The EMEA practice will continue to operate under the BearingPoint name following the completion of the Share Sale Agreement. The Company is pursuing the sale of all or substantially all of its businesses and assets to a number of parties. The Company expects that the sale transactions will result in modification of the plan of reorganization originally filed with the Bankruptcy Court on February 18, 2009 and, if the Company is successful in selling all or substantially all of its assets, in the liquidation of the Company's business and the Company ceasing to operate as a going concern. The EMEA Transaction contemplates that aggregate consideration will be provided to the Company and its affiliates (including repatriation of excess cash currently held by the EMEA practice) of roughly $69 million, as follows: -- in settlement of certain intercompany charges, BearingPoint Europe and its subsidiaries transferred roughly $8.1 million to Seller and was to transfer an additional $5.9 million to Seller by July 24, 2009; -- at the completion date of the EMEA Transaction, the Purchaser will pay to the Seller $5 million as consideration for the sale of the shares of BearingPoint Europe; -- at the completion date of the EMEA Transaction, BearingPoint Europe and its subsidiaries will pay to Seller roughly $35 million in settlement of certain payables owed from BearingPoint Europe and its subsidiaries to the Company and its subsidiaries; and -- at the completion date of the EMEA Transaction, BearingPoint Europe will enter into a loan agreement to evidence pre-existing intragroup indebtedness in the amount of $15 million owed by BearingPoint Europe to the Seller, with the loan maturing in three months and bearing interest at a rate of 8% per annum. The Company has agreed to provide certain transition services to the Purchaser following completion of the EMEA Transaction for a separate fee. In connection with the EMEA Transaction, Dallas Projects Holdings, Limited, a subsidiary of the Company, will establish a trust under the laws of the Cayman Islands that will survive the wind-down of the Company's domestic operations. The Trust will own certain BearingPoint trademarks, BearingPoint domain names and associated goodwill and may license the BearingPoint trademarks to third parties in accordance with the terms of the Trust. The EMEA Transaction is subject to (i) the approval of the Bankruptcy Court, (ii) the formation of a trust to which certain intellectual property rights will be transferred for the benefit of the Purchaser and (iii) the Company being released from certain outstanding letters of credit issued in respect of the Company's EMEA practice. There can be no assurance that the EMEA Transaction will be approved by the Bankruptcy Court or that the EMEA Transaction will be completed. The Purchaser may terminate the Share Sale Agreement if: -- the Seller breaches any material covenant or obligation under the Share Sale Agreement; -- the Seller modifies, amends or alters the Approval Order in any material respect without the consent of the Purchaser; or -- the Bankruptcy Court does not enter the Approval Order within 30 days after the related motion is filed with the Bankruptcy Court. The Seller may terminate the Share Sale Agreement if BearingPoint Europe (or certain of its subsidiaries) defaults on the obligation to pay the Additional Amount to Seller for more than two business days after the date such payment is due. About BearingPoint BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP - - has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next- generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 protection on February 18, 2009 (Bankr. S.D.N.Y., Case No. 09-10691). Alfredo R. Perez, Esq., at Weil Gotshal & Manges LLP, in Houston; Marcia J. Goldstein, Esq., Ronit J. Berkovich, Esq., and Jose R. Alcantar, Esq., at Weil Gotshal & Manges LLP, in New York, represent the Debtors as restructuring counsel. AlixPartners, LLP, is the Debtors' restructuring advisors. Greenhill & Co., LLC, is the Debtor's financial advisor & investment banker. Jeffrey S. Sabin, Esq., at Bingham McCutchen LLP represents the Creditors' Committee as counsel. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of September 30, 2008. BIOSANTE PHARMA: Posts $4.6MM Net Loss in Quarter Ended June 30 --------------------------------------------------------------- Biosante Pharmaceuticals, Inc., posted a net loss of $4,620,701 for three months ended June 30, 2009, compared with a net loss of $6,048,067 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $8,671,313 compared with a net loss of $9,674,705 for the same period in 2008. At June 30, 2009, the Company's balance sheet showed total assets of $9,529,471, total liabilities of $3,716,522 and stockholders' equity of $5,812,949. The Company had cash and cash equivalents of $6,000,000 at June 30, 2009. The Company said that its merger with Cell Genesys is not completed or is delayed, the Company will need to raise additional financing immediately. Even if the merger with Cell Genesys is completed, the Company likely will need to raise additional financing to continue its Phase III clinical studies for LibiGel, unless LibiGel is licensed or sold to another company. Deloitte & Touche LLP, the Company's independent registered public accounting firm, modified their report on the Company's financial statements for the year ended December 31, 2008, to include an explanatory paragraph that expresses substantial doubt regarding the Company's ability to continue as a going concern. The Company related that the modification may adversely affect the Company's ability to raise additional financing and close its proposed merger with Cell Genesys. Failure to obtain adequate financing also may adversely affect the Company's ability to operate as a going concern and cause the Company to significantly curtail or cease ongoing operations. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4184 Biosante Pharmaceuticals, Inc. (NASDAQ:BPAX) is a specialty pharmaceutical company focused on developing products for female sexual health, menopause, contraception and male hypogonadism. The Company primary products include gel formulations of testosterone and estradiol. It is also engaged in the development of its calcium phosphate nanotechnology, primarily for aesthetic medicine, vaccines and drug delivery. The Company's principal products include LibiGel, Bio-T-Gel and Pill-Plus. The Company's CaP products in development include BioLook, BioVant, BioOral, and BioAir. BLACKWATER MIDSTREAM: Posts $1-Mil. Net Loss for Second Quarter --------------------------------------------------------------- Blackwater Midstream Corp. posted a net loss of $1,125,342 for three months ended June 30, 2009, compared with a net income of $39,236 for the same period in 2008. At June 30, 2009, the Company's balance sheet showed total asset of $6,421,573, total liabilities of $5,075,127 and stockholders' equity of $1,346,446. The Company's management said that there is substantial doubt about its ability to continue as a going concern. The Company related that it had recurring net losses, and as of June 30, 2009, had a working capital deficit. The Company's ability to continue as a going concern is dependent upon its ability to obtain financing for future terminal acquisitions, finance general working capital requirements and fund future operations. The management plans to seek additional capital through debt financing, private placement, and public offerings of its common stock for future terminal acquisitions. A full-text copy of the Company's Form 10-Q is avaialable for free at http://ResearchArchives.com/t/s?418d Blackwater Midstream Corp.(OTC:BWMS) fka Laycor Ventures Corp. is a manager of third party fuel, agricultural and chemical bulk liquid storage terminals. The Company's operations support different commercial customers, including refiners and chemical manufacturers. As of March 31, 2009, the Company's asset portfolio consisted of the Westwego Terminal located along the Mississippi River within the Port of New Orleans. BOSTON GENERATING: Moody's Junks Ratings on 1st Lien From 'B3' -------------------------------------------------------------- Moody's Investors Service downgraded the 1st lien senior secured rating of Boston Generating, LLC, to Caa2 from B3 and downgraded the 2nd lien senior secured rating to Ca from Caa2. The outlook is negative. This concludes the review initiated on April 9, 2009. The affected 1st lien facilities are an approximate $1.1 billion senior secured term loan B due 2013; a $250 million senior secured synthetic letter of credit due 2013, and a $70 million senior secured revolving credit facility due 2013. The affected 2nd lien facility is a $350 million senior secured term loan C due 2014. As of June 30, 2009, there was also approximately $393 million of mezzanine holding company debt at the parent EBG Holdings that is not rated. The downgrade reflects the inability of Boston Gen to reach a settlement with its lenders regarding a restructuring proposal and the fact that the date for a potential financial covenant violation (now expected in the 4th quarter 2009 or 1st quarter 2010) is rapidly approaching. The project's current levels of cash flows are not expected to be able to support the existing level of leverage going forward without a restructuring. Moody's has been monitoring the situation and had expected that a financial restructuring plan would have been agreed upon by now, along with an amendment of the financial covenants. Therefore, there is the real possibility of a default if the covenants are not waived or amended, and the lenders exercise their right to accelerate. Management has told Moody's that they continue to be in discussions with the 1st lien lenders regarding a potential restructuring, but that discussions with the 2nd lien and mezzanine debt have been suspended. The project has been considering a number of options including amending the financial covenants of the 1st lien debt, release of counterparty L/C collateral requirements (in exchange for the sharing of collateral with the 1st lien lenders), and a swap of equity for the 2nd lien and mezzanine debt. The project has also been considering modifications to current hedging arrangements The Caa2 also reflects the ongoing deterioration in Boston Generating's cash flow, which has resulted in poor financial performance relative to Moody's expectations. Financial performance has deteriorated primarily because of a difficult operating profile, exposure to volatile natural gas pricing, and inefficient financial hedging arrangements. In addition, low off- peak spark spreads primarily caused by lower cost baseload resources in NEPOOL have resulted in lower than forecasted energy revenues. Furthermore, one of the plants in the portfolio (Mystic 7) is generating cash flow well below expectations due to the impact of in-state transmission that came online in 2007. These factors have contributed to the project's lower than forecasted cash flow over the last year and a half. In addition, recent FCM capacity auctions are expected to provide less than expected future capacity revenues. In short, the level of leverage on this project is simply not supportable with the existing level of cash flow. As a result of the poor financial performance, the minimum interest coverage and maximum leverage covenants have experienced severe pressure due to lower than expected levels of compliance EBITDA. The project was able to meet the minimum 1.10x interest coverage ratio and the maximum 11.0x senior debt to EBITDA leverage ratio tests in 2008 due to contributions from a restricted contingency cash reserve at the project level. The project last drew on the contingency cash reserve in the third quarter of 2008. The leverage ratio subsequently stepped down to a maximum 10.0x senior debt to EBITDA in the first quarter of 2009. Due to better than expected cash flow in the first two quarters of 2009, the project did not need to draw on the reserve and was able to delay a technical default. A technical default on the leverage covenant is now expected to occur in the first quarter of 2010 when the required leverage ratio steps down further to 9.0x. There could also be an interest coverage covenant violation when that ratio steps up from 1.1x to 1.25x in the first quarter of 2010. The remaining $26 million in the contingency reserve for covenant compliance may not be enough for the project to remain in compliance. Hence, the project may have a technical default if the covenants are not amended or waived. The Ca rating on the 2nd lien debt reflects the expectation that there will be some form of debt to equity swap and that the recovery prospects for the 2nd lien debt will be substantially reduced. The negative outlook incorporates the uncertainty that the lenders to the project, which include collateralized loan obligations, hedge funds and institutional investors, will be able to reach an agreement on a restructuring proposal. The last rating action was on April 9, 2009, when the ratings of Boston Gen were placed on review for possible downgrade. Boston Gen is a 2,970 MW natural gas -- fired portfolio of assets that sells power into the New England Power Pool. The assets are located in close proximity to the Boston metro area. Boston Gen is indirectly owned by the US Power Generating Company. BRANDYWINE REALTY: Fitch Keeps BB+ IDR; Pref Stock 2 Notches Down ----------------------------------------------------------------- Fitch has released a revision of a report issued on August 11, 2009. It clarifies that there is a two-notch differential between Brandywine's 'BB+' IDR and preferred stock rating. Based on the steps taken over the last three months to improve its liquidity position and reduce leverage, Fitch Ratings has affirmed the credit ratings of Brandywine Realty Trust and Brandywine Operating Partnership, L.P., and revised the Outlook to Stable from Negative. Fitch has affirmed these ratings: Brandywine Realty Trust -- Issuer Default Rating at 'BB+'; -- Preferred stock rating at 'BB-'. Brandywine Operating Partnership, L.P. -- IDR at 'BB+'; -- Unsecured revolving credit facility at 'BB+'; -- Senior unsecured notes at 'BB+.' The Rating Outlook is Stable. Through the combination of a secondary equity offering, additional tender offers for near-term bonds and asset sales, Brandywine has a liquidity surplus of $200 million for the next two years. On June 2, 2009, Brandywine completed a common share offering of 40.2 million shares at a public offering price of $6.30 per share. The net proceeds of approximately $242.5 million were used to repay a portion of the amount outstanding under Brandywine's unsecured revolving line of credit and meaningfully improve liquidity. Fitch calculates that Brandywine's sources of liquidity (cash, availability under its unsecured revolving credit facility, expected retained cash flows from operating activities) exceed uses of liquidity (debt maturities and expected capital expenditures) by over $200 million from June 30, 2009 through June 30, 2011. The forward financing commitment of $256.1 million received on May 11, 2009, eliminates the funding risk for Brandywine's 30th Street Post Office and Cira South Garage construction project set to be completed in the third quarter of 2010. Considering all other development activity, Brandywine's sources of liquidity after development are $157 million. The second quarter illustrated declining fundamentals for Brandywine's portfolio, with same store GAAP Net Operating Income declining 4% (cash NOI declined 1%) as compared to the same three month period in 2008. Additionally, core-portfolio occupancy dropped to 88.8% from 90.2% on December 31, 2008. While fundamentals are expected to deteriorate further in 2009, the company's credit metrics are solid for the 'BB+' rating. On June 30, 2009, the company's debt to recurring operating EBITDA was 7.5 times (x) as compared to 8.1x on December 31, 2008. Additionally, Brandywine's fixed charge coverage (defined as recurring EBITDA less capital expenditures and straight-line rent adjustments, divided by interest expense, capitalized interest, and preferred stock dividends) remained at 1.7x for the 12 months ended June 30, 2009, as compared to the year ended December 31, 2008. Finally, while Brandywine did raise funds through encumbering an additional asset, Fitch estimates the company's book value of unencumbered real estate operating assets to unsecured debt ratio improved to 1.8x on June 30, 2009, from 1.7x on December 31, 2008. Additionally, Brandywine is sufficiently capitalized for the 'BB' rating category with a risk adjusted capital ratio of 1.0x on June 30, 2009, improved from 0.9x on December 31, 2008. Assuming a 5% decline in Brandywine's rental revenues (on a GAAP basis) in 2009 and again in 2010, debt to recurring operating EBITDA would remain below 9.0x, consistent with the 'BB+' rating. Further considering reduced interest expense due to the unsecured bonds repaying in the next two years, Brandywine's fixed charge coverage would remain in a range of 1.7x to 1.8x range and Brandywine's risk adjusted capital ratio will remain sufficient for the rating category around 1.0x at a 'BB' stress. The 5% rental revenue decline is based on the cumulative 2009-2013 market rent decline projected by Property and Portfolio Research (PPR) in Brandywine's regional markets. A cumulative 4.9% decline is calculated using PPR expectations for cumulative rent declines and weighting them by Brandywine's exposure to each market. Brandywine's leases expiring from 2009-2011 are about $0.75 below the average market rents, indicating that below-market leases will be expiring over the next two years. The two-notch differential between Brandywine's IDR and its preferred stock rating is consistent with Fitch's criteria for corporate entities with an IDR of 'BB+'. Based on Fitch's criteria report, 'Equity Credit for Hybrids & Other Capital Securities', available on Fitch's web site at 'www.fitchratings.com', Brandywine's preferred stock is 75% equity-like and 25% debt-like, since it is perpetual and has no covenants but has a cumulative deferral option. These factors may have a positive impact on Brandywine's ratings: -- Maintaining a healthy liquidity surplus; -- Maintaining recurring EBITDA/fixed charges above 1.8x (for the six months ended June 30, 2009, recurring EBITDA divided by total fixed charges was 1.9x); -- Demonstrated access to the unsecured debt markets; -- Total debt to recurring operating EBITDA declines to a range below 7.0x. Going forward, these factors may have a negative impact on Brandywine's ratings: -- If recurring EBITDA divided by total fixed charges were to decrease below 1.4x; -- If secured debt-to-total gross assets were to increase above 30% (as of June 30, 2009 Fitch estimated secured debt to total gross assets was 21%); -- If the gross book value of unencumbered operating real estate assets to unsecured debt falls below 1.5x; -- If Total Debt to recurring operating EBITDA increases above 9.0x. Brandywine is an office REIT (with some industrial properties) that actively participates in acquiring, developing, redeveloping, leasing and managing properties, primarily in select markets in the mid-Atlantic region and California. As of June 30, 2009, Brandywine had $4.7 billion in total book assets. Its stabilized portfolio consisted of 210 office properties, 22 industrial facilities, and three mixed-use projects. The portfolio represents approximately 23.4 million net rentable square feet. The company also holds two properties under development and seven properties under redevelopment containing an aggregate of 2.3 million net rentable square feet. BTH LLC: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: BTH, LLC 197 E. Warner Road Chandler, AZ 85225 Bankruptcy Case No.: 09-19178 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Red Mountain Machinery Company 09-19166 Red Mountain Holdings, LLC 09-19170 Red Mountain Pacific, LLC 09-19175 Chapter 11 Petition Date: August 11, 2009 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Steven N. Berger, Esq. Engelman Berger, P.C. One Columbus Plaza, Suite 700 3636 N Central Avenue Phoenix, Az 85012-1985 Tel: (602) 271-9090 Fax: (602) 222-4999 Email: snb@engelmanberger.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by David Gonzales, chief restructuring officer of the Company. CABLEVISION SYSTEMS: Amends Quarterly Report to Include XBRL Docs ----------------------------------------------------------------- Cablevision Systems Corporation and CSC Holdings, Inc., filed Amendment No. 1 to their Quarterly Report on Form 10-Q for the period ended June 30, 2009, as filed with the Securities and Exchange Commission on July 30, 2009. The purpose of Amendment No. 1 is to furnish Exhibit 101 to the Form 10-Q as required by Rule 405 of Regulation S-T. Exhibit 101 provides items from the Form 10-Q formatted in Extensible Business Reporting Language (XBRL): (i) the unaudited Condensed Consolidated Statements of Operations, (ii) the unaudited Condensed Consolidated Balance Sheets, (iii) the unaudited Condensed Consolidated Statements of Cash Flows, and (iv) the combined notes to the unaudited condensed consolidated financial statements, tagged as blocks of text. -- XBRL Instance Document See http://ResearchArchives.com/t/s?419f -- XBRL Taxonomy Extension Schema Document See http://ResearchArchives.com/t/s?41a0 -- XBRL Taxonomy Extension Calculation Linkbase Document See http://ResearchArchives.com/t/s?419b -- XBRL Taxonomy Extension Definition Linkbase See http://ResearchArchives.com/t/s?419c -- XBRL Taxonomy Extension Label Linkbase Document See http://ResearchArchives.com/t/s?419d -- XBRL Taxonomy Extension Presentation Linkbase Document See http://ResearchArchives.com/t/s?419e Users of this data are advised that pursuant to Rule 406T of Regulation S-T these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise are not subject to liability under those sections. No other changes have been made to the Form 10-Q other than those described. Amendment No. 1 does not reflect subsequent events occurring after the original filing date of the Form 10-Q or modify or update in any way disclosures made in the Form 10-Q. As reported by Troubled Company Reporter on August 3, 2009, Cablevision and CSC Holdings posted net income of $87,059,000 for the three months ended June 30, 2009, lower compared to $92,298,000 booked during the same period last year. The Company posted net income of $108,077,000 for the six months ended June 30, 2009, higher compared to $64,652,000 booked during the same period last year. At June 30, 2009, the Company had $9,307,950,000 in total assets; and $14,592,186 in total liabilities and $12,293,000 in redeemable noncontrolling interests, resulting in $5,296,319,000 stockholders' deficiency. At June 30, 2009, the Company had ($210,000) in noncontrolling interests, resulting in $5,296,529,000 total deficiency. A full-text copy of the Original Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?4077 About Cablevision Cablevision Systems Corporation -- http://www.cablevision.com/-- is one of the nation's leading media and entertainment companies. Its cable television operations serve more than 3 million households in the New York metropolitan area. The company's advanced telecommunications offerings include its iO: Interactive Optimum digital television, Optimum Online high-speed Internet, Optimum Voice digital voice-over-cable, and its Optimum Lightpath integrated business communications services. Cablevision operates several programming businesses, including AMC, IFC, Sundance Channel and WE tv, through Rainbow Media Holdings LLC, and serves the New York area as publisher of Newsday and other niche publications through Newsday LLC. In addition to these businesses, Cablevision owns Madison Square Garden and its sports teams, the New York Knicks, Rangers and Liberty. The company also operates New York's famed Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre, and owns and operates Clearview Cinemas. * * * As reported by the Troubled Company Reporter on May 22, 2009, Moody's Investors Service upgraded Cablevision Systems Corporation's Corporate Family Rating and Probability of Default Rating, each to Ba2 from Ba3. In addition, Moody's upgraded the instrument ratings of Cablevision's and its subsidiaries' debt as detailed below. Cablevision's speculative grade liquidity rating remains at SGL-2 and the rating outlook is stable. CALPINE CORP: To Repurchase Bank Debt at Discount ------------------------------------------------- Kristen Haunss at Bloomberg News reports that a spokeswoman for Calpine Corp. confirmed that the Company is asking its lenders for permission to repurchase bank debt at a discount to the issue price. Norma Dunn, a company spokeswoman, confirmed Calpine seeks to be able to extend its revolver's maturity in the future and to exchange a portion of its term loans into bonds. According to Bloomberg, Goldman Sachs Group Inc. is arranging the amendment for Calpine, which held a call August 13 to discuss the proposal with lenders. Calpine has about $13 billion of debt according to data compiled by Bloomberg. Calpine, Bloomberg relates, also is asking for the ability to issue first-lien bonds to repay bank debt at 100 cents on the dollar. Chief Financial Officer Zamir Rauf said last month that Calpine was planning to amend its credit agreement to give it more options to deal with its 2014 maturity, when Bloomberg data show it has about $9 billion coming due. About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company and its affiliates filed for Chapter 11 protection on December 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On February 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06- 10198). On September 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On August 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on September 19, 2007 and on September 24, 2007, filed a Third Amended Plan. On September 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. On December 19, 2007, the Court confirmed the Debtors' Plan. The Amended Plan was deemed effective as of January 31, 2008. CATHOLIC CHURCH: Greens Drop Civil Case vs. Diocese of Fairbanks ---------------------------------------------------------------- In a letter addressed to the U.S. Bankruptcy Court for the District of Alaska, Louis and Nancy Green say that after much consideration, they have decided to drop their civil case against the Diocese of Fairbanks effective as of June 30, 2009. No reason was cited for the Greens' decision to drop the case. The Greens also did not provide details about their civil case. About Diocese of Fairbanks The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/-- filed for Chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110). Susan G. Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its restructuring efforts. Michael R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's local counsel and Cook, Schuhmann & Groseclose Inc. as its special counsel. Judge Donald MacDonald, IV, of the United States Bankruptcy Court for the District of Alaska presides over Fairbanks' Chapter 11 case. The Debtor's schedules show total assets of $13,316,864 and total liabilities of $1,838,719. The church's plans to file its bankruptcy plan and disclosure statement on July 15, 2008. Its exclusive plan filing period expires on Jan. 15, 2009. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Sinnott Withdraws as Counsel for Oregon Priests ---------------------------------------------------------------- Robert E. Sinnott, Esq., at Cooney & Crew, LLP, in Lake Oswego, Oregon, notifies the U.S. Bankruptcy Court for the District of Oregon that he is withdrawing as counsel for confidential priests, Fathers B, J, S, T, W and P, in the bankruptcy case of the Archdiocese of Portland in Oregon. Mr. Sinnott, however, informs Judge Perris that Thomas E. Cooney, Esq., also from Cooney & Crew, will continue to represent the priests in the bankruptcy proceeding. About Archdiocese of Portland The Archdiocese of Portland in Oregon filed for Chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. The Court approved the Debtor's disclosure statement explaining its Second Amended Joint Plan of Reorganization on February 27, 2007. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Status Report on Suit vs. Insurers on Sept. 30 --------------------------------------------------------------- Judge Ralph R. Beistline of the U.S. District Court for the District of Alaska ordered the parties to file a status report with the District Court on or before September 30, 2009, and every six months thereafter, advising the District Court of those pretrial matters still pending before the Bankruptcy Court in the adversary proceeding commenced by the Catholic Bishop of Northern Alaska against four insurers, and the expected date by which those pending matters are to resolved. To recall, Judge Beistline granted the request of Travelers Casualty and Surety Company to withdraw the reference of the adversary proceeding to the U.S. District Court. About Diocese of Fairbanks The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/-- filed for Chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110). Susan G. Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its restructuring efforts. Michael R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's local counsel and Cook, Schuhmann & Groseclose Inc. as its special counsel. Judge Donald MacDonald, IV, of the United States Bankruptcy Court for the District of Alaska presides over Fairbanks' Chapter 11 case. The Debtor's schedules show total assets of $13,316,864 and total liabilities of $1,838,719. The church's plans to file its bankruptcy plan and disclosure statement on July 15, 2008. Its exclusive plan filing period expires on Jan. 15, 2009. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CENA LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Cena, LLC 2854 Miamisburg-Centerville Road Dayton, OH 45459 Bankruptcy Case No.: 09-34990 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court Southern District of Ohio (Dayton) Debtor's Counsel: Ira H. Thomsen, Esq. 140 North Main St., Suite A PO Box 639 Springboro, OH 45066 Tel: (937) 748-5001 Fax: (937) 748-5003 Email: cornell76@aol.com Estimated Assets: $0 to $50,000 Estimated Debts: $500,001 to $1,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohsb09-34990.pdf The petition was signed by Eva Christian, sole member of the Company. CHRYSLER LLC: Old CarCo Schedules $21BB Assets vs. $26.9BB Debts ---------------------------------------------------------------- A. Real Property Lands and buildings $2,203,600,672 Others 520,069,998 B. Personal Property 18,300,477,576 TOTAL SCHEDULED ASSETS $21,024,148,246 ========================================================== C. Property Claimed None D. Creditors Holding Secured Claims JP Morgan Chase First Lien Credit $6,916,458,541 JP Morgan Chase Second Lien Credit 2,110,926,198 U.S. Department Of Treasury 4,285,371,805 E. Creditors Holding Unsecured Priority Claims Unknown F. Creditors Holding Unsecured Nonpriority Claims 13,546,026,447 TOTAL SCHEDULED LIABILITIES $26,858,782,991 ========================================================== Items disclosed by Chrysler in the Personal Property section include these: Bank Accounts JPMorgan Chase $971,281,753 Other banks 666,230,689 Security Deposits - Blue Cross Health Insurance Co. 9,533,496 General Electric Aircrafts 8,900,000 Liberty Mutual 7,486,400 State of Florida contracts escrow 7,462,754 Others 8,065,950 The Company said estimate lists were "prepared with data as of a time period as near as possible to the petition date." In its bankruptcy petition, Chrysler said that it had Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts as of December 31, 2008. Chrysler had $1.9 billion in cash at that time. Following its bankruptcy filing, Chrysler sold its best assets to Fiat SpA in a deal funded by the U.S. and Canadian governments. A full-text copy of Old CarCo's Schedules of Assets and Liabilities is available for free at: http://bankrupt.com/misc/Chrysler_SAL_081209.pdf 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. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Creditors Committee Launches Bankruptcy Web Site -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Chrysler LLC (n/k/a Old Carco LLC) announces the launch of its new bankruptcy information Web site: http://www.chryslercommittee.com/ On April 30, 2009, Chrysler LLC and certain of its subsidiaries and affiliates filed for chapter 11 bankruptcy protection. On May 5, 2009, the United States Trustee appointed 11 of the largest unsecured creditors to serve as the Official Committee of Unsecured Creditors of Old Chrysler. One of the Committee's responsibilities is to provide access to information for all of Old Chrysler's general unsecured creditors. On July 16, 2009, the Bankruptcy Court authorized the Committee to establish a Web site to provide information and communicate with Old Chrysler's creditors. The Committee Web site offers an opportunity for general unsecured creditors of Old Chrysler to submit their questions to the Committee and its professional advisors. The Web site also provides information about the material aspects of Old Chrysler' bankruptcy case, which is continuing under Old Chrysler's new name: "Old CarCo LLC". Aspects of the bankruptcy case include: -- names of the current members of the unsecured creditors' committee; -- deadlines for filing proofs of claim and the forms for filing proofs of claim in the chapter 11 cases; -- contact information for the primary parties in the chapter 11 cases; -- access to key court documents in the chapter 11 cases; -- a "frequently asked questions" section about the chapter 11 cases; and -- general bankruptcy overview. The information on the Web site was created by, and is being maintained by, Kramer Levin Naftalis & Frankel LLP, which is counsel to the Committee in Old Chrysler's chapter 11 case. CHRYSLER LLC: Anchor Wants Case Transferred Back to Ohio Court -------------------------------------------------------------- Anchor Tool & Die Co. asked the U.S. Bankruptcy Court for the Southern District of New York to transfer the case it brought against Chrysler Group LLC back to the Ohio District Court. The case was initially filed by Anchor Tool in the U.S. District Court for the Northern District of Ohio to seek an order in favor of the company's decision to terminate its agreements, in the form of purchase orders, with the automaker. The lawsuit, however, was transferred to the NY Bankruptcy Court on July 28, 2009, upon request by Chrysler Group on grounds that it is related to the bankruptcy case of its predecessor, Chrysler LLC. Both automakers complained that Anchor Tool violated the bankruptcy court's order approving the sale of Chrysler LLC's assets and it "poses significant risk to the effective conveyance" of assets to Chrysler Group and assignment of remaining contracts. Attorney for Anchor Tool, Mark Jackowski, Esq., at McDonald Hopkins LLC, in Cleveland, Ohio, said that the NY bankruptcy court "lacks jurisdiction" to hear the case. Mr. Jackowski pointed out that there is no provision in the bankruptcy court's sale order stating that it retains jurisdiction over the non-renewal of Anchor Tool's purchase orders with Chrysler Group. "The sale order simply prohibits a party from terminating an agreement with [Chrysler Group] as a result of the change of control," Mr. Jackowski said. "Anchor does not in any way rely on the sale of the assets as a basis for not renewing or terminating the purchase orders." According to Mr. Jackowski, if the NY bankruptcy court decides to take jurisdiction over the dispute between the companies, every future dispute involving the termination or interpretation of a contract "would be subject under the same flawed reasoning to a return to this [bankruptcy court]." "This would establish the dubious precedent in all cases of returning any dispute involving assets purchased out of a bankruptcy," he pointed out. Court Orders Continues Supply to Chrysler The bankruptcy court issued a ruling on August 6, 2009, directing Anchor Tool to continue supplying parts to Chrysler Group under the purchased orders until September 30, 2009. The bankruptcy court will convene a hearing on September 14, 2009, to consider the proposed transfer of the case to the Ohio District Court. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: McKenna Long Advised Canada in Deals With Automakers ------------------------------------------------------------------ McKenna Long & Aldridge (MLA) announced that the firm advised the government of Canada in connection with its recent transactions involving automakers Chrysler and General Motors. Chrysler filed for bankruptcy on April 30 and the transaction closed on June 10. GM filed for bankruptcy on June 1 and the transaction closed on July 10. MLA advised the government of Canada on the court-supervised sale of Chrysler that resulted in an alliance with Italian car maker Fiat. As part of the transaction, the Canadian government (along with the government of Ontario) provided a $3.775 billion loan which enabled Canada to maintain its 20 percent production share in the North American market and protect nearly one million Canadian jobs. Canada holds a two percent share in the new Chrysler and will appoint a member to the board of directors. "We are honored that the Canadian government called on McKenna Long & Aldridge for legal support and guidance during this unprecedented and challenging time for the North American auto industry," said Christopher F. Graham, lead bankruptcy attorney at MLA on the Chrysler and GM deals. "Through the efforts of our bankruptcy, corporate, finance, tax, and public policy teams, we were able to work collaboratively with the U.S. and Canadian governments as well as the legal teams representing the unions, lenders, creditors and other constituencies involved in these highly complex and sophisticated transactions." In connection with the court-supervised sale of a majority interest in General Motors to the U.S. Department of Treasury, the Canadian government (along with the government of Ontario) provided a $9.5 billion loan to the new General Motors ?- an amount proportional to the $50 billion package provided by the U.S. government. As part of the transaction, Canada holds a 12 percent share in the new General Motors and will appoint a member to the board of directors. "McKenna Long & Aldridge's unique experience in trans-border regulatory and transactional matters, coupled with our deep ties to Canada, enabled us to help the government of Canada successfully achieve its goals and save jobs vital to the country's economy," said former Ambassador to Canada Gordon Giffin, now a Partner at MLA. "The collaborative investments by the two governments represent a new model for continental partnership to ensure the efficiency of our integrated economies in a new era." About McKenna Long & Aldridge McKenna Long & Aldridge LLP -- http://www.mckennalong.com-- is an international law firm with 475 attorneys and public policy advisors. The firm provides business solutions in the areas of environmental regulation, international law, public policy and regulatory affairs, corporate law, government contracts, intellectual property and technology, complex litigation, real estate, energy, and finance. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Mexico Plants to Continue Production of Cruiser ------------------------------------------------------------- Chrysler Group LLC announced that production of the Chrysler PT Cruiser will continue. The Chrysler Group Toluca (Mexico) Assembly Plant -- the exclusive home of Chrysler PT Cruiser -- will continue to build the quality-proven, versatility packaged and "too cool to categorize" small car. "The heritage-styled Chrysler PT Cruiser continues to be a global success story," said Peter Fong ?- President and Chief Executive Officer ?- Chrysler Brand and Lead Executive for the Sales Organization, Chrysler Group LLC. "With more than 1.3 million PT Cruisers sold in more than 60 countries since 2000, we're excited to announce we're re-energizing the iconic and award-winning PT Cruiser." The Chrysler Group changed the landscape of the automotive market when it introduced the segment-busting Chrysler PT Cruiser nearly 10 years ago. Its one-of-a-kind exterior styling and Swiss Army knife-like interior flexibility, offered at a compact car price, redefined the small-car segment and became an instant hit with consumers. High-quality, craftsmanship, performance and functionality continue to give the award-winning Chrysler PT Cruiser a leg up on the competition. For years, leading consumer magazines and third- party studies have recommended the PT Cruiser for its consistently high levels of quality and refinement?tying for first place in J.D. Power's Initial Quality Survey (IQS) this July. Some of the Awards the vehicle has won are: * 2008 Chrysler PT Cruiser, Consumer Reports "Recommended" * 2006 Chrysler PT Cruiser, Consumer Guide, "Best Buy - Compact Cars Category" * 2006 Chrysler PT Cruiser, Consumer Reports, "Recommended" * 2005 Chrysler PT Cruiser, Edmunds.com, "Most Significant" * 2004 Chrysler PT Cruiser, AutoPacific, "Top Vehicle customer satisfaction" * 2001 Chrysler PT Cruiser, North American International Auto Show, "North American Car of the Year" * 2001 Chrysler PT Cruiser, African Americans on Wheels and Latinos on Wheels, "Car of the Year" * 2001 Chrysler PT Cruiser, Strategic Vision, "Compact Car Segment" * 2001 Chrysler PT Cruiser, Industrial Design Excellence, "Gold Award" * 2001 Chrysler PT Cruiser, Automobile Magazine, "Best Small Car" Since production of the Chrysler PT Cruiser began in February 2000 (as a 2001 model), the PT Cruiser lineup has been a continuous hit. The latest flavor, the 2009 Chrysler PT Dream Cruiser 5 marked the 14th customized version of the segment-busting small car. The Chrysler PT Dream Cruiser Series 5 joined the Flames, Woodie, PT Dream Cruiser Series 1, 2, 3, and 4, PT Turbo and Chrome Accents models, the Chrysler PT Cruiser Convertible, the refreshed 2006 Chrysler PT Cruiser, the Chrysler PT Street Cruiser Route 66, Street Cruiser Pacific Coast Highway Edition and Street Cruiser Sunset Boulevard Editions. Chrysler Mexico Operations Chrysler initiated operations in Mexico in 1938, it actually has 5,000 employees. Its manufacturing operations include 5 plants which are localized in Saltillo and Toluca, as well as the Corporate Building in Mexico City. The products that the company manufactures, imports and commercializes with the Chrysler, Dodge, Jeep, Mopar and Mitsubishi brands, are sold in the domestic market through over 160 dealers in the country. The Chrysler Foundation, recognized by the Latin American Center of Social Responsibility of the Anahuac University for its excellent philanthropic work, supports corporate social responsibility programs in the areas of education, health, culture, community development and natural disasters in Mexico. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Old Carco's Interests in Non-Debtor Entities ---------------------------------------------------------- Pursuant to the Court's order approving the sale of substantially all of the Debtors' assets to Fiat S.p.A., Ronald E. Kolka, chief executive officer of Old Carco LLC, submits a periodic report as of July 30, 2009, which report addresses the value, operations and profitability of the non-Debtor entities in which the Debtors' bankruptcy estates hold a substantial or controlling interest. Mr. Kolka says that the report covers the non-Debtor entities and equity interests not sold in the Fiat Transaction. He notes that the qualitative and the quantitative information in the report, unless otherwise noted, reflect assets, liabilities, valuations and operations as they exist after the Fiat Transaction. A full-text copy of the report is available for free at: http://bankrupt.com/misc/Chrysler_PeriodicReport_073009.pdf About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- manufactures Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The Company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan, and Australia. In 2007, Cerberus Capital Management LP acquired an 80.1% stake in Chrysler for $7.2 billion. Daimler AG kept a 19.9% stake. On April 30, Chrysler LLC and 24 affiliates sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Warren Workers to Lose Jobs if Tax Appeals Succeed ---------------------------------------------------------------- A Warren official warned that several city workers including police officers and firefighters would lose their jobs if Chrysler and General Motors Corp. successfully fight their property tax assessments, according to an August 10 report by The Macomb Daily. Mayor Jim Fouts said the city stands to lose $7.3 million in revenue if Chrysler wins its appeal to reduce by 45% its assessments on machinery and other personal properties, and if GM prevails in seeking an 80% reduction on its assessments on buildings and equipment. "Successful property tax appeals would be devastating to Warren and other taxing units, such as Macomb County and local school districts," The Macomb Daily quoted Mr. Fouts as saying. The city assessor's office reports that school districts in the city stand to lose $6.6 million; Macomb County, $1.7 million; and other taxing units, $1.5 million. To gain more ground in the tax fight, Mr. Fouts plans to ask the City Council to approve the hiring of an outside appraiser and a consultant to handle the separate appeals, The Macomb Daily reported. "We have no choice but to fight these tax appeals by hiring qualified experts on property tax appraisals," The Macomb Daily quoted Mr. Fouts as saying. GM and Chrysler are the largest taxpayers in Warren. Together, they comprise 15% of the city's property tax revenue. 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: Adopts Plan to Protect Net Operating Losses ------------------------------------------------------ CIT Group Inc. on August 13 announced that its board of directors has adopted a Tax Benefits Preservation Plan. While the Rights Plan will not impede the Company's ability to pursue restructuring or strategic opportunities, it is designed to protect the Company's ability to utilize its net operating losses and other tax assets, preserving value for the benefit of all stakeholders. This value could be reduced if the Company experiences an "ownership change" under U.S. federal income tax rules, which occurs if one or more "5% shareholders" have aggregate increases of 50% in their CIT ownership over a three year historic period. The Rights Plan reduces the likelihood that CIT experiences such an ownership change by discouraging any person or group from becoming a "5% shareholder." In addition, the Company announced that on August 12, 2009, it entered into a Written Agreement with the Federal Reserve Bank of New York, the principal regulator for its bank holding company. The Agreement requires regular reporting to the FRB, as well as the submission of plans and certain restrictions related to corporate governance, credit practices, capital and liquidity and the Company's businesses. The Agreement also requires prior written approval related to the payment of dividends and distributions, incurrence of debt, and the purchase or redemption of stock. Restructuring Plan 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 later announced a restructuring of its liabilities to provide additional liquidity and further strengthen its capital position. CIT obtained a $3 billion loan and 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 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 in August. 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 24, Standard & Poor's Ratings Services said that its ratings on CIT Group Inc. (CC/Negative/C) are not immediately affected by the company's announcement that it had initiated a recapitalization plan and entered into a $3 billion loan facility provided by a group of major bondholders. "The current rating level continues to reflect a significantly heightened risk of bankruptcy," S&P said. As part of the restructuring, CIT commenced a cash tender offer for its outstanding floating-rate senior notes due August 17, 2009. Noting that the price offered is less than face value, S&P said that, in accordance with criteria, upon completion of the offer, it will lower its counterparty credit rating on the company to 'SD' (selective default) and lower the ratings on the affected debt issue to 'D'. As reported by the TCR on July 20, Moody's Investors Service lowered CIT Group'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. COLONIAL BANCGROUP: FDIC Directs CBG Florida REIT Shares Swap ------------------------------------------------------------- Colonial Bank, a wholly owned subsidiary of The Colonial BancGroup, Inc., received notice on August 10, 2009, from the Federal Deposit Insurance Corporation, the Bank's primary federal regulator, directing CBG Florida REIT Corp., an indirect subsidiary of the Bank, to exchange all outstanding shares of its Fixed-to-Floating Rate Perpetual Non-cumulative Preferred Stock, Class A, Series A -- REIT Preferred Stock -- for an equal amount of Fixed-to-Floating Rate Perpetual Non-cumulative Preferred Stock, Series A of BancGroup -- BancGroup Preferred Stock -- due to the occurrence of an "Exchange Event". There was $300 million in liquidation amount of REIT Preferred Stock outstanding. The exchange was effective at 8:00 a.m. New York time on August 11, 2009. BancGroup will shortly send notice to registered holders of the REIT Preferred Stock of the procedures for exchanging their REIT Preferred Stock for BancGroup Preferred Stock. Until certificates representing the BancGroup Preferred Stock are issued, the certificates representing the REIT Preferred Stock will be deemed for all purposes to represent BancGroup Preferred Stock. BancGroup will issue 300,000 shares of its Fixed-to-Floating Rate Perpetual Non-cumulative Preferred Stock, Series A, par value $2.50 per share and liquidation preference $1,000 per share. The holders of the BancGroup Preferred Stock will have no pre-emptive rights with respect to any shares of BancGroup's capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock. The BancGroup Preferred Stock is perpetual and will not be convertible into shares of BancGroup common stock or any other class or series of its capital stock, and will not be subject to any sinking fund or other obligation for its purchase or retirement. The BancGroup Preferred Stock will, with respect to dividend rights and rights on liquidation, winding-up and dissolution, rank senior to BancGroup's common stock, and each other class of capital stock BancGroup may issue in the future. BancGroup may authorize and issue additional shares of preferred stock that may rank junior to or pari passu with the BancGroup Preferred Stock as to dividends and upon liquidation, winding-up or dissolution without the consent of the holders of the BancGroup Preferred Stock. Dividends on the BancGroup Preferred Stock will be payable if, when and as declared by BancGroup's Board of Directors out of its legally available funds, on a non-cumulative basis at an annual rate of 7.114% until May 15, 2012 (whether or not a Business Day), and 3-Month USD LIBOR (calculated as set forth in the Certificate of Designations) plus 2.02% for the Dividend Period starting on May 15, 2012, and for each Dividend Period thereafter, in each case, on the liquidation preference thereof, which is $1,000 per share, from and including the Dividend Payment Date on or prior to the date of issuance of the BancGroup Preferred Stock. BancGroup has entered into a "Replacement Capital Covenant" in which it covenanted in favor of certain of its debtholders, that, if prior to May 15, 2017, BancGroup or one of its subsidiaries, purchases or redeems BancGroup Preferred Stock, BancGroup or its subsidiaries will do so only if and to the extent that the total redemption or purchase price is equal to or less than designated percentages of the net cash proceeds that BancGroup or its subsidiaries have received during the 180 days prior to the redemption or purchase from the issuance of BancGroup common stock, non-cumulative perpetual preferred stock or certain other securities or combinations of securities satisfying the requirements of the Replacement Capital Covenant. BancGroup's covenants in the Replacement Capital Covenant run in favor of persons that buy, hold or sell BancGroup's indebtedness during the period that such indebtedness is "Covered Debt", which is currently comprised of Colonial's 7.875% Trust Preferred Securities due October 1, 2033, bearing CUSIP No. 19560Q203. Other debt will replace BancGroup's Covered Debt under the Replacement Capital Covenant on the earlier to occur of (i) the date two years prior to the maturity of the existing Covered Debt and (ii) the date of a redemption or purchase of the existing Covered Debt in an amount such that the outstanding principal amount of the existing Covered Debt is or will become less than $100 million. If BancGroup voluntarily or involuntarily liquidates, dissolves or winds up, the holders of BancGroup Preferred Stock at the time outstanding will be entitled to an amount equal to $1,000 per share, plus an amount equal to the undeclared dividends from the most recent Dividend Payment Date to, but not including, the date the liquidation payment is made, out of BancGroup's assets legally available for distribution to its shareholders, before any distribution of assets is made to holders of BancGroup's common stock or any securities ranking junior to the BancGroup Preferred Stock, subject to the rights of the holders of any series of BancGroup's preferred stock ranking on a parity with the BancGroup Preferred Stock -- BankGroup Parity Stock. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of the BancGroup Preferred Stock will have no right or claim to any of BancGroup's remaining assets. In the event that, upon any such voluntary or involuntary liquidation, dissolution, or winding-up, BancGroup's available assets are insufficient to pay the amount of the liquidation distributions on all outstanding BancGroup Preferred Stock and the corresponding amounts payable on any other securities of equal ranking, then the holders of the BancGroup Preferred Stock and any other securities of equal ranking will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. For such purposes, BancGroup's consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into it, or the sale of all or substantially all of BancGroup's property or business, will not be deemed to constitute its liquidation, dissolution, or winding-up. Holders of BancGroup Preferred Stock will not have any voting rights, including the right to elect any directors, except on certain instances. FDIC Probe & Going Concern Doubt As reported by the Troubled Company Reporter on August 12, 2009, Colonial BancGroup was informed by the U.S. Department of Justice on August 6, 2009, that it is the target of a federal criminal investigation relating to the Company's mortgage warehouse lending division and related alleged accounting irregularities. BancGroup's management and board of directors are assessing the impact of the events on the Company's financial position and results of operations, and as a result, BancGroup has been unable to file its Quarterly Report on Form 10-Q for the period ended June 30, 2009 within the prescribed time period. BancGroup believes that the consolidated statements of income will reflect a net loss for the three and six months ended June 30, 2009 and as a result of uncertainties associated with BancGroup's ability to increase its capital levels to meet regulatory requirements, management has concluded that there is substantial doubt about its ability to continue as a going concern. The net loss is due primarily to increased credit costs and noncash charges related to a deferred tax asset valuation allowance and goodwill impairment. About Colonial BancGroup Colonial BancGroup (NYSE: CNB) -- http://www.colonialbank.com/-- operates 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. Fitch Ratings has downgraded the ratings of The Colonial BancGroup's Long-term Issuer Default Rating (IDR) to 'C' from 'CCC' and Colonial Bank's long-term IDR to 'C' from 'B-'. Moody's Investors Service downgraded the issuer ratings of Colonial BancGroup to 'C' from 'Caa1'. COLONIAL BANCGROUP: DBRS Assigns 'C' Rating to Preferred Stock -------------------------------------------------------------- DBRS has withdrawn the preferred stock rating of CBG Florida REIT Corp. (CBG) and has assigned a 'C' rating to Colonial BancGroup, Inc's preferred stock. The rating actions follow Colonial's disclosure in an 8-K filing of an exchange of CBG's preferred stock for Colonial's preferred stock. Concurrently, DBRS has placed Colonial's preferred stock rating Under Review with Negative Implications. About Colonial Bank Colonial BancGroup (NYSE: CNB) -- http://www.colonialbank.com/-- operates 355 branches in Florida, Alabama, Georgia, Nevada and Texas with over $25 billion in assets. BancGroup posted a net loss of $606 million, or $3.02 per common share, in the quarter compared to a net loss of $168 million, or $0.86 per common share, in the 1st quarter of 2009. As a result of regulatory actions and the current uncertainties associated with Colonial's ability to increase its capital levels to meet regulatory requirements, management has concluded that there is substantial doubt about Colonial's ability to continue as a going concern. As reported by the TCR on August 4, Fitch Ratings has downgraded the ratings of The Colonial BancGroup's Long-term Issuer Default Rating (IDR) to 'C' from 'CCC' and Colonial Bank's long-term IDR to 'C' from 'B-'. Moody's Investors Service downgraded the issuer ratings of Colonial BancGroup to 'C' from 'Caa1'. The rating actions follow the announcement that the pending $300 million investment by Taylor Bean & Whitaker and its consortium of investors has terminated. BancGroup was mandated to raise $300 million in equity from the private sector in order to receive the much needed $550 million of capital through the Treasury's Capital Purchase Program, for which it already received preliminary approval. COOPER-STANDARD: Canada Unit's CCAA Restructuring Database ---------------------------------------------------------- Applicant filing petition under the Companies' Creditors Arrangement Act: * Cooper-Standard Automotive Canada Limited CCAA Petition Date: August 4, 2009 Court: Ontario Superior Court of Justice (Commercial List) Canadian Judge: The Honorable Justice Sidney N. Lederman Applicant's Lawyers: Davies Ward Phillips & Vineberg LLP Barristers & Solicitors 44th Floor, 1 First Canadian Place Toronto, ON M5X 1 B1 Jay A. Swartz (LSUC #15417L) Robin Schwill (LSUC #384521) Tel: (416) 863-0900 Fax: (416) 863-0871 CCAA Monitor: RSM Richter Inc. About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. For more information, visit the Company's Web site at: http://www.cooperstandard.com/ Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard FrA res & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: Intends to Pay $3.5 Mil. in Prepetition Taxes -------------------------------------------------------------- Cooper-Standard Holdings Inc. and its affiliated debtors sought and obtained court approval to earmark as much as $3.5 million to pay their pre-bankruptcy taxes and other charges. As of August 3, 2009, the Debtors estimate that they owe not more than $3.5 million in taxes and other charges, which consist of: Sales and Use Taxes $300,000 Franchise Taxes $173,000 Real/Personal Property Taxes $2,637,000 The Debtors also have to pay business license fees, registration fees, annual reporting fees and other charges to operate their business. The Debtors estimate that the cost associated with those fees is approximately $2,625 for this year. In connection with the Debtors' request, the Court authorized all concerned banks and financial institutions to honor prepetition wire transfer requests or checks issued by the Debtors. It also authorized the Debtors to issue postpetition checks or to effect postpetition fund transfer requests as replacement of those checks or requests relating to taxes that have been dishonored or rejected. All payments arising from or in connection with the Debtors' request will be subject to any interim and final orders authorizing the "debtor-in-possession financing," and related budgets and projections approved by the Court. About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. For more information, visit the Company's Web site at: http://www.cooperstandard.com/ Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard FrA res & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: Proposes Kurtzman Carson as Claims Agent --------------------------------------------------------- Cooper-Standard Holdings Inc. and its affiliated debtors sought and obtained court approval to employ Kurtzman Carson Consultants LLC as their notice, claims and solicitation agent. Attorney for the Debtors, Michael Merchant, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware, says the Debtors selected the firm because of its substantial experience in providing comprehensive Chapter 11 administrative services. The firm, he pointed out, also acted as the official agent in many large bankruptcy cases. As the Debtors' notice, claims and solicitation agent, Kurtzman is tasked to: (1) prepare and serve required notices in their cases; (2) file with the Court within seven days after the mailing of a particular notice, a copy of the notice served with a certificate of service attached indicating the name and complete address of each party served; (3) receive, examine, and maintain copies of all proofs of claim and proofs of interest filed in the Chapter 11 cases; (4) maintain official claims registers in the Chapter 11 cases by docketing all proofs of claim and proofs of interest in a claims database; (5) record all transfers of claims pursuant to Bankruptcy Rule 3001(e). (6) revise the creditor matrix after the objection period expires; (7) record any order entered by the Court which may affect a claim by making a notation on the claims register. (8) monitor the Court's docket for any claims related pleading filed and making necessary notations on the claims register; (9) maintain a separate claims register for each debtor if the Chapter 11 cases are jointly administered; (10) file a quarterly updated claims register with the Court in alphabetical and numerical order, and if there was no claims activity, a certification of no claim activity may be filed; (11) maintain an up-to-date mailing list of all creditors and all entities that have filed proofs of claim, proofs of interest or request for notices in the case and provide that list to the Court or any interested party upon request within 48 hours; (12) provide access to the public for examination of claims and the claims register at no charge; (13) forward all claims, an updated claims register and an updated mailing list to the Court within 10 days of entry of an order converting a case or within 30 days of entry of a final decree; (14) implement necessary security measures to ensure the completeness and integrity of the claims registers; (15) comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; (16) provide temporary employees to process claims as necessary; (17) promptly comply with further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; and (18) provide other claims processing, noticing and administrative services as may be requested from time to time by the Debtors. The Debtors agree to pay Kurtzman for its services, expenses and supplies at the rates or prices set by the firm. Kurtzman will receive a retainer for $75,000 for its services and expenses incurred in connection with its employment. In an affidavit, Michael Frishberg, Vice-President of Corporate Restructuring Services of Kurtzman, said his firm does not hold or represent interest adverse to the Debtors' estates. He assured the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Cooper-Standard Cooper-Standard Automotive Inc., headquartered in Novi, Mich., is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. For more information, visit the Company's Web site at: http://www.cooperstandard.com/ Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard FrA res & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COUNTRY COACH: Recreation Live to Buy 6 Motor Coaches, 50% Stake ---------------------------------------------------------------- Tim Christie at The Register-Guard reports that Recreation Live LLC will buy six motor coaches from Country Coach LLC and invest about $4 million in return for a 50% equity stake in the Company. The Register-Guard relates that Recreation Live said in a July 14 letter of intent with County Coach that it would purchase six coaches per month until January 1, 2010, then eight units per month for the next six months, then 12 units per month after that, and open at least three "factory stores." This is part of a proposed deal that would allow Country Coach to emerge from Chapter 11 bankruptcy, the report says. The proposed deal calls for Recreation Live to own half of Country Coach, but Country Coach executives are weighing "many other prospective offers" for the other half of the Company, The Register-Guard says, citing Country Coach spokesperson Matt Howard. Court documents say that Country Coach asked U.S. Bankruptcy Judge Albert Radcliffe to authorize the Company to pay Recreation Live a $100,000 "break-up" fee, plus up to $100,000 in expenses, if another party comes in with a better offer for the Junction City coach maker. The Register-Guard states that the fee would be paid from the proceeds of any alternative deal that emerges. A hearing on the motion will be held on September 2, The Register- Guard says. According to The Register-Guard, Country Coach has until August 31 to file a reorganization plan. Country Coach, LLC -- http://www.countrycoach.com/-- is a Highline motorcoach builder. Country Coach was founded in 1973 and has a 508,000 square feet manufacturing facility in Junction City, Oregon. Country Coach was sent to Chapter 11 less than two months after its owner, National R.V. Holdings Inc., reorganized in court. National R.V., had its reorganization plan approved by a judge in December. The Perris, California based company sought Chapter 11 protection in November 2007, listing assets of $54.4 million against debt of $30.1 million. In September, Country Coach completed a restructuring plan aimed at stemming a sharp decline in sales volume to due market pressures. In its eight-month restructuring, Country Coach cut its size by 50%, reduce staffing and inventory. Country Coach LLC's key investors, led by Bryant Riley, also reaffirmed their commitment towards the company. "Adding to the millions of dollars this group has invested in Country Coach since February 2007, the investing partners have committed an additional $6 million in new cash to ensure the company can maintain an aggressive position relative to product quality, lean manufacturing initiatives and new R & D projects like the exciting new Veranda line of coaches," a September 2008 release said. COYOTES HOCKEY: Largest Creditor Now Backing Reinsdorf Bid ---------------------------------------------------------- Mike Sunnucks at Phoenix Business Journal reports that SOF Investments, the largest secured creditor in Phoenix Coyotes' Chapter 11 bankruptcy case, told the U.S. Bankruptcy Court that it is supporting Jerry Reinsdorf's $148 million bid to acquire the team. Michael Dell's SOF Investments said that it was happy with the offer by the owner of the Chicago Bulls and Chicago White Sox, which includes reworking debts to the creditor. The National Hockey League also supports Mr. Reinsdorf, while opposing a $213 million offer from Research in Motion CEO Jim Balsillie. As reported by the TCR on August 7, 2009, Judge Redfield T. Baum of the U.S. Bankruptcy Court for the District of Arizona held that Jim Balsillie's $212.5 million offer -- which requires a move by the team to Canada -- must be included in the September 10 auction for the National Hockey League franchise. The Globe and Mail reported in early August that Balsillie's bid was included in the auction in light of the fact that bids by Jerry Reinsdorf and Ice Edge Holdings LLC, which both contemplate on keeping the team in Arizona, have yet to be finalized. Globe and Mail also pointed out that Judge Baum, in his decision to include Mr. Balsille's bid, noted that lawyers for largest creditor, computer tycoon Michael Dell, wanted Mr. Balsille's bid included since it was the only one that offered to settle its $80 million debt in cash and in full. Judge Baum previously approved a two-phase auction for Coyotes Hockey's main asset. Under the rules, an auction for bids that would keep the team in Glendale, Arizona was scheduled for August 5. If bids were unsatisfactory, an auction that would accept relocation bids will be held September 10. The original auction rules preferred local bids after the NHL had argued that transferring the team without its consent would be illegal. Parties' Depositions Bob Baum at The Associated Press states that NHL agreed to allow depositions from commissioner Gary Bettman, deputy commissioner Bill Daly, and two of the league's owners in the Phoenix Coyotes' bankruptcy proceedings. NHL, according to The AP, also agreed to provide Boston Bruins owner Jeremy Jacobs and Minnesota Wild owner Craig Leipold for questioning. According to The AP, NHL wants the Hon. Redfield T. Baum of the U.S. Bankruptcy Court for the District of Arizona to reject the proposed deposition of Toronto Maples Leafs owner Richard Peddie. Mr. Balsillie's lawyers, The AP says, want to question Mr. Peddie over what role Maple Leafs might play in the proposed relocation of Phoenix Coyotes to Hamilton, Ontario. The relocation issue is moot, as the NHL board of governors overwhelmingly rejected Mr. Balsillie as an owner, the report states, citing NHL. The AP reports that Judge Baum has scheduled a September 2 hearing on whether he should disregard the NHL board's 26-0 rejection of Mr. Balsillie and designate him a qualified bidder for the team. About Coyotes Hockey Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. Jim Balsillie, Research in Motion Ltd.'s co-chief executive officer, offered to buy the Phoenix Coyotes for $212 million and move the NHL team to Hamilton, Ontario, and the League balked at the relocation proposal. Mr. Balsillie was unsuccessful in 2007 when he attempted to buy and relocate the Nashville Predators, and lost a similar bid in 2006 to buy and relocate the Pittsburgh Penguins. CRM USA: AM Best Affirms Trust Preferred Securities at 'BB' ----------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit rating (ICR) of "a-" of Majestic Insurance Company (San Francisco, CA). Additionally, A.M. Best has affirmed the FSR of B++ (Good) and ICR of "bbb" of Twin Bridges (Bermuda) Ltd. (Hamilton, Bermuda). Both companies are subsidiaries of CRM Holdings, Ltd. (Hamilton, Bermuda) [NASDAQ: CRMH]. A.M. Best also has affirmed the ICRs of "bbb-" of CRM Holdings, Embarcadero Insurance Holdings, Inc. (San Francisco, CA) and CRM USA Holdings, Inc. (Wilmington, DE). Concurrently, A.M. Best has affirmed the debt ratings of "bb" on the trust preferred securities of CRM USA and the surplus notes of Embarcadero. The outlook for all ratings is negative. The ratings of Majestic reflect its solid capitalization, profitable operating results, stabilization of its loss reserves and its expertise within its specialty workers' compensation markets. Offsetting these strengths is the adverse loss reserve development reported in Majestic's earlier years, a recent shift in the company's book of business to smaller risks and new geographic areas, the reduced financial flexibility of CRM Holdings, as well as some concern over Majestic's ability to meet performance projections while maintaining prudent capitalization levels. The ratings of Twin Bridges recognize its solid capitalization, favorable underwriting and operating performance to date and management's experience in the excess workers' compensation reinsurance market for self-insured groups. Offsetting these strengths is the significant decline in Twin Bridges' overall capitalization following management's decision to reallocate capital within the overall CRM group, the relative immaturity of the company's loss reserves and the concentration in a single line business. The following debt ratings have been affirmed: CRM USA Holdings, Inc.: -- "bb" on $35 million 8.65% junior subordinated debt securities, due 2036 Embarcadero Insurance Holdings, Inc.: -- "bb" on $8 million LIBOR+ 4.2% surplus notes, due 2033 As reported by the TCR on July, 22, 2008, A.M. Best has removed from under review with negative implications and affirmed the debt ratings of "bb" of the trust preferred securities of CRM USA Holdings, Inc., and the "bb" of the surplus notes of Embarcadero Insurance Holdings, Inc. The outlook assigned to all ratings is negative. CRUCIBLE MATERIALS: Delays Plant Shutdown to Find Buyer ------------------------------------------------------- Crucible Materials Corporation, also known as Crucible Specialty Metals, has delayed its planned closure to give potential buyers a chance to watch its steel mill in Geddes, in Syracuse, New York, in action, Charley Hannagan at The Post-Standard reports. Crucible Materials, according to The Post-Standard, has been trying to sell Geddes mill and a mill-and-research center in Pittsburgh, Pennsylvania The Post-Standard states that Crucible Specialty told its 675 local employees it would close on August 28 unless it could find a buyer, secure suitable financing or reorganize in Chapter 11. Crucible Specialty told the United Steel Workers of America on Monday that it will keep the plant open through the first three weeks of September, The Post-Standard relates, citing Steel Workers' subdistrict director Richard J. Knowles. Based in Syracuse, New York, Crucible Materials Corporation -- aka Crucible Specialty Metals, Crucible Service Centers, Crucible Compaction Metals, Crucible Research and Trent Tube -- makes stainless and alloy steel for use in the aircraft, automotive, petrochemical, and other industries. The Company is currently employee-owned. Its Web site is http://www.crucible.com/ The Company and its affiliate, Crucible Development Corporation, filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. The Debtors engaged Duff & Phelps Securities LLP as investment banker; RAS Management Advisors LLC as business advisor; and Epiq Bankruptcy Solutions LLC as claims agent. Roberta A. DeAngelis, United States Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors. The Debtors listed assets and debts both ranging from $100 million to $500 million. DAE AVIATION: S&P Downgrades Corporate Credit Rating to 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on DAE Aviation Holdings Inc., including lowering the corporate credit rating to 'B-' from 'B'. In addition, S&P removed the ratings from CreditWatch, where S&P had placed them with negative implications on January 30, 2009. The outlook is negative. The ratings downgrade reflects constrained liquidity due to tight covenant compliance, poor credit protection measures resulting from high debt levels and low, but improving, profitability, and a significant deterioration in the business aviation market. Poor profitability, due largely to losses at DAE Aviation's business aircraft completions business (5%-10% of sales) resulted in deteriorating credit protection measures in 2008 and tightening covenant compliance, despite the company paying down more than $350 million of debt by using proceeds from a divestiture. In addition, high fuel prices, the weakening economy, and lower corporate profitability resulted in declining business jet usage, a trend that continued into the first half of 2009. Customers have also been cancelling and deferring orders for new aircraft, which could result in lower demand for DAE Aviation's maintenance services in the future. As a result, DAE Aviation's revenues from this market (25%-30% of revenues) have declined significantly. Standard & Poor's expects efforts to improve profitability and growth in some markets to largely offset weakness in the business aviation market. However, credit protection measures are likely to remain weak and tight covenant compliance leaves little room for any deterioration in operating performance. "We could lower the ratings if profitability does not improve as S&P expected, or if further deterioration in the business aviation market or other key segments result in a covenant violation," said Standard & Poor's credit analyst Christopher DeNicolo. "Although unlikely in the near term, S&P could revise the outlook to stable if key markets stabilize, profitability increases more than S&P expect, and liquidity improves," he continued. DELPHI CORP: European Union OKs Plants Purchase by GM ----------------------------------------------------- The European Commission on August 13 said it has approved under the EU Merger Regulation the proposed acquisition of Delphi Steering Business and of four U.S. sites of Delphi Corporation, a U.S. manufacturer of automotive components by the US car manufacturer General Motors. The Commission concluded that the transaction would not significantly impede effective competition within the European Economic Area or a substantial part of it and has therefore approved the concentration. GM manufactures and sells cars and commercial vehicles worldwide. GM intends to acquire Delphi Steering Business and four U.S sites of the US automotive component supplier Delphi (the Targets). The Targets are globally active in the design, manufacture and sale of a great number of automotive components for various fields of use. This transaction relates to the clearance decision M.5500 whereby GM intends to acquire control of Delphi Steering Business. This new transaction enlarges the scope of the original merger since it includes four US sites. The newly included sites are not active in the same automotive components. The Commission's examination of the transaction showed that for all automotive components, the merged entity will have very small market shares and will continue to face several strong, effective competitors with significant market shares. Also, Delphi is a major supplier of GM's vehicle manufacturing activities. The Commission thus concluded that the proposed transaction does not raise competition concerns. About Delphi Corp Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi technology is also found in computing, communications, consumer accessories, energy and medical applications. Delphi has approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on December 20, 2007. The Court confirmed the Debtors' First Amended Plan on January 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DETROIT PUBLIC SCHOOLS: Manager May Decide on Bankr. This Month --------------------------------------------------------------- Alex P. Kellogg at The Wall Street Journal reports that Robert Bobb, emergency financial manager for Detroit Public Schools, is expected to decide this month whether the school district should file for Chapter 9 bankruptcy. The Journal says that DPS has an estimated budget deficit of $259 million. Citing Wayne County prosecutor Kym Worthy, The Journal relates that five employees of the Detroit public school system were charged on Wednesday with multiple felonies as part of a probe into alleged corruption and the loss of tens of millions of dollars in school funds. The report says that the defendants, if convicted, could face decades in prison, as Michigan law allows harsh penalties for public officials found guilty of wrongdoing. According to The Journal, eight felony embezzlement charges were filed against: -- a district administrative staffer and a high-school teacher's aide who both allegedly embezzled more than $50,000; -- a clerical worker at an elementary school, who allegedly wrote checks and withdrew $25,000 of the district's money; and -- a food-services employee, allegedly stole more than $400 of lunch money at another elementary school. The Journal notes that the losses alleged in the charges are a fraction of the improper expenses uncovered since the state sent Mr. Bobb to straighten out the city's ailing school system. The Journal states that according to findings of a probe launched by Mr. Bobb, paychecks went to 257 "ghost" employees who have yet to be accounted for. Citing Mr. Bobb, the report says that about 500 illegal health-care dependents he uncovered have cost the district millions. "We can not allow people to use DPS as their personal welfare system," but there there has been a "tendency to over-dramatize the level of corruption and the financial impact," The Journal quoted Keith R. Johnson -- president of the Detroit Federation of Teachers, which represents 7,700 teachers and is currently negotiating a new contract with the district -- as saying. Detroit Public Schools is a school district that covers all of the city of Detroit, Michigan, United States. The district had 194 schools as of 2008. DEX MEDIA WEST: Earns $30.6 Million in Quarter Ended June 30 ------------------------------------------------------------ Dex Media West LLC reported a net income of $30.6 million for three months ended June 30, 2009, compared with a net loss of $150.0 million for the same period in 2008. For six months ended June 30, 2009, the Company reported a net income of $38.3 million compared with a net loss of $787.2 million for the same period in 2008. At June 30, 2009, the Company's balance sheet showed total assets of $4.8 billion, total liabilities of $3.6 billion and owners' equity of $1.2 billion. Going Concern The Company's management said that there is substantial doubt about its ability to continue as a going concern for a reasonable period of time. The assessment of the Company's ability to continue as a going concern was made by management considering, among other factors: (i) its Chapter 11 bankruptcy filing on May 28, 2009; (ii) the current global credit and liquidity crisis; (iii) the significant negative impact on its operating results and cash flows from the overall downturn in the global economy and an increase in competition and more fragmentation in the local business search market; (iv) that certain of its credit ratings have been downgraded; and (v) that its parent company, R.H. Donnelley Corporation's common stock ceased trading on the New York Stock Exchange on December 31, 2008, and is now traded over- the-counter on the Pink Sheets. A full-text copy of the Company's Form 10Q is available for free at http://ResearchArchives.com/t/s?418c About Dex Media West LLC Dex Media West LLC is a subsidiary of Dex Media West, Inc., and an indirect wholly-owned subsidiary of Dex Media, Inc. Dex Media is a direct wholly-owned subsidiary of R.H. Donnelley Corporation. Dex Media West is the exclusive publisher of the official yellow pages and white pages directories for Qwest Corporation, the local exchange carrier of Qwest Communications International Inc., in Arizona, Idaho, Montana, Oregon, Utah, Washington, and Wyoming. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC and Dex Media West LLC, filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. The Garden City Group, Inc., is claims and noticing agent. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-700 DIRECTV HOLDINGS: Fitch Upgrades Issuer Default Rating From 'BB' ---------------------------------------------------------------- Fitch Ratings has upgraded the Issuer Default Rating assigned to DIRECTV Holdings LLC to 'BBB-' from 'BB'. Additionally, Fitch has upgraded the senior unsecured notes issued by DIRECTV to 'BBB-' from 'BB' and the company's senior secured credit facility to 'BBB' from 'BB+'. The Rating Outlook has been revised to Stable from Positive. DIRECTV is a wholly owned subsidiary of The DIRECTV Group, Inc. Approximately $5.8 billion of debt as of June 30, 2009, is affected. Fitch's rating actions follows the company's announcement that DTVG's board of directors approved a more conservative leverage (debt-to-EBITDA) target of 2.5 times (x). Fitch had acknowledged for some time that DIRECTV's credit and operating profile was strong within the 'BB' rating category, and indicated that a key consideration for positive rating action was the extent to which DTVG levers DIRECTV's balance sheet to fund shareholder friendly actions and other investments. The company's new leverage policy is more supportive than management's previous target of 3.0x to 3.5x, and when combined with DIRECTV's strong operating profile and Fitch's expectation for continued generation of free cash flow (before dividends to DTVG) reflective of an investment grade credit profile. Fitch does not expect DTVG to rapidly increase leverage to its new target. DIRECTV's leverage as of June 30, 2009, was 1.3x on a last 12 months basis, and no debt is outstanding at DTVG. Once the merger with Liberty Entertainment, Inc., is finalized (Fitch anticipates the merger will close by year end 2009) DTVG's leverage pro forma for the $2 billion of LEI debt increases to 1.7x. Fitch believes that returning capital to its shareholders will remain a priority for the company as DTVG historically has used free cash flow generated by DIRECTV to fund large share repurchase programs. As of June 30, 2009, approximately $1.3 billion of capacity remains within DTVG's current share repurchase authorization (Fitch notes that during July DTVG repurchased approximately 18 million DTVG shares for $437 million, reducing capacity to approximately $839 million). Overall, the ratings for DIRECTV reflect the size and scale of DIRECTV's operations as the second-largest multi-channel video programming distributor in the United States, Fitch's expectation for continued generation of free cash flow (before dividends to DTVG), and the company's high level of financial flexibility. The ratings also incorporate DIRECTV's strong operating momentum fostered by the company's strategy of targeting high quality subscribers. This strategy in Fitch's opinion yields higher average revenue per user (ARPU), operating margins, and lifetime subscriber revenue and cash flows while lowering subscriber churn levels. Rating concerns center on the evolving competitive landscape, DIRECTV's lack of revenue diversity and narrow product offering relative to its cable multiple system operator and growing telephone company competition and, finally, DIRECTV's ability to balance subscriber growth with growing operating margins and free cash flow. While the current economic environment has yet to negatively affect DIRECTV's operating profile, the risk that a slowing economy will weigh on DIRECTV's operating results during 2009 remains present within the company's credit profile. The notching between DIRECTV's IDR and its senior secured rating reflects the payment priority and assets pledged as security associated with bank debt. The Stable Rating Outlook incorporates Fitch's expectation that the company will maintain its relative competitive position and its operating profile will not meaningfully deteriorate given the current economic climate. Fitch has upgraded these ratings: DIRECTV Holdings, LLC -- IDR to 'BBB-' from 'BB'; -- Senior Secured Debt to 'BBB' from 'BB+'; -- Senior Unsecured Debt to 'BBB-' from 'BB'. DOLLAR THRIFTY: Deutsche Bank Amends Loan to Limits L/C Issuance ---------------------------------------------------------------- Dollar Thrifty Automotive Group, Inc., and the requisite percentage of the lenders under the Company's senior secured credit facility, dated as of June 15, 2007, as amended, which is comprised of a revolving credit facility and a term loan, entered into the Seventh Amendment to Credit Agreement limiting the issuance of letters of credit as enhancement for future fleet financing to 7% of the initial face amount of each series of asset backed notes issued, up to the existing sub-limit under the Credit Agreement of $100 million. DTAG is required to pay to Bingham McCutchen LLP, special counsel to Deutsche Bank Trust Company Americas, as administrative agent and letter of credit issuer, all reasonable fees and expenses owed to the firm. To contact the firm: Bingham McCutchen LLP One State Street Hartford, Connecticut Attn: Anthony Goodman, Esq. Fax: (860) 240-2800 Email: anthony.goodman@bingham.com A full-text copy of the Seventh Amendment to Credit Agreement, dated as of August 7, 2009, among Dollar Thrifty Automotive Group, Inc., as borrower, Deutsche Bank Trust Company Americas, as administrative agent and letter of credit issuer, and various financial institutions as are party thereto, is available at no charge at http://ResearchArchives.com/t/s?41a1 About Dollar Thrifty Automotive Group Dollar Thrifty Automotive Group, Inc. -- http://www.dtag.com/, http://www.dollar.com/and http://www.thrifty.com/-- is a Fortune 1000 company headquartered in Tulsa, Oklahoma. The Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value- conscious travelers in more than 70 countries. Dollar and Thrifty have more than 700 corporate and franchised locations in the United States and Canada, operating in virtually all of the top U.S. and Canadian airport markets. The Company's roughly 6,800 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network. As of June 30, 2009, the Company had $2.58 billion in total assets and $2.35 billion in total liabilities. * * * The TCR said April 6, 2009, that Standard & Poor's Ratings Services lowered its ratings on DTAG, including the long-term corporate credit rating to 'CCC' from 'CCC+'. All ratings were removed from CreditWatch, where they were initially placed with negative implications on February 12, 2008, and subsequently lowered three times and maintained on CreditWatch. The outlook is now negative. DONNIE FLYNN KING: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------------- Joint Debtors: Donnie Flynn King, Sr. Lou Wells King 4605 Pine Hollow Drive Wilmington, NC 28409 Bankruptcy Case No.: 09-06765 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtors' Counsel: David J. Haidt, Esq. Ayers, Haidt & Trabucco, P.A. PO Box 1544 New Bern, NC 28563 Tel: (252) 638-2955 Fax: (252) 638-3293 Email: davidhaidt@embarqmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 12 largest unsecured creditors is available for free at: http://bankrupt.com/misc/nceb09-06765.pdf The petition was signed by the Joint Debtors. DYNEGY INC: Fitch Downgrades Issuer Default Rating to 'B-' ---------------------------------------------------------- Fitch Ratings has downgraded these ratings of Dynegy Inc., Dynegy Holdings Inc. and Sithe/Independence Funding Corp.: Dynegy Inc. -- Issuer Default Rating to 'B-' from 'B'. Dynegy Holdings, Inc. -- IDR to 'B-' from 'B'; -- Secured bank facilities to 'BB-/RR1' from 'BB/RR1'; -- Second priority notes to 'BB-/RR1' from 'BB/RR1'; -- Senior unsecured to 'B/RR3' from 'B+/RR3'. Dynegy Capital Trust I -- Trust preferred to 'CCC/RR6' from 'CCC+/RR6'. Sithe Independence Funding Corp. -- Secured bonds to 'BB-' from 'BB'. Fitch revised the Rating Outlook to Negative from Stable. The rating action recognizes the underperformance of Dynegy's merchant generation operations and the correlation of its future financial performance to the level of natural gas and power prices, which are expected to remain volatile. Operating EBITDA and cash flow at Dynegy continues to be negatively affected by the declines in power prices, and margin stability at the company has proven to be elusive. Fitch believes that Dynegy has taken steps to increase the stability of its earnings and cash flow in 2009 and 2010 by contracting for 95% and 90% of its expected volumetric output, respectively, however, credit metrics nevertheless are forecasted to remain weak and are more appropriate to the lower ratings level. The credit profile benefits from Dynegy's strong liquidity position and strong asset values as well as its intention to pay down some of its nearer term maturities with proceeds from its recent transaction. Dynegy had $1.87 billion in available liquidity as of August 3, 2009 consisting of $715 million in cash and $1,158 million in available credit lines. DYN's liquidity is projected to be strong, however, continued weakness in power prices, volatility in the price of natural gas, tightness in capital markets, and with Dynegy's capital spending plans could all pressure liquidity needs. Fitch notes that the announced transaction with LS Power is generally a credit positive as it further supports the liquidity position and will allow Dynegy to push out some of its maturities alleviating some refinancing risk. Additionally, the recently announced credit facility amendments should give Dynegy some needed covenant flexibility. Fitch notes that for Dynegy, asset valuations are strong relative to outstanding indebtedness. Consequently, while margin pressure may continue to hamper credit metrics, strong asset valuations would lead to strong recoveries across the capital structure in case of default. Fitch assigns Recovery Ratings (RRs) to issuers with IDRs in the 'B' category or below. For competitive generating companies like Dynegy, Fitch generates a theoretical distressed enterprise value, calculated based on a discounted cash flow evaluation of each individual power generating asset. Based on Fitch's power plant valuation model, secured debt holders could expect strong recovery of claims in case of a default, which is reflective of the 'RR1' rating on Dynegy's secured debt. The 'RR3' rating on Dynegy's unsecured notes reflects expectations for good (50%-70%) recovery on these obligations in a default scenario. The 'RR6' on the Trust preferred indicates poor (0%- 10%) recovery due to the subordinated nature of the issue. The Outlook revision reflects expectations for continued weakness in wholesale power prices and difficult capital market conditions that serve to temper some of the credit implication of the above mentioned transactions. The Outlook also considers the uncertainty surrounding Dynegy's earnings and cash flow stability beyond 2010 should power prices fail to meaningfully recover. Fitch notes that continued pricing pressure and failure of Dynegy to hit its earnings estimates and execute on its planned cost cutting initiative could result in further negative rating actions. Conversely, should Dynegy successfully weather the current low price environment and execute on its announced plans, Fitch would consider a positive rating action. Fitch has also downgraded the rating of Sithe/Independence Funding Corporation's secured bonds to 'BB-' from 'BB'. Fitch continues to view the project as a distinct entity, separate from the project's owner. However, in light of the Dynegy companies' dual role as owner and off-taker as well as their current credit ratings, Fitch views the project's credit profile as being closely analogous to a separately secured financing of Dynegy and has notched it as such. Dynegy is engaged in the generation and sale of wholesale electric power. Dynegy owns approximately 12,950 megawatts of wholesale power assets pro forma for the LS Power transaction. EUROFRESH INC: May Now Send Plan to Creditors for Voting -------------------------------------------------------- Arizona Daily Star reports that the Hon. Charles G. Case II of the U.S. Bankruptcy Court for the District of Arizona said during a hearing on Tuesday that he would sign an order approving Eurofresh, Inc.'s disclosure statement. With the approval of the Disclosure Statement, Eurofresh may now send the Plan to creditors for voting. Eurofresh proposes to seek confirmation of its proposed Chapter 11 plan at a hearing on September 28. As reported by the TCR on June 19, 2009, Eurofresh Inc. and its debtor-affiliates delivered to the Bankruptcy Court a proposed plan that contemplates the Debtors' continued operation as a going concern. Under the Plan, holders of existing credit facility secured claims, miscellaneous secured claims, and convenience claims are expected to receive 100% recovery. Holders of general unsecured claims and senior noteholder claims are expected to get between 5% and 7% recovery under the plan. The Debtors do not expect any distribution to holders of discount noteholder claims, subordinated debt securities claims and holders of equity interests. According to the explanatory disclosure statement, claimants will receive these distributions under the Plan: i) holders of existing credit facility secured claims -- debt of $50 million secured by a blanket lien on substantially all assets of Eurofresh pursuant to a Credit and Guaranty Agreement dated as of March 25, 2008, signed by Silver Point Finance, LLC, as agent -- will receive a principal reduction payment of $7.5 million of the outstanding obligations under the existing credit documents and a rollover of all remaining obligations under the existing credit documents, to the extent allowed, into a new credit facility; ii) holders of miscellaneous secured claims will, on the effective date, either be reinstated, paid in full in cash or satisfied by the return of collateral; iii) holders of allowed convenience claims will receive the lesser of the allowed general unsecured claims of the holder or $1,000 paid in cash; iv) holders of allowed general unsecured claims will receive cash payments in an amount equal to the holder's pro rata share of the general unsecured claim fund; and v) holders of allowed senior noteholder claims will receive their pro rata share of: a) $10.0 million in face amount of PIK preferred stock; b) one million shares of New Common Stock; and c) certain proceeds of reserved shares under certain circumstances. The Plan will be funded by new money financing and the issuance of new common stock and PIK stock. A total of $12.5 million in new financing will be provided by Johan van den Berg and certain noteholders -- holders of the $170,000,000 of 11-1/2% senior notes due in 2013 issued by Eurofresh prepetition. The $7.5 million of the new money financing will be applied to reduce the principal amount under the Existing Credit Documents and $5 million of which will be used for working capital of Reorganized Eurofresh. Bio Dynamics B.V./S.a.r.L., a Luxembourg company, company, which is an affiliate, and under the direction, of Johan van den Berg, will receive 40% of the stock of reorganized Eurofresh, the Investing Noteholders 40%, 10% to Senior Noteholders and the remaining 10% to be held in reserve. A full-text copy of the Debtors' disclosure statement is available for free at http://ResearchArchives.com/t/s?3df6 A full-text copy of the Debtors' Chapter 11 plan of reorganization is available for free at http://ResearchArchives.com/t/s?3df7 About Eurofresh Inc. Headquartered in Snowflake, Arizona, Eurofresh, Inc. -- http://www.eurofresh.com/-- produces and sells tomatoes. The Company and Eurofresh Produce Ltd., its affiliate, filed for Chapter 11 on April 21, 2009 (Bankr. D. Ariz. Lead Case No. 09-07970). Craig D. Hansen, Esq., at Squire, Sanders & Dempsey L.L.P. represents the Debtors in their restructuring effort. Ilene J. Lashinsky, U.S. Trustee for Region 14, appointed five creditors to serve on the official committee of unsecured creditors in the Debtors' Chapter 11 cases. the Committee retained Stutman, Treister & Glatt P.C. as counsel, and Lewis & Roca L.L.P. as co-counsel. The Eurofresh Inc., in its bankruptcy petition, said it has assets worth $50 million to $100 million and debts of $100 million to $500 million. FARMERS MUTUAL INSURANCE: AM Best Rates Financial Strength at B- ---------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B- (Fair) from B (Fair) and issuer credit rating to "bb-" from "bb" of Farmers' Mutual Insurance Company (Traverse City, MI). The outlook for both ratings is negative. The ratings reflect Farmers' Mutual's continued unfavorable operating performance trends that have caused surplus losses for five consecutive years, as well as its geographic concentration of risk within the northwestern portion of the lower peninsula of Michigan. This location exposes the company to frequent and severe weather-related events. These negative rating factors are partially offset by the company's low underwriting leverage and consistent balance sheet liquidity. However, Farmers' Mutual's recent capital losses and continued unfavorable underwriting performance support the rating outlook. FINLAY ENTERPRISES: Can Initially Use GE Capital's Cash Collateral ------------------------------------------------------------------ Hon. James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York authorized, on an interim basis, Finlay Enterprises, Inc., and its debtor-affiliates to: -- use cash collateral of the prepetition agent and prepetition lenders; and -- provide adequate protection to the prepetition agent and prepetition lenders and for any diminution in value of their interests in the prepetition collateral, including the cash collateral. A final hearing on the cash collateral motion is set for August 19, 2009, at 11:00 a.m. (Eastern Time), in this Court. Objections, if any, are due August 17, 2009, at 5:00 p.m. (Eastern Time). The Debtors are parties to the Fourth Amended and Restated Credit Agreement dated as of November 9, 2007, with General Electric Capital Corporation, as agent, L/C issuer, and lender, GE Capital Markets, Inc., as sole bookrunner and joint lead arranger, JPMorgan Securities Inc., as joint lead arranger, and Wachovia Bank, NA, as documentation agent, and the lenders that are parties thereto from time to time. As of Finlay's petition date, the outstanding principal amount of all loans under the prepetition credit agreement was not less than $37,500,000, and $8,500,281 face amount of issued and outstanding letters of credit. The Debtors also owe $24,745,869 under senior secured second lien notes and $176,590,830 under senior secured third lien notes. The Debtors granted security interests in and liens on substantially all of the Debtors' existing and after acquired personal and real property. The Debtors related that they had an arm's-length negotiation with the prepetition agents, prepetition lenders regarding the Debtors' use of cash collateral to fund the continued operation of the Debtors' businesses during the specified period. In connection with the use of the cash collateral, the Debtors are required to comply with these covenants: a) On or before August 17, 2009, the Court will have entered an order, in form and substance acceptable to the prepetition senior agent, approving sale procedures and scheduling an auction date and final sale hearing pursuant to the sale motion. b) By August 31, 2009, the Debtors will have completed an auction of substantially all of Debtors' assets. c) By September 1, 2009, the Court will have entered an order, in form and substance acceptable to the prepetition senior agent, approving the sale transaction. d) By September 3, 2009, the Debtors will close a sale transaction and deliver sufficient net proceeds of the sale to the prepetition senior agent in cash to repay all outstanding prepetition credit obligations in full. e) The Debtors and their advisors will provide the prepetition senior agent with telephonic reports of all sale efforts, expressions of interest and offers received periodically upon request. A full-text copy of the budget is available for free at: http://bankrupt.com/misc/FINLAY_Budget.pdf Finlay Enterprises, Inc. (OTC Bulletin Board: FNLY) through its wholly owned subsidiary, Finlay Fine Jewelry Corporation, is a retailer of fine jewelry operating luxury stand-alone specialty jewelry stores and licensed fine jewelry departments in department stores throughout the United States and achieved sales of $754.3 million in fiscal 2008. The number of locations at the end of the second quarter ended August 1, 2009, totaled 182, including 67 Bailey Banks & Biddle, 34 Carlyle and four Congress specialty jewelry stores and 77 licensed departments with The Bon Ton. The Company and seven affiliates filed for Chapter 11 on August 5, 2009 (Bankr. S.D.N.Y. Case No. 09-14873). Weil, Gotshal & Manges LLP, serves as bankruptcy counsel. Alvarez & Marsal North America, LLC, is engaged as restructuring advisor in the Chapter 11 case, and the firm's David Coles is appointed as chief restructuring officer. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Judge James Peck presides over the case. In its bankruptcy petition, Finlay Enterprises disclosed assets of $331,824,000 against debts of $385,476,000 as of July 4, 2009. As of the Petition Date, Finlay owes $38 million outstanding under a first lien credit agreement, $24.7 million under second lien notes, $176.6 million outstanding under third lien notes (in addition to $17.5 million to secured vendors), and $40.6 million under remaining unsecured obligations under the senior notes. FINLAY ENTERPRISES: Gets Sept. 21 Schedules Filing Extension ------------------------------------------------------------ The Hon. James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York extended until September 21, 2009, Finlay Enterprises, Inc., and its debtor-affiliates' time to file their (i) schedules of assets and liabilities; (ii) schedules of current income and current expenditures; (iii) schedules of executory contracts and unexpired leases; and (iv) statements of financial affairs. Finlay Enterprises, Inc. (OTC Bulletin Board: FNLY) through its wholly owned subsidiary, Finlay Fine Jewelry Corporation, is a retailer of fine jewelry operating luxury stand-alone specialty jewelry stores and licensed fine jewelry departments in department stores throughout the United States and achieved sales of $754.3 million in fiscal 2008. The number of locations at the end of the second quarter ended August 1, 2009, totaled 182, including 67 Bailey Banks & Biddle, 34 Carlyle and four Congress specialty jewelry stores and 77 licensed departments with The Bon Ton. The Company and seven affiliates filed for Chapter 11 on August 5, 2009 (Bankr. S.D.N.Y. Case No. 09-14873). Weil, Gotshal & Manges LLP, serves as bankruptcy counsel. Alvarez & Marsal North America, LLC, is engaged as restructuring advisor in the Chapter 11 case, and the firm's David Coles is appointed as chief restructuring officer. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Judge James Peck presides over the case. In its bankruptcy petition, Finlay Enterprises disclosed assets of $331,824,000 against debts of $385,476,000 as of July 4, 2009. As of the Petition Date, Finlay owes $38 million outstanding under a first lien credit agreement, $24.7 million under second lien notes, $176.6 million outstanding under third lien notes (in addition to $17.5 million to secured vendors), and $40.6 million under remaining unsecured obligations under the senior notes. FINLAY ENTERPRISES: Selling Orange Facility, Closing 129 Locations ------------------------------------------------------------------ Rob Varnon at The Connecticut Post Online reports that Finlay Enterprises, Inc., has put its repair and warehouse facility at 205 Edison Road in Orange up for sale. Finlay, The Connecticut Post says, is consolidating its operations while it goes through the bankruptcy process. It also filed plans to close 129 retail locations, the report states. Citing Angel Commercial senior vice president Brett Sherman, The Connecticut Post relates that there have been people looking at the place, which is listed for $5.5 million. Mr. Sherman said that the 75,530-square-foot facility is Class A warehouse and distribution space, and has bulletproof windows and reinforced walls and other security measures, the report states. Finlay Enterprises, Inc. (OTC Bulletin Board: FNLY) through its wholly owned subsidiary, Finlay Fine Jewelry Corporation, is a retailer of fine jewelry operating luxury stand-alone specialty jewelry stores and licensed fine jewelry departments in department stores throughout the United States and achieved sales of $754.3 million in fiscal 2008. The number of locations at the end of the second quarter ended August 1, 2009, totaled 182, including 67 Bailey Banks & Biddle, 34 Carlyle and four Congress specialty jewelry stores and 77 licensed departments with The Bon Ton. The Company and seven affiliates filed for Chapter 11 on August 5, 2009 (Bankr. S.D.N.Y. Case No. 09-14873). Weil, Gotshal & Manges LLP, serves as bankruptcy counsel. Alvarez & Marsal North America, LLC, is engaged as restructuring advisor in the Chapter 11 case, and the firm's David Coles is appointed as chief restructuring officer. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Judge James Peck presides over the case. In its bankruptcy petition, Finlay Enterprises disclosed assets of $331,824,000 against debts of $385,476,000 as of July 4, 2009. As of the Petition Date, Finlay owes $38 million outstanding under a first lien credit agreement, $24.7 million under second lien notes, $176.6 million outstanding under third lien notes (in addition to $17.5 million to secured vendors), and $40.6 million under remaining unsecured obligations under the senior notes. FLEETWOOD ENTERPRISES: Judge OKs Sale of Housing Business to Cavco ------------------------------------------------------------------ Cavco Industries, Inc., said a federal bankruptcy judge approved the sale of certain manufactured housing assets of Fleetwood Enterprises, Inc. to Cavco and an investment partner, Third Avenue Trust Value Fund, through FH Holding, Inc., their jointly owned corporation, headquartered in Phoenix, Ariz. FH emerged as the successful bidder for the assets during an auction sale held on August 10, 2009. FH will pay $26.6 million for the assets subject to customary closing conditions and certain post-closing purchase price adjustments. In addition, FH will assume certain liabilities of Fleetwood, including among other things, certain warranty and contractual obligations. The assets include seven operating manufactured housing plants, one office building, one idled plant, all related equipment, accounts receivable, inventory, certain trademarks and trade names, intellectual property, and specified contracts and leases. The operating manufactured housing plants are located in Nampa, Ida.; Woodburn, Ore.; Riverside, Calif.; Waco, Tex.; Lafayette, Tenn.; Douglas, Ga.; and Rocky Mount, Va. The idled plant, located in Woodland, Calif., was added to FH's bid during the auction. Joseph Stegmayer, Chairman, President and Chief Executive Officer commented, "We are pleased to have the opportunity to bring aboard Fleetwood's team of experienced, highly regarded people and to integrate the strong Fleetwood brand and family of product offerings with our own growing business. We have been patient in seeking additional growth opportunities and believe that this acquisition will be a positive long-term strategic move for Cavco and our shareholders." About Cavco Industries, Inc. Cavco -- http://www.cavco.com/-- is a producer of manufactured housing, park model homes, and vacation cabins in the United States. Headquartered in Phoenix, Ariz., Cavco has built a reputation for quality and value since it opened for business in 1965. Cavco's factory-built homes are produced under various trade names and in a variety of floor plans and price ranges. The company employs approximately 600 people and operates two manufacturing plants in the Phoenix area and one in Seguin, Tex. About Third Avenue Management Third Avenue Management manages approximately $13 billion of assets for private and institutional clients. Most or all of Third Avenue's proposed investment in FH Holding, Inc. will be made by Third Avenue Value Fund, the company's flagship mutual fund. FONTAINEBLEAU: Court OKs Genovese as Committee's Co-Counsel ----------------------------------------------------------- Pursuant to Section 327(a) of the Bankruptcy Code, the Bankruptcy Court has authorized the Official Committee of Unsecured Creditors in Fontainebleau Las Vegas Holdings LLC's Chapter 11 cases to retain Paul J. Battista, Esq., and the law firm of Genovese Joblove & Battista, P.A., as its co-counsel, nunc pro tunc to June 22, 2009. The limited objection to the Application filed by the Debtors is overruled. The Debtors asserted that the retention of two firms as co-counsel is unnecessary and will unduly burden the estate with excessive administrative expenses that may complicate its efforts to confirm a plan of reorganization. Genovese will be required to render, among others, these services to the Committee: (a) advise the Committee with respect to its rights, powers, and duties in the Chapter 11 cases; (b) assist and advise the Committee in its consultations with the Debtors relative to the administration of the Cases; (c) assist the Committee in analyzing the claims of the Debtors' creditors and in negotiating with the creditors; (d) assist with the Committee's investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors and of the operation of the Debtors' business; (e) assist the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to the use of cash collateral, debtor-in- possession financing, the liquidation of assets and the terms of a plan or plans of reorganization; (t) assist and advise the Committee with respect to its communications with the general creditor body regarding significant matters in these Cases; (g) represent the Committee at all hearings and other proceedings in the cases; (h) review and analyze all applications, motions, orders, statements of operations, and schedules filed with the Court and advise the Committee as to their propriety; (i) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; and (j) perform other legal services as may be required and are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code. The Firm will be paid based on its hourly rates: Professional Hourly Rate ------------ ----------- Paul J. Battista $525 Glenn D. Moses $435 Heather L. Harmon $330 Attorney $160 - $650 Associate Attorneys $160 - $350 Legal Assistants $85 - $160 The Debtors will pay Fox's fees and reimburse its expenses after the filing of interim or final fee application and a hearing consistent with the requirements of Sections 327, 330, and 331 of the Bankruptcy Code, Rules 2002 and 2016 of the Federal Rules of Bankruptcy Procedure and Local Rules 2016-1. Paul J. Battista, Esq., an attorney and shareholder of Genovese Joblove & Battista, P.A., assures the Court that his firm neither holds nor represents any interest adverse to the Debtors and is a "disinterested person" within the scope and meaning of Section 101(14) of the Bankruptcy Code. A search of GJB's conflicts check system and the responses from attorneys at GJB revealed certain connections with the Cases, none of which, according to Mr. Batista, impairs GJB's disinterestedness or constitutes any conflict of interest. A list of these connections is available for free at http://bankrupt.com/misc/FB_GJBRepresentations.pdf About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU: Court OKs Fox Rothschild as Co-Counsel ----------------------------------------------------- The Bankruptcy Court has authorized the Official Committee of Unsecured Creditors in Fontainebleau Las Vegas Holdings LLC's cases to retain Michael J. Viscount, Esq., and the law firm of Fox Rothschild, LLP, as its co-counsel nunc pro tunc to June 22, 2009. The limited objection to the Application filed by the Debtors is overruled. The Debtors asserted that the retention of two firms as co-counsel is unnecessary and will unduly burden the estate with excessive administrative expenses that may complicate its efforts to confirm a plan of reorganization. As co-counsel to the Committee, Fox is expected to: (a) advise the Committee with respect to its rights, powers, and duties in the Chapter 11 cases; (b) assist and advise the Committee in its consultations with the Debtors relative to the administration of the Cases; (c) assist the Committee in analyzing the claims of the Debtors' creditors and in negotiating with the creditors; (d) assist with the Committee's investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors and of the operation of the Debtors' business; (e) assist the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to the use of cash collateral, debtor-in- possession financing, the liquidation of assets and the terms of a plan or plans of reorganization; (t) assist and advise the Committee with respect to its communications with the general creditor body regarding significant matters in the Cases; (g) represent the Committee at all hearings and other proceedings in the Cases; (h) review and analyze all applications, motions, orders, statements of operations, and schedules filed with the Court and advise the Committee as to their propriety; (i) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; and (g) perform other legal services as may be required and are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code. In exchange for its services, Fox will be paid based on its hourly rates: Professional Hourly Rate ------------ ----------- Michael J. Viscount, Jr. $540 Josefina Fernandez McEvoy $600 Josh Klein $335 Kelly M. Cooper $220 Attorneys $220 - $675 Associate Attorneys $220 - $450 Legal Assistants $50 - $265 The Debtors will pay Fox's fees and reimburse its expenses incurred after the filing of interim or a final application and a hearing consistent with the requirements of Sections 327, 330, and 331 of the Bankruptcy Code, Rules 2002, 2016 of the Federal Rules of Bankruptcy Procedure and Local Rules 2016-1. Michael J. Viscount, Jr., Esq., an attorney and shareholder at Rothschild LLP, relates that Fox does not have any connections with the Debtors, their creditors, or any other party-in- interest, or their attorneys and accountants, or the United States Trustee or any person employed in the office of the U.S. Trustee, except HSH NordBank. Prior to the Petition Date, Mr. Vicount relates, one or more of the Debtors filed a law suit in Nevada against various of the Debtors' lenders including HSH Nor Bank. Fox was retained and served as local Nevada counsel to Kaye Scholer LLP on behalf of HSH. The representation of HSH in that matter was directed by Kaye Scholer. Fox had no direct contact with HSH, received no confidential information from HSH concerning the matter, and the services provided were limited to filing of pleadings in the Federal Court located in Las Vegas, Mr. Viscount relates. The only lawyers at Fox involved were three located in the firm's Las Vegas office and one attorney in Philadelphia who secured the representation, he adds. The law suit was dismissed by the Debtors prior to the Petition Date at which time the involvement of Fox ceased with respect to the claims of the Debtors against HSH. In addition to the Debtors' lawsuit, HSH was also sued in Nevada by other lender parties in connection with extensions of credit to the Debtors. Fox was in the process of finalizing the terms of the same local counsel representation for Kaye Scholer in the Lender's Action until the relationship was terminated by Kaye Scholer. Out of an abundance of caution, Fox has set up an ethical screen around the four lawyers who provided local counsel services in Nevada. The four lawyers will have no role whatsoever in the representation of the Committee in the Cases, and no member of the firm's Financial Services and Bankruptcy Department will have any access to the firm's files of HSH, Mr. Viscount informs the Court. Against this backdrop, Mr. Viscount assures the Court that his firm does not hold any interest adverse to the Debtors and is a "disinterested person" within the scope and meaning of Section 101(14) of the Bankruptcy Code. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU: Engagement of Moelis Approved on Interim Basis ------------------------------------------------------------- The Bankruptcy Court issued a second interim order allowing the Debtors to employ Moelis & Company LLC, as their financial advisors and investment bankers, nunc pro tunc to the Petition Date. The Court authorized the Debtors to pay Moelis the firm's "Monthly Fee" under the Engagement Letter plus expenses incurred, until the conclusion of the final hearing on the application. No other fees described in the Application were approved on an interim basis. A final hearing on the Application is scheduled for August 19, 2009, at 2:00 p.m., (Eastern Time). In the event the Application is not granted on a final basis, Moelis will be authorized to submit a fee application with the Court for compensation for services rendered in the period between the Petition Date and the Final Application Hearing, including the right to seek payment of a Restructuring Fee, Capital Transaction Fee or Sale Transaction Fee, as applicable. Entry of the Interim Order is without prejudice to the rights of any party-in-interest who has interposed a timely objection to the Application, and any objection will be considered on a de novo standard at the Final Application Hearing. Moelis will assist the Debtors in the restructure of outstanding debt obligations, raising additional capital and consummating a sale transaction, in a short timeframe, to help the Debtors reorganize and emergence from Chapter 11. Specifically, Moelis is expected to: (a) undertake, in consultation with members of management of the Debtors, a comprehensive business and financial analysis of the Debtors; (b) review and analyze the Debtors' assets and their operating and financial strategies; (c) review and analyze the business plans and financial projections prepared by the Debtors, including testing assumptions and comparing those assumptions to historical and industry trends of the Debtors; (d) evaluate the Debtors' debt capacity and assist in the determination of an appropriate capital structure for the Debtors; (e) identify, initiate, review, negotiate, and evaluate any restructuring transaction, sale transaction or capital transaction, or any combination, and develop and evaluate alternative proposals for a restructuring transaction, sale transaction or capital transaction, or their combination; (f) solicit and evaluate indications of interest and proposals regarding any Restructuring Transaction, Sale Transaction or Capital Transaction from current or potential lenders, equity investors, acquirors or strategic partners; (g) assist the Debtors in developing strategies to effectuate any Restructuring Transaction, Sale Transaction or Capital Transaction, including financing alternatives; (h) advise and assist the Debtors in the course of their negotiation of any Restructuring Transaction, Sale Transaction or Capital Transaction and participate in those negotiations, as requested; (i) determine and evaluate the risks and benefits of considering, initiating and consummating any Restructuring Transaction, Sale Transaction or Capital Transaction; (j) determine values or ranges of values for the Debtors and any securities that the Debtors offer or propose to offer in connection with a Capital Transaction; (k) in coordination with the Debtors, prepare and implement a marketing plan and prepare one or more memoranda, called selling memos, which describe assets, properties or businesses to be sold in any Sale Transaction; (l) working with the Debtors' management in preparing one or more memoranda, called information memeo, describing the Debtors and their businesses for use in any potential Capital Transaction; (m) contact potential acquirors or investors that Moelis and the Debtors have agreed may be appropriate, and in rendering the services, Moelis may meet with representatives of those acquirors or investors and provide the representatives with the selling memo or information memo and additional information about the Debtors' assets, properties or businesses as may be appropriate and acceptable to the Debtors, subject to customary business confidentiality agreements in form and substance approved by the Debtors; (n) assist the Debtors in the development, preparation and distribution of selected information, documents and other materials to create interest in and to consummate any Restructuring Transaction, Sale Transaction or Capital Transaction; (o) assist the Debtors in valuing their assets or business, provided that any real estate or fixed asset appraisals will be undertaken by outside appraisers, separately retained and compensated by the Debtors; (p) be available at the Debtors' request to meet with Debtors' management, board of directors or board of managers, creditor groups, equity holders, any official committees appointed in these Chapter 11 cases, or other parties, to discuss any Restructuring Transaction, Sale Transaction or Capital Transaction; (q) if requested by the Debtors, participate in hearings before the Bankruptcy Court and provide relevant testimony; and (r) provide other financial advisory and investment banking services as may be agreed upon by Moelis and the Debtors. The Debtors relate that Moelis will provide services concurrently with the Citadel Derivatives Group LLC. The Debtors believe that it is in the best interests of their estates to retain both Moelis and CDRG as financial advisors and investment bankers, and have determined that each possess complementary, but distinct, expertise necessary to assist them in effectuating a Restructuring Transaction, Capital Transaction or Sales Transaction. The Debtors have proposed to pay Moelis based on this fee structure: (A) Monthly Fee of $150,000 whether or not a Restructuring Transaction, Sale Transaction or Capital Transaction has taken place or will take place, from the Petition Date until the end of the term of the Engagement Letter. All Monthly Fees paid by the Debtors to Moelis will be credited against any Restructuring Fee, Capital Transaction Fee or Sale Transaction Fee payable under the Engagement Letter, provided, however, that credit will not apply to the extent that, and in the amount that, any Restructuring Fee, Capital Transaction Fee or Sale Transaction Fee is not entirely approved by the Bankruptcy Court. (B) Restructuring Fee of $9,000,000 in cash, if a Restructuring Transaction is consummated, to be paid immediately upon any closing of a Restructuring Transaction. A separate Restructuring Fee will be payable in respect of each Restructuring Transaction in the event more than one Restructuring Transaction will occur. (C) Capital Transaction Fee, in cash, equal to: (1) 0.60% of the aggregate amount of new debt raised in a Capital Transaction in the form of secured, first lien, non-convertible debt, (2) 1.05% of the aggregate amount of new debt raised in a Capital Transaction in the form of senior unsecured, non- convertible debt, (3) 1.35% of the aggregate amount of new debt raised in a Capital Transaction in the form of subordinated and/or junior lien, non-convertible debt, (4) 1.50% of the aggregate amount of new debt raised in a Capital Transaction in the form of convertible debt, (5) 2.25% of the aggregate amount or face value of new capital raised in a Capital Transaction in the form of non-convertible preferred equity, including preferred equity in the form of stock or partnership, membership or limited liability company interests, equity-linked securities, options, warrants or other rights to acquire preferred equity interests in the Debtors, and (6) 2.40% of the aggregate amount or face value of new capital raised in a Capital Transaction in the form of common equity, including common equity in the form of stock or partnership, membership or limited liability company interests, equity-linked securities, options, warrants or other rights to acquire common equity interests in the Debtors, or in the form of convertible preferred equity, including convertible preferred equity in the form of stock or partnership, membership or limited liability company interests; Each percentage, however, will be reduced: (a) with respect to clauses (5) or (6), by 50% with respect solely to new preferred equity or common equity raised in a Capital Transaction from: * any person or entity that is an existing investor or holder of debt of the Debtors, other than from Jeffrey Soffer or any entity that Jeffrey Soffer controls, or * indemnified persons specified in the Engagement Letter, or (b) to 0% with respect solely to new debt or new capital raised in a Capital Transaction from Jeffrey Soffer or any entity that Jeffrey Soffer controls. The Capital Transaction Fee will be paid in cash immediately upon any closing of a Capital Transaction. A separate Capital Transaction Fee will be payable in respect of each Capital Transaction in the event that more than one Capital Transaction will occur. (D) Sale Transaction Fee, in cash and in an amount equal to 0.75% of the Transaction Value. In the event, however, that the Sale Transaction consists of (i) a liquidation in a bankruptcy case under chapter 7, or (ii) a credit bid by any secured lender where the credit bid consists solely of secured debt, the cash fee will be an amount equal to 0.60% of the Transaction Value, provided, further, that, any Sale Transaction Fee will not exceed $9,000,000. The Sale Transaction Fee will be paid in cash immediately upon any closing of a Sale Transaction. A separate Sale Transaction Fee will be payable in respect of each Sale Transaction if more than one Sale Transaction occurs. About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. An official committee of unsecured creditors has been appointed in the Chapter 11 cases. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FORD MOTOR: Likely to Close Volvo Sale This Year, Sweden Says ------------------------------------------------------------- Niklas Magnusson and Keith Naughton at Bloomberg News report Swedish Industry Ministry State Secretary Joeran Haegglund said Ford Motor Co. is likely to complete the sale of its Volvo Cars unit in the latter part of this year. Mr. Haegglund declined to name any suitors for Gothenburg, Sweden-based Volvo Cars. Bloomberg relates Mr. Haegglund said Ford isn;t in the same rush to dispose of the unit as General Motors Co. is with its proposed sale of Saab Automobile. "We're in touch with Ford and note all rumors," Bloomberg quoted the Mr Haegglund as saying. "Ford has a slower pace than GM and Saab and we expect a sale will be completed in the latter part of the year." Citing Dagens Industri newspaper, Bloomberg discloses, Chinese carmaker Geely Automotive Holdings Ltd. wants to buy a majority of Volvo with an unidentified Swedish investor, possibly including state pension funds, and let Ford keep a stake. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The Company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. As reported by the Troubled Company Reporter on April 15, 2009, Standard & Poor's Ratings Services said it raised its ratings on Ford Motor Co. and related entities, including the corporate credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank PLC, Ford Credit's European bank, are also unchanged, at 'B-', maintaining the one-notch rating differential between FCE and its parent Ford Credit. S&P said that the outlook on all entities is negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FRONTIER AIRLINES: Republic Beats Southwest in Bankruptcy Auction ----------------------------------------------------------------- Frontier Airlines Holdings, Inc. said August 13 that Republic Airways Holdings, Inc. has been declared the winning bidder in the auction to acquire Frontier. The auction was conducted under procedures established in Frontier's Chapter 11 bankruptcy cases. Republic submitted the highest and best bid, which included substantial improvements from its original investment proposal. Republic waived virtually all conditions precedent to closing and has advised Frontier that it yesterday received Hart-Scott- Rodino antitrust clearance for the transaction. Republic also agreed to waive distributions on its $150 million prepetition unsecured claim, which is expected to result in a 94 percent increase in the distribution to Frontier's general unsecured creditors. The selection of Republic's bid was made in consultation with the Creditors' Committee appointed in Frontier's Bankruptcy Case. "We appreciate the participation of both Republic and Southwest Airlines in our auction process," said Frontier President and Chief Executive Officer Sean Menke. "We are pleased to have Republic as a plan sponsor that will allow Frontier to emerge from bankruptcy as a well-financed, competitive and sustainable airline. This plan provides for Frontier and Lynx to maintain normal operations as a subsidiary of Republic, with further capital and growth opportunities in the future. This is also great news because it is expected to preserve the jobs of most Frontier employees, who have worked tirelessly to further build our unique brand and deliver outstanding service to our customers. I would be remiss if I didn't mention my 5,000 plus team members. [The] announcement is the beginning of a wonderful new chapter for this proud organization and would not have happened without the hard work, dedication and sacrifice of them all." "I look forward to welcoming Frontier to our Republic family," said Bryan Bedford, Chairman, President and CEO of Republic. "Frontier has made impressive strides in returning to sustained profitability in a challenging and uncertain economic environment. We congratulate the employees of Frontier. Their commitment and perseverance during the bankruptcy process has allowed the Frontier brand to survive and thrive." Frontier's unsecured creditors will continue voting on Frontier's current proposed Plan of Reorganization, which is premised on a Republic acquisition. Pursuant to its investment agreement, Republic has agreed to purchase 100 percent of the stock of Frontier Holdings upon its emergence from bankruptcy for $108.75 million, so long as certain conditions are met. Frontier Airlines Holdings would become a wholly-owned subsidiary of Republic, an airline holding company that owns Chautauqua Airlines, Midwest Airlines, Mokulele Airlines, Republic Airlines and Shuttle America. Frontier currently expects to emerge from Chapter 11 this autumn. Frontier Supporters: Save the Airline In light of the proposed takeover of Frontier Airlines, more than 80 employees and supporters of the airline marched down in Denver, Colorado on August 4, 2009, in efforts to send messages to save the Company and their jobs. Participants held signs that said "Keep your khakis off our animals" and "Save Flip the Dolphin!", blew noisemakers and chanted "Save our tails," in reference to the well-known animals on Frontier's aircraft. In separate letters filed with the Court, Frontier workers and customers expressed concern over the effects of the proposed acquisition, notably endorsing Republic Holdings as the better bidder. According to Frontier First Pilot Officer Beverly Sinclair, Republic Holdings' takeover plan is designed to "provide a path for Frontier Airlines to continue to operate in its current mode." "Under the Republic Holdings plan, jobs will be retained, competition will flourish, Colorado will retain a long time business asset, [and] teamwork and entrepreneurial spirit will be rewarded," Ms. Sinclair noted. "Please evaluate this case with American entrepreneurial ideals in mind, as well as the jobs that are on the line," she told the Court. Steven Stewart, a Frontier airlines frequent flier, asked Judge Drain to "look beyond the strictly business and legal aspects" of the potential takeover and think about the "other emotional considerations," as the loss of the airline will be "extremely tough for the Denver community." "Frontier's employees deserve better than the eventual fate waiting for them at Southwest Airlines," Mr. Stewart averred. About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Union Contingencies Sink Southwest Bid --------------------------------------------------------- Frontier Airlines Holdings, Inc. said August 13 that Republic Airways Holdings, Inc. has been declared the winning bidder in the auction to acquire Frontier. Republic beat Southwest Airlines at the auction. Southwest Airlines formally submitted on August 10, 2009, a bid of more than $170 million in cash to take over Frontier Airlines -- at least $56 million more than it initially offered and $61 million more than what rival bidder Republic Airways Holdings had proposed. "We said all along that we would only move forward on this deal if it proved to be the right decision for our Employees and financially prudent for our Company," said Gary Kelly, Southwest's Chairman of the Board, President, and CEO. "We have a mission to preserve and protect our Culture and the best interests of our Employees, Customers, and Shareholders. This was a great opportunity that required us to act fast. A lot of people worked very hard with every intention of making this work. We were fortunate to be in a position to examine the acquisition to see if it was the right decision for Southwest Airlines. We chose not to amend our bid to remove the labor requirement, a key reason our bid was not selected. Our congratulations to Republic Airways and Frontier Airlines." As stated in its initial statement of interest on July 30, 2009, Southwest said there would be several contingencies to be resolved for a deal to go through. Key in its position, Southwest was not willing to remove the need for the two Pilot Unions to reach agreement. Southwest says its Culture and relationships with its Employees are too important to compromise. "Southwest remains committed to serving the Denver market with our low fares and excellent Customer Service," Kelly said. "We began serving Denver in 2006 with just 13 flights and have grown to offer 112 nonstop daily flights today. We are very pleased with the response we have seen to our service and growth in Denver, and we will continue to compete vigorously in the market." One of the contingencies in Southwest's proposal was that labor groups from the two airlines would need to reach an agreement on how the two Pilot Unions (SWAPA and FAPA) would work together. Despite a good faith and diligent effort by all involved, including the top leadership of the Southwest Airlines Pilots Association (SWAPA) and the Frontier Airlines Pilots Association (FAPA), who labored long into the night, the two unions were not able to come to an agreement before the auction deadline. As a result, Southwest's bid was deemed unacceptable. According to Mary Schlangenstein at Bloomberg News, Southwest Airlines Co., prior to the bidding, said it was "still a participant" in a bankruptcy auction to buy Frontier Airlines Holdings Inc. after the Southwest Airlines Pilots' Association a union reported an impasse in talks to combine the carriers' pilot groups. Southwest, Bloomberg relates, told its pilot union it would seek an extension of the auction until the two sides agree on how to mesh seniority lists. Southwest Airlines resumed talks with its pilots union last week to consider a contract proposal from the union. The airline and the Southwest Airlines Pilots' Association have been engaged in negotiations on a new contract agreement since it became amendable in September 2006. However, talks had ended in June after 51% of pilots voted against a new five-year agreement offered by the airline. According to Ms. Schlangenstein should Southwest Airlines succeed in acquiring Frontier Airlines, the pilots will have to negotiate two more agreements. She said Southwest would have to resolve (i) how the two sets of pilots would operate until Frontier is merged into Southwest, and (ii) how the pilot groups are combined on a single seniority list. About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Court OKs Entry Into ACG Aircraft Lease ---------------------------------------------------------- Judge Robert Drain approved in their entirety, and authorized Frontier Airlines Inc. and its affiliates to enter into, (i) a lease with Wells Fargo Bank Northwest, National Association, involving one Airbus A320-214 aircraft on the terms contemplated by the Letter of Intent between Frontier and ACG Trust III dated July 10, 2009, and (ii) an aircraft lease agreement on the terms contemplated by the ACG Term Sheet. Wells Fargo is the owner trustee for the benefit of ACG as lessor, for whom Aviation Capital Group Corp. is servicer. Pursuant to Sections 105 and 362(d)(1) of the Bankruptcy Code, the Court modified the automatic stay to the extent necessary to enable Frontier, Wells Fargo and ACG, to perform under the ACG Term Sheet and the Aircraft Lease Agreement. Upon the occurrence of a default under the terms of the Agreement, the Stay will also be modified to the extent necessary to permit Wells Fargo to enforce any and all of their rights and remedies under the Agreement, including the suspension of its performance and or termination. The Debtors' and ACG's rights, obligations, remedies and protections in the Agreement will survive the conversion, dismissal or closing of the Chapter 11 cases, appointment of a trustee, the confirmation of a plan or plans of reorganization, or the substantive consolidation of the Cases. In the event of a liquidation of Frontier's business or a conversion of its cases into a Chapter 7, Wells Fargo will have no claims or causes of action arising under or relating to the lease of the Aircraft including any general unsecured claims. However, Wells Fargo will be entitled to an administrative expense claim for: * any unpaid lease rent and maintenance rent with respect to the period up to, and including, the surrender and return of the Aircraft and all records; and * any loss or damage sustained or incurred resulting from Frontier's failure to maintain the Aircraft. In addition, Wells Fargo will be entitled to retain any deposit payment or payment of lease rent or maintenance rent already having been paid by the Debtors through the date of surrender of the Aircraft. In the event of any inconsistency between the provisions of the Court's Order and the ACG Term Sheet or the Aircraft Lease Agreement, the provisions of the Court's Order will govern, the Court ruled. About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Records 92% Mainline Load Factor for July ------------------------------------------------------------ Frontier Airlines Holdings, Inc. (OTC Bulletin Board: FRNTQ) announced preliminary traffic results for July 2009 for both Frontier's mainline operation and its wholly-owned subsidiary, Lynx Aviation. The Denver-based carrier reported a record mainline load factor of 92.0% for the month. Mainline Results for July 2009: * Revenue passenger miles decreased 12.0 percent to 862,264,000 and capacity (as measured by available seat miles) was down 16.0 percent to 937,415,000 from the same period last year. This resulted in a record load factor of 92.0 percent, an increase of 4.2 points from July 2008. * The airline carried 961,418 passengers, a 10.5 percent decrease from the same period last year. * The airline's average length of haul decreased 1.8 percent to 897 miles. Lynx Aviation Results for July 2009: * Revenue passenger miles increased 14.1 percent to 42,259,000 and capacity was up 6.6 percent to 55,007,000. This resulted in a record load factor for July 2009 of 76.8 percent, an increase of 5.0 points over July 2008. * Lynx carried 127,378 passengers, a 17.4 percent increase from July 2008. * The airline's average length of haul decreased 2.6 percent to 332 miles. Frontier estimates that mainline passenger unit revenue decreased year-over-year by 7 to 8 percent in the month of July 2009. These tables represent comparisons for the month of June year- over-year, fiscal year-to-date and calendar year-to-date traffic results for Frontier's mainline operations and for Lynx. Frontier Airlines Mainline Operations Increase/ July 2009 July 2009 (Decrease) Percent --------- --------- ---------- ------- Available Seat Miles 937,415,000 1,115,427,000 (178,012,000) (16.0%) Revenue Passenger Miles 862,264,000 979,767,000 (117,503,000) (12.0%) Load Factor 92.0% 87.8% 4.2 points NA Revenue Passengers Carried 961,418 1,073,624 (112,206) (10.5%) Passenger Yield (cents) 10.27 12.08 (1.81) (15.0%) Passenger Revenue Per Avail. Seat Mile (cents) 9.44 10.61 (1.17) (11.0%) Average Length of Haul 897 913 (16) (1.8%) Fiscal Fiscal Increase/ YTD 2010 YTD 2009 (Decrease) Percent ---------- ---------- ---------- ------- Available Seat Miles 3,635,286,000 4,299,717,000 (664,431,000) (15.5%) Revenue Passenger Miles 3,115,046,000 3,642,386,000 (527,340,000) (14.5%) Load Factor 85.7% 84.7% 1.0 points NA Revenue Passengers Carried 3,459,914 3,903,906 (443,992) (11.4%) Passenger Yield (cents) 9.60 10.96 (1.36) (12.4%) Passenger Revenue Per Avail. Seat Mile (cents) 8.23 9.28 (1.05) (11.3%) Average Length of Haul 900 933 (33) (3.5%) Calendar Calendar Increase/ YTD 2009 YTD 2008 (Decrease) Percent ---------- ---------- ---------- ------- Available Seat Miles 6,244,883,000 7,414,144,000 (1,169,261,000) (15.8%) Revenue Passenger Miles 5,060,822,000 6,083,169,000 (1,022,347,000) (16.8%) Load Factor 81.0% 82.1% (1.1) NA Revenue Passengers Carried 5,619,288 6,380,684 (761,396) (11.9%) Passenger Yield (cents) 9.86 10.88 (1.02) (9.4%) Passenger Revenue Per Avail. Seat Mile (cents) 7.99 8.93 (0.94) (10.5%) Average Length of Haul 901 953 (52) (5.5%) Lynx Aviation Increase/ July 2009 July 2009 (Decrease) Percent --------- --------- ---------- ------- Available Seat Miles 55,007,000 51,588,000 3,419,000 6.6% Revenue Passenger Miles 42,259,000 37,040,000 5,219,000 14.1% Load Factor 76.8% 71.8% 5.0 points NA Revenue Passengers Carried 127,378 108,492 18,886 17.4% Passenger Yield (cents) 18.71 24.22 (5.51) (22.7%) Passenger Revenue Per ASM (cents) 14.38 17.39 (3.01) (17.3%) Average Length of Haul 332 341 (9) (2.6%) Fiscal Fiscal Increase/ YTD 2010 YTD 2009 (Decrease) Percent ---------- ---------- ---------- ------- Available Seat Miles 203,294,000 184,296,000 18,998,000 10.3% Revenue Passenger Miles 132,538,000 119,164,000 13,374,000 11.2% Load Factor 65.2% 64.7% 0.5 points NA Revenue Passengers Carried 392,301 343,659 48,642 14.2% Passenger Yield (cents) 18.81 22.61 (3.80) (16.8%) Passenger Revenue Per ASM (cents) 12.26 14.62 (2.36) (16.1%) Average Length of Haul 338 347 (9) (2.6%) Calendar Calendar Increase/ YTD 2009 YTD 2008 (Decrease) Percent ---------- ---------- ---------- ------- Available Seat Miles 340,039,000 332,521,000 7,518,000 2.3% Revenue Passenger Miles 205,999,000 208,719,000 (2,720,000) (1.3%) Load Factor 60.6% 62.8% (2.2 points) NA Revenue Passengers Carried 605,960 546,111 59,849 11.0% Passenger Yield (cents) 19.84 20.74 (0.90) (4.3%) Passenger Revenue Per ASM (cents) 12.02 13.02 (1.0) (7.7%) Average Length of Haul 340 382 (42) (11.0%) About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Teamsters to Hold Vote on New Contract Aug. 20 ----------------------------------------------------------------- Frontier Airlines and the International Brotherhood of Teamsters, Local 961, announced on August 6 entry into a consensual, long- term labor agreement and a comprehensive settlement of the Company's litigation under Section 1113 of the Bankruptcy Code. The agreement modifies the wage and benefit reductions Frontier obtained from its IBT-represented employees under a Bankruptcy Court order last November. The new agreement's modified wage and benefit reductions are comparable to the consensual reductions Frontier has obtained from its other employee groups. The settlement, if ratified, also will resolve the ongoing appeals of last year's Bankruptcy Court order. The proposed agreement, which is endorsed and supported by IBT leadership, will now be put before Frontier's maintenance employees for a ratification vote. The IBT anticipates it will hold the ratification vote on the agreement and count ballots by August 20. "Frontier and the IBT worked together to negotiate an agreement that takes into account the best interests of Frontier, the IBT and, most importantly, all of our maintenance employees," said Frontier President and CEO Sean Menke. "I applaud the IBT leadership for working with us to reach this agreement. It provides us with cost assurances and labor certainty as we proceed with the upcoming auction process and our anticipated emergence from bankruptcy." "The Teamsters Union and its members understand the importance to our members and to Frontier of this agreement," said Matthew Fazakas, President and Principal Officer of Teamsters Local 961. "On behalf of the IBT leadership, we fully endorse this agreement and will work to achieve ratification as promptly as possible." About Frontier Airlines Holdings Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ) -- http://www.FrontierAirlines.com/-- is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. In conjunction with a fleet of 10 Bombardier Q400 aircraft operated by Lynx Aviation -- a subsidiary of Frontier Airlines Holdings, Inc. -- Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. Frontier Airlines and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008 (Bankr. S.D.N.Y. Case No. 08-11297 thru 08-11299). Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. The Debtors' exclusive period to file a plan of reorganization will expire on October 9, 2009. Their exclusive period to solicit and obtain acceptances of that plan will expire December 9, 2009. Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Frontier Airlines Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Judge Gropper Declines to Drop SPE's Ch. 11 Cases ----------------------------------------------------------------- Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York denied the motions filed by ING Clarion Capital Loan Services; Helios AMC, LLC; Metropolitan Life Insurance Company; and KBC Bank N.V. seeking to dismiss the Chapter 11 cases of some affiliates of General Growth Properties, Inc. Each of ING Clarion, Helois, MetLife and KBC Bank is a secured lender with a loan to one of the Debtors whose Chapter 11 cases they asked to be dismissed. The primary ground on which dismissal is sought is that the Subject Debtors' cases were filed in bad faith. ING Clarion also asserted that one of the Subject Debtors, Lancaster Trust, was ineligible to file for bankruptcy because Lancaster Trust as an Illinois land trust. ING Clarion sought for the dismissal of the Chapter 11 cases of Bakersfield Mall LLC; RASCAP Realty, Ltd.; Visalia Mall, L.L.C.; GGP-Tucson Mall L.L.C.; Lancaster Trust; HO Retail Properties II Limited Partnership; RS Properties Inc.; Stonestown Shopping Center L.P.; and Fashion Place, LLC. Helios sought for the dismissal of the Chapter 11 cases of Faneuil Hall Marketplace, LLC; and Saint Louis Galleria L.L.C. MetLife and KBC Bank sought for the dismissal of the Chapter 11 cases of Providence Place Holdings LLC; Rouse Providence LLC; White Marsh Mall LLC; White Marsh Mall Associates; White Marsh Mall Phase II Associates; White Marsh General Partnership; Howard Hughes Properties, Limited Partnership; 10000 West Charleston Boulevard LLC; 9901-9921 Covington Cross, LLC; and 1120/1140 Town Center Drive, LLC. ING Clarion, Helois, MetLife and KBC Bank contended that the Chapter 11 filings of the Subject Debtors were, in effect, premature on the grounds that the Subject Debtors were not in financial distress at the time of filing, where the prospect of liability was speculative, and where there was evidence that the filing was designed to obtain a litigation advantage. Judge Gropper, in a 47-page memorandum of opinion, held that the record on the Dismissal Motions demonstrates that the Subject Debtors were in varying degrees of financial distress in April 2009. Loans to four of the Subject Debtors had cross-defaulted to the defaults of affiliates or would have been in default as a result of other bankruptcy petitions. Of the loans to the remaining sixteen Subject Debtors, one had gone into hyper- amortization in 2008. Interest had increased by 4.26%. Five of the Subject Debtors had mortgage debt maturing or hyperamortizing in 2010, two in 2011, and one in 2012. The remaining seven Subject Debtors were either guarantors on maturing loans of other entities or their property was collateral for a loan that was maturing, or there existed other considerations that in the Debtors' view placed the loan in distress, like a high loan-to- value ratio. Judge Gropper pointed out that the Debtors' determination that the Subject Debtors were in financial distress was made in a series of Board meetings following substantial financial analysis. The Debtors have established that in late 2008 they hired a team of advisors to assist in the evaluation of either an in-court or an out-of-court restructuring. The team included Miller Buckfire as restructuring advisor, AlixPartners LLP as financial advisor, and both Weil Gotshal & Manges and Kirkland & Ellis as legal advisors. Judge Gropper found that neither ING Clarion, Helois or MetLife has establish that the Debtors' procedures for determining whether to file the individual Subject Debtors were unreasonable or that the Debtors were unreasonable in concluding that the disarray in the financial market made it uncertain whether they would be able to refinance debt years in the future. There was no evidence, Judge Gropper pointed out, to counter the Debtors' demonstration that the commercial mortgage-backed securities market, in which they historically had financed and refinanced most of their properties, was "dead" as of the Petition Date, and that no one knows when or if that market will revive. Indeed, he said, at the time of the hearings on the Dismissal Motions, it was anticipated that the CMBS market would worsen, and there is no evident means of refinancing billions of dollars of real estate debt coming due in the next several years. Judge Gropper also found that ING Clarion, Helios and MetLife do not contend that the parent companies acted in bad faith in filing their own Chapter 11 petitions. The parent companies, Judge Gropper noted, depended on the cash flow from the subsidiaries, but much of the project-level debt was in default. Faced with the unprecedented collapse of the real estate markets, and serious uncertainty as to when or if they would be able to the refinance the project-level debt, the Debtors' management had to reorganize the Group's capital structure, Judge Gropper pointed out. ING Clarion, Helios and MetLife, he noted, do not explain how the billions of dollars of unsecured debt at the parent levels could be restructured responsibly if the cash flow of the parent companies continued to be based on the earnings of subsidiaries that had debt coming due in a period of years without any known means of providing for repayment or refinance. Judge Gropper also rejected arguments that a plan was objectively futile since it could not be confirmed over certain creditors' opposition, noting that the Bankruptcy Code did not require that a debtor prove that a plan is confirmable in order to file a petition, and that litigation posturing about plan opposition did not mean that a consensus could not be reached later in a case. It is clear that ING Clarion, Helios and MetLife have been inconvenienced by the Chapter 11 filings, Judge Gropper noted. However, he ruled that inconvenience to a secured creditor is not a reason to dismiss a Chapter 11 case. He pointed out that the salient point of the Dismissal Motions is that the fundamental protections that ING Clarion, Helios and MetLife negotiated and that the special purpose entity structure represents are still in place and will remain in place during the Chapter 11 cases, including protection against the substantive consolidation of the project-level Debtors with any other entities. Judge Gropper clarified that nothing in his Memorandum of Opinion implies that the assets and liabilities of any of the Subject Debtors could properly be substantively consolidated with those of any other entity. On the argument that Lancaster Trust is not eligible to file for bankruptcy, Judge Gropper held that there is ample evidence in the record that Lancaster Trust is a profit-making enterprise and that its purpose goes beyond merely conserving a trust res or holding title to land. As owner and operator of the Park City Mall, he noted that Lancaster Trust is an active participant in various business activities aimed at earning a profit. Lancaster Trust, he added, is the named lessor in leases with its tenants, the borrower under a loan agreement, party to various service contracts, and explicitly authorized to conduct business in Pennsylvania. Judge Gropper thus held that Lancaster Trust is a business trust eligible to file under Chapter 11. "We are pleased with the court's decision and we look forward to moving ahead with the restructuring of the Company," Adam Metz, chief executive officer of General Growth Properties, Inc., said in a press release. Morrison & Foerster's Observations In a statement, Morrison & Foerster, advisor to major creditors in General Growth Properties' case, said Judge Gropper's decision not to dismiss any of the GCP special purpose entity subsidiaries from the bankruptcy comes is not surprising and the result is clear. The decision, according to the statement, is wholly consistent with the judge's statements and demeanor since the outset of the case. Judge Gropper's observations about the CMBS structure, the "roadblocks" to GGP's attempts to refinance its CMBS debt, the practical difficulties of negotiating with CMBS servicers in advance of an imminent default and the "unprecedented collapse" of the real estate finance market and the "disarray" in the financial markets make for interesting reading. The judge's detailed discussion of the steps taken by GGP in analyzing whether and which entities to file, and how to go about it, also makes for interesting reading. But the result is clear. The court found that the filing of an SPE subsidiary can be made in the context of, and not in isolation from, the entire "group" of GGP entities, and that the "independent" directors and managers could/should take that into account. And the judge sent a reminder to lenders that "independent" directors and managers are not there solely to protect the interests of secured creditors but have fiduciary duties in their decision making process. Interestingly, this judge was convinced that the last minute "replacement" of these SPE directors was not an event demonstrating "bad faith," but a good thing, because the new directors were an upgrade over the original directors, with much more background and experience in the real estate industry. The judge in various places in his decision-and consistent with his prior statements in the case-goes out of his way to throw a bone to the SPE structure (and the CMBS industry) by pointing out that "fundamental protections . . . that the SPE structure represents are still in place and will remain in place during" a Chapter 11 case. The judge views those protections to include an insulation from substantive consolidation of the assets and liabilities of the various SPE entities (at this early date in the case, no substantive consolidation motions have been filed) as well as rights to adequate protection and post-petition interest and fees for oversecured creditors. ("Secured creditors' access to their collateral may be delayed by a filing, but secured creditors have a panoply of rights" and while the secured creditors "have been inconvenienced" by the filings-such as by having cash flows interrupted and special servicers appointed-they still have typical bankruptcy protections.) The court pointed out that earlier in the case during the cash collateral fight, where cash was upstreamed from the SPE's to the parent GGP entity, that the bankruptcy protection of adequate protection resulted in the secured SPE creditors receiving, among other things, payment of interest at the non-default rate during the case, continued maintenance of the properties, a replacement lien on the cash being upstreamed and a second priority lien on other properties. Further, as a result of the DIP bidding process, there were no second liens placed on the SPE properties to secure the DIP loan approved by the court. From Judge Gropper's perspective, this is evidence that the bankruptcy process and secured creditor protections are working. No doubt this case will be widely commented upon and analyzed, and it's unclear whether any of the secured creditors who lost their motions will appeal, the statement said. But on a going forward basis, the decision will need to be taken into account in connection with future financings-CMBS, ABS and others-both in terms of underwriting, deal structuring and legal documentation. Order Gives Way for Bankruptcy Exit Talks Judge Gropper's decision, according to The Wall Street Journal, cleared the way for General Growth to begin negotiating with its creditors for multiyear extensions of its debt maturities that would eventually allow it to exit bankruptcy court. "I think this is a rude awakening for a real-estate finance industry that placed faith in certain structures without any thought to how they could be stressed in a severe economic environment or how they could be tested under the bankruptcy code," the Journal quoted Kevin Starke, an analyst with CRT Capital Group LLC, which tracks distressed securities, as saying. "The lenders that wanted these cases dismissed failed to demonstrate why the subsidiaries they loaned money were any different than any other corporate subsidiary." About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Sues Center Partners, et al., to Halt Urban Action ------------------------------------------------------------------ By this complaint, debtors General Growth Properties, Inc., GGP Limited Partnership, Rouse LLC, and The Rouse Company L.P. seek declaratory judgment and injunction against Center Partners, Ltd., Urban-Water Tower Associates, Miami Associates, L.P., and Old Orchard Limited Partnership. Center Partners, et al., filed a direct and derivative partnership action pending in the U.S. Circuit Court of Cook County, Illinois, against the Debtors, non-debtor Rouse-Urban, LLC, an indirect, wholly-owned subsidiary of The Rouse Company., and a number of non-debtor and non-GGP affiliated entities namely Growth Head G.P., LLC, SPG Head GP, LLC, Westfield America Limited Partnership, Westfield America, Inc., Simon Property Group, L.P., Simon Property Group, Inc., Westfield America Trust, and Head Acquisition. Center Partners, et al., alleged that Head Acquisition is merely an alter-ego of Rouse Urban, along with Head Acquisition's other two general partners because they control and conduct Head Acquisition's affairs. The amended complaint seeks causes of action for, among others, breach of fiduciary duty, breach of partnership agreement, and civil conspiracy. The Debtors believe that the automatic stay should be extended and applied to the Urban Parties' continued prosecution against the non-Debtor defendants in the Urban Action. Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York, argues that if the automatic stay imposed by Section 362 of the Bankruptcy Code is not extended to the Non-Debtor Defendants in the Urban Action, findings or judgments rendered in the Urban Action could be used against the Debtors under the doctrines of collateral estoppel, res judicata, she points out. Adverse findings in the Urban Action could result in preclusive effects against the Debtors in actions brought by the other non-debtor defendants for contribution without the Debtors' full participation in the Urban Action, she stresses. Ms. Gray asserts that the Debtors have a high probability of successfully reorganizing under the Bankruptcy Code provided their resources are not unduly wasted by prepetition litigation, including the Urban Action. Thus, an injunction against the continued prosecution of the Urban Action until December 21, 2009, and during the crucial stages of the Debtors' reorganization will enhance the Debtors' prospects of achieving a successful reorganization and maximizing the value of their assets, she tells the Court. She also contends that the harm on the Debtors' reorganization efforts outweighs the interests of the Urban plaintiffs in continuing the prosecution of the Urban Action against the non-debtor defendants. Accordingly, the Debtors ask the Court to: (a) declare that the automatic stay imposed by Section 362(a) extends and applies to the continued prosecution of the Urban Action against the non-debtor defendants, subject to the Debtors' agreement that the automatic stay should be modified as to all defendants in the Urban Action, including the Debtors, after 180 days from June 24, 2009, so that the Urban Action can proceed with the participation of all parties, and the claim can be liquidated against the Debtors; and (b) pursuant to Section 105(a) of the Bankruptcy Code, permanently enjoin the Urban plaintiffs from prosecuting the Urban Action against the non-debtor defendants for a period of 180 days from June 24, 2009, subject to further extensions as the Court may deem. In a separate request, the Debtors ask the Court to (i) enforce the automatic stay with respect to the non-debtor defendants, or (ii) grant a preliminary injunction enjoining the prosecution of the Urban Action pending determination of the relief sought in the complaint. Ms. Gray stresses that allowing the Urban Action to proceed at this time will compel the Debtors to actively participate in ongoing discovery to protect their interests. Indeed, more than thirty depositions of fact witnesses remain to be taken and will occur in the next few months in the Urban Action if the Debtors' Motion is not granted, she emphasizes. In light of the substantial task associated with the early stages of the Debtors' Chapter 11 cases and the formulation, filing and confirmation of a reorganization plan, the Debtors' primary focus should be on those efforts, she further contends. The Debtors further seek the Court's authority to waive the requirements for security under Rule 65(c) of the Federal Rules of Civil Procedure. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Wants Prepetition Class Suits vs. D&Os Stayed ------------------------------------------------------------- Debtors General Growth Properties, Inc., and GGP Limited Partnership brought to the Court a complaint seeking declaratory judgment and injunction against certain plaintiffs of two prepetition class actions filed against the Debtors' directors and officers pending in the United States District Court for the Northern District of Illinois. The Prepetition Class Actions are: (1) an Employee Retirement Income Security Act action filed by Jay R. Barnes, Dana Kaminske, and Nathan B. Zable as lead plaintiffs, on behalf of themselves and a putative class; and (2) a consolidated securities class action filed by Sharankishor Desai, as appointed lead plaintiff. The ERISA Action named the Debtors' former and current directors and officers as defendants -- John L. Buckbaum, Robert A. Michaels, Bernard Freibaum, Jean Schlemmer, Charles Lhotka, Kate Sheehy, Heather Margulis, Judy Herbst, and Michelle R. McGovern. The ERISA Parties alleged that the Directors breached their fiduciary duties under ERISA in connection with the management and administration of the Debtors' pension plan. The ERISA Parties seek damages in favor of the pension plan for losses in an unspecified amount for the alleged breaches, declaratory and injunctive relief, including the imposition of a constructive trust, restitution, and attorneys' fees and costs. The Securities Action named John L. Bucksbaum, Robert A. Michaels, Anthony Downs, Beth Stewart, Joel Bayer, Edmund Hoyt, Ronald L. Gern, Sharon Polonia, Bernard Freibaum, Jean Schlemmer and Alexander Berman as defendants in the action, which alleged that the Directors violated Section 10(b) of the Securities and Exchange Act and Rule 10b-5 and Section 20(a) of the Securities and Exchange Act by, among others, allegedly misrepresenting and failing to disclose GGP's ability to refinance billions of dollars of debt that was coming due in the 2008 and 2009. The Debtors counsel, Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York, argues that if the automatic stay is not extended to the Directors, the Debtors will have an obligation to defend and indemnify the Directors in the Prepetition Class Actions at great cost and expense to the Debtors. The Debtors and the Directors will also be forced to devote valuable time and resources to the Prepetition Class Actions, which will divert their attention from focusing on the Debtors' reorganization, she stresses. Ms. Gray also notes that findings or judgments rendered in the Prepetition Class Actions could be used against the Debtors under the doctrines of collateral estoppel and res judicata. Essentially, the prosecution of the Prepetition Class Actions, if not stayed, will hinder the Debtors' reorganization to the detriment and prejudice of all parties-in-interest and is directly antithetical to the purpose of the automatic stay, she maintains. Moreover, Ms. Gray argues that the Debtors will suffer immediate and substantial injury, loss, or damage if the Prepetition Class Actions are not enjoined. Thus, an injunction against the continued prosecution of the Prepetition Class Actions until December 21, 2009, will enhance the Debtors' prospects for a successful reorganization, she asserts. "The harm to the Debtors' reorganization outweighs the interests of the Prepetition Parties in continuing to prosecute the Prepetition Class Actions against the Directors during the crucial early stages of the Debtors' reorganizations," Ms. Gray maintains. Accordingly, the Debtors ask the Court to: (i) declare that the automatic stay applies to the continued prosecution of the Prepetition Class Actions against the Directors; and (ii) permanently enjoin the Prepetition Parties from prosecuting the Prepetition Class Actions against the Directors for a period of 180 days from June 24, 2009, subject to further extensions as the Court may deem. The Debtors also ask the Court to (i) apply the automatic stay to the Directors, or (ii) grant a preliminary injunction enjoining the Prepetition Class Actions, pending a determination of the relief sought in the Complaint. Ms. Gray points out that the Debtors could suffer evidentiary prejudice if the Prepetition Class Actions are allowed to proceed against the Directors. She further stresses that the Debtors' employees would shoulder the additional pressures and concerns about potential exposure to personal liability, while simultaneously performing numerous, substantial tasks associated with the early stages of a complex reorganization. The Debtors further ask the Court to approve their waiver of requirements for security under Rule 65(c) of the Federal Rules of Civil Procedure. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly ] 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Receives Supporting Documents on Bids for Opel -------------------------------------------------------------- Carla Main at Bloomberg reports that General Motors Co., according to a company spokesman, received documents regarding a bid for its Opel division August 13 from Magna International Inc. and Russia's Sberbank, and has requested an outline of Germany's plan to help with the sale. As reported by the Troubled Company Reporter on Aug. 10, 2009, John Smith, GM Group Vice President, wrote that there have been some progress on talks regarding the sale of Opel with bidders -- Magna International Inc. and RHJ International SA -- but said that there are still outstanding issues with respect to those bids. Mr. Smith also denied that Magna International has been selected as winning bidder, saying that press reports tended to exaggerate the state of progress of the talks. As the RHJI proposal is the simpler of the two, there were very few significant issues with this offer, Mr. Smith said. GM, on the other hand, still has to resolve a number of issues with Magna, he stated. GM said that it has provided in excess of $5 billion to support GM over the past several years. Despite its minority status, GM will continue to support Opel by the near full reimbursement of the new company's annual engineering budget (including a markup) and a reduction in royalties otherwise paid during the first five years of operation by over $2 billion. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GENERAL MOTORS: European Union OKs Sale of Delphi Plants -------------------------------------------------------- The European Commission on August 13 said it has approved under the EU Merger Regulation the proposed acquisition of Delphi Steering Business and of four U.S. sites of Delphi Corporation, a U.S. manufacturer of automotive components by the US car manufacturer General Motors. The Commission concluded that the transaction would not significantly impede effective competition within the European Economic Area or a substantial part of it and has therefore approved the concentration. GM manufactures and sells cars and commercial vehicles worldwide. GM intends to acquire Delphi Steering Business and four U.S sites of the US automotive component supplier Delphi (the Targets). The Targets are globally active in the design, manufacture and sale of a great number of automotive components for various fields of use. This transaction relates to the clearance decision M.5500 whereby GM intends to acquire control of Delphi Steering Business. This new transaction enlarges the scope of the original merger since it includes four US sites. The newly included sites are not active in the same automotive components. The Commission's examination of the transaction showed that for all automotive components, the merged entity will have very small market shares and will continue to face several strong, effective competitors with significant market shares. Also, Delphi is a major supplier of GM's vehicle manufacturing activities. The Commission thus concluded that the proposed transaction does not raise competition concerns. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GENERAL MOTORS: Florida Courts Enforce Stay on GM-Related Cases --------------------------------------------------------------- In light of the Chapter 11 cases of Motors Liquidation Co., formerly known as General Motors Corp., the Circuit Courts in and for Pinellas County and Broward County in Florida stayed the cases commenced by Michael Bentley, James Evans, Margaret Charles and John and Sharon Glass against the Debtors until either: -- the continuation of the Debtors' warranty programs in the ordinary course of business has been clarified by the U.S. Bankruptcy Court for the Southern District of New York; -- the Bankruptcy Court permits the continued litigation of the Actions; or -- the Debtors emerge from their Chapter 11 cases. The Circuit Courts have also reset the scheduled trials on the Actions. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GENERAL MOTORS: FRG & Brittingham Want Docs. for PI Suit -------------------------------------------------------- Pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, the Office of Defense Administration of the USA/Canada under the Federal Republic of Germany and David and Julie Brittingham, separately ask the Court to direct (i) the production of documents, and (ii) the oral examination of certain individuals connected with the Debtors in relation to: * a personal injury action commenced by Florian Hinrichs, styled Florian Hinrichs v. General Motors Corp., et al., litigated in the Circuit Court for Geneva County in Alabama; and * the Brittingham's employment-related lawsuit styled Brittingham v. General Motors Corporation, et al., pending in the Common Pleas Court of Montgomery County, Ohio. In 2007, a GM truck in which Mr. Hinrichs was a passenger was rammed, leaving Mr. Hinrichs a paraplegic for life. As a result of the accident, FRG has paid and continues to pay medical and related expenses, as required under German law. The Brittinghams initiated the lawsuit alleging that the Debtors negligently performed and approved Ms. Brittingham's pre- employment physical examination and failed to inform her of a lung abnormality or to refer her to a qualified physician, as GM policies and procedures required. The Brittinghams seek recovery for personal damages, wages and other expenses, which are estimated to add up to "several million dollars." FRG and the Brittinghams are entitled to determine whether insurance benefits exist as part of the Debtors' bankruptcy assets, either through private policies or through a self-insured program that could apply to their claims under the Alabama and Ohio Actions, Samir P. Gebrael, Esq., at Klestadt & Winters LLP, in New York, avers, on behalf of the Parties. Hence, FRG and the Brittinghams specifically seek to be provided with, among other things, copies of all policies of insurance or indemnity issued to a policyholder, GM or the Debtors. They also seek the Court's authority to issue a subpoena to individuals designated by, and within the control of, the Debtors and believed to have knowledge of the matters relating to the Actions. Mr. Gebrael contends that the Rule 2004 Examination could entitle FRG and the Brittinghams to pursue claim in the Chapter 11 cases, regarding any available insurance benefits. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GENERAL MOTORS: H. Wice's Notice of Appeal Over Wage Claim Lawsuit ------------------------------------------------------------------ Harvey D. Wice, a millwright at General Motors Corporation, notified the U.S. Bankruptcy Court for the Southern District of New York that he took an appeal of the summary judgment entered in favor of the Debtors in December 2008, by Judge John Corbett O'Meara in the U.S. District Court for the Eastern District of Michigan, denying his wage employment claim. Asserting more than $150,000 in wage overtime losses against the Debtors, Mr. Wice asked the United States Court of Appeals for the Sixth Circuit to review the District Court's order. Specifically, Mr. Wice asks the Appeals Court to determine whether, among other things, (i) the Debtors wrongfully denied the Claim, and (ii) the Debtors, as employers, violated 42 U.S.C. 1211(b)(5( by conditioning employment and retaliating Mr. Wice based on requiring him to undergo a general medical exam. According to Mr. Wice, "the general medical exam is not job- related, [and not] necessary for the employer's operation of its business." About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GENERAL MOTORS: Holden Unit Gets AU$200 Mil. Credit Aid From EFIC ----------------------------------------------------------------- General Motors Corp.'s Australian unit Holden received a credit line of as much as AU$200 million, or US$167 million, from Export Finance & Insurance Corp., a lender to Australian exporters lender based in Sydney, Bloomberg News said in a report dated August 8, 2009. The credit was extended "to provide support for GM Holden exports of vehicles, parts and engineering services to Europe, the Middle East, Africa and Asia," EFIC Chief Executive Officer Angus Armour confirmed in an e-mailed statement to Bloomberg. The Australian government, according to the report, has approved the EFIC-backed credit facility, "which is not drawn and is subject to commercial terms and conditions." GM Holden "is an iconic Australian company and EFIC is delighted to support GMH's ongoing export activities," Bloomberg quoted Mr. Armour as saying. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GENERAL MOTORS: New GM Pulls Out of Mercury Disposal Partnership ---------------------------------------------------------------- General Motors Company is pulling out of the End of Life Vehicle Solutions partnership that manages a program to collect and dispose of mercury switches from scrapped automobiles, reports the Associated Press. The partnership, which works closely with the Environmental Protection Agency, was created in 2005. It manages the National Vehicle Mercury Switch Recovery Program which has recovered 2.5 million switches and disposed of nearly 5,600 pounds of mercury, and is scheduled to run until 2017. While Motors Liquidation Company, or Old GM, remains a member of the partnership, New GM is cutting ties with the organization, as it "has never produced vehicles with mercury switches and has no mercury switch responsibility under the terms of the bankruptcy court order," GM spokeswoman Sharon Basel told AP. Tim Yost, a Motors Liquidation spokesman, said the Old GM is in the process of analyzing its more than 500,000 contracts and agreements, "including this one." Prior to its Chapter 11 filing, General Motors was the group's largest participant. Other participants include automakers Chrysler Group LLC, Ford Motor Co. and Daimler AG. The companies pay fees that are based on market share and their portions of the switch population. "We're surprised that GM, who wants to have this great, green image, would do this," Mary Bills, the partnership's executive director, related to the AP. Ms. Bills added that since its Petition Date, GM has not paid its dues. Its annual bill is $700,000 to $1 million, a substantial portion of the program's funding. With GM's departure from the partnership, ELVS may be forced to scale back or cease operations, the AP reported. If the organization remains unfunded for the GM costs, "we will no longer be able to accept GM switches for recycling," Ms. Bills wrote in a letter to 15 states that require automakers to set up a collection system to recycle their switches. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall, and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GENERAL MOTORS: New GM May Fire More Workers as Few Accept Buyout ----------------------------------------------------------------- General Motors Company is expected to shed more hourly positions to meet its targeted number as its job buy-outs fell short from target. Some 6,000 employees of General Motors Company who are represented by the United Auto Workers union availed of the buyout packages offered by the automaker, the Wall Street Journal reported on August 4, 2009. The buyout, according to The New York Times, left behind 48,000 hourly workers, which is 7,500 more than New GM's goal of 40,500 by the end of 2009. GM spokesperson Sherrie Childers Arb shared with the New York Times that GM will meet with the UAW to discuss on how GM could meet its employee goal by December 31, 2009. Ms. Arb however noted that New GM is not considering another buyout offer, New York Times said. In other news, GM's plant in Northeast Ohio reopens for the production of Chevrolet Cruze compact car and sees the return of about 2,250 hourly and salaried workers to the plant. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GENERAL MOTORS: U.S. Senate Says No to Equity Distribution ---------------------------------------------------------- The United States Senate blocked a proposal requiring the U.S. Government to distribute its stakes in General Motors Company and Chrysler LLC to taxpayers as common stock immediately after the companies emerge from Chapter 11, Dow Jones Newswires relates. The vote, according to, was 59-38 against the amendment, sponsored by Senate Republicans who are trying to devise a way to expedite the federal government's ownership of auto companies. If approved, the United States Department of the Treasury will distribute its 60% stake in GM and 8% stake in Chrysler to all taxpayers, Dow Jones says. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GENERAL MOTORS: Sonic Expects $3.3 Million in Dole-Outs ------------------------------------------------------- Sonic Automotive, Inc., discloses that subject to bankruptcy approval, General Motors Corporation has offered assistance with winding down the operations of various franchises in exchange for Sonic's execution of termination agreements. Sonic executed all of the termination agreements. Assistance expected to be received from General Motors totals $3.3 million. Sonic said none of the funds was recorded as a receivable from General Motors as of June 30, 2009, due to the uncertainty of bankruptcy court approval and certain conditions required for the payments to occur had not yet been satisfied. As of June 30, 2009, Sonic operated 33 General Motors franchises (under the Cadillac, Chevrolet, Hummer, Saab, Buick and Saturn nameplates) at 26 physical dealerships. Six of Sonic's General Motors dealerships, representing 12 franchises, including three Hummer franchises at multi-franchise dealerships, two Saab franchises at multi-franchise dealerships and one additional General Motors franchise at a multi-franchise dealership received letters stating that the franchise agreements between General Motors and Sonic will not be continued by General Motors on a long-term basis. The termination agreements provide for: -- The termination of the franchise agreement no earlier than January 1, 2010, and no later than October 31, 2010; -- The assignment and assumption of the franchise agreement by the purchaser of General Motors' assets; -- The payment of financial assistance to the franchisee in installments in connection with the orderly winding down of the franchise operations; -- The waiver of any other termination assistance of any kind that may have been required under the franchise agreement; -- The release of claims against General Motors or the purchaser of General Motors' assets and their related parties; -- The continuation of franchise operations pursuant to the franchise agreement, as supplemented by the termination agreement, through the effective date of termination of the franchise agreement, except that Sonic shall not be entitled to order any new vehicles from General Motors or the purchaser of General Motors' assets; and -- A restriction on Sonic's ability to transfer the franchise agreement to another party. For the remaining General Motors franchises, Sonic executed "continuation agreements" which require, among other things, that existing franchise agreements will expire no later than October 31, 2010. In consideration of the execution of the "continuation agreements" General Motors will recommend to the bankruptcy court the continuation or assumption of Sonic's existing franchise agreements, as amended by the "continuation agreements". Sonic expects its franchises which executed "continuation agreements" to be renewed on or before October 31, 2010. With the exception of product liability indemnifications, amounts owed to Sonic through incentive programs, amounts currently owed to Sonic's franchises under their open accounts with General Motors and warranty claims occurring within 90 days prior to June 1, 2009, all amounts owed to Sonic from General Motors were extinguished as a result of the execution of the termination and continuation agreements. Sonic said a motion was made by General Motors to the bankruptcy court and the motion was granted by the bankruptcy court allowing General Motors to pay the claims. As a result, Sonic has been receiving payments related to pre- bankruptcy claims and the effect of General Motor's bankruptcy filing has not had a material effect on Sonic's recorded receivable balances as of June 30, 2009. As Sonic's operations at the affected franchises that will not be renewed wind down, Sonic said it may be required to accelerate depreciation expenses and record impairment charges related to, but not limited to, lease obligations, fixed assets, franchise assets, accounts receivable and inventory. On June 2, 2009, General Motors announced that Chinese equipment manufacturer Sichuan Tengzhong Heavy Industrial Machinery Co. will buy its Hummer brand. As of June 30, Sonic operated three Hummer franchises at three dealership locations. It is uncertain whether STHIMC will continue supporting the Hummer brand or whether STHIMC's ownership of the Hummer brand will have a positive or negative impact on Sonic's Hummer franchises' operations. On June 5, 2009, General Motors announced that Penske Automotive Group will buy its Saturn brand. As of June 5, Sonic operated one Saturn franchise at one dealership location. It is uncertain whether PAG will continue supporting the Saturn brand or whether PAG's ownership of the Saturn brand will have a positive or negative impact on Sonic's Saturn franchise's operations. On July 10, 2009, General Motors emerged from bankruptcy as the new General Motors Company, with the former General Motors Corp. henceforth known as Motors Liquidation Company. With the exception of the sale of the Hummer and Saturn brands, the new General Motors expects to continue its current brand portfolio going forward, however, discontinuation or sale of additional brands in the future could have an uncertain impact on Sonic's operations. On April 30, 2009, Chrysler LLC filed for bankruptcy protection and submitted a plan of reorganization. On June 10, 2009, Fiat SpA purchased a substantial portion of Chrysler's assets which include rights related to Sonic's franchise agreements. As of June 30, Sonic owned six Chrysler franchises at two dealership locations. It is uncertain whether Fiat will continue supporting the Chrysler brand or whether Fiat's ownership of the Chrysler brand will have a positive or negative impact on Sonic's Chrysler franchises' operations. In conjunction with Chrysler's reorganization efforts in the second quarter of 2009, three franchise agreements associated with one of Sonic's dealership locations were terminated. The result of these franchise terminations was not material to Sonic's results of operations, balance sheet or cash flows for the second quarter ended June 30, 2009. Revenues associated with the General Motors franchises that received termination letters for the second quarter ended June 30, 2008, and 2009 were roughly $42.8 million and $28.9 million, respectively. Revenues associated with the General Motors franchises that received termination letters for the six-month periods ended June 30, 2008 and 2009 were roughly $91.2 million and $59.8 million, respectively. About Sonic Automotive Sonic Automotive, Inc., headquartered in Charlotte, North Carolina, is one of the largest automotive retailers in the United States. As of June 30, 2009, it operated 154 dealership franchises, representing 31 different brands of cars and light trucks, at 131 locations and 30 collision repair centers in 15 states. Its dealerships provide comprehensive services including sales of both new and used cars and light trucks, sales of replacement parts, performance of vehicle maintenance, manufacturer warranty repairs, paint and collision repair services, and arrangement of extended service contracts, financing, insurance and other aftermarket products for customers. * * * According to the Troubled Company Reporter on May 25, 2009, Moody's Investors Service downgraded to Caa1 from B2 the Corporate Family rating of Sonic Automotive Holdings, Inc., and upgraded the probability of default rating to Caa1 from Caa3. The outlook is negative. GENERAL MOTORS: Saab May Get Loan Guarantees Exceeding $600 Mil. ---------------------------------------------------------------- Niklas Magnusson at Bloomberg News reports that General Motors Co.'s Swedish unit, Saab Automobile AG, may be able to get state guarantees for loans from the European Investment Bank that exceed the US$600 million originally sought. Bloomberg relates Haakan Lind, a government spokesman, said in a telephone interview Tuesday Saab and Koenigsegg Group, which intends to buy the Swedish carmaker, are having discussions with Swedish officials that are primarily focused on guarantees by the National Debt Office for EIB loans. Mr. Lind, as cited by Bloomberg, said the US$600 million sought by Saab is not the maximum the company can get. As reported in the Troubled Company Reporter on June 25, 2009, Koenigsegg Group AB, a group led by Koenigsegg Automobile AB, a Swedish maker of exclusive sports cars, agreed to buy Saab Automobile, which filed for insolvency proceedings in Sweden in February 2009. According to Business Week, the deal is expected to close in the third quarter of 2009. Debts In the June 25 TCR report The Wall Street Journal disclosed creditors of Saab approved the automakers' proposal for settling its debts by paying a quarter of what it originally owed. Saab proposed to settle its debts by paying 25% of about US$1.34 billion it owed to more than 600 creditors, including auto suppliers and the Swedish government. The vast majority of the debt, almost SEK10 billion, was owed to U.S. parent company GM. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GENERAL MOTORS: To Cut Production in Spain if Magna Bid Succeeds ---------------------------------------------------------------- Brian McGee at Bloomberg News, citing Cinco Dias, reports that Magna International Inc. plans to cut production in Spain should it succeed in buying General Motors Co.'s Opel unit. According to Bloomberg, the newspaper said Magna plans to stop one production line next year at Figuerelas near Zaragoza, cease making the Corsa small car three-door model there, and share the five-door version with Eisenach in Germany. Tony Czuczka at Bloomberg News reports German Chancellor Angela Merkel restated her "clear preference" for Magna as the buyer of GM's Opel unit and said she will intervene in the sale negotiations if needed. Ms. Merkel, as cited by Bloomberg, said the German government is in "constant talks" over the sale of Opel. "I'm always informed, I'm always in the loop and I will get involved whenever necessary," Bloomberg quoted Ms. Merkel as saying. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as 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) GLOBAL CROSSING: S&P Gives Positive Outlook, Affirms 'B-' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Bermuda-based global communications solutions provider Global Crossing Ltd. to positive from stable. S&P is also affirming the 'B-' corporate credit rating on the company. "The change in the outlook reflects the continued good operating performance by the company, especially in this difficult economic environment," said Standard & Poor's credit analyst Naveen Sarma. As a result, GCL has improved its adjusted leverage to 4.6x adjusted debt to EBITDA as of June 30, 2009, through healthy EBITDA growth and is likely to achieve modest net free cash flow in 2009, ahead of its expectations. GLOBAL SAFETY: Files Plan; Senior Lenders to Get 100% Equity ------------------------------------------------------------ Global Safety Textiles LLC has reached an agreement with a majority of its senior lenders to successfully restructure the Company's obligations and has filed a Plan of Reorganization with the Bankruptcy Court. Under the Plan of Reorganization, the senior lenders would receive 100% of the equity interest and long- term debt in the reorganized GST Group. In addition, a subset of the supporting lenders also delivered a DIP loan commitment for up to $5 million of additional liquidity, subject to Bankruptcy Court approval. Although the Company believes it has sufficient liquidity to complete its exit from the Chapter 11 reorganization process without the need for this DIP commitment, this additional show of support by the lenders provides the Company with an important liquidity cushion that will further assure the Company's successful reorganization. The Company anticipates emerging from Chapter 11 in October 2009. Under the Plan of Reorganization, the reorganized GST Group would emerge with $70 million of long-term senior debt, $30 million of convertible long-term junior debt, and a new $5 million working capital facility. This represents a reduction of over 50% in the Company's debt from when it filed for Chapter 11 protection in June. Giving effect to the proposed reorganization, the reorganized GST Group will be well positioned to continue to serve its automotive customers with its broad global footprint that spans Europe, the Americas and China. The management teams of GST and its parent company, International Textile Group, Inc., are committed to working together in forming a transitional services agreement to provide support for GST, its customers, suppliers, and employees. ITG is not a part of GST's Chapter 11 proceedings, and ITG's other operations continue to operate in the ordinary course of business. Georg Saint-Denis, President of GST Europe and Asia, commenting on the agreement that has been reached with the lenders, said, "The Lenders' commitment demonstrates the solid, long term opportunities of GST, which are based on innovative technologies, cost-competitiveness, and strong customer value. The new structure of the Company will provide the flexibility and financial stability to support our strategic international customers." Mr. Saint-Denis continued, "I, along with Frank Goehring, President of GST North America, believe the Lenders' Plan allows GST management to act quickly to maintain the Company's competitive leadership, preserve the value of its business, and leverage new opportunities. The successful financial restructuring of the Company will culminate management's proactive process for dealing with the abrupt economic downturn in the global automotive industry. We believe that GST is now able to benefit from that strong position to be among the first companies with a financial structure adapted to the challenging market environment." GST is being advised by White & Case, Zolfo Cooper and Helbling Corporate Finance. Prior to the filing of the Plan, Global Safety entered into a plan support agreement with two thirds of revolving facility and first lien facility lenders, led by Goldman Sachs Credit Partners, L.P., as administrative agent. Under the Plan, holders of these claims will receive (i) equity interests in "New GST Holdco", the legal entity created to serve as the ultimate parent of the reorganized Debtors, (ii) firs-tlien notes in an amount equal to $70,000,000 plus amounts owed under the debtor-in-possession facility and due on the third anniversary of the Plan's effective date, and (iii) second lien notes in an amount of $30 million. Holders of other claims will receive full recovery in cash. Under the Plan, holders of unsecured claims and equity interests won't receive anything. Copies of the Plan and the disclosure statement explaining the Plan are available for free at: http://bankrupt.com/misc/GlobalSafety_Chapter11_Plan.pdf http://bankrupt.com/misc/GlobalSafety_DS_Plan.pdf About Global Safety Textiles Greensboro, North Carolina-based Global Safety Textiles Holdings LLC is a manufacturer of fabrics for auto air bags wholly owned by Wilbur Ross's International Textile Group Inc. The Company has operations in three states in the U.S. and in five other countries. There are 217 employees in the U.S. and 3,000 abroad. Global Safety filed for Ch. 11 on June 30, 2009 (Bankr. D. Del. Case No. 09-12234). Foreign based affiliates GST ASCI Holdings Mexico, Inc., GST ASCI Holdings Asia Pacific, GST ASCI Holdings Europe II LLC, Global Safety Textiles Acquisition GmbH, GST Widefabric International GmbH, and GST ASCI Holdings Europe, Inc., were included in the Chapter 11 filing. Michael C. Shepherd, Esq., at White & Case LLP, serves as the Debtors' bankruptcy counsel. Attorneys at Fox Rothschild LLP serves as co-counsel. EPIQ Bankruptcy Systems is claims agent. The petition says Global Safety's assets and debts are between US$100 million to US$500 million. GMAC INC: ResCap Posts $841MM Net Loss in Quarter Ended June 30 --------------------------------------------------------------- Residential Capital LLC posted a net loss of $841.1 million for three months ended June 30, 2009, compared with a net loss of $1.8 billion for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $837.4 million compared with a net loss of $2.7 billion for the same period in 2008. The Company's balance sheet showed total assets of $21.9 billion, total liabilities of $20.9 billion and stockholders equity of $1.0 billion. The Company related that there remains substantial doubt about the Company's ability to continue as a going concern. The Company added that it is dependent on its parent and affiliates for funding and capital support and there can be no assurance that its parent or affiliates will continue the actions. GMAC has disclosed that if the Company were to need additional support, GMAC would provide that support so long as it was in the best interests of GMAC stakeholders. Although GMAC's continued actions through various funding and capital initiatives demonstrate support for the Company, and GMAC's status as a bank holding company and completion of its debt exchange in 2008 and further capital actions in 2009 better positions GMAC to be capable of supporting the Company, there are no commitments or assurances for future funding or capital support. If GMAC no longer continue to support the capital or liquidity needs of the Company or if the Company be unable to successfully execute other initiatives, it would have a material adverse effect on its business, results of operations and financial position. GMAC Financial Services -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a bank holding company with operations in North America, South America, Europe and Asia- Pacific. GMAC specializes in automotive finance, real estate finance, insurance, commercial finance and online banking. As of December 31, 2008, the company had $189 billion in assets and serviced 15 million customers around the world. GMAC is the biggest lender to GM's 6,500 dealers nationwide, most of which get the financing they need to operate and buy vehicle inventory from the automaker, CNNMoney.com notes. GMAC Financial Services is wholly owned by GMAC LLC. Cerberus Capital Management LP led a group of investors that bought a 51% stake in GMAC LLC from General Motors Corp. in December 2006 for $14 billion. On December 24, 2008, GMAC Financial Services' application to become a bank holding company under the Bank Holding Company Act of 1956, as amended, was approved by the Board of Governors of the Federal Reserve System. In addition, GMAC Bank received approval from the Utah Department of Financial Institutions to convert to a state bank. * * * As reported in the Troubled Company Reporter on May 5, 2009, Standard & Poor's Ratings Services maintains its CCC/Negative/C rating on GMAC LLC despite the Company's announcement that it entered into an agreement with Chrysler Financial Services Americas LLC to provide future automotive financing products and services to Chrysler dealers and customers. About ResCap Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. GREEKTOWN HOLDINGS: June 2009 Revenues Total $28.8MM, MGCB Reports ------------------------------------------------------------------ The Michigan Gaming Control Board stated in its Web site that Greektown Casino's aggregated revenues for June 2009 is $28,849,029. Of this revenue, Greektown Casino's state wagering tax is $3,490,732. In May 2009, Greektown's aggregate revenue was $30,153,069 while its state wagering tax was $3,648,521. The Gaming Board also released the June 2009 revenues of two other Detroit casinos, MGM Grand Detroit and MotorCity Casino. The Board notes that MGM Grand Detroit earned $43,772,027 in June 2009 and MotorCity Casino had $36,881,519 in revenues for the same period. In March 2009, MGM Grand earned $48,417,844 while MotorCity earned $41,632,619. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN HOLDINGS: To Pay Fines for Political Contributions ------------------------------------------------------------ Greektown Casino Hotel and some of its contractors and suppliers are asked to pay fines by the Michigan Gaming Control Board for making contributions to local political groups, The Detroit News reports. Rick-Kalm, MGCB's board of director, maintained that the violations were all minor, the news source notes. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HARRIS BLDG I LLC: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Harris Bldg I LLC 403-501 NW Lyman Rd Topeka, KS 66608 Bankruptcy Case No.: 09-22572 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Harris Bldg II, LLC 09-22573 House of Rising Suds LLC 09-22574 Mini Storage LLC 09-22575 Lawrence Powersports, LLC 09-22576 Carol Ann Harris 09-22577 Daniel Patrick Harris 09-22578 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court District of Kansas (Kansas City) Judge: Dale L. Somers Debtor's Counsel: Jonathan C. Becker, Esq. 3220 Mesa Way, Suite B Lawrence, KS 66049-2344 Tel: (785) 842-0900 Fax: (785) 842-0916 Email: jcb3220law@hotmail.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $500,001 to $1,000,000 A full-text copy of the Debtors' petition, including a list of their 6 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ksb09-22572.pdf The petition was signed by Carol Harris, managing member of the Company. HELLER EHRMAN: Former Chairman Denies Insider Payments ------------------------------------------------------ Bloomberg's Carla Main reported that Matthew Larrabee, former chairman of Heller Ehrman LLP, issued a statement dismissing as baseless allegations made by the firm's committee of unsecured creditors in an August 7 report. The Creditors Committee has said in a report that Heller Ehrman, by December of 2007, was using creditors' funds to overpay shareholders instead of observing its duty to make timely payments to its creditors and properly reserve funds for its operations. The Committee said that the firm paid its partners $9 million in 2007, falsely labeling the distributions as "loans." The Creditors Committee, Bloomberg relates, believes it has evidence to support a claim of constructive fraudulent conveyance against Heller. According to Bloomberg, the Creditors Committee believes unsecured creditors are owed $106 million from the Heller estate as a result of the 2007 distributions and subsequent partner payouts. About Heller Ehrman Headquartered in San Francisco, California, Heller Ehrman, LLP LP -- http://www.hewm.com/-- was an international law firm of more than 730 attorneys in 15 offices in the United States, Europe, and Asia. The firm filed a voluntary petition under Chapter 11 of the Bankruptcy Code on December 28, 2008 (Bankr. N.D. Calif. Case No. 08-32514). Members of the firm's dissolution committee led by Peter J. Benvenutti approved a plan dated September 26, 2008, to dissolve the firm. The Hon. Dennis Montali presides over the case. John D. Fiero, Esq., and Miriam Khatiblou, Esq., at Pachulski, Stang, Ziehl, Young and Jones, represent the Debtors as counsel. Thomas A. Willoughby, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP, represents the official committee of unsecured creditors of the Debtor. The firm listed between $50 million and $100 million each in assets and debts in its bankruptcy petition. HILLMAN GROUP: S&P Raises Corporate Credit Rating to 'B' -------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Hillman Group Inc. to 'B' from 'B-', and raised its bank loan rating to 'BB-' from 'B+', and removed all of the ratings from CreditWatch, where they were placed with positive implications on July 29, 2009. The bank facility is rated two notches higher than the corporate credit rating, with a recovery rating of '1', indicating S&P's expectation of very high (90%-100%) recovery for senior secured lenders in a payment default. The outlook is stable. S&P also assigned its 'BB-' senior secured debt rating to the company's new $20 million R-2 revolving credit facility due March 2012, new $149.6 million term loan B-2 due 2012, and new $30 million delayed draw term loan B-3 due March 2012. The recovery rating for these new facilities is '1', indicating S&P's expectation of very high (90%-100%) recovery for senior secured lenders in a payment default. "The upgrade reflects S&P's view that the recently completed bank amendment and restatement help mitigate S&P's concerns related to near-term liquidity risk that existed under its previous capital structure," said Standard & Poor's credit analyst Mark Salierno. "These concerns resulted from Hillman's tight covenant cushion, significant stepped up amortization requirements on the company's previous term loan facility starting in June 2010, and the near- term maturity on the company's previous $40 million revolving credit facility due March 2010." Under the amended terms and conditions, lenders reduced the $40 million revolving commitment by $18.7 million to an aggregate amount of $21.3 million, and the revolver was split into $20 million consenting and $1.3 million nonconsenting tranches. The $188.9 million outstanding on Hillman's term loan B was also split into nonconsenting (term loan B-1 facility) and consenting (term loan B-2 facility) tranches of $39.3 million and $149.6 million, respectively. Within the consenting lender tranches, the transaction extended Hillman's revolver and term loan maturities to March 2012, and modify its term loan amortization requirements to 1.25% per quarter to maturity, compared with quarterly term amortization of 24.8% commencing June 2010 under the previous structure. Consenting lenders received increased pricing and an amendment fee in exchange for the maturity date extensions and modified amortization schedule. The transaction also included a new $30 million delayed draw term loan due 2012, which can only be drawn to fund amortization payments related to term loan commitments of nonconsenting lenders. The transaction also amended the leverage covenant beginning in 2010, which S&P believes provides an enhanced covenant cushion on the entire credit facility. Despite the ongoing weakness in the housing market and the downturn of the U.S. economy, Hillman's operating performance has been fairly stable, in part because lower price-point products at the home improvement retailers have performed better than the big- ticket, more discretionary merchandise. S&P expects that the company's operating performance and overall profitability will continue to remain relatively stable under adverse market conditions. Hillman's operating margins remain in the 17% area as Hillman was largely able to offset such rising product input costs in 2008 with price increases. Although S&P remains concerned that a prolonged recession could affect the company's ability to continue to take additional price increases, Hillman has reduced its workforce and has implemented other restructuring initiatives aimed at streamlining its cost structure to preserve its operating margins. At the same time, free operating cash flow generation has remained positive. Credit measures have improved over the past year, mainly due to continued term loan debt reduction. However, Hillman is still highly leveraged. The outlook is stable reflecting S&P's expectation that liquidity should remain adequate in the near term following the amendment and restatement of its credit facility. S&P believes Hillman will continue to maintain relatively stable operating performance despite continued challenges related to the weak economy. S&P could revise the outlook to negative if Hillman's operating performance is materially affected by declines in consumer spending related the weak economy. Despite S&P's expectation that the company will continue to apply free cash flow toward debt reduction, S&P believes that financial covenants could tighten meaningfully from current levels if sales decline to mid-to-high single digits and operating margins remain unchanged. An outlook revision to positive is unlikely in the near term. HORNBECK OFFSHORE: Moody's Rates New Senior Unsec. Notes to 'Ba3' ----------------------------------------------------------------- Moody's Investors Service rated Hornbeck Offshore Services, Inc.'s (HOS) new senior unsecured notes Ba3. Moody's also affirmed the existing Ba3 Corporate Family Rating and Ba3 ratings on the existing senior unsecured notes. The outlook is stable. Proceeds from the notes offering will be used to repay outstandings under the company's senior secured revolving credit facility. This will increase the company's financial flexibility for funding the remainder of the newbuild program should operating cash flows weaken more than anticipated. Under Moody's Loss-Given-Default methodology, the senior unsecured notes are rated the same as the Ba3 CFR with a loss given default of LGD4 (59% changed from 66%), reflecting the relatively small amount of secured debt in the capital structure. Pro forma for the offering, the company's $250 million revolving credit facility will be largely undrawn while the senior unsecured notes will amount to $700 million, making up the bulk of the capital structure. The affirmation of the Ba3 CFR reflects HOS's strong market position within its business lines as it is the second largest provider for Gulf of Mexico deepwater and ultra deepwater offshore supply vessels. Despite the current softness in the oilfield services markets and HOS' relatively small size in terms of total assets compared to its Ba3-rated peers, the quality of the asset base and its market position are above average for the peer group. In addition, Moody's view the deepwater and ultra deepwater markets as having more durability and better visibility than most oilfield services markets, particularly given the number of oil related projects in those markets. While Moody's view these markets as having better fundamentals, they are nonetheless experiencing greater than anticipated weakness. Spot dayrates have fallen across all vessel classes and Moody's estimate this is likely to result in HOS's EBITDA falling as much as 20% for 2009 relative to the twelve months ended June 30, 2009. This lower EBITDA combined with the additional debt from the newbuild program will cause leverage (debt/EBITDA) to trend towards the 3.5x Moody's have established for the rating, and possibly higher. However, the stable outlook considers Moody's view that while this near-term leverage is likely to be at or above the higher end of Moody's expectations; it is also likely to be fairly short-term in nature. Although the company is inserting more permanent debt into its capital structure, the funding requirements for the newbuild program should be largely complete by year-end and liquidity will be greatly improved. This will greatly reduce HOS's spending needs and provide it with increased financial flexibility into 2010. In addition, HOS will have a fleet of higher spec vessels with greater cash flow generation capability, which should result in improved EBITDA generation and therefore reduced leverage through 2010. The Ba3 ratings also consider the high quality and versatility of HOS's fleet particularly as the company completes its newbuild program, increases its focus on international expansion and diversification, and grows its military contracts which provide a steady stream of earnings and cash flows. The tug, tank and barge segment's contribution to consolidated operating income is expected to decline to 6% for 2009 as the company focuses more on its OSV operations, and will likely not be a significant factor in HOS's overall rating going forward. The last rating action on HOS was on April 28, 2009, at which time HOS's outlook was changed to stable from negative. Hornbeck Offshore Services, Inc., a diversified marine service company headquartered in Covington, Louisiana, is a leading provider of technologically advanced, new generation OSVs primarily in the GOM and select international markets, and is a leading transporter of petroleum products through its fleet of ocean-going tugs and tank barges primarily in the northeastern U.S., the GOM and in Puerto Rico. Hornbeck currently owns a fleet of over 80 vessels primarily serving the energy industry. HORNBECK OFFSHORE: S&P Assigns 'BB-' Rating on $200 Mil. Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' senior unsecured rating to marine services firm Hornbeck Offshore Services Inc.'s proposed $200 million senior unsecured notes due 2017, the same as the corporate credit rating on the company. S&P assigned a '3' recovery rating to this debt, indicating expectations of meaningful (50% to 70%) recovery in the event of a payment default. At the same time, Standard & Poor's affirmed its ratings, including the 'BB-' corporate credit rating, on the company. The outlook is stable. Covington, Louisiana-based Hornbeck intends to use the proceeds from the notes offering to repay outstanding borrowings under its credit facility and for general corporate purposes. S&P expects Hornbeck to benefit from its fleet expansion, as well as the historically less-volatile nature of the deepwater U.S. Gulf of Mexico market. "The proposed notes offering will significantly improve the company's liquidity position, providing full availability under the revolving credit facility," said Standard & Poor's credit analyst Kenneth Cox. Although estimated pro forma debt leverage could exceed 3x by the end of the year, additional EBITDA generated from recent and future vessel deliveries should result in lower leverage in 2010. The ratings on Hornbeck Offshore Services Inc. reflect the risks posed by the company's niche position in the highly volatile offshore supply vessel industry, aggressive growth strategy, and elevated debt leverage. The company's young, technically advanced OSV fleet, growing geographic and business diversification, and historically better-than-average performance of its deep water market, buffer the above risks. The stable outlook assumes Hornbeck's deep water fleet will continue to support spending levels, such that debt to EBITDA decreases in 2010. Negative rating actions could occur if debt leverage per Hornbeck's financial covenants exceeds 4x, something S&P does not currently expect. In addition, negative rating actions could occur if Hornbeck pursues additional fleet expansion to the detriment of expected debt repayment in 2010. For a rating upgrade, S&P would require improving debt leverage and contract coverage such as debt to EBITDA remains less than 2.5x on a sustained basis. HOST HOTELS: Moody's Affirms 'Ba1' Senior Unsecured Debt Rating --------------------------------------------------------------- Moody's Investors Service affirmed Host Hotels & Resorts' Ba1 senior unsecured debt rating and revised the outlook to negative. The negative outlook reflects ongoing challenges facing the lodging industry, which resulted in the REIT revising its guidance to RevPar declining approximately 20%-23% for full year 2009 from its forecasted decline of 18%-20% at 1Q09. Moody's expects Net Debt to EBITDA in particular to be pressured well into 2010 given the current, weak economic conditions. Moody's notes that Host Hotels bolstered its liquidity and balance sheet strength by raising significant new capital during 2Q09. In April, Host Hotels raised $479 million of common equity followed by the issuance of $400 million of unsecured debt in May. These capital raising efforts should enhance Host Hotels' ability to absorb the expected operating pressures at its current rating level. The Ba1 senior unsecured debt rating reflects the REIT's strong asset quality, strengthened operator diversification, a large unencumbered asset pool and current moderate leverage (4.0X at 6/30/09, defined as net debt to TTM EBITDA). These positive aspects are offset by the cyclicality and high fixed costs associated with the lodging industry, as well as the resulting cash flow and profit volatility. In addition, Moody's expects leverage (net debt/TTM EBITDA) to rise beyond 6.0X over the near- term. Importantly, Host Hotels has good liquidity to meet its near-term debt obligations. Moody's indicated that a return to a stable outlook would be predicated upon net debt to TTM EBITDA at or below 6.0X with little change to its existing liquidity profile. The ratings would be downgraded should fixed charge coverage slip below 1.5X, net debt to TTM EBITDA exceed 6.0X on a sustained basis, or debt covenant cushion deteriorate materially. Moody's last rating action with respect to Host Hotels & Resorts, Inc., was on March 10, 2009, when Moody's affirmed the ratings of Host Hotels & Resorts, Inc., and Host Marriott, L.P. (senior debt at Ba1), with a stable outlook. These ratings were affirmed with a negative outlook: * Host Hotels and Resorts, Inc. -- senior unsecured debt at Ba1, with these rated bonds being obligations of Host Marriott, L.P.; industrial revenue bonds at Ba1, with these bonds being obligations of Host Marriott, L.P.; preferred stock at Ba2; preferred stock shelf at (P)Ba2. * Host Marriott, L.P. -- senior unsecured debt at Ba1; senior unsecured shelf at (P)Ba1. Host Hotels and Resorts, Inc., is a REIT headquartered in Bethesda, Maryland, USA, that owns upscale and luxury full-service hotels and resorts operated primarily under premium brands, such as Marriott, Starwood, Ritz-Carlton and Hyatt. The REIT, the largest in the lodging REIT sector, owns or holds controlling interest in approximately 124 lodging properties. ICICI BANK: Moody's Puts Prim-1 Rating to Commercial Paper ---------------------------------------------------------- Moody's ABCP rating actions for the seven-day period ended August 10, 2009. Moody's Rated USCP Program Prime-1 During The Period August 4, 2009, Through August 10, 2009: Moody's Assigns Prime-1 Rating To ICICI Bank's Uscp Program Supported By A Letter Of Credit Provided By Bank Of America Moody's has assigned a Prime-1 rating to the commercial paper issued by ICICI Bank Limited (rated Ba2/NP/C-) through its $160 million fully supported commercial paper program. ICICI Bank, acting through its Bahrain Branch, its Hong Kong Branch, and its New York Branch, will issue commercial paper notes and will use the proceeds for general corporate purposes. Each issuing entity will issue its own series of commercial paper. Bank of America, N.A. (Aa3/Prime-1/D) has issued an irrevocable, direct- pay letter of credit that provides full and timely support for the repayment of each series of commercial paper notes upon maturity. Moody's rating on the CP notes is based primarily on Bank of America's Prime-1 rating. Deutsche Bank National Trust Company (Aa3/Prime-1/C), acting as depositary, will draw on the letter of credit to pay maturing series of commercial paper notes. ICICI Bank Limited is the largest retail bank in India. These ABCP Program Was Placed Under Review For Possible Downgrade During The Period August 4, 2009 Through August 10, 2009: Taylor, Bean & Whitaker Mortgage Corp.'S Ocala Funding Placed On Review For Possible Downgrade On August 5, 2009, Moody's placed both the Prime-1 rating of the extendible asset-backed commercial paper and the Baa2 rating of the subordinated notes issued by Ocala Funding, LLC, on review for possible downgrade. Ocala is a partially supported, single-seller mortgage warehouse program sponsored by Taylor, Bean & Whitaker Mortgage Corp (TB&W). Ocala provides warehouse funding for conforming residential mortgages and has a program size of $1.75 billion. The rating action follows news of a federal investigation into TB&W which raises concerns over the company's business practices. The FHA has suspended TB&W from making loans insured by that agency and this has triggered an event of default under the Ocala program documents and placed the program into wind down. TB&W has announced that it has closed down its mortgage lending operations. Moody's is placing the Ocala ratings on review based on the increased uncertainty with respect to the program collateral and operations and expects to the resolve the review as more information becomes available. The Rating Of These ABCP Program Was Withdrawn During The Period August 4, 2009 Through August 10, 2009: Advantage Asset Securitization Corp. Rating Withdrawn At the issuer's request, Moody's has withdrawn the Prime-1 rating of the ABCP issued by Advantage Asset Securitization Corporation, a partially supported, multiseller ABCP program administered by the Mizuho Corporate Bank, Ltd. (Aa3/Prime-1/D+). As of August 3, 2009, all outstanding ABCP was repaid in full. Advantage Asset Securitization Corporation will not issue any further ABCP. IMPEL INC: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------- Impel, Inc., has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Western District of North Carolina, listing $7,037,600 in total assets and $3,171,559 in debts. Will Boye at Charlotte Business Journal reports that Impel's debts include unsecured claims totaling $147,671. Court documents say that the majority of those assets and liabilities are tied up in a Seven Eagles property that burned down in 2008. Impel, according to Business Journal, said that it put about $7 million into a seven-bedroom home at 8407 Winged Bourne Road, and owes more than $3 million on a construction loan for the property to Blue Ridge Savings Bank Inc. A fire destroyed the Seven Eagles property in June 2008. Investigators determined it wasn't accidental, and Charlotte Fire Investigation Task Force's chief investigator David Lowery said that the case remains open, Business Journal states. The report says that the house has been rebuilt since the fire and is listed for sale for $4.49 million. According to Business Journal, Blue Ridge filed a motion with the court seeking relief from an automatic stay, to be allowed to take steps like foreclosing upon the Seven Eagles property, which it values at $3.1 million. Based in Mint Hill, Impel, Inc., is a luxury home builder founded in 1991. It specializes in luxury homes with a heavy European influence and engages in several design-build projects each year. The Company has built luxury homes in communities like Piper Glen, Stratford, on Providence in Weddington and Firethorne Country Club in Marvin. Impel was owned and operated by Mirko Djuranovic. INSIGNIA SOLUTIONS: Posts $49,642 Net Loss in Qtr. Ended June 30 ---------------------------------------------------------------- Insignia Solutions plc, doing business as DollarDays International, Inc., posted a net loss of $49,642 for three months ended June 30, 2009, compared with a net income $785,311 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $151,694 compared with a net income of $368,857. At June 30, 2009, the Company's balance sheet showed total assets of $1,937,390, total liabilities of $1,608,652 and stockholders' equity of $328,738. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4183 On March 30, 2009, Malone & bailey, PC in Houston, Texas, expressed substantial doubt about Insignia Solutions plc's ability to continue as a going concern after auditing the Company's financial statements for fiscal years ended December 31, 2008, and 2007. The auditor noted that the Company has suffered an accumulated deficit. The Company also state that it has a recent history of operating losses and operating cash outflows. About Insignia Solutions plc Headquartered in Fremont, California, Insignia Solutions plc, dba DollarDays International, Inc., develops software programs and provides general merchandise for resale to businesses through its Web site at http://www.DollarDays.com/ JEFFREY ABREU PROSPER: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Joint Debtors: Jeffrey Abreu Prosper dba Aac, Inc Lissette Alers Mendez dba Aac, Inc PO Box 1334 Isabela, PR 00662 Bankruptcy Case No.: 09-06612 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtors' Counsel: Alberto O. Lozada Colon, Esq. Bufete Lozada Colon PO Box 427 PMB 1019 Mayaguez, PR 00681 Tel: (787) 833-6323 Email: alberto3@coqui.net Total Assets: $2,374,500 Total Debts: $3,609,738 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/prb09-06612.pdf The petition was signed by the Joint Debtors. JEH INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: Jeh, Inc., An Arizona Corporation 6161 E. Farimount St. Tucson, AZ 85712 Bankruptcy Case No.: 09-19293 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court District of Arizona (Tucson) Debtor's Counsel: Michael W. Baldwin, Esq. Law Offices of Michael Baldwin PLC P.O. Box 35487 Tucson, AZ 85740-5487 Tel: (520) 792-3600 Fax: (520) 792-8616 Email: michael.baldwin@azbar.org Total Assets: $1,935,279 Total Debts: $1,174,613 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb09-19293.pdf The petition was signed by John E. Haines, president of the Company. JOHN DUNCAN CRERAR: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: John Duncan Crerar, Jr. 25158 Lightridge Farm Road Aldie, VA 20105 Bankruptcy Case No.: 09-16498 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Debtor's Counsel: Michael Lawrence Eisner, Esq. Oh & Eisner, PLLC 8484 Westpark Dr. Suite 640 McLean, VA 22102 Tel: (703) 821-9425 Email: Michael.Eisner1@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 9 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/vaeb09-16498.pdf The petition was signed by John Duncan Crerar, Jr. JOSEPH YAKUBIK: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Joint Debtors: Joseph William Yakubik PO Box 530778 Henderson, NV 89053 Darcie Ann Yakubik fka Darcie Crine 1448 Macdonald Ranch Drive Las Vegas, NV 89102 Bankruptcy Case No.: 09-24688 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtors' Counsel: Timothy S. Cory, Esq. 8831 W. Sahara Ave. Lakes Business Park Las Vegas, NV 89117 Tel: (702) 388-1996 Email: tim.cory@corylaw.us Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-24688.pdf The petition was signed by the Joint Debtors. JS KEMPF: Files for Chapter 7 Bankruptcy Protection --------------------------------------------------- J.S. Kempf & Associates has filed for Chapter 7 bankruptcy protection, listing more than $4.4 million in liabilities against less than $50,000 in assets. Cameron Steele at CharlotteObserver.com reports that J.S. Kempf's creditors include: * largest creditors with unsecured claims: -- BB&T, owed about $2.1 million; and -- Fifth Third Bank, owed about $1.3 million. * secured creditors: -- First Horizon Construction Lending, owed about $334,000; and -- RBC Builder Finance, owed about $365,000. Matthews-based homebuilder J.S. Kempf & Associates built homes in neighborhoods including The Palisades, a luxury home development near Lake Wylie, and The Club at Longview, off Rea Road in Union County south of Mecklenburg. KIMAN CHANG: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------- Joint Debtors: Kiman Chang fka Kiman Tjokroaminoto fdba Fresh and Natural dba Prime Wok Express Juliana Chang fka Juliana Susilo 2038 Cassia Way Rocklin, CA 95765 Bankruptcy Case No.: 09-37039 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtors' Counsel: Patrick Calhoun, Esq. 333 W San Carlos, St #1625 San Jose, CA 95110 Tel: (408) 279-2288 Total Assets: $1,347,659 Total Debts: $1,793,748 A full-text copy of the Debtors' petition, including a list of their 12 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/caeb09-37039.pdf The petition was signed by the Joint Debtors. LEAR CORP: Committee Proposes Lowenstein Sandler as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors in Lear Corp.'s cases seeks the Court's authority to retain Lowenstein Sandler PC as its counsel. The Committee has selected Lowenstein because of its attorneys' experience and knowledge in the matters for which the firm is to be retained. As counsel, Lowenstein will: (a) provide legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Section 1102 of the Bankruptcy Code; (b) assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business, potential claims, and any other matters relevant to the case, or to the formulation of a plan of reorganization or a sale of estate assets; (c) participate in the formulation of a Plan or sale of estate assets; (d) provide legal advice as necessary with respect to any disclosure statement and Plan filed in the Chapter 11 cases and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; (e) prepare on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements and other legal papers; (f) appear in Court to present necessary motions, applications, and pleadings, and otherwise protecting the interests of those represented by the Committee; (g) assist the Committee in requesting the appointment of a trustee or examiner, should that action be necessary; and (h) performing other legal services as may be required and that are in the best interests of the Committee and creditors. The Debtors will pay Lowenstein based on the firm's current hourly rates: Professional Rate/Hour ------------ --------- Partners $400 - $765 Senior Counsel $310 - $520 Counsel $335 - $405 Associates $220 - $350 Legal Assistants $120 - $195 The Debtors will also reimburse Lowenstein for actual and necessary expenses. Kenneth A. Rosen, Esq., at Lowenstein Sander PC, in New York, assures the Court that his firm is a "disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. 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: Committee Proposes Mesirow as Financial Advisors ----------------------------------------------------------- The Official Committee of Unsecured Creditors in Lear Corp.'s cases seeks the Court's authority to retain Mesirow Financial Consulting LLC as its financial advisor, nunc pro tunc to July 17, 2009. As financial advisor, Mesirow will: (a) review and analyze the Debtors' proposed Term Sheet and pre-negotiated plan of reorganization; (b) review and analyze potential recoveries to unsecured creditors and related liquidation and other analyses; (c) review and analyze cash flow budgets, including wind down costs and other transitional costs; (d) assist in the review of reports or filings as required by the Bankruptcy Court or the Office of the United States Trustee, including, but not limited to, schedules of assets and liabilities, statements of financial affairs and monthly operating reports; (e) review the Debtors' financial information, including, but not limited to, analyses of cash receipts and disbursements, DIP budget, financial statement items and proposed transactions for which Bankruptcy Court approval is sought; (f) review and analyze the Debtors' business plan, operations, assets and strategic plans and the business and financial condition of the Debtors generally; (g) evaluate employee issues, including, but not limited to potential employee incentive and severance plans, review and analysis of pension funding and related liabilities, and other union related issues; (h) Analyze assumption and rejection issues regarding executory contracts and leases, including, but not limited to, dealers, suppliers, and other counterparties; (i) review and analyze legal entity relationships, including, but not limited to, analysis of issues which may be raised regarding substantive consolidation and accounting for intercompany transactions and balances; (j) advise and assist the Committee in negotiations and meetings with the Debtors, the banks and other lenders, bondholders and any other stakeholders and the financial and legal advisors of these parties; (k) advise and assist on the tax consequences of proposed transactions, including, but not limited to, preservation of tax attributes; (l) assist with the claims resolutions and procedures, including, but not limited to, analyses of creditors' claims by type and entity; (m) provide valuation analyses of the Company, if requested, and provide expert testimony related to any valuation; (n) review and analyze potential fraudulent transfers, including specific transaction and forensic analyses; (o) litigate consulting services and expert witness testimony regarding confirmation issues, avoidance actions or other matters; (p) review and analyze exit and other new financing, including collateral analysis and cash flow validation; and (q) other functions as requested by the Committee or its counsel to assist the Committee in the Chapter 11 cases. The Committee has selected Mesirow because of the firm's diverse experience and extensive knowledge in the field of bankruptcy. The Debtors will pay Mesirow based on the firm's customary hourly rates: Professional Title Rate/Hour ------------ ----- --------- Larry H. Lattig Senior Managing Director $750 Ben Pickering Senior Managing Director $750 Edna Lee Managing Director $700 Krysten Thomas Senior Vice President $640 Tiffany Davis Vice President $510 Jonas Curchack Senior Associate $410 Ben Fund Associate $350 David Neziroski Paraprofessional $160 The Debtors will also reimburse Mesirow for necessary expenses incurred, which will include, photocopying, delivery service, postage, vendor charges and other out-of-pocket expenses. The Debtors will indemnify defend and hold harmless Mesirow, its officers, directors, shareholders, principals, members, managers, employees, and affiliates from and against any and all losses, claims damages, and liabilities. Larry Lattig, senior managing Director of Mesirow Financial Consulting, LLC, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Committee Amends Indemnification Provisions The Committee submitted an amended proposed order with the Court, which provides that: (a) all requests of Mesirow Financial Consulting, LLC for payment of indemnity will be made by means of an application and will be subject to review by the Court to ensure that payment of that indemnity conforms to the terms of the Application and is reasonable based upon the circumstances of the litigation or settlement in respect of which indemnity is sought; (b) in no event will Mesirow be indemnified in the case of own bad-faith, self-dealing, breach of fiduciary duty, gross negligence or willful misconduct; (c) in no event will Mesirow be indemnified if the Debtor or a representative of the estate, asserts a claim for, and a court determines by final order that the claim arose out of Mesirow's own bad-faith, self-dealing, breach of fiduciary duty, gross negligence, or willful misconduct; and (d) in the event that Mesirow seeks reimbursement for attorneys' fees from the Debtors, the invoices and supporting time records from those attorneys will be included in Mesirow's own applications and those invoices and time records will be subject to the U.S. Trustee's guidelines for compensation and reimbursement of expenses and the approval of the Bankruptcy Court under the standards of Sections 330 and 331 of the Bankruptcy Code without regard to whether that attorney has been retained under Section 327 of the Bankruptcy Code and without regard to whether those attorneys' services satisfy Section 330(a)(3)(C) of the Bankruptcy Code. About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India, and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tappes as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restrcturing advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of US$1,270,800,000 against debts of US$4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: Court Approves Kirkland as Bankruptcy Attorneys ---------------------------------------------------------- Pursuant to Sections 327(a) and 330 of the Bankruptcy Code, Lear Corp. and its affiliates obtained consent from the Bankruptcy Court to employ Kirkland & Ellis LLP as their attorneys, nunc pro tunc to the Petition Date. The Debtors have selected Kirkland & Ellis because of the firm's expertise and extensive experience and knowledge in the fields of debtors' protections, creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. As attorneys, Kirkland & Ellis will: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties; (b) advise and consult on the conduct of the Chapter 11 Cases, including all of the legal and administrative requirements of operating in Chapter 11; (c) attend meetings and negotiate with representatives of creditors and other parties-in-interest; (d) take all necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors and represent the Debtors' interests in negotiations concerning all litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; (e) prepare pleadings, including motions, applications, answers, orders, reports and papers necessary or otherwise beneficial to the administration of the Debtors' estates; (f) represent the Debtors in connection with obtaining financing and new money investments; (g) advise the Debtors in connection with any potential sales of assets; (h) appear before the Court and any appellate courts to represent the interests of the Debtors' estates before those courts; (i) consult with the Debtors regarding tax matters; (j) take any necessary action on behalf of the Debtors to negotiate, prepare on behalf of the Debtors and obtain approval of a Chapter 11 plan; and (k) perform all other necessary or otherwise beneficial legal services for the Debtors in connection with the prosecution of the Chapter 11 Cases, including: (i) analyzing the Debtors' leases and contracts and the assumptions, rejections or assignments; (ii) analyzing the validity of liens against the Debtors; and (iii) advising the Debtors on corporate and litigation matters. The Debtors will pay Kirkland & Ellis based on the firm's customary hourly rates: Professional Range ------------ ----- Partners $550-$1,045 Of Counsel $500-$965 Associates $320-$660 Paraprofessionals $120-$280 James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., Ryan Blaine Bennett, Esq., and Paul Wierbicki, Esq., are expected to have primary responsibility in providing services to the Debtors. The Debtors will also reimburse Kirkland & Ellis for expenses incurred in connection with the Chapter 11 cases including overnight mail, transportation, overtime expenses, computer- assisted legal research, photocopying, meals and lodging. On February 6, 2009, the Debtors paid Kirkland & Ellis a classic retainer of $750,000. Pursuant to the Engagement Letter, the classic retainer payments are property of Kirkland & Ellis and are not held in a separate account. James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in New York, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent an interest adverse to the Debtors' estates. 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: Gets Court OK for Winston Strawn as Special Counsel -------------------------------------------------------------- Lear Corp. and its affiliates won permission from the Bankruptcy Court to employ Winston & Strawn LLP as their special corporate and finance counsel, nunc pro tunc to the Petition Date. The primary attorneys anticipated to work with the Debtors and their current hourly rates are: Attorney Name Title Hourly Rate ------------- ----- ----------- Bruce A. Toth Partner $800 Charles B. Boehrer Partner $715 Mark S. Weisberg Partner $615 Brian M. Schafer Partner $570 Timothy W. Smith Partner $580 Erik B. Lundgren Partner $500 Erin A. Kartheiser Associate $450 Benjamin Gould Associate $415 Erin G. Stone Associate $380 Brendan J. Geary Associate $345 Matthew Petrillo Associate $315 Jacob B. Schtevie Associate $295 Kristen Nowicki Associate $280 Christina T. Trotta Associate $280 The Debtors have selected Winston & Strawn to act as their special counsel because of the firm's extensive experience, knowledge and expertise in the areas of corporate and securities law, litigation and employee benefits matters. Winston & Strawn has also represented the Debtors in connection with numerous corporate, securities, employee benefits, litigation and patent matters since 1992. As special counsel, Winston & Strawn will represent the Debtors in connection with: (a) general corporate matters including external reporting and corporate compliance matters; (b) financing matters including capital structure and restructuring matters; (c) securities matters; (d) employee benefits and other employment matters; (e) litigation including patent, Employee Retirement Income Security Act and general litigation; and (f) any other matters as the Debtors may specifically request during the pendency of the Chapter 11 Cases for which Kirkland & Ellis LLP is not advising the Debtors. Bruce A. Toth, Esq., at Winston & Strawn LLP, in Chicago, Illinois, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Lear Corp. Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company's products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear's headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Outside the United States, Lear has subsidiaries in Germany, Luxembourg, Sweden, Singapore, China, India, and Mexico, among others. Lear Corporation and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part of the Chapter 11 filing include Lear South Africa Limited, Lear Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear Mexican Holdings Corporation, and Lear South American Holdings Corporation. Attorneys at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy counsel. McCarthy Tetrault LLP has been engaged as CCAA counsel. Bodman LLP has been hired as special Michigan counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also been tappes as special counsel. Alvarez & Marsal North America LLC, is the Debtors' restrcturing advisors. Ernst & Young LLP is the Debtors' auditors and tax advisors. Kurtzman Carson Consultants LLC is the Debtors' claims and notice agent. Simpson Thacher & Bartlett LLP represents JP Morgan, as admin. agent for senior secured lenders and DIP lenders. As of May 30, 2009, Lear has assets of US$1,270,800,000 against debts of US$4,536,000,000. Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000) LEAR CORP: Proposes Miller Buckfire as Investment Banker -------------------------------------------------------- Lear Corp. and its affiliates seek the Court's authority to employ Miller Buckfire & Co., LLC, as their investment banker and financial advisor, nunc pro tunc to the Petition Date. The Debtors have selected Miller Buckfire because of the firm's extensive experience in providing financial advisory and investment banking services to financially distressed companies and to creditors, equity holders and other constituencies in reorganization proceedings and complex financial restructuring. The Debtors note that Miller Buckfire has worked closely with their management and has become well-acquainted with their businesses, capital structure, financial affairs and related matters. According to the Debtors, the experience Miller Buckfire gained before the Petition Date will facilitate the provision of the services needed in their Chapter 11 Cases. Pursuant to an Engagement Letter, Miller Buckfire will: (a) review and analyze the Debtors' business, operations and financial projections; (b) provide financial and valuation advice and assistance to the Debtors in developing and seeking approval of a restructuring plan under Chapter 11; (c) provide financial and valuation advice and assistance to the Debtors in structuring any new securities to be issued under the Plan; (d) assist and participate in negotiations with entities or groups affected by the Plan; (e) participate in hearings before the Court with respect to the matters upon which Miller Buckfire has provided advice, including, as relevant, coordinating with the Debtors' counsel; and (f) provide other financial advisory services as the Debtors may reasonably request. Under the Engagement Letter and subject to the Court's approval, Miller Buckfire will receive: (a) a monthly financial advisory fee of $250,000; and (b) "Restructuring Transaction Fee," contingent upon the consummation of a Restructuring and payable at the closing, equal to $10,875,000, in the case of a Prepackaged Plan, or $12,750,000, in the case of any other restructuring pursuant to Chapter 11 of the Bankruptcy Code. Fifty percent of the monthly financial advisory fees paid by the Debtors will be credited against the amount of any Restructuring Transaction Fee(s) paid to Miller Buckfire in the case of a Prepackaged Plan. (c) If the Debtors have requested in writing that Miller Buckfire provide Financing services, then if at any time on or prior to the entry of a final order approving any debtor-in-possession Financing, any debtor-in-possession Financing is consummated that replaces the DIP Facility contemplated by the Joint Plan of Reorganization Term Sheet, which is attached as Exhibit 1 to the Company's Plan Support Agreements, then the Company will pay to Miller Buckfire financing fees in the amount of 1% of the gross proceeds of that replacement debtor-in-possession Financing. In addition, the Debtors have agreed to reimburse Miller Buckfire for its reasonable expenses incurred in connection with the provision of services, like travel and other reasonable out-of- pocket expenses. Prior to the Petition Date, the Debtors paid Miller Buckfire monthly fees of $1,750,000, pursuant to Section 2(a) of the Engagement Letter, a Restructuring Transaction Fee pursuant to Section 2(b) of the Engagement Letter of $4,562,500 and $25,638 for reimbursement of expenses incurred from December 16, 2008, through the Petition Date. The Debtors also paid Miller Buckfire a fee and expense retainer of $265,000. In total, the Debtors paid Miller Buckfire $6,603,138 prior to the Petition Date. Durc A. Savini, a managing director of Miller Buckfire & Co., LLC, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as required by Section 327(a). The Debtors have agreed to indemnify and to make certain contributions to Miller Buckfire in accordance with the indemnification provisions. The Debtors note that the indemnification provisions reflected in the Engagement Letter are customary and reasonable terms of consideration for financial advisors and investment bankers like Miller Buckfire for proceedings both out of court and in Chapter 11. 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: To Lose $500MM if Shinsei Bank Controls Unit ------------------------------------------------------------- Lehman Brothers Holdings Inc. asks the U.S. Bankruptcy Court for the Southern District of New York to enter an order enforcing the automatic stay against Ltd. Shinsei Bank Ltd. LBHI tells the Bankruptcy Court that it may lose $500 million if Japan's Shinsei Bank Ltd. gains control of the reorganization of an Asian Lehman unit. LBHI and its Hong Kong affiliate, Lehman Brothers Asia Holdings Limited, have an intercompany claim in the Japanese insolvency proceedings of their affiliate, Sunrise Finance Co., Ltd. Shinsei Bank, one of LBHI's largest unsecured creditors and a co-chair of the Asia sub-committee within the Creditors Committee, recently has proposed an alternative plan of liquidation in the Sunrise insolvency proceeding designed to preclude entirely LBHI's and LB Asia's recoveries from Sunrise, so that Shinsei Bank may recover virtually 100% of its Sunrise claims. Richard L. Levine, Esq., at Weil, Gotshal & Manges LLP, asserts that Shinsei Bank's actions in Japan constitute a willful and knowing violation of the automatic stay. Shinsei Bank not only is aware of the automatic stay provided for in Section 362(a) of the Bankruptcy Code, but also, being an active participant in these cases and on the Asia sub-committee within the Creditors Committee, is acutely aware of the devastating impact that its actions in Sunrise's insolvency proceeding could have on the Debtors' estates. Accordingly, the Debtors request that Shinsei Bank be directed to comply with the automatic stay and cease any further attempts to block LBHI's and LB Asia's recoveries from Sunrise. Furthermore, the Debtors request that Shinsei Bank be held in contempt of this Court for willfully and knowingly violating the automatic stay. 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. Lehman Brothers 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. 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 U.S. 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 (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of 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, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. 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. 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. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. 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) LENNY DYKSTRA: Court to Hear Index's Ch. 7 Conversion Plea Sept. 1 ------------------------------------------------------------------ Jane Wells at CNBC reports that the Hon. Geraldine Mund of the U.S. Bankruptcy Court for the Central District of California has put off until September 1 a decision on Index Investors' motion to replace Lenny Dykstra as trustee of the estate or convert his Chapter 11 reorganization case to Chapter 7 liquidation. "He's [Mr. Dykstra] gotta show me where some money's going to come from," CNBC quoted Judge Mund as saying. As reported by the Troubled Company Reporter on August 11, 2009, Index Investors made two separate loans totaling $770,000 in 2008 secured against the Thousand Oaks estate home Mr. Dykstra bought from Wayne Gretzky for $18.5 million in 2007. The loans entitle Index Investors to the second and third secured interest in the property. The first lien is held by JP Morgan Chase as security against a $12 million loan on the home. The property is Mr. Dykstra's most valuable property asset. According to CNBC, Judge Mund wants proof of insurance brought to court by September 1, as there were conflicting accounts over whether the home is insured. CNBC relates that Judge Mund also wants proof that Mr. Dykstra has listed the home for sale by then, along with another home he owns worth anywhere from $5 million to $8 million. Judge Mund, the report states, said that she wants proof that Mr. Dykstra has an income plan next time she sees him. Jon Hayes, Mr. Dykstra's lawyer, said that his client has no income and that his entire Major League Baseball pension is going to his estranged wife by court order, CNBC relates. "I guess she should be paying part of the mortgage, or at least the insurance," the report quoted Judge Mund as saying. CNBC reports that Mr. Dykstra said that he will relaunch the Players Club Magazine. Mr. Hayes, CNBC says, told the court that a major investor should soon be lined up and that "it'll [Players Club] be extremely valuable." Mr. Dykstra believes he can regain control of his former car wash business, the report states, citing Mr. Hayes. Judge Mund required Mr. Dykstra to present on September 1 a financial plan containing "an outline of what's going to happen in this case," CNBC relates. Westlake Village, California-based Lenny Dykstra is a former Major League Baseball All-Star. He was center fielder for the New York Mets and Philadelphia Phillies. He filed for Chapter 11 bankruptcy protection on July 7, 2009 (Bankr. C.D. Calif. Case No. 09-18409). M Jonathan Hayes, Esq., at the Law Office of M Jonathan Hayes in Northridge, California, assists the Debtor in his restructuring efforts. The Debtor listed up to $50,000 in assets and $10,000,001 to $50,000,000 in debts. LITTLE TRAVERSE: S&P Downgrades Senior Unsec. Debt Rating to 'CC' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issuer credit and senior unsecured debt ratings on the Little Traverse Bay Band of Odawa Indians (the Tribe) to 'CC' from 'CCC'. The rating outlook is negative. The rating downgrade follows the August 11, 2009 announcement by the Tribe that it intends to suspend the $6.3 million interest payment on its senior notes due August 17. S&P will lower the ratings to 'D' on August 17, 2009, once the interest payment has been missed. While the notes provide for a 30-day grace period during which interest may be paid to avoid a default, under S&P's criteria, S&P consider an event of default to have occurred on the payment date unless S&P is confident that a payment will be made during the grace period. MAGUIRE PROPERTIES: Says No Impairment Charge on Park Place I Deal ------------------------------------------------------------------ Maguire Properties, Inc., says there will be no impairment charge taken during the quarter ending September 30, 2009, as a result of the disposition of Park Place I properties as they were written down to their fair value as of June 30, 2009. As reported by the Troubled Company Reporter, Maguire completed on August 11, 2009, a deed in lieu of foreclosure with the lender to dispose of Park Place I. Additionally, it closed the sale of certain parking areas together with related development rights associated with the Park Place campus and received proceeds of roughly $17 million that will be used for general corporate purposes. Nelson Rising, Maguire's President and Chief Executive Officer, said, "We are extremely pleased with the swift and timely execution of these transactions which represents another step in our program of working cooperatively with lenders. As previously stated, the Company's Board of Directors approved a plan to dispose of a number of identified assets including Park Place I. The Company moved quickly with the lender to achieve a satisfactory result for all parties." About Maguire Properties, Inc. Maguire Properties, Inc. is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high- quality office properties in the Southern California market. Maguire Properties, Inc. is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. For more information on Maguire Properties, visit its website at www.maguireproperties.com. As of June 30, 2009, assets total $4,392,301,000 against debts of $4,866,253,000, for a stockholders' deficit of $473,952,000. Net loss for three months ended June 30, 2009 was $428,608,000, compared with a $112,726,000 net loss during the year-ago period. The Company said, in its second quarter report on Form 10-Q, if it is unable to refinance or repay its debt as it comes due and maintain sufficient cash flow, its business will be adversely affected, and it may be required to seek for bankruptcy protection. MEDIACOM COMMUNICATIONS: Amends Tender Offer for 2011, 2013 Notes ----------------------------------------------------------------- Mediacom Communications Corporation said subsidiaries Mediacom LLC and Mediacom Capital Corporation have amended their cash tender offers for their outstanding 9-1/2% Senior Notes due 2013 and their outstanding 7-7/8% Senior Notes due 2011. The Companies have eliminated the maximum offer amount that applied to the tender offer for the 7-7/8% Notes, and are now offering to purchase any and all of the outstanding 9-1/2% Notes and any and all of the outstanding 7-7/8% Notes that are validly tendered and not withdrawn and accepted for purchase in the tender offers. On August 11, the Companies originally said if the amount of 7-7/8% Notes that are validly tendered and not withdrawn on or prior to the expiration date for that offer exceeds the maximum principal amount, then the Companies will accept 7-7/8% Notes, if any, on a pro rata basis. The Companies intend to fund the purchase of the Notes pursuant to the amended tender offers with net proceeds from a new issuance of their senior notes in the principal amount of $350 million, and borrowings of $300 million under a new tranche of incremental facility term loans under an existing credit agreement of their operating subsidiaries. The Companies also now intend, subject to the satisfaction or waiver of the conditions to the tender offers, to call for redemption all Notes that are not tendered and accepted for purchase in the tender offers prior to or promptly following completion of the tender offers. The Companies are not amending the Tender Offering Consideration, the Early Tender Payment or the Total Consideration being offered for the 9-1/2% Notes and the 7-7/8% Notes: Outstanding Tender Early Series Principal Offer Tender Total of Notes Amount Consideration Payment Consideration -------- ----------- ------------- ------- ------------- 9-1/2% Notes $500,000,000 $982.50 $20.00 $1,002.50 7-7/8% Notes $125,000,000 $980.00 $20.00 $1,000.00 The tender offers are still scheduled to expire at 11:59 p.m., New York City time, on September 8, 2009, unless either such tender offer is extended or earlier terminated. The Total Consideration for the Notes in the tender offers includes an early tender payment of $20 per $1,000 principal amount of Notes tendered. Holders who tender Notes in the tender offers after 5:00 p.m., New York City time, on the Early Tender Date but at or prior to 11:59 p.m., New York City time on the Expiration Date and whose Notes are accepted for purchase will not be entitled to receive the Early Tender Payment and will therefore be entitled only to receive the consideration specified in the table above under the heading "Tender Offer Consideration", for each $1,000 principal amount of Notes tendered. In addition to the Total Consideration or the Tender Offer Consideration as applicable, the Companies will also pay an amount equal to the accrued and unpaid interest on the principal amount of all Notes that are purchased from the last interest payment date applicable to the Notes to, but not including, the applicable payment date. Under the existing terms of the tender offers, the Companies may accept Notes of either or both series for payment after the Early Tender Date but prior to the Expiration Date. The Companies presently intend (but are not obligated) to have an Early Acceptance Date and an Early Payment Date for both the 9-1/2% Notes and the 7-7/8% Notes. The Companies' obligation to accept for payment and to pay for the Notes in the tender offers remains subject to the satisfaction or waiver of the conditions to the tender offers specified in the Offer to Purchase, dated August 11, 2009, as amended and supplemented by the Supplement to the Offer to Purchase, dated August 13, 2009, including that the Companies close on the issuance of $350 million of senior notes and the operating subsidiaries close on the $300 million tranche of incremental facility term loans. The Companies have retained Wells Fargo Securities and Citi to serve as dealer managers for the offers, and Global Bondholder Services Corporation to serve as the information agent and depositary. Copies of the offer to purchase, supplement to the offer to purchase and related documents may be obtained from Global Bondholder Services Corporation at (866) 873-7700. Questions regarding the tender offers may be directed to Wells Fargo Securities at (866) 309-6316 or Citi at (800) 558-3745. Private Offering of Senior Notes due 2019 Mediacom LLC and Mediacom Capital Corporation intend to offer $300 million in aggregate principal amount of new senior notes due 2019 in a private offering to be conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. Mediacom LLC and Mediacom Capital will use the net proceeds of the offering, together with borrowings under a proposed new incremental term loan facility to be entered into by Mediacom LLC's operating subsidiares pursuant to their existing credit agreement, to purchase up to $500 million principal amount of their outstanding 9-1/2% senior notes due 2013 and 7-7/8% senior notes due 2011 pursuant to two tender offers. There is currently $500 million and $125 million principal amount outstanding of 9-1/2% notes and 7-7/8% notes, respectively. The 91/2% senior notes will be given priority in the tender offers. The Senior Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration. About Mediacom Communications Mediacom Communications Corporation (Nasdaq: MCCC) -- http://www.mediacomcc.com/-- is the nation's eighth largest cable television company and one of the leading cable operators focused on serving the smaller cities and towns in the United States. Mediacom Communications offers a wide array of broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high- definition television, high-speed data access and phone service. MEDIACOM COMMUNICATIONS: Files Pro Forma Info on Transfer Deal -------------------------------------------------------------- Mediacom Communications Corporation on August 11, 2009, submitted to the Securities and Exchange Commission information being used in connection with a preliminary offering memorandum relating to the offering of senior notes by Mediacom LLC and Mediacom Capital Corporation. A full-text copy of the SEC filing is available at no charge at http://ResearchArchives.com/t/s?41a2 The Company disclosed unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2008, and the six months ended June 30, 2008 and 2009, which give effect to an asset transfer agreement and the net impact of Mediacom LLC's cash contribution to MCC. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2008, and the six months ended June 30, 2008, and 2009, give effect to the Transactions as if they occurred on January 1, 2008. On September 7, 2008, MCC entered into a Share Exchange Agreement with Shivers Investments, LLC and Shivers Trading & Operating Company. Both STOC and Shivers are affiliates of Morris Communications Company, LLC. On February 13, 2009, MCC completed the Exchange Agreement pursuant to which it exchanged 100% of the shares of stock of a wholly owned subsidiary, which held roughly $110 million of cash and non-strategic cable systems serving roughly 25,000 basic subscribers contributed by Mediacom LLC, for 28,309,674 shares of MCC Class A common stock held by Shivers. On February 11, 2009, certain of Mediacom LLC's operating subsidiaries executed the Transfer Agreement with MCC and the operating subsidiaries of Mediacom Broadband LLC, pursuant to which certain of Mediacom LLC's cable systems located in Florida, Illinois, Iowa, Kansas, Missouri and Wisconsin, which serve roughly 45,900 basic subscribers, would be exchanged for certain of Mediacom Broadband's cable systems located in Illinois, which serve roughly 42,200 basic subscribers, and a cash payment of $8.2 million. The Asset Transfer was completed on February 13, 2009. As part of the Transfer Agreement, Mediacom LLC contributed to MCC cable systems located in Western North Carolina, which serve roughly 25,000 basic subscribers. The cable systems were part of the Exchange Agreement. Mediacom LLC received a $74 million cash contribution on February 12, 2009, which funds had been distributed to MCC by Mediacom Broadband on the same date. In total, Mediacom LLC received $82.2 million under the Transfer Agreement, which it used to repay a portion of the outstanding balance under the revolving commitments of its operating subsidiaries' bank credit facility. On February 12, 2009, after giving effect to the debt repayment funded by the Transfer Proceeds, Mediacom LLC's operating subsidiaries borrowed roughly $110 million under the revolving commitments of such operating subsidiaries' bank credit facility. This represented net new borrowings of about $28 million. On February 12, 2009, Mediacom LLC contributed roughly $110 million to MCC to fund its cash obligation under the Exchange Agreement. About Mediacom Communications Mediacom Communications Corporation (Nasdaq: MCCC) -- http://www.mediacomcc.com/-- is the nation's eighth largest cable television company and one of the leading cable operators focused on serving the smaller cities and towns in the United States. Mediacom Communications offers a wide array of broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high- definition television, high-speed data access and phone service. MEDIACOM COMMUNICATIONS: Posts $34.4 Mil. Net Income for Q2 2009 ---------------------------------------------------------------- Mediacom Communications Corporation posted net income of $34,406,000 for the three months ended June 30, 2009, from $20,932,000 net income for the same period a year ago. For the six months ended June 30, 2009, Mediacom Communications posted net income of $56,768,000 from a net loss of $9,704,000 for the same period a year ago. As of June 30, 2009, the Company had $7,707,511,000 in total assets and $4,134,059,000 in total liabilities, resulting in $426,548,000 in stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $185,851,000 in total current assets, including $68,774,000 in cash and cash equivalents, for $451,307,000 in total current liabilities. Based on the strength of its performance to date and the outlook for the remainder of the year, the Company raised full year 2009 financial guidance as follows: -- Free Cash Flow of at least $1.30 per share; it was previously set at about $1.00 per share Revenue and Adjusted OIBDA are expected to increase on a full year basis, although at reduced growth rates than achieved in 2008, and capital expenditures are expected to decline 20% to 25% on a full year basis from 2008. A full-text copy of the Company's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?41a3 Mediacom Communications said as of June 30, 2009, total debt was $3,370,000,000. Of this amount, $120,300,000 matures during the 12 months ended June 30, 2010. Mediacom Communications also said as of June 30, 2009, total net debt outstanding -- total debt less cash balances -- was $3,301,000,000, a reduction of $30,000,000 from the total net debt outstanding as of March 31, 2009. The Company's net debt leverage was 6.0 times as of June 30, 2009, as compared to 6.2 times for the prior year period. As of the same date, its unused credit facilities were $611,300,000, all of which could be borrowed and used for general corporate purposes based on the terms and conditions of its debt arrangements. About 78% of the total debt was at fixed interest rates or subject to interest rate protection. During the six months ended June 30, 2009, Mediacom Communications paid cash interest of $102,200,000, net of capitalized interest. "We have assessed, and will continue to assess, the impact, if any, of the recent distress and volatility in the capital and credit markets on our financial position. Further disruptions in such markets could cause our counterparty banks to be unable to fulfill their commitments to us, potentially reducing amounts available to us under our revolving credit commitments or subjecting us to greater credit risk with respect to our interest rate exchange agreements. At this time, we are not aware of any of our counterparty banks being in a position where they would be unable to fulfill their obligations to us. Although we may be exposed to future consequences in the event of such counterparties' non-performance, we do not expect any such outcomes to be material," Mediacom Communications said. "We believe that we have sufficient liquidity to meet our requirements over the next two years, which include debt maturities of $62.3 million during the remainder of 2009 and $92.0 million of debt maturities in 2010. In addition to our cash flows from operating activities, we also have available to us $68.8 million of cash on hand and $611.3 million of unused revolving credit commitments as of June 30, 2009," Mediacom Communications added. About Mediacom Communications Mediacom Communications Corporation (Nasdaq: MCCC) -- http://www.mediacomcc.com/-- is the nation's eighth largest cable television company and one of the leading cable operators focused on serving the smaller cities and towns in the United States. Mediacom Communications offers a wide array of broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high- definition television, high-speed data access and phone service. MEDIACOM LLC: Loan Upsizing Won't Affect S&P's 'BB-' Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB-' issue-level rating and '2' recovery rating on Middletown, New York-based Mediacom LLC's (subsidiary of Mediacom Communications Corp. [B+/Stable/--]) proposed term loan D due 2017 are unaffected by the upsizing of that term loan to $300 million from the original $200 million. However, with the upsizing of the term loan D, there is no further capacity for secured debt at Mediacom LLC at the '2' recovery rating level. The '2' recovery rating indicates expectations for substantial (70%-90%) recovery in the event of a payment default. Additionally, the 'B-' issue-level and '6' recovery rating on the newly issued 9.125% senior notes due 2019 are also unaffected by its upsizing to $350 million from the original $300 million. The '6' recovery rating indicates expectations for negligible (0%-10%) recovery in the event of a payment default. MERCER INT'L: Zero Turnout Prompts Extension of Exchange Offer -------------------------------------------------------------- Mercer International Inc. reports that as of 5:00 p.m., New York City time, on August 11, 2009, no 8.5% Convertible Senior Subordinated Notes due 2010 had been tendered for exchange. Mercer thus extended its exchange offer for its Old Notes. The Exchange Offer, previously scheduled to expire August 11, 2009, will now expire at 5:00 p.m., New York City time, on August 25, unless further extended or amended. All other terms and conditions of the Exchange Offer remain unchanged. Questions about the Exchange Offer or requests for additional copies of the Exchange Offer documentation may be directed to the Information Agent for the Exchange Offer, Georgeson Inc., at 1-800-267-4403 (toll free). As reported by the Troubled Company Reporter on July 16, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating and issue-level rating on Mercer International. S&P lowered the corporate credit rating to 'CC' from 'B-' and lowered the rating on the senior unsecured debt to 'CC' from 'B-'. The rating outlook is negative. The rating downgrade followed Mercer's exchange offer announcement. Approximately $67.3 million was outstanding under the old notes at March 31, 2009. Under the terms of the proposed transaction, Mercer is offering to exchange each $1,000 principal amount of the old notes for: * 129 shares of Mercer common stock, plus * A premium of $200 in principal amount of new 3% convertible senior subordinated notes due 2012 (new notes); and * Accrued and unpaid interest to, but excluding, the settlement date. The old notes are currently convertible into Mercer common stock at a conversion rate of 129 shares per $1,000, or a conversion price of $7.75 per share. The new notes will be convertible into Mercer's common stock at a conversion price of $2.75 per share. "The rating downgrade reflects S&P's view that the exchange is tantamount to a default given Mercer's highly leveraged financial profile," said Standard & Poor's credit analyst Andy Sookram. Upon completion of the exchange, S&P would lower the corporate credit rating to 'SD' (selective default). As soon as possible thereafter, S&P will reassess Mercer's post-exchange capital structure. It is S&P's preliminary expectation that, in the event the exchange succeeds, S&P would not raise the corporate credit rating to higher than the previous 'B-' level. S&P acknowledges that the post-exchange capital structure could reduce Mercer's outstanding debt balances. However, until S&P is confident that there is a substantial improvement in market conditions for pulp, S&P is unlikely to consider a rating higher than 'B-'. In addition, the company's financial risk profile encompasses the challenging market conditions and significant earnings volatility for its single product, which is pulp, and refinancing risk associated with the upcoming February 2010 maturity of its EUR40 million Rosenthal working capital facility (EUR10 million outstanding at March 31, 2009). Nonetheless, if the exchange is successful, S&P believes Mercer would have enhanced capacity to weather the current downturn over the next several quarters. The rating outlook is negative, reflecting S&P's expectation to lower the corporate credit rating on Mercer to 'SD' following the completion of the exchange offer. Mercer International Inc. (Nasdaq: MERC, TSX: MRI.U) -- http://www.mercerint.com/-- is a global pulp manufacturing company. METABASIS THERA: June 30 Balance Sheet Upside-Down by $441,000 -------------------------------------------------------------- Metabasis Therapeutics, Inc.'s balance sheet showed total assets of $10,146,000 and total liabilities of $10,587,000, resulting in a stockholders' deficit of $441,000. For three months ended June 30, 2009, the Company reported a net income of $3,060,000 compared with a net loss of $11,542,000 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $5,181,000 compared with a net loss of $22,642,000 for the same period in 2008. As of June 30, 2009 the Company's accumulated deficit totalled $197,500,000. In July 2009, the Company entered into an agreement with a third party to sell its laboratory and office equipment for $1.5 million. In addition, in July 2009 the Company terminated its lease for its corporate headquarters. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4186 On March 27, 2009, Ernst & Young LLP in San Diego, California, expressed substantial doubt about Metabasis Therapeutics, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended December 31, 2008, and 2007. The auditor noted that the Company's existing working capital is not sufficient to meet its cash requirements to fund planned operating expenses and working capital requirements through December 31, 2009, without additional sources of cash. About Metabasis Therapeutics, Inc. Metabasis Therapeutics, Inc. (NASDAQ:MBRX) is a biopharmaceutical company focused on the discovery development of drugs. The Company's product pipeline includes product candidates and advanced discovery programs for the treatment of metabolic diseases as diabetes and hyperlipidemia, which it refer to as its core assets, well as product candidates and advanced discovery programs for the treatment of liver diseases such as hepatitis and primary liver cancer, which it refer to as its non-core assets. METALDYNE CORP: Panel Can Retain Huron Consulting as Fin'l Advisor ------------------------------------------------------------------ The U.S. Bankrupty Court for the Southern District of New York has granted the official committee of unsecured creditors of Metaldyne Corporation, et al., permission to retain Huron Consulting Services, LLC, as its financial advisor, nunc pro tunc to June 9, 2009. Huron has agreed, among other things, to provide these services: a. review and analysis of financial information prepared by the Debtors, their accountants and/or other financial advisors; b. monitoring and analysis of the Debtor's operations and financial condition, cash expenditures, court filings, business plans, operating forecasts, financial projections, liquidation analyses, strategy, projected cash requirements and cash management; c. attendance at meetings of the Committee, the Debtors or their respective professionals, bankruptcy court hearings and other such matters on such occasions as the Committee may, from time to time, request; and d. review and analysis of any restructuring or plan of reorganization or plan of liquidation proposed by the Debtors or any other party and the provision of assistance to the Committee in developing, structuring, evaluating and negotiating the terms and conditions of any restructuring or plan of reorganization, including analysis with respect to the value of securities or other consideration, if any, that may be distributed to unsecured creditors under any such restructuring or plan of reorganization. Huron's hourly rates are: Managing Director $670-$715 Director $540-$610 Manager $400-$450 Associate $325-$350 Analyst $245-$275 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. On August 12, 2009, the Bankruptcy Court approved the sale of substantially all assets of Metaldyne Corp. to Carlyle Group, through entity MD Investors Corp. The price includes $39.5 million in cash, about $32 million in assumed obligations and $425 million in secured debt mostly owned by the group backed by Carlyle and New York-based Solus Alternative Asset Management LP. The sale involves Metaldyne's powertrain, balance shaft module, tubular products, and chassis units. NORTEL NETWORKS: Court OKs Network Svcs. Pact With Chrysler ------------------------------ ---------------------------- Nortel Networks Inc. and its affiliated debtors obtained 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 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: Panel's Akin Gump Bills $960,000 for June Work --------------------------------------------------------------- Three professionals hired in Nortel Networks Inc.'s Chapter 11 cases filed applications, seeking interim monthly allowance of fees and reimbursement of expenses on account of services they provided to the Debtors: Professional Fee Period Fees Expenses ------------ ---------- ---------- -------- Huron Consulting Group 06/01/09 to $112,613 $20,836 06/30/09 Punter Southall LLC 05/08/09 to $124,193 $0 06/30/09 Morris Nichols Arsht 06/01/09 to $74,734 $42,928 & Tunnell LLP 06/30/09 Four other professionals retained by the Official Committee of Unsecured Creditors also filed monthly fee applications for June 2009. They are: Professional Fee Period Fees Expenses ------------ ---------- ---------- -------- Akin Gump Strauss 06/01/09 to $962,202 $25,000 Hauer & Feld LLP 06/30/09 Fraser Milner 06/01/09 to C$548,943 C$11,021 Casgrain LLP 06/30/09 Ashurst LLP 06/01/09 to GBP115,135 GBP330 06/30/09 Richards Layton & 06/01/09 to $8,998 $1,479 Finger P.A. 06/30/09 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 does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: To Auction Off Voice Applications Business ----------------------------------------------------------- According to Financial Post, Nortel Networks Corp. is auctioning off its voice-applications business. The report relates that Samih Elhage, the executive responsible for the operation, said that the division is winning major contracts in major contracts in Britain, Australia and Austria despite the fact that Nortel is in bankruptcy. While Nortel's wireless business has been sold, several units of Nortel are still up for disposal. As reported by the Troubled Company Reporter on July 29, 2009, Nortel, at a joint hearing July 28, Nortel obtained orders from the Ontario Superior Court of Justice and the U.S. 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. 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. The parties have notyet closed the sale. 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 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) NORTHERN NEWS: Case Summary & 8 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Northern News Company 3389 M-119 Harbor Springs, MI 49740 Bankruptcy Case No.: 09-09550 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Harris Bldg II, LLC Harbor Park Storage Co. 09-09551 Harbor Park Market Co. 09-09554 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Scott W. Dales Debtor's Counsel: John T. Piggins, Esq. Miller Johnson 250 Monroe Avenue NW, Suite 800 Grand Rapids, MI 49503 Tel: (616) 831-1793 Fax: (616) 988-1793 Email: ecfpigginsj@millerjohnson.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 8 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/miwb09-09550.pdf The petition was signed by Ronald E. Scherer, president of the Company. OMNOVA SOLUTIONS: Moody's Gives Stable Outlook; Keeps 'B2' Rating ----------------------------------------------------------------- Moody's Investors Service moved the rating outlook for OMNOVA Solutions Inc. to stable from negative and affirmed its B2 Corporate Family Rating and other ratings. The change in outlook reflects the improved margins, specifically in the Performance Chemicals segment, cash flow and liquidity. OMNOVA's margins and free cash flow have improved over the past year, primarily due to falling raw material, energy and transportation costs. In addition, the company has benefited from competitors either exiting the market or temporarily reducing capacity. OMNOVA has raised prices and taken steps to improve its cost structure including manufacturing and selling, general and administrative expense reductions costs. The decline in crude oil prices in the second half of 2008 significantly lowered styrene and butadiene raw material prices which has contributed to the recent gross margin expansion. However, continued weak end market demand (e.g., in housing, commercial construction and refurbishments, marine) will continue to pressure sales through the end of 2009 and into 2010. OMNOVA's liquidity is primarily supported by its revolving credit facility, cash balances ($23.7 million as of May 31, 2009) and expectations for positive free cash flow over the next twelve months. Availability under the revolver was $46.4 million as of May 31, 2009, and is expected to improve as working capital needs in the second half of the year decline. The fall in raw material prices (and sales) provided working capital relief through first half of 2009, when the company is normally investing in working capital to support seasonal sales to the chousing and construction industries. This summarizes the ratings: OMNOVA Solutions Inc. * Outlook: Stable from Negative Ratings Affirmed: * Corporate Family Rating -- B2 * Probability of Default Rating -- B2 * $150mm Gtd Sr Sec Term Loan B due 2014 -- B2 (LGD4, 57%) from B2 (LGD4, 51%) Moody's most recent announcement concerning the ratings for OMNOVA was on November 6, 2008, when the firm's outlook was moved to negative from stable as a result of weak operating margins and concerns over the company's liquidity. OMNOVA manufactures decorative and functional surfaces, emulsion polymers and specialty chemicals. The company operates in two business segments, Decorative Products (approximately 40% of FY2008 consolidated net sales), which makes commercial wall coverings, coated fabrics and decorative laminates, and Performance Chemicals (approximately 60% of FY 2008 consolidated net sales), which offerings include binders, coatings and adhesives for the paper and carpet industries. OMNOVA is a producer of styrene butadiene latex in North America. Headquartered in Fairlawn, Ohio, OMNOVA was formed when it was spun-off from GenCorp in 1999. Revenues were $781 million for the LTM ended May 31, 2009. ON ASSIGNMENT: Weak Operations Won't Affect Moody's 'Ba3' Rating ---------------------------------------------------------------- Moody's Investors Service said the ratings of On Assignment, Inc. -- including the Ba3 Corporate Family Rating, stable outlook, and SGL-2 liquidity rating -- are currently not impacted by the company's weak operating performance in the first half of 2009. On Assignment, Inc. is a diversified professional staffing firm providing flexible and permanent staffing solutions in specialty skills including Laboratory/Scientific, Healthcare/Nursing, Physicians, Medical Financial, Information Technology and Engineering. The company generated revenues of $528 million in the twelve months ended June 30, 2009. ONE COMMUNICATIONS: Moody's Withdraws B2 Rating on $275 Mil. Notes ------------------------------------------------------------------ Moody's Investors Service has withdrawn the B2 rating assigned to One Communications Corp.'s proposed $275 million (gross proceeds) senior secured note issuance. The Company has elected not to proceed with the note issuance due to inopportune market conditions. Moody's believes that the company may seek to raise the contemplated funds if market conditions improve. Moody's also notes that if One Communications is unable to refinance or amend its existing senior secured term loan, the Company will be operating under tight covenant compliance over the rating horizon. Withdrawals: Issuer: One Communications Corp. -- US$275M Senior Secured Regular Bond/Debenture, B2 LGD4- 51% Moody's most recent rating action on One Communications was on June 25, 2009, when the rating agency assigned a B2 rating to the Company's proposed senior secured note issuance. One Communications is a CLEC headquartered in Burlington, MA. The Company generated over $785 million in revenues in 2008. ONE COMMUNICATIONS: S&P Puts 'B' Rating on CreditWatch Negative --------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings, including its 'B' corporate credit rating, on Burlington, Massachusetts-based One Communications Corp. on CreditWatch with negative implications. S&P is also withdrawing the 'B' issue- level and '5' recovery ratings on the company's $275 million senior secured notes due 2015. "The CreditWatch placement reflects its increasing concerns that the company may violate its bank credit facility covenants or that the cushion will be very limited in the third quarter of 2009," said Standard & Poor's credit analyst Allyn Arden, "most notably the total leverage covenant, which steps down to 2.75x from 3.00x." On June 22, 2009, the company announced that it would launch $275 million of senior secured notes and as part of the transaction it would get more favorable financial covenants. However, the company recently decided to not proceed with the bond transaction and as a result, S&P is withdrawing its ratings on the notes. While One Communications' financial performance has remained relatively stable over the past few quarters and operating lease-adjusted leverage is low for the rating at 3.8x (not used in the covenant calculation) as of the March 2009 quarter, S&P is concerned that in light of bond transaction not being completed, the company will be challenged to maintain compliance under its bank credit facility covenants, unless it obtains relief. "We will resolve the CreditWatch listing as additional information becomes available regarding the third-quarter performance, market opportunities, or potential covenant relief," added Mr. Arden. Without a refinancing or covenant relief, S&P could still lower the ratings if there is inadequate protection. ORLEANS HOMEBUILDERS: Eyes Amendment to Revolving Credit Facility ----------------------------------------------------------------- Orleans Homebuilders, Inc., said the cash flow savings and enhanced liquidity obtained from its private debt exchange offering -- for 100% of its $75 million aggregate principal amount of unsecured junior subordinated trust preferred securities issued by an affiliate of the Company on November 23, 2005 for new unsecured junior subordinated notes issued by OHI Financing, Inc., a wholly owned subsidiary of the Company -- are not sufficient to meet the Company's current liquidity needs. The Company anticipates that without an amendment to the Company's revolving credit facility to increase borrowing base availability on or before August 15, 2009 -- the date the borrowing base certificate as of July 31, 2009 is due -- the net borrowing base availability at that time will be significantly less than the borrowings outstanding under the revolving credit facility at that time. If the Company is not successful in obtaining a bank amendment addressing its borrowing base liquidity and other needs on or before August 15, 2009, the Company anticipates that it will likely not have sufficient liquidity to continue its normal operations and will be in breach of its minimum liquidity covenant under the revolving credit facility at that time, or within approximately a week thereafter. While the Company continues to work constructively with its lenders to obtain an amendment to the Company's revolving credit facility addressing the Company's liquidity and covenant needs, and it remains hopeful that such an amendment can be obtained, the Company can offer no assurance that it will be able to obtain such an amendment, obtain such an amendment on acceptable terms or obtain alternative financing in the event it does not obtain such an amendment. Terms of Revolving Credit Facility The borrowing limit under the Company's December 2004 Revolving Credit Facility, as amended, is $405,000,000. The amount will be reduced to $375,000,000 beginning July 16, 2009, unless otherwise permanently reduced to an amount less than or equal to $375,000,000, as a result of certain required prepayments. A fee will be earned and payable on September 15, 2009, equal to 8.0% per annum, calculated on a daily basis, of the difference between $250,000,000 and the aggregate level of the lenders' lending commitments under the Revolving Credit Facility as they exist from time to time between September 30, 2008, and the earlier of September 15, 2009 and the date the commitments are permanently reduced to $250,000,000; however this fee will be reduced by 80% if the aggregate level of commitments on or before September 15, 2009, have been permanently reduced to $250,000,000 or less. The Company expects that it will pay no amounts under this provision as it intends to refinance or otherwise modify the debt before the payment is due and payable. In addition, if all indebtedness under the Revolving Credit Facility is not fully repaid by December 20, 2009, a separate fee will be earned and payable on December 20, 2009 equal to 8.0% per annum of the amount by which the aggregate commitments under the Revolving Credit Facility that exist from time to time after September 15, 2009 exceed $250,000,000, calculated on a daily basis. Under this provision, the Company currently estimates that the minimum it will be required to pay is $0 and the maximum is $2,630,000. The Company expects that it will pay no amounts under this provision as it intends to refinance the debt before the payment is due and payable. In addition to any interest that may be payable with respect to amounts advanced by the lenders pursuant to a letter of credit, the Company will be required to pay to the lender issuing letters of credit an issuance fee of 0.125% of the amount of the letters of credit. The Revolving Credit Facility contains various financial covenants, which among other things, require that: -- Subject to a five-day cure period, the Company must maintain a minimum consolidated tangible net worth of at least $25,000,000 (1) reduced by the sum of (a) any impairments or other charges under GAAP on assets in the borrowing base taken by the Company and recorded in respect of the financial quarters ended December 31, 2008 and March 31, 2009, plus (b) any deferred tax assets valuation allowance reserves recorded in respect of the fiscal quarters ended December 31, 2008 and March 31, 2009, plus (c) any impairments or write-offs relating to tangible assets or pre-acquisition costs not contained in the borrowing base recorded in respect of the fiscal quarters ended December 31, 2008 and March 31, 2009 (provided, however, that the aggregate covenant level reduction pursuant to this clause (1) shall not exceed $15,000,000), and (2) increased by the sum of (x) any favorable adjustment to the deferred tax asset valuation allowance recorded in respect of the fiscal quarters ended December 31, 2008 and March 31, 2009, plus (y) 50% of positive quarterly net income after March 31, 2008. -- The Company must maintain a required liquidity level based on cash plus borrowing base availability of at least $10,000,000 of cash and cash equivalents (including cash Held at a title company) on a consolidated basis at all times, minus the amount by which the then-outstanding principal balance of the Company's loans plus any swing line loans exceeds the then-current borrowing base availability. -- The Company's minimum cash flow from operations ratio based on cash flow from operations to interest incurred covenant, must exceed 1.25-to-1.00 for the quarter ending December 31, 2008; 0.40-to-1.00 for the quarter ending March 31, 2009; 0.50-to-1.00 for the quarter ending June 30, 2009; and 0.65-to-1.00 for the quarter ending September 30, 2009, and thereafter. Cash flow from operations is calculated based on the last 12 months cash flow from operations, adjusted for interest paid (excluding any amortized deferred financing costs related to all amendments to the Amended Credit Agreement, the Second Amended Credit Agreement and the trust preferred securities and any future amendments to any of the foregoing), amounts from the disposition of model homes that are subject to a sale-leaseback transaction to the extent such amounts are not otherwise included in net cash provided by operating activities, and interest income. -- The maximum amount of cash or cash equivalents (excluding cash at title companies) the Company is allowed to maintain for any consecutive five-day period is $15,000,000. -- The Company may purchase improved land (i.e., finished lot takedowns or controlled rolling lot options) purchased by the borrowers in the normal course of business, consistent with the projections provided to the lenders, but otherwise limits the Company's ability to purchase improved and unimproved land -- At the fiscal quarters ended September 30, 2006, December 31, 2006, March 31, 2007, June 30, 2007, March 31, 2008, June 30, 2008, and December 31, 2008, the Company would have been in violation of certain financial covenants in the Amended and Restated Credit Agreement if not for the first, second, third and fourth amendments to and waiver letter with respect to the Amended and Restated Credit Agreement, the Second Amended Credit Agreement, the waiver letter and the First Amendment to the Second Amended Credit Agreement, respectively. Orleans Homebuilders, Inc. (AMEX: OHB) -- http://www.orleanshomes.com-- develops, builds and markets high- quality single-family homes, townhouses and condominiums. It has operations in Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. On February 11, 2009, Orleans Homebuilders reported that it and its lenders have entered into the First Amendment to its Second Amended and Restated Credit Loan Agreement and First Amendment to Security Agreement, effective immediately. Among other things, the Amendment immediately improves the borrowing base availability calculation by decreasing certain borrowing base category limitations. The Troubled Company Reporter reported February 2, 2009, Orleans Homebuilders received a limited waiver from its lenders under the Company's Second Amended and Restated Revolving Credit Line Agreement. ORLEANS HOMEBUILDERS: Inks Employment, Non-Compete Deal with Vesey ------------------------------------------------------------------ Orleans Homebuilders, Inc., on August 6, 2009, entered into an Employment Agreement and a Non-Competition and Confidentiality Agreement with Thomas R. Vesey. The Agreements are effective as of August 1, 2009. Pursuant to the terms of the Employment Agreement, Mr. Vesey will continue to be employed on an "at-will" basis as Executive Vice President -- Southern Region, reporting to the President and Chief Operating Officer of the Company, or as otherwise determined by the Chairman, President, Chief Operating Officer, Vice Chairman or the Company's Board of Directors, or by a committee thereof. However, after the closing date of any transaction constituting a change of control, Mr. Vesey will have such title, duties and responsibilities, and be subject to the supervision and control of such persons as may be, after taking into account the fact that a change of control has occurred and other relevant facts and circumstances, determined by the Company in its sole discretion from time to time. Mr. Vesey's base salary will continue to be $300,000, which will be reviewed annually and may be adjusted upward or, after September 30, 2010, downward without the consent of Mr. Vesey, provided that in the event of the consummation of a change of control, the base salary will not be decreased from the level in effect at the closing date of the change of control without Mr. Vesey's consent for a period of one year following the closing date of the change of control transaction. Mr. Vesey will also continue to be eligible to participate in the Company's annual bonus program (which may include a discretionary bonus) and may also receive, at the Company's sole discretion, an annual bonus for fiscal year 2009. Mr. Vesey will also be paid an annual bonus of at least $50,000, less applicable withholding amounts, for fiscal year 2010, provided Mr. Vesey is employed by the Company on the earlier of October 15, 2010 and the date on which the fiscal year 2010 bonuses are paid to all employees (anticipated to be October 2010). If Mr. Vesey's employment is terminated for any reason or no reason after his fiscal 2010 bonus is earned, any earned but unpaid amounts of the fiscal year 2010 annual bonus will be paid to Mr. Vesey. Mr. Vesey, and his eligible dependents, where applicable, will also continue to be eligible to participate in: (i) the Company's insurance and health benefit plans, including any supplemental executive retirement plans that may be offered by the Company, subject to applicable eligibility requirements and other terms and conditions, (ii) the Company's equity incentive plans on terms substantially similar to the terms offered to other similarly situated Company Officers, and (iii) certain other fringe benefits offered by the Company. Mr. Vesey will be eligible for three weeks of vacation per year and business expense reimbursement. Pursuant to the terms of the written Employment Agreement, Mr. Vesey will also be entitled to: (1) Upon any termination of employment, Mr. Vesey will be entitled to receive his unpaid base salary through the date of termination and expense reimbursement for business expenses incurred prior to termination. (2) Upon termination of employment by the Company without "cause", termination by Mr. Vesey for "good reason", or termination by Mr. Vesey for any reason during the 30-day period immediately preceding the one-year anniversary of a change of control, Mr. Vesey will be entitled to (i) $300,000 as severance, and (ii) any earned but unpaid incentive bonus for fiscal year 2010. Generally, to be eligible to receive any payments upon termination, Mr. Vesey is required to execute and not revoke a Termination Agreement. In addition, payments required to be made in the event of termination are to be made within 60 days after termination, except to the extent necessary to make such payment at a time and in a manner consistent with Section 409(A) of the Internal Revenue Code. If any payments are delayed pursuant to this provision, those payments will be made in a single lump sum with interest at the lesser of 5% or prime rate as published in the Money Rates Section of the Wall Street Journal. The Company may terminate Mr. Vesey's employment for any or no reason -- i.e., without "cause" -- by providing Mr. Vesey with 14 days prior written notice, which the Company may waive by paying Mr. Vesey for such time. However, the Company may terminate Mr. Vesey immediately for cause or in the event of Mr. Vesey's "disability," as defined in the Employment Agreement. Mr. Vesey may terminate his employment at any time for good reason by providing the Company with 45 days prior written notice if the termination date is prior to December 31, 2010, which notice the Company may waive, or with 30 days prior written notice if the termination date is after December 31, 2010. In addition to the Employment Agreement, Mr. Vesey entered into the Non-Competition Agreement which (i) restricts his ability to engage in or be financially interested in a business competitive with the Company, except holding no more than 1% of a class of equity security of a publicly traded company, for a period of three months after his termination, (ii) restricts his ability to solicit certain Company employees and customers for a period of one year after his termination and (iii) soliciting potential customers for a period of three months following his termination. This agreement also contains customary confidentiality provisions. About Orleans Homebuilders Orleans Homebuilders, Inc. (AMEX: OHB)-- http://www.orleanshomes.com-- develops, builds and markets high- quality single-family homes, townhouses and condominiums. It has operations in Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. On February 11, 2009, Orleans Homebuilders reported that it and its lenders have entered into the First Amendment to its Second Amended and Restated Credit Loan Agreement and First Amendment to Security Agreement, effective immediately. Among other things, the Amendment immediately improves the borrowing base availability calculation by decreasing certain borrowing base category limitations. The Troubled Company Reporter reported February 2, 2009, Orleans Homebuilders received a limited waiver from its lenders under the Company's Second Amended and Restated Revolving Credit Line Agreement. ORLEANS HOMEBUILDERS: Wachovia Consents to Exchange Transaction --------------------------------------------------------------- Orleans Homebuilders, Inc.; its wholly owned subsidiary, Greenwood Financial, Inc., and certain affiliates of Greenwood; Wachovia Bank, National Association, as administrative agent, and various other lenders entered into a Limited Consent to Exchange Transaction dated as of August 3, 2009. The Consent was provided pursuant to the Company's Second Amended and Restated Revolving Credit Loan Agreement dated September 30, 2008, by and among Greenwood and certain of its affiliates as Borrowers; the Company as guarantor; Wachovia Bank as administrative agent; and various other lender parties. The Consent permits the Company and its wholly owned subsidiary OHI Financing, Inc. to consummate a private debt exchange with Taberna Preferred Funding III, Ltd., Taberna Preferred Funding IV, Ltd., and Taberna Preferred Funding VI, Ltd., for 100% of the outstanding $75 million of unsecured trust preferred securities issued by the Company's affiliate Orleans Homebuilders Trust II for new unsecured subordinated notes issued by OHI and guaranteed by the Company on a subordinated basis. Orleans Homebuilders Trust II is the holder of the Junior Subordinated Note due 2036 in the original principal amount of $77,320,000 issued by the Company pursuant to the Existing Indenture. Taberna III, Taberna IV, and Taberna VI are the holders of Preferred Securities in the original aggregate principal amount of $75,000,000 issued by Trust II. The Company and The Bank of New York Mellon, as trustee, have entered into a Junior Subordinated Indenture pursuant to which Company proposes to issue $93,750,000 in aggregate principal amount of the Junior Subordinated Notes due 2036: -- Junior Subordinated Note due 2036 in the original principal amount of $35,156,000 issued by the Company to Taberna III; -- Junior Subordinated Note due 2036 in the original principal amount of $30,469,000 issued by the Company to Taberna IV; and -- Junior Subordinated Note due 2036 in the original principal amount of $28,125,000 issued by the Company to Taberna VI. The private debt exchange also closed on August 3. The terms of the Credit Agreement prohibited the consummation of the Exchange without the consent of two-thirds (by commitment) of the Lenders. The Consent provided the Lender consent necessary under the terms of the Credit Agreement to consummate the Exchange. In addition, in connection with consummating the Consent, the Company provided to the Lenders a mortgage on a parcel of real property consisting of roughly 60 lots as security for the performance of the Borrowers' obligations under the Credit Agreement. The lots subject to the mortgage had previously been included in the borrowing base calculations under the Credit Agreement. In addition, the Consent also provides Lender consent for the Company to enter into an exchange offer with respect to its outstanding $30 million issue of 8.52% unsecured junior subordinated trust preferred securities issued by the Company's affiliate Orleans Homebuilders Trust I provided that (i) the terms of the exchange offer for those trust preferred securities are substantially similar to, and no less favorable to the Borrowers, the Company, and the Lenders, than the terms of Exchange, as determined by the Agent, (ii) the exchange offer is consummated prior to September 30, 2009, (iii) the documentation for the exchange offer is in form and substance satisfactory to the Agent, and (iv) no Event of Default, or any condition or event that, after notice or lapse of time or both, would constitute and Event of Default, has occurred and is continuing as of the effective date of the exchange offer. In addition, the Consent also contained other customary terms relating to representations, warranties and acknowledgements by the Borrowers and the Company, limitations on the consent, conditions to the effectiveness of the Consent and the waiver by Borrowers and the Company of certain claims and causes of action the Borrowers or the Company may have against the Agent or the other Lenders. Jeffrey P. Orleans, Chief Executive Officer, stated, "We appreciate the cooperation of the holders of our $75 million issue of trust preferred securities in these challenging times. We believe that the terms of the new subordinated notes will improve our ability to manage through the current difficult homebuilding environment and over the longer term." Principal Terms of New Notes The Indenture sets forth the principal terms of the New Notes, including: -- The New Notes require quarterly interest payments (a) at an interest rate of 1.00% per annum for each of the first five years through and including July 30, 2014; (b) at an interest rate of 8.61% per annum from July 31, 2014 through January 30, 2016 inclusive; and (c) at an interest rate of LIBOR plus 3.60% per annum thereafter. -- The aggregate principal amount of the New Notes is $93.75 million and the New Notes mature on January 30, 2036 (the same maturity date as the Trust Preferred Securities). -- The Company may redeem the New Notes in whole or in part at any time prior to the maturity date at a price equal to the principal amount plus any accrued and unpaid interest to the date of redemption. -- The New Notes are entitled to the benefit of a $5.0 million financial letter of credit which may be drawn upon by the Trustee for the benefit of the holders of the New Notes upon the occurrence of certain Events of Default under the Indenture, the redemption of the New Notes pursuant to a "change of control" for less than the principal amount of the New Notes, the non-renewal of the Letter of Credit or the issuer of the Letter of Credit failing to maintain certain rating characteristics without the issuance of a replacement letter of credit by an issuer conforming with such characteristics. -- In the event of a "change of control", the Company may, at its option, redeem the New Notes in whole at a price equal to the aggregate of (a) $17.580 million provided that the change of control occurs on or before December 31, 2012, or $21.975 million if the change of control occurs on or after January 1, 2013, but prior to the maturity date; plus (b) the $5.0 million Letter of Credit, plus (c) 0.17857 times the amount paid or distributed to or received by, directly or indirectly, the equity interests of the Company. In no event shall this optional redemption amount ever exceed the par amount of the New Notes. -- "Change of control" is defined in the Indenture as the occurrence of one or more of: (a) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company to any person or group of related persons for purposes of Section 13(d) of the Exchange Act, together with any affiliates thereof, on an arm's-length basis with an entity that is not an affiliate of the Company; or (b) any person or Group -- other than Jeffrey P. Orleans and his affiliates and family or any affiliate of the Company -- will acquire either by purchase from a JPO Party or from the Company through purchase or merger or otherwise, directly or indirectly, beneficially or of record, shares representing more than 80% of the issued and outstanding equity interests of the Company and more than 50% of the aggregate ordinary voting power represented by the issued and outstanding equity interests of the Company. -- The Indenture generally restricts OHI from declaring or paying any dividends or distributions on equity until July 30, 2014. In addition, neither the Company nor OHI shall incur any debt that is senior in right of payment to the New Notes or the guarantee of the New Notes, as the case may be, and subordinated in right of payment to any other debt of the Company or OHI, as the case may be. No debt will be deemed to be subordinated in right of payment to any other debt of the Company or OHI solely by virtue of such debt being unsecured or by virtue of the fact that the holders of such debt have entered into one or more intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them. Furthermore, neither the Company nor OHI nor any of their respective Subsidiaries may incur any Senior Debt (a) other than any Senior Debt that is incurred in an arm's-length transaction with a party that is not a JPO Party and on terms which the Company or OHI, as the case may be, reasonably determines are commercially reasonable or (b) the proceeds of which are distributed to an entity other than the Company, OHI or a Subsidiary of either thereof which is subject to the covenants of the Indenture. -- The Company will not, without the express written consent of the holders of a majority in aggregate principal amount of the outstanding New Notes, enter into an exchange offer, amendment, supplement or similar transaction with respect to the existing $30 million of 8.52% trust preferred securities unless the material terms of any such transaction are substantially similar to and not more favorable to the holders of those securities than those set forth under the Indenture. -- The Indenture contains these principal events of default: (i) default in the payment of any interest upon any New Note when it becomes due and payable, and continuance of such default for a period of 30 days; (ii) default in the payment of the principal of or any premium on any New Note at its maturity; (iii) default in the performance, or breach, of any covenant or warranty of the Company or OHI in the Indenture, the Parent Guarantee Agreement or the Exchange Agreement (with certain limited exceptions) and continuance of such default or breach for a period of 30 days after there has been given, by registered or certified mail, to the Company and OHI by the Trustee or to the Company, OHI and the Trustee by the holders of at least 25% in aggregate principal amount of the outstanding New Notes a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" under the Indenture; and (iv) certain events of bankruptcy involving OHI or the Company. -- The Indenture contains provisions that subordinate the payment of principal and interest on the New Notes (but not the proceeds of a drawing under the Letter of Credit) to the prior payment in full of Senior Debt. Senior Debt is defined as the principal of and any premium and interest on (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to OHI, whether or not such claim for post- petition interest is allowed in such proceeding) all Debt of the Company and OHI, whether incurred on or prior to the date of the Indenture or thereafter incurred, unless it is provided in the instrument creating or evidencing the same or pursuant to which the same is outstanding, that such obligations are not superior in right of payment to theNew Notes; provided that Senior Debt shall not be deemed to include any (i) debt or (ii) other debt securities (and guarantees, if any, in respect of such debt securities) issued to any trust (or a trustee of any such trust), partnership or other entity affiliated with OHI that is a financing vehicle of OHI (a "financing entity") in connection with the issuance by such financing entity of equity securities or other securities, in each case pursuant to an instrument that ranks pari passu with or junior in right of payment to the Indenture. -- The Indenture provides that OHI may only consolidate or merge with, or sell, lease or convey all or substantially all of its assets to, entities that meet certain conditions and with the consent of the holders of a majority in principal amount of the outstanding New Notes, subject to the exercise of the redemption right. Garry P. Herdler, Executive Vice President and Chief Financial Officer, stated, "While the Company continues to be negatively impacted by poor industry fundamentals, this transaction improves the Company's capital structure, flexibility and liquidity through the significant cash flow savings for each of the next five years. We believe that this debt exchange agreement is a positive first step for the bank group, the Company and the holders of these notes." A full-text copy of the Limited Consent to Exchange Transactions dated as of August 3, 2009, by and among Greenwood Financial, Inc. and certain affiliates, Orleans Homebuilders, Inc., Wachovia Bank, National Association and various other lenders party thereto, is available at no charge at http://ResearchArchives.com/t/s?41b7 A full-text copy of the Exchange Agreement among OHI Financing, Inc., the Company, Taberna Preferred Funding III, Ltd., Taberna Preferred Funding IV, Ltd., and Taberna Preferred Funding VI, Ltd. dated as of August 3, 2009, is available at no charge at: http://ResearchArchives.com/t/s?41b8 A full-text copy of the Junior Subordinated Indenture between OHI Financing, Inc., as issuer, and The Bank of New York Mellon as Trustee, dated as of August 3, 2009, is available at no charge at: http://ResearchArchives.com/t/s?41b9 A full-text copy of the Parent Guarantee Agreement between Orleans Homebuilders, Inc., as Parent Guarantor, and The Bank of New York Mellon, as Guarantee Trustee, dated as of August 3, 2009, is available at no charge at http://ResearchArchives.com/t/s?41ba About Orleans Homebuilders Orleans Homebuilders, Inc. (AMEX: OHB) -- http://www.orleanshomes.com-- develops, builds and markets high- quality single-family homes, townhouses and condominiums. It has operations in Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. On February 11, 2009, Orleans Homebuilders reported that it and its lenders have entered into the First Amendment to its Second Amended and Restated Credit Loan Agreement and First Amendment to Security Agreement, effective immediately. Among other things, the Amendment immediately improves the borrowing base availability calculation by decreasing certain borrowing base category limitations. The Troubled Company Reporter reported February 2, 2009, Orleans Homebuilders received a limited waiver from its lenders under the Company's Second Amended and Restated Revolving Credit Line Agreement. PEQUOT CAPITAL: SEC May Sue Co. for Insider-Trading --------------------------------------------------- Kara Scannell and Jenny Strasburg at The Wall Street Journal report that the U.S. Securities and Exchange Commission sent a letter to Pequot Capital Management and its founder Arthur Samberg, saying that it is prepared to bring civil fraud charges against them over the Company's 2001 trading of Microsoft Corp. stock. As reported by the Troubled Company Reporter on August 12, 2009, Mary Schapiro, the SEC chairperson, said that since 2005, the agency had received about 45 referrals from self-policing industry watchdogs related to Pequot Capital. Pequot Capital closed in May 2009 amidst investigations on alleged insider trading. The Journal relates that the SEC sent a Wells notice to Mr. Samberg and the firm indicating that it may seek to prevent him from serving as an investment adviser. Citing a person familiar with the matter, the report says that Pequot Capital received the Wells notice about six weeks ago. The Journal says that a Wells notice is issued to indicate that a SEC staff will recommend to the five-member commission that it approve the filing of a lawsuit or administrative proceeding. According to The Journal, a source said that Mr. Samberg and Pequot Capital argued that the trades weren't based on material, nonpublic information. Citing Pequot Capital, the report states that the Company, along with Mr. Samberg, would likely fight the charges if the SEC were to move forward with the case. Pequot Capital Management, Inc. -- https://www.pequotcap.com/ -- is a U.S. registered investment adviser founded in 1998 by Arthur J. Samberg, Chairman and Chief Executive Officer, to manage the Pequot Family of Funds, which began trading in 1986. Pequot Capital managed about $15 billion in 2001, making it one of the largest hedge funds in the world. As reported by the Troubled Company Reporter on May 29, 2009, Pequot Capital founder Arthur Samberg said that he decided to close the business, citing public disclosures about the continuing investigation, which he claimed had "cast a cloud over the firm" and had "become a source of personal distraction." PIONEER 74 LOTS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Pioneer 74 Lots, LLC 801 Kearny Street San Francisco, CA 94108 Bankruptcy Case No.: 09-32305 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court Northern District of California (San Francisco) Debtor's Counsel: Guy A. Odom Jr., Esq. Law Offices of Guy A. Odom Jr. 800 W El Camino Real #180 Mountain View, CA 94040 Tel: (650) 965-4400 Email: odomlawoffices@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Martin Lee Eng, owner of the Company. PHYSICIANS FORMULA: Posts $591,000 Profit But Defaults on Loan -------------------------------------------------------------- Physicians Formula Holdings, Inc., posted a net income of $591,000 for three months ended June 30, 2009, compared with a net loss of $1,983,000 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $1,123,000 compared with a net income of $3,036,000 for the same period in 2008. At June 30, 2009, the Company's balance sheet showed total assets of $107,830,000, total liabilities of $56,836,000 and stockholders' equity of $50,994,000. The Company related that there is substantial doubt about its ability to continue as a going concern. Since July 29, 2009, the Company has had outstanding indebtedness under its senior credit facility in excess of the maximum amount it is permitted to borrow under its borrowing base, which triggered an event of default under the Company's senior credit agreement beginning August 5, 2009. The Company is in active discussions with the lender regarding the event of default but has not obtained a waiver. As a result of the event of default, the Company is precluded from borrowing under its senior credit facility and all indebtedness outstanding under the credit facility could be declared immediately due and payable, which would have a material adverse effect on the Company's business, financial condition and liquidity and could impact the Company's ability to continue as a going concern. There is no assurance that the Company will be able to obtain a waiver, and even if it does, the Company may be required to agree to other changes in the senior credit agreement, including increased interest rates, tighter covenants or lower availability thresholds, or pay a fee for waiver. If the indebtedness outstanding under the credit facility is declared due and immediately payable, then the Company would need to obtain additional sources of liquidity; however, given the unprecedented instability in worldwide capital markets, there can be no assurance that the Company will be able to obtain additional sources of liquidity on terms acceptable to the Company, or at all. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?418b Physicians Formula Holdings, Inc. (NASDAQ:FACE) is a cosmetics company, which specializes in developing and marketing products for the mass market channel. The Company's products focus on addressing skin imperfections. Its products address specific, everyday cosmetics needs and include face powders, bronzers, concealers, blushes, foundations, eye shadows, eye liners, brow makeup and mascaras. The Company sells its products to mass market channel to retailers, such as Wal-Mart, Walgreens, CVS, Target and Rite Aid. POLYFUEL INC: Fails to Find Buyer, to Cease Operations ------------------------------------------------------ PolyFuel Inc said on Thursday it would cease operations immediately and seek shareholder approval to liquidate its assets after failing to secure a buyer. The board of PolyFuel has previously announced that it was exploring various strategic alternatives, including the possible sale of the Company or an orderly wind down of its operations. Unfortunately, notwithstanding extensive efforts during the past several months, the Board and its banker, KBC Peel Hunt have been unable to secure a satisfactory offer for the Company on a going concern basis. Consequently PolyFuel will be ceasing operations immediately and the Board will be seeking shareholder approval for the dissolution of the Company and liquidation of its assets. As part of this process the Board will also be seeking approval to delist from AIM and the London Stock Exchange has agreed that trading of the Company's shares continue to be suspended pending the cancellation of the Company's AIM listing. Meanwhile, Harry Fitzgibbons, a non-executive Director of PolyFuel since July 2005, has elected to resign from the Board at this time, with immediate effect. About PolyFuel Inc. PolyFuel claims to be a world leader in engineered membranes for fuel cells and has developed technology for use in portable fuel cells, which the Company believes will enable portable consumer electronic devices to deliver unlimited, unplugged runtimes. It is currently pursuing the commercialisation of its breakthrough membrane material for the Direct Methanol Fuel Cell (DMFC). PolyFuel, a U.S. corporation, is headquartered in Mountain View, California where it conducts its membrane research and development, manufacturing, business development and administrative activities. The Company has also a facility in Burnaby, British Columbia focused on advanced reaserch in fuel cell systems technology. QUEST RESOURCE: Restatement Prompts Delay of Q2 2009 Fin'l Report ----------------------------------------------------------------- Quest Resource Corporation said it won't be able to file its quarterly report for the period ended June 30, 2009, on time. Quest presented restated and re-audited financial statements for the years ending December 31, 2005, 2006, and 2007 in its Form 10- K for the year ended December 31, 2008. To accomplish this, Quest said it first had to complete the audit of the financial statements for the year ended December 31, 2008 and the re-audits of the financial statements for the years ended December 31, 2005, through 2007. Quest filed its Annual Report on Form 10-K on June 3, 2009, and Amendment No. 1 to its Annual Report on Form 10- K/A on July 29, 2009, which was filed to correct errors identified in July 2009 related to its consolidated statement of operations during the year ended December 31, 2008. Additionally, Quest filed amendments to its Quarterly Reports on Form 10-Q/A for the quarters ended March 31, 2008, and June 30, 2008, on July 14, 2009, and the initial filing of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, on July 29, 2009. Quest is currently in the process of completing the initial filing of its Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, and Quest plans to file its First Quarter Form 10-Q before filing its Second Quarter Form 10-Q. Quest anticipates that, based on the information that is currently available to it, Quest's results of operations for the quarter ended June 30, 2009, will be significantly different from those for 2008, based upon the significant developments that have occurred in its business since June 30, 2008, including increased production; the acquisition of PetroEdge Resources (WV) LLC (k/n/a Quest Eastern Resource LLC) in July 2008, the costs of the previously reported internal investigation into the activities of former management; the costs associated with the proposed merger among Quest, Quest Energy Partners, L.P. and Quest Midstream Partners, L.P.; the magnitude of the cumulative effect of the restatement adjustments to Quest's financial statements for the years ending December 31, 2005, 2006, and 2007, and the significant decline in the price of natural gas during the first half of 2009 compared to the first half of 2008. Quest is unable to provide a reasonable estimate of its results for the quarter ending June 30, 2009, as it is still in the process of first completing the First Quarter Form 10-Q. About Quest Resource Quest Resource Corporation -- http://www.qrcp.net/, http://www.qelp.net,and http://www.qmlp.net/-- is a fully integrated E&P company that owns producing properties and acreage in the Appalachian Basin of the northeastern United States; 100% of the general partner and a 57% limited partner interest in Quest Energy Partners, L.P.; and 85% of the general partner and a 36.4% of the limited partner interests in the form of subordinated units in Quest Midstream Partners, L.P. Quest Resource operates and controls Quest Energy Partners and Quest Midstream Partners through its ownership of their general partners. As reported by the Troubled Company Reporter on June 23, 2009, the report of UHY LLP, in Houston, Texas, the Company's independent registered public accounting firm, on its financial statements for the fiscal year ended December 31, 2008, includes an explanatory paragraph regarding the Company's ability to continue as a going concern. The factors contributing to this concern include QRCP's recurring losses from operations, stockholders' accumulated deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations. QRCP does not anticipate being able to make its next quarterly principal payment due September 30, 2009, under its Amended and Restated Credit Agreement with Royal Bank of Canada, as administrative agent and collateral agent. The TCR said July 14 that QRCP's lenders led by Royal Bank of Canada, among other things, agreed to waive the interest coverage ratio and leverage ratio covenants for the fiscal quarter ended June 30, 2009; and defer until September 30, 2009, interest payment due on June 30, 2009. At December 31, 2008, the Company had $650,176,000 in total assets; $96,276,000 in current liabilities, $353,246,000 in long- term liabilities, and $204,536 in minority interests; resulting in $3,882,000 in stockholders' deficit. RALPH MILLER: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Ralph A. Miller, III 28 Towpath Way New Hope, PA 18938 Bankruptcy Case No.: 09-16041 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Allen B. Dubroff, Esq. 101 Greenwood Avenue, Fifth Floor Jenkintown, PA 19046 Tel: (215) 635-7200 Fax: (215) 635-7212 Email: adubroff@fsalaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Ralph A. Miller, III. REALOGY CORP: Has $27M Q2 Loss, Needs Lower Leverage Ratio in Q3 ---------------------------------------------------------------- Realogy Corporation incurred a net loss of $15,000,000 on net revenues of $1,018,000,000 during the three months ended June 30, 2009, compared with a net loss of $27,000,000 on net revenues of $1,389,000,000 during the same period last year. Net loss for the six months ended June 30, 2009, was $274,000,000 compared with $160,000,000 in the 2008 period. Realogy Corp. said it had assets of $8,425,000,000 against debts of $9,430,000,000, for a total stockholders' deficit of $1,005,000,000 as of June 30, 2009. Realogy noted in a statement that it generated $172 million of cash flow from operations in the first half of 2009 -- a year- over-year improvement of $246 million -- and, as of June 30, 2009, had $356 million of readily available cash. Realogy's EBITDA for the period was positively affected by $36 million of legacy items net of restructuring charges, including $49 million from the prepayment of a receivable from Wright Express. "While the rate of decline in home sales is slowing and there are emerging positive signals, given the macroeconomic headwinds it is premature to conclude that the housing market has started its rebound," said Realogy Chief Executive Officer Richard A. Smith. "That said, long term we remain bullish on housing and are very well positioned to capitalize on its eventual recovery." Covenant Compliance In connection with a merger with an entity affiliated with Apollo Management L.P. in April 2007, Realogy Corporation entered into a senior secured credit facility consisting of (i) a $3,170 million term loan facility, (ii) a $750 million revolving credit facility and (iii) a $525 million synthetic letter of credit facility. The credit facility contains financial, affirmative and negative covenants and requires the Company to maintain on the last day of each quarter a senior secured leverage ratio not to exceed a maximum amount. Specifically the Company's senior secured debt (net of unsecured cash and permitted investments) to trailing twelve month EBITDA, calculated on a "pro forma" basis pursuant to the senior secured credit facility, may not exceed 5.35 to 1 at June 30, 2009. The ratio steps down to 5.0 to 1 at September 30, 2009 and to 4.75 to 1 at March 31, 2011 and thereafter. As of June 30, 2009, the Company's senior secured leverage ratio was 5.1 to 1. The senior secured leverage ratio is determined by taking Realogy's senior secured net debt of $3.4 billion at June 30, 2009 and dividing it by the Company's Adjusted EBITDA of $655 million for the 12 months ended June 30, 2009. In its Form 10-Q explaining its second quarter 2009 results, Realogy said that based upon current financial forecast, it will continue to be in compliance with, or be able to avoid an event of default under, the senior secured leverage ratio and meet its cash flow needs during the next twelve months. Realogy said it can avoid violating the covenant by reducing debt, increasing earnings or having a holding company affiliated with Apollo inject capital by issuing equity. The Company has the right to avoid an event of default of the senior secured leverage ratio in three of any of the four consecutive quarters through the issuance of additional Apollo affiliate Domus Holdings Corp. equity for cash, which would be infused as capital into the Company. The effect of such infusion would be to increase Adjusted EBITDA and reduce net senior secured indebtedness. A copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?41a4 About Realogy Corp. 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. Headquartered in Parsippany, N.J., Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. Realogy fully supports the principles of the Fair Housing Act. At March 31, 2009, Realogy had $8.62 billion in total assets, $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. REGAL ENTERTAINMENT: Files Second Quarter Report on Form 10-Q ------------------------------------------------------------- Regal Entertainment Group filed with the Securities and Exchange Commission its quarterly report on Form 10-Q for the period ended July 2, 2009. A full-text copy of the Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?41a5 As reported by the Troubled Company Reporter on August 5, 2009, Regal Entertainment said total revenues for the second quarter ended July 2, 2009, were $789.2 million compared to total revenues of $675.8 million for the second quarter ended June 26, 2008. Net income was $40.4 million and net income attributable to controlling interest was $40.5 million in the second quarter of 2009. Net income was $24.2 million and net income attributable to controlling interest was $24.3 million for the second quarter of 2008. Diluted earnings per share was $0.26 for the second quarter of 2009 compared to $0.16 during the second quarter of 2008. Adjusted EBITDA was $167.1 million for the second quarter of 2009 and $124.4 million for the second quarter of 2008. As of July 2, 2009, the Company had total assets of $2.64 billion, including cash and cash equivalents of $267.7 million; $1.99 billion in total debt; and $227.9 million in stockholders' deficit. As of April 2, 2009, the Company had $2.56 billion in total assets and $2.81 billion in total liabilities. About Regal Entertainment Based in Knoxville, Tennessee, Regal Entertainment Group (NYSE: RGC) -- http://www.REGmovies.com/-- is the largest motion picture exhibitor in the world. The Company's theatre circuit, comprising Regal Cinemas, United Artists Theatres and Edwards Theatres, operates 6,782 screens in 549 locations in 39 states and the District of Columbia. Regal operates theatres in all of the top 33 and 44 of the top 50 U.S. designated market areas. * * * As reported by the Troubled Company Reporter on July 13, 2009, Moody's Investors Service rated Regal Cinemas' new $300 million 10-year senior unsecured notes B1. On July 14, 2009, the TCR said Standard & Poor's Ratings Services revised its recovery rating on Regal Cinemas's debt to '2', indicating S&P's expectation of substantial (70% to 90%) recovery for secured lenders in the event of a payment default, from '3'. In addition, S&P raised the issue-level rating on this debt to 'BB-' (one notch higher than the 'B+' corporate credit rating on the company) from 'B+', in accordance with S&P's notching criteria for a '2' recovery rating. On July 15, 2009, the TCR said Fitch Ratings assigned a 'B+/RR4' rating to Regal Cinemas' $400 million 8.625% senior unsecured notes. The notes are expected to rank senior to Regal Cinemas' existing 9.375% senior subordinated notes and junior to the secured bank facility. In addition, the $400 million in notes are structurally senior to RGC's 6.25% convertible notes. RESIDENTIAL CAPITAL: Posts $841MM Net Loss in Qrtr. Ended June 30 ----------------------------------------------------------------- Residential Capital LLC posted a net loss of $841.1 million for three months ended June 30, 2009, compared with a net loss of $1.8 billion for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $837.4 million compared with a net loss of $2.7 billion for the same period in 2008. The Company's balance sheet showed total assets of $21.9 billion, total liabilities of $20.9 billion and stockholders equity of $1.0 billion. The Company related that there remains substantial doubt about the Company's ability to continue as a going concern. The Company added that it is dependent on its parent and affiliates for funding and capital support and there can be no assurance that its parent or affiliates will continue the actions. GMAC has disclosed that if the Company were to need additional support, GMAC would provide that support so long as it was in the best interests of GMAC stakeholders. Although GMAC's continued actions through various funding and capital initiatives demonstrate support for the Company, and GMAC's status as a bank holding company and completion of its debt exchange in 2008 and further capital actions in 2009 better positions GMAC to be capable of supporting the Company, there are no commitments or assurances for future funding or capital support. If GMAC no longer continue to support the capital or liquidity needs of the Company or if the Company be unable to successfully execute other initiatives, it would have a material adverse effect on its business, results of operations and financial position. About ResCap Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. About GMAC GMAC Financial Services -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a bank holding company with operations in North America, South America, Europe and Asia- Pacific. GMAC specializes in automotive finance, real estate finance, insurance, commercial finance and online banking. As of March 31, 2009, the Company had approximately $180 billion in assets and serviced 15 million customers around the world. GMAC is the biggest lender to GM's 6,500 dealers nationwide, most of which get the financing they need to operate and buy vehicle inventory from the automaker, CNNMoney.com notes. GMAC Financial Services is wholly owned by GMAC LLC. Cerberus Capital Management LP led a group of investors that bought a 51% stake in GMAC LLC from General Motors Corp. in December 2006 for $14 billion. On December 24, 2008, GMAC Financial Services' application to become a bank holding company under the Bank Holding Company Act of 1956, as amended, was approved by the Board of Governors of the Federal Reserve System. In addition, GMAC Bank received approval from the Utah Department of Financial Institutions to convert to a state bank. REVLON INC: Offers to Swap New Preferreds for Class A Shares ------------------------------------------------------------ Revlon, Inc., commenced an exchange offer in which each issued and outstanding share of Revlon Class A common stock may be exchanged on a one-for-one basis for a share of a newly-issued series of Revlon preferred stock. The new shares of preferred stock to be issued to tendering holders of Class A common stock upon successful consummation of the Exchange Offer would entitle its holders to: -- Cash payments of roughly $7.10 over the four-year term of the preferred stock, through the payment of 12.75% annual dividends in cash (equal to roughly $0.11 per share quarterly), a special cash dividend of $1.50 per share after two years, and a $3.71 per share liquidation preference at maturity (assuming there is not a change of control of Revlon during that period); -- The opportunity to share in proceeds upon a change of control of Revlon within two years after issuance of the preferred stock capped at total payments over the term of the preferred stock of $12.00 per preferred share; -- The opportunity to share in proceeds upon a change of control of Revlon during the third year after issuance of the preferred stock capped at total payments over the term of the preferred stock of $12.50 per preferred share for stockholders electing to forgo the $1.50 special cash dividend; and -- A security that is senior in Revlon's capital structure to the common stock and senior in right of payment to Revlon's Senior Subordinated Term Loan. Each share of the preferred stock to be issued in the Exchange Offer would have a liquidation preference of $3.71, would be entitled to receive a 12.75% annual dividend payable quarterly in cash and would be mandatorily redeemable for cash four years from issuance. If Revlon engages in certain change of control transactions within two years after consummation of the Exchange Offer, the holders of the preferred stock would have the right to receive a special cash dividend, capped at an amount that would provide holders of the preferred stock with aggregate cash payments of up to $12.00 per share (including the liquidation preference and any dividends). If Revlon does not engage in any such change of control transaction within two years after consummation of the Exchange Offer, holders of the preferred stock would have the right to receive a special cash dividend of $1.50 per share. In addition, each preferred stockholder will have a one-time opportunity, exercisable not earlier than six weeks nor later than two weeks prior to the second anniversary of the issuance of the preferred stock, to convert his or her shares into shares of a new series of preferred stock in exchange for giving up the right to receive the $1.50 per share special cash dividend; the effect of this conversion would be to extend from the second anniversary of the issuance of the preferred stock until the third anniversary of such issuance the preferred stockholder's right to receive the change of control payment (but during such third year capped at $12.50 per share instead of $12.00 per share (in each case, including the liquidation preference and any dividends) over the term of the preferred stock and the new series of preferred stock). Each share of preferred stock would have the same voting rights as a share of Class A common stock, except with respect to certain mergers. Any shares of Class A common stock not exchanged in the Exchange Offer would remain issued and outstanding after the closing of the Exchange Offer. Beneficial owners of Revlon Class A common stock who wish to exchange their shares for preferred stock in the Exchange Offer should follow the instructions provided to them by their broker or nominee. Information for beneficial holders of Revlon Class A common stock will be mailed to Revlon stockholders by their brokers. Registered holders of Revlon Class A common stock who wish to exchange their shares for preferred stock in the Exchange Offer should follow the instructions included in the Letter of Transmittal mailed to Revlon stockholders. Holders of Class A common stock may contact D.F. King & Co., Inc., the information agent for the Exchange Offer, toll-free at (800) 949-2583, with any questions. There can be no assurance that the Exchange Offer will be consummated. Consummation of the Exchange Offer is subject to, among other things, the non-waivable condition that at least a majority of the Class A common stock not beneficially owned by MacAndrews & Forbes Holdings Inc., Revlon's principal stockholder, and its affiliates are tendered, and not withdrawn, in the Exchange Offer. MacAndrews & Forbes has agreed not to tender any shares of Class A common stock beneficially owned by it in the Exchange Offer. The Exchange Offer has been authorized by all of the independent members of Revlon's Board of Directors. The Exchange Offer will expire on September 10, 2009, unless terminated or extended by Revlon. Upon the successful completion of the Exchange Offer, the terms of the $107 million Senior Subordinated Term Loan between Revlon's wholly owned operating subsidiary, Revlon Consumer Products Corporation, and MacAndrews & Forbes will be amended to extend the maturity date of the loan from August 2010 to four years after the consummation of the Exchange Offer and change its interest rate from 11% to 12.75% per annum. If upon completion of the Exchange Offer MacAndrews & Forbes is eligible to consummate a merger under Delaware law by reason of its 90% ownership of the outstanding shares of Class A common stock, MacAndrews & Forbes will as soon as reasonably practicable seek to consummate a short-form merger in accordance with Delaware law in which the remaining holders of Class A common stock (other than MacAndrews & Forbes or its affiliates) receive shares of the preferred stock to be issued in the Exchange Offer. For each share of Class A common stock exchanged in the Exchange Offer or acquired in a short-form merger, Revlon will issue to MacAndrews & Forbes one share of Class A common stock and MacAndrews & Forbes will contribute to Revlon $3.71 of the aggregate outstanding principal amount of RCPC's Senior Subordinated Term Loan currently owed to MacAndrews & Forbes, up to a maximum contribution of $75 million of the principal amount outstanding under the Senior Subordinated Term Loan. On August 10, 2009, counsel for parties in certain Delaware shareholder lawsuits filed against Revlon, its directors and MacAndrews & Forbes in connection with an initial proposal by MacAndrews & Forbes that led to the Exchange Offer reached an agreement in principle to settle all claims raised therein. MacAndrews & Forbes, which is wholly owned by Ronald O. Perelman, beneficially owns roughly 58% of Revlon's outstanding Class A common stock, 100% of Revlon's Class B common stock and roughly 61% of Revlon's combined outstanding shares of Class A and Class B common stock, which together represent roughly 75% of the combined voting power of such shares. Revlon has filed with the SEC a Schedule TO/13E-3 and Offer to Exchange, consisting of an offering circular, a related letter of transmittal and other ancillary offering documents, as well as a Schedule 14C and Information Statement. A copy of the Schedule TO is available at no charge at http://ResearchArchives.com/t/s?41a6 A full-text copy of the Offer to Exchange is available at no charge at http://ResearchArchives.com/t/s?41a9 On August 10, Revlon President and CEO Alan T. Ennis circulated to shareholders a preliminary notice and information statement in connection with the written consent of the majority stockholders of Revlon related to the issuance of up to 20,235,337 shares of Class A Common Stock to MacAndrews & Forbes. A full-text copy of the letter filed on Form PRE 14C is available at no charge at: http://ResearchArchives.com/t/s?41a8 On August 11, Revlon filed Amendment No. 1 to amend the Tender Offer Statement and Schedule 13E-3 Transaction Statement on Schedule TO. The Amendment No. 1 was filed solely to add a Q&A for Employees, dated August 10, 2009, which was inadvertently omitted due to printer error. A full-text copy of the Q&A is available at no charge at http://ResearchArchives.com/t/s?41a7 About Revlon Revlon Inc. -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti- perspirants/deodorants and beauty care products company. Revlon Inc. conducts its business exclusively through its direct wholly owned operating subsidiary, Revlon Consumer Products Corporation, and its subsidiaries. Revlon is a direct and indirect majority owned subsidiary of MacAndrews & Forbes Holdings Inc., a corporation wholly-owned by Ronald O. Perelman. The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), ColorSilk(R), Mitchum(R), Charlie(R), Gatineau(R), and Ultima II(R). At June 30, 2009, Revlon had $797.4 million in total assets; and $326.4 million in total current liabilities, $1.15 billion in long-term debt, $107.0 million in long-term debt by affiliates, $213.8 million in long-term pension and other post-retirement plan liabilities, $66.6 million in other long-term liabilities; resulting in $1.07 billion in stockholders' deficiency. SAINT VINCENT: Chapter 11 Case Reassigned to Judge C. Morris ------------------------------------------------------------ The Clerk for the United States Bankruptcy Court for the Southern District of New York informed Saint Vincent Catholic Medical Centers that their Chapter 11 Case No. 05-14945 and all pending, affiliated cases and adversary proceedings have been reassigned from Judge Adlai S. Hardin, Jr., to Judge Cecelia G. Morris. Saint Vincent Catholic Medical Centers -- http://www.svcmc.org/-- is anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Its behavioral health services also provide supportive housing programs for people with mental illness throughout the Metropolitan area. Saint Vincent's is the designated provider for the New York and New Jersey region of the US Family Health Plan sponsored by the US Department of Defense. Saint Vincent's serves as the academic medical center of New York Medical College in New York City. The healthcare organization is sponsored by the Roman Catholic Bishop of Brooklyn and the president of the Sisters of Charity of New York. Saint Vincent Catholic Medical Centers of New York and six of its affiliates filed for Chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' Chapter 11 cases. On September 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represented the Official Committee of Unsecured Creditors. As of April 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. The Court confirmed the Debtors' Chapter 11 plan on July 27, 2007. SAINT VINCENT: Frances Alvarez Allowed to File Claim ---------------------------------------------------- Frances Alvarez commenced an action in the Supreme Court of the State of New York, County of Richmond (Index No. 101993/05), against Debtor Saint Vincent's Catholic Medical Centers of New York alleging claims based on injuries due to prepetition, non- medical malpractice and negligence. The Action is currently stayed by the Plan Injunction and the automatic stay imposed by Section 362 of the Bankruptcy Code. Moreover, Ms. Alvarez has not filed any proofs of claim in the Chapter 11 cases, including in respect of the Action. The Post- Effective Date Debtors, however, have confirmed that neither Ms. Alvarez nor her counsel was served with notice of the Bar Date. Based on that, the Post-Effective Date Debtors and Ms. Alvarez entered into a Court-approved stipulation (i) to extend the Bar Date solely to allow a proof of claim with respect to the Action to be deemed timely filed in the Cases, and (ii) to modify the Stay and the Plan Injunction to allow the Action to proceed. The parties also agree that: (a) The Stipulation will constitute a proof of claim with respect to the Action, and will be deemed to be properly and timely filed in the Cases, nunc pro tunc to the Bar Date. Other than with respect to the time and manner of filing of the Proof of Claim, the Stipulation will not limit the Post-Effective Date Debtors' or any other party in interest's right to object to, assert a defense against, or otherwise challenge any claim asserted by Ms. Alvarez. Ms. Alvarez agrees that she will not file or seek to file any other proof of claim in the Cases other than the Proof of Claim. (b) Any recovery obtained by Alvarez related to the Action will be limited to the available proceeds from the Debtors' and the Post-Effective Date Debtors' applicable third party insurance policies in respect of liabilities of the Debtors arising from non-medical malpractice personal injury claims, if any. (c) The Stay and the Plan Injunction are modified solely to permit Alvarez to proceed with the Action to judgment and settlement, and to collect on the judgment and settlement, without further Court order. (d) Ms. Alvarez will fully and finally waive, release, acquit and forever discharge the Debtors and the Post-Effective Date Debtors from any Claims or damages under any legal theory in law or in equity, including tort, contract or other claims which Alvarez may now have, may claim to have or ever had, whether the claims are currently known or unknown, foreseen or unforeseen, and whether based on the Action or otherwise. About Saint Vincent Catholic Medical Centers Saint Vincent Catholic Medical Centers -- http://www.svcmc.org/-- is anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Its behavioral health services also provide supportive housing programs for people with mental illness throughout the Metropolitan area. Saint Vincent's is the designated provider for the New York and New Jersey region of the US Family Health Plan sponsored by the US Department of Defense. Saint Vincent's serves as the academic medical center of New York Medical College in New York City. The healthcare organization is sponsored by the Roman Catholic Bishop of Brooklyn and the president of the Sisters of Charity of New York. Saint Vincent Catholic Medical Centers of New York and six of its affiliates filed for Chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' Chapter 11 cases. On September 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represented the Official Committee of Unsecured Creditors. As of April 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. The Court confirmed the Debtors' Chapter 11 plan on July 27, 2007. (Saint Vincent Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: Court OKs $65.35MM Sale of SemFuel Assets to Noble --------------------------------------------------------------- SemGroup, L.P. received approval from the U.S. Bankruptcy Court for the District of Delaware to sell the principal assets of its SemFuel LP subsidiary to Noble Americas Corp. for $65.35 million. The transaction is expected to close by September 30, 2009. "This transaction ensures that SemGroup is continuing to maximize value for all of our stakeholders," said Terry Ronan, the company's president and chief executive. "It also positions the company to emerge from Chapter 11 protection as a strong player in the gathering, storage, transportation and distribution of crude oil, natural gas liquids and natural gas." SemGroup selected Noble Americas as the winning bidder at a court- authorized auction on Aug. 3. The assets being sold include equipment and facilities in Oklahoma, Kansas, Texas, Iowa, Wisconsin, and Michigan. Once the transaction with Noble closes, SemGroup will have raised more than $140 million for its stakeholders through asset sales since filing for Chapter 11 protection in July 2008. SemGroup, LP and certain subsidiaries filed voluntary petitions for Chapter 11 under the U.S. Bankruptcy Code on July 22, 2008. About SemGroup Based in Tulsa, Okla., SemGroup, L.P., is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SEMGROUP LP: Names New President of SemStream --------------------------------------------- SemGroup, L.P. announced August 12 Kevin Clement has been named President of its SemStream, L.P. subsidiary. He succeeds Larry Payne who has resigned to pursue other opportunities. Mr. Clement was most recently President and Chief Operating Officer of SemMaterials where he was responsible for the overall business, including planning and executing its sale. He previously served as SemMaterials' Vice President of residual fuel and Vice President of asphalt supply and marketing. Mr. Clement also brings to SemStream more than 20 years of professional leadership experience gained as an officer within several Koch Industries' market sectors -- including natural gas liquids operations and marketing, asphalt processing and marketing, and residual fuels. Mr. Clement graduated from Wichita State University's W. Frank Barton School of Business with a BBA in marketing. About SemGroup L.P. 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) SONIC AUTOMOTIVE: Delays Effective Date of 6% Notes Registration ---------------------------------------------------------------- Sonic Automotive, Inc., filed with the Securities and Exchange Commission on August 7 and 10, amendments to its registration statement on Form S-3. The amendments were filed to delay the effective date of the registration statement until Sonic files "a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine." Sonic said certain securityholders may offer and sell $85,627,000 aggregate principal amount of the Company's 6.00% Senior Secured Convertible Notes due 2012, Series A, accompanied by the guarantees thereof by certain of Sonic's subsidiaries, 21,406,750 shares of Sonic's Class A common stock issuable upon conversion thereof and 1,348,519 additional shares of Sonic's Class A common stock offered by them from time to time. Sonic is registering the offer and sale of the Notes and shares of Class A common stock to satisfy contractual obligations entered into in connection with transactions exempt from the registration requirements of the Securities Act of 1933, as amended. The Notes bear interest at 6.00% per year and mature on May 15, 2012, unless earlier converted, redeemed or repurchased by the Company. Sonic will pay interest on the Notes on May 1 and November 1 of each year, beginning on November 1, 2009. The Notes are secured by a second priority lien on substantially all of Sonic's assets that secure its credit agreement dated February 17, 2006, on a first priority basis. Holders of the Notes may convert them into shares of Class A common stock at any time on or after August 25, 2011. The conversion rate for the Notes is initially 73.58 shares of Class A common stock per $1,000 principal amount of Notes, or $13.59 per share. As required by the indenture governing the Notes, Sonic is seeking stockholder approval of an increase in the conversion rate to 250 shares of Class A common stock per $1,000 principal amount of Notes, or $4.00 per share, subject to further adjustment upon certain events as set forth in the indenture governing the Notes. Sonic anticipates the increase in the conversion rate will be approved at an upcoming special meeting of stockholders because holders of a majority of the voting power of its outstanding common stock, including O. Bruton Smith and his affiliates, have indicated their intention to vote in favor of this proposed increase. Sonic may redeem the Notes at any time prior to May 1, 2010 at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, from May 1, 2010 to April 30, 2011 at a redemption price equal to 106% of the principal amount of the Notes to be redeemed, and at any time thereafter at a redemption price equal to 112% of the principal amount of the Notes to be redeemed, in each case including accrued and unpaid interest. The Notes and the shares of Class A common stock may be offered by selling securityholders through public or private transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale or at negotiated prices. The timing and amount of any sale are within the sole discretion of the selling securityholder, subject to certain restrictions. A full-text copy of Amendment No. 1 filed on August 7 is available at no charge at http://ResearchArchives.com/t/s?41ad A full-text copy of Amendment No. 2 filed on August 10 is available at no charge at http://ResearchArchives.com/t/s?41ae Amendment No. 2 discusses indemnification provided by the Company to its directors and officers. About Sonic Automotive Sonic Automotive, Inc., headquartered in Charlotte, North Carolina, is one of the largest automotive retailers in the United States. As of June 30, 2009, it operated 154 dealership franchises, representing 31 different brands of cars and light trucks, at 131 locations and 30 collision repair centers in 15 states. Its dealerships provide comprehensive services including sales of both new and used cars and light trucks, sales of replacement parts, performance of vehicle maintenance, manufacturer warranty repairs, paint and collision repair services, and arrangement of extended service contracts, financing, insurance and other aftermarket products for customers. * * * According to the Troubled Company Reporter on May 25, 2009, Moody's Investors Service downgraded to Caa1 from B2 the Corporate Family rating of Sonic Automotive Holdings, Inc., and upgraded the probability of default rating to Caa1 from Caa3. The outlook is negative. SONIC AUTOMOTIVE: Expects $3.3 Million in Dole-Out from GM ---------------------------------------------------------- Sonic Automotive, Inc., discloses that subject to bankruptcy approval, General Motors Corporation has offered assistance with winding down the operations of various franchises in exchange for Sonic's execution of termination agreements. Sonic executed all of the termination agreements. Assistance expected to be received from General Motors totals $3.3 million. Sonic said none of the funds was recorded as a receivable from General Motors as of June 30, 2009, due to the uncertainty of bankruptcy court approval and certain conditions required for the payments to occur had not yet been satisfied. As of June 30, 2009, Sonic operated 33 General Motors franchises (under the Cadillac, Chevrolet, Hummer, Saab, Buick and Saturn nameplates) at 26 physical dealerships. Six of Sonic's General Motors dealerships, representing 12 franchises, including three Hummer franchises at multi-franchise dealerships, two Saab franchises at multi-franchise dealerships and one additional General Motors franchise at a multi-franchise dealership received letters stating that the franchise agreements between General Motors and Sonic will not be continued by General Motors on a long-term basis. The termination agreements provide for: -- The termination of the franchise agreement no earlier than January 1, 2010, and no later than October 31, 2010; -- The assignment and assumption of the franchise agreement by the purchaser of General Motors' assets; -- The payment of financial assistance to the franchisee in installments in connection with the orderly winding down of the franchise operations; -- The waiver of any other termination assistance of any kind that may have been required under the franchise agreement; -- The release of claims against General Motors or the purchaser of General Motors' assets and their related parties; -- The continuation of franchise operations pursuant to the franchise agreement, as supplemented by the termination agreement, through the effective date of termination of the franchise agreement, except that Sonic shall not be entitled to order any new vehicles from General Motors or the purchaser of General Motors' assets; and -- A restriction on Sonic's ability to transfer the franchise agreement to another party. For the remaining General Motors franchises, Sonic executed "continuation agreements" which require, among other things, that existing franchise agreements will expire no later than October 31, 2010. In consideration of the execution of the "continuation agreements" General Motors will recommend to the bankruptcy court the continuation or assumption of Sonic's existing franchise agreements, as amended by the "continuation agreements". Sonic expects its franchises which executed "continuation agreements" to be renewed on or before October 31, 2010. With the exception of product liability indemnifications, amounts owed to Sonic through incentive programs, amounts currently owed to Sonic's franchises under their open accounts with General Motors and warranty claims occurring within 90 days prior to June 1, 2009, all amounts owed to Sonic from General Motors were extinguished as a result of the execution of the termination and continuation agreements. Sonic said a motion was made by General Motors to the bankruptcy court and the motion was granted by the bankruptcy court allowing General Motors to pay the claims. As a result, Sonic has been receiving payments related to pre- bankruptcy claims and the effect of General Motor's bankruptcy filing has not had a material effect on Sonic's recorded receivable balances as of June 30, 2009. As Sonic's operations at the affected franchises that will not be renewed wind down, Sonic said it may be required to accelerate depreciation expenses and record impairment charges related to, but not limited to, lease obligations, fixed assets, franchise assets, accounts receivable and inventory. On June 2, 2009, General Motors announced that Chinese equipment manufacturer Sichuan Tengzhong Heavy Industrial Machinery Co. will buy its Hummer brand. As of June 30, Sonic operated three Hummer franchises at three dealership locations. It is uncertain whether STHIMC will continue supporting the Hummer brand or whether STHIMC's ownership of the Hummer brand will have a positive or negative impact on Sonic's Hummer franchises' operations. On June 5, 2009, General Motors announced that Penske Automotive Group will buy its Saturn brand. As of June 5, Sonic operated one Saturn franchise at one dealership location. It is uncertain whether PAG will continue supporting the Saturn brand or whether PAG's ownership of the Saturn brand will have a positive or negative impact on Sonic's Saturn franchise's operations. On July 10, 2009, General Motors emerged from bankruptcy as the new General Motors Company, with the former General Motors Corp. henceforth known as Motors Liquidation Company. With the exception of the sale of the Hummer and Saturn brands, the new General Motors expects to continue its current brand portfolio going forward, however, discontinuation or sale of additional brands in the future could have an uncertain impact on Sonic's operations. On April 30, 2009, Chrysler LLC filed for bankruptcy protection and submitted a plan of reorganization. On June 10, 2009, Fiat SpA purchased a substantial portion of Chrysler's assets which include rights related to Sonic's franchise agreements. As of June 30, Sonic owned six Chrysler franchises at two dealership locations. It is uncertain whether Fiat will continue supporting the Chrysler brand or whether Fiat's ownership of the Chrysler brand will have a positive or negative impact on Sonic's Chrysler franchises' operations. In conjunction with Chrysler's reorganization efforts in the second quarter of 2009, three franchise agreements associated with one of Sonic's dealership locations were terminated. The result of these franchise terminations was not material to Sonic's results of operations, balance sheet or cash flows for the second quarter ended June 30, 2009. Revenues associated with the General Motors franchises that received termination letters for the second quarter ended June 30, 2008, and 2009 were roughly $42.8 million and $28.9 million, respectively. Revenues associated with the General Motors franchises that received termination letters for the six-month periods ended June 30, 2008 and 2009 were roughly $91.2 million and $59.8 million, respectively. About Sonic Automotive Sonic Automotive, Inc., headquartered in Charlotte, North Carolina, is one of the largest automotive retailers in the United States. As of June 30, 2009, it operated 154 dealership franchises, representing 31 different brands of cars and light trucks, at 131 locations and 30 collision repair centers in 15 states. Its dealerships provide comprehensive services including sales of both new and used cars and light trucks, sales of replacement parts, performance of vehicle maintenance, manufacturer warranty repairs, paint and collision repair services, and arrangement of extended service contracts, financing, insurance and other aftermarket products for customers. * * * According to the Troubled Company Reporter on May 25, 2009, Moody's Investors Service downgraded to Caa1 from B2 the Corporate Family rating of Sonic Automotive Holdings, Inc., and upgraded the probability of default rating to Caa1 from Caa3. The outlook is negative. SONIC AUTOMOTIVE: Posts $26,000 Net Income for 2nd Quarter 2009 --------------------------------------------------------------- Sonic Automotive, Inc., recorded $26,000 in net income for the second quarter ended June 30, 2009, from net income of $9,217,000 for the same period a year ago. For the six months ended June 30, 2009, the Company posted net income of $1,704,000 from $21,842,000 for the same six-month period in 2008. As of June 30, 2009, the Company had $2,099,945,000 in total assets, including $5,163,000 in cash and cash equivalents; $1,135,323,000 in total current liabilities, $644,260,000 in long- term debt, and $99,823,000 in other long-term liabilities; resulting in $220,539,000 in stockholders' equity. In the second quarter ended June 30, 2009, Sonic recorded franchise asset impairment charges of $2,100,000 within continuing operations. The impairment charges were recorded based on management's estimate that the recorded values would not be recoverable either through operating cash flows or through an eventual sale of the franchise. The impairment charges recorded in continuing operations relate to dealership franchises to be discontinued in future periods based on notifications from General Motors. A full-text copy of Sonic's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?41aa Presentation materials for the Company's July 28, 2009 earnings conference call at 11:00 A.M. (Eastern) are available at no charge at http://ResearchArchives.com/t/s?41ab August 19 Stockholders' Meeting A special stockholders' meeting will be at 10:30 a.m. August 19, 2009, at Lowe's Motor Speedway, Smith Tower, 600 Room, U.S. Highway 29 North, in Concord, North Carolina. At the meeting, stockholders will be asked to vote on a proposal to approve the issuance of shares of Sonic Class A Common Stock upon conversion of its 6.00% Senior Secured Convertible Notes due 2012 at a lower conversion price of $4.00. On May 7, 2009, Sonic issued $85,627,000 in aggregate principal amount of its 6.00% Senior Secured Convertible Notes due 2012 and 860,723 shares of its Class A Common Stock in a private placement to certain holders of its 5.25% Convertible Senior Subordinated Notes due 2009 in satisfaction in full of its obligations to those holders under those notes, which were due on May 7, 2009. In connection with the issuance, Sonic agreed to seek stockholder approval for the issuance of shares of Class A Common Stock upon conversion of the 6.00% Senior Secured Convertible Notes due 2012 at a lower conversion price that is subject to further adjustment in certain circumstances. If this stockholder approval is not obtained, Sonic will be in default under the indenture governing the 6.00% Senior Secured Convertible Notes and of its other debt, lease facilities and operating agreements, which would have a material adverse effect on its business, financial condition, liquidity and operations, and raise substantial doubt about its ability to continue as a going concern. "If that were to occur, we might be unable to continue our operations, be unable to avoid filing for bankruptcy protection and/or have an involuntary bankruptcy case filed against us," Sonic said. A full-text copy of Sonic's proxy statement is available at no charge at http://ResearchArchives.com/t/s?41ac About Sonic Automotive Sonic Automotive, Inc., headquartered in Charlotte, North Carolina, is one of the largest automotive retailers in the United States. As of June 30, 2009, it operated 154 dealership franchises, representing 31 different brands of cars and light trucks, at 131 locations and 30 collision repair centers in 15 states. Its dealerships provide comprehensive services including sales of both new and used cars and light trucks, sales of replacement parts, performance of vehicle maintenance, manufacturer warranty repairs, paint and collision repair services, and arrangement of extended service contracts, financing, insurance and other aftermarket products for customers. * * * According to the Troubled Company Reporter on May 25, 2009, Moody's Investors Service downgraded to Caa1 from B2 the Corporate Family rating of Sonic Automotive Holdings, Inc., and upgraded the probability of default rating to Caa1 from Caa3. The outlook is negative. SPANSION INC: Court Approves Warren H. Smith as Fee Auditor ----------------------------------------------------------- Judge Kevin Carey approved the appointment of Warren H. Smith as fee auditor Spansion Inc. and its affiliates, nunc pro tunc to June 24, 2009. The Debtors, in consultation with the Office of the U.S. Trustee and the Official Committee of Unsecured Creditors, have recommended Warren H. Smith & Associates, P.C., to be their fee auditor, nunc pro tunc to June 24, 2009. WHS will audit all fee applications of: (a) professionals employed by the Debtors and the Committee pursuant to Sections 327, 328, 1103 or 1106 of the Bankruptcy Code; (b) all members of the Committee; (c) any claims for reimbursement of professional fees and expenses under Section 503(b) of the Bankruptcy Code. WHS will review in detail, quarterly Interim Fee Application Requests and final fee applications filed with the Court pursuant to Sections 330 and 331 of the Bankruptcy Code. If the Fee Auditor has any questions, issues or disputes regarding a Fee Application Request, WHS will communicate those issues in writing to the Applicant within 30 days after the due date of (i) a quarterly Interim Fee Application Request or (ii) service upon the Fee Auditor of a quarterly Interim Fee Application Request. The Fee Auditor will file with the Court a final report with respect to each quarterly Interim Fee Application Request within the later of: (i) 30 days after the date of the Initial Report; or (ii) 20 days after the receipt of a response to the Initial Report. The principal attorney designated to serve as the Debtors' fee auditor is Warren H. Smith, whose hourly rate is $295 per hour. The hourly rates for other professionals and paraprofessionals at WHS ranges from $45 to $260. The Debtors will also reimburse WHS for all expenses incurred including, among other things, telephone, telecopier, photocopying charges, travel expenses and computerized research. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. SPANSION INC: Gets Court OK to Hire K&L for ITC Action ------------------------------------------------------ Spansion Inc. and its affiliates obtained the Bankruptcy Court's authority to employ K&L Gates LLP as their special litigation counsel, nunc pro tunc to June 1, 2009. The Debtors have selected K&L because of the firm's expertise and familiarity with the specific aspects in which it is to be employed. K&L attorneys have represented the Debtors since October 2005. As special litigation counsel, K&L will: (a) represent the Debtors in the International Trade Commission and Eastern District of Texas in an action filed by LSI Corporation and Agere Systems, Inc.; (b) represent the Debtors in the ITC and Northern District of California relating to an action filed by Tessera, Inc.; and (c) serve as a patent counsel. Up until May 31, 2009, the Debtors will pay K&L for services rendered as an ordinary course professional. Thereafter, the Debtors will pay K&L based on the firm's current hourly rates: Professional Range ------------ ----- Partners $595-$500 Associates $500-$295 Paraprofessionals $300-$175 The Debtors anticipate that K&L's monthly fees will not exceed $300,000. The Debtors will reimburse K&L for out-of-pocket expenses including transportation, overtime expenses, computer assisted legal research, photocopying, and lodging. Michael J. Bettinger, Esq., at K&L Gates LLP, in San Francisco, California, assures the Court that his firm is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. SPANSION INC: Has Court Nod for Morrison as Litigation Attorneys ---------------------------------------------------------------- Spansion Inc. and its affiliates obtained the Bankruptcy Court's authority to employ Morrison & Foerster LLP as their special litigation counsel, nunc pro tunc to June 1, 2009. Morrison will represent the Debtors in a complaint filed by Fast Memory Erase, LLC, in the U.S. District Court for the Northern District of Texas asserting claims for patent infringement against seven defendant groups, including the Debtors. The Debtors have selected Morrison because, among other things, attorneys with Morrison have represented them since January 2008 in the FME Litigation. On February 25, 2009, Fast Memory, the Debtors, and the other defendants filed a Joint Claim Construction and Prehearing Statement setting forth their positions on the proper construction of disputed claim terms in the patents at issue, which hearing will be continued to August 8, 2009. Subsequently, the U.S. Bankruptcy Court for the District of Delaware granted limited relief from the automatic stay to allow the Texas District Court to issue a ruling on the Patent Action following the hearing scheduled for August 8, 2009. With the lifting of the automatic stay, the Debtors believe that the costs of Morrison's representation will exceed the $50,000 limit for ordinary course professionals, thus the Debtors find that a separate application with the Court is necessary. The Debtors propose to pay Morrison as an ordinary course professional from the Petition Date until May 31, 2009. Thereafter, the Debtors will pay Morrison based on the firm's current hourly rates: Professional Range ------------ ----- Partners $650-$750 Associates $295-$640 Paraprofessionals $175-$280 The Debtors will also reimburse Morrison for non-overhead expenses incurred including, among other things, telephone calls, airfare, and lodging. Alexander J. Hadjis, Esq., at Morrison & Foerster LLP, in Northwest, Washington, DC, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. He further discloses that the Debtors owe Morrison $1,120,530 as of the Petition Date, which amount remains unpaid. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. SPRINT NEXTEL: To Raise $500 Million by Issuing Notes Due 2017 -------------------------------------------------------------- Sprint Nextel Corporation filed a preliminary prospectus supplement dated August 10, 2009, on Form 424B5 with the Securities and Exchange Commission in connection with its planned issuance of $500,000,000 of __% Notes due 2017. Sprint will pay interest on the notes on February 15 and August 15 of each year, beginning February 15, 2010. The notes will mature on August 15, 2017. Sprint may redeem some or all of the notes at any time and from time to time at a redemption price. If a change of control triggering event occurs, Sprint will be required to make an offer to repurchase the notes in cash from the holders at a price equal to 101% of their aggregate principal amount, plus accrued but unpaid interest to, but not including, the date of repurchase. The notes are Sprint's unsecured senior obligations and rank equally with existing and future unsecured senior indebtedness. The notes will be effectively subordinated to the indebtedness and other liabilities -- including trade payables -- of Sprint's subsidiaries, as well as secured indebtedness to the extent of the value of the assets securing such debt. The underwriters -- J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and Wells Fargo Securities, LLC -- have severally agreed to purchase the principal amount of notes. A full-text copy of the preliminary prospectus supplement is available at no charge at http://ResearchArchives.com/t/s?41af 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. * * * All three rating agencies rate Sprint's senior unsecured debt below investment grade. On May 1, 2008, Standard & Poor's lowered Sprint's rating to BB. On April 3, 2009, they changed Sprint's outlook to negative from stable. On December 10, 2008, Moody's Investors Service lowered Sprint's rating to Ba2. At the same time, they raised Sprint's amended bank credit facility rating to Baa2. They rate Sprint's outlook as negative. On February 19, 2009, Fitch Ratings lowered Sprint's rating to BB. They rate Sprint's outlook as negative. SPRINT NEXTEL: To Raise $1.3 Billion by Issuing 8.375% Notes ------------------------------------------------------------ Sprint Nextel Corporation filed with the Securities and Exchange Commission a prospectus supplement on Form 424B5 and a Free Writing Prospectus with respect to its planned issuance of $1,300,000,000 in 8.375% Notes due 2017. Sprint will pay interest on the notes on February 15 and August 15 of each year, beginning February 15, 2010. The notes will mature on August 15, 2017. Sprint may redeem some or all of the notes at any time and from time to time at a redemption price. If a change of control triggering event occurs, Sprint will be required to make an offer to repurchase the notes in cash from the holders at a price equal to 101% of their aggregate principal amount, plus accrued but unpaid interest to, but not including, the date of repurchase. The notes are Sprint's unsecured senior obligations and rank equally with its existing and future unsecured senior indebtedness. The notes will be effectively subordinated to the indebtedness and other liabilities (including trade payables) of Sprint's subsidiaries, as well as its secured indebtedness to the extent of the value of the assets securing such debt. The underwriters have severally agreed to purchase the principal amount of notes as set forth: Underwriter Principal Amount ----------- ---------------- J.P. Morgan Securities Inc. $325,000,000 Citigroup Global Markets Inc. 227,500,000 Wells Fargo Securities, LLC 227,500,000 Banc of America Securities LLC 78,000,000 Barclays Capital Inc. 78,000,000 Mitsubishi UFJ Securities (USA), Inc. 78,000,000 RBS Securities Inc. 78,000,000 Daiwa Securities America Inc. 52,000,000 Deutsche Bank Securities Inc. 52,000,000 Goldman, Sachs & Co. 52,000,000 Mizuho Securities USA Inc. 52,000,000 ---------------- Total $1,300,000,000 A full-text copy of the prospectus supplement is available at no charge at http://ResearchArchives.com/t/s?41b0 A full-text copy of the free writing prospectus is available at no charge at http://ResearchArchives.com/t/s?41b1 In connection with the issuance of 8.375% Notes due 2017, Sprint filed these documents with the SEC: -- Specimen of 8.375% Notes due 2017 See http://ResearchArchives.com/t/s?41b2 -- Opinion of Jones Day regarding validity See http://ResearchArchives.com/t/s?41b3 -- Opinion of Polsinelli Shughart PC See http://ResearchArchives.com/t/s?41b4 -- Opinion of Jones Day regarding United States federal income tax matters See http://ResearchArchives.com/t/s?41b5 -- Computation of Ratio of Earnings to Fixed Charges See http://ResearchArchives.com/t/s?41b6 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. * * * All three rating agencies rate Sprint's senior unsecured debt below investment grade. On May 1, 2008, Standard & Poor's lowered Sprint's rating to BB. On April 3, 2009, they changed Sprint's outlook to negative from stable. On December 10, 2008, Moody's Investors Service lowered Sprint's rating to Ba2. At the same time, they raised Sprint's amended bank credit facility rating to Baa2. They rate Sprint's outlook as negative. On February 19, 2009, Fitch Ratings lowered Sprint's rating to BB. They rate Sprint's outlook as negative. STANT PARENT: Seeks to Sell All Assets to Vapor Acquisition ----------------------------------------------------------- Stant Parent Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve proposed bidding procedures for the sale of substantially all of their assets. Investment firm H.I.G. Capital Partners IV LP and the Debtors' senior prepetition agent agreed to fund the Debtors to allow for a competitive sale process. The Debtors have entered into an asset purchase agreement under which Vapor Acquisition Corp. will buy the Debtors' assets in exchange for the assumption of all amounts under the debtor-in- possession facility, senior prepetition loans, and liabilities. The sale is subject to higher and better offers. In a document filed with the Court, Roberta A. DeAngelis, U.S. Trustee for Region 3, pointed out, "the stalking-horse bidder is an affiliate of H.I.G. Capital and the majority shareholder of the Debtors" According to the U.S. Trustee, the Debtors has 920,001 shares of common stock. Of this total, 744,907 shares, or 80.97%, are held by H.I.G. Capital or its affiliates -- H.I.G. Stant IV LLC, Stant Partners and Vapour Investors LLC. An affiliate of H.I.G. Capital has obtained a majority participation the proposed DIP facility. At the first day hearing held on July 29, 2009, representative of the Debtors and H.I.G. Capital disclosed the amount of the participation as $6 million out of a proposed $11 million DIP facility, the U.S. Trustee points out. "The aggregate consideration for the sale and transfer of the acquired assets shall be an estimated $81 million," the U.S. Trustee adds. The Debtors propose that all bids for their assets must be accompanied by a good-faith deposit in an amount equal to 5% of the proposed purchase price. The bid deadline has yet to be determined. The Debtors say that they want to hold an auction by September 18, 2009. The Debtors seek to provide expense reimbursement of $300,000 in recognition of the stalking-horse purchaser's substantial expenditure of resources. About Stant Parent Connersville, Indiana-based Stant Parent Corp. and its affiliates filed for Chapter 11 on July 27, 2009 (Bank. D. Del. Lead Case No. 09-12647). Sandra G.M. Selzer, Esq., and Scott D. Cousins, Esq., at Greenberg Traurig, LLP, represent the Debtors in their restructuring efforts. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' case. In their petition, the Debtors listed assets and debts both ranging from $50,000,001 to $100,000,000. TABERNA PREFERRED III: Fitch Cuts Ratings on 2 Classes of Notes --------------------------------------------------------------- Fitch Ratings has downgraded two classes of notes from Taberna Preferred Funding III, Ltd./Inc. The downgrades incorporate the transaction's non-payment of the full interest due to the class B-1 and B-2 notes (collectively, the class B notes) on the August 5, 2009 payment date. All available proceeds went to pay the class A notes' interest in full, and the remaining interest proceeds were exhausted when paying the class B notes. The class B notes received only 39.3% of their $523,552 interest due. This partial interest payment is considered a payment default. Taberna III is expected to enter into an Event of Default as a result of the partial non-payment of interest to the class B notes. However, Fitch has not received a notice of an event of default. These notes are backed by trust preferred securities and subordinated debt issued by subsidiaries of real estate investment trusts, real estate operating companies, homebuilders and specialty finance companies, as well as commercial mortgage-backed securities. Fitch has taken these actions: -- $91,250,000 class B-1 notes downgraded to 'D' from 'CC'; -- $7,500,000 class B-2 notes downgraded to 'D' from 'CC'. TABERNA PREFERRED IV: Fitch Downgrades Ratings on 2 Notes to 'D' ---------------------------------------------------------------- Fitch Ratings has downgraded two classes of notes from Taberna Preferred Funding IV, Ltd./Inc. The downgrades incorporate the transaction's non-payment of the full interest due to the class B-1 and B-2 notes (collectively, the class B notes) on the August 5, 2009 payment date. All available proceeds went to pay the class A notes' interest in full, and the remaining interest proceeds were exhausted when paying the class B notes. The class B notes received only 32.1% of their $481,477 interest due. This partial interest payment is considered a payment default. Taberna IV entered into an Event of Default on August 11, 2009, as a result of the partial non-payment of interest to the class B notes. These notes are backed by trust preferred securities and subordinated debt issued by subsidiaries of real estate investment trusts, real estate operating companies, homebuilders and specialty finance companies, as well as senior debt securities and commercial mortgage-backed securities. Fitch has taken these actions: -- $81,450,000 class B-1 notes downgraded to 'D' from 'CCC'; -- $7,000,000 class B-2 notes downgraded to 'D' from 'CCC'. TABERNA PREFERRED VI: Interest Nonpayment Cues Fitch's Rating Cut ----------------------------------------------------------------- Fitch Ratings has downgraded one class of notes from Taberna Preferred Funding VI, Ltd./Inc. The rating action follows at the end of this press release. The downgrade incorporates the transaction's non-payment of the full interest due to the class C notes on the August 5, 2009 payment date. All available proceeds went to pay the class A and B notes' interest in full, and the remaining interest proceeds were exhausted when paying the class C notes. The class C note received only 69.6% of its $274,490 interest due. This partial interest payment is considered a payment default. Taberna VI is expected to enter into an Event of Default as a result of the partial non-payment of interest to the class C notes. However, Fitch has not received a notice of an event of default. These notes are backed by trust preferred securities and subordinated debt issued by subsidiaries of real estate investment trusts, real estate operating companies, homebuilders and specialty finance companies, as well as senior debt securities and commercial mortgage-backed securities. Fitch has taken this action: -- $97,000,000 class C notes downgraded to 'D' from 'CCC'. TAYLOR BEAN: Moody's Takes Rating Actions on Ocala Funding Notes ---------------------------------------------------------------- Moody's ABCP rating actions for the seven-day period ended August 10, 2009. Moody's Rated USCP Program Prime-1 During The Period August 4, 2009 Through August 10, 2009: Moody's Assigns Prime-1 Rating To ICICI Bank's Uscp Program Supported By A Letter Of Credit Provided By Bank Of America Moody's has assigned a Prime-1 rating to the commercial paper issued by ICICI Bank Limited (rated Ba2/NP/C-) through its $160 million fully supported commercial paper program. ICICI Bank, acting through its Bahrain Branch, its Hong Kong Branch, and its New York Branch, will issue commercial paper notes and will use the proceeds for general corporate purposes. Each issuing entity will issue its own series of commercial paper. Bank of America, N.A. (Aa3/Prime-1/D) has issued an irrevocable, direct- pay letter of credit that provides full and timely support for the repayment of each series of commercial paper notes upon maturity. Moody's rating on the CP notes is based primarily on Bank of America's Prime-1 rating. Deutsche Bank National Trust Company (Aa3/Prime-1/C), acting as depositary, will draw on the letter of credit to pay maturing series of commercial paper notes. ICICI Bank Limited is the largest retail bank in India. These ABCP Program Was Placed Under Review For Possible Downgrade During The Period August 4, 2009 Through August 10, 2009: Taylor, Bean & Whitaker Mortgage Corp.'S Ocala Funding Placed On Review For Possible Downgrade On August 5, 2009, Moody's placed both the Prime-1 rating of the extendible asset-backed commercial paper and the Baa2 rating of the subordinated notes issued by Ocala Funding, LLC, on review for possible downgrade. Ocala is a partially supported, single-seller mortgage warehouse program sponsored by Taylor, Bean & Whitaker Mortgage Corp (TB&W). Ocala provides warehouse funding for conforming residential mortgages and has a program size of $ 1.75 billion. The rating action follows news of a federal investigation into TB&W which raises concerns over the company's business practices. The FHA has suspended TB&W from making loans insured by that agency and this has triggered an event of default under the Ocala program documents and placed the program into wind down. TB&W has announced that it has closed down its mortgage lending operations. Moody's is placing the Ocala ratings on review based on the increased uncertainty with respect to the program collateral and operations and expects to the resolve the review as more information becomes available. The Rating Of These ABCP Program Was Withdrawn During The Period August 4, 2009 Through August 10, 2009: Advantage Asset Securitization Corp. Rating Withdrawn At the issuer's request, Moody's has withdrawn the Prime-1 rating of the ABCP issued by Advantage Asset Securitization Corporation, a partially supported, multiseller ABCP program administered by the Mizuho Corporate Bank, Ltd. (Aa3/Prime-1/D+). As of August 3, 2009, all outstanding ABCP was repaid in full. Advantage Asset Securitization Corporation will not issue any further ABCP. TBS INTERNATIONAL: Posts $16MM Net Loss in Quarter Ended June 30 ---------------------------------------------------------------- TBS International Limited posted a net loss of $16,913,000 for three months ended June 30, 2009, compared with a net income of $52,641,000 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $38,201,000 compared with a net income of $98,019,000 for the same period in 2008. The Company's balance sheet showed total assets of $952,912,000, total liabilities of $387,874,000 and stockholders' equity of $565,038,000. The Company related that its lenders agreed to waive original financial covenants through January 1, 2010, which will be reinstated effective January 1, 2010. Based on current internal projections the Company anticipated that it will not meet the reinstated financial covenant requirements in 2010. At that time the Company will need to obtain additional waivers or modify the terms of the existing credit facilities or refinance its debt. The Company discussed this situation with its lenders, and they have agreed to commence discussions in September or October 2009, to either extend the existing waivers or modify the covenants based on its 2009 actual and projected results and updated 2010 forecast. Assuming the Company is able to obtain additional waivers or modify the terms of the existing credit facilities, the Company believes it has sufficient liquidity to meet its needs over the next twelve months. The Company cannot assure that it would be able to raise sufficient additional capital, to sell assets at sufficient prices or to obtain further waivers if so required, and the failure to accomplish the goals in those circumstances would have a material adverse effect on its business, operations, financial condition and liquidity and would raise substantial doubt about its ability to continue as a going concern at that time. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4188 About TBS International Limited TBS International Limited -- http://www.tbsship.com/-- is a fully-integrated transportation service company that offers customers the TBS Five Star Service consisting of: ocean transportation, operations, logistics, port services, and strategic planning. TBS offers liner, parcel, bulk, and chartering services, supported by a fleet of multipurpose tweendeckers and handysize and handymax bulk carriers, including specialized heavy-lift vessels. TBS has developed its business around key trade routes between Latin America and China, Japan and South Korea, as well as select ports in North America, Africa, the Caribbean, and the Middle East. TOM NEBEL: Chapter 7 Trustee Not Bound by State Court Fee Award --------------------------------------------------------------- WestLaw reports that a prior judgment by a Tennessee chancery court, which awarded attorney fees and expenses on a "common fund" theory in a shareholders' derivative action, was not a determination of the right to fees by a law firm which had been representing minority shareholders in the derivative action. It did not collaterally estop minority shareholders from disputing the law firm's right to the entire amount awarded by the chancery court, in a subsequent turnover proceeding brought by the trustee of the law firm's Chapter 7 estate. The pleadings in the chancery action and the prayer for relief showed that the chancery court was concerned only with minority shareholders' right to a fee award as against the chancery defendants, and that the fee claims of the law firm vis-a-vis the minority shareholders were never considered. In re Tom Nebel, P.C., --- B.R. ----, 2009 WL 981733 (Bankr. M.D. Tenn.). Tom Nebel, P.C., a Tennessee professional corporation that was chartered in 1997 to incorporate the law practice of Tom Nebel (an individual licensed to practice law in Tennessee since 1976. Mr. Nebel is the sole shareholder of Tom Nebel, P.C.), filed its petition for bankruptcy protection (Bankr. M.D. Tenn. Case No. 07- 02848) on April 25, 2007. Eva M. Lemeh serves as the chapter 7 trustee liquidating the professional corporation. Ms. Lemeh filed adversary proceedings (Bankr. M.D. Tenn. Adv. Pro. Nos. 07-00204 and 07-00237) to compel the Clerk and Master of the Chancery Court for Davidson County, Tennessee, to turnover of funds from a $2.2 million appeal bond posted to secure an award of attorneys fees and costs in a derivative action in which the debtor-law firm had been representing plaintiff-minority shareholders. TONY BLAKES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Joint Debtors: Tony A. Blakes Cheryl Fennell-Blakes 8201 Heathermore Blvd Upper Marlboro, MD 20772 Bankruptcy Case No.: 09-24896 Chapter 11 Petition Date: August 11, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Paul Mannes Debtors' Counsel: Olivia Desiree Cammack, Esq. The Law Office of Olivia D. Cammack, P.A 8605 Cameron Street, Suite 508 Silver Spring, MD 20910 Tel: (301) 608-0055 Fax: (301) 608-2226 Email: olivia.cammack@oliviacammacklaw.com Total Assets: $1,426,875 Total Debts: $1,711,099 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-24896.pdf The petition was signed by the Joint Debtors. TOUSA INC: Gets Nod to Reject 75 Deals With Subcontractors ---------------------------------------------------------- TOUSA Inc. and its affiliates sought and obtained the Court's authority to reject 148 executory contracts, which consist of: -- 14 lease agreements for equipment, including on-site, trailers, golf cars and office equipment; -- 75 master agreements that govern the Debtors' relationship with certain subcontractors for services ranging from cleaning to construction-related services; -- 17 advertising contracts for, among others, rental of private space for placing signs, billboard rentals and print advertisements; -- 21 agreements requiring the Debtors to construct, among others, water and waste water services, develop land within certain municipalities and construct fire and emergency services facilities; -- 21 supply agreements relating to product suppliers, escrow service providers, cleaning services, and other real estate related services; and -- an agreement for the purchase of certain real property. A list of the 148 Rejected Contracts Agreements is available for free at http://bankrupt.com/misc/TOUSA_RejectedContracts.pdf The Debtors determined that the Rejected Agreements are no longer necessary or beneficial to their business operations. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TOUSA INC: Wachovia Gets Court Nod for Foreclosure Proceeding ------------------------------------------------------------- Wachovia Bank, National Association, ad administrative agent for itself, Comerica Bank and Franklin Bank, ask the Court for additional relief from the automatic stay in order to schedule and conduct a sale of non-estate real property, which is subject to a subordinated second mortgage of Debtor Tousa Homes, Inc. Robert N. Gilbert, Esq., at Carlton Fields, P.A., in West Palm Beach, Florida, relates that Wachovia holds a valid and perfected first mortgage on certain real property located in Miami-Date County, Florida, consisting of about 26.3 acres of land and six partially completed condominium buildings. The first mortgage was originally provided to Wachovia by Promenade at Doral II, LLC. Promenade commenced the construction of condominiums on the Property, however, that construction ceased before the Petition Date. Tousa Homes purportedly holds a second mortgage on the Miami-Dade Property to secure Promenade's guarantee of a $4 million obligation owed by Haverhill Development LLC to the Debtor relating to the acquisition of the Property from the Debtor in 2004. In March 2008, the Bankruptcy Court granted Wachovia relief from the automatic stay to join the Debtor in its U.S. Circuit Court for Miami-Dade County, Florida foreclosure action of the Property and to proceed with that action through judgment, but not sale of the Property. The Circuit Court entered a final judgment on the foreclosure in June 2009 in Wachovia's favor. Pursuant to the final judgment, Wachovia is currently owed $67.4 million, which constitutes a first lien on the Property senior to the interests of all of the named defendants in that action, including the Debtor and its purported second mortgage. In this light, Wachovia sought and obtained a further modification of the automatic stay in order to complete the foreclosure and schedule and conduct the foreclosure sale. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TOUSA INC: Wins Nod to Sell JV Membership Interests to Centex ------------------------------------------------------------- The Bankruptcy Court has authorized TOUSA Homes, Inc., to enter into an agreement with Centex Real Estate Corporation to effectuate TOUSA Homes' sale of its membership interests and certain residential lots in the joint venture with Centex Homes. Moreover, Claim Nos. 3106 and 4228 asserted by PNC Bank, National Association, as administrative agent under a credit agreement among the Joint Venture, PNC Bank and certain lenders, will be deemed withdrawn upon closing of the Sale Agreement. Similarly, Claim Nos. 1804 and 1861 filed by Centex Homes will be deemed withdrawn upon closing under the Sale Agreement. The Debtors ask the Court to authorize TOUSA Homes, Inc., to enter into an agreement with Centex Real Estate Corporation to effectuate TOUSA Homes' sale of its membership interests and certain residential lots in a joint venture with Centex Homes. In November 2005, TOUSA Homes and Centex Homes entered into a joint venture agreement for the acquisition and development of real estate in Florida. The joint venture is governed by a Limited Liability Company Agreement of Centex/TOUSA at Wellington, LLC. Centex Homes and TOUSA Homes own all of the issued and outstanding membership interests in the JV. The JV does business in the completion of infrastructure and horizontal development in residential communities and in the marketing and sale of finished lots. If a member of the JV fails to make required capital contributions, the non-defaulting member has (i) the right under certain circumstances to make required capital contributions to the JV, and (ii) the right to make a loan to the JV to replace the capital contribution the defaulting member was to have made. The JV obtained a loan in the principal amount of $50,400,000 from PNC Bank, National Association, as administrative agent, and certain other lenders. The current outstanding amount due under the loan is $35,250,000; the JV estimates that the value of all of its assets is substantially less than the outstanding amount. In connection with entering into the Loan and the Credit Agreement, Centex Homes and TOUSA, Inc. executed a (i) Continuing Agreement of Completion by Centex and TOUSA to the benefit of Agent and Lenders; (ii) a Continuing Agreement of Repayment by TOUSA; and (iii) Regulated Substances Certificate and Environmental Indemnity Agreement by Centex and TOUSA. Through those Guaranties, TOUSA assumed identical obligations owed to the Lenders, guaranteeing certain of the JV's obligations arising out of and related to the Loan and the Credit Agreement. Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, reminds the Court that the Debtors' revised business plan contemplates an orderly disposition of their interests in their remaining joint ventures. In this light, TOUSA Homes avers that a sale of its membership interests in the Centex/TOUSA JV as well as 44 residential lots in a Wellington development owned by TOUSA Homes and previously conveyed by the JV to TOUSA Homes is consistent with the revised business plan. The TOUSA Lots are subject to certain restrictions and limitations with respect to the right of TOUSA Homes to resell the TOUSA Lots under the LLC Agreement, Mr. Singerman relates. Against this backdrop, Centex Real Estate and TOUSA Homes entered into the Sale Agreement, which provides that: (1) Centex Real Estate will pay TOUSA Homes $1,100,000 in exchange for all of TOUSA Homes' membership interest in the JV and TOUSA Homes' right, title and interest in the TOUSA Lots; (2) Centex Real Estate will deliver to TOUSA Homes the documents executed by the current holders of the Loan as are necessary for the withdrawal of PNC Bank's claims, and a release by the current holder of the Loan of TOUSA from any liability under the Guaranties; (3) Centex Real Estate and TOUSA Homes will enter into mutual releases from their liabilities under the Credit Agreement and the Loan and any other liability under the LLC Agreement with respect to the JV; (4) Centex Real Estate will deliver to TOUSA Homes a waiver of its rights related to the limitation on the right to resell the TOUSA Lots under the LLC Agreement; and (5) TOUSA Homes will deliver a special warranty deed in favor of Centex Real Estate that conveys the TOUSA Lots, free and clear of all claims, liens, pledges, restrictions, encumbrances and interests. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRANSMERIDIAN EXPLORATION: Court Confirms Amended Chapter 11 Plan ----------------------------------------------------------------- BankruptcyData.com reports that a U.S. Bankruptcy confirmed the first amended joint consolidated plan of liquidation for Transmeridian Exploration Inc. According to the report, the principal asset consists of the Caspi Neft Shares, which will be liquidated pursuant to the stock purchase agreement between the Debtors and Ufex Advisors Corp. The net proceeds of this sale will be disbursed to the indenture trustee and the senior secured noteholders at the closing/effective date of the Plan. Under the plan, allowed priority claims will be paid in full with the proceeds from the sale of the shares. Gary Neus, a former director of the Debtors, has been hired as the liquidating trustee. The remaining assets of the Debtors will include litigation and recovery claims against the Debtors' former management, consisting of certain officers and directors. About Transmeridian Exploration Headquartered in Houston, Texas, Transmeridian Exploration Incorporated is an independent energy company engaged in the business of acquiring, developing and producing oil and natural gas. Its activities are primarily focused on the Caspian Sea region of the former Soviet Union. The License and oil and gas production in Kazakhstan is handled through the Debtors' wholly owned subsidiary, JSC Caspi Neft TME, a joint stock company organized under the laws of Kazakhstan. The Company and two affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. S.D. Tex. Lead Case No. 09-31859). Judge Marvin Isgur presides over the case. John Wesley Wauson, Esq., and Matthew Brian Probus, Esq., at Wauson & Probus, serve as the Debtors' bankruptcy counsel. As of September 30, 2008, the Debtor has total assets of $377,902,000 and total debts of $451,678,000. * * * According to the Troubled Company Reporter on June 24, 2009, the United States Trustee informed the U.S. Bankruptcy Court for the Southern District of Texas that it was unable to appoint an Official Committee of Unsecured Creditors in the bankruptcy cases of Transmeridian Exploration Incorporated. The U.S. Trustee said it had contacted unsecured creditors, but too few creditors expressed an interest in being appointed to the Committee. TRIBUNE CO: Court OKs Deloitte & Touche as Financial Advisor ------------------------------------------------------------ The Bankruptcy Court authorizes Tribune Co. and its affiliates to employ Deloitte & Touche LLP as financial advisors. Prior to the entry of the order, the Debtors had submitted with the Court a certification of no objection as to the application. The Debtors sought the Court's authority to employ Deloitte and Touche nunc pro tunc to June 26, 2009. The Debtors have selected Deloitte because of the firm's substantial experience in large and complex Chapter 11 cases. As advisors, Deloitte will: (a) assist the Debtors with the preparation of required financial statements, and pro forma financial information in connection with the Debtors' plan of reorganization; and (b) advise the Debtors on questions concerning other related accounting and advisory services. The Debtors will pay Deloitte based on the firm's current hourly rates: Principal/Partner $550 Senior Manager $475 Manager $425 Senior $350 Associate $275 The Debtors project that the total fees for Deloitte's services will be between $250,000 and $450,000. In addition to the professional fees, the Debtors will also reimburse Deloitte for expenses like postage, photocopying, telephone, travel, transportation, lodging, and meals. The Debtors relate that as of the Petition Date, they owe $34,000 to Deloitte for prepetition services. Moreover, the Debtors relate they paid Deloitte approximately $750,000 within 90 days prior to the Petition Date. The Debtors will also indemnify and hold harmless Deloitte and its personnel from any claims, liabilities or expenses relating to the Engagement Letter, except to the extent finally judicially determined to have resulted from gross negligence, bad faith, or intentional misconduct of Deloitte. Peter Leadstrom, a partner of Deloitte & Touche LLP, in Chicago, Illinois, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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: Lazard Freres Charges $200,000 for May Work ------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, these professionals hired in Tribune Co.'s bankruptcy cases filed interim fee applications: Debtors' Professionals Professional Period Fees Expenses ------------ ------ ---- -------- Reed Smith LLP 06/01/09- 06/30/09 $7,650 $149 Dow Lohnes PLLC 05/13/09- 06/30/09 199,917 1,243 Lazard Freres & Co. LLC 05/01/09- 05/31/09 200,000 2,981 Reed Smith serves as the Debtors' special counsel. Dow Lohnes serves as the Debtors' special regulatory counsel. Lazard Freres serves as the Debtors' financial advisor. The Debtors said they received no objections as to these professionals' monthly fee applications: Professional Period ------------ ------ Cole, Schotz, Meisel, Forman & Leonard, P.A. 03/01/09-05/31/09 Jenner Block LLP 03/01/09-05/31/09 Alvarez & Marsal North America, LLC 03/01/09-05/31/09 Stuart Maue 03/01/09-05/31/09 Jones Day 12/08/08-02/28/09 Jones Day 03/01/09-05/31/09 Daniel J. Edelman, Inc. 03/09/09-03/31/09 Sidley Austin LLP 03/01/09-05/31/09 Paul, Hastings, Janofsky & Walker LLP 03/01/09-05/31/09 Mercer (US) Inc. 01/12/09-05/31/09 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) TRUMP ENTERTAINMENT: Noteholders Offer Coastal-Backed Plan ---------------------------------------------------------- An ad hoc committee of certain holders of the 8.5% Senior Secured Notes Due 2015 issued by Trump Entertainment Resorts Holdings, L.P. and Trump Entertainment Resorts Funding, Inc., ask the Bankruptcy Court to enter an order terminating the Debtors' exclusive rights to propose and solicit acceptances of a Chapter 11 plan. Termination of the plan exclusivity would allow the senior lenders and other constituents to propose their own Chapter 11 plan for the Debtors. As reported by the TCR on August 4, 2009, Trump Entertainment Resorts entered into an agreement with existing shareholder Donald J. Trump and BNAC, Inc., an affiliate of Beal Bank Nevada, under the terms of which Trump and BNAC will invest $100 million cash in the reorganized Trump Entertainment and become its owners. Under the deal, Beal Bank's $486 million first lien prepetition claim will be reinstated and the maturity period for the repayment is extended until December 2020 from the existing maturity of 2012. The Debtors' proposed Chapter 11 plan is built around the agreement reached with Donald Trump and Beal Bank. The Plan estimates an enterprise value of the reorganized Debtors of up to $464 million and provides for a 4% recovery for Beal Bank and zero recovery for second lien lenders and unsecured creditors. The Debtors explain in the disclosure statement attached to the Plan that because the value of their business operations is less than the amount of Beal Bank's first lien priority claim, there is no value available for the holders of the senior notes, who are owed principal amount of $1.25 billion and hold liens on the Debtors' assets that are junior to Beal Bank's. The Ad Hoc Noteholders Committee, however, asserts that, on its face, the Insider Plan violates the absolute priority rule and cannot be reconciled with the Debtors' fiduciary obligation to maximize recoveries to creditors. The Noteholders Committee notes that even the Insider Plan fixes the collateral value below the face amount of the Beal Bank claim, it reinstates the full prepetition balance of the claim. The Noteholders Committee also notes that it is willing to submit an alternative competing plan co-sponsored with Coastal Development, LLC. The Noteholder Plan, which was filed under seal, is "fully documented and financed and ready to go." In stark contrast to the Insider Plan, the Noteholder Plan, proposed by the largest creditor constituency (by a wide margin) of these estates, would deliver far more value to all constituencies, as follows: -- The Noteholder Plan contemplates a capital contribution of $175 million in new equity capital in the form of a rights offering backstopped by certain holders of the Senior Secured Notes. -- The Noteholder Plan further contemplates the sale of the Trump Marina Hotel Casino to Coastal Marina, LLC for $75 million, net of certain deposits and the dismissal of the litigation commenced by the Debtors against, among others, Richard T. Fields and Coastal Development, LLC, alleging that the defendants defrauded the Debtors of the opportunity to construct, operate and ultimately reap the proceeds of the sale of Hard Rock casino and hotel projects on Seminole land in Hollywood and Tampa, Florida. This results in the infusion of immediate value to the estate in exchange for the elimination of the huge cash drain caused by the Trump Marina's losses and ongoing litigation. -- Beal Bank would receive a cash pay down equal to the proceeds from the Marina Sale, plus $75 million from the proceeds of a rights offering. In addition, Beal Bank would receive new debt at an interest rate to be determined by the Court sufficient to provide Beal Bank with the present value of Beal's allowed secured claim. -- Holders of the Senior Secured Notes, together with eligible holders of general unsecured claims, will be entitled to receive their pro rata share of (a) 5% of the common stock of the reorganized Debtors, and (b) subscription rights to acquire 95% of the New Common Stock. In addition, holders of general unsecured claims that are not eligible to receive subscription rights would be entitled to receive their pro rata share of a fixed pool of cash. The Noteholders Committee asserts that the Noteholder Plan is plainly superior to the Insider Plan for all parties-in-interest: * The Noteholder Plan provides for $175 million of new, committed equity capital sufficient to fund debt service, capital expenditures and working capital needs of the Debtors. * The Noteholder Plan provides for the sale of the Trump Marina, currently a negative EBITDA business for the Debtors that the Debtors and Mr. Trump have been unable or unwilling to sell to date. * Unlike the Insider Plan, the Noteholder Plan is consistent with the absolute priority rule, affords the senior lender with the benefit of its bargain, provides for a meaningful recovery to holders of $1.25 billion in Senior Secured Notes and offers a recovery to general unsecured creditors. The Noteholders are represented by: LOWENSTEIN SANDLER PC Kenneth A. Rosen (KR 4963) Jeffrey D. Prol (JP 7454) 65 Livingston Avenue Roseland, New Jersey 07068 Tel: 973-597-2500 Fax: 973-597-2400 Email: krosen@lowenstein.com jprol@lowenstein.com -and- STROOCK & STROOCK & LAVAN LLP Kristopher M. Hansen (KH 4679) Curtis C. Mechling (CM 5957) Erez E. Gilad (EG 7601) Sayan Bhattacharyya (SB 3810) 180 Maiden Lane New York, New York 10038 Tel: 212-806-5400 Fax: 212-806-6006 Email: khansen@stroock.com cmechling@stroock.com egilad@stroock.com sbhattacharyya@stroock.com About Trump Entertainment Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the Company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Trump Hotels' obtained the Court's confirmation of its Chapter 11 plan on Apr. 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. TRUMP ENTERTAINMENT: Examiner for Aborted Sale, Trump Deal Pushed ----------------------------------------------------------------- An ad hoc committee of certain holders of the 8.5% Senior Secured Notes Due 2015 issued by Trump Entertainment Resorts Holdings, L.P. and Trump Entertainment Resorts Funding, Inc., ask the Bankruptcy Court to enter an order directing the appointment of an examiner to investigate certain matters related to the Debtors' chapter 11 cases. Kenneth A. Rosen, Esq., at Lowenstein Sandler PC, asserts that the Chapter 11 cases cry out for appointment of an examiner. "Unrestrained by the oversight of a trustee or official creditors committee, and apparently still in the thrall of Donald Trump, the Debtors have engaged in conduct detrimental to the Debtors' estates and in possible violation of their fiduciary duty to creditors." The Noteholders Committee submits that three principal matters merit investigation: a. The Florida Litigation and Aborted Trump Marina Sale. For almost five years, the Debtors have poured tens of millions of dollars into litigation against Richard T. Fields and Coastal Development, LLC in Florida, which was crafted by Mr. Trump. Now the Debtors have effectively torpedoed the proposed sale of the Trump Marina Hotel Casino that would have settled the Florida Litigation, rid the Debtors of a money-losing operation, and provided the Debtors with a badly needed infusion of cash. They have done so purportedly for the privilege of spending many millions more in the pursuit of litigation of dubious value that they list nowhere as an asset of their estate and apparently do not include in their enterprise valuation. The Debtors' failure to close the Trump Marina sale has itself now generated new litigation based on fraud and conspiracy against the Debtors and their CEO and General Counsel. How and why did the Debtors allow this to happen? More specifically, is there any value in the Florida Litigation and can that litigation possibly justify the loss of the Trump Marina sale? b. The Trump Partnership "Abandonment." Just four days before the Debtors' bankruptcy filings last February, Mr. Trump purported to "abandon" his partnership interest in TER Holdings, declaring it to be "worthless." Although the Debtors initially challenged whether this purported renunciation of Mr. Trump's partnership interest was valid, it appears that it has not pursued the matter further as no mention of the issue is made in the plan of reorganization proposed by the Debtors and supported by Mr. Trump and Beal Bank (the "Insider Plan") or accompanying Disclosure Statement (the "Insider Disclosure Statement"). The Ad Hoc Committee believes that, by this curious maneuver, Mr. Trump sought to avoid significant personal tax liability and to foist those liabilities on the Debtors. Just what are the facts surrounding Mr. Trump's purported "abandonment" of his partnership interest, what are the tax or other implications for the Debtors of his actions and why are the Debtors not disclosing anything about this? c. The Insider Plan Process. After months of assuring the Court, creditors and the investing public that it was seriously considering a plan of reorganization proposed by the Ad Hoc Committee that would provide recoveries to all creditors, the Debtors disclosed on the night of August 3 that they had already decided in April to adopt the Insider Plan that would turn over the Debtors to Mr. Trump and Beal Bank and wipe out every other party in the case. How and why did the Debtors and their Board of Directors secretly decide to abandon the interests of their other creditors for the benefit of a single bank and a single out-of-the-money insider shareholder who attempted to abandon his limited partnership interests in the Company and foist his potential personal tax losses on the Debtors? How is it that Beal Bank decided to partner with Mr. Trump and possibly finance his investment in the Debtors under the Insider Plan? And how long have Mr. Beal and Mr. Trump conspired to attempt their takeover in violation of the Bankruptcy Code? As reported by the TCR on August 4, 2009, Trump Entertainment Resorts entered into an agreement with existing shareholder Donald J. Trump and BNAC, Inc., an affiliate of Beal Bank Nevada, under the terms of which Trump and BNAC will invest $100 million cash in the reorganized Trump Entertainment and become its owners. Under the deal, Beal Bank's $486 million first lien prepetition claim will be reinstated and the maturity period for the repayment is extended until December 2020 from the existing maturity of 2012. The Debtors' proposed Chapter 11 plan is built around the agreement reached with Donald Trump and Beal Bank. The Plan estimates an enterprise value of the reorganized Debtors of up to $464 million and provides for a 4% recovery for Beal Bank and zero recovery for second lien lenders and unsecured creditors. The Debtors explain in the disclosure statement attached to the Plan that because the value of their business operations is less than the amount of Beal Bank's first lien priority claim, there is no value available for the holders of the senior notes, who are owed principal amount of $1.25 billion and hold liens on the Debtors' assets that are junior to Beal Bank's. The Ad Hoc Noteholders Committee, however, asserts that, on its face, the Insider Plan violates the absolute priority rule and cannot be reconciled with the Debtors' fiduciary obligation to maximize recoveries to creditors. The Noteholders Committee notes that even the Insider Plan fixes the collateral value below the face amount of the Beal Bank claim, it reinstates the full prepetition balance of the claim. The Noteholders Committee said that it is submitting an alternative plan co-sponsored with Coastal Development, LLC. Its Plan, it says, would deliver far more value to all constituencies. Under the Noteholder Plan, second lien lenders and unsecured creditors would receive distributions. The Noteholders are represented by: LOWENSTEIN SANDLER PC Kenneth A. Rosen (KR 4963) Jeffrey D. Prol (JP 7454) 65 Livingston Avenue Roseland, New Jersey 07068 Tel: 973-597-2500 Fax: 973-597-2400 Email: krosen@lowenstein.com jprol@lowenstein.com -and- STROOCK & STROOCK & LAVAN LLP Kristopher M. Hansen (KH 4679) Curtis C. Mechling (CM 5957) Erez E. Gilad (EG 7601) Sayan Bhattacharyya (SB 3810) 180 Maiden Lane New York, New York 10038 Tel: 212-806-5400 Fax: 212-806-6006 Email: khansen@stroock.com cmechling@stroock.com egilad@stroock.com sbhattacharyya@stroock.com About Trump Entertainment Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the Company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Trump Hotels' obtained the Court's confirmation of its Chapter 11 plan on Apr. 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. TUCKAHOE CREDIT: S&P Gives Negative Outlook; Affirms 'BB' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Tuckahoe Credit Lease Trust 2001-CTL1 credit lease-backed pass-through certificates to negative from stable. At the same time, S&P affirmed its 'BB' rating on the certificates. The negative outlook reflects S&P's Aug. 11, 2009, outlook revision on Qwest Communications International Inc. The rating on Tuckahoe Credit Lease Trust 2001-CTL1 is dependent on the rating assigned to Qwest (BB/Negative/--). Tuckahoe Credit Lease Trust 2001-CTL1's credit lease-backed certificates are collateralized by a first mortgage and assignment of lease encumbering a condominium interest in a two-story industrial building in Yonkers, N.Y. The entire property is leased to Qwest Communications Corp., a wholly owned subsidiary of Qwest, on a triple net basis, with QCC responsible for all operating and maintenance costs. Rating Affirmed And Outlook Revised To Negative Tuckahoe Credit Lease Trust 2001-CTL1 Credit lease-backed pass-through certs series 2001-CTL1 Rating ------ To From -- ---- BB/Negative BB/Stable UAL CORP: Files Second Quarter Report on Form 10-Q -------------------------------------------------- UAL Corp., the holding company of United Air Lines, Inc., filed with the U.S. Securities and Exchange Commission its Form 10Q dated July 22, 2009, disclosing UAL's financial results for the quarter ended June 30, 2009. A full-text copy of UAL Corp.'s 2nd Quarter 2009 Results is available for free at: http://ResearchArchives.com/t/s?413f UAL Corporation and Subsidiary Companies Statement of Consolidated Financial Position At June 30, 2009 (In Millions) Current Assets: Cash and cash equivalents $2,566 Restricted cash 68 Receivables, less allowance for doubtful accounts 921 Prepaid fuel 311 Aircraft fuel 228 Fuel hedge collateral deposits 185 Deferred income taxes 102 Prepaid expenses and other 373 ----------- Total current assets 4,754 ----------- Operating property and equipment: Owned Flight equipment 8,539 Other property and equipment 1,717 ------------ 10,256 Less -- accumulated depreciation and amortization (1,817) ------------ Total owned 8,439 ------------ Capital leases Flight equipment 1,740 Other property and equipment 43 ------------ 1,783 Less -- accumulated amortization (279) ------------ Total capital leases 1,504 ------------ Total operating property and equipment 9,943 ------------ Other assets: Intangibles, net 2,507 Aircraft lease deposits 314 Restricted cash 213 Investments 79 Others 996 ------------ Total other assets 4,109 ------------ TOTAL ASSETS $18,806 ============ Liabilities and Stockholders' Equity Current liabilities: Advance ticket sales 1,916 Mileage Plus deferred revenue 1,353 Long-term debt maturing within one year 846 Accounts payable 791 Accrued salaries, wages and benefits 728 Fuel purchase commitments 311 Fuel derivative instruments 175 Current obligations under capital leases 165 Accrued Interest 93 Other 722 ------------ Total current liabilities 7,100 Long-term debt 5,604 ------------ Long-term obligations under capital leases 1,197 ------------ Other liabilities and deferred credits: Mileage Plus deferred revenue 2,905 Postretirement benefit liability 1,819 Advanced purchase of miles 1,087 Deferred income taxes 582 Other 1,141 ------------ Total other liabilities and deferred credits 7,534 ------------ Stockholders' equity: Preferred stock - Common stock 2 Additional capital invested 2,970 Retained earnings (5,662) Stock held in treasury (28) Accumulated other comprehensive income 89 ------------ TOTAL LIABILITIES $18,806 ============ About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The Company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 12, 2009, Fitch Ratings has downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp. and its principal operating subsidiary United Airlines, Inc. The downgrade reflects Fitch's view that the airline's credit profile is likely to weaken further, as extreme pressure in the revenue environment continues to undermine the positive cash flow impact of lower jet fuel prices in 2009. UAL CORP: Parties Oppose Cases Closing, Cite Unresolved Issues -------------------------------------------------------------- UAL Corporation and its debtor affiliates have asked the U.S. Bankruptcy Court for the Northern District of Illinois to enter a final decree closing their Chapter 11 cases. Section 350(a) of the Bankruptcy Code provides that after an estate is fully administered and the court has discharged the trustee, the court will close the case. Erik W. Chalut, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, has said that since the effective date of the Debtors' Confirmed Second Amended Plan of Reorganization, the Debtors have worked diligently to implement the Plan. In separate filings, these parties filed responses to UAL Corporation and its debtor affiliates' Motion to Close their Chapter 11 cases: * United States of America; * UMB Bank, N.A.; * Regional Airports Improvement Corporation; * The California State Board of Equalization; * Regen Capital I, Inc., N.A.; and * Barnita P. Vann The United States of America, on behalf the Equal Employment Opportunity Commission and the General Services Administration, objects to the entry of a final decree in the Debtors' Chapter 11 cases until the (i) EEOC's motion for leave to file an amended administrative expense claim, and (ii) the United's objection to the prepetition claims of GSA have been fully resolved. Margaret M. Newell, Esq., at Civil Division of the United States Department of Justice, in Washington, D.C., insists that resolution of United's pending disputes with the U.S. will be much more complicated than the ministerial tasks that may be completed after closing of a Chapter 11 case. Moreover, she stresses that entry of a final decree in the Debtors' Chapter 11 case could divest the Court or appellate courts over the EEOC's Motion for Leave or United's objection to the GSA claim. Accordingly, the U.S. asks the Court to deny the Debtors' Motion. If the Court determines that a final decree should be entered, the U.S. asks the Court to explicitly retain jurisdiction over the EEOC's Motion for Leave and United's objection to the GSA claim. UMB Bank, as successor indenture trustee for the special facilities revenue bonds issued in connection with construction at Los Angeles International Airport, argues that the Debtors' Motion to Close Chapter 11 cases is premature given that disputes with UMB Bank remains unresolved. Jeffrey S. Trachtman, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, points out that the adversary proceedings involve complex issues with respect to the valuation of collateral securing the LAX bonds, the status of an escrow account valued at more than $20 million, and the UMB Bank's entitlement to a secured claim, including postpetition interest of $75 million. He also contends that United is obligated to pay UMB Bank's reasonable fees and expenses incurred in the adversary proceedings and the Debtors' Chapter 11 cases. Indeed, United has contested as "unreasonable" $1 million of UMB Bank's legal fees in litigating the valuation and escrow issues and has paid nothing with respect to Kramer Levin's legal fees that were incurred from October 1, 2007 to March 27, 2008, Mr. Trachtman says. This matter remains outstanding and will require bankruptcy court determination as a contested matter under the Plan, not as part of the adversary proceedings, he adds. For these reasons, UMB Bank asks the Court to (i) deny the Debtors' Motion to Close, or (i) expressly retain jurisdiction over the matters and require United to pay into escrow the full amount for which it may be liable to UMB. Regional Airports Improvement Corporation joins in UMB Bank's objection. Regional Airports is also concerned as to whether the entry of a final decree in closing the Debtors' Chapter 11 cases will deprive the Court of jurisdiction to determine all issues regarding the final allowance and payment of Regional Airports' claims. The California State Board of Equalization does not object to the Debtors' Motion to Close Chapter 11 cases so long as appropriate reservations are made for the resolution and potential ultimate payment in full of the California Board's claim. Accordingly, the California Board asks the Court to preserve its right to seek relief from the Court should the California Board be unable to reach a settlement with the Debtors with respect to the California Board's audit settlements. Regen Capital, for its part, objects to the extent that the closing of the Debtors' Chapter 11 cases would affect the Court's jurisdiction to resolve a pending contested matter between Regen and the Debtors or affect any appeals or other proceedings arising from that contested matter. Regen asks the Court that any final decree closing the Debtors' Chapter 11 cases should state that the Court retains jurisdiction to consider and determine the amended request of Regen for payment of cure claim, and any disputes related to the Amended Cure Claim. Meanwhile, Barnita P. Vann alleges that her Claim No. 39399 is unresolved and her due process rights have been violated. Accordingly, she asks the Court to sustain her objection to the Debtors' Motion to Close Chapter 11 cases. Subsequently, Judge Wedoff denied Ms. Vann's motion to sustain objection for reasons stated on the record. Debtors: Chapter 11 Cases Need Not be Open To Resolve Contested Matters On behalf of the Debtors, Erik W. Chalut, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, asserts that in light of the Debtors' Chapter 11 circumstances, the existence of the adversary proceedings should not preclude the entry of a final decree. With respect to all open matters involved in United's dispute with UMB Bank and Regional Airports, those matters should be heard in the adversary proceedings, he says. He further contends that $30 billion in unsecured claim liability has been allowed against the Debtors. The claim by UMB Bank for $60 million, while significant, amounts to only 0.2 % of the Debtors' total claims pool. To the extent necessary, United has already informed UMB that it will consent to the Court's retention of jurisdiction over those issues as part of the adversary proceedings, he discloses. As to the remaining claims, the Debtors believe that the existence of those claims should not impede entry of a final decree. Specifically, Mr. Chalut notes that the GSA's claim is set for trial before the Court in October 2009. United also proposes that the Court convert the contested matter into an adversary proceeding. United has asked the GSA to stipulate to this conversion but the GSA has not yet decided whether or not to stipulate. He maintains that there should be no substantive and procedural impact on the parties' rights as a result of this conversion. Thus, the Debtors seek the Court's authority to convert the case to an adversary proceeding. Similarly, Regen's objection to the Motion to Close Chapter 11 cases is mooted by an order disallowing Regen's Amended Cure Claim entered on July 29, 2009. Mr. Chalut also notes that the EEOC claims, once resolved, will either be expunged or allowed without need for the Court's jurisdiction. The California Board's objection should likewise be overruled since the California Board never filed a claim for alleged postpetition taxes, penalties and interests, and has not filed a motion to deem a late claim timely filed, he adds. Against this backdrop, the Debtors ask the Court to enter a final decree closing their Chapter 11 cases and overrule the objections filed. Judge Wedoff will consider the Debtors' Motion to Close Chapter 11 cases on August 26, 2009. A hearing on the Motion to Close was previously scheduled for July 29, 2009. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The Company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 12, 2009, Fitch Ratings has downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp. and its principal operating subsidiary United Airlines, Inc. The downgrade reflects Fitch's view that the airline's credit profile is likely to weaken further, as extreme pressure in the revenue environment continues to undermine the positive cash flow impact of lower jet fuel prices in 2009. UAL CORP: Regen Appeals Disallowance of $4.89 Mil. Cure Claim ------------------------------------------------------------- The Bankruptcy Court has sustained UAL Corp.'s objection to Regen Capital I, Inc.'s amended cure claim for $4,898,728, and disallowed the claim. Regen Capital I, Inc., took an appeal to the U.S. District Court for the Northern District of Illinois from the order issued by Judge Wedoff of the U.S. Bankruptcy Court for the Northern District of Illinois disallowing Regen's amended cure claim. Prior to entry of the disallowance order, Regen asserted that the Court already entered a final order that allowed Regen's claim for $4,898,728 in July 2005. Peter J. Roberts, Esq., at Shaw Gussis Fishman Glantz, in Chicago, Illinois, pointed out that the Debtors should not be permitted to ignore the requirement of Section 365(b)(1)(A) of the Bankruptcy Code that the non-debtor party to an executory contract be provided a prompt cure. He stressed that under the Debtors' Confirmed Second Amended Plan of Reorganization, the contracts between AT&T Corp. and the Debtors are deemed assumed upon the entry of a confirmation order and not at the time when any cure amount is resolved by the parties or determined by the Court. He argued that the Debtors cannot simply ignore the language of their own Plan. With respect to their alleged rejection of the AT&T Contracts, the Debtors ignore the requirement that to reject a contract, it must be executory. He pointed out that certain of the AT&T Contracts have expired on their own terms, and are thus no longer executory and no longer rejected. Moreover, the Debtors' subsequent rejection of the assumed AT&T Contracts would result in Regen having an administrative claim against the Debtors' estates for $4,272,555, he added. Regen filed with the Court a memorandum of law in support of its response, stating that the Debtors' arguments are flawed and the Debtors' objection should be overruled. As a supplement, Regen filed with the Court a copy of United Contract No. 119287, a master services agreement between the Debtors and AT&T, cited in Regen's memorandum of law. Regen thus asked the Court to overrule the Debtors' objection to the Amended Cure Claim. The Debtors, for their part, argued that since none of AT&T's obligations were assigned to Regen, neither was the right to demand cure as a condition of assumption. Regen bought an unsecured claim, and received full payment, Regen is thus entitled to nothing more, Michael B. Slade, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, asserted. Moreover, he pointed out that the Debtors already revoked the assumption of the AT&T Contracts that took place under the Plan, and that the law certainly does not entitle a provider of no services whatsoever to United to $4.5 million. Mr. Slade further contended that even if Regen was entitled to cure payment, the Plan gave the Debtors the right to reject the AT&T Contracts rather than pay disputed cure amounts and the Debtors already exercised that right. At the end of the day, Regen's efforts to contort its purchase of a prepetition claim into a $4.5 million hand-out cannot survive even basic scrutiny, he maintained. Accordingly, the Debtors asked the Court to deny Regen's Amended Cure Claim. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The Company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 12, 2009, Fitch Ratings has downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp. and its principal operating subsidiary United Airlines, Inc. The downgrade reflects Fitch's view that the airline's credit profile is likely to weaken further, as extreme pressure in the revenue environment continues to undermine the positive cash flow impact of lower jet fuel prices in 2009. UAL CORP: To Reduce Flight Attendant Count by 2,100 by August 31 ---------------------------------------------------------------- United Airlines announced in late July that approximately 2,100 flight attendants have taken advantage of voluntary furlough and other furlough mitigation programs, once again eliminating the need for involuntary furloughs. Last month, United announced it needed to reduce its flight attendant workforce, as a result of capacity reduction and lower attrition. Last year, the company announced a reduction of 1,550 flight attendants, which were all achieved through voluntary furloughs. "We worked very closely with the Association of Flight Attendants to protect jobs and find solutions to prevent involuntary furloughs," said Alexandria Marren, senior vice president - Onboard Service. "We are pleased to avoid the involuntary furlough of any of our flight attendants, and are grateful that many were able to take advantage of the voluntary programs as we continue to work through this challenging economic environment." As of August 31, 2009, United will reduce the flight attendant workforce by a total 2,100 positions through voluntary furloughs and other furlough mitigation programs, including the original 1,550 voluntary furloughs from last year. Eligible participants will receive benefits such as medical insurance and travel benefits throughout the duration of their furlough. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The Company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 12, 2009, Fitch Ratings has downgraded the issuer debt rating to 'CCC' from 'B-' for UAL Corp. and its principal operating subsidiary United Airlines, Inc. The downgrade reflects Fitch's view that the airline's credit profile is likely to weaken further, as extreme pressure in the revenue environment continues to undermine the positive cash flow impact of lower jet fuel prices in 2009. UNITED COMMERCIAL: Moody's Junks Deposit, Long-Term Issuer Ratings ------------------------------------------------------------------ Moody's Investors Service downgraded United Commercial Bank's Bank Financial Strength Rating to E from E+, deposits to Caa1 from B1, and long-term issuer rating to C from B2. The short term ratings of the bank remain at Not Prime. Following the downgrade, the Caa1 deposit rating remains on review for possible downgrade. United Commercial Bank is a subsidiary of UCBH Holdings, Inc., which is unrated. The rating action follows UCB's announcement of a preliminary second quarter 2009 pretax operating loss of approximately $300 million driven by credit costs, primarily on commercial real estate. These results indicate that cumulative credit losses may eventually exceed Moody's expectations. This magnitude of loss also significantly depletes UCB's capital. Moody's estimates that the company's tangible common equity ratio fell below 4% at June 30, 2009, and according to UCB's June 30, 2009 regulatory filings, the bank's regulatory capital ratios no longer meet "well capitalized" minimums. The bank's reported Tier 1 risk-based capital was 5.3% and Total RBC was 7.9%, compared to the well capitalized minimums of 6% and 10%, respectively. Moody's multiple notch downgrade reflects a number of challenges which face UCB. Foremost, its asset quality problems are likely to remain high as long as the U.S. recession continues. Although Moody's has expected for some time that asset quality issues would challenge UCB's capital adequacy, the size of losses experienced by the company in the second quarter were higher than anticipated. Moody's had expected the company would have additional time to allow pre-provision profit to partially offset credit costs and develop its capital management plan as outlined in the company's July announcement. However, Moody's believes the large second quarter loss decreases the probability UCB will be successful in raising external capital. The company's ongoing restatement of its 2008 10K and failure to file 10Q's in 2009 may also limit its ability to raise capital. Additionally, given the potential magnitude of the company's year- to-date loss, which will be finalized once financial restatements are completed, Moody's believes there is risk that the company may recognize a valuation allowance against its deferred tax asset and be unable to recognize full tax benefit from ongoing losses. This would accelerate the depletion of UCB's capital base. During the review, Moody's will focus on the development of UCB's capital management plan and the company's ability to enhance its capital levels. In the event of default, Moody's ratings reflect an expected loss of up to 10% for uninsured domestic deposits and more than 50% for unsecured creditors. Moody's last rating action on UCB was on July 14, 2009, when the Bank Financial Strength Rating was downgraded to E+ from D-; long- term deposits were downgraded to B1 from Ba3, and the long-term issuer and Other Senior Obligations ratings were downgraded to B2 from B1. Following that action, long-term ratings remained on review for additional possible downgrade. UCBH Holding, Inc., which is headquartered in San Francisco, CA, reported total assets of $12.8 billion as of June 30, 2009. Issuer: United Commercial Bank Downgrades: -- Bank Financial Strength Rating, Downgraded to E from E+ -- Senior Unsecured Deposit Rating, Downgraded to Caa1 from B1 -- Issuer Rating, Downgraded to C from B2 -- OSO Senior Unsecured OSO Rating, Downgraded to C from B2 USA INC: S&P Raises Corporate Credit Rating to 'B-' From 'CCC' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Gastar Exploration USA Inc. to 'B-' from 'CCC'. S&P removed the rating from CreditWatch, where it was placed with negative implications on July 2, 2009. The outlook is stable. At the same time S&P is withdrawing the ratings at the company's request. "We raised the rating based on the company's announcement that it has repaid a substantial amount of its debt from proceeds related to an asset sale," said Standard & Poor's credit analyst Amy Eddy. At closing, Gastar received approximately $217 million in gross proceeds from the sale of certain of its Australian assets to Santos Energy. The company used proceeds to retire the $100 million senior secured notes, a $25 million term loan, and all outstanding balances under its revolver. Although the company has one remaining debt issue outstanding, $30 million in convertible debentures due November 2009, S&P expects the company to be able to repay it out of cash, cash flow, and its fully available revolving credit facility. VIKING SYSTEMS: Posts $386,533 Net Loss in Quarter Ended June 30 ---------------------------------------------------------------- Viking Systems Inc. posted a net loss of $386,533 for three months ended June 30, 2009, compared with a net loss of $1,050,654 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $677,045 compared with a net loss of $5,012,125 for the same period in 2008. At June 30, 2009, the Company's balance sheet showed total assets of $3,087,919, total liabilities of $2,149,283 and stockholders' equity of $938,636. As of June 30, 2009, the Company had $311,711 of cash and cash equivalents and a net working capital balance of $680,579. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?4189 On April 15, 2009, Squar, Milner, Peterson, Miranda & Williamson, LLP, in San Diego, California expressed substantial doubt about Viking Systems Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended December 31, 2008, and 2007. The auditor noted that the Company has incurred significant recurring net losses and negative cash flows from operating activities through December 31, 2008. About Viking Systems Inc. Based in Westborough, Massachusetts, Viking Systems Inc. (OTC BB: VKNG) -- http://www.vikingsystems.com/-- is a worldwide developer, manufacturer and marketer of visualization solutions for complex minimally invasive surgery. The Company partners with medical device companies and healthcare facilities to provide surgeons with proprietary visualization systems enabling minimally invasive surgical procedures, which reduce patient trauma and recovery time. VMV LLC: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------- Debtor: VMV, LLC 12516 Sycamore View Dr. Potomac, MD 20854 Bankruptcy Case No.: 09-24945 Chapter 11 Petition Date: August 12, 2009 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: James Greenan, Esq. 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Tel: (301) 441-2420 Email: jgreenan@mhlawyers.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mdb09-24945.pdf The petition was signed by Thomas Z. Zambetis, managing member of the Company. WESTMORELAND COAL: Posts $10.5 Million Net Loss for Q2 2009 ----------------------------------------------------------- Westmoreland Coal Company and subsidiaries reported a net loss of $10.5 million for the three months ended June 30, 2009, compared to a net loss of $17.9 million for the same period a year ago. The Company posted a net loss of $16.3 million for the six months ended June 30, 2009, compared to a net loss of $29.0 million for the same period a year ago. As of June 30, 2009, the Company had $793.36 billion in total assets and $1.018 billion in total liabilities, resulting in $221.74 million in Westmoreland Coal Company shareholders' deficit. Revenues for the 2009 quarter were down 8% from 2008, primarily due to a 19% reduction in coal tonnage partially offset by a 12% increase in power revenues. The reduction in coal tonnage was largely driven by two unexpected customer outages, both of which followed planned maintenance shutdowns. One of these outages ended in July, and the Company resumed its coal deliveries. The remaining outage, at one of the Company's largest customers, is expected to continue into the fourth quarter of 2009. Net results for the 2009 quarter were favorably impacted by recognition of $6.8 million of Indian Coal Tax Credit transaction income, a $2.4 million increase in power segment operating income, and a $800,000 gain on the settlement of a small portion of the Company's heritage medical liabilities. The 2009 quarter also benefitted from reductions in corporate and stock compensation expenses. Offsetting these favorable items were the customer outages, which resulted in a $7.8 million decrease in coal operating income. Results for the 2008 quarter were unfavorably impacted by a $3.8 million loss on the extinguishment of debt and $400,000 of interest expense attributable to the conversion feature on the Company's convertible debt. The Company has suffered recurring losses from operations, has a working capital deficit and a net capital deficiency that raise substantial doubt about the ability of the Company to continue as a going concern. The Company's lending arrangements contain, among other conditions, events of default and various affirmative and negative covenants. As reported by the Troubled Company Reporter on August 11, 2009, the Company as of June 30 defaulted on a leverage ratio covenant in its WML debt agreement as a result of customer outages. The leverage ratio is calculated using Earnings Before Interest, Taxes, Depreciation and Amortization, or EBITDA, as defined by the agreement, for the previous four quarters. As a result the Company believes it will not be able to meet the leverage ratio measurement for at least the next three quarters. The Company is currently in discussions with its lenders regarding resolution but in the absence of a waiver, the Company has classified $125.0 million of outstanding WML debt previously classified as noncurrent to a current liability in the Consolidated Balance Sheet. The Company's belief that it will not be able to meet the WML leverage ratio covenant for the next three quarters could also potentially trigger future cross defaults on the Company's convertible notes and WRI term debt. As a result, the Company also classified $11.0 million of its convertible note debt and $3.2 million of its WRI term debt also formerly classified as noncurrent to current liabilities. As a result of the non-compliance, the Company's lenders may require additional operating and financial restrictions, the payment of additional fees, acceleration of the amortization schedule, an increase in the interest rates charged, or a foreclosure on the assets securing such indebtedness. Specifically, until a resolution is reached, the lenders have limited the Company's ability to access funds under WML's $25.0 million revolving line of credit. No funds were drawn under this revolving line of credit at June 30, 2009. A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?41bb Westmoreland Coal has filed a prospectus supplement to add on to information contained in the prospectus dated May 22, 2009, relating to the resale, from time to time, by securityholders of (i) a warrant to purchase 172,775 shares of Westmoreland Coal common stock at an exercise price of $19.10 per share until August 20, 2010, and (ii) 4,601,664 shares of Westmoreland Coal common stock. The prospectus supplement includes the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, which was filed with the Securities and Exchange Commission on August 10, 2009. Westmoreland Coal Company (NYSE Amex:WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. XERIUM TECHNOLOGIES: Files Transcript of Aug. 5 Conference Call --------------------------------------------------------------- Xerium Technologies, Inc., on August 5, 2009, conducted a conference call regarding its financial results for the quarter ended June 30, 2009. A transcript of the conference call is available at no charge at http://ResearchArchives.com/t/s?41bc The transcript includes bracketed language to correct inadvertent errors in, or to clarify, the information provided on the call. As reported by the Troubled Company Reporter on August 11, 2009, Xerium Technologies disclosed that absent a significant recovery in revenue resulting from an economic revival in the paper industry, the Company anticipates it will not be in compliance with certain of its financial covenants for the period ending September 30, 2009. Xerium said it intends to seek an amendment to its senior credit facility agreement with the lenders prior to the date when an event of default would occur due to the Company's failure to demonstrate compliance with the financial covenants for the period ending September 30, 2009. The Company has begun work toward this amendment, initiating contact with its lenders, although no assurances can be given that the Company will successfully obtain the lenders' consent to amend the credit facility on this timetable or at all, or amend covenants in a manner sufficient to adequately reduce the risk of default. In light of this risk, and as part of its ongoing focus on enterprise risk management, the Company is continuing to evaluate market conditions and plan for contingencies, including, without limitation, exploring strategic initiatives to reduce its debt, which may include, among other things, an issuance of equity or other securities to repay a portion of its outstanding debt. There can be no assurance that the Company will be able to complete any such strategic initiatives on satisfactory terms, and any such strategic initiatives involving issuances of equity are likely to be highly dilutive to its existing stockholders. Xerium has created a steering committee of the Board of Directors to lead this activity and has retained AlixPartners LLC as its financial advisor to assist in this process. Xerium posted a net loss of $7.84 million for the six months ended June 30, 2009, compared net income of $9.4 million a year ago. Xerium booked net income for the second quarter 2009 of $1.6 million or $0.03 per diluted share, compared to net income of $14.1 million or $0.31 per diluted share for the second quarter of 2008. The decrease is primarily a result of lower sales volumes in the second quarter of 2009 as compared with the second quarter of 2008, and the increase in interest expense in the second quarter of 2009 due to the effect of the mark to market gains of $13.7 million in the second quarter of 2008 based on the loss of hedge accounting, partially offset by lower operating expenses in the second quarter of 2009 as compared with the second quarter of 2008. Net sales for the 2009 second quarter were $120.8 million, a 29.1% decrease from net sales for the 2008 second quarter of $170.4 million. Excluding currency effects, second quarter 2009 net sales decreased 20.0% from the second quarter of 2008, with a decline of 16.8% in the clothing segment and a decline of 25.7% in the roll covers segment. As of June 30, 2009, the Company had $771.8 million in total assets; $150.8 million in total current liabilities, $560.3 million in long-term debt, $13.0 million in deferred and long-term taxes, $66.3 million in pension and other postretirement and postemployment obligations, and $4.62 million in other long- term liabilities, resulting in $26.3 million in stockholders' deficit. The Company had $226.7 million in accumulated deficit as of June 30, 2009. About Xerium Technologies Xerium Technologies, Inc. (NYSE: XRM) is a manufacturer and supplier of two types of consumable products used primarily in the production of paper: clothing and roll covers. The Company, which operates around the world under a variety of brand names, utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 32 manufacturing facilities in 13 countries around the world, Xerium has roughly 3,300 employees. YRC WORLDWIDE: Bankruptcy Increasingly Likely, Analyst Says ----------------------------------------------------------- Stifel Nicolaus transportation analyst David Ross said that YRC Worldwide Inc.'s bankruptcy has become increasingly likely, although it isn't yet imminent, Jim Mackinnon at Beacon Journal reports. According to Beacon Journal, other industry analysts have said that YRC Worldwide could file for bankruptcy. Beacon Journal relates that Mr. Ross said downgraded YRC Worldwide shares from "hold" to "sell," saying that the stock is basically worthless. Beacon Journal says that the shares dropped 25 cents to $2.05 on Wednesday, about 28.6% lower since January 1, 2009, and about 89.5% lower from a year ago. Mr. Ross said that it is likely that the first quarter of 2010 -- the industry's weakest time of the year -- will be the Company's last and that company employees currently own "35 percent of zero," Beacon Journal states. Mr. Ross, Beacon Journal reports, said that he wouldn't be surprised if YRC Worldwide filed for bankruptcy in a day or in February, but it is likely that the Company has enough liquidity to make it through the year-end. "The Company was over-levered and mismanaged from the top down. I don't think the banks are going to give them any more money," the report quoted Mr. Ross as saying. Mr. Ross said that YRC Worldwide likely faces liquidation, even if it survives through 2010, because there has never been a successful Chapter 11 bankruptcy filing in the market that the Company operates in, Beacon Journal relates. Citing Mr. Ross, Beacon Journal says that if there is a successful pre-packaged Chapter 11 bankruptcy that lets companies reorganize and continue to operate, debt holders would own those firms. Mr. Ross, according to Beacon Journal, said that YRC Worldwide and its rivals will be fighting lower shipping volumes and tougher pricing in the third quarter. YRC Worldwide said in a statement that the Company "continues to report significant progress on its comprehensive plan to manage through the economic recession. Through the ongoing support of its key stakeholders including its lender group, union and non- union employees and pension funds, the company is moving forward with its strategic plans to restore financial strength and position its operating companies for future success. "The recent announcement of the modified labor agreement for its employees represented by the International Brotherhood of Teamsters provides an immediate estimated savings of approximately $45 million per month in 2009, and the savings increase to $50 million per month in 2010. The Company also recently announced further actions that can improve its liquidity by reaching an asset sale contract with North American Terminals Management Inc. for approximately $81 million. Sales and lease- back transactions are now expected to generate around $375 million of cash proceeds and excess property sales should generate over $100 million in 2009," according to YRC Worldwide's statement. YRC Worldwide said in a statement, "The recent bank amendment which eliminates the third-quarter covenant and resets the [financial] covenants through 2010, provides YRC Worldwide additional flexibility to meet the needs of its customers. The Company continues to work with its lenders to evaluate the need for long-term modifications to its credit agreements. In addition, the Company is in discussions with groups of its bondholders to address the maturities of bonds next year." About YRC Worldwide Headquartered in Overland Park, Kansas, YRC Worldwide Inc. -- http://www.yrcw.com-- a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Glen Moore, YRC Logistics, New Penn, Holland and Reddaway. YRC Worldwide has the largest, most comprehensive network in North America with local, regional, national and international capabilities. Through its team of experienced service professionals, YRC Worldwide offers industry-leading expertise in heavyweight shipments and flexible supply chain solutions, ensuring customers can ship industrial, commercial and retail goods with confidence. As of June 30, 2009, the Company had $3.41 billion in total assets, including $164.5 million in cash and cash equivalents; $1.72 billion in total current liabilities, $832.9 million in long-term debt, $126.5 million in deferred income tax liabilities, $380.7 million in pension and post-retirement liabilities, and $423.1 million in claims and other liabilities; resulting in $72.9 million in shareholders' deficit, as reported by the Troubled Company Reporter on August 3, 2009. As reported by the Troubled Company Reporter on May 20, 2009, Standard & Poor's Ratings Services maintained its 'CCC' long-term corporate credit rating on YRC Worldwide Inc. on CreditWatch with negative implications. S&P had revised the CreditWatch implications to negative from positive on April 24, 2009, reflecting concerns that the company may not be able to meet its amended bank covenants. * Business Filings in Second Quarter Up 11.8% --------------------------------------------- Bankruptcy filings rose in the second quarter, Bloomberg said, citing the Administrative Office of the U.S. Courts. According to Bloomberg's Kristy Scheuble, total bankruptcy filings increased 15.3% in the second quarter. Total business filings hiked 11.8% while consumer bankruptcy filings were up 15.5%. Chapter 7 bankruptcy filings, which allow certain property to be kept exempt from creditors, were up 18.2%. Chapter 13 filings were up 7.8% last quarter. FTC Seeks Public Comment on a Proposal to Create a Separate Account Class for Customer Positions in Cleared OTC Derivatives * CFTC Proposes New Rules for Bankrupt Commodity-Broker Assets -------------------------------------------------------------- The Commodity Futures Trading Commission has approved for publication in the Federal Register a proposal to amend Part 190 of the CFTC regulations to create a sixth and separate account class for OTC derivatives. The new class would include derivatives that a futures commission merchant carries for a customer and submits for clearing through a derivatives clearing organization (cleared OTC derivatives). The creation of this class would permit the extension of certain protections in bankruptcy to (i) the positions that customers of an FCM hold in cleared OTC derivatives, and (ii) the collateral that such customers deposit to secure such positions, in the event that the CFTC has not issued an order permitting the positions and collateral pertaining to such account class to be commingled with positions and collateral relating to the domestic futures account class. Additionally, the Proposal codifies the appropriate allocation of positions and collateral during bankruptcy, in the event that the CFTC does issue an order permitting the commingling of (i) positions and collateral relating to commodity contracts of one account class with (ii) positions and collateral relating to commodity contracts of the domestic futures account class. The CFTC seeks public comment on the Proposal. The comment file will remain open for 30 days following publication in the Federal Register. Copies may be obtained by contacting the CFTC's Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581, 202-418-5100 or by accessing the CFTC's website, www.cftc.gov. Interested parties may submit their comments via email to secretary@cftc.gov. All comments received will be promptly posted on the CFTC's Web site. * Florence Lentini Joins E&Y's Transaction Advisory Services ------------------------------------------------------------ Florence V. Lentini has joined Ernst & Young LLP as a partner in the Transaction Advisory Services practice in the restructuring group. Ms. Florence has close to 20 years of experience as a financial advisor and turnaround consultant, focused on advising senior management, boards of directors, secured lenders, equity sponsors, unsecured creditors and bondholders. She has led many large national and international high profile cases. She has also served as a Chief Restructuring Officer in company-side crisis situations and trustee for liquidating trusts representing secured and unsecured creditors. Her background extends across many industries, where she advised her clients on value-maximizing strategies both in and out-of-court. Florence Lentini is based out of New York and can be reached at +1 212.773 0948 or at florence.lentini@ey.com E&Y's Transaction Advisory Services Restructuring Practice With more than 2,000 financial and tax restructuring professionals, globally, Ernst & Young LLP -- http://www.ey.com/US/transactions-- works with companies, lenders, creditors and stakeholders to understand and navigate them through troubled times. It provides services in the context of early interventions, strategic financial advice, informal workouts, out-of-court restructurings, and formal bankruptcy proceedings. For companies and debtors, E&Y can act as a strategic financial advisor to senior management and board of directors, assist senior management in the analysis of its current financial situation, help stabilize and manage cash flows and working capital and understand and assess strategic alternatives. It can assist lenders, creditors, and stakeholders to assess strategic alternatives to maximize value, review and assess business plans and short-term cash-flow forecasts, and perform viability assessments of companies and recommend solutions. * BOOK REVIEW: Bankruptcy in United States History -------------------------------------------------- Author: Charles Warren Publisher: Beard Books Softcover: 195 pages List Price: $34.95 by Henry Berry Written by a lawyer, this book on the history of bankruptcy in the United States from the latter 1700s, when the country first gained its independence, through the years of the Great Depression in the early 1930s has a legalistic slant. Warren, a Harvard-educated lawyer, gives some attention to social conditions of the day, the effects on individuals such as debtors, and the overall evolution of bankruptcy in the U.S., but he is mainly interested in the groundbreaking legal decisions concerning bankruptcy, and especially in major U.S. Supreme Court decisions. The book is an amplification of lectures the author gave in 1934 at the Law School of Northwestern University. As Warren explains, "This book is an attempt to place the subject [of bankruptcy] in its proper historical setting." The author proceeds to argue that American history has neglected the important economic and social subject of bankruptcy because "[h]istory and law have long been regarded as distinct subjects." By bringing the subjects of history and bankruptcy law together, Warren provides the first history of bankruptcy in the U.S. In doing so, he makes bankruptcy law a useful, adaptable, comprehensible, and beneficial resource. Warren was motivated to write the book after witnessing the effects of the Great Depression. He hoped that public officials, lawyers, economists, and general readers would not only be heartened, but also get practicable economic ideas, from the book's "sketch of the great depressions of the past, and the description of the attempts at legislative adjustment of the relations of debtor and creditor . . . bearing upon present conditions." Throughout U.S. history, major changes in bankruptcy laws have always been related to financial crises and periods of economic depression. During such times, states usually took the lead in revising bankruptcy laws. From time to time, the U.S. Congress also intervened to make changes in national bankruptcy and business law. In many cases, with both state and national legislation, the U.S. Supreme Court would have the final word on the constitutionality of changes in existing laws or on new laws. The phrase "to establish uniform laws upon the subject of bankruptcy . . . ." was included as a late addition to Article I, Section 8 of the U.S. Constitution. During times of financial crisis, Warren discerns three distinct, fundamental themes concerning bankruptcy law. In its earliest period, up until the 1820s, U.S. bankruptcy laws were modeled after English laws, which favored creditors. In the following years, up to the start of the Civil War in 1861, new bankruptcy laws favored debtors. The turmoil of the Civil War and the subsequent Southern Reconstruction, large inflows of immigrants, and the economic development of all parts of the country in the latter 1800s and early 1900s produced bankruptcy laws with the national interest in mind. This national perspective of bankruptcy law continues through today, sometimes favoring the creditor and sometimes the debtor depending on prevailing social conditions and political agendas. Bankruptcy in United States History is a readable book which both bankruptcy professionals and general readers will find informative on the subject of bankruptcy. After graduating from Harvard law school, Charles Warren (1868- 1954) practiced law in Boston. He also served as Assistant Attorney General of the United States in Washington, D.C. ********* 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 **